2024 Q3 Form 10-Q Financial Statement

#000149315224031254 Filed on August 12, 2024

View on sec.gov

Income Statement

Concept 2024 Q3 2024 Q2
Revenue $21.67M $20.16M
YoY Change 35.24% 27.97%
Cost Of Revenue $1.992M $2.009M
YoY Change 13.74% -8.18%
Gross Profit $19.68M $18.15M
YoY Change 37.87% 33.79%
Gross Profit Margin 90.81% 90.04%
Selling, General & Admin $18.99M $18.96M
YoY Change 36.86% 37.26%
% of Gross Profit 96.51% 104.45%
Research & Development $1.360M $985.7K
YoY Change 37.82% -16.27%
% of Gross Profit 6.91% 5.43%
Depreciation & Amortization $129.6K $133.3K
YoY Change 11.15% 22.87%
% of Gross Profit 0.66% 0.73%
Operating Expenses $21.60M $21.03M
YoY Change 42.31% 36.31%
Operating Profit -$1.924M -$2.885M
YoY Change 112.21% 54.59%
Interest Expense $927.6K $644.3K
YoY Change 392.62%
% of Operating Profit
Other Income/Expense, Net -$959.0K -$644.3K
YoY Change 409.32%
Pretax Income -$2.883M -$3.529M
YoY Change 163.3% 89.11%
Income Tax
% Of Pretax Income
Net Earnings -$2.858M -$3.504M
YoY Change 169.51% 91.71%
Net Earnings / Revenue -13.19% -17.38%
Basic Earnings Per Share -$0.34 -$0.41
Diluted Earnings Per Share -$0.34 -$0.41
COMMON SHARES
Basic Shares Outstanding 8.747M shares 8.625M shares
Diluted Shares Outstanding 8.517M shares 8.469M shares

Balance Sheet

Concept 2024 Q3 2024 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $16.28M $6.150M
YoY Change 160.85% 1.49%
Cash & Equivalents $16.28M $6.150M
Short-Term Investments
Other Short-Term Assets $429.4K $489.2K
YoY Change -30.74% 0.72%
Inventory $3.008M $3.565M
Prepaid Expenses
Receivables $11.11M $10.61M
Other Receivables $1.079M $0.00
Total Short-Term Assets $31.91M $20.81M
YoY Change 64.69% 14.49%
LONG-TERM ASSETS
Property, Plant & Equipment $995.8K $1.116M
YoY Change -24.96% -10.0%
Goodwill $3.602M $3.602M
YoY Change 0.0% 0.0%
Intangibles $42.03M $42.98M
YoY Change -8.62% 42.58%
Long-Term Investments $8.321M $3.084M
YoY Change 170.18% 0.0%
Other Assets
YoY Change
Total Long-Term Assets $56.64M $52.57M
YoY Change 0.96% 31.1%
TOTAL ASSETS
Total Short-Term Assets $31.91M $20.81M
Total Long-Term Assets $56.64M $52.57M
Total Assets $88.55M $73.38M
YoY Change 17.32% 25.92%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.452M $896.0K
YoY Change -27.4% -19.48%
Accrued Expenses $10.98M $9.584M
YoY Change 9.92% 18.79%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $14.34M $11.57M
YoY Change 8.41% 17.05%
LONG-TERM LIABILITIES
Long-Term Debt $30.08M $14.37M
YoY Change 217.99%
Other Long-Term Liabilities $2.006M $2.654M
YoY Change -58.83% -53.06%
Total Long-Term Liabilities $34.75M $20.42M
YoY Change 91.48% 174.67%
TOTAL LIABILITIES
Total Short-Term Liabilities $14.34M $11.57M
Total Long-Term Liabilities $34.75M $20.42M
Total Liabilities $49.09M $31.98M
YoY Change 56.46% 84.71%
SHAREHOLDERS EQUITY
Retained Earnings -$36.25M -$33.39M
YoY Change 30.38% 24.86%
Common Stock $76.03M $75.09M
YoY Change 5.43% 10.61%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $39.78M $41.71M
YoY Change
Total Liabilities & Shareholders Equity $88.55M $73.38M
YoY Change 17.32% 25.92%

Cashflow Statement

Concept 2024 Q3 2024 Q2
OPERATING ACTIVITIES
Net Income -$2.858M -$3.504M
YoY Change 169.51% 91.71%
Depreciation, Depletion And Amortization $129.6K $133.3K
YoY Change 11.15% 22.87%
Cash From Operating Activities $2.050M -$1.412M
YoY Change 93.44% -17.9%
INVESTING ACTIVITIES
Capital Expenditures $9.100K $58.76K
YoY Change -94.65% 354.1%
Acquisitions
YoY Change
Other Investing Activities -$6.348M
YoY Change -36.14%
Cash From Investing Activities -$6.357M -$58.76K
YoY Change -37.12% 354.1%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 14.43M 4.793M
YoY Change 56.37% 846.1%
NET CHANGE
Cash From Operating Activities 2.050M -1.412M
Cash From Investing Activities -6.357M -58.76K
Cash From Financing Activities 14.43M 4.793M
Net Change In Cash 10.13M 3.322M
YoY Change 5526.01% -370.93%
FREE CASH FLOW
Cash From Operating Activities $2.050M -$1.412M
Capital Expenditures $9.100K $58.76K
Free Cash Flow $2.041M -$1.471M
YoY Change 129.37% -15.13%

