CHF Solutions
Aug 8, 2017

CHF Solutions, Inc. Announces 18% Revenue Growth for its Second Quarter and Provides Company Update

EDEN PRAIRIE, Minn., Aug. 08, 2017 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (NASDAQ:CHFS) announced today its second quarter results for the period ending June 30, 2017, which included the following highlights:

"We are pleased with our second quarter results in both revenue growth and operational accomplishments," said John Erb, Chairman and CEO. "We have supported our account penetration goals with the addition of a growing direct salesforce and a focused effort to reengage with dormant accounts who stand to realize improved patient care and cost efficiencies with our Aquadex system.  We are excited to bring our manufacturing in-house which provides numerous advantages for CHF Solutions and enables us to better control our supply chain and potential margin improvements as well. Our focus remains on serving the large number of heart failure patients with fluid overload who can benefit from our Aquadex therapy. We continue to be very optimistic about our future and look forward to further developments in the coming quarters in support of achieving our growth and business objectives," Mr. Erb added.

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
  2017  2016    2017 
 2016
Net sales$864  $-  $1,765  $- 
Costs and expenses:               
  Cost of goods sold 616   -    1,130   - 
  Selling, general and administrative 2,420   1,412    4,807   2,761 
  Research and development 327    2,570   635   5,776 
     Total costs and expenses 3,363   3,982   6,572   8,537 
     Loss from operations (2,499)   (3,982)  (4,807)  (8,537)
Other income (expense):                
  Interest expense -    (207)  -   (436)
  Other income (expense), net 5    (1)  11   - 
  Warrant valuation expense -    -   (67)  - 
  Change in fair value of warrant liability 37    -   1,466   - 
     Total other income (expense) 42    (208)  1,410   (436)
     Loss before income taxes (2,457)   (4,190)  (3,397)  (8,973)
  Income tax benefit (expense), net (1)   2   (1)  (1)
Net loss $(2,458) $(4,188) $(3,398 ) $(8,974)
                
Basic and diluted loss per share$(0.47) $(6.83) $(1.39) $(14.64)
                
Weighted average shares outstanding - basic and diluted 7,430   613   4,505   613 
                
Other comprehensive income:               
  Foreign currency translation adjustments$(5) $(2) $(6) $(6)
Total comprehensive loss $(2,463) $(4,190) $(3,404) $(8,980)



 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
 
  June 30,
2017 (unaudited)
  December 31, 2016  
ASSETS       
Current assets       
  Cash and cash equivalents  $5,558 $1,323  
  Accounts receivable 618  282  
  Inventory 864  677  
  Other current assets 129  137  
Total current assets 7,169  2,419  
  Property, plant and equipment, net 446  540  
  Intangible assets, net 3,980  4,302  
  Goodwill 189  189  
  Other assets 21  21  
TOTAL ASSETS$11,805 $7,471  
        
LIABILITIES AND STOCKHOLDERS' EQUITY       
Current liabilities       
  Accounts payable and accrued expenses$1,520 $2,351  
  Accrued compensation 644  909  
Total current liabilities 2,164  3,260  
  Common stock warrant liability 10  1,843  
  Other liabilities 126  126  
Total liabilities 2,300  5,229  
Commitments and contingencies 
    
        
Temporary Stockholders' Equity       
Series D convertible preferred stock as of June 30, 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 June 30, 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 June 30, 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 June 30, 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     
Preferred stock as of June 30, 2017 and December 31, 2016, par value
$0.0001 per share; authorized 39,970,000 and 39,964,375.6 shares, respectively, none outstanding
     
Common stock as of June 30, 2017 and December 31, 2016, par value
$0.0001 per share; authorized 100,000,000 shares, issued and outstanding
12,321,238 and 777,238, respectively
 1    
Additional paid‑in capital 180,647  169,496  
Accumulated other comprehensive income:       
  Foreign currency translation adjustment 1,229  1,235  
Accumulated deficit (172,372) (168,974) 
Total stockholders' equity 9,505  1,757  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$11,805 $7,471 


 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
  Six months ended
June 30,
  2017 
  2016 
Operating Activities:        
Net loss$(3,398) $(8,974)
Adjustments to reconcile net loss to cash flows used in operating activities:       
  Depreciation and amortization expense 436   152 
  Stock-based compensation expense, net 281    499 
  Amortization of debt discount and financing fees -   162 
  Change in fair value of warrant liability (1,466)  - 
  Warrant valuation expense 67    - 
Changes in operating assets and liabilities:       
  Accounts receivable  (336)  - 
  Inventory (187)  - 
  Other current assets 8   197 
  Other assets -    25 
  Accounts payable and accrued expenses (1,103)  (1,197)
Net cash used in operations (5,698)  (9,136)
        
Investing Activities:       
  Purchases of property and equipment (20)  (29)
Net cash used in investing activities (20)  (29)
        
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    - 
  Repayments on borrowings on long-term debt -   (1,895)
Net cash (used in) provided by financing activities 9,954   (1,895)
         
Effect of exchange rate changes on cash (1)  (4)
Net increase (decrease) in cash and cash equivalents 4,235   (11,064)
Cash and cash equivalents - beginning of period 1,323   23,113 
Cash and cash equivalents - end of period$5,558  $12,049 
         
Supplement schedule of non-cash activities       
  Warrants issued as inducement to warrant exercise$509  $- 
  Conversion of temporary equity to permanent equity$485  $- 
        
Supplemental cash flow information       
  Interest paid on debt borrowings$-  $257 
        

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 61351748. 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 an early-stage 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, statements regarding building a direct field organization, increasing account penetration and utilization, driven by strong account training and servicing, commencement of in-house manufacturing, and the sufficiency of cash on hand.  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.

For further information, please contact:



Claudia Napal Drayton

Chief Financial Officer

CHF Solutions, Inc.

T: +1-952-345-4205



-or-



Bret Shapiro

Managing Partner

CORE IR

516 222 2560

brets@coreir.com

www.coreir.com



Investor Relations

CHF Solutions, Inc.

ir@chf-solutions.com

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Source: CHF Solutions

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