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As filed with the Securities and Exchange Commission on November 13, 2017

September 29, 2023

Registration No. 333-221010

333-274610

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1


Amendment No. 2

to
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933



CHF SOLUTIONS,NUWELLIS, INC.

(Exact name of registrant as specified in its charter)



Delaware
​​
3845
​​
68-0533453
(State or Other Jurisdiction of Incorporation)
Incorporation or Organization)
​​
(Primary Standard Industrial
Classification Code Number)
​​
(I.R.S. Employer
Identification Number)

12988 Valley View Road

Eden Prairie, Minnesota 55344
(952) 345-4200
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Nestor Jaramillo, Jr.


John Erb

Chief Executive Officer
CHF Solutions,
Nuwellis, Inc.
12988 Valley View Road
Eden Prairie, Minnesota 55344
(952) 345-4200
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)



Copies to:

Phillip D. Torrence Esq.
Meredith Ervine, Esq.
Honigman Miller Schwartz and Cohn LLP
350 East Michigan Avenue,
650 Trade Centre Way, Suite 300200
Kalamazoo, MI 4900749002
Tel: (269) 337-7700
Fax: (269) 337-7703
​​
Michael F. NertneyNeil P. Ayotte
Ellenoff Grossman
Senior Vice President, General
Counsel,
Secretary and Chief Compliance
Officer
Nuwellis, Inc.
12988 Valley View Road
Eden Prairie, Minnesota 55344
Tel: (952) 345-4200
​​
David E. Danovitch
Aaron M. Schleicher
Shu Wei
Sullivan & ScholeWorcester LLP
1345 Avenue of the Americas
1633 Broadway
New York, NY 10105-0302New York 10019
Tel:
(212) 370-1300
Fax: (212) 401-4741660-3060



Approximate date of commencement of proposed sale to the public: From time to timeAs soon as practicable after this Registration Statement becomesregistration statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o☐
​​
Accelerated filer  o☐
​​
Non-accelerated filer o
(Do not check if a
smaller reporting company)☒
​​
Smaller reporting company ☒
 
​​
 
​​
​​
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 7(a)(2)(B) of the Securities Act.  o

CALCULATION OF REGISTRATION FEE

Title of securities to be registered(1)
Proposed maximum
aggregate offering price(1)
Amount of
Registration Fee(2)
Series F Convertible Preferred Stock
$
10,000,000
 
$
1,245.00
 
Common Stock issuable upon conversion of Series F Convertible Preferred Stock
 
 
 
 
 
 
Warrants to purchase common stock
 
 
 
 
 
 
Common Stock issuable on exercise of Warrants
$
22,000,000
 
$
2,739.00
 
Total
$
32,000,000
 
$
3,984.00(3
)
☐

(1)Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the “Act”). Pursuant to Rule 416 under the Act, the securities registered also include such indeterminate amounts and numbers of shares of common stock issuable to cover additional securities that may be offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(2)Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price of all securities being registered.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
(3)Of this amount, $2,147.63 was previously paid.

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The information contained in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement relating to these securities filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it isthey are not soliciting an offer to buy these securities in any jurisdiction where theany such offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED NOVEMBER 13, 2017

SEPTEMBER 29, 2023

PRELIMINARY PROSPECTUS

 


CHF SOLUTIONS,

NUWELLIS, INC.

10,000

Up to 400,000 Units
Consisting of 400,000 Shares of Series FJ Convertible Redeemable Preferred Stock
with a Liquidation Preference of $25.00 and
400,000 Warrants to Purchase 200,000 Shares of Series J Convertible Preferred Stock
(and 2,141,328
200,000 Shares of Series J Convertible Preferred Stock Underlying the Warrants
967,821 Shares of Series J Convertible Preferred Stock Issuable as PIK Dividends
25,617,993 Shares of Common Stock Underlying the Series FJ Convertible Preferred Stock)
Warrants to Purchase up to 4,282,655 Shares of Common Stock
(and 4,282,655 Shares of Common Stock Issuable Upon Exercise of Warrants)

We are offering 10,000 sharesup to 400,000 units (“Unit(s)”) on a best efforts basis, with each Unit consisting of Series F convertible preferred stock, and 4,282,655 warrants each exercisable for 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 400,000 Units consist of 400,000 shares of Series J Convertible Preferred Stock and 400,000 Warrants with an assumed exercise price of $7.50 per one-half of one share to purchase 200,000 shares of Series J Convertible Preferred Stock. The assumed public offering price for each Unit is $15.00. 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 $15.00 per Unit reflects the issuance of the Series J Convertible Preferred Stock with an original issue discount (“OID”) of 40%. 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 20% 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 October 31, January 31, April 30, and July 31 of each year (the “Dividend Record Dates”) at the quarterly dividend rate of 5% (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 $15.00, 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 numberthe registration statement of warrants equals 200%which this prospectus forms a part is declared effective by the Securities and Exchange Commission. The assumed fixed conversion price of $1.53, which assumed conversion price is based on the closing price of our common stock on September 27, 2023, 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 numberWarrants 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 a share ofthe Series F convertible preferred stock atJ Convertible Preferred Stock, the conversion price, at an exercise price per share equal to $[_____]. This prospectus also covers up to 2,141,328Warrants and the shares of common stock issuable upon conversion of theour Series F convertible preferred stock and up to 4,282,655 shares of common stockJ Convertible Preferred Stock issued or issuable upon exercise of the warrants.

Each share of Series F convertible preferred stock will be sold with one warrant that expires on the first anniversary of the date of issuance to purchase up to 214 shares of common stock (referred to as “Series 1 warrants”) and one warrant that expires on the seventh anniversary of the date of issuance to purchase up to 214 shares of common stock (referred to as “Series 2 warrants”), and collectively will be sold, at the public offering price of $1,000 per share of Series F convertible preferred stock. The shares of Series F convertible preferred stock and related warrants are immediately separable and will be issued separately. Subject to certain ownership limitations, the Series F convertible preferred stock is convertible at any time at the option of the holder into shares of our common stock at an initial conversion price per share equal to $    . Subject to certain ownership limitations, the warrants are immediately exercisable.

For a more detailed description of the Series F convertible preferred stock, see the section entitled “Description of Securities—Description of Series F Convertible Preferred Stock” beginning on page 41. For a more detailed description of the warrants, see the section entitled “Description of Securities—Description of Warrants, We Are Offering In This Offering” beginning on page 43 of this prospectus. For a more detailed description of our common stock, see the section entitled “Description of Securities—Description of Our Common Stock” beginning on page 44 of this prospectus. We refer to the Series F convertible preferred stock issued hereunder, the warrants to purchase common stock issued hereunder and the shares of common stock issuable upon conversion of the Series F convertible preferred stock and upon exercise of the warrants issued hereunder, collectively, as the securities.

The price of our common stock on The Nasdaq Capital Market during recent periods

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 only be one of many factorsend 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 determiningan escrow account or trust account since the public offering price. Other factors to be consideredplacement agents will not receive investor funds in determiningconnection with the public offering price include our history, our prospects, the industry in which we operate, our past and present operating results, the previous experience of our executive officers, the general conditionsale of the securities markets at the time of this offering and discussions between the underwriter and prospective investors. All share numbers included in this prospectus are based upon an assumed conversion price of $4.67, the closing price of our common stock on November 9, 2017.

offered hereunder.

Our common stock trades on Thethe Nasdaq Capital Market under the ticker symbol “CHFS”“NUWE”. See “Prospectus Summary—Recent Developments” in this prospectusOn September 27, 2023, the last reported sale price for important information about the listing of our common stock on Thethe Nasdaq Capital Market. WeMarket was $1.53 per share. There is no established trading market for, and we do not expect a market to develop for, the Series J Convertible Preferred Stock or the Warrants. In addition, we do not intend to list the warrantsSeries J Convertible Preferred Stock or preferred stockthe Warrants on The Nasdaq Capital Market or any other national securities exchange or any other nationally recognized trading system.
We have engaged Lake Street Capital Markets, LLC and Maxim Group LLC as placement agents (the “placement agents”) to use their reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The placement agents are not purchasing or selling any of the securities we are offering and the placement agents are not required to arrange the purchase or sale of any specific number or dollar amount of securities. We have agreed to pay to the placement agents the placement agent fees set forth in the table below, which assumes that we sell all of the securities offered by this prospectus. There is no arrangement for funds to be soldreceived in escrow, trust or similar arrangement. See “Plan of Distribution” in this offering on any stock exchange or other trading market.

prospectus for more information.

Investing in our common stocksecurities involves a high degree of risk. Before making any investment in our securities, you should read and carefully consider the risks described in this prospectus under the section of this prospectus entitled “Risk Factors” on page 713 of this prospectus.

prospectus, as well as the other information included or incorporated by reference in this prospectus, before buying any of our securities.
 
​​
Per Unit
​​
Total
Public offering price
​​
$15.00
​​
$6,000,000
Placement agent fees(1)
​​
$1.20
​​
$480,000
Proceeds, before expenses, to us(2)
​​
$13.80
​​
$5,520,000
(1)
Per Share of
Series F Convertible
Preferred Stock and Accompanying
Warrants(1)
Total
Public offering price
Underwriting discounts(2)
Proceeds, before expenses,Represents a cash fee equal to CHF Solutions, Inc.

(1)The public offering price and underwriting discount corresponds to a public offering price per share of Series F Preferred Stock of $[ ], a public offering price per Series 1 warrant of $[] (or $[] for Series 1 warrants to purchase 214 shares of common stock), and a public offering price per Series 2 warrant of $[] (or $[] for Series 2 warrants to purchase 214 shares of common stock).
(2)We have agreed to pay certain expenses8% of the underwriteraggregate purchase price paid by investors in this offering. We refer youhave also agreed to “Underwriting”reimburse the placement agents for certain of their offering-related expenses. See “Plan of Distribution” beginning on page 5054 of this prospectus for additional information regarding underwriting compensation.a description of the compensation to be received by the Placement Agent.
(2)
The amount of offering proceeds to us presented in this table does not give effect to any exercise of the Warrants.

Our Chief Executive Officer has indicated an interest in purchasing approximately $100,000 of Series F convertible preferred stock and accompanying warrants in this offering on the same terms and at the same price as the Series F convertible preferred stock and accompanying warrants sold to the public in this offering. The underwriter will receive the same underwriting discount on any Series F convertible preferred stock and accompanying warrants purchased by our Chief Executive Officer as it will on any other Series F convertible preferred stock and accompanying warrants sold to the public in this offering.

Neither the Securities and Exchange CommissionSEC nor any state securities commission has approved or disapproved of these securities or passed on the adequacydetermined if this prospectus is truthful or accuracy of this prospectus.complete. Any representation to the contrary is a criminal offense.

The underwriter expects to deliver

Delivery of the securities is expected to purchasersbe made on []or about     , 2017.

Sole Book-Running Manager

Ladenburg Thalmann

2023.

LAKE STREET
​​
​​
MAXIM GROUP LLC
The date of this prospectus is      [], 2017.

2023

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TABLE OF CONTENTS

ABOUT THIS PROSPECTUS
​		​
ii
WHERE YOU CAN FIND ADDITIONAL INFORMATION
ii
INFORMATION INCORPORATED BY REFERENCE
ii
PROSPECTUS SUMMARY
​		​
1
SUMMARY OF RISK FACTORS
​​
11
RISK FACTORS
​		​
713
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
​		​
2422
USE OF PROCEEDS
​		​
2523
SELECTED FINANCIAL DATA
26
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
​		​
2724
CAPITALIZATION
​		​
2825
DILUTION
29
BUSINESS
30
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
​		​
4027
DESCRIPTION OF SECURITIES BEING OFFERED
​		​
4128
UNDERWRITINGDESCRIPTION OF CAPITAL STOCK
​		​
5038
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONSCONSEQUENCES
​		​
5345
PLAN OF DISTRIBUTION
​​
54
LEGAL MATTERS
​		​
5760
EXPERTS
​		​
5760
WHERE YOU CAN FIND ADDITIONAL INFORMATION
​​
60
INFORMATION INCORPORATED BY REFERENCE
​​
61

You should rely only on the information contained in this prospectus and any free-writing prospectus that we authorize to be distributed to you. We have not, and the underwriter has not, authorized anyone to provide you with information different from or in addition to that contained in this prospectus or any related free-writing prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. We are offering to sell, and are seeking offers to buy, the securities offered by this prospectus only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the securities. Our business, financial conditions, results of operations and prospects may have changed since that date.

We obtained industry and market data used throughout and incorporated by reference into this prospectus through our research, surveys and studies conducted by third parties and industry and general publications. We have not independently verified market and industry data from third-party sources.

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S-1 that we filed with the Securities and Exchange Commission (“SEC”). It omits some of the information contained in the registration statement and reference is made to the registration statement for further information with regard to us and the securities being offered hereby. You should review the information and exhibits in the registration statement for further information about us and the securities being offered hereby. Statements in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to the filings. You should review the complete document to evaluate these statements.

You should not assume that the information contained in this prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus is delivered or securities are sold on a later date. Our business, financial condition, results of operations and prospects may have changed since those dates.
You should read this prospectus, any documents that we incorporate by reference in this prospectus and the additional information described below under “Where You Can Find Additional Information” and “Information Incorporated byBy Reference” before making an investment decision. You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorizedprospectus and any other personfree-writing prospectus that we authorize to provide you with different information. If anyone provides you with additional, different or inconsistent information, you should not rely on it.be distributed to you. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

You should not assume that the information in this prospectus or any documents we incorporate by reference herein is accurate as of any date other than the date on the front of such document. Our business, financial condition, results of operations and prospects may have changed since those dates.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We file reports, proxy statements and other information with the SEC in accordance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”). You may read and copy our reports, proxy statements and other information filed by us at the public reference room

For investors outside of the SEC located at 100 F Street, N.E., Washington, D.C. 20549, on official business days duringUnited States: We have not, and the hours of 10 a.m. to 3 p.m. Please call the SEC at 1-800-SEC-0330 for further information about the public reference rooms. Our reports, proxy statements and other information filed with the SEC are available free of charge to the public over the Internet at the SEC’s website at http://www.sec.gov.

INFORMATION INCORPORATED BY REFERENCE

SEC rules allow us to “incorporate by reference” intoplacement agents have not, done anything that would permit this prospectus much of the information we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference into this prospectus is considered to be part of this prospectus. These documents may include Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements. You should read the information incorporated by reference because it is an important part of this prospectus.

This prospectus incorporates by reference the documents listed below, other than those documentsoffering or the portions of those documents deemed to be furnished and not filed in accordance with SEC rules:

our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on March 8, 2017;
our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 12, 2017, for the quarter ended June 30, 2017, filed with the SEC on August 10, 2017, and for the quarter ended September 30, 2017, filed with the SEC on November 2, 2017;
our Current Reports on Form 8-K filed with the SEC on January 10, 2017, January 13, 2017, February 3, 2017, February 10, 2017, February 16, 2017, March 3, 2017, March 22, 2017, March 24, 2017, March 29, 2017, April 11, 2017, April 25, 2017, April 28, 2017, May 5, 2017, May 23, 2017, May 30, 2017, June 2, 2017, June 9, 2017, October 12, 2017, October 30, 2017;
the information specifically incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2016 from our definitive proxy statement for the annual meeting of stockholders held on May 25, 2017, filed with the SEC on April 13, 2017;
the description of our common stock in our registration statement on Form 10 filed with the SEC on September 30, 2011, including any amendmentpossession or report filed for the purpose of updating such description; and

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the description of our Series A Junior Participating Preferred Stock, par value $0.0001 per share, in our registration statement on Form 8-A filed with the SEC on June 14, 2013.

Any statement contained in any document incorporated by reference herein shall be deemed to be modified or superseded for purposesdistribution of this prospectus toin any jurisdiction where action for that purpose is required, other than in the extent that a statement contained inUnited States. Persons outside the United States who come into possession of this prospectus ormust inform themselves about, and observe any prospectus modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded,restrictions relating to constitute a part of this prospectus.

We also incorporate by reference any future filings, other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items, made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, in each case, other than those documents or the portions of those documents deemed to be furnished and not filed in accordance with SEC rules, until the offering of the securities under the registration statementand distribution of which this prospectus forms a part is terminated or completed. Information in such future filings updatesoutside the United States.

We obtained industry and supplements the information provided in this prospectus. Any statements in any such future filings will be deemed to modifymarket data used throughout and supersede any information in any document we previously filed with the SEC that is incorporated or deemed to be incorporated herein by reference to the extent that statements in the later filed document modify or replace such earlier statements.

Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and later information filed with the SEC may update and supersede some of the information included or incorporated by reference in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded.

These documents may also be accessed on our website at www.chf-solutions.com. Information contained in, or accessible through, our website is not a part of this prospectus.

We will provide without charge to each person, including any beneficial owners, to whom this prospectus is delivered, upon his or her written or oral request, a copy of any or all reports or documents referred to above which have been or may be incorporated by reference into this prospectus butthrough our research, surveys and studies conducted by third parties and industry and general publications. We have not delivered with this prospectus, excluding exhibits to those reports or documents unless they are specifically incorporated by reference into those documents. You may request a copy of these documents by writing or telephoning us at the following address.

CHF Solutions, Inc.
12988 Valley View Road
Eden Prairie, Minnesota 55344
(952) 345-4200
Attention: Claudia Drayton
Chief Financial Officer

independently verified market and industry data from third-party sources.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before deciding to invest in our securities, you should read this entire prospectus carefully, including our financial statements and related notes incorporated herein by reference, the information in the section “Risk Factors” and our filings incorporated by reference herein to which we have referred you in the sections “Where You Can Find Additional Information,”Information” and “Information Incorporated by Reference” and “Risk Factors”, including our financial statements and related notes.Reference.” Unless the context otherwise requires, references in this prospectus to the “Company,” “CHFS,“NUWE,” the “registrant,” “we,” “us”, and “our” refer to CHF Solutions, Nuwellis, Inc.

Company Overview

We are a medical devicetechnology company dedicated to transforming the lives of patients suffering from fluid overload through science, collaboration, and innovative technology. The company is focused on developing, manufacturing, and commercializing ourmedical devices used in ultrafiltration therapy, including the Aquadex FlexFlow® ultrafiltration system. The Aquadex FlexFlow system consists of:

A console, a piece of capital equipment containing electromechanical pumps and an LCD screen,
A one-time disposable blood set (the “Aquadex Blood Set”), an integrated collection of tubing, filter, sensors, and connectors that contain and deliver the blood from and back to the patient, and
A disposable catheter (the “Aquadex Catheter”), a small, dual-lumen catheter designed to access the peripheral venous system of the patient and to simultaneously withdraw blood and return filtered blood to the patient.

The Aquadex Blood Set is proprietary and the Aquadex FlexFlowSmartFlow® systems (collectively the “Aquadex System”). The Aquadex SmartFlow® system is indicated for temporary (up to eight hours) or extended (longer than 8 hours in patients who require hospitalization) use in adult and pediatric patients weighing 20 kg. or more whose fluid overload is unresponsive to medical management, including diuretics.

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 onlycause an imbalance and damage to an individual’s health.
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. Medical conditions or diseases where excess fluid accumulates in the body are heart failure, kidney failure, nephrotic syndrome, cirrhosis, or burn injuries/trauma. Individuals may also suffer from temporary fluid overload following certain surgical procedures, such as cardiac surgery. The diagnosis of fluid overload can be usedmade through a variety of tests/exams such as a physical exam (weight and edema), blood chemistry, electrocardiogram (ECG or EKG), glomerular filtration rate (GFR), liver enzymes, and urinalysis, or serum/urine sodium test. Fluid overload has a significant association with the Aquadex Blood Set. combined events of death, infection, bleeding, arrhythmia, and pulmonary edema1 and is a leading cause of hospital readmissions with patients suffering from heart failure and patients following cardiac surgery.
The condition of fluid overload is often observed in patients with heart failure and secondary oliguric states.2 Most of the symptoms of congestive heart failure result from extracellular fluid volume. For this reason, diuretics have been the cornerstone of heart failure treatment for more than 50 years. Over the past 20 years, approaches to treatment have changed dramatically.3 These dramatic improvements include new medications and new technologies, such as ultrafiltration, to help treat fluid overload. Each year there are over 1 million heart failure hospitalizations in the United States, and 90% of those hospitalizations are due to symptoms of fluid overload.4 These patients are hospitalized on average for 8.35 days at a cost of approximately $24,0006, to which reimbursement will only cover about 34%6 of that cost. On top of that, there is a 24% readmission rate in which the hospitals absorb another cost but do not get reimbursed.7
1
Stein, A, et. al. Critical Care, 2012:16:R99.
2
Ronco C, Costanzo MR, Bellomo R, et al. (2010) Fluid Overload Diagnosis and Management. Basel, Switzerland: Karger.
3
Ellison DH. Diuretic therapy and resistance in congestive heart failure. Cardiology.2001;96:132-143.
4
Costanzo MR, et al. J Am Coll Cardiol. 2017 May 16;69(19):2428-2445.
5
From Premier Applied Sciences database.
6
Reimbursement estimates from MCRA.
7
Costanzo MR, et al. J Am Coll Cardiol. 2017 May 16;69(19):2428-2445.
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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 ACE inhibitors, beta-blockers, and inotropic drugs. Although diuretics are the mainstay of treatment for congestion or fluid overload, no randomized trials have shown the effects of diuretics on mortality in chronic heart failure patients. Furthermore, appropriate titration of diuretics, specifically in the heart failure population, is unclear. Increasing concern exists that diuretics, particularly at high doses, may be deleterious in the inpatient setting. In addition, patients with heart failure and cardiorenal syndrome have diminished response to loop diuretics, making these agents less effective at relieving congestion.8Also, long term use of diuretics has been associated with kidney damage.9 Approximately 40% of heart failure patients have poor diuretic response.10 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.11 Despite treatment with loop diuretics, patients are frequently hospitalized and treated for recurrent symptoms and signs of fluid overload. Among more than 50,000 patients enrolled in the Acute Decompensated Heart Failure National Registry (“ADHERE”) study, only 33% lost ≥ 2.27 kg. (5 lbs.), and 16% gained weight during hospitalization.12
Nearly one-half of hospitalized patients with heart failure are discharged with residual fluid excess after receiving conventional diuretic therapies.13 Additionally, one study found that 24% of such patients were readmitted to the hospital within 30 days of their discharge, and 50% were readmitted within 90 days.8 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.14 There is an association of chronic loop diuretic therapy and greater resource utilization at hospitals.15 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 patients for over 20 years.16 Ultrafiltration is a safe and effective alternative therapy to remove extra fluid and salt by gently filtering blood through an ultrafiltration system. 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, the therapy provides economic advantages. One hospital cost analysis demonstrated a total cost savings of $3,975, or 14.4%, per patient when using ultrafiltration as compared to diuretic therapy over 90 days.17
The Aquadex Catheter is often used in conjunction with the Aquadex FlexFlow system, although it is one of many potential catheter options available to the provider.

System

The Aquadex FlexFlow systemSystem 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. Heart failure is the leading cause of fluid overload, a condition where patients become decompensated resulting in lengthy and costly hospitalizations. Based on data from the National Health and Nutrition Examination Survey conducted by the Centers for Disease Control and Prevention/National Center for Health Statistics from 2011 to 2014, the American Heart Association estimates that 6.5 million people in the United States, age 20 and over, had heart failure. Based on the Atherosclerosis Risk in Communities Study from 2005 to 2013, conducted by the National Heart, Lung and Blood Institute, there are an estimated 960,000 new heart failure cases annually. Annual hospitalizations for heart failure exceed 1 million in United States and Europe, and more than 90% are due to symptoms and signs of fluid overload.
8
Kamath SA. The role of ultrafiltration in patients with decompensated heart failure. Int J of Nephrol. 2011.
9
Felker MG. Diuretics and ultrafiltration in acute decompensated heart failure J Am Coll Cardiol 2012 Jun 12;59(24):2145-53.
10
Testani JM, Hanberg JS, Cheng S, et al. Rapid and highly accurate prediction of poor loop diuretic natriuretic response in patients with heart failure. Circ Heart Fail. 2016 Jan;9(1):e002370.
11
Hoorn EJ and Ellison DH. Diuretic Resistance. Am J Kidney Dis. 2017;69(1):136-142.
12
Costanzo MR, Ronco C, Abrahman WT, et al. Extracorporeal ultrafiltration for fluid overload in heart failure. J Am Coll Cardiol. 2017;69(19):2428-2445.
13
Gheorghiade M, Filippatos G. Reassessing treatment of acute heart failure syndromes: the ADHERE registry. Eur Heart J Suppl. 2005; 7:B13–19.
14
Felker GM, Lee KL, Bull DA, et al. Diuretic strategies in patients with acute decompensated heart failure. N Engl J Med. 2011; 364:797–805.
15
Costanzo MR, Guglin ME, Saltzberg MT, et al. Ultrafiltration versus intravenous diuretics for patients hospitalized for acute decompensated heart failure. J Am Coll Cardiol. 2007; 49(6):675-683.
16
Agostoni PG, Marenzi GC, Pepi M, et al. Isolated ultrafiltration in moderate congestive heart failure. J Am Coll Cardiol. 1993; 21(2):424-431.
17
Costanza MR, et. al. Ultrafiltration vs. Diuretics for the Treatment of Fluid Overload in Patients with Heart Failure: A Hospital Cost Analysis. Value Health. 2018; 21 (Suppl 1):S167.
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The Aquadex FlexFlow system is indicated for temporary (up to eight hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy, and extended (longer than 8 hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy and require hospitalization.

With the Aquadex FlexFlow system,System, medical practitioners can specify and control the amount of fluid to be extracted at a safe, predictable, and effective rate, in a process we refer to as Aquapheresis® therapy. All Aquapheresis treatments must be administered by a healthcare provider, under physician prescription, both of whom have received training in extracorporeal therapies.rate. The Aquadex FlexFlow systemSystem has been shown to have no clinically significant impact on electrolyte balance, blood pressure or heart rate.118

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.

Benefits of the Aquadex System
The Aquadex FlexFlow ultrafiltration systemSystem offers a safe approach to treating fluid overload and:

•
Reduces hospitalization by 81%19 compared to diuretics;
•
Rehospitalizations with Aquadex were 48% lower than the national average at 30 days;19
•
Reduces length of hospital stay when initiated early, resulting in average savings of $3,975 (14%);20-21
•
No significant changes to kidney function;19
•
Stabilizes or improves cardiac hemodynamics;22-25
Predictably removes excess fluid;
Safe, easy-to-use, and flexible in application;
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 patientpatient;
Aquapheresis therapy canCan be performed via peripheral or central venous access
access;
•
Removes isotonic fluid (extracts sodium while sparing potassium and magnesium);226
•
Following ultrafiltration, neurohormonal activation is reset toward a more physiological condition and diuretic efficacy is restored;27
Provides highly automated operation with only one setting required to begin therapy;
Utilizes a single-use, disposable auto-loading blood filter circuit that facilitates easy set-up; and
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:
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
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.
1
18
SAFE Trial: Jaski BE, et al. J Card Fail. 2003 Jun; 9(3): 227-231; RAPID Trial: Bart BA, et al. J Am Coll Cardiol. 2005 Dec 6; 46(11): 2043-2046.
19
2
Watson R et al. J Cardiac Fail. 2020; 26(10): s56.
20
Kiziltepe, U, et al. Ann Thorac Surg. 2001;71(2): 684-93.
21
Sahoo, TK, et al. Indian J Thorac Cardiovas Surg. 2007;23(2): 116-24.
22
Boga et al. Perfusion. 2000;15:143-50.
23
Onoe et al. Perfusion. 2001;16:37-42.65.
23
Costanzo MR et al. JACC. 2005; 46(11); 2457-51.
25
Costanzo, et. al., ISPOR 23rd Annual Int’l Mtg., May 19-23, 2018, Baltimore, MD, USA.
26
Ali SS, et al. Congest Heart Fail. 2009; 15(1):1-4.
27
Marenzi G, et al. J Am Coll Cardiol. 2001 Oct; 38(4): 963-968.
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•Following ultrafiltration, neurohormonal activation is reset toward a more physiological condition and diuretic efficacy is restored3
Provides highly automated operation with only one setting required to begin
Utilizes a single-use, disposable auto-loading blood filter circuit that facilitates easy set-up
The console guides medical practitioner through the setupAquadex blood circuit set is proprietary, and operational process
Decreased hospital length of stay and readmissions

Until July 2016, we were focused on developing the C-Pulse® Heart Assist System, or C-Pulse System, for treatment of Class III and ambulatory Class IV heart failure. In August 2016, we acquired the Aquadex FlexFlow system (the “Aquadex Business”), from Gambro UF Solutions, Inc., a subsidiarySystem can only be used with the Aquadex blood circuit set. The dual lumen extended length catheter (dELC) is designed for use with the Aquadex System, although it is one of Baxter International Inc., a global leader in the hospital products and dialysis markets (collectively, “Baxter”). On September 29, 2016, we announced a strategic refocus of our near-term strategy that includes halting clinical evaluations relatedmany potential catheter options available to the C-Pulse System technology to fully focus our resources on the Aquadex Business, taking actions to reduce our cash burn in connection with such strategic refocus and reviewing potential strategic alliances and financing alternatives.

You should read this prospectus, any documents that we incorporate by reference in this prospectus and the additional information described under “Where You Can Find Additional Information” and “Information Incorporated By Reference” before making an investment decision. You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

healthcare provider.

Corporate Information

CHF Solutions,

Nuwellis, Inc. (then, Sunshine Heart, Inc.) was incorporated in Delaware on August 22, 2002. We began operating our business in November 1999 through Sunshine Heart Company Pty Limited, which currently iswas a wholly owned Australian subsidiary of CHF Solutions,Nuwellis, Inc. Our common stock began trading on the Nasdaq Capital Market on February 16, 2012 under the symbol “SSH”. We delisted from the ASX at the close of trading on May 6, 2013. On May 23, 2017, we changed our name to CHF Solutions, Inc. and changed our trading symbol to “CHFS”.

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.chf-solutions.com.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 pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (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.Securities and Exchange Commission (“SEC”). These reports are also available on the SEC’s website, www.sec.gov. The information on, or that may be accessed through, our website is not incorporated by reference into and should not be considered a part of this prospectus or the registration statement of which it forms a part.

We qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012 or the JOBS Act. Furthermore, we are, and will remain, a smaller“smaller reporting companycompany” as long as our public float remains less than $75$250 million as of the last business day of our most recently-completed second fiscal quarter. An emerging growth company orA smaller reporting company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to U.S. public companies. These provisions include an exemptionAs long as our public float remains below $75 million as of the last business day of our most recently completed second fiscal quarter, 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)Section 404(b) of the Sarbanes-Oxley Act of 2002 (“SOX”), but do not preclude us from the requirementare required to make our own internal assessment of the effectiveness of our internal controlscontrol over financial reporting.

In addition, the JOBS Act permits emerging growth companies to take advantage of an extended transition period to comply with new or revised accounting standards applicable to U.S. public companies. We may take advantage of these provisions until December 31, 2017. We have elected to take advantage of the benefits of this extended transition period, and as a result of this election, our financial statements may not be comparable to those of companies that comply with new or revised accounting standards for U.S. public companies.

3Marenzi G, et al. J Am Coll Cardiol. 2001 Oct; 38(4): 963-968.
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Recent Developments

Nasdaq Compliance

On June 1, 2017, we received a notification from

The NASDAQ Stock Market LLC (“Nasdaq”) informingOffering
Units offered by us that we were no longer in compliance with the minimum bid price requirement, as the bid price
Up to 400,000 Units, each consisting of sharesone share of our common stock closed below the minimum $1.00 per share for the 30 consecutive business days priorSeries J Convertible Preferred Stock (for a total of up to the date of the notice. Nasdaq also notified us that we were provided 180 calendar days, or until November 28, 2017, to regain compliance with the minimum bid price requirement. Accordingly, we implemented the reverse stock split described below. On October 27, 2017, we received formal notice from Nasdaq that we had regained compliance with the minimum $1.00 bid price requirement, as set forth in Nasdaq Listing Rule 5550(a)(2), and the matter is now closed. We cannot assure you that we will be able continue to meet the Nasdaq listing standards. If do not continue to meet any of the Nasdaq listing standards, our common stock may be subject to delisting from Nasdaq.

Reverse Stock Split

At a special meeting of our stockholders on October 10, 2017, our stockholders approved, among other things, a reverse stock split, and following such special meeting, our Board of Directors approved a 1-for-20 reverse split of our issued and outstanding shares of common stock. We filed with the Secretary of State of the State of Delaware a Certificate of Amendment to our Fourth Amended and Restated Certificate of Incorporation to effect the reverse stock split. The reverse stock split was effective as of 5:00 p.m. Eastern Time on October 12, 2017, and our common stock began trading on a split-adjusted basis on The Nasdaq Capital Market on October 13, 2017. The reverse stock split did not change the par value of our stock or the authorized number of common or preferred shares. All share and per share amounts in this prospectus and the registration statement of which it forms a part have been retroactively adjusted to reflect the reverse stock split for all periods presented.

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The Offering

Issuer
CHF Solutions, Inc.
Securities offered by us
We are offering 10,000400,000 shares of Series F convertible preferred stock. EachJ Convertible Preferred Stock) and one Warrant (for a total of up to 400,000 Warrants) to purchase one-half of one share (0.5) of our Series J Convertible Preferred Stock (for a total of up to 200,000 shares of Series J Convertible Preferred Stock), on a best-efforts basis. 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 accompanied by (a) Series 1 warrants to purchase a number of shares of common stock equal to 100% of the shares of common stock initially issuable upon conversion of the Series F convertible preferred stock, as described below, and (b) Series 2 warrants to purchase a number of shares of common stock equal to 100% of the shares of common stock initially issuable upon conversion of the Series F convertible preferred stock, as described below. issued separately in this offering.
This prospectusoffering also relates to the offeringshares of Series J Convertible Preferred Stock issuable as PIK dividends and the shares of common stock issuable upon conversion of the Series F convertible preferred stock and exerciseJ Convertible Preferred Stock.
Series J Convertible Preferred Stock– Original Issue Discount
The assumed public offering price of $15.00 per Unit reflects the issuance of the Series 1 warrants and J Convertible Preferred Stock with an original issue discount (“OID”) of 40% of the stated value ($25.00).
Series 2 warrants.
Description of Series F preferred stockJ Convertible Preferred Stock– Maturity Date
The Series F preferredJ Convertible Preferred Stock matures three (3) years from the Closing Date.
Series J Convertible Preferred Stock– Conversion Rights
Each share of Series J Convertible Preferred Stock is convertible at the option of the holder at any time into shares of our common stock hasat a liquidation preference, has full ratchetfixed assumed conversion price based anti-dilution protection, and is subject to certain ownership limitations. In addition, we haveof $1.53 (the “Conversion Price”) (based on the right to require holders to convert the Series F preferred stock if certain equity conditions are met and if the volume weighted averageclosing price of our common stock exceeds 300%on the Nasdaq Capital Market on September 27, 2023, which Conversion Price is subject to adjustment. The Conversion Price will equal 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 SEC. The Conversion Price is subject to adjustment for: (i) the payment of stock dividends or other distributions payable in common stock on the outstanding shares of our common stock, excluding the shares of common stock issuable upon the conversion of the conversion price for any 20Series J Convertible Preferred Stock; and (ii) subdivisions and combinations (including by way of 30 consecutive trading days and the daily dollar trading volume during such period exceeds $200,000 per trading day. See the section entitled “Description of Securities—Description of Series F Preferred Convertible Stock” beginning on page 41a reverse stock split).
This prospectusoffering also relates to the offering of shares of common stock issuable upon conversion of the Series F preferred stock at its initial conversion price.J Convertible Preferred Stock.
Conversion priceSee “Description of Securities Being Offered—Series F preferred stock
$       per share (subjectJ Convertible Preferred Stock Being Offered Pursuant to adjustment as described in this prospectus), which is 100% of the consolidated closing bid price of our common stock on The nasdaq Capital Market on the date we entered into the underwriting agreement. Until the volume weighted average price of our common stock exceeds 300% of the conversion price of the Series F preferred stock for any 20 of 30 consecutive trading days and the daily dollar trading volume for each trading day during such period exceeds $200,000 per trading day, the Series F preferred stock has full ratchet price based anti-dilution protection, subject to customary carve-outs, in the event of a down-round financing below the conversion price.Prospectus—Conversion”.
Shares of common stock underlying the Series F preferred stock
2,141,328 (Based on a Series F preferred stock conversion price of $       per share, which was 100% of the consolidated closing bid price of our common stock on The Nasdaq Capital Market on the date we entered into the underwriting agreement.)
Limitations on beneficial ownership
Notwithstanding anything herein to the contrary, no holder will be permitted to convert its Series F preferred stock or exercise its warrants if, after such conversion or exercise, such holder would beneficially own more than 4.99% of the shares of common stock then outstanding (subject to the right of the
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holder to increase such beneficial ownership limitation upon not less than 61 days prior notice provided that such limitation can never exceed 9.99% and such 61 day period cannot be waived).

Series J Convertible Preferred Stock–Mandatory Redemption
Series 1 warrants
We are offering Series 1 warrants to purchase up to 2,141,328If any shares of our Series J Convertible Preferred Stock are outstanding at the end of the three-year term, then we shall promptly redeem all of such outstanding shares of Series J Convertible Preferred Stock on a pro rata basis among all of the holders of Series J Convertible Preferred Stock commencing on the third-year anniversary of the Closing Date (the “Mandatory Redemption Date”) in cash, to the extent legally permissible under Delaware law, or, if redemption for cash is not legally permissible in duly authorized, validly issued, fully paid and non-assessable shares of the Company’s common stock. Each Series 1 warrant will have an initial exercisestock equal in number to the quotient obtained by dividing such unpaid amount by the closing price of $the Company’s common stock on the Nasdaq on the Mandatory Redemption Date.
See “Description of Securities Being Offered—Series J Convertible Preferred Stock Being Offered Pursuant to this Prospectus—Mandatory Redemption.
Series J Convertible Preferred Stock–
Dividends
The Certificate of Designation of Preferences, Rights and Limitations (the “Certificate of Designations”) shall provide that 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 subjectat an assumed dividend rate of 20% per annum. The PIK dividends will be paid on a quarterly basis for three (3) years following the Closing Date to appropriate adjustmentholders of the Series J Convertible Preferred of record at the close of business at the end of October 31, January 31, April 30, and July 31 of each year (each a “Dividend Record Date”) at the quarterly dividend rate of 5% (the “Quarterly Dividend Rate”). PIK dividends on each share of Series J Convertible Preferred Stock shall be paid within three business days of each 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.
See “Description of Securities Being Offered—Series J Convertible Preferred Stock Being Offered Pursuant to this Prospectus—Dividends”.
Series J Convertible Preferred Stock– Limited Voting Rights
Holders of the Series J Convertible Preferred Stock will not have any voting rights, except as described below or as otherwise required by law.
In any matter in which the Series J Convertible Preferred Stock may vote (as expressly provided herein or as may be required by law), each share of Series J
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Convertible Preferred Stock will be entitled to one vote per share. So long as any shares of Series J Convertible Preferred Stock remain outstanding, we will not, without the consent or the affirmative vote of a majority of the outstanding shares of Series J Convertible Preferred Stock, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose:
(i)
alter or change adversely the powers, preferences or rights given to the Series J Convertible Preferred Stock or alter or amend adversely the Certificate of Designations;
(ii)
increase the number of authorized shares of Series J Convertible Preferred Stock; or
(iii)
enter into any agreement with respect to any of the foregoing.
See “Description of Securities Being Offered—Series J Convertible Preferred Stock Being Offered Pursuant to this Prospectus—Limited Voting Rights”.
Series J Convertible Preferred Stock– Liquidation Rights
In the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizationsthe voluntary or similar events affectinginvoluntary liquidation, dissolution or winding up of our common stock,affairs, the holders of shares of Series J Convertible Preferred Stock will be exercisable upon issuanceentitled to be paid out of our assets legally available for distribution to our stockholders (i.e., after satisfaction of all our liabilities to creditors, if any) and, will expire on the first anniversary of the date of issuance. This prospectus also relatessubject to the offeringrights of holders of any shares of each other class or series of capital stock ranking, as to rights to the distribution of assets upon our voluntary or involuntary liquidation, dissolution or winding-up, senior to the Series J Convertible Preferred Stock, a liquidation preference of $25.00 per share, before any distribution or payment may be made to holders of shares of common stock issuableor any other class or series of our capital stock ranking, as to rights to the distribution of assets upon exerciseany voluntary or involuntary liquidation, dissolution or winding up, junior to the Series J Convertible Preferred Stock. See “Description of Securities Being Offered—Series J Convertible Preferred Stock Being Offered Pursuant to this Prospectus—Ranking and Liquidation Preference”.
Series J Convertible Preferred Stock–Fundamental Transactions
In the event of a Fundamental Transaction (as defined in the Certificate of Designations) and generally including any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our assets, our consolidation or merger with or into another person, or the acquisition of more than 50% of our outstanding common stock, the holders of the Series 1 warrants.J Convertible Preferred Stock will be entitled to receive
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upon conversion of the Series 2 warrantsJ Convertible Preferred Stock the kind and amount of securities, cash or other property that the holders would have received had they converted the Series J Convertible Preferred Stock immediately prior to such Fundamental Transaction (without regard to the Beneficial Ownership Limitation).
We are offering See “Description of Securities Being Offered—Series 2 warrantsJ Convertible Preferred Stock Being Offered Pursuant to purchase up to 2,141,328 shares of common stock. this Prospectus—Fundamental Transactions”.
Warrants
Each Series 2 warrantWarrant will have an initial exercise price of $$7.50 (50.0% of the public offering price per Unit) per one-half of one share 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,Series J Convertible Preferred Stock, be exercisable for one-half of one (0.5) share of Series J Convertible Preferred Stock, will be immediately exercisable upon issuance and will expire onthree (3) years from the seventh anniversaryClosing Date. No fractional shares will be issued in connection with the exercise of a Warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the stated value of $25.00 per share of Series J Convertible Preferred Stock. The terms of the Warrants will be governed by a Warrant Agency Agreement, dated as of the closing date of issuance. This prospectusthis offering, between us and Equiniti Trust Company, LLC, and any successor warrant agent under thereunder (collectively, the “Warrant Agent”). For more information regarding the Warrants, you should carefully read the section titled “Description of Securities Being Offered—Description of Warrants Included in the Units” in this prospectus. You should also relates toread the offering of the shares of common stock issuable upon exercise of the Series 2 warrants.

Series 1 warrants and the Series 2 warrants are collectively referred to as the “warrants.” The form of warrantWarrant Agency Agreement, which is filed as an exhibit to the registration statement of which this prospectus isforms a part.

This offering also relates to the shares of Series J Convertible Preferred Stock issuable upon exercise of the Warrants.
SharesBest Efforts Offering
We have agreed to offer and sell the securities offered hereby to the purchasers through the placement agents. The placement agents are not required to buy or sell any specific number or dollar amount of common stock underlying the warrantssecurities offered hereby, but they will use their reasonable best efforts to solicit offers to purchase the securities offered by this prospectus. See “Plan of Distribution” on page 54 of this prospectus.
4,282,655 shares.Common Stock Outstanding Prior To
Offering
Shares of common stock outstanding before this offering
625,7911,864,265 shares as of October 31, 2017.September 27, 2023.
Common Stock Anticipated After the
SharesOffering
Approximately 27,482,258 shares based on an assumed conversion price of common stock to be outstanding afterthe Series J Convertible Preferred Stock of $1.53 (assuming conversion of all of the shares of Series J Convertible Preferred Stock issued
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in this offering,
625,791 shares (2,767,119 shares on an as-converted basis, assuming the including conversion of the Series F Preferred Stock).
SharesPIK dividend shares and the shares of Series FJ Convertible Preferred Stock outstanding beforeissued upon exercise of the Warrants).
Use of proceeds
We estimate that the net proceeds to us from the offering will be approximately $5 million (calculated based on an assumed price of $15.00 per Unit), after deducting the placement agent fees and estimated offering expenses payable by us, and assuming the sale of all Units offered hereby and no exercise of Warrants. However, this is a best efforts offering with no minimum number of securities or amount of proceeds as a condition to closing, and we may not sell all or any of these securities offered pursuant to this prospectus; as a result, we may receive significantly less in net proceeds. We intend to use the proceeds of this offering for working capital and for general corporate purposes. See “Use of Proceeds” for a more complete description of the intended use of proceeds from this offering.
None.Exchange listing
Shares ofThere is no established trading market for the Series FJ Convertible Preferred Stock or the Warrants, and we do not expect a market to develop. In addition, we do not intend to list the Series J Convertible Preferred Stock or the Warrants on The Nasdaq Capital Market or any other national securities exchange or any other nationally recognized trading system. Without an active trading market, the liquidity of the Series J Convertible Preferred Stock and the Warrants will be outstanding after this offering
10,000 shares.
Market for the common stocklimited.
Our common stock is listed on The Nasdaq Capital Market under the symbol “CHFS”“NUWE”. See “—Recent Developments” above for important information about
Transfer agent and Warrant agent
The registrar, transfer agent and dividend and redemption price disbursing agent in respect of the listing of our common stock on The Nasdaq Capital Market.
Use of Proceeds
We intend to useSeries J Convertible Preferred Stock, and the net proceeds from this offering for working capital needs for our Aquadex product, includingwarrant agent for the Warrants, will be Equiniti Trust Company, LLC.
Form
The Series J Convertible Preferred Stock and the Warrants will be represented by one or more global certificates in definitive, fully registered form deposited with Equiniti Trust Company, LLC, as custodian on behalf of The Depository Trust Company (“DTC”), or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
Settlement
Delivery of the Series J Convertible Preferred Stock and the Warrants offered hereby will settle delivery versus payment (“DVP”)/receipt versus payment (“RVP”).
Material U.S. Federal Income Tax
Consequences
For a discussion of certain U.S. federal income tax consequences the purchase, ownership, disposition and conversion of Baxter’s remaining Aquadex product inventory for $1.2 million by February 1, 2018, for general corporate purposes, including the continuing expansionSeries J Convertible Preferred Stock, the acquisition, ownership and disposition of our field sales force, and to fund anticipated clinical studies. See “Use of Proceeds” herein.
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No listing of Series F Preferred Stock
We do not intend to apply for listingcommon stock received upon conversion of the Series FJ Convertible Preferred Stock, on any securities exchange or trading system.
No listing of warrants
We do not intend to apply for listingand the purchase, ownership, disposition and exercise of the warrants on any securities exchange or trading system.
Potential Insider Participation
Our Chief Executive Officer has indicated an interest in purchasing approximately $100,000Warrants, please see the section entitled “Material U.S. Federal Income Tax Consequences.” You should consult your independent tax advisor with respect to the U.S. federal income tax consequences of Series F convertible preferred stock and accompanying warrants in this offering on the same terms and at the same price asowning the Series F convertible preferredJ Convertible Preferred Stock, the common stock received upon conversion of the Series J Convertible Stock, and accompanying warrants soldthe Warrants in light of your own particular situation and with respect to any tax consequences arising under non-U.S. federal income tax laws, including the public in this offering. The underwriter will receive the same underwriting discount on any Series F convertible preferred stock and accompanying warrants purchased by our Chief Executive Officer as it will onlaws of any other Series F convertible preferred stocktaxing jurisdiction.
Risk Factors
Investing in our securities involves a high degree of risk. You should carefully review and accompanying warrants sold toconsider the public insection of this offering.
Risk Factors
Seeprospectus entitled “Risk Factors” beginning on page 713 and other information included inof this prospectus for a discussion of factors that you shouldto consider carefully before deciding to invest in this offering.

Except as otherwise indicated, all information in this prospectus is based on 625,7911,864,265 shares of common stock outstanding as of October 31, 2017September 27, 2023 and excludes the following:
111,275 shares of common stock being offered by this prospectus or issuable upon conversion of the Series F Preferred Stock or exercise of warrants being offered by this prospectus and also excludes the following:

36,868 shares ofour common stock issuable upon the exercise of outstanding stock options, having a weighted average exercise price of $90.70$36.78 per share and 297 shares of common stock issuable upon the vesting of restricted stock units;share;
496,4681,308,271 shares of our common stock issuable upon the exercise of outstanding warrants (other than the warrants offered hereby) with a weighted-average exercise price of $26.10$35.51 per share;
5,080 shares of our common stock issuable upon the conversion of the 127 outstanding shares of our Series F Preferred Stock; and
57,28449,456 shares of our common stock reserved for future issuance under our equity incentive plans.
Except as otherwise noted, all information in this prospectus assumes:
the conversion of the Series J Convertible Preferred Stock sold in this offering; and
no exercise of the Warrants issued in connection with this offering.
To the extent that additional shares of common stock are issued upon the exercise of outstanding options or warrants, or the conversion of our outstanding Series F Convertible Preferred Stock, or the vesting of restricted stock units or additional grants are made pursuant to our equity incentive plans, there will be dilution to new investors. All share and per share amounts for all periods presented in this prospectus and the registration statement of which it forms a part have been retroactively adjusted to reflect the reverse stock splits we previously effected on January 12, 2017, October 12, 2017, January 2, 2019, October 16, 2020 and December 9, 2022.
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SUMMARY RISK FACTORS

An investment in our securities has

Our business is subject to a high degreenumber of risk. Before you invest you should carefully consider the risksrisks. The principal factors and uncertainties described below and the other information in this prospectus. Any of the risks and uncertainties set forth herein could materially and adversely affect our business, results of operations and financial condition, which in turn could materially and adversely affect the trading price or value of our securities. Additional risks not currently known to us or which we consider immaterial based on information currently available to us may also materially adversely affect us. As a result, you could lose all or part of your investment.

Risks Related to Our Business

include, among others:

We have limited history of operations and limited experience in sales and marketing, and we might be unsuccessful in increasing our sales and cannot assure you that we will ever generate substantial revenue or be profitable.

Prior to our acquisition of the Aquadex FlexFlow system in August 2016, we did not have a product approved for commercial sale and focused our resources on developing, manufacturing and commercializing our C-Pulse System. On September 29, 2016, we announced a strategic refocus of our near-term strategy that includes halting all clinical evaluations to fully focus our resources on our recently acquired Aquadex FlexFlow system, taking actions to reduce our cash burn in connection with such strategic refocus and reviewing potential strategic alliances and financing alternatives. Our business strategy depends in part on our ability to grow our Aquadex Business by establishing an effective sales force, selling our products to hospitals and other healthcare facilities and controlling costs all of which we may be unable to do. We have no prior experience with respect to manufacturing, sales or marketing. If we are unsuccessful at manufacturing, marketing and selling our Aquadex FlexFlow system, our operations and potential revenues will be materially adversely affected.

We have incurred operating losses since our inception and anticipate that we will continue to incur operating losses in the near-term. The report ofTo date, we have been funded by equity financings, and although we believe that we will be able to successfully fund our independent registered public accounting firm issued in connection with its audit of our financial statements for the fiscal year ended December 31, 2016 expresses substantial doubt about our ability to continue as a going concern.

We are an emerging company with a history of incurring net losses. We have incurred net losses since our inception, including net losses of $15.8 million and $26.6 million for the years ended December 31, 2016 and 2015, respectively. For the nine months ended September 30, 2017, we incurred a net operating loss of $6.2 million. As of September 30, 2017, our accumulated deficit was $175.2 million.

The report of our independent registered public accounting firm issued in connection with its audit of our consolidated financial statements for the fiscal year ended December 31, 2016 expresses substantial doubt about our ability to continue as a going concern. Prior to August 2016, we did not have any products approved for commercialization, generated only limited revenue from our clinical studies and had significant operating losses as we incurred costs associated with the conduct of clinical studies and our research and development programs for our C-Pulse System. We became a revenue generating company only after acquiring the Aquadex Business in August 2016. We expect to incur additional losses in the near-term as we grow the Aquadex Business, including investments in expanding our sales and marketing capabilities, purchasing inventory, manufacturing components, and complying with the requirements related to being a U.S. public company listed on Nasdaq. To become and remain profitable, we must succeed in expanding the adoption and market acceptance of the Aquadex FlexFlow system. This will require us to succeed in a range of challenging activities, including training personnel at hospitals and effectively and efficiently manufacturing, marketing and distributing the Aquadex FlexFlow system and related components. Thereoperations, there can be no assurance that we will succeed in these activities, and we may never generate revenues sufficient to achieve profitability. If we do achieve profitability, we may not be able to sustain it.

We believedo so or that we will ever operate profitably. If this financing is not successful or if we raise less than we intend, we will need to raise additional capital to fund our operations in 2018 and beyond. the fourth quarter of 2023. If additional capital is not available, we will have to delay, reduce or cease operations.

We believe that we will need to These factors raise additional capital to fund our operations in 2018 and beyond. Changing circumstances may cause us to consume capital significantly faster than we currently anticipate and could adversely affect oursubstantial doubt about the Company’s ability to raise additional capital. Additional financing may not be available when we need it or may not be available on terms that are favorable to us. In addition, the risk that we may not be able to continue as a going concern may make it more difficult to obtain necessary additional funding on terms favorable to us, or at all. If we raise additional funding through the issuance of equity securities, our stockholders may suffer dilution and our ability

next twelve months.

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to use our net operating losses to offset future income may be limited. If we raise additional funding through debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, require us to use our cash to make payments under such indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions. If we are unable to secure additional funding, our development programs and our commercialization efforts would be delayed, reduced or eliminated, our relationships with our suppliers and manufacturers may be harmed, and we may not be able to continue our operations.

Our near-term prospects are highly dependent on revenues from a single product, the Aquadex FlexFlow system. System. We face significant challenges in expanding market acceptance of the Aquadex FlexFlow system,System, which could adversely affect our potential sales and revenues.

Our near-term prospects are highly dependent on revenues from a single product, the Aquadex FlexFlow system, and we have no other commercial products or products in active development at this time. The established market or customer base for our Aquadex FlexFlow system is limited and our success depends on our ability to increase adoption and utilization of the Aquadex FlexFlow system. Acceptance of our product in the marketplace by health care providers is uncertain, and our failure to achieve sufficient market acceptance will significantly limit our ability to generate revenue and be profitable. Market acceptance will require substantial marketing efforts and the expenditure of significant funds by us to inform health care providers of the benefits of using the Aquadex FlexFlow system and to provide further training on its use. We may not be able to build key relationships with health care providers to drive further sales in the United States or sell the Aquadex FlexFlow system outside the United States. Product orders may be cancelled, patients or customers currently using our products may cease to do so and patients or customers expected to begin using our products may not. In addition, market acceptance of the Aquadex FlexFlow system may require that we make enhancements to the system or its components. We cannot be sure that we will be able to successfully develop such enhancements, or that if developed they will be viewed favorable by the market. Our ability to achieve acceptance of our Aquadex FlexFlow system depends on our ability to demonstrate the safety, efficacy, ease-of-use and cost-effectiveness of the system. We may not be able to expand the adoption and market acceptance of the Aquadex FlexFlow system to both the inpatient and outpatient markets and our potential sales and revenues could be harmed.

sales.

We depend on a limited number of customers, the loss of which, or failure of which to order our products in a particular period, could cause our revenues to decline.

Our ten largest customers represented 63.9% or our revenues in the first nine months of 2017, with our largest two customers representing 13.9% and 10.8%, respectively, of our revenues during that period. Customer ordering patterns may vary significantly from quarter to quarter, or customers may discontinue providing therapies using our products. If one of our largest customers reduced its purchases in a fiscal period, our revenues for that period may be materially adversely affected. Further, if one of our largest customers discontinued the use of our products, our revenues may be materially adversely affected.

We do not have limited commercial manufacturing experience and could experience difficulty in producing commercial volumes of the Aquadex FlexFlow systemSystem and related components or may need to depend on third parties for manufacturing.

We have no experience in commercial manufacturing. In connection with the acquisition of the Aquadex Business, we entered into a commercial manufacturing and supply agreement with Baxter, which requires Baxter to manufacture Aquadex Blood Sets and Aquadex Catheters for a period of 18 months following our acquisition of the Aquadex Business. In May 2017, we notified Baxter that we intended to have it cease the manufacturing Aquadex product effective as of June 30, 2017. We completed the transfer of manufacturing equipment for the Aquadex Business that we purchased from Baxter to our manufacturing facility in July 2017. We expect to begin manufacturing Aquadex FlexFlow products in-house in the fourth quarter of 2017. However, because we do not have prior commercial manufacturing experience, we may incur manufacturing inefficiencies, delays or interruptions. We may not be able to achieve low-cost manufacturing capabilities and processes that will enable us to manufacture the Aquadex FlexFlow system or related components in significant volumes, while meeting the legal, regulatory, quality, price, durability, engineering, design and production standards required to market our products successfully. If we experience difficulties with our manufacturing operations, we may experience delays in providing products and services to our customers, and our business could be harmed.

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We depend upon third-party suppliers, including single source suppliers, making us vulnerable to supply problems and price fluctuations.

We will rely on third-party suppliers, including single source suppliers, to provide us with certain components

The COVID-19 outbreak and other public health threats or outbreaks of the Aquadex FlexFlow system. We depend on our suppliers to provide us with materials in a timely manner that meet our quality, quantity and cost requirements. The forecasts of demand we use to determine order quantities and lead times for components purchased from outside suppliers may be incorrect. Our failure to obtain required components or subassemblies when needed and at a reasonable cost would adversely affect our business. These suppliers may encounter problems during manufacturing for a variety of reasons, any of which could delay or impede their ability to meet our demand. Any difficulties in locating and hiring third-party manufacturers, or in the ability of third-party manufacturers to supply quantities of our products at the times and in the quantities we need,communicable diseases could have a material adverse effect on our business.

operations and overall financial performance.

We have been negatively impacted by the prioritization of COVID-19 patients in hospitals.
If we cannot develop adequate distribution, customer service and technical support networks, then we may not be able to market and distribute the Aquadex systemSystem effectively and our sales and revenues will suffer.

Our strategy requires us to provide a significant amount of customer service and maintenance and other technical service to our customers. To provide these services, we have begun, and will need to continue, to develop a network of distribution and a staff of employees and independent contractors in each of the areas in which we intend to operate. We cannot assure that we will be able to organize and manage this network on a cost-effective basis. If we cannot effectively organize and manage this network, then it may be difficult for us to distribute our products and to provide competitive service and support to our customers, in which case customers may be unable, or decide not, to order our products and our sales and revenues will suffer.

We compete against many companies, some of which have longer operating histories, more established products and greater resources than we do, which may prevent us from achieving further market penetration or improving operating results.

Competition from medical device companies and medical device divisions of health care companies, as well as pharmaceutical companies is intense and is expected to increase. Our Aquadex FlexFlow system mainly competes against pharmacological therapies, diuretics, as well as a range of other specialized medical device companies with devices at varying stages of development. Many of these competitors have significantly greater financial and human resources than we do and have established reputations, as well as worldwide distribution channels and sales and marketing capabilities that are significantly larger and more established than ours. Additional competitors may enter the market, and we are likely to compete with new companies in the future. We also face competition from other medical therapies which may focus on our target market as well as competition from manufacturers of pharmaceutical and other devices that have not yet been developed. Competition from these companies could harm our business.

Our ability to compete effectively depends upon our ability to distinguish our Company and our system from our competitors and their products. Factors affecting our competitive position include:

financial resources;
product performance and design;
product safety;
acceptance of our system in the marketplace;
sales, marketing and distribution capabilities;
manufacturing and assembly costs;
pricing of our system and of our competitors’ products;
the availability of reimbursement from government and private health insurers;
success and timing of new product development and introductions;
regulatory approvals in the United States; and
intellectual property protection.

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The competition for qualified personnel is particularly intense in our industry. If we are unable to retain or hire key personnel, we may not be able to sustain or grow our business.

Our ability to operate successfully and manage our potential future growth depends significantly upon our ability to attract, retain and motivate highly skilled and qualified research, technical, clinical, regulatory, sales, marketing, managerial and financial personnel. We face intense competition for such personnel, and we may not be able to attract, retain and motivate these individuals. We compete for talent with numerous companies, as well as universities and nonprofit research organizations. Our future success also depends on the personal efforts and abilities of the principal members of our senior management and scientific staff to provide strategic direction, manage our operations and maintain a cohesive and stable environment. We do not maintain life insurance on the lives of any of the members of our senior management. The loss of key personnel for any reason or our inability to hire, retain and motivate additional qualified personnel in the future could prevent us from sustaining or growing our business.

Significant additional governmental regulation could subject us to unanticipated delays which would adversely affect our sales and revenues.

Our business strategy depends in part on our ability to expand the use of the Aquadex FlexFlow system in the market as quickly as possible. To achieve expanded market use of the Aquadex FlexFlow system, we may develop enhancement to the system or its components. Depending on their nature, such enhancements may be subject to review by the U.S. Food and Drug Administration (the “FDA”) under its regulations. Any regulatory delay in our ability to implement enhancements to the Aquadex FlexFlow system or its components could have an adverse effect on our potential sales and revenues.

Health care laws in the United States and other countries are subject to ongoing changes, including changes to the amount of reimbursement for hospital services. Additional laws and regulations, or changes to existing laws and regulations that are applicable to our business may be enacted or promulgated, and the interpretation, application or enforcement of the existing laws and regulations may change. Legislative proposals can substantially change the way health care is financed by both governmental and private insurers and may negatively impact payment rates for our system. We cannot predict the nature of any future laws, regulations, interpretations, applications or enforcements or the specific effects any of these might 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 health care by challenging the prices charged, or deny coverage, for health care products and services. Any future laws, regulations, interpretations, applications or enforcements could delay or prevent regulatory approval or clearance of our Aquadex FlexFlow system and our ability to market our Aquadex FlexFlow system. Moreover, changes that result in our failure to comply with the requirements of applicable laws and regulations could result in the types of enforcement actions by the U.S. Food and Drug Administration (the “FDA”) and/or other agencies as described above, all of which could impair our ability to have manufactured and to sell the affected products.

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

While the agency responsible for administering the Medicare program, the Centers for Medicare and Medicaid Services, has not issued a favorable national coverage determination under its Investigational Device Exception Studies Program for ultrafiltration using the Aquadex FlexFlow system, a number of private insurers have approved reimbursement for Aquadex FlexFlow products for specific indications and points of service. In addition, patients and providers may seek insurance coverage on a case-by-case basis. We are exploring the ability to increase the range of coverage for uses of Aquadex FlexFlow therapies, such as use in the outpatient setting and use for decompensated heart failure and other indicated uses under its approved labeling, although we may not be successful in doing so.

We enrolled patients in studies for the C-Pulse System through February 2016 and continue to have reporting obligations related to two open studies for the C-Pulse.

Conducting clinical studies is a complex and uncertain process. Clinical trials are subject to extensive recordkeeping and reporting requirements. Any clinical trials must be conducted under the oversight of an institutional review board for the relevant clinical trial sites and must comply with FDA regulations, including, but

sales.

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not limited to, those relating to current good clinical practices. Each trial must obtain the written informed consent of patients in form and substance that complies with both FDA requirements and state and federal privacy and human subject protection regulations. The testing company, the FDA or the applicable institutional review board (IRB) may suspend a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits. Similarly, in Europe, the clinical study must be approved by a local ethics committee and, in some cases, including studies with high-risk devices, by the ministry of health in the applicable country. Patients may experience serious adverse events or side effects during the study, which, whether or not related to our system, could cause the FDA or other regulatory authorities to investigate and potentially assess regulatory penalties. Any regulatory penalties assessed for failure to comply with the foregoing requirements could harm our business, results of operations, financial condition and prospects and cause us to seek additional funding.

Product defects, resulting in lawsuits for product liability, could harm our business, results of operations and financial condition.

The design, manufacture and marketing of medical devices involve certain inherent risks. Manufacturing or design defects, unanticipated use of a product or inadequate disclosure of risks relating to the use of the product can lead to injury or other adverse events. These events could lead to recalls or safety alerts relating to a product (either voluntary or required by the FDA or similar governmental authorities in other countries), and could result, in certain cases, in the removal of a product from the market. Any recall of our Aquadex FlexFlow system or any related components could result in significant costs, as well as negative publicity and damage to our reputation that could reduce demand for our products. Personal injuries relating to the use of our products could also result in product liability claims being brought against us. In some circumstances, such adverse events could also cause delays in new product approvals.

We may be held liable if any product we develop or commercialize causes injury or is found otherwise unsuitable during product testing, manufacturing, marketing, sale or consumer use. The safety studies we must perform and the regulatory approvals required to commercialize our products will not protect us from any such liability. We carry product liability insurance with a $5 million aggregate limit. However, if there are product liability claims against us, our insurance may be insufficient to cover the expense of defending against such claims, or may be insufficient to pay or settle such claims. Furthermore, we may be unable to obtain adequate product liability insurance coverage for commercial sales of any approved product. If such insurance is insufficient to protect us, our business, results of operations and financial condition will be harmed. If any product liability claim is made against us, our reputation and future sales will be damaged, even if we have adequate insurance coverage. Even if a product liability claim against us is without merit or if we are not found liable for any damages, a product liability claim could result in decreased interest in our registry studies, decreased demand for our system, if approved for commercialization, injury to our reputation, diversion of management’s attention from operating our business, withdrawal of study participants, significant costs of related litigation, loss of revenue or the inability to commercialize our products.

We may face significant risks associated with international operations, which could have a material adverse effect on our business, financial condition and results of operations.

We expect to market our products globally. Our international operations are subject to a number of risks, including the following: fluctuations in exchange rates of the United States dollar could adversely affect our results of operations, we may face difficulties in enforcing and collecting accounts receivable under some countries’ legal systems, local regulations may restrict our ability to sell our products, have our products serviced or conduct other operations, political instability could disrupt our operations, some governments and customers may have longer payment cycles, with resulting adverse effects on our cash flow, and some countries could impose additional taxes or restrict the import of our products. Any one or more of these factors could increase our costs, reduce our revenues, or disrupt our operations, which could have a material adverse effect on our business, financial condition and results of operations.

If we are not able to maintain sufficient quality controls, then the approval or clearance of our products by the European Union, the FDA or other relevant authorities could be withdrawn, delayed or denied and our sales and revenues will suffer.

Approval or clearance of our products could be withdrawn, delayed or denied by the European Union, the FDA and the relevant authorities of other countries if our manufacturing facilities do not comply with their respective manufacturing requirements. The European Union imposes requirements on quality control systems of

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manufacturers, which are inspected and certified on a periodic basis and may be subject to additional unannounced inspections. Failure to comply with these requirements could prevent us from marketing our products in the European Community. The FDA also imposes requirements through quality system requirements, or QSR, regulations, which include requirements for good manufacturing practices, or GMP. Failure to comply with these requirements could prevent us from obtaining FDA approval of our products and from marketing such products in the United States. Our manufacturing facilities have not been inspected and certified by a worldwide testing and certification agency (also referred to as a notified body) that performs conformity assessments to European Union requirements for medical devices. Nor have they been inspected by the FDA. A “notified body” is a group accredited and monitored by governmental agencies that inspects manufacturing facilities and quality control systems at regular intervals and is authorized to carry out unannounced inspections. We cannot be sure that our facilities or the processes we use will comply or continue to comply with their respective requirements on a timely basis or at all, which could delay or prevent our obtaining the approvals we need to market our products in the European Community and the United States.

To market our products in the European Community, the United States and other countries, where approved, manufacturers of such products must continue to comply or ensure compliance with the relevant manufacturing requirements. Although we cannot control the manufacturers of our products, if we choose to subcontract manufacturing to a contract manufacturer, we may need to expend time, resources and effort in product manufacturing and quality control to assist with their continued compliance with these requirements. If violations of applicable requirements are noted during periodic inspections of the manufacturing facilities of our manufacturers or we fail to address issues raised by the FDA in these inspections, then we may not be able to continue to market the products manufactured in such facilities and our revenues may be materially adversely affected.

If we violate any provisions of the Federal Food, Drug, and Cosmetic Act (“FDC Act”) or any other statutes or regulations, then we could be subject to enforcement actions by the FDA or other governmental agencies.

We face a significant compliance burden under the FDC Act and other applicable statutes and regulations which govern the testing, labeling, storage, record keeping, distribution, sale, marketing, advertising and promotion of our medically approved products.

If we violate the FDC Act or other regulatory requirements at any time during or after the product development and/or approval process, we could be subject to enforcement actions by the FDA or other agencies, including: fines, injunctions, civil penalties, recalls or seizures of products, total or partial suspension of the production of our products, withdrawal of any existing approvals or pre-market clearances of our products, refusal to approve or clear new applications or notices relating to our products, recommendations that we not be allowed to enter into government contracts and criminal prosecution. Any of the above could have a material adverse effect on our business, financial condition and results of operations.

We cannot assure you that our products will be safe or that there will not be serious injuries or product malfunctions. Further, we are required under applicable law to report any circumstances relating to our
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medically approved products that could result in deaths or serious injuries. These circumstances could trigger recalls, class action lawsuits and other events that could cause us to incur expenses and may also limit our ability to generate revenues from such products.

We cannot assure you that our products will prove to be safe or that there will not be serious injuries or product malfunctions, which could trigger recalls, class action lawsuits and other events that could cause us to incur significant expenses, limit our ability to market our products and generate revenues from such products or cause us reputational harm.

Under the FDC Act, we are required to submit medical device reports, or MDRs, to the FDA to report device-related deaths, serious injuries and malfunctions of medically approved products that could result in death or serious injury if they were to recur. Depending on their significance, MDRs could trigger events that could cause us to incur expenses and may also limit our ability to generate revenues from such products, such as the following: information contained in the MDRs could trigger FDA regulatory actions such as inspections, recalls and patient/physician notifications; because the reports are publicly available, MDRs could become the basis for private lawsuits, including class actions; and if we fail to submit a required MDR to the FDA, the FDA could take enforcement action against us.

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If any of these events occur, then we could incur significant expenses and it could become more difficult for us to market and sell our products and to generate revenues from sales. Other countries may impose analogous reporting requirements that could cause us to incur expenses and may also limit our ability to generate revenues from sales of our products.

We face significant uncertainty in the industry due to government healthcare reform.

The Patient Protection and Affordable Care Act, as amended, (the “Affordable Care Act”) as well as other healthcare reform, including possible repeal of the Affordable Care Act, may have a significant impact on our business. The impact of the Affordable Care Act on the health care industry is extensive and includes, among other things, the federal government assuming a larger role in the health care system, expanding healthcare coverage of United States citizens and mandating basic healthcare benefits. The Affordable Care Act contains many provisions designed to generate the revenues necessary to fund the coverage expansions and to reduce costs of Medicare and Medicaid, including imposing a 2.3% excise tax on domestic sales of many medical devices by manufacturers that began in 2013. A moratorium was placed on the medical device excise tax in 2016 and 2017. If the excise tax is not repealed, we will be subject to this or any future excise tax on our sales of certain medical devices in the U.S. following December 31, 2017.

The Affordable Care Act includes a Hospital Readmission Reduction program and is designed to reduce payments to hospitals with excess heart failure readmissions, among other conditions. The penalty to hospitals can be significant, as much as 3% of total Medicare reimbursement. We believe the Aquadex FlexFlow system may offer hospitals an economic benefit for using the device on a regular basis for in-patient or out-patient usage to avoid readmissions for heart failure; however, if the Hospital Readmission Reduction program is repealed, hospitals may not be as inclined to take measures to reduce readmissions.

In addition, any healthcare reforms enacted in the future may, like the Affordable Care Act, be phased in over a number of years, but if enacted, could reduce our revenue, increase our costs, or require us to revise the ways in which we conduct business or put us at risk for loss of business. In addition, our results of operations, financial position and cash flows could be materially adversely affected by changes under the Affordable Care Act and changes under any federal or state legislation adopted in the future.

Moreover, the Physician Payment Sunshine Act (the “Sunshine Act”), which was enacted by Congress as part of the Patient Protection and Affordable Care Act on March 23, 2010, requires medical device companies to track and publicly report, with limited exceptions, all payments and transfers of value to physicians and teaching hospitals in the U.S. Implementing regulations for these tracking and reporting obligations were finalized in 2013, and companies are now required to track payments made since August 1, 2013. If we fail to comply with the data collection and reporting obligations imposed by the Sunshine Act, we may be subject to substantial civil monetary penalties.

We are subject, directly or indirectly, to United States federal and state healthcare fraud and abuse and false claims laws and regulations. Prosecutions under such laws have increased in recent years and we may become subject to such litigation. If we are unable to, or have not fully complied with such laws, we could face substantial penalties.

Our operations are directly, or indirectly through customers,

Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws could subject us to various state and federal fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the stark law and federal False Claims Act. These laws may impact, among other things, our sales, marketing and education programs.

The federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a federal healthcare program such as the Medicare and Medicaid programs. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated. The Anti-Kickback Statute is broad and, despite a series of narrow safe harbors, prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. Penalties for violations of the federal Anti-Kickback Statute include criminal penalties and civil sanctions such as fines, imprisonment and possible exclusion from Medicare, Medicaid and other federal healthcare programs. Many states have also adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs. The physician self-referral laws, commonly referred to as the Stark law is a strict liability statute that generally

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prohibits physicians from referring Medicare patients to providers of “designated health services,” with whom the physician or the physician’s immediate family member has an ownership interest or compensation arrangement, unless an applicable exception applies. Moreover, many states have adopted or are considering adopting similar laws, some of which extend beyond the scope of the Stark law to prohibit the payment or receipt of remuneration for the prohibited referral of patients for designated healthcare services and physician self-referrals, regardless of the source of the payment for the patient’s care. If it is determined that any of the relationships we may have with physicians violate the Stark law or similar statutes, we could become subject to civil and criminal penalties. The imposition of any such penalties could harm our business.

The federal False Claims Act prohibits persons from knowingly filing, or causing to be filed, a false claim to, or the knowing use of false statements to obtain payment from the federal government. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals, commonly known as “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. The frequency of filing qui tam actions has increased significantly in recent years, causing greater numbers of medical device, pharmaceutical and healthcare companies to have to defend a False Claim Act action. When an entity is determined to have violated the federal False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim. Various states have also enacted laws modeled after the federal False Claims Act.

We are unable to predict whether we could be subject to actions under any of these laws, or the impact of such actions. If we are found to be in violation of any of the laws described above or other applicable state and federal fraud and abuse laws, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from government healthcare reimbursement programs and the curtailment or restructuring of our operations.

If we are required to write down intangible assets or goodwill from our acquisition of the Aquadex Business, our financial condition and results would be negatively affected.

When we acquired the Aquadex Business, a substantial portion of the purchase price of the acquisition was allocated to identifiable intangible assets and goodwill. As of September 30, 2017, our identifiable intangible assets, including customer relationships, developed technology, and trademarks and tradenames, were $4.6 million, net of accumulated amortization of $0.8 million, represented 54.7% of our total stockholders’ equity. Intangible assets are being amortized over a period of seven years. In addition to identifiable intangible assets, we have recorded $189,000 of goodwill as of September 30, 2017.

We review our definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. In cases where the carrying value exceeds the undiscounted cash flows, the carrying value is written down to its fair value, using a discounted cash flow analysis. We evaluate goodwill for impairment annually on November 1st of each calendar year, or to the extent events or conditions indicate a risk of possible impairment during the interim periods prior to its annual impairment test.

If we determine identifiable intangible assets or goodwill are impaired, we will be required to write down these assets. Any write down of identifiable intangible assets or goodwill would have a negative effect on our consolidated financial statements.

If we acquire other businesses, products or technologies, we could incur additional impairment charges and will be subject to risks that could hurt our business.

We may pursue acquisitions to obtain complementary businesses, products or technologies. Any such acquisition may not produce the revenues, earnings or business synergies that we anticipate and an acquired business, product or technology might not perform as we expect. Our management could spend a significant amount of time, effort and money in identifying, pursuing and completing the acquisition. If we complete an acquisition, we may encounter significant difficulties and incur substantial expenses in integrating the operations and personnel of the acquired businesses, products or technologies into our operations. In particular, we may lose the services of key employees and we may make changes in management that impair the acquired business’s relationships with employees, vendors and customers. Additionally, we may acquire development-stage companies that are not yet profitable and which require continued investment, which could decrease our future earnings or increase our futures losses.

Any of these outcomes could prevent us from realizing the anticipated benefits of an acquisition. To pay for an acquisition, we might use stock or cash. Alternatively, we might borrow money from a bank or other lender. If we

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use stock, our stockholders would experience dilution of their ownership interests. If we use cash or debt financing, our financial liquidity would be reduced. As a result of a potential acquisition, we may be required to capitalize a significant amount of intangibles, including goodwill, which may lead to significant amortization or write-off charges if these assets were later impaired. These amortization charges and write-offs could decrease our future earnings or increase our future losses.

Risks Related to Our Intellectual Property

We may not be able to protect our intellectual property rights effectively, which could have an adverse effect on our business, financial condition or results of operations.

Our success depends in part on our ability to obtain and maintain protection in the United States and other countries of the intellectual property relating to or incorporated into our Aquadex FlexFlow system and related components. On August 5, 2016, upon closing of our acquisition of the Aquadex Business, we entered into a patent license agreement with Baxter pursuant to which we obtained, for no additional consideration, a world-wide license to 49 exclusively licensed and 9 non-exclusively licensed patents used in connection with the Aquadex FlexFlow system to make, have made, use, sell, offer for sale and import, the Aquadex FlexFlow system in the “field of use.” The “field of use” is defined as system and apparatus only capable of performing isolated ultrafiltration for treatment of congestive heart failure, and methods to the extent used therein (excluding system, apparatus, or methods performing any kind of renal therapy or dialysis and/or any system capable of providing substitution fluid). The license is exclusive, with respect to some patents, and non-exclusive, with respect to other patents. Under the patent license agreement, Baxter has agreed to use commercially reasonable efforts to continue maintenance of seven “required maintenance patents,” and we have agreed to reimburse Baxter for all fees, costs, and expenses (internal or external) incurred by Baxter in connection with such continued maintenance. The rights granted to us under the patent license agreement will automatically revert to Baxter in the event we cease operation of the Aquadex Business or we file for, or have filed against us, or otherwise undertake any bankruptcy, reorganization, insolvency, moratorium, or other similar proceeding. For two years following the closing, the patent license agreement is not assignable by us (including in connection with a change of control) without Baxter’s prior written consent. We estimate that the patents licensed from Baxter will expire between approximately 2020 and 2025.

In addition, as of September 30, 2017, we owned 40 issued patents and 5 pending patent applications in the United States and in foreign jurisdictions related to our C-Pulse System and had 2 pending applications for neuromodulation. We estimate that most of our currently issued U.S. patents will expire between approximately 2021 and 2027. Given the strategic refocus away from C-Pulse and towards the Aquadex FlexFlow system, we have chosen to limit the maintenance of issued C-Pulse related patents to those innovations that are of the highest value. Further, we have elected to emphasize a few of the most critical jurisdictions rather than maintain the earlier approach that involved multiple countries. 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. Changes in patent laws or their interpretation in the United States and other countries could also diminish the value of our intellectual property or narrow the scope of our patent protection. In addition, the legal systems of certain countries do not favor the aggressive enforcement of patents, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. In order to preserve and enforce our patent and other intellectual property rights, we may need to make claims or file lawsuits against third parties. This can entail significant costs to us and divert our management’s attention from our business.

Intellectual property litigation could be costly and disruptive to us.

In recent years, there has been significant litigation involving intellectual property rights. From time to time, third parties may assert patent, copyright, trademark and other intellectual property rights to technologies used in our business. Any claims, with or without merit, could be time-consuming, result in costly litigation, divert the efforts of our technical and management personnel or require us to pay substantial damages. If we are unsuccessful in defending ourselves against these types of claims, we may be required to do one or more of the following:

halt use of our Aquadex FlexFlow products;
attempt to obtain a license to sell or use the relevant technology or substitute technology, which license may not be available on reasonable terms or at all; or
redesign our system.

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In the event a claim against us were successful and we could not obtain a license to the relevant technology on acceptable terms or license a substitute technology or redesign our system to avoid infringement, our business, results of operations and financial condition would be significantly harmed.

If we were unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and system could be adversely affected.

In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes and know-how. We generally seek to protect this information by confidentiality agreements with our employees, consultants, scientific advisors and third parties. These agreements may be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise become known or be independently developed by competitors. To the extent that our employees, consultants or contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Our products could infringe patent rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages or limit our ability to commercialize our products.

Our commercial success depends on our ability to increase adoption of the Aquadex FlexFlow system without infringing the patents and other proprietary rights of third parties. As our industry expands and more patents are issued, the risk increases that there may be patents issued to third parties that relate to our system and technologies of which we are not aware or that we must challenge to continue our operations as currently contemplated. Our system may infringe or may be alleged to infringe these patents.

In addition, some patent applications in the United States may be maintained in secrecy until the patents are issued because patent applications in the United States and many foreign jurisdictions are typically not published until 18 months after filing, and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our issued patents or our pending applications or that we were the first to invent the technology. Another party may have filed, and may in the future file, patent applications covering our system or technology similar to ours. Any such patent application may have priority over our patent applications or patents, which could further require us to obtain rights to issued patents covering such technologies. If another party has filed a U.S. patent application on inventions similar to ours, we may have to participate in an interference or derivation proceeding declared by the U.S. Patent and Trademark Office to determine priority of invention in the United States. The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if the other party had independently arrived at the same or similar invention prior to our own invention, resulting in a loss of our U.S. patent position with respect to such inventions.

We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.

As is common in our industry, we employ individuals who were previously employed at other medical device companies, including our competitors or potential competitors. Although no claims against us are currently pending, we may be subject to claims that these employees, or we, have used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.

In the ordinary course of our business, we collect and store sensitive data, including legally protected health information, personally identifiable information, intellectual property and proprietary business information owned or controlled by ourselves or others. At times we may have access to limited amounts of protected health information as part of other healthcare providers’ provision of treatment to patients with our medical devices. We manage and maintain our applications and data utilizing on-site systems. These applications and data encompass a wide variety of business-critical information including research and development information, commercial information, and business and financial information. We face four primary risks relative to protecting this critical information, including: loss of access risk; inappropriate disclosure risk; inappropriate modification risk; and the risk of our being unable to adequately monitor our controls over the first three risks.

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The secure processing, storage, maintenance, and transmission of this critical information is vital to our operations and business strategy. Although we take measures to protect sensitive information from unauthorized access or disclosure, our information technology and infrastructure may be vulnerable to attacks by hackers or viruses or breached due to employee error, malfeasance, or other disruptions. Any such breach or interruption could compromise our networks and the information stored there could be accessed by unauthorized parties, publicly disclosed, lost, or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws and regulations that protect the privacy of personal information and regulatory penalties. To the extent that we may engage in activities regulated by the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Clinical and Economic Health Act (HITECH) we may have additional regulatory and reporting obligations. Although we believe we have implemented security measures, there is no guarantee we can protect our systems and data from unauthorized access, loss or dissemination that could also disrupt our operations, including our ability to conduct our analyses, conduct research and development activities, collect, process, and prepare company financial information, provide information about our products and other patient and physician education and outreach efforts through our website, manage the administrative aspects of our business, and damage our reputation, any of which could adversely affect our business.

In addition, the interpretation and application of consumer, health-related, and data protection laws in the United States, Europe and elsewhere are often uncertain, contradictory, and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our practices. If so, this could result in government-imposed fines or orders requiring that we change our practices, which could adversely affect our business. In addition, these privacy regulations may differ from country to country, and may vary based on whether testing is performed in the United States or in the local country. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business.

Risks Related to Our Common Stock

The reverse split of our common stock could decrease our total market capitalization and increase the volatility of our stock price.

We effected 1-for-20 reverse split of our issued and outstanding shares of common stock as of 5:00 p.m. Eastern Time on October 12, 2017, and our common stock began trading on a split-adjusted basis on The Nasdaq Capital Market on October 13, 2017. There can be no assurance that the total market capitalization of our common stock after the reverse stock split will be equal to or greater than the total market capitalization before the reverse stock split or that the per share market price of our common stock followingprice has been, and could continue to be, volatile.

The rights of holders of our capital stock will be subject to, and could be adversely affected by, the reverserights of holders of our outstanding preferred stock split will increase in proportion to the reductionand stock that may be issued in the number of shares offuture.
A more active, liquid trading market for our common stock outstanding beforemay not develop, and the reverseprice of our common stock split. Furthermore, a declinemay fluctuate significantly.
Our ability to use U.S. net operating loss carryforwards and other tax attributes might be limited.
We do not intend to pay cash dividends on our common stock in the foreseeable future.
Investors in Units may have to pay taxes (or have taxes withheld) in certain circumstances with respect to our Series J Convertible Preferred Stock or the Warrants, even though holders would not receive any cash.
There may be future sales of our securities or other dilution of our equity, which may adversely affect the market price of our common stock afterstock.
This is a best-efforts offering, no minimum amount of securities is required to be sold, and we may not raise the reverse stock split may resultamount of capital we believe is required for our business plans.
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RISK FACTORS
An investment in our securities has a greater percentage decline than would occurhigh degree of risk. Before you invest you should carefully consider the risks and uncertainties described below, the other information in this prospectus, and under the absencecaption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2023 and June 30, 2023, each of a reverse stock split,which is incorporated by reference and the liquidityother information in this prospectus. Any of the risks and uncertainties set forth herein could materially and adversely affect our business, results of operations and financial condition, which in turn could materially and adversely affect the trading price or value of our common stocksecurities. Additional risks not currently known to us or which we consider immaterial based on information currently available to us may also materially adversely affect us. As a result, you could be adversely affected following such a reverse stock split.

We previously effected a 1-for-30 reverse splitlose all or part of our issued and outstanding shares of common stock as of January 12, 2017.your investment.

Risks Related to Our total market capitalization following such reverse split was substantially lower than our total market capitalization prior to such split, and the per share market price of our common stock following such reverse stock split, after initially increasing, eventually decreased such that the market price following the split did not increase in proportion to the reduction in the number of shares of common stock outstanding before the reverse stock split.

Common Stock

Nasdaq may delist our common stock from its exchange which could limit your ability to make transactions in our securities and subject us to additional trading restrictions.

On June 1, 2017,May 31, 2022, we received a notificationnotice from The NASDAQ Stock Market LLC (“Nasdaq”)the Staff of Nasdaq informing us that because the closing bid price for our common stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, we were no longernot in compliance with the minimum bid price requirement,Minimum Bid Price Requirement for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Marketplace Rule 5550(a)(2).
In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the bid priceCompany had a period of our shares of common stock closed below the minimum $1.00 per share for the 30 consecutive business days prior to the date of the notice. Nasdaq also notified us that we were provided 180 calendar days from May 31, 2022, or until November 28, 2017,2022, to regain compliance with the minimum bid price requirement.

AtMinimum Bid Price Requirement.

On December 9, 2022, we effected a special meeting1-for-100 reverse split of our stockholders on October 10, 2017, our stockholders approved, among other things, aoutstanding common stock. This reverse stock split and following such special meeting,did not change the par value of our Board of Directors approved a 1-for-20 reverse split ofcommon stock or the Company’s issued and outstanding sharesnumber of common stock. The reverse stock split became effective asor preferred shares authorized by our Certificate of 5:00 p.m. Eastern Time on October 12, 2017, andIncorporation. On December 27, 2022, Nasdaq notified the Company’s common stock began trading on a split-adjusted

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basis on The Nasdaq Capital Market on October 13, 2017. On October 27, 2017, we received formal notice from NasdaqCompany that weit had regained compliance with the minimum $1.00 bid price requirement, as set forth in Nasdaq Listing Rule 5550(a)(2), and the matter is now closed.

If,.

Our ability to effectuate another reverse stock split in the future it appearsmay be limited. If a Company fails to the Nasdaq staff that we will not meet the continued listing requirement for minimum bid price requirementand the Company has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then the Company shall not be eligible for any other listing standard, our common stock may be subject tocompliance period specified in Nasdaq Marketplace Rule 5810(c)(3)(A) and the Staff of Nasdaq will issue a delisting from the Nasdaq market. determination.
If our common stock is ever delisted Baxter, pursuantfrom Nasdaq, our ability to raise capital through public offerings of our securities and to finance our operations could be adversely affected. We also believe that delisting would likely result in decreased liquidity and/or increased volatility in our common stock and could harm our business and future prospects. In addition, we believe that, if our common stock is delisted, our stockholders would likely find it more difficult to obtain accurate quotations as to the asset purchase agreement for the Aquadex Business, has the right to require us to repurchase, in cash, all or partprice of the common stock held by Baxterand it may be more difficult for stockholders to buy or sell our common stock at a price equal to their faircompetitive market value, as determined by a third-party appraiser. In addition,prices, or at all.
If our common stock is ever delisted, our common stock would likely then trade only in the over-the-counter market. If our common stock were to trade on the over-the-counter market, selling our common stock could be more difficult because smaller quantities of shares would likely be bought and sold, and transactions could be delayed, and we could face significant material adverse consequences, including:

a limited availability of market quotations for our securities;
reduced liquidity with respect to our securities;
a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities;
a reduced amount of news and analyst coverage for our Company; and
a decreased ability to issue additional securities or obtain additional financing in the future.

These factors could result in lower prices and larger spreads in the bid and ask prices for our common stock and would substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for us.

In addition to the foregoing, if our common stock is delisted from NASDAQNasdaq and it trades on the over-the-counter market, the application of the “penny stock” rules could adversely affect the market price of our common stock and increase the transaction costs to sell those shares. The SEC has adopted regulations which generally define a “penny stock” as an equity security that has a market price of less than $5.00 per share,
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subject to specific exemptions. The closing price of our common stock on October 31, 2017 was $6.99. If our common stock is delisted from NASDAQNasdaq and it trades on the over-the-counter market at a price of less than $5.00 per share, our common stock would be considered a penny stock. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our common stock and may affect the ability of investors to sell their shares, until our common stock no longer is considered a penny stock.

The

Sales of a substantial number of shares of common stock underlying our outstanding warrants is significant in relation to our currently outstanding common stock and their exercise and sale would cause dilution to the existing holders of our common stock and to investorsby our stockholders in this offering, andthe public market could cause downward pressure on the marketour stock price for our common stock.

As of October 31, 2017, we have warrants to purchase 496,468 shares of common stock outstanding, with exercise prices ranging from $22.00 to $3,132.00, with a weighted-average exercise price of $26.10. fall.

The number of shares of common stock issuable upon conversion of our outstanding preferred stock and exercise of outstanding warrants is significant in relation to the number of shares of our common stock currently outstanding.
As of September 27, 2023, we have warrants to purchase 1,308,271 shares of common stock outstanding, with exercise prices ranging from $3.2996 to $189,000 with a weighted-average exercise price of $35.51.
As of September 27, 2023, there were 127 shares of Series F Preferred Stock outstanding, convertible into 5,080 shares of common stock. The certificate of designation for our Series F Preferred Stock contains an anti-dilution provision, which provision requires the lowering of the applicable conversion price, as then in effect, to the purchase price per share of common stock or common stock equivalents issued in the future. If the effective price per share on a common-stock equivalent basis in a future equity offering is lower than the then-current conversion price of the Series F Convertible Preferred Stock, then such conversion price shall be reduced to such lower price and additional shares of common stock will be issuable upon the conversion of the of the Series F Convertible Preferred Stock. To the extent the outstanding shares of Series F Convertible Preferred Stock become exercisable for additional shares of common stock, holders of our common stock will experience further dilution.
If any security holder determines to sell a substantial number of shares into the market at any given time, there may not be sufficient demand in the market to purchase the shares without a decline in the market price for our common stock. Moreover, continuous sales into the market of a number of shares in excess of the typical trading volume for our common stock or even the availability of such a large number of shares, could depress the trading market for our common stock over an extended period of time.

Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could significantly reduce the market price of our common stock and impair our ability to raise adequate capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our common stock. As of September 27, 2023, we have outstanding warrants to purchase an aggregate of approximately 1,308,271 shares of our common stock, and options to purchase an aggregate of approximately 111,275 shares of our common stock, which, if exercised, may further increase the number of shares of our common stock outstanding and the number of shares eligible for resale in the public market.
Our business could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities.
Stockholders may, from time to time, engage in proxy solicitations or advance stockholder proposals, or otherwise attempt to effect changes and assert influence on our board of directors and management. Activist campaigns that contest or conflict with our strategic direction or seek changes in the composition of our board of directors could have an adverse effect on our operating results and financial condition. A proxy contest would require us to incur significant legal and advisory fees, proxy solicitation expenses and administrative and associated costs and require significant time and attention by our board of directors and management, diverting their attention from the pursuit of our business strategy. Any perceived uncertainties as to our future direction

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The rights

and control, our ability to execute on our strategy, or changes to the composition of holders of our capital stock will be subject to, and could be adversely affected by, the rights any preferred stock that may be issued in the future.

Our board of directors has authority, without further stockholder approval,or senior management team arising from a proxy contest could lead to issue additional sharesthe perception of preferred stock with such rights, preferences and privileges as our board may determine. These rights, preferences and privileges may include dividend rights, conversion rights, voting rights and liquidation rights that may be greater thana change in the rightsdirection of our common stock.

The rights, preferencesbusiness or instability which may result in the loss of potential business opportunities, make it more difficult to pursue our strategic initiatives, or limit our ability to attract and privilegesretain qualified personnel and business partners, any of the Series F Preferred Stockwhich could adversely affect our business and operating results. If individuals are ultimately elected to be issued in this offering are described under “Description of Securities—Description of Capital Stock—Preferred Stock—Series F Preferred Stock” herein. As described therein, upon liquidation, dissolution or winding-up of the Company, the holders of Series F Preferred Stock are entitled to participate on an as-converted-to-common stock basis with holders of the common stock in any distribution of assets of the Company.

Ourour board of directors with a specific agenda, it may issueadversely affect our ability to effectively implement our business strategy and create additional series of preferred stock in the future pursuantvalue for our stockholders. We may choose to this authority. Asinitiate, or may become subject to, litigation as a result of the rightsproxy contest or matters arising from the proxy contest, which would serve as a further distraction to our board of holdersdirectors and management and would require us to incur significant additional costs. In addition, actions such as those described above could cause significant fluctuations in our stock price based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our capital stock will be subject to, and could be adversely affected by, the rights of holders of any stock that may be issued in the future.

business.

We have a large number of authorized but unissued shares of stock, which could negatively impact a potential investor if they purchased our common stock.

We

On December 9, 2022, we effected 1-for-20a 1-for-100 reverse split of our issued and outstanding sharescommon stock. This reverse stock split did not change the par value of common stock as of 5:00 p.m. Eastern Time on October 12, 2017, and our common stock began trading on a split-adjusted basis on The Nasdaq Capital Market on October 13, 2017.

or the number of common or preferred shares authorized by our Certificate of Incorporation. Because the number of authorized shares of our common stock was not reduced proportionately, the reverse stock split increased our board of directors’ ability to issue authorized and unissued shares without further stockholder action. As of the date of this prospectus,September 27, 2023, our certificate of incorporation provides for 100,000,000 shares of authorized common stock and 40,000,000 shares of authorized preferred stock. Asstock, 30,000 of October 31, 2017,which are designated Series A Junior Participating Preferred Stock, 127 of which are designated Series F Preferred Stock, and we had 625,791have 1,864,265 shares of common stock outstanding, 533,6331,424,626 shares reserved for issuance upon the conversion, exercise or vesting of outstanding preferred stock, warrants and options, and restricted stock units, and 57,28449,456 shares of common stock reserved for future grant under the Company’s equity incentive plans.

With respect to authorized but unissued and unreserved shares, we could also use such shares to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management. The issuance of additional shares of common stock or securities convertible into common stock may have a dilutive effect on earnings per share and relative voting power and may cause a decline in the trading price of our common stock. We could use the shares that are available for future issuance in dilutive equity financing transactions, or to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management, including transactions that are favored by a majority of the stockholders or in which the stockholders might otherwise receive a premium for their shares over then-current market prices or benefit in some other manner.

The price of our common stock may fluctuate significantly, and this may make it difficult for you to resell the common stock you want or at prices you find attractive.

The price of our common stock constantly changes. The price of our common stock could fluctuate significantly for many reasons, including the following:

future announcements concerning us, including our clinical and product development strategy, or our competitors;
regulatory developments, disclosure regarding completed, ongoing or future clinical studies and enforcement actions bearing on advertising, marketing or sales;
reports and recommendations of analysts and whether or not we meet the milestones and metrics set forth in such reports;
introduction of new products;
acquisition or loss of significant manufacturers, distributors or suppliers or an inability to obtain sufficient quantities of materials needed to manufacture our system;

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quarterly variations in operating results, which we have experienced in the past and expect to experience in the future;
business acquisitions or divestitures;
changes in governmental or third-party reimbursement practices;
fluctuations of investor interest in the medical device sector; and
fluctuations in the economy, world political events or general market conditions.

In addition, stock markets in general, and the market for shares of health care stocks in particular, have experienced extreme price and volume fluctuations in recent years, fluctuations that frequently have been unrelated to the operating performance of the affected companies. These broad market fluctuations may adversely affect the market price of our common stock. The market price of our common stock could decline below its current price and the market price of our shares may fluctuate significantly in the future. These fluctuations may be unrelated to our performance. We expect that the market price of our common stock will continue to fluctuate.

Our ability to use U.S. net operating loss carryforwards or Australian tax losses might be limited.

As of December 31, 2016, we had U.S. net operating loss (“NOL”) carryforwards of approximately $110.6 million for U.S. Federal income tax purposes, which expire from 2024 through 2034. To the extent these NOL carryforwards are available, we intend to use them to reduce any corporate income tax liability associated with our operations that we might have in the future. Section 382 of the U.S. Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on the amount of NOL carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. As a result, prior or future changes in ownership, including due to this offering, could put limitations on the availability of our NOL carryforwards. In addition, our ability to utilize the current NOL carryforwards might be further limited by future issuances of our common stock.

As of December 31, 2016, we had tax losses in the Commonwealth of Australia of approximately AU$49.0 million. Continuing utilization of carryforward tax losses in Australia may also be affected by the issuance of our common stock. This is because one test for carrying forward tax losses in Australia from year to year requires continuity of ultimate ownership (subject to the relevant tests in Australian tax law) of more than 50% between the loss year and the income year in which the loss is claimed.

To the extent use of our NOL carryforwards or tax losses is limited, our income could be subject to corporate income tax earlier than it would if we were able to use NOL carryforwards and tax losses, which could result in lower profits.

We do not intend to pay cash dividends on our common stock in the foreseeable future.

We have never declared or paid any cash dividends on our common stock, and we currently do not anticipate paying any cash dividends in the foreseeable future. We intend to retain any earnings to finance the development and expansion of our products and business. Accordingly, our stockholders will not realize a return on their investments unless the trading price of our common stock appreciates.

We will continue to incur increased costs as a result of being a U.S. reporting company.

In connection with the effectiveness of our registration statement on Form 10, as of February 14, 2012, we became subject to the periodic reporting requirements of the Exchange Act. Although we were previously listed on the Australian Securities Exchange and had been required to file financial information and make certain other filings with the Australian Securities Exchange, our status as a U.S. reporting company under the Exchange Act has caused us, and will continue to cause us, to incur additional legal, accounting and other expenses that we did not previously incur, including costs related to compliance with the requirements of SOX and the listing requirements of Thethe Nasdaq Capital Market. We expect these rules and regulations will continue to increase our legal and financial compliance costs and make some activities more time-consuming and costly, and these activities may increase general and administrative expenses and divert management’s time and attention away from revenue-generating activities. Furthermore, now that we are a revenue-generating company following the acquisition of the Aquadex Business in August 2016, our costs to comply with regulations applicable to U.S. reporting companies may further increase. We also expect these rules and regulations may make it more difficult and more expensive for us to obtain director and

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officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers.

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Investors could lose confidence in our financial reports, and the value of our common stock may be adversely affected, if our internal controls over financial reporting are found not to be effective by management or by an independent registered public accounting firm or if we make disclosure of existing or potential material weaknesses in those controls.

In connection with becoming

As long as we remain a company required to file reports with the SEC,non-accelerated filer, we are required to comply withexempt from the internal control evaluation and certification requirements of Section 404 of SOX. Our independent registered public accounting firm will not be required to formally attest toattestation requirement in the effectivenessassessment of our internal control over financial reporting by our independent auditors pursuant to Section 404section 404(b) of SOX, until the date webut are no longer an “emerging growth company” as defined in the JOBS Act or a “smaller reporting company” as defined by applicable SEC rules. We will no longer qualify as an “emerging growth company” on or before December 31, 2017, although we will remain a “smaller reporting company” as long asrequired to make our public float remains less than $75 million asown internal assessment of the last business dayeffectiveness of our most recently-completed second fiscal quarter.

internal controls over financial reporting.

We continue to evaluate our existing internal controls over financial reporting against the standards adopted by the Public Company Accounting Oversight Board.reporting. During the course of our ongoing evaluation of the internal controls, we may identify areas requiring improvement and may have to design enhanced processes and controls to address issues identified through this review. Remediating any deficiencies, significant deficiencies or material weaknesses that we or our independent registered public accounting firm may identify may require us to incur significant costs and expend significant time and management resources. We cannot assure you that any of the measures we implement to remedy any such deficiencies will effectively mitigate or remedy such deficiencies. The existence of one or more material weaknesses could affect the accuracy and timing of our financial reporting. It may be more difficult for us to manage our internal control over financial reporting following our acquisition of the Aquadex Business now that we are a revenue generating company. Investors could lose confidence in our financial reports, and the value of our common stock may be harmed, if our internal controls over financial reporting are found not to be effective by management or by anour independent registered public accounting firm or if we make disclosure of existing or potential material weaknesses in those controls.

Our certificateFourth Amended and Restated Certificate of incorporation designates the Court of Chancery of the State of DelawareIncorporation, as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with the Company.

Our certificate of incorporationamended, provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i)substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our Fourth Amended and Restated Certificate of Incorporation, as amended, provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf, (ii)behalf; any action asserting a breach of fiduciary duty; any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officersagainst us arising pursuant to the Delaware General Corporation Law (the “DGCL”); or other employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, as amended (the “DGCL”), or (iv) any other action asserting a claimagainst us that is governed by the internal affairs doctrine. This choice of forum provision does not preclude or contract the scope of exclusive federal or concurrent jurisdiction for any actions brought under the Securities Act of 1933 (“Securities Act”) or the Exchange Act. Accordingly, our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
Any person or entity purchasing or otherwise acquiring any interest in sharesany of our capital stocksecurities shall be deemed to have notice of and to have consented to thethese provisions. These exclusive-forum provisions described above. This forum selection provision may limit our stockholders’a stockholder’s ability to obtainbring a claim in a judicial forum that they find favorableof its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees.

If a court were to find the choice of forum provision contained in our Fourth Amended and Restated Certificate of Incorporation, as amended, to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management and other employees.
Our certificate of incorporation and bylaws, as well as certain provisions of the DGCL, may delay or deter a change in control transaction.

Certain provisions of our certificate of incorporation and bylaws may have the effect of deterring takeovers, such as those provisions authorizing our board of directors to issue, from time to time, any series of preferred stock and fix the designation, powers, preferences and rights of the shares of such series of preferred stock; prohibiting stockholders from acting by written consent in lieu of a meeting; requiring advance notice of
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stockholder intention to put forth director nominees or bring up other business at a stockholders’ meeting; prohibiting stockholders from calling a special meeting of stockholders; requiring a 662/ 2⁄3% majority stockholder approval in order for stockholders to amend certain provisions of our certificate of incorporation or bylaws or adopt new bylaws; providing that, subject to the rights of preferred shares, the directors will be divided into three classes and the number of directors is to be fixed exclusively by our board of directors; and providing that none of our directors may be removed without cause.

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Section 203 of the DGCL, from which we did not elect to opt out, provides that if a holder acquires 15% or more of our stock without prior approval of our board of directors, that holder will be subject to certain restrictions on its ability to acquire us within three years. These provisions may delay or deter a change in control of us, and could limit the price that investors might be willing to pay in the future for shares of our common stock.

We are an “emerging growth company” and a “smaller reporting company” under federal securities laws and we cannot be certain ifwhether the reduced reporting requirements applicable to such companies will make our common stock less attractive to investors.

We are an “emerging growth company” and a “smaller reporting company” under federal securities laws. For as long as we continue to be an emerging growth company or a smaller reporting company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies, including not being required to comply with the external auditor attestation requirements of Section 404 of SOX, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and, for emerging growth companies, exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. The JOBS Act also permits emerging growth companies to take advantage of an extended transition period to comply with new or revised accounting standards applicable to U.S. public companies.statements. We will be an emerging growth company until December 31, 2017, although we will remain a smaller reporting company so long as our public float remains less than $75$250 million as of the last business day of our most recently-completedrecently completed second fiscal quarter. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may decline or be more volatile.

As explained above, Section 102(b)(1)

Stockholder litigation could divert the attention of management from the day-to-day operation of our business or result in us incurring substantial costs and liabilities.
We cannot be sure that our stockholders will not initiate securities litigation against us in the future. If securities or stockholder derivative litigation were to be commenced against us, our defense of such litigation could divert the attention of management from the day-to-day operation of our business or result in us incurring substantial costs and liabilities, irrespective of the JOBS Act also provides that an emerging growth company can take advantagemerits of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. An emerging growth company can delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period, and as a result of this election, our financial statements may not be comparable to those of companies that comply with public company effective dates for new or revised accounting standards for U.S. public companies. We will be an emerging growth company until December 31, 2017 and after such date can no longer take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act.

litigation.

Risks Relating to this Offering

If you purchase Series F convertible preferred stock in this offering, you will incur immediate and substantial dilution in the net tangible book value of your shares.

Investors in this offering will experience immediate dilution in their net tangible book value per share to the extent of the difference between the conversion price per share of common stock and the “adjusted” net tangible book value per share after giving effect to the offering. Our net tangible book value as of September 30, 2017 was approximately $3.0 million, or $4.75 per share of our common stock. Assuming that we issue 10,000 shares of Series F convertible preferred stock at a price of $1,000 per share and the Series F preferred stock sold in this offering has a conversion price of $4.67 per share, which was 100% of the consolidated closing bid price of our common stock on The Nasdaq Capital Market on November 9, 2017, and assuming the conversion of all the shares of Series F preferred stock sold in the offering (not taking into account any anti-dilution adjustments in the Series F preferred stock), and after deducting the commissions and estimated offering expenses payable by us, our net tangible book value as of September 30, 2017 would have been approximately $12.0 million, or $4.32 per share of our common stock. This calculation excludes the proceeds, if any, from the exercise of the warrants issued in this offering. This amount represents an immediate decrease in net tangible book value of $0.43 per share to our existing stockholders and an immediate dilution in net tangible book value of $0.35 per share to new investors in this offering. If outstanding options and warrants to purchase our common stock are exercised, you will experience dilution. See the section entitled “Dilution” below.

As a result of the dilution to investors purchasing shares in this offering, investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of a liquidation of our company.

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Because our management will have broad discretion and flexibility in how the net proceeds from this offering are used, our management may use the net proceeds in ways with which you disagree or which may not prove effective.

We currently intend to use the net proceeds from this offering as discussed under “Use of Proceeds” in this prospectus. We have not allocated specific amounts of the net proceeds from this offering for any of the foregoing purposes. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds of this offering. You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. It is possible that the net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results and cash flow.
This is a best-efforts offering, no minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe is required for our business plans.
The placement agents have agreed to use their reasonable best efforts to solicit offers to purchase the securities in this offering. The placement agents have no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering. Because there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, placement agent fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth herein. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a
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refund in the event that we do not sell an amount of securities sufficient to support our continued operations. Thus, we may not raise the amount of capital we believe is required for our operations and may need to raise additional funds. Such additional fundraises may not be available or available on terms acceptable to us.
The Series FJ Convertible Preferred Stock and the warrantsWarrants are unlisted securities and there is no public market for them.

There is no established public trading market for, the Series F Preferred Stock or the warrants, and we do not expect a market to develop.develop for the Series J Convertible Preferred Stock or the Warrants. In addition, neither the Series FJ Convertible Preferred Stock nor the warrantsWarrants are listed, and we do not intend to apply for listing of the Series FJ Convertible Preferred Stock or the warrantsWarrants on any securities exchange or trading system. Without an active market, the liquidity of the Series FJ Convertible Preferred Stock and the warrantsWarrants is limited, and investors may be unable to liquidate their investments in the Series FJ Convertible Preferred Stock or the warrants.

Warrants.

The Warrants in this offering are speculative in nature.
Following this offering, the market value of the Warrants, if any, is uncertain and there can be no assurance that the market value of the Warrants will equal or exceed their imputed public offering price. In the event that the price of our Series J Convertible Preferred Stock does not exceed the exercise price of the Warrants during the period when such Warrants are exercisable, such Warrants may not have any value. Furthermore, each Warrant will expire three (3) years from the Closing Date.
Holders of the Warrants will not have rights of holders of our shares of our Series J Convertible Preferred Stock until such Warrants are exercised.
The Warrants in this offering do not confer any rights of share ownership on their holders, but rather merely represent the right to acquire shares of our Series J Convertible Preferred Stock at a fixed price upon exercise thereof. Until holders of Warrants acquire shares of our Series J Convertible Preferred Stock upon exercise of the Warrants, as applicable, holders of Warrants will have no rights with respect to our shares of Series J Convertible Preferred Stock underlying such Warrants.
The value of our Series F convertible preferred stockJ Convertible Preferred Stock is directly tied to the value of our common stock, and any change in the value of our common stock will be reflected in the value of our Series F convertible preferred stock.

J Convertible Preferred Stock.

There is no established public trading market for the Series F convertible preferred stock, and we do not expect a market to develop.develop for the Series J Convertible Preferred Stock. In addition, we do not intend to apply for listing of the Series F convertible preferred stockJ Convertible Preferred Stock on any national securities exchange or other nationally recognized trading system. As a result, because each share of Series F convertible preferred stockJ Convertible Preferred Stock is initially convertible into a numberone share of shares of our common stock, equal to $1,000 divided by the conversion price, subject to certain beneficial ownership limitations, we expect the value of the Series F convertible preferred stockJ Convertible Preferred Stock to have a value directly tied to the value of our common stock. Accordingly, any change in the trading price of our common stock will be reflected in the value of our Series F convertible preferred stock,J Convertible Preferred Stock, and the price of our common stock may be volatile as described above.

Because we do not intend to pay cash dividends, our stockholders will benefit from an investment in our securities only if they appreciate in value.
We intend to retain our future earnings, if any, to finance the expansion of our business and do not expect to pay any cash dividends in the foreseeable future. As a result, the success of an investment in our securities will depend entirely upon any future appreciation. There is no guarantee that our securities will appreciate in value or even maintain the price at which our stockholders purchased their shares.
Purchasers in this offering may experience dilution of their investment in the future.
Subject to lock-up provisions described under “Plan of Distribution,” we are generally not restricted from issuing additional securities, including shares of common stock, securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or substantially similar securities. The conversionissuance of securities may cause dilution to our stockholders, including investors in this offering. In order to raise additional capital, such securities may be at prices that are not the same as the price per share in this offering.
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We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders, including investors who purchase securities in this offering. The price per share at which we sell additional shares of our Series Fcommon stock or securities convertible preferred stock into common stock in future transactions may be higher or lower than the perceptionprice per share in this offering. The exercise of outstanding stock options or warrants and the vesting of outstanding restricted stock units may also result in dilution of your investment.
The terms of our Series J Convertible Preferred Stock could prohibit us from issuing additional equity because of the significant dilutive effects on our common stock.
The Certificate of Designations shall provide that dividends on the Series J Convertible Preferred Stock shall be paid in-kind in additional shares of Series J Convertible Preferred Stock based on the stated value of $25.00 per share at an assumed annual dividend rate of 20%. 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 at October 31, January 31, April 30, and July 31 of each year (each a “Dividend Record Date”) at the quarterly dividend rate of 5% (the “Quarterly Dividend Rate”). PIK dividends on each share of Series J Convertible Preferred Stock shall be paid within three business days of each 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 $15.00, based on the assumed public offering price set forth on the cover page of the prospectus), as a result such conversionssubsequent issued PIK dividends will be convertible into common stock and could have dilutive effects on our common stock.
Mandatory redemption obligations may occur,make it more difficult for a party to acquire us or discourage a party from acquiring us.
The mandatory redemption feature of the Series J Convertible Preferred Stock may have the effect of discouraging a third party from making an acquisition proposal for us or of delaying, deferring or preventing certain of our change of control transactions under circumstances that otherwise could provide the holders of our common stock and Series J Convertible Preferred Stock with the opportunity to realize a premium over the then-current market price of such stock or that shareholders may otherwise believe is in their best interests.
We may incur additional indebtedness and obligations to pay dividends on preferred stock, some of which may be senior to the rights of the Series J Convertible Preferred Stock.
We and our subsidiaries may incur additional indebtedness and obligations to pay cumulative dividends on preferred stock, some of which may be senior to the rights of the Series J Convertible Preferred Stock. The terms of the Series J Convertible Preferred Stock do not prohibit us or our subsidiaries from incurring additional indebtedness or issuing additional series of preferred stock. Any such indebtedness will in all cases be senior to the rights of holders of Series J Convertible Preferred Stock. We may also issue additional series of preferred stock that contain dividend rights and liquidation preferences that are senior to the rights of holders of Series J Convertible Preferred Stock. Our subsidiaries may also incur indebtedness that is structurally senior to the Series J Convertible Preferred Stock, and we and our subsidiaries could incur indebtedness secured by a lien on our assets, entitling the holders of such indebtedness to be paid first from the proceeds of such assets. If we issue any additional preferred stock that ranks senior or pari passu with the Series J Convertible Preferred Stock, the holders of those shares will be entitled to a senior or ratable share with the holders of the Series J Convertible Preferred Stock in any proceeds distributed in connection with our insolvency, liquidation, reorganization or dissolution. This may have the effect of reducing the amount of proceeds paid to the holders of Series J Convertible Preferred Stock.
The Series J Convertible Preferred Stock is a new issue of securities does not have an established trading market and we do not intend to list the Series J Convertible Preferred Stock on any national securities exchange or other nationally recognized trading system, which may negatively affect its value and your ability to transfer and sell your shares.
The Series J Convertible Preferred Stock is a new issue of securities and currently no market exists for the Series J Convertible Preferred Stock. In addition, the Series J Convertible Preferred Stock is not listed, and we do not intend to apply for listing of the Series J Convertible Preferred Stock on any national securities exchange
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or other nationally recognized trading system, including Nasdaq. Without an active market, the liquidity of the Series J Convertible Preferred Stock is limited, and investors may be unable to liquidate their investments in the Series J Convertible Preferred Stock or to sell at a price that you consider reasonable. As a result, the liquidity of the Series J Convertible Preferred Stock will be limited and a holders’ ability to transfer or sell the Series J Convertible Preferred Stock and could be adversely affected.
Market interest rates may adversely affect the value of the Series J Convertible Preferred Stock.
One of the factors that continues to influence the price of the Series J Convertible Preferred Stock will be the dividend yield on the Series J Convertible Preferred Stock (as a percentage of the price of the Series J Convertible Preferred Stock) relative to market interest rates. An increase in market interest rates may lead prospective purchasers of the Series J Convertible Preferred Stock to expect a higher dividend yield, and higher interest rates would likely increase our borrowing costs and potentially decrease funds available for dividends. Accordingly, higher market interest rates could cause the market price of the Series J Convertible Preferred Stock to decrease.
The amount of the liquidation preference on the Series J Convertible Preferred Stock is fixed and investors in this offering that receive shares of Series J Convertible Preferred Stock will have no right to receive any greater payment.
The payment due upon liquidation on the Series J Convertible Preferred Stock is fixed at the liquidation preference of $25.00 per share. If, in the case of our common stockliquidation, there are remaining assets to be distributed after payment of this amount, you will have no right to receive or to participate in these amounts. In addition, if the market price of a holder’s Series J Convertible Preferred Stock is greater than the liquidation preference, such holder will have no right to receive the market price from us upon our liquidation.
There may be future sales of Series J Convertible Preferred Stock or similar securities, which may adversely affect the market price of the Series J Convertible Preferred Stock.
Subject to the terms of the Certificate of Designations, our certificate of incorporation, as amended, and the DGCL, we are not restricted from issuing additional Series J Convertible Preferred Stock or securities similar to the Series J Convertible Preferred Stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, Series J Convertible Preferred Stock. Holders of the Series J Convertible Preferred Stock have no preemptive rights that entitle holders to purchase their pro rata share of any offering of shares of any class or series. The market price of the Series J Convertible Preferred Stock could decline as a result of sales of Series J Convertible Preferred Stock or of other securities made after this offering or the perception that such sales could occur. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future offerings. Thus, holders of the Series J Convertible Preferred Stock bear the risk of our future offerings reducing the market price of the Series J Convertible Preferred Stock and diluting their holdings in the Series J Convertible Preferred Stock.
Raising additional funds through debt or equity financing could be dilutive and may cause the market price of the Series J Convertible Preferred Stock to decline.

Each share We still may need to raise additional funding which may not be available on acceptable terms, or at all. Failure to obtain additional capital may force us to delay, limit, or terminate our product development efforts or other operations.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Furthermore, any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our products and services. We may continue to seek funds through equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing. Additional funding may not be available to us on acceptable terms, or at all. Any failure to raise capital as and when needed, as a result of insufficient authorized shares or otherwise, could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.
The voting rights of holders of the Series F convertible preferred stock is initially convertible into a numberJ Convertible Preferred Stock are limited and holders of Series J Convertible Preferred Stock will not have the voting rights of holders of our shares of our common stock equal to $1,000 divided by the conversion price at any time at the optionuntil such shares of Series J Convertible Preferred Stock are converted into shares of our common stock.
Holders of the holder, subjectSeries J Convertible Preferred Stock have no voting rights with respect to certain limitations. See “Descriptionmatters that generally require the approval of Securities.” The conversionvoting stockholders and will not have the voting rights that the holders of substantial amounts of our Series F convertible preferred stock would result in the issuance by us of a substantial number of additional
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shares of our common stock which,have until the shares of Series J Convertible Preferred Stock are converted into shares of common stock. The limited voting rights of holders of the Series J Convertible Preferred Stock include the right to vote as a single class on certain matters that may affect the preference or special rights of the Series J Convertible Preferred Stock, as described under “Description of the Securities We Are Offering—Description of the Series J Convertible Preferred Stock—Voting Rights”.
Our ability to use net operating losses and other tax attributes to offset future taxable income may be subject to certain limitations, could be traded publicly. Such conversions,limitations.
Under Section 382 of the Internal Revenue Code of 1986, as amended, or the perceptionCode, substantial changes in a corporation’s ownership may limit the amount of net operating losses, or NOLs, that can be utilized annually in the future to offset the corporation’s (and the corporation’s affiliates’) U.S. federal and state taxable income. Specifically, this limitation may arise in the event of a cumulative change in ownership of more than 50% within any three-year period. The amount of the annual limitation is determined based on the value of the corporation that underwent the ownership change, immediately before the ownership change. Subsequent ownership changes may further affect any limitation in future years (including by way of exercising of warrants).
Holders may have to pay taxes if we adjust the conversion rate of the Series J Convertible Preferred Stock or make adjustments to the Warrant exercise price or other terms in certain circumstances, even though holders would not receive any cash.
Upon certain adjustments to (or certain failures to make adjustments to) the conversion price of the Series J Convertible Preferred Stock or adjustments to the Warrant exercise price or other terms, holders may be deemed to have received a distribution from us, resulting in taxable income to them for U.S. federal income tax purposes, even though holders would not receive any cash in connection with such conversionsadjustment to (or failure to adjust) the conversion price. If you are a non-U.S. holder (as defined in “Material U.S. Federal Income Tax Consequences”) of the Series A Convertible Preferred Stock, any deemed dividend may occur,be subject to U.S. federal withholding tax at a 30% rate, or such lower rate as may be specified by an applicable treaty.
Dividends or other distributions (including deemed distributions) with respect to the Series J Convertible Preferred Stock, or the Warrants, may be subject to withholding taxes in circumstances where we are not obliged to make gross up payments, and this could causeresult in holders receiving less than expected in such circumstances.
On account of certain tax laws that require tax to be withheld from dividends or other distributions (including deemed distributions) on the Series J Convertible Preferred Stock or with respect to the Warrants, we are not required to make gross up payments in respect of such taxes. This would result in holders of Series J Convertible Preferred Stock and the Warrants receiving less than expected and could materially adversely affect the return on your investment.
The Series J Convertible Preferred Stock has not been rated.
We have not sought to obtain a rating for the Series J Convertible Preferred Stock. However, one or more rating agencies may independently determine to issue such a rating or such a rating, if issued, may adversely affect the market price of our common stockthe Series J Convertible Preferred Stock. In addition, we may elect in the future to decline.

The warrants may not have any value.

Theobtain a rating for the Series 1 warrants will be exercisable for one year fromJ Convertible Preferred Stock, which could adversely affect the closing date at an initial exercise price of $[      ] per share. The Series 2 warrants will be exercisable for seven years from the closing date at an initial exercise price of $[      ] per share. In the event that the price of a share of our common stock does not exceed the exercisemarket price of the warrants duringSeries J Convertible Preferred Stock. Ratings only reflect the period whenviews of the warrants are exercisable,rating agency or agencies issuing the warrants may notratings and such ratings could be revised downward, placed on a watch list or withdrawn entirely at the discretion of the issuing rating agency if in its judgment circumstances so warrant. Any such downward revision, placing on a watch list or withdrawal of a rating could have any value.

The warrants purchasedan adverse effect on the market price of the Series J Convertible Preferred Stock.

Purchasers who purchase our securities in this offering dopursuant to a securities purchase agreement may have rights not entitleavailable to purchasers that purchase without the holderbenefit of a securities purchase agreement.
In addition to any rights as common stockholders until the holder exercises the warrant for shares of our common stock.

Until you acquire shares of our common stock upon exercise of your warrants purchasedand remedies available to all purchasers in this offering such warrantsunder federal securities and state law, the purchasers that enter into a securities purchase agreement will not provide you any rights asalso be able to bring claims of breach of contract against us. The ability to pursue a common stockholder, except as set forth inclaim for breach of contract provides those investors with the warrants. Upon exercise of your warrants purchased in this offering, you will be entitledmeans to exerciseenforce the rights of a common stockholder only ascovenants uniquely available to matters for whichthem under the record date occurs on or after the exercise date.

securities purchase agreement.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus includingand the documents that we incorporateinformation incorporated by reference containsherein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act and Section 21E of the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but are not always, made through the use of words or phrases such as “anticipates,” “estimates,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” and similar words or phrases. Accordingly, these statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this prospectus, and in particular those factors included in the section entitled “Risk Factors.”

Because the factors referred to in the preceding paragraph could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements we make, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should carefully read this prospectus and any related free writing prospectus together with the information incorporated herein or therein by reference as described under the section titled “Information Incorporated by Reference,” and with the understanding that our actual future results may materially differ from what we expect.

Except as required by law, forward-looking statements speak only as of the date they are made, and we assume no obligation to update any forward-looking statements publicly, or to update the reasons why actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available.

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USE OF PROCEEDS

We estimate that the net proceeds to us from the sale of the securities offered by this prospectusUnits in this offering will be approximately $9.0$5 million (calculated based on an assumed public offering price per Unit of $15.00) after deducting commissionsplacement agent fees and estimated offering expenses payable by us.

This estimate excludes the proceeds, if any, from the exercise of the Warrants sold in this offering. If all of the Warrants sold in the offering were sold and exercised for cash, we would receive additional net proceeds of approximately $3 million. If 50% of the Warrants offered in this offering were sold and exercised for cash, we would receive additional net proceeds of approximately $1.5 million. We cannot predict when or if these Warrants will be exercised. It is possible that these Warrants may expire and may never be exercised.
A $3.00 increase or decrease in the assumed public offering price of $15.00 per Unit would increase or decrease the proceeds from this offering by approximately $1 million, assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated placement agent fees and estimated offering expenses payable by us, and excluding the proceeds, if any, from the conversion of the Series J Convertible Preferred Stock and the exercise of the Warrants issued pursuant to this offering.
Similarly, a 40,000 Unit increase or decrease in the number of Units offered by us, as set forth on the cover page of this prospectus, would increase or decrease the net proceeds to us by approximately $0.5 million, assuming the assumed public offering price of $1.53 per Unit remains the same, and after deducting the estimated placement agent fees and estimated offering expenses payable by us, and excluding the proceeds, if any, from the conversion of the Series J Convertible Preferred Stock and the exercise of the Warrants issued pursuant to this offering.
Because this is a best efforts offering and there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, the placement agent fees and net proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth on the cover page of this prospectus.
We currently intend to use the net proceeds from this offering for working capital needs for our Aquadex product, including the purchase of Baxter’s remaining Aquadex product inventory for $1.2 million by February 1, 2018, forand general corporate purposes, including the continuing expansion offor continued investments in our field sales force, and to fund anticipated clinical studies.

The allocationcommercialization efforts. We may use a portion of the net proceeds for the acquisitions of businesses, products, technologies or licenses that are complementary to our business, although we have no present commitments or agreements to do so.

The net proceeds of the offering set forth above represents our estimates based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures.

The amounts and timing of our actual expenditures may vary significantly and will depend uponon numerous factors, including market conditions, cash generated or used by our operations, business developments and opportunities that may arise and related rate of growth. We may find it necessary or advisable to use portions of the proceeds from this offering for other purposes.

Circumstances that may give rise to a change in the use of proceeds and the alternate purposes for which the proceeds may be used include:

the existence of other opportunities or the need to take advantage of changes in timing of our existing activities;
the need or desire on our part to accelerate, increase or eliminate existing initiatives due to, among other things, changing market conditions and competitive developments; and/or
if strategic opportunities present themselves (including acquisitions, joint ventures, licensing and other similar transactions).

From time to time, we evaluate these and other factors and we anticipate continuing to make such evaluations to determine if the existing allocation of resources, including the proceeds of this offering, is being optimized.

Pending such uses, we intend to investthe application of the net proceeds ofas described above, we will hold the net proceeds from this offering in direct and guaranteed obligations of the United States,short-term, interest-bearing investment-grade instruments or certificates of deposit.

We believe that we will need to raise additional capital to fund our operations in 2018. Additional capital may not be available on terms favorable to us, or at all. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Debt financing, if available, may involve restrictive covenants or additional security interests in our assets. Any additional debt or equity financing that we complete may contain terms that are not favorable to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologies or products, or grant licenses on terms that are not favorable to us. If we are unable to raise adequate funds, we may have to delay, reduce the scope of, or eliminate some or all of, our development programs or liquidate some or all of our assets.

securities.

23

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SELECTED FINANCIAL DATA

DIVIDEND POLICY

We have not declared or paid dividends to common stockholders since inception and do not plan to pay cash dividends in the foreseeable future to common stockholders. We currently intend to retain earnings, if any, to finance our growth.
Dividends on the Series J Convertible Preferred Stock will be paid in-kind 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 20% per annum. The PIK dividends will be paid on a quarterly basis for three (3) years following selected financial data asthe Closing Date to holders of Decemberthe Series J Convertible Preferred Stock of record at the close of business at the end of October 31, 2016January 31, April 30 and 2015 and for the fiscal years ended DecemberJuly 31 2016 and 2015 are derived from, and should be read together with, our consolidated financial statements incorporated herein from our Annual Report on Form 10-K for the year ended December 31, 2016. The following selected financial data as of December 31, 2014, 2013 and 2012 and for the fiscal years ended December 31, 2014, 2013 and 2012 are derived from consolidated financial statements not included or incorporated herein. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Consolidated Financial Statements and Notes thereto and other financial information included elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2016.

 
For the year ended December 31,
(in thousands, except share and per share data)
 
2016
2015
2014
2013
2012
Statement of Operations Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
$
1,289
 
$
59
 
$
295
 
$
59
 
$
—
 
Research and development expense
$
8,109
 
$
17,672
 
$
16,874
 
$
13,504
 
$
8,003
 
Net loss
$
(15,792
)
$
(26,583
)
$
(25,587
)
$
(21,758
)
$
(14,065
)
Basic and diluted loss per share(1)
$
(482.72
)
$
(880.23
)
$
(908.40
)
$
(1,026.50
)
$
(1,188.73
)
Weighted average shares outstanding – basic and diluted1
 
32,711
 
 
30,201
 
 
28,167
 
 
21,197
 
 
11,832
 
each year.
 
As of December 31,
(in thousands)
 
2016
2015
2014
2013
2012
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
7,471
 
$
24,450
 
$
32,373
 
$
55,230
 
$
15,036
 
Long-term obligations
 
1,969
 
 
4,281
 
 
—
 
 
—
 
 
—
 
Total stockholders’ equity
 
1,757
 
 
12,171
 
 
29,215
 
 
51,727
 
 
12,949
 
24
(1)Adjusted to reflect the 1-for-30 reverse split of our common stock that was effected after trading on January 12, 2017 and the 1-for-20 reverse split of our common stock that was effected after trading on October 12, 2017.

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PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

Our common stock is currently listed on The Nasdaq Capital Market under the symbol “CHFS.” See “Prospectus Summary—Recent Developments” in this prospectus for important information about the listing of our common stock on The Nasdaq Capital Market. Neither the Series F Preferred Stock nor the warrants will be traded on a national securities exchange. The following table contains, for the periods indicated, the intraday high and low sale prices per share of our common stock. These prices have been adjusted to reflect the 1-for-30 reverse split of our common stock that was effected after trading on January 12, 2017 and the 1-for-20 reverse split of our common stock that was effected after trading on October 12, 2017.

 
High
Low
2015
 
 
 
 
 
 
First Quarter
$
4,140.41
 
$
2,280.23
 
Second Quarter
$
2,976.30
 
$
1,932.19
 
Third Quarter
$
2,141.55
 
$
1,200.12
 
Fourth Quarter
$
1,638.16
 
$
636.06
 
2016
 
 
 
 
 
 
First Quarter
$
828.08
 
$
336.03
 
Second Quarter
$
584.28
 
$
240.02
 
Third Quarter
$
972.10
 
$
264.03
 
Fourth Quarter
$
576.06
 
$
90.01
 
2017
 
 
 
 
 
 
First Quarter
$
240.02
 
$
33.00
 
Second Quarter
$
45.00
 
$
10.29
 
Third Quarter
$
22.00
 
$
11.20
 
Fourth Quarter (through November 9, 2017)
$
13.20
 
$
4.51
 

As of November 9, 2017, the last reported sale price of our common stock on The Nasdaq Capital Market was $4.67.

As of November 9, 2017, there were approximately 106 stockholders of record for our common stock. A substantially greater number of stockholders may be “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.

We have never declared or paid any cash dividends on our common stock, and we currently do not anticipate paying any cash dividends in the foreseeable future. We intend to retain any earnings to finance the development and expansion of our products and business.

Our transfer agent is American Stock Transfer & Trust Company LLC, 6201 15th Avenue, Brooklyn, New York 11219; Telephone: 800-937-5449.

CAPITALIZATION

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CAPITALIZATION

The following table sets forth our actual cash and cash equivalents and our capitalization as of SeptemberJune 30, 20172023 and on an adjusted basis to give effect to the sale by us of all 400,000 Units in this offering at an assumed public offering price of $15.00 per Unit, after deducting the estimated placement agent fees and estimated offering expenses, and assuming no conversion of the securities offered herebySeries J Convertible Preferred Stock and no exercise of the use of proceeds, as describedWarrants issued in the section entitled “Use of Proceeds.”

connection with this offering.

You should read this information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing in our Annual Report on Form 10-K for the year ended December 31, 2022, and our condensed consolidated financial statements and related notes appearing in our Quarterly ReportReports on Form 10-Q for the quarterly periodperiods ended SeptemberMarch 31, 2023 and June 30, 2017,2023, which isare each incorporated by reference intoin this prospectus. The information provided below has been adjusted to reflect our 1-for-20 reverse stock split that was effected after trading on October 12, 2017.

 
As of September 30, 2017
(in thousands, except
share and per share data)
 
Actual
As Adjusted
Cash and cash equivalents
$
2,513
 
$
11,498
 
Common stock warrant liability
 
6
 
 
6
 
Stockholders’ equity:
 
 
 
 
 
 
Series A junior participating preferred stock, par value $0.0001 per share; authorized 30,000 shares, none outstanding
 
—
 
 
—
 
Series F convertible preferred, par value $0.0001 per share; authorized none and 10,000, respectively, issued and outstanding none and 10,000, respectively
 
—
 
 
—
 
Preferred stock, par value $0.0001 per share; authorized 39,970,000 and 39,960,000, respectively, none outstanding
 
 
 
 
 
 
Common stock, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 625,844 and 625,844, respectively
 
—
 
 
—
 
Additional paid-in capital
 
180,972
 
 
189,957
 
Accumulated other comprehensive income:
 
 
 
 
 
 
Foreign currency translation adjustment
 
1,228
 
 
1,228
 
Accumulated deficit
 
(175,219
)
 
(175,219
)
Total stockholders’ equity
 
6,981
 
 
15,966
 
the effect of this current offering.

The as adjusted column above reflectsinformation set forth in the table below is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

 
​​
As of June 30, 2023
(in thousands, except
share and per share data)
 
​​
Actual
​​
As
Adjusted(1)
Cash and cash equivalents
​​
$8,896
​​
14,051
Stockholders’ equity:
​​
 
​​
 
Series A junior participating preferred stock, par value $0.0001 per share; authorized 30,000 shares, none outstanding actual and as adjusted
​​
—
​​
—
Series F convertible preferred stock, par value $0.0001 per share; authorized 127 shares, issued and outstanding 127 shares actual and as adjusted
​​
—
​​
—
Series J convertible preferred stock, par value $0.0001 per share; authorized none and 1,700,000 shares, actual and as adjusted respectively, issued and outstanding none and 1,567,821 shares, actual and as adjusted respectively
​​
—
​​
—
Preferred stock, par value $0.0001 per share; authorized 39,969,873 shares, none outstanding actual and as adjusted
​​
—
​​
—
Common stock, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 1,864,265 shares actual and as adjusted
​​
—
​​
—
Additional paid-in capital
​​
289,845
​​
295,000
Accumulated other comprehensive income:
​​
 
​​
 
Foreign currency translation adjustment
​​
(24)
​​
(24)
Unrealized gain on marketable securities
​​
—
​​
—
Accumulated deficit
​​
(278,747)
​​
(278,747)
Total stockholders’ equity
​​
11,074
​​
16,229
(1)
As adjusted balance does not include Series J Convertible Redeemable Preferred Stock classified as liability or equity due to indeterminate conversion activity to take place upon issuance.
A $3.00 increase or decrease in the assumed public offering price of $15.00 per Unit would increase or decrease the proceeds from this offering by approximately $1 million, assuming that the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated placement agent fees and estimated offering expenses payable by us. Similarly, each increase or decrease of 40,000 Units offered would increase or decrease our saleproceeds by approximately $0.5 million, assuming the assumed public offering price remains the same, and after deducting estimated placement agent fees and estimated offering expenses payable by us and excluding the proceeds, if any, from the conversion of the Series F convertible preferred stock inJ Convertible Preferred Stock and the exercise of the Warrants issued pursuant to this offering.
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The above discussion and table are based on 625,8441,864,265 shares of common stock outstanding as of SeptemberJune 30, 2017 and:

exclude 36,874 shares of common stock issuable upon the exercise of stock options, having a weighted average exercise price of $91.17 per share2023 and 324 shares of common stock issuable upon the vesting of restricted stock units, in each case outstanding as of September 30, 2017;excludes:
exclude 496,629114,004 shares of our common stock issuable upon the exercise of outstanding stock options, having a weighted average exercise price of $41.67 per share;
1,308,271 shares of our common stock issuable upon the exercise of outstanding warrants (other than the warrants offered hereby) with a weighted-average exercise price of $27.51$35.51 per shareshare;
5,080 shares of our common stock issuable upon the conversion of the 127 outstanding asshares of September 30, 2017;our Series F Preferred Stock; and
exclude 57,29646,727 shares of our common stock reserved for future issuance under our equity incentive plans;.
Except as otherwise noted, all information in this prospectus assumes:
additional shares of common stock that may be issuable uponthe conversion of the Series F preferred stock pursuant to the anti-dilution provisions thereof;J Convertible Preferred Stock sold in this offering; and
exclude 4,282,655 shares of our common stock initially issuable upon theno exercise of the warrants to be sold in this offering.

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DILUTION

If you invest in the shares of Series F convertible preferred stock, your interest in the common stock underlying the Series F preferred stock and the warrants offered hereunder may be diluted to the extent of the difference between the price you pay for each share of common stock and the net tangible book value per share of our common stock immediately after this offering. Our net tangible book value as of September 30, 2017 was approximately $3.0 million, or $4.75 per share of our common stock. Net tangible book value per share is equal to our total tangible assets minus total liabilities, all divided by 625,844 of shares of common stock outstanding at September 30, 2017. The information provided in this section has been adjusted to reflect the 1-for-20 reverse stock split that was effected after trading on October 12, 2017.

Assuming that we issue 10,000 shares at a price of $1,000 per share, the Series F preferred stock sold in this offering has a conversion price of $4.67 per share, which was 100% of the consolidated closing bid price of our common stock on The Nasdaq Capital Market on November 9, 2017, and assuming the conversion of all the shares of Series F preferred stock sold in the offering (not taking into account any anti-dilution adjustments in the Series F preferred stock), and after deducting the commissions and estimated offering expenses payable by us, our net tangible book value as of September 30, 2017 would have been approximately $12.0 million, or $4.32 per share of our common stock. This calculation excludes the proceeds, if any, from the exercise of warrantsWarrants issued in this offering. This amount represents an immediate decrease in net tangible book value of $0.43 per share to our existing stockholders and an immediate dilution in net tangible book value of $0.35 per share to new investors in this offering.

We determine dilution by subtracting the adjusted net tangible book value per share after this offering from the conversion price per share of our common stock. The following table illustrates the dilution in net tangible book value per share to new investors:

Assumed conversion price per share of Series F preferred stock
 
 
 
$
4.67
 
Historical net tangible book value per share at September 30, 2017
$
4.75
 
 
 
 
Decrease per share attributable to investors purchasing securities in this offering
$
0.43
 
 
 
 
Net tangible book value per share, as adjusted to give effect to this offering
 
 
 
$
4.34
 
Dilution per share to investors in this offering
 
 
 
$
0.35
 

The information above is illustrative only and will change based on actual pricing and other terms of this offering determined at pricing.

The information above is based on 625,844 shares of common stock outstanding as of September 30, 2017 and:

excludes 36,874 shares of common stock issuable upon the exercise of stock options, having a weighted average exercise price of $91.17 per share and 324 shares of common stock issuable upon the vesting of restricted stock units, in each case outstanding as of September 30, 2017;
excludes 496,629 shares of our common stock issuable upon the exercise of warrants with a weighted-average exercise price of $27.51 per share outstanding as of September 30, 2017;
excludes 57,296 shares of our common stock reserved for future issuance under our equity incentive plans;
additional shares of common stock that may be issuable upon conversion of Series F preferred stock pursuant to the anti-dilution provisions thereof; and
excludes 4,282,655 shares of our common stock initially issuable upon the exercise of the warrants to be sold in this offering.

To the extent that outstanding options or warrants are exercised, you could experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of additional equity, the issuance of these shares could result in further dilution to our stockholders.

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BUSINESS

Overview

We are a medical device company focused on commercializing our Aquadex FlexFlow ultrafiltration system. Our commercial product, the Aquadex FlexFlow system, is indicated for temporary (up to eight hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy, and extended (longer than 8 hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy and require hospitalization.

Company History

Prior to July 2016, we were focused on developing the C-Pulse® Heart Assist System for treatment of Class III and ambulatory Class IV heart failure. The C-Pulse System utilized the known concept of counterpulsation applied to the aorta. In March 2016, we announced that we were no longer enrolling patients into our two clinical studies for the C-Pulse System and that we planned to pursue a new strategic direction. In July 2016, we announced that we were moving forward with a therapeutic strategy utilizing neuromodulation rather than counterpulsation.

In August 2016, we acquired the Aquadex Business from Baxter, a global leader in the hospital products and dialysis markets.

On September 29, 2016, we announced a strategic refocus of our near-term strategy that includes halting clinical evaluations of our neuromodulation technology to fully focus our resources on our recently acquired Aquadex Business, taking actions to reduce our cash burn in connection with such strategic refocus, and reviewing potential strategic alliances and financing alternatives.

The Aquadex FlexFlow System

The Aquadex FlexFlow system is designed 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 FlexFlow system, medical practitioners can specify and control the amount of fluid to be extracted at a safe, predictable, and effective rate, in a process we refer to as Aquapheresis® therapy. All Aquapheresis treatments must be administered by a healthcare provider, under physician prescription, both of whom have received training in extracorporeal therapies. The Aquadex FlexFlow system has been shown to have no clinically significant impact on electrolyte balance, blood pressure or heart rate.4

Benefits of the Aquadex FlexFlow System

The Aquadex FlexFlow ultrafiltration system offers a safe approach to treating fluid overload and:

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 patientthis offering.
Aquapheresis therapy can be performed via peripheral or central venous access
•Removes isotonic fluid (extracts sodium while sparing potassium and magnesium)5
•Following ultrafiltration, neurohormonal activation is reset toward a more physiological condition and diuretic efficacy is restored6
Provides highly automated operation with only one setting required to begin
Utilizes a single-use, disposable auto-loading blood filter circuit that facilitates easy set-up
The console guides medical practitioner through the setup and operational process
•Decreased hospital length of stay and readmissions7
26
4SAFE Trial: Jaski BE, et al. J Card Fail. 2003 Jun; 9(3): 227-231; RAPID Trial: Bart BA, et al. J Am Coll Cardiol. 2005 Dec 6; 46(11): 2043-2046.
5Ali SS, et al. Congest Heart Fail. 2009; 15(1):1-4.
6Marenzi G, et al. J Am Coll Cardiol. 2001 Oct; 38(4): 963-968.
7Costanzo MR, et al. J Am Coll Cardiol. 2005 Dec 6; 46(11): 2047-2051.

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The Aquadex FlexFlow system consists of:

A console, a piece of capital equipment containing electromechanical pumps and an LCD screen
A one-time disposable blood set (the “Aquadex Blood Set”), an integrated collection of tubing, filter, sensors, and connectors that contain and deliver the blood from and back to the patient, and
A disposable catheter (the “Aquadex Catheter”), a small, dual-lumen catheter designed to access the peripheral venous system of the patient and to simultaneously withdraw blood and return filtered blood to the patient.
The Aquadex Blood Set is proprietary and the Aquadex FlexFlow system can only be used with the Aquadex Blood Set. The Aquadex Catheter is often used in conjunction with the Aquadex FlexFlow system, although it is one of many potential catheter options available to the provider.

Our Market Opportunity

Heart failure is one of the leading causes of death in the United States and other developed countries. Based on data from the National Health and Nutrition Examination Survey conducted by the Centers for Disease Control and Prevention/National Center for Health Statistics from 2011 to 2014, the American Heart Association estimates that 6.5 million people in the United States, age 20 and over, had heart failure8. Based on the Atherosclerosis Risk in Communities Study from 2005 to 2013, conducted by the National Heart, Lung and Blood Institute, there are an estimated 960,000 new heart failure cases annually9. Annual hospitalizations for heart failure exceed 1 million in both the United States and Europe, and more than 90% are due to symptoms and signs of fluid overload10. Congestive heart failure is the highest U.S. chronic health care expense category11.

Heart failure is a progressive disease caused by impairment of the left heart’s ability to pump blood to the various organs of the body. Patients with heart failure 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 left 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 is able to pump blood throughout the body.

Heart failure is the leading cause of fluid overload, a condition where patients become decompensated resulting in lengthy and costly hospitalizations. In fact, 90% of heart failure patients present symptoms of fluid overload.12 Our system is indicated for temporary (up to eight hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy, and extended (longer than 8 hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy and require hospitalization.

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 lost.13 This clinical evidence from the ADHERE Registry clearly shows patients are discharged too early, while still showing evidence of fluid overload. By not truly addressing the fluid overload problem, patients are being readmitted to the hospital too frequently, with 30-day readmissions of 24% and 6-month readmissions of 50%, while 78% of patients are admitted directly to the Emergency Department as the first point of care.1415

8Benjamin EJ, al. on behalf of the American Heart Association Statistics Committee and Stroke Statistics Subcommittee. Heart disease and stroke statistics—2017 update: a report from the American Heart Association. Circulation. 2017;135:00-00. (e378)
9Benjamin EJ, al. on behalf of the American Heart Association Statistics Committee and Stroke Statistics Subcommittee. Heart disease and stroke statistics—2017 update: a report from the American Heart Association. Circulation. 2017;135:00-00. (e378)
10Costanzo MR, et al. J Am Coll Cardiol. 2017; 69: 2428-45.
11Mozzafarian D, Benjamin EJ, Go AS, et al. on behalf of the American Heart Association Statistics Committee and Stroke Statistics Subcommittee. Heart disease and stroke statistics—2016 update: a report from the American Heart Association. Circulation. 2016;133:e38-e360. (6)
12Costanzo MR, et al. J Am Coll Cardiol. 2007 Feb 13; 49(6): 675-683.
13ADHERE Scientific Advisory Committee. ADHERE Final Cumulative National Benchmark Report. Mountain View, CA: Scios Inc.; 2006.
14Desao AS, Steverson LW. Circulation. 2012 Jul 24, 126(4): 501-506
15Krumholtz HM et. al. Arch Intern Med. 1997 Jan 13;157(1): 99-104—Ross JS, et al. Circ Heart Fail. 2010 Jan; 3(1): 97-103.

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The Affordable Care Act includes a Hospital Readmission Reduction program and is designed to reduce payments to hospitals with excess heart failure readmissions, among other conditions. The penalty to hospitals can be significant, as much as 3% of total Medicare reimbursement. The Aquadex FlexFlow system is positioned to assist hospitals with the Affordable Care Act and may offer hospitals an economic benefit for using the device on a regular basis for in-patient or out-patient usage.

There are two market segments for treating fluid overload with the Aquadex FlexFlow system:

1)Inpatient Care—Provided to a patient admitted to a hospital, extended care facility, nursing home or other facility. Long term care is the range of services typically provided at skilled nursing, intermediate-care, personal care or eldercare facilities.
2)Outpatient Care—Any health care service provided to a patient who is not admitted to a facility. Outpatient care can be provided in a doctor’s office, clinic, or hospital outpatient department.

Our target customers for the Aquadex FlexFlow system include large academic hospitals specializing in advanced treatment of chronic heart failure, other large hospitals with heart failure related admissions and clinical practices with transplant or left ventricle assist device, known as LVAD, programs.

Our Strategy

Our mission is to improve the quality of life for people suffering from fluid overload. We provide healthcare professionals with a sophisticated, yet easy to use, mechanical pump and filter system to remove excess fluid in fluid overloaded congestive heart failure patients and patients with related conditions. 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, shareholders and potential investors will use to judge our performance. In addition to revenues’ contribution to funding operations, revenue growth demonstrates a workable business model and proves a successful business turn-around. Management has identified five critical actions to drive revenue: (i) commercial execution; (ii) enhance product offerings; (iii) demonstrate health economic advantages; (iv) provide important new clinical evidence; and (v) increase partnerships with key opinion leading physicians.

Commercial Execution Strategy – We have allocated, and plan to continue to allocate, resources to aggressively build sales and marketing strength and grow the worldwide market for the Aquadex FlexFlow system. In the third quarter of 2017, we increased our direct sales force by six employees and plan to further expand our direct sales force in 2018. Our trained sales team will focus on sales penetration in large hospital accounts. The Aquadex FlexFlow system can be used in large hospital in multiple areas, including: the emergency department, the heart failure telemetry floor, the intensive care unit, and the coronary care unit. In addition to expending our direct sales force, we are implementing high quality customer service support systems and technical servicing to increase support to customers. We have also initiated international distribution and support of our products by entering into a distribution and service provider agreement with APC Cardiovascular Ltd., a distributor based in the United Kingdom.

Enhance Product Offering Strategy – We intend to develop products and product enhancements to improve performance and customer satisfaction. We have several projects currently underway to enhance product performance. We plan to introduce a new peripheral access catheter and enhance the functionality of the hematocrit sensor that is part of the Aquadex FlexFlow system console. We also are working to identify or develop a diagnostic tool for physicians to use during an Aquapheresis 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.

Health Economics Strategy – We plan to develop clinical trial evidence regarding the impact of ultrafiltration on hospital lengths of stay and rehospitalizations of patients with fluid overload. We plan to publish information on the budgetary impacts to hospitals that adopt the Aquadex FlexFlow system into their continuum of care when treating critical heart failure patients with fluid overload in whom diuretic therapy has failed.

New Clinical Evidence Strategy – We plan to expand the body of clinical evidence for Aquapheresis and the Aquadex FlexFlow system to drive adoption and support reimbursement. We plan to initiate an ultrafiltration mechanism of action clinical study to provide scientific evidence on how ultrafiltration provides safe clinical results

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without causing clinically significant harm to the kidneys. We also plan to initiate a registry to build individual account evidence sets, identify use patterns, and attain customer feedback to support marketing claims regarding clinical efficacy demonstrating weight reduction, reduced length of hospital stays, and reduced readmission rates.

Key Opinion Leaders Strategy – We plan to partner with key opinion leaders to advance medical understanding of the ultrafiltration as a therapy for treating fluid overload. We have recruited a scientific advisory board comprised of six key opinion leading physicians to help us develop and implement both the mechanistic clinical study and the registry. We are partnering with the Cardio Renal Society of America in a leadership role and increasing our involvement with the Heart Failure Society of America. In addition, we are working with several physicians that are implementing hospital observation unit use of the Aquadex FlexFlow system to provide outpatient care for patients that are fluid overloaded but may not require hospitalization.

Sales and Marketing

As of October 31, 2017, we had 15 full-time employees in sales and marketing. During the third quarter of 2017, we hired and trained six sales personnel with extensive medical device sales experience. Our sales force includes therapy development managers as well as field clinical engineers who provide training, technical and other support services to our customers. Since the acquisition of the Aquadex Business from Baxter in August 2016, our direct sales force has focused on reengaging hospital accounts that ordered Aquadex Blood Sets in prior years, re-educating customers on the therapy and assessing each hospital’s use of the Aquadex FlexFlow system to gain additional opportunity for increased utilization. We plan to grow the sales and marketing organization as necessary to support future growth.

Our sales representatives implement consumer marketing programs and provide physicians and nurses with patient educational materials. We also market to potential referral source clinicians in order to build awareness.

Clinical Experience

Several large-scale, multi-center, randomized, controlled trials have evaluated the use of ultrafiltration using the Aquadex FlexFlow system patients in 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 FlexFlow 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. No differences were noted in symptoms of dyspnea between the groups. In addition, through 90 days of follow-up, the ultrafiltration group experienced fewer re-hospitalizations for heart failure, while renal function assessed by serum creatinine level was not significantly different between the groups.

The CARESS 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. Results of CARESS have been criticized on several grounds, particularly that trial results were impacted by centers unfamiliar with the use of ultrafiltration therapy and that the diuretic regimen employed was not representative of standard-of-care. In addition, a recent analysis of the DOSE trial to explore the putative link between short-term changes in creatinine level and outcome in acute decompensated heart failure has found that the intragroup difference observed in CARESS does not fall into a range associated with adverse long-term outcomes including death, re-hospitalization or visits to the emergency department. Such events were examined in CARESS over 60 days and no differences were detected between the groups.

Disparate results between UNLOAD and CARESS led to initiation of the AVOID trial. AVOID was designed to prospectively address the question of patient outcomes when treated with ultrafiltration versus intravenous diuretics for acute decompensated heart failure. Trial design assumptions indicated that 810 patients would need to be randomized to achieve adequate statistical power. However, the study was terminated at 224 patients for business reasons by Baxter. Despite being underpowered, the results of AVOID indicated distinct trends toward reduced composite heart-failure events in the ultrafiltration group over 90 days. In addition, pre-specified secondary endpoints demonstrated significant reductions in heart failure re-hospitalization at 30 days. No significant differences were

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observed in creatinine level between the groups, although a trend toward increase may have been present at 48 hours. In totality, AVOID recapitulated the results of both UNLOAD and CARESS while providing evidence that had AVOID been followed to completion it would likely have met its primary endpoint of improved outcome in acute decompensated heart failure patients.

We anticipate conducting additional clinical studies to provide further evidence of the safety and effectiveness of the Aquadex FlexFlow system and to support obtaining a specific reimbursement code for Aquapheresis therapy.

Other uses of ultrafiltration with the Aquadex FlexFlow system have not been studied extensively. Case studies and case series demonstrating the use of ultrafiltration in the maintenance of outpatient chronic heart failure have been published, but there has been no prospective, systematic evaluation of ultrafiltration versus standard-of-care for this population. Other potential uses also largely remain to be formally evaluated.

Research and Development

Research and development costs include activities related to research, development, design, testing and manufacturing of improvement to the Aquadex FlexFlow system and potential related products. The Aquadex FlexFlow system software will require periodic modifications for feature additions and performance improvements. We will make such design changes as needed based on pro-active and reactive mechanisms. Research and development costs also include expenses related to clinical research. We may sponsor or conduct additional clinical research related to the Aquadex FlexFlow system to enhance understanding of the product and its use.

Manufacturers and Suppliers

In connection with the acquisition of the Aquadex Business, we entered into a commercial manufacturing and supply agreement with Baxter, which requires Baxter to manufacture Aquadex Blood Sets and Aquadex Catheters for a period of 18 months following our acquisition of the Aquadex Business. In May 2017, we notified Baxter that we intended to have it cease the manufacturing Aquadex product effective as of June 30, 2017. We completed the transfer of manufacturing equipment for the Aquadex Business that we purchased from Baxter to our manufacturing facility in July 2017. We expect to begin manufacturing Aquadex FlexFlow products in-house in the fourth quarter of 2017. We will continue to purchase raw materials and finished goods from an indirect subsidiary of Baxter until February 1, 2018.

Intellectual Property

We have established an intellectual property portfolio through which we seek to protect our system and technology. In connection with our acquisition of the Aquadex Business, we entered into a patent license agreement with Baxter pursuant to which we obtained, for no additional consideration, a world-wide license to 49 exclusively licensed and 9 non-exclusively licensed patents used in connection with the Aquadex FlexFlow system to make, have made, use, sell, offer for sale and import, the Aquadex FlexFlow system in the “field of use.” The “field of use” is defined as system and apparatus only capable of performing isolated ultrafiltration for treatment of congestive heart failure, and methods to the extent used therein (excluding system, apparatus, or methods performing any kind of renal therapy or dialysis and/or any system capable of providing substitution fluid). The license is exclusive, with respect to some patents, and non-exclusive, with respect to other patents. Under the patent license agreement, Baxter has agreed to use commercially reasonable efforts to continue maintenance of seven “required maintenance patents,” and we have agreed to reimburse Baxter for all fees, costs, and expenses (internal or external) incurred by Baxter in connection with such continued maintenance. The rights granted to us under the patent license agreement will automatically revert to Baxter in the event we cease operation of the Aquadex Business or we file for, or have filed against us, or otherwise undertake any bankruptcy, reorganization, insolvency, moratorium, or other similar proceeding. For two years following the closing, the patent license agreement is not assignable by us (including in connection with a change of control) without Baxter’s prior written consent. We estimate that the patents licensed from Baxter will expire between approximately 2020 and 2025.

In addition, as of September 30, 2017, we owned 40 issued patents and 5 pending patent applications in the United States and in foreign jurisdictions related to our C-Pulse System and had 2 pending applications for neuromodulation. We estimate that most of our currently issued U.S. patents will expire between approximately 2021 and 2027. Given the strategic refocus away from C-Pulse and towards the Aquadex FlexFlow system, we have chosen to limit the maintenance of issued C-Pulse related patents to those innovations that are of the highest value. Further, we have elected to emphasize a few of the most critical jurisdictions rather than maintain the earlier approach that

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involved multiple countries. 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.

We have developed technical knowledge that, although non-patentable, we consider to be significant in enabling us to compete. It is our policy to enter into confidentiality agreements with each of our employees and consultants prohibiting the disclosure of any confidential information or trade secrets. In addition, these agreements provide that any inventions or discoveries by employees and consultants relating to our business will be assigned to us and become our sole property.

Despite our patent rights and policies with regard to confidential information, trade secrets and inventions, we may be subject to challenges to the validity of our patents, claims that our system infringes the patent rights of others and the disclosure of our confidential information or trade secrets. These and other risks are described more fully under the heading “Risk Factors—Risks Relating to our Intellectual Property”.

At this time we are not a party to any material legal proceedings that relate to patents or proprietary rights.

Competition

Competition from medical device companies and medical device divisions of health care companies, pharmaceutical companies and gene- and cell-based therapies is intense and expected to increase. The vast majority of heart failure patients with fluid overload receive pharmacological treatment (diuretics) as a standard of care. There are no direct competitors for the Aquadex FlexFlow system in the U.S., other than diuretics. Other ultrafiltration 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 competitors.

Our ability to compete effectively depends upon our ability to distinguish Aquadex FlexFlow system from our competitors and their products. Factors affecting our competitive position include:

Financial resources;
Product performance and design;
Risk management;
Product safety;
Acceptance of our system in the marketplace;
Sales, marketing and distribution capabilities;
Manufacturing and assembly costs;
Pricing of our system and of our competitors’ products;
The availability of reimbursement from government and private health insurers;
Success and timing of new product development and introductions;
Regulatory approvals; and
Intellectual property protection.

Third-Party Reimbursement

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

While the agency responsible for administering the Medicare program, the Centers for Medicare and Medicaid Services has not issued a favorable national coverage for ultrafiltration using the Aquadex FlexFlow system, a

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number of private insurers have approved reimbursement for Aquadex FlexFlow system use for specific indications and points of service. In addition, patients and providers may seek insurance coverage on a case-by-case basis.

We are exploring the ability to increase the range of coverage for uses of Aquadex FlexFlow therapies, such as use in the outpatient setting and other indicated uses under its approved labeling.

Legislative proposals can substantially change the way health care is financed by both governmental and private insurers and may negatively impact payment rates for our system. Also, from time to time, there are a number of 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 health care by challenging the prices charged, or deny coverage, for health care 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 pre-clinical testing as a condition of approval by the FDA and by similar authorities in foreign countries. Any proposed products will require regulatory approval prior to commercialization.

United States

The 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 wish to commercially distribute in the U.S. will require marketing authorization from the FDA prior to distribution. The two primary types of FDA marketing authorization are premarket notification (also called 510(k) clearance) and premarket approval (PMA). The type of marketing authorization applicable to a device—510(k) clearance or PMA—is generally linked to classification of the device. The FDA classifies medical devices into one of three classes (Class I, II or III) based on the degree of risk the FDA determines to be associated with a device and the extent of control deemed necessary to ensure the device’s safety and effectiveness. Devices requiring fewer controls because they are deemed to pose lower risk are placed in Class I or II. Class I devices are deemed to pose the least risk and are subject only to general controls applicable to all devices, such as requirements for device labeling, premarket notification, and adherence to the FDA’s current good manufacturing practice requirements, as reflected in its Quality System Regulation (“QSR”). Class II devices are intermediate risk devices that are subject to general controls and may also be subject to special controls such as performance standards, product-specific guidance documents, special labeling requirements, patient registries or post market surveillance. Class III devices are those for which insufficient information exists to assure safety and effectiveness solely through general or special controls, and include life-sustaining, life-supporting or implantable devices, and devices not “substantially equivalent” to a device that is already legally marketed.

Most Class I devices and some Class II devices are exempted by regulation from the 510(k) clearance requirement and can be marketed without prior authorization from FDA. Class I and Class II devices that have not been exempted are eligible for marketing through the 510(k) clearance pathway. By contrast, devices placed in Class III generally require PMA prior to commercial marketing. The PMA process is generally more stringent, time-consuming and expensive than the 510(k) clearance process.

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

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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. Generally, the 510(k) clearance process can exceed 90 days and may extend to a year or more.

After a device has received 510(k) clearance for a specific intended use, any modification that could significantly affect its safety or effectiveness, such as a significant change in the design, materials, method of manufacture or intended use, will require a new 510(k) clearance or PMA (if the device as modified is not substantially equivalent to a legally marketed predicate device). The determination as to whether new authorization is needed is initially left to the manufacturer; however, the FDA may review this determination to evaluate the regulatory status of the modified product at any time and may require the manufacturer to cease marketing the modified device until 510(k) clearance or PMA is obtained. The manufacturer may also be subject to significant regulatory fines or penalties.

The Aquadex FlexFlow system was granted FDA 510(k) clearance for commercial use on June 3, 2002. Additional 510(k) clearances have been received for the Aquadex FlexFlow system in subsequent years.

Clinical Trials. To obtain FDA approval to market the C-Pulse System, clinical trials would be required to support a PMA application. We have halted clinical trials related to the C-Pulse System. These trials generally require submission of an application for an IDE to the FDA. The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE application must be approved in advance by the FDA for a specified number of patients, unless the product is deemed a non-significant risk device and eligible for more abbreviated IDE requirements. Generally, clinical trials for a significant risk device may begin once the IDE application is approved by the FDA and the study protocol and informed consent are approved by appropriate institutional review boards at the clinical trial sites.

FDA approval of an IDE allows clinical testing to go forward but does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and efficacy, even if the trial meets its intended success criteria. With certain exceptions, changes made to an investigational plan after an IDE is approved must be submitted in an IDE supplement and approved by FDA (and by governing institutional review boards when appropriate) prior to implementation.

All clinical trials must be conducted in accordance with regulations and requirements collectively known as Good Clinical Practice. Good clinical practices include the FDA’s IDE regulations, which describe the conduct of clinical trials with medical devices, including the recordkeeping, reporting and monitoring responsibilities of sponsors and investigators, and labeling of investigational 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. The results of clinical testing may be unfavorable or, even if the intended safety and efficacy success criteria are achieved, may not be considered sufficient for the FDA to grant approval or clearance of a product. The commencement or completion of any clinical trials may be delayed or halted, or be inadequate to support approval of a PMA application or clearance of a premarket notification for numerous reasons, including, but not limited to, the following:

the FDA or other regulatory authorities do not approve a clinical trial protocol or a clinical trial (or a change to a previously approved protocol or trial that requires approval), or place a clinical trial on hold;
patients do not enroll in clinical trials or follow up at the rate expected;
patients do not comply with trial protocols or experience greater than expected adverse side effects;
institutional review boards and third-party clinical investigators may delay or reject the trial protocol or changes to the trial protocol;
third-party clinical investigators decline to participate in a trial or do not perform a trial on the anticipated schedule or consistent with the clinical trial protocol, investigator agreements, good clinical practices or other FDA requirements;

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third-party organizations do not perform data collection and analysis in a timely or accurate manner;
regulatory inspections of the clinical trials or manufacturing facilities, which may, among other things, require corrective action or suspension or termination of the clinical trials;
changes in governmental regulations or administrative actions;
the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or efficacy; or
the FDA concludes that the trial design is inadequate to demonstrate safety and efficacy.

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

establishment registration and device listing upon the commencement of manufacturing;
the QSR, which requires manufacturers, including third-party manufacturers, to follow design, testing, control, documentation and other quality assurance procedures during medical device design and manufacturing processes;
labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling and promotional activities;
medical device reporting regulations, which require that manufacturers 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;
corrections and removal reporting regulations, which require that manufacturers report to the FDA field corrections; and
product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDC Act caused by the device that may present a risk to health.

In addition, the FDA may require a company to conduct post market surveillance 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;
unanticipated expenditures;
delays in clearing or approving or refusal to clear or approve products;
withdrawal or suspension of FDA approval;
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 and suppliers are also required to manufacture our products in compliance with Current Good Manufacturing Practice requirements set forth in the QSR.

The QSR requires 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 QSR 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 is not in compliance with these requirements, it can shut down our

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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.

Employees

As of October 31, 2017, we had 38 full-time employees and no part-time employees. None of our employees are covered by a collective bargaining agreement. We consider relations with our employees to be good.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))Act) of our common stock as of October 31, 2017September 27, 2023 by (i) each of the directors and named executive officers, (ii) all of the directors and executive officers as a group, and (iii) to our knowledge, beneficial owners of more than 5% of our common stock. As of October 31, 2017,September 27, 2023, there were 625,7911,864,265 shares of our common stock outstanding. Unless otherwise indicated and subject to applicable community property laws, each owner has sole voting and investment powers with respect to the securities listed below.

Name of Beneficial Owner
Number of
Shares
Right to
Acquire(1)
Total
Aggregate
Percent of Class(2)
John L. Erb
 
5,771
 
 
5,489
 
 
11,260
 
 
1.78
%
Steve Brandt
 
71
 
 
1,497
 
 
1,568
 
 
 
*
Matthew E. Likens
 
71
 
 
1,497
 
 
1,568
 
 
 
*
Jon W. Salveson
 
69
 
 
1,556
 
 
1,625
 
 
 
*
Gregory D. Waller
 
74
 
 
1,537
 
 
1,611
 
 
 
*
Warren S. Watson
 
69
 
 
1,556
 
 
1,625
 
 
 
*
Claudia Drayton
 
37
 
 
180
 
 
217
 
 
 
*
All directors and executive officers as a group (8 persons)
 
6,162
 
 
13,312
 
 
19,474
 
 
3.05
%
Ki Yong Choi
36 Great Circle Drive
Mill Valley, CA 94941
 
86,573
(3)
 
—
 
 
86,573
 
 
13.83
%
Trend Discovery, LP
601 Cape Eleuthra Road
Bethany Beach, DE 19930
 
31,612
(4)
 
—
 
 
31,612
 
 
5.05
%
Name of Beneficial Owner
​​
Number
of Shares
​​
Right to
Acquire(1)
​​
Total
​​
Aggregate
Percent of
Class(2)
John L. Erb
​​
4
​​
5,325(3)
​​
5,329
​​
*
Michael McCormick
​​
—
​​
820
​​
820
​​
*
Maria Rosa Costanzo, M.D.
​​
—
​​
—
​​
—
​​
—
Jon W. Salveson
​​
—
​​
1,336
​​
1,336
​​
*
Gregory D. Waller
​​
—
​​
1,336
​​
1,336
​​
*
Robert B. Scott
​​
—
​​
66
​​
66
​​
*
Nestor Jaramillo, Jr.
​​
4,098
​​
1,526
​​
5,624
​​
*
Neil P. Ayotte
​​
—
​​
360
​​
360
​​
*
Lynn Blake
​​
100
​​
0
​​
100
​​
*
All current directors and executive officers as a group (8 persons)
​​
4,102
​​
10,769
​​
14,871
​​
*%
*
Less than one percent.
(1)
Except as otherwise described below, amounts reflect the number of shares that such holder could acquire through (i) the exercise of outstanding stock options, (ii) the vesting/settlement of outstanding RSUs, and (iii) the exercise of outstanding warrants to purchase common stock, and (iv) the conversion of outstanding Series F Preferred Stock, in each case within 60 days of October 31, 2017.after September 27, 2023.
(2)
Based on 625,7911,864,265 shares outstanding as of October 31, 2017.September 27, 2023.
(3)
(3)Based onConsists of (i) 1,319 shares issuable upon the Schedule 13D/A filed byexercise of outstanding stock options, (ii) 6 shares issuable upon the reporting person on September 20, 2017, as adjusted for the 1-for-20 reverse splitexercise of ouroutstanding warrants to purchase common stock that was effected after trading on October 12, 2017.and (iii) 4,000 shares issuable upon conversion of outstanding shares of Series F Convertible Preferred Stock (assuming all 100 shares of Series F Convertible Preferred Stock held by Mr. Erb are converted at once and rounded up to the nearest whole share).
(4)Based on the Schedule 13G filed by the reporting person on October 12, 2017, as adjusted for the 1-for-20 reverse split of our common stock that was effected after trading on October 12, 2017. The reporting person has sole voting and dispositive power with respect to 29,981 such shares.

