UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 001-35312

NUWELLIS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		No. 68-0533453
(State or Other Jurisdiction of Incorporation or Organization)		(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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of outstanding shares of the registrant’s common stock, $0.0001 par value, as of November 8, 2024, was 4,373,968.

TABLE OF CONTENTS

		Page Number
PART I—FINANCIAL INFORMATION
Item 1	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4	Controls and Procedures	27
PART II—OTHER INFORMATION
Item 1	Legal Proceedings	27
Item 1A	Risk Factors	27
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3	Defaults Upon Senior Securities	31
Item 4	Mine Safety Disclosures	31
Item 5	Other Information	31
Item 6	Exhibits	31

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NUWELLIS, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

	September 30, 2024			December 31, 2023
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	1,907		$	3,800
Accounts receivable		1,293			1,951
Inventories, net		1,864			1,997
Other current assets		430			461
Total current assets		5,494			8,209
Property, plant and equipment, net		551			728
Operating lease right-of-use asset		563			713
Other assets		120			120
TOTAL ASSETS	$	6,728		$	9,770

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued liabilities	$	1,822		$	2,380
Accrued compensation		597			525
Current portion of operating lease liability		232			216
Other current liabilities		50			51
Total current liabilities		2,701			3,172
Common stock warrant liability		480			2,843
Operating lease liability		368			544
Total liabilities		3,549			6,559
Commitments and contingencies

Mezzanine Equity Series J Convertible Preferred Stock as of September 30, 2024 and December 31, 2023, par value $0.0001 per share; authorized 600,000 shares, issued and outstanding 95 and 11,950, respectively		2			221

Stockholders’ equity
Series A junior participating preferred stock as of September 30, 2024 and December 31, 2023, par value $0.0001 per share; authorized 30,000 shares, none outstanding		—			—
Series F convertible preferred stock as of September 30, 2024 and December 31, 2023, par value $0.0001 per share; authorized 18,000 shares, issued and outstanding 127 shares		—			—
Preferred stock as of September 30, 2024 and December 31, 2023, par value $0.0001 per share; authorized 39,352,000 shares, none outstanding		—			—
Common stock as of September 30, 2024 and December 31, 2023, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 1,866,890 and 162,356, respectively		—			—
Additional paid‑in capital		300,546			290,647
Accumulated other comprehensive income:
Foreign currency translation adjustment		(46	)		(31	)
Accumulated deficit		(297,323	)		(287,626	)
Total stockholders’ equity		3,177			2,990
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY	$	6,728		$	9,770

See notes to the condensed consolidated financial statements.

Table of Contents

NUWELLIS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except per share amounts and weighted average shares outstanding)

	Three months ended September 30						Nine months ended September 30
	2024			2023			2024			2023
Net sales	$	2,367		$	2,412		$	6,418		$	6,313
Cost of goods sold		711			1,031			2,097			2,718
Gross profit		1,656			1,381			4,321			3,595
Operating expenses:
Selling, general and administrative		2,702			3,428			10,544			13,582
Research and development		486			1,117			2,378			4,050
Total operating expenses		3,188			4,545			12,922			17,632
Loss from operations		(1,532	)		(3,164	)		(8,601	)		(14,037	)
Other income (expense), net		8			(204	)		(87	)		98
Financing Expense		—			—			(5,607	)		—
Change in fair value of warrant liability		3,882			—			4,602			(755	)
Income (loss) before income taxes		2,358			(3,368	)		(9,693	)		(14,694	)
Income tax expense		—			(2	)		(4	)		(6	)
Net income (loss)	$	2,358		$	(3,370	)	$	(9,697	)	$	(14,700	)
Deemed dividend attributable to Series J Convertible Preferred Stock		—			—			541			—
Net income (loss) attributable to common shareholders	$	2,358		$	(3,370	)	$	(9,156	)	$	(14,700	)

Basic and diluted net income (loss) per share	$	1.74		$	(63.27	)	$	(14.99	)	$	(357.42	)

Weighted average shares outstanding – basic and diluted		1,351,939			53,265			647,079			41,128

Other comprehensive loss:
Foreign currency translation adjustments	$	(4	)	$	—

SEC Form 10-Q filed by Nuwellis Inc.