View:
Download DOC
Download PDF
Download XLS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 7, 2018

CHF Solutions, Inc.
(Exact name of registrant as specified in its charter)
 

Delaware
 001-35312
68-0533453
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

12988 Valley View Road
Eden Prairie, Minnesota  55344
(Address of principal executive offices) (Zip Code)

(952) 345-4200
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Item 2.02
Results of Operations and Financial Condition.

On August 7, 2018, CHF Solutions, Inc. (the "Company") issued a press release reporting its financial results for the quarter ended June 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information included in this Current Report on Form 8-K (including Exhibit 99.1) is furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

Item 9.01
Financial Statements and Exhibits.

  (d)
Exhibits.

The following exhibit is filed as part of this report:

No.
  
Description
     
 
Press Release, dated August 7, 2018, reporting the Company’s financial results for the quarter ended June 30, 2018
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: August 7, 2018
CHF SOLUTIONS, INC.
       
 
By:
/s/ Claudia Drayton
  
 
Name:
Claudia Drayton
  
 
Title:
Chief Financial Officer
  
 
 
Exhibit 99.1
 

CHF Solutions, Inc. Announces 27% Revenue Growth for its Second Quarter and Provides Company Update

Eden Prairie, MN: August 7, 2018: CHF Solutions, Inc. (NASDAQ: CHFS) announced today its second quarter results for the period ended June 30, 2018.  Highlights include:

•
Revenue for second quarter ended June 30, 2018 increased 27 percent compared to the same period in 2017 and six percent sequentially over the first quarter of 2018.

•
Expanded US sales territories from ten to 13 and hired and trained three additional sales representatives.

•
In July 2018, received a blanket purchase agreement from the United States Department of Veteran’s Affairs for up to a maximum of $6.5 million to supply Aquadex FlexFlow systems for outpatient services. The blanket purchase agreement is for a period of up to five-years and allows but does not obligate the purchase of the products.

•
Recently published data at the International Society for Pharmaeconomics and Outcomes Research conference shows that hospitals that use an ultrafiltration system versus diuretic therapy save an average of $3,975 per patient at 90 days due to a reduction of patient readmission rates and duration of stay.

•
Continued international expansion and announced entrance into the German market by signing an agreement with HSC, our current European logistics provider.

•
Subsequent to quarter end, completed an underwritten public equity offering for net proceeds of approximately $4.7 million.

“We have continued to incrementally execute on our expansion strategy, including continued upward trends in our revenue,” said John Erb, Chairman and CEO. “We continue to be optimistic about our future growth and look forward to reporting further developments.”

The Company will host a conference call and webcast at 9:00 AM ET today to discuss its financial results and provide an update on the Company’s performance.

To access the live webcast, please visit the Investors page of the CHF Solutions website at www.chf-solutions.com. Alternatively, you may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID 8576075. An audio archive of the webcast and a transcript of the call will be available following the call on the Investor page at www.chf-solutions.com.

About CHF Solutions

CHF Solutions, Inc. (NASDAQ:CHFS) is a medical device company focused on commercializing the Aquadex FlexFlow system for Aquapheresis® therapy. 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. All treatments must be administered by a healthcare provider, under physician prescription, both of whom having received training in extracorporeal therapies.  The company's objective is to improve the quality of life for patients with heart failure and related conditions. CHF Solutions is a Delaware corporation headquartered in Minneapolis with wholly owned subsidiaries in Australia and Ireland. The company has been listed on the NASDAQ Capital Market since February 2012.
 
Forward-Looking Statements

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, the statement regarding the benefits from using the Aquadex FlexFlow, trends in our revenue, our expansion plan and our future growth and developments.  Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this release, including, without limitation, those risk associated with our ability to execute on our business strategy, the possibility that we may be unable to raise sufficient funds necessary for our anticipated operations, our post-market clinical data collection activities, benefits of our products to patients, our expectations with respect to product development and commercialization efforts, our ability to increase market and physician acceptance of our products, potentially competitive product offerings, intellectual property protection, our ability to integrate acquired businesses, our expectations regarding anticipated synergies with and benefits from acquired businesses, and other risks and uncertainties described in our filings with the SEC. Forward-looking statements speak only as of the date when made. CHF Solutions does not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
#  #  #

FINANCIALS
 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Loss
 (Unaudited and in thousands, except per share amounts)
 
   
Three months ended
June 30,
    
Six months ended
June 30,
  
   
2018
    
2017
    
2018
    
2017
  
Net sales
  
$
1,099
    
$
864
    
$
2,136
    
$
1,765
  
Costs and expenses:
                                
Cost of goods sold
    
870
      
616
      
1,771
      
1,130
  
Selling, general and administrative
    
3,765
      
2,420
      
7,776
      
4,807
  
Research and development
    
643
      
327
      
1,122
      
635
  
Total costs and expenses
    
5,278
      
3,363
      
10,669
      
6,572
  
Loss from operations
    
(4,179
)
    
(2,499
)
    
(8,533
)
    
(4,807
)
Other income (expense):
                                
