SANUWAVE gets JPMorgan waiver on fixed charge ratio, tightens limits

The waiver and the amendment

SANUWAVE Health, Inc. and SANUWAVE, Inc. signed Amendment No. 1 to Credit Agreement and Waiver on October 28, 2026. JPMorgan Chase Bank, N.A. signed as administrative agent and as a lender, and the amendment refers to the other lenders only as the Lenders party hereto without naming them. The original credit agreement is dated September 25, 2025. The amendment describes no new loan or advance, and it names no placement agent or underwriter.

The waiver covers one default. The credit agreement requires the company's fixed charge coverage ratio for the twelve months ending September 30, 2026 to be at least 1.25 to 1.00. The exhibit does not state the ratio the company reported. It waives any default that has arisen or may arise solely because the ratio for that period fell below the required level. The waiver is conditional. It takes effect only after the conditions are met, including payment of amounts due under an Amendment No. 1 Fee Letter between the company and JPMorgan. The waiver does not apply to any later failure to meet the ratio or any other covenant.

The amendment narrows the company's room in several places. A Permitted Acquisition now needs the prior written consent of the Required Lenders. A figure in Section 2.11(c), the section on prepayment of loans, falls from $500,000 to $250,000. A restated Section 6.01(m) caps other unsecured debt at $250,000 in aggregate principal, and the investment baskets in Sections 6.04(c), 6.04(d) and 6.04(e) each fall from $500,000 to $250,000. Finally, any redemption or purchase of company equity needs the Required Lenders' prior written consent. The only exceptions are cashless or net exercises of options and warrants, and shares withheld to cover tax obligations on equity awards.

In practice, the Required Lenders now hold a consent right over acquisitions and equity buybacks, and the baskets for smaller debts and investments are set at $250,000. The amendment restates Section 6.08(a) in full without reproducing the earlier text, so it does not say what the company could do before.

The financial position behind the default

The company's annual report shows revenue of $44.1 million for 2025, up from $32.6 million for 2024. It also shows net income of $11.8 million for 2025, after a net loss of $33.1 million for 2024. The amendment says nothing about what produced the swing from loss to profit. Cash provided by operations was $3.9 million in 2025, against $2.5 million in 2024. Research and development expense was $1.4 million in 2025, compared with $673,000 in 2024.

Cash is the weaker figure. Year-end cash and cash equivalents were $12.0 million for 2025, according to a 10-Q filed August 6, 2026, and $10.2 million for 2024. At June 30, 2026, cash and cash equivalents were $9.4 million. A company that sought a waiver of its coverage ratio, held $9.4 million in cash at mid-year and now needs lender consent for acquisitions and buybacks has less freedom than its net income suggests.

The amendment does not describe the company's products, pipeline or markets, and it contains no going-concern statement either way.

Costs and what comes next

The company must reimburse the administrative agent for its out-of-pocket expenses, including attorneys' fees and legal expenses of the agent's counsel. The exhibit does not name that counsel. The company also agrees to pay the fees under the Fee Letter as a condition of the waiver.

The next test is the one the waiver does not cover. Any later shortfall on the fixed charge coverage ratio, or any other breach, would be a fresh default under the amended agreement, with tighter baskets and a consent requirement on equity redemptions already in place. The amendment does not say when the next test period falls.

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