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 9, 2017

 

SUNSHINE HEART, INC.

(Exact Name of Registrant as Specified in its Charter)

 


 

Delaware
(State or other jurisdiction of
incorporation)

 

001-35312
(Commission File No.)

 

68-0533453
(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 (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            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 x

 

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. o

 

 

 



 

Item 2.02   Results of Operations and Financial Condition.

 

On May 9, 2017, Sunshine Heart, Inc. (the “Company”) issued a press release reporting its financial results for the first quarter ended March 31, 2017.  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)

 

Exhibit No.

 

Description

99.1

 

Press Release, dated May 9, 2017, reporting the Company’s financial results for the first quarter ended March 31, 2017.

 

2



 

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 9, 2017

SUNSHINE HEART, INC.

 

 

 

By:

/S/ CLAUDIA DRAYTON

 

Name:

Claudia Drayton

 

Title:

Chief Financial Officer

 

3



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

99.1

 

Press Release, dated May 9, 2017, reporting the Company’s financial results for the first quarter ended March 31, 2017.

 

4


Exhibit 99.1

 

 

Sunshine Heart Announces First Quarter 2017 Financial Results and Provides Company Update

 

Eden Prairie, MN: May 9, 2017: (GLOBE NEWSWIRE) Sunshine Heart, Inc. (NASDAQ: SSH) announced today its financial results for the first quarter ended March 31, 2017. 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 Sunshine Heart website at ir.sunshineheart.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 18075619. An audio archive of the webcast and a transcript of the call will be available following the call at ir.sunshineheart.com.

 

Business Highlights

 

·                  The Company continues to execute strategy to drive growth with the recently acquired Aquadex business, resulting in revenue in the first quarter of 2017 increasing by 21% sequentially from the fourth quarter of 2016.

 

·                  Direct field organization continuing efforts to re-engage hospital accounts with installed consoles. The Company is on track with its plans and currently has 135 active hospital accounts ordering products and services.

 

·                  Pursuing growth strategies in 4 primary areas: i) re-engaging and revitalizing dormant Aquadex accounts, ii) identifying diagnostic technologies to optimize patient selection and fluid removal, iii) expanding into other areas of the hospital, and iv) data generation to optimize reimbursement and expansion to outpatient setting.

 

·                  Completed a warrant exercise agreement to incent exercise of warrants for cash which netted approximately $1.8 million in cash proceeds.  Subsequent to quarter end, completed an underwritten public equity offering for net proceeds of approximately $8.1 million, following which we believe we have sufficient cash to fund our operations through the first quarter of 2018.

 

·                  Reduced operating expenses by 41% and operating cash utilization by 72% from same quarter last year.

 

·                  Subsequent to quarter end, received Nasdaq notification that Company regained compliance with all continued listing requirements and the Nasdaq listing matter has been closed.

 

“Our focus remains on serving the large number of heart failure patients in the U.S. with fluid overload who could benefit from our Aquadex therapy” said John Erb, Chairman and CEO. “We are very excited about our revitalized and growing business.”

 



 

FINANCIALS

 

SUNSHINE HEART, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited and in thousands, except per share amounts)

 

 

 

Three months ended
March 31,

 

 

 

2017

 

2016

 

Net sales

 

$

901

 

$

 

Costs and Expenses:

 

 

 

 

 

Cost of goods sold

 

514

 

 

Selling, general and administrative

 

2,387

 

1,349

 

Research and development

 

308

 

3,206

 

Total costs and expenses

 

3,209

 

4,555

 

Loss from operations

 

(2,308

)

(4,555

)

Other income (expense):

 

 

 

 

 

Interest expense

 

 

(229

)

Other income, net

 

6

 

1

 

Warrant valuation expense

 

(67

)

 

Change in fair value of warrant liability

 

1,429

 

 

Total other income (expense)

 

1,368

 

(228

)

Loss before income taxes

 

(940

)

(4,783

)

Income tax expense

 

 

(3

)

Net loss

 

$

(940

)

$

(4,786

)

 

 

 

 

 

 

Basic and diluted loss per share

 

$

(1.75

)

$

(7.82

)

 

 

 

 

 

 

Weighted average shares outstanding — basic and diluted

 

1,579

 

612

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

Foreign currency translation adjustments

 

$

(1

)

$

(4

)

Total comprehensive loss

 

$

(941

)

$

(4,790

)

 



 

SUNSHINE HEART, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited and in thousands, except share and per share amounts)

 

 

 

March 31,
2017

 

December 31,
2016

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

1,661

 

$

1,323

 

