NASDAQ: NUWE

Fluid Overload

Fluid overload, also known as hypervolemia, is a condition in which there is too much fluid in the blood, vital organs, and interstitial space, and generally refers to the expansion of the extracellular fluid volume. Although the body does need some amount of fluid to remain healthy, too much can cause an imbalance and damage to an individual’s health.1

The signs and symptoms of fluid overload are not always the same in each patient and may vary. However, possible signs and symptoms of fluid overload include pulmonary edema/pleural effusion, peripheral edema, anasarca (swelling of the skin) ascites, jugular vein distention and dyspnea.2 Medical conditions or diseases where excess fluid accumulates in the body are heart failure, kidney failure, nephrotic syndrome, cirrhosis, and burn injuries/trauma. Individuals may also suffer from temporary fluid overload following certain surgical procedures, such as cardiac surgery.3 The diagnosis of fluid overload can be made through a variety of tests/exams such as a physical exam (weight, presence of pulmonary rales, and edema), blood chemistry, natriuretic peptides, liver enzymes, hemoglobin and hematocrit, blood volume analysis, and/or bioimpedance analysis.4 Fluid overload has a significant association with the combined events of death, infection, bleeding, arrhythmia, and pulmonary edema5 and is a leading cause of hospital readmissions with patients suffering from heart failure and patients following cardiac surgery.6

1 Murugan R et al. Nature Rev Nephrol. 2020; 1-14.

2 Koratala A et al. Cardiorenal Med. 2022;12(4):141-154.

3 Vaara ST et al. Crit Care.2012; 16: 1-11.

4 Koratala A et al Cardiorenal Med. 2022;12(4):141-154

5 Stein, A, et. al. Critical Care, 2012:16:R99.

6 Iribarne A, et al. Ann Thorac Surg. 2014; 98(4): 1274-80.

The condition of fluid overload is often observed in patients with heart failure and secondary oliguric states,7 although in pediatric patients, fluid overload is associated with significant increases in mortality.8 9 Congestion or fluid overload, the hallmark of decompensated heart failure (HF), is the primary reason for hospitalization in 90% of these patients.10 11 For this reason, diuretics have been the cornerstone of heart failure treatment for more than 50 years.12 Over the past 20 years, approaches to treatment have changed dramatically.13

These dramatic improvements include new medications and new technologies, such as ultrafiltration, to help treat fluid overload. Each year there are over one million heart failure hospitalizations in the United States, and 90% of those hospitalizations are due to symptoms of fluid overload.14 These patients are hospitalized on average for eight days at a cost of approximately $24,000, for which reimbursement typically does not cover the full cost.15

Treatments for Fluid Overload

Diuretics

Treatment for fluid overload has traditionally been achieved through use of oral or loop diuretics which may be accompanied by use of other categories of medications, such as angiotensin-converting enzyme (ACE) inhibitors, sodium-glucose co-transporter 2 (SGLT-2) inhibitors, Aldosterone receptor antagonists (MRAs), beta-blockers, and inotropic drugs. Chronic diuretic use has been associated with increased long-term mortality and hospitalizations in a wide spectrum of chronic systolic and diastolic HF patients.16 We believe that diuretics, particularly at high doses, may be deleterious to patients. Additionally, between 10-40% of heart failure patients are refractory to diuretics,17 with diuretic resistance associated with a higher risk of in-hospital worsening of heart failure, increase mortality after discharge, and a three-fold increase in rehospitalization rates.18 In addition, patients with heart failure and cardiorenal syndrome have diminished response to loop diuretics, making these agents less effective at relieving congestion.19 Also, long-term use of diuretics has been associated with kidney damage.20 One study found that approximately 40% of heart failure patients have poor diuretic response.21 This poor response is possibly due to noncompliance or high intake of salt, poor drug absorption, insufficient kidney response to drug, and reduced diuretic secretion.22 Despite treatment with loop diuretics, patients are frequently hospitalized and treated for recurrent symptoms and signs of fluid overload.

7 Ronco C, Costanzo MR, Bellomo R, et al. (2010) Fluid Overload Diagnosis and Management. Basel, Switzerland: Karger.

8 Sutherland SM, et al. Am J Kidney Disease. 2010; 5(2): 316-25.

9 Gillespie RS, et al. Ped Nephro. 2004; 19(12): 1394-99.

10 Kazory A & Costanzo MR. Adv Chronic Kidney Dis. 2018; 25(5): 434-442.

11 Fonarow GC. Rev Cardiovasc Med. 2003; 4: s21-30.

12 Kamath SA. Int J of Nephrol. 2011; 1-6.

13 Ellison DH. Cardio.2001;96:132-143

14 Costanzo MR, et al. J Am Coll Cardiol. 2017 May 16;69(19):2428-2445.

15 Gheorghiade M, et al. Eur Heart J Suppl. 2005; 7:B13- 19.

16 Ahmed A, et al. Eur Heart J. 2006 Jun;27(12):1431-9.

17 Testani JM, Hanberg JS, Cheng S et al. Circ Heart Fail. 2016; 9(1): e002370.

18 Costanzo MR, et al. J Am Coll Cardiol. 2017;69(19):2428-2445.

19 Kamath SA. Int J of Nephrol. 2011: 1-6.

20 Felker MG & Mentz RJ. J Am Coll Cardiol. 2012;59(24):2145-53.

21 Testani JM. Circ Heart Fail. 2016 Jan;9(1):e002370.

22 Hoorn EJ & Ellison DH. Am J Kidney Dis. 2017;69(1):136-142.

Nearly one half of hospitalized patients with heart failure are discharged with residual fluid excess after receiving conventional diuretic therapies.23 Additionally, one study found that 24% of such patients were readmitted to the hospital within 30 days of their discharge, and up to 42-50% were readmitted at 90 days and six months respectively.24 25 Regardless of diuretic strategy, 42% of acutely decompensated heart failure subjects in the DOSE (Diuretic Optimization Strategies Evaluation) trial reached the composite endpoint of death, rehospitalization, or emergency department visit at 60 days.26 We believe that there is an association of chronic loop diuretic therapy and greater resource utilization at hospitals.27 Therefore, an alternative therapy to help stabilize or improve patient care is needed.

Ultrafiltration.

Ultrafiltration, or aquapheresis, is an alternative therapy to diuretics for fluid removal in patients with volume overload. Ultrafiltration has been a well-documented technique in the treatment of fluid overload in heart failure and critical care patients for over 20 years.28 We believe that ultrafiltration is a safe and effective therapy to treat fluid overload and congestion by removing the overload of fluid and congestion by removing extra fluid and salt.29 With ultrafiltration, medical practitioners can specify and control the amount of fluid to be extracted at a safe, predictable, and effective rate. The use of ultrafiltration therapy in subgroups of patients, such as heart failure and post-cardiac surgery, has demonstrated clinical benefits in treating fluid overload signs and symptoms. In addition to the clinical benefits of ultrafiltration, we believe the data suggests that the therapy provides economic advantages. One hospital’s cost analysis demonstrated a total cost savings of $3,975 per patient when using ultrafiltration as compared to diuretic therapy over 90 days.30

The Aquadex System

The Aquadex System is designed and clinically proven to simply, safely, and precisely remove excess fluid (primarily excess salt and water) from patients suffering from fluid overload who have failed diuretic therapy.

