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| EX-99.2 - PRESS RELEASE - SANUWAVE Health, Inc. | snwv_ex992.htm |
| 8-K - CURRENT REPORT - SANUWAVE Health, Inc. | snwv_8k.htm |
Exhibit
99.1
SANUWAVE HEALTH, INC.
CONFERENCE CALL TO DISCUSS FOURTH QUARTER AND FULL FISCAL YEAR
2019
FINANCIAL RESULTS AND PROVIDE A BUSINESS UPDATE
TUESDAY, MARCH 31, 2020
9:00 a.m. Eastern Time
Operator
Ladies
and gentlemen good day, and thank you all for joining this SANUWAVE
2019 Annual Earnings Conference. As a reminder, today's meeting is
being recorded and all phone participants are in a listen-only mode
but after today's prepared remarks, you will have the opportunity
to ask questions. And now to get us started with opening remarks
and introductions I'm pleased to turn the floor over to Lisa
Sundstrom, welcome Lisa.
Lisa Sundstrom – Chief Financial Officer
Thank
you and good morning. We appreciate your interest in SANUWAVE and
in today's call. SANUWAVE will provide an update on our most recent
activities as well as our 2019 annual financial results. Our annual
form on form 10-K was filed with the SEC on Monday, March 30, 2020.
If you would like to be added to the Company's distribution list,
please call SANUWAVE at 770-419-7525 or go to the Investor
Relations section of our website at www.sanuwave.com.
Before
we begin, I would like to caution that comments made during this
conference call by management will contain certain forward-looking
statements that involve risks and uncertainties regarding the
operations and future results of SANUWAVE. We encourage you to
review the Company's filings with the Securities and Exchange
Commission, including without limitation our Forms 10-K and 10-Q,
which identify specific factors that may cause actual events or
results to differ materially from those described in the
forward-looking statements.
Furthermore,
the content of this conference call contains time-sensitive
information that is accurate only as of the date of the live
broadcast, March 31, 2020. SANUWAVE undertakes no obligation to
revise or update any statements to reflect events or circumstances
after the date of this conference call.
I would
now like to turn the call over to our Chairman of the Board, Kevin
Richardson. Kevin.
Kevin Richardson – Chairman and Chief Executive
Officer
Thank
you, Lisa. Normally SANUWAVE uses this year end call to reflect on
our milestones achieved during the prior year and lay out our goals
for the coming year. It is important to lay out these goals to
establish a pathway to achieve our ultimate mission of having a
dermaPACE System anywhere and everywhere a wound is
treated.
Unfortunately,
these are not normal times, the COVID-19 pandemic has altered the
landscape in which we operate and the priorities of many
organizations including SANUWAVE must be altered as well. Our top
priority is the safety of our organization, but also making sure we
can deliver our services and products to those in need, especially
in these trying times.
Where
there is change there's also opportunity and we will discuss how
SANUWAVE has positioned itself to help deal with the COVID-19
pandemic. I will briefly review the highlights from the fourth
quarter then turn it over to Lisa to walk through the financials.
Then I will conclude, with how we are currently positioned to what
are we doing to take advantage of opportunities as they arrive
during this crisis to help alleviate crisis. During the fourth
quarter and in early 2020, we have had some major highlights, which
we would like to share.
Recently, we've
added Dr. Tom Price to the Board of Directors, as many of you know,
if you want to Wikipedia him, you can. Tom was Secretary of Health
and Human Services, HHS, after spending many years on Capitol Hill
and driving much of the positive changes we see in DC. Tom has
already made major impacts at the board level and has helped shape
some of the critical decisions, we have made regarding operations
in pursuing opportunities during this pandemic. We are very
fortunate to have him as a board member.
Next,
we completed the joint venture in Brazil, we received $500,000
toward the end of 2019, the money is non-refundable, the joint
venture contract has been signed. Unfortunately, under the revenue
recognition policies that FASB has in place, we thought we could
but we cannot recognize this revenue. We will eventually recognize
this revenue, but it must be spread out over the term of the joint
venture. Although, this makes absolutely zero sense in a way to
deal with something structured the way it is or how a normal
business minded person thinks, it did have an impact on our fourth
quarter, as we expected to show $500,000 of revenue given it had
come in as a signed contract and was non-refundable and other
milestones have been met. Aside from the accounting nuances, we are
very happy with our partners in the region. We have met with a few
of the key opinion leaders and we will be launching in earnest in
Brazil later this year after we receive ANVISA, which is their
equivalent of the FDA. 2021 should shape up to be a very strong
year in Brazil post ANVISA.
