SANUWAVE Health Reports Third Quarter 2019 Financial Results

Expects Fourth Quarter Revenue to Exceed One Million Dollars

/EIN News/ -- SUWANEE, Ga., Nov. 15, 2019 (GLOBE NEWSWIRE) -- SANUWAVE Health, Inc. (OTCQB: SNWV) reported financial results for the three and nine months ended September 30, 2019 with the SEC on Thursday, November 14, 2019. The Company will also host a conference call today, November 15, 2019, at 9:00 a.m. Eastern Time. 

Highlights from the third quarter and last few weeks:

• Expect Q4 revenue to exceed $1million, due to the Brazil deal, Strong International orders, and domestic procedural revenue commencing.
• Placed 58 dermaPACE^® Systems in the United States in total by the end of the third quarter and have achieved 70 placed by the end of October. On track to reach 85 by end of November and 110 by year end.  We plan to place at least 300 in 2020.
• Presented abstracts, symposium, and posters at four conferences in third quarter; DFCon, SAWC, AAWC Sacramento and Wounds Canada.  Our global partners also participated in three conferences.
• Over 200 patients treated and over 1,500 treatments performed.
• Over 200 clinicians certified to use and treat with dermaPACE System.
• Successful completion of Medical Device Single Audit Program (MDSAP) and Korean Ministry of Food and Drug Safety (MFDS).
• Attendance at Global Diabetic Foot Course (GDFC) in Muscat, Oman with our partners in the region, Taiba Healthcare and MenaCare.
• Signing of a term sheet for a Brazilian joint venture for the dermaPACE System with IDIC Group of São Paulo, Brazil.  Fees for partnership are $600,000 with cash payments already occurring.
• Signing of a distribution partnership agreement with Ametus Group for the commercialization of the dermaPACE System.

“SANUWAVE’s focus during 2019 remains placing devices with qualified clinicians in fifteen target states.  We have added some significant talent in 2019 with new employees joining us from very well established wound companies and medical backgrounds.  The buzz around our device and product is growing through our expanded presence at tradeshows, addition of new hires, published articles, increased social media footprint, but most importantly through word of mouth from professionals to each other about how great and successful the device is in treating DFU’s.  Third quarter was one of our busier quarters on record for activity and the team performed extremely well.  We also began to refine our processes from learnings in the field.  The refinement in implementation and support and sales cycles will help improve our efficiency and customer interactions as we move forward.  Through these process improvements we are comfortable that we will achieve our placement goals for 2019.  Added to this comfort is the recently announced agreement with Ametus Group to help support and accelerate our growth in 2019, 2020 and beyond.  The playbook we are following is the same playbook used by many successful medical device companies.  The fourth quarter will begin the revenue trends from all the hard work as we begin recognizing revenue from these placements.  We are confident we will exceed one million dollars in revenue in the fourth quarter driven by Brazil, other international partners and dermaPACE procedural revenue.  We are still working with our auditing firm to determine how much of the initial procedural revenue will be recognized in Q4, and we will discuss this more on the year end call,” stated Kevin Richardson, CEO.

SANUWAVE President, Shri Parikh added, “The 300 qualified customer leads from the past four wound care conferences and ongoing payments of reimbursement claims activity continue to validate the cost efficiency of SANUWAVE’s dermaPACE technology on the treatment of DFUs and the cost avoidance of amputation. Commercializing this only FDA cleared shockwave technology, with our new and growing sales and clinical professionals experienced in wound care together with clinicians that are deeply committed to driving positive change in today’s healthcare ecosystem is highly rewarding.”

Goals for 2019 and update on progress

• 110 dermaPACE system placements and 300 certified users
  • 58 at end of Q3, 85 by end of November, and 110 by year end
  • 200 certified users on track for over 300 by year end
• Finish with at least 10 million covered lives for insurance reimbursement
• Launch 2-3 domestic clinical studies.  On track with 2 perfusion studies and dosage study under way
• Add 3-4 new countries.  On track to exceed this goal.
• Add additional advisors to our scientific board.  On track for additions in second half
• Add other key senior management positions.  Continuous process with success to date.

