Strategic and Operational Highlights in the First Quarter 2024
- In the first quarter of 2024, the Company generated a record
$18.5 million in sales, representing a tenth consecutive record revenue quarter for the Company. - For the three months ended
March 31, 2024 , the Company had a net loss of$1.8 million , compared to a net loss of$1.2 million for the three months endedMarch 31, 2023 . The Company generated Adjusted EBITDA* of$0.3 million for the three months endedMarch 31, 2024 , compared to negative Adjusted EBITDA of$0.3 million for the three months endedMarch 31, 2023 . - During the trailing twelve-month period, the Company’s products were sold in over 1,080 facilities across 34 states plus the
District of Columbia . The Company’s products were contracted or approved to be sold in more than 3,000 hospitals/ambulatory surgery centers as ofMarch 31, 2024 . - The Company made significant progress in the areas of intellectual property and the manufacturing process for its CellerateRX® product.
- Subsequent to the end of the quarter, the Company announced the appointments of
Jake Waldrop as Chief Operating Officer andTyler Palmer as Chief Corporate Development and Strategy Officer. - Subsequent to the end of the quarter, the Company announced that it has entered into a
$55.0 million non-dilutive term loan agreement withCRG Servicing LLC , an affiliate ofCRG LP , a healthcare focused investment fund, to support the Company’s growth initiatives in 2024 and 2025. The Company received$15.0 million in gross proceeds at closing and, subject to certain conditions, has the option to draw up to$40.0 million in additional funds in two tranches beforeJune 30, 2025 . - Subsequent to the end of the quarter, former CEO
Zach Fleming delivered notice of his resignation, effectiveMay 10, 2024 .Ron Nixon , Sanara’s Chairman, who has been deeply involved in developing and executing the Company’s strategic vision, has been appointed CEO by Sanara’s Board of Directors.
First Quarter 2024 Sales Analysis
In the first quarter of 2024, Sanara focused on increasing the use of its products in new and existing territories, expanding usage in new specialty areas, and increasing per facility sales. For the quarter ended
Earnings Analysis
Sanara reported a net loss of
* Adjusted EBITDA is a non-GAAP financial measure. See the discussion below under the heading “Use of Non-GAAP Financial Measures" and the reconciliations at the end of this release for additional information.
Use of Non-GAAP Financial Measures
To supplement the Company’s financial information presented in accordance with generally accepted accounting principles in
The Company’s non-GAAP financial measures are not in accordance with, nor an alternative for, measures conforming to GAAP and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company continues to provide all information required by GAAP, but it believes that evaluating its ongoing operating results may not be as useful if an investor or other user is limited to reviewing only GAAP financial measures. The Company does not, nor does it suggest that investors should, consider these non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Material limitations associated with the use of such measures include that they do not reflect all costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances. The Company presents these non-GAAP financial measures to provide investors with information to evaluate the Company’s operating results in a manner similar to how management evaluates business performance. To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in understanding and analyzing the results of the business to review both GAAP information and the related non-GAAP financial measures. Whenever the Company uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Investors are encouraged to review and consider these reconciliations.
Conference Call
Sanara will host a conference call on
A live webcast of Sanara’s conference call will be available under the Investor Relations section of the Company's website, www.SanaraMedTech.com. A one-year online replay will be available after the conclusion of the live broadcast.
About
With a focus on improving patient outcomes through evidence-based healing solutions,
Information about Forward-Looking Statements
The statements in this press release that do not constitute historical facts are “forward-looking statements,” within the meaning of and subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements may be identified by terms such as “aims,” “anticipates,” “believes,” contemplates,” “continue,” “could,” “estimates,” “expect,” “forecast,” “guidance,” “intend,” “may,” “plan,” “possible,” “potential,” “predicts,” “preliminary,” “projects,” “seeks,” “should,” “targets,” “will” or “would,” or the negatives of these terms, variations of these terms or other similar expressions. These forward-looking statements include, among others, statements regarding the development of new products, the timing of commercialization of our products, the regulatory approval process and expansion of the Company’s business in telehealth and wound care. These items involve risks, contingencies and uncertainties such as our ability to build out our executive team, our ability to identify and effectively utilize the net proceeds of the term loan to support the Company’s growth initiatives, the extent of product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, uncertainties associated with the development and process for obtaining regulatory approval for new products, the ability to consummate and integrate acquisitions, and other risks, contingencies and uncertainties detailed in the Company’s
All forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to revise any of these statements to reflect the future circumstances or the occurrence of unanticipated events, except as required by applicable securities laws.