In other international news during the year were the additions of
new countries and partnerships, one that stands out is Oman, which
although a small country, they are at the forefront in the Gulf
Coast countries in treating DFUs and we believe this will be the
launch pad for the region when things return to
normal.
1
We have
distribution partners lined up and ready to begin distributing our
product in the area once things are ready to go in 2020. If you've
not seen some of the poster results from the use in Oman, please
visit our website; the device is having an amazing impact on many
lives in that region. This region is probably showing the greatest
growth in diabetic foot ulcers anywhere in the world and will be at
the forefront in treating them.
Another
highlight in the quarter, we were also successful in raising $5
million in capital in two tranches which closed in December and
January. This was led by four institutional investors and this
funding allows SANUWAVE to path to achieve break even and
profitability later this year, we will discuss timing of this later
in the call but this event will still happen this year and we were
very fortunate to be a company that had prepared with proper
funding prior to the pandemic occurring.
We also
hit our target of 100 devices ship during the year and currently
have just over 130 in place; this is a key first step in the
revenue generating cycle, which we will discuss later. Although
hospital placements have ground to a stop due to the pandemic where
reps are no longer allowed in hospital setting, we are seeing
office placement continue albeit at a slower rate.
And
most important, the mobile home health area showing tremendous
potential and growth opportunities for us moving forward. We will
provide updated guidance on 2020 at a later time, but we are again
fortunate, we have a device that can be used in the field to treat
patients that are unable to get into the hospital for
treatment.
Other
key metrics, we treated over 450 patients with over 3,000
treatments and have over 250 clinicians trained on the system. We
actually added a partnership, Ametus which we discussed on the last
conference call. Training was completed, devices are being placed,
and our expectations remain high for this relationship once things
open up again.
In the meantime, they will also help us on the new home health
initiatives in their regions of coverage. Lastly, we added five
additional patents in the U.S., one in Europe covering eight
countries. Our patent portfolio will be discussed later on the call
when we explore some of the COVID-19 related opportunities, we'll
continue to add IP.
Reflective of the scientific know how we were selected in a very
exclusive way to be part of the NASA Lunar mission expert
committee. We are helping them currently with some with some
product design for a successful lunar mission, which will become
the base for the Mars missions. Our expertise and knowledge in
biofilms and shock waves are where we will be assisting
NASA.
Speaking of biofilm, we have also been selected to work directly
with the FDA on a project to educate them on biofilm eradication;
we'll be working closely with the teams in Maryland in the coming
months. All in all, 2019 was a good year and was and still is
setting up for a very successful 2020.
The one area I will discuss before turning over to Lisa is revenue
recognition from procedural revenue, we have chosen an extremely
conservative approach to this, until we get more information from
an actuarial standpoint. Currently the way we recognize is after a
device is placed we work to get a signed contract. Less than 50% of
our placements had signed contracts at year end because there's
usually a 60 day trial period, after a patient is treated the claim
is submitted, this takes usually 30 to 60 sometimes 90 days, if the
claim is submitted properly we're showing very good results with
over 80% of the hospitals receiving payments, this is an extremely
strong number for new medical products.
Unfortunately, during the quarter we also realized that many of the
sites still needed work on how to submit the claims appropriately.
We spent much time in the first quarter reviewing and examining
these processes with our team and sites in the field. We have made
our process easier for the billing person and pushed more support
to ensure these claims will be filed the right way the first
time.
In summary, although we are seeing treatment values continue to
increase and accelerate because the clinical results are so strong,
we're having to go back, re-educate and resubmit many of the claims
and work with the sites to get the revenue recovered. We have
already seen a lot of this progress through March and we'll
continue to see even more in April and to push this even greater in
the second quarter.
