UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 14, 2022
Nuwellis, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
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001-35312
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No. 68-0533453
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(State or Other Jurisdiction of Incorporation or Organization)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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12988 Valley View Road,
Eden Prairie, MN 55344
(Address of Principal Executive Offices) (Zip Code)
(952) 345-4200
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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NUWE
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Nasdaq Capital Market
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 |
Entry into a Material Definitive Agreement
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On October 14, 2022, Nuwellis, Inc. (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with Ladenburg
Thalmann & Co. Inc. (the “Underwriter”), pursuant to which the Company issued and sold, in a registered public offering
by the Company (the “Public Offering”), (a) 15,235,196 Class A Units (the “Class A Units”), with each Class A Unit consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and 1.5 warrants that expire on the sixth anniversary of the date of effectiveness of stockholder approval to purchase one share of our Common Stock (referred to individually as a “Class A Warrant” and collectively as the “Class A Warrants”), with each Class A Unit offered to the public at an offering price of $0.25 per Class A Unit and (b) 23,157,124 Class B Units (the “Class B Units”, and collectively with the Class A Units, the “Units”), with
each Class B Unit consisting of one share of the Company’s Series I Convertible Preferred Stock, par value $0.0001 per share (the “Series
I Preferred Stock”), convertible into one share of Common Stock and 1.5 warrants that expire on the sixth anniversary of the date of effectiveness of stockholder approval to purchase one share of Common Stock (referred to individually as a
“Class B Warrant” and collectively as the “Class B Warrants” and together with the “Class A Warrants” as the “Warrants”), with each Class B Unit offered to the public at an offering price of $0.25 per Class B Unit.
In addition, pursuant to the Underwriting Agreement, the Company granted the Underwriter a 45 day option (the “Overallotment Option”) to purchase up to (i) 5,758,848 additional shares of Common Stock and (ii) additional Warrants to purchase up to 8,638,272
additional shares of Common Stock, solely to cover over-allotments. The Overallotment Option was exercised in full on October 14, 2022.
The Units were not certificated and the shares of Common Stock, shares of Series I Preferred Stock and Warrants comprising such Units were
immediately separable and were issued separately in the Public Offering. The securities were offered by the Company pursuant to (i) the registration statement on Form S-1 (File No. 333-267368) as amended, which was initially filed with the
Securities and Exchange Commission (the “Commission”) on September 9, 2022 and declared effective by the Commission on
October 13, 2022, and an additional registration statement on Form S-1 (File No. 333-267868) filed by the Company with the Commission on October 13, 2022 pursuant to Rule 462(b) under the Securities Act of 1933, as amended which became effective
upon filing (collectively, the “Registration Statements”).
On October 18, 2022, the Public Offering closed, and the Company issued and sold (i) 20,994,044 shares of Common Stock (which includes
5,758,848 shares of Common Stock sold pursuant to the exercise of the Overallotment Option), (ii) 23,157,124 shares of Series I Preferred Stock, (iii) Warrants to purchase 66,226,752 shares of Common Stock (which includes Warrants to purchase 8,638,272 shares of Common Stock sold pursuant to the exercise of the Overallotment Option), pursuant to the Registration Statements and the Underwriting
Agreement. The net proceeds to the Company, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company, are expected to be approximately $9.8 million.
The Warrants will be exercisable beginning on the
effective date of a reverse stock split in an amount sufficient to permit the exercise in full of the warrants, contingent upon stockholder approval of such reverse stock split and of the exercisability of the warrants under Nasdaq rules, and are exercisable at a price per share of Common Stock of $0.25. Subject to limited exceptions, a holder of Warrants will not have the right to exercise any
portion of its Warrants if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of Common Stock in excess of
4.99% (or, upon election by a holder prior to the issuance of any warrants, 9.99%) of the shares of Common Stock then outstanding. At the holder’s option, upon notice to the Company, the holder may increase or decrease this beneficial ownership
limitation not to exceed 9.99% of the shares of Common Stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company. The exercise price per share of the Warrants is subject to appropriate adjustment
in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our common stock.
