Nuwellis, Inc.

Good day and thank you for standing by. Welcome to the New Wellness, Inc. First Quarter 2022 Earnings. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to Matt Baxo. Please go ahead.

Thank you, operator. Thank you for joining today's conference call to discuss New Orleans corporate developments and financial results for the first quarter ended March 31st, 2022. 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 Orleans released financial results for the quarter ended March 31st, 2022. If you have not received New Orleans' earnings release, please visit the investors page on the company's website. During this conference call, the company will be making 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 1925. 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 including but are not limited to risks associated with the possibility that the company may be unable to grow revenue in future quarters, that the company may not be able to commercialize its products successfully, 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 caption risk factors and elsewhere in the company's filings with the Securities and 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 the 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 in discussion 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 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 this call and are readily available on the company's website. With that said, I would now like to turn the call over to Nestor Jaramillo, New Orleans' CEO.

Thank you, Matt, and good morning, everyone. Welcome to New Orleans' first quarter 2022 earnings call. Revenue for the first quarter came in at $1.93 million, representing 17% sequential growth from the fourth quarter of 2021 and essentially even with the prior year period. Sales early in the quarter were negatively impacted by COVID-19, which limited elective procedure volumes, hospital access, and funding priorities. However, COVID-19's impact subsides as we progress through the quarter, allowing the sales trajectory to improve. Sales of consumables proved particularly strong in the first quarter, driven primarily by increased utilization of the Aquadex therapy at our largest accounts and favorable order timing. Reviewing performance by customer segment, both critical care and pediatric posted strong growth versus the prior quarter, fueled by higher consumable sales volumes across many of our current accounts. However, both of these segments had lower total revenue than the prior year period due to fewer console placements in the first quarter of 2022. The shortfall in consoles was offset by strong hard failure growth, which benefits from increased utilization and order timing. I would like to point out that Critical Care continues to be our largest customer segment and represent nearly half of our revenue, followed by pediatrics and then heart failure, thereby providing an indication of the success of our expansion strategy, which we implemented in late 2019 prior to the pandemic. On our previous earnings call in March, I mentioned the following four growth catalysts we expect to positively impact performance in 2022. One, improved reimbursement, two, additional compelling clinical evidence, three, a new sales management system, and four, product development. Now I would like to speak on each of them, starting with reimbursement. Effective January 1st, 2022, the American Medical Association granted a new Paragory 3 current procedure terminology code or CPT code for the therapeutic ultrafiltration procedure. This code is the 0692T. This code supplements DRG-based reimbursement for inpatient care by allowing healthcare providers to also seek reimbursement under a professional fee. Prior to this code, physicians treating patients suffering from fluid overload in the inpatient or outpatient setting did not have an appropriate CPT code to bill for treating their patients with the Aquadex and often did not receive adequate reimbursement. In addition, this CPT code expands reimbursement to include facility and professional fees for outpatient procedures. To date, reimbursement in the outpatient setting has been an important reason for not using Aquadex to treat patients in an ambulatory setting. We anticipate this new code will lead to increased utilization of Aquadex therapy, and in so doing, will allow for tracking of Aquadex utilization and costs throughout Medicare and commercial payers' claims databases. in support of obtaining a permanent CPT code that adequately and fairly compensates healthcare providers and facilities when using ultrafiltration. To support patients and customers with access to the AQUADEX, we have proactively established a third-party patient access program to answer questions related to the new CPT code and general reimbursement questions. Throughout 2022, we will continue to work to establish appropriate reimbursement for the use of Aquadex in support of our four-pillar growth strategy, which are reimbursement, clinical evidence, sales productivity, and product development. While it is too soon to quantify the benefit from improved reimbursement, it has generated considerable interest from our customers. Switching to our clinical evidence efforts, we continue to make progress building a dossier of evidence demonstrating our product's therapeutic and economic value that will drive utilization and recognition in the medical society's guidelines. More significantly, we receive independent institutional review board, or IRB, approval for the trial protocol of our reverse HF randomized control multicenter trial. This trial is designed to validate clinical outcomes and the economic value of 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 ultrafiltration be considered as the first-line treatment option and standard of care for heart patients who are otherwise refractory to the benefits of diuretics. We are now working to initiate sites and begin enrolling patients in this pivotal trial during the second quarter of 2022. Additionally, abstracts covering the use of Aquadex in pediatric patients who suffer from kidney disease were recently were presented at two academic conferences. We're also awaiting publication of a peer-reviewed journal article demonstrating the clinical benefit to mortality and morbidity when using the Aquadex system earlier in the treatment pathway for critical care patients undergoing open-heart surgery. The third growth catalyst has to do with sales productivity. Following the broad rollout of our new sales management system, we are encouraged by the progress already made in the first quarter of 2022. Specifically, it has enabled our sales reps to have higher quality interactions with key stakeholders at the individual account level, which we believe played a vital role in delivering strong quarterly results. we added our first customer resulting from the relationship with Premier Group Purchasing Organization that we entered. We continue to make inroads with additional Premier accounts and currently have several customer product trials underway. The last growth catalyst I want to highlight is the progress we have made on product development, specifically we continue to make advances on both a new dual lumen catheter and a dedicated pediatric continuous renal replacement therapy device, both of which remain on track. In summary, we continue to advance in executing our strategy with the ultimate goal of making the Aquadex therapy the standard of care for fluid management in patients that are resistant to diuretics. We continue to expand commercial relationships, establish the foundation for appropriate reimbursement, build supporting clinical evidence, and develop differentiated products. Like many businesses, we have been affected by COVID-19, inflationary pressures, a difficult hiring environment, and the time required to develop appropriate reimbursement and clinical activity. As we move past the latest wave of COVID-19 and its impact on hospital infrastructure, we see a strong underlying momentum in our business. In 2022, we will continue to leverage our investments to execute our long-term strategy. Now, I would like to turn the call over to George to discuss the financial statements.