QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
No.
|
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
|
Smaller reporting company
|
|
Emerging growth company
|
Page Number
|
||
PART I—FINANCIAL INFORMATION
|
||
Item 1
|
3
|
|
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
Item 2
|
16
|
|
Item 3
|
22
|
|
Item 4
|
22
|
|
PART II—OTHER INFORMATION
|
||
Item 1
|
23
|
|
Item 1A
|
23
|
|
Item 2
|
23
|
|
Item 3
|
23
|
|
Item 4
|
23
|
|
Item 5
|
23
|
|
Item 6
|
23
|
September 30,
2023
|
December 31,
2022
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Marketable securities
|
||||||||
Accounts receivable
|
|
|
||||||
Inventories, net
|
|
|
||||||
Other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property, plant and equipment, net
|
|
|
||||||
Operating lease right-of-use asset
|
|
|
||||||
Other assets
|
|
|
||||||
TOTAL ASSETS
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$
|
|
$
|
|
||||
Accrued compensation
|
|
|
||||||
Current portion of operating lease liability
|
|
|
||||||
Current portion of finance lease liability
|
|
|
||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Common stock warrant liability
|
||||||||
Operating lease liability
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity
|
||||||||
Series A junior participating preferred stock as of September 30,
2023 and December 31,
2022, par value $
|
|
|
||||||
Series F convertible preferred stock as of both September 30,
2023 and December 31,
2022, par value $
|
|
|
||||||
Series I convertible preferred stock as of September 30, 2023 and December 31, 2022, par value
$
|
||||||||
Preferred stock as of both September 30, 2023 and December 31, 2022, par value $
|
|
|
||||||
Common stock as of September 30, 2023 and December 31, 2022, par value $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated other comprehensive income:
|
||||||||
Foreign currency translation adjustment
|
(
|
)
|
(
|
)
|
||||
Unrealized gain on marketable securities
|
||||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
|
$
|
|
Three months ended
September 30
|
Nine months ended
September 30
|
|||||||||||||||
2023
|
2022
|
2023 | 2022 | |||||||||||||
Net sales
|
$
|
|
$
|
|
$ | $ | ||||||||||
Cost of goods sold
|
|
|
||||||||||||||
Gross profit
|
|
|
||||||||||||||
Operating expenses:
|
||||||||||||||||
Selling, general and administrative
|
|
|
||||||||||||||
Research and development
|
|
|
||||||||||||||
Total operating expenses
|
|
|
||||||||||||||
Loss from operations
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Other income (expense), net
|
(
|
)
|
|
|||||||||||||
Change in fair value of warrant liability
|
( |
) | ||||||||||||||
Loss before income taxes
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Income tax expense
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
Basic and diluted loss per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
Weighted average shares outstanding – basic and diluted
|
|
|
||||||||||||||
Other comprehensive loss:
|
||||||||||||||||
Foreign currency translation adjustments
|
$
|
|
$
|
|
$ | ( |
) | $ | ||||||||
Total comprehensive loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) |
Outstanding
Shares of
Common Stock
|
Common
Stock
|
Additional
Paid in
Capital
|
Accumulated
Other
Comprehensive
Income
|
Accumulated
Deficit
|
Stockholders’
Equity
|
|||||||||||||||||||
Balance December 31, 2021
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Net loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Unrealized foreign currency translation adjustment
|
— | ( |
) | ( |
) | |||||||||||||||||||
Stock-based compensation, net
|
|
|
|
|
|
|
||||||||||||||||||
Balance March 31, 2022
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||
Net loss
|
— |
( |
) | ( |
) | |||||||||||||||||||
Foreign currency translation adjustment |
— | |||||||||||||||||||||||
Stock-based compensation, net
|
||||||||||||||||||||||||
Balance June 30, 2022
|
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Net loss |
— | ( |
) | ( |
) | |||||||||||||||||||
Foreign currency translation adjustment
|
— | |||||||||||||||||||||||
Stock-based compensation, net
|
||||||||||||||||||||||||
Balance September 30, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | $ |
Outstanding
Shares of
Common Stock
|
Common
Stock
|
Additional
Paid in
Capital
|
Accumulated
Other
Comprehensive
Income
|
Accumulated
Deficit
|
Stockholders’
Equity
|
|||||||||||||||||||
Balance December 31, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net loss
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||
Unrealized foreign currency translation adjustment
|
— | ( |
) | ( |
) | |||||||||||||||||||
Unrealized gain on marketable securities
|
— | |||||||||||||||||||||||
Stock-based compensation, net
|
|
|
|
|
|
|
||||||||||||||||||
Issuance costs related to 2022 common stock offering
|
— | ( |
) | ( |
) | |||||||||||||||||||
Conversion of preferred stock into common stock
|
||||||||||||||||||||||||
Reclassification of warrants to equity |
— | |||||||||||||||||||||||
Conversion of warrants into common stock
|
||||||||||||||||||||||||
Balance March 31, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||
Net loss
|
— |
( |
) | ( |
) | |||||||||||||||||||
Unrealized foreign currency translation adjustment
|
— | |||||||||||||||||||||||
Unrealized gain on marketable securities
|
— | ( |
) | ( |
) | |||||||||||||||||||
Stock-based compensation, net
|
||||||||||||||||||||||||
Issuance costs related to ATM offering
|
— | ( |
) | ( |
) | |||||||||||||||||||
Issuance of common stock from ATM offering
|
||||||||||||||||||||||||
Balance June 30, 2023
|
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Net loss
|
— | ( |
) | ( |
) | |||||||||||||||||||
Unrealized foreign currency translation adjustment
|
— | |||||||||||||||||||||||
Unrealized gain on marketable securities |
— | |||||||||||||||||||||||
Stock-based compensation, net
|
||||||||||||||||||||||||
Issuance costs related to ATM offering |
— | |||||||||||||||||||||||
Issuance of common stock from ATM offering |
||||||||||||||||||||||||
Balance September 30, 2023 | $ | $ | $ | ( |
) | $ | ( |
) | $ |
Nine months ended
September 30
|
||||||||
2023
|
2022
|
|||||||
Operating Activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to cash flows used in operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Stock-based compensation expense, net
|
|
|
||||||
Change in fair value of warrant liability
|
||||||||
Net realized gain on marketable securities
|
( |
) | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
||||
Inventory, net
|
|
(
|
)
|
|||||
Other current assets
|
(
|
)
|
(
|
)
|
||||
Other assets and liabilities
|
(
|
)
|
(
|
)
|
||||
Accounts payable and accrued expenses
|
(
|
)
|
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Investing Activities:
|
||||||||
Proceeds from sale of marketable securities
|
||||||||
Additions to intangible assets
|
( |
) | ||||||
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
||||
Net cash provided by (used in) investing activities
|
|
(
|
)
|
|||||
Financing Activities:
|
||||||||
Proceeds from ATM stock offerings, net
|
|
|
||||||
Payments on finance lease liability
|
(
|
)
|
(
|
)
|
||||
Net cash provided by (used in) financing activities
|
|
(
|
)
|
|||||
Effect of exchange rate changes on cash
|
(
|
)
|
|
|||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents - beginning of period
|
|
|
||||||
Cash and cash equivalents - end of period
|
$
|
|
$
|
|
||||
Supplemental cash flow information
|
||||||||
Inventory transferred to property, plant and equipment
|
$ |
$ |
||||||
Non-cash impact of conversion of warrants to common stock (see Note 3)
|
$ |
$ |
(in thousands)
|
September 30,
2023
|
December 31,
2022
|
||||||
Finished Goods
|
$
|
|
$
|
|
||||
Work in Process
|
|
|
||||||
Raw Materials
|
|
|
||||||
Inventory Reserves |
( |
) | ( |
) | ||||
Total
|
$
|
|
$
|
|
September 30
|
||||||||
2023
|
2022
|
|||||||
Stock options
|
|
|
||||||
Warrants to purchase common stock
|
|
|
||||||
Series F convertible preferred stock
|
|
|
||||||
Total
|
|
|
Three months ended
September 30
|
Nine
months ended
September 30
|
|||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
Weighted average shares outstanding
|
|
|
||||||||||||||
Basic and diluted loss per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) |
Three months ended
September 30
|
Nine
months ended
September 30
|
|||||||||||||||
(in thousands)
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Selling, general and administrative expense
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Research and development expense
|
|
|
|
|
||||||||||||
Total stock-based compensation expense
|
$
|
|
$
|
|
$
|
|
$
|
|
Three months ended
|
Nine months ended
|
|||||||||||||||
September 30
|
September 30
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Expected volatility
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Expected Life of options (years)
|
|
|
|
|
||||||||||||
Expected dividend yield
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Risk-free interest rate
|
|
%
|
|
%
|
|
%
|
|
%
|
●
|
Level 1 — Financial instruments with unadjusted quoted prices listed on active market exchanges.
