The Eden Prairie, Minn.-based fluid overload treatment developer brought in $1.66 million under the PPP as part of the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. That full amount is available to the company, based on its payroll expense.
If CHF Solutions uses the PPP funds solely for the purposes outlined under the program under the next eight weeks (at least 75% for payroll, including benefits, and the remaining 25% or less for rent and utilities), the principal amount will be fully forgiven. The PPP loan has a fixed interest rate of 1% and a maturity of two years, with all payments deferred for six months. According to a news release, the company expects to meet the forgiveness terms of the program.
Additionally, CHF Solutions added $1.1 million in proceeds from the exercise of outstanding warrants. The warrants had an exercise price of 30¢ per share and were issued as part of the units sold in CHF Solutions’ underwritten public offering that closed on Jan. 28.
The company said in the release that, with these funds in addition to proceeds from three equity financings closed earlier this year, its total pro forma cash balance, as of Dec. 31, 2019, is approximately $15.7 million.
“We are impressed and thankful for the speed and efficiency in which our bank processed our application, providing additional funding for a growing company,” CHF Solutions CEO John Erb said in the release. “We continue to see an increased use of the Aquadex SmartFlow system to treat critically-ill COVID-19 patients.”
Earlier this month, CHF Solutions increased its production staff that assembles the next-generation Aquadex SmartFlow consoles after the heightened demand from hospitals as a result of the COVID-19 pandemic.
Aquadex SmartFlow is designed to remove excess fluid from patients suffering from hypervolemia (fluid overload). It is indicated for temporary (up to eight hours) of ultrafiltration treatment for patients who have failed diuretic therapy and for extended (more than eight hours) in patients who failed diuretic therapy and require hospitalization.
CHF Solutions saw increased demand for the Aquadex Smartflow after the company announced the system’s capabilities for treating critically ill patients amid the spread of coronavirus. That led to the Eden Prairie, Minn.-based company doubling its production staff. CHF Solutions declined to disclose the total number of staffers involved in the increase. According to its latest annual report, CHF Solutions had 66 full-time employees as of February.