Nuwellis secures $5.1 million from warrant exercises

MINNEAPOLIS - Nuwellis, Inc. (NASDAQ:NUWE), a medical device company specializing in fluid overload treatment, has announced the exercise of existing warrants which has generated approximately $5.1 million in gross proceeds. The company, known for its Aquadex SmartFlow system, stated that the exercised warrants will allow for the purchase of 1,832,517 shares of common stock at $2.10 per share.

In the past week, additional warrants were exercised in accordance with their original terms, contributing $1.3 million to the total proceeds. Ladenburg Thalmann & Co. Inc. served as the exclusive agent for this transaction.

As part of the agreement, Nuwellis will issue new Series I and Series II common stock purchase warrants for up to 3,665,034 shares. These new warrants have an exercise price of $1.94 and are exercisable in six months, with Series I warrants valid for five years and Series II warrants for two years from the date they can be exercised. The company emphasized that these warrants have fixed prices and lack variable pricing features.

The issuance of these warrants was conducted in a private placement under an exemption from registration requirements stipulated by Section 4(a)(2) of the Securities Act of 1933. The securities were offered solely to accredited investors, and Nuwellis has committed to file a registration statement with the SEC for the resale of the common stock issuable upon exercise of the new warrants.

Nuwellis has clarified that the securities described have not been registered under the Securities Act and, hence, cannot be offered or sold in the United States without registration or an applicable exemption from registration requirements.

This financial move comes as Nuwellis continues to focus on its mission to alleviate fluid overload in patients through its Aquadex SmartFlow system, which is designed for ultrafiltration therapy in adults and pediatric patients.

The information for this article is based on a press release statement from Nuwellis, Inc.

In other recent news, Nuwellis, Inc. has seen several significant developments. The Centers for Medicare and Medicaid Services (CMS) has increased the outpatient reimbursement rate for Nuwellis's Aquadex ultrafiltration therapy by 397%, potentially encouraging its adoption in outpatient settings. Nuwellis reported a 6% rise in Q2 2024 revenue, reaching $2.2 million, largely due to increased utilization of heart failure and critical care consumables. Nuwellis has also ended its supply agreement with DaVita Inc (NYSE:DVA). and its exclusive distribution and supply agreements with SeaStar Medical (TASE:PMCN) Holding Corporation.

In terms of financial developments, Nuwellis secured funding through a registered direct offering and concurrent private placement, selling 496,901 shares of common stock to institutional investors. Ladenburg Thalmann & Co. Inc. served as the exclusive placement agent. However, Roth/MKM analysts have lowered the price target for Nuwellis to $16.00, maintaining a Buy rating.

On the clinical front, Nuwellis is conducting the REVERSE-HF trial to evaluate the clinical outcomes and economic value of Aquadex compared to intravenous loop diuretics in treating fluid overload in patients with worsening heart failure. These are just a few of the recent developments at Nuwellis, Inc.

InvestingPro Insights

Nuwellis' recent warrant exercise, which generated $5.1 million in gross proceeds, comes at a critical time for the company. According to InvestingPro data, Nuwellis has been quickly burning through cash, making this capital infusion particularly significant. The company's market capitalization stands at a modest $3.79 million, underscoring the importance of this financial move.

Despite the recent positive news, InvestingPro Tips indicate that Nuwellis has faced significant challenges. The stock has performed poorly over the last decade and has fallen significantly over the past year. However, there are signs of a potential turnaround, with the stock showing a strong return over the last month and a significant return over the last week.

Investors should note that Nuwellis operates with a moderate level of debt and is not currently profitable. The company's revenue for the last twelve months as of Q2 2024 was $9.01 million, with a revenue growth of 8.54%. However, the operating income margin stands at -153.38%, reflecting the company's ongoing struggles with profitability.

These insights provide context to Nuwellis' recent financial maneuvers and highlight the company's efforts to strengthen its position. For those interested in a deeper analysis, InvestingPro offers 13 additional tips for Nuwellis, providing a more comprehensive view of the company's financial health and market position.

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