[10-Q] SANUWAVE Health, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

SANUWAVE Health (SNWV) reported Q3 2025 results with revenue of $11.5M (up 22% year over year) and gross margin of 78%. Operating income was $1.5M. Net income reached $10.3M, driven by a $6.1M favorable change in warrant fair value and $5.0M other income from a patent sale.

Year to date, revenue was $31.0M (up 39%) and operating income was $4.3M. Consumables and parts contributed $7.0M in the quarter; system revenue was $4.4M. Stock‑based compensation totaled $1.4M in Q3.

Balance sheet and liquidity: SANUWAVE closed a new credit agreement with a $23.0M secured term loan (maturing 2029) and a $5.0M revolver (undrawn availability $4.3M as of Sept 30, 2025), and repaid prior senior secured debt. Management states that refinancing and positive operating income alleviated prior going‑concern doubt. Cash was $9.6M; total liabilities were $38.5M. Shares outstanding were 8,576,164 as of Nov 3, 2025.

Insights

Credit & capital structure analyst

Refinancing extends maturities and eases going‑concern pressure.

SANUWAVE replaced legacy senior secured notes with a JPM‑led facility: a $23.0M secured term loan (amortizing quarterly) and a $5.0M revolver. As of Sept 30, 2025, revolver availability was $4.3M. The company recorded a small extinguishment loss of $0.5M and reported covenant compliance.

Quarterly interest expense was $1.7M, partly offset by other income from a $5.0M patent sale. Management indicates that refinancing and operating income alleviated going‑concern doubt, contingent on continued performance and covenant adherence.

Watch amortization of $1.4375M per quarter on the term loan starting Dec 31, 2025, gross margin sustainability at 78%, and utilization of the revolver. Actual cash flows will depend on revenue mix (consumables vs. systems) and expense control.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

o 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 000-42552

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.)

9600 W. 76th St, Ste 118 Eden Prairie, MN			55344
(Address of principal executive offices)			(Zip Code)

(952) 656-1029

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, par value $0.001 per share			SNWV			The Nasdaq Stock Market LLC

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.  x  Yes  o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    x Yes  o  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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:

			Large accelerated filer o			Accelerated filer o
			Non-accelerated filer x			Smaller reporting company x
						Emerging growth company o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o No  x  

As of November 3, 2025, there were issued and outstanding 8,576,164 shares of the registrant’s common stock, $0.001 par value per share.

Table of Contents

SANUWAVE Health, Inc.

Table of Contents

						Page
PART I – FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited)			4
			Condensed Consolidated Balance Sheets as of September 30, 2025, and December 31, 2024			4
			Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024			5
			Condensed Consolidated Statements of Stockholders’ Deficit for the three and nine months ended September 30, 2025 and 2024			6
			Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024			8
			Notes to Unaudited Condensed Consolidated Financial Statements			10
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			30
Item 4.			Controls and Procedures			30
PART II – OTHER INFORMATION
Item 1.			Legal Proceedings			31
Item 1A.			Risk Factors			31
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			32
Item 3.			Defaults Upon Senior Securities			32
Item 4.			Mine Safety Disclosures			32
Item 5.			Other Information			32
Item 6.			Exhibits			32
			SIGNATURES			34

2

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Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q of SANUWAVE Health, Inc. and its subsidiaries (“SANUWAVE,” the “Company,” “we,” “us,” and “our”) contains forward-looking statements. All statements in this Quarterly Report on Form 10-Q, including those made by the management of the Company, other than statements of historical fact, are forward-looking statements. Examples of forward-looking statements include statements regarding: results of operations, liquidity, and operations, restrictions and new regulations on our operations and processes; the Company’s future financial results, operating results, and projected costs; market acceptance of and demand for UltraMIST® and PACE®; success of future business development and acquisition activities; management’s plans and objectives for future operations; industry trends; regulatory actions that could adversely affect the price of or demand for our approved products; our intellectual property portfolio; our business, marketing and manufacturing capacity and strategy; estimates regarding our capital requirements, the anticipated timing of the need for additional funds, and our expectations regarding future capital-raising transactions, including through investments by strategic partners for market opportunities, which may include strategic partnerships or licensing agreements, or raising capital through the conversion of outstanding warrants or issuances of securities; product liability claims; economic conditions that could adversely affect the level of demand for or the cost of our products; timing of clinical studies and any eventual U.S. Food and Drug Administration ("FDA") approval of new products and new uses of our current products; financial markets; the competitive environment; supplier and customer disputes; and our plans to remediate our material weaknesses in our disclosure controls and procedures and our internal control over financial reporting. These forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof and include the assumptions that underlie such statements. Forward-looking statements may contain words such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” and “continue,” the negative of these terms, or other comparable terminology. Any expectations based on these forward-looking statements are subject to risks and uncertainties and other important factors, including those discussed in the reports we file with the Securities and Exchange Commission (the “SEC”), specifically the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 20, 2025. Other risks and uncertainties are and will be disclosed in the Company’s subsequent SEC filings, including this Quarterly Report on Form 10-Q. These and many other factors could affect the Company’s future financial condition and operating results and cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by the Company or on its behalf. The Company undertakes no obligation to revise or update any forward-looking statements. The following information should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on March 20, 2025.

Except as otherwise indicated by the context, references in this Quarterly Report on Form 10-Q to “we,” “us” and “our” are to the consolidated business of the Company.

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PART I -- FINANCIAL INFORMATION

Item 1.    FINANCIAL STATEMENTS

SANUWAVE HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share data)

			September 30, 2025						December 31, 2024
ASSETS
Current Assets:
Cash and cash equivalents			$	9,602					$	10,237
Accounts receivable, net of allowance of $1,259 and $1,147, respectively			4,620						3,329
Inventory			6,814						4,149
Prepaid expenses and other current assets			1,597						682
Total Current Assets			22,633						18,397
Non-Current Assets:
Property and equipment, net			1,994						303
Right of use assets, net			431						429
Intangible assets, net			3,202						3,730
Goodwill			7,260						7,260
Secured revolving credit facility debt issuance costs, net			79						-
Total Non-Current Assets			12,966						11,722
Total Assets			$	35,599					$	30,119
LIABILITIES
Current Liabilities:
Current portion of secured term loan			$	5,629					$	-
Senior secured debt			-						25,305
Accounts payable			3,992						3,728
Accrued expenses			3,586						4,678
Warrant liability			5,921						8,107
Current portion of operating lease liabilities			191						126
Current portion of finance lease liabilities			-						175
Current portion of contract liabilities			252						193
Other			6						33
Total Current Liabilities			19,577						42,345
Non-current Liabilities:
Secured term loan, net of current portion and debt issuance costs			17,079						-
Secured revolving credit facility			655						-
Operating lease liabilities, less current portion			897						125
Finance lease liabilities, less current portion			-						66
Contract liabilities, less current portion			322						300
Total Non-current Liabilities			18,953						491
Total Liabilities			$	38,530					$	42,836
Commitments and Contingencies (Footnote 16)
STOCKHOLDERS’ DEFICIT
Preferred Stock, par value $0.001, 5,000,000 shares authorized; 6,175 shares Series A, 293 shares Series B, 90 shares Series C and 8 shares Series D designated, respectively; no shares issued and outstanding at September 30, 2025 and December 31, 2024			$	-					$	-
Common stock, par value $0.001, 2,500,000,000 shares authorized; 8,576,164 and 8,543,686 issued and outstanding at September 30, 2025 and December 31, 2024, respectively			9						9
Additional paid-in capital			242,767						238,685
Accumulated deficit			(245,717)						(251,421)
Accumulated other comprehensive loss			10						10
Total Stockholders’ Deficit			(2,931)						(12,717)
Total Liabilities and Stockholders’ Deficit			$	35,599					$	30,119

The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.

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SANUWAVE HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(In thousands, except share data)

			Three Months Ended September 30,												Nine Months Ended September 30,
			2025						2024						2025						2024
Revenue			$	11,451					$	9,360					$	30,957					$	22,308
Cost of Revenues			2,526						2,293						6,690						5,799
Gross Margin			8,925						7,067						24,267						16,509
Operating Expenses:
General and administrative			4,810						2,545						13,316						8,059
Selling and marketing			2,081						2,202						5,286						4,468
Research and development			345						161						747						519
Depreciation and amortization			222						206						588						568
Total Operating Expenses			7,458						5,114						19,937						13,614
Operating Income			1,467						1,953						4,330						2,895
Other Income (Expense):
Interest expense			(1,722)						(3,315)						(5,448)						(9,948)
Interest expense, related party			-						(346)						-						(1,056)
Gain (Loss) on extinguishment of debt			(477)						-						(477)						5,205
Change in fair value of derivative liabilities			6,097						(18,849)						2,186						(17,633)
Loss on impairment of assets			(196)						-						(196)						-
Other expense			(14)						(106)						(42)						(893)
Other income (See Note 15)			5,170						6						5,351						2,806
Total Other Income (Expense)			8,858						(22,610)						1,374						(21,519)
Net Income (Loss)			$	10,325					$	(20,657)					$	5,704					$	(18,624)
Other Comprehensive Income (Loss)
Foreign currency translation adjustment			-						-						-						121
Total Comprehensive Income (Loss)			$	10,325					$	(20,657)					$	5,704					$	(18,503)
Earnings (Loss) per Share:
Basic			$	1.20					$	(6.49)					$	0.67					$	(5.92)
Diluted			$	0.46					$	(6.49)					$	0.38					$	(5.92)
Weighted average shares outstanding
Basic			8,571,111						3,185,495						8,560,174						3,146,000
Diluted			9,140,668						3,185,495						9,178,144						3,146,000

The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.

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SANUWAVE HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)

(In thousands, except share data)

Three Months Ended September 30, 2025
						Common Stock
						Number of Shares Issued and Outstanding						Par Value						Additional Paid- in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income						Total
Balances as of June 30, 2025						8,568,005						$	9					$	241,248					$	(256,042)					$	10					$	(14,775)
Stock-based compensation						-						-						1,397						-						-						1,397
Stock options exercised						8,159						-						122						-						-						122
Net income						-						-						-						10,325						-						10,325
Balances as of September 30, 2025						8,576,164						$	9					$	242,767					$	(245,717)					$	10					$	(2,931)

Three Months Ended September 30, 2024
						Common Stock
						Number of Shares Issued and Outstanding						Par Value						Additional Paid- in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income						Total
Balances as of June 30, 2024						3,150,062						$	3					$	178,397					$	(218,016)					$	10					$	(39,606)
Net loss						-						-						-						(20,657)						-						(20,657)
Balances as of September 30, 2024						3,150,062						$	3					$	178,397					$	(238,673)					$	10					$	(60,263)

The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.

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SANUWAVE HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)

(In thousands, except share data)

Nine Months Ended September 30, 2025
						Common Stock
						Number of Shares Issued and Outstanding						Par Value						Additional Paid- in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income						Total
Balances as of December 31, 2024						8,543,686						$	9					$	238,685					$	(251,421)					$	10					$	(12,717)
Stock-based compensation						4,787						-						3,630						-						-						3,630
Stock options exercised						25,167						-						375						-						-						375
Shares granted in lieu of board of director fees						2,524						-						77						-						-						77
Net income						-						-						-						5,704						-						5,704
Balances as of September 30, 2025						8,576,164						$	9					$	242,767					$	(245,717)					$	10					$	(2,931)

Nine Months Ended September 30, 2024
						Common Stock
						Number of Shares Issued and Outstanding						Par Value						Additional Paid- in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income (Loss)						Total
Balances as of December 31, 2023						3,041,492						$	3					$	176,979					$	(220,049)					$	(111)					$	(43,178)
Shares issued for settlement of warrants						14,440						-						6						-						-						6
Shares issued for settlement of debt						94,130						-						1,412						-						-						1,412
Foreign currency translation adjustment						-						-						-						-						121						121
Net loss						-						-						-						(18,624)						-						(18,624)
Balances as of September 30, 2024						3,150,062						$	3					$	178,397					$	(238,673)					$	10					$	(60,263)

The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.

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SANUWAVE HEALTH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

			Nine Months Ended September 30,
(in thousands)			2025						2024
Cash Flows - Operating Activities:
Net income (loss)			$	5,704					$	(18,624)
Adjustments to reconcile net income to net cash (used in) provided by operating activities
Stock-based compensation			3,513						-
Depreciation and amortization			634						570
Amortization of right-of-use assets			268						268
Allowance for credit losses			112						16
Loss on disposal and impairment of assets			210						-
Loss (Gain) on extinguishment of debt			477						(5,205)
Change in fair value of derivative liabilities			(2,186)						17,633
Gain on sale of patents			(5,000)						-
Amortization of debt issuance costs and debt discounts			1,416						4,792
Gain on lease modification			(7)						-
Accrued interest and accrued interest, related party			-						2,749
Proceeds from tenant improvement funds			586						-
Changes in operating assets and liabilities
Accounts receivable			(1,387)						66
Inventory			(2,665)						(480)
Prepaid expenses and other assets			(1,009)						225
Accounts payable			264						(1,013)
Accrued expenses and contract liabilities			(294)						819
Operating lease payments			(79)						(102)
Net Cash Flows Provided by Operating Activities			557						1,714
Cash Flows - Investing Activities:
Purchase of property and equipment			(1,846)						(254)
Proceeds from sale of patents			5,000						-
Net Cash Flows Provided by (Used in) Investing Activities			3,154						(254)
Cash Flows - Financing Activities:
Proceeds from secured term loan			23,000						-
Proceeds from secured revolving credit facility			655						-
Payment of debt issuance costs			(371)						-
Proceeds from exercises of stock options			359						-
Payment of note payable			(27,747)						(2,175)
Proceeds from convertible notes payable			-						1,300
Proceeds from promissory note payable, related party			-						500
Proceeds from factoring, net			-						449
Payments of principal on finance lease and extinguishment of lease liability			(242)						(193)
Net Cash Flows Used in Financing Activities			(4,346)						(119)

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Effect of Exchange Rates on Cash			-						121
Net Change in Cash During Period			(635)						1,462
Cash at Beginning of Period			10,237						1,797
Cash at End of Period			$	9,602					$	3,259
Supplemental Information:
Cash paid for interest			$	3,291					$	3,189
Non-cash Investing and Financing Activities:
Capitalize interest into senior secured debt			549						3,850
Shares granted in lieu of board of director fees			77						-
Stock options granted in lieu of cash bonus			117						-
Right-of-use assets obtained in exchange for lease liabilities			430						-
Lease liabilities reduced upon lease modification			99						-
RSUs granted in exchange for services			10						-
Warrants issued in conjunction with convertible promissory notes			-						3,633
Conversion of asset-backed secured promissory notes to convertible promissory notes			-						4,584
Shares issued for settlement of debt			-						1,412
Write off deferred merger costs			-						1,226

The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.

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SANUWAVE HEALTH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

1.        Nature of the Business and Basis of Presentation

SANUWAVE Health, Inc. and subsidiaries (“SANUWAVE” or the “Company”) is focused on the commercialization of its patented regenerative medicine utilizing noninvasive ultrasound or shockwaves to produce a biological response promoting the repair and regeneration of tissue, musculoskeletal, and vascular structures.

Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all the information and disclosures required by U.S. GAAP for comprehensive financial statements.

The financial information as of September 30, 2025, and for the three and nine months ended September 30, 2025, and 2024 is unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2025.

The condensed consolidated balance sheet on December 31, 2024, has been derived from the audited consolidated financial statements at that date but does not include all the information and disclosures required by U.S. GAAP for comprehensive financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 20, 2025 (the “2024 Annual Report”).

Reverse Stock Split - All share numbers, including the number of shares underlying warrants, options and convertible debt, and per share amounts presented in these condensed consolidated financial statements, including these footnotes, reflect a one-for-three hundred seventy five (1:375) reverse stock split of the outstanding shares of the Company's common stock effected on October 18, 2024 (the "Reverse Stock Split"). The Company's authorized shares of common and preferred stock along with the par value did not change as a result of the Reverse Stock Split, and no fractional shares were issued as a result of the Reverse Stock Split. Any fractional shares that would have resulted from the Reverse Stock Split were settled in cash. The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder's percentage interest in the Company's common stock, except to the extent that the Reverse Stock Split resulted in certain stockholders experiencing an adjustment of a fractional share as described above.

Reclassification - Certain accounts in the prior period condensed consolidated balance sheets and statement of cash flows have been reclassified to conform to the presentation of the current period condensed consolidated financial statements. These reclassifications had no effect on the previously reported operating results.

2.        Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In prior periods, the Company experienced recurring net losses, accumulated deficits, negative working capital, and significant debt maturities, which raised substantial doubt about its ability to continue as a going concern.

During the third quarter of 2025, management executed a comprehensive debt refinancing with a new lender, which extended the maturity of the Company’s principal debt obligations from the secured term loan and provided the option for additional liquidity to support ongoing operations through a secured revolving credit facility. In addition, the Company achieved positive operating income for the three and nine months ended September 30, 2025, and prior fiscal year ended December 31, 2024, reflecting the impact of strategic initiatives focused on revenue growth and operational efficiency.

As a result of these actions, management has evaluated the Company’s financial condition and cash flow requirements for the twelve months following the issuance of these condensed consolidated financial statements. Based on the debt refinancing, the achievement of operating income, and cash inflow from forecasted operations for at least the next 12

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months, management believes the Company has sufficient resources to meet its obligations as they become due and to continue its operations for the foreseeable future. Accordingly, when considering all conditions and factors, management has concluded that the substantial doubt about the Company’s ability to continue as a going concern for at least twelve months from issuance of these condensed consolidated financial statements has been alleviated.

Management will continue to monitor the Company’s financial position, operating results, and compliance with debt covenants.

3.        Summary of Significant Accounting Policies

Significant accounting policies followed by the Company are summarized below and should be read in conjunction with those described in Note 3 of the consolidated financial statements in our 2024 Annual Report.

Estimates – These condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. Because a precise determination of assets and liabilities, and correspondingly revenues and expenses, depend on future events, the preparation of condensed consolidated financial statements for any period necessarily involves the use of estimates and assumptions. Actual amounts may differ from these estimates. These condensed consolidated financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized herein.

Significant estimates include the recording of allowances for credit losses, the net realizable value of inventory, fair value of goodwill and other intangible assets, the determination of the valuation allowances for deferred taxes, litigation contingencies, stock-based compensation, incremental borrowing rate, and the estimated fair value of financial instruments, including warrants.

Revenue Recognition - The core principle of Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers” (“ASC 606”) requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company allocates the transaction price to all contractual performance obligations included in the contract. If a contract has more than one performance obligation, we allocate the transaction price to each performance obligation based on standalone selling price, which depicts the amount of consideration we expect to be entitled in exchange for satisfying each performance obligation. The Company recognizes revenue primarily from the following types of contracts:

System Sales, Consumables and Part Sales - System sales, consumables and part sales include devices and applicators (new and refurbished). Performance obligations are satisfied at the point in time when the customer obtains control of the goods, which is generally at the point in time that the product is shipped.

Licensing Fees - Licensing transactions include distribution licenses and intellectual property licenses. Licensing revenue is recognized as the Company satisfies its performance obligations, which may vary with the terms of the licensing agreement.

Other Revenue - Other revenue primarily includes warranties, repairs, and billed freight. The Company allocates the device sales price to the product and the embedded warranty by reference to the stand alone extended warranty price. Warranty revenue is recognized over the time that the Company satisfies its performance obligations, which is generally the warranty term. Repairs (parts and labor) and billed freight revenue are recognized at the point in time that the service is performed, or the product is shipped, respectively.

Stock-based compensation - The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation—Stock Compensation”. Stock-based compensation expense is recognized for all share-based payment awards based on the grant-date fair value. The Company grants the following types of equity awards:

Time-based or service awards, which vest based on continued service over a specified period. These awards are valued using the Black-Scholes option pricing model (for stock options) or the grant-date fair value of the underlying common stock (for restricted stock units).

Performance-based awards, which vest upon the achievement of pre-established internal performance targets. These awards are valued using the Black-Scholes option pricing model.

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Market-based awards, which vest upon the attainment of defined market conditions, such as stock price milestones. These awards are valued using a Monte Carlo simulation model.

The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period for time-based awards, on a straight-line basis over the requisite service period for performance-based awards when it is probable that the associated performance condition will be satisfied, and on a straight-line basis over the requisite service period for market-based awards irrespective of likelihood that the associated market condition will be satisfied. Forfeitures are recognized as they occur. Compensation expense is included in the same functional expense categories as the related employee payroll costs.

Leases

The Company accounts for leases in accordance with ASC Topic 842, "Leases". At the commencement date of a lease, the Company recognizes a right-of-use (“ROU”) asset and a lease liability for all leases with a term greater than 12 months. Short-term leases (those with an original term of 12 months or less) are not recorded on the balance sheet; lease expense for these is recognized on a straight-line basis over the lease term.

Lease liabilities are measured at the present value of future lease payments using the Company’s incremental borrowing rate unless the implicit rate is readily determinable. ROU assets are measured at the initial lease liability, adjusted for lease incentives, initial direct costs, and any prepaid or accrued lease payments.

Lease Incentives

Lease incentives received from lessors, such as rent-free periods or reimbursement for leasehold improvements, are recognized as a reduction to the ROU asset at lease commencement. These incentives are amortized on a straight-line basis over the lease term, consistent with the amortization of the ROU asset. Incentives that are paid directly to the Company or on its behalf are included in the measurement of the ROU asset and reduce the total lease cost recognized over the lease term.

New accounting pronouncements

ASU 2024-03, Disaggregation of Income Statement Expenses

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures to improve the disclosures about a public entity’s expenses and provide more detailed information about the types of expenses in commonly presented expense captions such as inventory purchases, employee compensation, depreciation and intangible asset amortization. The disclosure requirements must be applied retrospectively to all prior periods presented in the financial statements. The effective date for the standard is for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.

Recently adopted accounting pronouncements

ASU 2023-09, Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 aims to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state, and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 prospectively in the first quarter of 2025. The adoption of ASU 2023-09 did not have a material impact on the Company’s financial position or results of operations.

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4.       Allowance for Credit Losses

The Company maintains an allowance for credit losses to cover estimated losses on accounts receivable. The allowance is based on the Company's assessment of various factors, including historical loss experience, the age of receivables, current economic conditions, and the creditworthiness of customers. The allowance for credit losses is reviewed and adjusted as necessary at each reporting date.

The roll-forward of the allowance for credit losses is as follows:

(in thousands)						Nine Months Ended September 30, 2025						Nine Months Ended September 30, 2024
Allowance for credit losses, December 31						$	1,147					$	1,237
Provision for credit losses						153						67
Write-offs						(41)						(248)
Allowance for credit losses, September 30						$	1,259					$	1,056

5.      Inventory

Inventory consisted of the following:

(in thousands)			September 30, 2025						December 31, 2024
Finished goods			$	6,083					$	386
Parts and accessories			731						3,763
Total Inventory			$	6,814					$	4,149

6.        Leases

Operating lease commitments - On March 27, 2025, the Company entered into a new operating lease agreement for its new headquarters in Eden Prairie, Minnesota. The lease term commenced on March 28, 2025, and extends for a period of 5.5 years, expiring on August 30, 2030. The lease includes an option to renew for an additional 5 years at the Company's discretion.

Lease payments - Under the terms of the lease, the Company is obligated to make monthly lease payments starting September 1, 2025, with an annual escalation of 3.5% starting on September 1, 2026 through August 30, 2030. The total minimum lease payments over the initial lease term amount to approximately $1.4 million.

Right-of-use asset and lease liability - In accordance with ASC 842, "Leases," the Company recognized a right-of-use asset and a corresponding lease liability on the condensed consolidated balance sheets as of March 28, 2025. The initial measurement of the right-of-use asset and lease liability was $0.4 million, which represents the present value of the lease payments over the lease term, discounted at the Company's incremental borrowing rate of 11.5%.

Lease incentive - As part of a new office lease agreement, the Company received reimbursement payments from the lessor as a lease incentive. These payments, totaling $586 thousand, were intended to offset certain costs associated with leasehold improvements.

Lease expense - For the three and nine months ended September 30, 2025, the Company recognized lease expense of $37 thousand and $86 thousand, respectively, related to this operating lease, which is included in general and administrative expenses in the condensed consolidated statements of comprehensive income (loss).

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As of September 30, 2025, the maturities of the Company’s operating leases, which have initial or remaining lease terms more than one year, consist of the following:

(in thousands)			Operating Leases
2025			$	99
2026			270
2027			272
2028			282
2029			292
Thereafter			199
Total Lease Payments			1,414
Imputed interest			(326)
Present value of lease liabilities			$	1,088

The weighted-average useful life of operating leases at September 30, 2025, is 4.75 years.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

7.        Long Term Debt, Revolving Credit Facility and Senior Secured Debt

The following table summarizes outstanding debt at September 30, 2025 and December 31, 2024:

			September 30, 2025																								December 31, 2024
(in thousands)			Principal						Debt Issuance Costs						Carrying Value												Principal						Debt Discount						Carrying Value
Secured term loan			$	23,000					$	(292)					$	22,708											$	-					$	-					$	-
Secured revolving credit facility			655						(79)						576												-						-						-
Senior secured debt			$	-					$	-					$	-											$	26,898					$	(1,593)					$	25,305

Revolving Credit Facility and Senior Secured Debt - On September 25, 2025, the Company entered into a new credit agreement (the “JPM Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders. The JPM Credit Agreement provides for a $23.0 million secured term loan (the “Term Loan”) with term payments through September 25, 2029, and a $5.0 million secured revolving credit facility (the “Revolver”) maturing September 25, 2027. Loans under the JPM Credit Agreement accrue interest at a rate per annum equal to, at the Company’s option, either a term rate based on the secured overnight financing rate (“SOFR”) plus a margin of 3.50%, or the CB Floating Rate (“CBFR”) plus a margin of 2.50%. Interest is payable in arrears, either at the end of the applicable interest period for SOFR-based loans or quarterly for CBFR-based loans.

Debt issuance costs incurred in connection with obtaining new debt facilities are capitalized and amortized over the term of the related debt. For the term loan, these costs are presented as a direct reduction of the carrying amount of the debt. For the revolving credit facility, such costs are presented as an asset. Amortization of debt issuance costs is included in interest expense in the condensed consolidated statements of comprehensive income (loss).

Principal payments on the term loan will commence on December 31, 2025, and will be made in quarterly installments of $1,437,500 on the last day of each fiscal quarter. The Company may prepay outstanding loans at any time without premium or penalty, subject to customary breakage costs for SOFR-based borrowings.

As of September 30, 2025, the undrawn amount available under the revolver was $4.3 million.

Retirement of Senior Secured Debt - Concurrently, on September 25, 2025, in connection with the funding of the term loan and the initial draw of $0.7 million under the revolver, the Company paid all amounts due under and terminated in full all commitments under the Note and Warrant Purchase and Security Agreement, dated August 6, 2020, with NH Expansion

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Credit Fund Holdings LP and the related senior secured debt (collectively, the “Existing Debt”). The payoff and termination of the Existing Debt resulted in the release of all associated liens and security interests.

