SNWV 10-K & 10-Q changes, risk factors and insider trading
SANUWAVE Health, Inc. · Nasdaq · Surgical & Medical Instruments & Apparatus · CIK 1417663 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.”
New heading “Our history of operating losses and prior reliance on external financing has raised, and could again raise, substantial doubt about our ability to continue as a going concern.”
New heading “Changes in reimbursement affecting the wound care market could adversely affect our customers and indirectly reduce demand for our products.”
Removed heading “Our recurring losses from operations and dependency upon future issuances of equity or other financing to fund ongoing operations have raised substantial doubt as to our ability to continue as a going concern. We will be required to raise additional funds to finance our operations and remain a going concern; we may not be able to do so, and/or the terms of any financings may not be advantageous to us.”
Removed heading “The rights of the holders of common stock may be impaired by the potential issuance of preferred stock.”
Removed heading “We have not sought an advisory stockholder vote to approve the compensation of our named executive officers.”
Largest changes
“Our recurring losses from operations and dependency upon future issuances of equity or other financing to fund ongoing operations have raised substantial doubt as to our ability to continue as a going concern. We will be required to raise additional funds to finance our operations and remain a going concern; we may not be able to do so, and/or the terms of any financings may not be advantageous to us.”see in full comparison
“Our history of operating losses and prior reliance on external financing has raised, and could again raise, substantial doubt about our ability to continue as a going concern.”see in full comparison
“However, there can be no assurance that the Company will continue to generate positive operating results or maintain sufficient liquidity in the future. Management will continue to monitor the Company’s financial position, operating results, and compliance with debt covenants. If the Company is unable to sustain improved operating performance, maintain access to financing, or comply with applicable debt covenants, its financial condition and ability to continue operations could be materially adversely affected.”see in full comparison
“In connection with the preparation of our consolidated financial statements for the year ended December 31, 2025, we engaged a third party to conduct a sales and use tax nexus study. Management used this third party report and identified that we had a historical state and local sales tax liability related to prior periods. We are required and subject to collect and remit sales and use tax in state and local jurisdictions where we have economic and physical nexus. …”see in full comparison
“The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. …”see in full comparison
“The continuation of our business is dependent upon raising additional capital. We expect to devote substantial resources for the commercialization of UltraMIST which will require additional capital resources. We incurred a net loss of $31.4 million and $25.8 million for the years ended December 31, 2024, and 2023, respectively. The operating losses and the current portion of our Senior Secured Debt indicate substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the filing of this Annual Report on Form 10-K.”see in full comparison
Full comparison: every changed paragraph (29)
Our recurring losses from operations and dependency upon future issuances of equity or other financing to fund ongoing operations have raised substantial doubt as to our ability to continue as a going concern. We will be required to raise additional funds to finance our operations and remain a going concern; we may not be able to do so, and/or the terms of any financings may not be advantageous to us.
The continuation of our business is dependent upon raising additional capital. We expect to devote substantial resources for the commercialization of UltraMIST which will require additional capital resources. We incurred a net loss of $31.4 million and $25.8 million for the years ended December 31, 2024, and 2023, respectively. The operating losses and the current portion of our Senior Secured Debt indicate substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the filing of this Annual Report on Form 10-K.
Management’s plans are to obtain additional capital in 2025. The Company could obtain additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company’s existing stockholders. In addition, there can be no assurances that the Company’s plans to obtain additional capital will be successful on the terms or timeline it expects, or at all. If these efforts are unsuccessful, the Company may be required to significantly curtail or discontinue operations or, if available, obtain funds through financing transactions with unfavorable terms.
The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. The Company’s consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.
We have identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. These material weaknesses are as follows:
•The Company lacked expertise and resources to analyze and properly apply U.S. GAAP to complex and non-routine transactions such as complex financial instruments and derivatives and complex sales distributing agreements with select vendors.
•A lack of internal resources to analyze and properly apply U.S. GAAP to account for financial instruments included in service agreements with select vendors.
•Failure to implement controls around the following accounting processes: Equity, Financial Reporting, Accounts Payable, Expenses, Revenue, Accounts Receivable, Tax, Cash, Debt, Fixed Assets, Inventory, Commissions, Entity-Level, Human Resources/Payroll, and IT processes: change management, operations, and access security. As such, we believe that accounting and IT processes and procedures need to be tested for operating effectiveness.
We are taking certain measures to remediate these material weaknesses described above as discussed further in Part II, Item 9A of this Annual Report on Form 10-K; however, such material weaknesses had not been remediated as of December 31, 2024.2025. In addition, due to the material weaknesses in internal control over financial reporting, we have also determined that our disclosure controls and procedures were ineffectivenot operating effectively as of December 31, 2024.2025. The material weaknesses will not be considered remediated until management completes the design and implementation of the measuresapplicable describedcontrols, above and thesuch controls operatehave operated effectively for a sufficient period of timetime, and management has concluded, through testing, that these controls are effective.operating effectively.
In connection with the preparation of our consolidated financial statements for the year ended December 31, 2025, we engaged a third party to conduct a sales and use tax nexus study. Management used this third party report and identified that we had a historical state and local sales tax liability related to prior periods. We are required and subject to collect and remit sales and use tax in state and local jurisdictions where we have economic and physical nexus. During the year ended December 31, 2025, we determined that a sales tax liability, related to the periods of 2022 through 2025, was probable and determined an estimated liability for sales transactions processed in jurisdictions where we had not previously reported. Management has concluded that the error was material to the previously issued annual financial statements and, accordingly, a restatement of prior period financial information was required in accordance with U.S. GAAP and SEC rules. For further information, refer to Note 2 to the consolidated financial statements.
There can be no assurance as to when the material weaknesses will be remediated. At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan; however, theseThese remediation measures will be time consuming, will result in us incurring significant costs, and will place significant demands on our financial and operational resources.
We cannot assure that the measures we have taken to date and may take in the future will be sufficient to remediate the control deficiencies that led to our material weaknesses in internal control over financial reporting or that they will prevent or avoid potential future material weaknesses to be identified in the future.weaknesses. The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human errorerror, and the risk of fraud. Any failure to design, implementimplement, and maintain effective internal control over financial reporting and effective disclosure controls and procedures, or any difficulties encountered in their implementation or improvement, maycould result in additionalerrors material misstatements ofin our consolidatedfinancial statements that could require us to restate our financial statements, or cause us to fail to meet our periodic reporting obligations, and cause shareholders to lose confidence in our reported financial information, all of which maycould materially and adversely affect our business, financial condition andcondition, results of operations.operations, and stock price.
Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.
We have incurred net losses since our inception. If not utilized, some of our federal and state net operating loss (“NOL”) carryforwards will begin to expire in various years beginning after 2033. Under the Internal Revenue Code of 1986, as amended, (the “Code”), and certain similar state tax provisions, we are generally allowed to carry forward our NOLs from a prior taxable year to offset our future taxable income, if any, until such NOLs are used or expire, subject to certain limitations. The same is true of other unused tax attributes, such as tax credits. In addition, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. During the quarter ended June 30, 2025, we completed an IRC Section 382 analysis of our tax attributes. That analysis showed that $44.2 million of our NOL tax attributes would expire before becoming available under our limitation as a result of shifts in our ownership. We have adjusted our tax attributes to account for this limitation.
Our history of operating losses and prior reliance on external financing has raised, and could again raise, substantial doubt about our ability to continue as a going concern.
The Company has historically experienced recurring net losses, accumulated deficits, negative working capital, and significant debt maturities, which raised substantial doubt about its ability to continue as a going concern.
During the year ended December 31, 2025, management executed a comprehensive refinancing of the Company’s secured debt with a new lender, which extended the maturity of the Company’s principal debt obligations and established a secured revolving credit facility. In addition, the Company generated net income of $11.8 million for the year ended December 31, 2025, and achieved positive operating income for both the years ended December 31, 2025, and December 31, 2024.
Management evaluated the Company’s financial condition and projected cash flows for the twelve months following the issuance of the consolidated financial statements included in this Annual Report on Form 10-K. Based on the debt refinancing, improved operating performance, and expected cash inflows from operations, we believe that our anticipated cash flows from operations, and cash on hand will be sufficient to satisfy our working capital needs, capital expenditures and debt repayments for at least twelve months from the issuance date of these consolidated financial statements.
However, there can be no assurance that the Company will continue to generate positive operating results or maintain sufficient liquidity in the future. Management will continue to monitor the Company’s financial position, operating results, and compliance with debt covenants. If the Company is unable to sustain improved operating performance, maintain access to financing, or comply with applicable debt covenants, its financial condition and ability to continue operations could be materially adversely affected.
WePrior haveto 2025, we experienced negative operating cash flows since our inception and have funded our operations primarily from proceeds received from sales of our capital stock, the issuance of promissory notes and convertible promissory notes, the issuance of notes payable to related parties, and product sales. We willmay seek to obtain additional funds in the future either through equity or debt financings or through strategic alliances with third parties, either alone or in combination with equity financings. These financings could result in substantial dilution to the holders of our common stock or require contractual or other restrictions on our operations or on alternative business opportunities that may be available to us. If we can raise additional funds by issuing debt securities, these debt securities could impose significant additional restrictions on our operations. Any such required financing may not be available in amounts or on terms acceptable to us, and the failure to procure such required financing could have a material adverse effect on our business, financial condition, and results of operations, or threaten our ability to continue as a going concern.
Changes in reimbursement affecting the wound care market could adversely affect our customers and indirectly reduce demand for our products.
The wound care market is highly dependent on reimbursement from governmental and private third-party payors, including CMS and Medicare Administrative Contractors. CMS and other payors periodically revise coverage policies, payment levels, coding guidance, and utilization rules for wound care products and procedures, including cellular and tissue-based products for skin wounds ("skin substitutes" or allografts) and other advanced wound care therapies.
Although our UltraMIST system is not a skin substitute or allograft product, many of our customers operate within care settings where these products are frequently used as part of broader wound care treatment protocols. Significant reimbursement reductions or policy changes affecting such products or procedures could negatively affect the economics of wound care practices, hospitals, and other providers. These changes could reduce provider revenues, alter treatment protocols, or limit capital expenditures, which could indirectly reduce demand for our products.
Reimbursement policies are determined by governmental and private payers and are outside our control. Changes affecting the wound care reimbursement environment could adversely affect the financial condition of our customers and have a material adverse effect on our business, financial condition, and results of operations.
As a small company with lessfewer than 5060 employees, our success depends on the continuing contributions of our management team and qualified personnel. Turnover, transitions or other disruptions in our management team and personnel could make it more difficult to successfully operate our business and achieve our business goals and could adversely affect our results of operation and financial condition. Our success depends in large part on our ability to attract and retain highly qualified personnel. We face intense competition in our hiring efforts from other pharmaceutical, biotechnology and medical device companies, as well as from universities and nonprofit research organizations, and we may have to pay higher salaries to attract and retain qualified personnel. The loss of one or more of these individuals, or our inability to attract additional qualified personnel, could substantially impair our ability to implement our business plan.
The rights of the holders of common stock may be impaired by the potential issuance of preferred stock.
Our board of directors has the right, without stockholder approval, to issue preferred stock with voting, dividend, conversion, liquidation, or other rights which could adversely affect the voting power and equity interest of the holders of common stock, which could be issued with the right to more than one vote per share, and could be utilized as a method of discouraging, delaying or preventing a change of control. The possible negative impact on takeover attempts could adversely affect the price of our common stock.
We have not sought an advisory stockholder vote to approve the compensation of our named executive officers.
Rule 14a-21 under the Exchange Act requires us to seek a separate stockholder advisory vote at our annual meeting at which directors are elected to approve the compensation of our named executive officers, not less frequently than once every three years (say-on-pay vote), and, at least once every six years, to seek a separate stockholder advisory vote on the frequency with which we will submit advisory say-on-pay votes to our stockholders (say-on-frequency vote). We have not submitted to our stockholders a say-on-pay vote to approve an advisory resolution regarding our compensation program for our named executive officers, or a say-on-frequency vote. Consequently, the board of directors has not considered the outcome of our say-on-pay vote results when determining future compensation policies and pay levels for our named executive officers.
Management's Discussion & Analysis (MD&A)
New heading “Cash Flows from Investing Activities”
New heading “Segment and Geographic Information”
New heading “Effects of Inflation”
Removed heading “Recent Developments”
Largest changes
“Management has evaluated our ability to continue as a going concern in light of these developments. Based on the successful refinancing and other recent initiatives, management believes the Company has sufficient resources to meet its obligations as they become due and to continue as a going concern for at least the next 12 months. We continue to monitor our financial position, liquidity, and compliance with debt covenants on an ongoing basis.”see in full comparison
“Management remains focused on maintaining the Company’s improved financial position and operational momentum. While we continue to monitor our liquidity and capital resources closely, we believe that the successful refinancing of our debt, as described in Note 9 of our consolidated financial statements, together with our recent operating income and capital initiatives, have significantly strengthened our ability to meet our obligations as they come due. These actions have alleviated the substantial doubt about our ability to continue as a going concern. …”see in full comparison
“Although no assurances can be given that our plans to obtain refinancing will be successful or on the terms or timeline we expect, or at all, management believes that the actions taken to date, along with the planned initiatives, will enable the Company to meet its obligations as they become due and to continue as a going concern.. If these efforts are unsuccessful, we may be required to significantly curtail or discontinue operations or obtain funds through financing transactions with unfavorable terms.”see in full comparison
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations provides information management believes to be relevant to understanding the financial condition and results of operations of the Company. The discussion focuses on our financial results of operations for the years ended December 31,see in full comparison20242025 and2023.2024. You should read this discussion and analysis in conjunction with our consolidated financial statements and related notes thereto for the years ended December 31,2024,2025, and2023,2024, which are presented within Part II, Item 8. "Financial Statements and Supplementary Data" in this Annual Report on Form 10-K. This discussion has been updated to reflect the restatement of our previously issued financial statements for the quarters ended March 31, June 30, September 30, 2025, and the year ended 2024. All amounts and discussions herein are based on the restated financial information. Refer to Note 2 to the consolidated financial statements for further details regarding the nature and impact of the restatement. Amounts reported in thousands within this annual report are computed based on the amounts in thousands, and therefore, the sum of the components may not equal the total amount reported in thousands due to rounding.
“We have incurred recurring net losses in prior years, currently have a significant accumulated deficit, and have experienced negative working capital. Previously, the scheduled maturity of the Senior Secured debt in September 2025 raised substantial doubt about our ability to continue as a going concern for a period of 12 months from the filing of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.”see in full comparison
Full comparison: every changed paragraph (47)
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations provides information management believes to be relevant to understanding the financial condition and results of operations of the Company. The discussion focuses on our financial results of operations for the years ended December 31, 20242025 and 2023.2024. You should read this discussion and analysis in conjunction with our consolidated financial statements and related notes thereto for the years ended December 31, 2024,2025, and 2023,2024, which are presented within Part II, Item 8. "Financial Statements and Supplementary Data" in this Annual Report on Form 10-K. This discussion has been updated to reflect the restatement of our previously issued financial statements for the quarters ended March 31, June 30, September 30, 2025, and the year ended 2024. All amounts and discussions herein are based on the restated financial information. Refer to Note 2 to the consolidated financial statements for further details regarding the nature and impact of the restatement. Amounts reported in thousands within this annual report are computed based on the amounts in thousands, and therefore, the sum of the components may not equal the total amount reported in thousands due to rounding.
We realized significant revenue growth during the year ended December 31, 2024,2025, with a 60%35% growth in revenue to $32.6$44.1 million for the year ended December 31, 2024,2025, as compared to $20.4$32.6 million in 2023.2024. Gross margins also increased to 75%77% from 70%75% in 2023.2024. As the Company continues to focus on profitable growth, we have also increased our operating income by 1103%29% to $5.4$4.9 million for the year ended December 31, 2024,2025, compared to an operating loss of $0.5$3.8 million for the year ended December 31, 2023.2024.
Net lossincome for the year ended December 31, 2024,2025, was $31.4$11.8 million, or $7.03$1.38 per basic share and $0.41 per diluted share, compared to a net loss of $25.8$33.1 million, or $12.19$7.41 per basic and diluted share, for the year ended December 31, 2023,2024, an increase of $5.6$44.9 million, which was largely driven by a non-cash change in the fair value of derivatives.derivatives and improved operational performance. We believe these improvements set the stage for additional growth as we head into 2025.2026.
Recent Developments
On March 7, 2025, our common stock began trading on The Nasdaq Global Market under the ticker symbol “SNWV.”
The Company uses Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA to assess its operating performance. Adjusted EBITDA is Earnings before Interest, Taxes, Depreciation and Amortization adjusted for the change in fair value of derivatives and any significant non-cash or non-recurring infrequent charges. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (loss) as a measure of financial performance or any other performance measure derived in accordance with U.S. GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or infrequent items. These non-GAAP financial measures are presented in a consistent manner for each period, unless otherwise disclosed. The Company uses these measures for the purpose of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. These measures also help the Company to make operational and strategic decisions. The Company believes that providing this information to investors, in addition to U.S. GAAP measures, allows them to see the Company’s results through the eyes of management, and to better understand its historical and future financial performance. These non-GAAP financial measures are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other U.S. GAAP measures.
As presented in the GAAP to Non-GAAP Reconciliations section below, our non-GAAP financial measures exclude the impact of certain charges that contribute to our net loss.income (loss).
1 The charges represent a non-recurring state and local sales tax expense related to the restatement of prior period financial statements.
2 The charges represent the net amount of proceeds received of $0.4 million and inventory written down of $0.5 million, as part of the Company's sale and disposal of the PACE product line.
Revenues for the year ended December 31, 20242025 were $32.6$44.1 million, compared to $20.4$32.6 million for 2023,2024, an increase of $12.2$11.4 million or 60%.35%. The increase in net salesrevenue was primarily driven by thehigher growthsales in quantityvolumes of UltraMIST® disposablesconsumables and systems sold.systems. The quantity of UltraMIST® disposablesconsumables sold increased by24%, 37% in 2024 as compared to 2023. The quantity ofand UltraMIST® systems sold increased by 77%67% in 2024 as2025 compared to 2023. Pricing of the UltraMIST® system and disposables also showed growth in 2024 as compared to 2023; disposables average selling price increased 21% in 2024, and systems average selling price increased 10% in 2024. Revenue from UltraMIST® totaled over 98% of total revenue in 2024 and 90% in 2023.
Pricing trends also contributed to year-over-year performance. The average selling price of UltraMIST® consumables increased 3% in 2025 compared to 2024. In contrast, the average selling price of UltraMIST® systems declined by 3%, primarily due to a higher proportion of sales through resellers. UltraMIST® systems sold through resellers comprised 34% of system sales in 2025 compared to no reseller system sales in 2024. Expanding reseller sales supports faster placement of systems into customer facilities and contributes to growth in our active system base.
Cost of revenues for the year ended December 31, 20242025 waswere $8.1$10.1 million, compared to $6.0$8.1 million for 2023.2024. Gross profit as a percentage of revenues was 75%77% for the year ended December 31, 2024,2025, compared to 70%75% for the same period in 2023.2024. This increase in gross margin was largely driven by increased pricing on our UltraMIST® consumables and reductions in system cost of revenue, partially offset by a decrease in UltraMIST® system pricing, largely resulting from a higher reseller mix. The average gross profit of systems andsold applicators.increased 0.1% in 2025 compared to 2024.
General and administrative expenses for the year ended December 31, 20242025 were $11.3$19.4 million as compared to $8.7$12.9 million for 2023,2024, an increase of $2.7$6.5 million, or 31%.50%. The increase in 20242025 as compared to 20232024 was primarily due to increased headcount,headcount severanceexpenses andof legal$2.7 settlement expenses, andmillion, non-cash charges for stock-based compensation expense.totaling $2.4 million, software expenses of $0.4 million, audit and tax professional expenses of $0.2 million, and public company costs of $0.2 million.
Selling and marketing expenses for the year ended December 31, 20242025 were $6.3$7.4 million as compared to $4.9$6.3 million for 2023,2024, an increase of $1.4$1.1 million, or 29%.17%. The year-over-year increase in sales and marketing expenses in 20242025, was largelyprimarily driven by increased commissionheadcount expenses dueof to$1.9 increasedmillion, sales.non-cash charges for stock-based compensation totaling $0.8 million, and consulting expenses of $0.5 million, partially offset by a decrease in outside commission expense of $1.9 million as our focus shifted toward a higher mix of resellers versus distributors.
Research and development expenses for the year ended December 31, 20242025 were $0.7$1.4 million, compared to $0.6$0.7 million for 2023.2024. The increase in research and development costs in 20242025 remainedas approximatelycompared consistentto with2024, thewas costslargely indriven 2023.by research and development (R&D) project expenses totaling $0.2 million, consulting expenses of $0.2 million, and patent legal fees of $0.2 million.
Other expense,income (expense), net consists of the following:
Total other income for the year ended December 31, 2025 was $7.0 million, as compared to an expense of $36.9 million for 2024, an increase of $43.9 million. The increase was primarily driven by the change in fair value of derivative liabilities of $39.5 million, interest expense reduction of $7.5 million, and an other income increase of $3.0 million, partially offset by a change in the gain (loss) on extinguishment of debt of $6.8 million. The change in fair value of derivative liability relates to the valuation of warrants previously issued by the Company. The reduction in interest expense is due to the conversion of previously issued notes that were exchanged for common stock in October 2024 as described in Note 13 of our consolidated financial statements, as well as a reduction in interest rate from the repayment of our Senior Secured Debt and issuance of our Term Loan as described in Note 9 of our consolidated financial statements. Other income for 2025 mainly consists of the one-time payment of $5.0 million related to the patent purchase agreement as described in Note 20 of our consolidated financial statements. Other income for 2024 mainly consists of the one-time payment of $2.5 million related to the Patent License agreement as described in Note 20 of our consolidated financial statements.
Other expenses totaled $36.8 million for the year ended December 31, 2024, as compared $25.3 million for 2023, an increase of $11.5 million. The increase was primarily driven by an increased loss from the change in the fair value of derivative liability of $21.8 million, partially offset by a gain on the extinguishment of debt of $6.3 million and other income of $2.5 million from a license and option agreement. The change in fair value of the derivative liability mainly relates to warrants issued during 2024, 2023, and 2022 with the convertible debt. That convertible debt and associated warrants were converted to common stock in October 2024, as further discussed in Note 16 to the consolidated financial statements in Part II, Item 8. “Financial Statements and Supplementary Data”. The gain on extinguishment of debt was mainly due to the settlement of outstanding notes to Celularity and HealthTronics, as further discussed in Note 10 to the consolidated financial statements in Part II, Item 8. “Financial Statements and Supplementary Data”.
SinceFrom inception,inception through the year ended December 31, 2024, we have incurred losses from operations each year. As of December 31, 2024,2025, we had an accumulated deficit of $251$242.7 million. Historically, our operations have primarily been funded from the sale of capital stock, and issuances of notes payable, and convertible debt securities.
We have incurred recurring net losses in prior years, currently have a significant accumulated deficit, and have experienced negative working capital. Previously, the scheduled maturity of the Senior Secured debt in September 2025 raised substantial doubt about our ability to continue as a going concern for a period of 12 months from the filing of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.
However, as described in Note 9 of our consolidated financial statements, we successfully refinanced our outstanding debt during 2025. The refinancing extended the maturity of our debt and provided the option for additional liquidity to support ongoing operations through the secured revolving credit facility. In addition, the operating income achieved in 2025, the receipt of $5.0 million from the patent purchase agreement as described in Note 20 of our consolidated financial statements, and the capital raised from a private placement in October 2024 as described in Note 14 of our consolidated financial statements, have all contributed to a significant improvement in our financial position.
Management has evaluated our ability to continue as a going concern in light of these developments. Based on the successful refinancing and other recent initiatives, management believes the Company has sufficient resources to meet its obligations as they become due and to continue as a going concern for at least the next 12 months. We continue to monitor our financial position, liquidity, and compliance with debt covenants on an ongoing basis.
Management remains focused on maintaining the Company’s improved financial position and operational momentum. While we continue to monitor our liquidity and capital resources closely, we believe that the successful refinancing of our debt, as described in Note 9 of our consolidated financial statements, together with our recent operating income and capital initiatives, have significantly strengthened our ability to meet our obligations as they come due. These actions have alleviated the substantial doubt about our ability to continue as a going concern. We will continue to evaluate opportunities to further enhance our capital structure and support our growth strategy. Although we cannot predict all future events or guarantee that unforeseen circumstances will not arise, we are confident that the steps taken to date position the Company well to support ongoing operations and execute on our strategic objectives.
See Notes 1, 10, 11, 15, and 16, to the consolidated financial statements in Part II, Item 8. “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional information regarding the Convertible Promissory Notes, Senior Secured Note, Reverse Stock Split, and the October 2024 transaction.
Cash provided by operating activities for 2025 totaled $3.9 million. The primary source was net income of $11.8 million, adjusted for non-cash items including stock-based compensation expense of $4.9 million, amortization of debt issuance costs and debt discounts of $1.5 million, depreciation and amortization of $1.3 million, a $0.5 million inventory write-off related to the disposal of PACE, $0.6 million in tenant improvement allowances received, and $0.9 million of other non-cash items. These were partially offset by a non-cash gain of $8.1 million on the change in fair value of derivative liabilities, a $5.4 million non-cash gain on the sale of patents, and a $4.0 million net use of cash from changes in operating assets and liabilities, driven primarily by an increase in accounts receivable reflecting higher revenue activity and an increase in inventory due to a build up to support anticipated demand.
WeCash haveprovided improvedby ouroperating cashactivities flow from operations infor 2024 astotaled compared$2.5 to 2023, which was driven by increased emphasis on improved cash managementmillion and operatingconsisted expense management. Additional volatility in adjustmentsprimarily of cash flows from operations is the change in fair value of derivative liabilities connected to our convertible debt and warrants issued. The Company recognized a loss on these liabilities of $31.4 million for the year ended December 31, 2024, as compared to a loss of $9.6 million for the year ended December 31, 2023.2024.
Cash Flows from Investing Activities
Cash provided by investing activities for 2025 totaled $3.4 million, consisting of $5.4 million in proceeds from the sale of patents, partially offset by $1.9 million in purchases of property and equipment.
Cash used in investing activities for 2024 totaled $0.5 million, consisting entirely of purchases of property and equipment.
Cash used in financing activities for 2025 totaled $5.6 million, consisting primarily of $27.7 million in payments on notes payable, $1.4 million in repayment of principal on the secured term loan, $0.4 million in debt issuance costs, and $0.2 million in principal payments on finance leases, partially offset by $23.0 million in proceeds from a new secured term loan, $0.7 million in proceeds from the secured revolving credit facility, and $0.6 million in proceeds from exercises of stock options.
Cash provided by financing activities for 2024 totaled $6.4 million, consisting primarily of $10.3 million in proceeds from the sale of common stock, $1.3 million in proceeds from convertible promissory notes, and $0.5 million from secured promissory notes payable from a related party, partially offset by $3.5 million in payments on notes payable, $0.5 million in repayments of secured promissory notes payable to a related party, $1.5 million in payments to factoring, and $0.2 million in principal payments on finance leases.
Cash flows provided by financing activities increased while also paying off outstanding debt. For the year ended December 31, 2024, we received proceeds of $12.1 million from the issuance of the convertible promissory notes, sales of common stock, and proceeds from promissory note payable as compared to $6.0 million for the year ended December 31, 2023. In 2024, we paid off outstanding debt owed to Celularity, HealthTronics, and our factoring line of credit for a total of $5.0 million.
Going Concern
The Company has incurred recurring operating losses in prior years, has negative working capital, and the Senior Secured Note becomes due in September 2025, which raises substantial doubt about our ability to continue as a going concern for a period of 12 months from the filing of the Form 10-K.
During the current fiscal year, the Company has achieved operating income, reflecting a significant improvement in its financial performance. The Company is addressing its financial obligations, including the significant portion of debt that is coming due in September 2025. Management is actively engaged in discussions with lenders and financial institutions to refinance this debt, which will extend the maturity of the debt and provide additional liquidity to support ongoing operations and strategic initiatives.
Although no assurances can be given that our plans to obtain refinancing will be successful or on the terms or timeline we expect, or at all, management believes that the actions taken to date, along with the planned initiatives, will enable the Company to meet its obligations as they become due and to continue as a going concern.. If these efforts are unsuccessful, we may be required to significantly curtail or discontinue operations or obtain funds through financing transactions with unfavorable terms.
See Note 2 to the consolidated financial statements in Part II, Item 8. “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for additional information on our ability to continue as a going concern.
We may be involved in legal actions involving product liability, intellectual property and commercial disputes, tax disputes, and governmental proceedings and investigations. The outcomes of these legal actions are not completely within our control and may not be known for prolonged periods of time. In some actions, the enforcement agencies or private claimants seek damages that could require significant expenditures or result in lost revenues or limit our ability to conduct business in the applicable jurisdictions. Estimating probable losses from our litigation and governmental proceedings is inherently difficult, particularly when the matters are in early procedural stages, with incomplete scientific facts or legal discovery; involve unsubstantiated or indeterminate claims for damages; potentially involve penalties, fines, or punitive damages; or could result in a change in business practice. The Company records a liability in the consolidated financial statements for loss contingencies when a loss is known or considered probable, and the amount may be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. The Company has reserved approximately $150 thousand for unasserted claims. Our significant legal proceedings are discussed in Note 21 to the consolidated financial statements in Part II, Item 8. “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
Sales Tax Nexus and Related Liabilities
During the fiscal year ended December 31, 2025, the Company completed its initial sales tax nexus study to evaluate its obligations to collect and remit sales tax across various state and local jurisdictions. Determining the extent of the Company's sales tax nexus requires significant judgment regarding the nature of the Company's business activities in each jurisdiction, the applicability of economic nexus thresholds, specific customers and their exempt status, the interpretation of state and local tax laws and regulations, which continue to evolve following South Dakota v. Wayfair, Inc. and subsequent legislative developments. This can cause changes in the widely acceptable administrative practices of jurisdictions.
The Company recorded a liability for estimated sales tax obligations, including potential interest and penalties, arising from both current and prior periods, when an exposure is considered probable and the amount can be reasonably estimated. Where the reasonable estimate of a probable liability is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. Reasonably possible exposures identified in the study that do not meet the threshold for accrual are disclosed when material. Given the inherent complexity of multistate tax compliance and the application of economic nexus rules, actual liabilities may differ materially from current estimates, depending on the outcome of ongoing or future reviews by state tax authorities. Such differences may have a material impact on the Company's financial condition, results of operations, or cash flows.
Segment and Geographic Information
We have determined that we have one reportable segment. Our revenues are generated from sales primarily in the United States. All significant expenses are generated in the United States and all significant assets are in the United States. For further information on the Company's reportable segment, refer to Note 22 to the consolidated financial statements.
Effects of Inflation
The rate of inflation, which remains elevated, affects expenses such as employee compensation, office space leasing costs, and research and development charges, which may not be readily recoverable. To the extent inflation results in rising interest rates and has other adverse effects on the market, it may adversely affect our consolidated financial condition and results of operations.
