Fuse Medical, Inc. Announces Third Quarter 2021 Financial Results
Fuse Medical, Inc. (OTCPINK: FZMD) (“Fuse” or the “Company”) an emerging manufacturer and distributor of innovative medical devices for the orthopedic and spine marketplace, announced that it has filed its quarterly report on Form 10-Q for the quarter ended September 30, 2021 with the Securities and Exchange Commission (“SEC”) on Wednesday, November 10, 2021.
Third Quarter 2021 Financial Highlights
- Net revenues for the nine months ended September 30, 2021 were $14.35 million, compared to $14.38 million for the nine months ended September 30, 2020, which was a decrease of approximately $29,503.
- For the nine months ended September 30, 2021, gross profit was $5.9 million, or 59% of revenues, compared to $5.8 million, or 60% of revenues, for the nine months ended September 30, 2020, which was an increase of 2%.
- Selling, general, administrative, and other expenses (“SG&A”) for the nine months ended September 30, 2021 was approximately $5.01 million compared to $5.02 million for the nine months ended September 30, 2020.
- Commissions expense for the nine months ended September 30, 2021 decreased to $4.89 million from $5.0 million for the nine months ended September 30, 2020, a decrease of approximately $101,998.
- For the nine months ended September 30, 2021, net loss was $1.24 million compared to $1.63 for the nine months ended September 30, 2020, reflecting a reduction in our net loss of $391,107 or approximately 24%.
“The unexpected emergence of the COVID -19 Delta variant impacted our third quarter results, primarily from restrictions on inpatient elective surgeries in multiple markets we service in the US, as well as surgical cases canceling due to patients testing positive for the COVID -19 virus,” said Christopher C. Reeg, Chief Executive Officer of Fuse Medical, “As the rates for infection, hospitalizations, and deaths from COVID -19 now appear to be on the decline, we are confident that the investment into our product portfolio development and launches of unique and clinically differentiated products in spine, biologics, orthopedics, and the foot and ankle markets will prove to be instrumental in securing our position as an emerging, relevant manufacturer of medical devices.”
About Fuse Medical, Inc.
Fuse is an emerging manufacturer and distributor of innovative medical devices for the orthopedic and spine marketplace. We provide a comprehensive portfolio of products in the orthopedic total joints, sports medicine, trauma, foot and ankle space, as well as, degenerative and deformity spine, osteobiologics, wound care, and regenerative products. For more information about the Company, or if you’re interested in becoming a distributor of any Fuse’s products, please contact us at info@fusemedical.com or visit: www.fusemedical.com.
Forward Looking Statements
Certain statements in this press release, constitute “forward-looking statements” within the meaning of the federal securities laws. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend,” or similar expressions or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based only on information available to the Company as of the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in the Company’s filings with the Securities and Exchange Commission; the failure of the Company to close the transaction; and integration issues with the consolidated company. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events, or otherwise, except as required by law.
FUSE MEDICAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in dollars, except share data) |
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September 30, 2021 |
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December 31, 2020 |
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(Unaudited) |
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Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
1,765,282 |
|
|
$ |
1,187,458 |
|
Accounts receivable, net of allowance of $883,655 and $787,766, respectively |
|
|
2,459,071 |
|
|
|
4,427,896 |
|
Inventories, net of allowance of $2,591,117 and $3,077,728, respectively |
|
|
8,567,852 |
|
|
|
6,981,413 |
|
Prepaid expenses and other current assets |
|
|
66,461 |
|
|
|
24,203 |
|
Total current assets |
|
|
12,858,666 |
|
|
|
12,620,970 |
|
Property and equipment, net |
|
|
8,938 |
|
|
|
17,791 |
|
Long term accounts receivable, net of allowance of $3,194,336 and $2,615,834, respectively |
|
|
2,075,066 |
|
|
|
1,669,510 |
|
Intangible assets, net |
|
|
1,100,181 |
|
|
|
1,138,080 |
|
Goodwill |
|
|
1,972,886 |
|
|
|
1,972,886 |
|
Total assets |
|
$ |
18,015,737 |
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|
$ |
17,419,237 |
|
Liabilities and Stockholders' Equity (Accumulated Deficit) |
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|
|
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Current liabilities: |
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|
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Accounts payable |
|
$ |
4,408,853 |
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|
$ |
3,236,592 |
|
Accrued expenses |
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|
3,037,899 |
|
|
|
2,584,734 |
|
Convertible notes payable - related parties |
|
|
150,000 |
|
|
|
150,000 |
|
Paycheck Protection Program Loan |
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|
- |
|
|
|
361,400 |
|
Economic Injury Disaster Loan - short term portion |
|
|
- |
|
|
|
2,241 |
|
Senior secured revolving credit facility |
|
|
913,352 |
|
|
|
913,352 |
|
Total current liabilities |
|
|
8,510,104 |
|
|
|
7,248,319 |
|
Notes payable - related parties |
|
|
200,000 |
|
|
|
200,000 |
|
Economic Injury Disaster Loan - long term portion |
|
