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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): February 20, 2019

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 February 20, 2019, CHF Solutions, Inc. issued a press release reporting its financial results for the quarter and year ended December 31, 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

Exhibit No.
Description
   
Press Release, dated February 20, 2019, reporting the financial results of CHF Solutions, Inc. for the quarter and year ended December 31, 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: February 20, 2019
CHF Solutions, Inc.
     
 
By:
/s/ Claudia Drayton
 
Name:
Claudia Drayton
 
Title:
Chief Financial Officer

Exhibit 99.1

CHF Solutions, Inc. Announces 80% Revenue Growth for its Fourth Quarter and Provides Company Update

Eden Prairie, MN: February 20, 2019: (GLOBE NEWSWIRE) CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for the fourth quarter and year ended December 31, 2018, which included the following highlights:


 •
Revenue for the fourth quarter ended December 31, 2018 increased 80.4 percent compared to the same period in 2017. Revenue growth for the year 2018 was 40.7 percent compared to the year 2017.


•
Continued marketing focus into post-cardiovascular surgery and heart failure outpatient clinics.


•
Commenced discussions with the FDA to request a label modification to include pediatrics.


•
Continued international expansion with announcement of new distributor agreements in India and Brazil.


•
Announced the filing of two new patent applications to deepen the company’s intellectual property protection of its Aquadex Flexflow® system.


•
Ended the quarter with $5.5 million in cash and cash equivalents and no debt.

“Our fourth quarter and year-end performance reflects the significant work our team accomplished during 2018. We achieved impressive revenue growth and continued to make strides in our commercialization efforts,” said John Erb, chairman and CEO of CHF Solutions. “I look forward to executing on the additional market opportunities we have identified, which we believe will deliver additional growth in 2019 and beyond.”

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 http://ir.chf-solutions.com/events. Alternatively, you may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID: 4589101. An audio archive of the webcast will be available following the call at http://ir.chf-solutions.com/events.

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 trends in our revenue, our expansion plans to expand into the post-cardiovascular surgery market, our plans for label expansion of Aquadex FlexFlow and our future growth and developments in 2019 and beyond.  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, 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
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share amounts)

   
Three months ended
December 31
    
Twelve months ended
December 31,
  
   
2018
    
2017
    
2018
    
2017
  
Net sales
  
$
1,499
    
$
831
    
$
4,998
    
$
3,553
  
Costs and Expenses:
                                
     Cost of goods sold
    
984
      
851
      
3,670
      
2,763
  
     Selling, general and administrative
    
3,822
      
2,692
      
15,311
      
10,170
  
     Research and development
    
946
      
479
      
3,053
      
1,481
  
     Goodwill and intangibles impairment
    
—
      
3,951
      
—
      
3,951
  
           Total costs and expenses
    
5,752
      
7,973
      
22,034
      
18,365
  
           Loss from operations
    
(4,253
)
    
(7,142
)
    
(17,036
)
    
(14,812
)
Other income (expense):
                                
     Other income, net
    
—
      
—
      
10
      
28
  
     Warrant valuation expense
    
—
      
—
      
—
      
(67
)
     Change in fair value of warrant liability
    
—
      
5
      
—
      
1,475
  
           Total other income
    
—
      
5
      
10
      
1,436
  
           Loss before income taxes
    
(4,253
)
    
(7,137
)
    
(17,026
)
    
(13,376
)
Income tax expense
    
(3
)
    
—
      
(6
)
    
(6
)
           Net loss
  
$
(4,256
)
  
$
(7,137
)
  
$
(17,032
)
  
$
(13,382
)
                                 
Basic and diluted loss per share
  
$
(8.37
)
  
$
(140.07
)
  
$
(42.14
)
  
$
(525.01
)
                                 
Weighted average shares outstanding – basic and diluted
    
509
      
113
      
404
      
48
  
                                 
Other comprehensive loss:
                                
     Foreign currency translation adjustment
  
$
(2
)
  
$
(1
)
  
$
(4
)
  
$
(8
)
Total comprehensive loss
  
$
(4,258
)
  
$
(7,138
)
  
$
(17,036
)
  