Derivative Liabilities from Warrants
The Company determined that certain warrants qualified as derivative financial instruments. Various valuation models were used to estimate the fair value of these derivative financial instruments that are classified as derivative liabilities on the consolidated balance sheets. The models include subjective input assumptions that can materially affect the fair value estimates and as such are subject to uncertainty. The Company's volatility is the most significant assumption and changes over time with the market. Our significant input assumptions are discussed in Note 13 to the consolidated financial statements in Part II, Item 8. “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
What changed in the latest 10-Q
Risk Factors
There have been no material changes from our risk factors as previously reported in Part I, Item 1A “Risk Factors” in our 2025 Annual Report.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
Total Othersee in full comparisonexpense,Expense, nettotaledwas$0.3$0.4 million for the three months endedMarchJune31,30, 2026,ascompared to$6.7$0.9 million for the same period of 2025, a decrease in net expense of$6.4$0.5 million. The decrease was primarily driven by a $1.4 million reduction in interest expense, partially offset by the non-recurrence of a $1.0 million gain from the change inthefair value of derivative liabilitiesofrecognized$4.9inmilliontheandprior-yeardecreased interest expense of $1.4 million.period. The change in fair value of derivative liabilities relates to the valuation of warrants previously issued by theCompany; these warrants expired during 2025. The reduction in interest expense reflects the September 2025 repayment of our Prior Debt and the closing of our Term Loan under the JPM Credit Agreement, which carries a lower interest rate, as described in Note 8 to the condensed consolidated financial statements.Company.
“Revenues for the three months ended June 30, 2026 were $9.7 million, compared to $10.1 million for the same period of 2025, a decrease of $0.3 million, or 3%. The decrease was primarily driven by a decline in UltraMIST® system revenue, which decreased to $2.3 million from $3.4 million, or approximately 34%, partially offset by growth in consumables revenue, which increased to $7.3 million from $6.5 million, or approximately 12%. …”see in full comparison
“Revenues for the six months ended June 30, 2026 were $19.4 million, approximately flat compared to $19.4 million for the same period of 2025. Consumables revenue increased to $14.0 million from $12.5 million, or approximately 11%, substantially offset by a decline in UltraMIST® system revenue to $5.2 million from $6.6 million, or approximately 22%. …”see in full comparison
“Cash provided by operating activities for the three months ended March 31, 2026 totaled $0.4 million, an improvement of $1.9 million compared to cash used in operating activities of $1.5 million for the three months ended March 31, 2025. The improvement was primarily driven by a $4.7 million reduction in net loss, from $6.1 million in the prior year period to $1.4 million in the current year period, reflecting continued revenue growth and operational improvements. …”see in full comparison
“Revenues for the three months ended March 31, 2026, were $9.6 million, compared to $9.3 million for the same period of 2025, an increase of $0.3 million or 3%. The increase in net sales was primarily driven by the growth in quantity of UltraMIST® disposables, which increased by 22% in the three months ended March 31, 2026, as compared to the same period of 2025. The quantity of UltraMIST® systems sold decreased by 1% in the three months ended March 31, 2026, as compared to the same period of 2025. …”see in full comparison
“Net loss for the six months ended June 30, 2026 was $2.1 million, compared to a net loss of $5.6 million for the same period in 2025. The reduction in net loss was driven principally by items below operating income, including the non-recurrence of a $3.9 million loss from the change in fair value of derivative liabilities recognized in the prior-year period and a $2.8 million decrease in interest expense following our September 2025 debt refinancing. …”see in full comparison
Full comparison: every changed paragraph (30)
WeRevenue realized modest revenue growth duringfor the three months ended MarchJune 31,30, 2026,2026 astotaled $9.7 million, a decrease of approximately 3% compared to $10.1 million for the same period in 2025. Revenue for the threesix months ended MarchJune 31,30, 2026,2026 totaled $9.6$19.4 million, anapproximately increase of 3%, asflat compared to $9.3$19.4 million for the same period ofin 2025.
Net loss for the three months ended June 30, 2026 was $0.7 million, compared to net income of $0.6 million for the same period in 2025. The change from net income to a net loss was primarily attributable to an operating loss of $0.3 million in the current-year period, compared to operating income of $1.4 million in the prior-year period, reflecting higher operating expenses during the current-year period, including increased headcount costs, stock-based compensation, and research and development that outpaced a modestly lower gross margin on reduced revenue. Total other expense, net improved to $0.4 million from $0.9 million, as significantly lower interest expense more than offset the non-recurrence of a $1.0 million gain from the change in fair value of derivative liabilities recognized in the prior-year period.
Net loss for the six months ended June 30, 2026 was $2.1 million, compared to a net loss of $5.6 million for the same period in 2025. The reduction in net loss was driven principally by items below operating income, including the non-recurrence of a $3.9 million loss from the change in fair value of derivative liabilities recognized in the prior-year period and a $2.8 million decrease in interest expense following our September 2025 debt refinancing. These improvements were partially offset by a decline in operating results: our operating loss for the six months ended June 30, 2026 was $1.4 million, compared to operating income of $2.0 million for the same period in 2025. The decline in operating results for the six months ended June 30, 2026 was primarily driven by higher operating expenses, including increased research and development, selling and marketing, and general and administrative spending, together with a slight decline in gross margin.
Net loss for the three months ended March 31, 2026, was $1.4 million compared to a net loss of $6.1 million for the same period in 2025. The decrease in our net loss for the three months ended March 31, 2026, was primarily attributable to the $4.9 million non-cash loss on the change in fair value of derivative liabilities recognized in the prior year period that did not recur during the three months ended March 31, 2026. For the three months ended March 31, 2026, our operating loss totaled $1.1 million, which is a change of $1.7 million compared to operating income of $0.6 million for the same period of 2025.
As presented in the U.S. GAAP to Non-GAAP Reconciliations section below, our non-GAAP financial measure excludes the impact of certain charges that contribute to our net loss.(loss) income.
Revenues for the three months ended June 30, 2026 were $9.7 million, compared to $10.1 million for the same period of 2025, a decrease of $0.3 million, or 3%. The decrease was primarily driven by a decline in UltraMIST® system revenue, which decreased to $2.3 million from $3.4 million, or approximately 34%, partially offset by growth in consumables revenue, which increased to $7.3 million from $6.5 million, or approximately 12%. The decrease in UltraMIST® system revenue for the three months ended June 30, 2026 compared to the same period in 2025, was primarily driven by a 29% decline in unit volume, reflecting weaker capital sales due to financial pressures in the industry as well as increased availability of used UltraMIST® systems in the market. UltraMIST® system revenue was also impacted by a 9% decrease in average selling price, primarily due to a higher reseller mix. The increase in consumables revenue for the three months ended June 30, 2026 compared to the same period in 2025, was primarily driven by a 27% increase in unit volume, reflecting strong consumable utilization across our active installed base. This consumable growth was partially offset by a 11% decrease in average selling price due to a higher mix of reseller sales.
