Nuwellis, Inc. Reports Third Quarter 2022 Financial Results
November 08 2022 - 7:00AM
Nuwellis, Inc. (Nasdaq: NUWE), a medical technology company focused
on transforming the lives of people with fluid overload, today
reported financial results for the third quarter ended September
30, 2022.
Q3 Results and Recent
Highlights:
- Revenue of $2.1 million in the
third quarter 2022, an 11% increase over the same year ago
period
- Gross margin of 61% was consistent
with the same period last year
- Activated three additional sites
for pivotal REVERSE-HF clinical study
- Announced AVOID-HF clinical study
analysis demonstrating statistically superior benefit of
ultrafiltration over diuretics for fluid-overloaded heart failure
patients at 30 and 90 days
- Announced clinical data
demonstrating reduced mortality rates, with 100% survival rate in
post-operative CABG patients at 30 days following use of
ultrafiltration
- Awarded U.S. patent for novel
innovation that improves fluid balance and safety in pediatric
dialysis and hemofiltration
- Closed an underwritten public
offering on October 18, with $11.0 million of gross proceeds
“We made meaningful progress this quarter on the
continued execution of our key strategic initiatives and achieved
11% year-over-year revenue growth. These results not only
demonstrate that we are gaining traction on the sales front but
also continuing to achieve key milestones toward making the Aquadex
system the standard of care for restoring fluid balance. We are
confident that continued expansion of our field sales team,
including clinical education specialists, bolstered by our market
penetration initiatives and growing body of clinical evidence, will
position Nuwellis well for strong growth in 2023 and beyond,” said
Nestor Jaramillo, CEO of Nuwellis.
Third Quarter 2022 Financial
Results
Total revenue for the third quarter of 2022 was
$2.1 million, an increase of 11% compared to the third quarter of
2021.
Gross margin was 61.0% for the third quarter of
2022 compared to 60.4% in the prior-year period.
Selling, general and administrative expenses for
the third quarter of 2022 were $4.3 million, compared to $4.6
million in the prior-year period. This reduction resulted from
continued spending vigilance, as well as some open positions in the
current year quarter.
Third quarter research and development expenses
were $0.9 million, compared to $1.7 million in the third quarter of
2021, while continuing to advance the most critical new product
development initiatives.
The net loss for the third quarter of 2022 was
$3.9 million, or a loss of $0.37 per basic and diluted common
share, compared to a net loss of $5.3 million, or a loss of $0.75
per basic and diluted common share in the prior-year period.
Cash and cash equivalents were approximately
$12.1 million at September 30, 2022. On October 18, Nuwellis closed
an underwritten public offering with gross proceeds of $11.0
million. After deducting underwriting discounts and commissions on
the offering, pro forma cash at the end of the third quarter would
have been $21.9 million.
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 the
Investors page of the Nuwellis website at https://ir.nuwellis.com.
Alternatively, you may access the live conference call by dialing
1-844-825-9789 (U.S) or 1-412-317-5180 (international) and using
the conference ID: 10172214. 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 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
superior 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 healthcare provider, in an
outpatient or inpatient clinical setting, under physician
prescription, both having received training in extracorporeal
therapies.
Forward-Looking
StatementsCertain 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.
CONTACTS
INVESTORS:
Vivian CervantesGilmartin Group
ir@nuwellis.com
MEDIA:
Sarah
LundbergHealth+Commercesarahlundberg@healthandcommerce.com
FINANCIAL STATEMENTSNUWELLIS, INC. AND
SUBSIDIARYCondensed Consolidated Balance
Sheets(In thousands, except share and per share
amounts) |
|
|
|
September 30,2022 |
|
|
December 31,2021 |
ASSETS |
|
|
(unaudited) |
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
12,053 |
|
|
$ |
24,205 |
|
Accounts receivable |
|
|
1,100 |
|
|
|
750 |
|
Inventories |
|
|
2,919 |
|
|
|
2,843 |
|
Other current assets |
|
|
368 |
|
|
|
328 |
|
Total current
assets |
|
|
16,440 |
|
|
|
28,126 |
|
Property, plant and equipment, net |
|
|
1,027 |
|
|
|
1,188 |
|
Operating lease right-of-use asset |
|
|
949 |
|
|
|
1,082 |
|
Other assets |
|
|
21 |
|
|
|
21 |
|
TOTAL
ASSETS |
|
$ |
18,437 |
|
|
$ |
30,417 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,561 |
|
|
$ |
1,414 |
|
Accrued compensation |
|
|
1,751 |
|
|
|
1,664 |