If we, while the Warrants are outstanding, sell shares of common stock at a price per share less than the exercise price then in effect,
then the exercise price of the Warrants will be adjusted to that lower price and the number of shares underlying the Warrants will be increased such that the aggregate exercise price payable thereunder, after taking into account the decrease in
the exercise price, shall be equal to (x)-(y) where (x) is equal to the aggregate exercise price in effect at the time of issuance of the Warrants and (y) is equal to the aggregate cash exercise price paid in connection with any warrant exercises
prior to any dilutive issuance plus the cash exercise price that would have been payable in connection with any “cashless exercises”, if any such exercises were by means of a cash exercise rather than a cashless exercise, subject to customary
conditions and carve outs. The Warrants contain a one-time reset of the exercise price to a price equal to the lesser of (i) the then exercise price and (ii) 90% of the five-day volume weighted average price for the five trading days immediately
preceding the date that is ninety days after issuance of the Warrants.
The Underwriting Agreement contains representations, warranties and covenants made by the Company that are customary for transactions of
this type. Under the terms of the Underwriting Agreement, the Company has agreed to indemnify the Underwriter against certain liabilities, including liabilities under the Securities Act of 1933, as amended. In addition, pursuant to the terms of the
Underwriting Agreement, the Company and its executive officers and directors have entered into agreements providing that the Company and each of these persons may not, without the prior written approval of the Underwriter, subject to limited
exceptions, offer, sell, transfer or otherwise dispose of the Company’s securities until the later of (i) 90 days following the closing date of the Public Offering and
(ii) 30 days following the later of (x) the effective date of the reverse stock split to permit the exercise in full of the warrants and (y) stockholder approval of the exercisability of the warrants is received and effective.
On October 18, 2022, the Company also entered into a warrant agency agreement with the Company’s transfer agent, American Stock Transfer
& Trust Company LLC, who will act as warrant agent for the Company, setting forth the terms and conditions of the Warrants sold in the Public Offering (the “Warrant Agency Agreement”).
The foregoing summaries of the Underwriting Agreement, the Warrant and the Warrant Agency Agreement do not purport to be complete and are
subject to, and qualified in their entirety by, such documents attached as Exhibits 1.1, 4.1 and 4.2, respectively, to this Current Report on Form 8-K (this “Current Report”), which are incorporated herein by reference. The Underwriting Agreement is attached hereto as an exhibit to provide interested persons with information regarding its terms, but is not intended to
provide any other factual information about the Company. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of the Underwriting Agreement as of specific dates indicated therein, were
solely for the benefit of the parties to the Underwriting Agreement, and may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution
of the Underwriting Agreement.
| Item 3.03 |
Material Modification to Rights of Security Holders.
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To the extent required, the information included in Items 1.01 and 8.01 of this Current Report is hereby incorporated by reference into this
Item 3.03.
| Item 5.03 |
Amendments to Articles of Incorporation; Change in Fiscal Year.
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In connection with the closing of the Public Offering, on October 14, 2022, the Company filed the Certificate of Designation of Preferences,
Rights and Limitations of Series I Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware. The Certificate of Designation
provides for the issuance of the shares of Series I Preferred Stock. The shares of Series I Preferred Stock rank on par with the shares of the Common Stock, in each case, as to dividend rights and distributions of assets upon liquidation,
dissolution or winding up of the Company.
With certain exceptions, as described in the Certificate of Designation, the shares of Series I Preferred Stock have no voting rights.
However, as long as any shares of Series I Preferred Stock remain outstanding, the Certificate of Designation provides that the Company shall not, without the affirmative vote of holders of a majority of the then outstanding shares of Series I
Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series I Preferred Stock or alter or amend the Certificate of Designation, (b) amend our certificate of incorporation or other charter documents in any
manner that adversely affects any rights of the holders of Series I Preferred Stock, (c) increase the number of authorized shares of Series I Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.