This year sets the stage for SANUWAVE to shift from a clinical research company to a rapidly growing commercialization company.  The process involves placing devices, training clinicians, gaining reimbursement, and supporting the infrastructure with more clinical research, published articles, and case studies.  The method will allow SANUWAVE to achieve the goal of delivering a dermaPACE System anywhere and everywhere a DFU is treated.  This allows SANUWAVE to accomplish the vision of providing a positive impact on life and the environment, one shock at a time. 

We are well on our way of achieving our stated goals for 2019 which will allow for rapid revenue growth in 2020 and beyond.  Our stated long term goal is to reach 2,000 placed devices and $100 million in Revenue in three to four years.  To accomplish this long term goal, we establish yearly goals and objectives by which investors can measure managements performance.  2019 is on track to meet or exceed our objectives for the year.  SANUWAVE will release their goals for 2020 in early 2020, but plan to have at least 300 devices placed during 2020 as part of those goals.

Third Quarter Financial Results

Revenues for the three months ended September 30, 2019 were $197,640, compared to $595,789 for the same period in 2018, a decrease of $398,149, or 67%.  Revenue resulted primarily from sales in Europe and Asia/Pacific of our orthoPACE devices and related applicators.  The decrease in revenue for 2019 was primarily due to a return of sales of devices and applicators as a result of the termination of distribution deal with Johnfk Medical Inc. (“FKS”), lower sales of refurbished applicators and lower upfront international distribution fees, as compared to the prior year.  This is partially offset by device sales in Asia/Pacific.  Although procedures occurred in the third quarter, we did not begin to bill and receive payments from vendors until the fourth quarter.

Operating expenses for the three months ended September 30, 2019 were $2,460,372, compared to $3,082,551 for the same period in 2018, a decrease of $622,179, or 20%.  Research and development expenses decreased by $322,249.  The decrease was due to a reclassification of employees and related costs from research and development to general and administrative in 2019 and lower stock based compensation expense as compared to the prior year.  This is partially offset by an increase in contracting for temporary services and increased study expenses related to our dosage study in Poland.  Selling and marketing expenses increased by $124,818.  The increase was due to an increase in hiring of trainers and salespeople, increased travel expenses for placement and training related to the commercialization of dermaPACE and increased participation in domestic tradeshows.  General and administrative expenses decreased by $441,377. The decrease was due to a decrease in stock based compensation expense related to options issued in 2018, lease expense related to pay-off of lease agreement for devices in 2018 and lower outside consultant costs.  This is partially offset by an increase in salary, bonus and benefits related to new hires in 2019.

Net loss for the three months ended September 30, 2019 was $2,748,018, or ($0.01) per basic and diluted share, compared to a net loss of $825,142, or ($0.01) per basic and diluted share, for the same period in 2018, an increase in the net loss of $1,922,876, or 233%. 

Cash and cash equivalents increased by $38,107 for the nine months ended September 30, 2019 and decreased by $657,873 for the nine months ended September 30, 2018.  For the nine months ended September 30, 2019 and 2018, net cash used by operating activities was $4,684,611 and $2,271,566, respectively, primarily consisting of compensation costs, dermaPACE commercialization activities and general corporate operations. The increase of $2,413,045 in the use of cash for operating activities for the nine months ended September 30, 2019, as compared to the same period for 2018, was primarily due to the increased accrued operating and payroll related expenses and increased inventory and prepaid expenses in 2019.  Net cash used by investing activities for the nine months ended September 30, 2019 and 2018, consisted of purchase of property and equipment of $28,990 and $32,171, respectively.  Net cash provided by financing activities for the nine months ended September 30, 2019 was $4,738,556, which consisted of $1,378,142 from the exercise of warrants, $1,215,000 from the issuance of short term notes payable, $90,000 from increase in related party line of credit and $2,055,414 from advances from related parties.  Net cash provided by financing activities for the nine months ended September 30, 2018 was $1,663,063, which consisted of $144,000 net from advances from related parties, $38,528 from exercise of warrants, $1,159,785 from the issuance of convertible promissory notes, $184,750 from issuance of short term notes payable and $136,000 net from increase in line of credit, related party.

Conference Call 

The Company will also host a conference call on Friday, November 15, 2019, beginning at 9AM Eastern Time to discuss the third quarter financial results, provide a business update and answer questions.

Shareholders and other interested parties can participate in the conference call by dialing 844-602-0380 (U.S.) or 862-298-0970 (international) or via webcast at https://www.investornetwork.com/event/presentation/56798. 

