SANUWAVE Health Secures New Financing, Issues Equity

TL;DR

**SANUWAVE Health just took on new debt and sold more shares, watch for dilution.**

AI Summary

SANUWAVE Health, Inc. entered into a material definitive agreement on January 21, 2024, involving the creation of a direct financial obligation and unregistered sales of equity securities. This filing indicates the company is raising capital, likely to fund operations or growth initiatives, which could dilute existing shareholders if not managed effectively. Investors should understand the terms of these new financial obligations and equity sales as they directly impact the company's financial health and potential future stock performance.

Why It Matters

This filing signals SANUWAVE Health is taking on new debt and selling shares, which can provide necessary capital but also dilute existing ownership and add to financial obligations. Investors need to assess if the benefits of this new capital outweigh the potential dilution and increased debt burden.

Risk Assessment

Risk Level: medium — The creation of new financial obligations and unregistered sales of equity securities introduces both debt risk and potential shareholder dilution.

Analyst Insight

A smart investor would closely monitor subsequent filings for details on the terms of the new financial obligations and equity sales, specifically looking at the amount of debt, interest rates, and the number of new shares issued to assess the true impact on valuation and potential dilution.

Key Players & Entities

• SANUWAVE Health, Inc. (company) — the registrant filing the 8-K
• January 21, 2024 (date) — date of the earliest event reported in the 8-K
• Nevada (company) — state of incorporation for SANUWAVE Health, Inc.
• 000-52985 (company) — Commission File Number for SANUWAVE Health, Inc.
• 20-1176000 (company) — IRS Employer Identification No. for SANUWAVE Health, Inc.

Forward-Looking Statements

• SANUWAVE Health, Inc. will likely provide more details on the terms of the material definitive agreement and financial obligations in future filings. (SANUWAVE Health, Inc.) — high confidence, target: Q1 2024
• The unregistered sales of equity securities will lead to an increase in outstanding shares. (SANUWAVE Health, Inc.) — high confidence, target: Q1 2024

FAQ

Key Financial Figures

• $4.6 million — tes in an aggregate principal amount of $4.6 million (the "ABL Notes") to certain accredited
• $3.0 million — eceived total proceeds of approximately $3.0 million. On July 21, 2023, the Company and th
• $0.04 — Warrants, one with an exercise price of $0.04 per share and one with an exercise pric
• $0.067 — share and one with an exercise price of $0.067 per share, each of which would be exerc
• $0.01 — f the Warrants shall never be less than $0.01 per share. The Warrants have a five-yea
• $12.0 million — quirement that SEPA shall have at least $12.0 million at closing resulting from proceeds of (

Filing Documents

• ny20018318x4_8k.htm (8-K) — 65KB
• ny20018318x4_ex4-1.htm (EX-4.1) — 191KB
• ny20018318x4_ex4-2.htm (EX-4.2) — 263KB
• ny20018318x4_ex10-1.htm (EX-10.1) — 292KB
• ny20018318x4_ex10-2.htm (EX-10.2) — 55KB
• ny20018318x4_ex10-3.htm (EX-10.3) — 54KB
• ny20018318x4_ex10-4.htm (EX-10.4) — 105KB
• ny20018318x4_ex10-5.htm (EX-10.5) — 12KB
• ny20018318x4_ex10-6.htm (EX-10.6) — 28KB
• ny20018318x4_ex10-6img01.jpg (GRAPHIC) — 145KB
• ny20018318x4_ex10-6img02.jpg (GRAPHIC) — 501KB
• 0001140361-24-003890.txt ( ) — 2280KB
• snwv-20240121.xsd (EX-101.SCH) — 4KB
• snwv-20240121_lab.xml (EX-101.LAB) — 20KB
• snwv-20240121_pre.xml (EX-101.PRE) — 14KB
• ny20018318x4_8k_htm.xml (XML) — 4KB

01

Item 1.01 Entry into a Material Definitive Agreement. As previously disclosed in a Current Report on Form 8-K filed by Sanuwave Health, Inc. ("Sanuwave" or the "Company") with the Securities and Exchange Commission (the "SEC") on July 26, 2023, the Company issued Asset-Backed Secured Promissory Notes in an aggregate principal amount of $4.6 million (the "ABL Notes") to certain accredited investors (the "Purchasers") at an original issue discount of 33.33% on July 21, 2023 (the "July Private Placement"). The ABL Notes bore interest at a rate of zero percent (0%) per annum and matured on January 21, 2023 (the "Maturity Date"). The closing of the July Private Placement occurred on July 21, 2023, when the Company received total proceeds of approximately $3.0 million. On July 21, 2023, the Company and the Purchasers also entered into a side letter (the "Side Letter"), pursuant to which the parties agreed that upon the Maturity Date, the Company would issue each Purchaser (i) a Future Advance Convertible Promissory Note with the same principal amount as the principal amount of such Purchasers' ABL Note, plus any accrued and unpaid interest, and (ii) two Common Stock Purchase Warrants, one with an exercise price of $0.04 per share and one with an exercise price of $0.067 per share, each of which would be exercisable for such number of shares of the Company's common stock calculated by dividing the principal amount of the Purchaser's Future Advance Convertible Promissory Note by $0.04. In addition, the parties agreed to enter into a securities purchase agreement, a subordination agreement, a security agreement and a registration rights agreement. Securities Purchase Agreement and Common Stock Warrant In accordance with the terms of the Side Letter, on January 21, 2024, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement"), with the Purchasers for the sale by the Company in a private placement (the "January Private Placement") of (i) t

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 January 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; 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 common stock that has not been redeemed and (b) a private pl

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 January 21, 2024 4.2 Forms of Common Stock Purchase Warrants issued to certain purchasers, dated January 21, 2024 10.1 Securities Purchase Agreement, dated January 21, 2024, by and among the Company and the purchasers identified on the signature pages thereto 10.2 Security Agreement, dated January 21, 2024, by and among the Company and certain lenders 10.3 Subordination Agreement, dated January 21, 2024, by and among the Company, NH Expansion Credit Fund Holdings LP and certain creditors 10.4 Registration Rights Agreement, dated January 21, 2024, by and among the Company and certain lenders 10.5 Form of waiver letter with purchasers in January 2024 offering 10.6 Form of letter agreement with purchasers in January 2024 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 25, 2024 By: /s/ Toni Rinow Name: Toni Rinow Title: Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR