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CST: 13/12/2019 15:11:26   

SANUWAVE Health Reports Third Quarter 2019 Financial Results

28 Days ago

Expects Fourth Quarter Revenue to Exceed One Million Dollars

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    
               

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