A replay of the conference call will be available beginning two hours after its completion through November 29, 2019, by dialing 877-481-4010 (U.S.) or 919-882-2331 and entering PIN #56798 and a replay of the webcast will be available at https://www.investornetwork.com/event/presentation/56798 until February 15, 2020.

About SANUWAVE Health, Inc.

SANUWAVE Health, Inc. (OTCQB:SNWV) (www.SANUWAVE.com) is a shockwave technology company initially focused on the development and commercialization of patented noninvasive, biological response activating devices for the repair and regeneration of skin, musculoskeletal tissue and vascular structures. SANUWAVE’s portfolio of regenerative medicine products and product candidates activate biologic signaling and angiogenic responses, producing new vascularization and microcirculatory improvement, which helps restore the body’s normal healing processes and regeneration. SANUWAVE applies its patented PACE^® technology in wound healing, orthopedic/spine, plastic/cosmetic and cardiac conditions. Its lead product candidate for the global wound care market, dermaPACE^®, is US FDA cleared for the treatment of Diabetic Foot Ulcers.  The device is also CE Marked throughout Europe and has device license approval for the treatment of the skin and subcutaneous soft tissue in Canada, South Korea, Australia and New Zealand. SANUWAVE researches, designs, manufactures, markets and services its products worldwide, and believes it has demonstrated that its technology is safe and effective in stimulating healing in chronic conditions of the foot (plantar fasciitis) and the elbow (lateral epicondylitis) through its U.S. Class III PMA approved OssaTron^® device, as well as stimulating bone and chronic tendonitis regeneration in the musculoskeletal environment through the utilization of its OssaTron, Evotron^® and orthoPACE^® devices in Europe, Asia and Asia/Pacific. In addition, there are license/partnership opportunities for SANUWAVE’s shockwave technology for non-medical uses, including energy, water, food and industrial markets.

Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. Forward-looking statements include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control. Actual results may differ materially from those projected in the forward-looking statements. Among the key risks, assumptions and factors that may affect operating results, performance and financial condition are risks associated with the regulatory approval and marketing of the Company’s product candidates and products, unproven pre-clinical and clinical development activities, regulatory oversight, the Company’s ability to manage its capital resource issues, competition, and the other factors discussed in detail in the Company’s periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement.

For additional information about the Company, visit www.sanuwave.com.

Contact:

Millennium Park Capital LLC
Christopher Wynne
312-724-7845
cwynne@mparkcm.com

SANUWAVE Health, Inc.
Kevin Richardson II
CEO and Chairman of the Board
978-922-2447
investorrelations@sanuwave.com

 

(FINANCIAL TABLES FOLLOW)

	SANUWAVE HEALTH, INC. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED BALANCE SHEETS
					September 30,				December 31,
						2019				2018
			ASSETS		(Unaudited)
CURRENT ASSETS
	Cash and cash equivalents				$	402,656			$	364,549
	Accounts receivable, net of allowance for doubtful accounts					56,308				234,774
	Due from related parties					-				1,228
	Inventory					290,936				357,820
	Prepaid expenses and other current assets					208,118				125,111
	TOTAL CURRENT ASSETS					958,018				1,083,482
PROPERTY AND EQUIPMENT, net						79,300				77,755
RIGHT OF USE ASSETS						576,927				-
OTHER ASSETS						30,058				16,491
	TOTAL ASSETS				$	1,644,303			$	1,177,728
			LIABILITIES
CURRENT LIABILITIES
	Accounts payable				$	1,697,051			$	1,592,643
	Accrued expenses					816,866				689,280
	Accrued employee compensation					1,181,813				340,413
	Contract liabilities					61,429				131,797
	Lease liability - right of use					227,981				-
	Advances from related parties					1,094,765				-
	Line of credit, related parties					338,279				883,224
	Accrued interest, related parties					1,679,975				1,171,782
	Short term notes payable					1,061,408				1,883,163
	Convertible promissory notes, net					1,012,458				2,652,377
	Notes payable, related parties, net					5,372,743				5,372,743
	Warrant liability					-				1,769,669
	TOTAL CURRENT LIABILITIES					14,544,768				16,487,091
NON-CURRENT LIABILITIES
	Contract liabilities					61,179				46,736
	Lease liability - right of use					356,530				-
	TOTAL NON-CURRENT LIABILITIES					417,709				46,736
	TOTAL LIABILITIES					14,962,477				16,533,827
COMMITMENTS AND CONTINGENCIES
			STOCKHOLDERS' DEFICIT
PREFERRED STOCK, par value $0.001, 5,000,000
	shares authorized; no shares issued and outstanding					-				-
PREFERRED STOCK, SERIES A CONVERTIBLE, par value $0.001,
	6,175 designated; 6,175 shares issued and 0 shares outstanding
	in 2019 and 2018					-				-
PREFERRED STOCK, SERIES B CONVERTIBLE, par value $0.001,
	293 designated; 293 shares issued and 0 shares outstanding
	in 2019 and 2018					-				-
COMMON STOCK, par value $0.001, 350,000,000 shares authorized;
	245,768,619 and 155,665,138 issued and outstanding in 2019 and
	2018, respectively					245,768				155,665
ADDITIONAL PAID-IN CAPITAL						109,488,657				101,153,882
ACCUMULATED DEFICIT						(123,002,883	)			(116,602,778	)
ACCUMULATED OTHER COMPREHENSIVE LOSS						(49,716	)			(62,868	)
	TOTAL STOCKHOLDERS' DEFICIT					(13,318,174	)			(15,356,099	)
	TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT				$	1,644,303			$	1,177,728

