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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 1, 2022

Nuwellis, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware
001-35312
No.68-0533453
(State or Other Jurisdiction of Incorporation or Organization)
(Commission File Number)
 
(I.R.S. Employer Identification No.)
 

12988 Valley View Road , Eden Prairie, MN 55344
(Address of Principal Executive Offices) (Zip Code)

(952) 345-4200
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.0001 per share
NUWE
 Nasdaq Capital Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

  ☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

  ☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

  ☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

  ☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02
Results of Operations and Financial Condition.

On March 1, 2022, Nuwellis, Inc. (the “Company”) issued a press release reporting its financial results for the twelve months ended December 31, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information included in this Current Report on Form 8-K (including Exhibit 99.1) is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 9.01
Financial Statements and Exhibits.


(d)
Exhibits

Exhibit No.
Description
   
Press Release, dated March 1, 2022, reporting the financial results of Nuwellis, Inc. for the twelve months ended December 31, 2021.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 1, 2022
NUWELLIS, INC.
   

By: /s/ Nestor Jaramillo  
 
Name:
Nestor Jaramillo  

Title: President and Chief Executive Officer  


Exhibit 99.1


Nuwellis, Inc. Announces Fourth Quarter and Full Year 2021 Financial Results

Minneapolis, MN, March 1, 2022 (GLOBE NEWSWIRE) -- Nuwellis, Inc. (Nasdaq: NUWE) announced today its results for the fourth quarter and full year ended December 31, 2021, which included the following highlights:


 •
Generated $1.6 million in total revenue for the fourth quarter 2021, 19.6% below the prior-year period and a 20% increase above the comparable pre-pandemic period in 2019.

•
Generated $7.9 million in total revenue for the fiscal year 2021, representing 6.5% growth compared to the prior-year period and a 44% increase above the comparable pre-pandemic period in 2019

•
Announced the commencement of the REVERSE-HF randomized controlled multi-center trial designed to validate Aquadex therapy as a first-line treatment option for re-hospitalized heart failure patients

•
Received a Category III CPT Code effective January 1, 2022 specifically for the use of therapeutic ultrafiltration, thereby increasing reimbursement to professionals and facilities, an important step in advancing Aquadex to standard of care

•
Ended 2021 with approximately $24.2 million in cash and no debt

“We are encouraged by our progress executing our strategy throughout 2021.  Our organization and its employees continued to show adaptability and resilience amid changing market conditions and customer requirements, and we ultimately succeeded in helping more patients benefit from our therapy during the year.” said Nestor Jaramillo, CEO of Nuwellis. “We anticipate that when this most recent Omicron variant wave dissipates, we will see accelerating sales growth by continuing to position ourselves as the primary provider of ultrafiltration therapy for treating patients suffering from fluid overload that are refractory to diuretics.”

Fourth Quarter 2021 Financial Results

Revenue for the fourth quarter of 2021 was $1.6 million, compared to $2.0 million the prior year period. The decrease was primarily due to lower U.S. product sales, which was affected by order timing, hospital budgetary constraints, and a reduction in elective procedures due to COVID headwinds. When comparing fourth quarter of 2021 to the pre-pandemic fourth quarter of 2019, U.S. product revenue increased 20%.

In the fourth quarter of 2021, Pediatrics posted positive sequential growth due to increased patient census in numerous accounts following an uncharacteristically low third quarter. Heart Failure was also modestly up sequentially, while Critical Care was down due to a combination of fewer new accounts, order timing and reduced utilization.

Gross margin was 54.4% for the fourth quarter 2021, compared to 56.1% in the prior-year period based on volume and an unfavorable product and geographic mix. In contrast, volume and favorable mix increased full-year gross margin to 56.7%, a 2.2% increase compared to prior year.

Selling, general and administrative (“SG&A”) expenses for the fourth quarter of 2021 were $4.1 million, representing a decline of 7% compared to the prior year period and 12% below third quarter of 2021 levels. Vigilant cost management amid the uncertain market environment led to our lowest quarterly SG&A spend in more than two years. For full year 2021, SG&A expenses were $19.0 million, a 9% increase from prior year due to sales and marketing investments plus non-recurring management transition and administrative costs earlier in the year.