Investor Contact:
713-826-0524
CNichols@sanaramedtech.com
SOURCE:
CONSOLIDATED BALANCE SHEETS
(Unaudited) | ||||||||
2024 | 2023 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash | $ | 2,828,234 | $ | 5,147,216 | ||||
Accounts receivable, net | 9,194,799 | 8,474,965 | ||||||
Accounts receivable – related parties | 23,002 | 8,400 | ||||||
Royalty receivable | - | 49,344 | ||||||
Inventory, net | 4,229,150 | 4,717,533 | ||||||
Prepaid and other assets | 911,594 | 608,411 | ||||||
Total current assets | 17,186,779 | 19,005,869 | ||||||
Long-term assets | ||||||||
Intangible assets, net | 43,953,610 | 44,926,061 | ||||||
3,601,781 | 3,601,781 | |||||||
Investment in equity securities | 3,084,278 | 3,084,278 | ||||||
Right of use assets – operating leases | 1,894,687 | 1,995,204 | ||||||
Property and equipment, net | 1,190,805 | 1,257,956 | ||||||
Total long-term assets | 53,725,161 | 54,865,280 | ||||||
Total assets | $ | 70,911,940 | $ | 73,871,149 | ||||
Liabilities and shareholders’ equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 1,191,816 | $ | 1,924,082 | ||||
Accounts payable – related parties | 87,116 | 77,805 | ||||||
Accrued bonuses and commissions | 6,893,381 | 7,676,770 | ||||||
Accrued royalties and expenses | 2,288,428 | 2,047,678 | ||||||
Earnout liabilities – current | 979,488 | 1,100,000 | ||||||
Current portion of debt | 928,571 | 580,357 | ||||||
Operating lease liabilities – current | 377,273 | 361,185 | ||||||
Total current liabilities | 12,746,073 | 13,767,877 | ||||||
Long-term liabilities | ||||||||
Long-term debt, net of current portion | 8,767,991 | 9,113,123 | ||||||
Earnout liabilities – long-term | 2,777,835 | 2,723,001 | ||||||
Operating lease liabilities – long-term | 1,626,130 | 1,737,445 | ||||||
Other long-term liabilities | 1,982,345 | 1,941,686 | ||||||
Total long-term liabilities | 15,154,301 | 15,515,255 | ||||||
Total liabilities | 27,900,374 | 29,283,132 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity | ||||||||
Common Stock: | 8,623 | 8,535 | ||||||
Additional paid-in capital | 73,180,208 | 72,860,556 | ||||||
Accumulated deficit | (29,898,146 | ) | (28,036,814 | ) | ||||
Total | 43,290,685 | 44,832,277 | ||||||
Equity attributable to noncontrolling interest | (279,119 | ) | (244,260 | ) | ||||
Total shareholders’ equity | 43,011,566 | 44,588,017 | ||||||
Total liabilities and shareholders’ equity | $ | 70,911,940 | $ | 73,871,149 |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Net Revenue | $ | 18,536,638 | $ | 15,521,917 | ||||
Cost of goods sold | 1,890,046 | 2,125,659 | ||||||
Gross profit | 16,646,592 | 13,396,258 | ||||||
Operating expenses | ||||||||
Selling, general and administrative expenses | 16,192,259 | 12,969,069 | ||||||
Research and development | 946,298 | 1,317,324 | ||||||
Depreciation and amortization | 1,105,420 | 778,875 | ||||||
Change in fair value of earnout liabilities | (65,678 | ) | (452,687 | ) | ||||
Total operating expenses | 18,178,299 | 14,612,581 | ||||||
Operating loss | (1,531,707 | ) | (1,216,323 | ) | ||||
Other expense | ||||||||
Interest expense and other | (267,336 | ) | (6 | ) | ||||
Total other expense | (267,336 | ) | (6 | ) | ||||
