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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

 

 

FORM 10-Q

 

 

(Mark One)

 

 

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2024

or

 

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 001-36817

 

 

AVINGER, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

20-8873453

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification Number)

 

400 Chesapeake Drive

Redwood City, California 94063

(Address of principal executive offices and zip code)

 

(650) 241-7900

(Telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each
class:

  

Trading
Symbol(s):

  

Name of each exchange on which registered:

Common Stock, par value $0.001 per share

  

AVGR

  

The Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☐
   

Non-accelerated filer ☒

Smaller reporting company ☒
   
 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

 

As of August 2, 2024, the number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was 2,296,146.

 

 
 

  

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

 

 

●

our ability to continue as a going concern;

 

 

●

our ability to regain and remain in compliance with the listing requirements of the Nasdaq Capital Market;

 

 

●

the outcome of and expectations regarding our current clinical studies and any additional clinical studies we initiate;

 

 

●

our plans to modify our current products, or develop new products, to address additional indications;

 

 

●

our ability to obtain additional financing through future equity or debt financings;

 

 

●

the expected timing of 510(k) clearances by the U.S. Food and Drug Administration (“FDA”) which may include but are not limited to additional versions of Pantheris, Ocelot, Tigereye and Lightbox;

 

 

●

the expected timing of 510(k) submission to the FDA, and associated marketing clearances by the FDA, which may include but are not limited to additional versions of Pantheris, Ocelot, Tigereye and Lightbox;

 

 

●

our ability to realize benefits from our license and collaboration agreements with Zylox-Tonbridge;

 

 

●

the expected growth in our business and our organization;

 

 

●

our expectations regarding government and third-party payor coverage and reimbursement, including the ability of Pantheris to qualify for reimbursement codes used by other atherectomy products;

 

 

●

our ability to retain and recruit key personnel, including the continued development of our sales and marketing infrastructure;

 

 

●

our ability to obtain and maintain intellectual property protection for our products;

 

 

●

our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for, or ability to obtain, additional financing;

 

 

●

our expectations regarding revenue, cost of revenue, gross margins, and expenses, including research and development and selling, general and administrative expenses;

 

 

●

our ability to identify and develop new and planned products and acquire new products, including those for the coronary market;

 

 

●

our financial performance;

 

 

●

our ability to remain in compliance with laws and regulations that currently apply or become applicable to our business, both in the United States and internationally; and

 

 

●

developments and projections relating to our competitors or our industry.

 

 
 

 

We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the “Risk Factors” section and elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 20, 2024. We urge you to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. We assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

 

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations.

 

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the United States Securities and Exchange Commission (“SEC”) as exhibits to the Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

 

 
 

 

 

AVINGER, INC.

AS OF AND FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

 

TABLE OF CONTENTS

 

   

Page

Part I

Financial Information

  

Item 1.

Unaudited Financial Statements

1
 

Condensed Balance Sheets

1
 

Condensed Statements of Operations and Comprehensive Loss

2
 

Condensed Statements of Stockholders’ Equity

3
 

Condensed Statements of Cash Flows

5
 

Notes to Condensed Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

38
     

Part II

Other Information

  

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

43

Item 3.

Defaults Upon Senior Securities

43

Item 4.

Mine Safety Disclosures

43

Item 5.

Other Information

43

Item 6.

Exhibits

44
     

Signatures

45

 

“Avinger,” “Pantheris,” “Lumivascular,” and “Tigereye” are trademarks of our company. Our logo and our other trade names, trademarks and service marks appearing in this Quarterly Report on Form 10-Q are our property. Other trade names, trademarks and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, our trademarks and trade names referred to in this Quarterly Report on Form 10-Q appear without the ™ symbol, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to these trademarks and trade names.

 

 
 

  

 

PART I. FINANCIAL INFORMATION

 

ITEM 1.    UNAUDITED FINANCIAL STATEMENTS

 

AVINGER, INC.

