2024 Q3 Form 10-Q Financial Statement

#000143774924025597 Filed on August 08, 2024

View on sec.gov

Income Statement

Concept 2024 Q3 2024 Q2
Revenue $1.650M $1.847M
YoY Change -9.19% -9.51%
Cost Of Revenue $1.224M $1.469M
YoY Change -14.35% 2.3%
Gross Profit $426.0K $378.0K
YoY Change 9.79% -37.52%
Gross Profit Margin 25.82% 20.47%
Selling, General & Admin $3.009M $3.601M
YoY Change -10.9% 7.62%
% of Gross Profit 706.34% 952.65%
Research & Development $1.086M $904.0K
YoY Change 4.02% -8.5%
% of Gross Profit 254.93% 239.15%
Depreciation & Amortization $76.00K $86.00K
YoY Change 8.57% 26.47%
% of Gross Profit 17.84% 22.75%
Operating Expenses $4.095M $4.505M
YoY Change -7.37% 3.95%
Operating Profit -$3.669M -$4.127M
YoY Change -9.03% 10.67%
Interest Expense $48.00K $234.0K
YoY Change -89.45% -152.58%
% of Operating Profit
Other Income/Expense, Net $11.00K -$1.000K
YoY Change -8.33% -50.0%
Pretax Income -$3.706M -$4.362M
YoY Change -17.28% 4.45%
Income Tax
% Of Pretax Income
Net Earnings -$3.706M -$4.362M
YoY Change -17.2% -19.13%
Net Earnings / Revenue -224.61% -236.17%
Basic Earnings Per Share -$1.82 -$2.82
Diluted Earnings Per Share -$1.82 -$2.82
COMMON SHARES
Basic Shares Outstanding 2.296M 1.702M
Diluted Shares Outstanding

Balance Sheet

Concept 2024 Q3 2024 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $5.901M $8.806M
YoY Change -32.41% 23.56%
Cash & Equivalents $5.900M $8.800M
Short-Term Investments
Other Short-Term Assets $947.0K $1.043M
YoY Change 72.18% 17.19%
Inventory $3.759M $4.120M
Prepaid Expenses
Receivables $877.0K $931.0K
Other Receivables $0.00 $0.00
Total Short-Term Assets $11.48M $14.90M
YoY Change -26.77% 3.07%
LONG-TERM ASSETS
Property, Plant & Equipment $466.0K $455.0K
YoY Change -11.74% -79.54%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $224.0K $229.0K
YoY Change -10.04% -12.93%
Total Long-Term Assets $2.117M $2.395M
YoY Change -2.04% -3.7%
TOTAL ASSETS
Total Short-Term Assets $11.48M $14.90M
Total Long-Term Assets $2.117M $2.395M
Total Assets $13.60M $17.30M
YoY Change -23.78% 2.08%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $921.0K $725.0K
YoY Change 67.76% 71.39%
Accrued Expenses $589.0K $804.0K
YoY Change -34.34% -81.65%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $4.168M $4.044M
YoY Change -69.78% -73.4%
Total Short-Term Liabilities $9.503M $9.002M
YoY Change -48.26% -59.89%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $6.000K $12.00K
YoY Change -99.04% -98.9%
Total Long-Term Liabilities $6.000K $12.00K
YoY Change -99.04% -98.9%
TOTAL LIABILITIES
Total Short-Term Liabilities $9.503M $9.002M
Total Long-Term Liabilities $6.000K $12.00K
Total Liabilities $9.726M $9.542M
YoY Change -49.34% -59.45%
SHAREHOLDERS EQUITY
Retained Earnings -$434.3M -$430.6M
YoY Change 4.47% 4.72%
Common Stock $438.2M $438.3M
YoY Change 5.75% 8.33%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $3.875M $7.753M
YoY Change
Total Liabilities & Shareholders Equity $13.60M $17.30M
YoY Change -23.78% 2.08%

Cashflow Statement

Concept 2024 Q3 2024 Q2
OPERATING ACTIVITIES
Net Income -$3.706M -$4.362M
YoY Change -17.2% -19.13%
Depreciation, Depletion And Amortization $76.00K $86.00K
YoY Change 8.57% 26.47%
Cash From Operating Activities -$2.861M -$3.568M
YoY Change -18.95% 8.09%
INVESTING ACTIVITIES
Capital Expenditures $0.00
YoY Change -100.0%
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities $0.00
YoY Change -100.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -44.00K 5.200M
YoY Change -100.86% 8865.52%
NET CHANGE
Cash From Operating Activities -2.861M -3.568M
Cash From Investing Activities 0.000
Cash From Financing Activities -44.00K 5.200M
Net Change In Cash -2.905M 1.632M
YoY Change -282.7% -150.32%
FREE CASH FLOW
Cash From Operating Activities -$2.861M -$3.568M
Capital Expenditures $0.00
Free Cash Flow -$2.861M
YoY Change -19.18%

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avgr Increase Decrease Right Of Use Asset And Leasehold Liability Arising From Lease Amendment
IncreaseDecreaseRightOfUseAssetAndLeaseholdLiabilityArisingFromLeaseAmendment
1177000 usd
avgr Increase Decrease Right Of Use Asset And Leasehold Liability Arising From Lease Amendment
IncreaseDecreaseRightOfUseAssetAndLeaseholdLiabilityArisingFromLeaseAmendment
0 usd
us-gaap Debt Conversion Converted Instrument Amount1
DebtConversionConvertedInstrumentAmount1
11000000 usd
us-gaap Debt Conversion Converted Instrument Amount1
DebtConversionConvertedInstrumentAmount1
0 usd
avgr Accretion Of Preferred Stock Dividends
AccretionOfPreferredStockDividends
303000 usd
avgr Accretion Of Preferred Stock Dividends
AccretionOfPreferredStockDividends
2436000 usd
avgr Reclassification Of Other Longterm Liabilities To Accrued Compensation
ReclassificationOfOtherLongtermLiabilitiesToAccruedCompensation
0 usd
avgr Reclassification Of Other Longterm Liabilities To Accrued Compensation
ReclassificationOfOtherLongtermLiabilitiesToAccruedCompensation
724000 usd
avgr Transfers Between Inventory And Property And Equipment
TransfersBetweenInventoryAndPropertyAndEquipment
136000 usd
avgr Transfers Between Inventory And Property And Equipment
TransfersBetweenInventoryAndPropertyAndEquipment
4000 usd
us-gaap Nature Of Operations
NatureOfOperations
<p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>1. Organization</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Organization, Nature of Business</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">Avinger, Inc. (the “Company”), a Delaware corporation, was incorporated in March 2007. The Company designs, manufactures and sells image-guided, catheter-based systems that are used by physicians to treat patients with peripheral artery disease (“PAD”). 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 (“U.S.”) and in select international markets. The Company has developed its Lumivascular platform, which integrates optical coherence tomography (“OCT”) visualization with interventional catheters and is the industry’s only system that provides real-time intravascular imaging during the treatment portion of PAD procedures. The Company’s Lumivascular platform consists of a capital component, Lightbox consoles, as well as a variety of disposable catheter products. The Company’s current catheter products include Ocelot, Tigereye and Tigereye ST, which are designed to allow physicians to penetrate a total blockage in an artery, known as a chronic total occlusion (“CTO”). The Company also has image-guided atherectomy products, Pantheris, Pantheris SV and Pantheris LV, which are designed to allow physicians to precisely remove arterial plaque in PAD patients. The Company is in the process of developing next-generation CTO crossing devices to target coronary CTO markets. The Company is located in Redwood City, California.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Liquidity Matters</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;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 (“FASB”) Accounting Standards Update (“ASU”) No. 2014-15, <i>Presentation of Financial Statements - Going Concern (Subtopic 205-40)</i> requires the Company to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within one year from the date of the issuance of these financial statements.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;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 June 30, 2024, the Company had an accumulated deficit of $430.6 million. The Company expects to incur losses for the foreseeable future. The Company believes that its cash and cash equivalents of $8.8 million at June 30, 2024, together with debt and other financing activities and expected revenues from operations will be sufficient to allow the Company to fund its current operations through the end of the fourth quarter of 2024. On March 5, 2024, the Company entered into a financing as part of a broader strategic collaboration with Zylox-Tonbridge Medical Technology Co., Ltd. (“Zylox-Tonbridge”) in which the Company received an aggregate of $7.5 million before any commissions, legal and accounting fees, and other ancillary expenses as described more fully below. On June 17, 2024, the Company completed a public offering in which it received an aggregate of $6.0 million before any commissions, legal and accounting fees, and other ancillary expenses. The Company had also received net proceeds of approximately $6.5 million from the sale of its common stock under an At The Market Offering Agreement from the time of activation through the quarter ended June 30, 2024. The Company may seek to raise additional funds in future equity offerings to meet its operational needs and capital requirements for product development, clinical trials and commercialization or other strategic objectives.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">The Company can provide no 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 not create substantial dilution for its existing stockholders. Given the volatility in the Company’s stock price, any financing that the Company may undertake in the next twelve months could cause substantial dilution to its existing stockholders, and there can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its various endeavors. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the macroeconomic environment has in the past resulted in and could continue to result in reduced consumer and investor confidence, instability in the credit and financial markets, volatile corporate profits and reduced business and consumer spending, which could increase the cost of capital and/or limit the availability of capital to the Company.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable to it, the Company may have to significantly reduce its operations or delay, scale back or discontinue the development and sale of one or more of its products. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’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.</p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">Additionally, due to the substantial doubt about the Company’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 “CRG”), the entire amount of outstanding borrowings at June 30, 2024 and December 31, 2023 has been classified as current in these financial statements. CRG has not purported that an Event of Default (as defined in the Loan Agreement) has occurred due to a Material Adverse Change.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">Currently substantially all of the Company’s cash and cash equivalents are held at a single financial institution, First Citizens Bank, which acquired the Company’s prior banking partner, Silicon Valley Bank, in March 2023. On March 10, 2023, the Federal Deposit Insurance Corporation announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. While the Company has regained access to its accounts at Silicon Valley Bank, now a division of First Citizens Bank, and is evaluating its banking relationships, future disruptions of financial institutions where it banks or has credit arrangements, or disruptions of the financial services industry in general, could adversely affect the Company’s ability to access its cash and cash equivalents. If the Company is unable to access its cash and cash equivalents as needed, its financial position and ability to operate its business will be adversely affected.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Public Offerings</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><i>June 2024 Offering</i></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">On June 13, 2024, the Company entered into a securities purchase agreement with two institutional investors for the issuance and sale of 3,614,457 shares of its common stock in a best efforts public offering (“the Offering”) at a purchase price of $1.66 per share, or pre-funded warrants in lieu thereof. The Company received aggregate net proceeds of approximately $5.2 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">As a result, the Company issued (i) 330,000 shares of common stock, (ii) and pre-funded warrants in lieu of common stock to purchase up to an aggregate of 3,284,457 shares of common stock (the “Pre-Funded Warrants”). As of June 30, 2024, all the Pre-Funded Warrants remained outstanding. On July 22, 2024, holders of Pre-Funded Warrants opted to exercise a portion of their warrants into common stock. During July 2024, a total of 267,253 shares of the Pre-Funded Warrants were exercised resulting in the issuance of an aggregate of 267,253 shares of common stock. After giving effect to these aforementioned exercises, 3,017,204 Pre-Funded Warrants remain outstanding.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">In addition, the Company issued to the investors in the Offering (i) Series A-1 warrants (the “Series A-1 Warrants”) to purchase up to an aggregate of 3,614,457 shares of common stock, (ii) Series A-2 warrants (the “Series A-2 Warrants”) to purchase up to an aggregate of 3,614,457 shares of common stock, and (iii) Series A-3 warrants (the “Series A-3 Warrants,” and together with the Series A-1 Warrants and Series A-2 Warrants, the “Warrants”) to purchase up to an aggregate of 3,614,457 shares of common stock. Each share of common stock or Pre-Funded Warrant was sold together with one Series A-1 Warrant to purchase one share of common stock, one Series A-2 Warrant to purchase one share of common stock, and one Series A-3 Warrant to purchase one share of common stock. Each Warrant has an exercise price of $1.66 per share and will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares upon exercise of the Warrants (“Warrant Stockholder Approval”).</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">The Series A-1 Warrants expire on the earlier of the five (5) year anniversary following the Warrant Stockholder Approval and sixty (60) days following the public announcement by the Company of the Company receiving FDA clearance of second image-guided coronary device with a therapeutic indication other than diagnostic imaging or coronary CTO crossing. The Series A-2 Warrants expire on the earlier of the twenty-four (24) month anniversary following the Warrant Stockholder Approval and sixty (60) days following the date of the public announcement by the Company of the occurrence of the Company receiving 510(k) clearance of image-guided Coronary CTO crossing device. The Series A-3 Warrants expire on the earlier of the nine (9) month anniversary following the Warrant Stockholder Approval and sixty (60) days following the date of the public announcement by the Company of the occurrence of the Company receiving FDA approval of image-guided Coronary CTO investigational device exemption (“IDE”) application.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">Pursuant to an engagement letter (the “Engagement Letter”) with H.C. Wainwright &amp; Co., LLC (the “Placement Agent”), the Company, in connection with the Offering, issued warrants to designees of the Placement Agent (the “Placement Agent Warrants”) to purchase up to an aggregate of 216,867 shares of common stock (the “Placement Agent Warrant Shares”). The Placement Agent Warrants have substantially the same terms as the Warrants issued and sold in the Offering, except that the Placement Agent Warrants have an exercise price of $2.075 per share and expire on June 13, 2029.</p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family: Times New Roman; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt;"><i>At The Market Offering Agreement</i></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">On May 20, 2022, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright &amp; Co., LLC (the “Agent”), as sales agent, pursuant to which the Company may offer and sell shares of common stock, par value $0.001 per share (the “Shares”) up to an aggregate offering price of $7,000,000 from time to time, in an at the market public offering. Sales of the Shares are to be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of 3.0% of the gross proceeds of any Shares sold under the ATM Agreement. The Shares sold under the ATM Agreement are offered and sold pursuant to the Company’s shelf registration statement on Form S-3, which was initially filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2022 and declared effective on April 7, 2022, and a prospectus supplement and the accompanying prospectus relating to the At The Market Offering filed with the SEC on May 20, 2022. On August 3, 2022, the Company suspended sales under the ATM Agreement. On March 17, 2023, the Company reactivated the ATM Agreement. During the year ended December 31, 2023, the Company sold 607,241 shares of common stock at an average price of $9.01 per share for aggregate proceeds of approximately $5.5 million, of which approximately $164,000 was paid in the form of commissions to the Agent. There were <span style="-sec-ix-hidden:c521"><span style="-sec-ix-hidden:c522">no</span></span> sales under the ATM Agreement during the three or six months ended June 30, 2024. While the Company may attempt additional sales in the future, there can be no assurance that the Company will be successful in acquiring additional funding through these means.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">Other than the ATM Agreement, the Company currently does not have any commitments to obtain additional funds.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Strategic Partnership and Private Placement</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">On March 4, 2024, the Company entered into a License and Distribution Agreement (the “License Agreement”) with Zylox-Tonbridge effective as of the Initial Closing (defined below), pursuant to which the Company will license and distribute certain of the Company’s products (including consumables) in the Greater China region, including mainland China, Hong Kong, Macao, and Taiwan (the “Territory”). Zylox-Tonbridge will lead all regulatory activities for the registration of the Avinger products in the Territory. Avinger will also license its intellectual property and know-how related to Avinger products to Zylox-Tonbridge so that Zylox-Tonbridge can manufacture the localized products in the Territory. Avinger will supply Avinger products to Zylox-Tonbridge until Zylox-Tonbridge’s manufacturing capability has been established and Zylox-Tonbridge has obtained the regulatory approval of the localized products manufactured by Zylox-Tonbridge. All sales of Avinger products locally manufactured by Zylox-Tonbridge with regulatory approval by the regulatory authorities in the Territory and commercialized in the Territory will be royalty bearing to Avinger at a rate from a mid-single to high-single digit percentage depending on the amount of gross revenue as defined in the License Agreement, with certain increases depending on the amount of product gross margin. The License Agreement has an initial term of 20 years, which shall be further automatically extended for additional 20-year terms, subject to certain conditions. The License Agreement may not be terminated by either party, other than for certain uncured material breaches or the other party’s insolvency. In March 2024, the Company received approximately $0.2 million from Zylox-Tonbridge related to inventory consumed for regulatory approval which is recorded as a reduction to research and development expenses in the Condensed Statement of Operations and Comprehensive Loss for the three months ended March 31, 2024 which substantially offset the related expenditures associated with the inventory consumption.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">In connection with the License Agreement, on March 4, 2024, the Company and Zylox-Tonbridge also entered into a Strategic Cooperation and Framework Agreement in conjunction with the Initial Closing (the “Collaboration Agreement” and, together with the License Agreement, the “Strategic Collaboration”), which provides the opportunity for the Company to access certain Zylox-Tonbridge peripheral vascular products for distribution in the U.S. and Germany. The agreement also provides the option for Avinger to source finished goods inventory from Zylox-Tonbridge following registration of Zylox-Tonbridge’s manufacturing facility with the FDA.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><i>Private Placement</i></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">On March 4, 2024, in connection with the Strategic Collaboration, the Company and Zylox-Tonbridge Medical Limited, a wholly-owned subsidiary of Zylox-Tonbridge (the “Purchaser”), entered into a Securities Purchase Agreement (the “Purchase Agreement”), pursuant to which the Purchaser agreed to purchase, in two tranches, up to an aggregate of $15 million in shares of the Company’s common stock, and shares of two new series of the Company’s preferred stock (the “Private Placement”). On March 5, 2024, (the “Initial Closing”), the Company issued to the Purchaser 75,327 shares of the common stock at a purchase price per share of $3.664 (the “Purchase Price”), and 7,224 shares of a newly authorized Series F convertible preferred stock, par value $0.001 per share (the “Series F Preferred Stock”), at a purchase price per share of $1,000, for an aggregate purchase price of $7.5 million.</p> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">Each share of Series F Preferred Stock has a stated value of $1,000 and is initially convertible into approximately 273 shares of common stock at a conversion price equal to the Purchase Price, subject to the terms of the Certificate of Designation of Preferences, Rights, and Limitations of the Series F Preferred Stock (the “Series F Certificate of Designation”).</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">Upon completion of the following as mutually agreed upon by the Company and the Purchaser: (i) the successful registration and listing under 21 CFR part 807 with the FDA of the Purchaser and one of its designated affiliates to manufacture Avinger’s products, and (ii) the Company achieving an aggregate of $10 million in gross revenue within any four consecutive fiscal quarters after the Initial Closing, excluding any gross revenue achieved by Avinger under the License Agreement discussed above (together, the “Milestones”), the Purchaser will invest an additional $7.5 million (the “Milestone Closing”) to purchase shares of the Company new Series G convertible preferred stock, par value $0.001 per share (the “Series G Preferred Stock”). Each share of Series G Preferred Stock will have a stated value of $1,000 and will be convertible into shares of common stock at a conversion price of equal to the lowest of (x) the Purchase Price, (y) the closing price of the common stock on the date immediately preceding the Milestone Closing, and (z) the average closing price for the last five trading days preceding the Milestone Closing, provided that the conversion price will be no less than $0.20. The Milestone Closing was determined to be a separate freestanding equity-classified instrument issued together with the common stock and Series F preferred stock, all of which are classified within equity.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">On May 22, 2024, the Company held a special meeting of stockholders to vote on the following proposals resulting from the Private Placement (i) accept conversion of the shares of Series F Preferred Stock in excess of 19.9% of the Company’s outstanding common stock, which may be deemed a “change of control” under Nasdaq Listing Rule 5635(b) and (ii) issue and sell shares of Series G Preferred Stock upon completion of the Milestones. Both proposals were approved by the Company’s stockholders. There were no conversions of Series F Preferred Stock during the three months ended June 30, 2024.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">The Company engaged two financial advisors in connection with the Private Placement and agreed to pay them an aggregate cash fee equal to 7% of the gross proceeds to the Company. Additionally, the Company agreed to issue to one financial advisor warrants to purchase an aggregate number of shares of common Stock equal to 2% of the gross proceeds. In connection with the Private Placement, the Company issued the financial advisor warrants (the “Advisor Warrants”) to purchase 40,938 shares of common stock. The cash fee of approximately $0.5 million and warrants with a fair value of approximately $0.1 million are considered financing costs and are recognized as a reduction of the proceeds from the Private Placement.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><i>Series A Preferred Stock Exchange</i></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">On March 5, 2024, the Company entered into a Securities Purchase Agreement (the “A-1 Securities Purchase Agreement”) with CRG to exchange all outstanding shares of Series A preferred stock for 10,000 shares of Series A-1 preferred stock (the “Exchange”). Among other things, the shares of Series A-1 preferred stock: (i) are convertible into an aggregate of approximately 2,729,257 shares of common stock at a conversion price equal to the Purchase Price, (ii) do not accrue or pay dividends payable solely on the Series A-1 preferred stock, (iii) will have no liquidation preference and (iv) will be junior in rank to shares of the Company’s Series E preferred stock, Series F preferred stock and Series G preferred stock. The Exchange resulted in approximately $1.9 million gain included in the net loss applicable to common holders for the three months ended March 31, 2024.</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><i>CRG Loan Amendment</i></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">Also on March 5, 2024, the Company entered into Amendment No. 9 to Loan Agreement effective as of the Initial Closing (the “Amendment”) with CRG, which amends the Loan Agreement to, among other things:</p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <table border="0" cellpadding="0" cellspacing="0" style="width: 100%; text-indent: 0px;"> <tbody><tr style="vertical-align: top;"> <td style="width: 27pt;"> </td> <td style="width: 18pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; margin: 0pt;">-</p> </td> <td style="width: auto;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt;">extend the interest-only period through December 31, 2026;</p> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 27pt;"> </td> <td style="width: 18pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt;">-</p> </td> <td style="width: auto;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt;">provide that interest payable through December 31, 2026 may be payable in kind rather than in cash; and</p> </td> </tr> <tr style="vertical-align: top;"> <td style="width: 27pt;"> </td> <td style="width: 18pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt;">-</p> </td> <td style="width: auto;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; font-variant: normal; text-align: justify; margin: 0pt;">permit the payment of dividends on the preferred stock issued or issuable to the Purchaser.</p> </td> </tr> </tbody></table> <p style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; margin: 0pt; text-align: left">  </p>
CY2024Q2 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
-430600000 usd
CY2024Q2 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
8800000 usd
CY2024Q1 avgr Agreement To Purchase Common Stock Maximum Amount
AgreementToPurchaseCommonStockMaximumAmount
15000000 usd
CY2024Q1 us-gaap Proceeds From Issuance Or Sale Of Equity
ProceedsFromIssuanceOrSaleOfEquity
7500000 usd
CY2024Q1 avgr Milestone Payment Additional Authorized Amount
MilestonePaymentAdditionalAuthorizedAmount
7500000 usd
CY2024Q1 us-gaap Class Of Warrant Or Right Number Of Securities Called By Warrants Or Rights
ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights
40938
CY2024Q1 us-gaap Fair Value Adjustment Of Warrants
FairValueAdjustmentOfWarrants
500000 usd
CY2024Q1 avgr Gain Loss On Convertible Preferred Stock Converted To Other Securities
GainLossOnConvertiblePreferredStockConvertedToOtherSecurities
100000 usd
CY2024Q1 avgr Securities Purchase Agreement Number Of Shares To Convert
SecuritiesPurchaseAgreementNumberOfSharesToConvert
10000
avgr Gain Loss On Convertible Preferred Stock Converted To Other Securities
GainLossOnConvertiblePreferredStockConvertedToOtherSecurities
1900000 usd
us-gaap Use Of Estimates
UseOfEstimates
<p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;margin:0pt;"><b>Use of Estimates</b></p> <p style="font-family:'Times New Roman';font-size:10pt;font-variant:normal;margin:0pt;"> </p> <p style="font-family:Times New Roman;font-size:10pt;font-variant:normal;text-align:justify;margin:0pt;text-indent:36pt;">The preparation of financial statements in conformity with U.S. 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 stock-based compensation, accruals related to compensation, the valuation of the common stock warrants, 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 not readily apparent from other sources. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.</p>
CY2024Q1 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
182000 usd
CY2023Q1 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
114000 usd
CY2023Q4 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
193000 usd
CY2022Q4 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
109000 usd
CY2024Q2 us-gaap Product Warranty Accrual Warranties Issued
ProductWarrantyAccrualWarrantiesIssued
17000 usd
CY2023Q2 us-gaap Product Warranty Accrual Warranties Issued
ProductWarrantyAccrualWarrantiesIssued
15000 usd
us-gaap Product Warranty Accrual Warranties Issued
ProductWarrantyAccrualWarrantiesIssued
32000 usd
us-gaap Product Warranty Accrual Warranties Issued
ProductWarrantyAccrualWarrantiesIssued
34000 usd
CY2024Q2 avgr Product Warranty Accrual Payments And Release
ProductWarrantyAccrualPaymentsAndRelease
49000 usd
CY2023Q2 avgr Product Warranty Accrual Payments And Release
ProductWarrantyAccrualPaymentsAndRelease
1000 usd
avgr Product Warranty Accrual Payments And Release
ProductWarrantyAccrualPaymentsAndRelease
75000 usd
avgr Product Warranty Accrual Payments And Release
ProductWarrantyAccrualPaymentsAndRelease
15000 usd
CY2024Q2 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
150000 usd
CY2023Q2 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
128000 usd
CY2024Q2 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
150000 usd
CY2023Q2 us-gaap Product Warranty Accrual
ProductWarrantyAccrual
128000 usd
CY2024Q2 us-gaap Net Income Loss Available To Common Stockholders Basic
NetIncomeLossAvailableToCommonStockholdersBasic
-4600000 usd
CY2023Q2 us-gaap Net Income Loss Available To Common Stockholders Basic
NetIncomeLossAvailableToCommonStockholdersBasic
-5394000 usd
us-gaap Net Income Loss Available To Common Stockholders Basic
NetIncomeLossAvailableToCommonStockholdersBasic
-8274000 usd
us-gaap Net Income Loss Available To Common Stockholders Basic
NetIncomeLossAvailableToCommonStockholdersBasic
-11256000 usd
CY2024Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
1634000
CY2023Q2 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
609000
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
1555000
us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
579000
CY2024Q2 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
-2.82
CY2023Q2 us-gaap Earnings Per Share Basic
EarningsPerShareBasic
-8.86
us-gaap Earnings Per Share Basic
EarningsPerShareBasic
-5.32
us-gaap Earnings Per Share Basic
EarningsPerShareBasic
-19.44
CY2024Q2 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
2685800
CY2023Q2 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
623698
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
1484205
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
644623
CY2024Q2 us-gaap Inventory Raw Materials Net Of Reserves
InventoryRawMaterialsNetOfReserves
2102000 usd
CY2023Q4 us-gaap Inventory Raw Materials Net Of Reserves
InventoryRawMaterialsNetOfReserves
3203000 usd
CY2024Q2 us-gaap Inventory Work In Process Net Of Reserves
InventoryWorkInProcessNetOfReserves
90000 usd
CY2023Q4 us-gaap Inventory Work In Process Net Of Reserves
InventoryWorkInProcessNetOfReserves
25000 usd
CY2024Q2 us-gaap Inventory Finished Goods Net Of Reserves
InventoryFinishedGoodsNetOfReserves
1928000 usd
CY2023Q4 us-gaap Inventory Finished Goods Net Of Reserves
InventoryFinishedGoodsNetOfReserves
2070000 usd
CY2024Q2 us-gaap Inventory Net
InventoryNet
4120000 usd
CY2023Q4 us-gaap Inventory Net
InventoryNet
5298000 usd
CY2024Q1 us-gaap Lessee Operating Lease Liability Payments Due
LesseeOperatingLeaseLiabilityPaymentsDue
1300000 usd
CY2019Q4 us-gaap Lessee Operating Lease Liability Payments Due
LesseeOperatingLeaseLiabilityPaymentsDue
7100000 usd
CY2024Q2 us-gaap Operating Lease Weighted Average Remaining Lease Term1
OperatingLeaseWeightedAverageRemainingLeaseTerm1
P1Y4M24D
us-gaap Right Of Use Asset Obtained In Exchange For Operating Lease Liability
RightOfUseAssetObtainedInExchangeForOperatingLeaseLiability
2200000 usd
CY2024Q2 us-gaap Lessee Operating Lease Discount Rate
LesseeOperatingLeaseDiscountRate
0.065 pure
avgr Operating Lease Expense Excluding Maintenance Fee And Other Expense Monthly
OperatingLeaseExpenseExcludingMaintenanceFeeAndOtherExpenseMonthly
105000 usd
CY2024Q2 us-gaap Operating Lease Expense
OperatingLeaseExpense
315000 usd
CY2023Q2 us-gaap Operating Lease Expense
OperatingLeaseExpense
314000 usd
us-gaap Operating Lease Expense
OperatingLeaseExpense
631000 usd
us-gaap Operating Lease Expense
OperatingLeaseExpense
628000 usd
CY2024Q2 us-gaap Operating Lease Cost
OperatingLeaseCost
83000 usd
CY2023Q2 us-gaap Operating Lease Cost
OperatingLeaseCost
103000 usd
us-gaap Operating Lease Cost
OperatingLeaseCost
173000 usd
us-gaap Operating Lease Cost
OperatingLeaseCost
168000 usd
CY2024Q2 us-gaap Operating Lease Right Of Use Asset Amortization Expense
OperatingLeaseRightOfUseAssetAmortizationExpense
285000 usd
CY2023Q2 us-gaap Operating Lease Right Of Use Asset Amortization Expense
OperatingLeaseRightOfUseAssetAmortizationExpense
284000 usd
us-gaap Operating Lease Right Of Use Asset Amortization Expense
OperatingLeaseRightOfUseAssetAmortizationExpense
577000 usd
us-gaap Operating Lease Right Of Use Asset Amortization Expense
OperatingLeaseRightOfUseAssetAmortizationExpense
564000 usd
CY2024Q2 us-gaap Prepaid Rent
PrepaidRent
3000 usd
CY2023Q4 us-gaap Prepaid Rent
PrepaidRent
13000 usd
CY2024Q2 us-gaap Lessee Operating Lease Liability Payments Due Next Twelve Months
LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths
623000 usd
CY2024Q2 us-gaap Lessee Operating Lease Liability Payments Due Year Two
LesseeOperatingLeaseLiabilityPaymentsDueYearTwo
1166000 usd
CY2024Q2 us-gaap Lessee Operating Lease Liability Payments Due
LesseeOperatingLeaseLiabilityPaymentsDue
1789000 usd
CY2024Q2 us-gaap Lessee Operating Lease Liability Undiscounted Excess Amount
LesseeOperatingLeaseLiabilityUndiscountedExcessAmount
78000 usd
CY2024Q2 us-gaap Operating Lease Liability
OperatingLeaseLiability
1711000 usd
CY2024Q2 us-gaap Operating Lease Right Of Use Asset
OperatingLeaseRightOfUseAsset
1711000 usd
CY2023Q4 us-gaap Operating Lease Right Of Use Asset
OperatingLeaseRightOfUseAsset
1102000 usd
CY2024Q2 us-gaap Operating Lease Right Of Use Asset
OperatingLeaseRightOfUseAsset
1711000 usd
CY2024Q2 us-gaap Operating Lease Liability Current
OperatingLeaseLiabilityCurrent
1183000 usd
CY2023Q4 us-gaap Operating Lease Liability Current
OperatingLeaseLiabilityCurrent
1102000 usd
CY2024Q2 us-gaap Operating Lease Liability Noncurrent
OperatingLeaseLiabilityNoncurrent
528000 usd
CY2023Q4 us-gaap Operating Lease Liability Noncurrent
OperatingLeaseLiabilityNoncurrent
0 usd
CY2024Q2 us-gaap Operating Lease Liability
OperatingLeaseLiability
1711000 usd
CY2023Q4 us-gaap Operating Lease Liability
OperatingLeaseLiability
1102000 usd
CY2024Q2 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
5000000
CY2023Q4 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
5000000
CY2024Q2 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.001
CY2023Q4 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.001
CY2024Q2 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
30229
CY2024Q2 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
30229
CY2023Q4 us-gaap Preferred Stock Shares Outstanding
PreferredStockSharesOutstanding
62881
CY2023Q4 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
62881
CY2024Q2 us-gaap Common Stock Shares Authorized
CommonStockSharesAuthorized
100000000
CY2024Q2 us-gaap Common Stock Par Or Stated Value Per Share
CommonStockParOrStatedValuePerShare
0.001
CY2024Q2 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
1916434
CY2024Q2 us-gaap Common Stock Shares Issued
CommonStockSharesIssued
1916434
CY2024Q2 us-gaap Class Of Warrant Or Right Outstanding
ClassOfWarrantOrRightOutstanding
55433132
CY2024Q2 us-gaap Class Of Warrant Or Right Number Of Securities Called By Warrants Or Rights
ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights
14841729
CY2023Q4 us-gaap Class Of Warrant Or Right Outstanding
ClassOfWarrantOrRightOutstanding
41047499
CY2023Q4 us-gaap Class Of Warrant Or Right Number Of Securities Called By Warrants Or Rights
ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights
456096
CY2024Q2 us-gaap Share Price
SharePrice
1.86
CY2024Q2 us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
207000 usd
CY2023Q2 us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
239000 usd
us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
1303000 usd
us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
484000 usd
CY2024Q2 us-gaap Restructuring And Related Cost Number Of Positions Eliminated Period Percent
RestructuringAndRelatedCostNumberOfPositionsEliminatedPeriodPercent
0.24 pure
CY2024Q2 us-gaap Restructuring And Related Cost Number Of Positions Eliminated
RestructuringAndRelatedCostNumberOfPositionsEliminated
17 pure
CY2024Q2 us-gaap Severance Costs1
SeveranceCosts1
66000 usd
CY2024Q2 avgr Restructuring And Related Cost Number Of Positions Eliminated Severance Paid
RestructuringAndRelatedCostNumberOfPositionsEliminatedSeverancePaid
13 pure
CY2024Q2 avgr Severance Costs Included In Accrued Compensation
SeveranceCostsIncludedInAccruedCompensation
4000 usd

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