EX-99.1 2 ex99-1.htm EX-99.1

 

Exhibit 99.1

 

 

Sanara MedTech Inc. Reports First Quarter 2025 Financial Results (Unaudited)

 

Q1 Net Revenue Increased 26% Year-Over-Year

 

FORT WORTH, TX, May 14, 2025 (GLOBE NEWSWIRE) - Sanara MedTech Inc. (“Sanara,” the “Company,” “we,” “our” or “us”) (Nasdaq: SMTI), 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, today reported its financial results for the first quarter ended March 31, 2025.

 

First Quarter 2025 Financial Summary

 

  Net revenue increased 26% to $23.4 million, compared to $18.5 million in the first quarter of 2024.
     
  Net loss of $3.5 million, compared to a net loss of $1.8 million in the first quarter of 2024.
     
  Adjusted EBITDA(1) of $0.7 million, compared to $0.3 million in the first quarter of 2024.

 

(1) Adjusted EBITDA is a non-GAAP financial measure. See the discussion and the reconciliations at the end of this release for additional information.

 

First Quarter 2025 Operational Announcements

 

  On January 21, 2025, the Company announced the execution of an exclusive license and distribution agreement with, and minority investment in, Biomimetic Innovations Ltd (“BMI”), a privately-held medical device company headquartered in Shannon, Ireland. Sanara acquired the exclusive U.S. marketing, sales, and distribution rights to BMI’s OsStic® Synthetic Injectable Structural Bio-Adhesive Bone Void Filler, as well as a hardware agnostic adjunctive internal fixation technology (“ARC”).
     
  On January 21, 2025, the Company announced the expansion of its executive leadership team with new appointments, effective January 15, 2025. Elizabeth Taylor was appointed to the position of Chief Financial Officer, succeeding Michael McNeil, who was appointed to serve as Chief Accounting Officer and Chief Administrative Officer.
     
  On March 19, 2025, the Company entered into the First Amendment to Term Loan Agreement with CRG Servicing LLC (“CRG”), which amended Sanara’s existing term loan with CRG (as amended, the “CRG Term Loan Agreement”) to provide for up to two additional borrowings under the term loan, and extended the date by which borrowings are permitted to occur to December 31, 2025. The total available borrowing amount under the facility and the related interest rate and fees were not modified. On March 31, 2025, the Company borrowed an additional $12.25 million under the CRG Term Loan Agreement, which may be used for permitted acquisition opportunities and for general working capital and corporate purposes. Pursuant to the terms of the CRG Term Loan Agreement, the Company may make one additional borrowing of up to $12.25 million on or before December 31, 2025.

 

Management Comments

 

“The commercial team for our Sanara Surgical segment delivered a strong start to 2025, with net revenue growth in the first quarter of 26% year-over-year, which was consistent with our expectations,” stated Ron Nixon, Sanara’s Executive Chairman and CEO. “Our Sanara Surgical segment revenue performance reflects impressive execution of our commercial strategy, marked by progress in developing our network of distributor partners, adding new healthcare facility customers, and increasing our penetration of existing facility customers. We are pleased to complement our Sanara Surgical segment revenue performance with enhanced gross margins, and while net loss for the Sanara Surgical segment increased $0.2 million on a year-over-year basis, we achieved a $1.5 million improvement in Segment Adjusted EBITDA(1). In tandem, we enhanced our new product pipeline with the execution of an exclusive agreement with BMI, expanded our leadership team with key appointments, and continued to develop our value-based wound care program, Tissue Health Plus.”

 

 

 

 

Mr. Nixon continued: “Over the balance of 2025, we remain focused on driving revenue growth and improving profitability in our Sanara Surgical segment. In parallel, our Tissue Health Plus team is preparing to launch our first pilot program with a wound care provider group later in the second quarter, while actively pursuing financial partners to invest in the execution of our THP strategy. We look forward to building on our recent progress in 2025, and addressing the large surgical greenfield opportunity that remains ahead of us, for the benefit of all of our stakeholders.”

 

(1) Segment Adjusted EBITDA is a non-GAAP financial measure. See the discussion and the reconciliations at the end of this release for additional information.

 

First Quarter 2025 Revenue

 

The following table summarizes revenue streams from product sales for the three months ended March 31, 2025 and 2024:

 

  

Three Months Ended

March 31,

 
   2025   2024   $ Change   % Change 
Soft tissue repair products  $20,532,440   $16,082,292   $4,450,148    28%
Bone fusion products   2,901,656    2,454,346    447,310    18%
Total Net Revenue  $23,434,096   $18,536,638   $4,897,458    26%

 

First Quarter 2025 Financial Results

 

Net revenue for the first quarter of 2025 was $23.4 million, compared to $18.5 million for the first quarter of 2024, an increase of $4.9 million, or 26%, year-over-year. The increase in net revenue was driven by an increase of $4.5 million, or 28%, in sales of soft tissue repair products and an increase of $0.4 million, or 18%, in sales of bone fusion products. The increase in sales of soft tissue repair products was driven primarily by increased demand for CellerateRX® Surgical Activated Collagen® (“CellerateRX Surgical”) and, to a lesser extent, BIASURGE® Advanced Surgical Solution (“BIASURGE”) as a result of the Company’s increased penetration of medical facilities that represent existing accounts, expansion into additional medical facilities, and development of its independent distribution network in both new and existing U.S. markets.

 

Gross profit for the first quarter of 2025 was $21.6 million, compared to $16.6 million for the first quarter of 2024, an increase of $5.0 million, or 30%, year-over-year. The increase in gross profit was primarily driven by increased sales of soft tissue repair products. Gross margin was 92% of net revenue for the first quarter of 2025, compared to 90% of net revenue for the first quarter of 2024. The higher gross margin realized in the first quarter of 2025 was due to increased sales of soft tissue repair products and lower manufacturing costs related to CellerateRX Surgical.

 

Operating expenses for the first quarter of 2025 were $23.7 million, compared to $18.2 million for the first quarter of 2024, an increase of $5.5 million, or 30%, year-over-year. The increase in operating expenses was driven primarily by an increase of $5.2 million, or 32%, in selling, general and administrative (“SG&A”) and an increase of $0.2 million, or 18%, in research and development. The increase in SG&A was primarily driven by a $2.4 million increase in direct sales and marketing expenses in the Sanara Surgical segment, $1.7 million of additional SG&A in the Tissue Health Plus segment, and approximately $0.7 million related to the buildout of the Company’s corporate infrastructure.

 

Operating loss for the first quarter of 2025 was $2.1 million, compared to operating loss of $1.5 million for the first quarter of 2024.

 

 

 

 

Other expense for the first quarter of 2025 was $1.4 million, compared to $0.3 million for the first quarter of 2024. Other expense for the first quarter of 2025 primarily included higher interest expense and fees related to the CRG Term Loan Agreement.

 

Net loss for the first quarter of 2025 was $3.5 million compared to a net loss of $1.8 million for the first quarter of 2024. The Company’s Sanara Surgical segment generated a net loss of $0.6 million for the first quarter of 2025, compared to a net loss of $0.4 million for the first quarter of 2024. The Company’s Tissue Health Plus segment generated a net loss of $2.9 million for the first quarter of 2025, compared to a net loss of $1.4 million for the first quarter of 2024.

 

Adjusted EBITDA(1) for the first quarter of 2025 was $0.7 million, compared to $0.3 million for the first quarter of 2024. The Company’s Sanara Surgical segment generated Segment Adjusted EBITDA(1) of $2.7 million for the first quarter of 2025, compared to $1.2 million for the first quarter of 2024. The Company’s Tissue Health Plus segment generated Segment Adjusted EBITDA(1) of ($2.0) million for the first quarter of 2025, compared to ($0.9) million for the first quarter of 2024.

 

As of March 31, 2025, Sanara had $20.7 million of cash, $42.8 million of principal debt obligations outstanding, and $12.25 million of available borrowing capacity, compared to $15.9 million, $30.5 million, and $24.5 million, respectively, as of December 31, 2024.

 

(1) Adjusted EBITDA and Segment Adjusted EBITDA are non-GAAP financial measures. See the discussion and the reconciliations at the end of this release for additional information.

 

Conference Call

 

Sanara will host a conference call on Wednesday, May 14, 2025, at 8:00 a.m. Eastern Time to discuss the results for the quarter ended March 31, 2025, and hold a question and answer session at the end of the call. The toll-free number to call for this teleconference is 888-506-0062 (international callers: 973-528-0011) and the access code is 490762. A telephonic replay of the conference call will be available through Wednesday, May 28, 2025, by dialing 877-481-4010 (international callers: 919-882-2331) and entering the replay passcode: 52308.

 

A live webcast of Sanara’s conference call will be available under the “Events” section of the Company’s Investor Relations website, www.SanaraMedTech.com/investor-relations/. An online replay will be available for approximately one year following the conclusion of the live broadcast.