Net loss | (1,799,043 | ) | (1,216,329 | ) | ||||
Less: Net loss attributable to noncontrolling interest | (34,859 | ) | (38,429 | ) | ||||
Net loss attributable to | $ | (1,764,184 | ) | $ | (1,177,900 | ) | ||
Net loss per share of common stock, basic and diluted | $ | (0.21 | ) | $ | (0.14 | ) | ||
Weighted average number of common shares outstanding, basic and diluted | 8,419,528 | 8,173,784 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (1,799,043 | ) | $ | (1,216,329 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 1,105,420 | 778,875 | ||||||
Bad debt expense | 65,000 | 36,000 | ||||||
Inventory obsolescence | 95,235 | 30,511 | ||||||
Share-based compensation | 803,386 | 597,305 | ||||||
Noncash lease expense | 100,517 | 76,545 | ||||||
Accretion of finance liabilities | 58,834 | - | ||||||
Amortization of debt issuance costs | 3,083 | - | ||||||
Change in fair value of earnout liabilities | (65,678 | ) | (452,687 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (735,490 | ) | 352,102 | |||||
Accounts receivable – related parties | (14,602 | ) | 74,602 | |||||
Inventory, net | 393,148 | 86,785 | ||||||
Prepaid and other assets | (303,182 | ) | (361,719 | ) | ||||
Accounts payable | (732,266 | ) | 405,360 | |||||
Accounts payable – related parties | 9,311 | (10,747 | ) | |||||
Accrued royalties and expenses | 300,574 | (112,774 | ) | |||||
Accrued bonuses and commissions | (783,390 | ) | (1,949,325 | ) | ||||
Operating lease liabilities | (95,227 | ) | (75,817 | ) | ||||
Net cash used in operating activities | (1,594,370 | ) | (1,741,313 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (65,818 | ) | (27,705 | ) | ||||
Proceeds from disposal of property and equipment | - | 650 | ||||||
Net cash used in investing activities | (65,818 | ) | (27,055 | ) | ||||
Cash flows from financing activities: | ||||||||
Equity offering net proceeds | - | 751,752 | ||||||
Net settlement of equity-based awards | (580,794 | ) | (655,942 | ) | ||||
Cash payment of finance and earnout liabilities | (78,000 | ) | - | |||||
Net cash provided by (used in) financing activities | (658,794 | ) | 95,810 | |||||
Net decrease in cash | (2,318,982 | ) | (1,672,558 | ) | ||||
Cash, beginning of period | 5,147,216 | 8,958,995 | ||||||
Cash, end of period | $ | 2,828,234 | $ | 7,286,437 | ||||
Cash paid during the period for: | ||||||||
Interest | $ | 205,591 | $ | 6 | ||||
Supplemental noncash investing and financing activities: | ||||||||
Equity offering accrued proceeds | - | 282,010 | ||||||
Right of use assets obtained in exchange for lease obligations | - | 1,369,164 |
Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of Net Loss to Adjusted EBITDA (Unaudited):
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Net Loss | $ | (1,764,184 | ) | $ | (1,177,900 | ) | ||
Adjustments | ||||||||
Interest expense and other | 267,336 | 6 | ||||||
Depreciation and amortization | 1,105,420 | 778,875 | ||||||
Noncash share-based compensation | 803,386 | 597,305 | ||||||
Change in fair value of earnout liabilities | (65,678 | ) | (452,687 | ) | ||||
Noncontrolling interest | (34,859 | ) | (38,429 | ) | ||||
Adjusted EBITDA | $ | 311,421 | $ | (292,830 | ) |
Source:
2024 GlobeNewswire, Inc., source