With the Aquadex System, medical practitioners can specify and control the amount of fluid to be extracted at a safe, predictable, and effective rate. The Aquadex System has been shown to have no clinically significant impact on electrolyte balance, blood pressure or heart rate.31 32 Unlike other forms of ultrafiltration, which typically require administration specifically by a nephrologist, the Aquadex System may be prescribed by any physician and administered by a healthcare provider, both of whom have received training in extracorporeal therapies. The Company estimates it has treated more approximately 15,000 patients across all three (3) of our customer categories since it reintroduced the Aquadex System to the U.S. market in 2016.

23 Orso D, et al. Eur Rev Med Pharmacol Sci. 2021 Apr;25(7):2971-2980.

24 Costanzo MR, et al. J Am Coll Cardiol. 2017;69(19):2428- 2445.

25 Thandra A, et al. Clin Invest. 2023; 365(2): 145-51.

26 Felker GM, et al. N Engl J Med. 2011; 364:797-805.

27 Costanzo MR, et al. J Am Coll Cardiol. 2007; 49(6):675-683.

28 Agostoni PG, et al. J Am Coll Cardiol. 1993; 21(2):424-431.

29 Kazory A, et al. Cardiorenal Med. 2023;13(1)1-8.

30 Costanza MR, et. al. Value Health. 2018; 21 (Suppl 1):S167.

31 SAFE Trial: Jaski BE, et al. J Card Fail. 2003; 9(3): 227-231.

32 RAPID Trial: Bart BA, et al. J Am Coll Cardiol. 2005; 46(11): 2043-2046.

Benefits of the Aquadex System

The Aquadex System offers a safe approach to treating fluid overload and:

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In a single center, retrospective analysis of 335 consecutive patients in whom there was follow-up for 12 months, there were 1.74 fewer rehospitalizations for HF in the year following UF when compared to the 12 months preceding UF; 33

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Analysis of an Aquadex program in community-based regional hospitals with 30 patients showed refractory acute decompensated heart failure (ADHF) patients benefited from significant volume loss (mean loss of 9.40 + 4.55L) and weight reduction (mean decrease of 7.40kg) along with stable renal function and remarkable clinical benefit as well as a statistically significant reduction in the ADHF rehospitalization rate at 60 days (p=0.013). 34

•

A re-appraisal of the AVOID-HF trial (n=224 patients), including an additional 31 adjudicated events to complete the dataset, demonstrated that patients treated with adjustable ultrafiltration (AUF) had a 60% reduction in heart failure events at 30 days compared to intravenous diuretics (p=0.014) and significantly fewer HF hospitalizations at 30 days (p=0.032). 35

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Rehospitalizations at 30 days with Aquadex were 12.4% compared with the national average at 30 days of 24%;

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Reduces length of hospital stay when initiated early, resulting in average savings of $3,975 (14%);36

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Stabilizes or improves cardiac hemodynamics;37 38

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Is safe, easy-to-use, and flexible in application;

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Provides complete control over rate and total volume of fluid removed by allowing a medical practitioner to specify the amount of fluid to be removed from each individual patient;

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Can be performed via peripheral or central venous access;

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Predictably removes excess isotonic fluid (extracts water and sodium while sparing potassium and magnesium; decrease risk of electrolyte abnormalities);38 40

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Results in no significant changes to kidney function;41

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Uses continuous hematocrit monitoring and SvO2 sensors to provide guided-therapy ultrafiltration,42

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Following ultrafiltration, neurohormonal activation is reset toward a more physiological condition and diuretic efficacy is restored;43

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Provides highly automated operation with only one setting required to begin therapy;

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Utilizes a single-use, disposable auto-loading blood filter circuit that facilitates easy set-up; and

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Has a built-in console that guides the medical practitioner through the setup and operational process.

Components of the Aquadex System

The Aquadex System consists of:

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A console, a piece of capital equipment containing electromechanical pumps, an LCD screen and stand;

•

A one-time disposable blood circuit set, an integrated collection of tubing, filter, sensors, and connectors that contain and deliver the blood from and back to the patient; and

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A disposable catheter, a small, dual-lumen, extended-length catheter designed to access the peripheral venous system of the patient and to simultaneously withdraw blood and return filtered blood to the patient.

33 Watson R, et al. Am Heart J Plus: Cardiol Res & Pract 24. 2022; 1-6.

34 Chinta et al. Current Problems in Cardiology. 49 (2024) 102716.

35 Pinney et al. J Am Coll Cardiol HF. Feb 19, 2025.

36 Costanza MR, et. al. Value Health. 2018; 21 (Suppl 1):S167.

37 Boga M, et al. Perf. 2000; 15:143-150.

38 Kiziltepe U, et al. Ann Thorac Surg 2001;71:684-93.

39 Kazory A, et al. Cardiorenal Med. 2023;13(1)1-8.

40 Agostoni PG et al. J Am Coll Cardiol. 1993;21(2):424-31.

41 Kazory A, et al. Cardiorenal Med. 2023;13(1)1-8.

42 Starr MC, et al. Pediatric Nephrology. 2024; 39(2):597-601.

43 Costanzo MR, et al. J Am Coll Cardiol. 2005; 46(11): 2047-51.

Our Market Opportunity

The Aquadex System is used for the treatment of patients suffering from fluid overload who have failed medical therapy including diuretics. We are currently focusing our commercial activities in three primary clinical areas where fluid overload is prevalent: pediatrics, critical care, and heart failure.

Pediatrics

Many of the conditions and procedures faced by adult patients also occur in pediatric patients, such as cardiac surgery, organ transplants, heart failure, nephrotic syndromes and ECMO therapy. Similar to adult patients, these conditions and procedures may lead to fluid overload. While incidence data is not readily available, it is estimated that there are approximately 10,000 to 14,000 pediatric patients with heart failure.67 Fluid overload drives pediatric morbidity and mortality risk in critically ill patients. In one pediatric study, a 3% increase in mortality was observed for every 1% increase in fluid overload, and children who are more than 20% fluid overloaded have an odds ratio for mortality of 8.5 compared to children who are less than 20% fluid overloaded.68 69

The Company believes that the total U.S. pediatric market for fluid overload is approximately $160 million.70 In 2025, the Company derived approximately 40% of its revenue from the treatment of pediatric patients.

While the Aquadex System is only FDA-cleared for the treatment of pediatric patients weighing 20 kg or more, the Company is aware that many children’s hospitals in the U.S. are modifying the way that the Aquadex System is used in a manner that is deemed to be off-label by the Company and the FDA in order to provide dialysis to neonates and other premature infants who weigh less than 20 kg and who were born either without kidneys, inborn errors of metabolism or without normal kidney function. These patients typically have very few other treatment options given the large extracorporeal blood volume required by standard dialysis machines (58ml for Baxter HF20 device), the need for blood priming of the dialysis circuit, vasoactive medications to support hemodynamics, and the use of large bore dialysis catheters. By comparison, the Aquadex extracorporeal blood volume is only 35 ml, with low blood flow range of 10-40 ml/min, and smaller alternative catheters can be used.

It is because of this unmet medical need that the Company has undertaken the development of a dedicated Continuous Renal Replacement Therapy (“CRRT”) device intended for patients weighing above 2.5 kg and under 20 kg. See - Product Development Activities below.

