Nuwellis, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Thank you, operator.

Thank you for joining today's conference call to discuss Nuwellis' corporate developments and financial results for the second quarter ended June 30, 2026. Joining me today are Mike McCormick, Nuwellis' newly appointed President and Chief Executive Officer, and Carisa Schultz, Chief Financial Officer. Earlier today, Nuwellis released its financial results for the second quarter of 2026. If you have not received the earnings release, please visit the investor page on the company's website. During this conference call, the company will be making forward-looking statements. All forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. Any statements that relate to our expectations or predictions of future events and marketing trends, as well as our estimated results or performance, are forward-looking statements. All forward-looking statements are based upon our current estimates and various assumptions.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon currently available information, and the company assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. Please refer to the cautionary statements and discussion of risk in the company's filings with the Securities and Exchange Commission, including the latest 10-K. With that, I would now like to turn the call over to Mike.

Thank you, Leah, and good morning, everyone. I am pleased to be joining you for my first earnings call as CEO of Nuwellis. I would like to begin by thanking John Erb for his leadership and for the work he has done to position the company for its next phase. John has transitioned his executive role. However, he still remains as chairman of our board. Personally, having served on the board since 2023 and closely working with the company on its commercial strategy, I enter this role with a clear understanding of Nuwellis' strengths and where greater focus can create meaningful value. We have established a commercial therapy addressing an important clinical need, a growing installed base, strong relationships with leading institutions, and a differentiated position in precision fluid management. My mandate is to turn those strengths into a growing, scalable, and financially disciplined business.

We will do that by prioritizing three essential objectives. First, we intend to increase Aquadex utilization and recurrent circuit revenue by concentrating on accounts and clinical pathways where we can establish sustained use. Second, we intend to build our position in pediatrics and expand our presence in adult critical care, two areas where we see the strongest combination of clinical relevance and commercial traction as well as long-term growth opportunities. Third, we will endeavor to strategically broaden our cardiorenal platform through technologies and collaborations that complement the Aquadex, strengthen our existing customer relationships, and have a clear path toward commercial value. We believe the second quarter results showed progress across all of these priorities. An important commercial indicator of our continued expansion is the installed base.

During the second quarter, we sold 9 consoles, bringing the first half total to 24, compared with only 5 in the first half of 2025. Each of those placements expands the opportunity for recurrent circuit utilization. Our focus is now on helping all of those accounts translate the placements into sustained clinical use through training, protocol development, and early identification of appropriate patients. We will measure progress not only by the consoles placed but by the number of accounts achieving consistent utilization, the number of patients treated, and recurring circuit revenue generated from the installed base. Pediatrics remained the clearest example of this strategy in action. During the quarter, we expanded our presence in a major South Carolina healthcare system, and we expanded into two new states with the first pediatric programs in their history. We opened in Michigan and also in Wisconsin.

We continue to strengthen the educational foundation supporting pediatric adoption. At the International Society for Heart and Lung Transplantation 46th annual meeting and scientific sessions, clinicians from the University of Iowa presented a case that highlighted the Aquadex use in managing recurrent fluid overload in a very complex pediatric cardiac patient. We also marked five years of support for the Pediatric Cardiac Critical Care Consortium, or PC4, a collaborative network focused on improving outcomes for critically ill pediatric cardiac patients. From a product standpoint, we continue to enhance the Aquadex platform with software updates designed to improve workflow efficiency, support treatment precision, and reduce barriers to therapy use. We also completed a pre-submission meeting with the FDA regarding a proposed expansion of the Aquadex indication for patients from 20 kilograms and above, which it is today, to patients weighing 5 kilograms and above.

This meeting provided greater clarity regarding the proposed regulatory pathway. That includes bench testing, toxicology assessments, and supporting pediatric clinical evidence. We plan to submit the proposed label expansion to the FDA in the fourth quarter of this year. Together, these developments create a focused pediatric growth strategy, expand our commercial footprint, increase utilization within existing programs, improve products for smaller patients, and pursue a regulatory pathway that can meaningfully broaden the population that we serve. Critical care represents another significant opportunity for us. We recently announced the strategic development initiative to expand the capabilities of the Aquadex into broader extracorporeal therapy platform. These initiatives include higher flow capabilities designed to support new filtration technologies and expand the potential use of Aquadex in more complex critical care, high-pressure extracorporeal environments.

We are also developing an enhanced user interface called SmartView that will make the Aquadex easier to use, improve clinical workflows, and support greater utilization. Together, these development programs are intended to broaden the capabilities of Aquadex and to strengthen our position in critical care. During the quarter, more than 280 physicians attended a critical care cardiac education summit that included hands-on training with the Aquadex. That created one of the largest concentrated physician training initiatives in the company's history. Our next step is to connect that growing clinical awareness with focused account development. We see an opportunity with our broader cardiorenal strategy to build from the same customer relationships and area of clinical expertise. The acquisition of Rendiatech in the first quarter of 2026 added Clarity Prime, an automated kidney function monitoring system to our development portfolio.

During the second quarter, our focus was on product development and technology integration and commercial planning. Aquadex gives clinicians the ability to remove excess fluid with precision. Clarity Prime has the potential to provide earlier and more continuous insights, allowing early detection of changes in kidney function. We expect this important Clarity Prime product to launch in 2027. Together, these technologies support stronger solutions to cardiorenal care in which clinicians can make better-informed decisions about fluid balance and kidney function. To further broaden our product offering and leverage our commercial infrastructure, we are evaluating complementary pediatric technologies, including pediatric urine output monitoring and pediatric non-invasive cardiac monitoring. Our approach will remain selective and capital efficient. We expect to only pursue technologies and collaborations that strengthen our position in pediatrics and critical care, complement the customer relationships we already have, and create a clear clinical and commercial benefit.

During the quarter, we also received a notice of allowance from the United States Patent and Trademark Office for our dual lumen midline catheter technology. This intellectual property could support less invasive peripheral access for extracorporeal therapies, and it strengthens the technology foundation surrounding our fluid management platform. That patent, in fact, issued in mid-July. Excuse me. Capital discipline will remain central to the way that we operate. We intend to concentrate resources around Aquadex utilization, the proposed pediatric label expansion, focused development of Clarity Prime, and selected strategic opportunities that directly support our strategy. Nuwellis has an established commercial foundation, differentiated strength in pediatrics, a growing traction in critical care, and a focused strategy to expand our role in cardiorenal care. While we do not provide formal financial guidance, our objectives remain clear.

Deliver consistent double-digit revenue growth, maintain strong gross margins, increase our installed base and recurring circuit utilization, and advance our highest priority development programs to reduce and reduce cash utilization over time. In addition, through June financing and subsequent to the end-of-the-quarter financing events, we raised approximately $12.7 million in gross proceeds. That included $6 million in June. That was a private placement, and subsequent to the end of the quarter, we raised an additional $3.4 million from a registered direct offering and $3.3 million from warrant exercises. These actions strengthened our cash position, and it simplified our capitalization structure. With that, I am pleased to turn the call over to Carisa Schultz, who is our Chief Financial Officer, for a detailed review of our financial results.

Carisa? Thank you, Mike, and good morning.