|
●
|
Level 2 — Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. The prices for the financial instruments are determined using prices for
recently traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
|
●
|
Level 3 — Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little, if any, market activity for the financial instrument. The prices are determined using
significant unobservable inputs or valuation techniques.
|
September 30, 2023
|
December 31, 2022
|
|||||||||||||||
(in thousands)
|
Fair Value
|
Level 1
|
Fair Value
|
Level 1
|
||||||||||||
Marketable securities
|
$
|
|
$
|
|
$
|
|
$
|
|
(in thousands)
|
||||
Balance at December 31, 2022
|
$
|
|
||
Change in fair value
|
|
|||
Balance at January 4, 2023 (revaluation date)
|
|
|||
Warrants reclassified to equity
|
( |
) | ||
Balance at September 30, 2023 | $ |
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three months ended
September 30, 2023
|
Three months ended
September 30, 2022
|
Increase (Decrease)
|
% Change
|
|||||||||||
$
|
2,412
|
$
|
2,065
|
$
|
347
|
16.8
|
%
|
(in thousands)
|
Three months ended
September 30, 2023
|
Three months ended
September 30, 2022
|
Increase (Decrease)
|
% Change
|
||||||||||||
Cost of goods sold
|
$
|
1,031
|
$
|
806
|
$
|
225
|
27.9
|
%
|
||||||||
Selling, general and administrative
|
$
|
3,428
|
$
|
4,251
|
$
|
(823
|
)
|
(19.4) | % | |||||||
Research and development
|
$
|
1,117
|
$
|
928
|
$
|
189
|
20.4
|
% |
Nine months ended
September 30, 2023
|
Nine months ended
September 30, 2022
|
Increase (Decrease)
|
% Change
|
|||||||||||
$
|
6,313
|
$
|
6,204
|
$
|
109
|
1.8
|
%
|
(in thousands)
|
Nine months ended
September 30, 2023
|
Nine months ended
September 30, 2022
|
Increase (Decrease)
|
% Change
|
||||||||||||
Cost of goods sold
|
$
|
2,718
|
$
|
2,780
|
$
|
(62
|
)
|
(2.2) | % | |||||||
Selling, general and administrative
|
$
|
13,582
|
$
|
12,920
|
$
|
662
|
5.1
|
%
|
||||||||
Research and development
|
$
|
4,050
|
$
|
3,141
|
$
|
909
|
28.9
|
%
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
ITEM 6. |
EXHIBITS
|
Incorporated By Reference
|
|||||||||||||
Exhibit
Number
|
Exhibit Description
|
Form
|
File
Number
|
Date of First Filing
|
Exhibit
Number
|
Filed
Herewith
|
Furnished Herewith
|
||||||
|
Fourth Amended and Restated Certificate of Incorporation
|
10
|
001-35312
|
February 1, 2012
|
3.1
|
||||||||
|
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
|
8-K
|
001-35312
|
January 13, 2017
|
3.1
|
||||||||
|
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
|
8-K
|
001-35312
|
May 23, 2017
|
3.1
|
||||||||
|
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
|
8-K
|
001-35312
|
October 12, 2017
|
3.1
|
||||||||
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
|
8-K/A
|
001-35312
|
October 16, 2020
|
3.1
|
|||||||||
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
|
8-K
|
001-35312
|
January 2, 2019
|
3.1
|
|||||||||
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
|
8-K
|
001-35312
|
April 27, 2021
|
3.1
|
|||||||||
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
|
8-K
|
001-35312
|
December 9, 2022
|
3.1
|
|||||||||
Form of Certificate of Designation of Series A Junior Participating Preferred Stock
|
8-K
|
001-35312
|
June 14, 2013
|
3.1
|
|||||||||
Form of Certificate of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock
|
S-1/A
|
333-221010
|
November 17, 2017
|
3.7
|
|||||||||
Form of Certificate of Designation of Preferences, Rights and Limitations of Series I Convertible Preferred Stock
|
8-K
|
001-35312
|
October 18, 2022
|
3.1
|
|||||||||
Certificate of Designation of Preferences, Rights and Limitations of Series J Convertible Preferred Stock
|
8-K
|
001-35312
|
October 17, 2023
|
3.1
|
Incorporated By Reference | |||||||||||||
Exhibit
Number
|
Exhibit Description | Form |
File
Number
|
Date of First Filing |
Exhibit
Number
|
Filed
Herewith
|
Furnished Herewith | ||||||
Third Amended and Restated Bylaws
|
8-K
|
001-35312
|
April 27, 2021
|
3.2
|
|||||||||
Amendment to Third Amended and Restated Bylaws
|
8-K
|
001-35312
|
October 5, 2022
|
3.1
|
|||||||||
Form of Warrant to Purchase Shares of Common Stock
|
S-1/A
|
333-274610
|
September 29, 2023
|
4.13
|
|||||||||
Transition Agreement dated August 4, 2023 by and between Nuwellis, Inc. and Lynn Blake
|
8-K
|
001-35312
|
August 8, 2023
|
10.1
|
|||||||||
Consulting Agreement dated August 4, 2023 by and between Nuwellis, Inc. and Lynn Blake
|
8-K
|
001-35312
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August 8, 2023
|
10.2
|
|||||||||
Offer Letter by and between Nuwellis, Inc. and Robert B. Scott, effective as of September 2, 2023
|
8-K
|
001-35312
|
August 18, 2023
|
10.1
|
|||||||||
Form of Warrant Agency Agreement
|
S-1/A
|
333-274610
|
September 29, 2023
|
10.68
|
|||||||||
Form of Securities Purchase Agreement
|
S-1/A
|
333-274610
|
September 29, 2023
|
10.69
|
|||||||||
Placement Agency Agreement dated as of October 12, 2023, by and between Nuwellis, Inc., Lake Street Capital Markets, LLC and Maxim Group LLC
|
8-K
|
001-35312
|
October 17, 2023
|
1.1
|
|||||||||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
||||||||||||
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
||||||||||||
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
X
|
||||||||||||
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
X
|
||||||||||||
101.INS
|
Inline XBRL Instance Document
|
X
|
|||||||||||
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
X
|
|||||||||||
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
X
|
Incorporated By Reference | |||||||||||||
Exhibit
Number
|
Exhibit Description | Form |
File
Number
|
Date of First Filing |
Exhibit
Number
|
Filed
Herewith
|
Furnished Herewith | ||||||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
X
|
|||||||||||
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
X
|
|||||||||||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
X
|
|||||||||||
104 |
Cover Page Interactive Data File
(formatted as Inline XBRL and
contained in Exhibit 101)
|
X |
Nuwellis, Inc.