The full repayment of the Existing Debt was accounted for as a debt extinguishment under ASC 470-50. The Company recognized a $0.5 million loss on extinguishment of debt, which includes the write-off of unamortized debt issuance costs and debt discounts.

Debt Covenants and Restrictions - The JPM Credit Agreement contains customary covenants, including requirements to maintain certain financial ratios and restrictions on additional indebtedness, asset sales, and dividend payments.

As of September 30, 2025, the Company was in compliance with all covenants under the JPM Credit Agreement.

Collateral and Security - The Company’s obligations under the JPM Credit Agreement are secured by a first-priority lien on substantially all of the Company’s tangible and intangible assets, including the Company’s equity interests in subsidiaries.

Maturity Analysis - Future principal payments on the term loan and revolver are due as follows:

(in thousands)			Principal Payments
2025			$	1,438
2026			5,750
2027 (includes the revolver)			6,405
2028			5,750
2029			4,312
Total Principal Payments			23,655
Debt Issuance Costs			(371)
Total			23,284
Less current maturities			(5,750)
Long term debt, net of current maturities			$	17,534

Prior to full repayment, the debt issuance costs and debt discount related to the Senior Secured Note were capitalized as a reduction in the principal amount and were amortized to interest expense over the life of the Senior Secured Note.

						Three Months Ended												Nine Months Ended
(In millions)						September 30, 2025						September 30, 2024						September 30, 2025						September 30, 2024
Amortization of debt issuance costs and debt discount, included in interest expense						$	0.5					$	0.5					$	1.6					$	1.4
Interest expense						$	1.8					$	2.1					$	5.5					$	6.1

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8.        Accrued Expenses

Accrued expenses consisted of the following:

(in thousands)			September 30, 2025						December 31, 2024
Registration penalties			$	1,583					$	1,583
Board of directors fees			172						249
Employee compensation			1,042						2,232
Other			789						614
Accrued expenses			$	3,586					$	4,678

9.        Fair Value Measurements

The Company uses various inputs to measure the outstanding warrants on a recurring basis to determine the fair value of the liabilities. The following tables classify the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy:

			Fair value measured at September 30, 2025
(in thousands)			Fair value at September 30, 2025						Quoted prices in active markets (Level 1)						Significant other observable inputs (Level 2)						Significant unobservable inputs (Level 3)
Warrant liability			$	5,921					$	-					$	-					$	5,921

			Fair value measured at December 31, 2024
(in thousands)			Fair value at December 31, 2024						Quoted prices in active markets (Level 1)						Significant other observable inputs (Level 2)						Significant unobservable inputs (Level 3)
Warrant liability			$	8,107					$	-					$	-					$	8,107

There were no transfers among Levels 1, 2 or 3 during the three and nine months ended September 30, 2025, and 2024. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable and unobservable inputs.

Warrant Liability

The Company's liability classified warrants as of September 30, 2025, and December 31, 2024, were valued using the Black Scholes valuation model.

Significant Black Scholes valuation model inputs related to the Company’s warrants are listed below:

			September 30, 2025						December 31, 2024
Weighted average expected life in years			0.23						0.85
Weighted average volatility			60%						91%
Value of underlying shares			$37.48						$22.76
Weighted average risk free interest rate			3.96%						4.10%
Expected dividend yield			0%						0%

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A summary of the Level 3 warrant activity for the three and nine months ended September 30, 2025, is as follows:

(in thousands, except per share data)			Warrants Outstanding						Fair Value per Share						Warrant Liability Fair Value
Balance at June 30, 2025			390						$	30.82					$	12,018
Expired			(222)
Change in fair value															(6,097)
Balance at September 30, 2025			168						$	35.24					$	5,921

(in thousands, except per share data)			Warrants Outstanding						Fair Value per Share						Warrant Liability Fair Value
Balance at December 31, 2024			390						$	20.79					$	8,107
Expired			(222)
Change in fair value															(2,186)
Balance at September 30, 2025			168						$	35.24					$	5,921

10.        Promissory Notes Payable

Convertible Notes Payable and Convertible Notes Payable, Related Parties - In August 2022, November 2022, May 2023, December 2023, January 2024, and June 2024, the Company entered into Securities Purchase Agreements (the “Purchase Agreements”) for the sale in a private placement of (i) Future Advance Convertible Promissory Notes (the “Notes”) in an aggregate principal amount of $16.2 million in August 2022, $4.0 million in November 2022, $1.2 million in May 2023, $1.9 million in December 2023, $4.6 million in January 2024 related to the conversion of the Asset-Backed Secured Promissory Notes, and $1.3 million in June 2024 (ii) Common Stock Purchase Warrants to purchase an additional 1.9 million shares of common stock with an exercise price of $25.13 per share and (iii) Common Stock Purchase Warrants to purchase an additional 1.9 million shares of common stock with an exercise price of $15.00 per share. Interest expense for the three and nine months ended September 30, 2025 totaled $0, and interest expense for the three and nine months ended September 30, 2024, totaled $1.5 and $4.3 million, respectively.

Pursuant to the Notes, the Company promised to pay in cash and/or in shares of common stock, at a conversion price of $15.00 (the “Conversion Price”), the principal amount and interest at a rate of 15% per annum on any outstanding principal. The Conversion Price of the Notes was subject to adjustment, including if the Company issued or sold shares of common stock for a price per share less than the Conversion Price of the Notes or if the Company listed 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 was less than $15.00 per share; provided, however, that the Conversion Price was never less than $3.75. The Notes contained customary events of default and covenants, including limitations on incurrences of indebtedness and liens. The Notes had a term of 12 months from the date of issue.

In May 2024, the Company utilized its election to convert the May Notes into shares of common stock upon the Notes' maturity. The May Notes totaling $1.2 million in principal and $0.2 million interest were converted to 94,130 shares of common stock.

All remaining outstanding convertible notes payable and convertible notes payable related party converted on October 18, 2024 to 591,802 shares of common stock. The outstanding principal and interest converted totaled $8.9 million. The Company recognized a $0.3 million gain on conversion of the Notes.

Promissory note payable, related parties - In June 2024 the Company entered into a $0.5 million promissory note with a related party. Interest was accrued at 12% with an original maturity date of December 3, 2024. The Note was paid in full with accrued interest in October 2024.

Acquisition Convertible promissory notes payable - In August 2020, the Company entered into an asset purchase agreement with Celularity to acquire Celularity’s UltraMIST assets. A portion of the aggregate consideration of $24 million paid for the assets included the issuance of a promissory note to Celularity in the principal amount of $4 million (the “Seller Note”). The Seller Note matured on August 6, 2021, and was not repaid. The Company’s failure to pay the outstanding principal balance when due constituted an event of default under the terms of the Seller Note and, accordingly,

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it began accruing additional interest of 5.0% in addition to the 12.0% initial rate, as of the date of the default. As of December 31, 2024, the Seller Note had outstanding accrued interest of $0. This Seller Note was settled in 2024 for a cash payment of $2.2 million.

Convertible promissory notes payable, related party - In August 2020, the Company issued a convertible promissory note payable in the amount of $1.4 million. The note matured on August 6, 2021, and was not repaid and thus was in default. As of December 31, 2024, the note had outstanding accrued interest of $0.

The convertible promissory note was settled in 2024 for a cash payment of $1.4 million, which resulted in a gain on the extinguishment of debt of $0.8 million and a reduction in accrued interest of $0.8 million.

11.        Revenue

The disaggregation of revenue is based on type. The following table presents revenue from contracts with customers:

			Three Months Ended September 30, 2025						Three Months Ended September 30, 2024
Consumables and parts revenue			$	7,026					$	5,620
System revenue			4,391						3,661
License fees and other			5						10
Product Revenue			$	11,422					$	9,291
Rental Income			29						69
Total Revenue			$	11,451					$	9,360

			Nine Months Ended September 30, 2025						Nine Months Ended September 30, 2024
Consumables and parts revenue			$	19,806					$	14,879
System revenue			11,034						7,144
License fees and other			20						30
Product Revenue			$	30,860					$	22,053
Rental Income			97						255
Total Revenue			$	30,957					$	22,308

12.        Stock-Based Compensation

On August 7, 2024, the stockholders of the Company approved the 2024 Equity Incentive Plan (the “2024 Plan”). The 2024 Plan authorizes the issuance of up to 1,376,556 shares of common stock. On August 19, 2025, at our annual meeting of stockholders, an amendment to the 2024 Plan was ratified, authorizing an additional 500,000 shares of common stock authorized for issuance under the plan. Stock options granted under the 2024 Plan include service-based, performance-based, and market-based awards. Service-based stock options generally vest over a three-year period, expire 10 years from the date of grant, and are forfeited upon separation from the Company. Performance-based stock options vest upon the achievement of pre-established financial or operational performance criteria, as determined by the Company’s Board of Directors or Compensation Committee. These awards generally expire five years from the date of grant and are subject to forfeiture if the performance goals are not achieved within the specified performance period. Market-based stock options vest upon the attainment of certain market conditions, such as specified stock price targets, and also expire five years after the grant date. The fair value of market-based awards is estimated using a Monte Carlo simulation model.

