Nuwellis, Inc. Announces First Quarter 2023 Financial Results
May 09 2023 - 8:00AM
Nuwellis, Inc. (Nasdaq: NUWE), a medical technology company focused
on transforming the lives of people with fluid overload, today
reported financial results for the first quarter ended March 31,
2023.
- Revenue of $1.8 million for the
first quarter 2023, a 5% decrease over the prior-year period.
- By segment, first quarter 2023
revenue in Heart Failure increased approximately 21% over the same
period last year, while Pediatrics and Critical Care declined
approximately 28% and 4%, respectively. The decline in Pediatrics
was primarily driven by lower patient volume in large hospital
accounts.
- Gross margin of 58.4% in the first
quarter 2023 increased 120 basis points from the same period last
year.
- Announced peer-reviewed publication
of clinical trials analysis by A. Kazory, et al, advocating earlier
and expanded use of ultrafiltration for diuretics-resistant
patients suffering from heart failure as well as kidney disease,
sepsis, and other indications.
- Cash, cash equivalents, and
marketable securities of $12.1 million and no debt as of March 31,
2023.
“With growth in our heart failure segment fueled
by new clinical evidence, and an active pipeline of business
development activities, our team is excited to continue executing
on our growth agenda, utilizing our growing body of clinical
evidence that supports use of the Aquadex ultrafiltration therapy
as a mechanical fluid removal solution for fluid-overloaded
patients across multiple hospital specialty units. We remain
committed to making Aquadex the standard of care for patients with
fluid overload who are not responsive to conventional diuretics,
and we look forward to increased sales momentum as we continue to
build awareness and drive market penetration,” said Nestor
Jaramillo, Jr., President & CEO of Nuwellis.
First Quarter 2023 Financial
Results
Revenue for the first quarter of 2023 was $1.8
million, compared to $1.9 million in the prior-year period.
Gross margin was 58.4% for the first quarter of
2023, compared to 57.2% in the prior-year period, an increase of
120 basis points, driven primarily by pricing increases that were
effective in the second quarter of 2022.
Selling, general and administrative expenses for
the first quarter of 2023 were $5.5 million, compared to $4.4
million in the prior-year period. The increase was primarily due to
increased professional fees associated with strategic initiatives
and increased audit and legal expenses.
First quarter research and development expenses
were $1.4 million, compared to $1.1 million in the first quarter of
2022, reflecting increased product development costs related to the
ongoing development of the Company’s dedicated pediatric
device.
Net loss for the first quarter of 2023 was $6.5
million, or a loss of $5.76 per basic and diluted common share,
compared to a net loss of $4.5 million, or a loss of $42.45 per
basic and diluted common share, in the prior-year period. The
current period loss includes a non-recurring, non-cash expense of
approximately $755,000 related to the revaluation of the warrant
liability associated with the Company’s October 2022 financing.
At March 31, 2023, the Company had cash, cash
equivalents, and marketable securities of approximately $12.1
million and no debt, with approximately 1.2 million common shares
outstanding.
Webcast and Conference Call
InformationThe Company will host a conference call and
webcast at 9:00 AM ET today to discuss its financial results and
provide an update on the Company’s performance.
To access the live webcast, please visit the
Investors page of the Nuwellis website at https://ir.nuwellis.com.
Alternatively, you may access the live conference call by dialing
1-833-816-1404 (U.S) or 1-412-317-0497 (international) and using
the conference ID: 10177112. An audio archive of the webcast will
be available following the call on the Investors page at
https://ir.nuwellis.com.
About NuwellisNuwellis,
Inc. (Nasdaq: NUWE) is a medical technology company dedicated
to transforming the lives of patients suffering from fluid overload
through science, collaboration, and innovation. The Company is
focused on commercializing the Aquadex SmartFlow® system for
ultrafiltration therapy. Nuwellis is headquartered
in Minneapolis, with a wholly owned subsidiary in Ireland. For
more information visit www.nuwellis.com or visit us on
LinkedIn.
About the Aquadex SmartFlow®
System The Aquadex SmartFlow system delivers
clinically proven therapy using a simple, flexible, and smart
method of removing excess fluid from patients suffering from
hypervolemia (fluid overload). The Aquadex SmartFlow system is
indicated for temporary (up to 8 hours) or extended (longer than 8
hours in patients who require hospitalization) use in adult and
pediatric patients weighing 20 kg. or more whose fluid overload is
unresponsive to medical management, including diuretics. All
treatments must be administered by a health care provider, within
an outpatient or inpatient clinical setting, under physician
prescription, both having received training in extracorporeal
therapies.