|
||
Date: November 7, 2023
|
By:
|
/s/ Nestor Jaramillo, Jr.
|
Nestor Jaramillo, Jr.
|
||
President and Chief Executive Officer
|
||
Date: November 7, 2023
|
By:
|
/s/ Robert Scott
|
Robert Scott
|
||
Chief Financial Officer
|
||
1. |
I have reviewed this Quarterly Report on Form 10-Q of Nuwellis, Inc. for the quarterly period ended September 30, 2023;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 7, 2023
|
/s/ Nestor Jaramillo, Jr.
|
Nestor Jaramillo, Jr.
|
|
President and Chief Executive Officer
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Nuwellis, Inc. for the quarterly period ended September 30, 2023.
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 7, 2023
|
/s/ Robert Scott
|
Robert Scott
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 7, 2023
|
/s/ Nestor Jaramillo, Jr.
|
Nestor Jaramillo, Jr.
|
|
President and Chief Executive Officer
|
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 7, 2023
|
/s/ Robert Scott
|
Robert Scott
|
|
Chief Financial Officer
|
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Condensed Consolidated Statements of Operations and Comprehensive Loss [Abstract] | ||||
Net sales | $ 2,412 | $ 2,065 | $ 6,313 | $ 6,204 |
Cost of goods sold | 1,031 | 806 | 2,718 | 2,780 |
Gross profit | 1,381 | 1,259 | 3,595 | 3,424 |
Operating expenses: | ||||
Selling, general and administrative | 3,428 | 4,251 | 13,582 | 12,920 |
Research and development | 1,117 | 928 | 4,050 | 3,141 |
Total operating expenses | 4,545 | 5,179 | 17,632 | 16,061 |
Loss from operations | (3,164) | (3,920) | (14,037) | (12,637) |
Other income (expense), net | (204) | 52 | 98 | 14 |
Change in fair value of warrant liability | 0 | 0 | (755) | 0 |
Loss before income taxes | (3,368) | (3,868) | (14,694) | (12,623) |
Income tax expense | (2) | (2) | (6) | (6) |
Net loss | $ (3,370) | $ (3,870) | $ (14,700) | $ (12,629) |
Basic loss per share (in dollars per share) | $ (1.81) | $ (36.72) | $ (10.21) | $ (119.85) |
Diluted loss per share (in dollars per share) | $ (1.81) | $ (36.72) | $ (10.21) | $ (119.85) |
Weighted average shares outstanding - basic (in shares) | 1,864 | 105 | 1,439 | 105 |
Weighted average shares outstanding - diluted (in shares) | 1,864 | 105 | 1,439 | 105 |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | $ 0 | $ 2 | $ (6) | $ 1 |
Total comprehensive loss | $ (3,370) | $ (3,868) | $ (14,706) | $ (12,628) |
Nature of Business and Basis of Presentation |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Business and Basis of Presentation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Business and Basis of Presentation |
Note 1 — Nature of Business and Basis of Presentation
Nature of Business: Nuwellis, Inc. (the “Company”) is a medical technology company focused on developing, manufacturing, and commercializing the Aquadex FlexFlow®
and Aquadex SmartFlow® systems (collectively, the “Aquadex System”) for ultrafiltration therapy. The Aquadex System is indicated for temporary (up to eight 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. Nuwellis, Inc. is a Delaware corporation headquartered in Minneapolis with a wholly owned subsidiary in
Ireland. The Company’s common stock began trading on the Nasdaq Capital Market in February 2012.
In August 2016, the Company acquired the business associated with the Aquadex System (the “Aquadex
Business”) from a subsidiary of Baxter International, Inc. (“Baxter”), and refocused its strategy to fully devote its resources to the Aquadex Business. On April 27, 2021, the Company announced that it was changing its name from CHF Solutions,
Inc. to Nuwellis, Inc. to reflect the expansion of its customer base from treating fluid imbalance resulting from congestive heart failure to also include critical care and pediatric applications.
Principles of Consolidation: The accompanying condensed consolidated balance sheet as of December 31, 2022, which has been derived from the consolidated
audited financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial
information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Certain information and note disclosures normally included in the audited annual consolidated financial statements have been condensed or omitted pursuant to
those rules and regulations. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive loss, financial condition, and cash flows in conformity with U.S. GAAP. In the
opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented.
Operating results for interim periods are not necessarily indicative of results that may be expected for the year as a whole. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the consolidated financial statements and during the reporting period. Actual results could
differ materially from these estimates.
These condensed
consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Going Concern: The Company’s consolidated financial statements have been prepared and presented on a basis assuming it continues as a going concern. During the years ended December 31, 2022 and 2021 and
through September 30, 2023, the Company incurred losses from operations and net cash outflows from operating activities as disclosed in the consolidated statements of operations and cash flows, respectively. As of September 30, 2023, the Company had an accumulated deficit of $282.1 million and it expects to incur losses for the immediate future. To date, the Company has been funded by equity financings, and although the
Company believes that it will be able to successfully fund its operations, there can be no assurance that it will be able to do so or that it will ever operate profitably. These factors raise substantial doubt about the Company’s ability to
continue as a going concern through the next twelve months.
The Company became a revenue-generating company after
acquiring the Aquadex Business in August 2016. The Company expects to incur additional losses in the near-term as it grows the Aquadex Business, including investments in its sales and marketing capabilities, product development, purchasing
inventory, manufacturing components, generating additional clinical evidence supporting the efficacy of the Aquadex System, and complying with the requirements related to being a U.S. public
company. To become and remain profitable, the Company must succeed in expanding the adoption and market acceptance of the Aquadex System. This will require the Company to succeed in training personnel at hospitals and in outpatient care
settings, and effectively and efficiently manufacturing, marketing, and distributing the Aquadex System and related components. There can be no assurance that the Company will succeed in these activities, and it may never generate revenues
sufficient to achieve profitability.
During 2022, the Company closed on an underwritten public equity
offering for aggregate net proceeds of approximately $9.4 million after deducting the underwriting discounts and commissions and other
costs associated with the offering. See Note 3 — Stockholders’ Equity for additional related disclosures. The Company will require additional funding to grow its Aquadex Business, which may not be available on terms favorable to the Company, or at
all. The Company may receive those funds from the proceeds from future warrant exercises, issuances of equity securities, or other financing transactions.
