Nuwellis - 10-Q quarterly report FY

 

For the transition period from __________ to __________

 

 

 

 

 

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.

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 ☐

 

 

 

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. ☐

 

 

Yes ☐ No ☒

 

The number of outstanding shares of the registrant’s Common Stock, $0.0001 par value, as of May 11, 2026, was 2,680,752

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 and in our subsequent filings with the Securities and Exchange Commission (the “SEC”).

 

Unless otherwise specified or indicated by the context, “Nuwellis,” “Company,” “we,” “us,” and “our” refer to Nuwellis, Inc. and its subsidiary.

 

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include all statements that are not historical facts and include, without limitation, statements regarding our intent, belief or expectations with respect to our financial condition, results of operations, business strategy, plans and objectives of management, future operations and performance, and the markets in which we operate. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Factors that may cause such differences include, but are not limited to, those discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and in our subsequent filings with the SEC. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

 

 

 

 

We have adopted various accounting policies to prepare our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Our most significant accounting policies are disclosed in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies and estimates from the information provided in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2025.

 

The Company completed the asset acquisition of Rendiatech Ltd. on March 17, 2026. The transaction was accounted for as an asset acquisition under ASC 805-50. The purchase price was allocated to the individual assets acquired and liabilities assumed on a relative fair value basis, resulting in the recognition of inventory, non-compete agreements, and the immediate expensing of $552 thousand of in-process research and development (IPR&D) that had no alternative future use. There were no operations from the acquired Rendiatech assets between the acquisition date and March 31, 2026, and the transaction was not material to the Company’s results of operations or cash flows for the three months ended March 31, 2026. See Note 10 – Asset Acquisition for additional information regarding the transaction and the purchase price allocation.

 

 

There were no new accounting pronouncements adopted during the three months ended March 31, 2026 that had a material effect on the Company’s condensed consolidated financial statements. For a discussion of accounting pronouncements recently adopted or issued, refer to Note 1 – Nature of Business and Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

 

 

Nuwellis is dedicated to advancing cardiorenal care by enabling earlier, safer, and more controlled fluid management for patients. Activities since inception have consisted principally of raising capital, performing research and product development, and conducting preclinical and clinical studies. During 2016, we acquired the Aquadex Business and announced that we were halting all clinical evaluations of our prior technology, the C-Pulse System. Since then, our activities have consisted mainly of expanding our sales and marketing efforts, as well as continued development of clinical evidence and new product development efforts. As March 31, 2026, we had an accumulated deficit of $320.9 million, and we expect to incur losses for the foreseeable future. To date, we have been funded by public and private equity financings. Although we believe that we will be able to successfully fund our operations in the future, there can be no assurance that we will be able to do so or that we will ever operate profitably.

 

 

 

 

 

Revenue is generated mainly from the sale of consoles and blood filters and catheters used in conjunction with the Aquadex System consoles. We sell primarily in the United States to hospitals and clinics through our direct salesforce. The increase in sales in the current year period is primarily due to a 633% increase in console sales, and a 15% increase in circuits reflecting continued increases in the number of patients treated with the Aquadex therapy.

 

 

Our costs and expenses were as follows:

 

 

The decrease in cost of goods sold for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily due to the increase in margin from switching to contract manufacturing, KDI Precision Manufacturing.

 

The increase in selling, general and administrative expense was primarily driven by increased headcount and sales related compensation from a 26.2% increase in sales vs prior year, and higher professional services fees.

 

 

 

 

We have funded our operations primarily through cash on hand, equity issuances, and at-the-market offerings. As of March 31, 2026, and December 31, 2025, cash, cash equivalents, and restricted cash were $2.2 million and $1.2 million, respectively.

 

On March 17, 2026, we completed the acquisition of Rendiatech Ltd., which utilized $125 thousand of net cash (after $24 thousand of cash acquired in the business) and the issuance of equity (150,000 shares of common stock and 30,000 stock options). Transaction costs associated with the acquisition were expensed in selling, general and administrative expenses.

 

Our business strategy and ability to fund operations depend on growing the Aquadex business through expanded sales, product adoption, and cost control, as well as the successful integration of the Rendiatech technology. We expect to seek additional financing in the future, primarily through equity offerings or the existing At-The-Market program.

 

Net cash used in operating activities was $3.1 million for the three months ended March 31, 2026, compared to $2.5 million for the comparable prior-year period. This primarily reflects our net loss, partially offset by non-cash items (e.g., stock-based compensation, depreciation, warrant fair value changes) and changes in working capital.

 

Net cash used in investing activities was $284 thousand, primarily for property and equipment purchases and cash paid for the Rendiatech acquisition (net of cash acquired).

 

Net cash provided by financing activities was $4.4 million, primarily from proceeds under the January PIPE Warrants.

 

As of March 31, 2026, we had no material commitments for capital expenditures beyond ordinary course purchases.

 

We believe our existing capital resources will support operations through the end of the second quarter of 2026, but we will require additional capital to fund operations through the end of fiscal year 2026. See Note 1 – Going Concern for additional discussion.

 

 

Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management's beliefs, assumptions, and expectations and information currently available. Forward-looking statements include statements regarding future operating performance, business strategy, product development, market acceptance, financing needs, and other matters. Such statements are identified by words such as "believe," "expect," "anticipate," "may," "will," "should," "could," "estimate," "plan," "potential," or similar expressions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including those described in our Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent SEC filings. We undertake no obligation to update forward-looking statements except as required by law.

 

 

Not applicable.

 

 

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), as appropriate, to allow for timely decisions regarding required disclosure.

 

In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

As of March 31, 2026, the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of management, including the Certifying Officers, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their stated objectives. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of March 31, 2026. The Certifying Officers based their conclusion on the fact that the Company has identified two material weaknesses in controls over financial reporting, as detailed in the 2025 Annual Report on Form 10-K. In light of this fact, management expects to perform additional analyses, reconciliations, and remediations.

 

 

There was no change in our internal control over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. However, as a result of the identified material weaknesses, changes in our internal control over financial reporting will occur.

 

PART II—OTHER INFORMATION

 

 

On February 11, 2026, E.F. Hutton & Co. filed a complaint against the Company in the Supreme Court of the State of New York alleging breach of an engagement letter. On April 24, 2026, the parties executed a Settlement Agreement and Release whereby the Company agreed to pay E.F. Hutton $204 thousand, with neither party admitting liability.  E.F. Hutton agreed to dismiss its complaint with prejudice within two business days of the Company’s payment of the settlement amount paid on May 1, 2026.

 

 

You should carefully consider the risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2025, and in other reports filed thereafter with the SEC, before deciding to invest in or retain shares of our Common Stock. There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, other than the following update related to the recent acquisition:

 

 

On March 17, 2026, we completed the asset acquisition of Rendiatech Ltd. For a discussion of risks related to acquisitions and integration, including the Rendiatech transaction, see the risk factor titled “Our business could be adversely affected due to risks related to proposed acquisitions and the subsequent integration of such acquisitions” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

 

None of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s three months ended March 31, 2026, as such terms are defined under Item 408(a) of Regulation S-K.

 

 

 

 

 

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