67 Jayaprasad, N. Heart Views. 2016; 17(3): 92-99.

68 Sutherland SM, et al. Am J Kidney Dis. 2010; 55(2):315-25.

69 Gillespie RS, et al. Ped Nephro. 2004; 19(12):1394-99.

70 See Appendix to Company Investor Presentation filed with the SEC on Form 8-K/A, dated January 9, 2024.

Critical Care

Patients suffer from fluid overload in connection with a variety of critical care procedures and treatments, including cardiac surgery, cardiogenic shock, liver and other organ transplants, ventricular assist device (“VAD”) implants, extracorporeal membrane oxygenation (“ECMO”) therapy, sepsis, liver disease and severe burns. According to the National Center for Health Sciences, over 7.3 million cardiovascular operations are performed each year in the United States, including an estimated 340,000 coronary-artery bypass grafting (“CABG”) procedures.56 Cardiac surgery is associated with a degree of fluid overload due to cardiopulmonary bypass.57 Intravenous fluid therapy is an integral treatment for patients undergoing surgery and in critical care units.58 Fluid overload in post-cardiac surgery can readily occur because surgery can affect the pumping actions of the heart, leading to postoperative hemodynamic instability.59 The condition often remains symptomless for several days until clinical symptoms become apparent, when treatment is almost always too late and ineffective.60

Major complications after cardiac operations are associated with an increased risk for operative death, longer hospital length of stay, and higher rates of discharge to a location other than home.61 As many as 80% of cardiac surgery patients may have stage one or greater cardiac-surgery-associated acute kidney injury (CSA-AKI). 62 In the recent publication A Turnkey Order Set for Prevention of CSA-AKI the new CSA-AKI Guidelines suggest the avoidance of nephrotoxic agents including loop diuretics and considering the use of ultrafiltration during post-surgery recovery. 62

Hospital readmissions are a common problem in cardiac surgery and remain high. Approximately 20% of patients who undergo cardiac operations require readmission, an outcome with significant health economic implications. Volume overload was among the top three most prevalent causes for first readmission within 30 days and beyond 30 days.63 It is estimated that 13.5% of post-cardiac surgery patients are readmitted due to fluid overload within 30 days of discharge. Research has been recently published demonstrating the value of ultrafiltration in high-risk coronary artery bypass grafting surgery.64 It is also encouraging to see ultrafiltration being recommended for cardiac surgery patients who are unresponsive to diuretics in a recently published turnkey order set proposed by the Enhanced Recovery After Surgery (“ERAS”) Society consensus guidelines.62

The Company believes it can expand use cases for the Aquadex System without any additional clinical trial or other labeling changes at the U.S. Food and Drug Administration (“FDA”) to support its use in the applications identified immediately above.

The Company believes the total U.S. critical care failure market is approximately $900 million.65 In 2025, the Company derived approximately 32% of its revenue from the treatment of critical care patients.

56 https://idataresearch.com/new-study-shows-approximately-340000-cabg-procedures-per-year-in-the-united-states/.

57 Kruger A et al. J Cardiovasc Dev Dis. 2023;10(6);263-78.

58 Bowdish ME, et al. Ann Thorac Surg. 2021;111(6):1770-1780.

59 Xu J, et al. Medicine. 2015.94(33):e1360.

60 Xu J, et al. Medicine. 2015;94(33):e1360.

61 Crawford TC, et al. Ann Thorac Surg. 2017;103:32-40.

62 Engelman D, et al. Ann Thorac Surg. 2023;115:11-5A

63 Iribane A, et al. Ann Thorac Surg. 2014;98:1274-80.

64 Beckles DL et al. J Card Surg.2022; 37: 2951-57.

65 See Appendix to Company Investor Presentation filed with the SEC on Form 8-K/A, dated January 9, 2024.

Heart Failure

Heart Failure

Heart failure is a syndrome that can have an acute onset or is a progressive disease caused by impairment of the heart’s ability to pump blood to the various organs of the body. Patients with heart failure and fluid overload commonly experience shortness of breath, fatigue, difficulty exercising and swelling of the legs. The heart becomes weak or stiff and enlarges over time, making it harder for the heart to pump the blood needed for the body to function properly. The severity of heart failure depends on how well a person’s heart pumps blood throughout the body.48

According to a nationwide study of over 140,000 patients suffering from acute decompensated heart failure, over 38% of patients discharged were still symptomatic and about half of the patients were discharged with less than five pounds of lost fluid.49 This clinical evidence from the ADHERE registry shows patients are discharged too early, while still showing evidence of fluid overload.

As a result of not fully having their fluid imbalance properly addressed prior to discharge from the hospital, patients are frequently being readmitted, with one study showing 30-day readmission rates of 24% and six-month readmission rates of 44%.50 51

Heart failure often requires inpatient treatment, and it carries a huge economic burden in the United States, costing the nation an estimated $60.2 billion each year, with hospital costs accounting for 62% of the economic burden.52 As the population ages, healthcare expenditures are expected to increase substantially.53 Therefore, therapies aimed at treating congestion and fluid overload are essential from a patient care and healthcare economics perspective.

To remove the excess fluid, patients suffering from heart failure may receive ultrafiltration therapy in two settings: (i) inpatient care: provided to a patient admitted to a hospital; and (ii) outpatient care: provided to a patient who is not admitted to a facility but receives treatment at a clinic or hospital outpatient department.

Hospitals in the United States also face potential penalties for heart failure readmissions. As part of the Patient Protection and Affordable Care Act of 2012, as amended (the “Affordable Care Act”), Medicare instituted the Hospital Readmissions Reduction Program, which penalizes hospitals with high 30-day readmission rates for heart failure and other common diseases and procedures. This penalty can be as high as 3% of reimbursement for all Medicare admissions. Technologies that help reduce readmissions, such as the Aquadex System, can help hospitals mitigate these penalties.54

The Company believes the total U.S. heart failure market is approximately $1 billion for inpatient therapy and is approximately $770 million for outpatient therapy.55 Roughly 17% of its 2025 revenue was derived from the treatment of heart failure patients.

44 Shah, K, et al. J Am Coll Cardiol. 2017 Nov, 70 (20) 2476-2486.

45 Bozhurt B, et al. J Card Fail. J Card Fail. 2023; 29(10): 1412-42.

46 Benjamin EJ, et al. Circ. 2017;135:00-00. (e378).

47 Fonarow GC, et al. Rev Cardiovasc Med. 2003; 4: s21-30.

48 Arrigo M et al. Nat Rev Dis Primers. 2020; 6(16):1-15.

49 Fonarow et al. Rev Cardiovasc Med. 2003;4: Suppl 7:S21-30.

50 Costanzo MR, et al. J Am Coll Cardiol. 2017 May 16;69(19):2428-2445.

51 Sax D, et al. J Card Fail. 2022: 28(10): 1545-59.

52 Voigt J, et al. Clin Cardiol. 2014;37(5): 312-321.

53 Heidenreich PA, et al. Circ Heart Fail. 2013;6(3):606-619.

54 McIlvennan C et al. Circ. 2015; 131(20): 1796-1803.

55 See Appendix to Company Investor Presentation filed with the SEC on Form 8-K/A, dated January 9, 2024.

Growing Clinical Evidence

In December 2025, the Journal of Clinical Nephrology published Diversifying Aquapheresis in Critical Care: An Institutional Experience which highlights data using the Aquadex System at Lenos Hill Hospital in New York City. The retrospective review spans therapy use from January 2018 through July 2024, and captures data for 69 patients in various critical care environments including Cardiothoracic ICU, Medical ICU, Surgical ICU, and Cadiac ICU.93 Each patient had a component of kidney dysfunction: oliguric acute kidney injury (39), decompensated CHF (10), post cardiovascular surgery/intervention (10), optimization pre-cardiovascular surgery/intervention in end-stage renal disease (ESRD) patients (7), septic shock with non-oliguric AKI and volume overload (2), transfusion associated circulatory overload or TACO (1).93 Conclusions from the review include; The average UF volume was 6.4 L per patient, with an UF rate of 82 mL/h.93 Aquapheresis is used as an adjunct therapy with traditional Renal Replacement Therapies (RRT) in 59% of cases, as well as 64% of patients received vasoactive medications during therapy.93 Aquapheresis was shown to effectively and predictably remove significant volume across diverse patient populations in Critical Care environments.93

In March 2025, data from the ULTRA-PEDs multicenter, observational retrospective and prospective pediatric registry was presented at the Advances in Critical Care Nephrology’s AKI & CRRT meeting. The Company launched the registry in November 2020 and conducted the registry at seven clinical sites prior to closure in October 2023 with one patient enrolled. The results indicated that the Aquadex® device can provide both standard ultrafiltration and modified continuous veno-venous hemofiltration (CVVH) in children with end-stage renal disease (ESRD) or acute kidney injury (AKI) and Fluid Overload (FO) across a wide weight spectrum. Two thirds of procedures lasted for the intended duration, and very few patients could not tolerate the Aquadex® procedure.71, 72

In January 2023, we began designing an IDE clinical study for the Company’s dedicated pediatric device currently under development. The design was reviewed with FDA in May 2023 and the study is anticipated to begin enrollment in 2027.