CONDENSED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)

 

   

June 30,

    

December 31,

  
   

2024

    

2023

  

Assets

                

Current assets:

                

Cash and cash equivalents

   $ 8,806     $ 5,275  

Accounts receivable, net of allowance for doubtful accounts of $56 and $41 at June 30, 2024 and December 31, 2023, respectively

     931       1,014  

Inventories, net

     4,120       5,298  

Prepaid expenses and other current assets

     1,043       575  

Total current assets

     14,900       12,162  
                 

Right of use asset

     1,711       1,102  

Property and equipment, net

     455       487  

Other assets

     229       19  

Total assets

   $ 17,295     $ 13,770  
                 

Liabilities and stockholders’ equity (deficit)

                

Current liabilities:

                

Accounts payable

   $ 725     $ 777  

Accrued compensation

     1,943       2,311  

Preferred stock dividends payable

     303       —  

Accrued expenses and other current liabilities

     804       817  

Leasehold liability, current portion

     1,183       1,102  

Borrowings

     4,044       14,293  

Total current liabilities

     9,002       19,300  
                 

Leasehold liability, long-term portion

     528       —  

Other long-term liabilities

     12       672  

Total liabilities

     9,542       19,972  
                 

Commitments and contingencies (Note 6)

            
                 

Stockholders’ equity (deficit):

                

Convertible preferred stock issuable in series, par value of $0.001;

                

Shares authorized: 5,000,000 at June 30, 2024 and December 31, 2023;

                

Shares issued and outstanding: 30,229 and 62,881 at June 30, 2024 and December 31, 2023, respectively; aggregate liquidation preference related to Series E, Series F, and Series H convertible preferred stock of $18,338 at June 30, 2024 and $62,796 at December 31, 2023 related to Series A and Series E convertible preferred stock

     —       —  

Common stock, par value of $0.001;

                

Shares authorized: 100,000,000 at June 30, 2024 and December 31, 2023;

                

Shares issued and outstanding: 1,916,434 and 1,279,928 at June 30, 2024 and December 31, 2023, respectively

     2       1  

Additional paid-in capital

     438,326       414,493  

Accumulated deficit

     (430,575

)

     (420,696

)

Total stockholders’ equity (deficit)

     7,753       (6,202 )

Total liabilities and stockholders’ equity (deficit)

   $ 17,295     $ 13,770  
 

All share, per share data, par values, and additional paid-in-capital amounts reflect the impact of the reverse stock split effective September 12, 2023. See accompanying notes.

 

1
 

 

 

AVINGER, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(In thousands, except per share data)

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Revenues

   $ 1,847     $ 2,041     $ 3,706     $ 3,929  

Cost of revenues

     1,469       1,436       2,985       2,688  

Gross profit

     378       605       721       1,241  
                                 

Operating expenses:

                                

Research and development

     904       988       1,966       2,344  

Selling, general and administrative

     3,601       3,346       7,971       6,884  

Total operating expenses

     4,505       4,334       9,937       9,228  

Loss from operations

     (4,127

)

     (3,729

)

     (9,216 )     (7,987 )
                                 

Interest expense, net

     (234

)

     (445

)

     (650 )     (837 )

Other (expense) income, net

     (1 )     (2 )     (13 )     4  

Net loss and comprehensive loss

     (4,362

)

     (4,176

)

     (9,879 )     (8,820 )

Accretion of preferred stock dividends

     (238 )     (1,218 )     (303 )     (2,436 )

Gain on exchange of Series A for Series A-1 convertible preferred stock

     —       —       1,908       —  

Net loss applicable to common stockholders

   $ (4,600

)

   $ (5,394

)

   $ (8,274 )   $ (11,256 )
                                 

Net loss per share attributable to common stockholders, basic and diluted

   $ (2.82

)

   $ (8.86

)

   $ (5.32 )   $ (19.44 )

Weighted average common shares used to compute net loss per share, basic and diluted

     1,634       609       1,555       579  

 

All share and per share data reflect the impact of the reverse stock split effective September 12, 2023. See accompanying notes.

