Current report Chf Solutions, Inc.

8-K - Current report

Filed: 2018-03-20 08:15:23
Dated: 2018-03-20
Period of Report: 2018-03-20
form8k.htm 8-K



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):  March 20, 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 March 20, 2018, CHF Solutions, Inc. (the “Company”) issued a press release reporting its financial results for the quarter and year ended December 31, 2017.  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 March 20, 2018, reporting the Company’s financial results for the quarter and year ended December 31, 2017
 

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: March 20, 2018
CHF SOLUTIONS, INC.
 
       
 
By:
/s/ Claudia Drayton
 
 
Name:
Claudia Drayton
 
 
Title:
Chief Financial Officer
 
 
 

ex99_1.htm EXHIBIT 99.1



Exhibit 99.1
 
 
 
CHF Solutions, Inc. Announces 11.4 Percent Revenue Growth for its Fourth Quarter and Provides Company Update

Eden Prairie, MN: March 20, 2018: (GLOBE NEWSWIRE) CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for the fourth quarter and year ended December 31, 2017, which included the following highlights:

Revenue for fourth quarter ended December 31, 2017 increased 11.4 percent compared to the same period in 2016. Revenue growth for the year 2017 was 12.4 percent compared to the prior year on a pro forma basis.
 
Continued onboarding of six experienced sales professionals hired in the prior quarter. Subsequent to quarter end, announced the addition of three new field clinical specialists for a total of five who will assist in training and supporting hospital accounts.
 
Continued international expansion by signing a distribution agreement with TransMedic Plc, a southeast Asia distributor.
 
Meta-analysis on role of ultrafiltration in reducing hospital readmissions published in the November 2017 issue of peer-reviewed publication Heart Failure Reviews.
 
Initiated manufacturing consoles and disposables following a successful transition from Baxter to in-house operations.
 
Completed an underwritten public offering for net proceeds of $16.2 million.
 
Completed annual impairment review of intangible assets and goodwill. Recorded a non-cash write off of $4.0 million to reflect the difference between fair market valuation of the Company’s net assets with its recorded book values.
 
Reduced operating cash utilization by 27 percent in 2017 compared to the same period in 2016.
 
“We are pleased with our fourth quarter and year performance, as we achieved double-digit revenue growth over 2016,” said John Erb, CEO of CHF Solutions. “I’m particularly proud with the execution of our business plan that drove the last quarter of the year, setting us up for continued progress into 2018.  We are committed to increasing our footprint in the market, and the hiring of sales staff as well as the expansion of our international distribution channels, will go a long way toward that goal.”
 
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 or access the webcast directly at https://edge.media-server.com/m6/p/dxgvnn8x. Alternatively, investors may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID 9684909.  An audio archive of the webcast and the call script will be available following the call on the Investor page at www.chf-solutions.com.
 

 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,
 
   
2017
   
2016
   
2017
   
2016
 
Net sales
 
$
831
   
$
746
   
$
3,553
   
$
1,289
 
Costs and Expenses:
                               
Cost of goods sold
   
851
     
526
     
2,763
     
713
 
Selling, general and administrative
   
2,692
     
2,685
     
10,170
     
8,129
 
Research and development
   
479
     
598
     
1,481
     
8,109
 
Goodwill and intangibles impairment
   
3,951
     
     
3,951
     
 
Total costs and expenses
   
7,973
     
3,809
     
18,365
     
16,951
 
Loss from operations
   
(7,142
)
   
(3,063
)
   
(14,812
)
   
(15,662
)
Other income (expense):
                               
Interest expense
   
     
     
     
(504
)
Loss on early retirement of long-term debt
   
     
     
     
(500
)
Other income (expense), net
   
     
     
28
     
2
 
Warrant valuation expense
   
     
     
(67
)
   
 
Change in fair value of warrant liability
   
5
     
172
     
1,475
     
818
 
Total other income (expense)
   
5
     
172
     
1,436
     
(184
)
Loss before income taxes
   
(7,137
)
   
(2,891
)
   
(13,376
)
   
(15,846
)
Income tax (expense) benefit, net
   
     
(10
)
   
(6
)
   
54
 
Net loss
 
$
(7,137
)
 
$
(2,901
)
 
$
(13,382
)
 
$
(15,792
)
                                 
Basic and diluted loss per share
 
$
(10.00
)
 
$
(133.36
)
 
$
(37.51
)
 
$
(536.12
)
                                 
Weighted average shares outstanding – basic and diluted
   
1,587
     
36
     
665
     
33
 
                                 
Other comprehensive income:
                               
Foreign currency translation adjustment
 
$
(1
)
 
$
1
   
$
(8
)
 
$
(11
)
Total comprehensive loss
 
$
(7,138
)
 
$
(2,900
)
 
$
(13,390
)
 
$
(15,803
)
 

CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share amounts)

