Nuwellis, Inc.

Good day and welcome to the Novelis Inc. 4th Quarter 2021 Earnings Call. At this time, all participants are in a lesson-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touchtone telephone. I would now like to turn the conference over to your host, Mr. Matt Baxo.

Thank you, operator. Thank you for joining today's conference call to discuss New Ellis corporate developments and financial results for the fourth quarter ended December 31st, 2021. In addition to myself, with us today are Nestor Jaramillo, the company's president and CEO, and George Montague, the company's CFO. At 8 a.m. Eastern today, New Ellis released financial results for the quarter ended December 31st, 2021. If you have not received New Ellis earnings release, please visit the investors page of the company's website. During this conference call, the company will make forward-looking statements except for historical information mentioned during the conference call. Statements made by the management of New Ellis are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that are based on management's beliefs, assumptions, expectations, and information currently available to management. Those risks include but are not limited to risks associated with the possibility that the company may not be able to excuse me, that possibly that the company may be unable to grow revenue in the future quarters, that the company may not be able to successfully commercialize its products, the possibility that it may be unable to raise the funds necessary for the company's anticipated operations and the other risk factors described under the cash and risk factors and elsewhere in the company's filings with the Securities Exchange Commission. The company believes that these forward-looking statements are reasonable as of today's date. However, you should not place under reliance on forward-looking statements because They speak only as of the date when made. By providing this information, the company undertakes no obligation to update or revise any projections or forward-looking statements, whether because of new information, new developments, or other circumstances that might subsequently arise. You should review the cautionary statements and discussions of risk factors included in the company's press release issued today, the company's latest 10-K subsequent reports, as well as its other filings with the Securities and Exchange Commission under the titles Risk Factors or Cautionary Statements related to the forward-looking statements for additional discussion of risk factors that could cause actual results to differ materially from management's current expectations. Those discussions regarding risk factors, as well as the discussion of forward-looking statements in such sections, are incorporated by reference in the call and are readily available on the company's website. With that said, I will now turn the call over to Nesta Jaramillo, who is also CEO.

Thank you, Matt, and good morning, everyone. Welcome to New Orleans' fourth quarter 2021 earnings call. 2021 was another challenging year for the global healthcare system due to the ebb and flow of the COVID-19 pandemic. Although the world has dramatically changed, our business model and fundamentals have not. We remain optimistic about the potential of our business and the value we can bring to our customers, investors, and patients we serve. Despite the setback experienced in the third and fourth quarter, we generated 2021 total revenue of $7.9 million, representing growth of 6.5% compared to 2020 and 44% relative to the pre-pandemic period of 2019. We believe our growth relative to pre-pandemic levels provides a useful representation of the progress implemented in our strategy as we have expanded meaningfully into the pediatric and critical care markets as we advance the Aquadex therapy towards the standard of care in treating fluid overload, which is the leading cause of hospitalizations for heart failure and re-hospitalizations after cardiac surgery. Despite the volatility that the COVID pandemic has introduced into the healthcare market, our growth over the last two years illustrates the strides we have made positioning New Orleans as the primary provider of ultrafiltration therapy for cardiologists, nephrologists, hospitalists, intensivists, cardiac surgeons, and pediatricians who treat patients suffering from fluid overload. Now, turning to our quarterly results. The company reported fourth quarter total revenue of $1.6 million, representing a decline of 19.6% compared to the prior year and 11% below the third quarter of 2021. Compared to the fourth quarter of 2020, the decrease was primarily due to lower U.S. sales of circuits, hospital budgetary constraints, and a reduction in elective procedures due to COVID headwinds. When looking at the sequential trends, pediatric posted positive growth due to increase in patient census in numerous accounts following an uncharacteristically low third quarter. Heart failure also show up modestly while critical care was down due to a combination of fewer new accounts, order timing, cancellation of elective procedures, and reduced utilization. While circuit cells are ultimately tied to utilization, order timing can play a role in growth comparisons. More specifically, the 49.5 revenue growth versus prior year reported during the fourth quarter of 2020 came from a near doubling of U.S. circuits revenue due to large orders from key customers. U.S. circuit sales during the fourth quarter of 2021 fell short of this record level but were still 45% above the fourth quarter of 2019. During the quarter, Various customers have expressed concerns regarding supply chain disruptions, forcing them to use more of their budget dollars to stockpile higher volume supplies with longer leads, leaving less funding for items used less frequently, which we believe could also impact order timing. We also believe performance in the fourth quarter was negatively impacted by ongoing hospital staffing shortages which has impacted the scheduling of elective procedure volumes. And last, COVID prompted some hospitals to limit nonessential public access, either to decrease the risk of COVID transmission or to focus efforts on treating critically ill patients. This restricted our ability to meet with customers, which is consistent with prior surges in COVID cases. We believe once elective procedures volumes recover and hospital budget constraints ease, positive sales growth will resume. We recently implemented a new sales management system aimed at increasing sales force productivity and customer success through improved account selection, adoption, utilization, and retention. We have successfully applied this approach in our largest accounts, which we believe contributed to increased utilization and faster overall revenue growth compared to our broader account base. Moving forward, we are looking to extend this strategy to our broader customer base and are confident in our approach, given our proven success at some of the most prestigious hospitals in the country. The sales organization has been trained on this approach, and we look forward to sharing our progress as it gets implemented. There are three other growth catalysts that should positively impact performance in 2022, while also advancing Aquadex to the standard of care over the long term. These growth catalysts relate to reimbursement, clinical evidence, and product development. I will start with reimbursement. A Category 3 CPT code for the use of therapeutic ultrafiltration became effective in January of 2022. This CPT code expands reimbursement to include facility and professional fees for outpatient procedures, and it supplements DRG-based reimbursement for inpatient care by allowing health providers to also seek reimbursement under a professional fee. We anticipate that this new code will lead to increased utilization of the Aquadex therapy for heart failure patients, and in so doing, will capture health economics data to obtain a permanent CPT reimbursement that adequately and fairly compensates healthcare providers and facilities when using ultrafiltration. In January, our sales organization started meeting with physicians, clinicians, and reimbursement quarters at accounts to inform them of these changes and to provide them with our new updated reimbursement guide. In addition, we continue to work with a third-party knowledge partner to implement a patient access program hotline to assist customers with prior authorizations claim denials, and education on the use of a new Category 3 CPT code. Regarding our clinical efforts, we are making progress on a number of fronts as we continue to build a dossier of evidence demonstrating our product's therapeutic and economic value and drive recognition in the medical society's guidelines. Specifically, we recently announced the initiation of the reverse HF, randomized control multicenter trial. This trial is designed to validate clinical outcomes and economic value of the AQUADEX therapy for the treatment of fluid overload in patients with worsening heart failure. We are confident that the results of this trial will help this therapy be considered as the first-line treatment option and standard of care for rehospitalized heart failure patients. We expect to obtain institutional review board, also known as IRB approvals, and begin enrolling patients in this pivotal trial during the second quarter. Additionally, abstracts covering the use of the Aquadex in pediatric patients who suffer from kidney disease have been accepted for presentation at next week's international conference on advances in critical care nephrology, and in next month's Pediatric Academic Society's meeting. Lastly, we're very excited about an upcoming peer-reviewed journal article demonstrating the benefit to mortality and morbidity when using Aquadex early in the treatment pathway for critical care patients undergoing open heart surgery. The third growth catalyst is on the product development front. You may recall that our development partner, Coronas Biomedical Technologies Corporation, was awarded a $1.7 million grant from the National Institute of Health during the third quarter of 2021 to support the co-development of a pediatric continuous renal replacement therapy device. Development of this product began in earnest during the fourth quarter. and we achieved our initial product development milestones during which we demonstrated the feasibility of our initial design. When put it all together, we are encouraged by our progress in executing our strategy through our 2021. We obtained category three reimbursement. We have strengthened the clinical evidence demonstrating improved health and economic outcomes. and we have a compelling design for a pediatric dedicated device to expand our current pediatric indication. Our organization and its employees continue to show adaptability and resilience amid changes, market conditions, and customer requirements. And we ultimately succeeded in helping more patients benefit from our therapy during the year. We expect that once the healthcare environment begins to normalize, our strategy will yield a resumption of positive revenue growth. Moving forward, we will continue to execute on our growth strategy by expanding commercial relationships, building additional supporting clinical evidence, establishing a firm foundation for a permanent reimbursement, and launching differentiated products to ultimately drive sustainable growth. Now, I would like to turn the call over to George to discuss the financial statement.