Q1 2024 Nuwellis Inc Earnings Call
Good day and welcome to the new wireless first quarter 'twenty 'twenty four earnings conference call.
Operator: Good day, and welcome to the Nuwellis First Quarter 2024 Earnings Conference Call. All participants will be in 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 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Vivian Cervantes, Investor Relations, Gilmartin Group. Please go ahead.
Vivian Cervantes: All participants will be in listen only mode.
Vivian Cervantes: Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Vivian Cervantes: After todays presentation, there will be an opportunity to ask questions.
Vivian Cervantes: To ask a question you May press Star then one on a touchtone phone.
Operator: To withdraw your question. Please press Star then two.
Operator: Please note this event is being recorded.
Operator: I would now like to turn the conference over to Vivian Cervantes Investor Relations with Gilmartin Group. Please go ahead.
Vivian Cervantes: Thank you Cindy good morning, everyone. Thank you for joining us on today's conference call to discuss <unk> corporate developments.
Vivian Cervantes: Thank you, Cindy. Good morning, everyone. Thank you for joining us on today's conference call to discuss Nuwellis' corporate development and financial results for the first quarter ended March 31st, 2024. In addition to myself, with us today are Nestor Jaramillo, Nuwellis' President and CEO, as well as Rob Scott, CFO. At 8 a.m. Eastern today, Nuwellis released financial results for the first quarter and March 31st, 2024. If you have not received Nuwellis's earnings release, please visit the company's investor page on its website.
Vivian Cervantes: Financial results for the first quarter ended March 31 2024.
Nestor Jaramillo: In addition to myself with US today are Mr. Head of media, the wireless as president and CEO as well, it's Rob Scott CFO.
Vivian Cervantes: At eight a M. Eastern today, no wireless released financial results for the first quarter ended March 31 2024.
Vivian Cervantes: Not receive Neurolysis earnings.
Vivian Cervantes: Release, please visit the company's Investor page on its website.
Vivian Cervantes: 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.
Vivian Cervantes: During this conference call the company will be making forward looking statements.
Vivian Cervantes: All forward looking statements made during today's call will be protected under the private Securities Litigation Reform Act 1995.
Vivian Cervantes: 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.
Vivian Cervantes: All forward looking statements are based upon our current estimates and various assumptions.
Vivian Cervantes: 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.
Vivian Cervantes: 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 and discussion of risk in the company's filings with the SEC, including the latest candidates. With that, I'd like to now turn the call over to Nestor.
Vivian Cervantes: All forward looking statements are based upon current available information and the company assumes no obligation to update these statements.
Nestor: Accordingly, you should not place undue reliance on these statements.
Nestor: Please refer to the cautionary statements and discussion of risk in the Companys filings with the SEC, including the latest 10-K.
Nestor: With that I'd like to now turn the call over to next year.
Nestor: Thank you Vivian and good morning, everyone welcome to new Wellies first quarter 2024 earnings conference call.
Nestor Jaramillo: Thank you, Vivian, and good morning, everyone. Welcome to Nuwellis' First Quarter 2024 Earnings Complex 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, Rob Scott, will then provide detailed commentary on the financial results before opening up the call for questions, followed by my closing remarks.
Nestor Jaramillo: Nuwellis generated $1.9 million in revenue for the first quarter of 2024, a 2% increase year over year, driven by our 11% increase in consumable utilization. Our pediatric customer category once again led the way with 40% revenue growth, which was driven by a 54% increase in consumable utilization. We continue to grow our pediatric customer category, acquiring five new accounts over the past 12 months for a total of 40 accounts compared to 10 accounts in 2019 prior to FDA clearance. However, revenue in our critical care customer category was flat.
Nestor Jaramillo: On today's call I will provide an overview of our first quarter performance and give an update on our strategic initiatives.
Nestor Jaramillo: However, consumable utilization grew by 9%, and Heart Failure revenue decreased by 38%, which was driven by lower utilization and console sales. We are pleased to continue to see a healthy consumable utilization trend signaling strong therapy adoption. Consumable sales in Q1 represented 82% of the total revenue, which grew 11% compared to last year.
Nestor Jaramillo: Our Chief Financial Officer, Rob Scott will then provide detailed commentary on the financial results before opening up the call for questions.
Speaker Change: Good Bye my closing remarks.
Nestor Jaramillo: New World has generated $1.9 million in revenue for the first quarter of 2024% to 2% increase year over year, driven by our 11% increase in consumable utilization.
Nestor Jaramillo: Our pediatric customer category once again led the way with 40% revenue growth.
Nestor Jaramillo: Which was driven by 54% increase in consumable utilization.
Nestor Jaramillo: We continue to grow our pediatric customer category acquiring five new accounts over the past 12 months for a total of 40 accounts compared to Tanner columns in 2019 prior to FDA clearance.
Nestor Jaramillo: Revenue in our critical care customer category was flat, however, consumable utilization grew by 9%.
Nestor Jaramillo: And heart failure revenue decreased by 38%, which was driven by lower utilization and console sales.
Nestor Jaramillo: We are pleased to continue to see a healthy consumable utilization trends signaling strong therapy adoption.
Nestor Jaramillo: Consumable sales in Q1 represented 82% of the total revenue, which grew 11% compared to last year.
Nestor Jaramillo: We continue to balance the strong sales of consumables with the unpredictable capital sales cycle in our hospitals' accounts. Our capital rental program provides an alternative to our customers experiencing capital budget constraints with a solution to treat patients with Aquadex. Similar to last year, our first quarter capital sales were lower than expected.
Nestor Jaramillo: We continue to balance these strong sales of consumables with the unpredictable capital sales cycle in our hospital accounts.
Nestor Jaramillo: Our capital rental program provides an alternative to our customers experiencing capital budget constraints with the solution to treat patients with <unk>.
Nestor Jaramillo: Similar to last year first quarter capital sales were lower than expected. However, as in the second half of 2023, we expect capital sales to increase throughout the year as our pipeline of new target accounts is robust.
Nestor Jaramillo: However, as in the second half of 2023, we expect capital sales to increase throughout the year as our pipeline of new target accounts is robust. We are confident of our growth momentum in 2024 because of increased awareness of the efficacy of Aquadex, including recent clinical data reported at the Technology and Heart Failure Therapeutics Conference, also known as the THC Conference, in early March at a late-breaking clinical trial session. The use of Aquadex demonstrated a clinically and statistically significant reduction in heart failure hospitalizations and heart failure events at 30 days.
Nestor Jaramillo: We are confident of our growth momentum in 2024 because of the increased awareness of the efficacy of athletics, including recent clinical data reported that the technology on heart failure Therapeutics Conference also known as Dth D Conference in.
Nestor Jaramillo: Early mid March.
Nestor Jaramillo: At the late breaking clinical trial session.
Nestor Jaramillo: The use of the <unk> demonstrated a clinically and statistically significant reduction in heart failure hospitalizations and heart failure event at 30 days.
Nestor Jaramillo: This new clinical data is the result of our key priority to continue developing strong clinical and economic evidence for using the Aquadex system to treat patients with fluid overload and who are unresponsive to diuretics. In addition to the steady organic growth in our core business, we look forward to new product sales in our fast-growing pediatric category. In addition to expanding the utilization of Aquadex as we progress our DaVita pilot program, which I will provide more details on next. Now, turning to our recent commercial developments and expected new product introduction. In February,
Nestor Jaramillo: These new clinical data is the result of our key priority to continue developing strong clinical and economic evidence for using the <unk> system to treat patients with fluid overload and who are unresponsive to diabetics.
Nestor Jaramillo: In addition to the steady organic growth in our base business, we look forward to new product sales in our fast growing pediatric category.
Nestor Jaramillo: In addition to expanding the utilization of <unk> as we progress our Davita pilot program, which I will provide more details next.
Nestor Jaramillo: Now turning to our recent commercial developments unexpected.
Nestor Jaramillo: New product introductions.
Nestor Jaramillo: In February.
Nestor Jaramillo: Ceased our medical received humanitarian device exemption or H D E from the F. D. A four it's selective saluretic device or at Seabee branded while immune.
Nestor Jaramillo: CSTAR Medical received Humanitarian Device Exemption, or HDE, from the FDA for its Selective Cytophoretic Device, or SCD, branded Qualimune, for use in pediatric patients with acute kidney injury due to sepsis or a septic condition. Nuwellis has exclusive U.S. license and distribution rights, and we have begun commercializing Qualimune in targeted medical centers by pursuing IRB approvals in five accounts while simultaneously The unique technology behind Qual-Immune has demonstrated a 77% ICU survival rate in children with potentially deadly hyper-inflammation.
Nestor Jaramillo: For use in pediatric patients with acute kidney injury due to sepsis or septic condition.
Nestor Jaramillo: Well it has exclusive U S license and distribution rights and we have begun commercializing quality immune targeted medical centers by pursuing IRB approvals and bite by accounts.
Nestor Jaramillo: Simultaneously engaging in preliminary dialogue with all the key pediatric institutions.
Nestor Jaramillo: The unique technology behind call immune has demonstrated a 77% ICU survival rate in children with potentially deadly hyper inflammation.
Nestor Jaramillo: We believe this product will have a positive impact on the patient population for which it serves.
Nestor Jaramillo: We believe this product will have a positive impact on the patient population for which it serves, and we look forward to providing continued updates as this collaboration progresses. We also continue the development of our pediatric continuous kidney replacement therapy device, branded Vivian. We, along with many pediatric nephrologists, believe this product will have a positive impact on survival and improve the quality of life of neonates and small children with kidney malfunction.
Nestor Jaramillo: And we look forward to providing continued updates.
Nestor Jaramillo: As these collaboration progresses.
Nestor Jaramillo: Yeah.
Nestor Jaramillo: We also continue the development of our pediatric continues kidney replacement therapy device branded Vivian.
Nestor Jaramillo: We along with many pediatric Nephrologist believe this product will have a positive impact on survival and improved the quality of life of neonates and a small children with kidney malfunction.
Nestor Jaramillo: Kidney issues or those born without kidney.
Nestor Jaramillo: This device is complementary to cease door medical squali immune device and we believe these two products together will add meaningful value to our growing portfolio products for pediatric patients with fluid overload and renal disease.
Nestor Jaramillo: This device is complementary to C-STAR Medical's Qualimune device, and we believe these two products together will add meaningful value to our growing portfolio of products for pediatric patients with fluid overload and renal disease. We continue to advance the pilot phase of our supply and collaboration agreement with DaVita. As a reminder, this collaboration allows Davida and Nuwellis to pilot aquadex therapy for adults with heart failure in selected U.S. markets. Pairing Aquadex with DaVita's clinical infrastructure could potentially help accelerate the clinical adoption of ultrafiltration when diuretics therapies are ineffective. We have made introductions in nine hospitals with very positive results. We look forward to providing more specific information during the quarter.
Nestor Jaramillo: We continued to advance the pilot phase of our supply and collaboration agreement with Davita.
Nestor Jaramillo: As a reminder, this collaboration allows the leader a new wellness to pilot Aqua therapy for adult heart failure patients in selected U S markets.
Nestor Jaramillo: Pairing <unk> with Davita clinical infrastructure could potentially help accelerate the clinical adoption of all profit equation when diuretics therapy therapies are ineffective.
Nestor Jaramillo: We have made introduction the nine hospitals with very positive results, we look forward to providing more specific information during the quarter.
Nestor Jaramillo: In early April we announced the launch of ultrafiltration therapy for heart failure patients using the app with eggs at Henry Ford Health.
Nestor Jaramillo: In early April, we announced the launch of ultrafiltration therapy for heart failure patients using the Aquadex at Henry Ford Health as part of our pivotal reverse heart failure clinical study. Based in Michigan, Henry Ford Health is one of the nation's leading academic heart failure centers. They are recognized for clinical excellence in heart failure, heart transplant, and left ventricular assist devices. We are honored to be working with them as their Heart Failure Program is one of the largest in Michigan.
Nestor Jaramillo: Part of our pivotal reverse heart failure clinical study.
Nestor Jaramillo: Based in Michigan Henry for Health is one of the nation's leading academic heart failure centers recognized for clinical excellence is heart failure heart transplant and left ventricular assist devices.
Nestor Jaramillo: We are honored to be working with them as their heart failure program is one of the largest in Michigan.
Nestor Jaramillo: Dr. Jennifer Cogger, Head of the Heart Failure Program, will lead the efforts, and I look forward to hearing her findings as the study progresses. We currently have 123 patients enrolled in the randomized multicenter trial, and Henry Ford is the only site in Michigan offering this study intervention. I'd like to now turn it to Rob to discuss our first quarter financial results.
Nestor Jaramillo: Dr. Jennifer <unk> head of the heart failure program will lead the effort and I look forward to hearing her findings as the study progresses.
Nestor Jaramillo: We currently have 123 patients enrolled in the randomized multicenter trial and Henry poor is the only site in Michigan offering this study intervention.
Nestor Jaramillo: I like to now turn it to Rob to discuss our first quarter financial results.
Robert B. Scott: Thank you, Nestor, and good morning, everyone. Now, turning to the Q1 financial results. Revenue for the first quarter was $1.9 million, representing 2% growth over the prior year period, driven by an 11% increase in consumables utilization, partially offset by a decrease in console shipments. Our pediatric customer category had the strongest growth in Q1, with a 40% increase year-over-year. The pediatric results were driven by a 54% increase in consumables utilization.
Rob: Thank you Nestor and good morning, everyone.
Rob: Turning to the Q1 financial results.
Robert B. Scott: Revenue for the first quarter was $1 $9 million, representing a 2% growth over the prior year period, driven by an 11% increase in consumables utilization, partially offset by a decrease in console shipments are pediatric.
Robert B. Scott: Customer category had the strongest growth in Q1, with a 40% increase year over year PD.
Robert B. Scott: Pediatric results were driven by a 54% increase in consumables utilization.
Robert B. Scott: Critical care revenue was flat, but the company experienced a 9% increase in consumable sales. Total revenue was offset by a decrease in utilization in console sales, and Gross margin was 64.1% for the first quarter compared to 58.4% in the prior year. The margin improvement was primarily driven by higher manufacturing volumes of consumables in the current year period.
Robert B. Scott: Critical grip critical care revenue was flat, but experienced a 9% increase in consumable sales.
Robert B. Scott: Total revenue was offset by a decrease in utilization and console sales and heart failure.
Robert B. Scott: Gross margin was 64, 1% for the first quarter compared to gross margin of 58, 4% in the prior year quarter. The margin improvement was primarily driven by higher manufacturing volumes of consumables in the current year period.
Robert B. Scott: Selling general and administrative expenses were $4 $6 million in the first quarter, a decrease of 16, 1% as compared to $5 $5 million in the first quarter of 2023. The decrease in SG&A was primarily due to reduced head count and compensation related expense and lower corporate <unk>.
Robert B. Scott: Selling general and administrative expenses were $4.6 million in the first quarter, a decrease of 16.1% as compared to $5.5 million in the first quarter of 2023. The decrease in SG&A was primarily due to reduced headcount and compensation-related expenses and lower corporate administrative expenses. First quarter research and development expense was $1.3 million compared to $1.4 million in the prior year. Total operating expenses were $5.9 million in the quarter, a decrease of approximately $1 million as compared to the first quarter of 2023.
Robert B. Scott: Ministry of expenses.
Robert B. Scott: First quarter research and development expense was $1 $3 million compared to $1.4 million in the prior year period.
Robert B. Scott: Total operating expenses were $5 $9 million in the quarter, a decrease of approximately $1 million as compared to the first quarter of 2023.
Robert B. Scott: The period-over-period decrease was due to cost-saving measures implemented early in the second half of 2023 and carried forward to the current period as we continue to drive operating efficiency. We anticipate significant expense reductions approaching 50% through operating efficiency initiatives for the rest of the calendar year. Operating loss in the first quarter was $4.7 million compared to an operating loss of $5.8 million in the prior year period, resulting in a $1.1 million period-over-period increase. Net loss attributable to common shareholders in the first quarter was $3.8 million or a loss of 60 cents per share compared to a net loss attributable to common shareholders of $6.5 million or $5.76 per share for the same period in 2023
Robert B. Scott: The period over period decrease was due to cost saving measures implemented early in the second half of 2023 and carried forward to the current period as we continue to drive operating efficiencies.
Robert B. Scott: We anticipate significant expense reductions approaching approaching 50% through operating efficiency initiatives for the rest of the calendar year.
Robert B. Scott: Operating loss in the first quarter was $4 $7 million compared to an operating loss of $5.8 million in the prior year period, resulting in a $1.1 million period over period improvement.
Robert B. Scott: Net loss attributable to common shareholders in the first quarter was $3 $8 million or a loss of 60 cents per share compared to a net loss attributable to common shareholders of $6 $5 million or $5.76 per share for the same period in 2023.
Robert B. Scott: We ended the first quarter with $1.4 million in cash and cash equivalents and with no debt on the balance sheet.
Robert B. Scott: On April 30th New wireless closed an underwritten public offering with gross proceeds of 2.7, $2 7 million before deducting underwriting discounts and commissions related to the offering.
Speaker Change: This concludes our prepared remarks.
Robert B. Scott: We ended the first quarter with $1.4 million in cash and cash equivalents and with no debt on the balance. On April 30th, Nuwellis closed an underwritten public offering with gross proceeds of $2.7 million before deducting underwriting discounts and commissions related to the offer. This concludes our prepared remarks. Operator, we would now like to open the call to. We will now begin the
Speaker Change: Operator, we would now like to open the call to questions.
Speaker Change: We will now begin the question and answer session.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Anthony Vendetti of Maxim Group. Go ahead, please.
Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.
Operator: If you are using a speakerphone please pick up your handset before pressing the keys.
Anthony V. Vendetti: At any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Operator: At this time, we will pause momentarily to assemble our roster.
Operator: Our first question comes from Anthony Vendetti of Maxim Group go ahead. Please.
Anthony V. Vendetti: Thank you.
Operator: <unk>.
Anthony V. Vendetti: So necessary just curious on the on the seats started distribution agreement.
Anthony V. Vendetti: Thank you. So Nestor, I was just curious about the CSTAR distribution Agreement. You mentioned it on the call. I was just wondering if you could talk about where that's at in terms of are all your salespeople trained on it, have they started selling it? What's your – do you have expectations on a quarterly basis or by the end of the year for that? And also, just talk about the cross-selling opportunities.
Operator:
Anthony V. Vendetti: You mentioned it on the call I was just wondering if you could talk about.
Anthony V. Vendetti: Bob.
Anthony V. Vendetti: Where that add in terms of our all your salespeople trained on it have they started.
Speaker Change: Uh huh.
Anthony V. Vendetti: Selling it.
Anthony V. Vendetti: What's your do you have expectations on a quarterly basis or by the end of the year.
Anthony V. Vendetti: For that and also just talk about the cross selling opportunities.
Anthony V. Vendetti: Okay.
Nestor Jaramillo: Good questions, Anthony, and good morning. We're starting to train, we have already started to train our personnel, especially our clinical education specialists. We have initially targeted two phases. The first phase is five centers, and we are pursuing IRB in each one of them per the HDE requirement. I expect that the clinical personnel from CSTAR will be very involved in these first five sites along with our clinical personnel. Once they are educated, then we move into the next five centers, which all of these 10 centers have been identified.
Nestor Jaramillo: Good questions Anthony and good morning.
Nestor Jaramillo: The we're starting to train we have started already to train our personnel, especially our clinical education specialists. We have target initially two phases. The first phases five centers and now we are pursuing IRB in each one of them.
Nestor Jaramillo: Hurt the H E requirements.
Speaker Change: We have.
Nestor Jaramillo: I expect that the clinical personnel from six star will be very involved in this first five sites along with our clinical personnel.
Nestor Jaramillo: <unk> age of Kate. It then we move into the next five centers, which all of these 10 centers have been identified.
Nestor Jaramillo: And in terms of cross-selling, this opportunity with Qualimune would be very good for us to start talking about our technology that is coming up, because the two devices together would be a perfect combination. Our device would be a pediatric-dedicated CRRT, and Qualimune is a pediatric-dedicated cytophoretic device. So the combination of the two is going to be fantastic in terms of saving lives and improving the quality of life of children and young adults.
Nestor Jaramillo: And we have.
Nestor Jaramillo: In terms of the cross selling this opportunity with while immune.
Nestor Jaramillo: Would be very good for us to start talking about our technology that is coming up because the two devices together would be a perfect combination our device will be a pediatric dedicated E. R. R T and while immune is pediatric dedicated site operatic device. So the combination of the two.
Nestor Jaramillo: Are going to be fantastic in terms of saving lives and improving the quality of life of children's in neonates.
Speaker Change: Okay, great and before I have a couple of cost reduction questions.
Nestor Jaramillo: Okay, great. And before I have a couple of cost reduction questions, I wanted to also talk about you saying that during the year, you expect capital equipment sales to pick up. When you place a capital equipment order or have a capital equipment sale, what is the expected consumable generation for that capital equipment per year? What are the factors that determine that? Maybe just give us a little insight into how that sales process works.
Speaker Change: Wanted to talk also about.
Nestor Jaramillo: You said that.
Nestor Jaramillo: During the year, you expect capital equipment sales.
Nestor Jaramillo: To pick up.
Nestor Jaramillo: When you place a capital equipment capital equipment sale.
Nestor Jaramillo: What is the expected consumable generation for that capital equipment per year, what are the factors that determine that.
Nestor Jaramillo: Maybe just give us a little color into how that how that sales process works and Zanesville works.
Nestor Jaramillo: Okay. Well, first of all, I just want to acknowledge that our capital equipment sales have been lumpy, just as we saw in the first part of last year. And we're not the only ones with that situation. I saw the earnings release of two companies, GE being one of them, and they reported very low capital sales due to all the capital constraints that hospitals are having as a result of the pandemic. So.
Nestor Jaramillo: Okay.
Nestor Jaramillo: The well first of all I, just want to acknowledge that our capital equipment sales have been lumpy just as we saw in the first part of last year and we're not the only ones with that situation.
Nestor Jaramillo: I saw the earnings release, our two companies GE being one of them and they had they reported a very low capital sales due to all the capital constrains that the hospital are having pass post pandemic.
Nestor Jaramillo:
Nestor Jaramillo: The use of consumables per console in a hospital depends a lot on how much utilization there is in the different specialty units that the hospital is using the Aquadex. We have centers like Mount Sinai in New York City or Washington MedStar in Washington, D.C. that they use; they treat 20, 30 patients a month. And this high utilization of the consoles; they have anywhere from 6 to 12 consoles in this institution. We also have institutions that only have one or two consoles, and they probably treat, you know, 5, 10 patients per quarter, as low as per quarter or as high as per month. So the only driving factor here is how much the doctors are prescribing the therapy to different patients in the hospital.
Nestor Jaramillo: The use of consumables.
Nestor Jaramillo: Her console in a hospital depends a lot on how much utilization in the different specialty units that the hospital is using the athletics, we have centers like Mount Sinai, New CD or a wash.
Nestor Jaramillo: Washington Medstar.
Nestor Jaramillo: Washington D C that they use they they tweet 2030 patients a month and these high utilization of the console. They have anywhere from six to 12 consoles. In these institutions. We also have institutions that only have one or two console and they probably tweet.
Nestor Jaramillo: You know 510 patients.
Nestor Jaramillo: Per quarter as loss per quarter or us highest per month. So they the only dry a driving factor here is how much the.
Nestor Jaramillo: The doctors are prescribing the therapy to the different patient in the hospital.
Speaker Change: Okay. That's helpful.
Anthony V. Vendetti: Okay, that's helpful. And then switching gears to the cost reduction, I think there was a comment about a 50% reduction in costs for this year, in addition to salary reductions and so forth. Were there any programs that you have either scaled back or discontinued to hit those targets? And if not, you know, how did you get to a 50% number?
Nestor Jaramillo: And then just switching gears to the cost reduction I think.
Anthony V. Vendetti: There was a comment about 50% reduction in.
Anthony V. Vendetti: And costs for this year.
Anthony V. Vendetti: In addition to.
Anthony V. Vendetti: Salary reductions until fourth where there any any programs that you have either scale back or discontinued to hit those targets.
Anthony V. Vendetti: Uh huh.
Anthony V. Vendetti: If not how did you get to a 50% number.
Anthony V. Vendetti: Well.
Nestor Jaramillo: Well, the three initiatives, strategic initiatives that we have been mentioning over the years are three, sales and marketing, Reverse Heart Failure, and Vivian, the Pediatric Dedicated Device. The first two initiatives were not affected, and they have not been affected. And the third one, Vivian, we are in the final phases of development, and software development is the toll pole in the tent. And for that, we are using a lot of consultants in software development, and that was the part that was affected the most.
Anthony V. Vendetti: The three initiatives strategic initiatives that we have been mentioning over the years, our three sales and marketing.
Nestor Jaramillo: <unk> heart failure, and BB&T pediatric dedicated device. The first two initiatives were not affected have not been affected and the third one BBN a we are in the final phase.
Nestor Jaramillo: <unk> phases of the development and the software.
Nestor Jaramillo: Development is the total pole in the tent and for that we are using a lot of consultants.
Nestor Jaramillo: On software.
Nestor Jaramillo: Development and that was the part that was affected the most.
Speaker Change: Okay, and then and then just lastly on the cash so $1 4 million at the end of quarter $2 7 million was the gross proceeds I believe that the offering on April 30.
Anthony V. Vendetti: Okay. And then just lastly on cash, so $1.4 million at the end of the quarter. $2.7 million was the gross proceeds, I believe, for the offering on April 30th. So what were the net proceeds of that offering that was added to your balance sheet?
Anthony V. Vendetti: So what were the net proceeds of that offering.
Anthony V. Vendetti: That was added to your balance sheet.
Nestor Jaramillo: That's approximately 2.4 million people.
Anthony V. Vendetti: It was approximately $2 4 million approximately.
Anthony V. Vendetti: Approximately
Anthony V. Vendetti: Okay.
Speaker Change: My fault.
Nestor Jaramillo: Okay.
Nestor Jaramillo: Okay, great. You know, it's, it's, uh, obviously, we can try to estimate what the burn rate is per quarter internally, you know, with the cost reductions as you're trying to put that all together as we're in the second quarter here. Do you have an anticipated cash burn rate for this quarter?
Speaker Change: Okay great.
Anthony V. Vendetti:
Anthony V. Vendetti:
Anthony V. Vendetti: Obviously, we can try to estimate what the what the burn rate per quarter.
Nestor Jaramillo: Internally.
Nestor Jaramillo: You know what the cost reductions that you are trying to.
Nestor Jaramillo: Put that all together as we as we are in the second quarter here.
Nestor Jaramillo: Do you have an anticipated cash burn rate for this for this quarter.
Nestor Jaramillo: While we believe that the with the net proceeds that we received from this last financing will be.
Nestor Jaramillo: Well, we believe that with the net proceeds that we received from this last financing, we will have enough cash until early fall, which would allow us time to execute on three key milestones that we have communicated. Those three milestones are, you know, commercialization of Qualimune and the C-Star device, the continuing execution of the DaVita pilot, which we expect to have patients starting to be treated soon, and also the potential for a reimbursement change in the APC code. So once we execute on those three milestones, then we can go back to market and do another financing round if we need to. Okay, great.
Nestor Jaramillo: We will have enough cash until early fall.
Nestor Jaramillo: Which will allow us time to execute on three key milestones that we have communicated those three milestones are you know commerciality station all by quality immune. This these darn device.
Nestor Jaramillo: The continuing.
Nestor Jaramillo: Execution on the Davita pilot.
Nestor Jaramillo: Which we expect to have patients starting to be treated.
Nestor Jaramillo: As soon.
Nestor Jaramillo: And also a potential for a reimbursement change in the ADC Coke.
Nestor Jaramillo: So once we execute on those three milestones.
Nestor Jaramillo: Then we can go back to market and do.
Nestor Jaramillo: <unk> financing if we need.
Speaker Change: Okay, great. Thanks for all the color all happens it I'll hop back in the queue I appreciate it.
Anthony V. Vendetti: Okay, great. Thanks for all the calls. I'll hop back in the queue. Appreciate it. Thank you, Anthony.
Speaker Change: Thank you Anthony.
Anthony V. Vendetti: This concludes our question and answer session I would like to turn the conference back over to Nestor for some concluding remarks.
Nestor Jaramillo: This concludes our question and answer session. I would like to turn the conference back over to Nestor for some concluding remarks.
Nestor Jaramillo: Thank you operator.
Nestor Jaramillo: We are confident that our growth momentum in 2024, led by increased awareness of the efficacy of Aquadex and increased therapy adoption, will result in a strong year, helped further as hospital capital expenditure headwinds diminish. We look forward to new product sales in our fast-growing pediatric category as we commercialize Quali-Immune SED from our exclusive license and distribution agreement with Seastar Medical, in addition to expanding the utilization of Aquadex as we progress our DaVita pilot program.
Nestor Jaramillo: We are confident that our growth momentum in 2024 led by increased awareness of the efficacy of athletics and increased therapy adoption will result in a strong year helped further as hospital capital expenditure headwinds diminish.
Nestor Jaramillo: In addition.
Nestor Jaramillo: We look forward to the new product sales in our fast growing pediatric category as we commercialized quality immune SCD from our exclusive license and distribution agreement with <unk> Medical in addition to expanding the utilization of <unk> as we progress our Davita pilot program.
Nestor Jaramillo: I would like to conclude by highlighting the Nuwellis mission, which is to transform the lives of patients suffering from fluid overload. Our Aquadex Ultrafiltration Therapy is the superior method for removing excess fluid from patients suffering from fluid overload, as demonstrated by the THD conference, and it is our goal to reach as many patients as possible to enhance their quality of life. I want to thank all our stakeholders, employees, stockholders, physicians, nurses, patients, and healthcare workers in the field. Without your support, we would not be able to achieve key advances in transforming the lives of patients suffering from fluid overload. Thank you for your participation and support, and we look forward to a productive 2024.
Nestor Jaramillo: I would like to conclude by highlighting the new wellness mission, which is to transform the lives of patients suffering from fluid overload.
Nestor Jaramillo: Our athletics Ultrafiltration therapy is the superior method for removing excess fluid from patients suffering from fluid overload as demonstrated T HD conference.
Nestor Jaramillo: And it is our goal to reach as many patients as possible to enhance their quality of life.
Nestor Jaramillo: I want to thank all our stakeholders.
Nestor Jaramillo: Well its employees stockholders decisions nurses patients and health care workers in the field without your support we would not be able to achieve key advantages in transforming the lives of patients suffering from fluid overload.
Nestor Jaramillo: Thank you for your participation and support and we look forward to productive 2024.
Nestor Jaramillo: Okay.
Nestor Jaramillo: Okay.
Speaker Change: The conference has now concluded.
Operator: The conference is now concluded. Thank you for today's presentation. You may now disconnect.
Speaker Change: Thank you for todays presentation, you may now disconnect.