Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Sanara MedTech Inc. (714256) 10-Q published on May 12, 2020 at 12:44 pm
Reporting Period: Mar 30, 2020
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The extent to which the COVID-19 pandemic may directly or indirectly impact our business, financial condition, and results of operations is highly uncertain and subject to change. We considered the potential impact of the COVID-19 pandemic on our estimates and assumptions and there was not a material impact to our consolidated financial statements as of and for the three months ended March 31, 2020; however, actual results could differ from those estimates and there may be changes to our estimates in future periods.
The Loan is in the principal amount of $583,000, bears interest at a fixed rate of 1.00% per annum and matures on April 22, 2022. The Loan requires monthly payments of principal and interest in the amount of $24,546 commencing on November 2, 2020 with a final payment of $174,115 due on April 22, 2022. The Loan may be prepaid at any time prior to maturity without penalty. Under the terms of the PPP, the Company may apply for forgiveness of the amount due on the Loan equal to the sum of payroll costs, covered rent and covered utility payments incurred during the 8-week period commencing on the loan funding date of April 24, 2020.The foregoing summary is qualified in its entirety by reference to the promissory note which is attached as Exhibit 10.1 to the Company’s Form 8-K filed on April 29, 2020.
This Form 10-Q Report contains forward-looking statements concerning the impact of COVID-19 among other matters. These statements may discuss expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to the Company. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside of the Company’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: unanticipated changes in the markets for the Company’s business; unanticipated downturns in business relationships with customers or their purchases from us; the potential effects on our businesses from natural disasters; the availability of credit to customers and suppliers; competitive pressures on sales and pricing; unanticipated changes in the cost of inventory and other operating costs; the introduction of competing products; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; new laws and governmental regulations; stock market and currency fluctuations; war, civil or political unrest or terrorism; the course of the COVID-19 pandemic and government responses thereto, and unanticipated deterioration of economic and financial conditions in the United States and around the world. The Company does not assume any obligation to update these forward-looking statements.
During the first quarter of 2020, the COVID-19 pandemic had a moderate impact on the Company's business. With a large percentage of the Company's revenue derived from elective surgeries that have been or will be postponed, management is expecting a significant decline in revenue during the second quarter of 2020. In April 2020, the Company’s revenues were approximately 50% lower than revenue levels prior to the COVID-19 outbreak. During late April and early May 2020, we have seen a limited resumption of elective surgical procedures in the Company’s primary markets in Texas and the southeastern United States. In the absence of another widespread suspension of elective surgical procedures, we expect to see gradual improvement in revenues as markets in other areas of the country begin to reopen.
Because a majority of our revenue is currently generated from the sale of products in connection with surgical procedures, extensive limitations on those procedures and restrictions on our sales personnel from entering patient facilities would adversely affect our sales and operating results. Additionally, we obtain our products from manufacturers in the United States, and any disruptions in those manufacturing sites or the shipment of the products could impact our sales and operations. Similarly, interruptions in patient clinical studies and trials that are necessary to obtain FDA clearance of anticipated new products could delay expansion of our product portfolio.