Nuwellis (NUWE) Announces Preferred Stock Offering

Nuwellis (NASDAQ: NUWE) has just filed the following:
We are offering up to [•] units (“Unit(s)”) on a best efforts basis, with each Unit consisting of one share of our Series J Convertible Redeemable Preferred Stock, par value $0.0001 per share, with a liquidation preference of $25.00 per share (the “Series J Convertible Preferred Stock”), and one warrant (each, a “Warrant”) to purchase one-half of one (0.50) share of our Series J Convertible Preferred Stock in this offering pursuant to this prospectus. Accordingly, the [•] Units consist of [•] shares of Series J Convertible Preferred Stock and [•] Warrants with an exercise price of $[•] to purchase [•] shares of Series J Convertible Preferred Stock. The assumed public offering price for each Unit is $[•]. The Units have no stand-alone rights and will not be certificated or issued as stand-alone securities. The Series J Convertible Preferred Stock and Warrants are immediately separable and will be issued separately in this offering. The Warrants offered hereby will be immediately exercisable on the date of issuance and will expire three (3) years from the closing date of this offering (the “Closing Date”).

The assumed public offering price of $[•] per Unit reflects the issuance of the Series J Convertible Preferred Stock with an original issue discount (“OID”) of [•]%. The Series J Convertible Preferred Stock will not have voting rights, except as required by Delaware law and other limited circumstances.

Dividends on the Series J Convertible Preferred Stock shall be paid in-kind (“PIK dividends”) in additional shares of Series J Convertible Preferred Stock based on the stated value of $25.00 per share at an assumed dividend rate of [•]% per annum (the “Dividend Rate”). The PIK dividends will be paid on a quarterly basis for three (3) years following the Closing Date to holders of the Series J Convertible Preferred Stock of record at the close of business on [•], [•], [•] and [•] of each year (the “Dividend Record Dates”) at the quarterly dividend rate of [•]% (the “Quarterly Dividend Rate”). PIK dividends on each share of Series J Convertible Preferred Stock shall be paid three business days after the applicable Dividend Record Date in additional fully paid and nonassessable, registered shares of Series J Convertible Preferred Stock in a number equal to the quotient obtained by dividing (A) the product obtained by multiplying (i) the Quarterly Dividend Rate and (ii) the stated value of $25.00 per share, by (B) the public offering price per Unit (equal to $[•], based on the assumed public offering price per Unit).

The Series J Convertible Preferred Stock has a term of three (3) years and is convertible at the option of the holder at any time into shares of our common stock at a conversion price equal to the closing price of our common stock on the Nasdaq Capital Market on the date on which the registration statement of which this prospectus forms a part is declared effective by the Securities and Exchange Commission. The assumed fixed conversion price of $[•], which assumed conversion price is based on the closing price of our common stock on September [•], 2023, and is subject to adjustment. The Series J Convertible Preferred Stock is redeemable under the circumstances described under “Description of Securities Being Offered—Series J Convertible Preferred Stock Being Offered Pursuant to this Prospectus—Mandatory Redemption”.

This offering also includes the Series J Convertible Preferred Stock issuable from time to time upon exercise of the Warrants and shares of common stock issuable from time to time upon conversion of the Series J Convertible Preferred Stock.

We refer to the shares of our Series J Convertible Preferred Stock, the shares of our common stock issuable upon conversion of the Series J Convertible Preferred Stock, the Warrants and the shares of our Series J Convertible Preferred Stock issued or issuable upon exercise of the Warrants, collectively, as the securities.

Because this is a best efforts offering, the placement agents do not have an obligation to purchase any securities, and, as a result, there is a possibility that we may not be able to sell the securities. We expect that the offering will end two trading days after we first enter into a securities purchase agreement relating to the offering and the offering will settle delivery versus payment (“DVP”)/receipt versus payment (“RVP”). Accordingly, we and the placement agents have not made any arrangements to place investor funds in an escrow account or trust account since the placement agents will not receive investor funds in connection with the sale of the securities offered hereunder.

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