UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q/A
(Amendment No.1)
 
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2017
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ________ to
 
Commission File Number 000-52985
 
SANUWAVE Health, Inc.
(Exact name of registrant as specified in its charter)
 
Nevada
20-1176000
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
3360 Martin Farm Road, Suite 100
Suwanee, GA
30024
(Address of principal executive offices)
(Zip Code)
 
(770) 419-7525
(Registrant's telephone number, including area code)
 
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).       ☒  Yes  ☐  No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):
 
Large accelerated filer   ☐
Accelerated filer   ☐
Non-accelerated filer   ☐
Smaller reporting company     ☒
(Do not check if a smaller reporting company)
 Emerging growth company     ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ☐  Yes ☒  No
 
As of November 10, 2017, there were issued and outstanding 139,249,926 shares of the registrant’s common stock, $0.001 par value.
 

 
 
 
  SANUWAVE Health, Inc.
 
Table of Contents

EXPLANATORY NOTE
3
 
 
 
 
PART II – OTHER INFORMATION
 
Item 6.
Exhibits  
4
 
 
 
 
 
 
SIGNATURES
5
 
 
 
2
 
 
Explanatory Note
 
 
 
The purpose of this Amendment No. 1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, filed with the Securities and Exchange Commission on November 14, 2017 (the “Form 10-Q”), is to furnish Exhibit 10.2 to the Form 10-Q. No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing and does not modify or update in any way disclosures made in the original Form 10-Q.
 
 
 
 
 
 
 
3
 
 
PART II — OTHER INFORMATION
 
Item 6.      EXHIBITS
 
Exhibit No.
 
Description
 
 
 
 
Class K Warrant Agreement dated as of August 3, 2017, between SANUWAVE Health, Inc. and HealthTronics, Inc. (Incorporated by reference to Form 8-K filed with the SEC on August 4, 2017).
 
 
 
 
Form of Class N Warrant. (Incorporated by reference to Form 8-K filed with the SEC on November 9, 2017).
 
 
 
 
Third Amendment to promissory notes entered into as of August 3, 2017 by and among SANUWAVE Health, Inc., SANUWAVE, Inc. and HealthTronics, Inc. (Incorporated by reference to Form 8-K filed with the SEC on August 4, 2017).
 
 
 
 
Binding Term Sheet for Joint Venture Agreement between SANUWAVE Health, Inc. and MundiMed Distribuidora Hospitalar LTDA effective as of September 25, 2017.
 
 
 
 
Form of 10% Convertible Promissory Note, by and among the Company and the accredited investors a party thereto, dated November 3, 2017. (Incorporated by reference to Form 8-K filed with the SEC on November 9, 2017).
 
 
 
 
 Form of Registration Rights Agreement, by and among the Company and the accredited investors a party thereto, dated November 3, 2017 (Incorporated by reference to Form 8-K filed with the SEC on November 9, 2017).
 
 
 
 
Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer.
 
 
 
 
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
 
 
 
 
Section 1350 Certification of the Principal Executive Officer.
 
 
 
 
Section 1350 Certification of the Chief Financial Officer.
 
 
 
101.INS*†
 
XBRL Instance.
 
 
 
101.SCH*†
 
XBRL Taxonomy Extension Schema.
 
 
 
101.CAL*†
 
XBRL Taxonomy Extension Calculation.
 
 
 
101.DEF*†
 
XBRL Taxonomy Extension Definition.
 
 
 
101.LAB*†
 
XBRL Taxonomy Extension Labels.
 
 
 
101.PRE*†
 
XBRL Taxonomy Extension Presentation.
______________________________________________________________
* Filed herewith.
# Confidential treatment has been requested as to certain portions of this exhibit, which portions have been omitted and Submitted separately to the Securities and Exchange Commission.
† XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
4
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 

 
SANUWAVE HEALTH, INC.
 
 
 
 
 
Dated: November 15, 2017
By:  
/s/ Kevin A. Richardson, II
 
 
 
Name: Kevin A. Richardson, II
 
 
 
Title: Acting Chief Executive Officer
 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
 
Signatures
 
Capacity
 
Date
 
 
 
 
 
By: /s/ Kevin A. Richardson, II
 
Acting Chief Executive Officer and Chairman of the Board of Directors
 
November 15, 2017
Name: Kevin A. Richardson, II
 
(principal executive officer)
 
 
 
 
 
 
 
By: /s/ Lisa E. Sundstrom
 
Chief Financial Officer
 
November 15, 2017
Name: Lisa E. Sundstrom
 
(principal financial and accounting officer)
 
 
 


 
5
EXECUTION VERSION
 
Exhibit 10.2
 
 
Binding Term Sheet for Joint Venture Agreement
 
September 25, 2017
 
This term sheet (“Term Sheet”) sets out the key terms of a proposed transaction for a joint venture between SANUWAVE Health Inc. of 3360 Martin Farm Road, Suite 100, Suwanee, Georgia, 30024, United States (“Sanuwave”), and MundiMed Distribuidora Hospitalar LTDA of of Rua Manoel Gomes dos Santos, 1173 – Jardim Sumaré – Cravinhos/SP Brazil (“MundiMed”). Each of Sanuwave and MundiMed are referred to herein as a “Party” and collectively, as the “Parties”.
 
