CHF Solutions, Inc. Announces 21% Revenue Growth for its Third Quarter, 2017 and Provides Company Update
- 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 theUnited 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
FINANCIALS
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited and in thousands, except per share amounts) | |||||||||||||||
| Three months ended | Nine months ended | |||||||||||||
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 | ) |
Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts) | ||||||
2017 (unaudited) | ||||||
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 | ||||
| 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 | — | 485 | ||||
Stockholders' equity | ||||||
Series A junior participating preferred stock as of | — | — | ||||
Series B-1 convertible preferred stock as of | — | — | ||||
Series C convertible preferred stock as of | — | — | ||||
Preferred stock as of | — | — | ||||
Common stock as of 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 |
Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | ||||||||
Nine months ended | ||||||||
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
To access the live webcast, please visit the Investors page of the
About
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
For further information, please contact:
Claudia Napal Drayton
Chief Financial Officer
T: +1-952-345-4205
Investor Relations
ir@chf-solutions.com
-or-
Managing Partner
CORE IR
516 222 2560
brets@coreir.com
www.coreir.com
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