All awards under the 2024 Plan are subject to the terms and conditions of the 2024 Plan and the individual award agreements.

During the nine months ended September 30, 2025, the Company granted performance- and market-based option awards to three employees which provide for the vesting of up to 65,500 shares of common stock. Vesting is contingent upon the achievement of specified performance or market conditions, with 100% of the related shares vesting upon satisfaction of each applicable condition.

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The performance conditions include the achievement of (a) specific revenue recognized (12,750 shares), (b) specific adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) targets (12,750 shares), (c) listing on NASDAQ (10,000 shares), (d) the refinancing or repayment of certain debt obligations (10,000 shares), and (e) various operations related milestones (10,000 shares). The market condition relates to the attainment of a defined stock price target (10,000 shares).

During the nine months ended September 30, 2025, 5,500 shares subject to performance conditions (2,750 shares under criterion (a) and 2,750 shares under criterion (b)) were forfeited due to the termination of one of the employees. As a result, the maximum number of shares eligible to vest under these awards was reduced to 60,000 shares as of September 30, 2025.

As of September 30, 2025, the Company concluded that the performance conditions related to revenue, adjusted EBITDA, and half of the various operations related milestones were not probable of achievement, and accordingly, no compensation expense was recognized for those awards. The debt refinancing condition and half of the various operations related milestones were achieved during the quarter ended September 30, 2025, and the related compensation expense was recognized in the quarter. The NASDAQ listing condition was achieved during the quarter ended March 31, 2025, and the related compensation expense was recognized in the quarter ended September 30, 2025.

The market condition has not been met as of September 30, 2025, however, compensation expense for the market-based award is recognized on a straight-line basis over the requisite service period, regardless of whether the market condition is ultimately satisfied. If the condition is achieved prior to the end of the service period, any unrecognized expense will be recognized immediately.

On November 1, 2010, the Company approved the Amended and Restated 2006 Stock Incentive Plan of SANUWAVE Health, Inc. effective as of January 1, 2010 (the “Stock Incentive Plan”). Upon the approval of the 2024 Plan by the Company's stockholders, no further awards will be made under the Stock Incentive Plan.

The Stock Incentive Plan permitted grants of awards to selected employees, directors, and advisors of the Company in the form of restricted stock or options to purchase shares of common stock. Options granted may include non-statutory options as well as qualified incentive stock options. The Stock Incentive Plan is administered by the board of directors of the Company. The Stock Incentive Plan gives broad powers to the board of directors of the Company to administer and interpret the form and conditions of each option.

The following table presents stock compensation expense recognized by the Company for the three and nine months ended September 30, 2025. Total unrecognized compensation cost related to equity awards as of September 30, 2025 was $10.1 million and is expected to be recognized over a weighted average period of 2.36 years. All stock compensation expense from the Stock Incentive Plan was recognized prior to 2024. The first grants from the 2024 Plan were issued in the three months ended December 31, 2024, thus there is no expense for the three and nine months ended September 30, 2024. The Company recognizes compensation expense on a straight-line basis over the requisite service period, net of actual forfeitures.

						Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)						2025						2025
Cost of revenues						$	14					$	32
General and administrative						1,182						2,889
Selling and marketing						192						557
Research and development						9						35
Total expense						$	1,397					$	3,513

The following table presents a summary of stock options award activity during the nine months ended September 30, 2025:

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			Number of Options (in thousands)						Weighted Average Exercise Price						Weighted Average Remaining Contractual Term (Years)						Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2024			1,137						$	15.97					9.5						$	9,305
Granted			426						29.55						6.9						1,432
Exercised			(25)						14.68						0.0						471
Forfeited			(187)						19.66						0.0						-
Outstanding, September 30, 2025			1,351						$	19.03					8.6						$	24,099
Exercisable, September 30, 2025			402						$	25.15					7.9						$	7,454

Valuation Information for Stock-Based Compensation

The fair value of each stock option award during the three and nine months ended September 30, 2025 was based on the closing price of the Company's common stock on the date of the grant. Expected volatility was based on 100% of the historical realized volatilities of peer companies. The risk-free interest rate was based on the implied yield for U.S. Treasury zero-coupon issue with the remaining term equal to the expected term. The expected holding period was calculated using the simplified method. No dividend was assumed as the Company does not pay regular dividends on its common stock and does not anticipate paying any dividends in the foreseeable future. The Company's policy is to recognize forfeitures as they occur.

The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted in the three and nine months ended September 30, 2025 are summarized in the table below:

			Three Months Ended September 30,						Nine Months Ended September 30,
			2025						2025
Fair value at grant date			$37.34						$30.61
Expected volatility			63%						62%
Risk-free interest rate			4%						4%
Expected holding period, in years			5.48						5.13
Dividend yield			0%						0%

13.       Net Income (Loss) per Share

Basic net income (loss) per share is computed based on the weighted average number of shares outstanding during the applicable period, including nominally priced warrants. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. Diluted net income (loss) per share is calculated based on the weighted average of shares of common stock outstanding and the number of additional shares that would have been outstanding if the potentially dilutive securities had been issued. The Company uses the treasury stock method to calculate the number of shares for the nominally priced warrants.

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			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands, except per share data)			2025						2024						2025						2024
Numerator:
Basic net income (loss) available to stockholders			10,325						(20,657)						5,704						(18,624)
Change in fair value of warrants			(6,097)						-						(2,186)						-
Diluted net income (loss) available to stockholders			4,228						(20,657)						3,518						(18,624)
Denominator:
Weighted average common shares outstanding - Basic			8,571						3,185						8,560						3,146
Dilutive effect of warrants			158						-						295						-
Dilutive effect of stock options			412						-						323						-
Dilutive effect of convertible promissory notes including interest			-						—						-						—
Weighted average common shares outstanding - Diluted			9,141						3,185						9,178						3,146
Net income (loss) per share:
Basic			$	1.20					$	(6.49)					$	0.67					$	(5.92)
Diluted			$	0.46					$	(6.49)					$	0.38					$	(5.92)

Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding that are nominally priced. In September 2024, the Company did not have any dilutive common stock equivalents that were nominally priced. The following securities were excluded from the calculation of diluted net income per share during the nine months ended September 30, 2025 because the result would have been anti-dilutive.

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2025						2024						2025						2024
Common stock options			84						42						112						42
Common stock purchase warrants			2						3,963						2						3,963
Convertible notes payable, including interest									621						-						621
			86						4,626						114						4,626

14.        Concentration of Credit Risk and Limited Suppliers

Major customers are defined as customers whose accounts receivable or sales individually consist of more than 10% of trade receivables or total sales, respectively. The percentage of accounts receivable from major customers of the Company for the periods indicated were as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2025						2024						2025						2024
Revenue:
Customer A			N/A						15		%				N/A						N/A

The Company currently purchases most of its product component materials from single suppliers and the loss of any of these suppliers could result in a disruption in the Company’s production. The percentage of purchases from major vendors

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of the Company that exceeded ten percent of total purchases for the three and nine months ended September 30, 2025, and 2024 were as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2025						2024						2025						2024
Purchases:
Vendor A			31		%				33		%				26		%				25		%
Vendor B			11		%				-		%				-		%				-		%

15.        License and Option Agreement

In March 2024, the Company entered into an exclusive license and option agreement (the "Patent License") with a third party licensee in connection with a portfolio of patents related to the field of intravascular shockwave applications. The Company received a one-time payment of $2.5 million related to this Patent License, which was recorded in other income during the three months ended March 31, 2024. The Company granted the Licensee an exclusive license to the patents and an option to acquire the patents for a period of 3 years following the effective date of the Agreement. Upon acquisition of the patents, the Licensee will distribute any resulting proceeds to the Company, including but not limited to any royalties, license fees, settlement payments, or other proceeds generated from the licensing or assertion of the patents, in accordance with a revenue sharing agreement.

On July 23, 2025, the Licensee exercised the acquisition option. In connection with such exercise, the Licensee and the Company executed a patent purchase agreement, and the Licensee made a $5.0 million cash payment to Sanuwave, Inc. on August 21, 2025. At the time of the Patent License and through the Licensees exercise of the acquisition option, the Company did not have any amounts capitalized related to the underlying portfolio of patents, nor was any write-down of assets recorded upon executing the Patent License or acquisition option. Accordingly, the Company recognized a $5.0 million gain on sale of patents within Other Income (Expense) on the condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2025. The Company does not have any ongoing obligations associated with the patent license. Additional proceeds may be provided to the Company under certain conditions of the agreement with the Licensee.

Contingent Consideration - The Company considers such royalties, license fees, settlement payments, or other proceeds as variable or contingent consideration. The Company determined that the amount of variable consideration would be constrained until the period the uncertainty related to the consideration is relieved.

16.        Commitments and Contingencies

Litigation

In the ordinary course of business, the Company from time to time becomes involved in various legal proceedings involving a variety of matters. The Company does not believe there are any pending legal proceedings that will have a material adverse effect on the Company’s business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties. The Company expenses legal fees in the period in which they are incurred.

17.        Segment Information

The Company operates in one reportable segment engaged in the design and sale of medical devices.

