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 12, 2020
 
CHF Solutions, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware
001-35312
No. 68-0533453
(State or Other Jurisdiction of Incorporation or Organization)
(Commission File Number)
(I.R.S. Employer Identification No.)

12988 Valley View Road, Eden Prairie, MN 55344
(Address of Principal Executive Offices) (Zip Code)

(952) 345-4200
(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.0001 per share
CHFS
Nasdaq Capital Market

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 (Sec.230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Sec.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 12, 2020, CHF Solutions, Inc. (the “Company”) issued a press release reporting its financial results for the quarter ended March 31, 2020. 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 Item 2.02 of 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 8.01
Other Events.

As previously announced on April 21, 2020, the Company received $1.66 million under the Paycheck Protection Program established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

In light of new guidance issued by the United States Treasury Department and the U.S. Small Business Administration on April 23, 2020, following receipt of the funds by the Company, the Company has elected to return all funds the Company previously received under the Paycheck Protection Program, so that these funds could be used to help another small business in greater need during the COVID-19 pandemic. The Company has initiated the process with the lender for return of the funds and expects the funds to be returned before May 14, 2020.

Item 9.01
Financial Statements and Exhibits.

 
(d)
Exhibits

Exhibit No.
Description
   
Press Release, dated May 12, 2020, reporting the financial results of CHF Solutions, Inc. for the quarter ended March 31, 2020
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 12, 2020
CHF SOLUTIONS, INC.
     
 
By:
/s/ Claudia Drayton
 
Name:
Claudia Drayton
 
Title:
Chief Financial Officer
Exhibit 99.1

CHF Solutions, Inc. Announces 34 Percent Increase in Revenue for First Quarter 2020 Over Previous Year and Provides Company Update

Eden Prairie, MN: May 12, 2020: (GLOBE NEWSWIRE) CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for the first quarter ended March 31, 2020, which included the following highlights:


•
Revenue for the first quarter ended March 31, 2020, was $1.6 million, an increase of 34 percent compared to the same period of the prior year. Revenue increased by 19% from Q4 of 2019.


•
Received 510(k) clearance in the U.S. and CE Mark in the EU for adult and pediatric patients who weigh 20 kg or more and for the next generation Aquadex console, the Aquadex SmartFlow(TM).


•
Announced that Aquadex therapy is helping COVID-19 patients by managing fluid overload when dialysis equipment is in short supply.


•
Hosted two physician-led webinars on treatment of critically ill, COVID-19 patients, which addressed the importance of fluid management per the World Health Organization guidelines, and real-life applications of simple ultrafiltration, such as Aquadex therapy, in COVID-19 patients.


•
Announced expansion of commercial presence in Europe with distribution arrangement for Germany, Austria and Switzerland, and regulatory clearance to sell in India.


•
Ended the quarter with $5.7 million in cash and no debt. Subsequent to quarter end, announced the closing of two registered direct offerings for net proceeds of approximately $3.5 million, and warrant exercises of approximately $1.0 million, for total pro forma cash balance as of March 31, 2020 of $10.1 million.

“We are very pleased that we produce a product that is providing a meaningful therapy for treating the COVID-19 patients,” said John Erb, chairman and CEO of CHF Solutions. “We know we are very fortunate to be less impacted than many small medical device companies, and although the rest of the year is full of uncertainty, we remain optimistic about the value we can bring to our customers and our investors.”

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: 7875248. 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 dedicated to improving the lives of patients suffering from fluid overload with its novel ultrafiltration therapy system. The company is focused on developing, manufacturing and commercializing the Aquadex SmartFlow(TM) system for ultrafiltration therapy. CHF Solutions is headquartered in Minneapolis, Minn., with wholly-owned subsidiaries in Australia and Ireland. The company has been listed on the Nasdaq Capital Market since February 2012.

About the Aquadex SmartFlow System

The Aquadex SmartFlow system delivers clinically proven therapy using a simple, flexible and smart method of removing excess fluid from patients suffering from hypervolemia (fluid overload). The Aquadex SmartFlow system is indicated for temporary (up to 8 hours) or extended (longer than 8 hours in patients who require hospitalization) use in adult and pediatric patients weighing 20 kg or more whose fluid overload is unresponsive to medical management, including diuretics. All treatments must be administered by a health care provider, within an outpatient or inpatient clinical setting, under physician prescription, both having received training in extracorporeal therapies.
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 new market opportunities and anticipated growth in 2020 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 commercialization strategy, the impact of the COVID-19 pandemic,  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.

#  #  #

FINANCIALS

CHF SOLUTIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss
 (unaudited, in thousands, except per share amounts)

   
Three months ended March 31,
 
   
2020
   
2019
 
Net sales
 
$
1,630
   
$
1,215
 
Costs and Expenses:
               
     Cost of goods sold
   
796
     
612
 
     Selling, general and administrative
   
4,537
     
4,018
 
     Research and development
   
864
     
1,310
 
           Total costs and expenses
   
6,197
     
5,940
 
           Loss from operations
   
(4,567
)
   
(4,725
)
Other income, net
   
1
     
-
 
           Loss before income taxes
   
(4,566
)
   
(4,725
)
 Income tax expense
   
(2
)
   
(2
)
           Net loss
 
$
(4,568
)
 
$
(4,727
)
                 
Basic and diluted loss per share
 
$
(0.37
)
 
$
(11.47
)
                 
Weighted average shares outstanding – basic and diluted
   
16,439
     
805
 
                 
Other comprehensive income:
               
     Foreign currency translation adjustments
 
$
(3
)
 
$
(2
)
Total comprehensive loss
 
$
(4,571
)
 
$
(4,729
)
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)

   
March 31, 2020
   
December 31, 2019
 
ASSETS
 
(unaudited)
       
Current assets
           
        Cash and cash equivalents
 
$
5,669
   
$
1,279
 
        Accounts receivable
   
727
     
799
 
        Inventory
   
2,195
     
1,797
 
        Other current assets
   
141
     
161
 
Total current assets
   
8,732
     
4,036
 
        Property, plant and equipment, net
   
897
     
991
 
        Operating lease right-of-use asset
   
397
     
442
 
        Other assets
   
21
     
133
 
TOTAL ASSETS
 
$
10,047
   
$
5,602
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities
               
          Accounts payable
 
$
787
   
$
1,488
 
          Accrued compensation
   
1,114
     
1,592
 
          Current portion of operating lease liability
   
191
     
186
 
          Other current liabilities
   
39
     
85
 
Total current liabilities
   
2,131
     
3,351
 
          Operating lease liability
   
212
     
261
 
Total liabilities
   
2,343
     
3,612
 
                 
Commitments and contingencies
   
—
     
—
 
                 
Stockholders’ equity
               
Series A junior participating preferred stock as of March 31, 2020 and December 31, 2019, par value $0.0001 per share; authorized 30,000 shares, none outstanding
   
—
     
—
 
Series F convertible preferred stock as of March 31, 2020 and December 31, 2019, par value $0.0001 per share; authorized 435 and 535 shares, respectively, issued and outstanding 435 and 535, respectively
   
—
     
—
 
Series H convertible preferred stock as of March 31, 2020 and December 31, 2019, par value $0.0001 per share; authorized 488,090 and 0 shares, respectively, issued and outstanding 488,090 and 0, respectively
               
Preferred stock as of March 31, 2020 and December 31, 2019, par value
 
$0.0001 per share; authorized 39,481,475 and 39,969,465 shares, none outstanding
   
—
     
—
 
Common stock as of March 31, 2020 and December 31, 2019, par value
 
$0.0001 per share; authorized 100,000,000 shares, issued and outstanding
 
27,142,390 and 4,674,068, respectively
   
3
     
—
 
Additional paid‑in capital
   
228,560
     
218,278
 
Accumulated other comprehensive income:
               
     Foreign currency translation adjustment
   
1,211
     
1,214
 
Accumulated deficit
   
(222,070
)
   
(217,502
)
Total stockholders’ equity
   
7,704
     
1,990
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
10,047
   
$
5,602
 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)

   
Three months ended March 31,
 
   
2020
   
2019
 
Operating Activities:
           
Net loss
 
$
(4,568
)
 
$
(4,727
)
Adjustments to reconcile net loss to cash flows used in operating activities:
               
     Depreciation and amortization
   
65
     
59
 
      Stock-based compensation expense, net
   
380
     
362
 
      Loss on disposal of property and equipment
   
46
     
—
 
Changes in operating assets and liabilities:
               
     Accounts receivable
   
72
     
164
 
     Inventory
   
(398
)
   
(132
)
     Other current assets
   
20
     
(147
)
     Other assets and liabilities
   
67
     
112
 
     Accounts payable and accrued expenses
   
(1,179
)
   
(598
)
Net cash used in operating activities
   
(5,495
)
   
(4,907
)
                 
Investing Activities:
               
    Purchases of property and equipment
   
(17
)
   
(41
)
Net cash used in investing activities
   
(17
)
   
(41
)
                 
Financing Activities:
               
    Proceeds from public stock offerings, net
   
9,616
     
10,959
 
    Proceeds from warrant exercises
   
289
     
—
 
Net cash provided by financing activities
   
9,905
     
10,959
 
                 
Effect of exchange rate changes on cash
   
(3
)
   
(2
)
Net increase (decrease) in cash and cash equivalents
   
4,390
     
6,009
 
Cash and cash equivalents - beginning of period
   
1,279
     
5,480
 
Cash and cash equivalents - end of period
 
$
5,669
   
$
11,489
 
                 
Supplemental cash flow information
               
   Cash paid for income taxes
 
$
—
   
$
—
 
CONTACTS:

INVESTORS:
Claudia Napal Drayton
Chief Financial Officer
CHF Solutions, Inc.
952-345-4205
ir@chf-solutions.com

MEDIA:
Jessica Stebing
Health+Commerce
260-336-6202
jstebing@healthandcommerce.com