 

2
 

 

 

AVINGER, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

(In thousands, except share data)

 

 

   

Convertible

Preferred Stock

    

Common Stock

    

Additional

Paid-in

    

Accumulated

    

Total

Stockholders’

  
   

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Deficit

  

Balance at March 31, 2023

     60,961     $ —       575,123     $ 9     $ 405,519     $ (407,020

)

   $ (1,492 )

Issuance of common stock in public offerings, net of commissions and issuance costs

     —       —       5,988       —       58       —       58  

Exercise of pre-funded warrants for common stock

     —       —       41,467       —       (1 )     —       (1 )

Employee stock-based compensation

     —       —       —       —       239       —       239  

Accretion of Series A preferred stock dividends

     —       —       —       —       (1,218

)

     —       (1,218

)

Net and comprehensive loss

     —       —       —       —       —       (4,176

)

     (4,176

)

Balance at June 30, 2023

     60,961     $ —       622,578     $ 9     $ 404,597     $ (411,196

)

   $ (6,590 )

 

 

   

Convertible

Preferred Stock

    

Common Stock

    

Additional

Paid-in

    

Accumulated

    

Total

Stockholders’

  
   

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity (Deficit)

  

Balance at March 31, 2024

     19,229     $ —       1,586,434     $ 2     $ 422,157     $ (426,213

)

   $ (4,054

)

Issuance of common stock in public offerings, net of commissions and issuance costs

     —       —       330,000       —       5,200       —       5,200  

Conversion of CRG loan principal into Series H convertible preferred stock

     11,000       —       —       —       11,000       —       11,000  

Employee stock-based compensation

     —       —       —       —       207       —       207  

Accretion of preferred stock dividends

     —       —       —       —       (238 )     —       (238 )

Net and comprehensive loss

     —       —       —       —       —       (4,362 )     (4,362 )

Balance at June 30, 2024

     30,229     $ —       1,916,434     $ 2     $ 438,326     $ (430,575 )   $ 7,753  

 

All share and per share data reflect the impact of the reverse stock split effective September 12, 2023. See accompanying notes.

 

3
 

 

AVINGER, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

(unaudited)

(In thousands, except share data)

 

   

Convertible

Preferred Stock

    

Common Stock

    

Additional

Paid-in

    

Accumulated

    

Total

Stockholders’

  
   

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity (Deficit)

  

Balance at December 31, 2022

     60,961     $ —       522,177     $ 8     $ 406,514     $ (402,376

)

   $ 4,146  

Issuance of common stock in public offerings, net of commissions and issuance costs

     —       —       6,782       —       37       —       37  

Exercise of pre-funded warrants for common stock

     —       —       91,325       1       (2 )     —       (1 )

Issuance of common stock upon vesting of restricted stock units

     —       —       2,294       —       —       —       —  

Employee stock-based compensation

     —       —       —       —       484       —       484  

Accretion of Series A preferred stock dividends

     —       —       —       —       (2,436

)

     —       (2,436

)

Net and comprehensive loss

     —       —       —       —       —       (8,820

)

     (8,820

)

Balance at June 30, 2023

     60,961     $ —       622,578     $ 9     $ 404,597     $ (411,196

)

   $ (6,590 )

 

   

Convertible

Preferred Stock

    

Common Stock

    

Additional

Paid-in

    

Accumulated

    

Total

Stockholders’

  
   

Shares

    

Amount

    

Shares

    

Amount

    

Capital

    

Deficit

    

Equity (Deficit)

  

Balance at December 31, 2023

     62,881     $ —       1,279,928     $ 1     $ 414,493     $ (420,696

)

   $ (6,202

)

Issuance of common stock and Series F preferred stock in a Private Placement, net of commissions and issuance costs

     7,224       —       75,327       —       6,880       —       6,880  

Issuance of common stock warrants in connection with the Private Placement

     —       —       —       —       127       —       127  

Issuance of common stock in public offerings, net of commissions and issuance costs

     —       —       330,000       —       5,200       —       5,200  

Conversion of CRG loan principal into Series H convertible preferred stock

     11,000       —       —       —       11,000       —       11,000  

Cancellation of Series A preferred stock

     (60,876 )     —       —       —       —       —       —  

Issuance of Series A-1 preferred stock, net of commissions and issuance costs

     10,000       —       —       —       —       —       —  

Issuance of common stock upon vesting of restricted stock awards

     —       —       368,503       1       —       —       1  

Net share settlement of restricted stock awards in satisfaction of tax obligations

     —       —       (137,324 )     —       (374 )     —       (374 )

Employee stock-based compensation

     —       —       —       —       1,303       —       1,303  

Accretion of preferred stock dividends

     —       —       —       —       (303 )     —       (303 )

Net and comprehensive loss

     —       —       —       —       —       (9,879 )     (9,879 )

Balance at June 30, 2024

     30,229     $ —       1,916,434     $ 2     $ 438,326     $ (430,575 )   $ 7,753  

 

All share and per share data reflect the impact of the reverse stock split effective September 12, 2023. See accompanying notes.