The accounting policies of the reportable segment are the same as those described in the summary of significant accounting policies. The Chief Operating Decision Maker (“CODM”) assesses performance for the reportable segment and decides how to allocate resources primarily based on gross margin that is also reported on the condensed consolidated statements of comprehensive income (loss). The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

The CODM uses gross profit to evaluate income (loss) generated from segment assets (return on assets) in deciding whether to reinvest profits or to apply them to other parts of the entity.

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Net income (loss) is used to monitor budget versus actual results. The CODM also uses net income (loss) in competitive analysis by benchmarking to competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.

Management has determined that Morgan Frank, CEO, is the CODM.

The following table sets forth our condensed consolidated statements of comprehensive income (loss) used by the CODM:

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2025						2024						2025						2024
Revenue			$	11,451					$	9,360					$	30,957					$	22,308
Cost of Revenues			2,526						2,293						6,690						5,799
Gross Margin			8,925						7,067						24,267						16,509
Operating Expenses:
General and administrative			4,810						2,545						13,316						8,059
Selling and marketing			2,081						2,202						5,286						4,468
Research and development			345						161						747						519
Depreciation and amortization			222						206						588						568
Operating Income			1,467						1,953						4,330						2,895
Total Other Income (Expense)			8,858						(22,610)						1,374						(21,519)
Net Income (Loss)			$	10,325					$	(20,657)					$	5,704					$	(18,624)

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Item 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes appearing elsewhere in this report, and together with our audited consolidated financial statements, related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as of and for the year ended December 31, 2024 included in our Annual Report on Form 10-K, filed with the SEC on March 20, 2025 (the “2024 Annual Report”).

Executive Summary

We continued to realize significant revenue growth during the three months ended September 30, 2025, as compared to the same period in 2024. Revenue for the three months ended September 30, 2025, totaled $11.5 million, an increase of 22%, as compared to $9.4 million for the same period of 2024. Revenue for the nine months ended September 30, 2025, totaled $31.0 million, an increase of 39%, as compared to $22.3 million for the same period of 2024.

Net income for the three months ended September 30, 2025, was $10.3 million compared to net loss of $20.7 million for the same period in 2024. The increase in our net income for the three months ended September 30, 2025, was primarily related to the change in fair value of derivative liabilities of $6.1 million for the three months ended September 30, 2025 compared to a loss of $18.8 million for the three months ended September 30, 2024 and $5.2 million in other income for the three months ended September 30, 2025 compared to none for the three months ended September 30, 2024. The change in fair value of derivative liability relates to the valuation of warrants previously issued by the Company. Other income for the three months ended September 30, 2025 mainly consists of the one-time payment of $5.0 million related to the patent purchase agreement as described in Note 15 of our condensed consolidated financial statements for the period. For the three months ended September 30, 2025, our operating income totaled $1.5 million compared to $2.0 million for the same period of 2024. The decrease in net income was mainly due to an increase in non-cash charges for stock-based compensation of $1.4 million for the three months ended September 30, 2025 as compared to the same period of 2024.

Net income for the nine months ended September 30, 2025, was $5.7 million compared to a net loss of $18.6 million for the same period in 2024. The increase in net income for the nine months ended September 30, 2025, was primarily related to the change in fair value of derivative liabilities of $2.2 million for the nine months ended September 30, 2025 compared to a loss of $17.6 million for the nine months ended September 30, 2024 and a decrease in interest expense in the nine months ended September 30, 2025 of $4.5 million compared to the same period of 2024. For the nine months ended September 30, 2025, our operating income totaled $4.3 million, which is an improvement of $1.4 million compared to the same period of 2024. The increase in operating income was mainly driven by an increase in revenue and gross margin for the nine months ended September 30, 2025.

Non-GAAP Financial Measures

Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, we present certain financial measures that facilitate management's review of the operational performance of the Company and as a basis for strategic planning; however, such financial measures are not presented in our financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) (“U.S. GAAP”). These financial measures are considered "non-GAAP financial measures" and are intended to supplement, and should not be considered as superior to, or a replacement for, financial measures presented in accordance with U.S. GAAP.

The Company uses Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA to assess its operating performance. Adjusted EBITDA is Earnings before Interest, Taxes, Depreciation and Amortization adjusted for the change in fair value of derivatives and any significant non-cash or non-recurring infrequent charges. EBITDA and Adjusted EBITDA should not be considered as alternatives to net loss as a measure of financial performance or any other performance measure derived in accordance with U.S. GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or infrequent items. These non-GAAP financial measures are presented in a consistent manner for each period, unless otherwise disclosed. The Company uses these measures for the purpose of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. These measures also help the Company to make operational and strategic decisions. The Company believes

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that providing this information to investors, in addition to U.S. GAAP measures, allows them to see the Company’s results through the eyes of management, and to better understand its historical and future financial performance. These non-GAAP financial measures are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other U.S. GAAP measures.

EBITDA and Adjusted EBITDA have their limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are that EBITDA and Adjusted EBITDA:

•Do not reflect every expenditure, future requirements for capital expenditures or contractual commitments.

•Do not reflect all changes in our working capital needs.

•Do not reflect interest expense, or the amount necessary to service our outstanding debt.

As presented in the U.S. GAAP to Non-GAAP Reconciliations section below, our non-GAAP financial measure excludes the impact of certain charges that contribute to our net income (loss).

			Three Months Ended September 30,												Nine Months Ended September 30,
(in thousands)			2025						2024						2025						2024
Net Income (Loss)			$	10,325					$	(20,657)					$	5,704					$	(18,624)
Non-GAAP Adjustments:
Interest expense			1,722						3,661						5,448						11,004
Depreciation and amortization			329						256						902						736
EBITDA			12,376						(16,740)						12,054						(6,884)
Non-GAAP Adjustments for Adjusted EBITDA:
Change in fair value of derivative liabilities			(6,097)						18,849						(2,186)						17,633
Other non-cash or infrequent charges:
Stock-based compensation			1,397						-						3,513						-
Loss (Gain) on extinguishment of debt			477						-						477						(5,205)
Loss on impairment of assets			196						-						196						-
Severance agreement and legal settlement			113						-						113						585
Release of historical accrued expenses			-						-						-						(579)
Gain on license and option agreement			(5,000)						-						(5,000)						(2,500)
Prepaid legal fees expensed from termination of Merger Agreement			-						-						-						457
Adjusted EBITDA			$	3,462					$	2,109					$	9,167					$	3,507

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Results of Operations

			Three Months Ended September 30,												Change												Nine Months Ended September 30,												Change
(in thousands)			2025						2024						$						%						2025						2024						$						%
Revenue			$	11,451					$	9,360					$	2,091					22		%				$	30,957					$	22,308					$	8,649					39		%
Cost of revenue			2,526						2,293						233						10		%				6,690						5,799						891						15		%
Gross margin			8,925						7,067						1,858						26		%				24,267						16,509						7,758						47		%
Gross margin %			78		%				76		%																78		%				74		%
Operating expenses:
General and administrative			4,810						2,545						2,265						89		%				13,316						8,059						5,257						65		%
Selling and marketing			2,081						2,202						(121)						-5		%				5,286						4,468						818						18		%
Research and development			345						161						184						114		%				747						519						228						44		%
Depreciation and amortization			222						206						16						8		%				588						568						20						4		%
Operating income			1,467						1,953						(486)						-25		%				4,330						2,895						1,435						50		%
Other income (expense)			8,858						(22,610)						31,468						-139		%				1,374						(21,519)						22,893						-106		%
Net income (loss)			$	10,325					$	(20,657)					$	30,982					-150		%				$	5,704					$	(18,624)					$	24,328					-131		%

Revenue

Revenues for the three months ended September 30, 2025, were $11.5 million, compared to $9.4 million for the same period of 2024, an increase of $2.1 million or 22%. The increase in net sales was primarily driven by the growth in quantity of UltraMIST® disposables and systems sold. The quantity of UltraMIST® disposables sold increased by 23% in the three months ended September 30, 2025, as compared to the same period of 2024. The quantity of UltraMIST® systems sold increased by 25% in the three months ended September 30, 2025, as compared to the same period of 2024. Pricing of the UltraMIST® disposables showed growth in the three months ended September 30, 2025, as compared to the same period of 2024; the average selling price of disposables increased 3% in the three months ended September 30, 2025. The average selling price of systems decreased 4% in the three months ended September 30, 2025. Revenue from UltraMIST® totaled 99% of total revenue in the three months ended September 30, 2025, and over 99% in the same period of 2024.

Revenues for the nine months ended September 30, 2025, were $31.0 million, compared to $22.3 million for the same period of 2024, an increase of $8.6 million or 39%. The increase in net sales was primarily driven by the growth in quantity of UltraMIST® disposables and systems sold as well as a strategic focus on price discipline. The quantity of UltraMIST® disposables sold increased by 28% in the nine months ended September 30, 2025, as compared to the same period of 2024. The quantity of UltraMIST® systems sold increased by 54% in the nine months ended September 30, 2025, as compared to the same period of 2024. Pricing of the UltraMIST® system and disposables also showed growth in the nine months ended September 30, 2025, as compared to the same period of 2024; the average selling price of disposables increased 6% in the nine months ended September 30, 2025, and the average selling price of systems increased 1% in the nine months ended September 30, 2025. Revenue from UltraMIST® totaled 99% of total revenue in the nine months ended September 30, 2025, and over 98% in the same period of 2024.

