13 May Fuse Medical, Inc. Announces First Quarter 2021 Financial Results
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