SANUWAVE Health Inks Material Deal, Issues Unregistered Equity

TL;DR

**SANUWAVE just took on new debt and sold shares privately, watch for dilution and increased liabilities.**

AI Summary

SANUWAVE Health, Inc. entered into a material definitive agreement on December 30, 2023, involving the creation of a direct financial obligation and unregistered sales of equity securities. This filing indicates the company is likely raising capital through new debt and issuing shares outside of a public offering. For investors, this matters because it could dilute existing shareholder value if new shares are issued at a discount, and new debt adds to the company's liabilities, potentially impacting future profitability and financial flexibility.

Why It Matters

This filing signals SANUWAVE is taking on new financial obligations and potentially diluting existing shareholders, which could impact the stock's value and the company's financial health.

Risk Assessment

Risk Level: medium — The creation of new financial obligations and unregistered sales of equity securities can introduce dilution and increase debt burden, posing a moderate risk to current shareholders.

Analyst Insight

A smart investor would closely monitor the details of the material definitive agreement and the terms of the unregistered equity sales once they are disclosed, to assess the extent of dilution and the impact of new debt on SANUWAVE's financial health.

Key Players & Entities

• SANUWAVE Health, Inc. (company) — the registrant filing the 8-K
• December 30, 2023 (date) — date of the earliest event reported
• Nevada (company) — state of incorporation for SANUWAVE Health, Inc.

Forward-Looking Statements

• SANUWAVE Health, Inc. will experience increased debt service costs due to the new financial obligation. (SANUWAVE Health, Inc.) — medium confidence, target: 2024-12-31
• The unregistered sales of equity securities will lead to dilution for existing shareholders. (SANUWAVE Health, Inc. shareholders) — high confidence, target: 2024-06-30

FAQ

Key Financial Figures

• $1.9 million — egate principal amount of approximately $1.9 million (the "Notes"), (ii) warrants to purchas
• $0.067 — f the Company with an exercise price of $0.067 per share (the "First Warrants") and (i
• $0.04 — f the Company with an exercise price of $0.04 per share (the "Second Warrants," colle
• $0.01 — f the Warrants shall never be less than $0.01 per share. The Warrants have a five-yea
• $1.8 million — the Company received total proceeds of $1.8 million. Notes As described above, on Decembe
• $12.0 million — quirement that SEPA shall have at least $12.0 million at closing resulting from proceeds of (

Filing Documents

• ef20017967_8k.htm (8-K) — 57KB
• ef20017967_ex4-1.htm (EX-4.1) — 143KB
• ef20017967_ex4-2.htm (EX-4.2) — 197KB
• ef20017967_ex10-1.htm (EX-10.2) — 206KB
• ef20017967_ex10-2.htm (EX-10.2) — 41KB
• ef20017967_ex10-3.htm (EX-10.3) — 58KB
• ef20017967_ex10-4.htm (EX-10.4) — 88KB
• ef20017967_ex10-5.htm (EX-10.5) — 8KB
• ef20017967_ex10-6.htm (EX-10.6) — 22KB
• graphic1.jpg (GRAPHIC) — 39KB
• image00003.jpg (GRAPHIC) — 7KB
• 0001140361-24-000483.txt ( ) — 1219KB
• snwv-20231230.xsd (EX-101.SCH) — 4KB
• snwv-20231230_lab.xml (EX-101.LAB) — 20KB
• snwv-20231230_pre.xml (EX-101.PRE) — 14KB
• ef20017967_8k_htm.xml (XML) — 4KB

01

Item 1.01 Entry into A Material Definitive Agreement. Securities Purchase Agreement and Common Stock Warrant On December 30, 2023, SANUWAVE Health, Inc. ("SANUWAVE" or the "Company") entered into a Securities Purchase Agreement (the "Purchase Agreement"), with the purchasers identified on the signature pages thereto (the "Purchasers") for the sale by the Company in a private placement (the "Private Placement") of (i) the Company's future advance convertible promissory notes in an aggregate principal amount of approximately $1.9 million (the "Notes"), (ii) warrants to purchase an additional 46.5 million shares of common stock of the Company with an exercise price of $0.067 per share (the "First Warrants") and (iii) warrants to purchase an additional 46.5 million shares of common stock of the Company with an exercise price of $0.04 per share (the "Second Warrants," collectively with the First Warrants, the "Warrants"). The exercise price of the Warrants is subject to adjustment, including if the Company issues or sells shares of common stock or Share Equivalents (as defined in the Warrants) for an effective consideration price less than the exercise price of the Warrants or if the Company lists its shares of common stock on the Nasdaq Capital Market and the average volume weighted average price of such common stock for the five trading days preceding such listing is less than $0.04 per share; provided, however, that the exercise price of the Warrants shall never be less than $0.01 per share. The Warrants have a five-year term. The closing of the Private Placement occurred on December 30, 2023 (the "Closing Date"). At the Closing Date, the Company received total proceeds of $1.8 million. Notes As described above, on December 30, 2023, the Company issued Notes to the Purchasers in an aggregate principal amount of $1.9 million. Pursuant to the Notes, the Company promised to pay each Purchaser, its designee or registered assigns (the "Holder") in cash and/or in shar

03

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

02

Item 3.02 Unregistered Sales of Equity Securities. The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The securities in the Private Placement were offered and sold in a transaction exempt from registration under the Securities Act in reliance on Section 4(a)(2) thereof. Each Purchaser represented that it was an accredited investor.

Forward-Looking Statements

Forward-Looking Statements This report may contain, "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. SANUWAVE's and SEPA's actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "might" and "continues," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements may include, without limitation, the satisfaction of the closing conditions to the proposed merger and related transactions (the "Transactions") contemplated by the Agreement and Plan of Merger, dated as of August 23, 2023 (the "Merger Agreement"), by and among SEPA, SEP Acquisition Holdings Inc., a Nevada corporation and a wholly owned subsidiary of SEPA, and SANUWAVE; the timing of the closing of the Transactions, including the exchanges pursuant to the Letter Agreements; and expected results for the combined company. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Most of these factors are outside the control of SANUWAVE and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; (2) the inability to consummate the Transactions, including due to any failure to obtain approval of the stockholders of SANUWAVE or SEPA or other conditions to the closing in the Merger Agreement, such as the requirement that SEPA shall have at least $12.0 million at closing resulting from proceeds of (a) SEPA's Class A c

Financial Statements and Exhibits

Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description 4.1 Form of Future Advance Convertible Promissory Note issued to certain purchasers, dated December 30, 2023 4.2 Forms of Common Stock Purchase Warrants issued to certain purchasers, dated December 30, 2023 10.1 Securities Purchase Agreement, dated December 30, 2023, by and among the Company and the purchasers identified on the signature pages thereto 10.2 Security Agreement, dated December 30, 2023, by and among the Company and certain lenders 10.3 Subordination Agreement, dated December 30, 2023, by and among the Company, NH Expansion Credit Fund Holdings LP and certain creditors 10.4 Registration Rights Agreement, dated December 30, 2023, by and among the Company and certain lenders 10.5 Form of waiver letter with purchasers in December 2023 offering 10.6 Form of letter agreement with purchasers in December 2023 offering 104 Cover Page Interactive Data File--the cover page XBRL tags are embedded within the Inline XBRL document.

SIGNATURES

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 hereunto duly authorized. SANUWAVE HEALTH, INC. Dated: January 3, 2024 By: /s/ Toni Rinow Name: Toni Rinow Title: Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR