Nuwellis, Inc.

Good morning, everyone, and welcome to the New Ellis fourth quarter and full year 2023 earnings conference call. All participants will be in a listen-only mode. If you need assistance, please send to 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 and then one using a touchtone telephone. To withdraw your questions, you may press star and two. We'd also note today's event is being recorded. At this time, I'd like to turn the floor over to Vivian Cervantes, Investor Relations. Ma'am, please go ahead.

Thank you, Operator. Good morning, everybody. Thank you for joining us on today's conference call to discuss Noelle's corporate developments and financial results for the fourth quarter and full year end of December 31, 2023. In addition to myself, with us today are Nestor Jaramillo, Noelle's President and CEO, Rob Scott, our CFO, and Dr. John Jeffries, our Chief Medical Officer. Mr. Jaramillo is reporting from Boston, where he is attending the 2024 THT Conference. At 8 a.m. Eastern today, Noellis released financial results for the quarter and year ended December 31, 2023. If you have not received Noellis' earnings press release, please visit the Investor Relations 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 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 in these statements. Please refer to the cautionary statements and discussion of risk in the company's filings with the SEC, including the latest 10-K. With that, I would now like to turn the call over to Nestor.

Thank you, Vivian, and good morning, everyone. Welcome to New Orleans' fourth quarter and four-year 2023 earnings conference call. As Vivian mentioned, I'm currently in Boston attending the Technology and Heart Failure Therapeutics Conference, also known as THT. This conference provides attendees a look into the latest heart failure innovations, focusing on device and technology-based treatment for heart failure. This has been a productive meeting for us with much to report. Last night, we hosted a well-attended symposium titled Aquaphoresis, New Technological and Clinical Developments, where four of our key opinion leaders presented three separate significant clinical evidence findings on the safety and efficacy of the Aquadex therapy. Dr. Jeffries will provide more detail later on this call on the symposium. Yesterday, we had one podium presentation showing a statistical significance in several endpoints at 30 days, including fewer patients rehospitalized, fewer days in the hospital due to heart failure readmission, lower rehospitalization rates due to cardiovascular events, fewer rehospitalization days due to cardiovascular events, and fewer patients rehospitalization for cardiovascular events. More detail on this data will be presented tomorrow in a late-breaking clinical trial presentation. This conference has served as a platform for the clinical reestablishment of the superiority of ultrafiltration using New Wellness Aquadex technology as compared to the traditional diuretics. I'm happy to open our call today with an emphasis on how excited we are about the future of New Orleans, despite the difficult environment for micro-cap companies like New Orleans. With our steadfast focus on executing upon our strategic growth initiatives, positive momentum in our business continues to build. 2024 is poised to be another important year for us with key value milestones targeted. This includes continued commercial introduction of our strategic collaborator, Seastar Medical, with their selective sirephoretic device branded Coalimine for pediatric, for treatment of pediatric acute kidney injury where we have an exclusive US license and distribution rights. And also the steady progress on our product pipeline with our new pediatric dedicated CRRT device, branded Vivian. We also look forward to completing our DaVita pilot program in 2024, paving the way for expanded clinical and market access for our Aquadex system. And finally, we expect to complete the IDE submission for Vivian. I will dive deeper into each one of these initiatives momentarily. and provide an overview of our fourth quarter and full year results. Dr. John Jeffries, our chief medical officer, will also discuss recent positive peer-reviewed publications on our Aquadex system, including expanded applications for our therapy to the end-stage liver disease, in addition to providing an update on the clinical evidence presented here at THD conference. Our chief financial officer, Rob Scott, would provide detailed financial results before opening up the call for questions, followed by my closing remarks. I'm pleased to report that we ended 2023 on a high note, recording our highest total quarter revenue in the company history. In the fourth quarter of 2023, Newell has generated $2.6 million in revenue, a 9% increase versus the fourth quarter of 2022, led by an increase in disposable utilization and record quarterly international sales. For the full year 2023, New Orleans generated revenue of $8.9 