The Parties are engaged in the negotiation of terms of a proposed joint venture (the “Joint Venture”) for the establishment of a business (the “Business”) for the sole purpose of the manufacture, sale and distribution of a Sanuwave proprietary, patented medical device (the “Device”). The purpose of this Term Sheet is to confirm to-date the agreement among the Parties concerning certain terms of the proposed Joint Venture.
 
The Parties will continue to work together in good faith to enter into a definitive agreement reflecting these terms (the “Definitive Agreement”). In the event a Definitive Agreement has not been executed by the Parties by September 30, 2017, the terms set forth in this Term Sheet will be binding on the Parties.
 
Financial Terms :
 
Partnership Fee:
MundiMed shall pay to Sanuwave the aggregate amount of USD
[****](the “Partnership Fee”) as follows:
(1) USD [****] on September 30, 2017; and
(2) USD [****] in equal monthly installments payable over a period of eighteen (18) months, commencing November 30, 2017, and on the 30th day (or the following business day if the 30th day of a given month does not fall on a business day) of each month thereafter.
 
Organizational Expenses:
MundiMed shall bear the cost of any and all fees and expenses incurred in connection with the formation, organization and startup of the Joint Venture, expected not to exceed USD $200,000.
 
 
 
  1
[****] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 
Profit-Sharing:
Any profits distributed by the Joint Venture shall be distributed between MundiMed, Sanuwave, LHS Latina Health Solutions Gestão Empresarial LTDA a company organized under the laws of Brazil (“Latina Health”) and Universus Global Advisors LLC, a Delaware limited liability company (“Universus Global”) (MundiMed, Sanuwave, Latina Health and Universus Global are collectively referred to herein as the “Profit Sharing Recipients”). Each of MundiMed and Sanuwave shall receive an amount equal to 45% of such profits and each of Latina Health and Universus Global shall receive an amount equal to 5% of such profits.
 
Miscellaneous Terms:
MundiMed shall purchase two to six Devices from the Joint Venture on or before December 31, 2017, and the Joint Venture shall sell such Devices to MundiMed in exchange for payment of the total purchase price in cash. These devices shall be used by targeted parties to do experimental, pre-approved work. The foregoing obligations of the Parties are subject to the advice of legal counsel that the consummation of such purchase(s) and sale(s) will not constitute a material violation of applicable government regulations.
 
Term and Termination:
This Term Sheet shall be effective as of the date this Term Sheet is executed by both Parties and shall continue until the earlier to occur of (a) the date the Definitive Agreement is fully-executed by both Parties and (b) May 30, 2019. In the event the Definitive Agreement has not been executed by both Parties by September 30, 2017, this Term Sheet shall continue to be in effect as of such date.
Notwithstanding the foregoing, this Term Sheet may be terminated by either Party for a material breach of its terms by the other Party (following an applicable cure period) where it is reasonably foreseeable that such material breach could result in a material adverse effect on the business, financials or results of operations of the non-breaching Party.
Upon the termination of the Term Sheet all rights granted to MundiMed under the Term Sheet, as applicable, shall revert to Sanuwave and MundiMed shall promptly pay to Sanuwave all payments due and payable to Sanuwave as of the termination, return all materials provided to MundiMed by Sanuwave under the Term Sheet, as applicable, and all tangible embodiments of any and all proprietary information disclosed to MundiMed by Sanuwave in connection with the proposed Business, as applicable, and provide Sanuwave with a certificate of such return.
 
 
  2
[****] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 
 
Notwithstanding the foregoing, the provisions set forth opposite the “Confidentiality” and “Integration” headings in this Term Sheet shall survive termination.
 
Confidentiality:
This Term Sheet, the MOU, their respective contents, and the fact that the Parties are engaged in discussions regarding a potential joint venture shall constitute confidential information. The Parties hereby agree not to disclose the existence of such discussions, the Term Sheet, MOU or the respective contents thereof; provided, however, that the Parties may disclose the foregoing to their respective attorneys, accountants and any other party who has a “need to know” basis warranting disclosure. Notwithstanding the foregoing, the Parties hereby acknowledge that Sanuwave is subject to certain securities laws, compliance with which may require the disclosure of confidential information. The Parties hereby agree that Sanuwave may disclose confidential information in connection with its ongoing reporting requirements under applicable securities laws and pursuant to any other acts it may take in connection with its obligation to comply with such securities laws.
 
Governing Law:
This Term Sheet, the MOU are, and any Definitive Agreement will be, governed by and interpreted in accordance with the laws of the State of New York, United States of America, without regard to conflict of laws provisions thereof.
 
General:
This Term Sheet constitutes the entire agreement and understanding of the Parties as to the terms set forth in this Term Sheet and supersedes all communication between the Parties related to the terms set forth in this Term Sheet, and all prior agreements, oral or written, including the terms of the Memorandum of Understanding by and between the Parties, dated August 13, 2017 (the “MOU”), to the extent of the subject matter of the terms included in this Term Sheet, including, but not limited to, the confidentiality, governing law and integration provisions set forth herein. For the avoidance of doubt, the MOU shall remain in full force and effect to the extent the terms of the MOU are not the subject matter of this Term Sheet. This Term Sheet shall be binding upon and inure to the benefit of and be enforceable by the Parties respective successors and permitted assigns. Nothing in this Term Sheet shall confer any rights upon any person or entity other than the Parties and their respective successors and permitted assigns. No Party may assign this Term Sheet or any of its rights hereunder to any person or entity without the prior written consent of the other Party. This Term Sheet may be amended or modified only by a writing executed by both Parties.
 
 
 
  3
[****] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
 
IN WITNESS WHEREOF, this Term Sheet is effective as of the date first set forth above. This Term Sheet may be executed in counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute the entire document and may be executed by electronically scanned or “pdf” signatures.
 
 
SANUWAVE Health Inc.
 
 
/s/ Kevin A. Richardson II
Name: Kevin A. Richardson II
Title: Chairman & CEO
MundiMed Distribuidora Hospitalar LTDA
 
 
/s/ Alessandro Cardim
Name: Alessandro Cardim
Title: Director
 
 
 
LHS Latina Health Solutions
Gestão Empresarial LTDA
 
 
/s/ Mauricio Grimoni
Name: Mauricio Grimoni
Title: CEO
Universus Global Advisors LLC
 
 
 
/s/ Michael Hubert
Name: Michael Hubert
Title: Managing Member
 
 
 
  4
[****] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 
EXHIBIT 31.1
Certification of Principal Executive Officer
Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
Under the Securities Exchange Act of 1934
 
I, Kevin A Richardson, II, certify that:
 
1.
I have reviewed this amended quarterly report on Form 10-Q/A of SANUWAVE Health, Inc.;
 
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
 
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
 
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
 
Date:  November 15, 2017
 
/s/ Kevin A. Richardson II
    Kevin A. Richardson II
    Acting Chief Executive Officer
    (principal executive officer)
 
 
EXHIBIT 31.2
Certification of Chief Financial Officer
Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
Under the Securities Exchange Act of 1934
I, Lisa E. Sundstrom, certify that:
 
1.
I have reviewed this amended quarterly report on Form 10-Q/A of SANUWAVE Health, Inc.;
 
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
 
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
 
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
 
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:  November 15, 2017
 
/s/ Lisa E. Sundstrom
    Lisa E. Sundstrom
    Controller and Chief Financial Officer
     (principal financial officer and principal accounting officer)
 
 
EXHIBIT 32.1
 
CERTIFICATION
 
 
In connection with the periodic report of SANUWAVE Health, Inc. (the “Company”) on Amendment No.1 of Form 10-Q/A for the period ended September 30, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, Kevin A. Richardson, II, Acting Chief Executive Officer (and principal executive officer) of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that:
 
1.
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
 
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
 
 
 
 
Date:  November 15, 2017
 
  /s/ Kevin A. Richardson II
     Kevin A. Richardson II
     Acting Chief Executive Officer
     (principal executive officer)
 
 
 
 
 
 
 
 
EXHIBIT 32.2
 
CERTIFICATION
 
In connection with the periodic report of SANUWAVE Health, Inc. (the “Company”) on Amendment No.1 of Form 10-Q/A for the period ended September 30, 2017 as filed with the Securities and Exchange Commission (the “Report”), I, Lisa S. Sundstrom, Controller and Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that:
 
1.
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
 
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
 
 
 
 
Date:  November 15, 2017
 
/s/ Lisa E. Sundstrom
  Lisa E. Sundstrom
  Controller and Chief Financial Officer
  (principal financial officer and principal accounting officer)