2020 Q1 Form 10-K Financial Statement

#000143774920004451 Filed on March 06, 2020

View on sec.gov

Income Statement

Concept 2020 Q1 2019 2018 Q4
Revenue $2.261M $9.131M $2.030M
YoY Change 22.88% 15.36% 6.28%
Cost Of Revenue $1.760M $6.264M $1.470M
YoY Change 19.97% -4.09% -15.03%
Gross Profit $501.0K $2.867M $560.0K
YoY Change 34.32% 107.15% 211.11%
Gross Profit Margin 22.16% 31.4% 27.59%
Selling, General & Admin $4.386M $16.53M $4.960M
YoY Change 10.04% -10.16% 5.76%
% of Gross Profit 875.45% 576.7% 885.71%
Research & Development $1.594M $5.692M $1.670M
YoY Change 12.73% -5.28% -15.66%
% of Gross Profit 318.16% 198.54% 298.21%
Depreciation & Amortization $225.0K $890.0K $540.0K
YoY Change 12.5% -30.52% 68.75%
% of Gross Profit 44.91% 31.04% 96.43%
Operating Expenses $5.980M $22.23M $6.630M
YoY Change 10.74% -8.96% -0.6%
Operating Profit -$5.479M -$19.36M -$6.070M
YoY Change 8.99% -15.94% -6.47%
Interest Expense $398.0K $1.480M -$260.0K
YoY Change 13.71% -74.0% -83.33%
% of Operating Profit
Other Income/Expense, Net -$4.000K $1.101M $240.0K
YoY Change -101.67% 16.02%
Pretax Income -$5.850M -$19.45M -$6.090M
YoY Change 15.61% -29.43% -40.0%
Income Tax
% Of Pretax Income
Net Earnings -$5.851M -$19.45M -$6.090M
YoY Change 15.75% -29.42% -40.0%
Net Earnings / Revenue -258.78% -213.01% -300.0%
Basic Earnings Per Share
Diluted Earnings Per Share -$400.1K -$2.686M -$2.683M
COMMON SHARES
Basic Shares Outstanding 16.81M 23.46M
Diluted Shares Outstanding

Balance Sheet

Concept 2020 Q1 2019 2018 Q4
SHORT-TERM ASSETS
Cash & Short-Term Investments $9.860M $10.94M $16.41M
YoY Change -40.99% -33.33% 204.45%
Cash & Equivalents $9.862M $10.94M $16.41M
Short-Term Investments
Other Short-Term Assets $1.020M $310.0K $640.0K
YoY Change -56.41% -51.56% 0.0%
Inventory $3.875M $3.910M $3.422M
Prepaid Expenses
Receivables $1.352M $1.460M $1.154M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $16.11M $16.62M $21.62M
YoY Change -33.18% -23.13% 88.81%
LONG-TERM ASSETS
Property, Plant & Equipment $1.387M $6.520M $2.078M
YoY Change -35.19% 213.46% -29.56%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $637.0K $680.0K
YoY Change
Total Long-Term Assets $6.687M $7.210M $2.078M
YoY Change 212.48% 246.63% -42.86%
TOTAL ASSETS
Total Short-Term Assets $16.11M $16.62M $21.62M
Total Long-Term Assets $6.687M $7.210M $2.078M
Total Assets $22.80M $23.83M $23.70M
YoY Change -13.15% 0.55% 57.07%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.385M $660.0K $1.148M
YoY Change 42.93% -42.61% -9.82%
Accrued Expenses $695.0K $3.160M $1.449M
YoY Change -23.29% 19.25% -59.72%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $9.370M $8.970M $7.490M
YoY Change 19.52% 19.76% -83.26%
Total Short-Term Liabilities $14.46M $12.79M $14.20M
YoY Change 11.79% -9.93% -71.87%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities $10.00K $4.140M $41.00K
YoY Change -73.68% 10250.0% -86.38%
Total Long-Term Liabilities $10.00K $4.140M $41.00K
YoY Change -73.68% 10250.0% -86.38%
TOTAL LIABILITIES
Total Short-Term Liabilities $14.46M $12.79M $14.20M
Total Long-Term Liabilities $10.00K $4.140M $41.00K
Total Liabilities $18.39M $16.93M $14.24M
YoY Change 41.76% 18.89% -71.96%
SHAREHOLDERS EQUITY
Retained Earnings -$354.2M -$328.9M
YoY Change 6.06% 9.15%
Common Stock $358.6M $338.3M
YoY Change 3.28% 27.37%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $4.408M $6.900M $9.460M
YoY Change
Total Liabilities & Shareholders Equity $22.80M $23.83M $23.70M
YoY Change -13.15% 0.55% 57.07%