On March 3, 2023, we entered into a Sales Agreement with
Ladenburg Thalmann & Co. Inc. (“Ladenburg”) to create an at-the-market offering program under which we could offer and sell shares of our common stock having an aggregate offering price of up to $10.0 million. Ladenburg was entitled to a commission at a fixed rate equal to 3%
of the gross proceeds. For the three and nine months ending September
30, 2023, the Company issued shares under the at-the-market program for aggregate net proceeds of none and approximately $2.1 million after deducting the underwriting discounts and commissions and
other costs associated with the offering.
The Company believes that its existing capital resources will
be sufficient to support its operating plan through February 28, 2024. However, the Company will seek to raise additional capital to support its growth or other strategic initiatives through debt, equity or a combination thereof. There can be no
assurance we will be successful in raising additional capital.
Revenue Recognition: The Company recognizes revenue in accordance with Accounting Standards Codification, Topic 606, Revenue from Contracts with Customers, which
the Company adopted effective January 1, 2018. Accordingly, the Company recognizes revenue when its customers obtain control of its products or services, in an amount that reflects the consideration that the Company expects to receive in
exchange for those goods and services. See Note 2 – Revenue Recognition below for additional disclosures. For the three months ended September 30, 2023, two customers represented 21% and 11% of net sales. For the nine months ended September 30, 2023, two customers each represented 17% and 12% of net sales. For
the three months ended September 30, 2022, one customer represented 12% of net sales. For
the nine months ended September 30, 2022, two customers each represented 13%
and 10% of net sales.
Accounts Receivable:
Accounts receivable are unsecured, are recorded at net realizable value, and do not bear interest. The Company makes judgments as to its ability to collect outstanding receivables based upon significant
patterns of collectability, historical experience, and management’s evaluation of specific accounts and will provide an allowance for credit losses when collection becomes doubtful. The Company performs credit evaluations of its customers’
financial condition on an as-needed basis. Payment is generally due 30 days from the invoice date and accounts past 30 days are individually analyzed for collectability. When all collection efforts have been exhausted, the account is written off against the related
allowance. To date, the Company has not experienced any write-offs or significant deterioration of the aging of its accounts receivable, and therefore, no allowance for doubtful accounts was considered necessary as of September 30, 2023, or December 31, 2022. As of September 30, 2023, three customers represented 17%, 17% and 11% of the accounts receivable balance. As of December 31, 2022, two customers represented 15% and 10% of the total accounts receivable balance.
Inventories: Inventories represent finished goods purchased from the Company’s suppliers and are recorded as the lower of cost or net realizable value using the first-in, first-out
method. Overhead is allocated to manufactured finished goods inventory based on the normal capacity of the Company’s production facilities. Abnormal amounts of overhead, if any, are expensed as incurred. Inventories consisted of the following:
Loss per Share: Basic
loss per share is computed based on the net loss for each period divided by the weighted average number of common shares outstanding. See Note 3 – Stockholders’ Equity below for additional disclosures.
Diluted earnings per share is computed based on the net loss
allocable to common stockholders for each period divided by the weighted average number of common shares outstanding, increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been
issued, and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include shares underlying outstanding convertible
preferred stock, warrants, stock options and other stock-based awards granted under stock-based compensation plans.
The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be
anti-dilutive as of the end of each period presented:
The following table reconciles reported net loss with reported net loss per share for each of the three and nine months ended September 30:
Subsequent Events: The Company evaluates events through the
date the consolidated financial statements are filed for events requiring adjustment to or disclosure in the consolidated financial statements. See note 10 – Subsequent Events for additional disclosures.
|
Revenue Recognition |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Revenue Recognition [Abstract] | |
Revenue Recognition |
Note 2 — Revenue Recognition
Net Sales: The Company sells its products in the United States primarily through a direct salesforce. Customers who purchase the Company’s products
include hospitals and clinics throughout the United States. In countries outside the United States, the Company sells its products through a limited number of specialty healthcare distributors in Austria, Brazil, Colombia, The Czech
Republic, Germany, Greece, Hong Kong, India, Indonesia, Israel, Italy, Panama, Romania, Singapore, Slovakia, Spain, Switzerland, Thailand, United Arab Emirates, and the United Kingdom. These distributors resell the Company’s products to
hospitals and clinics in their respective geographies. International revenue represents 5% of net sales for the three and nine months ended September
30, 2023 and 2022
Revenue from product sales is recognized when the customer or distributor obtains control of the
product, which occurs at a point in time, most frequently upon shipment of the product or receipt of the product, depending on shipment terms. The Company’s standard shipping terms are FOB shipping point unless the customer requests that control
and title to the inventory transfer upon delivery.
Revenue is measured as the amount of consideration we expect to receive, adjusted for any applicable
estimates of variable consideration and other factors affecting the transaction price, which is based on the invoiced price, in exchange for transferring products. All revenue is recognized when the Company satisfies its performance obligations
under the contract. The majority of the Company’s contracts have a single performance obligation and are short term in nature. The Company has entered into extended service plans with customers whose related revenue is recognized over time. This
revenue represents less than 1% of net sales for the three and nine months ended September 30, 2023 and 2022. The unfulfilled
performance obligations related to these extended service plans are included in deferred revenue, which is included in other current liabilities on the consolidated balance sheets. The majority of the deferred revenue is expected to be recognized
within one year.
Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and
remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Revenue includes shipment and handling fees charged to customers. Shipping and handling costs associated with outbound freight after
control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold.
Product Returns: The Company
offers customers a limited right of return for its products in case of non-conformity or performance issues. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of
revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using available industry data and its own historical sales and returns information. The Company has not received any
returns to date and believes that future returns of its products will be minimal. Therefore, revenue recognized is not currently impacted by variable consideration related to product returns.
|
Stockholders' Equity |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity |
Note 3 — Stockholders’ Equity
Series F Convertible Preferred Stock: On November 27, 2017, the Company closed on an underwritten public offering of Series F convertible preferred
stock and warrants to purchase shares of common stock for gross proceeds of $18.0 million. Net proceeds totaled approximately $16.2 million after deducting the underwriting discounts and commissions and other costs associated with the offering. The offering was
comprised of Series F convertible preferred stock, convertible into shares of the Company’s common stock at a conversion price of $189,000
per share. Each share of Series F convertible preferred stock was accompanied by a Series 1 warrant, which expired on the first anniversary of its issuance, to purchase 16 shares of the Company’s common stock at an exercise price of $189,000 per share, and a Series 2
warrant, which expires on the seventh anniversary of its issuance, to purchase 4 shares of the Company’s common stock at an exercise
price of $189,000 per share. The Series F convertible preferred stock has full ratchet price-based anti-dilution protection, subject to
customary carve-outs, in the event of a down-round financing at a price per share below the conversion price of the Series F convertible preferred stock (which protection will expire if, during any 20 of 30 consecutive trading days, the volume weighted average
price of the Company’s common stock exceeds 300% of the then-effective conversion price of the Series F convertible preferred stock and
the daily dollar trading volume for each trading day during such period exceeds $200,000). The exercise price of the warrants is fixed
and does not contain any variable pricing features, nor any price-based anti-dilutive features, apart from customary adjustments for stock splits, combinations, reclassifications, stock dividends or fundamental transactions. A total of 18,000 shares of Series F convertible preferred stock convertible into 96 shares of common stock and warrants to purchase 191 shares of common stock were issued in the
offering.
