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PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

CHF Solutions, Inc. Announces 17 Percent Increase in Revenues for First Quarter 2019 Over Previous Year and Provides Company Update

May 7, 2019

EDEN PRAIRIE, Minn., May 07, 2019 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for the first quarter ended March 31, 2019, which included the following highlights:

-- Revenue for first quarter ended March 31, 2019 was $1.2 million, an increase of 17 percent compared to the same period of the prior year. Gross margin percentages increased to 50 percent from 13 percent from the same period a year ago, after transition to in-house manufactured inventory. -- Continued progress towards obtaining regulatory clearance for an expanded label in pediatrics. Pre-submission meeting with the FDA scheduled for May 2019. -- Continued expansion into cardiovascular surgery and announced the launch of two new accounts with surgery focus. -- Exhibited at three cardiovascular surgery conferences: Society of Thoracic Surgeons in January 2019, International Conference of Heart and Lung Transplantation in March 2019, and the American Association for Thoracic Surgery conference in May 2019. Sponsored seminar led by renowned cardiothoracic surgeon, Dr. Daniel Beckles, MD, PhD. -- Announced the publication of an article in the Journal of Medical Economics, a peer reviewed journal that evaluated the cost saving benefits of the Aquadex FlexFlow® system in the hospital setting. -- Closed on an underwritten public offering of stock, for net proceeds of $11.0 million. Ended quarter with $11.5 million in cash and no debt.

“We began the year strong with continued double-digit increase in our revenues over the previous year 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, 2019 2018 ------ - Net sales $ 1,215 $ 1,037 Costs and Expenses: Cost of goods sold 612 901 Selling, general and administrative 4,018 4,011 Research and development 1,310 479 ------ ------ Total costs and expenses 5,940 5,391 ------ ------ Loss from operations (4,725 ) (4,354 ) Loss before income taxes (4,725 ) (4,354 ) Income tax expense (2 ) — ------ ------ Net loss $ (4,727 ) $ (4,354 ) ------ ------ Basic and diluted loss per share $ (11.47 ) $ (15.12 ) ------ ------ Weighted average shares outstanding – basic and diluted 805 288 Other comprehensive income: Foreign currency translation adjustments $ (2 ) $ 1 ------ ------ Total comprehensive loss $ (4,729 ) $ (4,353 ) ------ ------

CHF SOLUTIONS, INC. AND SUBSIDIARIESCondensed Consolidated Balance Sheets(In thousands, except share and per share amounts)

March 31, December 31, 2018 2019 ----------- ----------------- ASSETS (unaudited) Current assets Cash and cash equivalents $ 11,489 $ 5,480 Accounts receivable 622 786 Inventory 1,790 1,658 Other current assets 350 203 ----------- ----------------- Total current assets 14,251 8,127 Property, plant and equipment, net 518 536 Operating lease right-of-use asset 574 — Other assets 20 113 ----------- ----------------- TOTAL ASSETS $ 15,363 $ 8,776 ----------- ----------------- LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 1,202 $ 1,133 Accrued compensation 831 1,498 Current portion of operating lease liability 171 — Other current liabilities 228 209 ----------- ----------------- Total current liabilities 2,432 2,840 Operating lease liability 403 - ----------- ----------------- Total liabilities 2,835 2,840 Commitments and contingencies — — Stockholders’ equity Series A junior participating preferred stock as of March 31, 2019 and December 31, 2018, par value $0.0001 per share; authorized 30,000 — — shares, none outstanding Series F convertible preferred stock as of March 31, 2019 and December 31, 2018, par value $0.0001 per share; authorized 535 and 535 shares, — — respectively, issued and outstanding 535 and 535, respectively Series G convertible preferred stock as of March 31, 2019 and December 31, 2018, par value $0.0001 per share; authorized 810,142 and 0 shares, respectively, issued and outstanding 810,142 and 0, respectively Preferred stock as of March 31, 2019 and December 31, 2018, par value $0.0001 per share; authorized 39,159,323 and 39,969,465 shares, none — — outstanding Common stock as of March 31, 2019 and December 31, 2018, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding — — 2,069,020 and 513,445, respectively Additional paid‑in capital 215,422 204,101 Accumulated other comprehensive income: Foreign currency translation adjustment 1,221 1,223 Accumulated deficit (204,115 ) (199,388 ) ----------- ----------------- Total stockholders’ equity 12,528 5,936 ----------- ----------------- TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 15,363 $ 8,776 ----------- -----------------

CHF SOLUTIONS, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Stockholders’ Equity(Unaudited, In thousands, except share amounts)

Accumulat Commo Additional ed Stockholde Outstanding n Paid in Other Accumulated rs’ Shares of Common Stock Stock Capital Comprehen Deficit Equity sive Income ----------------------------- ---------------------- ---- ---------- -------- ----------- --------- - Balance December 31, 2017 271,357 $ — $ 197,367 $ 1,227 $ (182,356 ) $ 16,238 Net loss — — — — (4,354 ) (4,354 ) Foreign currency translation — — — 1 — 1 adjustment Stock-based compensation and 3 — 501 — — 501 stock awards, net Conversion of preferred stock 32,365 — — — — — into common stock ---------------------- ---- ---------- -------- ----------- --------- - Balance March 31, 2018 303,725 $ — $ 197,868 $ 1,228 $ (186,710 ) $ 12,386 ---------------------- -- - - -------- -- ----- -- -------- -- ------ - Accumulat Commo Additional ed Stockholde Outstanding n Paid in Other Accumulated rs’ Shares of Common Stock Stock Capital Comprehen Deficit Equity sive Income ----------------------------- ---------------------- ---- ---------- -------- ----------- --------- - Balance December 31, 2018 513,445 $ — $ 204,101 $ 1,223 $ (199,388 ) $ 5,936 Net loss — — — — (4,727 ) (4,727 ) Foreign currency translation adjustment — — — (2 ) — (2 ) Stock-based compensation, net 3 — 362 — — 362 Issuance of common and 455,178 — 10,959 — — 10,959 preferred stock, net Conversion of preferred stock 1,100,394 — — — — — into common stock ---------------------- ---- ---------- -------- ----------- --------- - Balance March 31, 2019 2,069,020 $ — $ 215,422 $ 1,221 $ (204,115 ) $ 12,528 ---------------------- -- - - -------- -- ----- -- -------- -- ------ -

CHF SOLUTIONS, INC. AND SUBSIDIARIESCondensed Consolidated Statements of Cash Flows(Unaudited and in thousands)

Three months ended March 31, 2019 2018 - -------- - ------- Operating Activities: Net loss $ (4,727 ) $ (4,354 ) Adjustments to reconcile net loss to cash flows used in operating activities: Depreciation and amortization 59 54 Stock-based compensation expense, net 362 500 Changes in operating assets and liabilities: Accounts receivable 164 (113 ) Inventory (132 ) (937 ) Other current assets (147 ) 6 Other assets and liabilities 112 — Accounts payable and accrued expenses (598 ) (192 ) ------ ------ Net cash used in operating activities (4,907 ) (5,036 ) Investing Activities: Purchases of property and equipment (41 ) (57 ) Net cash used in investing activities (41 ) (57 ) Financing Activities: Net proceeds from public stock offering, net 10,959 — Net cash provided by financing activities 10,959 — Effect of exchange rate changes on cash (2 ) 2 ------ ------ Net increase (decrease) in cash and cash equivalents 6,009 (5,091 ) Cash and cash equivalents - beginning of period 5,480 15,595 ------ ------ Cash and cash equivalents - end of period $ 11,489 $ 10,504 ------ ------ 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 Investors page of the CHF Solutions website at http://ir.chf-solutions.com or access the webcast directly at 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: 7369669. An audio archive of the webcast will be available following the call on the Investor page at http://ir.chf-solutions.com/events.

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.comwww.coreir.com

MEDIA Jules Abraham JQA Partners, Inc. 917-885-7378 jabraham@jqapartners.com