 

About Sanara MedTech Inc.

 

Sanara MedTech Inc. 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. The Company markets, distributes and develops surgical, wound and skincare products for use by physicians and clinicians in hospitals, clinics and all post-acute care. Sanara’s products are primarily sold in the North American advanced wound care and surgical tissue repair markets. Sanara markets and distributes CellerateRX® Surgical Activated Collagen®, FORTIFY TRG® Tissue Repair Graft and FORTIFY FLOWABLE® Extracellular Matrix as well as a portfolio of advanced biologic products focusing on ACTIGEN™ Verified Inductive Bone Matrix, ALLOCYTE® Plus Advanced Viable Bone Matrix, BiFORM® Bioactive Moldable Matrix, TEXAGEN® Amniotic Membrane Allograft, and BIASURGE® Advanced Surgical Solution to the surgical market. In addition, the following products are sold in the wound care market: BIAKŌS® Antimicrobial Skin and Wound Cleanser, BIAKŌS® Antimicrobial Wound Gel, and BIAKŌS® Antimicrobial Skin and Wound Irrigation Solution. Sanara’s pipeline also contains potentially transformative product candidates for mitigation of opportunistic pathogens and biofilm, wound re-epithelialization and closure, necrotic tissue debridement and cell compatible substrates. The Company believes it has the ability to drive its pipeline from concept to preclinical and clinical development while meeting quality and regulatory requirements. Sanara is constantly seeking long-term strategic partnerships with a focus on products that improve outcomes at a lower overall cost. For more information, please visit SanaraMedTech.com.

 

 

 

 

Information about Forward-Looking Statements

 

The statements in this press release that do not constitute historical facts are “forward-looking statements,” within the meaning of and subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements may be identified by terms such as “aims,” “anticipates,” “believes,” contemplates,” “continue,” “could,” “estimates,” “expect,” “forecast,” “guidance,” “intends,” “may,” “plans,” “possible,” “potential,” “predicts,” “preliminary,” “projects,” “seeks,” “should,” “targets,” “will” or “would,” or the negatives of these terms, variations of these terms or other similar expressions. These forward-looking statements include, among others, statements regarding the timing of the Company’s planned commercial launch of its Tissue Health Plus platform, the Company’s business strategy and mission, the development of new products, the timing of commercialization of the Company’s products, the regulatory approval process and expansion of the Company’s business into value-based skincare, wound care and other services. These items involve risks, contingencies and uncertainties such as uncertainties associated with the development and process for obtaining regulatory approval for new products, the Company’s ability to build out its executive team, the Company’s ability to identify and effectively utilize the net proceeds of the CRG Term Loan Agreement to support the Company’s growth initiatives, the extent of product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, uncertainties associated with the development and process for obtaining regulatory approval for new products, the ability to consummate and integrate acquisitions, and other risks, contingencies and uncertainties detailed in the Company’s SEC filings, which could cause the Company’s actual operating results, performance or business plans or prospects to differ materially from those expressed in, or implied by these statements.

 

All forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence of unanticipated events, except as required by applicable securities laws.

 

Investor Relations Contact:

 

Jack Powell or Mike Piccinino, CFA

ICR Healthcare

[email protected]

 

 

 

 

SANARA MEDTECH INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

   (Unaudited)     
   March 31,
2025
   December 31,
2024
 
Assets          
Current assets          
Cash  $20,687,806   $15,878,295 
Accounts receivable, net   11,861,502    12,408,819 
Accounts receivable – related parties   42,819    40,566 
Inventory, net   3,159,382    2,753,032 
Convertible loan receivable   -    1,101,478 
Prepaid and other assets   1,091,039    1,123,798 
Total current assets   36,842,548    33,305,988 
           
Long-term assets          
Intangible assets, net   42,013,997    41,006,776 
Goodwill   3,601,781    3,601,781 
Investment in equity securities   10,690,283    8,297,223 
Right of use assets – operating leases   1,173,851    1,447,907 
Property and equipment, net   2,056,121    432,317 
Total long-term assets   59,536,033    54,786,004 
           
Total assets  $96,378,581   $88,091,992 
           
Liabilities and shareholders’ equity          
Current liabilities          
Accounts payable  $2,095,600   $1,499,764 
Accounts payable – related parties   41,805    30,913 
Accrued bonuses and commissions   8,212,379    10,778,840 
Accrued royalties and expenses   2,701,561    2,621,867 
Operating lease liabilities – current   229,710    358,687 
Total current liabilities   13,281,055    15,290,071 
           