As this begins, we will begin to see rapid procedural revenue
growth occur and accelerate, this will happen regardless of any
COVID-19 related activities, this is all working directly with the
sites as they submit their claims. At this point, I'll turn over to
Lisa, then I'll jump back on and discuss some of the COVID-19
opportunities and how we are managing in 2020.
Lisa Sundstrom – Chief Financial Officer
Thank
you, Kevin. Revenues for the year ended December 31, 2019 were $1
million, a decrease of $821,000, or 44% from the prior year.
Revenue resulted primarily from sales in Europe and Asia/Pacific of
our orthoPACE devices and related applicators. Sales in
Asia/Pacific of our dermaPACE devices and related applicators and
our first treatment revenue from dermaPACE devices in the United
States from the billing in December that Kevin just discussed. The
decrease in revenue in 2019 is due to a decrease in sales of
orthoPACE devices, new applicators and refurbishment of applicators
in Asia/Pacific and in the European Community.
We also
had lower license fees related to international joint ventures.
Research and development expenses for the year ended December 31,
2019, were $1.2 million, an increase of $200,000 or 20%. The
increase in research and development expenses in 2019 was due to
increased contracting expenses for temporary services; increased
services related to the dose of study in Poland and increased
expenses related to necessary electrical testing for our
devices.
Selling
and marketing expenses for the year ended December 31, 2019 were
$1.6 million, an increase of $1.1 million or 205%, the increase in
sales and marketing expenses in 2019 was due to an increase in
hiring of client account managers and sales people, increased
travel expenses for placement and training relates to the
commercialization of dermaPACE, and increased participation in
domestic and international trade shows.
2
General
and administrative expenses for the year ended December 31, 2019
were $6.4 million, a decrease of $371,000 or 5%. The decrease in
general and administrative expenses in 2019 was due to lower
stock-based compensation expense, lower lease expense related to
the pay-off of lease agreement for devices in 2018 and lower travel
and entertainment costs.
This
was partially offset by increasing consultants related to
distribution partner searches and execution and an increase in
regulatory audit fees for updated ISO audit and initial MDSAP
audit. Net loss for the year ended December 31, 2019 was $10.4
million or negative $0.05 for basic and diluted share compared to a
loss of $11.6 million or negative $0.08 per basic and diluted share
for the same period in 2018.
A
decrease in the net loss of $1.2 million, or 10%, the decrease in
the net loss was primarily a result of increase in operating
expenses as just explained, offset by a decrease in interest
expense. We were able to raise $5 million from an institutional
equity raise completed in December 2019 with a follow along
completed in February 2020.
We
continue to protect our burn rate from operations and stretch
payables. Our burn rate is currently $450K to $550K per month and
has continued at this rate into early 2020. We will be looking
closely at our burn rate over the next few months as we navigate
through the COVID-19 pandemic. We will also be looking at trade
shows, trade show attendance and adjust our spending to only
essential items as things progress. We still anticipate our burn
rates to decrease as we move through move through 2020 as we see
payment on dermaPACE procedures and improve our billing and
collection processes.
With
that, I'll turn it back over to Kevin.
Kevin Richardson – Chairman and Chief Executive
Officer
Thanks,
Lisa. Normally we would spend this time laying out our goals for
2020. Given the environment that we are in I think it's most useful
to discuss what are we doing to move forward with the COVID-19
crisis.
First,
as I stated earlier, we're very fortunate to have raised some funds
prior to the pandemic started.
Second,
even with the pandemic, we're still on track to break even later
this year, either through increased revenue from the existing base
of installations or with the home health initiative and other
initiatives, which we will discuss. By moving quickly to these
changes in the environment, we can support our customers and
meeting their needs in the field.
Third,
we are and have been good about expense management over the years
and we will continue to be vigorous about that. Lisa used the trade
shows as an example. Last year alone we spent over $500,000
probably even more when you include T&E that is an expense that
given the pandemic we will not be incurring this year, which will
help us manage our expenses. We're using video conferences and
telephone calls to reach our existing and potential new customers.
We're doing this both for training and for tele-medicine, where we
can help with wound assessments.
Through
these other alternatives like tele-medicine and video conferencing
and better expense management, it will help us to get to
breakeven.