In December 2021, we launched the REVERSE-HF prospective, multicenter, randomized controlled trial (RCT) to evaluate ultrafiltration compared to IV diuretics in patients with heart failure (HF). Seventeen clinical sites nationwide were activated to enroll patients in this RCT and fifteen sites have contributed to patient enrollment, which began in June 2022. The Company terminated the study in July 2025 as a cost saving measure: the decision to end the study was unrelated to efficacy, product performance or patient safety concerns. This decision reflects the Company’s strategic commitment to prioritize resources in areas demonstrating the greatest potential for patient impact and business growth, namely, outpatient heart failure, pediatric, and critical care. The Company anticipates it will save approximately $4.0M over the next 2.5 years by terminating the REVERSE-HF clinical trial prior to reaching expected enrollment.

71 Starr et al. Epidemiology and Outcomes of Children with AKI or ESKD treated with Aquadex. AKI & CRRT meeting; March 2025, San Deigo, CA.

72 Goldstein et al. Aquadex Technical Performance in Children with AKI or ESKD. AKI & CRRT meeting; March 2025, San Deigo, CA.

93 Pino Domenech E, Moses AA, Rosenstock JL, De Vita M. Diversifying aquapheresis in critical care: An institutional experience. Clin Nephrol. 2025 Dec 11.

In February 2025, a re-appraisal of the complete dataset, including an additional 31 adjudicated events, from the AVOID-HF trial, demonstrated that patients treated with adjustable ultrafiltration (AUF) had a 60% reduction in heart failure events (HF) at 30 days (p=0.014) compared to adjustable intravenous diuretics (ALD) and significantly fewer HF hospitalizations at 30 days (p=0.032). 73 Additionally, a hierarchical composite endpoint of 30-day cardiovascular (CV) mortality, HF events (including HF rehospitalization, unscheduled outpatient or emergency room treatment with intravenous loop diuretics, vasoactive drugs, or ultrafiltration) and change in quality of life was evaluated using the Finkelstein-Schoenfeld win ratio (WR) method. In the composite outcome, there were two CV deaths within 30 days. AUF won in 71.0% of the HF event-related paired comparisons (versus 29.0% for ALD) and in 53.4% of quality-of-life comparisons (versus 46.6% for ALD), resulting in a WR = 1.43 (p=0.056) favoring ultrafiltration. 73 This updated evidence further suggests that AUF may be more effective than ALD at reducing HF events and HF rehospitalizations and shows a clear trend toward a sustained clinical benefit when evaluating a holistic composite outcome including CV mortality, HF events and quality of life. 73 The re-analysis was also presented as a Late Breaking Clinical Trial podium presentation at the Technology and HF Therapeutics Conference in March 2024. 74

A former reanalysis of the original AVOID-HF dataset, using a similar WR composite method, was presented at the Annual Scientific Session of the Heart Failure Society of America in September 2022, “Revisiting The Aquapheresis Versus Intravenous Diuretics And Hospitalizations For Heart Failure (AVOID-HF) Trial: Further Evidence Supporting Aquapheresis To Reduce Heart Failure Events,” exploring CV mortality within 90 days and HF events within 30 days. This WR analysis also yielded results favoring ultrafiltration, demonstrating that AUF is safe and more effective than ALD in reducing CV mortality and subsequent HF events for hospitalized heart failure patients. 75

In June 2024, analysis of an Aquadex program, Outcomes of Ultrafiltration in community-based hospitals, showed diuretic refractory acute decompensated heart failure (ADHF) patients benefited from significant volume loss and weight reduction along with stable renal function and remarkable clinical benefit. 76 All 30 patients treated over the first-year cohort were included in a retrospective analysis that demonstrated Aquadex therapy provided a statistically significant reduction in heart failure rehospitalization rate at 60 days (p=0.013) and numerically fewer ADHF readmissions at 30 days from UF initiation compared to the pre-UF era. 76 The study demonstrated that a successful Aquadex program is reproducible and can be coordinated by general cardiologists without the need for a dedicated heart failure unit. 76

In a November 2023 retrospective case series and literature review conducted by The Mount Sinai Hospital, “Utilization of aquapheresis among hospitalized patients with end-stage liver disease: A case series and literature review,” utilization of ultrafiltration from January 2020 through July 2023 in patients with decompensated cirrhosis in the intensive care unit (ICU) found that the introduction of ultrafiltration earlier in a patient’s hospital course may reduce the risk of kidney injury and diuretic-induced electrolyte derangement and reduce the risk of development of sequential organ failures in patients with decompensated cirrhosis. 77

In September 2023, a third-party, single-center case study review of pediatric patients showed the Aquadex System successfully treated small patients without hemodynamic instability or other complications, demonstrating that therapy is an effective treatment option for fluid overload. Patient treatment was guided with the continuous hematocrit monitoring function built within the Aquadex System, supporting safe and effective fluid removal in critically ill pediatric patients.78

In December 2022, a third-party, single-center, real-world retrospective study of 335 consecutive patients treated with the Aquadex FlexFlow® System, “Ten Year Real World Experience with Ultrafiltration for the Management of Acute Decompensated Heart Failure,” compared previous randomized controlled clinical trials with ultrafiltration and demonstrated that ultrafiltration compares favorably in reducing heart failure rehospitalizations (2.14 hospitalizations per year before Aquadex versus 0.4 hospitalizations per year one year after Aquadex), renal function response, and weight/volume loss. 75 The study found ultrafiltration to be safe with regard to renal function despite the cohort in this study being sicker than those studied in other clinical trials, and that ultrafiltration can be a safe and effective strategy for decongestion in clinical practice wherein the benefits outweigh the potential risks of kidney dysfunction requiring hemodialysis and major bleeding events.79

In February 2022, a third-party retrospectively reviewed study, “The Use of Ultrafiltration as a fluid management strategy for High-Risk Coronary Artery Bypass Grafting,” concluded that ultrafiltration is a safe and effective modality to manage fluid balance in a patient population with relatively high Society of Thoracic Surgery (“STS”) scores, but a prospective multicenter study would be warranted in this patient cohort. 76

Additionally, another peer-reviewed publication advocates for early clinical application of ultrafiltration in diuretic resistant patients80 and a cost analysis demonstrated that compared to diuretics, ultrafiltration resulted in a total cost savings of 14.4% at 90 days due to reduced readmissions.81

73 Pinney et al. Ultrafiltration for Management of Decompensated Heart Failure: A re-appraisal of AVOID-HF. J Am Coll Cardiol HF. Feb 19, 2025.