$
(13,390
)
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share amounts)

   
December 31,
2018
    
December 31,
2017
  
ASSETS
            
Current assets
            
        Cash and cash equivalents
  
$
5,480
    
$
15,595
  
        Accounts receivable
    
786
      
545
  
        Inventories
    
1,658
      
1,588
  
        Other current assets
    
203
      
136
  
Total current assets
    
8,127
      
17,864
  
        Property, plant and equipment, net
    
536
      
570
  
        Other assets
    
113
      
21
  
TOTAL ASSETS
  
$
8,776
    
$
18,455
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities
                
          Accounts payable
  
$
1,133
    
$
862
  
          Accrued compensation
    
1,498
      
1,021
  
          Other current liabilities
    
209
      
208
  
Total current liabilities
    
2,840
      
2,091
  
          Other liabilities
    
—
      
126
  
Total liabilities
    
2,840
      
2,217
  
Commitments and contingencies
                
                 
Stockholders’ equity
                
Series A junior participating preferred stock as of December 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 30,000 shares, none outstanding
    
—
      
—
  
Series F convertible preferred stock as of December 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 535 and 3,780 shares, respectively, issued and outstanding 535 and 3,780, respectively
                
Preferred stock as of December 31, 2018 and December 31, 2017, par value
                
$0.0001 per share; authorized 39,969,465 and 39,966,220 shares, respectively, none outstanding
    
—
      
—
  
Common stock as of December 31, 2018 and December 31, 2017, par value
                
$0.0001 per share; authorized 100,000,000 shares, issued and outstanding
                
513,445 and 271,357, respectively
    
—
      
—
  
Additional paid‑in capital
    
204,101
      
197,367
  
Accumulated other comprehensive income:
                
     Foreign currency translation adjustment
    
1,223
      
1,227
  
Accumulated deficit
    
(199,388
)
    
(182,356
)
Total stockholders’ equity
    
5,936
      
16,238
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
8,776
    
$
18,455
  
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)

   
For the years ended
December 31,
  
   
2018
    
2017
  
Operating Activities
            
Net loss
  
$
(17,032
)
  
$
(13,382
)
Adjustments to reconcile net loss to cash flows from operating activities:
                
Depreciation and amortization
    
232
      
769
  
Stock-based compensation expense, net
    
2,087
      
499
  
Goodwill and intangibles impairment
    
—
      
3,951
  
Change in fair value of warrant liability
    
—
      
(1,475
)
Warrant valuation expense
    
—
      
67
  
Changes in assets and liabilities:
                
Accounts receivable
    
(241
)
    
(263
)
Inventories
    
(70
)
    
(911
)
Other current assets
    
(67
)
    
1
  
Other assets
    
(14
)
    
—
  
Accounts payable and accrued expenses
    
545
      
(1,176
)
Net cash used in operations
    
(14,560
)
    
(11,920
)
                 
Investing activities:
                
Purchase of property and equipment
    
(198
)
    
(259
)
Net cash used in investing activities
    
(198
)
    
(259
)
                 
Financing activities:
                
Net proceeds from public stock offerings
    
4,647
      
24,281
  
Net proceeds from exercise of warrants
    
—
      
1,989
  
Net proceeds from the sale of preferred stock, common stock and warrants
    
—
      
184
  
Net cash provided by financing activities
    
4,647
      
26,454
  
                 
Effect of exchange rate changes on cash
    
(4
)
    
(3
)
Net increase (decrease) in cash and cash equivalents
    
(10,115
)
    
14,272
  
Cash and cash equivalents—beginning of period
    
15,595
      
1,323
  
Cash and cash equivalents—end of period
  
$
5,480
    
$
15,595
  
                 
Supplemental schedule of non-cash activities
                
     Financing fees incurred for subsequent equity financing included in other assets and accounts payable
  
$
78
    
$
—
  
    Warrants issued as inducement to warrant exercise
  
$
—
    
$
509
  
    Conversion of temporary equity to permanent equity
  
$
—
    
$
485
  
                 
Supplemental cash flow information
                
Cash paid for income taxes
  
$
2
    
$
6
  
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