Cashflow Statement

Concept 2020 Q1 2019 2018 Q4
OPERATING ACTIVITIES
Net Income -$5.851M -$19.45M -$6.090M
YoY Change 15.75% -29.42% -40.0%
Depreciation, Depletion And Amortization $225.0K $890.0K $540.0K
YoY Change 12.5% -30.52% 68.75%
Cash From Operating Activities -$4.970M -$17.26M -$4.030M
YoY Change -17.11% -6.51% -22.2%
INVESTING ACTIVITIES
Capital Expenditures $88.00K $380.0K
YoY Change 175.0%
Acquisitions
YoY Change
Other Investing Activities $20.00K $0.00
YoY Change -33.33%
Cash From Investing Activities -$70.00K $380.0K
YoY Change 1650.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $3.811M
YoY Change 1113.69%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 3.889M 11.87M 10.05M
YoY Change -38.83% -59.76% 2412.5%
NET CHANGE
Cash From Operating Activities -4.970M -17.26M -4.030M
Cash From Investing Activities -70.00K 380.0K
Cash From Financing Activities 3.889M 11.87M 10.05M
Net Change In Cash -1.081M -5.467M 6.400M
YoY Change -463.97% -149.61% -233.89%
FREE CASH FLOW
Cash From Operating Activities -$4.970M -$17.26M -$4.030M
Capital Expenditures $88.00K $380.0K
Free Cash Flow -$4.970M -$17.35M -$4.410M
YoY Change -18.24% -6.2% -14.86%

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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.</div> Organization</div></div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;"><div style="display: inline; font-weight: bold;">Organization, Nature of Business</div></div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">Avinger,&nbsp;Inc. (the &#x201c;Company&#x201d;), a Delaware corporation, was incorporated in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007.</div> The Company designs, manufactures and sells image-guided, catheter-based systems that are used by physicians to treat patients with peripheral artery disease (&#x201c;PAD&#x201d;). Patients with PAD have a build-up of plaque in the arteries that supply blood to areas away from the heart, particularly the pelvis and legs. The Company manufactures and sells a suite of products in the United States (&#x201c;U.S.&#x201d;) and in select international markets. The Company has developed its Lumivascular platform, which integrates optical coherence tomography (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> &#x201c;OCT&#x201d;) </div>visualization with interventional catheters and is the industry&#x2019;s only system that provides real-time intravascular imaging during the treatment portion of PAD procedures. The Company&#x2019;s Lumivascular platform consists of a capital component, Lightbox, as well as a variety of disposable catheter products. The Company&#x2019;s current products include its non-imaging catheters, Wildcat and Kittycat, as well as its Lumivascular platform products, Ocelot, Ocelot PIXL and Ocelot MVRX, all of which are designed to allow physicians to penetrate a total blockage in an artery, known as a chronic total occlusion (&#x201c;CTO&#x201d;). In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016,</div> the Company received <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">510</div>(k)&nbsp;clearance from the U.S. Food and Drug Administration (&#x201c;FDA&#x201d;) for commercialization of Pantheris, the Company&#x2019;s image-guided atherectomy system, designed to allow physicians to precisely remove arterial plaque in PAD patients. In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 2018, </div>the Company also received <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">510</div>(k) clearance from the FDA for its next-generation of Pantheris. In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 2019, </div>the Company further received FDA clearance for Pantheris SV, a lower profile Pantheris, and commenced sales in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 2019. </div>The Company has sales in the U.S. and select international markets. The Company is located in Redwood City, California.</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;"><div style="display: inline; font-weight: bold;">Liquidity Matters</div></div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Financial Accounting Standards Board (&#x201c;FASB&#x201d;) Accounting Standards Update (&#x201c;ASU&#x201d;) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div>&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2014</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,</div>&nbsp;<div style="display: inline; font-style: italic;">Presentation of Financial Statements - Going Concern (Subtopic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">205</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">40</div>) </div>requires the Company to make certain disclosures if it concludes that there is substantial doubt about the entity&#x2019;s ability to continue as a going concern within <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> year from the date of the issuance of these financial statements.</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">In the course of its activities, the Company has incurred losses and negative cash flows from operations since its inception. As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2019, </div>the Company had an accumulated deficit of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$348.3</div>&nbsp;million. The Company expects to incur losses for the foreseeable future. The Company believes that its cash and cash equivalents of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.9</div> million at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2019 </div>and expected revenues and funds from operations will be sufficient to allow the Company to fund its current operations through at least the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">third</div> quarter of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2020.</div> Even though we received net proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.7</div> million from the sale of our common stock in our <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 2020 </div>offering, net proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.8</div> million from the sales of our common stock in our <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 2019 </div>offering, proceeds from issuance of common stock upon the exercise of warrants during <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May </div>of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019</div> of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$8.0</div> million, net proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.2</div> million from the sale of our Series C preferred stock and common stock in our <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 2018 </div>offering, net proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.0</div> million from the sale of common stock and warrants in our <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July 2018 </div>offering, and net proceeds of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$15.5</div> million from the sale of our Series B preferred stock and warrants in our <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2018 </div>offering, the Company will need to raise additional funds through future equity or debt financings within the next <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">twelve</div> months to meet its operational needs and capital requirements for product development, clinical trials and commercialization and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>subsequently require additional fundraising.</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">The Company can provide <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> assurance that it will be successful in raising funds pursuant to additional equity or debt financings or that such funds will be raised at prices that do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> create substantial dilution for our existing stockholders. Given the recent decline in the Company&#x2019;s stock price, any financing that we undertake in the next <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">twelve</div> months could cause substantial dilution to our existing stockholders, there can be <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its operations. These conditions raise substantial doubt about the Company&#x2019;s ability to continue as a going concern. If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable to it, the Company <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>have to significantly reduce its operations or delay, scale back or discontinue the development of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> or more of its products. The financial statements do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> include any adjustments that might result from the outcome of this uncertainty. The Company&#x2019;s ultimate success will largely depend on its continued development of innovative medical technologies, its ability to successfully commercialize its products and its ability to raise significant additional funding.</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">&nbsp;</div> <div style="width: 100%; margin-left: 0pt; margin-right: 0pt"> <div style="text-align: center; width: 100%"> <div> <div style="text-align: center; font-size: 10pt; font-family: Times New Roman;"> </div></div></div></div><div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;"></div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">Additionally, due to the substantial doubt about the Company&#x2019;s ability to continue operating as a going concern and the material adverse change clause in the Loan Agreement with CRG Partners III L.P. and certain of its affiliated funds (collectively &#x201c;CRG&#x201d;), the entire amount of borrowings at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2019 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> has been classified as current in these financial statements. CRG has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> invoked the material adverse change clause.