XML 46 R24.htm IDEA: XBRL DOCUMENT
v3.25.1

SEGMENT REPORTING | 12 Months Ended
--- | ---
Dec. 31, 2024
Segment Reporting [Abstract] |
SEGMENT REPORTING | NOTE 14 – SEGMENT REPORTING As discussed in Note 1, the Company historically managed its business as one operating and reportable segment. During the second quarter of 2024, the Company changed its reportable segments to reflect a change in the manner in which the business is managed. Based on the growing importance of the value-based wound care program to the Company’s future outlook and how the Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, reviews operating results and makes decisions about resource allocation, the Company has two reportable segments: Sanara Surgical and THP. Segment Adjusted EBITDA is the primary profitability measure used by the CODM for purposes of assessing financial performance and resource allocation. The Company defines Segment Adjusted EBITDA for the reportable segments as net income (loss) 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, share of losses from equity method investments, executive separation costs, legal and diligence expenses related to acquisitions, and gains/losses on disposal of property and equipment, as each are applicable to the periods presented. The Company has historically presented this profitability measure as Segment EBITDA and, starting with the fourth quarter ended December 31, 2024, is presenting it as Segment Adjusted EBITDA. The definition and methodology for calculating this measure has remained unchanged. Segment Adjusted EBITDA, as it relates to the Company’s reportable segments, is presented in conformity with ASC 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission’s Regulation G and Item 10(e) of Regulation S-K. Segment Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The CODM also reviews budget-to-actual variances for expenses on a monthly basis when making decisions about allocating resources to the segments. The Company has not included any disclosure regarding total segment assets, as no segment level asset information is regularly provided to the CODM. Sanara Surgical The Sanara Surgical segment primarily markets and sells soft tissue repair and bone fusion products for use in the operating room or other sterile environments. Sanara Surgical’s soft tissue repair products include, among other products, the Company’s lead product, CellerateRX Surgical, and BIASURGE Advanced Surgical Solution, which is a sterile no-rinse, advanced surgical solution used for wound irrigation. Sanara Surgical’s bone fusion products include, among other products, BiFORM, which is an osteoconductive, bioactive, porous implant that allows for bony ingrowth across the graft site, and ALLOCYTE Plus, which is a human allograft cellular bone matrix containing bone-derived progenitor cells and conformable bone fibers. Sanara Surgical also includes an in-house research and development team (Rochal Technologies) with an extensive pipeline of innovative products under development. Tissue Health Plus The THP segment is focused on value-based wound care services. Through THP, the Company plans to offer a first of its kind value-based wound care program to payers and risk-bearing entities such as accountable care organizations and value-based primary care companies, with Medicare Advantage payers as the initial target market for this program. THP’s programs are expected to enable payers to divest wound care spend risk, reduce wound related hospitalizations and improve patient quality of life. THP plans to coordinate delivery of community and home-based wound care for its managed patients. Community based care spans a variety of settings including physician offices, skilled nursing facilities, assisted living facilities and senior living facilities. THP programs are intended to integrate science and evidence-based medicine protocols to standardize wound prevention and treatment. Currently, there are no allocated costs included in the THP segment. All corporate and overhead expenses are included in the Sanara Surgical segment, as substantially all of those costs relate to supporting the operations and activities of the Sanara Surgical segment. As a result of the change in reportable segments, certain prior period amounts have been recast to conform to the current period presentation. Throughout this Annual Report on Form 10-K, unless otherwise indicated, amounts and activity reflect reclassifications related to the Company’s change in reportable segments. The change in reportable segments had no impact on the Company’s previously reported Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Cash Flows or Consolidated Statements of Shareholders’ Equity. The following table reflects results of operations including significant segment expenses that are regularly provided to the CODM for the Company’s reportable segments and Segment Adjusted EBITDA for the periods indicated below: SCHEDULE OF OPERATIONS, ASSETS AND CAPITAL EXPENDITURES FOR OUR BUSINESS SEGMENTS
|  | Sanara Surgical |  |  | THP |  |  | Total |  |  | Sanara Surgical |  |  | THP |  |  | Total |
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
|  | Sanara Surgical |  |  | THP |  |  | Total |  |  | Sanara Surgical |  |  | THP |  |  | Total |
Net revenue |  | $ | 86,672,425 |  |  | $ | - |  |  | $ | 86,672,425 |  |  | $ | 64,987,112 |  |  | $ | 2,730 |  |  | $ | 64,989,842 |
Gross profit (loss) |  |  | 78,532,524 |  |  |  | - |  |  |  | 78,532,524 |  |  |  | 57,143,391 |  |  |  | (6,235 | ) |  |  | 57,137,156 |