Fourth,
as Lisa alluded to we're exploring all current opportunities for
funds coming from the federal government, state government, and we
need to make sure they don't come with any provisions which may
impact us later but the government is flooding the system right now
and we will take advantage of the money where it becomes available
and the opportunities exist.
But the
biggest impacts from COVID will be in three areas for
us.
First
is home health, our device is mobile, simple to use, quick to set
up and can assist home health nursing, assisted living and nursing
care with wound care patients. We have spoken to many of our KOLs
and the wound industry is changing as we speak, it's changing due
to the pandemic, more patients to be treated telemedicine and home
health, they are being told to stay home, do not come to the
hospital. But for them to get treatment and avoid infections, which
lead to amputation, they still need to have treatments and care.
This is where dermaPACE works well. You cannot take a hyperbaric
chamber to someone's house. You cannot perform a skin graft surgery
in someone's house, but you can treat them with the dermaPACE
system. This past week -- over the past two weeks, we've had many
calls with existing and new potential customers and we expect to
have many devices placed as mobile units quickly to meet this
demand.
We're
still working on the economic models because in the home health
market, they are paid differently than a hospital. The good news is
CMS has recently put in place a waiver called 1135, which allows
payments in all settings office, hospital, at home, so our code
will work in that environment. We plan to take advantage of that
and treat our customers.
The
second and third areas may not bring immediate revenue but we're
exploring how our deep scientific knowledge in shock waves can help
with the treatment and benefit in how COVID-19 is treated. We are
encouraged by the level of interest we are receiving. This would be
more likely to put in place for the second wave which is expected
in the fall of 2020.
But
with our patents IP and abilities, think of some of the things
we've done in sterilization and other areas that will be crucial in
the health market going forward and we expect to be part of the
solution to this problem going forward. On these two initiatives,
we'll update shareholders; once we receive orders or results from
the clinical work we're performing to confirm our
capabilities.
In conclusion and before I turn it over to Q&A, 2019 was a very
good year for us. 2020 was poised to be a rocket ship replacement
in revenue and getting to breakeven. We're fortunate that we have a
good balance sheet focused on expense management and are using the
device to continue to grow in this uncertain market, by moving into
the telehealth and home health markets. We may have some other
announcements in the future with regards to COVID-19 and we still
plan to get to breakeven later this year one way
another.
3
Without
anymore, I'll turn it over to Q&A. Thank you.
Operator
Kevin,
thank you. (Operator Instructions). We will go first to the line of
Ian Miller.
Q: Hey, Kevin, can you hear me?
Kevin Richardson – Chairman and Chief Executive
Officer
I can hear you fine.
Q: Yes. Great. Just quick question on one of the remarks you
made about the technology and helping with COVID-19. You mentioned
sterilization and then biofilm, is that something that could have
potential application with the use of ventilators?
Kevin Richardson – Chairman and Chief Executive
Officer
So,
right now, what we've done -- Ian that is a good question but let
me go into --. We've done a lot of work with biofilms as many of
you know, we have been a better partner with the center for biofilm
engineering, which is out of Montana State and we've done some work
with the University of Georgia and other areas where we've shown
dramatic decreases in biofilm, but we've also seen reductions in
Staph, E. coli and other bacteria and so we can have a direct
impact, shockwaves have a direct impact on disrupting biofilm and
think of things, where bad stuff grows. And so, how that is
implemented in different settings? It's how we'll be exploring?
Where and how our device can help with either inside the human body
or in the settings, in which those humans are treated? Or with
potentially equipment, that may be used to assist. Now, I don't
know if that's specific to ventilators or specific to anything
else, but we do have -- the team has done a good job, a great job
on really pushing the envelope on biofilm.
And as
I mentioned at the beginning of the talk, I mean we've -- NASA has
picked us as an expert to help on the lunar mission, because of our
expertise in shockwaves and biofilm. And biofilm is a big issue and
you're -- when you're spending that much time in an enclosed
environment up in space. And then with that the FDA, we've been
picked to help them on understanding how shockwaves can help with
prevention and getting rid of biofilm, but specific to what area
will be doing -- that we're still working on and we'll have more to
report hopefully later, in a few weeks on that, but it's there are
exciting areas that play to our strengths and so we are going to be
pursuing that. As I mentioned earlier, we're fortunate to have a
Board member on Board recently, who can help us navigate some of
that, in DC and know where to look and how to get -- how to bring
our products to help treat this as fast as we can because it's a --
the sooner we can bring these products to help the
better.