	SANUWAVE HEALTH, INC. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
	(UNAUDITED)
				Three Months Ended				Three Months Ended				Nine Months Ended				Nine Months Ended
				September 30,				September 30,				September 30,				September 30,
					2019				2018				2019				2018
REVENUES
	Product			$	158,855			$	240,759			$	444,087			$	703,054
	License fees				16,250				335,697				189,307				623,570
	Other revenue				22,535				19,333				59,185				66,647
		TOTAL REVENUES			197,640				595,789				692,579				1,393,271
COST OF REVENUES
	Product				91,179				151,624				334,749				413,447
	Other				31,744				31,970				67,908				102,256
		TOTAL COST OF REVENUES			122,923				183,594				402,657				515,703
GROSS MARGIN					74,717				412,195				289,922				877,568
OPERATING EXPENSES
	Research and development				299,903				622,152				867,825				1,339,933
	Selling and marketing				335,472				210,654				901,031				268,051
	General and administrative				1,802,659				2,244,036				4,746,519				5,163,044
	Depreciation				22,338				5,709				40,150				16,733
	Loss on sale of property and equipment				-				-				-				3,170
		TOTAL OPERATING EXPENSES			2,460,372				3,082,551				6,555,525				6,790,931
		OPERATING LOSS			(2,385,655	)			(2,670,356	)			(6,265,603	)			(5,913,363	)
OTHER INCOME (EXPENSE)
	Gain (loss) on warrant valuation adjustment				-				2,241,008				227,669				428,846
	Interest expense				(182,001	)			(195,613	)			(1,120,440	)			(3,486,878	)
	Interest expense, related party				(175,522	)			(199,991	)			(508,193	)			(583,448	)
	Gain (loss) on foreign currency exchange				(4,840	)			(190	)			(13,199	)			(15,213	)
		TOTAL OTHER INCOME (EXPENSE), NET			(362,363	)			1,845,214				(1,414,163	)			(3,656,693	)
		NET LOSS			(2,748,018	)			(825,142	)			(7,679,766	)			(9,570,056	)
OTHER COMPREHENSIVE INCOME (LOSS)
	Foreign currency translation adjustments				(14,061	)			(6,230	)			13,152				(17,199	)
		TOTAL COMPREHENSIVE LOSS		$	(2,762,079	)		$	(831,372	)		$	(7,666,614	)		$	(9,587,255	)
LOSS PER SHARE:
	Net loss - basic and diluted			$	(0.01	)		$	(0.01	)		$	(0.04	)		$	(0.06	)
	Weighted average shares outstanding - basic and diluted				211,423,362				151,852,757				181,088,995				147,550,321