Cost of Revenues

Cost of revenues for the three months ended September 30, 2025, was $2.5 million, compared to $2.3 million for the same period of 2024. Gross profit as a percentage of revenues was 78% for the three months ended September 30, 2025, compared to 76% for the same period in 2024. This increase in gross margin was largely driven by improved pricing initiatives on our UltraMIST® systems and applicators as well as a decrease in the cost of systems.

Cost of revenues for the nine months ended September 30, 2025, was $6.7 million, compared to $5.8 million for the same period of 2024. Gross profit as a percentage of revenues was 78% for the nine months ended September 30, 2025,

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compared to 74% for the same period in 2024. This increase in gross margin was largely driven by improved pricing initiatives on our UltraMIST® systems and applicators.

General and Administrative

General and administrative expenses for the three months ended September 30, 2025, were $4.8 million as compared to $2.5 million for the same period of 2024, an increase of $2.3 million, or 89%. The increase in the three months ended September 30, 2025, as compared to the same period of 2024, was primarily due to non-cash charges for stock-based compensation totaling $1.2 million, increased headcount expenses of $0.5 million, legal expenses of $0.1 million, and software expenses of $0.1 million.

General and administrative expenses for the nine months ended September 30, 2025, were $13.3 million as compared to $8.1 million for the same period of 2024, an increase of $5.3 million, or 65%. The increase in the nine months ended September 30, 2025, as compared to the same period of 2024, was primarily due to non-cash charges for stock-based compensation expense totaling $2.9 million, increased headcount expenses of $1.7 million, and public company costs of $0.3 million.

Selling and Marketing

Selling and marketing expenses for the three months ended September 30, 2025, were $2.1 million as compared to $2.2 million for the same period of 2024, a decrease of $0.1 million, or 5%. The year-over-year decrease in sales and marketing expenses in the three months ended September 30, 2025, was primarily due to a decrease of $1.0 million in outside commission expense, partially offset by an increase in headcount expenses of $0.8 million.

Selling and marketing expenses for the nine months ended September 30, 2025, were $5.3 million as compared to $4.5 million for the same period of 2024, an increase of $0.8 million, or 18%. The year-over-year increase in sales and marketing expenses for the nine months ended September 30, 2025, was primarily due to increased headcount expenses of $2.2 million, partially offset by a decrease in outside commission expense of $1.3 million.

Research and Development

Research and development expenses for the three months ended September 30, 2025 were $0.3 million compared to $0.2 million for the three months ended September 30, 2024. The research and development costs in the three months ended September 30, 2025, remained approximately consistent with the costs in the same period of 2024.

Research and development expenses for the nine months ended September 30, 2025 were $0.7 million compared to $0.5 million for the nine months ended September 30, 2024. The research and development costs in the nine months ended September 30, 2025, remained approximately consistent with the costs in the same period of 2024.

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Total Other Income (Expense)

Other income (expense) consists of the following:

			Three Months Ended September 30,												Change												Nine Months Ended September 30,												Change
			2025						2024						$						%						2025						2024						$						%
Interest expense			$	(1,722)					$	(3,661)					$	1,939					53		%				$	(5,448)					$	(11,004)					$	5,556					50		%
Change in fair value of derivative liabilities			6,097						(18,849)						24,946						132		%				2,186						(17,633)						19,819						112		%
Gain (Loss) on extinguishment of debt			(477)						-						(477)						-		%				(477)						5,205						(5,682)						109		%
Loss on impairment of assets			(196)						-						(196)						-		%				(196)						-						(196)						-%
Other expense			(14)						(106)						92						87		%				(42)						(893)						851						95		%
Other income			5,170						6						5,164						86067		%				5,351						2,806						2,545						91		%
Total Other Income (Expense)			$	8,858					$	(22,610)					$	31,468					139		%				$	1,374					$	(21,519)					$	22,893					106		%

Total other income (expense) increased by $31.5 million to other income of $8.9 million for the three months ended September 30, 2025, as compared to an expense of $22.6 million for the same period of 2024. The increase was primarily driven by the change in fair value of derivative liabilities of $24.9 million and other income of $5.2 million. The change in fair value of derivative liability relates to the valuation of warrants previously issued by the Company. Other income for the three months ended September 30, 2025 mainly consists of the one-time payment of $5.0 million related to the patent purchase agreement as described in Note 15 of our condensed consolidated financial statements for the period.

Total other income (expense) increased by $22.9 million to other income of $1.4 million for the nine months ended September 30, 2025, as compared to other expense of $21.5 million for the same period of 2024. The increase was primarily driven by the change in fair value of derivative liabilities of $19.8 million, interest expense of $5.6 million, and other income of $2.5 million, partially offset by the gain on extinguishment of debt of $5.7 million. The change in fair value of derivative liability relates to the valuation of warrants previously issued by the Company. Other income for the nine months ended September 30, 2025 mainly consists of the one-time payment of $5.0 million related to the patent purchase agreement as described in Note 15 of our condensed consolidated financial statements for the period. Other income for the nine months ended September 30, 2024 mainly consists of the one-time payment of $2.5 million related to the Patent License agreement as described in Note 15 of our condensed consolidated financial statements for the period.

Liquidity and Capital Resources

From inception through the year ended December 31, 2023, we incurred losses from operations each year. As of September 30, 2025, we had an accumulated deficit of $245.7 million. Historically, our operations have primarily been funded from the sale of capital stock, issuances of notes payable, and convertible debt securities.

We have incurred recurring net losses in prior years, currently have a significant accumulated deficit, and have experienced negative working capital. Previously, the scheduled maturity of the Senior Secured Note (as defined in Note 7) in September 2025 raised substantial doubt about our ability to continue as a going concern for a period of 12 months from the filing of the prior Form 10-Q.

However, as described in Note 7 of our condensed consolidated financial statements for the period, we successfully refinanced our outstanding debt during the three months ended September 30, 2025. The refinancing extended the maturity of our debt and provided the option for additional liquidity to support ongoing operations through the secured revolving credit facility. In addition, the operating income achieved in the current year, the receipt of $5 million from the patent purchase agreement, and the capital raised from a private placement in October 2024 have all contributed to a significant improvement in our financial position.

As discussed in Note 2, management has evaluated our ability to continue as a going concern in light of these developments. Based on the successful refinancing and other recent initiatives, management believes the Company has

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sufficient resources to meet its obligations as they become due and to continue as a going concern for at least the next 12 months. We continue to monitor our financial position, liquidity, and compliance with debt covenants on an ongoing basis.

Management remains focused on maintaining the Company’s improved financial position and operational momentum. While we continue to monitor our liquidity and capital resources closely, we believe that the successful refinancing of our debt, as described in Note 7, together with our recent operating income and capital initiatives, have significantly strengthened our ability to meet our obligations as they come due. As discussed in Note 2, these actions have alleviated the substantial doubt about our ability to continue as a going concern. We will continue to evaluate opportunities to further enhance our capital structure and support our growth strategy. Although we cannot predict all future events or guarantee that unforeseen circumstances will not arise, we are confident that the steps taken to date position the Company well to support ongoing operations and execute on our strategic objectives.

The following table presents summarized cash flow information:

			Nine Months Ended September 30,
(in thousands)			2025						2024
Cash flows provided by operating activities			$	557					$	1,714
Cash flows provided by (used in) investing activities			$	3,154					$	(254)
Cash flows used in financing activities			$	(4,346)					$	(119)

Cash provided by operating activities for the nine months ended September 30, 2025, totaled $0.6 million and consisted primarily of net income of $5.7 million and an increase in net operating assets of $5.1 million, partially offset by non-cash charges of $3.5 million related to stock-based compensation expense, $2.2 million related to a change in the fair value of derivative liabilities, and $1.4 million related to amortization of debt issuance and debt discounts. Net operating assets consisted primarily of inventory, accrued expenses, prepaid expenses and accounts receivable to support the growth of our operations.

Cash provided by operating activities for the nine months ended September 30, 2024 totaled $1.7 million and consisted primarily of a net loss of $18.6 million and a gain of extinguishment of debt of $5.2 million, partially offset by non-cash charges of $17.6 million related to a change in the fair value of derivative liabilities and $4.8 million related to amortization of debt issuance and debt discounts, as well as the receipt of $2.5 million related to the Patent License, as further discussed in Note 15 to the condensed consolidated financial statements.

Cash provided by investing activities for the nine months ended September 30, 2025, totaled $3.2 million and consisted primarily of proceeds from the patent purchase agreement of $5.0 million partially offset by purchases of property and equipment of $1.8 million, of which $0.9 million was related to leasehold improvements at our new headquarters and $0.7 million was related to purchases of property and equipment related to manufacturing equipment.

Cash used in investing activities for the nine months ended September 30, 2024, totaled $0.3 million and primarily consisted of purchases of property and equipment related to manufacturing equipment.