Q: Got it. The press release that I read this morning
mentioned two specific areas and maybe it's too early to say but
how should we think of that? One as in sterilization and the other
in treating the patient or are you not there yet?
Kevin Richardson – Chairman and Chief Executive
Officer
It's
hard to say we're there yet, but I think you're going down the
right path. I mean there's a lot of different things that need to
happen for treating patients and if you think about some of the
things that shockwaves are capable of, we could be poised to help
tremendously with maybe not the cure, but with alleviating some of
the sickness and making it easier to -- for the patients. But
again, we're still -- we're probably a few weeks away from having
anything that we can specifically point to either in the form of
revenue or in clinical work that would lead us to bring it to
market, but we are definitely pursuing it and you will definitely
hear on the -- on those initiatives in the future.
Q:
Okay. Thanks, Kevin. I appreciate you taking my call.
Kevin Richardson – Chairman and Chief Executive
Officer
Thank
you, Ian. Appreciate it.
Operator
Next
we'll hear from Wayne Spencer. Please go ahead. Your line is
open.
Q: Hey Kevin, congratulations in tough times out there. Last
year, you guys reported along some movement with -- I think, its
national government services and some of the changes they made in
reimbursement. Can you update it on how that's going and any other
additional movement within the private payers or with the
government payers?
Kevin Richardson – Chairman and Chief Executive
Officer
Yes.
Now, Wayne, thank you. Thank you for the question, because we --
this call we really didn't focus on reimbursement at all, in the
movement we've been making, but it's a great point. We're getting
paid or if not we -- the hospitals and our clients are getting paid
and lots of different states right now. Some are surprising, the
ones that we hadn't expected are actually getting paid, others were
still have to work the system.
4
NGS was
the first kind of breakthrough, but we're seeing that occur in
other areas. I would expect to hear from at least two or three
states on Medicaid, which usually lags Medicare, but we've made
some presentations with our consultants and others that are helping
on the Medicaid. Because Diabetic Foot Ulcers tend to hit a certain
part of the population a little more severely and therefore they
need help. And where our product is priced from a standpoint, it
can save a lot of money to the Medicaid systems at the state level,
as an example, if we were to implement our product in our system in
Georgia, we would say, the state of Georgia close to $10 million a
year in treating patients.
And so,
they're very interested especially, in times where budgets are
tight and I can only imagine it's going to get tighter given the
situation we're in. Unfortunately, I think what's going to happen
is some of these are going to get delayed because everyone's focus
is on COVID. And so some of the decisions in the meetings we've had
with different private payers and with the states are probably
going to get pushed out from a decision standpoint. It doesn't mean
we're not getting good traction and we're not having good meetings,
it's just -- I'm being realistic about how states operate and work
and how some of these insurance carriers work, they're all --
everyone's trying to navigate through this crisis and new things
tend to get pushed off unless they directly impact
COVID-19.
With
that said, I still expect to see us get over 30 million covered
lives later this year. We're not going to stop. And at some point
the pandemic will slow or flattened or get to a point where things
do return to whatever normal is and that's when we're going to see
a little bit of a surge. Our clinical evidence is even stronger in
the real world that it was in our studies, so people are seeing it
impact lives. They're seeing it first hand, the word of mouth is
fantastic and we're working, trying issues on the claims and
payments, because quite frankly a lot of its new. And we've made
some great inroads on that. So we're excited about it.
There's
not to keep rambling on, but there's three things that are really
important. Can you make the patient better? Can the physician -- is
it easy for him to use? Or are they going to make money? And then
also importantly is the payer going to save money? And those are
the kind of three peers [ph] of this success to -- [ph] medical
device and we luckily have a great product that really works so and
it's really compliant. It's easy for the compliance with the
patient. It isn't like they have to go in a oxygen, a hyperbaric
chamber, they have to go wear a boot or things like that, ours is
comes in, they sit there for six minutes and get treated. So
patients like it and the results are good.