 

4
 
 

 

AVINGER, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)

 

   

Six Months Ended June 30,

  
   

2024

    

2023

  

Cash flows from operating activities

                

Net loss

   $ (9,879

)

   $ (8,820

)

Adjustments to reconcile net loss to net cash used in operating activities:

                

Depreciation and amortization

     169       140  

Amortization of debt issuance costs and debt discount

     24       41  

Stock-based compensation

     1,303       484  

Noncash interest expense and other charges

     728       997  

Change in right of use asset

     10       28  

Provision for excess and obsolete inventories

     97       271  

Other non-cash charges

     14       (52 )

Changes in operating assets and liabilities:

                

Accounts receivable

     68       186  

Inventories

     945       (828 )

Prepaid expenses and other current assets

     (468

)

     (528

)

Other assets

     (220 )     21  

Accounts payable

     (52

)

     (208

)

Accrued compensation

     (368 )     352  

Accrued expenses and other current liabilities

     (13 )     98  

Other long-term liabilities

     (660 )     305  

Net cash used in operating activities

     (8,302

)

     (7,513

)
                 

Cash flows from financing activities

                

Proceeds from the issuance of common stock and convertible preferred stock in a private placement, net of commissions and issuance costs

     7,007       —  

Proceeds from the issuance of common stock in public offerings, net of commissions and issuance costs

     5,200       37  

Net share settlement on restricted stock awards in satisfaction of tax obligations

     (374 )     —  

Net cash provided by financing activities

     11,833       37  
                 

Net change in cash and cash equivalents

     3,531       (7,476 )
Cash and cash equivalents, beginning of period     5,275       14,603  

Cash and cash equivalents, end of period

   $ 8,806     $ 7,127  
                 

Supplemental disclosure of cash flow information

                

Noncash investing and financing activities:

                

Increase to right of use asset and leasehold liability arising from lease amendment

   $ 1,177     $ —  

Conversion of CRG loan principal and accrued interest into Series H convertible preferred stock

   $ 11,000     $ —  

Accretion of preferred stock dividends

   $ 303     $ 2,436  

Reclassification of other long-term liabilities to accrued compensation

   $ —     $ 724  

Transfers between inventory and property and equipment

   $ 136     $ 4  

 

See accompanying notes.

 

5
 

 

AVINGER, INC.

 

Notes to Condensed Financial Statements

 

 

1. Organization

 

Organization, Nature of Business

 

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.

 

Liquidity Matters

 

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, Presentation of Financial Statements - Going Concern (Subtopic 205-40) 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.

 

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.

 

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.

 

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.

 
6
 

 

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.

 

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.

 

Public Offerings

 

June 2024 Offering

 

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.

 

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.

 

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”).

 

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.

 

Pursuant to an engagement letter (the “Engagement Letter”) with H.C. Wainwright & 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.

 
7
 

 

At The Market Offering Agreement

 

On May 20, 2022, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & 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 no 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.

 

Other than the ATM Agreement, the Company currently does not have any commitments to obtain additional funds.

 

Strategic Partnership and Private Placement

 

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.

 

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.

 

Private Placement

 

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.

 
8
 

 

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”).

 

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.

 

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.

 

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.

 

Series A Preferred Stock Exchange

 

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.

 

CRG Loan Amendment

 

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:

 

 

-

extend the interest-only period through December 31, 2026;
 

-

provide that interest payable through December 31, 2026 may be payable in kind rather than in cash; and
 

-

permit the payment of dividends on the preferred stock issued or issuable to the Purchaser.

 
9
 

  
 

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. The accompanying unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company’s financial information. The results for the three and six months ended June 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, or for any other interim period or for any future year. The December 31, 2023 condensed balance sheet data has been derived from audited financial statements. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements. These unaudited condensed financial statements and notes should be read in conjunction with the financial statements included in the Company’s Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 20, 2024. The Company’s significant accounting policies are more fully described in Note 2 of the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

 

On September 8, 2023, the Company’s Board of Directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1-for-15 reverse stock split of the Company’s issued and outstanding common stock. The reverse stock split became effective on September 12, 2023.

