EDEN PRAIRIE, Minn., Oct. 31, 2017 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (NASDAQ:CHFS) announced today its
third quarter 2017 results, for the period ending September 30, 2017, which included the following highlights:
- Revenue for third quarter ended September 30, 2017 increased 21% compared to the same period in 2016 on a proforma
basis.
- Hired and trained 6 additional experienced sales professionals and increased the US sales team to 10 territories, up from 4
territories in Q2.
- Initiated international distribution by signing a distribution agreement with APC Cardiovascular Ltd., a distributor based in
the United Kingdom.
- Held a scientific advisory board meeting with 6 key physician opinion leaders that provided guidance on protocol design for a
mechanistic study and a registry study expected to begin in early 2018.
- Transition of Aquadex FlexFlow System manufacturing from Baxter to in-house operations going as planned and on schedule.
In-house manufacturing expected to commence in the fourth quarter of 2017.
- Reduced operating expenses by 31% and operating cash utilization by 35% from same quarter last year.
- Subsequent to quarter end, received NASDAQ notification that Company is in compliance with minimum bid price requirements and
the listing matter has been closed.
“We are pleased with our performance during the third quarter 2017 as we realized substantive revenue growth as compared to the
same period in 2016 and versus last quarter,” said John Erb, CEO of CHF Solutions. “We are pleased to have initiated our
international distribution and continue to make progress in the execution of our growth strategy with the addition of 6 new
experienced sales representatives, while continuing to make progress on manufacturing, product enhancements, market positioning and
clinical evidence development,” 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
September 30, |
Nine months ended
September 30, |
| |
|
2017 |
|
2016 |
|
|
2017 |
2016 |
|
| Net sales |
$ |
957 |
|
$ |
543 |
|
$ |
2,722 |
|
$ |
543 |
|
| Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of goods sold |
|
782 |
|
|
187 |
|
|
1,912 |
|
|
187 |
|
| Selling, general and administrative |
|
2,671 |
|
|
2,683 |
|
|
7,478 |
|
|
5,444 |
|
| Research and development |
|
367 |
|
|
1,735 |
|
|
1,002 |
|
|
7,511 |
|
| Total costs and expenses |
|
3,820 |
|
|
4,605 |
|
|
10,392 |
|
|
13,142 |
|
| Loss from operations |
|
(2,863 |
) |
|
(4,062 |
) |
|
(7,670 |
) |
|
(12,599 |
) |
| Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
- |
|
|
(68 |
) |
|
- |
|
|
(504 |
) |
| Loss on early retirement of long-term debt |
|
- |
|
|
(500 |
) |
|
- |
|
|
(500 |
) |
| Other income, net |
|
17 |
|
|
2 |
|
|
28 |
|
|
2 |
|
| Warrant valuation expense |
|
- |
|
|
- |
|
|
(67 |
) |
|
- |
|
| Change in fair value of warrant liability |
|
4 |
|
|
646 |
|
|
1,470 |
|
|
646 |
|
| Total other income (expense) |
|
21 |
|
|
80 |
|
|
1,431 |
|
|
(356 |
) |
| Loss before income taxes |
|
(2,842 |
) |
|
(3,982 |
) |
|
(6,239 |
) |
|
(12,955 |
) |
| Income tax benefit (expense), net |
|
(5 |
) |
|
65 |
|
|
(6 |
) |
|
64 |
|
| Net loss |
$ |
(2,847 |
) |
$ |
(3,917 |
) |
$ |
(6,245 |
) |
$ |
(12,891 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted loss per share |
$ |
(4.55 |
) |
$ |
(117.66 |
) |
$ |
(25.36 |
) |
$ |
(409.02 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding – basic and diluted |
|
626 |
|
|
33 |
|
|
359 |
|
|
32 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation adjustments |
$ |
(1 |
) |
$ |
(6 |
) |
$ |
(7 |
) |
$ |
(12 |
) |
| Total comprehensive loss |
$ |
(2,848 |
) |
$ |
(3,923 |
) |
$ |
(6,252 |
) |
$ |
(12,903 |
) |
| |
|
|
|
|
|
|
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts) |
|
| |
|
|
|
|
|
|
| |
|
September 30,
2017 (unaudited) |
|
|
December 31, 2016 |
|
| ASSETS |
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
| Cash and cash equivalents |
$ |
2,513 |
|
$ |
1,323 |
|
| Accounts receivable |
|
780 |
|
|
282 |
|
| Inventory |
|
1,337 |
|
|
677 |
|
| Other current assets |
|
108 |
|
|
137 |
|
| Total current assets |
|
4,738 |
|
|
2,419 |
|
| Property, plant and equipment, net |
|
575 |
|
|
540 |
|
| Intangible assets, net |
|
3,817 |
|
|
4,302 |
|
| Goodwill |
|
189 |
|
|
189 |
|
| Other assets |
