Business Wire | Aug 12, 2021 02:50PM EDT

Fuse Medical, Inc. Announces First Quarter 2021 Financial Results

Aug. 12, 2021

RICHARDSON, Texas--(BUSINESS WIRE)--Aug. 12, 2021--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 June 30, 2021 with the Securities and Exchange Commission ("SEC") on Thursday, August 12, 2021.

First Quarter 2021 Financial Highlights

* Net revenues for the quarter ended June 30, 2021 were $5.7 million, compared to $4.0 million for the quarter ended June 30 2020 which was an increase of approximately 41%.

* For the quarter ended June 30, 2021, gross profit was $3.4 million, or 61% of revenues, compared to $2.2 million, or 55% of revenues, for the quarter ended June 30, 2020 which was an increase of 56%.

* Selling, general, administrative, and other expenses ("SG&A") for the quarter ended June 30, 2021 was approximately $2.0 million compared to $1.1 million for the quarter ended June 30, 2020.

* Commissions expense for the quarter ended June 30, 2021 increased to $1.8 million from $1.4 million for the quarter ended June 30, 2020, an increase of approximately $414,133.

* For the quarter ended June 30, 2021, net loss was $85,481 compared to $423,431 for the quarter ended June 30, 2020, reflecting a reduction in our net loss of $337,950 or approximately 80%.

Christopher C. Reeg, Chief Executive Officer of Fuse Medical, commented "We are pleased with our second quarter performance, as highlighted by a 41% increase in revenue, and a 56% increase in gross profit over the prior-year period. Our implementation and achievement of strategic initiatives, which includes increasing our portfolio of manufactured products, continued research and development of unique intellectual property for commercialization, investing in our sales team, and expansion of our national distribution footprint are reflected in our second quarter results."

"Our growth for the remainder of 2021 is focused on new product launches in the biologics, orthopedics, and spine marketplace. With the alpha launch and successful first surgical implantation of the Orbitum(tm) Compression Staple System in the second quarter, we expect this disruptive technology for the extremity market will drive growth in the near term, while increasing our visibility as an emerging manufacturer of relevant 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)



June 30, December 31, 2021 2020

(Unaudited)

Assets

Current assets:

Cash $ 1,356,876 $ 1,187,458

Accounts receivable, net of allowance of 3,051,935 4,427,896 $941,283 and $787,766, respectively

Inventories, net of allowance of $2,644,223 8,312,711 6,981,413 and $3,077,728, respectively

Prepaid expenses and other current assets 61,098 24,203

Total current assets 12,782,620 12,620,970

Property and equipment, net 10,799 17,791

Long term accounts receivable, net ofallowance of $3,275,276 and $2,615,834, 2,129,026 1,669,510 respectively

Intangible assets, net 1,112,814 1,138,080

Goodwill 1,972,886 1,972,886

Total assets $ 18,008,145 $ 17,419,237

Liabilities and Stockholders' Equity (Accumulated Deficit)

Current liabilities:

Accounts payable $ 4,304,891 $ 3,236,592

Accrued expenses 2,819,523 2,584,734

Convertible notes payable - related parties 150,000 150,000

Paycheck Protection Program Loan - 361,400

Economic Injury Disaster Loan - short term 4,459 2,241 portion

Senior secured revolving credit facility 913,352 913,352

Total current liabilities 8,192,225 7,248,319

Notes payable - related parties 200,000 200,000

Economic Injury Disaster Loan - long term 145,541 147,759 portion

Earn-out liability 11,936,000 11,936,000

Total liabilities 20,473,766 19,532,078

Commitments and contingencies - -

Stockholders' equity (accumulated deficit)

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

outstanding

Common stock, $0.01 par value; 100,000,000shares authorized, 73,124,458 shares issued 731,245 731,245 and outstanding as of June 30, 2021 andDecember 31, 2020.

Additional paid-in capital 1,370,245 1,184,222

Accumulated deficit (4,567,111 ) (4,028,308 )

Total stockholders' equity (accumulated (2,465,621 ) (2,112,841 )deficit)

Total liabilities and stockholders' equity $ 18,008,145 $ 17,419,237 (accumulated deficit)

FUSE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in dollars, except share data)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2021

2020

2021

2020

Net revenues

$

5,665,015

$

4,010,666

$

10,105,774

$

8,647,169

Cost of revenues

2,219,608

1,796,663

4,073,473

3,779,559

Gross profit

3,445,407

2,214,003

6,032,301

4,867,610

Operating expenses:

Selling, general, administrative and other

2,021,576

1,161,476

3,456,887

3,642,247

Commissions

1,834,372

1,420,239

3,399,125

2,811,356

Depreciation and amortization

15,465

30,752

32,258

60,735

Total operating expenses

3,871,413

2,612,467

6,888,270

6,514,338

Operating loss

(426,006

)

(398,464

)

(855,969

)

(1,646,728

)

Other (income) expense:

Interest expense

16,048

24,021

35,048

55,022

Gain on Payroll Protection Loan extinguishment

(361,400

)

-

(361,400

)

-

Total other (income) expense

(345,352

)

24,021

(326,352

)

55,022

Net loss before tax

(80,654

)

(422,485

)

(529,617

)

(1,701,750

)

Income tax benefit

4,826

946

9,186

5,680

Net loss

$

(85,480

)

$

(423,431

)

$

(538,803

)

$

(1,707,430

)

Net loss per common share - basic

$

(0.00

)

$

(0.01

)

$

(0.01

)

$

(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 OPERATIONS

(unaudited)

(in dollars, except share data)



For the Three Months Ended For the Six Months Ended June June 30, 30,

2021 2020 2021 2020



Net revenues $ 5,665,015 $ 4,010,666 $ 10,105,774 $ 8,647,169

Cost of 2,219,608 1,796,663 4,073,473 3,779,559 revenues

Gross profit 3,445,407 2,214,003 6,032,301 4,867,610

Operating expenses:

Selling,general, 2,021,576 1,161,476 3,456,887 3,642,247 administrativeand other

Commissions 1,834,372 1,420,239 3,399,125 2,811,356

Depreciationand 15,465 30,752 32,258 60,735 amortization

Totaloperating 3,871,413 2,612,467 6,888,270 6,514,338 expenses

Operating loss (426,006 ) (398,464 ) (855,969 ) (1,646,728 )

Other (income) expense:

Interest 16,048 24,021 35,048 55,022 expense

Gain onPayrollProtection (361,400 ) - (361,400 ) - Loanextinguishment

Total other(income) (345,352 ) 24,021 (326,352 ) 55,022 expense

Net loss (80,654 ) (422,485 ) (529,617 ) (1,701,750 )before tax

Income tax 4,826 946 9,186 5,680 benefit

Net loss $ (85,480 ) $ (423,431 ) $ (538,803 ) $ (1,707,430 )

Net loss percommon share - $ (0.00 ) $ (0.01 ) $ (0.01 ) $ (0.02 )basic

Weightedaverage numberof common 70,221,566 70,221,566 70,221,566 70,221,566 sharesoutstanding -basic

FUSE MEDICAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

For the Six Months Ended June 30,

2021

2020

Cash flows from operating activities

Net loss

$

(538,803

)

$

(1,707,430

)

Adjustments to reconcile net loss to net cash provided by operating

activities:

Depreciation and amortization

32,258

60,735

Stock based compensation

186,023

327,098

Provision for bad debts and discounts

153,517

186,359

Provision for long term accounts receivable

659,442

604,194

Provision for slow moving inventory

(433,505

)

(621,604

)

Gain on Payroll Protection Program Loan extinguishment

(361,400

)

-

Changes in operating assets and liabilities:

Accounts receivable

1,222,444

2,076,373

Inventories

(897,793

)

1,425,600

Prepaid expenses and other current assets

(36,895

)

(47,902

)

Long term accounts receivable

(1,118,958

)

(1,510,486

)

Accounts payable

1,068,299

(513,268

)

Accrued expenses

234,789

(238,198

)

Net cash provided by operating activities

169,418

41,471

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

-

(664,149

)

Proceeds from Paycheck Protection Program

-

361,400

Proceeds from Economic Injury Disaster Loan

-

150,000

Proceeds from related party promissory notes

-

200,000

Net cash provided by (used in) financing activities

-

47,251

Net increase (decrease) in cash

169,418

67,965

Cash and cash equivalents - beginning of period

1,187,458

1,099,310

Cash and cash equivalents - end of period

$

1,356,876

$

1,167,275

Supplemental disclosure of cash flow information:

Cash paid for interest

$

21,235

$

40,018

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