Forward-Looking
StatementsCertain statements in this release may be
considered forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including without
limitation, statements regarding the new market opportunities and
anticipated growth in 2023 and beyond. Forward-looking statements
are predictions, projections and other statements about future
events that are based on current expectations and assumptions and,
as a result, are subject to risks and uncertainties. Many factors
could cause actual future events to differ materially from the
forward-looking statements in this release, including, without
limitation, those risks associated with our ability to execute on
our commercialization strategy, the impact of the COVID-19
pandemic, the possibility that we may be unable to raise sufficient
funds necessary for our anticipated operations, our post-market
clinical data collection activities, benefits of our products to
patients, our expectations with respect to product development and
commercialization efforts, our ability to increase market and
physician acceptance of our products, potentially competitive
product offerings, intellectual property protection, our ability to
integrate acquired businesses, our expectations regarding
anticipated synergies with and benefits from acquired businesses,
and other risks and uncertainties described in our filings with the
SEC. Forward-looking statements speak only as of the date when
made. Nuwellis does not assume any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
CONTACTS
INVESTORS: Vivian CervantesGilmartin Group
ir@nuwellis.com
MEDIA: Annika
ParishHealth+Commerceannika@healthandcommerce.com
PART I—FINANCIAL INFORMATION |
ITEM 1. FINANCIAL
STATEMENTS |
|
NUWELLIS, INC. AND SUBSIDIARY |
Condensed Consolidated Balance Sheets |
(In thousands, except share and per share amounts) |
|
|
|
March 31,2023 |
|
|
December 31, 2022 |
|
|
ASSETS |
|
(unaudited) |
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
11,515 |
|
$ |
17,737 |
|
|
Marketable securities |
|
575 |
|
|
569 |
|
|
Accounts receivable |
|
1,301 |
|
|
1,406 |
|
|
Inventories, net |
|
2,742 |
|
|
2,661 |
|
|
Other current assets |
|
477 |
|
|
396 |
|
|
Total current assets |
|
16,610 |
|
|
22,769 |
|
|
Property, plant and equipment, net |
|
907 |
|
|
980 |
|
|
Operating lease right-of-use asset |
|
856 |
|
|
903 |
|
|
Other assets |
|
106 |
|
|
21 |
|
|
TOTAL ASSETS |
$ |
18,479 |
|
$ |
24,673 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
2,524 |
|
$ |
2,245 |
|
|
Accrued compensation |
|
1,312 |
|
|
2,161 |
|
|
Current portion of operating lease liability |
|
201 |
|
|
196 |
|
|
Current portion of finance lease liability |
|
21 |
|
|
28 |
|
|
Other current liabilities |
|
49 |
|
|
58 |
|
|
Total current liabilities |
|
4,107 |
|
|
4,688 |
|
|
Common stock warrant liability |
|
— |
|
|
6,868 |
|
|
Operating lease liability |
|
708 |
|
|
760 |
|
|
Total liabilities |
|
4,815 |
|
|
12,316 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
Series A junior participating preferred stock as of March 31, 2023
and December 31, 2022, par value $0.0001 per share; authorized
30,000 shares, none outstanding |
|
— |
|
|
— |
|
|
Series F convertible preferred stock as of both March 31, 2023 and
December 31, 2022, par value $0.0001 per share; authorized 127
shares, issued and outstanding 127 shares |
|
— |
|
|
— |
|
|
Series I convertible preferred stock as of March 31, 2023 and
December 31, 2022, par value $0.0001; authorized 1,049,280, issued
and outstanding none and 1,049,280, respectively Preferred stock as
of both March 31, 2023 and December 31, 2022, par value$0.0001 per
share; authorized 39,969,873 shares, none outstanding |