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DESCRIPTION OF SECURITIES BEING OFFERED
Description of Units
We are offering on a best-efforts basis up to 400,000 Units in this offering at the assumed public offering price of $15.00 per Unit. Each Unit includes one share of our Series J Convertible Preferred Stock and one Warrant to purchase one-half of one (0.5) share of our Series J Convertible Preferred Stock at an exercise price equal to $7.50 per one-half of one share of Series J Convertible Preferred Stock, which is 50% of the public offering price of the Units. Our Units will not be certificated and the shares of our Series J Convertible Preferred Stock and Warrants consisting of such Units are immediately separable and will be issued separately in this offering. We are also registering the shares of Series J Convertible Preferred Stock issuable as PIK dividends, the shares of Series J Convertible Preferred Stock issuable upon exercise of the Warrants and the shares of common stock issuable upon conversion of the Series J Convertible Preferred Stock. These securities are being issued pursuant to a securities purchase agreement between us and the purchasers. You should review the securities purchase agreement, the form of Certificate of Designations establishing the Series J Convertible Preferred Stock, the form of Warrant, the Warrant Agency Agreement, and the placement agency agreement between us and the placement agents, each of which are filed, or will be filed, as exhibits to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the Units, the Series J Convertible Preferred Stock and the Warrants.
Series J Convertible Preferred Stock Being Offered Pursuant to this Prospectus
The following describes the material terms of the Series J Convertible Preferred Stock. This is not a complete description and is subject to, and entirely qualified by reference to applicable provisions of our Certificate of Incorporation, Bylaws and the Certificate of Designations establishing the Series J Convertible Preferred Stock, which are filed with the SEC as exhibits to the registration statement of which this prospectus is a part, as well as the relevant portions of Delaware law. Capitalized terms used but not defined in this subsection shall have the meanings ascribed to them in the Certificate of Designations establishing the Series J Convertible Preferred Stock.
Pursuant to our Certificate of Incorporation, we are authorized to issue 40,000,000 shares of our preferred stock, par value $0.0001 per share. As of the date of this prospectus, there are 30,000 shares designated as Series A Preferred Stock, of which no shares are issued and outstanding, and 127 shares designated as Series F Convertible Preferred Stock, of which 127 shares are issued and outstanding. In connection with this offering, our board of directors will designate approximately 1,700,000 of these shares of preferred stock as the “Series J Convertible Redeemable Preferred Stock”, pursuant to a Certificate of Designation of Preferences, Rights and Limitations (the “Certificate of Designations”) that sets forth the terms of such Series J Convertible Preferred Stock, with a liquidation preference of $25.00 per share, which final number of designated shares will be based on the actual number of Series J Convertible Preferred Stock issued in connection with this offering.
In addition, subject to the limitations described herein, we may issue additional preferred stock from time to time in one or more series, each with such designation, powers, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions applicable to any of those rights, including dividend rights, voting rights, conversion or exchange rights, terms of redemption and liquidation preferences, as the Board (or a duly authorized committee of the Board) may determine prior to the time of such issuance.
Listing. There is no established public trading market for, and we do not expect a market to develop for, the Series J Convertible Preferred Stock. In addition, we do not intend to apply to list the Series J Convertible Preferred Stock or the Warrants on any other national securities exchange or any other nationally recognized trading system, including Nasdaq.
Transfer Agent and Registrar. The transfer agent and registrar for the Series J Convertible Preferred Stock will be Equiniti Trust Company, LLC (the “Transfer Agent”). The Transfer Agent’s address is 6201 15th Avenue, Brooklyn, NY, 11219. The Series J Convertible Preferred Stock will be issued and maintained in book-entry form registered in the name of the nominee, The Depository Trust Company. See “—Book–Entry Procedures” below.
Maturity. The Series J Convertible Preferred Stock matures three (3) years from the Closing Date.
Ranking and Liquidation Preference. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, prior and in preference to the common stock, holders of the Series J
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Convertible Preferred Stock shall be entitled to receive out of the assets available for distribution to stockholders an amount equal in cash to 100% of the aggregate Stated Value of $25.00 per share (the “Stated Value”) of all shares of Series J Convertible Preferred Stock held by such holder, and any other fees then due and owing thereon under the Certificate of Designations, and no more, and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the holders shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.
Dividends. The Certificate of Designations shall provide that dividends on the Series J Convertible Preferred Stock shall be paid in-kind in additional shares of Series J Convertible Preferred Stock based on the stated value of $25.00 per share at an assumed annual dividend rate of 20% and a quarterly dividend rate of 5% (the “Quarterly 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 of record at the close of business at the end of October 31, January 31, April 30, and July 31 of each year (each a “Dividend Record Date”) at the Quarterly Dividend Rate. PIK dividends on each share of Series J Convertible Preferred Stock shall be paid three business days after each 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 $15.00, based on the assumed public offering price set forth on the cover page of the prospectus).
Conversion. The Series J Convertible Preferred Stock is convertible at any time at the option of the holder. Except as provided below, the Series J Convertible Preferred Stock is not convertible into or exchangeable for any other securities or property.
Conversion at Option of Holder. Each share of Series J Convertible Preferred Stock is convertible at the option of the holder at any time into shares of our common stock at the Conversion Price (assumed to be $1.53 based on the closing price of our common stock on the Nasdaq Capital Market on September 27, 2023) which Conversion Price is subject to adjustment. The Conversion Price will equal 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 SEC. The Conversion Price is subject to adjustment for: (i) the payment of stock dividends or other distributions payable in common stock on the outstanding shares of our common stock, excluding the shares of common stock issuable upon the conversion of the Series J Convertible Preferred Stock; and (ii) subdivisions and combinations (including by way of a reverse stock split).
Holders shall effect conversions of the Series J Convertible Preferred Stock by providing us a conversion notice (a “Notice of Conversion”), duly completed and executed. The Notice of Conversion must specify the number of shares of Series J Convertible Preferred Stock then held by the holder and the number of such shares which the holder is converting. To effect conversions of shares of Series J Convertible Preferred Stock, a holder shall not be required to surrender the certificate(s), if any, representing the shares of Series J Convertible Preferred Stock to us unless all of the shares of Series J Convertible Preferred Stock represented thereby are so converted, in which case such holder shall deliver the certificate representing such shares of Series J Convertible Preferred Stock promptly following the conversion date at issue. Shares of Series J Convertible Preferred Stock converted into our shares of common stock shall be canceled and shall not be reissued.
If, at any time while the Series J Convertible Preferred Stock is outstanding: we (A) pay a stock dividend or otherwise make a distribution or distributions payable in shares of our common stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of common stock issued by us upon conversion of the Series J Convertible Preferred Stock, or payment of a dividend on the Series J Convertible Preferred Stock) with respect to the then outstanding shares of common stock; (B) subdivide outstanding shares of common stock into a larger number of shares; (C) combine (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares or (D) issue, in the event of a reclassification of shares of the common stock, any shares of our capital stock, which we refer to collectively as the “Anti-Dilution Provisions”, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of common stock (excluding any treasury shares) outstanding immediately before such event and of which the denominator shall be the number of shares of common stock outstanding immediately after such event (excluding any treasury shares). Any adjustment made as a result of the Anti-Dilution Provisions shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the
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effective date in the case of a subdivision or combination. All calculations will be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of the Anti-Dilution Provisions, the number of shares of common stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of common stock (excluding any treasury shares) issued and outstanding.
Whenever the Conversion Price is adjusted pursuant to any Anti-Dilution Provision, we will promptly deliver to each holder of Series J Convertible Preferred Stock a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Notwithstanding the foregoing in no event may the Conversion Price be less than the par value per share of Series J Convertible Preferred Stock.
Obligations Absolute. Subject to holder’s right to rescind a notice of conversion, our obligation to issue and deliver the shares of common stock upon conversion of Series J Convertible Preferred Stock in accordance with its terms are absolute and unconditional, irrespective of any action or inaction by a holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such holder or any other Person of any obligation to us or any violation or alleged violation of law by such holder or any other Person, and irrespective of any other circumstance which might otherwise limit our obligation to such holder in connection with the issuance of such shares of common stock. If we fail to deliver to a holder shares of common stock upon conversion by the Share Delivery Date applicable to such conversion, we shall pay to such holder, in cash, as liquidated damages and not as a penalty, for each $250 of Stated Value of Series J Convertible Preferred Stock being converted, $2.50 per Trading Day (increasing to $5 per Trading Day on the third Trading Day after the Share Delivery Date and increasing to $10 per Trading Day on the sixth Trading Day after the Share Delivery Date) for each Trading Day after the Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion.
Buy-In on Failure to Timely Deliver Certificates Upon Conversion. If we fail to deliver to a holder the applicable certificate or certificates or to effect a delivery via DWAC, as applicable, by the Share Delivery Date (other than a failure caused by incorrect or incomplete information provided by the holder to us), and if after such Share Delivery Date the holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the holder’s brokerage firm otherwise purchases, shares of common stock to deliver in satisfaction of a sale by such holder of the Conversion Shares which the holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then we are obligated to (A) pay in cash to the holder (in addition to any other remedies available to or elected by the holder) the amount by which (x) the holder’s total purchase price (including any brokerage commissions) for the shares of common stock so purchased exceeds (y) the product of (1) the aggregate number of shares of common stock that such holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the holder, either reissue (if surrendered) the shares of Series J Convertible Preferred Stock equal to the number of shares of Series J Convertible Preferred Stock submitted for conversion or deliver to the holder the number of shares of common stock that would have been issued if we had timely complied with our delivery requirements. For example, if a holder purchases shares of common stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Series J Convertible Preferred Stock with respect to which the actual sale price (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, we would be required to pay such holder $1,000. The holder shall provide us written notice, within three Trading Days after the occurrence of a Buy-In, indicating the amounts payable to such holder in respect of such Buy-In together with applicable confirmations and other evidence reasonably requested by us. Nothing herein shall limit a holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect our failure to timely deliver certificates representing shares of common stock upon conversion of the shares of Series J Convertible Preferred Stock as required pursuant to the terms hereof; provided, however, that the holder shall not be entitled to both (i) require the reissuance of the shares of Series J Convertible Preferred Stock submitted for conversion for which such conversion was not timely honored and (ii) receive the number of shares of common stock that would have been issued if we had timely complied with applicable delivery requirements.
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Reservation of Shares Issuable Upon Conversion. We have agreed that we will at all times reserve and keep available out of our authorized and unissued shares of common stock for the sole purpose of issuance upon conversion of the Series J Convertible Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the holders of the Series J Convertible Preferred Stock, not less than such aggregate number of shares of the common stock as shall be issuable upon the conversion of all outstanding shares of Series J Convertible Preferred Stock. We have further agreed that all shares of common stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid, nonassessable and free and clear of all liens and other encumbrances.
Beneficial Ownership Limitation. Notwithstanding anything herein to the contrary, we shall not effect any conversion of the Series J Convertible Preferred Stock, and a Holder shall not have the right to convert any portion of the Series J Convertible Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, such 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 (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of common stock beneficially owned by such Holder and its Affiliates and Attribution Parties shall include the number of shares of common stock issuable upon conversion of the Series J Convertible Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of common stock which are issuable upon (i) conversion of the remaining, unconverted Series J Convertible Preferred Stock beneficially owned by such Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other of our securities subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, the Series J Convertible Preferred Stock) beneficially owned by such Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this section, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this section applies, the determination of whether the Series J Convertible Preferred Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and of how many shares of Series J Convertible Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Series J Convertible Preferred Stock may be converted (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and how many shares of the Series J Convertible Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to us each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this section and we shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this section, in determining the number of outstanding shares of common stock, a Holder may rely on the number of outstanding shares of common stock as stated in the most recent of the following: (i) our most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by us or (iii) a more recent written notice by us or the Transfer Agent setting forth the number of shares of common stock outstanding. Upon the written or oral request (which may be via email) of a Holder, we within one (1) Trading Day confirm orally and in writing to such Holder the number of shares of common stock then outstanding. In any case, the number of outstanding shares of common stock shall be determined after giving effect to the conversion or exercise of our securities, including the Series J Convertible Preferred Stock, by such Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of common stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any shares of Series J Convertible Preferred Stock, 9.99%) of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon conversion of Series J Convertible Preferred Stock held by the applicable Holder. A Holder, upon notice to us, may increase or decrease the Beneficial Ownership Limitation provisions of this section applicable to its Series J Convertible Preferred Stock; provided, that the Beneficial Ownership Limitation shall not in any event exceed 9.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of this Series J Convertible Preferred Stock held by the Holder and the provisions of this section shall continue to apply. Any such increase will not be effective until the 61st day after such notice is
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delivered to us and shall only apply to such Holder and no other Holder. The Beneficial Ownership Limitation shall not be waived by us or the Holder and upon issuance of the Series J Convertible Preferred Stock by us, and the purchase thereof by the Holder, each of us and the Holder shall be deemed to acknowledge such limitation and to agree not to waive it. The provisions of this section shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this section to correct this section (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this subsection shall apply to a successor holder of Series J Convertible Preferred Stock.
Subsequent Rights Offerings. In addition to any anti-dilution adjustments described above, if at any time we grant, issue or sell any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of common stock or any class thereof (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of common stock acquirable upon complete conversion of such Holder’s Series J Convertible Preferred Stock (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of common stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of common stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
Pro Rata Distributions. During such time as the Series J Convertible Preferred Stock is outstanding, if we declare or make any dividend or other distribution of our assets (or rights to acquire its assets) to holders of common stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) ( a “Distribution”), then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of common stock acquirable upon complete conversion of the Series J Convertible Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of our common stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of common stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
Fundamental Transactions. In the event of a Fundamental Transaction and generally including any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, or the acquisition of more than 50% of our outstanding common stock, the holders of the Series J Convertible Preferred Stock will be entitled to receive upon conversion of the Series J Convertible Preferred Stock the kind and amount of securities, cash or other property that the holders would have received had they converted the Series J Convertible Preferred Stock immediately prior to such Fundamental Transaction (without regard to the Beneficial Ownership Limitation).
Mandatory Redemption. If any shares of Series J Convertible Preferred Stock are outstanding at the end of the three (3) year term, then we shall promptly redeem all of such outstanding shares of Series J Convertible Preferred Stock on a pro rata basis among all of the Holders of Series J Convertible Preferred Stock commencing on the third-year anniversary of the Closing Date at a price per Series J Convertible Preferred Share equal to the sum of (x) 100% of the Stated Value plus (y) all other amounts due in respect of the Series J Convertible Preferred Stock (if any). If on the Mandatory Redemption Date, Delaware law governing distributions to
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stockholders prevents the Company from redeeming all shares of Series J Preferred Stock to be redeemed, then the Corporation shall, provided there is no prohibition under Delaware law, redeem the Series J Convertible Preferred Stock by paying to the Holder the unpaid cash redemption payment in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock equal in number to the quotient obtained by dividing such unpaid amount by the closing price of the Common Stock on the Trading Market on the Mandatory Redemption Date.
Limited Voting Rights. Holders of the Series J Convertible Preferred Stock will not have any voting rights, except as described below or as otherwise required by law.
In any matter in which the Series J Convertible Preferred Stock may vote (as expressly provided herein or as may be required by law), each share of Series J Convertible Preferred Stock will be entitled to one vote per share. So long as any shares of Series J Convertible Preferred Stock remain outstanding, the Company will not, without the consent or the affirmative vote of a majority of the outstanding shares of Series J Convertible Preferred Stock, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose: (i) alter or change adversely the powers, preferences or rights given to the Series J Convertible Preferred Stock or alter or amend adversely the Certificate of Designations; (ii) increase the number of authorized shares of Series J Convertible Preferred Stock; or (iii) enter into any agreement with respect to any of the foregoing.
The rules and procedures for calling and conducting any meeting of the holders of the Series J Convertible Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules the Board of Director (or a duly authorized committee of the Board of Directors), in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Certificate of Incorporation, Bylaws, applicable law and any national securities exchange or other trading facility on which the Series J Convertible Preferred Stock may be listed or traded at the time.
Holders of the Series J Convertible Preferred Stock will not have any voting rights with respect to, and the consent of the holders of the Series J Convertible Preferred Stock is not required for, the taking of any corporate action, including any merger or consolidation involving the Company or a sale of all or substantially all of the Company’s assets, regardless of the effect that such merger, consolidation or sale may have upon the powers, preferences, voting power or other rights or privileges of the Series J Convertible Preferred Stock, except as described above.
No Preemptive Rights. No holders of the Series J Convertible Preferred Stock will, as holders of Series J Convertible Preferred Stock, have any preemptive rights to purchase or subscribe for the common stock or any other security.
Exclusion of Other Rights. The shares of the Series J Convertible Preferred Stock do not have any voting powers, preferences or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth in the Certificate of Designations or in our Certificate of Incorporation.
Registration; Transfer. Pursuant to the terms of the Certificate of Designations, the Company is obligated to maintain an effective registration statement covering: (a) the issuance of shares of common stock issuable upon conversion of the Series J Convertible Preferred Stock and (b) the issuance of additional shares of Series J Convertible Preferred Stock pursuant to our obligation to pay PIK dividends, in each case, until such time as no Series J Convertible Preferred Stock (and no Warrants exercisable for shares of Series J Convertible Preferred Stock) remain outstanding, unless there is available an exemption from, or a transaction not subject to, the registration requirements of the Securities Act that covers the issuance of the Series J Convertible Preferred Stock and the shares of common stock issuable upon conversion of such shares of Series J Convertible Preferred Stock.
Book-Entry Procedures. DTC will act as securities depositary for the Series J Convertible Preferred Stock offered hereunder. With respect to the Series J Convertible Preferred Stock offered hereunder, we will issue one or more fully registered global securities certificates in the name of DTC or DTC’s nominee. These certificates will represent the total aggregate number of shares of Series J Convertible Preferred Stock. We will deposit these certificates with DTC or a custodian appointed by DTC. We will not issue certificates to you for the shares of Series J Convertible Preferred Stock that you purchase, unless DTC’s services are discontinued as described below.
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Title to book-entry interests in the Series J Convertible Preferred Stock will pass by book-entry registration of the transfer within the records of DTC in accordance with its procedures. Book-entry interests in the securities may be transferred within DTC in accordance with procedures established for these purposes by DTC. Each person owning a beneficial interest in shares of the Series J Convertible Preferred Stock must rely on the procedures of DTC and the participant through which such person owns its interest to exercise its rights as a holder of the Series J Convertible Preferred Stock. DTC has advised us that it is a limited-purpose trust company organized under the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered under the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants (“Direct Participants”) deposit with DTC. DTC also facilitates the settlement among Direct Participants of securities transactions, such as transfers and pledges in deposited securities through electronic computerized book-entry changes in Direct Participants’ accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. Access to the DTC system is also available to others such as securities brokers and dealers, including the Placement Agent, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The rules applicable to DTC and its Direct and Indirect Participants are on file with the SEC.
When you purchase shares of Series J Convertible Preferred Stock within the DTC system, the purchase must be by or through a Direct Participant. The Direct Participant will receive a credit for the Series J Convertible Preferred Stock on DTC’s records. You will be considered to be the “beneficial owner” of the Series J Convertible Preferred Stock. Your beneficial ownership interest will be recorded on the Direct Participants and Indirect Participants’ records, but DTC will have no knowledge of your individual ownership. DTC’s records reflect only the identity of the Direct Participants to whose accounts shares of Series J Convertible Preferred Stock are credited.
You will not receive written confirmation from DTC of your purchase. The Direct Participants or Indirect Participants through whom you purchased the Series J Convertible Preferred Stock should send you written confirmations providing details of your transactions, as well as periodic statements of your holdings. The Direct Participants and Indirect Participants are responsible for keeping an accurate account of the holdings of their customers like you.
Transfers of ownership interests held through Direct Participants and Indirect Participants will be accomplished by entries on the books of Direct Participants and Indirect Participants acting on behalf of the beneficial owners.
The laws of some states may require that specified purchasers of securities take physical delivery of shares of Series J Convertible Preferred Stock in definitive form. These laws may impair the ability to transfer beneficial interests in the global certificates representing the Series J Convertible Preferred Stock.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
We understand that, under DTC’s existing practices, in the event that we request any action of the holders, or an owner of a beneficial interest in a global security, such as you, desires to take any action that a holder is entitled to take under our Certificate of Incorporation (including the Certificate of Designations designating the Series J Convertible Preferred Stock), DTC would authorize the Direct Participants holding the relevant shares to take such action, and those Direct Participants and any Indirect Participants would authorize beneficial owners owning through those Direct Participants and Indirect Participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them.
Any redemption notices with respect to the Series J Convertible Preferred Stock will be sent to DTC or its nominee. If less than all of the outstanding shares of Series J Convertible Preferred Stock are being redeemed, DTC will reduce each Direct Participant’s holdings of shares of Series J Convertible Preferred Stock in accordance with its procedures.
In those instances where a vote is required, neither DTC nor its nominee will consent or vote with respect to the shares of Series J Convertible Preferred Stock. Under its usual procedures, DTC would mail an omnibus
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proxy to us as soon as possible after the record date. The omnibus proxy assigns DTC’s or its nominee’s consenting or voting rights to those Direct Participants whose accounts the shares of Series J Convertible Preferred Stock are credited to on the record date, which are identified in a listing attached to the omnibus proxy.
Dividends on the Series J Convertible Preferred Stock are made directly to DTC (or its successor, if applicable). DTC’s practice is to credit participants’ accounts on the relevant payment date in accordance with their respective holdings shown on DTC’s records unless DTC has reason to believe that it will not receive payment on that payment date.
Payments by Direct Participants and Indirect Participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name.” These payments will be the responsibility of the participant and not of DTC, us or any agent of ours. DTC may discontinue providing its services as securities depositary with respect to the Series J Convertible Preferred Stock at any time by giving reasonable notice to us. Additionally, we may decide to discontinue the book-entry only system of transfers with respect to the Series J Convertible Preferred Stock. In that event, we will print and deliver certificates in fully registered form for the Series J Convertible Preferred Stock. If DTC notifies us that it is unwilling to continue as securities depositary, or it is unable to continue or ceases to be a clearing agency registered under the Exchange Act and a successor depositary is not appointed by us within 90 days after receiving such notice or becoming aware that DTC is no longer so registered, we will issue the Series J Convertible Preferred Stock in definitive form, at our expense, upon registration of transfer of, or in exchange for, such global security.
According to DTC, the foregoing information with respect to DTC has been provided to the financial community for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind.
Global Clearance and Settlement Procedures. Initial settlement for the Series J Convertible Preferred Stock will be made in immediately available funds. Secondary market trading among DTC’s participants occurs in the ordinary way in accordance with DTC’s rules and will be settled in immediately available funds using DTC’s Same-Day Funds Settlement System.
Direct Registration System. The Series J Convertible Preferred Stock will be registered in book-entry form through the Direct Registration System (the “DRS”). The DRS is a system administered by DTC pursuant to which the depositary may register the ownership of uncertificated shares, which ownership shall be evidenced by periodic statements issued by the depositary to the holders of shares of Series J Convertible Preferred Stock entitled thereto. This direct registration form of ownership allows investors to have securities registered in their names without requiring the issuance of a physical stock certificate, eliminates the need for you to safeguard and store certificates and permits the electronic transfer of securities to effect transactions without transferring physical certificates.
Common Stock
The material terms of our common stock are described under the caption “Description of Capital Stock” in this prospectus.
Description of Warrants Included in the Units
The following summary of certain terms and provisions of the Warrants offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the form of Warrant Agency Agreement between us and the Warrant Agent, and the form of Warrant, both of which are filed as exhibits to the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions set forth in form of Warrant Agency Agreement, including the annexes thereto, and the form of Warrant. Capitalized terms used but not defined in this subsection shall have the meanings ascribed to them in the Warrants.
Exercisability. The Warrants are exercisable at any time after their original issuance and at any time up to the date that is three years after the Closing Date. The Warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, by payment in full in immediately available funds for the number of shares of Series J Convertible Preferred Stock purchased upon such exercise. The Warrants will not include a cashless exercise feature. No fractional shares will be issued in connection with the exercise of a Warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to the
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fractional amount multiplied by the Stated Value of the Series J Convertible Preferred Stock. Accordingly, a holder of the Warrants is entitled to exercise a number of Warrants that would solely result in the holder receiving one or more whole shares of Series J Convertible Preferred Stock. If we fail to deliver to a holder the applicable certificate or certificates or to effect a delivery via DWAC, as applicable, (other than certain specified failures ) and the holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the holder’s brokerage firm otherwise purchases, shares of common stock to deliver in satisfaction of a sale by such holder of the Series J Convertible Preferred Stock which the holder anticipated receiving upon such exercise, then we shall (A) pay in cash to the holder the amount, if any, by which (x) the holder’s total purchase price (including brokerage commissions, if any) for the shares of Series J Convertible Preferred Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of shares of Series J Convertible Preferred Stock that we were required to deliver to the holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the holder, either reinstate the portion of the Warrant and equivalent number of shares of Series J Convertible Preferred Stock for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the holder the number of shares of Series J Convertible Preferred Stock that would have been issued had we timely complied with its exercise and delivery obligations hereunder.
Exercise Limitation. A holder will not have the right to exercise any portion of the Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days following notice from the holder to us.
Exercise Price. The exercise price per Warrant is $7.50 to purchase one-half (0.5) of one shares of our Series J Convertible Preferred Stock, which is 50% of the public offering price per Unit. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock and also upon any distributions of assets, including cash, stock or other property to our stockholders.
Adjustments. If, at any time while the Warrants are outstanding: we (A) pay a stock dividend or otherwise make a distribution or distributions payable in shares of our Series J Convertible Preferred Stock (which, for avoidance of doubt, shall not include any shares of Series J Convertible Preferred Stock issued by us upon exercise of the Warrants and shall not include any of the PIK dividends to be paid to holders of shares of Series J Convertible Preferred Stock); (B) subdivide outstanding shares of Series J Convertible Preferred Stock into a larger number of shares; (C) combine (including by way of a reverse stock split) outstanding shares of Series J Convertible Preferred Stock into a smaller number of shares or (D) issue, in the event of a reclassification of shares of the Series J Convertible Preferred Stock, any shares of our capital stock, which we refer to collectively as the “Anti-Dilution Provisions”, then the number of shares issuable upon exercise of the Warrants shall be proportionately adjusted such that the aggregate Exercise Price of the Warrants shall remain unchanged.
Subsequent Rights Offerings. In addition to any adjustments pursuant to the paragraph above, if at any time that a Warrant is outstanding we grant, issue or sell any Preferred Stock Equivalents or rights to purchase shares, warrants, securities or other property pro rata to all of the record holders of the Series J Convertible Preferred Stock (the “Purchase Rights”), then the Holder or the Warrant will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Series J Convertible Preferred Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Series J Convertible Preferred Stock are to be determined for the grant, issue or sale of such Purchase Rights.
Pro Rata Distributions. During such time as a Warrant is outstanding, if we shall declare or make any dividend or other distribution of our assets (or rights to acquire our assets) to holders of shares of Series J Convertible Preferred Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, share or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (except to the extent an adjustment was already made pursuant to the second preceding paragraph ) (a “Distribution”), at any time after the issuance
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of the Warrants, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Series J Convertible Preferred Stock acquirable upon complete exercise of the Warrant immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Series J Convertible Preferred Stock are to be determined for the participation in such Distribution. Any Distribution or Distributions to be paid to any holder of shares of Series J Convertible Preferred Stock arising as a result of our obligation to issue PIK dividends on the Series J Convertible Preferred Stock pursuant to the Certificate of Designations, shall be held in trust for the benefit of such holder of shares of Series J Convertible Preferred Stock holding the Warrant at the time of exercise of the Warrant, and paid to such holder only upon such exercise.
Transferability. Subject to applicable laws, the Warrants may be offered for sale, sold, transferred or assigned without our consent.
No Listing. There is no established public trading market for, and we do not expect a market to develop for, the Warrants. In addition, we do not intend to apply for listing of the Warrants on any securities exchange or trading system, including Nasdaq. Without an active market, the liquidity of the Warrants will be limited.
Warrant Agent; Global Certificate. The Warrants will be issued in registered form under a Warrant Agency Agreement between us and the Warrant Agent, Equiniti Trust Company, LLC. The Warrants shall initially be represented only by one or more global warrants deposited with the Warrant Agent, as custodian on behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
Fundamental Transactions. In the event of a “fundamental transaction,” as defined in the Warrants and generally including any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, the holders of the Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants immediately prior to such fundamental transaction.
Registration; Transfer. Pursuant to the terms of the Warrants, we are obligated to maintain an effective registration statement covering the issuance of the shares of Series J Convertible Preferred Stock upon exercise of the Warrants and the shares of common stock issuable upon conversion of such shares of Series J Convertible Preferred Stock until such time as no Warrants remain outstanding, unless there is available an exemption from, or a transaction not subject to, the registration requirements of the Securities Act that covers the issuance of the Series J Convertible Preferred Stock and the shares of common stock issuable upon conversion of such shares of Series J Convertible Preferred Stock.
Rights as a Stockholder. Except as otherwise provided in the Warrants or by virtue of such holder’s ownership of our common stock, the holder of a Warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the Warrant and converts the shares of Series J Convertible Preferred Stock received upon such exercise into shares of common stock.
Governing Law. The Warrants and the Warrant Agency Agreement are governed by New York law.
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DESCRIPTION OF CAPITAL STOCK
Description of Capital Stock
Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.0001 per share, and 40,000,000 shares of preferred stock, par value $0.0001 per share, 30,000 of which are designated as Series A Junior Participating Preferred Stock and 127 of which are designated Series F Convertible Preferred Stock (the “Series F Preferred Stock”) as of September 27, 2023. Once shares of Series F Preferred Stock are converted, redeemed or reacquired by us, such shares shall resume the status of authorized but unissued shares of undesignated preferred stock.
As of September 27, 2023, we had (i) 1,864,265 outstanding shares of common stock, (ii) 127 outstanding shares of Series F Preferred Stock, which, at the currently applicable conversion price, would convert into 5,080 shares of common stock, subject to future adjustment, (iii) outstanding options to acquire 111,275 shares of our common stock, and (iv) outstanding warrants to purchase 1,308,271 shares of our common stock.
The following description summarizes the most important terms of our capital stock. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description you should refer to our certificate of incorporation, bylaws and bylaws,certificate of designation of preferences, rights and limitations of Series F Preferred Stock, copies of which have been incorporated by reference herein,as exhibits to the registration statement of which this prospectus forms a part, and to the applicable provisions of the DGCL.
Dividends
Holders of our common stock are entitled to receive dividends when and as declared by our board of directors out of funds legally available.
Voting
Holders of our common stock are entitled to one vote for each share on each matter properly submitted to our stockholders for their vote; provided however, that except as otherwise required by law, holders of our common stock will not be entitled to vote on any amendment to our certificate of incorporation (including any certificate of designation filed with respect to any series of preferred stock) that relates solely to the terms of a series of outstanding preferred stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to our certificate of incorporation (including any certificate of designation filed with respect to any series of preferred stock).
Subject to the voting restrictions described above, holders of our common stock may adopt, amend or repeal our bylaws and/or alter certain provisions of our certificate of incorporation with the affirmative vote of the holders of at least 66 2∕3% of the voting power of all of the then-outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class, in addition to any vote of the holders of a class or series of our stock required by law or our certificate of incorporation. Those provisions of our certificate of incorporation that may be altered only by the super-majority vote described above relate to:
the number of directors on our board of directors, the classification of our board of directors and the terms of the members of our board of directors;
the limitations on removal of any of our directors described below under “Description of Capital Stock –Anti-Takeover Effects of Certain Provisions of Our Certificate of Incorporation and Bylaws and Delaware General Corporation Law.Law;”
the ability of our directors to fill any vacancy on our board of directors by the affirmative vote of a majority of the directors then in office under certain circumstances;
the ability of our board of directors to adopt, amend or repeal our bylaws and the super-majority vote of our stockholders required to adopt, amend or repeal our bylaws described above;
the limitation on action of our stockholders by written action described below under “Description of Capital Stock –-Anti-Takeover Effects of Certain Provisions of Our Certificate of Incorporation and Bylaws and Delaware Law;”
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the choice of forum provision described below under “Description of Capital Stock –Choice of Forum;”
the limitations on director liability and indemnification described below under the heading “Description of Capital Stock –Limitation on Liability of Directors and Indemnification;” and
the super-majority voting requirement to amend our certificate of incorporation described above.
Conversion, Redemption and Preemptive Rights
Holders of our common stock do not have any conversion, redemption or preemptive rights pursuant to our organizational documents.
Liquidation, Dissolution and Winding-up
In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in any assets remaining after the satisfaction in full of the prior rights of creditors and the aggregate of any liquidation preference pursuant to the terms of any certificate of designations filed with respect to any series of preferred stock, including our outstanding Series F Preferred Stock.
Listing
Our common stock is listed on the Nasdaq Capital Market under the symbol “NUWE.”
Description of Preferred Stock
We may issue any class of preferred stock in any series. Our board of directors has the authority to establish and designate series, and to fix the number of shares included in each such series and to determine or alter for each such series, such voting powers, designation, preferences, and relative participating, optional, or other rights and such qualifications, limitations or restrictions thereof. Our board of directors is not restricted in repurchasing or redeeming such stock while there is any arrearage in the payment of dividends or sinking fund installments. Our board of directors is authorized to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. The number of authorized shares of preferred stock may be increased or decreased, but not below the number of shares thereof then outstanding, by the affirmative vote of the holders of a majority of the common stock, without a vote of the holders of the preferred stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of preferred stock.
Prior to issuance of shares of any series of preferred stock, our board of directors is required by Delaware law to adopt resolutions and file a certificate of designation with the Secretary of State of the State of Delaware. The certificate of designation fixes for each class or series the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Any shares of preferred stock will, when issued, be fully paid and non-assessable.
Outstanding Series F Convertible Preferred Stock

Stock.Our Board hasboard of directors designated 10,00018,000 shares of preferred stock as Series F convertible preferred stock, $0.0001 par value. As of November 13, 2017,September 27, 2023, there were no127 shares of Series F preferred stock outstanding. Although there is no current intent to do so, our Board may, without stockholder approval, issue sharesPreferred Stock outstanding with a conversion price of an additional class or series of preferred stock with voting and conversion rights which could adversely affect the voting power of the holders of the common stock or the convertible preferred stock, except as prohibited by the certificate of designation of preferences, rights and limitations of Series F convertible preferred stock.

The following is a summary of the material terms of our Series F preferred stock. For more information, please refer to the certificate of designation of preferences, rights and limitations of Series F convertible preferred stock filed as an exhibit to the registration statement of which this prospectus is a part.

$25.00.

Liquidation. Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of Series F preferred stockPreferred Stock will be entitled to receive distributions out of our assets, whether capital or surplus, of an amount equal to $0.0001 per share of Series F preferred stockPreferred Stock before any distributions shall be made on the common stock or any series of preferred stock ranked junior to the Series F preferred stock, but after distributions shall be made on any outstanding Series E preferred stock and any of our existing or future indebtedness.

Preferred Stock.

Dividends. Holders of the Series F preferred stock will bePreferred Stock are entitled to receive dividends equal (on an “as converted to common stock” basis) to and in the same form as dividends actually paid on shares of our common stock when, as and if such dividends are paid on shares of our common stock. No other dividends will be paid on shares of Series F preferred stock.

Preferred Stock.

Conversion. Each share of Series F preferred stockPreferred Stock is convertible, at any time and from time to time at the option of the holder thereof, into that number of shares of common stock determined by dividing $1,000 by the conversion price of $$25.00 (subject to adjustment described below), which is 100% of the consolidated closing bid price of our common stock on The Nasdaq Capital Market on the date we entered into the underwriting agreement.. This right to convert is limited by the beneficial ownership limitation described below.
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Forced Conversion.Subject to certain ownership limitations as described below and certain equity conditions being met, until such time that during any 20 of 30 consecutive trading days, the volume weighted average price of our common stock exceeds 300% of the conversion price and the daily dollar trading volume during such period exceeds $200,000 per trading day, we shall have the right to force the conversion of the Series F preferred stockPreferred Stock into common stock.

Beneficial Ownership Limitation. A holder shall have no right to convert any portion of Series F preferred stock,Preferred Stock, to the extent that, after giving effect to such conversion, such holder, together with such holder'sholder’s affiliates, and any persons acting as a group together with such holder or any such affiliate, would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock upon such conversion (subject to the right of the holder to increase such beneficial ownership limitation upon not less than 61 days prior notice provided that such limitation can never exceed 9.99% and such 61 day period cannot be waived). Beneficial ownership of the holder and its affiliates will be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.Act. Holders of Series F preferred stockPreferred Stock who are subject to such beneficial ownership limitation are and will remain responsible for ensuring their own compliance with Regulation 13D-G promulgated under the Securities Exchange Act, of 1934, as amended, consistent with their individual facts and circumstances. In addition, pursuant to Rule 13d-3(d)(1)(i) promulgated under the Securities Exchange Act, of 1934, as amended, any person who acquires Series F preferred stockPreferred Stock with the purpose or effect of changing or influencing the control of our company, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition will be deemed to be the beneficial owner of the underlying common stock.

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Conversion Price Adjustment

Subsequent Equity Sales.Optional Redemption. Subject to the terms of the certificate of designation, the Company holds an option to redeem some or all the Series F Preferred Stock six months after its issuance date at a 200% premium to the stated value of the Series F Preferred Stock subject to the redemption, upon 30 days prior written notice to the holder of the Series F Preferred Stock. The Series F preferred stockPreferred Stock would be redeemed by the Company for cash.

Conversion Price Adjustment
Subsequent Equity Sales. The Series F Preferred Stock has full ratchet price based anti-dilution protection, subject to customary carve outs, in the event of a down-round financing at a price per share below the conversion price of the Series F preferred stock.Preferred Stock, including in this offering. If during any 20 of 30 consecutive trading days the volume weighted average price of our common stock exceeds 300% of the then-effective conversion price of the Series F preferred stockPreferred Stock and the daily dollar trading volume for each trading day during such period exceeds $200,000, the anti-dilution protection in the Series F preferred stockPreferred Stock will expire and cease to apply.

Stock Dividends and Stock Splits. If we pay a stock dividend or otherwise make a distribution payable in shares of common stock on shares of common stock or any other common stock equivalents, subdivide or combine outstanding common stock, or reclassify common stock, the conversion price will be adjusted by multiplying the then conversion price by a fraction, the numerator of which shall be the number of shares of common stock outstanding immediately before such event, and the denominator of which shall be the number of shares outstanding immediately after such event.

Fundamental Transaction.If we effect a fundamental transaction in which we are the surviving entity, then upon any subsequent conversion of Series F preferred stock,Preferred Stock, the holder thereof shall have the right to receive, for each share of common stock that would have been issuable upon such conversion immediately prior to the occurrence of such fundamental transaction, the number of shares of our common stock and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of common stock into which Series F preferred stockPreferred Stock is convertible immediately prior to such fundamental transaction. If we effect a fundamental transaction in which we are not the surviving entity or a reverse merger in which we are the surviving entity, then the surviving entity shall purchase the outstanding Series F preferred stockPreferred Stock by paying and issuing, in the event that such consideration given to common stockholders is non-cash consideration, as the case may be, to such holder (or canceling such holder'sholder’s outstanding Series F preferred stockPreferred Stock and converting it into the right to receive) an amount equal to the greater of (i) the cash consideration plus the non-cash consideration (in the form issuable to the holders of common stock) per share of the common stock in the fundamental transaction multiplied by the number of conversion shares underlying the shares of Series F preferred stockPreferred Stock held by the holder on the date of the consummation of the fundamental transaction or (ii) 130% of the stated value of the Series F preferred stockPreferred Stock then outstanding on the date immediately prior to the
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consummation of the fundamental transaction. Such amount shall be paid in the same form and mix (be it securities, cash or property, or any combination of the foregoing) as the consideration received by the common stock in such fundamental transaction. A fundamental transaction means: (i) our merger or consolidation with or into another entity, (ii) any sale or other disposition of all or substantially all of our assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer allowing holders of our common stock to tender or exchange their shares for cash, property or securities, and has been accepted by the holders of 50% or more of the outstanding common stock, (iv) any reclassification of our common stock or any compulsory share exchange by which common stock is effectively converted into or exchanged for other securities, cash or property, or (v) consummation of a stock or share purchase agreement or other business combination with another person whereby such other person acquires more than 50% of the outstanding shares of common stock.

Voting Rights, etc. Except as otherwise provided in the Series F preferred stockPreferred Stock certificate of designation or required by law, the Series F preferred stockPreferred Stock has no voting rights. However, as long as any shares of Series F preferred stockPreferred Stock are outstanding, we may not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series F preferred stock,Preferred Stock, alter or change adversely the powers, preferences or rights given to the Series F preferred stock,Preferred Stock, amend its certificate of designation, amend our certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders, increase the number of authorized shares of Series F preferred stock,Preferred Stock, or enter into any agreement with respect to any of the foregoing. The Series F preferred stockPreferred Stock certificate of designation provides that if any party commences an action or proceeding to enforce any provisions of the certificate of designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys'attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding. This provision may, under certain circumstances, be inconsistent with federal securities laws and Delaware general corporation law.

DGCL.

Fractional Shares. No fractional shares of common stock will be issued upon conversion of Series F preferred stock.Preferred Stock. Rather, we shall, at our election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the conversion price or round up to the next whole share.

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The Series F preferred stock will bePreferred Stock was issued in book-entry form under a preferred stock agent agreement between Equiniti Trust Company, LLC, formerly American Stock Transfer & Trust LLC as preferred stock agent, and us, and shall initially be represented by one or more book-entry certificates deposited with The Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC. There is no established public trading market for the Series F preferred stockPreferred Stock, and we do not expect a market to develop. We do not plan on applying to list the Series F preferred stockPreferred Stock is not listed on Thethe Nasdaq Capital Market, any other national securities exchange or any other nationally recognized trading system.

Description of Warrants We Are Offering In This Offering

The material terms and provisions of the warrants being offered pursuant to this prospectus are summarized below. This summary of some provisions of the warrants is not complete. For the complete terms of the warrants, you should refer to the form of warrant filed as an exhibit to the registration statement of which this prospectus is a part.

Pursuant to a warrant agency agreement between us and American Stock Transfer & Trust Company LLC, as warrant agent, the warrants will be issued in book-entry form and shall initially be represented only by one or more global warrants deposited with the warrant agent, as custodian on behalf of The Depository Trust Company, or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

Each share of Series F convertible preferred stock will be issued with: (a) the number of warrants equal to 100% of the number of shares of our common stock initially issuable upon conversion of the share of Series F convertible preferred stock, which will be immediately exercisable and expire on the first anniversary of the date of issuance (the “Series 1 Warrants”), and (b) the number of warrants equal to 100% of the number of shares of our common stock initially issuable upon conversion of the shares of Series F convertible preferred stock, which will be immediately exercisable and expire on the seventh anniversary of the date of issuance (the “Series 2 Warrants”). Each whole warrant is exercisable to purchase one share of our common stock at an exercise price of $[___] per share at any time prior to expiration. The warrants issued in this offering will each be governed by the terms of a global warrant certificate deposited with DTC. The holder of a warrant will not be deemed a holder of our underlying common stock until the warrant is exercised, except as set forth in the warrant.

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, at the election of the holder, 9.99%) of the shares of our common stock then outstanding after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that upon notice to the Company, the holder may increase or decrease the Beneficial Ownership Limitation, provided that in no event shall the Beneficial Ownership Limitation exceed 9.99% and any increase in the Beneficial Ownership Limitation will not be effective until 61 days following notice of such increase from the holder to us.

The exercise price and the number of shares issuable upon exercise 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. The warrant holders must pay the exercise price in cash upon exercise of the warrants, unless such warrant holders are utilizing the cashless exercise provision of the warrants, which is only available in certain circumstances such as if the underlying shares are not registered with the SEC pursuant to an effective registration statement. We intend to use commercially reasonable efforts to have the registration statement of which this prospectus forms a part, effective when the warrants are exercised.

In addition, in the event we consummate a merger or consolidation with or into another person or other reorganization event in which our common shares are converted or exchanged for securities, cash or other property, or we sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of our assets or we or another person acquire 50% or more of our outstanding shares of common stock, then following such event, the holders of the warrants will be entitled to receive upon exercise of the warrants the same kind and amount of securities, cash or property which the holders would have received had they exercised the warrants immediately prior to such fundamental transaction. Any successor to us or surviving entity shall assume the obligations under the warrants. Further, as more fully described in the warrants, in the event of certain fundamental transactions, the holders of the warrants will be entitled to receive consideration in an amount equal to the Black Scholes value of the warrants on the date of consummation of such transaction.

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Upon the holder’s exercise of a warrant, we will issue the shares of common stock issuable upon exercise of the warrant within the earlier of three trading days following our receipt of a notice of exercise or the standard settlement period for the market on which the common stock is then listed, provided that payment of the exercise price has been made (unless exercised via the “cashless” exercise provision).

Prior to the exercise of any warrants to purchase common stock, holders of the warrants will not have any of the rights of holders of the common stock purchasable upon exercise, including the right to vote, except as set forth therein.

Warrant holders may exercise warrants only if the issuance of the shares of common stock upon exercise of the warrants is covered by an effective registration statement, or an exemption from registration is available under the Securities Act and the securities laws of the state in which the holder resides. We intend to use commercially reasonable efforts to have the registration statement of which this prospectus forms a part effective when the warrants are exercised. The warrant holders must pay the exercise price in cash upon exercise of the warrants unless there is not an effective registration statement or, if required, there is not an effective state law registration or exemption covering the issuance of the shares underlying the warrants (in which case, the warrants may only be exercised via a “cashless” exercise provision).

The Series 2 warrants are callable by us in certain circumstances. Subject to certain exceptions, in the event that the warrants are outstanding, following the date that is 180 days after the closing date, (i) the volume weighted average price of our common stock for each of 30 consecutive trading days (the “Measurement Period”), which Measurement Period commences after the date that is 180 days after the closing date, exceeds 300% of the initial exercise price (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and similar transactions), (ii) the average daily trading volume for such Measurement Period exceeds $500,000 per trading day and (iii) the holder is not in possession of any information that constitutes or might constitute, material non-public information which was provided by the Company, and subject to the Beneficial Ownership Limitation, then we may, within one trading day of the end of such Measurement Period, upon notice (a “Call Notice”), call for cancellation of all or any portion of the Series 2 warrants for which a notice of exercise has not yet been delivered (a “Call”) for consideration equal to $0.0001 per share. Any portion of a warrant subject to such Call Notice for which a notice of exercise shall not have been received by the Call Date (as hereinafter defined) will be canceled at 6:30 p.m. (New York City time) on the tenth trading day after the date the Call Notice is sent by the Company (such date and time, the “Call Date”). Our right to call the warrants shall be exercised ratably among the holders based on the outstanding Series 2 warrants.

We do not intend to apply for listing of the warrants on any securities exchange or other trading system.

Description of Authorized and Outstanding Capital Stock

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.0001 per share, and 40,000,000 shares of preferred stock, par value $0.0001 per share, 30,000 of which are designated as Series A Junior Participating Preferred Stock.

As of October 31, 2017, we had (i) 625,791 outstanding shares of common stock, (ii) outstanding options to acquire 36,868 shares of our common stock, (iii) 297 outstanding restricted stock units and (iv) outstanding warrants to purchase 496,468 shares of our common stock.

The following description summarizes the most important terms of our capital stock other than the underlying securities. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description you should refer to our certificate of incorporation and bylaws, copies of which have been incorporated by reference herein, and to the applicable provisions of the Delaware General Corporation Law.

Discription of Our Common Stock

Dividends

Holders of our common stock are entitled to receive dividends when and as declared by our board of directors out of funds legally available.

Voting

Holders of our common stock are entitled to one vote for each share on each matter properly submitted to our stockholders for their vote; provided however, that except as otherwise required by law, holders of our common stock

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will not be entitled to vote on any amendment to our certificate of incorporation (including any certificate of designation filed with respect to any series of preferred stock) that relates solely to the terms of a series of outstanding preferred stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to our certificate of incorporation (including any certificate of designation filed with respect to any series of preferred stock).

Subject to the voting restrictions described above, holders of our common stock may adopt, amend or repeal our bylaws and/or alter certain provisions of our certificate of incorporation with the affirmative vote of the holders of at least 662∕3% of the voting power of all of the then-outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class, in addition to any vote of the holders of a class or series of our stock required by law or our certificate of incorporation. Those provisions of our certificate of incorporation that may be altered only by the super-majority vote described above relate to:

the number of directors on our board of directors, the classification of our board of directors and the terms of the members of our board of directors;
the limitations on removal of any of our directors described below under “—Anti-Takeover Effects of Certain Provisions of Our Certificate of Incorporation and Bylaws and Delaware Law;”
the ability of our directors to fill any vacancy on our board of directors by the affirmative vote of a majority of the directors then in office under certain circumstances;
the ability of our board of directors to adopt, amend or repeal our bylaws and the super-majority vote of our stockholders required to adopt, amend or repeal our bylaws described above;
the limitation on action of our stockholders by written action described below under “—Anti-Takeover Effects of Certain Provisions of Our Certificate of Incorporation and Bylaws and Delaware Law;”
the choice of forum provision described below under “—Choice of Forum;”
the limitations on director liability and indemnification described below under the heading “—Limitation on Liability of Directors and Indemnification;” and
the super-majority voting requirement to amend our certificate of incorporation described above.

Conversion, Redemption and Preemptive Rights

Holders of our common stock do not have any conversion, redemption or preemptive rights pursuant to our organizational documents.

Liquidation, Dissolution and Winding-up

In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to share ratably in any assets remaining after the satisfaction in full of the prior rights of creditors and the aggregate of any liquidation preference pursuant to the terms of any certificate of designation filed with respect to any series of preferred stock.

Listing

Our common stock is listed on The Nasdaq Capital Market under the symbol “CHFS.” See “Prospectus Summary—Recent Developments” in this prospectus for important information about the listing of our common stock on The Nasdaq Capital Market.

Preferred Stock

We may issue any class of preferred stock in any series. Our board of directors has the authority to establish and designate series, and to fix the number of shares included in each such series and to determine or alter for each such series, such voting powers, designation, preferences, and relative participating, optional, or other rights and such qualifications, limitations or restrictions thereof. Our board of directors is not restricted in repurchasing or redeeming such stock while there is any arrearage in the payment of dividends or sinking fund installments. Our board of directors is authorized to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. The number of authorized shares of preferred stock may be increased or decreased, but not below the number of shares thereof then outstanding, by

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the affirmative vote of the holders of a majority of the common stock, without a vote of the holders of the preferred stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of preferred stock.

Prior to issuance of shares of any series of preferred stock, our board of directors is required by Delaware law to adopt resolutions and file a certificate of designation with the Secretary of State of the State of Delaware. The certificate of designation fixes for each class or series the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Any shares of preferred stock will, when issued, be fully paid and non-assessable.

Description of Outstanding Warrants

As of October 31, 2017,September 27, 2023, there were warrants outstanding to purchase a total of 496,4681,308,271 shares of our common stock, which expire between 20172024 and 2025.2028. Each of these warrants entitles the holder to purchase one share of common stock at prices ranging from $22.00$3.2996 to $3,132.00 per common share, with a weighted average exercise price of $26.10$189,000 per share. Certain of these warrants have a net exercise provision under which its holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of our common stock at the time of exercise of the warrant after deduction of the aggregate exercise price. Each of these warrants also contains provisions for the adjustment of the exercise price and the aggregate number of shares issuable upon the exercise of the warrant in the event of dividends, share splits, reorganizations and reclassifications and consolidations. Certain of these warrants provide that, subject to limited exceptions, a holder will not have the right to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own over 4.99% of our then outstanding common stock following such exercise; provided, however, that upon prior notice to us, the warrant holder may increase its ownership, provided that in no event will the ownership exceed 9.99%.

On June 19, 2023, we entered into a Supply and Collaboration Agreement (the “Supply Agreement”) with DaVita Inc., a Delaware corporation (“DaVita”), pursuant to which DaVita will pilot the Aquadex ultrafiltration therapy system to treat adult patients with congestive heart failure and related conditions within select U.S. markets. The pilot period commenced on June 30, 2023 and extends through May 31, 2024 (the “Pilot”). The Company currently anticipates that the first patient to be treated with Aquadex in the Pilot will occur in the fourth quarter of 2023. Through the Pilot, ultrafiltration therapy using Aquadex will be offered at a combination of DaVita’s customer hospital and outpatient center locations, with both companies collaborating on the roll-out

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of the therapy, clinician training, and patient support. At the conclusion of the pilot, DaVita has the option, in its sole discretion, to extend the Supply Agreement with the Company for continued provision of both inpatient and outpatient ultrafiltration services for up to 10 years (“Ultrafiltration Services Approval”).
In conjunction with the Supply Agreement, the Company issued DaVita a warrant to purchase up to an aggregate of 1,289,081 shares of common stock of the Company, par value $0.0001 per share, at an exercise price of $3.2996 per share, provided that at no time can it be exercised for an amount of shares that would represent greater than 19.9% ownership in the Company (the “DaVita Warrant”) subject to certain vesting milestones. The DaVita Warrant is expected to vest in four tranches as follows: (i) 25% upon the Company’s receipt of the Ultrafiltration Services Approval; (ii) 25% upon the attainment by the Company of a net revenue achievement from DaVita’s efforts pursuant to the Supply Agreement within twelve months of Ultrafiltration Services Approval; (iii) 25% upon the attainment by the Company of a net revenue achievement from DaVita’s efforts pursuant to the Supply Agreement within twenty-four months of Ultrafiltration Services Approval; and (iv) 25% upon the attainment by the Company of a net revenue achievement from DaVita’s efforts pursuant to the Supply Agreement within thirty-six months of Ultrafiltration Services Approval.
Anti-Takeover Effects of Certain Provisions of Our Certificate of Incorporation and Bylaws and Delaware Law

Certificate of Incorporation and Bylaws

Certain provisions of our certificate of incorporation and bylaws may be considered to have an anti-takeover effect, such as those provisions:

providing for our board of directors to be divided into three classes with staggered three-year terms, with only one class of directors being elected at each annual meeting of our stockholders and the other classes continuing for the remainder of their respective three-year terms;
authorizing our board of directors to issue from time to time any series of preferred stock and fix the voting powers, designation, powers, preferences and rights of the shares of such series of preferred stock;
prohibiting stockholders from acting by written consent in lieu of a meeting;
requiring advance notice of stockholder intention to put forth director nominees or bring up other business at a stockholders’ meeting;
prohibiting stockholders from calling a special meeting of stockholders;
•
requiring a 662∕3% super-majority stockholder approval in order for stockholders to alter, amend or repeal certain provisions of our certificate of incorporation;
•
requiring a 662∕3% super-majority stockholder approval in order for stockholders to adopt, amend or repeal our bylaws;
providing that, subject to the rights of the holders of any series of preferred stock to elect additional directors under specified circumstances, neither the board of directors nor any individual director may be removed without cause;
creating the possibility that our board of directors could prevent a coercive takeover of our Company due to the significant amount of authorized, but unissued shares of our common stock and preferred stock;
providing that, subject to the rights of the holders of any series of preferred stock, the number of directors shall be fixed from time to time exclusively by our board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; and
providing that any vacancies on our board of directors under certain circumstances will be filled only by a majority of our board of directors then in office, even if less than a quorum, and not by the stockholders.

Delaware Law

We are also subject to Section 203 of the DGCL, which generally prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder, unless:

prior to that date, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
•
on or subsequent to that date, the business combination is approved by our board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662∕3% of the outstanding voting stock that is not owned by the interested stockholder.
In general, Section 203 defines a “business combination” to include the following:
any merger or consolidation involving the corporation or a direct or indirect majority-owned subsidiary of the corporation and the interested stockholder;

any sale, lease, mortgage, pledge transfer, or other disposition of the assets of the corporation or direct or indirect majority-owned a subsidiary of the corporation to or with the interested stockholder, which assets have an aggregate value equal to 10% or more of the fair value of the assets on a consolidated basis or the aggregate market value of the outstanding stock of the corporation;

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subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation or a direct or indirect majority-owned subsidiary of the corporation of any stock of the corporation or subsidiary to the interested stockholder;
any transaction involving the corporation or direct or indirect majority-owned subsidiary of the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation or the subsidiary beneficially owned by the interested stockholder; or

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the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation or direct or indirect majority-owned subsidiary of the corporation.

In general, Section 203 of the DGCL defines an interested stockholder as an entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by any of these entities or persons.

The above-summarized provisions of our certificate of incorporation and bylaws and the above-summarized provisions of the DGCL could make it more difficult to acquire us by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions are expected to discourage certain types of coercive takeover practices and takeover bids that our board of directors may consider inadequate and to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.

Choice of Forum

Our certificateFourth Amended and Restated Certificate of incorporationIncorporation, as amended, provides that, unless we consent in writing otherwise,to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any (i) derivative action or proceeding brought on our behalf; (ii)any action asserting a breach of fiduciary duty owed byduty; any of our directors, officers or other employees to us or any of our stockholders; (iii) action asserting a claim against us arising pursuant to the DGCL; or (iv)any action asserting a claim against us that is governed by the internal affairs doctrine. These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. Our Fourth Amended and Restated Certificate of Incorporation, as amended, will further provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, subject to applicable law. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions. Our exclusive forum provision will not relieve us of our duties to
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comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
The provisions of the DGCL, our Fourth Amended and Restated Certificate of Incorporation, as amended, and our Second Amended and Restated Bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
Limitation on Liability of Directors and Indemnification

Our certificate of incorporation limits the liability of our directors to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability for any:

breach of their duty of loyalty to us or our stockholders;
act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
unlawful payment of dividends or redemption of shares as provided in Section 174 of the DGCL; or
transaction from which the directors derived an improper personal benefit.

These limitations of liability do not apply to liabilities arising under federal securities laws and do not affect the availability of equitable remedies such as injunctive relief or rescission.

Our bylaws provide that we will indemnify and advance expenses to our directors and officers to the fullest extent permitted by law or, if applicable, pursuant to indemnification agreements. They further provide that we may choose to indemnify our other employees or agents from time to time. Subject to certain exceptions and procedures, our bylaws also require us to advance to any person who was or is a party, or is threatened to be made a party, to any proceeding by reason of the person’s service as one of our directors or officers all expenses incurred by the person in connection with such proceeding.

Section 145(g) of the DGCL and our bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in connection with their services to us, regardless of whether our bylaws permit indemnification. We maintain a directors’ and officers’ liability insurance policy.

We entered into indemnification agreements with each of our directors and executive officers that provide, in general, that we will indemnify them to the fullest extent permitted by law in connection with their service to us or on our behalf and, subject to certain exceptions and procedures, that we will advance to them all expenses that they incur in connection with any proceeding to which they are, or are threatened to be made, a party.

At present, there is no pending litigation or proceeding involving any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Registration Rights
DaVita Supply Agreement. Concurrent with the signing of the Supply Agreement and issuance of the DaVita Warrant June 19, 2023, the Company entered into a Registration Rights Agreement (“Registration Rights Agreement”) with DaVita, whereby the Company agreed, subject to DaVita’s delivery of the Ultrafiltration Services Approval, to register the resale of the shares of common stock issuable upon exercise of the DaVita Warrant (“Underlying Shares”) on a Form S-1 or Form S-3, if eligible, upon DaVita’s demand. DaVita has “piggyback” registration rights allowing it to include its Underlying Shares in a registration effected by the Company for stockholders other than DaVita. The Company is responsible for all fees and expenses incident to the performance of or compliance with the Registration Rights Agreement borne by the Company whether or not any registrable securities are sold pursuant to a registration statement. The Registration Rights Agreement also contains customary indemnification provisions.

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Registration Rights

Outstanding Warrants. We intend to register for resale the shares of common stock underlying certain replacement warrants issued to investors under a letter agreement dated February 15, 2017 that was entered into between us and such affiliates to encourage such affiliates to exercise their then-outstanding warrants for cash on or before March 31, 2017. See our Current Reports on Form 8-K filed with the SEC on February 16, 2017 and March 29, 2017 for additional information about the letter agreement and replacement warrants.

Aquadex Acquisition. On August 5, 2016, upon closing of the acquisition of the Aquadex Business, we entered into a registration rights agreement with Baxter, pursuant to which Baxter or its affiliates has the right to request that we file a registration statement with the SEC to register all or part of the 1,666 shares of common stock that Baxter received in connection with the acquisition. Upon receipt of any such request, we have agreed to use reasonable best efforts to prepare and file a registration statement as expeditiously as possible but in any event within 30 days of such request, to cause the registration statement to become effective in accordance with Baxter’s intended method of distribution, and to pay the expenses incurred in connection with any such registration.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company LLC.

Listing

Our common stock trades on The Nasdaq Capital Market under the symbol “CHFS.” See “Prospectus Summary—Recent Developments” in this prospectus for important information about the listing of our common stock on The Nasdaq Capital Market.

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UNDERWRITING

We have entered into an underwriting agreement dated [], 2017 with Ladenburg Thalmann & Co. Inc., as underwriter. Subject to the terms and conditions of the underwriting agreement, the underwriter has agreed to purchase the number of our securities set forth opposite its name below.

Underwriter
Series F Convertible
Preferred Stock and Warrants
Ladenburg Thalmann & Co. Inc.
[]
Total
[]

A copy of the underwriting agreement will be filed as an exhibit to the registration statement of which this prospectus is part.

We have been advised by the underwriter that it proposes to offer the securities directly to the public at the public offering price set forth on the cover page of this prospectus. Any securities sold by the underwriter to securities dealers will be sold at the public offering price less a selling concession not in excess of $[] per fixed combination of a share of Series F convertible preferred stock, a Series 1 warrant and a Series 2 warrant.

The underwriting agreement provides that the underwriter’s obligation to purchase the securities we are offering is subject to conditions contained in the underwriting agreement.

No action has been taken by us or the underwriter that would permit a public offering of the shares of preferred stock and warrants in any jurisdiction outside the United States where action for that purpose is required. None of our securities included in this offering may be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sales of any of the securities offering hereby be distributed or published in any jurisdiction except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons who receive this prospectus are advised to inform themselves about and to observe any restrictions relating to this offering of securities and the distribution of this prospectus. This prospectus is neither an offer to sell nor a solicitation of any offer to buy the securities in any jurisdiction where that would not be permitted or legal.

The underwriter has advised us that they do not intend to confirm sales to any account over which they exercise discretionary authority.

Underwriting Discount and Expenses

The following table summarizes the underwriting discount and commission to be paid to the underwriter by us.

Per Share of
Series F Convertible
Preferred Stock and Warrants
Total
Public offering price
$
[]
$
[]
Underwriting discount to be paid to the underwriter by us (8%)(1)
[]
[]
Proceeds to us (before expenses)
$
[]
$
[]



(1)We have also agreed to reimburse the reasonable, out-of-pocket expenses of the underwriter, including legal fees, in this offering, up to a maximum of $85,000.

We estimate the total expenses payable by us for this offering to be approximately $[      ], which amount includes (i) the underwriting discount of $[      ] and (ii) reimbursement of the accountable expenses of the underwriter, including the legal fees of the underwriter and (iii) other estimated company expenses of approximately $[      ] which includes legal accounting printing costs and various fees associated with the registration and listing of our shares.

The securities we are offering are being offered by the underwriter subject to certain conditions specified in the underwriting agreement.

Other Relationships

Upon completion of this offering, we have granted the underwriter a right of first refusal to act as sole or lead bookrunner or exclusive placement agent in connection with any subsequent public or private offering of equity

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securities or other capital markets financing by us. This right of first refusal extends for 12 months from the closing date of this offering. The terms of any such engagement of the underwriter will be determined by separate agreement.

Determination of Offering Price

The public offering price of the Series F convertible preferred stock we are offering is $1,000 per share. The conversion price per share of the Series F convertible preferred stock is , and the exercise price per share of the warrants is of the consolidated closing bid price of our common stock on The Nasdaq Capital Market on the date we entered into the underwriting agreement. The public offering price of the shares of preferred stock and warrants we are offering, the conversion price and other terms of the Series F preferred stock and the exercise price and other terms of the warrants were negotiated between us and the underwriters, based on the trading of our common stock prior to the offering, among other things, including:

our history and our prospects;
the industry in which we operate;
our past and present operating results;
the previous experience of our executive officers; and
the general condition of the securities markets at the time of this offering, including discussions between the underwriter and prospective investors.

The offering price stated on the cover page of this prospectus should not be considered an indication of the actual value of the securities sold in this offering. That price is subject to change as a result of market conditions and other factors and we cannot assure you that the securities sold in this offering can be resold at or above the public offering price.

Lock-up Agreements

Our officers, directors and each of their respective affiliates and associated partners have agreed with the underwriter to be subject to a lock-up period of 90 days following the date of this prospectus. This means that, during the applicable lock-up period, such persons may not offer for sale, contract to sell, sell, distribute, grant any option, right or warrant to purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any shares of our common stock or any securities convertible into, or exercisable or exchangeable for, shares of our common stock. Certain limited transfers are permitted during the lock-up period if the transferee agrees to these lock-up restrictions. We have also agreed, in the underwriting agreement, to similar lock-up restrictions on the issuance and sale of our securities for 90 days following the closing of this offering, although we will be permitted to issue stock options or stock awards to directors, officers and employees under our existing plans. The underwriter may, in its sole discretion and without notice, waive the terms of any of these lock-up agreements.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company LLC.

Stabilization, Short Positions and Penalty Bids

The underwriter may engage in syndicate covering transactions stabilizing transactions and penalty bids or purchases for the purpose of pegging, fixing or maintaining the price of our common stock;

Syndicate covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. Such a naked short position would be closed out by buying securities in the open market. A naked short position is more likely to be created if the underwriter is concerned that there could be downward pressure on the price of the securities in the open market after pricing that could adversely affect investors who purchase in the offering.
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specific maximum.
Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

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These syndicate covering transactions, stabilizing transactions, and penalty bids may have the effect of raising or maintaining the market prices of our securities or preventing or retarding a decline in the market prices of our securities. As a result the price of our common stock may be higher than the price that might otherwise exist in the open market. Neither we nor the underwriter make any representation or prediction as to the effect that the transactions described above may have on the price of our common stock. These transactions may be effected on the Nasdaq Capital Market, in the over-the-counter market or on any other trading market and, if commenced, may be discontinued at any time.

In connection with this offering, the underwriter also may engage in passive market making transactions in our common stock in accordance with Regulation M during a period before the commencement of offers or sales of shares of our common stock in this offering and extending through the completion of the distribution. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for that security. However, if all independent bids are lowered below the passive market maker’s bid that bid must then be lowered when specific purchase limits are exceeded. Passive market making may stabilize the market price of the securities at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.

Neither we, nor the underwriter make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of our securities. In addition, neither we nor the underwriter make any representation that the underwriter will engage in these transactions or that any transactions, once commenced will not be discontinued without notice.

Indemnification

We have agreed to indemnify the underwriter against certain liabilities, including certain liabilities arising under the Securities Act or to contribute to payments that the underwriter may be required to make for these liabilities.

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

CONSEQUENCES

The following is a general discussion of material U.S. federal income tax considerations relatingrelevant to the purchase, ownership, disposition and conversion of the Series J Convertible Preferred Stock and the acquisition, ownership and disposition of our common stock received upon conversion of the Series FJ Convertible Preferred Stock, or warrants. Thisas well as the purchase, ownership, disposition and exercise of the Warrants. The following discussion is based on currentupon the provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”“Code”), existing and proposed U.S. Treasury Regulations promulgated or proposed thereunder and current administrative and judicial interpretations thereof, all as in effect as of the date of this prospectus and administrative authority, all of which are subject to change, or to differing interpretation, possibly with retroactive effect.effect, or to different interpretations. We cannot assure you that a change in the law will not significantly alter the tax consequences that we describe in this discussion. We have not sought and will not seek any rulingsruling from the Internal Revenue Service (the “IRS”) regardingor opinion of counsel with respect to the matters discussed below. Therestatements made and conclusions reached in this discussion, and there can be no assurance that the IRS or a court will not take a contrary position.

This discussion is limited to U.S. holdersagree with thee statements and non-U.S. holders who hold our common stock, Series F Preferred Stock or warrants as capital assets within the meaning of Section 1221 of the Internal Revenue Code (generally, as property held for investment). conclusions in this discussion.

This discussion does not address all aspects of U.S. federal income taxation such asthat may be relevant to an investor’s decision to purchase the U.S. alternative minimum incomeUnits, nor any tax and the additional tax on net investment income, nor does it address any aspect of state, local or non-U.S. taxes, orconsequences arising under U.S. federal taxes other than income taxes, such as federal estate taxes.or gift tax laws or under the laws of any state, locality or foreign jurisdiction. This discussion does not consider any specific facts or circumstances that may apply to a holder andalso does not address the specialMedicare tax considerationson certain investment income or the tax consequences that may be applicable to particularspecial classes of investors including, but not limited to, tax-exempt organizations, qualified foreign pension funds, insurance companies, banks or other financial institutions, partnerships or other pass-through entities or holders such as:

insurance companies;
tax-exempt organizations;
financial institutions;
brokers orof interests therein, dealers in securities;
securities or currency, persons liable for the alternative minimum tax, U.S. expatriates and former long-term U.S. residents, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, regulated investment companies;
pension plans;
controlledcompanies, real estate investment trusts, “controlled foreign corporations;
passivecorporations,” “passive foreign investment companies;
corporations that accumulate earnings to avoidcompanies,” common trust funds, certain trusts, hybrid entities, U.S. federal income tax;
certainholders whose “functional currency” is not the U.S. expatriates;
U.S.dollar, foreign governments or international organizations and persons that have a “functional currency” other than the U.S. dollar;
persons that acquirewill hold our Series J Convertible Preferred Stock, our common stock received upon conversion of the Series J Convertible Preferred Stock or the Warrants as compensation for services;
owners thata position in a “straddle,” “conversion transaction” or other risk reduction transaction. This discussion is limited to taxpayers who will hold our Series J Convertible Preferred Stock, our common stock received upon conversion of our Series FJ Convertible Preferred Stock and the Warrants as “capital assets” (generally, property held for investment).
If a partnership (including an entity or warrants as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment;
entities that arearrangement treated as disregarded entitiesa partnership for U.S. federal income tax purposes (regardlesspurposes) holds our Series J Convertible Preferred Stock, our common stock received upon conversion of their placesour Series J Convertible Preferred Stock or the Warrants, the tax treatment of organization or formation)a partner in the partnership will generally depend upon the status of the partner and their investors;upon the activities of the partnership. Accordingly, we urge partnerships (including entities and
partnerships or other entities arrangements treated as partnerships for U.S. federal income tax purposespurposes) that hold our Series J Convertible Preferred Stock, our common stock received upon conversion of our Series J Convertible Preferred Stock or the Warrants and partners in such partnerships to consult their investors.tax advisors.

If any entity taxable asThis discussion is addressed to a partnershipholder of our Series J Convertible Preferred Stock, our common stock received upon conversion of the Series J Convertible Preferred Stock or the Warrants that is a U.S. holder or non-U.S. holder for U.S. federal income tax purposes holdspurposes. You are a “U.S. holder” if you are a beneficial owner of Series J Convertible Preferred Stock, our common stock received upon conversion of the Series FJ Convertible Preferred Stock or warrants, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner, the activities of the partnershipWarrants and certain determinations made at the partner level. An investor in a partnership or entity treated as disregardedyou are, for U.S. federal income tax purposes should consult his, her or its own tax advisor regarding the applicable tax consequences relating to the purchase, ownership and disposition of our common stock, Series F Preferred Stock or warrants.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of our common stock, Series F Preferred Stock or warrants that is, for U.S. federal income tax purposes:

anAn individual who is a citizen or resident of the United States;
a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, that was created or organized in or under the laws of the United States, any state thereof or the District of any political subdivision of the United States;Columbia;

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an estate thewhose income of which is subject to U.S. federal income taxationtax regardless of its source; or
a trust if (i) whose administration is subject to the primary supervision of a U.S. court is able to exercise primary supervision over the administration of the trust and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (ii) the trustwhich has made a valid election to be treated as a U.S. person under applicable U.S. Treasury Regulations.person.

A “non-U.S. holder”Holder” is a beneficial ownerholder of our Series J Convertible Preferred Stock, our common stock received upon conversion of the Series J Convertible Preferred Stock or the Warrants who or that is neither a U.S. holder nor a partnership for U.S. federal income tax purposes.

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We urge each prospective investor to consult with its own tax adviser as to the U.S. federal, state, local, foreign and any other tax consequences of the purchase, ownership, conversion and disposition of our Series J Convertible Preferred Stock and of the acquisition, ownership and disposition of our common stock received upon conversion of the Series FJ Convertible Preferred Stock, or warrants thatas well as the purchase, ownership, disposition, and exercise of the Warrants.
General Treatment of Units
There is no authority directly addressing the treatment, for U.S. federal income tax purposes, an individual, corporation, estate or trust thatof instruments with terms substantially the same as the Units and, therefore, their treatment is not entirely clear. The purchase of a Unit should be treated for U.S. holder.

Prospective investorsfederal income tax purposes as the purchase of one share of our Series J Convertible Preferred Stock and one Warrant to acquire one-half of one share of our Series J Convertible Preferred Stock. We intend to treat the purchase of a Unit in this manner and, by purchasing a Unit, you agree to adopt such treatment for tax purposes. Each holder of a Unit must allocate the purchase price paid by such holder for such Unit between the share of our Series J Convertible Preferred Stock and one Warrant to acquire one-half of one share of our Series J Convertible Preferred Stock based on their respective relative fair market values. A holder’s initial tax basis in the one share of our Series J Convertible Preferred Stock and one Warrant to acquire one-half of one share of our Series J Convertible Preferred Stock included in each Unit should equal the portion of the purchase price of the Unit allocated thereto. The separation of the Series J Convertible Preferred Stock and Warrant constituting a Unit should not be a taxable event for U.S. federal income tax purposes.

The foregoing treatment of the Units and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there is no authority that directly addresses instruments that are similar to the Units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. The following discussion is based on the assumption that the characterization of the Series J Convertible Preferred Stock and the Warrant and the allocation described above are respected for U.S. federal income tax purposes.
Each prospective investor is urged to consult their ownits tax advisors regarding the U.S. federal, state, local and non-U.S. incomeany foreign tax consequences of an investment in a Unit (including possible alternative characterizations of a Unit and other tax considerations of purchasing, holdingits components).
U.S. Holders
Distributions on Series J Convertible Preferred Stock or Common Stock
Distributions in General.
Distributions paid on our Series J Convertible Preferred Stock and disposing of our common stock (other than certain stock distributions with respect to our Series FJ Convertible Preferred Stock and common stock) will be treated as dividends to the extent of our current or accumulated earnings and profits, as determined under the Code. To the extent that the amount of distributions with respect to our Series J Convertible Preferred Stock or warrants.

common stock exceeds our current and accumulated earnings and profits, such excess will be treated first as a tax-free return of capital to the extent of (and in reduction of) the U.S. Holders

Purchaseholder’s adjusted tax basis in such Series J Convertible Preferred Stock or common stock, as the case may be, on a share-by-share basis, and thereafter as capital gain. Such gain will be long-term capital gain provided that the U.S. holder has held such Series J Convertible Preferred Stock or common stock, as the case may be, for more than one year as of Series F Preferred Stock the time of the distribution. Subject to applicable limitations and Warrants

Forrestrictions, dividends paid to non-corporate U.S. holders will be subject to a reduced U.S. federal income tax purposes,rate if such dividends are treated as “qualified dividend income” for U.S. federal income tax purposes. Subject to applicable limitations and restrictions, dividends paid to U.S. holders that are U.S. corporations are subject to tax at ordinary corporate income tax rates, but will qualify for the purchasedividends received deduction. However, any distribution (or the portion of any distribution) that exceeds our current and accumulated earnings and profits will not be eligible for the dividends received deduction. A U.S. holder should consult its own tax adviser regarding the availability of the fixed combinationreduced U.S. federal income tax rate applicable to “qualified dividend income” or the dividends received deduction, as applicable, in the light of a share ofits particular circumstances.

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Redemption Premium with respect to the Series FJ Convertible Preferred Stock.
Because the Series J Convertible Preferred Stock and warrantsis being offered at a discount (i.e., the OID) to the Series J Convertible Preferred Stock stated value, which is the price at which the Series J Convertible Preferred Stock will be treated as the purchase of three components: a component consisting of one share of Series F Preferred Stock, a component consisting of one warrant that expiresredeemed on the firstthird anniversary of the date of original issuance of the Series J Convertible Preferred Stock (if not previously converted), we intend to purchase up to 214 sharestake the position that the Series J Convertible Preferred Stock issued in this offering will be issued with a “redemption premium” under Section 305(c) of our common stock, andthe Code that exceeds the statutory de minimis amount. U.S. holders of Series J Convertible Preferred should be treated as receiving constructive distributions as the redemption premium accrues under a component consistingconstant yield method. Such distributions should have the consequences described in “Distributions in General” above.
PIK Dividends Distributions on Series J Convertible Preferred Stock.
Our payment of one warrant that expiresa distribution on the seventh anniversary of the date of issuance to purchase up to 214 shares of our common stock. The purchase price for each fixed combination of a share of Series FJ Convertible Preferred Stock and warrants will be allocated between its components in proportion to the relative fair market value of each at the time the fixed combination of a share ofform Series FJ Convertible Preferred Stock and warrants is purchased by the holder. This allocation of the purchase price for each fixed combination of(i.e., a share of Series F Preferred Stock and warrantsPIK dividend) will establish a holder’s initial tax basisgenerally be taxable for U.S. federal income tax purposes in the same manner as distributions described in “Distributions in General” above. The amount of such distribution will equal the fair market value on the distribution date of the Series FJ Convertible Preferred Stock distributed to a U.S. holder on that date. A U.S. holder’s tax basis in such distributed Series J Convertible Preferred Stock will equal the fair market value of such Series J Convertible Preferred Stock on the distribution date, and warrantssuch U.S. holder’s holding period for such Series J Convertible Preferred Stock will begin on the day following the distribution date.
Extraordinary Dividends.
If a dividend received by a non-corporate U.S. holder that compose each fixedqualifies for the rate reduction for “qualified dividend income” is an “extraordinary dividend” within the meaning of Section 1059 of the Code, such non-corporate U.S. holder would be required to treat any losses on the sale of Series J Convertible Preferred Stock or common stock as long-term capital loss to the extent of such “extraordinary dividend,” irrespective of such holder’s holding period for the stock.
Investors that are U.S. corporations that receive an “extraordinary dividend” within the meaning of Section 1059 of the Code in respect of our Series J Convertible Preferred Stock or common stock generally would be required to reduce their tax basis in our Series J Convertible Preferred Stock or common stock (but not below zero) by the portion of the dividend that is not taxed because of the dividends received deduction. To the extent the non-taxed portion of such dividend exceeds the corporate investor’s stock basis, such investor must treat such excess as gain from the sale or exchange of our Series J Convertible Preferred Stock or common stock for the taxable year in which such dividend is received.
Adjustment to the Conversion Price of Series J Convertible Preferred Stock.
The conversion price of the Series J Convertible Preferred Stock is subject to adjustment under certain circumstances pursuant to the Anti-Dilution Provisions. Treasury Regulations promulgated under Section 305 of the Code would treat a U.S. holder of our Series J Convertible Preferred Stock as having received a constructive distribution includable in such U.S. holder’s income in the manner described in “Distributions in General” above, if and to the extent that certain adjustments (or failures to make adjustments) in the conversion price increase the proportionate interest of the U.S. holder in our assets or earnings and profits. For example, a decrease in the conversion price to reflect a taxable dividend to holders of common stock will generally give rise to a deemed taxable dividend to the holders of Series J Convertible Preferred Stock to the extent of an allocable portion of our current and accumulated earnings and profits. Thus, under certain circumstances, U.S. holders may recognize income in the event of a constructive distribution even though they may not receive any cash or property. Adjustments to the conversion price made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing dilution in the interest of the U.S. holders of the Series J Convertible Preferred Stock (other than an adjustment in respect of a taxable dividend on the common stock), however, generally will not be considered to result in a constructive distribution.
Sale, Exchange or Other Taxable Disposition of Series J Convertible Stock, Common Stock and Warrants
Sale, Exchange or Other Taxable Disposition – General.
A U.S. holder will generally recognize capital gain or loss on a sale, exchange or other taxable disposition of our Series J Convertible Preferred Stock (other than pursuant to a conversion into common stock), our
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common stock, or the Warrants equal to the difference between the amount realized upon the sale, exchange or other taxable disposition (not including any proceeds attributable to any dividends in arrears, which generally will be taxable as described under “Distributions in General” above to U.S. holders who have not previously included such dividends in income) and the U.S. holder’s adjusted tax basis in the shares sold, exchanged or disposed in another taxable transaction. Such capital gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period for the shares sold, exchange or disposed is more than one year. Long-term capital gains of non-corporate taxpayers generally are subject to a reduced rate of taxation. The deductibility of capital losses is subject to limitations.
Redemption of Series J Convertible Preferred Stock.
If we redeem our Series J Convertible Preferred Stock solely in exchange for common stock, the tax consequences to a U.S. holder would be as described in “Conversion of Series J Convertible Preferred Stock into Common Stock” below (except that any common stock received in respect of dividends in arrears generally will be taxable as described in “Distributions in General” above).
If we redeem our Series J Convertible Preferred Stock solely in exchange for cash, the redemption would be treated as a sale or exchange if the redemption (i) results in a meaningful reduction in the U.S. holder’s interest in us or (ii) results in a complete termination of the U.S. holder’s entire equity interest in us (in either case, within the meaning of Section 302(b) of the Code). If the redemption qualifies as a sale or exchange under one of these rules, the tax consequences to a U.S. holder would be as described in “Sale, Exchange or Other Taxable Disposition-General” above. If the redemption does not qualify as a sale or exchange for tax purposes under the rules described above, the amount of cash received by a U.S. holder would be treated as described in “Distributions in General” above.
If we redeem our Series J Convertible Preferred Stock in exchange for a combination of cash and common stock, a shareU.S. holder could not recognize a loss but would recognize gain equal to the lesser of (i) the excess of the sum of the fair market value of the common stock and the amount of cash received (not including any proceeds attributable to any dividends in arrears, which generally will be taxable as described in “Distributions in General” above) over the U.S. holder’s adjusted tax basis in the Series J Convertible Preferred Stock redeemed, and (ii) the amount of cash received by the U.S. holder (not including any proceeds attributable to any dividends in arrears, which generally will be taxable as described under “Distributions in General” above). The character of such gain is uncertain. If the redemption results in a meaningful reduction in the U.S. holder’s interest in us (within the meaning of Section 302(b) of the Code), then the gain would be capital gain that is taxed as described in “Sale, Exchange or Other Taxable Disposition-General” above. If the redemption does not qualify as a sale or exchange for tax purposes under one of these rules, the gain recognized by you would be treated as described in “Distributions in General” above. The initial adjusted tax basis of common stock received by a U.S. holder upon redemption will be equal to the U.S. holder’s aggregate adjusted tax basis in the Series J Convertible Preferred Stock redeemed, reduced by the amount of any cash received (other than cash attributable to accrued but unpaid dividends), and increased by the amount of gain, if any, recognized. The holding period for the shares of common stock received by the U.S. holder upon redemption of the Series J Convertible Preferred Stock generally will include the U.S. holder’s holding period in the Series J Convertible Preferred Stock redeemed, except that the holding period of any common stock received with respect to dividends in arrears will commence on the day after the date of receipt.
Conversion of Series FJ Convertible Preferred Stock and warrants.

Exercise of Warrants

into Common Stock.

A U.S. holder generally will not recognize any gain or loss in respect of the receipt of common stock upon the conversion of our Series J Convertible Preferred Stock into common stock. Cash received in lieu of a fractional share of common stock will generally be treated as a payment in a taxable exchange for such fractional share, and gain or loss will be recognized on the receipt of cash in an amount equal to the difference between the amount of cash received and the amount of adjusted tax basis in the stock that is allocable to the fractional share.
The adjusted tax basis of common stock received on conversion will equal the adjusted tax basis of the Series J Convertible Preferred Stock converted (reduced by the portion of adjusted tax basis allocated to any fractional shares of common stock exchanged for cash, as described above), and the holding period of such common stock received on conversion will generally include the period during which the Series J Convertible
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Preferred Stock was held by the U.S. holder prior to conversion. A U.S. holder’s tax basis in a fractional share will be determined by allocating such U.S. holder’s tax basis in the Series J Convertible Preferred Stock between the common stock such U.S. holder receives upon conversion and the fractional share in accordance with their respective fair market values.
If a U.S. holder exercises its right to convert the Series J Convertible Preferred Stock into shares of common stock after a regular record date but before the Dividend Record Date, then upon conversion, the U.S. holder generally will be required to pay to us in cash an amount equal to the portion of such dividend attributable to the current monthly dividend period. In this case, the U.S. holder will be entitled to receive the dividend payment on the corresponding Dividend Record Date. A U.S. holder should consult its own tax adviser with respect to the treatment of such cash payment and the subsequent receipt of such dividend payment.
Exercise or Lapse of Warrants
A U.S. holder will not recognize gain or loss on the exercise of a warrant and related receipt of shares of our common stock (unless cash is received in lieu of the issuance of a fractional share of our common stock).Warrant. A U.S. holder’s initial tax basis in the sharesone-half of our common stockone share of Series J Convertible Preferred Stock received upon the exercise of a warrantWarrant will be equal to the sum of (a) such U.S. holder’s(i) the initial tax basis of the Warrant exercised (as determined pursuant to the rules discussed in such warrant plus (b)“General Treatment of Units” above) and (ii) the exercise price paid by such U.S. holder onof the exercise of such warrant. AWarrant. The U.S. holder’s holding period for the sharesone-half of our common stockone share of Series J Convertible Preferred Stock received upon the exercise of a warrantWarrant will begin on the day after such exercise (or possibly on the date thatof exercise) and will not include the warrantperiod during which the U.S. holder held the Warrant. If a Warrant is exercised.

In certain limited circumstances,allowed to lapse unexercised, a U.S. holder may be permittedgenerally will recognize a capital loss equal to undertake a cashless exercise of warrants into shares of our common stock. The U.S. federal incomesuch holder’s tax treatment of a cashless exercise of warrants into shares of common stock is unclear, and the tax consequences of a cashless exercise could differ from the consequences upon the exercise of a warrant describedbasis in the preceding paragraph. U.S. holders should consult their own tax advisors regardingWarrant. Such loss will be a long-term capital loss if the U.S. federal income tax consequencesWarrant has been held for more than one year as of a cashless exercisethe date the Warrant lapsed. The deductibility of warrants.

Certain Adjustmentscapital losses is subject to limitations.