The net loss for the fourth quarter of 2021 was $4.4 million, compared to a net loss of $3.1 million in the prior year period. The primary difference in net loss compared to the prior year period is due to a one-time foreign currency translation gain of $1.2 million dollars resulting from the dissolution of an inactive Australian subsidiary.

Cash and cash equivalents were approximately $24.2 million as of December 31, 2021.

Webcast and Conference Call Information
The 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 http://ir.nuwellis.com.  Alternatively, you may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID: 9353528. An audio archive of the webcast will be available following the call at http://ir.nuwellis.com.

About Nuwellis
Nuwellis, Inc. (Nasdaq: NUWE) is a medical device company dedicated to transforming the lives of patients suffering from fluid overload through science, collaboration, and innovation. The Company is focused on developing, manufacturing and commercializing the Aquadex SmartFlow® system for ultrafiltration therapy. Nuwellis is headquartered in Minneapolis, MN, with a wholly-owned subsidiary in Ireland.

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 Statements
Certain statements in this release are 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 2022 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.

Financial Statements

NUWELLIS, INC. AND SUBSIDIARIES
 
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share amounts)

   
Three months ended
December 31,
    
Twelve months ended
December 31,
  
   
2021
    
2020
    
2021
    
2020
  
Net sales
  
$
1,642
    
$
2,044
    
$
7,921
    
$
7,441
  
Cost of goods sold
    
748
      
897
      
3,430
      
3,384
  
Gross profit
    
894
      
1,147
      
4,491
      
4,057
  
Operating expenses:
                                
Selling, general and administrative
    
4,094
      
4,384
      
19,039
      
17,417
  
Research and development
    
1,131
      
1,047
      
4,978
      
3,668
  
Total operating expenses
    
5,225
      
5,431
      
24,017
      
21,085
  
Loss from operations
    
(4,331
)
    
(4,284
)
    
(19,526
)
    
(17,028
)
Realized foreign currency translation gain from dissolution of subsidiary
    
-
      
1,202
      
-
      
1,202
  
Other income (expense), net
    
(21
)
    
(2
)
    
(43
)
    
(1
)
Loss before income taxes
    
(4,352
)
    
(3,084
)
    
(19,569
)
    
(15,827
)
Income tax expense
    
(2
)
    
(2
)
    
(9
)
    
(9
)
Net loss
  
$
(4,354
)
  
$
(3,086
)
  
$
(19,578
)
  
$
(15,836
)
                                 
Basic and diluted loss per share
  
$
(0.41
)
  
$
(1.13
)
  
$
(2.87
)
  
$
(10.67
)
                                 
Weighted average shares outstanding – basic and diluted
    
10,538
      
2,736
      
6,852
      
1,649
  
                                 
Other comprehensive loss:
                                
Realized foreign currency translation gain from dissolution of subsidiary
  
$
-
    
$
(1,202
)
  
$
-
    
$
(1,202
)
Unrealized foreign currency translation adjustments
    
(1
)
    
(12
)
    
(4
)
    
(19
)
Total comprehensive loss
  
$
(4,355
)
  
$
(4,300
)
  
$
(19,582
)
  
$
(17,057
)

NUWELLIS, INC. AND SUBSIDIARIES
 Consolidated Balance Sheets
(In thousands, except share and per share amounts)