</div> <div style=" font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;"><div style="display: inline; font-weight: bold;">Public Offerings</div></div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> we completed a public offering of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,979</div> shares of Series&nbsp;B preferred stock and warrants to purchase <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,797,900</div> shares of common stock. As a result, we received net proceeds of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$15.5</div> million after underwriting discounts, commissions, legal and accounting fees. The Series&nbsp;B preferred stock has a liquidation preference of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.001</div> per share, full ratchet price based anti-dilution protection, has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> voting rights and is subject to certain ownership limitations. The Series&nbsp;B preferred stock is immediately convertible at the option of the holder, has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> stated maturity, and does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> pay regularly stated dividends or interest. Each share of Series&nbsp;B preferred stock is accompanied by <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> Series&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div> warrant that expires on the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">seventh</div> anniversary of the date of issuance to purchase up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">50</div> shares of common stock and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> Series&nbsp;<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> warrant that expires on the earlier of (i)&nbsp;the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">seventh</div> anniversary of the date of issuance or (ii)&nbsp;the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60th</div> calendar day following the receipt and announcement of FDA clearance of our Pantheris below-the-knee device (or the same or similar product with a different name) to purchase up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">50</div> shares of common stock; provided, however, if at any time during such <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60</div>-day period the volume weighted average price for any trading day is less than the then effective exercise price, the termination date shall be extended to the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">seven</div> year anniversary of the initial exercise date. FDA clearance of Pantheris SV was received in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> April 2019, </div>triggering this <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60</div>-day period. During the entire <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60</div>-day period following clearance, the volume weighted average price was less than the then effective exercise price. As such, all Series <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> warrants are currently deemed to expire on the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">seventh</div> anniversary of the date of issuance. In addition, pursuant to the Series&nbsp;A Purchase Agreement, we issued to CRG <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">41,800</div> shares of Series&nbsp;A preferred stock at the closing of the Series&nbsp;B Offering. The Series&nbsp;A preferred stock was issued in exchange for the conversion of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$38.0</div> million of the outstanding principal amount of their senior secured term loan (plus the back-end fee and prepayment premium applicable thereto), totaling approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$41.8</div> million. The Series&nbsp;A preferred stock is initially convertible into <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,090,000</div> shares of common stock subject to certain limitations contained in the Series&nbsp;A Purchase Agreement.</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> we entered into a securities purchase agreement with certain investors pursuant to which we agreed to sell and issue, in a registered direct offering, an aggregate of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">216,618</div> shares of our common stock at an offering price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$16.425</div> per share. In a concurrent private placement, or the Private Placement, we agreed to issue to these investors warrants exercisable for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div> share of our common stock for each <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> shares purchased in the registered direct offering, which equals an aggregate of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">108,309</div> shares of common stock. The closing of such registered direct offering and the concurrent Private Placement occurred on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> in connection with which we received net proceeds of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.0</div> million after deducting placement agent fees and other expenses payable by us. The warrants have an exercise price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$15.80</div> per share of our common stock and expire on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July&nbsp;</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2021.</div></div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 1, 2018, </div>we completed a public offering of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">728,500</div> shares of common stock and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,586</div> shares of Series C convertible preferred stock (the &#x201c;Series C preferred stock&#x201d;). As a result, we received net proceeds of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.2</div> million after underwriting discounts, commissions, legal and accounting fees. Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of Series C preferred stock will be entitled to receive distributions out of our assets, whether capital or surplus, of an amount equal to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.001</div> per share of Series C preferred stock before any distributions shall be made on the common stock but after distributions shall be made on any outstanding Series A preferred stock and any of our existing or future indebtedness. The Series C preferred stock has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> voting rights.</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 26, 2019, </div>we completed a public offering of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,813,559</div> shares of common stock at an offering price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.18</div> per share. As a result, we received net proceeds of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.8</div> million after underwriting discounts, commissions, legal and accounting fees and the conversion price of the outstanding shares of Series B preferred stock, issued in our <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2018 </div>offering, was reduced to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1.18</div> per share as a result.&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 31, 2020, </div>we completed a public offering of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,428,572</div> shares of common stock at an offering price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.70</div> per share. As a result, we received net proceeds of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3.7</div> million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses. Due to anti-dilution provisions, the conversion price of the outstanding shares of Series B preferred stock, which was issued in our <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2018 </div>offering, was reduced to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.70</div> per share.</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">&nbsp;</div> <div style="width: 100%; margin-left: 0pt; margin-right: 0pt"> <div style="text-align: center; width: 100%"> <div> <div style="text-align: center; font-size: 10pt; font-family: Times New Roman;"> </div></div></div></div></div>
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;"><div style="display: inline; font-weight: bold;">Use of Estimates</div></div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left;">&nbsp;</div> <div style=" font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify; text-indent: 36pt;">The preparation of financial statements in conformity with U.S.&nbsp;GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. Management uses significant judgment when making estimates related to its common stock valuation and related stock-based compensation, the valuation of the common stock warrants, the valuation of compound embedded derivatives, provisions for doubtful accounts receivable and excess and obsolete inventories, clinical trial accruals, and its reserves for sales returns and warranty costs. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> readily apparent from other sources. Although these estimates are based on the Company&#x2019;s knowledge of current events and actions it <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>undertake in the future, actual results <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>ultimately materially differ from these estimates and assumptions.</div></div></div>
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0001437749-20-004451.txt Edgar Link pending
0001437749-20-004451-xbrl.zip Edgar Link pending
avgr-20191231.xml Edgar Link completed
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