Effective March 12, 2019, the conversion
price of the Series F convertible preferred stock was reduced from $89,040 to $15,750, the per share price to the public of the Series G convertible preferred stock issued in the March 2019 Offering. Effective October 25, 2019, the conversion price of the
Series F convertible preferred stock was reduced from $15,750 to $4,230, and on November 6, 2019, from $4,230 to $2,983, the per share price to the public in the October and November 2019 transactions, respectively. Effective January 28, 2020, the conversion price
of the Series F convertible preferred stock was reduced from $2,983 to $1,650, the per share price to the public of the Series H convertible preferred stock which closed in an underwritten public offering on January 28, 2020. Effective March 23,
2020, the conversion price of the Series F convertible preferred stock was reduced from $1,650 to $900, the per share price to the public in the March 2020 transaction. In connection with the March 2021 Offering, the conversion price of the Series F convertible preferred stock was
reduced from $900 to $550,
the per share price to the public in the March 2021 Offering. In addition, the exercise price of the common stock warrants issued in connection with the offering consummated by the Company on January 28, 2020 (the “January 2020 Offering”) was
reduced from $900 to $550,
the per share price to the public in the March 2021 Offering. In connection with the September 2021 offering, the conversion price of the Series F convertible preferred stock was reduced from $550 to $250, the per share price to the public in the September
2021 offering, described below. In connection with the October 2022 offering, the conversion price of the Series F convertible preferred stock was reduced from $250 to $25, the per share price to the public in the October 2022 offering, described below.
As of September 30, 2023, and December 31,
2022, 127 shares of the Series F convertible preferred stock remained outstanding.
March 2021 Offering: On March 19, 2021, the Company closed on an underwritten public
offering of 37,958 shares of common stock, for gross proceeds of approximately $20.9 million (the “March 2021 Offering”). Net proceeds totaled approximately $18.9
million after deducting the underwriting discounts and commissions and other costs associated with the offering and after giving effect to the underwriters’ full exercise of their overallotment option.
September 2021 Offering: On September 17, 2021, the Company closed on an underwritten
public offering of 40,056 shares of common stock, for gross proceeds of approximately $10.0 million (the “September 2021 Offering”). Net proceeds totaled approximately $9.0 million after deducting the underwriting discounts and commissions and other costs associated with the offering and after giving effect to the underwriters’ full exercise of their
overallotment option.
In connection with the September 2021 Offering, the conversion
price of the Series F convertible preferred stock was reduced from $550 to $250, the per share price to the public in the September 2021 Offering. In addition, the exercise price of the common stock warrants issued in connection with the January 2020 Offering was
reduced from $550 to $250,
the per share price to the public in the September 2021 Offering.
October 2022 Offering: On October 18, 2022, the Company closed on an underwritten public offering of 209,940
shares of common stock and 23,157,124 shares of Series I convertible preferred stock, for gross proceeds of approximately $11.0 million (the “October 2022 Offering”). Net proceeds totaled approximately $9.4 million after deducting underwriting discounts and commissions and other costs associated with the offering and after giving effect to the underwriters’ full exercise
of their overallotment option.
The offering was comprised of (1) 209,940 Class A Units, priced at a public offering
price of $25 per Class A Unit, with each Class A Unit consisting of one share of common stock and 1.5 warrants to purchase one
share of common stock at an exercise price of $25 per share, and (2) 23,157,124 Class B Units, priced at a public offering price of $0.25
per Class B Unit, with each Class B Unit consisting of one share of Series I convertible preferred stock, convertible into one share
of common stock for every one hundred shares of Series I convertible preferred stock, and 1.5 warrants to purchase one share of
common stock for every one hundred shares of Series I convertible preferred stock. The warrants included a cashless exercise provision that upon becoming exercisable, the warrant holders could exercise the warrants for common stock at a exercise price.
The warrants became
exercisable beginning on the effective date of a reverse stock split in an amount sufficient to permit the exercise in full of the warrants, contingent upon stockholder approval of (i) such reverse stock split and (ii) of the exercisability of
the warrants under Nasdaq rules, and they expire on the sixth anniversary of the initial exercise date.
On December 8, 2022, following a special meeting of stockholders, the Company’s board of directors approved a Reverse Stock Split”). On December 9, 2022, the Company filed
with the Secretary of State of the State of Delaware a Certificate of Amendment to its Certificate of Incorporation to effect the Reverse Stock Split. The Reverse Stock Split became effective as of 5:00 p.m. Eastern Time on December 9, 2022,
and the Company’s common stock began trading on a split-adjusted basis when the market opened on December 12, 2022. The conversion price of the preferred stock issued in the October 2022 offering was fixed and does not contain any variable
pricing feature or any price-based anti-dilutive feature. The preferred stock issued in this transaction includes a beneficial ownership blocker but has no dividend rights (except to the extent that dividends are also paid on the common
stock) or liquidation preference and, subject to limited exceptions, has no voting rights. The securities comprising the units are immediately separable and were issued separately. This reverse stock split did not change the par value of the
Company’s common stock or the number of common or preferred shares authorized by the Company’s Fourth Amended and Restated Certificate of Incorporation, as amended. All share and per-share amounts in this quarterly report have been
retroactively adjusted to reflect the reverse stock splits for all periods presented. reverse stock split of the Company’s issued and outstanding shares of common stock (the “
On January 4, 2023, the
Company secured stockholder approval for the exercisability of the common stock warrants issued in the October 2022 Offering. The warrants were subsequently determined to be equity-classified warrants and were marked to market, then reclassified
to the equity section of the consolidated balance sheet. Through June 30, 2023, 660,046 common stock warrants had converted into 660,046 shares of common stock at a
exercise price, with no proceeds received by the Company.In connection with the
October 2022 Offering, the conversion price of the Series F convertible preferred stock was reduced from $250 to $25, the per share price to the public in the October 2022 Offering. In addition, the exercise price of the common stock warrants issued in connection
with the January 2020 Offering was reduced from $250 to $25, the per share price to the public in the October 2022 Offering.
2023 At-the-Market Program: In March 2023, the Company filed a Prospectus Supplement to its Registration Statement on Form S-3 with the SEC in connection with
a proposed At-the-Market Securities offering (the “At-the-Market Program”). During the three months and nine months ended September 30, 2023, the Company issued none and 657,333 shares of common stock under the At-the-Market Program for gross proceeds of none and approximately $2.3 million,
respectively. Net proceeds for the three and nine months ended September 30, 2023, totaled none approximately $2.1 million, respectively, after deducting the underwriting discounts and commissions and other costs associated with the offering.
Underwriter and Placement Agent Fees: In connection with the offerings described above, the Company
paid the underwriter or placement agent, as applicable, an aggregate cash fee equal to 8% of the aggregate gross proceeds raised in
each of the offerings, except with
respect to the issuances made pursuant to the At-the-Market Program, for which the placement fee was equal to 3% of the aggregate
gross proceeds.