	SANUWAVE HEALTH, INC. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
	(UNAUDITED)
			Preferred Stock					Common Stock
			Number of					Number of														Accumulated
			Shares					Shares														Other
			Issued and					Issued and					Additional Paid-					Accumulated				Comprehensive
			Outstanding		Par Value			Outstanding		Par Value			in Capital					Deficit				Loss				Total
Balances as of January 1, 2018			-		$	-		139,300,122		$	139,300		$	94,995,040				$	(104,971,384	)		$	(43,783	)		$	(9,880,827	)
	Net loss		-			-		-			-			-					(5,856,655	)			-				(5,856,655	)
	Cashless warrant exercises		-			-		1,023,130			1,023			117,815					-				-				118,838
	Proceeds from warrant exercise		-			-		175,666			176			13,352					-				-				13,528
	Shares issued for services		-			-		551,632			552			78,448					-				-				79,000
	Warrants issued with convertible promissory notes		-			-		-			-			808,458					-				-				808,458
	Beneficial conversion feature on convertible promissory notes		-			-		-			-			709,827					-				-				709,827
	Warrants issued with promissory note		-			-		-			-			36,104					-				-				36,104
	Beneficial conversion feature on promissory notes		-			-		-			-			35,396					-				-				35,396
	Foreign currency translation adjustment		-			-		-			-			-					-				935				935
Balances as of March 31, 2018			-		$	-		141,050,550		$	141,051		$	96,794,440				$	(110,828,039	)		$	(42,848	)		$	(13,935,396	)
	Net loss		-			-		-			-			-					(2,888,259	)			-				(2,888,259	)
	Warrant exercises		-			-		227,273			227			24,773					-				-				25,000
	Cashless warrant exercises		-			-		4,606,675			4,607			(4,607	)				-				-				-
	Shares issued for services		-			-		71,532			71			27,429					-				-				27,500
	Warrants issued for services		-			-		-			-			737,457					-				-				737,457
	Conversion of promissory notes		-			-		5,896,727			5,897			642,743					-				-				648,640
	Stock-based compensation		-			-		-			-			836,796					-				-				836,796
	Foreign currency translation adjustment		-			-		-			-			-					-				(11,904	)			(11,904	)
Balances as of June 30, 2018			-		$	-		151,852,757		$	151,853		$	99,059,031				$	(113,716,298	)		$	(54,752	)		$	(14,560,166	)
	Net loss		-			-		-			-			-					(2,966,150	)			-				(2,966,150	)
	Cashless warrant exercises		-			-		653,859			654			(654	)				-				-				-
	Conversion of promissory notes		-			-		2,600,511			2,600			283,456					-				-				286,056
	Stock-based compensation		-			-		-			-			1,637,700					-				-				1,637,700
	Foreign currency translation adjustment		-			-		-			-			-					-				(6,230	)			(6,230	)
Balances as of September 30, 2018			-		$	-		155,107,127		$	155,107		$	100,979,533				$	(116,682,448	)		$	(60,982	)		$	(15,608,790	)
Balances as of January 1, 2019			-			-		155,665,138			155,665			101,153,882					(116,602,778	)			(62,868	)			(15,356,099	)
	Net loss		-			-		-			-			-					(2,197,317	)			-				(2,197,317	)
	Cashless warrant exercises		-			-		704,108			704			(704	)				-				-				-
	Proceeds from warrant exercise		-			-		620,000			620			52,580					-				-				53,200
	Other warrant exercise		-			-		3,333,334			3,334			263,333					-				-				266,667
	Reclassification of warrant liability to equity		-			-		-			-			262,339					1,279,661				-				1,542,000
	Foreign currency translation adjustment		-			-		-			-			-					-				(2,398	)			(2,398	)
Balances as of March 31, 2019			-		$	-		160,322,580		$	160,323		$	101,731,430				$	(117,520,434	)		$	(65,266	)		$	(15,693,947	)
	Net loss		-			-		-			-			-					(2,734,431	)			-				(2,734,431	)
	Cashless warrant exercises		-			-		2,997,375			2,997			13,003					-				-				16,000
	Proceeds from warrant exercise		-			-		17,051,769			17,052			1,333,005					-				-				1,350,057
	Other warrant exercise		-			-		5,804,167			5,804			451,697					-				-				457,501
	Conversion of line of credit, related parties to equity		-			-		2,475,000			2,475			177,525					-				-				180,000
	Stock-based compensation		-			-		-			-			31,758					-				-				31,758
	Warrants issued for consulting services		-			-		-			-			36,067					-				-				36,067
	Foreign currency translation adjustment		-			-		-			-			-					-				1,489				1,489
Balances as of June 30, 2019			-		$	-		188,650,891		$	188,651		$	103,774,485				$	(120,254,865	)		$	(63,777	)		$	(16,355,506	)
	Net loss		-			-		-			-			-					(2,748,018	)			-				(2,748,018	)
	Cashless warrant exercises		-			-		1,710,674			1,711			18,289					-				-				20,000
	Proceeds from warrant exercise		-			-		10,506,593			10,506			961,528					-				-				972,034
	Other warrant exercise		-			-		40,355,006			40,355			4,014,500					-				-				4,054,855
	Conversion of line of credit, related parties to equity		-			-		4,545,455			4,545			495,455					-				-				500,000
	Stock-based compensation		-			-		-			-			224,400					-				-				224,400
	Foreign currency translation adjustment		-			-		-			-			-					-				14,061				14,061
Balances as of September 30, 2019			-		$	-		245,768,619		$	245,768		$	109,488,657				$	(123,002,883	)		$	(49,716	)		$	(13,318,174	)

