Nuwellis(NUWE)2024-11-12 21:11Financial Performance - Net sales for Q3 2024 were $2,367,000, a decrease of 1.9% compared to $2,412,000 in Q3 2023[5] - Gross profit increased to $1,656,000 in Q3 2024, up 19.9% from $1,381,000 in Q3 2023[5] - Operating expenses decreased from $4,545,000 in Q3 2023 to $3,188,000 in Q3 2024, a reduction of approximately 29.9%[5] - The company reported a net income of $2,358,000 for Q3 2024, compared to a net loss of $3,370,000 in Q3 2023[5] - Basic and diluted net income per share for Q3 2024 was $1.74, a significant improvement from a loss of $63.27 per share in Q3 2023[5] - For the nine months ended September 30, 2024, net sales increased to $6.418 million, up 1.7% from $6.313 million in the same period in 2023[124] - Net loss attributable to common shareholders for the nine months ended September 30, 2024, was $(9,156,000), an improvement from $(14,700,000) in the same period of 2023[33] - Basic and diluted loss per share for the three months ended September 30, 2024, was $1.74, significantly better than $(63.27) for the same period in 2023[33] Assets and Liabilities - Total current assets decreased from $8,209,000 on December 31, 2023, to $5,494,000 as of September 30, 2024, representing a decline of approximately 33.1%[4] - Total liabilities decreased from $6,559,000 on December 31, 2023, to $3,549,000 as of September 30, 2024, a reduction of approximately 45.9%[4] - The company’s accumulated deficit increased to $(297,323,000) as of September 30, 2024, from $(287,626,000) on December 31, 2023[4] - Cash and cash equivalents decreased from $3,800,000 on December 31, 2023, to $1,907,000 as of September 30, 2024, a decline of approximately 49.9%[4] - The company’s additional paid-in capital increased to $300,546,000 as of September 30, 2024, up from $290,647,000 on December 31, 2023[4] Cash Flow and Financing - Nuwellis, Inc. experienced a net cash used in operating activities of $8,087,000 for the quarter ending September 30, 2024, compared to $15,183,000 for the same period in the previous year[9] - The company reported a net decrease in cash and cash equivalents of $1,893,000 for the quarter ending September 30, 2024, with cash and cash equivalents at the end of the period totaling $1,907,000[9] - Cash provided by financing activities was $6.2 million for the nine months ended September 30, 2024, up from $2.1 million in the same period in 2023, reflecting increased financing efforts[150] - The company closed a public offering on April 30, 2024, raising approximately $2.7 million from the sale of 240,571 shares at a price of $8.40 per share[15][17] - A registered direct offering on July 24, 2024, generated approximately $2.0 million from the sale of 469,340 shares at a price of $4.24 per share[17][19] - The gross proceeds from the offering on August 26, 2024, were approximately $892,000 from the sale of 483,351 shares at a price of $1.8450 per share[23] Cost Management - The company has reduced its monthly cash burn rate by approximately 40% through various cost-cutting measures, including job eliminations and salary reductions[24] - Stock-based compensation expense for the quarter ending September 30, 2024, was $374,000, down from $513,000 in the same quarter of the previous year[9] - Selling, general, and administrative expenses decreased by 21.2% to $2.702 million for the three months ended September 30, 2024, compared to $3.428 million in the same period in 2023[122] - Research and development expenses for the three months ended September 30, 2024, were $486,000, down 56.5% from $1.117 million in the same period in 2023[122] Business Strategy and Operations - Nuwellis, Inc. has focused on developing the Aquadex FlexFlow® and Aquadex SmartFlow® systems for ultrafiltration therapy, targeting patients with fluid overload[10] - The company underwent a name change from CHF Solutions, Inc. to Nuwellis, Inc. in April 2021 to reflect its expanded customer base[11] - The company must succeed in expanding the adoption of the Aquadex System to achieve profitability, which includes training personnel and effective marketing[14] - The company is currently evaluating the impact of ASU 2023-07 on its disclosures, which requires expanded segment reporting effective for fiscal 2024[33] - The company is assessing the impact of new SEC rules on climate-related disclosures, effective for fiscal years beginning on or after January 1, 2027[35] Customer and Revenue Insights - For the three months ended September 30, 2024, two customers represented 12% and 10% of net sales, compared to 21% and 11% for the same period in 2023[27] - International revenue represented 3% of net sales for the three months ended September 30, 2024, compared to 5% for the same period in 2023[37] - Revenue from extended service plans represents less than 1% of net sales for the three and nine months ended September 30, 2024[39] - The company sells products primarily through a direct salesforce in the U.S. and through specialty healthcare distributors internationally[37] Compliance and Reporting - The company has identified two material weaknesses in controls over financial reporting as of September 30, 2024, which management plans to address[156] - The company has established a full valuation allowance for its U.S. and foreign deferred tax assets due to uncertainty in generating enough taxable income[77] - The company has not established an allowance for credit losses as of September 30, 2024, due to no write-offs or deterioration in accounts receivable[102] - The company has not experienced any write-offs or significant deterioration in accounts receivable, maintaining no allowance for doubtful accounts as of September 30, 2024[28]