Each share of Series I Preferred Stock is convertible at any time at the holder’s option into one share of Common Stock, which conversion
ratio will be subject to adjustment for stock splits, stock dividends, distributions, subdivisions and combinations and other similar transactions as specified in the Certificate of Designation. Notwithstanding the foregoing, the Certificate of
Designation further provides that the Company shall not effect any conversion of the shares of Series I Preferred Stock, with certain exceptions, to the extent that, after giving effect to an attempted conversion, the holder of shares of Series I
Preferred Stock (together with such holder’s affiliates and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own a number of shares of Common Stock in excess of 4.99% (or 9.99% at the
election of the holder prior to the date of issuance) of the shares of Common Stock then outstanding. At the holder’s option, upon notice to the Company, the holder may increase or decrease this beneficial ownership limitation not to exceed 9.99%
of the shares of Common Stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.
Additionally, subject to certain exceptions and limitations, at any time after the date of issuance, the Company will have the right to
cause each holder of the Series I Preferred Stock to convert all or part of such holder’s Series I Preferred Stock in the event that (i) the volume weighted average price of the Common Stock for any 20 of 30 consecutive trading days exceeds 300% of
the conversion price of the Series I Preferred Stock (subject to adjustment for stock splits, recapitalizations, stock dividends and similar transactions) and (ii) the average daily trading volume for such period exceeds $200,000 per trading day.
The foregoing summary of the Certificate of Designation does not purport to be complete and is subject to, and qualified in its entirety by,
such document attached as Exhibit 3.1 to this Current Report, which is incorporated herein by reference.
Pursuant to the terms of the Company’s outstanding Series F Convertible Preferred Stock (the “Series F Preferred Stock”) set forth in the Certificate of Designations of Preferences, Rights and Limitations for such series, which Series F Preferred Stock is
subject to full-ratchet anti-dilution protection in the event the Company sells any Common Stock at a price lower than the then-conversion price of the Series F Preferred Stock, as a result of the Public Offering, the conversion price of the
Preferred Stock has been reduced to $0.25, the per share price to the public in the Public Offering, which reduction was effective upon the closing of the Public Offering on October 18, 2022.
Based on information from the Company’s transfer agent, following the completion of the Public Offering, as of 5:00 p.m. New York City time
on October 18, 2022, the Company had outstanding 31,531,650 shares of Common Stock, 127 shares of Series F Preferred Stock (convertible into 508,000 shares of Common Stock) and 23,157,124 shares of Series I Preferred Stock (convertible into
23,157,124 shares of Common Stock).
On October 14, 2022, the Company issued a press release announcing that it had priced the Public Offering, a copy of which is attached as
Exhibit 99.1 to this Current Report and is incorporated herein by reference.
On October 18, 2022, the Company issued a press release announcing
the exercise of the Overallotment Option and the closing of the Public Offering, a copy of which is attached as Exhibit 99.2 to this Current Report and is incorporated herein by reference. Information contained on or accessible through any
website reference in the press releases is not part of, or incorporated by reference in, this Current Report, and the inclusion of such website addresses in this Current Report by incorporation by reference of the press releases is as inactive
textual references only.
| Item 9.01 |
Financial Statements and Exhibits.
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Exhibit
Number
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Exhibit Description
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| 1.1 |
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Underwriting Agreement dated as of October 14, 2022, by and between Nuwellis, Inc. and Ladenburg Thalmann & Co. Inc.
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| 3.1 |
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Certificate of Designation of Preferences, Rights and Limitations, filed with the Delaware Secretary of State on October 14, 2022,
with respect to the Series I Convertible Preferred Stock.
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| 4.1 |
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Form of Warrant to purchase shares of common stock (incorporated by reference to Exhibit 4.20 of Company’s Amendment No. 5 to the
Registration Statement on Form S-1 filed on October 13, 2022 (File No. 333-267368)).
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| 4.2 |
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Warrant Agency Agreement.
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| 99.1 |
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Company Press Release dated October 14, 2022.
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| 99.2 |
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Company Press Release dated October 18, 2022.
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104
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Cover Page Interactive Data File (embedded within Inline XBRL document).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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Date: October 18, 2022
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NUWELLIS, INC.
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By:
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/s/ Nestor Jaramillo, Jr
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Name:
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Nestor Jaramillo, Jr.
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Title:
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President, Chief Executive Officer, and Interim Chief Financial Officer
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