Long-term liabilities          
Long-term debt   43,402,223    30,689,290 
Earnout liabilities – long-term   771,001    748,001 
Operating lease liabilities – long-term   1,087,947    1,237,051 
Other long-term liabilities   1,168,778    1,215,617 
Total long-term liabilities   46,429,949    33,889,959 
           
Total liabilities   59,711,004    49,180,030 
           
Commitments and contingencies          
           
Shareholders’ equity          
Common Stock: $0.001 par value, 20,000,000 shares authorized; 8,903,630 issued and outstanding as of March 31, 2025 and 8,753,773 issued and outstanding as of December 31, 2024   8,904    8,754 
Additional paid-in capital   77,973,673    77,179,211 
Accumulated deficit   (41,311,569)   (37,784,392)
Total Sanara MedTech shareholders’ equity   36,671,008    39,403,573 
Equity attributable to noncontrolling interest   (3,431)   (491,611)
Total shareholders’ equity   36,667,577    38,911,962 
Total liabilities and shareholders’ equity  $96,378,581   $88,091,992 

 

 

 

 

SANARA MEDTECH INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

  

Three Months Ended

March 31,

 
   2025   2024 
         
Net Revenue  $23,434,096   $18,536,638 
           
Cost of goods sold   1,834,967    1,890,046 
           
Gross profit   21,599,129    16,646,592 
           
Operating expenses          
Selling, general and administrative   21,440,610    16,192,259 
Research and development   1,114,138    946,298 
Depreciation and amortization   1,124,410    1,105,420 
Change in fair value of earnout liabilities   -    (65,678)
Total operating expenses   23,679,158    18,178,299 
           
Operating loss   (2,080,029)   (1,531,707)
           
Other income (expense)          
Interest expense   (1,317,092)   (267,336)
Share of losses from equity method investments   (143,608)   - 
Interest income   3,672    - 
Gain on disposal of property and equipment   9,674    - 
Total other income (expense)   (1,447,354)   (267,336)
           
Net loss   (3,527,383)   (1,799,043)
           
Less: Net loss attributable to noncontrolling interest   (206)   (34,859)
           
Net loss attributable to Sanara MedTech shareholders  $(3,527,177)  $(1,764,184)
           
Net loss per share of common stock, basic and diluted  $(0.41)  $(0.21)
           
Weighted average number of common shares outstanding, basic and diluted   8,570,104    8,419,528 

 

 

 

 

SANARA MEDTECH INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

   Three Months Ended March 31, 
   2025   2024 
         
Cash flows from operating activities:          
Net loss  $(3,527,383)  $(1,799,043)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   1,124,410    1,105,420 
Gain on disposal of property and equipment   (9,674)   - 
Credit loss expense   179,034    65,000 
Inventory obsolescence   199,278    95,235 
Share-based compensation   1,304,904    803,386 
Noncash lease expense   274,055    100,517 
Share of losses from equity method investments   143,608    - 
Back-end fee   176,079    - 
Paid-in-kind interest   411,324    - 
Accretion of finance liabilities   43,630    58,834 
Amortization and write-off of debt issuance costs   59,280    3,083 
Change in fair value of earnout liabilities   -    (65,678)
Changes in operating assets and liabilities:          
Accounts receivable, net   368,284    (735,490)
Accounts receivable – related parties   (2,254)   (14,602)
Inventory, net   (605,628)   393,148 
Prepaid and other assets   32,759    (303,182)
Accounts payable   595,836    (732,266)
Accounts payable – related parties   10,892    9,311 
Accrued royalties and expenses   67,224    300,574 
Accrued bonuses and commissions   (2,566,461)   (783,390)
Operating lease liabilities   (278,081)   (95,227)
Net cash used in operating activities   (1,998,884)   (1,594,370)
Cash flows from investing activities:          
Purchases of property and equipment   (1,722,649)   (65,818)
Proceeds from disposal of property and equipment   60,000    - 
Investment in equity securities   (3,517,206)   - 
Net cash used in investing activities   (5,179,855)   (65,818)
Cash flows from financing activities:          
Loan proceeds, net of debt issuance costs of $183,750 in 2025 and zero in 2024   12,066,250    - 
Net settlement of equity-based awards   -    (580,794)
Cash payment of finance and earnout liabilities   (78,000)   (78,000)
Net cash provided by (used in) financing activities   11,988,250    (658,794)
Net increase (decrease) in cash   4,809,511    (2,318,982)
Cash, beginning of period   15,878,295    5,147,216 
Cash, end of period  $20,687,806   $2,828,234 
           