Accounts receivable

 

406

 

282

 

Inventory

 

830

 

677

 

Other current assets

 

88

 

137

 

Total current assets

 

2,985

 

2,419

 

Property, plant and equipment, net

 

483

 

540

 

Intangible assets, net

 

4,144

 

4,302

 

Goodwill

 

189

 

189

 

Other assets

 

21

 

21

 

TOTAL ASSETS

 

$

7,822

 

$

7,471

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

2,930

 

$

2,351

 

Accrued compensation

 

868

 

909

 

Total current liabilities

 

3,798

 

3,260

 

Common stock warrant liability

 

46

 

1,843

 

Other liabilities

 

126

 

126

 

Total liabilities

 

3,970

 

5,229

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Temporary Stockholders’ Equity

 

 

 

 

 

Series D convertible preferred stock as of March 31, 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 March 31, 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 March 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 1,824.4 shares, issued and outstanding 0 and 1,824.4, respectively

 

 

 

Series C convertible preferred stock as of March 31, 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 March 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 39,970,000 and 39,964,375.6 shares, none outstanding

 

 

 

Common stock as of March 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 3,118,492 and 777,238, respectively

 

 

 

Additional paid-in capital

 

172,532

 

169,496

 

Accumulated other comprehensive income:

 

 

 

 

 

Foreign currency translation adjustment

 

1,234

 

1,235

 

Accumulated deficit

 

(169,914

)

(168,974

)

Total stockholders’ equity

 

3,852

 

1,757

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

7,822

 

$

7,471

 

 



 

SUNSHINE HEART, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

 

 

Three months ended
March 31,

 

 

 

2017

 

2016

 

Operating Activities:

 

 

 

 

 

Net loss

 

$

(940

)

$

(4,786

)

Adjustments to reconcile net loss to cash flows from operating activities:

 

 

 

 

 

Depreciation and amortization expense

 

215

 

81

 

Stock-based compensation expense, net

 

166

 

231

 

Amortization of debt discount and financing fees

 

 

84

 

Change in fair value of warrant liability

 

(1,429)

 

 

Warrant valuation expense

 

67

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(124)

 

 

Inventory

 

(153)

 

 

Other current assets

 

49

 

(67

)

Other assets and liabilities

 

 

2

 

Accounts payable and accrued expenses

 

535

 

(1,241

)

Net cash used in operations

 

(1,614

)

(5,696

)

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

Purchases of property and equipment

 

 

(8

)

Net cash used in investing activities

 

 

(8

)

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

Net proceeds from the sale of preferred stock and warrants

 

184

 

 

Net proceeds from exercise of warrants

 

1,768

 

 

Repayments on borrowings on long-term debt

 

 

(940

)

Net cash provided by (used in) financing activities

 

1,952

 

(940

)

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

1

 

Net increase (decrease) in cash and cash equivalents

 

338

 

(6,643

)

Cash and cash equivalents - beginning of period

 

1,323

 

23,113

 

Cash and cash equivalents - end of period

 

$

1,661

 

$

16,470

 

 

 

 

 

 

 

Supplement schedule of non-cash activities

 

 

 

 

 

Warrants issued as inducement to warrant exercise

 

$

509

 

$

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

Cash paid for interest

 

$

 

$

136

 

 

About Sunshine Heart

 

Sunshine Heart, Inc. (Nasdaq:SSH) is an early-stage medical device company focused on commercializing the Aquadex FlexFlow® System. The Company’s commercial product, the Aquadex 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. Our objective is to improve the quality of life for patients with heart failure and related conditions. Sunshine Heart 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 that are based on management’s beliefs, assumptions, expectations, and information currently available to management. All statements that address future operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements, including without limitation, our ability to execute on our recently announced strategic realignment, 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 and our expectations regarding anticipated synergies with and benefits from acquired businesses. The risk factors described in our filings with the SEC could cause actual events to adversely differ from the expectations indicated in these forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on forward-looking statements because they speak only as of the date when made. Sunshine Heart 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.  Sunshine Heart may not actually achieve the plans, projections or expectations disclosed in forward-looking statements, and actual results, developments or events could differ materially from those disclosed in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, including without limitation, the possibility that regulatory authorities do not accept our application or approve the marketing of our therapy, the possibility we may be unable to raise the funds necessary for the development and commercialization of our therapy and other risks and uncertainties described in our filings with the SEC. We do 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

Investor Relations

Chief Financial Officer

Sunshine Heart Inc.

Sunshine Heart, Inc.

ir@sunshineheart.com

T: +1-952-345-4205