Earnings release
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Sanara MedTech Exhibit 99.1 Sanara MedTech Inc. Reports Second Quarter 2026 Financial Results ( Unaudited ) FORT WORTH , TX , August 11 , 2026 ( GLOBE NEWSWIRE ) - Sanara MedTech Inc. ( " Sanara , " " Sanara MedTech , " the " Company , ” “ we , ” “ our ” or “ us ” ) ( Nasdaq : SMTI ) , a medical technology company focused on developing and commercializing transformative technologies to improve clinical outcomes and reduce healthcare expenditures in the surgical market , today reported its financial results for the second quarter ended June 30 , 2026 . Second Quarter 2026 Financial Summary ( 1 ) • Net revenue increased 9 % to $ 28.1 million , compared to $ 25.8 million in the second quarter of 2025 . • Gross profit of $ 26.2 million , or 93 % of net revenue , compared to gross profit of $ 23.9 million , or 92 % of net revenue , in the second quarter of 2025 . • Operating income of $ 1.8 million , compared to operating income of $ 2.5 million in the second quarter of 2025 . Net loss from continuing operations of $ 0.4 million , or a loss of $ 0.05 per diluted share , compared to net income from continuing operations of $ 0.5 million , or $ 0.05 per diluted share , in the second quarter of 2025 . Adjusted EBITDA ( 2 ) of $ 5.0 million , compared to $ 4.7 million in the second quarter of 2025 . First Six Months of 2026 Financial Summary ( 1 ) • Net revenue increased 14 % to $ 55.9 million , compared to $ 49.2 million in the first six months of 2025 . • Gross profit of $ 52.0 million , or 93 % of net revenue , compared to gross profit of $ 45.5 million , or 92 % of net revenue , in the first six months of 2025 . Operating income of $ 4.4 million , compared to operating income of $ 3.3 million in the first six months of 2025 . Net loss from continuing operations of $ 13,457 , or zero per diluted share , compared to net loss from continuing operations of $ 0.1 million , or a loss of $ 0.01 per diluted share , in the first six months of 2025 . Adjusted EBITDA ( 2 ) of $ 9.3 million , compared to $ 7.4 million in the first six months of 2025 . Cash and cash equivalents of $ 15.4 million and $ 46.5 million of long - term debt at June 30 , 2026 , compared to $ 16.6 million of cash and cash equivalents and $ 46.0 million of long - term debt at December 31 , 2025 . ( 1 ) As a result of the Company's strategic realignment , the operations of Tissue Health Plus ( " THP " ) , which were previously reported as the THP segment , have been classified as discontinued operations in Sanara's consolidated financial statements for the three and six months ended June 30 , 2026 and 2025 . ( 2 ) Adjusted EBITDA is a non - GAAP financial measure . See the discussion and the reconciliation at the end of this release for additional information .
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Management Comments Seth Yon, President and Chief Executive Officer of Sanara, commented, We continued to drive solid revenue growth in the second quarter of 2026 with net revenue of $28.1 million, representing a 9% increaseover the second quarter of 2025, as well as gross margin of 93% supporting Adjusted EBITDA of $5.0 million. Subsequent to the close of the quarter, we announced our entry into a transformational agreement in which Sanara is expected to be acquired by MIMEDX, a leading provider of products for applications inwound care, burn and surgical sectors of healthcare,” Mr. Yon continued. “The transaction is expected to combine Sanara’s pure play surgical focus and innovative technologies across collagen particulate,wound irrigation and bone fixation with MIMEDX’s high-growth, best-in-class surgical portfolio, creating a leading regenerative medicine company across numerous surgical subspecialties. The completion ofthis combination, which remains subject to customary closing conditions, would allow us to deepen our existing distributor relationships and expand our operating presence by bringing together two highlyfocused organizations with deep benches of talent and strong momentum in the surgical space. “We remain focused on continuing to meet the needs of our customers and expanding penetration of our portfolio of surgical products, which include our leading product CellerateRX Surgical, BIASURGE andOsStic, a licensed synthetic injectable structural bio-adhesive bone void filler which remains on track to be introduced to the market in the first quarter of 2027,” Mr. Yon concluded. Second Quarter and Year-to-Date 2026 Revenue The following table summarizes revenue streams from product sales for the periods presented: Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Soft tissue repair products $ 25,242,592 $ 22,661,457 $ 50,185,537 $ 43,193,897 Bone fusion products 2,894,165 3,142,795 5,749,754 6,044,451 Total Net Revenue $ 28,136,757 $ 25,804,252 $ 55,935,291 $ 49,238,348 Second Quarter of 2026 Financial Results(1) Net revenue for the second quarter of 2026 was $28.1 million, compared to $25.8 million for the second quarter of 2025, an increase of $2.3 million, or 9%, year-over-year. Higher net revenue for the secondquarter of 2026 was driven by an increase of $2.5 million, or 11%, in sales of soft tissue repair products, including CellerateRX® Surgical Powder (“CellerateRX Surgical”), BIASURGE® Advanced SurgicalSolution (“BIASURGE”) and FORTIFY TRG® Tissue Repair Graft (“FORTIFY TRG”), offset by a slight decrease of $0.2 million, or 8%, in sales of bone fusion products. Gross profit for the second quarter of 2026 was $26.2 million, compared to $23.9 million for the second quarter of 2025, an increase of $2.3 million, or 10%, year-over-year. Gross margin was 93% of netrevenue for the second quarter of 2026, compared to 92% of net revenue for the second quarter of 2025. Higher gross profit and margin for the second quarter of 2026 was primarily due to the net revenuegrowth factors above and product mix. Operating expenses for the second quarter of 2026 were $24.4 million, or 86.8% of net revenue, compared to $21.4 million, or 82.9% of net revenue, for the second quarter of 2025, an increase of $3.0 million,or 14%, year-over-year. The increase in operating expenses was primarily due to higher selling, general, and administrative (“SG&A”) as well as slightly increased research and development (“R&D”). HigherSG&A in the second quarter of 2026 was primarily due to increased direct sales and marketing expenses, which accounted for approximately $1.2 million of the increase, approximately $0.6 million related tocompensation expense and approximately $1.1 million related to legal and advisory services associated with corporate strategic initiatives. R&D for the second quarter of 2026 increased to $1.2 million, or 4%of net revenue, compared to $1.1 million, or 4% of net revenue, for the second quarter of 2025. Operating income for the second quarter of 2026 was $1.8 million, compared to operating income of $2.5 million for the second quarter of 2025. Other expense for the second quarter of 2026 was $2.2 million, compared to $2.0 million for the second quarter of 2025. The increase in other expense for the second quarter of 2026 was primarily due to higherinterest expense related to our term loan with CRG Servicing LLC (the “CRG Term Loan”) and our share of losses from equity method investments. In the second quarter of 2025, interest on the CRG TermLoan was paid-in-kind and capitalized to the loan balance, whereas all interest was paid in cash in the second quarter of 2026.
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Net loss from continuing operations for the second quarter of 2026 was $0.4 million, or a loss of $0.05 per diluted share, compared to net income from continuing operations of $0.5 million, or $0.05 per dilutedshare, for the second quarter of 2025. Net loss from continuing operations for the second quarter of 2026 was primarily due to higher SG&A, interest expense related to the CRG Term Loan and share of lossesfrom equity method investments, partially offset by net revenue growth. Net loss from discontinued operations for the second quarter of 2026 was $41,720, compared to a net loss from discontinued operationsof $2.5 million for the second quarter of 2025. Adjusted EBITDA(2) for the second quarter of 2026 was $5.0 million, compared to $4.7 million for the second quarter of 2025, an increase of $0.3 million. Higher Adjusted EBITDA in the second quarter of2026 was primarily due to net revenue growth offset by increases in SG&A. First Six Months of 2026 Financial Results(1) Net revenue for the first six months of 2026 was $55.9 million, compared to $49.2 million for the first six months of 2025, an increase of $6.7 million, or 14%, year-over-year. Higher net revenue for the first sixmonths of 2026 was driven by an increase of $7.0 million, or 16%, in sales of soft tissue repair products, including CellerateRX Surgical, BIASURGE and FORTIFY TRG, offset by a slight decrease of $0.3million, or 5%, in sales of bone fusion products. Gross profit for the first six months of 2026 was $52.0 million, compared to $45.5 million for the first six months of 2025, an increase of $6.5 million, or 14%, year-over-year. Gross margin was 93% of netrevenue for the first six months of 2026, compared to 92% of net revenue for the first six months of 2025. Higher gross profit and margin for the first six months of 2026 was primarily due to the net revenuegrowth factors above and product mix. Operating expenses for the first six months of 2026 were $47.6 million, or 85.2% of net revenue, compared to $42.2 million, or 85.8% of net revenue, for the first six months of 2025, an increase of $5.4million, or 13%, year-over-year. The increase in operating expenses was primarily due to higher SG&A offset by lower R&D, for the first six months of 2026. Higher SG&A in the first six months of 2026 wasprimarily due to increased direct sales and marketing expenses, which accounted for approximately $3.1 million of the increase, approximately $1.1 million related to compensation expense, approximately $1.1million related to legal and advisory services associated with corporate strategic initiatives and approximately $0.2 million related to contracted services. R&D for the first six months of 2026 decreased to $1.9million, or 3% of net revenue, compared to R&D of $2.0 million, or 4% of net revenue, for the first six months of 2025. Lower R&D in the first six months of 2026 was primarily due to the timing of productenhancement initiatives associated with the Company’s soft tissue repair products when compared to the first six months of 2025. Operating income for the first six months of 2026 was $4.4 million, compared to operating income of $3.3 million for the first six months of 2025. Other expense for the first six months of 2026 was $4.4 million, compared to $3.4 million for the first six months of 2025. The increase in other expense for the first six months of 2026 was primarily due tohigher interest expense related to the CRG Term Loan and share of losses from equity method investments. In the first six months of 2025, interest on the CRG Term Loan was paid-in-kind and capitalized tothe loan balance, whereas all interest was paid in cash in the first six months of 2026. Net loss from continuing operations for the first six months of 2026 was $13,457, or zero per diluted share, compared to a net loss from continuing operations of $0.1 million, or a loss of $0.01 per diluted share,for the first six months of 2025. Net loss from continuing operations for the first six months of 2026 was primarily due to higher SG&A, interest expense related to the CRG Term Loan and share of losses fromequity method investments, partially offset by net revenue growth. Net income from discontinued operations for the first six months of 2026 was $19,196, compared to a net loss from discontinued operations of$5.4 million for the first six months of 2025. Adjusted EBITDA(2) for the first six months of 2026 was $9.3 million, compared to $7.4 million for the first six months of 2025, an increase of $1.9 million. The increase in Adjusted EBITDA in the first sixmonths of 2026 was primarily due to net revenue growth offset by increases in SG&A. Net cash used in operating activities in the first six months of 2026 was $0.4 million, compared to $0.7 million of net cash provided by operating activities in the first six months of 2025. The increase in netcash used in operating activities during the first six months of 2026 was primarily due to the timing of commissions payments, higher cash interest expense resulting from a larger outstanding debt balancecompared to the prior-year period and the absence of paid-in-kind interest. As of June 30, 2026, the Company had $15.4 million of cash and cash equivalents and $46.5 million of long-term debt, compared to $16.6 million and $46.0 million, respectively, as of December 31, 2025. (1) As a result of the Company’s strategic realignment, the operations of THP, which were previously reported as the THP segment, have been classified as discontinued operations in Sanara’s consolidatedfinancial statements for the three and six months ended June 30, 2026 and 2025. (2) Adjusted EBITDA is a non-GAAP financial measure. See the discussion and the reconciliation at the end of this release for additional information.
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About Sanara MedTech Inc. Sanara MedTech Inc. is a medical technology company focused on developing and commercializing transformative technologies to improve clinical outcomes and reduce healthcare expenditures in the surgicalmarket. The Company develops, markets and distributes surgical products for use by physicians and clinicians in hospitals. Each of the Company’s products and technologies are designed to achieve the goal ofproviding better clinical outcomes at a lower overall cost for healthcare systems. Sanara’s products are primarily sold in the North American surgical tissue repair market. Sanara markets and distributesCellerateRX® Surgical Activated Collagen Powder, BIASURGE® Advanced Surgical Solution, FORTIFY TRG® Tissue Repair Graft and FORTIFY FLOWABLE® Extracellular Matrix, as well as a portfolioof advanced biologic products including: ACTIGEN® Verified Inductive Bone Matrix, ALLOCYTE® Plus Advanced Viable Bone Matrix, BiFORM® Bioactive Moldable Matrix and TEXAGEN® AmnioticMembrane Allograft to the surgical market. The Company believes it can drive its pipeline from concept to preclinical and clinical development while meeting quality and regulatory requirements. TheCompany strives to be one of the most innovative and comprehensive providers of effective surgical solutions and is continually seeking to expand its offerings for patients requiring treatments in the UnitedStates. For more information, please visit SanaraMedTech.com. Information about Forward-Looking Statements The statements in this press release that do not constitute historical facts are “forward-looking statements,” within the meaning of and subject to the safe harbor created by the Private Securities LitigationReform Act of 1995. These statements may be identified by terms such as “aims,” “anticipates,” “believes,” contemplates,” “continue,” “could,” “estimates,” “expects,” “forecast,” “guidance,” “intends,”“may,” “plans,” “possible,” “potential,” “predicts,” “preliminary,” “projects,” “seeks,” “should,” “targets,” “will” or “would,” or the negatives of these terms, variations of these terms or other similarexpressions. These forward-looking statements include, among others, statements regarding the Company’s expected net revenue, the Company’s ability to achieve enhanced results by focusing on the surgicalmarket, the Company’s business strategy and mission, the development of new products, the timing of commercialization of the Company’s products, and the regulatory approval process. These items involverisks, contingencies and uncertainties such as uncertainties as to the timing of the proposed transaction with MIMEDX (defined below); the timing, receipt and terms and conditions of any requiredgovernmental or regulatory approvals of the proposed transaction that could reduce the anticipated benefits of or cause the parties to abandon the proposed transaction; risks related to the satisfaction of theconditions to closing the proposed transaction (including the failure to obtain necessary regulatory approvals or the approval of the Company’s shareholders) in the anticipated timeframe or at all; the risk thatany announcements relating to the proposed transaction could have adverse effects on the market price of the Company’s stock; disruption from the proposed transaction making it more difficult to maintainbusiness and operational relationships, including retaining and hiring key personnel; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement,including in certain circumstances requiring the Company to pay a termination fee; risks related to disruption of management’s attention from the Company’s ongoing business operations due to the proposedtransaction; significant transaction costs; the risk of litigation and/or regulatory actions related to the proposed transaction; uncertainties associated with the development and process for obtaining regulatoryapproval for new products; the extent of product demand; market and customer acceptance; the effect of economic conditions, competition and pricing; uncertainties associated with the development andprocess for obtaining regulatory approval for new products; the ability to consummate and integrate acquisitions, and other risks, contingencies and uncertainties detailed in the Company’s most recent AnnualReport on Form 10-K, Quarterly Report on Form 10-Q and subsequent reports filed with the Securities and Exchange Commission (the “SEC”), which could cause the Company’s actual operating results,performance or business plans or prospects to differ materially from those expressed in or implied by these statements. All forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to revise any of these statements to reflect future circumstances or the occurrence ofunanticipated events, except as required by applicable securities laws.
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Important Information and Where to Find It In connection with the proposed transaction, MiMedx Group, Inc. (“MIMEDX”) intends to file with the SEC a registration statement on Form S-4 that will include a proxy statement of Sanara and that alsoconstitutes a prospectus of MIMEDX. Each of MIMEDX and Sanara may also file other relevant documents with the SEC regarding the proposed transaction. This communication is not a substitute for theproxy statement/prospectus or registration statement or any other document that MIMEDX or Sanara may file with the SEC. The definitive proxy statement/prospectus (if and when available) will be mailed toshareholders of Sanara. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANTDOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF ANDWHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders willbe able to obtain free copies of the registration statement and proxy statement/prospectus (if and when available) and other documents containing important information about MIMEDX, Sanara and theproposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at https://www.sec.gov. Copies of the documents filed with the SEC by MIMEDX will beavailable free of charge on MIMEDX’s website at https://investors.mimedx.com/. Copies will also be available at no charge at the Investor Relations section of Sanara’s website at https://ir.sanaramedtech.com/. Participants in the Solicitation Sanara, MIMEDX and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about thedirectors and executive officers of Sanara, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in Sanara’s proxy statement for its 2026 Annual Meeting ofShareholders, which was filed with the SEC on April 17, 2026. Information about the directors and executive officers of MIMEDX, including a description of their direct or indirect interests, by securityholdings or otherwise, is set forth in MIMEDX’s proxy statement for its 2026 Annual Meeting of Shareholders, which was filed with the SEC on April 29, 2026. Other information regarding the participants inthe proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed withthe SEC regarding the proposed transaction when such materials become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting orinvestment decisions. You may obtain free copies of these documents from Sanara and MIMEDX using the sources indicated above. No Offer or Solicitation This communication does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed transactions orotherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities lawsof such jurisdiction. Investor Relations Contact: Walter Frank or John NesbettIMS Investor RelationsIR@sanaramedtech.com(203) 972-9200
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SANARA MEDTECH INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS June 30, December 31, 2026 2025 (Unaudited) Assets Current assets Cash and cash equivalents $ 15,421,170 $ 16,578,857 Accounts receivable, net 12,572,651 11,998,075 Inventory, net 3,459,921 3,948,748 Prepaid and other assets 741,733 948,620 Current assets related to discontinued operations 5,203 67,863 Total current assets 32,200,678 33,542,163 Long-term assets Intangible assets, net 17,277,013 18,640,673 Goodwill 3,601,781 3,601,781 Investment in equity securities 13,730,703 14,626,858 Right of use assets – operating leases 1,909,278 2,075,634 Property and equipment, net 426,934 456,962 Total long-term assets 36,945,709 39,401,908 Total assets $ 69,146,387 $ 72,944,071 Liabilities and shareholders’ equity Current liabilities Accounts payable $ 1,401,443 $ 2,338,761 Accrued bonuses and commissions 6,801,395 11,781,435 Accrued royalties and expenses 3,562,415 2,684,626 Earnout liabilities – current - 235,001 Operating lease liabilities – current 383,153 353,229 Current liabilities related to discontinued operations 345,585 1,233,478 Total current liabilities 12,493,991 18,626,530 Long-term liabilities Long-term debt 46,477,087 45,970,937 Operating lease liabilities – long-term 1,669,529 1,868,703 Other long-term liabilities 571,320 548,125 Total long-term liabilities 48,717,936 48,387,765 Total liabilities 61,211,927 67,014,295 Commitments and contingencies Shareholders’ equity Common Stock: $0.001 par value, 20,000,000 shares authorized; 9,193,394 issued and outstanding as of June 30, 2026 and8,946,913 issued and outstanding as of December 31, 2025 9,194 8,948 Additional paid-in capital 82,826,049 81,232,536 Accumulated deficit (74,891,763) (75,303,042)Total Sanara MedTech shareholders’ equity 7,943,480 5,938,442 Equity attributable to noncontrolling interest (9,020) (8,666)Total shareholders’ equity 7,934,460 5,929,776 Total liabilities and shareholders’ equity $ 69,146,387 $ 72,944,071
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SANARA MEDTECH INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Net Revenue $ 28,136,757 $ 25,804,252 $ 55,935,291 $ 49,238,348 Cost of goods sold 1,981,347 1,937,282 3,904,936 3,772,249 Gross profit 26,155,410 23,866,970 52,030,355 45,466,099 Operating expenses Selling, general and administrative 22,601,690 19,634,319 44,483,210 38,763,527 Research and development 1,154,232 1,056,796 1,913,824 2,007,155 Depreciation and amortization 619,111 688,546 1,206,363 1,382,578 Total operating expenses 24,375,033 21,379,661 47,603,397 42,153,260 Operating income 1,780,377 2,487,309 4,426,958 3,312,839 Other income (expense) Interest expense (1,810,311) (1,791,568) (3,609,656) (3,108,660)Share of losses from equity method investments (433,648) (195,482) (896,155) (339,090)Interest income 53,814 - 66,772 3,672 Gain (loss) on disposal of property and equipment (1,376) - (1,376) 10,932 Total other income (expense) (2,191,521) (1,987,050) (4,440,415) (3,433,146) Net income (loss) from continuing operations (411,144) 500,259 (13,457) (120,307) Net income (loss) from discontinued operations (41,720) (2,518,657) 19,196 (5,425,474) Net income (loss) (452,864) (2,018,398) 5,739 (5,545,781) Less: Net loss attributable to noncontrolling interest from continuing operations - (4,036) (354) (4,242) Net income (loss) attributable to Sanara MedTech shareholders $ (452,864) $ (2,014,362) $ 6,093 $ (5,541,539) Net income (loss) per share, basic: Continuing operations $ (0.05) $ 0.06 $ - $ (0.01)Discontinued operations - (0.29) - (0.63)Net income (loss) per share of common stock, basic $ (0.05) $ (0.23) $ - $ (0.64) Net income (loss) per share, diluted: Continuing operations $ (0.05) $ 0.05 $ - $ (0.01)Discontinued operations - (0.28) - (0.63)Net income (loss) per share of common stock, diluted $ (0.05) $ (0.23) $ - $ (0.64) Weighted average number of common shares outstanding, basic 8,662,671 8,612,986 8,732,849 8,591,663 Weighted average number of common shares outstanding, diluted 8,662,671 8,927,060 8,732,849 8,591,663
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The following is a reconciliation of the numerator and denominator of basic and diluted net income (loss) per share for the periods presented: Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Numerator: Net income (loss) from continuing operations $ (411,144) $ 500,259 $ (13,457) $ (120,307)Net income (loss) from discontinued operations (41,720) (2,518,657) 19,196 (5,425,474)Less: Net loss attributable to noncontrolling interests from continuing operations - (4,036) (354) (4,242)Net income (loss) attributable to Sanara MedTech shareholders $ (452,864) $ (2,014,362) $ 6,093 $ (5,541,539) Denominator: Weighted average shares, basic 8,662,671 8,612,986 8,732,849 8,591,663 Dilutive effect of stock options - 31,013 - - Dilutive effect of unvested shares - 283,061 - - Weighted average shares, diluted 8,662,671 8,927,060 8,732,849 8,591,663 The following table summarizes the shares of common stock that were potentially issuable but were excluded from the computation of diluted net loss per share of common stock for the periods presented, assuch shares would have had an anti-dilutive effect: June 30, 2026 2025 Stock options 10,218 31,013 Unvested restricted stock 411,210 260,377
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SANARA MEDTECH INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months EndedJune 30, 2026 2025 Cash flows from operating activities: Net income (loss) $ 5,739 $ (5,545,781)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 1,206,363 2,238,641 (Gain) loss on disposal of property and equipment 1,376 (9,674)Credit loss expense 141,000 294,034 Inventory obsolescence 130,822 371,957 Share-based compensation 2,524,645 2,740,343 Noncash lease expense 166,356 359,758 Share of losses from equity method investments 896,155 339,090 Back-end fee 359,067 377,490 Paid-in-kind interest - 995,244 Accretion of finance liabilities 53,160 86,541 Amortization and write-off of debt issuance costs 147,083 132,821 Changes in operating assets and liabilities: Accounts receivable, net (700,576) 125,086 Accounts receivable – related parties - 31,485 Inventory, net 358,005 (1,130,775)Prepaid and other assets 254,547 (76,285)Accounts payable (937,318) (42,464)Accounts payable – related parties - 1,442 Accrued royalties and expenses 898,597 317,076 Accrued bonuses and commissions (5,762,706) (579,389)Operating lease liabilities (169,250) (361,513)Net cash provided by (used in) operating activities (426,935) 665,127 Cash flows from investing activities: Purchases of property and equipment (49,052) (3,484,008)Proceeds from disposal of property and equipment - 60,000 Purchases of intangible assets - (23,452)Investment in equity securities - (3,538,217)CarePICS Acquisition - (2,122,146)Net cash used in investing activities (49,052) (9,107,823)Cash flows from financing activities: Loan proceeds, net of debt issuance costs of zero in 2026 and $228,183 in 2025 - 12,021,817 Pay off debt assumed in CarePICS Acquisition - (1,650,000)Net settlement of equity-based awards (525,700) (692,672)Cash payment of finance and earnout liabilities (156,000) (156,000)Net cash provided by (used in) financing activities (681,700) 9,523,145 Net increase (decrease) in cash and cash equivalents (1,157,687) 1,080,449 Cash and cash equivalents, beginning of period 16,578,857 15,878,295 Cash and cash equivalents, end of period $ 15,421,170 $ 16,958,744 Cash paid during the period for: Interest $ 3,050,346 $ 1,516,563 Taxes 48,716 52,984 Supplemental noncash investing and financing activities: Non-monetary exchange to acquire intangible assets $ - $ 2,084,278 Conversion of note receivable into equity method investment - 1,101,478 Earnout liability generated by CarePICS Acquisition - 1,355,603
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SANARA MEDTECH INC. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURES (UNAUDITED) To supplement the Company’s financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present certain non-GAAP financial measures inthis press release, including Adjusted EBITDA. The Company’s management uses these non-GAAP financial measures, both internally and externally, to assess and communicate the financial performance ofthe Company. The Company defines Adjusted EBITDA as net income (loss) from continuing operations excluding interest expense/income, provision/benefit for income taxes, depreciation and amortization,non-cash share-based compensation expense, change in fair value of earnout liabilities, asset impairment charges, share of losses from equity method investments, gains/losses on the disposal of property andequipment, executive separation costs, and acquisition and other transaction related costs, as each is applicable to the periods presented. The Company believes Adjusted EBITDA is useful to investors because it facilitates comparisons of the Company’s core business operations across periods on a consistent basis. Accordingly, the Companyadjusts certain items when calculating Adjusted EBITDA because the Company believes that such items are not related to the Company’s core business operations. The Company’s non-GAAP financial measures are not in accordance with, nor an alternative for, measures conforming to GAAP and may be different from non-GAAP financial measures used by othercompanies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company continues to provide all information required by GAAP, butit believes that evaluating its ongoing operating results may not be as useful if an investor or other user is limited to reviewing only GAAP financial measures. The Company does not, nor does it suggest thatinvestors should, consider these non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Material limitations associated with the use ofsuch measures include that they do not reflect all costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, these non-GAAPfinancial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances. The Company presents these non-GAAP financial measures toprovide investors with information to evaluate the Company’s operating results in a manner similar to how management evaluates business performance. To compensate for any limitations in such non-GAAPfinancial measures, management believes that it is useful in understanding and analyzing the results of the business to review both GAAP information and the related non-GAAP financial measures. Wheneverthe Company uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Investors are encouraged to reviewand consider these reconciliations. Reconciliation of Net income (loss) from continuing operations to Adjusted EBITDA (Unaudited): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Net income (loss) from continuing operations $ (411,144) $ 500,259 $ (13,457) $ (120,307)Adjustments: Interest expense 1,810,311 1,791,568 3,609,656 3,108,660 Depreciation and amortization(1) 619,111 688,546 1,206,363 1,382,578 Noncash share-based compensation 1,496,310 1,278,871 2,524,645 2,454,367 Share of losses from equity method investments 433,648 195,482 896,155 339,090 (Gain) loss on disposal of property and equipment 1,376 - 1,376 (10,932)Interest income (53,814) - (66,772) (3,672)Executive separation costs(2) - 260,275 - 260,275 Acquisition and other transaction related costs(3) 1,114,980 4,826 1,114,980 4,826 Adjusted EBITDA $ 5,010,778 $ 4,719,827 $ 9,272,946 $ 7,414,885 (1) Depreciation expense of $7,021 and $12,482 was reclassified as continuing operations in the three and six months ended June 30, 2025 and is therefore no longer reflected in discontinued operations. (2) Includes $130,174 of share-based compensation related to executive separation costs for the three and six months ended June 30, 2025. (3) Acquisition and other transaction related costs are comprised of legal and advisory services related to prospective acquisitions and corporate strategic initiatives.
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ANNEX - Consolidated (reflecting our Surgical Business): The following tables reflect results of operations of our surgical business for the periods indicated below (Unaudited except for full fiscal years ended December 31, 2025, 2024, and 2023): 2025 2024 2023 Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4Net Revenue $23,434,096 $25,804,252 $26,333,819 $27,545,815 $103,117,982 $18,536,638 $20,158,823 $21,671,599 $26,305,365 $86,672,425 $15,519,187 $15,753,164 $16,024,948 $17,689,8 Cost of goodssold 1,834,967 1,937,282 1,874,214 1,874,506 7,520,969 1,890,046 2,008,686 1,991,987 2,249,182 8,139,901 2,116,694 2,187,516 1,751,349 1,788,1 Gross profit 21,599,129 23,866,970 24,459,605 25,671,309 95,597,013 16,646,592 18,150,137 19,679,612 24,056,183 78,532,524 13,402,493 13,565,648 14,273,599 15,901,6 Operatingexpenses Selling, generalandadministrative(1) 19,129,208 19,634,319 19,877,875 20,075,597 78,716,999 15,683,039 18,349,924 17,420,347 20,220,332 71,673,642 12,467,395 13,301,230 13,460,404 15,597,8Research anddevelopment 950,359 1,056,796 1,029,591 2,035,737 5,072,483 578,981 582,443 783,840 883,399 2,828,663 235,236 208,727 225,886 232,9Depreciationandamortization(2) 694,032 688,546 610,899 668,396 2,661,873 698,502 698,407 696,888 692,032 2,785,829 372,020 396,597 590,563 687,6Change in fairvalue of earnoutliabilities - - - - - (103,781) 89,330 - - (14,451) (191,127) (436,004) (758,783) 87,5Assetimpairmentcharges - - - 1,841,120 1,841,120 - - - - - - - - Total operatingexpenses 20,773,599 21,379,661 21,518,365 24,620,850 88,292,475 16,856,741 19,720,104 18,901,075 21,795,763 77,273,683 12,883,524 13,470,550 13,518,070 16,606,0 Operating income(loss) 825,530 2,487,309 2,941,240 1,050,459 7,304,538 (210,149) (1,569,967) 778,537 2,260,420 1,258,841 518,969 95,098 755,529 (704,3 Other income(expense) Interest expense (1,317,092) (1,791,568) (1,818,105) (1,833,035) (6,759,800) (267,336) (644,346) (927,577) (1,289,136) (3,128,395) (6) - (188,294) (287,4Share of lossesfrom equitymethodinvestments (143,608) (195,482) (288,642) (324,734) (952,466) - - (31,448) (58,559) (90,007) - - - Interest income 3,672 - - - 3,672 - - - 21,978 21,978 - - - Gain ondisposal ofproperty andequipment 10,932 - - - 10,932 - - - - - - - - Gain ondisposal ofinvestment - - - - - - - - - - - - - 251,0Total otherincome (expense) (1,446,096) (1,987,050) (2,106,747) (2,157,769) (7,697,662) (267,336) (644,346) (959,025) (1,325,717) (3,196,424) (6) - (188,294) (36,4 Net income (loss)from continuingoperations $ (620,566) $ 500,259 $ 834,493 $(1,107,310) $ (393,124) $ (477,485) $(2,214,313) $ (180,488) $ 934,703 $(1,937,583) $ 518,963 $ 95,098 $ 567,235 $ (740,8 (1) Selling, general and administrative expense of $90,293 was reclassified and is now reflected as discontinued operations in the first quarter of 2024. (2) Depreciation expense of $5,461 and $7,021 was reclassified as continuing operations in the first and second quarters of 2025, respectively, and is therefore no longer reflected in discontinuedoperations.
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ANNEX - Consolidated (reflecting our Surgical Business) (continued): Reconciliation of Net income (loss) from continuing operations to Adjusted EBITDA (Unaudited): 2025 2024 2023 Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTALNet income(loss) fromcontinuingoperations $(620,566) $500,259 $834,493 $(1,107,310) $ (393,124) $(477,485) $(2,214,313) $(180,488) $934,703 $(1,937,583) $518,963 $ 95,098 $567,235 $(740,811) $ 440,485Adjustments: Interestexpense 1,317,092 1,791,568 1,818,105 1,833,035 6,759,800 267,336 644,346 927,577 1,289,136 3,128,395 6 - 188,294 287,483 475,783Depreciationandamortization(1) 694,032 688,546 610,899 668,396 2,661,873 698,502 698,407 696,888 692,032 2,785,829 372,020 396,597 590,563 687,679 2,046,859Noncashshare-basedcompensation 1,175,496 1,278,871 1,164,070 1,155,545 4,773,982 753,616 1,046,321 1,003,599 1,165,472 3,969,008 545,214 1,064,516 813,606 777,994 3,201,330Change in fairvalue ofearnoutliabilities - - - - - (103,781) 89,330 - - (14,451) (191,127) (436,004) (758,783) 87,578 (1,298,336Assetimpairmentcharges - - - 1,841,120 1,841,120 - - - - - - - - - -Share of lossesfrom equitymethodinvestments 143,608 195,482 288,642 324,734 952,466 - - 31,448 58,559 90,007 - - - - -Gain ondisposal ofproperty andequipment (10,932) - - - (10,932) - - - - - - - - - -Interestincome (3,672) - - - (3,672) - - - (21,978) (21,978) - - - - -Executiveseparationcosts(2) - 260,275 172,048 - 432,323 - 904,781 59,685 - 964,466 - - - - -Acquisitioncosts (3) - 4,826 20,000 (24,826) - - 225,089 24,812 (64,872) 185,029 - - - 423,513 423,513AdjustedEBITDA $2,695,058 $4,719,827 $4,908,257 $4,690,694 $17,013,836 $1,138,188 $1,393,961 $2,563,521 $4,053,052 $9,148,722 $1,245,076 $1,120,207 $1,400,915 $1,523,436 $5,289,634 (1) Depreciation expense of $5,461 and $7,021 was reclassified as continuing operations in the first and second quarters of 2025, respectively, and is therefore no longer reflected in discontinuedoperations. (2) Includes share-based compensation related to executive separation costs. (3) Acquisition costs include legal, tax, accounting and other contract services related to prospective acquisitions.