 

Use of Estimates

 

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.

 

Concentration of Credit Risk, and Other Risks and Uncertainties

 

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable to the extent of the amounts recorded on the balance sheets.

 

The Company’s policy is to invest in cash and cash equivalents, consisting of money market funds. These financial instruments are held in Company accounts at one financial institution, First Citizens Bank, which acquired the Company’s prior banking partner, Silicon Valley Bank, in March 2023. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at June 30, 2024 and December 31, 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, a division of First Citizens Bank, future disruptions of financial institutions where it banks or have 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, the Company’s financial position and ability to operate its business will be adversely affected.

 

The Company’s accounts receivable are due from a variety of healthcare organizations in the United States and select international markets. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at June 30, 2024 and December 31, 2023. At June 30, 2024, there was one customer that represented 20% of the Company’s accounts receivable. At December 31, 2023, there was one customer that represented 24% of the Company’s accounts receivable. There was one customer that represented 16% of revenues for each of the three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, there was one customer that represented 17% and 16% of revenues, respectively. Disruption of the Company’s sales orders or a deterioration of financial condition of its customers would have a negative impact on the Company’s financial position and results of operations.

 
10
 

 

Product Warranty Costs

 

The Company typically offers a one-year warranty on its products commencing upon the transfer of title and risk of loss to the customer. The Company accrues for the estimated cost of product warranties upon invoicing its customers, based on historical results. Warranty costs are reflected in the statement of operations and comprehensive loss as a cost of revenues. The warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from these estimates, revisions to the estimated warranty liability would be required. Periodically the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts, as necessary. Warranty provisions and claims are summarized as follows (in thousands):

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Beginning balance

   $ 182     $ 114     $ 193     $ 109  

Warranty provision

     17       15       32       34  

Usage/Release

     (49

)

     (1

)

     (75 )     (15 )

Ending balance

   $ 150     $ 128     $ 150     $ 128  

 

Net Loss per Share Attributable to Common Stockholders

 

Basic net loss per share attributable to common stockholders is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Any common stock shares subject to repurchase are excluded from the calculations as the continued vesting of such shares is contingent upon the holders’ continued service to the Company. As of June 30, 2024 and 2023, there were no shares subject to repurchase. Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders as the inclusion of all potentially dilutive common shares would have been anti-dilutive.

 

Net loss per share applicable to common stockholders was determined as follows (in thousands, except per share data):

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net loss applicable to common stockholders

   $ (4,600

)

   $ (5,394

)

   $ (8,274 )   $ (11,256 )

Weighted average common stock outstanding, basic and diluted

     1,634       609       1,555       579  

Net loss per share attributable to common stockholders, basic and diluted

   $ (2.82

)

   $ (8.86

)

   $ (5.32 )   $ (19.44 )

 

The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted average shares outstanding because such securities have an anti-dilutive impact due to losses reported:

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Common stock warrants equivalents

     2,546,276       468,132       1,330,718       496,615  

Common stock options

     15       15       15       15  

Convertible preferred stock

     24,669       60,961       37,594       60,961  

Unvested restricted stock units

     114,840       94,590       115,878       87,032  
      2,685,800       623,698       1,484,205       644,623  

 
11
 

 

Segment and Geographical Information

 

The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Primarily all of the Company’s long-lived assets, which are comprised of property and equipment, are based in the United States. For each of the three months ended June 30, 2024 and 2023, 92% of the Company’s revenues were in the United States. For the six months ended June 30, 2024 and 2023, 93% and 92%, respectively, of the Company’s revenues were in the United States based on the shipping location of the external customer. The remaining revenues for the three and six months ended June 30, 2024 and 2023, were primarily derived in Germany.

 

Fair Value Measurements

 

As of June 30, 2024 and December 31, 2023, cash equivalents were all categorized as Level 1 and consisted of money market funds. As of June 30, 2024 and December 31, 2023, there were no financial assets and liabilities categorized as Level 2 or 3. There were no transfers between fair value hierarchy levels during the three or six months ended June 30, 2024 and June 30, 2023.

