UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of
1934
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Date of
Report (Date of earliest event reported)
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December 13, 2019
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SANUWAVE HEALTH, INC.
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(Exact
name of registrant as specified in its charter)
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Nevada
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000-52985
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20-1176000
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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3360 Martin Farm Road, Suite 100, Suwanee, Georgia
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30024
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
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(770) 419-7525
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N/A
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(Former
name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Indicate
by check mark whether the registration is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 or
Rule 12b-2 of the Securities Exchange Act of 1934.
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. ☐
Item 1.01. Entry into a Material Definitive
Agreement.
On
December 13, 2019, SANUWAVE Health, Inc. (the
“Company”) entered into a joint venture agreement (the
“Agreement”) with Universus Global Advisors LLC, a
limited liability company organized under the laws of the State of
Delaware (“Universus”), Versani Health Consulting
Consultoria em Gestão de Negócios EIRELI, an empresa individual de responsabilidade
limitada organized under the laws of Brazil
(“Versani”), Curacus Limited, a private limited company
organized under the laws of England and Whales
(“Curacus”), and certain individual citizens of Brazil
and the Czech Republic (the individuals together with Curacus, the
“IDIC Group”).
The
principal purpose of the joint venture company will be to
manufacture, import, use, sell, and distribute, on an exclusive
basis in Brazil, dermaPACE devices and wound kits consisting of a
standard ultrasound gel and custom size sterile sleeves used for
the treatment of various acute and chronic wounds using
extracorporeal shockwave therapy technology. The joint venture
company will also provide treatments related to the dermaPACE
devices.
The
IDIC Group has agreed to pay to the Company a partnership fee in
the total amount of $600,000 for the granting of exclusive
territorial rights to the joint venture company to distribute the
dermaPACE devices and wound kits in Brazil. The partnership fee is
to be paid as follows: (i) a $250,000 payment was made by IDIC
Group to the Company on November 14, 2019 which was initially
provided in the form of a loan that was forgiven and terminated on
December 13, 2019, (ii) an additional payment of $250,000 was made
by the IDIC Group to the Company on December 31, 2019, and (iii)
the remaining $100,000 is to be paid by the IDIC Group upon receipt
of required regulatory approvals from ANVISA (the Brazilian Health
Regulatory Agency). The parties intend to execute a
shareholders’ agreement, a trademark license agreement, a
supply agreement and a technology license agreement January 31,
2020. The IDIC Group will also have the right to receive
prioritized dividends until full reimbursement of the partnership
fee and expenses incurred in the formation of the joint venture
company, which are required to be paid by the IDIC
Group.
ANVISA
is part of the Brazilian Ministry of Health and the Brazilian
National Health System and is responsible for the protection of the
health of the Brazilian population by enforcing sanitary control
over the production, marketing and use of products and services
subject to health regulation in Brazil.
The
Company will supply the dermaPACE devices and wound kits to the
joint venture company at cost and the joint venture company will
purchase the devices from the Company in accordance with the terms
of the Supply Agreement to be entered into upon formation of the
joint venture company. The parties also agreed that the initial
five devices imported to Brazil by the IDIC Group on behalf of the
joint venture company will be provided by the Company on deferred
payment terms to be agreed, provided that the amounts invoiced for
such devices will be due by the time the joint venture company
reaches $1,000,000 in gross sales.
Upon
formation of the joint venture company, the Company will own 45% of
its equity interests, the IDIC Group, through a holding company,
will collectively own 45% of the equity interests of the joint
venture company and each of Versani and Universus will own 5% of
the joint venture company’s equity interests. The joint
venture company will be managed by a four-member board (two
appointed by the Company and two appointed by the IDIC Group), each
with a term of three years. The joint venture company will have two
officers, a Chief Executive Officer and a Chief Commercial Officer.
The IDIC Group will have the right to appoint the Chairman of the
board of directors.
The
Agreement may be terminated if the parties fail to meet certain
conditions precedent before December 31, 2020 (unless extended by
mutual agreement) and upon default by either party which is not
cured within a certain cure period, among others. In case AVISA
does not grant its approval, or such approval is granted with
restrictions that materially impact the joint venture
company’s operation, the IDIC Group may terminate the
Agreement and require the Company to refund the partnership fee
amount, plus the amounts incurred by the IDIC Group for payment of
other expenses related to the formation of the joint venture
company.
In the
event of a change of control of the Company, the Company will have
the right to cause the other parties to the Agreement to sell their
ownership interests to the Company’s new controlling entity,
at a price which varies, depending on whether the change of control
occurs prior to or after the joint venture company achieves
$2,000,000 in gross sales. If the change of control occurs before
the joint venture company achieves $2,000,000 gross sales, the
price to be paid for the equity interests of the other joint
venture parties (on a pro rata basis) will be equivalent to four
times the total amount invested by such parties in the joint
venture company, including the partnership fee and organizational
expenses. If the change of control occurs after the joint venture
company achieves $2,000,000 in gross sales, the price will be
equivalent to the multiple of twelve times the net sales of the
joint venture company in the previous twelve months before the
closing of the change of control transaction, also paid on a pro
rata basis.
In
addition, in the event of a change of control of the Company after
the joint venture company achieves $2,000,000 in gross sales, the
other parties to the joint venture will also have the right to put
their equity interests to the new controlling entity of the
Company, for a price based on the same EBITDA multiple paid for the
acquisition of the Company.
The
foregoing is only a brief description of the Agreement, does not
purport to be a complete description of the rights and obligations
of the parties thereunder and is qualified in its entirety by
reference to the full text of the Agreement.
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.
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SANUWAVE HEALTH, INC.
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Date:
January 28, 2020
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By:
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/s/
Lisa E.
Sundstrom
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Lisa E.
Sundstrom
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Controller
and Chief Financial Officer
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