Selling, general and administrative |  |  | 71,673,642 |  |  |  | 4,886,221 |  |  |  | 76,559,863 |  |  |  | 54,826,852 |  |  |  | 2,167,901 |  |  |  | 56,994,753 |
Research and development |  |  | 2,828,663 |  |  |  | 2,874,699 |  |  |  | 5,703,362 |  |  |  | 902,782 |  |  |  | 3,229,643 |  |  |  | 4,132,425 |
Depreciation and amortization |  |  | 2,785,829 |  |  |  | 2,137,395 |  |  |  | 4,923,224 |  |  |  | 2,046,859 |  |  |  | 1,628,167 |  |  |  | 3,675,026 |
Change in fair value of earnout liabilities |  |  | (14,451 | ) |  |  | (1,924,000 | ) |  |  | (1,938,451 | ) |  |  | (1,298,336 | ) |  |  | (2,151,559 | ) |  |  | (3,449,895 | )
Other expense |  |  | 3,196,424 |  |  |  | - |  |  |  | 3,196,424 |  |  |  | 224,749 |  |  |  | - |  |  |  | 224,749 |
Net income (loss) |  | $ | (1,937,583 | ) |  | $ | (7,974,315 | ) |  | $ | (9,911,898 | ) |  | $ | 440,485 |  |  | $ | (4,880,387 | ) |  | $ | (4,439,902 | )
Segment Adjusted EBITDA |  | $ | 9,148,722 |  |  | $ | (6,457,415 | ) |  | $ | 2,691,307 |  |  | $ | 5,289,634 |  |  | $ | (5,162,387 | ) |  | $ | 127,247 |
The following table provides a reconciliation of net income (loss) to Segment Adjusted EBITDA for the Company’s reportable segments for the periods indicated below: SCHEDULE OF RECONCILIATION OF NET INCOME (LOSS) TO SEGMENT EBITDA FOR REPORTABLE SEGMENTS
|  | Sanara Surgical |  |  | THP |  |  | Total |  |  | Sanara Surgical |  |  | THP |  |  | Total |
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
|  | Sanara Surgical |  |  | THP |  |  | Total |  |  | Sanara Surgical |  |  | THP |  |  | Total |
Net Income (Loss) |  | $ | (1,937,583 | ) |  | $ | (7,974,315 | ) |  | $ | (9,911,898 | ) |  | $ | 440,485 |  |  | $ | (4,880,387 | ) |  | $ | (4,439,902 | )
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | 3,128,395 |  |  |  | - |  |  |  | 3,128,395 |  |  |  | 475,783 |  |  |  | - |  |  |  | 475,783 |
Interest income |  |  | (21,978 | ) |  |  | - |  |  |  | (21,978 | ) |  |  | - |  |  |  | - |  |  |  | - |
Depreciation and amortization (1) |  |  | 2,785,829 |  |  |  | 2,137,395 |  |  |  | 4,923,224 |  |  |  | 2,046,859 |  |  |  | 1,628,167 |  |  |  | 3,675,026 |
Noncash share-based compensation |  |  | 3,969,008 |  |  |  | 138,245 |  |  |  | 4,107,253 |  |  |  | 3,201,330 |  |  |  | 241,392 |  |  |  | 3,442,722 |
Change in fair value of earnout liabilities |  |  | (14,451 | ) |  |  | (1,924,000 | ) |  |  | (1,938,451 | ) |  |  | (1,298,336 | ) |  |  | (2,151,559 | ) |  |  | (3,449,895 | )
Share of losses from equity method investments |  |  | 90,007 |  |  |  | - |  |  |  | 90,007 |  |  |  | - |  |  |  | - |  |  |  | - |
Executive separation costs (2) |  |  | 964,466 |  |  |  | - |  |  |  | 964,466 |  |  |  | - |  |  |  | - |  |  |  | - |
Acquisition costs (3) |  |  | 185,029 |  |  |  | 1,165,260 |  |  |  | 1,350,289 |  |  |  | 423,513 |  |  |  | - |  |  |  | 423,513 |
Segment Adjusted EBITDA |  | $ | 9,148,722 |  |  | $ | (6,457,415 | ) |  | $ | 2,691,307 |  |  | $ | 5,289,634 |  |  | $ | (5,162,387 | ) |  | $ | 127,247 |
| (1) | Includes a $506,836 non-cash charge during the fourth quarter of 2024 to write-off the remaining net book value of certain THP internal use software assets.
| (2) | Includes $328,795 of share-based compensation related to executive separation costs for the twelve months ended December 31, 2024.
| (3) | Acquisition costs include legal, tax and accounting services related to prospective acquisitions.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-32 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 270 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482964/270-10-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (ee) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-32 Reference 5: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-32 Reference 6: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 54 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-54 Reference 7: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 47 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-47 Reference 8: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 54 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-54 Reference 9: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 47 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-47 Reference 10: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 54 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-54 Reference 11: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 47 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-47 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-22 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-31 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-34 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-26C Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-26B Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-15 Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-42 Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-40 Reference 20: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/280/tableOfContent Reference 21: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-26 Reference 22: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-41 Reference 23: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 24: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 25: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-32 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration