Company: SNWV
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-038937
Chunk: 57

Company: SANUWAVE Health, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 57
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 of $2.5 million related to this Patent License, which was recorded in other income during the three months ended March 31, 2024. The Company granted the Licensee an exclusive license to the patents and an option to acquire the patents for an additional one-time payment in the mid single-digit millions of dollars for a period of 3 years following the effective date of the Agreement. Upon acquisition of the patents, the Licensee will distribute any resulting proceeds to the Company, including but not limited to any royalties, license fees, settlement payments, or other 

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proceeds generated from the licensing or assertion of the patents, in accordance with a revenue sharing agreement. If the Licensee does not exercise its option to acquire the Patents during a specified option period of 3 years from the effective date of the Agreement, the license terminates, a supplement license fee is owed, and all rights revert back to the Company.Contingent Consideration - The Company considers such royalties, license fees, settlement payments, or other proceeds as variable or contingent consideration. The Company determined that the amount of variable consideration would be constrained until the period the uncertainty related to the consideration is relieved.

17.        Commitments and Contingencies

LitigationIn the ordinary course of business, the Company from time to time becomes involved in various legal proceedings involving a variety of matters. The Company does not believe there are any pending legal proceedings that will have a material adverse effect on the Company’s business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties. The Company expenses legal fees in the period in which they are incurred.

18.        Segment Information

The Company operates in one reportable segment engaged in the design and sale of medical devices.The accounting policies of the one reportable segment are the same as those described in the summary of significant accounting policies. The Chief Operating Decision Maker (“CODM”) assesses performance for the reportable segment and decides how to allocate resources primarily based on gross profit that is also reported on the condensed consolidated statements of comprehensive income (loss). The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.The CODM uses gross profit to evaluate income (loss) generated from segment assets (return on assets) in deciding whether to reinvest profits or to apply them to other parts of the entity.Net income (loss) is used to monitor budget versus actual results. The CODM also uses net income (loss)