74 Pinney S, et al. Podium Presentation from Technology and HF Therapeutics Conference; March 2024, in Boston, MA.

75 Pinney S, et al. Poster from Heart Failure Society of America Meeting; October 2022; Washington, DC.

76 Chinta et al. Current Problems in Cardiology. 49 (2024) 102716.

77 Crismale, J. et al. Clinical Transplantation. 2024; 38:e15221.

78 Starr MC, et al. Pediatric Nephrology. September 2023.

75 Watson R, et al. Am Heart J Plus: Cardiol Res & Pract 24. 2022; 1-6.

79 Beckles D. et al. J of Card Surg. Fail. 2022; 37(10): 2951-2957.

77 Kazory et al. Cardiorenal Med. 2023;13:1-8.

81 Costanzo MR, et al. J of Med Econ. 2019: 22(6): 577-583.

Jain et al. pooled data from seven randomized controlled trials of ultrafiltration with a total of 771 patients and concluded that extracorporeal ultrafiltration is associated with more efficient fluid and sodium removal compared with medical therapy, hence leading to a reduction in readmission rates and a potential salutary impact on financial burden associated with the care of heart failure patients.82 Wobbe et al pooled data from eight randomized controlled trials enrolling 801 participants and studied the effectiveness of ultrafiltration compared to diuretics, demonstrating ultrafiltration increases fluid removal (difference in means 1372.5 mL; p < 0.001) and weight loss (difference in means 1.592 kg; p < 0.001), lower incidence of worsening heart failure (OR 0.63; p = 0.022) and rehospitalization for heart failure (OR 0.54; p = 0.003) suggesting ultrafiltration is a safe and effective treatment option for volume-overloaded heart failure. 83

One 2019 peer-reviewed paper reported on a multicenter, retrospective case series of children who received kidney replacement therapy (“KRT”) with an ultrafiltration device.84 Patients were grouped according to weight and primary disease state (e.g. kidney, cardiac or other) and received one of three treatment modalities. The study found that of the 72 patients who weighed less than 10 kg, 43 or 60% survived to the end of therapy or transitioned to another modality of kidney support, and 23 or 32% survived to hospital discharge. Among patients who weighed between 10-20 kg, 13 or 100% survived to the end of KRT treatment. Among patients who weighed more than 20 kg, 33 or 97% survived to KRT discontinuation and 23 or 68% survived to hospital discharge.84

82 Jain et al. Heart Fail Rev. 2016.

83 Wobbe et al. Heart Fail Rev. 2021; 26:577–585.

84 Menon S, et al. Clin J Am Soc Nephrol. 2019;14(10):1432-1440.

Product Development Activities

As we expand our commercialization efforts in the pediatric market, we are developing a dedicated CRRT device, branded Vivian, to address the unmet and specific needs of pediatric patients weighing 2.5kg and above who do not have functioning kidneys and who need kidney replacement therapy for survival. Approximately 10,300 children suffer from AKI, of these, over 1800 are neonates. 85 Funded in part by a $1.7 million grant from the National Institute of Health, (“NIH”) the Company completed preliminary engineering testing for its dedicated pediatric system in the fourth quarter of 2023. The Company intends to submit an Investigational Device Exemption (“ IDE”) with the FDA in the second quarter of 2028, with U.S. commercialization of this product expected in the first quarter of 2030. In 2025, the NIH awarded a second grant for $3 million over a three (3) year period to further support the Company development efforts related to Vivian.

85 Sutherland et al. Clin J Am Soc Nephrol. 2013 Oct 7; 8(10): 1661–1669.

Our Strategy

Nuwellis is dedicated to advancing cardiorenal care by enabling earlier, safer, and more controlled fluid management for patients. We provide healthcare professionals with a reliable, predictable, and easy-to-use mechanical pump and filtration system to remove excess fluid from fluid overloaded patients. We believe that our technology will provide a competitive advantage in the fluid management market by providing improved clinical benefits and reducing the cost of care relative to other treatment alternatives.

Our strategic focus is to demonstrate a strong business model by driving revenue growth. Growing revenue is the key metric employees, stockholders and potential investors will use to judge our performance. Our field-based employees include both sales representatives and clinical education specialists in ten sales territories in the United States. We intend to focus on the acute needs of fluid overloaded patients in cardiac surgery and other areas of critical care, while continuing to support heart failure patients in the inpatient setting, as well as the outpatient setting. With our FDA 510(k) clearance for use in pediatric patients weighing 20kg or more, we have expanded our commercialization efforts to treatments for pediatric patients.

Critical Care: We have launched a marketing campaign focused on the benefits of the Aquadex System in treating patients suffering from fluid overload following cardiac surgery procedures, such as CABG surgery, valve repairs and replacements procedures, VAD implants and other cardiac surgical procedures. Additionally, we realigned our salesforce to further focus on the acute needs of fluid overloaded patients in the critical care setting. We believe that we will continue to grow revenue in this faster-growing segment of our business by leveraging the synergies between heart failure cardiologists and cardiovascular surgeons, traditional technology adoption rates of cardiac surgeons, and product purchase cycle of the cardiac surgical and other critical care centers at large hospitals.

Pediatrics: Ultrafiltration is used by physicians to treat fluid overload in various conditions in pediatric patients, including heart failure, cardiac surgery,86 ECMO therapy,87 solid organ transplantation,88 and kidney replacement therapy for neonatal patients. In February 2020, the Company received FDA 510(k) clearance for the Aquadex System to include pediatric patients who weigh 20kg or more. With this clearance, we expanded our commercialization efforts to include promotion to physicians and hospitals who treat this pediatric population, and we are invested in the development of new clinical evidence around use of ultrafiltration in pediatric patients, including the ULTRA-Peds pediatrics registry that concluded in 2023. We are also investing in the development of a new dedicated pediatric CRRT device, to further address the needs of the pediatric population, and in clinical studies supporting the use of this device.

Heart Failure Inpatients: Heart failure patients suffering from fluid overload may be treated in an inpatient setting, such as a hospital cardiology clinic or ICU. Historically, our commercial efforts have been primarily focused on use of the Aquadex System in the inpatient setting in large hospital accounts. We intend to continue to support our sales efforts on inpatient facilities, leveraging the clinical benefits and economic advantages of using the Aquadex System over diuretic therapy. We are investing in additional clinical evidence analysis using the data collected via the REVERSE-HF ultrafiltration and IV diuretics comparison study, which was terminated early for reasons not related to patient safety.

Heart Failure Outpatients: Further, we intend to expand the use of the Aquadex System with heart failure patients in the outpatient setting, such as an infusion clinic or hospital outpatient department (e.g., observation unit). On January 1, 2022, the American Medical Association granted a new and dedicated Category III Current Procedural Terminology (CPT) code, 0692T, for Therapeutic Ultrafiltration. Healthcare providers can utilize this code when using Aquadex to deliver ultrafiltration to adult and pediatric patients weighing more than 20kg (both inpatient and outpatient). In addition, on January 1, 2025, the CPT code was associated with a level II Ambulatory Payment Code (APC) code that provides higher reimbursement per day for therapeutic ultrafiltration administered in the outpatient setting and will facilitate the migration of the therapy to this setting for a subset of the patient population, which may relieve some of the growing pressure on hospital systems and improve hospital economics and patient quality of life. Continued focus on driving positive coverage policies for various targeted private payers will be an ongoing strategy for the Company.

On August 7, 2025, the Company announced its decision to exit international operations in all but four (4) foreign jurisdictions: Singapore, Hong Kong, Israel and Brazil, in order to focus on the U.S. market—where the Company is seeing the strongest growth and clinical demand. This strategic realignment supports Nuwellis’ core business strategy: investing in the markets driving revenue growth. With expanding traction in U.S. cardiac surgery and pediatric programs, and a rising opportunity in the hospital-based outpatient space, the Company is streamlining to prioritize investment in markets where it can have the most immediate and long-term impact.

Besides driving near-term revenue growth through sales of the Aquadex System, we intend to develop product enhancements to improve performance and customer satisfaction. We had projects designed to improve venous access for the Aquadex catheter and enhance the functionality of the hematocrit sensor that is part of the Aquadex console. In 2025, project work started for a large Aquadex System software upgrade to enhance device performance, improve end user experience, and add features and functions to better meet the critical care and pediatric patient populations for therapy delivery. The upgrade is expected to be released to customers in 2026. As we expanded our commercialization efforts in the pediatric market, we developed a CRRT console to address the unmet and specific needs of pediatric patients who do not have functioning kidneys and need kidney replacement therapy for survival.

86 Elliott MJ. Ann Thorac Surg. 1993;56:1518-22.

87 Selewski DT, et al. Crit Care Med. 2012; 40(9): 2694-2699.

88 Riley AA. BMC Nephrology. 2018; 19:268-80.

Sales and Marketing

As of December 31, 2025, we had 24 full-time employees in sales and marketing. We have ten sales territories in the United States. Our U.S. field salesforce includes sales managers, account managers and clinical education specialists who provide training, technical and other support services to our customers. Following the acquisition of the business associated with the Aquadex System (the “Aquadex Business”) from Baxter in August 2016, our direct salesforce was focused initially on re-engaging hospital accounts that had ordered Aquadex blood sets in prior years, re-educating customers on ultrafiltration therapy, and assessing each hospital’s use of the Aquadex System to gain additional opportunity for increased utilization, primarily in heart failure. In 2018, we expanded our commercialization efforts to include post-cardiac surgery. In September 2019, we realigned our salesforce to further focus on the acute needs of fluid overloaded patients in the critical care setting, while still supporting heart failure. We expanded our commercialization efforts to include pediatrics, following receipt of FDA 510(k) clearance of the Aquadex System to include pediatric patients who weigh 20 kg or more in February 2020.

In the United States, our target customers for the Aquadex System include healthcare systems and academic hospitals specializing in advanced treatment of chronic heart failure and/or critical care patients. With the FDA 510(k) clearance of the Aquadex SmartFlow® system for patients weighing over 20kg, we are also targeting pediatric hospitals. Our largest customer represented 13.7% of our 2025 annual revenue. The loss of this customer would have a material adverse effect on our revenue.

Clinical Experience

Several large-scale, multi-center, randomized, controlled trials have evaluated the use of ultrafiltration using the Aquadex System on patients with acute decompensated heart failure compared to standard-of-care treatment with intravenous diuretics. These trials followed early-stage studies which primarily focused on safety of ultrafiltration treatment with the Aquadex System.

The UNLOAD trial enrolled 200 patients and showed that average weight and fluid loss were greater in the ultrafiltration group 48 hours following randomization. 89 No differences were noted in symptoms of dyspnea between the groups. In addition, through 90 days of follow-up, the ultrafiltration group experienced significantly fewer re-hospitalizations and unscheduled medical visits for heart failure, while renal function assessed by serum creatinine level was not significantly different between the groups. 89

The CARRESS trial studied 188 randomized acute decompensated heart failure patients over the course of 96 hours and found no difference in weight loss and an increase in creatinine level relative to the control group treated with intravenous diuretics. The creatinine increase was interpreted as a sign of potential worsening renal function in the ultrafiltration group. We believe that the trial results were impacted by centers unfamiliar with the use of ultrafiltration therapy; that more than one third of the ultrafiltration group received diuretics instead of ultrafiltration; ultrafiltration rates were fixed rather than utilizing adjusted ultrafiltration rates according to patient characteristics, whereas diuretic doses were titrated based on urine output, and that the diuretic regimen employed was not representative of standard-of-care.86 In addition, subsequent analyses of the CARRESS study cohort have been published since the original study results. One protocol analysis showed that ultrafiltration had higher net fluid loss and weight reduction compared to intravenous diuretics, and there were no significant differences in long-term outcomes.90 An additional sub-study analysis on urinary biomarkers showed that although further worsening creatinine levels were reported, decongestion and renal function recovery at 60 days were superior in patients with increased tubular injury markers.91 The data suggests that the benefits of decongestion may outweigh modest or transient increases in serum creatinine during ultrafiltration. Thus, we believe that a change in creatinine should not dissuade the use of ultrafiltration.

89 Costanzo MR, et al. J Am Coll Cardiol. 2007; 49(6):675-683

86 Urban S, et al. Adv Clin Exp Med. 2021;30(7):737-746.

90 Grodin JL, et al. Eur J of Heart Fail. 2018;20(7):1148-1156.

91 Rao VS, et al. Circ Heart Fail. 2019;12 (6):e005552.92 Costanzo MR, et al. JACC: Heart Failure. 2016;4(2):95-105.

Disparate results
between UNLOAD and CARRESS led to initiation of the AVOID-HF trial, designed to
prospectively address the question of patient outcomes when treated with
ultrafiltration versus intravenous diuretics for acute decompensated heart
failure (HF), which was initiated by Baxter International, Inc. (“Baxter”) in
2016.92 Trial design assumptions indicated that 810
patients would need to be randomized to achieve adequate statistical power.
However, the study was terminated by Baxter at 224 patients, for business
reasons unrelated to patient outcomes or device safety. Despite being
underpowered, the results of AVOID-HF indicated distinct trends toward a
greater amount of time free of heart failure events within 90 days, favoring
the ultrafiltration group over diuretics with 62 days to first event for
ultrafiltration patients and 34 days to first event for diuretic patients. In
addition, pre-specified secondary endpoints demonstrated significant reductions
in heart failure rehospitalizations and days in the hospital and cardiovascular
events at 30 days. No significant differences were observed in creatinine level
between the groups during treatment and up to 90 days following treatment. In
totality, AVOID-HF recapitulated the results of both UNLOAD and CARRESS while
providing evidence that had AVOID-HF been followed to completion, it is our
belief that the trial would likely have met its primary endpoint of improved
outcome in acute decompensated heart failure patients.

Research and Development

Research and Development costs include activities related to development, design, and testing improvements to the Aquadex System and potential related products. The Aquadex system software may require periodic modifications for feature additions and performance improvements. We will make such design changes as needed based on proactive and reactive mechanisms. Research and development costs also include expenses related to our clinical research.

In 2021 we initiated a product development project designed to enhance the functionality of the hematocrit sensor that is part of the Aquadex console. The sensor effort was completed in 2025 and will move into production consoles in 2026.

In 2021, we also initiated a product development project to develop a pediatric continuous renal replacement therapy (CRRT) device. We successfully completed functional system prototypes in 2022 and preliminary engineering testing in 2023. The Company intends to submit an IDE with the FDA in the second quarter of 2028 for this pediatric CRRT device, with commercialization expected in the United States in the first quarter of 2030 following completion of the IDE study.

Manufacturers and Suppliers

We manufactured the Aquadex System at our 23,000 square foot facility in Eden Prairie, Minnesota through the fourth quarter of 2025. We had manufactured the Aquadex SmartFlow® console and blood circuits since the Aquadex System’s development in 2019. We purchased parts and components for the Aquadex System from third-party manufacturers and suppliers.

