Sunshine Heart Inc (NASDAQ:CHFS)
Short-sellers of Sunshine Heart Inc (NASDAQ:CHFS) felt the pain today as the stock rocketed up over 500% in early afternoon trading, but have hit strong resistance at the $25 mark. While there has been no news released concerning the company, reports suggesting a catalyst for the upward move reference an SEC filing for a public offering of preferred stock and warrants.
The filing details a potential offering of preferred shares and warrants totaling $32 million. The unit offering involves $10 million of preferred shares and $22 million of common shares that would be exercisable by the warrant holder(s). The 10,000 preferred shares would be exercisable into 2.141 million common shares of CHFS. The 22 million warrants could be converted into 4.282 million common shares of CHFS. The pricing of the public offering was not disclosed in the filing. In April, 2017, CHFS stock plunged 30% on the news of a dilutive offering of common shares.
About Sunshine Heart
A cardiac surgeon founded Eden Prarie, MN-based Sunshine Heart, Inc (NASDAQ:CHFS). Sunshine Heart is a medical device company that creates, develops, and commercializes technologies that address heart failure. The EU regulatory authorities have granted a CE Mark to their C-Pulse Heart Assist System. In the USA, the system is undergoing clinical studies to determine its safety and efficacy for the treatment of moderate to severe heart failure.
Sunshine Heart, Inc (NASDAQ:CHFS) lead product is the Aquadex FlexFlow® ultrafiltration system. The Aquadex FlexFlow system removes excess fluid from patients suffering from fluid overload who have failed diuretic therapy. Heart failure is the leading cause of fluid overload. The American Heart Association estimates that 6.5 million people in the United States, age 20 and over, had heart failure. There are an estimated 960,000 new heart failure cases annually. Annual hospitalizations for heart failure exceed 1 million in United States and Europe, and more than 90% are due to symptoms and signs of fluid overload.
CHFS Stock Developments
On October 10, 2017, Sunshine Heart, Inc (NASDAQ:CHFS) stockholders approved, later approved by the Board of Directors, a reverse 1:20 stock split. That move was in response to a notification from The NASDAQ Stock Market LLC informing Sunshine Heart that they were no longer in compliance with the minimum bid price requirement, as the bid price of shares of CHFS common stock closed below the minimum $1.00 per share threshold for 30 consecutive business days. Nasdaq also notified the company that they had 180 calendar days, or until November 28, 2017, to regain compliance.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.