The
doctors like it, because they're getting paid and they're making
good money. And on a -- if you do kind of a gross income per hour
adjustment, they make as much from our procedures; they do any of
the other procedures in wound care, which is extremely important
message to get across to the wound care clinics and centers and
doctors.
And now
importantly, we've shown that we can save money and to the overall
system and some evidence of that is again in front of these
Medicaid providers, who have shown how at our rate we're -- they
are going to save tremendous amount of money. Again, the state of
Georgia, which stays close to $10 million a year using our product.
So, I feel very good about the reimbursement environment and I was
hopeful to hear something by this call from some of the folks we
had met with but quite frankly, it doesn't surprise me given the
pandemic.
Q: That's terrific
Kevin, thank you so much. And good luck.
Kevin Richardson – Chairman and Chief Executive
Officer
Thanks
Wayne. Appreciate it.
Operator
[Operator
instructions]. Next we'll hear a question from the line of Nate
Hurst.
Q: Kevin, good morning. Just a quick question on mentioned
the devices for mobile use. Curious of what the margins of like are
on that compared to a placement in a possible or wound care center
and off of that after all this COVID-19 is done; will the mobile
device market if you will be something you guys would still look
into?
Kevin Richardson – Chairman and Chief Executive
Officer
Good
questions. Thank you, Nate. So, first on the pricing. We're working
through those with the different organizations now; we had a call
even yesterday with one. They get paid sometimes differently, where
they're paid more on a capitated basis to for the care of that
patient. So the diagnosis goes out to that home -- at home patient.
And they kind of come up and they say yeah, we're going to give you
$4,500 this month to take care of that patient.
We
would have to be in that coding to get part of that 4500. And so
there are two different ways to approach it and I would expect
would expect that within the next few weeks we'll have the
capability to do it either way. One way is we just continue to get
paid per treatment and that would still be at the $211 every time
they use it.
5
And remember, these Home [ph] and Health agencies it's a kind of
route management business, the nurse is going from
location-to-location, whether it's a half hour and hour at each our
procedure -- set up time takes about five minutes, procedure time 6
minutes. So we don't really hurt them on their route capability, so
they can still continue to get a lot of flow. But we may end up
just placing the devices on a monthly charge, then letting them
manage the asset utilization on their own and incorporating it
within their own payment structures. And so that would -- and as an
example, we might charge certain amount per month for the device,
and we'll see. It depends on I think each one that we're talking to
and they're all different. Some are working with -- some are wound
clinics that our existing clients that are working now with Home
Health agencies to treat people at home, others are Home Health
agencies themselves, and they have -- one we talked to the other
day have 8,000 patients over 250 with Diabetic Foot Ulcers. So
that's a primary target for us, where we may end up with I'd guess
five to ten placements with them to treat those 250
patients.
Will we
be in this market? I think you're seeing a paradigm shift in how
wound care is being considered? You've seen a lot of the key
opinion leaders. The Lee Rogers is the -- Tom Serena these are the
some of the big name doctors out there talking about how the wound
care market needs just begin to triage these more and move more
towards that capitated model of how to close a wound. And I would
-- argue it stuff that we've been positioned wonderfully for going
forward.
I mean,
in fact, it's what we've talked about being in that position, so
that we can help with combination therapies and help with other
even at home. So I would envision if there's money to be made
there, using our device in the home, then we'll have it in home
that doesn't mean we won't have any at the wound clinics, we've
still have them at the wound clinic too. It's just I think you're
going to see more people take -- there's some great technology out
there digital imaging, where they can take pictures of your foot
and the doctor can do telemedicine.
We're
on the other day with the doctor Sammy and he was -- [ph] he or
Dr.Willis one of the two, they were talking about how -- they're
doing a lot of their work right now. They're kind of looking at the
foot over the computer saying "oh, yeah, here's what you need to do
to take care of it" and you need to come in or no, you don't need
to come in. So, I think you're going to see a lot of that occurring
going forward. I think it's going to be a paradigm shift within the
whole medical. I mean, I could I'm talking medical but all of us
are -- that have kids or at home right now and they're doing online
education home and that's the paradigm shift that's occurring in
education. I think, you're going to see a similar shift in wound
care and home health right now, the pandemics causing us to rethink
how business and how treatment is handled.