Cash used in financing activities for the nine months ended September 30, 2025, totaled $4.3 million and consisted primarily of paying off the Existing Debt as described in Note 7 to the condensed consolidated financial statements and offset by the proceeds of the secured term loan and secured revolving credit facility as also described in Note 7 to the condensed consolidated financial statements.

Cash used in financing activities for the nine months ended September 30, 2024, totaled $0.1 million and consisted primarily of payment of a note payable and offset by proceeds from a note payable.

Critical Accounting Estimates

We have used various accounting policies to prepare the condensed consolidated financial statements in accordance with U.S. GAAP. Our significant accounting policies are disclosed in Note 3 to the consolidated financial statements in Part II Item 8. “Financial Statements and Supplementary Data” in our 2024 Annual Report on Form 10-K filed with the SEC on March 20, 2025.

The preparation of the condensed consolidated financial statements, in conformity with U.S. GAAP, requires us to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates reflect our best judgment about economic and market conditions and the potential effects on the

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valuation and/or carrying value of assets and liabilities based upon relevant information available. We base our estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Segment and Geographic Information

We have determined that we have one operating segment. Our revenues are generated from sales primarily in the United States. All significant expenses are generated in the United States and all significant assets are in the United States. For further information on the Company's operating segment, refer to Note 17 to the condensed consolidated financial statements.

Effects of Inflation

Our assets are, to an extent, liquid in nature, so they are not significantly affected by inflation. However, the rate of inflation, which remains elevated, affects expenses such as employee compensation, office space leasing costs and research and development charges, which may not be readily recoverable. To the extent inflation results in rising interest rates and has other adverse effects on the market, it may adversely affect our consolidated financial condition and results of operations.

Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide the information required under this item.

Item 4.   CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not operating effectively as of September 30, 2025.

As of December 31, 2024, the Company identified the following material weaknesses which continue to exist as of September 30, 2025:

The Company lacked internal controls over key accounting and IT processes, including Equity, Financial Reporting, Accounts Payable, Expenses, Revenue, Accounts Receivable, Tax, Cash, Debt, Fixed Assets, Inventory, Commissions, Entity-Level Controls, Human Resources/Payroll, and IT General Controls (change management, operations, and access security). The Company lacked expertise and resources to analyze and properly apply U.S. GAAP to complex and non-routine transactions such as complex financial instruments and derivatives and complex sales distributing agreements with select vendors. The Company lacked internal resources to analyze and properly apply U.S. GAAP to account for financial instruments included in service agreements with select vendors.

As a result, management concluded that its internal control over financial reporting was not effective as of September 30, 2025.

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Remediation Plan

Management is fully committed to addressing the material weaknesses in our internal controls and has implemented several key initiatives to strengthen them. To that end, the Company has continued to implement and enhance appropriate internal controls and contracted with CliftonLarsonAllen LLP starting in the third quarter 2023 to conduct a valuation engagement. This engagement aims to provide an estimated conclusion of value and a summary, restricted appraisal report to assist management in determining the fair value of warrants to purchase the Company’s stock, embedded derivatives, and other interests.

We plan to remediate and implement these controls for high-risk processes throughout 2025. We hired a highly experienced Director of Internal Audit to review, adjust, as needed, and test our internal controls and ensure they function as intended. We recently deployed Governance, Risk, and Compliance software from Workiva to support these efforts. Furthermore, we plan to hire additional personnel and segregate certain duties to enhance our control activities and effectively mitigate risks. Until we fully remediate the material weaknesses, we will perform additional analyses and procedures to ensure our consolidated financial statements comply with U.S. GAAP. We remain vigilant in identifying any additional material weaknesses that may arise and are prepared to adjust our remediation strategies as needed.

We are collaborating with an external vendor to enhance our IT general controls over our enterprise resource planning system. This initiative aims to establish a robust framework for executing IT general controls, addressing weaknesses in our internal controls, and providing a solid framework for future testing.

The existence of any material weakness or significant deficiency requires management to devote significant time and incur significant expense to remediate any such material weaknesses or significant deficiencies, and management may not be able to remediate any such material weaknesses or significant deficiencies in a timely manner. The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations, and cause shareholders to lose confidence in our reported financial information, all of which could materially and adversely affect our business and stock price.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2025, that materially affect, or are reasonably likely to materially affect, our internal control over financial reporting, except as disclosed in “Remediation Plan” above.

PART II — OTHER INFORMATION

Item 1.          LEGAL PROCEEDINGS

For information regarding legal proceedings at September 30, 2025, see Note 16 to the condensed consolidated financial statements, which information is incorporated herein by reference.

Item 1A.       RISK FACTORS

Except as set forth below, there have been no material changes from our risk factors as previously reported in Part I, Item 1A “Risk Factors” in our 2024 Annual Report.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

We have incurred net losses since our inception. If not utilized, some of our federal and state net operating losses (“NOLs”) carryforwards will begin to expire in various years beginning after 2033. Under the Internal Revenue Code of 1986, as amended, (the “Code”), and certain similar state tax provisions, we are generally allowed to carry forward our NOLs from a prior taxable year to offset our future taxable income, if any, until such NOLs are used or expire, subject to certain limitations. The same is true of other unused tax attributes, such as tax credits. In addition, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. During the quarter ended June 30, 2025, we completed an IRC Section 382 analysis of our tax attributes. That analysis showed that $44.2 million of our NOL tax attributes would expire before becoming available under our limitation as a result of shifts in our ownership. We have adjusted our tax attributes to account for this limitation.

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Item 2.          UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Item 3.          DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4.          MINE SAFETY DISCLOSURES

Not applicable.

Item 5.          OTHER INFORMATION

During the three months ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in the SEC’s rules).

Item 6.          EXHIBITS

Exhibit No.						Description
2.1						Agreement and Plan of Merger, dated as of August 23, 2023, by and among SEP Acquisition Corp., SEP Acquisition Holdings Inc., and SANUWAVE Health, Inc. (Incorporated by reference to Exhibit 2.1 to the Form 8-K filed with the SEC on August 23, 2023).
2.2						Amendment Number One to Agreement and Plan of Merger, dated as of February 27, 2024, by and between SEP Acquisition Corp. and SANUWAVE Health, Inc. (Incorporated by reference to Exhibit 2.1 to the Form 8-K filed with the SEC on February 28, 2024).
2.3						Amendment Number Two to Agreement and Plan of Merger, dated as of April 25, 2024, by and between SEP Acquisition Corp. and SANUWAVE Health, Inc. (Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on April 26, 2024).
2.4						Amended Number Three to Agreement and Plan of Merger, dated as of May 28, 2024, by and between SEP Acquisition Corp. and SANUWAVE Health, Inc. (Incorporated by reference to Exhibit 2.1 to the Form 8-K filed with the SEC on June 3, 2024).
3.1						Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Form 10-SB filed with the SEC on December 18, 2007).
3.2						Certificate of Amendment to the Articles of Incorporation (Incorporated by reference to Appendix A to the Definitive Schedule 14C filed with the SEC on October 16, 2009).
3.3						Certificate of Amendment to the Articles of Incorporation (Incorporated by reference to Exhibit A to the Definitive Schedule 14C filed with the SEC on April 16, 2012).
3.4						Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on March 7, 2025).
3.5						Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock of the Company dated March 14, 2014 (Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on March 18, 2014).
3.6						Certificate of Amendment to the Articles of Incorporation, dated September 8, 2015 (Incorporated by reference to Exhibit 3.6 to the Form 10-K filed with the SEC on March 30, 2016).
3.7						Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock of the Company dated January 12, 2016 (Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on January 19, 2016).
3.8						Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock of the Company dated January 31, 2020 (Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on February 6, 2020).

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3.9						Certificate of Designation of Series D Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on May 20, 2020).
3.10						Certificate of Amendment of the Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on January 5, 2021).
3.11						Certificate of Amendment of the Articles of Incorporation, dated January 31, 2023 (Incorporated by reference to Exhibit 3.12 to the Form S-1/A filed with the SEC on January 31, 2023).
3.12						Certificate of Amendment of the Articles of Incorporation, effective as of October 18, 2024 (Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on October 18, 2024).
10.1						Separation and Release Agreement, dated July 28, 2025, between Nanci Gilmore and the Company (Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on July 31, 2025).
10.2						SANUWAVE Health, Inc. 2024 Equity Incentive Plan, as amended August 19, 2025 (Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on August 20, 2025).
10.3						Credit Agreement, dated as of September 25, 2025, by and among the Company, as a guarantor, Sanuwave, Inc., as a borrower, SanuWave Services, LLC, as a guarantor, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on September 26, 2025).
10.4						Separation and Release Agreement, dated October 24, 2025, between Andrew Walko and the Company (Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on October 30, 2025).
31.1*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
31.2*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
32.1*						Section 1350 Certification of the Principal Executive Officer.
32.2*						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.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Filed herewith.

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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 6, 2025			By:			/s/ Morgan Frank
									Morgan Frank
									Chief Executive Officer (Duly Authorized Officer and Principal Executive Officer)
Dated: November 6, 2025			By:			/s/ Peter Sorensen
									Peter Sorensen
									Chief Financial Officer (Principal Financial and Accounting Officer)

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