Cash paid during the period for:          
Interest  $626,779   $205,591 
Supplemental noncash investing and financing activities:          
Nonmonetary exchange to acquire intangible assets   2,084,278    - 
Conversion of note receivable into equity method investment   1,101,478    - 

 

 

 

 

SANARA MEDTECH INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 

To supplement the Company’s financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present certain non-GAAP financial measures in this press release and on the related teleconference call, including Adjusted EBITDA and Segment Adjusted EBITDA. The Company’s management uses these non-GAAP financial measures, both internally and externally, to assess and communicate the financial performance of the Company. The Company defines Adjusted EBITDA as net income (loss) excluding interest expense/income, provision/benefit for income taxes, depreciation and amortization, non-cash share-based compensation expense, change in fair value of earnout liabilities, share of losses from equity method investments, executive separation costs, legal and diligence expenses related to acquisitions, and gains/losses on the disposal of property and equipment, as each is applicable to the periods presented. Segment Adjusted EBITDA is calculated in the same manner as Adjusted EBITDA but is presented on a segment basis.

 

The Company believes Adjusted EBITDA and Segment Adjusted EBITDA are useful to investors because they facilitate comparisons of its core business operations across periods on a consistent basis. Accordingly, the Company adjusts for certain items, such as change in fair value of earnout liabilities, when calculating Adjusted EBITDA and Segment Adjusted EBITDA because the Company believes that such items are not related to the Company’s core business operations.

 

The Company’s non-GAAP financial measures are not in accordance with, nor an alternative for, measures conforming to GAAP and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company continues to provide all information required by GAAP, but it believes that evaluating its ongoing operating results may not be as useful if an investor or other user is limited to reviewing only GAAP financial measures. The Company does not, nor does it suggest that, investors should consider these non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Material limitations associated with the use of such measures include that they do not reflect all costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances. The Company presents these non-GAAP financial measures to provide investors with information to evaluate the Company’s operating results in a manner similar to how management evaluates business performance. To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in understanding and analyzing the results of the business to review both GAAP information and the related non-GAAP financial measures. Whenever the Company uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Investors are encouraged to review and consider these reconciliations.

 

 

 

 

Segment Adjusted EBITDA is reported to the chief operating decision maker, the Chief Executive Officer, for purposes of making decisions about allocating resources to the segments and assessing their performance. We have provided a reconciliation of this measure as it relates to our segments below.

 

Reconciliation of Net Income (Loss) to Segment Adjusted EBITDA and Adjusted EBITDA:

 

  

Three Months Ended

March 31,

 
   2025   2024 
   Sanara Surgical   THP   Total   Sanara Surgical   THP   Total 
Net Loss  $(615,105)  $(2,912,278)  $(3,527,383)  $(387,191)  $(1,411,852)  $(1,799,043)
Adjustments:                              
Interest expense   1,317,092    -    1,317,092    267,336    -    267,336 
Depreciation and amortization   688,571    435,839    1,124,410    698,502    406,918    1,105,420 
Noncash share-based compensation   1,175,496    129,408    1,304,904    753,615    49,771    803,386 
Change in fair value of earnout liabilities   -    -    -    (103,782)   38,104    (65,678)
Share of losses from equity method investments   143,608    -    143,608    -    -    - 
Gain on disposal of property and equipment   (10,932)   1,258    (9,674)   -    -    - 
Interest income   (3,672)   -    (3,672)   -    -    - 
Acquisition costs (1)   -    308,684    308,684    -    -    - 
Segment Adjusted EBITDA (on a segment basis) / Adjusted EBITDA (consolidated)  $2,695,058   $(2,037,089)  $657,969   $1,228,480   $(917,059)  $311,421 
Net revenue  $23,434,096   $-   $23,434,096   $18,536,638   $-   $18,536,638 
Net Loss as a % of Net Revenue   (2.6)%    N/A    (15.1)%    (2.1)%    N/A    (9.7)% 
Segment Adjusted EBITDA (on a segment basis) / Adjusted EBITDA (consolidated) as a % of Net Revenue   11.5%    N/A    2.8   6.6%    N/A    1.7% 

 

(1)Acquisition costs include legal, tax and accounting services related to prospective acquisitions.