Other income, net
    
-
      
5
      
-
      
11
  
Warrant valuation expense
    
-
      
-
      
-
      
(67
)
Change in fair value of warrant liability
    
-
      
37
      
-
      
1,466
  
Total other income, net
    
-
      
42
      
-
      
1,410
  
Loss before income taxes
    
(4,179
)
    
(2,457
)
    
(8,533
)
    
(3,397
)
Income tax benefit (expense), net
    
(2
)
    
(1
)
    
(2
)
    
(1
)
Net loss
  
$
(4,181
)
  
$
(2,458
)
  
$
(8,535
)
  
$
(3,398
)
                                 
Basic and diluted loss per share
  
$
(0.93
)
  
$
(9.38
)
  
$
(2.00
)
  
$
(27.77
)
                                 
Weighted average shares outstanding – basic and diluted
    
4,494
      
371
      
4,263
      
225
  
                                 
Other comprehensive loss:
                                
Foreign currency translation adjustments
  
$
(2
)
  
$
(5
)
  
$
(1
)
  
$
(6
)
Total comprehensive loss
  
$
(4,183
)
  
$
(2,463
)
  
$
(8,536
)
  
$
(3,404
)
 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
 
   
June 30,
2018
(unaudited)
    
December
31, 2017
  
ASSETS
            
Current assets
            
Cash and cash equivalents
  
$
6,995
    
$
15,595
  
Accounts receivable
    
652
      
545
  
Inventory
    
2,315
      
1,588
  
Other current assets
    
205
      
136
  
Total current assets
    
10,167
      
17,864
  
Property, plant and equipment, net
    
576
      
570
  
Other assets
    
195
      
21
  
TOTAL ASSETS
  
$
10,938
    
$
18,455
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities
                
Accounts payable and accrued expenses
  
$
838
    
$
862
  
Accrued compensation
    
979
      
1,021
  
Other current liabilities
    
186
      
208
  
Total current liabilities
    
2,003
      
2,091
  
Other liabilities
    
126
      
126
  
Total liabilities
    
2,129
      
2,217
  
                 
Commitments and contingencies
    
—
      
—
  
                 
Stockholders’ equity
                
Series A junior participating preferred stock as of June 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 30,000 shares, none outstanding
    
—
      
—
  
Series F convertible preferred stock as of June 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 610 and 3,780 shares, respectively, issued and outstanding 610 and 3,780, respectively
    
—
      
—
  
Preferred stock as of June 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 39,969,390 and 39,966,220 shares, none outstanding
    
—
      
—
  
Common stock as of June 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 4,505,953 and 3,798,929, respectively
            
—
  
Additional paid‑in capital
    
198,474
      
197,367
  
Accumulated other comprehensive income:
                
Foreign currency translation adjustment
    
1,226
      
1,227
  
Accumulated deficit
    
(190,891
)
    
(182,356
)
Total stockholders’ equity
    
8,809
      
16,238
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
10,938
    
$
18,455
  
 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

   
Six months ended
June 30,
  
   
2018
    
2017
  
Operating Activities:
            
Net loss
  
$
(8,535
)
  
$
(3,398
)
Adjustments to reconcile net loss to cash flows used in operating activities:
                
Depreciation and amortization expense
    
115
      
436
  
Stock-based compensation expense, net
    
1,107
      
281
  
Change in fair value of warrant liability
    
-
      
(1,466
)
Warrant valuation expense
    
-
      
67
  
Changes in operating assets and liabilities:
                
Accounts receivable
    
(107
)
    
(336
)
Inventory
    
(727
)
    
(187
)
Other current assets
    
(48
)
    
8
  
Accounts payable and accrued expenses
    
(283
)
    
(1,103
)
Net cash used in operations
    
(8,478
)
    
(5,698
)
                 
Investing Activities:
                
Purchases of property and equipment
    
(121
)
    
(20
)
Net cash used in investing activities
    
(121
)
    
(20
)
                 
Financing Activities:
                
Net proceeds from public stock offering
    
-
      
8,002
  
Net proceeds from exercise of warrants
    
-
      
1,768
  
Net proceeds from the sale of preferred stock and warrants
    
-
      
184
  
Net cash (used in) provided by financing activities
    
-
      
9,954
  
                 
Effect of exchange rate changes on cash
    
(1
)
    
(1
)
Net (decrease) increase in cash and cash equivalents
    
(8,600
)
    
4,235
  
Cash and cash equivalents - beginning of period
    
15,595
      
1,323
  
Cash and cash equivalents - end of period
  
$
6,995
    
$
5,558
  
                 
Supplement schedule of non-cash activities
                
Warrants issued as inducement to warrant exercise
  
$
-
    
$
509
  
Conversion of temporary equity to permanent equity
  
$
-
    
$
485
  
Financing fees included in long-term assets and accounts payable
  
$
195
    
$
-
  

CONTACTS:
 
INVESTORS:
Claudia Napal Drayton
Chief Financial Officer
CHF Solutions, Inc.
952-345-4205
ir@chf-solutions.com
 
-or-
Bret Shapiro
Managing Partner
CORE IR
516-222-2560
brets@coreir.com
www.coreir.com
 
MEDIA
Jules Abraham
JQA Partners, Inc.
917-885-7378
jabraham@jqapartners.com