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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):  May 8, 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 May 8, 2018, CHF Solutions, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended March 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 May 8, 2018, reporting the Company’s financial results for the quarter ended March 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: May 8, 2018
CHF SOLUTIONS, INC.
     
 
By:
/s/ Claudia Drayton
 
Name:
Claudia Drayton
 
Title:
Chief Financial Officer
 
 
Exhibit 99.1
 

CHF Solutions, Inc. Announces 25 Percent Increase in Revenues for First Quarter 2018 Over Previous Quarter and Provides Company Update

Eden Prairie, Minn., May 8, 2018 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for the first quarter ended March 31, 2018, which included the following highlights:

•
Revenue for first quarter ended March 31, 2018 increased 24.8 percent compared to the previous quarter and 15.1 percent compared to the same period during the prior year.
 
•
Strategic expansion of field clinical specialist team with the addition of three experienced heart failure nurses, for a total of five.
 
•
Addition of a seasoned vice president of marketing and additional marketing team members.
 
•
Continued international expansion and announced new agreements with distributors in Spain and Italy and initial commercial orders for Singapore and Hong Kong.
 
•
Launched new marketing initiatives and sales tools to continue education and awareness campaigns to support field team.
 
“We began the year strong with continued double-digit increase in our revenues over the previous quarter and we believe we are well-poised to continue to grow in the quarters to come,” said John Erb, Chairman and CEO of CHF Solutions. “We will continue to develop and refine our strategic focus toward driving revenue, which is the key metric our employees, shareholders and potential investors use to measure performance.”
 
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
March 31,
  
   
2018
    
2017
  
Net sales
  
$
1,037
    
$
901
  
Costs and Expenses:
                
Cost of goods sold
    
901
      
514
  
Selling, general and administrative
    
4,011
      
2,387
  
Research and development
    
479
      
308
  
Total costs and expenses
    
5,391
      
3,209
  
Loss from operations
    
(4,354
)
    
(2,308
)
Other income (expense):
                
Other income, net
    
—
      
6
  
Warrant valuation expense
    
—
      
(67
)
Change in fair value of warrant liability
    
—
      
1,429
  
Total other income (expense)
    
—
      
1,368
  
Loss before income taxes
    
(4,354
)
    
(940
)
Income tax expense
    
—
      
—
  
Net loss
  
$
(4,354
)
  
$
(940
)
                 
Basic and diluted loss per share
  
$
(1.08
)
  
$
(35.05
)
                 
Weighted average shares outstanding – basic and diluted
    
4,031
      
79
  
                 
Other comprehensive income (loss):
                
Foreign currency translation adjustments
    
1
      
(1
)
Total comprehensive loss
  
$
(4,353
)
  
$
(941
)
 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
 
   
March 31,
2018
    
December 31,
2017
  
ASSETS
  
(unaudited)
        
Current assets
            
Cash and cash equivalents
  
$
10,504
    
$
15,595
  
Accounts receivable
    
658
      
545
  
Inventory
    
2,525
      
1,588
  
Other current assets
    
130
      
136
  
Total current assets
    
13,817
      
17,864
  
Property, plant and equipment, net
    
573
      
570
  
Other assets
    
21
      
21
  
TOTAL ASSETS
  
$
14,411
    
$
18,455
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities
                
Accounts payable
  
$
1,051
    
$
862
  
Accrued compensation
    
650
      
1,021
  
Other current liabilities
    
198
      
208
  
Total current liabilities
    
1,899
      
2,091
  
Other liabilities
    
126
      
126
  
Total liabilities
    
2,025
      
2,217
  
                 
Commitments and contingencies
    
—
      
—
  
                 
Stockholders’ equity
                
Series A junior participating preferred stock as of March 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 March 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 1,748 and 3,780 shares, respectively, issued and outstanding 1,748 and 3,780, respectively
    
—
      
—
  
Preferred stock as of March 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 39,968,252 and 39,966,220 shares, none outstanding
    
—
      
—
  
Common stock as of March 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 4,252,134 and 3,798,929, respectively
    
—
      
—
  
Additional paid‑in capital
    
197,868
      
197,367
  
Accumulated other comprehensive income:
                
Foreign currency translation adjustment
    
1,228
      
1,227
  
Accumulated deficit
    
(186,710
)
    
(182,356
)
Total stockholders’ equity
    
12,386
      
16,238
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
14,411
    
$
18,455
  
 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited and in thousands)

   
Three months ended
March 31,
  
   
2018
    
2017
  
Operating Activities:
            
Net loss
  
$
(4,354
)
  
$
(940
)
Adjustments to reconcile net loss to cash flows from operating activities:
                
Depreciation and amortization
    
54
      
215
  
Stock-based compensation expense, net
    
500
      
166
  
Change in fair value of warrant liability
    
—
      
(1,429
)
Warrant valuation expense
    
—
      
67
  
Changes in operating assets and liabilities:
                
Accounts receivable
    
(113
)
    
(124
)
Inventory
    
(937
)
    
(153
)
Other current assets
    
6
      
49
  
Accounts payable and accrued expenses
    
(192
)
    
535
  
Net cash used in operations
    
(5,036
)
    
(1,614
)
                 
Investing Activities:
                
Purchases of property and equipment
    
(57
)
    
—
  
Net cash used in investing activities
    
(57
)
    
—
  
                 
Financing Activities:
                
Net proceeds from the sale of preferred stock and warrants
    
—
      
184
  
Net proceeds from exercise of warrants
    
—
      
1,768
  
Net cash provided by financing activities
    
—
      
1,952
  
                 
Effect of exchange rate changes on cash
    
2
      
—
  
Net increase (decrease) in cash and cash equivalents
    
(5,091
)
    
338
  
Cash and cash equivalents - beginning of period
    
15,595
      
1,323
  
Cash and cash equivalents - end of period
  
$
10,504
    
$
1,661
  
                 
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
                
Cash paid for income taxes
  
$
—
    
$
—
  

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 CHF Solutions website at http://ir.chf-solutions.com/events. Alternatively, investors may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID 8694787.  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.
 
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 Company’s ability to grow revenue in future quarters. 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 commercialization 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.
 
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