|
21 |
|
|
21 |
|
| TOTAL ASSETS |
$ |
9,340 |
|
$ |
7,471 |
|
| |
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
| Accounts payable and accrued expenses |
$ |
1,412 |
|
$ |
2,351 |
|
| Accrued compensation |
|
815 |
|
|
909 |
|
| Total current liabilities |
|
2,227 |
|
|
3,260 |
|
| Common stock warrant liability |
|
6 |
|
|
1,843 |
|
| Other liabilities |
|
126 |
|
|
126 |
|
| Total liabilities |
|
2,359 |
|
|
5,229 |
|
| Commitments and contingencies |
|
— |
|
|
— |
|
| |
|
|
|
|
|
|
| Temporary Stockholders’ Equity |
|
|
|
|
|
|
| Series D convertible preferred stock as of September 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 September 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 September 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 September 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 September 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 September 30, 2017 and December 31, 2016, par value
$0.0001 per share; authorized 100,000,000 shares, issued and outstanding
625,844 and 38,862, respectively |
|
— |
|
|
— |
|
| Additional paid‑in capital |
|
180,972 |
|
|
169,496 |
|
| Accumulated other comprehensive income: |
|
|
|
|
|
|
| Foreign currency translation adjustment |
|
1,228 |
|
|
1,235 |
|
| Accumulated deficit |
|
(175,219 |
) |
|
(168,974 |
) |
| Total stockholders’ equity |
|
6,981 |
|
|
1,757 |
|
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
9,340 |
|
$ |
7,471 |
|
| |
|
|
CHF SOLUTIONS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands) |
| |
|
|
| |
|
Nine months ended
September 30, |
| |
|
2017 |
|
|
2016 |
|
| Operating Activities: |
|
|
|
|
|
|
| Net loss |
$ |
(6,245 |
) |
$ |
(12,891 |
) |
| Adjustments to reconcile net loss to cash flows used in operating activities: |
|
|
|
|
|
|
| Depreciation and amortization expense |
|
656 |
|
|
457 |
|
| Stock-based compensation expense, net |
|
391 |
|
|
764 |
|
| Amortization of debt discount and financing fees |
|
- |
|
|
187 |
|
| Loss on early retirement of long-term debt |
|
- |
|
|
500 |
|
| Change in fair value of warrant liability |
|
(1,470 |
) |
|
(646 |
) |
| Warrant valuation expense |
|
67 |
|
|
- |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
| Accounts receivable |
|
(498 |
) |
|
(111 |
) |
| Inventory |
|
(660 |
) |
|
(202 |
) |
| Other current assets |
|
28 |
|
|
256 |
|
| Other assets |
|
- |
|
|
(471 |
) |
| Accounts payable and accrued expenses |
|
(1,038 |
) |
|
(1,406 |
) |
| Net cash used in operations |
|
(8,769 |
) |
|
(13,563 |
) |
| |
|
|
|
|
|
|
| Investing Activities: |
|
|
|
|
|
|
| Purchases of property and equipment |
|
(206 |
) |
|
(110 |
) |
| Acquisition of Aquadex product line |
|
- |
|
|
(4,000 |
) |
| Net cash used in investing activities |
|
(206 |
) |
|
(4,110 |
) |
| |
|
|
|
|
|
|
| Financing Activities: |
|
|
|
|
|
|
| Net proceeds from public stock offering |
|
8,002 |
|
|
- |
|
| Net proceeds from exercise of warrants |
|
1,981 |
|
|
- |
|
| Net proceeds from the sale of common stock, preferred stock, and
warrants |
|
184 |
|
|
3,362 |
|
| Repayments on borrowings on long-term debt |
|
- |
|
|
(8,000 |
) |
| Net cash (used in) provided by financing activities |
|
10,167 |
|
|
(4,638 |
) |
| |
|
|
|
|
|
|
| Effect of exchange rate changes on cash |
|
(2 |
) |
|
(10 |
) |
| Net increase (decrease) in cash and cash equivalents |
|
1,190 |
|
|
(22,321 |
) |
| Cash and cash equivalents - beginning of period |
|
1,323 |
|
|
23,113 |
|
| Cash and cash equivalents - end of period |
$ |
2,513 |
|
$ |
792 |
|
| |
|
|
|
|
|
|
| Supplement 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 |
|
|
|
|
|
|
| Cash paid for interest |
$ |
- |
|
$ |
840 |
|
| Cash paid for income taxes |
$ |
8 |
|
$ |
47 |
|
| |
|
|
|
|
|
|
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 2559289. 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, Inc.
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 expectations to commence in-house manufacturing in the fourth
quarter of 2017, and expectations to begin a mechanistic study and a registry study in early 2018. 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
Investor Relations
CHF Solutions, Inc.
ir@chf-solutions.com
-or-
Bret Shapiro
Managing Partner
CORE IR
516 222 2560
brets@coreir.com
www.coreir.com