Market-Based Warrants: On May 30, 2019, the Company granted a market-based warrant to a consultant in exchange
for investor relations services. The warrant represents the right to acquire up to 33 shares of the Company’s common stock at an
exercise price of $9,540 per share, based on the closing stock price of the Company’s common shares on May 30, 2019. The warrant is
subject to a vesting schedule based on the Company achieving certain market stock prices within a specified period of time. The warrant expires on May 30, 2024 and had not vested as of September 30, 2023.
Supply Agreement Warrants: On June 19, 2023,
we entered into a Supply and Collaboration Agreement (the “Supply Agreement”) with DaVita Inc., a Delaware corporation (“DaVita”),
pursuant to which DaVita will pilot the Aquadex ultrafiltration therapy system to treat adult patients with congestive heart failure and related conditions within select U.S. markets. The pilot program is expected to launch by the end of fourth
quarter 2023 and extend through May 31, 2024 (the “Pilot”). Through the Pilot, ultrafiltration therapy using Aquadex will be offered at a combination of DaVita’s hospital customer and
outpatient center locations, with both companies collaborating on the roll-out of the therapy, clinician training, and patient support. At the conclusion of the Pilot, DaVita has the option, in its sole discretion, to extend the Supply
Agreement with the Company for continued provision of both inpatient and outpatient ultrafiltration services for up to 10 years (“Ultrafiltration Services Approval”).
In conjunction with the Supply Agreement,
the Company issued DaVita a warrant to purchase up to an aggregate of 1,289,081 shares of common stock of the Company, par value $0.0001 per share, at an exercise price of $3.2996
per share (the “DaVita Warrant”), provided that at no time can the DaVita Warrant be exercised for an amount of shares that would represent greater than 19.9% ownership in the Company subject to certain vesting milestones. The DaVita Warrant is expected to vest in four tranches as follows: (i) 25% upon
receipt of notice to extend the Supply Agreement past the initial pilot-term; (ii) 25% upon the attainment by the Company of a net
revenue achievement from DaVita’s efforts pursuant to the Supply Agreement within twelve months of Ultrafiltration Services Approval;
(iii) 25% upon the attainment by the Company of a net revenue achievement from DaVita’s efforts pursuant to the Supply Agreement within
twenty-four months of Ultrafiltration Services Approval; and (iv) 25% upon the attainment by the Company of a net revenue achievement from DaVita’s efforts pursuant to the Supply Agreement within thirty-six months of Ultrafiltration Services Approval. This warrant had not
vested as of September 30, 2023.
The Company evaluated the accounting treatment for the DaVita Warrant pursuant to ASC
718, “Stock Compensation,” and ASC 480, “Distinguishing Liabilities from Equity,” and concluded that the DaVita Warrant should be classified as an equity instrument on the balance sheet as of September 30, 2023. In accordance with this
treatment, the Company’s management concluded none of the performance-based vesting conditions of the DaVita warrant were probable of vesting as of September 30, 2023, and therefore, no expense associated with the DaVita Warrant was recognized
in the Company’s financial statements as of that date. The Company will continue to evaluate the probability of achieving the performance milestones associated with the DaVita Supply Agreement and will record the related equity-based expense in
its financial statements based on the grant date fair value of the DaVita Warrant when management deems it is probable that the performance-based vesting conditions will be achieved.
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Stock-Based Compensation |
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Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation |
Note 4 — Stock-Based
Compensation
Under the fair value recognition provisions of
U.S. GAAP for accounting for stock-based compensation, the Company measures stock-based compensation expense at the grant date based on the fair value of the award and recognizes the compensation expense over the requisite service period, which is
generally the vesting period.
The following table presents the classification of stock-based compensation expense
recognized for the periods below:
During the three months ended September 30, 2023 and 2022, under the 2017 Equity Incentive Plan, the 2021 Inducement Plan,
and the 2013 Non-Employee Directors’ Equity Incentive Plan, the Company granted 18,643 and 369 stock options, respectively, to its directors, officers and employees. During the nine months ended September 30, 2023 and 2022, the Company granted 125,410 and 5,577, respectively, to
its directors, officers, employees and consultants. Vesting generally occurs over an immediate to 48-month period based on a
time-of-service condition, although vesting acceleration is provided under one grant in the event that a certain milestone is met. The weighted-average grant date fair value of the stock-options issued during the three months ended September 30,
2023 and 2022 was $1.63 and $60.40
per share, respectively. The weighted-average grant date fair value of the stock options issued during the nine months ended September 30, 2023 and 2022 was $6.18 and $79.07 per share, respectively.
The total number of stock options outstanding as of September 30, 2023 and September 30, 2022 was 111,275 and 12,003, respectively.
The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the three and nine months
ended September 30, 2023 and 2022:
During the three months ended September 30, 2023 and 2022, 2,576 and 823 stock options vested, respectively, and 21,372 and 343 stock options were
expired or forfeited during these periods, respectively. During the nine months ended September 30, 2023 and 2022, 5,022 and 2,730 stock options vested, respectively, and 24,620
and 1,148 stock options were expired or forfeited during these periods, respectively. During the three and nine months ended September
30, 2023 and 2022, no options were exercised.
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Fair Value of Financial Instruments |
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Fair Value of Financial Instruments |
Note 5 — Fair Value of Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents, marketable securities, and warrants.
Pursuant to the requirements of Accounting Standards Codification (“ASC”) Topic 820 “Fair Value Measurement,” the Company’s financial assets and
liabilities measured at fair value on a recurring basis are classified and disclosed in one of the following three categories:
All cash equivalents and marketable securities are considered Level 1 measurements for all periods presented.
The available-for-sale marketable securities primarily consist of investment-grade, U.S.-dollar-denominated fixed and floating rate debt, measured at
fair value on a recurring basis.
The fair value of the Company’s common stock warrant liability related to the investor warrants issued in the October 2022 Offering was calculated
using a Monte Carlo valuation model and was classified as Level 3 in the fair value hierarchy.
The following is a roll-forward of the fair value of the Level 3 warrants:
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Income Taxes |
9 Months Ended |
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Sep. 30, 2023 | |
Income Taxes [Abstract] | |
Income Taxes |
Note 6 — Income Taxes
The Company provides for a valuation allowance when it is more
likely than not that it will not realize a portion of its deferred tax assets. The Company has established a full valuation allowance for its U.S. and foreign deferred tax assets due to the uncertainty that enough taxable income will be generated
in those taxing jurisdictions to utilize the assets. Therefore, the Company has not reflected any benefit of such deferred tax assets in the accompanying condensed consolidated financial statements.
As of September 30, 2023, there were no material changes to what
the Company disclosed regarding tax uncertainties or penalties in its Annual Report on Form 10-K for the year ended December 31, 2022.
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Operating Leases |
9 Months Ended |
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Sep. 30, 2023 | |
Operating Leases [Abstract] | |
Operating Leases |
Note 7 — Operating Leases
The Company leases a 23,000 square foot facility located in Eden Prairie, Minnesota for office and manufacturing space under
a non-cancelable operating lease that expires in March 2027. In November 2021, the Company entered into a fourth amendment to the lease, extending the term of the lease from March 31, 2022 to March 31, 2027. This facility serves as our corporate
headquarters and houses substantially all our functional departments. Monthly rent and common area maintenance charges, including estimated property tax for our headquarters, total approximately $32,000. The lease contains provisions for annual inflationary adjustments. Rent expense is being recorded on a straight-line basis over the term of the lease. Beginning on
April 1, 2022, the annual base rent was $10.50 per square foot, subject to future annual increases of $0.32 to $0.34 per square foot.