On May 12, 2025, the Company announced it had finalized an agreement with KDI Precision Manufacturing to support the next phase of Nuwellis’ growth. The Company made a contractual payment of $240,000 on July 15, 2025 to initiate the transfer of the manufacturing process to KDI. This strategic relationship is expected to expand Nuwellis' manufacturing capabilities, streamline operations, and enhance the company's ability to deliver high-quality products to healthcare providers and patients. Under the agreement, KDI has assumed assembly responsibilities for the Aquadex SmartFlow® Console, AquaFlexFlow® Blood Circuits, and dELC® Catheters. To ensure a seamless transition and protect product expertise, Nuwellis assembly employees were hired by KDI. Sales, customer service, product design, and post-market surveillance will continue to reside within Nuwellis. During the third quarter of 2025, console manufacturing and calibration of consoles were moved to the KDI facility. As of October 20, 2025, all circuit and catheter manufacturing personnel had transitioned to KDI.

Intellectual Property

We have employed a patent strategy in order to establish an intellectual property portfolio through which we seek to protect our system and technology. We estimate that most of our currently issued U.S. patents will expire by 2027.

In addition to the licensed patents, we have ten (10) company-owned patents, including two (2) patents issued within the last two years.

A number of Nuwellis issued patents in the United States are directed to the C-Pulse® Heart Assist System (the “C-Pulse System”) for treatment of Class III and ambulatory Class IV heart failure of which the last expiring issued U.S. patent has a term to 2026. Given the strategic refocus away from the C-Pulse System and toward the Aquadex System, we have chosen to limit the maintenance of issued C-Pulse System.

In addition, we have four pending patent applications in the United States unrelated to our dedicated pediatric device in development.

We also have filed a family of patent applications related to our dedicated pediatric device in development. This has resulted in four (4) issued United States patents, five (5) pending United States patent applications and a pending international patent application filed under the Patent Cooperation Treaty.

Our pending and future patent applications may not issue as patents or, if issued, may not issue in a form that will provide us any financial return. Even if issued, existing or future patents may be challenged, narrowed, invalidated or circumvented, which could limit our ability to obtain commercial benefits from them.

At this time, we are not a party to any legal proceedings that relate to patents or intellectual property rights or any other subject matter.

Competition

Competition from medical device companies and medical device divisions of healthcare companies, pharmaceutical companies and gene- and cell-based therapies is intense and expected to increase. The vast majority of patients with fluid overload receive pharmacological treatment (diuretics) as the standard of care. There are no direct competitors for the Aquadex System in heart failure or critical care in the United States, other than diuretics. Other systems, such as Baxter’s Prismaflex, a filter-based device that is approved for continuous renal replacement therapy for patients weighing 20kg or more with acute renal failure and/or fluid overload, represent indirect competition, as they can only be used to conduct ultrafiltration with significant limitations. In pediatrics, the Carpediem system distributed by Medtronic is indicated for use in acute kidney injury or fluid overloaded patients requiring hemodialysis or hemofiltration therapy, and Baxter’s HF20 Set is authorized under an Emergency Use Authorization to deliver CRRT to treat patients of low weight (8-20kg) in an acute care environment during the COVID-19 pandemic. Additionally, Medtronic and DaVita have recently formed a joint venture, Mozarc Medical, to pursue a variety of kidney applications across each of our customer categories.

Our ability to compete effectively depends upon our ability to demonstrate the advantages of ultrafiltration as compared to diuretics, a pharmacological treatment that is currently the standard of care. In addition, we need to distinguish the Aquadex System from the indirect competition of other devices that can also be used to conduct ultrafiltration.

Third-Party Reimbursement

In the United States, our products are purchased primarily by customers such as hospitals or other healthcare providers. Customers bill various third-party payers for covered services provided to patients. These payers, which include federal healthcare programs (e.g., Medicare and Medicaid), state healthcare programs, private health insurance companies, and managed care organizations, then reimburse our customers based on established payment formulas that consider part or all of the costs associated with the devices and related procedures performed.

While the agency responsible for administering the Medicare program, the Centers for Medicare and Medicaid Services (CMS), has not issued a formal national coverage determination for ultrafiltration using the Aquadex System, there is established CMS reimbursement in absence of the policy. On January 1, 2022, a new and dedicated Category III Current Procedural Terminology (CPT) code, 0692T, became effective for Therapeutic Ultrafiltration. Healthcare providers can utilize this code when using Aquadex to deliver ultrafiltration to adult and pediatric patients weighing more than 20kg. On January 1, 2025, the CPT code was reassigned to a level II Ambulatory Payment Classification (APC) code that provides substantial daily reimbursement for therapeutic ultrafiltration administered in the outpatient setting. Additionally, a number of private insurers have approved reimbursement for use of the products included in the Aquadex System for specific indications and points of service as well, and patients and providers may seek insurance coverage on a case-by-case basis. Nuwellis has engaged a third-party reimbursement consulting firm to assist customers with the necessary tools to build billing and coding into hospital systems, advising on pre-authorization and pre-approvals, claims processing, denials, and local payor contracts per institution. The capability to support reimbursement efforts and claims with the existing 0692T code will pave the way for Nuwellis to expand use ultrafiltration with Aquadex to private payor approved procedures in the future.

Legislative proposals can substantially change the way healthcare is financed by both governmental and private insurers and may negatively impact payment rates for our system. Also, from time to time, there are numerous legislative, regulatory and other proposals both at the federal and state levels that may impact payment rates for our system. It remains uncertain whether there will be any future changes that will be proposed or finalized and what effect, if any, such legislation or regulations would have on our business. However, in the United States and international markets, we expect that both government and third-party payers will continue to attempt to contain or reduce the costs of healthcare by challenging the prices charged, or deny coverage for, healthcare products and services.

Government Regulations

Regulation by governmental authorities in the United States and foreign countries is a significant factor in the manufacture and marketing of our current system and any future products and in our ongoing research and development activities. In particular, medical devices are subject to rigorous preclinical testing as a condition of 510(k) clearance by the FDA and by similar authorities in foreign countries. Any proposed products will require regulatory clearance/approval prior to commercialization.

United States

The Federal Food, Drug, and Cosmetic Act (“FDC Act”) and the FDA’s implementing regulations govern medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance. Medical devices and their manufacturers are also subject to inspection by the FDA. The FDC Act, supplemented by other federal and state laws, also provides civil and criminal penalties for violations of its provisions. We manufacture and market medical devices that are regulated by the FDA, comparable state agencies and regulatory bodies in other countries.

Unless an exemption applies, each medical device we intend to commercially distribute in the U.S. will require premarket authorization from the FDA, most likely in the form of 510(k) clearance.

510(k) Clearance. To obtain 510(k) clearance for a medical device, an applicant must submit a premarket notification to the FDA demonstrating that the device is “substantially equivalent” to a predicate device legally marketed in the United States. A device is substantially equivalent if, with respect to the predicate device, it has the same intended use and has either (i) the same technological characteristics or (ii) different technological characteristics and the information submitted demonstrates that the device is as safe and effective as a legally marketed device and does not raise different questions of safety or effectiveness. A showing of substantial equivalence sometimes, but not always, requires clinical data. FDA has 90 days by statute to review a 510(k) notice once it has been accepted, though this clock is paused upon issuance of a request for additional information from the sponsor (usually around day 60). After a device has received 510(k) clearance for a specific indication for use, any modification to that device that “could significantly affect its safety or effectiveness,” such as a significant change in the design, materials, or method of manufacture, or which represents a “major change” to the intended use of the device, requires a new 510(k) clearance prior to being implemented. The determination as to whether a new 510(k) is needed is initially left to the manufacturer; however, the FDA may evaluate the regulatory status of the modified at any time and, if it disagrees with the sponsor’s determination that a new 510(k) was not needed, may require the manufacturer to cease marketing the modified device until 510(k) clearance is received.