   
December 31, 2021
    
December 31, 2020
  
ASSETS
            
Current assets
            
Cash and cash equivalents
  
$
24,205
    
$
14,437
  
Accounts receivable
    
750
      
905
  
Inventories
    
2,843
      
2,957
  
Other current assets
    
328
      
237
  
Total current assets
    
28,126
      
18,536
  
Property, plant and equipment, net
    
1,188
      
1,200
  
Operating lease right-of-use asset, net
    
1,082
      
255
  
Other assets
    
21
      
21
  
TOTAL ASSETS
  
$
30,417
    
$
20,012
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities
                
Accounts payable
  
$
1,414
    
$
1,097
  
Accrued compensation
    
1,664
      
2,192
  
Current portion of operating lease liability
    
167
      
206
  
Current portion of finance lease liability
    
26
      
24
  
Other current liabilities
    
36
      
66
  
Total current liabilities
    
3,307
      
3,585
  
Operating lease liability
    
956
      
55
  
Finance lease liability
    
28
      
54
  
Other long-term liability
    
179
      
—
  
Total liabilities
    
4,470
      
3,694
  
                 
Commitments and contingencies
                
                 
Stockholders’ equity
                
Series A junior participating preferred stock as of December 31, 2021 and December 31, 2020, par value $0.0001 per share; authorized 30,000 shares, none outstanding
    
—
      
—
  
Series F convertible preferred stock as of December 31, 2021 and December 31, 2020, par value $0.0001 per share; authorized 127 shares, issued and outstanding 127 shares
    
—
      
—
  
Preferred stock as of December 31, 2021 and December 31, 2020, par value $0.0001 per share; authorized 39,969,873 shares, none outstanding
    
—
      
—
  
Common stock as of December 31, 2021 and December 31, 2020, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 10,537,606 and 2,736,060, respectively
    
1
      
—
  
Additional paid‑in capital
    
278,873
      
249,663
  
Accumulated other comprehensive income:
                
Foreign currency translation adjustment
    
(11
)
    
(7
)
Accumulated deficit
    
(252,916
)
    
(233,338
)
Total stockholders’ equity
    
25,947
      
16,318
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
30,417
    
$
20,012
  

NUWELLIS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows
(In thousands)
   
For the years ended December 31,
  
   
2021
    
2020
  
Operating Activities
            
Net loss
  
$
(19,578
)
  
$
(15,836
)
Adjustments to reconcile net loss to cash flows from operating activities:
                
Depreciation and amortization
    
488
      
376
  
Stock-based compensation expense, net
    
1,314
      
1,349
  
Loss on disposal of property and equipment
    
—
      
40
  
Realized foreign currency translation gain from dissolution of subsidiary
    
—
      
(1,202
)
Changes in operating assets and liabilities:
                
Accounts receivable
    
155
      
(106
)
Inventory
    
(143
)
    
(1,420
)
Other current assets
    
(91
)
    
(76
)
Other assets and liabilities
    
186
      
112
  
Accounts payable and accrued expenses
    
(211
)
    
191
  
Net cash used in operations
    
(17,880
)
    
(16,572
)
                 
Investing activities:
                
Purchase of property and equipment
    
(219
)
    
(298
)
Proceeds from the sale of property and equipment
    
—
      
31
  
Net cash used in investing activities
    
(219
)
    
(267
)
                 
Financing activities:
                
Proceeds from public stock offerings, net
    
27,896
      
25,921
  
Proceeds from warrant exercises
    
1
      
4,115
  
Payments on finance lease liability
    
(26
)
    
(20
)
Net cash provided by financing activities
    
27,871
      
30,016
  
                 
Effect of exchange rate changes on cash
    
(4
)
    
(19
)
Net increase (decrease) in cash and cash equivalents
    
9,768
      
13,158
  
Cash and cash equivalents—beginning of year
    
14,437
      
1,279
  
Cash and cash equivalents—end of year
  
$
24,205
    
$
14,437
  
                 
Supplemental schedule of non-cash activities
                
Inventory transferred to property, plant and equipment
  
$
257
    
$
260
  
Equipment acquired through finance lease liability
  
$
—
    
$
98
  
Operating right-of-use asset recorded as an operating lease liability
  
$
901
    
$
—
  
                 
Supplemental cash flow information
                
Cash paid for income taxes
  
$
11
    
$
10
  

#  #  #

INVESTOR CONTACTS:

George Montague
Chief Financial Officer, Nuwellis, Inc.
ir@nuwellis.com 

Matt Bacso
Gilmartin Group
Matt.Bacso@gilmartinir.com