million, a 4% increase versus full year 2022. While our overall growth might seem modest at 4%, we had a very strong second half of the year, resulting in a 27% revenue growth compared to the first half of the year. Our capital equipment sales faced industry-wide headwinds in the first half of the year. However, we saw a remarkable turnaround in the second half with domestic console sales skyrocketing 207% compared to the first half. This signifies strong potential for future utilization growth. Hospitals navigated budget limitations by utilizing our rental programs resulting in a 23% year-over-year revenue growth, highlighting the flexibility and affordability that we offer. Despite the nursing staff shortages, the number of patients treated with Aquadex therapy increased by 9% from the first half of 2023 to the second half of 2023, demonstrating the value of our therapy provides. Now back to the fourth quarter results. In the fourth quarter, our pediatric customer category once again led the way with 35% growth over the prior year driven by a 28% increase in utilization and a 49% increase in console sales. And we opened four new pediatric accounts. Our failure and critical care sales declined 27% and 7% respectively. For the full year 2023, there was a 7% increase in disposable utilization. The pediatric customer category led with an 11% increase in utilization, followed by critical care with a 9% increase in utilization. Our failure was relatively flat, posting a 1% decline in utilization. Total sales decreased, total consult sales, excuse me, decreased by 21% for the year because of the industry headwinds we faced in the first half of the year. Overall, we continue to drive utilization gains and open new accounts, which reflects continued increase in the number of patients being treated with the Aquadex therapy on an expanding consult footprint. Now turning to our recent commercial developments and expected new product introductions. In early January of this year, We were pleased to announce that we received FDA clearance for an additional dual lumen extended length peripheral catheter, also called DELK. The addition of a new 12 centimeter catheter provides clinicians who treat patients with fluid overload with an additional venous access option to use our Aquadex ultrafiltration system. This new 12 centimeter DELK has the same features as the longer 16 centimeter option, but eliminates the need for trimming when a shorter catheter is needed, ultimately leading to increased patient comfort. The introduction of this new access catheter should be well received with clinicians confirming to us the need for this product. On February 22nd, we were pleased to announce that our strategic collaborator, Seastar Medical, received the Humanitarian Device Exemption, or HDE, from the FDA for its selective cytopheretic device, also called SCD, branded Quilamine, for use in pediatric acute kidney injury patients. We have exclusive U.S. license and distribution rights for Quilamine, and we have begun commercial launch activities at targeted medical centers. with further commercial expansion expected later in the first half of this year. The unique technology behind Qualimmune has demonstrated a 50% reduction in mortality rate in children with potentially deadly hyperinflammation. The addition of this product to our growing pediatric customer category will help save lives of many pediatric patients and further bolster our top-line growth. We also remain encouraged by our own internal product development program as we continue to advance development of our pediatric continuous kidney replacement therapy device branded as Vivian. We, along with many pediatric nephrologists, believe this product will have extremely positive impact on survival and significantly improve the lives of neonates, and small children with kidney malfunction, kidney issues, or those born without kidneys. This device is complementary to Seastar's medical quality immune, and we believe these two products will add tremendous value to our growing portfolio of products for pediatric patients with fluid overload and renal disease. Our collaboration with DaVita is progressing well. with both teams actively engaged in key areas like pilot selection, patient criteria development, target metric definition, and establishing patient care pathways and order sets for medical staff to start treating patients. We recognize the novelty of this initiative for DaVita for hospitals and for us at New Orleans, and we are taking a meticulous approach to ensure a successful pilot launch. This initiative will enable us to begin treating patients in the inpatient setting with DaVita's personnel and resources. We look forward to sharing further updates of this program and advances in the near future. I would now like to turn the call over to our Chief Medical Officer, Dr. John Jeffries, to discuss recent peer-reviewed publications on our Aquadex system and provide an update on last night's symposium. John?