Q: Thank you.
Kevin Richardson – Chairman and Chief Executive
Officer
Thanks,
Nate.
Operator
[Operator
instructions]. Next we'll hear a question from John
Fox.
Q: Hi, Kevin, Lisa. Can you
give us an update on how many employees full-time you have right
now? There's a couple of points here I wanted to mention. How many
you've? How many you had to lay off at this time? How many sales
reps specifically you have? And have you had to let go of
any?
And then lastly, for Lisa mainly and you also Kevin is that new
federal government program relating to loans for small businesses,
I've done some research on this and they're pretty aggressive and
I'm wondering if you or Lisa have looked into those loans at this
point? Thank you.
Kevin Richardson – Chairman and Chief Executive
Officer
Yes. So
I'll start and then I'll let Lisa finish. But with regard to the
SBA loans and things like that, we have been exploring those
looking into those. And again, there are certain hurdles you have
to meet, certain provisions you have to meet and that's what I
mentioned earlier that we're going to explore each and every one of
those to make sure that we're not going to get tripped up on
something that could impact us later. But, there are definitely
many, many, many opportunities from getting funds from both federal
state and local agencies.
I
think, the bigger opportunity for us is again in some of the Home
Health markets right now and in driving revenue that way in the
near-term, as far as employee count goes, right now we have a sales
people five, total sales people and five clinical account managers,
where repositioning one of them from one market to another market,
so that's one of the areas that we're focused on. And then the
overall headcount, it's -- when you include -- we have some that
are what I call, independent reps and -- but we treat them, they
act and are treated as full-time employees. I believe our numbers
somewhere in the mid to high 20s right now.
Lisa
will correct me, because for some reason I remember 31, but it
might be 28. So, Lisa?
Lisa Sundstrom – Chief Financial Officer
I'm sorry, I was distracted by something. Was that the number of
employees?
Kevin Richardson – Chairman and Chief Executive
Officer
Yes, exactly.
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Lisa Sundstrom – Chief Financial Officer
Okay.
Yes, we're at 23 full-time employees on payroll and we have five
independent contractors, so about 28.
Q: Okay. Great. Thanks very
much.
Kevin Richardson – Chairman and Chief Executive
Officer
Thanks, John.
Operator
[Operator
instructions]. Our next question will come from the line of Michael
Porter. Please go ahead, sir. Your line is open.
Q: Thank you. Good morning, Kevin. Can you give us some
color on whether the hospitals are starting to more-and-more guide
patience to you with all that's going on and into the nursing homes
and these kinds of facilities, Kevin?
Kevin Richardson – Chairman and Chief Executive
Officer
Yes. No
Michael, you're hidden. So the difficulty right now that all
hospitals are at least the ones we've dealt with and are dealing
with are focused on how do they manage the ICUs? How do they manage
the COVID influx that's occurring?
And so
if they're -- if you're deemed not essential meaning, if you just
have a Diabetic Foot ulcer, they're trying to push you elsewhere to
get treated or stay at home. Now that can't last forever, because
if you don't treat a Diabetic Foot Ulcer on a regular basis, what
ends up happening is it gets infected and we know that infected
Diabetic Foot Ulcers will lead to amputations. And so, then you
create a -- it's almost like a double whammy, right. So you are
treating the COVID patient, but then you have a patient with an
infection that has to come into a hospital environment. That's not
good either.
And so
that's what I mentioned, the paradigm is getting shifted so how do
they treat him at home? How do they treat the patient in the
nursing home instead of moving them to the wound clinic for
treatment? And that's the dynamic we're facing right now. It's
moving rapidly, I mean, three weeks ago this was not top of mind
with a lot of people and now it's the number one thing wound care
centers are talking about. Home Health agencies are all talking
about it. It's a major demand driver for us.