   
December 31,
2017
   
December 31,
2016
 
ASSETS
           
Current assets
           
Cash and cash equivalents
 
$
15,595
   
$
1,323
 
Accounts receivable
   
545
     
282
 
Inventories
   
1,588
     
677
 
Other current assets
   
136
     
137
 
Total current assets
   
17,864
     
2,419
 
Property, plant and equipment, net
   
570
     
540
 
Intangible assets, net
   
-
     
4,302
 
Goodwill
   
-
     
189
 
Other assets
   
21
     
21
 
TOTAL ASSETS
 
$
18,455
   
$
7,471
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities
               
Accounts payable
 
$
862
   
$
1,987
 
Accrued compensation
   
1,021
     
909
 
Other current liabilities
   
208
     
364
 
Total current liabilities
   
2,091
     
3,260
 
Common stock warrant liability
   
     
1,843
 
Other liabilities
   
126
     
126
 
Total liabilities
   
2,217
     
5,229
 
Commitments and contingencies
   
     
 
                 
Temporary Stockholders’ Equity
               
Series D convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 900 shares, respectively, issued and outstanding 0 and 700, respectively
   
     
485
 
                 
Stockholders’ equity
               
Series A junior participating preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 30,000 shares, none outstanding
   
     
 
Series B-1 convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 1,824.4 shares, respectively, issued and outstanding 0 and 1,824.4, respectively
   
     
 
Series C convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 2,900 shares, respectively, issued and outstanding 0 and 2,900, respectively
   
     
 
Series F convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 3,780 and 0 shares, respectively, issued and outstanding 3,780 and 0, respectively
               
Preferred stock as of December 31, 2017 and December 31, 2016, par value
$0.0001 per share; authorized 39,966,220 and 39,964,375.6 shares, respectively, none outstanding
   
     
 
Common stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 3,798,929 and 38,862, respectively
   
     
 
Additional paid‑in capital
   
197,367
     
169,496
 
Accumulated other comprehensive income:
               
Foreign currency translation adjustment
   
1,227
     
1,235
 
Accumulated deficit
   
(182,356
)
   
(168,974
)
Total stockholders’ equity
   
16,238
     
1,757
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
18,455
   
$
7,471
 
 

CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)

   
For the years ended December 31,
 
In thousands
 
2017
   
2016
 
Operating Activities
     
Net loss          
 
$
(13,382
)
 
$
(15,792
)
Adjustments to reconcile net loss to cash flows from operating activities:
               
Depreciation and amortization          
   
769
     
697
 
Stock based compensation expense, net          
   
499
     
949
 
Amortization of debt discount and financing fees          
   
     
187
 
Goodwill and intangibles impairment
   
3,951
     
 
Loss on retirement of long-term debt          
   
     
500
 
Change in fair value of warrant liability          
   
(1,475
)
   
(818
)
Warrant valuation expense          
   
67
     
 
Changes in assets and liabilities:
               
Accounts receivable          
   
(263
)
   
(282
)
Inventory          
   
(911
)
   
(677
)
Other current assets          
   
1
     
342
 
Other assets and liabilities          
   
     
(464
)
Accounts payable and accrued expenses          
   
(1,176
)
   
(934
)
Net cash used in operations          
   
(11,920
)
   
(16,292
)
                 
Investing activities:
               
Purchase of property and equipment          
   
(259
)
   
(117
)
Purchase of Aquadex product line          
   
     
(4,000
)
Net cash used in investing activities          
   
(259
)
   
(4,117
)
                 
Financing activities:
               
Net proceeds from public stock offering          
   
24,281
     
 
Net proceeds from exercise of warrants          
   
1,989
     
 
Net proceeds from the sale of preferred stock, common stock and warrants
   
184
     
6,636
 
Repayments of long-term debt          
   
     
(8,000
)
Net cash provided by (used in) financing activities          
   
26,454
     
(1,364
)
                 
Effect of exchange rate changes on cash          
   
(3
)
   
(17
)
Net increase (decrease) in cash and cash equivalents          
   
14,272
     
(21,790
)
Cash and cash equivalents—beginning of period          
   
1,323
     
23,113
 
Cash and cash equivalents—end of period          
 
$
15,595
   
$
1,323
 
                 
Supplemental schedule of non-cash activities
               
    Warrants issued as inducement to warrant exercise
 
$
509
    $
 
    Conversion of temporary equity to permanent equity
 
$
485
    $
 
Common stock issued for business acquisition
 
$
   
$
950
 
                 
Supplemental cash flow information
               
Interest paid on debt borrowings          
 
$
   
$
840
 
Cash paid for income taxes
 
$
6
   
$
47
 
 

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 mission is to predict, measure, and control patient fluid balance through science, collaboration, and innovative medical technology. CHF Solutions is a Delaware corporation headquartered in Minneapolis, Minnesota 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, statements regarding the impact of hiring sales staff and expansion of our distribution channels.  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 recently announced strategic realignment, 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.
 
CONTACTS:

INVESTORS:
Claudia Napal Drayton
Chief Financial Officer
CHF Solutions, Inc.
952-345-4205
[email protected]

-or-
Bret Shapiro
Managing Partner
CORE IR
516-222-2560
[email protected]
www.coreir.com

MEDIA
Jules Abraham
JQA Partners, Inc.
917-885-7378
[email protected]
 
 

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0001140361-18-014211.txt   Complete submission text file   236686
image00001.jpg 3 GRAPHIC 5105

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