The Aquadex FlexFlow system was first granted FDA 510(k) clearance for commercial use on June 3, 2002. On February 24, 2020, we received 510(k) clearance of the Aquadex FlexFlow System 2.0 (“SmartFlow®”) (K192756) system for use in adult and pediatric patients weighing 20 kg or more whose fluid overload is unresponsive to medical management, including diuretics. The Aquadex SmartFlow incorporates functions for physicians to use during an Aquadex therapy to more precisely determine the amount of excess fluid to be removed, the rate of ultrafiltration, and when to stop therapy as dry weight is approached.

Clinical Trials. Clinical trials may be required to support a marketing application for certain device. All clinical trials must be conducted in accordance with regulations and requirements collectively known as “Good All clinical trials must be conducted in accordance with “Good Clinical Practices” – including but not limited to the FDA’s IDE regulations – which describe the conduct of clinical trials with medical devices. They also prohibit promotion, test marketing or commercialization of an investigational device and any representation that such a device is safe or effective for the purposes being investigated. Good Clinical Practices also include the FDA’s regulations for institutional review board approval and for protection of human subjects (such as informed consent), as well as disclosure of financial interests by clinical investigators. Required records and reports are subject to inspection by the FDA. Premarket clinical trials require submission of an application for an investigational device exemption (IDE) to the FDA prior to commencing the trial if the device poses a “significant risk” as defined in the FDA regulations.

The results of clinical trials may be unfavorable or, even if the intended safety and effectiveness success criteria are achieved, may not be considered sufficient for the FDA to grant clearance of a product. The commencement or completion of any clinical trial may be delayed or halted or may be deemed inadequate to support clearance of a 510(k) application for numerous reasons.

Continuing Regulation. After a device is cleared for use and placed in commercial distribution, numerous regulatory requirements continue to apply. These include:

•

establishment registration and device listing upon the commencement of any activity defined as “manufacturing”;

•

the Quality Management System Regulation (“QMSR”), which imposes requirements for risk management, design/document controls, purchasing, traceability, and production/process controls on manufacturers, including third-party manufacturers;

•

labeling regulations, which (among other requirements and restrictions) prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling and promotional activities;

•

medical device reporting (“MDR”), per which manufacturers must report to the FDA if a device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if malfunctions were to recur;

•

mandatory reporting of corrections and removals taken to reduce a risk to health or remedy a violation of the Food, Drug, and Cosmetic Act caused by the device which may present a risk to health; and

•

voluntary recalls of devices.

In addition, the FDA may require a company to conduct post-market studies or order it to establish and maintain a system for tracking its products through the chain of distribution to the patient level.

Failure to comply with applicable regulatory requirements, including those applicable to the conduct of clinical trials, can result in enforcement action by the FDA, which may lead to any of the following sanctions:

•

Warning letters or Untitled letters;

•

fines, injunctions and civil penalties;

•

product recall or seizure;

•

civil fines and penalties;

•

delays in clearing or refusal to clear products;

•

import alerts or refusals;

•

withdrawal or suspension of FDA clearance;

•

orders for physician notification or device repair, replacement or refund;

•

operating restrictions, partial suspension or total shutdown of production or clinical trials; or

•

criminal prosecution.

We and our contract manufacturers are also required to manufacture our products in compliance with current Good Manufacturing Practice requirements set forth in the QMSR. The QMSR (which replaces the prior Quality System Regulation (“QSR”)) requires medical device establishments to maintain a quality system for the design, manufacture, packaging, labeling, storage, installation and servicing of marketed devices, and includes extensive requirements with respect to quality management and organization, device design, buildings, equipment, purchase and handling of components, production and process controls, packaging and labeling controls, device evaluation, distribution, installation, complaint handling, servicing and record keeping. The FDA enforces the QMSR through periodic announced and unannounced inspections that may include the manufacturing facilities of subcontractors. If the FDA believes that we or any of our contract manufacturers or regulated suppliers are not in compliance with applicable requirements, it can shut down our manufacturing operations, require recall of our products, refuse to clear or approve new marketing applications, institute legal proceedings to detain or seize products, enjoin future violations or assess civil and criminal penalties against us or our officers or other employees. Any such action by the FDA would have a material adverse effect on our business.

On August 7, 2025, the Company announced its decision to exit selected international operations in order to focus on the U.S. market—where the Company is seeing the strongest growth and clinical demand. This strategic realignment supports Nuwellis’ core business strategy: investing in the markets driving revenue growth. With expanding traction in U.S. cardiac surgery and pediatric programs, and a rising opportunity in the hospital-based outpatient space, the Company is streamlining operations to prioritize investment in markets where it can have the most immediate and long-term impact.

Human Capital Management

As of
December 31, 2025, we had 38 employees, all of whom are full-time. We employ
physicians, professionals in research and development, clinical, regulatory,
manufacturing, commercial, finance, legal and other functions that are
important to our business. None of our employees are covered by a collective
bargaining agreement. We consider relations with our employees to be good.

Attracting,
developing, and retaining highly qualified individuals are key to our success.
To do so, we believe we offer competitive compensation packages-inclusive of
base salary, bonus, and equity, and benefits. We also sought to establish a
values-based culture enhanced by principles that set us apart: our empathy for
patients and other stakeholders, our owner’s mindset, our prioritization of
clarity, our cross-functional collaboration, and our sense of urgency. These
values enhance the working environment for our current employees and attract
our desired candidates.

Legal Proceedings

From
time to time, we may become involved in legal proceedings or be subject to
claims arising in the ordinary course of our business. We are not currently a
party to any material legal proceedings. Regardless of outcome, such
proceedings or claims can have an adverse impact on us because of defense and
settlement costs, diversion of resources and other factors, and there can be no
assurances that favorable outcomes will be obtained. Please See Note 4 – Subsequent Events to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Company History

Prior to July 2016, we were focused on developing the C-Pulse System for treatment of Class III and ambulatory Class IV heart failure. In August 2016, we acquired the Aquadex Business from a subsidiary of Baxter. In September 2016, we announced a strategic refocus of our strategy that included halting all clinical evaluations of the C-Pulse System-related-technology to fully focus our resources on our recently acquired Aquadex Business. On April 27, 2021, we announced that we were changing our name from CHF Solutions, Inc. to Nuwellis, Inc. to reflect the expansion of our customer base from treating fluid imbalance resulting from congestive heart failure to also include critical care and pediatrics applications.

Corporate Information

Nuwellis, Inc. was incorporated in Delaware on August 22, 2002. We began operating our business in November 1999 through Sunshine Heart Company Pty Limited, which dissolved as a wholly owned Australian subsidiary of Nuwellis, Inc. in 2020. Our common stock began trading on Nasdaq on February 16, 2012.

Our principal executive offices are located at 12988 Valley View Road, Eden Prairie, Minnesota 55344, and our telephone number is (952) 345-4200. Our website address is www.nuwellis.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act will be made available free of charge on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. These reports are also available on the SEC’s website, www.sec.gov. The information on, or that may be accessed through, any websites noted herein is not incorporated by reference into and should not be considered a part of this Annual Report on Form 10-K.

We are a “smaller reporting company” under federal securities laws. For as long as we continue to be a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. As long as we remain a smaller reporting company and non-accelerated filer, we are exempt from the attestation requirement in the assessment of our internal control over financial reporting by our independent auditors pursuant to section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) but are required to make our own internal assessment of the effectiveness of our internal controls over financial reporting.