And
luckily, we have a device that can -- again easy to use, easy to
set up, can be moved into the home and treat patients. And so we
will be a beneficiary and again, I hate to use the word beneficiary
of a crisis, but that -- we can help treatments. Because as I
mentioned in the overview, you can't move a hyperbaric chamber to
someone's house, you can't do a skin graft surgery in someone's
house. What you can do and dermaPACE treatment in someone's house
and you can treat them in that mobile function. And that's really
what our teams are out pushing right now is that, hey, if you --
wound center need help with a mobile device, we're there for you.
And they like it because again, we don't have a capital cost at we
get paid on a per claim basis and so it's something that can get
immediately brought into the field and it's exciting for us right
now.
Q: Thank you.
Kevin Richardson – Chairman and Chief Executive
Officer
Thanks, Michael. Appreciate it.
Operator
And our
next question will come from the line of Gill Good [ph]. Please go
ahead. Your line is open.
Q: Hi, Kevin. I was just wondering, if there's any standard
number of treatments for a wound to heal? Or does it vary from
patient-to-patient?
Kevin Richardson – Chairman and Chief Executive
Officer
Yes.
It's still varies patient-to-patient. I would say, that -- in our
study and I can only point to our study, we had very good results
and we treated the patient. It was a total of 8 times and that was
over a -- we talked about trying to get the closure in 12 weeks and
things like that.
What
we're seeing right now from the data? And again, we've done over
3,000 treatments and it varies across the board from wounds that
are 2 centimeters squared the wounds that are 6 centimeters squared
but really deep. It depends on the BMI levels of the patient, are
they overweight, are they underweight, are they smoker, are they
not a smoker, the A1C levels are there sugar's high or low? I mean,
these are all the different factors that go into it. But we're
seeing a nice reduction on a week-to-week basis. We're and -- we're
seeing that happen immediately.
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One of
the studies will come out with or not we, but one of the doctors,
Dr.Wendy Cole was going to present a terrible at the WWH's
conference in Abu Dhabi, which was canceled. But her results were
absolutely fantastic and she measured not just closure rates which
were -- in this case better than what we had in our study from a
closure rate standpoint, but she also measure perfusion using a
device called Kent Imaging -- the Kent Imaging device that measures
oxygenation within the wound and without that you can -- wound
would close unless it has oxygenation. And so, we saw dramatic
increases in the oxygenation levels of the wound over four week --
four treatment sets.
So
every wound that do a little different and I think that's again
plays really well to us, because our device and we have some
patents around this is customizable based on those inputs. So, I
mentioned BMI, I mentioned smoking, I mentioned A1C, I mentioned
wound sizes. One of the things that we have the capability to do
with our algorithms is customize our shock count to what's going to
be best for a particular wound and in today's environment that's
really important, so in some wounds they may use 1,000 shocks [ph]
on a treatment and another wound they may use 2,000 shocks. And
they can also treat around the -- what called the periwound to
drive vascularization to the wound bed itself.
So
again, we're seeing a lot of differences and we're taking all this
data end datas [ph] the important part here. The more data we get
from this, the better we can drive the algorithms going forward. I
mean, I'd try to use like a fancy word like AI or something, but
it's more just driving the algorithms the right way to treat the
wounds. It's part of the polish study we did this year, the dosage
study was really to figure out some of those algorithms and we had
really good results over there including some things that the
doctor did with other types of wounds, that I'm sure we will be
talking about later this year, because it's an exciting area of
development that he pursued.
Q: Okay. Thanks very much.
Kevin Richardson – Chairman and Chief Executive
Officer
Thanks, Gill.
Operator
And
ladies and gentlemen, we do thank you all for your questions today.
Mr.Richardson, I'll turn it back to you for any additional or
closing remarks.
Kevin Richardson – Chairman and Chief Executive
Officer
Great.
So, just in closing, we're managing through this, we're trying our
best to do, what we can. We're going to take advantage of
opportunities where we can help our patients, our customers, our
clinicians. We're going to remain on track to get to our breakeven
later this year. Again, one way or another we're focused on expense
management and we're going to come out of this stronger and part of
the solution moving forward.
And if
anyone has any questions, please follow-up. If you need anything
from the website, you can do that as well. Please check out the
newly designed website too, because we've got some good
testimonials coming there and it's very educational on the
product.
Thank
you very much. Have a great day.
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