S-1/A: Avinger Eyes $5.3 Million in New Offering to Bolster Working Capital

Sentiment:

S-1/A Filing 11 June 2024 9:27 PM

Avinger, Inc. announces a proposed offering of common stock and warrants to raise approximately $5.3 million for working capital and general corporate purposes.

Capital raiseThe company is offering up to 3,053,435 shares of common stock, pre-funded warrants, and multiple series of warrants.The assumed combined public offering price is $1.965 per share and accompanying warrants.The company estimates net proceeds of approximately $5.3 million from the offering.The proceeds are intended for working capital and general corporate purposes.

Worse than expectedThe company's revenue declined in 2022 and 2023, indicating a worsening financial performance.The company has a history of operating losses and negative cash flows, raising concerns about its ability to continue as a going concern.

Summary

Avinger, Inc. has filed an amendment to its S-1 registration statement for a proposed offering.
The offering includes up to 3,053,435 shares of common stock, pre-funded warrants for the same amount, Series A-1, A-2, and A-3 warrants, and placement agent warrants.
The assumed combined public offering price is $1.965 per share of common stock and accompanying warrants, based on the closing price on June 10, 2024.
The company estimates net proceeds of approximately $5.3 million, after deducting placement agent fees and offering expenses, assuming full exercise of pre-funded warrants and no exercise of other warrants.
The proceeds are intended for working capital and general corporate purposes.
H.C. Wainwright & Co., LLC is acting as the exclusive placement agent.
The offering is subject to customary closing conditions and is expected to close around June , 2024.
The company has recently undertaken restructuring activities, including a workforce reduction, and has addressed Nasdaq listing compliance issues.
Avinger has also entered into a strategic collaboration with Zylox-Tonbridge, including licensing and distribution agreements and a private placement.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While the company is raising capital and has made progress in regaining Nasdaq compliance, it faces significant financial challenges and market competition. The restructuring activities and workforce reduction also contribute to a negative outlook.

Positives

The offering aims to strengthen Avinger's working capital position.
The strategic collaboration with Zylox-Tonbridge provides access to the Greater China market and potential product sourcing opportunities.
The company has addressed Nasdaq listing compliance issues, ensuring continued trading on the exchange.
Recent debt conversion has improved the company's balance sheet and liquidity.
The company has extended its lease agreement, providing stability for its operations.

Negatives

The company has a history of operating losses and negative cash flows, raising concerns about its ability to continue as a going concern.
The offering may dilute existing shareholders' equity.
There is no guarantee that the company will be able to maintain compliance with Nasdaq listing requirements in the future.
The company's stock price has been volatile, and investors could incur substantial losses.
The company's revenue declined in 2022 and 2023 due to staffing shortages and resource constraints.

Risks

The company's ability to continue as a going concern is uncertain, requiring additional financing.
Failure to comply with Nasdaq listing requirements could result in delisting.
The market for medical devices in the coronary artery disease space is highly competitive.
The company may not be able to secure additional financing on favorable terms.
The company has broad discretion in how it uses the net proceeds of this offering, and may not use these proceeds effectively.
The company is subject to a mandatory panel monitor for a period of one year from May 29, 2024.

Future Outlook

The company expects to expand to full commercial availability of Pantheris LV within the United States around mid-year 2024. The company believes that its cash and cash equivalents of $7.2 million at March 31, 2024 and expected revenues, debt and financing activities and funds from operations will be sufficient to allow it to fund its current operations through the end of the second quarter of 2024.

Management Comments

The document does not contain direct quotes, but it outlines management's plans to reduce operating costs and focus on the coronary artery disease program.

Industry Context

Avinger operates in the peripheral artery disease (PAD) and coronary artery disease (CAD) medical device markets, facing competition from established players. The company's Lumivascular platform offers a unique image-guided approach to PAD treatment, potentially improving patient outcomes compared to traditional methods. The company is developing CTO crossing devices to target the coronary CTO market.

Comparison to Industry Standards

The document does not provide specific comparisons to industry standards or competitors.
However, it mentions that Pantheris qualifies for existing reimbursement codes currently utilized by other atherectomy products, suggesting a level of market acceptance.
The company's Lumivascular platform is positioned as a differentiated technology offering radiation-free, high-definition real-time visualization, which could provide a competitive advantage.

Stakeholder Impact

Shareholders may experience dilution due to the offering of new shares and warrants.
Employees have been affected by the recent workforce reduction.
Customers may benefit from the company's continued development and commercialization of its products.
Suppliers and creditors may be impacted by the company's financial performance and ability to meet its obligations.

Next Steps

The company intends to use the net proceeds from this offering for working capital and other general corporate purposes.
The company intends to promptly seek Warrant Stockholder Approval.
The company will be subject to a mandatory panel monitor for a period of one year from May 29, 2024.

Key Dates

Date	Description
March 8, 2007	Avinger, Inc. was incorporated in Delaware.
September 2011	CE Marking obtained for original Ocelot product.
November 2012	FDA 510(k) clearance received for original Ocelot product.
October 2015	FDA 510(k) clearance received for Pantheris.
March 2016	FDA 510(k) clearance received for enhanced version of Pantheris.
May 2017	Data collection completed for VISION clinical trial patients at 12 and 24 months.
July 2017	Final 12and 24-month results released for VISION clinical trial.
May 2018	FDA 510(k) clearance received for next-generation version of Pantheris.
April 2019	FDA 510(k) clearance received for Pantheris Small Vessel (SV).
July 2019	Sales of Pantheris Small Vessel (SV) commenced.
September 2020	FDA 510(k) clearance received for Tigereye.
January 2022	FDA 510(k) clearance received for Lightbox 3 imaging console.
November 2021	FDA 510(k) clearance received for treating in-stent restenosis with Pantheris.
April 25, 2023	Received Nasdaq delisting notice for minimum bid price deficiency.
May 18, 2023	Received Nasdaq delisting notice for minimum stockholders equity deficiency.
June 2023	FDA 510(k) clearance received for Pantheris Large Vessel (LV).
June , 2024	Expected delivery date of the Securities.
September 12, 2023	Reverse stock split (1-for-15) became effective.
September 27, 2023	Received notification from Nasdaq of regaining compliance with Bid Price Requirement.
November 21, 2023	Staff formally notified that the Company was unable to demonstrate compliance with the Equity Requirement.
November 28, 2023	Requested and were granted a hearing before the Panel.
March 4, 2024	Entered into a License and Distribution Agreement with Zylox-Tonbridge.
March 5, 2024	Issued shares of Common Stock and Series F Preferred Stock to Zylox-Tonbridge Medical Limited.
March 14, 2024	Results from the hearing were rendered in which the Company was granted an extension by the Panel.
May 16, 2024	Entered into a Securities Purchase Agreement with CRG Partners III L.P.
May 20, 2024	Extension granted by the Panel stayed any further action by Nasdaq with respect to the Company's continued listing until this date.
May 29, 2024	Received a letter from Nasdaq confirming that the Company has regained compliance with the Equity Requirement.
June 5, 2024	Announced a plan of termination as part of efforts to reduce operating costs.
June 10, 2024	Last reported sale price on Nasdaq of shares of Common Stock.
June 11, 2024	Date of the prospectus.

Keywords

offering, warrants, common stock, Avinger, capital, financing, Lumivascular, Nasdaq, Zylox-Tonbridge, debt, CRG, delisting, restructuring, medical device

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