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Finance Lease Liability |
9 Months Ended |
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Sep. 30, 2023 | |
Finance Lease Liability [Abstract] | |
Finance Lease Liability |
Note 8 — Finance Lease Liability
In 2020, the Company entered into lease agreements to finance
equipment valued at $98,000. The equipment consisted of computer hardware and audio-visual equipment and is included in
in the accompanying consolidated financial statements. The principal amount under the lease agreements was $93,000 at the date the lease commenced, the implied interest rate is 7.5%, and the term of the lease is 39 months. |
Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies |
Note 9 — Commitments and Contingencies
Employee Retirement Plan: The Company has a 401(k) retirement plan that
provides retirement benefits to substantially all full-time U.S. employees. Eligible employees may contribute a percentage of their annual compensation, subject to Internal Revenue Service limitations, with the Company matching a portion of the
employees’ contributions at the discretion of the Company.
Milestone Payment: On December 27, 2022, the Company entered into a license and distribution agreement with SeaStar Medical Holding Corporation, (Nasdaq:
ICU), a medical device company developing proprietary solutions to reduce the consequences of dysregulated immune responses including hyperinflammation on vital organs (“SeaStar”), appointing the Company as the exclusive U.S. distributor to
promote, advertise, market, distribute and sell certain products. As a part of this agreement, the Company agreed to pay SeaStar, a milestone payment of $450,000, upon its receipt of a Human Device Exemption (HDE) approval from the U.S. Food and Drug Administration’s (FDA). This payment is due within 30 days after achievement of the milestone event. As of September 30, 2023, SeaStar had not obtained such HDE approval, but the Company believes approval is reasonably
possible. No liability for this milestone payment has been recorded in the financial statements as of September 30, 2023.
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events |
Note 10 — Subsequent
Events
Public Offering: On
October 17, 2023, the Company closed on a public offering of 150,000 units (the “Units”), with each Unit consisting of one share of the Company’s Series J Convertible Redeemable Preferred Stock, par value $0.0001 per share, with a liquidation preference of $25.00 per share (the
“Series J Convertible Preferred Stock”), and one warrant (the “October 2023 Warrants”) to purchase one-half of one (0.50) share of Series J Convertible Preferred Stock.
The purchase price for one Unit was $15.00, which reflects the issuance of the Series J Convertible Preferred Stock with an original issue discount. The Series J Convertible Preferred
Stock has a term of three (3) years and is convertible at the option of the holder at any time into shares of the Company’s common
stock at a conversion price of $1.01.
If any shares of our Series J Convertible Preferred Stock are outstanding at the end of the
three-year term, then the Company will promptly redeem all of such outstanding shares of Series J Convertible Preferred Stock on a pro rata basis among all of the holders of Series J Convertible Preferred Stock commencing on the third-year anniversary of the closing date of this offering (the “Mandatory Redemption
Date”) in cash, to the extent legally permissible under Delaware law, or, if redemption for cash is not legally permissible in duly authorized, validly issued, fully paid and non-assessable shares of the Company’s common stock equal in number
to the quotient obtained by dividing such unpaid amount by the closing price of the Company’s common stock on the Nasdaq on the Mandatory Redemption Date.
Dividends on the Series J Convertible Preferred Stock will be paid, if and when declared by the Company’s board of directors, in-kind (“PIK dividends”) in additional
shares of Series J Convertible Preferred Stock based on the stated value of $25.00 per share at a dividend rate of 5.0%. The PIK dividends will be paid on a quarterly basis for three (3) years following the closing date to holders of the Series J Convertible Preferred Stock of record at the close of business on October 31, January 31, April 30, and July 31 of each year.
The October 2023 Warrants have a term of three (3) years.
Each October 2023 Warrant has an exercise price of $7.50 (50.0% of the public offering price per Unit) per one-half of one share (0.5)
of Series J Convertible Preferred Stock and is immediately exercisable.
The Company is currently evaluating the accounting treatment of the Series J Convertible Preferred Stock and the October 2023 Warrants.
The gross proceeds before underwriting discounts and commissions and offering expenses, were approximately $2.25 million. The Company intends to use the net proceeds from the offering for working capital and for general corporate purposes.
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Nature of Business and Basis of Presentation (Policies) |
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Principles of Consolidation |
Principles of Consolidation: The accompanying condensed consolidated balance sheet as of December 31, 2022, which has been derived from the consolidated
audited financial statements, and the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial
information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Certain information and note disclosures normally included in the audited annual consolidated financial statements have been condensed or omitted pursuant to
those rules and regulations. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, comprehensive loss, financial condition, and cash flows in conformity with U.S. GAAP. In the
opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented.
Operating results for interim periods are not necessarily indicative of results that may be expected for the year as a whole. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the consolidated financial statements and during the reporting period. Actual results could
differ materially from these estimates.
These condensed
consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
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Going Concern |
Going Concern: The Company’s consolidated financial statements have been prepared and presented on a basis assuming it continues as a going concern. During the years ended December 31, 2022 and 2021 and
through September 30, 2023, the Company incurred losses from operations and net cash outflows from operating activities as disclosed in the consolidated statements of operations and cash flows, respectively. As of September 30, 2023, the Company had an accumulated deficit of $282.1 million and it expects to incur losses for the immediate future. To date, the Company has been funded by equity financings, and although the
Company believes that it will be able to successfully fund its operations, there can be no assurance that it will be able to do so or that it will ever operate profitably. These factors raise substantial doubt about the Company’s ability to
continue as a going concern through the next twelve months.
The Company became a revenue-generating company after
acquiring the Aquadex Business in August 2016. The Company expects to incur additional losses in the near-term as it grows the Aquadex Business, including investments in its sales and marketing capabilities, product development, purchasing
inventory, manufacturing components, generating additional clinical evidence supporting the efficacy of the Aquadex System, and complying with the requirements related to being a U.S. public
company. To become and remain profitable, the Company must succeed in expanding the adoption and market acceptance of the Aquadex System. This will require the Company to succeed in training personnel at hospitals and in outpatient care
settings, and effectively and efficiently manufacturing, marketing, and distributing the Aquadex System and related components. There can be no assurance that the Company will succeed in these activities, and it may never generate revenues
sufficient to achieve profitability.
During 2022, the Company closed on an underwritten public equity
offering for aggregate net proceeds of approximately $9.4 million after deducting the underwriting discounts and commissions and other
costs associated with the offering. See Note 3 — Stockholders’ Equity for additional related disclosures. The Company will require additional funding to grow its Aquadex Business, which may not be available on terms favorable to the Company, or at
all. The Company may receive those funds from the proceeds from future warrant exercises, issuances of equity securities, or other financing transactions.
On March 3, 2023, we entered into a Sales Agreement with
Ladenburg Thalmann & Co. Inc. (“Ladenburg”) to create an at-the-market offering program under which we could offer and sell shares of our common stock having an aggregate offering price of up to $10.0 million. Ladenburg was entitled to a commission at a fixed rate equal to 3%
of the gross proceeds. For the three and nine months ending September
30, 2023, the Company issued shares under the at-the-market program for aggregate net proceeds of none and approximately $2.1 million after deducting the underwriting discounts and commissions and
other costs associated with the offering.