	SANUWAVE HEALTH, INC. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	(UNAUDITED)
				Nine Months Ended				Nine Months Ended
				September 30,				September 30,
					2019				2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss				$	(7,679,766	)		$	(9,570,056	)
Adjustments to reconcile loss from operations
to net cash used by operating activities
	Depreciation				40,150				16,733
	Change in allowance for doubtful accounts				(18,835	)			(49,847	)
	Stock-based compensation				256,158				2,474,496
	Warrants issued for consulting services				36,067				737,457
	Waived proceeds from warrant exercise				36,000				-
	Stock issued for consulting services				-				106,500
	Loss (gain) on warrant valuation adjustment				(227,669	)			(428,846	)
	Accrued interest				1,139,904				280,975
	Interest payable, related parties				508,193				319,237
	Amortization of debt issuance costs				-				2,767,361
	Amortization of debt discount				-				112,984
	Loss on sale of fixed assets				-				3,170
	Amortization of operating lease				(14,634	)			-
	Changes in operating assets and liabilities
	Accounts receivable - trade				197,301				49,661
	Inventory				66,884				(9,441	)
	Prepaid expenses				(83,007	)			(76,871	)
	Due from related parties				1,228				-
	Other assets				(13,567	)			(3,901	)
	Accounts payable				118,908				184,442
	Accrued expenses				127,586				72,483
	Accrued employee compensation				863,400				362,823
	Operating leases				9,513				-
	Contract liabilties				(48,425	)			379,074
	NET CASH USED BY OPERATING ACTIVITIES				(4,684,611	)			(2,271,566	)
CASH FLOWS FROM INVESTING ACTIVITIES
	Purchases of property and equipment				(28,990	)			(32,171	)
	NET CASH USED BY INVESTING ACTIVITIES				(28,990	)			(32,171	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Advances from related parties				2,055,414				156,000
	Proceeds from warrant exercise				1,378,142				38,528
	Proceeds from short term note				1,215,000				184,750
	Proceeds from line of credit, related party				90,000				280,500
	Proceeds from convertible promissory notes, net				-				1,159,785
	Proceeds from note payable, product				-				96,708
	Payment on line of credit, related party				-				(144,500	)
	Payments on note payable, product				-				(96,708	)
	Payments on advances from related parties				-				(12,000	)
	NET CASH PROVIDED BY FINANCING ACTIVITIES				4,738,556				1,663,063
EFFECT OF EXCHANGE RATES ON CASH					13,152				(17,199	)
	NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				38,107				(657,873	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					364,549				730,184
	CASH AND CASH EQUIVALENTS, END OF PERIOD			$	402,656			$	72,311
NON-CASH INVESTING AND FINANCING ACTIVITIES
	Other warrant exercise			$	924,649			$	-
	Conversion of line of credit, related party to equity			$	680,000			$	-
	Conversion of short term notes payable to equity			$	2,860,769			$	-
	Conversion of convertible promissory notes to equity			$	1,918,254			$	-
	Reclassification of warrant liability to equity			$	1,542,000			$	-
	Advances from related and unrelated parties converted to Convertible promissory note			$	-			$	310,000
	Accounts payable and Accrued employee compensation converted to convertible promissory notes			$	-			$	120,000
	Accounts payable and Accrued employee compensation converted to equity			$	36,500			$	-
	Beneficial conversion feature on convertible debt			$	-			$	745,223
	Warrants issued with debt			$	-			$	844,562