|
— |
|
|
— |
|
|
Common stock as of March 31, 2023 and December 31, 2022, par
value$0.0001 per share; authorized 100,000,000 shares, issued and
outstanding 1,206,932 and 536,394 shares, respectively |
|
— |
|
|
— |
|
|
Additional paid-in capital |
|
287,529 |
|
|
279,736 |
|
|
Accumulated other comprehensive income: |
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
(25 |
) |
|
(18 |
) |
|
Unrealized gain on marketable securities |
|
62 |
|
|
56 |
|
|
Accumulated deficit |
|
(273,902 |
) |
|
(267,417 |
) |
|
Total stockholders’ equity |
|
13,664 |
|
|
12,357 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
18,479 |
|
$ |
24,673 |
|
|
NUWELLIS, INC. AND SUBSIDIARY |
Condensed Consolidated Statements of Operations and
Comprehensive Loss |
(Unaudited) |
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
Three months endedMarch 31, |
|
|
|
|
2023 |
|
|
2022 |
|
|
Net sales |
$ |
1,826 |
|
$ |
1,926 |
|
|
Cost of goods sold |
|
759 |
|
|
824 |
|
|
Gross profit |
|
1,067 |
|
|
1,102 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
5,490 |
|
|
4,412 |
|
|
Research and development |
|
1,428 |
|
|
1,106 |
|
|
Total operating expenses |
|
6,918 |
|
|
5,518 |
|
|
Loss from operations |
|
(5,851 |
) |
|
(4,416 |
) |
|
Other income (expense), net |
|
123 |
|
|
(55 |
) |
|
Change in fair value of warrant liability |
|
(755 |
) |
|
— |
|
|
Loss before income taxes |
|
(6,483 |
) |
|
(4,471 |
) |
|
Income tax expense |
|
(2 |
) |
|
(2 |
) |
|
Net loss |
$ |
(6,485 |
) |
$ |
(4,473 |
) |
|
|
|
|
|
|
|
|
|
Basic and diluted loss per share |
$ |
(5.76 |
) |
$ |
(42.45 |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – basic and diluted |
|
1,126 |
|
|
105 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss: |
|
|
|
|
|
|
|
Unrealized gain on marketable securities |
|
6 |
|
|
— |
|
|
Unrealized foreign currency translation adjustments |
$ |
(7 |
) |
$ |
(2 |
) |
|
Total comprehensive loss |
$ |
(6,486 |
) |
$ |
(4,475 |
) |
|
NUWELLIS, INC. AND SUBSIDIARY |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
(in thousands) |
|
|
|
|
|
|
|
Three months endedMarch 31, |
|
|
|
|
2023 |
|
2022 |
|
|
Operating Activities: |
|
|
|
|
|
|
Net loss |
$ |
(6,485 |
) |
$ |
(4,473 |
) |
|
Adjustments to reconcile net loss to cash flows used in operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
86 |
|
|
105 |
|
|
Stock-based compensation expense, net |
|
181 |
|
|
241 |
|
|
Change in fair value of warrant liability |
|
755 |
|
|
— |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
105 |
|
|
(201 |
) |
|
Inventory, net |
|
(81 |
) |
|
(451 |
) |
|
Other current assets |
|
(81 |
) |
|
(22 |
) |
|
Other assets and liabilities |
|
(16 |
) |
|
(80 |
) |
|
Accounts payable and accrued expenses |
|
(570 |
) |
|
54 |
|
|
Net cash used in operating activities |
|
(6,106 |
) |
|
(4,827 |
) |
|
|
|
|
|
|
|
|
|
Investing Activities: |
|
|
|
|
|
|
|
Additions to intangible assets |
|
(85 |
) |
|
— |
|
|
Purchases of property and equipment |
|
(13 |
) |
|
(70 |
) |
|
Net cash used in investing activities |
|
(98 |
) |
|
(70 |
) |
|
|
|
|
|
|
|
|
|
Financing Activities: |
|
|
|
|
|
|
|
Issuance costs related to 2022 common stock offering |
|
(11 |
) |
|
— |
|
|
Payments on finance lease liability |
|
— |
|
|
(6 |
) |
|
Net cash used in financing activities |
|
(11 |
) |
|
(6 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
(7 |
) |
|
(2 |
) |
|
Net
decrease in cash and cash equivalents |
|
(6,222 |
) |
|
(4,905 |
) |
|
Cash and cash equivalents - beginning of period |
|
17,737 |
|
|
24,205 |
|
|
Cash and cash equivalents - end of period |
$ |
11,515 |
|
$ |
19,300 |
|
|
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