Constructive Distributions on the Warrants or Series F Preferred Stock

An

Under Section 305 of the Code, an adjustment to the number of shares of our common stockSeries J Convertible Preferred Stock that will be issued upon the exercise of a warrant or conversion of a share of Series F Preferred Stock,our Warrants, or an adjustment to the exercise price of a warrant,such Warrants, may be treated as a constructive distribution to a U.S. holder of the warrantWarrants if, and to the extent that, such adjustment has the effect of increasing such U.S. holder’s proportionate interest in our “earnings and profits” or shareassets, depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other property to holders of our shareholders)common stock). Adjustments to the exercise price of warrants or conversion price of Series F Preferred Stocka Warrant made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing dilution of the interest of the holders thereofholder of the Warrant should generally should not be considered to result in a constructive distribution. Any such constructive distributiondistributions generally would be taxable whether or not there is an actual distribution of cash or other property. See the more detailed discussion of the rules applicable to distributions made by us under the heading “Distributions on Common Stock or Series F Preferred Stock” below.

Expiration of the Warrants without Exercise

Upon the lapse or expiration of a warrant, a U.S. holder will recognize a loss in an amount equal to such U.S. holder’s tax basis in the warrant. Any such loss generally will be a capital loss and will be long-term capital loss if the warrant is held for more than one year. Deductions for capital losses are subject to certain limitations.

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Conversion of Series F Preferred Stock

A U.S. holder generally will not recognize gain or loss upon the conversion of a share of Series F Preferred Stock into common stock. A U.S. holder’s initial tax basis in the shares of our common stock received upon the conversion of a share of Series F Preferred Stock will be equal to such U.S. holder’s tax basis in the share of Series F Preferred Stock. A U.S. holder’s holding period for the shares of our common stock received upon the conversion of a share of Series F Preferred Stock will include the U.S. holder’s holding period in such share of Series F Preferred Stock.

Distributions on Common Stock or Series F Preferred Stock

If we pay distributions of cash or property with respect to our common stock or Series F Preferred Stock (including constructive distributions as described above under the heading “Certain Adjustments to the Warrants or Series F Preferred Stock”), those distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the U.S. holder’s investment, up to such holder’s tax basis in its shares of our common stock or Series F Preferred Stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described belowin “Distributions in General” above.

Information Reporting and Backup Withholding
In general, information reporting requirements may apply to distributions (whether actual or constructive) paid to a U.S. holder on our Series J Convertible Preferred Stock, our common stock received upon conversion of the Series J Convertible Preferred Stock or the Warrants, and to the proceeds of the sale, exchange or other disposition of our Series J Convertible Preferred Stock our common stock received upon conversion of the Series J Convertible Preferred Stock or the Warrants, unless the U.S. holder is an exempt recipient. Backup withholding will apply to such payments if the U.S. holder fails to provide a taxpayer identification number or a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn). Backup withholding is not an additional tax. Any amounts withheld under the heading “—Gain on Sale, Exchangebackup withholding rules will be allowed as a refund or Other Taxable Disposition.”

Exercise of Warrants and Conversion of Series F Preferred Stock

A non-U.S. holder generally will not be subject toa credit against a U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

U.S. holders are urged to consult their own tax advisers regarding the application of backup withholding in their particular circumstances and the availability of and procedure for obtaining an exemption from backup withholding under current Treasury Regulations.
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Non-U.S. Holders
Distributions on the exercise of the warrants or conversion of shares of Series F Preferred Stock into shares of common stock. However, if a cashless exercise of warrants results in a taxable exchange, as described in “—U.S. Holders - Exercise of Warrants,” the rules described below under “Gain on Sale, Exchange or Other Taxable Disposition” would apply.

Gain on Sale, Exchange or Other Taxable Disposition

Upon the sale or other taxable disposition of common shares, Series FJ Convertible Preferred Stock or warrants, a U.S. holder generally will recognize capital gain or lossCommon Stock

Distributions in an amount equal to the difference between (a) the amount of cash plus the fair market value ofGeneral.
Generally, distributions (including any property received and (b) such U.S. holder’s tax basis in such common shares, Series F Preferred Stock or warrants sold or otherwise disposed of. Such gain or loss generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the common shares, Series F Preferred Stock or warrants have been held by the U.S. holder for more than one year. Preferential tax rates may apply to long-term capital gain of a U.S. holder that is an individual, estate, or trust. Deductions for capital losses are subject to certain limitations.

Non-U.S. Holders

Distributions on Common Stock or Series F Preferred Stock

If we pay distributions of cash or property with respect to our common stock or Series F Preferred Stock (including constructive distributions taxable as dividends as described above under the heading “Certain Adjustments to the Warrants or Series F Preferred Stock”), those distributions generally will constitute dividends for U.S. federal income tax purposes to the extentbelow and any cash paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Ifupon a distribution exceeds our current and accumulated earnings and profits, the excess will beconversion that is treated as a tax-free return of the non-U.S. holder’s investment, up to such holder’s tax basis in its shares of our common stock or Series F Preferred Stock. Any remaining excess will bedividend) treated as capital gain, subject to the tax treatment described below under the heading “—Gain on Sale, Exchange or Other Taxable Disposition.” Dividendsdividend income and paid to a non-U.S. holder generallywith respect to our Series J Convertible Preferred Stock or our common stock will be subject to withholding of U.S. federal income tax at a 30% rateU.S. withholding tax, or such lower rate as may be specified by an applicable income tax treaty betweentreaty. Any required withholding tax might be satisfied by the United States and such holder’s countrywithholding agent through a sale of residence. Ina portion of the case of any constructive distribution, it is possible that this tax wouldshares you receive as a dividend or might be withheld from any amount owed to the non-U.S. holder, including, but not limited to, distributions of cash common stockdividends or sales proceeds subsequently paid or credited to that holder. If we are unable to determine, atyou. To receive the time of paymentbenefit of a distribution, whetherreduced treaty rate, a non-U.S. holder must provide the distribution will constituteapplicable withholding agent with an IRS Form W-8BEN, IRS Form W-8BEN-E, or other appropriate version of IRS Form W-8 certifying qualification for the reduced rate. A non-U.S. holder of our Series J Convertible Preferred Stock or our common stock may obtain a dividend, we may nonetheless choose to withholdrefund of any U.S. federal incomeexcess amounts withheld under these rules if the non-U.S. holder is eligible for a reduced rate of United States withholding tax onand an appropriate claim for refund is timely filed with the distribution as permitted by U.S. Treasury Regulations.

DistributionsIRS.

Dividends that are treated as effectively connected with a trade or business conductedcarried on by a non-U.S. holder within the United States, areand, to the extent an applicable tax treaty provides, attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States, will generally notbe subject to U.S. federal income tax on a net basis at the 30%individual or corporate income tax rates generally applicable to U.S. holders, but will not be subject to U.S. withholding tax if thecertain certification requirements are satisfied. A non-U.S. holder providescan generally meet the certification requirements by providing a properly executed IRS Form W-8ECI stating thator appropriate substitute form to the distributions are not subject toapplicable withholding because they are

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effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States. If a non-U.S. holder is engaged in a trade or business in the United States and the distribution is effectively connected with the conduct of that trade or business, the distribution will generally have the consequences described above for a U.S. holder (subject to any modification provided under an applicable income tax treaty). Any U.S. effectively connected income received by aagent. A non-U.S. holder that is treated as a corporation for U.S. federal income tax purposes may also under certain circumstances, be subject to an additionala “branch profits tax” at a 30% rate (or such lower rate as may be specified by an applicable income tax treaty).

A on its “effectively connected earnings and profits,” subject to certain adjustments, which will include effectively connected dividends.

Redemption Premium with respect to the Series J Convertible Preferred Stock.
As described in “U.S. Holders-Redemption Premium with respect to the Series J Convertible Preferred Stock” above, we intend to take the position that, on account of the OID, the Series J Convertible Preferred Stock issued in this offering will be issued with a “redemption premium” under Section 305(c) of the Code that exceeds the statutory de minimis amount. U.S. holders of Series J Convertible Preferred should be treated as receiving constructive distributions as the redemption premium accrues under a constant yield method. Such distributions should have the consequences described in “non-U.S. Holders—Distributions on Series J Convertible Preferred Stock or Common Stock— Distributions in General” above.
PIK Dividends Distributions on Series J Convertible Preferred Stock.
Any dividends paid on our Series J Convertible Preferred Stock in shares of Series J Convertible Preferred Stock and taxed as dividend income as described in “U.S. Holders—Distributions on Series J Convertible Preferred Stock or Common Stock— PIK Dividends Distributions on Series J Convertible Preferred Stock” above will be subject to withholding tax in the same manner as described in non-U.S. Holders—Distributions on Series J Convertible Preferred Stock or Common Stock— Distributions in General” above.
Adjustment to the Conversion Price of Series J Convertible Preferred Stock.
As described above under “Consequences to U.S. Holders with respect to Series J Convertible Preferred Stock or Common Stock—Adjustment of Conversion Price,” adjustments in the conversion price (or failures to adjust the conversion price) that result in an increase in the proportionate interest of a non-U.S. holder who claimsin our assets or earnings and profits could result in deemed distributions to the benefit of an applicable income tax treaty between the United States and such holder’s country of residence generally will be required to provide a properly executed IRS Form W-8BEN or W-8BEN-E, as applicable, and satisfy applicable certification and other requirements. A non-U.S. holder that are taxed as described in “Distributions in General” above It is eligible for a reduced rate of U.S.possible that any withholding tax under an income tax treaty generally may obtainon such a refunddeemed distribution might be satisfied by the withholding agent through a sale of a portion of the shares you receive as a dividend or creditmight be withheld from cash dividends, shares of any excess amounts withheld by timely filing an appropriate claim with the IRS. Non-U.S. holders should consult their own tax advisors regarding their entitlementour common stock or sale proceeds subsequently paid or credited to benefits under a relevant income tax treaty.you.
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Gain on

Sale, Exchange or Other Taxable Disposition

of Series J Convertible Stock, Common Stock and Warrants

Sale, Exchange or Other Taxable Disposition – General.
Subject to the discussion below in “—Informationunder “Information Reporting and Backup Withholding” and “—Foreign Account Tax Compliance Act,”“and “FATCA” below, a non-U.S. holder generally will not be subject to U.S. federal income or withholding tax on any gain recognizedrealized on athe sale, exchange or other taxable disposition (other than a redemption) of our Series J Convertible Preferred Stock, our common stock Series F Preferred Stock or warrantsthe Warrants unless:

the gain is effectively connected with the non-U.S. holder’s conduct of a U.S. trade or business in the United States and, if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment“permanent establishment” or a “fixed base” maintained by thesuch non-U.S. holder in the United States;States, in these cases,which case the non-U.S. holder generally will be taxed on a net income basissuch gain at the regular graduated U.S. federal income tax rates and in the manner applicable to a U.S. holder,holders (as described in “U.S. Holders-Sale, Exchange or Other Taxable Disposition of Series J Convertible Stock, Common Stock and Warrants-Sale, Exchange or Other Taxable Disposition – General” above and, if the non-U.S. holder is a foreign corporation, an additionalthe branch profits tax at a rate of 30%, or a lower rate asdescribed in “Distributions in General” above also may be specified by an applicable income tax treaty, may also apply;
apply to such gain;
the non-U.S. holder is ana nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the taxable disposition and certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty)treaty between the United States and such holder’s country of residence) on the amountnet gain derived from the taxable disposition, which may be offset by which such non-U.S. holder’s capital gains allocable tocertain U.S. sources exceedsource capital losses allocable to U.S. sources during the taxable year of the disposition;non-U.S. holder, if any; or
we are, or werehave been, at any time during the five-year period preceding such taxable disposition (or the non-U.S. holder’s holding period, if shorter) a “U.S. real property holding corporation” during(“USRPHC”). We believe that we are not, and we do not expect to be for the shorterforeseeable future, a USRPHC (and this discussion assumes we are not and will not be a USRPHC).
Redemption of Series J Convertible Preferred Stock.
If we redeem our Series J Convertible Preferred Stock solely in exchange for common stock, the tax consequences to a non-U.S. holder would be as described above under “U.S. Holders—Conversion of Series J Convertible Preferred Stock into Common Stock” (except that any common stock received in respect of dividends in arrears generally will be taxable as described in “Sale, Exchange, or Other Taxable Disposition – General” above).
If we redeem our Series J Convertible Preferred Stock solely in exchange for cash, the redemption would be treated as a sale or exchange if the redemption results in a meaningful reduction in the non-U.S. holder’s interest in us, or results in a complete termination of the five-year period ending on the date of the disposition or the period that the non-U.S. holder held our common stock. Generally, a corporation is a “U.S. real property holding corporation” if the fair market value of its “U.S. real property interests” (withinholder’s entire equity interest in us (in each case, within the meaning of Section 302(b) of the Internal Revenue Code) equals. If the redemption qualifies as a sale or exceeds 50%exchange under one of these rules, the tax consequences to a non-U.S. holder would be as described in “Sale, Exchange or Other Taxable Disposition – General” above. If the redemption does not qualify as a sale or exchange for tax purposes under the rules described above, the amount of cash received by a non-U.S. holder would be treated as described in “Distributions in General” above.
If we redeem our Series J Convertible Preferred Stock in exchange for a combination of cash and common stock, a non-U.S. holder would recognize gain (but not loss) equal to the lesser of (i) the excess of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for usethe common stock and the amount of cash received (not including any proceeds attributable to any dividends in arrears, which generally will be taxable as described under “Distributions in General” above) over the non-U.S. holder’s adjusted tax basis in the Series J Convertible Preferred Stock redeemed, and (ii) the amount of cash received by the non-U.S. holder (not including any proceeds attributable to any dividends in arrears, which generally will be taxable as described under “Distributions in General” above).
The tax treatment of any such gain to non-U.S. holders is uncertain. If the redemption results in a trademeaningful reduction in the non-U.S. holder’s interest in us (in either case, within the meaning of Section 302(b) of the Code), then the gain generally would be taxed only as described under “Sale, Exchange or business. We believeOther Taxable Disposition – General” above. If the redemption does not qualify as a sale or exchange for tax purposes under
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one of these rules, the gain generally would be treated as described under “Distributions in General” above. Because the characterization of a taxable redemption of the Series J Convertible Preferred Stock is uncertain and is determined on a holder-by-holder basis, it is possible that we area withholding agent would withhold on the cash proceeds received.
Conversion of Series J Convertible Preferred Stock into Common Stock.
You generally will not currently, and we do not anticipate becoming, a “U.S. real property holding corporation” forrecognize any gain or loss by reason of receiving common stock upon conversion of the Series J Convertible Preferred Stock, except gain or loss will be recognized with respect to any cash received in lieu of fractional shares, which may be subject to U.S. federal income tax, purposes.as discussed in “Sale, Exchange or Other Taxable Disposition – General” above.
Exercise or Lapse of Warrants

In general, a non-U.S. holder will not be required to recognize gain or loss upon the exercise of a Warrant by payment of the exercise price. The lapse of a Warrant will be treated as if the non-U.S. holder sold or exchanged the Warrant and recognized a capital loss equal to the non-U.S. holder’s basis in the Warrant. A non-U.S. holder will not be able to utilize a loss recognized upon expiration of a Warrant against the non-U.S. holder’s U.S. federal income tax liability, however, unless the loss (i) is effectively connected with the non-U.S. holder’s conduct of a trade or business within the United States (and, if an income tax treaty applies, is attributable to a “permanent establishment” or “fixed base” in the United States) or (ii) is treated as a U.S. source loss and the non-U.S. holder is present in the United States 183 days or more in the taxable year of disposition and certain other conditions are met.
Constructive Distributions on the Warrants
As described in “U.S. Holders—Constructive Distributions on the Warrants” above, an adjustment to the Warrants could result in a constructive distribution to a non-U.S. holder, which would be treated as described in “Distributions in General” above. Any resulting withholding tax attributable to deemed dividends would be collected from other amounts payable or distributable to the non-U.S. holder.
Non-U.S. holders should consult their tax advisors regarding the tax treatment of any adjustments to the Warrants.
Information Reporting and Backup Withholding

Distributions on,Withholding.

Payment of dividends (including constructive dividends), and the tax withheld with respect thereto, is subject to information reporting requirements. These information reporting requirements apply regardless of whether withholding was reduced or eliminated by an applicable tax treaty or withholding was not required because the dividends were effectively connected with a trade or business in the United States conducted by the non-U.S. holder. Copies of the information returns reporting such dividends and withholding may also be made available under the provisions of an applicable tax treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides. U.S. backup withholding will generally apply to the payment of dividends to non-U.S. holders unless such non-U.S. holders furnish to the payor a Form W-8BEN or Form W-8BEN-E (or other applicable form) or otherwise establish an exemption.
Payment by a U.S. office of a broker of the proceeds of a dispositionsale of our Series J Convertible Preferred Stock, our common stock or the Warrants is subject to both backup withholding and information reporting unless the non-U.S. holder, or beneficial owner thereof, as applicable, certifies that it is a non-U.S. holder on Form W-8BEN or Form W-8BEN-E (or other suitable substitute or successor form), or otherwise establishes an exemption. Subject to certain exceptions, backup withholding and information reporting generally will not apply to a payment of proceeds from the sale of our Series FJ Convertible Preferred Stock, our common stock or warrants generally will be subject to information reportingthe Warrants if made within the United States orsuch sale is effected through certain U.S.-related financial intermediaries. Information returns are required to be filed with the IRS and copies of information returns may be made available to the tax authorities of the country in which a holder resides or is incorporated under the provisionsforeign office of a specific treaty or agreement.

Backup withholding may also apply ifbroker, provided that the holder fails to provide certification of exempt status or a correctbroker does not have certain U.S. taxpayer identification number and otherwise comply with the applicable backup withholding requirements. Generally, a holder will not be subject to backup withholding if it provides a properly completed and executed IRS Form W-9 or appropriate IRS Form W-8, as applicable. Backup withholding is not an additional tax. connections.

Amounts withheld under the backup withholding rules from a payment to a non-U.S. holder are not additional taxes and may be refunded or credited against thesuch holder’s U.S. federal income tax liability (if any), which may entitle the holder to a refund if any,in excess of such liability, provided certain information isthat the holder timely filed with the IRS.

provides

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Foreign Account Tax Compliance Act

Legislation

the required information to the IRS. Non-U.S. holders are urged to consult their own tax advisers regarding the application of backup withholding in their particular circumstances and the availability of and procedure for obtaining an exemption from backup withholding under current Treasury Regulations.
FATCA.
Sections 1471 to 1474 of the Code (such sections, and the Treasury Regulations and administrative guidance issued thereunder, commonly referred to as “FATCA”) impose a 30% U.S. withholding tax on certain “withholdable payments” made to a “foreign financial institution” or a “non-financial foreign entity.” “Withholdable payments” include payments of dividends. In general, if a holder is a “foreign financial institution” (which includes investment entities such as hedge funds and private equity funds), the Foreign Account Tax Compliance Act, or30% withholding tax will apply to withholdable payments made to such holder, unless such holder enter into an agreement with the U.S. Department of Treasury to collect and provide substantial information regarding its U.S. account holders, including certain account holders that are foreign entities with U.S. owners. If such holder is a “non-financial foreign entity,” FATCA also generally imposeswill impose a U.S. federal withholding tax of 30% on withholdable payments made to certain non-U.S. entities (including certain intermediaries)such holder unless such persons complythe holder provide the withholding agent with FATCA’s information reportinga certification that it does not have any “substantial United States owners” or a certification identifying its direct and indirect substantial United States owners. Intergovernmental agreements between the United States and a holder’s resident country may modify some of the foregoing requirements. The Treasury Secretary has issued proposed regulations providing that the withholding regime. This regime and its requirements are different from, and in additionprovisions under FATCA do not apply with respect to the certification requirements described elsewhere in this discussion. Thegross proceeds from a sale or other disposition of Class J Common Stock, which may be relied upon by taxpayers until final regulations are issued.
Non-U.S. holders should consult their own tax advisers with respect to the U.S. federal income tax consequences of FATCA withholding rules applyon their ownership and disposition of our Series J Convertible Preferred Stock, our common stock and the Warrants.
Excise Tax
We may be subject to dividend payments and,the Excise Tax (as defined below) included in the caseInflation Reduction Act (“IRA”) enacted in August 2022 in connection with redemptions of our Series J Convertible Preferred Stock or our common stock. In particular, an excise tax is imposed on “covered corporations” (generally, publicly-traded domestic corporations) equal to 1% of the fair market value of certain sales or other dispositions occurringstock repurchased after December 31, 2018 (including a distribution2022 (the “Excise Tax”). The Excise Tax base is reduced by the fair market value of any issuances of the covered corporation’s stock during its taxable year. The fair market value of any of shares our Series J Convertible Preferred Stock or common stock that are redeemed may exceed the fair market value of any of our stock issued during the same taxable year. Consequently, the Excise Tax may reduce the amount of cash we have available to the extent itshareholders.
The preceding discussion of material U.S. federal income tax consequences is treated as a return of capital or capital gain), the gross proceeds of such disposition.

The United States has entered into, and continues to negotiate, intergovernmental agreements (each, an “IGA”) with a number of other jurisdictions to facilitate the implementation of FATCA. An IGA may significantly alter the application of FATCA and its information reporting and withholding requirements with respect to any particular investor. FATCAfor informational purposes only. It is particularly complex and its application remains uncertain.not tax advice. Prospective investors should consult their own tax advisors regarding howthe particular U.S. federal, state, local and non-U.S. tax consequences of purchasing, holding and disposing of our Units, Series J Convertible Preferred Stock, our common stock or the Warrants, including the consequences of any proposed changes in applicable laws.

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PLAN OF DISTRIBUTION
We are offering on a best efforts basis up to 400,000 Units, at an assumed offering price of $15.00 per Unit, for gross proceeds of up to $6 million, before deduction of placement agent fees and offering expenses.
Because this is a best efforts offering, the placement agents do not have an obligation to purchase any 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.
Pursuant to a placement agency agreement, we have engaged Lake Street Capital Markets, LLC (“Lake Street”) and Maxim Group LLC (“Maxim”) to act as the placement agents (the “placement agents”) to solicit offers to purchase the securities offered by this prospectus. The placement agents are not purchasing or selling any securities, nor are they required to arrange for the purchase and sale of any specific number or dollar amount of securities, other than to use their “reasonable best efforts” to arrange for the sale of the securities by us. Therefore, we may not sell the entire amount of securities being offered. There is no minimum amount of proceeds that is a condition to closing of this offering. We will enter into a securities purchase agreement directly with the investors, at the investor’s option, who purchase our securities in this offering. Investors who do not enter into a securities purchase agreement shall rely solely on this prospectus in connection with the purchase of our securities in this offering. The placement agents may engage one or more subagents or selected dealers in connection with this offering.
The placement agency agreement provides that the placement agents’ obligations are subject to conditions contained in the placement agency agreement.
We will deliver the securities being issued to the investors upon receipt of investor funds for the purchase of the securities offered pursuant to this prospectus.
Placement Agent Fees, Commissions and Expenses
Upon the closing of this offering, we will pay the placement agents a cash transaction fee equal to 8.0% of the aggregate gross cash proceeds to us from the sale of the securities in the offering. Pursuant to the placement agency agreement, we will agree to reimburse the placement agents for certain out-of-pocket expenses of the placement agents payable by us, in an aggregate amount not to exceed $100,000. The placement agency agreement, however, will provide that in the event this offering is terminated, the placement agents will only be entitled to the reimbursement of out-of-pocket accountable expenses actually incurred in accordance with Financial Industry Regulatory Authority, Inc. (“FINRA”) Rule 5110(f)(2)(C).
The following table shows the public offering price, placement agents’ fees and proceeds, before expenses, to us.
 
​​
Per Unit
​​
Total
Public offering price
​​
$15.00
​​
$6,000,000
Placement agents’ fees (8.0%)
​​
$​1.20
​​
$​480,000
Proceeds, before expenses, to us
​​
$13.80
​​
$5,520,000
We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the placement agents’ commission, will be approximately $375,792, all of which are payable by us. This figure includes, among other things, the placement agents’ fees and expenses (including the legal fees, costs and expenses for the Placement Agent’s legal counsel) up to $100,000.
Determination of Offering Price
Our common stock is currently traded on the Nasdaq Capital Market under the ticker symbol “NUWE.” On September 27, 2023, the closing price of our common stock was $1.53 per share.
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The public offering price of the Units offered by this prospectus were negotiated between us, the placement agents and the investors in the offering based on the trading of our shares of common stock prior to the offering, among other things. Among the other factors that were considered in determining the public offering price of the Units:
our history and our prospects;
the industry in which we operate;
our past and present operating results;
the previous experience of our executive officers; and
the general condition of the securities markets at the time of this offering.
Lock-Up Agreements
We have agreed with the placement agents not to, subject to certain exceptions, (i) offer, pledge, issue, sell, contract to sell, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for our common stock; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of shares of our common stock; or (iii) file any registration statement with the SEC relating to this offering of any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock, other than with respect to the registration of shares of our common stock to be issued under an equity incentive plan, without the prior written consent of the placement agents for a period of 90 days following the date of this prospectus (the “Lock-Up Period”). This consent may be given at any time. These restrictions on future issuances are subject to exceptions for (i) the filing by the Company of a registration statement on Form S-4 or a registration statement on Form S-8 or a successor form thereto with respect to securities pursuant to any stock option, stock bonus or other stock plan or arrangement or the proposal or authorization of any increase in the Company’s authorized capital stock, (ii) the issuance of securities sold in this offering, and the issuance of securities upon the conversion or exercise of securities sold in this offering, (iii) the issuance of shares of our common stock upon the exercise of outstanding options or warrants or the vesting of outstanding restricted stock units, (iv) the issuance of employee stock options not exercisable during the Lock-Up Period and the grant or forfeiture of restricted stock awards or restricted stock units pursuant to our equity incentive plans or other arrangements described in this prospectus or the documents incorporated by reference herein and (v) the issuance of securities issued pursuant to certain acquisitions or strategic transactions not primarily for the purpose of raising capital.
In addition, our directors and executive officers have entered into lock-up agreements with the placement agents. Under these agreements, these individuals have agreed, subject to certain specified exceptions, not to sell or transfer any shares of common stock or securities convertible into or exchangeable or exercisable for our shares of common stock during the Lock-Up Period, without first obtaining the written consent of the placement agents. Specifically, these individuals have agreed, in part, not to:
(1)
offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock (including without limitation, our common stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant), whether now owned or hereafter acquired (the “Undersigned’s Securities”);
(2)
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Undersigned’s Securities;
whether any such transaction described in clause (1) or (2) above is to be settled by delivery of our common stock or such other securities, in cash or otherwise;
(3)
make any demand for or exercise any right with respect to the registration of any shares of our common stock or any security convertible into or exercisable or exchangeable for our common stock; or
(4)
publicly announce or disclose the intention to do any of the foregoing.
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Other Relationships
The Placement Agents and their affiliates may in the future provide various investment banking and other financial services for us and our affiliates for which they may in the future receive customary fees.
Common Stock Listing
Our common stock is currently listed on The Nasdaq Capital Market under the symbol “NUWE.” We do not intend to list the warrants or preferred stock to be sold in this offering on any stock exchange or other trading market.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Equiniti Trust Company, LLC.
Electronic Offer, Sale and Distribution of Shares
This registration statement may be made available in electronic format on websites or through other online services maintained by the placement agents, or their affiliates. Other than this registration statement in electronic format, the information on any placement agent’s websites and any information contained in any other websites maintained by the placement agents are not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or either placement agent, and should not be relied upon by investors.
Right of First Refusal
We have granted the Placement Agents (or any affiliate designated by the Placement Agents) the right to provide investment banking services to us on an exclusive basis in all matters involving our equity securities or other instruments that may at any time be convertible into, exchangeable for, or otherwise entitle the holder thereof to receive, directly or indirectly, equity securities of us, for which investment banking services are sought by us (the “Right of First Refusal”), for the period commencing on the date hereof and ending on the 6-month following the consummation of this offering. The Right of First Refusal shall be subject to FINRA Rule 5110(g)(5)(B), including that (i) the Right of First Refusal may be terminated by us for “cause”, and (ii) our exercise of the right of “termination for cause” eliminates any obligations with respect to the payment of any termination fee or provision of any right of first refusal.
Tail
We have also agreed to pay the Placement Agents a tail fee equal to the cash compensation in this offering, if any investor, who was contacted or introduced to us by the Placement Agents during the term of their engagement who was not a prior investor in us, provides us with capital in any public or private offering or other financing or capital raising transaction during the 6-month period following consummation of this offering, subject to certain exceptions.
Indemnification
We have agreed to indemnify the placement agents against certain liabilities, including certain liabilities arising under the Securities Act or to contribute to payments that the placement agents may be required to make for these liabilities.
Regulation M
The placement agents may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by them and any profit realized on the resale of the securities sold by them while acting as principal may be deemed to be underwriting discounts or commissions under the Securities Act. As underwriter, the placement agents would be required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of our securities by the placement agents acting as principal. Under these rules and regulations, the placement agents (i) may apply not engage
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in any stabilization activity in connection with our securities and (ii) may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until they have completed their participation in the distribution.
Offer Restrictions Outside the United States
Other than in the United States, no action has been taken by us or the Placement Agent that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
Selling Restrictions
Notice to prospective investors in the United Kingdom
In relation to the United Kingdom, no securities have been offered or will be offered to the public in the United Kingdom prior to the publication of a prospectus in relation to the securities which has been approved by the competent authority in the United Kingdom, except that offers of securities may be made to the public in the United Kingdom at any time under the following exemptions under the Prospectus Regulation:
i.
to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
ii.
to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation), subject to obtaining the prior consent of the placement agents; or
iii.
in any other circumstances falling within Article 1(4) of the Prospectus Regulation;
provided that no such offer of shares shall require the issuer or any placement agent to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation and each person who initially acquires any securities or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with each of the placement agents and us that it is a “qualified investor” within the meaning of Article 2(e) of the Prospectus Regulation. In the case of any securities being offered to a financial intermediary as that term is used in the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the securities acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any securities to the public other than their offer or resale in the United Kingdom to qualified investors as so defined or in circumstances in which the prior consent of the placement agents have been obtained to each such proposed offer or resale.
For the purposes of this provision, the expression an “offer to the public” in relation to any securities in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to decide to purchase or subscribe for any securities, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129. References to the Prospectus Regulation includes, in relation to the United Kingdom, the Prospectus Regulation as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.
In addition, in the United Kingdom, this prospectus is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the Prospectus Regulation) (i) who have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or the Order and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order, all such persons together being referred to as “relevant persons” or otherwise in circumstances which have not resulted and will not result in an offer to the public of the securities in the United Kingdom within the meaning of the Financial Services and Markets Act 2000.
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Any person in the United Kingdom that is not a relevant person should not act or rely on the information included in this prospectus or use it as basis for taking any action. In the United Kingdom, any investment or investment activity that this prospectus relates to may be made or taken exclusively by relevant persons.
Notice to prospective investors in Canada
The securities may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Notice to prospective investors in Australia
This prospectus:
does not constitute a disclosure document or a prospectus under Chapter 6D.2 of the Corporations Act 2001 (Cth), or the Corporations Act;
has not been, and will not be, lodged with the Australian Securities and Investments Commission, or ASIC, as a disclosure document for the purposes of the Corporations Act and does not purport to include the information required of a disclosure document for the purposes of the Corporations Act; and
may only be provided in Australia to select investors who are able to demonstrate that they fall within one or more of the categories of investors, available under section 708 of the Corporations Act, or the Exempt Investors.
The securities may not be directly or indirectly offered for subscription or purchased or sold, and no invitations to subscribe for or buy the securities may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any securities may be distributed in Australia, except where disclosure to investors is not required under Chapter 6D of the Corporations Act or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the securities, you represent and warrant to us that you are an Exempt Investor.
As any offer of securities under this prospectus will be made without disclosure in Australia under Chapter 6D.2 of the Corporations Act, the offer of those securities for resale in Australia within 12 months may, under section 707 of the Corporations Act, require disclosure to investors under Chapter 6D.2 if none of the exemptions in section 708 applies to that resale. By applying for the securities, you undertake to us that you will not, for a period of 12 months from the date of issue of the securities, offer, transfer, assign or otherwise alienate those securities to investors in Australia except in circumstances where disclosure to investors is not required under Chapter 6D.2 of the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.
Notice to prospective investors in the British Virgin Islands
The securities are not being, and may not be offered to the public or to any person in the British Virgin Islands for purchase or subscription by or on behalf of us. The securities may be offered to companies incorporated under the BVI Business Companies Act, 2004 (British Virgin Islands), or BVI Companies, but only
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where the offer will be made to, and received by, the relevant BVI Company entirely outside of the British Virgin Islands. This prospectus has not been, and will not be, registered with the Financial Services Commission of the British Virgin Islands. No registered prospectus has been or will be prepared in respect of the securities for the purposes of the Securities and Investment Business Act, 2010 or the Public Issuers Code of the British Virgin Islands.
Notice to prospective investors in Israel
In the State of Israel, this prospectus shall not be regarded as an offer to the public to purchase the securities under the Israeli Securities Law, 5728-1968, which requires a prospectus to be published and authorized by the Israel Securities Authority, if it complies with certain provisions of Section 15 of the Israeli Securities Law, 5728-1968, including, inter alia, if: (i) the offer is made, distributed or directed to not more than 35 investors, subject to certain conditions, or the Addressed Investors; or (ii) the offer is made, distributed or directed to certain qualified investors defined in the First Addendum of the Israeli Securities Law, 5728-1968, subject to certain conditions, or the Qualified Investors. The Qualified Investors shall not be taken into account in the count of the Addressed Investors and may be offered to purchase securities in addition to the 35 Addressed Investors. The company has not and will not take any action that would require it to publish a prospectus in accordance with and subject to the Israeli Securities Law, 5728-1968. We have not and will not distribute this prospectus or make, distribute or direct an offer to subscribe for the securities to any person within the State of Israel, other than to Qualified Investors and up to 35 Addressed Investors. Qualified Investors may have to submit written evidence that they meet the definitions set out in of the First Addendum to the Israeli Securities Law, 5728-1968. In particular, circumstances.

we may request, as a condition to be offered common stock, that Qualified Investors will each represent, warrant and certify to us and/or to anyone acting on our behalf: (i) that it is an investor falling within one of the categories listed in the First Addendum to the Israeli Securities Law, 5728-1968; (ii) which of the categories listed in the First Addendum to the Israeli Securities Law, 5728-1968 regarding Qualified Investors is applicable to it; (iii) that it will abide by all provisions set forth in the Israeli Securities Law, 5728-1968 and the regulations promulgated thereunder in connection with the offer of the securities; (iv) that the securities that it will be issued are, subject to exemptions available under the Israeli Securities Law, 5728-1968: (a) for its own account; (b) for investment purposes only; and (c) not issued with a view to resale within the State of Israel, other than in accordance with the provisions of the Israeli Securities Law, 5728-1968; and (v) that it is willing to provide further evidence of its Qualified Investor status. Addressed Investors may have to submit written evidence in respect of their identity and may have to sign and submit a declaration containing, inter alia, the Addressed Investor’s name, address and passport number or Israeli identification number.
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LEGAL MATTERS

Honigman Miller Schwartz and Cohn LLP, Kalamazoo, Michigan, will issue a legal opinion as to the validity of the securities offered by this prospectus. Ellenoff GrossmanSullivan & ScholeWorcester, LLP, New York, New York, is acting as counsel forto the underwriterplacement agents in connection with certain legal matters in connection withrelated to this offering.

EXPERTS

The

Baker Tilly US, LLP, our independent registered public accounting firm, has audited our consolidated financial statements as of Sunshine Heart, Inc. (now known as CHF Solutions, Inc.) and Subsidiaries appearingfor the years ended December 31, 2022 and 2021 included in Sunshine Heart, Inc.’s (now known as CHF Solutions, Inc.) our Annual Report (Form 10-K)on Form 10-K for the year ended December 31, 2016, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph describing conditions that raise substantial doubt about the Company’s ability to continue as a going concern as described in Note 1 to the consolidated financial statements),2022, which are incorporated by reference therein,into this prospectus and incorporated herein by reference. Such consolidated financial statementselsewhere in the registration statement, and are incorporated herein by referenceincluded in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file reports, proxy statements and other information with the SEC in accordance with the Exchange Act. Our reports, proxy statements and other information filed with the SEC are available free of charge to the public over the Internet at the SEC’s website at http://www.sec.gov. These documents may also be accessed on our website at www.nuwellis.com. Information contained in, or accessible through, our website is not a part of this prospectus.

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INFORMATION INCORPORATED BY REFERENCE
SEC rules allow us to “incorporate by reference” into this prospectus much of the information we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference into this prospectus, including the consolidated financial statements, is considered to be part of this prospectus. These documents may include Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements. You should read the information incorporated by reference because it is an important part of this prospectus.
This prospectus incorporates by reference the documents listed below, other than those documents or the portions of those documents deemed to be furnished and not filed in accordance with SEC rules:
•
our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 3, 2023;
•
our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 9, 2023; and for the quarter ended June 30, 2023, filed with the SEC on August 8, 2023;
•
our Current Reports on Form 8-K filed with the SEC on January 5, 2023, January 18, 2023, March 1, 2023, May 22, 2023, June 5, 2023, June 21, 2023, August 8, 2023, and August 18, 2023;
•
the information specifically incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2022 from our definitive proxy statement for the annual meeting of stockholders held on May 19, 2023, filed with the SEC on April 7, 2023;
•
our definitive proxy statement for the annual meeting of stockholders held on May 19, 2023, filed with the SEC on April 7, 2023;
•
the description of our common stock in our registration statement on Form 10 filed with the SEC on September 30, 2011, including any amendment or report filed for the purpose of updating such description; and
•
the description of our Series A Junior Participating Preferred Stock, par value $0.0001 per share, in our registration statement on Form 8-A filed with the SEC on June 14, 2013.
All documents we file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, except as to any portion of any report or document that is not deemed filed under such provisions, (i) on or after the date of filing of the registration statement containing this prospectus and prior to the effectiveness of the registration statement and (ii) on or after the date of this prospectus until the earlier of the date on which all of the securities registered hereunder have been sold or this prospectus has been withdrawn, shall be deemed incorporated by reference in this prospectus and to be a part of this prospectus from the date of filing of those documents. The information in documents that we file in the future will update and supersede the information currently included and incorporated by reference in this prospectus. Nothing in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC pursuant to Item 2.02 or 7.01 of Form 8-K.
These documents may also be accessed on our website at https://www.nuwellis.com/. Information contained in, or accessible through, our website is not a part of this prospectus.
We will provide without charge to each person, including any beneficial owners, to whom this prospectus is delivered, upon his or her written or oral request, a copy of any or all reports or documents referred to above which have been or may be incorporated by reference into this prospectus but not delivered with this prospectus, excluding exhibits to those reports or documents unless they are specifically incorporated by reference into those documents. You may request a copy of these documents by writing or telephoning us at the following address:
Nuwellis, Inc.
12988 Valley View Road
Eden Prairie, Minnesota 55344
(952) 345-4200
ir@nuwellis.com
Attention: Robert B. Scott
Chief Financial Officer
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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.
Other Expenses of Issuance and Distribution.

The following table sets forth the estimated costs and expenses, other than placement agent fees and commissions, to be incurred in connection with the issuance and distribution of the securities registered under this Registration Statement. All amounts are estimates except the Securities and Exchange Commission registration fee and the FINRA filing fee.

 
Amount to be Paid
SEC registration fee
$
2,148
 
FINRA filing fee
$
3,000
 
Legal fees and expenses
$
100,000
 
Printing expenses
$
15,000
 
Accountant’s fees and expenses
$
75,000
 
Transfer agent and registrar fees
$
5,000
 
Miscellaneous expenses
$
14,852
 
Total
$
215,000
 
​​
Amount to
be Paid
SEC registration fee
​​
$​992
FINRA filing fee
​​
2,300
Legal fees and expenses
​​
235,000
Printing expenses
​​
33,500
Accountant’s fees and expenses
​​
65,000
Warrant agent fees
​​
12,000
Transfer agent and registrar fees
​​
12,000
Miscellaneous fees and expenses
​​
15,000
Total
​​
$375,792
Item 14.
Indemnification of Directors and Officers.

Our certificate of incorporation and bylaws provide that each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or an officer of CHF Solutions,Nuwellis, Inc. or is or was serving at our request as a director, officer, or trustee of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director, officer or trustee or in any other capacity while serving as a director, officer or trustee, shall be indemnified and held harmless by us to the fullest extent authorized by the Delaware General Corporation Law, as amended (the “DGCL”), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such.

Section 145 of the DGCL permits a corporation to indemnify any director or officer of the corporation against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding brought by reason of the fact that such person is or was a director or officer of the corporation, if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reason to believe his or her conduct was unlawful. In a derivative action, (i.e., one brought by or on behalf of the corporation), indemnification may be provided only for expenses actually and reasonably incurred by any director or officer in connection with the defense or settlement of such an action or suit if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be provided if such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine that the defendant is fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.

Pursuant to Section 102(b)(7) of the DGCL, our certificate of incorporation eliminates the liability of a director to us or our stockholders for monetary damages for such a breach of fiduciary duty as a director, except for liabilities arising:

from any breach of the director’s duty of loyalty to us or our stockholders;
from acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
under Section 174 of the DGCL; and
from any transaction from which the director derived an improper personal benefit.

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We carry insurance policies insuring our directors and officers against certain liabilities that they may incur in their capacities as directors and officers.

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The Company has entered into indemnification agreements with each of its directors and executive officers. Pursuant to the indemnification agreements, the Company agrees to hold harmless and indemnify its directors and executive officers to the fullest extent authorized or permitted by the provisions of the Company’s certificate of incorporation and bylaws and the DGCL, including for any amounts that such director or officer becomes obligated to pay because of any claim to which such director or officer is made or threatened to be made a party, witness or participant, by reason of such director’s or officer’s service as a director, officer, employee or other agent of the Company.

There are certain exceptions from the Company’s obligation to indemnify its directors and executive officers pursuant to the indemnification agreements, including for “short-swing” profit claims under Section 16(b) of the Exchange Act, losses that result from conduct that is established by a final judgment as knowingly fraudulent or deliberately dishonest or that constituted willful misconduct, or that constituted a breach of the duty of loyalty to the Company or resulted in any improper personal profit or advantage, where payment is actually made to a director or officer under an insurance policy, indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement, for indemnification which is not lawful, or in connection with any proceeding initiated by such director or officer, or any proceeding against the Company or its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the board of directors of the Company, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the DGCL, or (iv) the proceeding is initiated to enforce a claim for indemnification pursuant to the indemnification agreement.

All agreements and obligations of the Company contained in the indemnification agreements shall continue during the period when the director or officer who is a party to an indemnification agreement is a director, officer, employee or other agent of the Company (or is or is serving at the request of the Company as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as such director or officer shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative. In addition, the indemnification agreements provide for partial indemnification and advance of expenses.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers or controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission this indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

Item 15.
Recent Sales of Unregistered Securities.

The following sets forth information regarding all unregistered securities sold by the registrant in the three years preceding the date of this registration statement. This information has been retroactively adjusted to reflect the reverse stock splits for all periods presented.

On February 18, 2015,June 19, 2023, the registrant entered intogranted a loan agreementwarrant to DaVita, Inc. (“DaVita”), pursuant to a Supply and Collaboration Agreement (“Supply Agreement”) dated as of June 19, 2023, pursuant to which DaVita will pilot the Aquadex ultrafiltration therapy system to treat adult patients with Silicon Valley Bank under whichcongestive heart failure and related conditions within select U.S. markets. The warrant represents the registrant issued to Silicon Valley Bank and its affiliate, Life Science Loans, LLC, warrantsright to purchase up to an aggregate of 1,289,081 shares of its common stock equalof the Company, par value $0.0001 per share, at an exercise price of $3.2996 per share, provided that at no time can it be exercised for an amount of shares that would represent greater than 19.9% ownership in the Company (the “DaVita Warrant”) subject to 6%certain vesting milestones. The DaVita Warrant is expected to vest in four tranches as follows (i): 25% upon the Company’s receipt of notice to extend the Supply Agreement past the initial pilot-term (the “Ultrafiltration Services Approval”); (ii) 25% upon the attainment by the Company of a $6.0 million term loan dividednet revenue achievement from DaVita’s efforts pursuant to the Supply Agreement within twelve months of the Ultrafiltration Services Approval; (iii) 25% upon the attainment by the lowerCompany of (i)a net revenue achievement from DaVita’s efforts pursuant to the closing price forSupply Agreement within twenty-four months of Ultrafiltration Services Approval; and (iv) 25% upon the attainment by the Company of a sharenet revenue achievement from DaVita’s efforts pursuant to the Supply Agreement within thirty-six months of the registrant’s common stock as reported on the Nasdaq Capital Market for the date on which such term loan advanceUltrafiltration Services Approval. This issuance was made toin reliance upon the registrant, and (ii) the average of the closing pricesexemption for a share of the registrant’s common stock reported for the ten trading days ending on the date of such term loan advance. The warrants were exercisable immediately with a term of ten years. Additionally, upon Silicon Valley Bank funding the $2.0 million term loan available until June 30, 2015, the warrants automatically became exercisable fortransactions by an additional number of shares equal to 6% of such term loan divided by the lower of (i) the closing price for a share of the registrant’s common stock as reported on the Nasdaq Capital Market for the date such term loan advance, and (ii) the average of the closing prices for a share of the registrant’s common stock reported or the ten trading date ending on the date of such term loan advance. The warrants were issuedissuer not involving any public offering under an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/orand Rule 506 of Regulation D.D promulgated thereunder.

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On July 20, 2016, the registrant entered into a securities purchase agreement with Sabby Healthcare Master Fund Ltd. and Sabby Volatility Warrant Master Fund Ltd. (collectively, Sabby) under which the registrant issued and sold, on July 26, 2016, 3,468 shares of Series B Convertible Preferred Stock at $1,000 per share directly to Sabby in a registered direct offering. In a concurrent private placement, the registrant issued warrants to purchase an aggregate of 6,149 shares of its common stock to Sabby. Each warrant was exercisable beginning on the six month anniversary of the date of issuance at an exercise price of $564.00 per share (as adjusted), subject to further adjustment as provided therein and for 36 months from the initial exercise date, but not thereafter. Northland Securities, Inc. acted as placement agent and the registrant issued Northland Securities, Inc. and its designees warrants to purchase an aggregate of 368 shares of common stock. The Northland warrants were exercisable beginning immediately upon the closing at an exercise price of $810.00 per share, subject to adjustment as provided there in, and for 5 years thereafter. The warrants were issued under an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D.
On August 5, 2016, the registrant entered into and consummated the transactions contemplated by an asset purchase agreement with Gambro UF Solutions, Inc. (the “Seller”), pursuant to which the registrant acquired certain assets exclusively related to the production and sale of Seller’s Aquadex FlexFlow products for consideration consisting of $4.0 million paid in cash and 1,666 shares of the registrant’s common stock. The shares of common stock were issued to Seller under an exemption from the registration requirement of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D.
On October 30, 2016, the registrant entered into a securities exchange agreement with Sabby, as holder of the registrant’s Series B Convertible Preferred Stock pursuant to which the registrant agreed to issue Sabby 2,227.2 shares of Series B-1 Convertible Preferred Stock in exchange for the cancellation of all shares of Series B Convertible Preferred Stock held by Sabby in reliance on an exemption from registration provided by Section 3(a)(9) of the Securities Act, and consummated such exchange on November 3, 2016.
On October 30, 2016, the registrant entered into securities purchase agreements with Sabby under which it agreed to issue and sell 2,900 shares of Series C Convertible Preferred Stock at $1,000 per share directly to Sabby in a registered direct offering. In a concurrent private placement, the registrant agreed to issue and sell 900 shares of Series D Convertible Preferred Stock at $1,000 per share directly to Sabby and warrants to purchase an aggregate of 37,256 shares of common stock. The registered direct offering closed on November 3, 2016, and the registrant concurrently sold 700 shares of the Series D Convertible Preferred Stock and warrants to purchase 35,295 shares of common stock. The remaining 200 shares of Series D Convertible Preferred Stock and warrants to purchase 1,961 shares of common stock were issued and sold at a second closing on January 11, 2017. The Series D Convertible Preferred Stock had a stated value of $1,000 per share and a conversion price of $102.00 (as adjusted) subject to further adjustment and may be converted to shares of common stock at any time following the receipt of stockholder approval of such issuance upon conversion. Each warrant became exercisable beginning on the day that is the later of the date stockholder approval of the issuance of common stock underlying such warrants is obtained or the six month anniversary of the date of issuance at an exercise price of $108.00 per share (as adjusted), subject to further adjustment as provided therein, and terminate five years thereafter. Northland Securities, Inc. acted as placement agent and the registrant issued Northland Securities, Inc. and its designees warrants to purchase an aggregate of 2,234 shares of common stock, with an exercise price of $127.60 per share. Subject to limited exceptions, a holder of Series D Convertible Preferred Stock or warrants will not have the right to convert or exercise if the holder, together with its affiliates, would beneficially own over 4.99% of the number of shares of the registrant’s common stock outstanding immediately after giving effect to such exercise; provided, however, that upon not less than 61 days’ prior notice, the holder may increase the limitation, provided that in no event will the limitation exceed 9.99%. The Series D Convertible Preferred Stock and the warrants were issued pursuant to an exemption from the registration requirement of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D.
On February 15, 2017, the registrant entered into a letter agreement with Sabby, to incent the cash exercise of the warrants held by Sabby on or before March 31, 2017 (the “Exercise Period”). In exchange for any such exercise, the registrant agreed to provide Sabby replacement warrants (the “Replacement Warrants”) to purchase the same number of shares of common stock as were issued upon exercise of the exercised warrants, with an exercise price equal to the consolidated closing bid price of the registrant’s common stock on the date

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of issuance. The agreement also (i) amends the definition of “Beneficial Ownership Limitation” in the existing warrants to mean, solely for purposes of any exercises of warrants that occur during the Exercise Period, “9.99%” and (ii) amends the Initial Exercise Date of the existing warrants issued on November 3, 2016 and January 11, 2017 so that such warrants are exercisable on or after the receipt of stockholder approval. Since such stockholder approval was received on January 9, 2017, such warrants were immediately exercisable as of the date of the agreement. The Replacement Warrants will be in the same form as the exercised warrants except the exercise price will not be subject to reduction for subsequent equity issuances and (ii) the Replacement Warrants will not allow Sabby to demand that the registrant purchase the Replacement Warrants in the event of a fundamental transaction involving the registrant. Concurrent with the signing of the agreement, Sabby exercised warrants to purchase 5,221 shares of common stock for cash proceeds of approximately $564,000, and the registrant issued Replacement Warrants to purchase 5,221 shares of common stock at an exercise price of $99.80 per share. From March 10, 2017 to March 28, 2017, Sabby exercised warrants to purchase 38,175 shares of common stock for cash proceeds of approximately $1.4 million, and the registrant issued Replacement Warrants to purchase 38,175 shares of common stock with exercise prices equal to the closing consolidated bid price of its common stock available on the date of issuance (ranging from $34.60 to $75.40 per share). The Replacement Warrants are issued pursuant to an exemption from the registration requirement of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D.

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Item 16.
Exhibits and Financial Statement Schedules.Schedules

(a) Exhibits

See the Exhibit Index attached toExhibits

The following exhibits are filed as part of this Registration Statement, which is incorportated by reference herein.registration statement:
 
​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
1.1
​​
Form of Placement Agency Agreement by and between the Company, Lake Street Capital Markets, LLC and Maxim Group, LLC
​​
 
​​
 
​​
 
​​
 
​​
X
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.1
​​
Fourth Amended and Restated Certificate of Incorporation
​​
10
​​
001-35312
​​
February 1, 2012
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.2
​​
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
​​
8-K
​​
001-35312
​​
January 13, 2017
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.3
​​
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
​​
8-K
​​
001-35312
​​
May 23, 2017
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.4
​​
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
​​
8-K
​​
001-35312
​​
October 12, 2017
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.5
​​
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
​​
8-K
​​
001-35312
​​
January 2, 2019
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.6
​​
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
​​
8-K/A
​​
001-35312
​​
October 16, 2020
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.7
​​
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
​​
8-K
​​
001-35312
​​
April 27, 2021
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.8
​​
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
​​
8-K
​​
001-35312
​​
December 9, 2022
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.9
​​
Third Amended and Restated Bylaws
​​
8-K
​​
001-35312
​​
April 27, 2021
​​
3.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.10
​​
Amendment to Third Amended and Restated Bylaws
​​
8-K
​​
001-35312
​​
October 5, 2022
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.11
​​
Form of Certificate of Designation of Series A Junior Participating Preferred Stock
​​
8-K
​​
001-35312
​​
June 14, 2013
​​
3.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
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​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
3.12
​​
Form of Certificate of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock
​​
S-1/A
​​
333-221010
​​
November 17, 2017
​​
3.7
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
3.13
​​
Form of Certificate of Designation of Preferences, Rights and Limitations of Series J Convertible Redeemable Preferred Stock
​​
 
​​
 
​​
 
​​
 
​​
X
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.1
​​
Form of Warrant to Purchase Shares of Common Stock
​​
S-1/A
​​
333-221010
​​
November 17, 2017
​​
4.9
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.2
​​
Form of Series 1 and Series 2 Warrant to Purchase Shares of Common Stock
​​
S-1/A
​​
333-209102
​​
February 25, 2019
​​
4.10
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.3
​​
Common Stock Purchase Warrant, dated May 30, 2019, between the Company and Redington, Inc.
​​
10-Q
​​
001-35312
​​
August 8, 2019
​​
4.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.4
​​
Form of Common Stock Purchase Warrant issued pursuant to the Securities Purchase Agreement, dated October 23, 2019, among the Company and the purchasers signatory thereto
​​
8-K
​​
001-35312
​​
October 23, 2019
​​
4.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.5
​​
Form of Common Stock Purchase Warrant issued pursuant to the Securities Purchase Agreement, dated November 4, 2019, among the Company and the purchasers signatory thereto
​​
8-K
​​
001-35312
​​
November 4, 2019
​​
4.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.6
​​
Form of Common Stock Pre-Funded Purchase Warrant issued pursuant to the Securities Purchase Agreement, dated November 4, 2019, among the Company and the purchasers signatory thereto
​​
8-K
​​
001-35312
​​
November 4, 2019
​​
4.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.7
​​
Form of Common Stock Purchase Warrant
​​
S-1/A
​​
333-235385
​​
January 23, 2020
​​
4.15
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
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​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
4.8
​​
Form of Common Stock Purchase Warrant issued pursuant to the Securities Purchase Agreement, dated March 19, 2020, among the Company and the purchasers identified on the signature pages thereto
​​
8-K
​​
001-35312
​​
March 20, 2020
​​
4.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.9
​​
Form of Common Stock Purchase Warrant issued pursuant to the Securities Purchase Agreement, dated March 30, 2020, among the Company and the purchasers identified on the signature pages thereto
​​
8-K
​​
001-35312
​​
March 30, 2020
​​
4.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.10
​​
Form of Common Stock Purchase Warrant issued pursuant to the Securities Purchase Agreement, dated May 1, 2020, among the Company and the purchasers identified on the signature pages thereto
​​
8-K
​​
001-35312
​​
May 4, 2020
​​
4.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.11
​​
Form of Warrant to Purchase Shares of Common Stock
​​
S-1/A
​​
333-24145
​​
August 17, 2020
​​
4.19
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.12
​​
Warrant to Purchase Shares of Common Stock
​​
S-1/A
​​
333-267368
​​
October 13, 2022
​​
4.20
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.13
​​
Form of Warrant to purchase shares of Series J Convertible Preferred Stock
​​
 
​​
 
​​
 
​​
 
​​
X
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.14
​​
Specimen of Common Stock Certificate
​​
10
​​
001-35312
​​
September 30, 2011
​​
4.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
4.15
​​
DaVita Inc. Common Stock Warrant Agreement+
​​
8-K
​​
001-35312
​​
June 21, 2023
​​
4.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
5.1
​​
Opinion of Honigman LLP
​​
 
​​
 
​​
 
​​
 
​​
X
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.1
​​
Patent License Agreement between Sunshine Heart, Inc. and Gambro UF Solutions, Inc. dated August 5, 2016
​​
8-K
​​
001-35312
​​
August 8, 2016
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.2
​​
2013 Non-Employee Directors’ Equity Incentive Plan†
​​
14A
​​
001-35312
​​
April 5, 2013
​​
App. A
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
II-5

TABLE OF CONTENTS

 
​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
10.3
​​
Form of Stock Option Grant Notice and Option Agreement for 2013 Non-Employee Directors’ Equity Incentive Plan†
​​
8-K
​​
001-35312
​​
May 29, 2013
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.4
​​
Form of Restricted Stock Unit Award Grant Notice and Agreement for 2013 Non-Employee Directors’ Equity Incentive Plan†
​​
10-K
​​
001-35312
​​
March 20, 2015
​​
10.11
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.5
​​
New-Hire Equity Incentive Plan†
​​
10-Q
​​
001-35312
​​
August 8, 2013
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.6
​​
First Amendment to New-Hire Equity Incentive Plan†
​​
10-Q
​​
001-35312
​​
November 12, 2013
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.7
​​
Second Amendment to New-Hire Equity Incentive Plan†
​​
S-8
​​
333-202904
​​
March 20, 2015
​​
99.12
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.8
​​
Third Amendment to New-Hire Equity Incentive Plan†
​​
S-8
​​
333-210215
​​
March 15, 2016
​​
99.13
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.9
​​
Fourth Amendment to New-Hire Equity Incentive Plan†
​​
8-K
​​
001-35312
​​
May 30, 2017
​​
10.4
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.10
​​
Fifth Amendment to New-Hire Equity Incentive Plan†
​​
8-K
​​
001-35312
​​
January 18, 2018
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.11
​​
Sixth Amendment to New-Hire Equity Incentive Plan†
​​
10-Q
​​
001-35312
​​
August 8, 2019
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.12
​​
Seventh Amendment to New-Hire Equity Incentive Plan†
​​
8-K
​​
001-35312
​​
December 6, 2019
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.13
​​
Eighth Amendment to New-Hire Equity Incentive Plan†
​​
8-K/A
​​
001-35312
​​
February 25, 2021
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.14
​​
Form of Stock Option Grant Notice and Option Agreement for New-Hire Equity Incentive Plan†
​​
10-Q
​​
001-35312
​​
November 12, 2013
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.15
​​
2017 Equity Incentive Plan†
​​
8-K
​​
001-35312
​​
May 30, 2017
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.16
​​
First Amendment to the 2017 Equity Incentive Plan†
​​
14A
​​
001-35312
​​
September 11, 2020
​​
App. A
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.17
​​
Second Amendment to the 2017 Equity Incentive Plan†
​​
10-K
​​
001-35312
​​
March 3, 2023
​​
10.17
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
II-6

TABLE OF CONTENTS

 
​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
10.18
​​
Form of Stock Option Grant Notice and Option Agreement for 2017 Equity Incentive Plan†
​​
8-K
​​
001-35312
​​
May 30, 2017
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.19
​​
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement for 2017 Equity Incentive Plan†
​​
8-K
​​
001-35312
​​
May 30, 2017
​​
10.3
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.20
​​
Nuwellis, Inc. 2021 Inducement Plan†
​​
8-K
​​
001-35312
​​
May 20, 2021
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.21
​​
First Amendment to the 2021 Inducement Plan†
​​
8-K
​​
001-35312
​​
April 21, 2022
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.22
​​
Second Amendment to the 2021 Inducement Plan†
​​
8-K
​​
001-35312
​​
March 1, 2023
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.23
​​
Form of Stock Option Grant Notice, Option Agreement and Notice of Exercise under the Nuwellis, Inc. 2021 Inducement Plan†
​​
8-K
​​
001-35312
​​
May 20, 2021
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.24
​​
Form of Indemnity Agreement for the Company’s executive officers and directors†
​​
10
​​
001-35312
​​
September 30, 2011
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.25
​​
Form of Change in Control Agreement for the Company’s executive officers†
​​
10-K
​​
001-35312
​​
March 20, 2015
​​
10.16
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.26
​​
Non-Employee Director Compensation Policy (effective August 18, 2021)†
​​
10-Q
​​
001-35312
​​
November 10, 2021
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.27
​​
Non-Employee Director Compensation Policy (effective January 1, 2023) †
​​
10-K
​​
001-35312
​​
March 3, 2023
​​
10.27
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.28
​​
Lease Agreement dated October 21, 2011 by and between the Company and Silver Prairie Crossroads, LLC
​​
10
​​
001-35312
​​
December 16, 2011
​​
10.18
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.29
​​
Second Amendment to Lease, dated as of April 20, 2015, by and between the Company and Capital Partners Industrial Fund I, LLLP dba Prairie Crossroads Business Center
​​
8-K
​​
001-35312
​​
April 23, 2015
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
II-7

TABLE OF CONTENTS

 
​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
10.30
​​
Third Amendment to Lease, dated as of August 3, 2018, by and between the Company and Capital Partners Industrial Fund I, LLLP
​​
10-Q
​​
001-35312
​​
November 7, 2018
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.31
​​
Fourth Amendment to Lease, dated as of November 18, 2021, by and between the Company and Capital Partners Industrial Fund I, LLLP
​​
8-K
​​
01-35312
​​
November 23, 2021
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.32
​​
Warrant Agency Agreement between the Company and American Stock Transfer & Trust Company, LLC dated April 24, 2017
​​
8-K
​​
001-35312
​​
April 25, 2017
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.33
​​
Form of Warrant Reprice Agreement
​​
8-K
​​
001-35312
​​
June 29, 2018
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.34
​​
Warrant Agency Agreement, dated as of March 12, 2019, between the Company and American Stock Transfer & Trust Company, LLC
​​
8-K
​​
001-35312
​​
March 13, 2019
​​
4.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.35
​​
Underwriting Agreement, dated as of March 8, 2019, by and between the Company and Ladenburg Thalmann & Co. Inc.
​​
8-K
​​
001-35312
​​
March 13, 2019
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.36
​​
Form of Employee Proprietary Information, Inventions Assignment and Non-Competition Agreement for the Company’s employees, including executive officers†
​​
10-Q
​​
001-35312
​​
May, 9, 2019
​​
10.3
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.37
​​
Offer Letter, by and between the Company and Nestor Jaramillo, dated April 12, 2019†
​​
10-Q
​​
001-35312
​​
May 9, 2019
​​
10.5
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.38
​​
Placement Agency Agreement, dated as of October 23, 2019, by and between the Company and Ladenburg Thalmann & Co. Inc.
​​
8-K
​​
001-35312
​​
October 23, 2019
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.39
​​
Form of Securities Purchase Agreement, dated as of October 23, 2019, by and among the Company and the purchasers identified on the signature pages thereto
​​
8-K
​​
001-35312
​​
October 23, 2019
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
II-8

TABLE OF CONTENTS

 
​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
10.40
​​
Placement Agency Agreement, dated as of November 4, 2019, by and between the Company and Ladenburg Thalmann & Co. Inc.
​​
8-K
​​
001-35312
​​
November 4, 2019
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.41
​​
Form of Securities Purchase Agreement, dated as of November 4, 2019, by and among the Company and the purchasers identified on the signature pages thereto
​​
8-K
​​
001-35312
​​
November 4, 2019
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.42
​​
Underwriting Agreement dated as of January 24, 2020, by and between the Company and Ladenburg Thalmann & Co. Inc.
​​
8-K
​​
001-35312
​​
January 29, 2020
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.43
​​
Warrant Agency Agreement, dated as of January 28, 2020, between the Company and American Stock Transfer & Trust Company, LLC
​​
8-K
​​
001-35312
​​
January 29, 2020
​​
4.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.44
​​
Placement Agency Agreement, dated as of March 19, 2020, by and between the Company and Ladenburg Thalmann & Co. Inc.
​​
8-K
​​
001-35312
​​
March 20, 2020
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.45
​​
Form of Securities Purchase Agreement, dated as of March 19, 2020, by and among the Company and the purchasers identified on the signature pages thereto
​​
8-K
​​
001-35312
​​
March 20, 2020
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.46
​​
Placement Agency Agreement, dated as of March 30, 2020, by and between the Company and Ladenburg Thalmann & Co. Inc.
​​
8-K
​​
001-35312
​​
March 30, 2020
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.47
​​
Form of Securities Purchase Agreement, dated as of March 30, 2020, by and among the Company and the purchasers identified on the signature pages thereto
​​
8-K
​​
001-35312
​​
March 30, 2020
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.48
​​
Form of Securities Purchase Agreement, dated as of May 1, 2020, by and among the Company and the purchasers identified on the signature pagers thereto
​​
8-K
​​
001-35312
​​
May 4, 2020
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
II-9

TABLE OF CONTENTS

 
​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
10.49
​​
Underwriting Agreement, dated as of August 19, 2020, by and between the Company and Ladenburg Thalman & Co. Inc.
​​
8-K
​​
0001-35312
​​
August 21, 2020
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.50
​​
Warrant Agency Agreement, dated as of August 21, 2020, between the Company and American Stock Transfer & Trust Company, LLC
​​
8-K
​​
001-35312
​​
August 21, 2020
​​
4.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.51
​​
Executive Employment Agreement, dated January 16, 2021, by and between the Company and Nestor Jaramillo, Jr.†
​​
8-K
​​
001-35312
​​
January 19, 2021
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.52
​​
Executive Employment Agreement, dated January 16, 2021, by and between the Company and John L. Erb†
​​
8-K
​​
001-35312
​​
January 19, 2021
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.53
​​
Offer Letter by and between the Company and George Montague, effective as of June 28, 2021†
​​
8-K
​​
001-35312
​​
June 22, 2021
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.54
​​
Offer letter by and between the Company and Neil P. Ayotte, effective as of June 7, 2021†
​​
10-Q
​​
001-35312
​​
August 12, 2021
​​
10.4
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.55
​​
Offer Letter by and between the Company and Lynn Blake, effective as of October 19, 2022†
​​
8-K
​​
001-35312
​​
October 5, 2022
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.56
​​
First Amendment to Offer Letter between the Company and Lynn Blake†
​​
8-K
​​
001-35312
​​
December 9, 2022
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.57
​​
Underwriting Agreement dated September 15, 2021, between the Company and Ladenburg Thalmann & Co. Inc., as the Representative of the several underwriters named in Schedule I thereto
​​
8-K
​​
001-35312
​​
September 17, 2021
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.58
​​
Warrant Agency Agreement, dated as of October 18, 2022, between the Company and American Stock Transfer & Trust Company, LLC
​​
8-K
​​
001-35312
​​
October 18, 2022
​​
4.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.59
​​
Leak-Out Agreement
​​
S-1/A
​​
333-267368
​​
September 30, 2022
​​
10.70
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
II-10

TABLE OF CONTENTS

 
​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
10.60
​​
Underwriting Agreement dated as of October 14, 2022, by and between Nuwellis, Inc. and Ladenburg Thalmann & Co. Inc.
​​
8-K
​​
001-35312
​​
October 18, 2022
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.61
​​
License and Distribution Agreement with SeaStar Medical Holding Corporation, dated as of December 27, 2022+
​​
10-K
​​
001-35312
​​
March 3, 2023
​​
10.63
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.62
​​
Supply and Collaboration Agreement dated as of June 19, 2023 by and between the Company and DaVita Inc. +
​​
8-K
​​
001-35312
​​
June 21, 2023
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.63
​​
Registration Rights Agreement dated as of June 19, 2023 by and between the Company and DaVita Inc.
​​
8-K
​​
001-35312
​​
June 21, 2023
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.64
​​
Transition Agreement, by and between Lynn Blake and the Company, dated as of August 4, 2023
​​
8-K
​​
001-35312
​​
August 8, 2023
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.65
​​
Consulting Agreement, by and between Lynn Blake and the Company, dated as of August 4, 2023
​​
8-K
​​
001-35312
​​
August 8, 2023
​​
10.2
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.66
​​
Offer Letter, by and between Robert B. Scott and the Company, effective as of September 2, 2023
​​
8-K
​​
001-35312
​​
August 18, 2023
​​
10.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.67
​​
At The Market Offering Agreement, dated as of March 3, 2023, by and between the Company and Ladenburg Thalmann & Co. Inc.
​​
10-K
​​
001-35312
​​
March 3, 2023
​​
1.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.68
​​
Form of Warrant Agency Agreement
​​
 
​​
 
​​
 
​​
 
​​
X
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
10.69
​​
Form of Securities Purchase Agreement to be entered into in this Offering
​​
 
​​
 
​​
 
​​
 
​​
X
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
21.1
​​
List of Subsidiaries
​​
10-K
​​
001-35312
​​
March 3, 2023
​​
21
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
23.1
​​
Consent of Baker Tilly US, LLP
​​
 
​​
 
​​
 
​​
 
​​
X
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
23.2
​​
Consent of Honigman LLP
​​
 
​​
 
​​
 
​​
 
​​
(included in Exhibit 5.1)
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
II-11

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​​
 
​​
Incorporated By Reference
​​
 
​​
 
Exhibit Number
​​
Exhibit
Description
​​
Form
​​
File
Number
​​
Date of First
Filing
​​
Exhibit
Number
​​
Filed
Herewith
24.1
​​
Power of Attorney
​​
S-1
​​
333-274610
​​
September 21, 2023
​​
24.1
​​
 
 
​​
 
​​
 
​​
 
​​
 
​​
 
​​
 
107
​​
Filing Fee Table
​​
 
​​
 
​​
 
​​
 
​​
X
†
Indicates management compensatory plan, contract or arrangement.
+
Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. Certain portions of the License and Distribution Agreement, Warrant, and the Supply and Collaboration Agreement have been redacted pursuant to Item 601(a)(6) and 601(b)(10)(iv) of Regulation S-K because the Company customarily and actually treats the redacted information as private or confidential and the omitted information is not material. Copies of the unredacted License and Distribution Agreement, Warrant, and Supply and Collaboration Agreement will be furnished to the SEC upon request.
(b) Financial Statement Schedules
All financial statement schedules are omitted because the information required to be set forth therein is not applicable or is included in the consolidated financial statements or related notes incorporated herein by reference.
Item 17.
Undertakings.
(1)
The undersigned registrant hereby undertakes:
a.
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
b.
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
c.
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

The undersigned registrant hereby undertakes that, forFor the purpose of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering.

The undersigned registrant hereby undertakes that, for the purposes of determining liability to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

The undersigned registrant hereby undertakes that, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

d.
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the undersigned registrant according the foregoing provisions, or otherwise, the undersigned registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report

(2)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(3)
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

SIGNATURES

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EXHIBIT INDEX

 
 
Incorporated By Reference
 
 
 
Exhibit
Number
Exhibit
Description
Form
File
Number
Date of
First Filing
Exhibit
Number
Filed
Herewith
Furnished
Herewith
 1.1
Form of Underwriting Agreement
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 2.1
Asset Purchase Agreement between Sunshine Heart, Inc. and Gambro UF Solutions, Inc. dated August 5, 2016
8-K
001-35312
August 8, 2016
2.1
 
 
 
 
 
 
 
 
 
 
 3.1
Fourth Amended and Restated Certificate of Incorporation
10
001-35312
February 1, 2012
3.1
 
 
 
 
 
 
 
 
 
 
 3.2
Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation
8-K
001-35312
January 13, 2017
3.1
 
 
 
 
 
 
 
 
 
 
 3.3
Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation
8-K
001-35312
May 23, 2017
3.1
 
 
 
 
 
 
 
 
 
 
 3.4
Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation
8-K
001-35312
October 12, 2017
3.1
 
 
 
 
 
 
 
 
 
 
 3.5
Second Amended and Restated Bylaws
8-K
001-35312
May 23, 2017
3.2
 
 
 
 
 
 
 
 
 
 
 3.6
Form of Certificate of Designation of Series A Junior Participating Preferred Stock
8-K
001-35312
June 14, 2013
3.1
 
 
 
 
 
 
 
 
 
 
 3.7
Form of Certificate of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock.
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 4.1
Warrant to Purchase Stock, dated February 18, 2015, issued to Silicon Valley Bank
8-K
001-35312
February 19, 2015
4.1
 
 
 
 
 
 
 
 
 
 
 4.2
Warrant to Purchase Stock, dated February 18, 2015, issued to Life Science Loans, LLC
8-K
001-35312
February 19, 2015
4.2
 
 
 
 
 
 
 
 
 
 
 4.3
Form of common stock Purchase Warrant issued pursuant to the Securities Purchase Agreement, dated July 20, 2016, among the Company and the purchasers signatory thereto
8-K
001-35312
July 22, 2016
4.2
 
 
 
 
 
 
 
 
 
 
 4.4
Form of common stock Purchase Warrant issued to Northland Securities, Inc.
8-K
001-35312
July 22, 2016
4.3
 
 
 
 
 
 
 
 
 
 
 4.5
Registration Rights Agreement between Sunshine Heart, Inc. and Gambro UF Solutions, Inc. dated August 5, 2016
8-K
001-35312
August 8, 2016
4.1
 
 

TABLE OF CONTENTS

 
 
Incorporated By Reference
 
 
 
Exhibit
Number
Exhibit
Description
Form
File
Number
Date of
First Filing
Exhibit
Number
Filed
Herewith
Furnished
Herewith
 4.6
Form of common stock Purchase Warrant issued pursuant to the Securities Purchase Agreement, dated October 30, 2016, among the Company and the purchasers signatory thereto
8-K
001-35312
October 31, 2016
4.1
 
 
 
 
 
 
 
 
 
 
 4.7
Form of common stock Purchase Warrant issued pursuant to the Letter Agreement between the Company and the purchasers signatory thereto, dated February 15, 2017
8-K
001-35312
February 16, 2017
4.1
 
 
 
 
 
 
 
 
 
 
 4.8
Form of common stock Purchase Warrant issued pursuant to the Underwriting Agreement between the Company and Ladenburg Thalmann & Co. Inc., dated April 19, 2017
S-1/A
333-216841
April 4, 2017
4.8
 
 
 
 
 
 
 
 
 
 
 4.9
Form of Warrant to purchase shares of common stock.
 
 
 
 
X
 
 
 
 
 
 
 
 
 
 5.1
Opinion of Honigman Miller Schwartz and Cohn LLP
 
 
 
 
X
 
 
 
 
 
 
 
 
 
10.1
Securities Purchase Agreement, dated July 20, 2016 among the Company and the purchasers signatory thereto
8-K
001-35312
July 22, 2016
10.1
 
 
 
 
 
 
 
 
 
 
10.2
Patent License Agreement between Sunshine Heart, Inc. and Gambro UF Solutions, Inc. dated August 5, 2016
8-K
001-35312
August 8, 2016
10.1
 
 
 
 
 
 
 
 
 
 
10.3
Loan and Security Agreement between Sunshine Heart, Inc. and Silicon Valley Bank dated August 5, 2016
8-K
001-35312
August 8, 2016
10.2
 
 
 
 
 
 
 
 
 
 
10.4
Amended and Restated 2002 Stock Plan†
10
001-35312
December 16, 2011
10.2
 
 
 
 
 
 
 
 
 
 
10.5
Form of Notice of Stock Option Grant and Option Agreement for Amended and Restated 2002 Stock Plan†
10
001-35312
September 30, 2011
10.3
 
 
 
 
 
 
 
 
 
 
10.6
Second Amended and Restated 2011 Equity Incentive Plan, as amended†
14A
001-35312
July 27, 2012
App. A
 
 
 
 
 
 
 
 
 
 
10.7
Form of Stock Option Grant Notice and Option Agreement for 2011 Equity Incentive Plan†
10
001-35312
September 30, 2011
10.5
 
 
 
 
 
 
 
 
 
 
10.8
Form of Stock Option Grant Notice and Option Agreement (Senior Management) for 2011 Equity Incentive Plan†
10
001-35312
September 30, 2011
10.6
 
 

TABLE OF CONTENTS

 
 
Incorporated By Reference
 
 
 
Exhibit
Number
Exhibit
Description
Form
File
Number
Date of
First Filing
Exhibit
Number
Filed
Herewith
Furnished
Herewith
10.9
Form of Stock Option Grant Notice and Option Agreement (Director) for 2011 Equity Incentive Plan†
8-K
001-35312
September 18, 2012
10.1
 
 
 
 
 
 
 
 
 
 
10.10
Form of Stock Grant Notice and Award Agreement for 2011 Equity Incentive Plan†
8-K
001-35312
September 10, 2013
10.1
 
 
 
 
 
 
 
 
 
 
10.11
Form of Restricted Stock Unit Grant Notice and Agreement for 2011 Equity Incentive Plan†
8-K
001-35312
September 10, 2013
10.2
 
 
 
 
 
 
 
 
 
 
10.12
2013 Non-Employee Directors’ Equity Incentive Plan†
14A
001-35312
April 5, 2013
App. A
 
 
 
 
 
 
 
 
 
 
10.13
Form of Stock Option Grant Notice and Option Agreement for 2013 Non-Employee Directors’ Equity Incentive Plan†
10-K
001-35312
May 29, 2013
10.2
 
 
 
 
 
 
 
 
 
 
10.14
Form of Restricted Stock Unit Award Grant Notice and Agreement for 2013 Non-Employee Directors’ Equity Incentive Plan†
10-K
001-35312
March 20, 2015
10.11
 
 
 
 
 
 
 
 
 
 
10.15
New-Hire Equity Incentive Plan†
10-Q
001-35312
August 8, 2013
10.1
 
 
 
 
 
 
 
 
 
 
10.16
First Amendment to New-Hire Equity Incentive Plan†
10-Q
001-35312
November 12, 2013
10.1
 
 
 
 
 
 
 
 
 
 
10.17
Second Amendment to New-Hire Equity Incentive Plan†
S-8
333-202904
March 20, 2015
99.12
 
 
 
 
 
 
 
 
 
 
10.18
Third Amendment to New-Hire Equity Incentive Plan†
S-8
333-210215
March 15, 2016
99.13
 
 
 
 
 
 
 
 
 
 
10.19
Fourth Amendment to New-Hire Equity Incentive Plan†
8-K
001-35312
May 30, 2017
10.4
 
 
 
 
 
 
 
 
 
 
10.20
Form of Stock Option Grant Notice and Option Agreement for New-Hire Equity Incentive Plan†
10-Q
001-35312
November 12, 2013
10.2
 
 
 
 
 
 
 
 
 
 
10.21
2017 Equity Incentive Plan†
8-K
001-35312
May 30, 2017
10.1
 
 
 
 
 
 
 
 
 
 
10.22
Form of Stock Option Grant Notice and Option Agreement for 2017 Equity Incentive Plan†
8-K
001-35312
May 30, 2017
10.2
 
 
 
 
 
 
 
 
 
 
10.23
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement for 2017 Equity Incentive Plan†
8-K
001-35312
May 30, 2017
10.3
 
 

TABLE OF CONTENTS

 
 
Incorporated By Reference
 
 
 
Exhibit
Number
Exhibit
Description
Form
File
Number
Date of
First Filing
Exhibit
Number
Filed
Herewith
Furnished
Herewith
10.24
Form of Indemnity Agreement for the Company’s executive officers and directors†
10
001-35312
September 30, 2011
10.1
 
 
 
 
 
 
 
 
 
 
10.25
Form of Change in Control Agreement for the Company’s executive officers†
10-K
001-35312
March 20, 2015
10.16
 
 
 
 
 
 
 
 
 
 
10.26
Non-Employee Director Compensation Policy†
10-Q
001-35312
August 8, 2013
10.2
 
 
 
 
 
 
 
 
 
 
10.27
Lease Agreement dated October 21, 2011 by and between the Company and Silver Prairie Crossroads, LLC
10
001-35312
December 16, 2011
10.18
 
 
 
 
 
 
 
 
 
 
10.28
Sales Agreement dated March 21, 2014 by and between the Company and Cowen and Company, LLC
S-3
333-194731
March 21, 2014
1.2
 
 
 
 
 
 
 
 
 
 
10.29
Second Amendment to Lease, dated as of April 20, 2015, by and between the Company and Capital Partners Industrial Fund I, LLLP dba Prairie Crossroads Business Center
8-K
001-35312
April 23, 2015
10.1
 
 
 
 
 
 
 
 
 
 
10.30
Separation and Release Agreement between the Company and David A. Rosa, dated November 30, 2015†
8-K
001-35312
November 30, 2015
99.1
 
 
 
 
 
 
 
 
 
 
10.31
Executive Employment Agreement between Sunshine Heart, Inc. and John L. Erb, dated March 1, 2016†
8-K
001-35312
March 2, 2016
10.1
 
 
 
 
 
 
 
 
 
 
10.32
Separation and Release Agreement by and between Sunshine Heart, Inc. and Brian J. Brown, dated February 3, 2016†
10-Q
001-35312
May 5, 2015
10.2
 
 
 
 
 
 
 
 
 
 
10.33
Separation and Release Agreement by and between Sunshine Heart, Inc. and Debra Kridner, dated January 24, 2016†
10-Q
001-35312
May 5, 2016
10.3
 
 
 
 
 
 
 
 
 
 
10.34
Claudia Drayton Retention Bonus Letter, dated as of December 12, 2016†
8-K
001-35312
December 16, 2016
10.1
 
 
 
 
 
 
 
 
 
 
10.35
Molly Wade Retention Bonus Letter, dated as of December 12, 2016†
S-1
333-221010
October 18, 2017
10.35
 
 
 
 
 
 
 
 
 
 
10.36
Letter Agreement dated February 15, 2017 among the Company, Sabby Volatility Warrant Master Fund, Ltd. and Sabby Healthcare Master Fund, Ltd.
8-K
003-35312
February 16, 2017
10.1
 
 

TABLE OF CONTENTS

 
 
Incorporated By Reference
 
 
 
Exhibit
Number
Exhibit
Description
Form
File
Number
Date of
First Filing
Exhibit
Number
Filed
Herewith
Furnished
Herewith
10.37
Offer Letter by and between the Company and Jim Breidenstein dated April 12, 2017
10-Q
001-35312
May 12, 2017
10.4
 
 
 
 
 
 
 
 
 
 
10.38
Warrant Agency Agreement between the Company and American Stock Transfer & Trust Company, LLC dated April 24, 2017
8-K
001-35312
April 25, 2017
10.1
 
 
 
 
 
 
 
 
 
 
15.1
Letter regarding unaudited interim financial information
S-1/A
333-221010
November 6, 2017
15.1
 
 
 
 
 
 
 
 
 
 
21
List of Subsidiaries
10-K
001-35312
March 8, 2017
21
 
 
 
 
 
 
 
 
 
 
23.1
Consent of Independent Registered Public Accounting Firm
 
 
 
 
X
 
 
 
 
 
 
 
 
 
23.2
Consent of Honigman Miller Schwartz & Cohn LLP
 
 
 
 
Included in Exhibit 5.1
 
 
 
 
 
 
 
 
 
24.1
Power of Attorney
S-1
333-221010
October 18, 2017
24.1
 
 
 
 
 
 
 
 
 
 
99.1
Report of Independent Registered Public Accounting Firm on June 30, 2017 financial statements
S-1/A
333-221010
November 6, 2017
99.1
 
 
†Indicates management compensatory plan, contract or arrangement.

TABLE OF CONTENTS

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Eden Prairie, State of Minnesota, on this 13th29th day of November, 2017.

September.
 
​​
CHF SOLUTIONS,NUWELLIS, INC.
 
​​
 
​​
 
 
​​
By:
​​
/s/ JOHN L. ERBNestor Jaramillo, Jr.
 
​​
 
​​
John L. ErbNestor Jaramillo, Jr.
 
​​
 
​​
Chief Executive Officer and Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature
​​
Title
​​
Date
 
​​
 
​​
 
/s/ JOHN L. ERB*
​​
Principal Executive Officer
and Chairman of the Board
​​
November 13, 2017September 29, 2023
John L. Erb
​
 
​​
​
*
​​
President, Chief Executive
Officer and Director
(principal executive officer)
​​
September 29, 2023
Nestor Jaramillo, Jr.
​
​​
​
*
​​
Chief Financial Officer
(principal financial officer
and principal accounting officer)
​​
September 29, 2023
Robert B. Scott
​
​​
​​
 
/s/ CLAUDIA DRAYTON*
​​
Principal Financial Officer and Principal Accounting OfficerDirector
​​
November 13, 2017September 29, 2023
Claudia DraytonMaria Rosa Costanzo, M.D.
​
​​
 
​​
*
​​
Director
​​
September 29, 2023
Michael McCormick
​
​​
​​
*
​​
Director
​​
September 29, 2023
Jon W. Salveson
​
​​
​​
*
​​
Director
​​
September 29, 2023
Gregory Waller
​
*By:
​​
/s/ Nestor Jaramillo, Jr.
​​
 
 
​​
Nestor Jaramillo, Jr.
*
​
Director
November 13, 2017
Steve Brandt
​
 
 
​​
Attorney-in-fact
*
​
Director
November 13, 2017
Matthew Likens
*
Director
November 13, 2017
Jon W. Salveson
*
Director
November 13, 2017
Gregory Waller
*
Director
November 13, 2017
Warren Watson
​
 
* By:
/s/ JOHN L. ERB
John L. Erb
Attorney-in-fact

II-14