The Company believes that its existing capital resources will
be sufficient to support its operating plan through February 28, 2024. However, the Company will seek to raise additional capital to support its growth or other strategic initiatives through debt, equity or a combination thereof. There can be no
assurance we will be successful in raising additional capital.
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Revenue Recognition |
Revenue Recognition: The Company recognizes revenue in accordance with Accounting Standards Codification, Topic 606, Revenue from Contracts with Customers, which
the Company adopted effective January 1, 2018. Accordingly, the Company recognizes revenue when its customers obtain control of its products or services, in an amount that reflects the consideration that the Company expects to receive in
exchange for those goods and services. See Note 2 – Revenue Recognition below for additional disclosures. For the three months ended September 30, 2023, two customers represented 21% and 11% of net sales. For the nine months ended September 30, 2023, two customers each represented 17% and 12% of net sales. For
the three months ended September 30, 2022, one customer represented 12% of net sales. For
the nine months ended September 30, 2022, two customers each represented 13%
and 10% of net sales.
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Accounts Receivable |
Accounts Receivable:
Accounts receivable are unsecured, are recorded at net realizable value, and do not bear interest. The Company makes judgments as to its ability to collect outstanding receivables based upon significant
patterns of collectability, historical experience, and management’s evaluation of specific accounts and will provide an allowance for credit losses when collection becomes doubtful. The Company performs credit evaluations of its customers’
financial condition on an as-needed basis. Payment is generally due 30 days from the invoice date and accounts past 30 days are individually analyzed for collectability. When all collection efforts have been exhausted, the account is written off against the related
allowance. To date, the Company has not experienced any write-offs or significant deterioration of the aging of its accounts receivable, and therefore, no allowance for doubtful accounts was considered necessary as of September 30, 2023, or December 31, 2022. As of September 30, 2023, three customers represented 17%, 17% and 11% of the accounts receivable balance. As of December 31, 2022, two customers represented 15% and 10% of the total accounts receivable balance.
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Inventories |
Inventories: Inventories represent finished goods purchased from the Company’s suppliers and are recorded as the lower of cost or net realizable value using the first-in, first-out
method. Overhead is allocated to manufactured finished goods inventory based on the normal capacity of the Company’s production facilities. Abnormal amounts of overhead, if any, are expensed as incurred. Inventories consisted of the following:
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Loss per Share |
Loss per Share: Basic
loss per share is computed based on the net loss for each period divided by the weighted average number of common shares outstanding. See Note 3 – Stockholders’ Equity below for additional disclosures.
Diluted earnings per share is computed based on the net loss
allocable to common stockholders for each period divided by the weighted average number of common shares outstanding, increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been
issued, and reduced by the number of shares the Company could have repurchased from the proceeds from issuance of the potentially dilutive shares. Potentially dilutive shares of common stock include shares underlying outstanding convertible
preferred stock, warrants, stock options and other stock-based awards granted under stock-based compensation plans.
The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be
anti-dilutive as of the end of each period presented:
The following table reconciles reported net loss with reported net loss per share for each of the three and nine months ended September 30:
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Subsequent Events |
Subsequent Events: The Company evaluates events through the
date the consolidated financial statements are filed for events requiring adjustment to or disclosure in the consolidated financial statements. See note 10 – Subsequent Events for additional disclosures.
|
Nature of Business and Basis of Presentation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Business and Basis of Presentation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consisted of the following:
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Potential Shares of Common Stock not Included in Diluted Net Loss Per Share |
The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be
anti-dilutive as of the end of each period presented:
|
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Reconciliation of Reported Net Loss with Reported Net Loss Per Share |
The following table reconciles reported net loss with reported net loss per share for each of the three and nine months ended September 30:
|
Stock-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Classification of Stock-Based Compensation Expense |
The following table presents the classification of stock-based compensation expense
recognized for the periods below:
|
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Weighted Average Assumptions used in Black-Scholes Option Pricing Model |
The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the three and nine months
ended September 30, 2023 and 2022:
|
Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-Sale Marketable Securities Measured at Fair Value on Recurring Basis |
The available-for-sale marketable securities primarily consist of investment-grade, U.S.-dollar-denominated fixed and floating rate debt, measured at
fair value on a recurring basis.
|
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Roll-Forward of Fair Value of Level 3 Warrants |
The following is a roll-forward of the fair value of the Level 3 warrants:
|
Revenue Recognition (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Abstract] | ||||
Expected timing of satisfaction, period | 1 year | 1 year | ||
Sales Revenue [Member] | Customer Concentration Risk [Member] | Revenue Recognized over Time [Member] | Maximum [Member] | ||||
Revenue, Performance Obligation [Abstract] | ||||
Percentage of net sales | 1.00% | 1.00% | 1.00% | 1.00% |
Sales Revenue [Member] | Customer Concentration Risk [Member] | International [Member] | Revenue Recognized over Time [Member] | Maximum [Member] | ||||
Revenue, Performance Obligation [Abstract] | ||||
Percentage of net sales | 5.00% | 5.00% | 5.00% | 5.00% |
Fair Value of Financial Instruments, Available-for-Sale Marketable Securities Measured at Fair Value on Recurring Basis (Details) - Recurring [Member] - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Available-for-sale marketable securities [Abstract] | ||
Marketable securities | $ 0 | $ 569 |
Level 1 [Member] | ||
Available-for-sale marketable securities [Abstract] | ||
Marketable securities | $ 0 | $ 569 |
Fair Value of Financial Instruments, Roll-Forward of Fair Value of Level 3 Warrants (Details) - Warrant [Member] - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Jan. 04, 2023 |
Sep. 30, 2023 |
|
Roll-Forward of Fair Value of Level 3 Warrants [Roll Forward] | ||
Beginning balance | $ 6,868 | $ 7,623 |
Change in fair value | 755 | |
Warrants reclassified to equity | (7,623) | |
Ending balance | $ 7,623 | $ 0 |
Operating Leases (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
$ / ft²
ft²
| |
Operating Leases [Abstract] | |
Area of property leased under operating lease | ft² | 23,000 |
Monthly rent and common area maintenance charges | $ | $ 32 |
Annual base rent (per square foot) | 10.5 |
Minimum [Member] | |
Operating Leases [Abstract] | |
Annual increase per square foot (in dollars per square foot) | 0.32 |
Maximum [Member] | |
Operating Leases [Abstract] | |
Annual increase per square foot (in dollars per square foot) | 0.34 |
Finance Lease Liability (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2020 |
---|---|---|
Finance Lease Liability [Abstract] | ||
Value of finance lease equipment | $ 98 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, Plant and Equipment, Net | |
Principal amount under lease agreement | $ 93 | |
Implied interest rate | 7.50% | |
Finance lease term | 39 months |
Commitments and Contingencies (Details) - SeaStar Medical Holding Corporation [Member] - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Dec. 27, 2022 |
Sep. 30, 2023 |
|
Commitments and Contingencies [Abstract] | ||
Milestone payments | $ 450 | |
Payment period after achievement of milestone event | 30 days |
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