Nuwellis, Inc.

Good morning and welcome to the New Wales first quarter 2023 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one or a telephone keypad. To withdraw your question, please press star then two. Please note that this event is being recorded. I would like now to turn the conference over to Ms. Vivian Gilmartin, Investor Relations at Gilmartin Group. Please go ahead.

Thank you, Operator. Thank you, everyone, for joining us for today's conference call to discuss New Orleans' corporate development and financial results for the first quarter ended March 31, 2023. In addition to myself, with us today are Nestor Jaramillo, New Orleans' President and CEO, Lynn Blake, CFO, We also have Dr. John Jeffries, New Orleans' chief medical officer, and John Kowalczyk, the company's senior vice president of sales and marketing. At 8 o'clock Eastern today, New Orleans released financial results for the quarter ended March 31st, 2023. If you have not received New Orleans' earnings press release, please visit the investor's page on the company's website. During this 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 expectations or predictions of future events and market 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 current 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 in discussion of risk in the company's filings with the SEC, including the latest 10-K and subsequent reports. With that, I would now like to turn the call over to Nestor.

Thank you, Vivian, and good morning, everyone. Welcome to New Orleans' first quarter 2023 earnings conference call. On today's call, I will provide an overview of our first quarter performance and give an update on our strategic initiatives. Our chief financial officer, Lynn Blake, will then provide detailed commentary on the financial results. Before I open the call up for questions, followed by my closing remarks. Dr. John Jeffries, our chief medical officer, and John Kowalczyk, our senior vice president of sales and marketing, are also on today's call and will be available during the question and answer section. Turning to our first quarter results, in the first quarter of 2023, New Orleans generated $1.8 million in revenue, a decrease of 5% over the first quarter of 2022. By this moment, first quarter 2023 revenue in heart failure increased 21% over the same period last year, while pediatric and critical care revenue declined 28% and 4% respectively. In heart failure, which in the last six months has had a bolus of support from multiple peer review publications, the 21% revenue growth in Q1 follows similar strong year-over-year heart failure revenue growth of 47% in Q4 of 2022. We attribute the growth in heart failure to the steady flow of positive peer-reviewed publications and clinical evidence bolstering the activities of the sales and marketing organization, which is now fully staffed in all territories. We remain committed to driving market penetration in our organization ultrafiltration treatment earlier in the hospital admission cycle and across multiple hospital specialty units. Key to the execution is driving awareness among clinicians and providers to understand that ultrafiltration is the next logical step in the care pathway. In other words, patients from whom oral or intravenous diuretics are not effective should immediately move to ultrafiltration therapy which is a mechanical fluid removal solution, and as such, is more controllable, precise, and predictable. This is the message that our field organization is now delivering, and based on the heart failure segment results for the past two quarters, the message is having a positive effect. In pediatric, we remain well-positioned and excited about our opportunities. which include the expected IDE approval of our new pediatric-dedicated continuous renal replacement therapy device in the first quarter of 2024. The softer-than-expected results in the first quarter were driven by lower patient census in key accounts with fewer hospitalizations of babies born with kidney disease. Census-driven factors are not new to our business. having seen this trend in the past with similar decline in the third quarter of 2021. While changes in hospital census are difficult to predict, we are confident that we have all the right measures in place to execute on our pediatric growth strategy, including increasing the use of Aquadex ultrafiltration system to treat other pediatric conditions such as heart failure and cardiothoracic surgery. Today, we have 30% more pediatric centers using Aquadex than in the same quarter last year. Overall, our Q1 revenue does not reflect the positive activities that make us excited about the future of New Orleans, which include, number one, developments in the number of hospitals to use Aquadex, not only for treating heart failure and critical care patients, but expanding its use to other hospital specialty units, including liver disease and left ventricular assist patients. And number two, steady product development progress on our pediatric device aim at saving lives and increasing the quality of life for neonates and small children with kidney disease. We believe this device will be a game changer in pediatric kidney treatment. Now I'd like to provide additional updates on our top strategic initiatives aimed at making Aquadex the standard of care for fluid overload patients resistant to diuretics. In the first quarter, we were pleased to announce a peer-reviewed publication advocating the use of ultrafiltration for heart failure patients resistant to diuretics. The publication title, Extracorporeal Ultrafiltration for Acute Heart Failure, was featured in the Cardiorenal Medicine Journal and authored by Dr. Amir Kasori and contributing nephrologist physicians. The publication includes a review of a pool of data from seven randomized controlled trials of ultrafiltration with a total of 771 patient participants. First, the authors outlined the scale of the clinical burden of heart failure. Approximately 6.5 million adults in the United States have heart failure, and one in eight deaths include heart failure as a contributing cause of mortality. Nearly 40 to 45 percent of patients who develop heart failure die within five years of diagnosis. Heart failure has the highest rehospitalization rate among all medical conditions. with 24% patients readmitted within 30 days and 50% of patients readmitted within six months. And the annual cost of care for patients with heart failure is estimated at $60 billion in the US, with the hospital-related expenses accounting for almost 70% of the total cost. The authors then highlighted the clinical application and value of ultrafiltration. The most important findings were as follows. Predictable, adjustable, and more efficient fluid removal with ultrafiltration compared to diuretics without clinical adverse impact on renal function, which leads to a reduction in hospital readmissions and related healthcare expenses. Applicability of ultrafiltration therapy in other clinical settings such as cardiac surgery, burn, and other specialty units where active and prompt fluid volume management is of utmost importance. And expanding the use of ultrafiltration into outpatient centers and other ambulatory settings to treat patients before their symptoms become severe and require hospital admissions. We have been and plan to continue using this peer review study to further expand our efforts and grow the heart failure segment of our business. We also continue to make progress on our reverse heart failure trial with 11 sites activated and a two-fold increase in the number of enrolled patients since last quarter. As a reminder, the primary effectiveness endpoint of the reverse heart failure trial will evaluate mortality and heart failure events within 90 days as a comparison between Aquadex ultrafiltration therapy and intravenous loop diuretics. We look forward to updating you on additional clinical data supporting the use of ultrafiltration using Aquadex as a mechanical fluid removal therapy to treat new indications, including liver disease and left ventricular assist device implantation. Turning to our product development initiatives, we remain on track with the development of our pediatric continuous renal replacement therapy device, and we continue to anticipate IDE approval in the first quarter of 2024. We, along with physicians, namely pediatric nephrologists, are beyond excited about this product. as it addresses the unmet needs of the pediatric patient population and could significantly increase the quality of life of neonates and small children with kidney malfunctioning, kidney issues, or those born without kidneys. All of them suffer from life-threatening fluid overload. As I mentioned earlier, we believe the device would be a game changer in pediatric treatment. In conclusion, Our team remains focused on leveraging our clinical data to steadily build awareness and drive market penetration of our Aquadex ultrafiltration system to treat fluid overload patients resistant to diuretics. We are addressing a two plus billion dollar market with opportunities across multiple inpatient specialty units and outpatient service centers. Our team is highly engaged in executing on our growth agenda as we continue to improve the lives of patients and support caregivers and clinicians who are battling day in and day out the limitations of diuretics, which is the current standard of care. For fluid-overloaded patients resistant to diuretics, we are confident that a mechanical fluid removal alternative using the Aquadex Ultrafiltration System is the solution. Now, I would like to turn the call over to our Chief Financial Officer, Lynn Blake, to discuss our Q1 financial results.