|
496,345 |
|
|
|
147,759 |
|
Earn-out liability |
|
|
11,936,000 |
|
|
|
11,936,000 |
|
Total long term liabilities |
|
|
12,632,345 |
|
|
|
12,283,759 |
|
Total liabilities |
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|
21,142,449 |
|
|
|
19,532,078 |
|
Commitments and contingencies |
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|
— |
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|
|
— |
|
Stockholders' equity (accumulated deficit) |
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|
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Preferred stock, $0.01 par value; 20,000,000 shares authorized, no shares issued and outstanding |
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— |
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— |
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Common stock, $0.01 par value; 100,000,000 shares authorized, 73,124,458 shares issued and outstanding as of September 30, 2021 and December 31, 2020. |
|
|
731,245 |
|
|
|
731,245 |
|
Additional paid-in capital |
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|
1,406,190 |
|
|
|
1,184,222 |
|
Accumulated deficit |
|
|
(5,264,147 |
) |
|
|
(4,028,308 |
) |
Total stockholders' equity (accumulated deficit) |
|
|
(3,126,712 |
) |
|
|
(2,112,841 |
) |
Total liabilities and stockholders' equity (accumulated deficit) |
|
$ |
18,015,737 |
|
|
$ |
17,419,237 |
|
FUSE MEDICAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in dollars, except share data) |
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For the Three Months Ended
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For the Nine Months Ended
|
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2021 |
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2020 |
|
2021 |
|
2020 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
4,250,554 |
|
|
$ |
5,738,662 |
|
|
$ |
14,356,328 |
|
|
$ |
14,385,831 |
|
Cost of revenues |
|
1,861,620 |
|
|
|
2,043,722 |
|
|
|
5,935,093 |
|
|
|
5,823,281 |
|
Gross profit |
|
2,388,934 |
|
|
|
3,694,940 |
|
|
|
8,421,235 |
|
|
|
8,562,550 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Selling, general, administrative and other |
|
1,609,739 |
|
|
|
2,185,487 |
|
|
|
5,016,594 |
|
|
|
5,021,632 |
|
Commissions |
|
1,445,689 |
|
|
|
1,379,385 |
|
|
|
4,894,845 |
|
|
|
4,996,843 |
|
Depreciation and amortization |
|
14,493 |
|
|
|
23,312 |
|
|
|
46,751 |
|
|
|
84,047 |
|
Total operating expenses |
|
3,069,921 |
|
|
|
3,588,184 |
|
|
|
9,958,190 |
|
|
|
10,102,522 |
|
Operating loss |
|
(680,987 |
) |
|
|
106,756 |
|
|
|
(1,536,955 |
) |
|
|
(1,539,972 |
) |
Other (income) expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
8,578 |
|
|
|
20,611 |
|
|
|
47,561 |
|
|
|
75,633 |
|
Gain on Payroll Protection Loan extinguishment |
|
3,934 |
|
|
|
- |
|
|
|
(361,400 |
) |
|
|
- |
|
Total other (income) expense |
|
12,512 |
|
|
|
20,611 |
|
|
|
(313,839 |
) |
|
|
75,633 |
|
Net loss before tax |
|
(693,499 |
) |
|
|
86,145 |
|
|
|
(1,223,116 |
) |
|
|
(1,615,605 |
) |
Income tax benefit |
|
3,537 |
|
|
|
5,661 |
|
|
|
12,723 |
|
|
|
11,341 |
|
Net loss |
$ |
(697,036 |
) |
|
$ |
80,484 |
|
|
$ |
(1,235,839 |
) |
|
$ |
(1,626,946 |
) |
Net loss per common share - basic |
$ |
(0.01 |
) |
|
$ |
0.00 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
Weighted average number of common shares outstanding - basic |
|
70,221,566 |
|
|
|
70,221,566 |
|
|
|
70,221,566 |
|
|
|
70,221,566 |
|
FUSE MEDICAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
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For the Nine Months Ended September 30, |
|
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|
2021 |
|
2020 |
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Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,235,839 |
) |
|
$ |
(1,626,946 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
46,752 |
|
|
|
84,047 |
|
Stock based compensation |
|
|
221,968 |
|
|
|
428,915 |
|
Provision for bad debts and discounts |
|
|
95,889 |
|
|
|
186,407 |
|
Provision for long term accounts receivable |
|
|
578,502 |
|
|
|
763,361 |
|
Provision for slow moving inventory |
|
|
(486,611 |
) |
|
|
- |
|
Gain on Payroll Protection Program Loan extinguishment |
|
|
(361,400 |
) |
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
1,872,936 |
|
|
|
1,848,177 |
|
Inventories |
|
|
(1,099,828 |
) |
|
|
872,971 |
|
Prepaid expenses and other current assets |
|
|
(42,258 |
) |
|
|
4,891 |
|
Long term accounts receivable |
|
|
(984,058 |
) |
|
|
(1,908,403 |
) |
Accounts payable |
|
|
1,172,261 |
|
|
|
(409,371 |
) |
Accrued expenses |
|
|
453,165 |
|
|
|
219,035 |
|
Net cash provided by operating activities |
|
|
231,479 |
|
|
|
463,084 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
- |
|
|
|
(20,757 |
) |
Net cash (used in) investing activities |
|
|
- |
|
|
|
(20,757 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Payments on senior secured revolving credit facility, net |
|
|
- |
|
|
|
(714,149 |
) |
Proceeds from Paycheck Protection Program |
|
|
- |
|
|
|
361,400 |
|
Payments from Economic Injury Disaster Loan, net |
|
|
(3,655 |
) |
|
|
200,000 |
|
Proceeds on Economic Injury Disaster Loan |
|
|
350,000 |
|
|
|
|
|
Proceeds from related party promissory notes |
|
|
- |
|
|
|
150,000 |
|
Net cash provided by (used in) financing activities |
|
|
346,345 |
|
|
|
(2,749 |
) |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
|
577,824 |
|
|
|
439,578 |
|
Cash and cash equivalents - beginning of period |
|
|
1,187,458 |
|
|
|
1,099,310 |
|
Cash and cash equivalents - end of period |
|
$ |
1,765,282 |
|
|
$ |
1,538,888 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
32,091 |
|
|
$ |
52,188 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211111005452/en/