Revenues for the six months ended June 30, 2026 were $19.4 million, approximately flat compared to $19.4 million for the same period of 2025. Consumables revenue increased to $14.0 million from $12.5 million, or approximately 11%, substantially offset by a decline in UltraMIST® system revenue to $5.2 million from $6.6 million, or approximately 22%. The decrease in UltraMIST® system revenue for the six months ended June 30, 2026 compared to the same period in 2025, was primarily driven by a 16% decline in unit volume, reflecting weaker capital sales due to financial pressures in the industry as well as increased availability of used UltraMIST® systems in the market. UltraMIST® system revenue was also impacted by an 8% decrease in average selling price, primarily due to a higher reseller mix. The increase in consumables revenue for the six months ended June 30, 2026, compared to the same period in 2025, was primarily driven by a 24% increase in unit volume, reflecting strong consumable utilization across our active installed base. This consumable growth was partially offset by an 8% decrease in average selling price due to a higher mix of reseller sales.
Revenues for the three months ended March 31, 2026, were $9.6 million, compared to $9.3 million for the same period of 2025, an increase of $0.3 million or 3%. The increase in net sales was primarily driven by the growth in quantity of UltraMIST® disposables, which increased by 22% in the three months ended March 31, 2026, as compared to the same period of 2025. The quantity of UltraMIST® systems sold decreased by 1% in the three months ended March 31, 2026, as compared to the same period of 2025. Pricing of the UltraMIST® system and disposables declined in the three months ended March 31, 2026, as compared to the same period of 2025; the average selling price of disposables decreased 6% in the three months ended March 31, 2026, and the average selling price of systems decreased 11% in the three months ended March 31, 2026. Revenue from UltraMIST® totaled 100% of total revenue in the three months ended March 31, 2026, and 99% in the same period of 2025.
Cost of revenues for the three months ended MarchJune 31,30, 2026,2026 was $2.2$2.3 million, compared to $2.0$2.2 million for the same period of 2025. Gross profitmargin as a percentage of revenues was 77%76% for the three months ended MarchJune 31,30, 2026, compared to 79%78% for the same period in 2025. ThisThe decreasedecline in gross margin percentage was largelyprimarily driven by a decreaseshift in pricingrevenue onmix ourtoward UltraMIST®consumables systemssales and applicatorsaway from higher-margin system sales, lower average sales prices due to a higher reseller mix.mix, and an increase in personnel costs within cost of revenues for the three months ended June 30, 2026, compared to the same period in 2025.
Cost of revenues for the six months ended June 30, 2026 was $4.5 million, compared to $4.2 million for the same period of 2025. Gross margin as a percentage of revenues was 77% for the six months ended June 30, 2026, compared to 79% for the same period in 2025. The decline in gross margin percentage was primarily driven by a shift in revenue mix toward consumables sales and away from higher-margin system sales and lower average sales prices due to a higher reseller mix, combined with increased personnel costs within cost of revenues.
General and administrative expenses for the three months ended MarchJune 31,30, 2026,2026 were $5.3$4.9 million asmillion, compared to $4.8$4.4 million for the same period of 2025, an increase of $0.4$0.5 million, or 8%.12%. The increase in the three months ended March 31, 2026, as compared to the same period of 2025, was primarily due to anhigher increasepersonnel incosts payrollof $0.5 million (including stock-based compensation), higher legal and relatedprofessional expensesfees of $0.4 million, software expenses of $0.2$0.6 million, and auditincreased andbad taxdebt feesexpense of $0.2 million, partially offset by a decrease$0.9 million reduction in Nasdaq listing costs of $0.3 millionstate and regulatorylocal costssales oftax $0.1 million.accruals.
General and administrative expenses for the six months ended June 30, 2026 were $10.2 million, compared to $9.2 million for the same period of 2025, an increase of $0.9 million, or 10%. The increase was primarily due to higher personnel costs of $1.0 million (including stock-based compensation), higher legal and professional fees of $0.7 million, increased bad debt expense of $0.2 million, and increased software costs of $0.2 million, partially offset by a $0.9 million reduction in state and local sales tax accruals and lower public company costs of $0.3 million from initial Nasdaq listing fees in the six months ended June 30, 2025 that did not recur.
Selling and marketing expenses for the three months ended MarchJune 31,30, 2026,2026 were $2.4$1.9 million asmillion, compared to $1.5$1.7 million for the same period of 2025, an increase of $0.9$0.2 million, or 57%.15%. The year-over-year increase in sales and marketing expenses in the three months ended March 31, 2026, was largelyprimarily drivendue byto increasedhigher consulting expensescosts of $0.5$0.2 million and payrollincreased andtravel related expensescosts of $0.4$0.1 million.
Selling and marketing expenses for the six months ended June 30, 2026 were $4.3 million, compared to $3.2 million for the same period of 2025, an increase of $1.1 million, or 35%. The increase was primarily due to higher consulting costs of $0.6 million, increased personnel costs of $0.5 million (primarily higher salary expense and stock-based compensation), and increased travel costs of $0.2 million, partially offset by lower sales commissions of $0.3 million.
Research and development expenses for the three months ended MarchJune 31,30, 2026,2026 were $0.7$0.6 million asmillion, compared to $0.2 million for the same period of 2025, an increase of $0.5$0.4 million. The year-over-year increase in research and development expenses in the three months ended March 31, 2026, was largelyprimarily drivendue byto consultinghigher expensespersonnel costs of $0.2$0.3 million, non-cashincluding charges forincreased stock-based compensation totalingof $0.1 million, and softwarehigher andconsulting patents expensescosts of $0.1 million.
Research and development expenses for the six months ended June 30, 2026 were $1.3 million, compared to $0.4 million for the same period of 2025, an increase of $0.9 million. The increase was primarily due to higher personnel costs of $0.4 million, including increased stock-based compensation of $0.2 million, higher consulting costs of $0.4 million, and increased development project and software costs of $0.1 million.
Other Expense,(Expense) Income, net
Other expense,(expense) income, net consists of the following:
Total Other expense,Expense, net totaledwas $0.3$0.4 million for the three months ended MarchJune 31,30, 2026, as compared to $6.7$0.9 million for the same period of 2025, a decrease in net expense of $6.4$0.5 million. The decrease was primarily driven by a $1.4 million reduction in interest expense, partially offset by the non-recurrence of a $1.0 million gain from the change in the fair value of derivative liabilities ofrecognized $4.9in millionthe andprior-year decreased interest expense of $1.4 million.period. The change in fair value of derivative liabilities relates to the valuation of warrants previously issued by the Company; these warrants expired during 2025. The reduction in interest expense reflects the September 2025 repayment of our Prior Debt and the closing of our Term Loan under the JPM Credit Agreement, which carries a lower interest rate, as described in Note 8 to the condensed consolidated financial statements.Company.
Total Other Expense, net was $0.7 million for the six months ended June 30, 2026, compared to $7.6 million for the same period of 2025, a decrease in net expense of $6.9 million. The decrease was primarily driven by the non-recurrence of a $3.9 million loss from the change in fair value of derivative liabilities recognized in the prior-year period, and a $2.8 million reduction in interest expense, reflecting the September 2025 refinancing of our senior secured debt. The change in fair value of derivative liabilities relates to the valuation of warrants previously issued by the Company.
From inception through the year ended December 31, 2024, we incurred losses from operations each year, before achieving net income for the year ended December 31, 2025. As of MarchJune 31,30, 2026, we had an accumulated deficit of $244.1$244.8 million.
As of MarchJune 31,30, 2026, we had cash and cash equivalents of $10.8$9.4 million, $20.1$18.7 million outstanding under our Term Loan, and $0.7 million drawn under our Revolver. We were in compliance with all financial and other covenants under the JPM Credit Agreement as of MarchJune 31,30, 2026.
Cash provided by operating activities for the six months ended June 30, 2026 totaled $0.8 million. This primarily reflected non-cash charges, including $3.1 million of stock-based compensation expense, $0.6 million of depreciation and amortization, $0.4 million of provision for credit losses, and $0.1 million of amortization of debt issuance costs and debt discounts, partially offset by a net loss of $2.1 million and a $1.4 million use of cash from changes in operating assets and liabilities. The change in operating assets and liabilities was driven primarily by increases in inventory and accounts receivable to support our operations.
Cash used in operating activities for the six months ended June 30, 2025 totaled $0.5 million. This primarily reflected a net loss of $5.6 million, partially offset by non-cash charges of $3.9 million related to the change in fair value of derivative liabilities, $2.1 million of stock-based compensation expense, and $1.1 million related to amortization of debt issuance costs and debt discounts.
Cash provided by operating activities for the three months ended March 31, 2026 totaled $0.4 million, an improvement of $1.9 million compared to cash used in operating activities of $1.5 million for the three months ended March 31, 2025. The improvement was primarily driven by a $4.7 million reduction in net loss, from $6.1 million in the prior year period to $1.4 million in the current year period, reflecting continued revenue growth and operational improvements. Significant non-cash adjustments in the current year period included stock-based compensation of $1.6 million and depreciation and amortization of $0.3 million. The prior year period included a $4.9 million non-cash loss on the change in fair value of derivative liabilities, which did not recur in the current year period as the related warrants expired during 2025. Working capital changes in the current year period reflected a $0.6 million increase in accounts receivable from higher revenue activity, while inventory remained relatively flat compared to a $1.3 million build in the prior year period.
Cash used in investing activities for the six months ended June 30, 2026 totaled $0.6 million, consisting primarily of $0.4 million of purchases of property and equipment, including leasehold improvements at our headquarters, and $0.2 million of investment in capitalized software development.
Cash used in investing activities for the six months ended June 30, 2025 totaled $1.3 million, and consisted entirely of purchases of property and equipment of $1.3 million, of which $0.9 million was related to leasehold improvements at our new headquarters.
Cash used in investing activities for the three months ended March 31, 2026 totaled $0.2 million, consisting of $23 thousand in purchases of property and equipment, $66 thousand in deposits on property and equipment, and $69 thousand in investment in software development. Cash used in investing activities for the three months ended March 31, 2025 totaled $0.2 million, consisting entirely of purchases of property and equipment.
Cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 totaled $1.4$2.8 million, consisting primarily of $1.4$2.9 million in scheduled quarterly principal payments on the Term Loan under the JPM Credit Agreement, partially offset by $19$0.1 thousandmillion in proceeds from stock option exercises. Cash used in financing activities for the three months ended March 31, 2025 totaled $57 thousand, consisting entirely of principal payments on finance leases. The increase in financing cash outflows reflects the transition from our prior non-amortizing Senior Secured Debt to the Term Loan, which requires quarterly principal payments that commenced on December 31, 2025.
Cash provided by financing activities for the six months ended June 30, 2025 totaled $0.1 million, consisting of proceeds from stock option exercises, partially offset by payments on principal of finance leases.
SNWV insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 3 filings (1 insider, 6 trade dates, 122,698 shares, about $2.2M). Net open-market shares: -122,698 (purchases minus sales); net value about -$2.2M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-01 | Opaleye Management Inc. |
Open-market sale | 10,081 | $16.11 | $162.4K |
| 2026-05-01 | Opaleye Management Inc. |
Open-market sale | 500 | $16.11 | $8.1K |
| 2026-04-30 | Opaleye Management Inc. |
Open-market sale | 1,000 | $16.15 | $16.1K |
| 2026-04-30 | Opaleye Management Inc. |
Open-market sale | 24,000 | $16.15 | $387.6K |
| 2026-04-29 | Opaleye Management Inc. |
Open-market sale | 1,000 | $17.25 | $17.2K |
| 2026-04-29 | Opaleye Management Inc. |
Open-market sale | 23,360 | $17.25 | $403.0K |
| 2026-04-28 | Opaleye Management Inc. |
Open-market sale | 43,788 | $18.47 | $808.8K |
| 2026-04-28 | Opaleye Management Inc. |
Open-market sale | 2,500 | $18.47 | $46.2K |
| 2026-04-21 | Opaleye Management Inc. |
Open-market sale | 202 | $20.50 | $4.1K |
| 2026-04-17 | Opaleye Management Inc. |
Open-market sale | 5,000 | $20.46 | $102.3K |
| 2026-04-17 | Opaleye Management Inc. |
Open-market sale | 11,267 | $20.46 | $230.5K |
Well-known investors holding SNWV (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 59,473 | $594.7K | 0.0% | Added 229% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 22,908 | $229.1K | 0.0% | New position |
| Millennium Management (Israel Englander) | 2026-06-30 | 16,925 | $169.2K | 0.0% | Reduced 31% |