|
Current portion of operating lease liability |
|
|
191 |
|
|
|
167 |
|
Current portion of finance lease liability |
|
|
35 |
|
|
|
26 |
|
Other current liabilities |
|
|
73 |
|
|
|
36 |
|
Total current
liabilities |
|
|
3,611 |
|
|
|
3,307 |
|
Operating lease liability |
|
|
810 |
|
|
|
956 |
|
Finance lease liability |
|
|
__ |
|
|
|
28 |
|
Other long-term liability |
|
|
— |
|
|
|
179 |
|
Total
liabilities |
|
|
4,421 |
|
|
|
4,470 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior participating
preferred stock as of September 30, 2022 and December 31, 2021, par
value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
|
— |
|
|
|
— |
|
Series F convertible preferred
stock as of both September 30, 2022 and December 31, 2021, par
value $0.0001 per share; authorized 127 shares, issued and
outstanding 127 shares |
|
|
— |
|
|
|
— |
|
Preferred stock as of both
September 30, 2022 and December 31, 2021, par value $0.0001 per
share; authorized 39,969,873 shares, none outstanding |
|
|
— |
|
|
|
— |
|
Common stock as of September
30, 2022 and December 31, 2021, par value $0.0001 per share;
authorized 100,000,000 shares, issued and outstanding 10,537,606
shares |
|
|
1 |
|
|
|
1 |
|
Additional paid-in
capital |
|
|
279,570 |
|
|
|
278,873 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(10 |
) |
|
|
(11 |
) |
Accumulated deficit |
|
|
(265,545 |
) |
|
|
(252,916 |
) |
Total stockholders’
equity |
|
|
14,016 |
|
|
|
25,947 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
18,437 |
|
|
$ |
30,417 |
|
NUWELLIS, INC. AND SUBSIDIARYCondensed
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)(In thousands, except per share
amounts) |
|
|
Three months endedSeptember
30, |
|
|
Nine months endedSeptember
30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net sales |
$ |
2,065 |
|
$ |
1,853 |
|
$ |
6,204 |
|
$ |
6,279 |
|
Cost of goods sold |
|
806 |
|
|
733 |
|
|
2,780 |
|
|
2,682 |
|
Gross profit |
|
1,259 |
|
|
1,120 |
|
|
3,424 |
|
|
3,597 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
4,251 |
|
|
4,645 |
|
|
12,920 |
|
|
14,945 |
|
Research and development |
|
928 |
|
|
1,726 |
|
|
3,141 |
|
|
3,847 |
|
Total operating expenses |
|
5,179 |
|
|
6,371 |
|
|
16,061 |
|
|
18,792 |
|
Loss from operations |
|
(3,920 |
) |
|
(5,251 |
) |
|
(12,637 |
) |
|
(15,195 |
) |
Other income (expense), net |
|
52 |
|
|
(19 |
) |
|
14 |
|
|
(22 |
) |
Loss before income taxes |
|
(3,868 |
) |
|
(5,270 |
) |
|
(12,623 |
) |
|
(15,217 |
) |
Income tax expense |
|
(2 |
) |
|
(2 |
) |
|
(6 |
) |
|
(7 |
) |
Net loss |
$ |
(3,870 |
) |
$ |
(5,272 |
) |
$ |
(12,629 |
) |
$ |
(15,224 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(0.37 |
) |
$ |
(0.75 |
) |
$ |
(1.20 |
) |
$ |
(2.72 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
10,538 |
|
|
7,098 |
|
|
10,538 |
|
|
5,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
$ |
2 |
|
$ |
— |
|
$ |
|
1 |
$ |
(3 |
) |
Total comprehensive
loss |
$ |
(3,868 |
) |
$ |
(5,272 |
) |
$ |
(12,628 |
) |
$ |
(15,227 |
) |
NUWELLIS, INC. AND SUBSIDIARYCondensed
Consolidated Statements of Cash
Flows(Unaudited)(in thousands) |
|
|
Nine months endedSeptember
30, |
|
|
|
2022 |
|
|
2021 |
|
Operating Activities: |
|
|
|
|
|
|
Net loss |
$ |
(12,629 |
) |
$ |
(15,224 |
) |
Adjustments to reconcile net
loss to cash flows used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
301 |
|
|
383 |
|
Stock-based compensation expense, net |
|
697 |
|
|
993 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(350 |
) |
|
(164 |
) |
Inventory |
|
(113 |
) |
|
(105 |
) |
Other current assets |
|
(40 |
) |
|
(183 |
) |
Other assets and liabilities |
|
(142 |
) |
|
279 |
|
Accounts payable and accrued expenses |
|
254 |
|
|
333 |
|
Net cash used in
operating activities |
|
(12,022 |
) |
|
(13,688 |
) |
|
|
|
|
|
|
|
Investing
Activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
(103 |
) |
|
(191 |
) |
Net cash used in
investing activities |
|
(103 |
) |
|
(191 |
) |
|
|
|
|
|
|
|
Financing
Activities: |
|
|
|
|
|
|
Proceeds from public stock offerings, net |
|
— |
|
|
27,896 |
|
Proceeds from warrant exercises |
|
— |
|
|
1 |
|
Payments on finance lease liability |
|
(28 |
) |
|
(21 |
) |
Net cash (used
in) provided by financing activities |
|
(28 |
) |
|
27,876 |
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
1 |
|
|
(3 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
(12,152 |
) |
|
13,994 |
|
Cash and cash equivalents -
beginning of period |
|
24,205 |
|
|
14,437 |
|
Cash and cash
equivalents - end of period |
$ |
12,053 |
|
$ |
28,431 |
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
Inventory transferred to property, plant and equipment |
$ |
37 |
|
$ |
257 |
|
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