Facts In Submission

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<p id="xdx_804_eus-gaap--NatureOfOperations_zTvVhibQP7Ak" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>NOTE 1 – <span id="xdx_82B_zgGXy14DXJl9">NATURE OF BUSINESS AND BACKGROUND</span></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sanara MedTech Inc. (together with its wholly owned and majority owned subsidiaries on a consolidated basis, the “Company”) is a medical technology company focused on developing and commercializing transformative technologies to improve clinical outcomes and reduce healthcare expenditures in the surgical, chronic wound and skincare markets. Each of the Company’s products, services and technologies are designed to achieve the Company’s goal of providing better clinical outcomes at a lower overall cost for patients regardless of where they receive care. The Company strives to be one of the most innovative and comprehensive providers of effective surgical, wound and skincare solutions and is continually seeking to expand its offerings for patients requiring treatments across the entire continuum of care in the United States.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">In June 2020, the Company formed a subsidiary, United Wound and Skin Solutions, LLC (formerly known as “WounDerm”), to hold certain investments and operations in wound and skincare virtual consult services. In 2023, WounDerm was renamed and is now doing business as “Tissue Health Plus” (“THP”). THP is continuing its mission to simplify skin health, starting with wound care through a refined business plan. Through THP, the Company plans to offer a first of its kind value-based wound care program to payers and risk-bearing entities such as accountable care organizations and value-based care primary care companies, with Medicare Advantage payers as the initial target market for this program.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As further discussed in Note 11, the Company historically managed its business on the basis of <span id="xdx_90F_eus-gaap--NumberOfOperatingSegments_dc_uInteger_c20240101__20240630_z40AUPkzX0v5" title="Number of operating segment"><span id="xdx_90A_eus-gaap--NumberOfReportableSegments_dc_uInteger_c20240101__20240630_z53KjWgzrQM4" title="Number of reportable segment">one</span></span> operating and reportable segment. During the second quarter of 2024, the Company changed its reportable segments to reflect the manner in which the business is currently managed. Based on the growing importance of the value-based wound care program to the Company’s future outlook and how the Company’s chief operating decision maker, the Chief Executive Officer, reviews operating results and makes decisions about resource allocation, the Company now has <span id="xdx_904_eus-gaap--NumberOfReportableSegments_dc_uInteger_c20240401__20240630_zn7aQzITTyX9" title="Number of reportable segment">two</span> reportable segments: Sanara Surgical and THP.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Sanara Surgical </i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Sanara Surgical segment primarily markets and sells soft tissue repair and bone fusion products for use in the operating room or other sterile environments. Sanara Surgical’s soft tissue repair products include, among other products, the Company’s lead product, CellerateRX Surgical Activated Collagen (“CellerateRX Surgical”), and BIASURGE Advanced Surgical Solution, which is a no-rinse, advanced surgical solution used for wound irrigation. Sanara Surgical’s bone fusion products include, among other products, BiFORM, which is an osteoconductive, bioactive, porous implant that allows for bony ingrowth across the graft site, and ALLOCYTE Plus, which is a human allograft cellular bone matrix containing bone-derived progenitor cells and conformable bone fibers.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sanara Surgical also includes an in-house research and development team (Rochal Technologies) with an extensive pipeline of innovative products under development.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Tissue Health Plus </i></b></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The THP segment is focused on value-based wound care services. Through THP, the Company plans to offer a first of its kind value-based wound care program to payers and risk-bearing entities such as accountable care organizations and value-based care (“VBC”) primary care companies, with Medicare Advantage payers as the initial target market for this program.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">THP’s programs are expected to enable payers to divest wound care spend risk, reduce wound related hospitalizations and improve patient quality of life. THP plans to coordinate delivery of community and home-based wound care for its managed patients. Community-based care spans a variety of settings including physician offices, skilled nursing facilities, assisted living facilities and senior living facilities. THP’s programs are intended to integrate science and evidence-based medicine protocols to standardize wound prevention and treatment.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As a result of the change in reportable segments, certain prior period amounts have been recast to conform to the current period presentation. Throughout this Quarterly Report on Form 10-Q, unless otherwise indicated, amounts and activity reflect reclassifications related to the Company’s change in reportable segments. The change in reportable segments had no impact on the Company’s Consolidated Balance Sheets, Statements of Operations, Cash Flows and Shareholders’ Equity previously reported.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> </b></span></p>
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