RICHARDSON, Texas–(BUSINESS WIRE)–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 March 31, 2021 with the Securities and Exchange Commission (“SEC”) on Wednesday, May 12, 2021.

First Quarter 2021 Financial Highlights

  • Net revenues for the quarter ended March 31, 2021 was $4.4 million, compared to $4.6 million for the quarter ended March 31 2020.
  • For the quarter ended March 31, 2021, gross profit was $2.6 million, or 58% of revenues, compared to $2.7 million, or 57% of revenues, for the quarter ended March 31, 2020.
  • Selling, general, administrative, and other expenses (“SG&A”) for the quarter ended March 31, 2021 declined by approximately $1 million or 42% to $1.4 million compared to $2.4 million for the quarter ended March 31, 2020.
  • Commissions expense for the quarter ended March 31, 2021 increased to $1.6 million from $1.4 million for the quarter ended March 31, 2020, an increase of approximately $200,000 of approximately 12%.
  • For the quarter ended March 31, 2021, net loss was $453,323 compared to $1,283,999 for the quarter ended March 31, 2020, reflecting a reduction in our net loss of $830,676 or approximately 65%.

Christopher C. Reeg, Chief Executive Officer of Fuse, commented “As we continue to navigate the COVID-19 pandemic, our first quarter of 2021 still felt the impact of elective surgery restrictions in several of our key markets. Despite this setback in January, coupled with the severe Texas Winter Storm in February that crippled Dallas and most of Texas, our Teams remained committed to our customers, and our elective case volumes are now trending above pre-pandemic levels. In light of these challenges, we have been successful in launching multiple new product lines, with several more launches scheduled throughout 2021. Q1 2021 also marked the beginning of our international expansion, with our first sales into the Australian marketplace.”

“We remain committed to growing our portfolio of innovative orthopedic and spinal devices, expanding our distribution footprint, and look forward to continuing this momentum throughout 2021 and beyond,” Mr. Reeg added.

First Quarter 2021 Highlights:

Highlights of Fuse’s first quarter 2021 include the following:

  • In January 2021, we entered into a marketing agreement with CarePICS Telehealth Platform to increase our wound care position.
  • In January 2021, we entered into an exclusive agreement with Orthovestments, LLC for the manufacturing and commercialization of the novel Orbitum™ Staple System, which increases our manufactured product portfolio. Initial Alpha launch of the Orbitum™ Staple System is slated for June 2021, with full commercial launch beginning early in Q3 2021.
  • In February 2021, we launched our Fuse ACP Anterior Cervical Plating System, expanding our offerings in our Spine division.
  • In March 2021, we fulfilled our first international sales order to a new Distributor partner in Australia, better positioning us to expand our business and sell our products globally.
  • We were successful in adding 7 new distributors during the three months ended March 31, 2021.
  • On May 4, 2021, we executed the Seventh Amendment to our Amended and Restated Business Lona Agreement with Amegy Bank, renewing our credit facility until November 4, 2021.

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 medicine 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)

March 31,

2021

December 31,

2020

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

1,417,793

$

1,187,458

Accounts receivable, net of allowance of $618,771 and $787,766, respectively

3,487,710

4,427,896

Inventories, net of allowance of $3,315,541 and $3,077,728, respectively

7,594,969

6,981,413

Prepaid expenses and other current assets

94,536

24,203

Total current assets

12,595,008

12,620,970

Property and equipment, net

13,630

17,791

Long term accounts receivable, net of allowance of $2,707,228 and $2,615,834, respectively

1,750,478

1,669,510

Intangible assets, net

1,125,447

1,138,080

Goodwill

1,972,886

1,972,886

Total assets

$

17,457,449

$

17,419,237

Liabilities and Stockholders’ Equity (Accumulated Deficit)

Current liabilities:

Accounts payable

$

3,325,107

$

3,236,592

Accrued expenses

2,696,806

2,584,734

Convertible notes payable – related parties

150,000

150,000

Payroll Protection Program Loan

361,400

361,400

Economic Injury Disaster Loan – short term portion

3,004

2,241

Senior secured revolving credit facility

1,088,352

913,352

Total current liabilities

7,624,669

7,248,319

Notes payable – related parties

200,000

200,000

Economic Injury Disaster Loan – long term portion

146,996

147,759

Earn-out liability

11,936,000

11,936,000

Total liabilities

19,907,665

19,532,078

Commitments and contingencies

Stockholders’ equity (accumulated deficit):

Preferred stock, $0.01 par value; 20,000,000 shares authorized, no shares issued and

outstanding

Common stock, $0.01 par value; 100,000,000 shares authorized, 73,124,458 shares issued and outstanding as of March 31, 2021 and December 31, 2020

731,245

731,245

Additional paid-in capital

1,300,170

1,184,222

Accumulated deficit

(4,481,631

)

(4,028,308

)

Total stockholders’ deficit

(2,450,216

)

(2,112,841

)

Total liabilities and stockholders’ equity (accumulated deficit)

$

17,457,449

$

17,419,237

 

FUSE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in dollars, except share data)

For the Three Months Ended March 31,

2021

2020

Net revenues

$

4,440,759

$

4,636,503

Cost of revenues

1,853,865

1,982,896

Gross profit

2,586,894

2,653,607

Operating expenses:

Selling, general, administrative and other

1,435,310

2,480,771

Commissions

1,564,753

1,391,117

Depreciation and amortization

16,794

29,983

Total operating expenses

3,016,857

3,901,871

Operating loss

(429,963

)

(1,248,264

)

Other expense:

Interest expense

19,000

31,001

Total other expense

19,000

31,001

Operating loss before tax

(448,963

)

(1,279,265

)

Income tax expense

4,360

4,734

Net loss

$

(453,323

)

$

(1,283,999

)

Net loss per common share – basic and diluted

$

(0.01

)

$

(0.02

)

Weighted average number of Common Stock outstanding – basic and diluted

70,221,566

70,221,566

FUSE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

For the Three Months Ended March 31,

2021

2020

Cash flows from operating activities

Net loss

$

(453,323

)

$

(1,283,999

)

Adjustments to reconcile net loss to net cash provided by operating

activities:

Depreciation and amortization

16,794

29,983

Share-based compensation

115,948

162,656

Provision for bad debts and discounts

417,219

Provision for long term accounts receivable

91,394

198,124

Provision for slow moving inventory

237,813

81,190

Changes in operating assets and liabilities:

Accounts receivable

940,186

1,639,955

Inventories

(851,369

)

(27,267

)

Prepaid expenses and other current assets

(70,333

)

(77,520

)

Long term accounts receivable

(172,362

)

(495,310

)

Accounts payable

88,515

(181,162

)

Accrued expenses

112,072

(539,973

)

Net cash provided by (used in) operating activities

55,335

(76,104

)

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

Net payments/proceeds on senior secured revolving credit facility

175,000

(249,181

)

Net cash provided by (used in) financing activities

175,000

(249,181

)

Net increase (decrease) in cash

230,335

(346,042

)

Cash and cash equivalents – beginning of period

1,187,458

1,099,310

Cash and cash equivalents – end of period

$

1,417,793

$

753,268

Supplemental disclosure of cash flow information:

Cash paid for interest

$

10,000

$

21,788

Contacts

Fuse Medical, Inc.
Devon Morgan, Sr. Investor Relations Analyst
Office (469) 862-3030
Facsimile (469) 862-3035
info@Fusemedical.com

SOURCE: Business Wire, 13th May 2021