 

Recent Accounting Pronouncements

 

Recent accounting standards adopted

 

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which among other things, simplifies the accounting models for the allocation of proceeds attributable to the issuance of a convertible debt instrument.  As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (i) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (ii) a convertible debt instrument was issued at a substantial premium. The standard becomes effective for the Company, as a smaller reporting company as defined by the SEC, in the first quarter of 2024 and early adoption is permitted.  This new standard did not have a material impact on the Company’s financial statements.

 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures. This ASU requires that a public entity provide additional segment disclosures on an interim and annual basis. The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements unless impracticable. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. This new standard did not have a material impact on the Company’s financial statements.

 

Recent accounting standards not yet adopted

 

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU No. 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, if any, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its first quarter of 2025. ASU No. 2023-09 allows for adoption using either a prospective or retrospective transition method.

 

 

3. Inventories

 

Inventories consisted of the following (in thousands):

 

   

June 30,

    

December 31,

  
   

2024

    

2023

  

Raw materials

   $ 2,102     $ 3,203  

Work-in-process

     90       25  

Finished products

     1,928       2,070  

Total inventories

   $ 4,120     $ 5,298  

 
12
 

  
 

4. Borrowings

 

CRG

 

On September 22, 2015, the Company entered into a Term Loan Agreement, as amended (the “Loan Agreement”) with CRG under which, subject to certain conditions, the Company had the right to borrow up to $50 million in principal amount from CRG on or before the end of the twenty-fourth (24th) month period commencing on the first Borrowing Date (as defined in the Loan Agreement). The Company borrowed $30 million on September 22, 2015. The Company borrowed an additional $10 million on June 15, 2016 under the Loan Agreement.

 

On February 14, 2018, the Company and CRG further amended the Loan Agreement concurrent with the conversion of $38 million of the principal amount of the senior secured term loan (plus $3.8 million in back-end fees and prepayment premium applicable thereto) into a newly authorized Series A convertible preferred stock.

 

On August 2, 2023, the Company and CRG entered into a Securities Purchase Agreement (“Series E Purchase Agreement”) pursuant to which the Company issued 1,920 shares of a newly authorized Series E convertible preferred stock (“Series E Preferred Stock”) in exchange for CRG surrendering for cancellation $1.92 million of outstanding principal and accrued interest of the senior secured term loan under the Loan Agreement. Each share of Series E preferred stock has a stated value of $1,000 per share and is convertible into 93 shares of the Company’s common stock at a conversion price of $10.725 per share.

 

On May 16, 2024, the Company and CRG entered into another Securities Purchase Agreement (“Series H Purchase Agreement”) pursuant to which the Company issued 11,000 shares of a newly authorized Series H convertible preferred stock (“Series H Preferred Stock”) in exchange for CRG surrendering for cancellation $11.0 million of outstanding principal and accrued interest of the senior secured term loan under the Loan Agreement. Each share of Series H preferred stock has a stated value of $1,000 per share and is convertible into 259 shares of the Company’s common stock at a conversion price of $3.86 per share. Both the shares of Series E preferred stock and Series H preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess 9.99% of the Company’s outstanding voting power and in no case will the beneficial ownership limitation exceed 19.99% of the Company’s outstanding voting power on a combined basis (as CRG collectively holds all of the issued and outstanding shares of the Company’s Series A-1 Convertible Preferred Stock, Series E Convertible Preferred Stock and Series H Convertible Preferred Stock), unless approved by the Company's stockholders in accordance with Nasdaq Listing Rule 5635(b).

 

The Company has entered into several amendments to the Loan Agreement (the “Amendments”) with CRG since September 2015. The Amendments, among other things: (1) extended the interest-only period through December 31, 2026; (2) extended the period during which the Company may elect to pay a portion of interest in payment-in-kind (“PIK”), interest payments through December 31, 2026 so long as no Default (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted the Company to make the entire interest payments in PIK interest payments through December 31, 2026 so long as no Default has occurred and is continuing; (4) extended the Stated Maturity Date (as defined in the Loan Agreement) to December 31, 2028; (5) reduced the minimum liquidity covenant to $3.5 million at all times; (6) eliminated the minimum revenue covenants for all years (7) changed the date under the on-going stand-alone representation regarding no “Material Adverse Change” to December 31, 2020; (8) amended the on-going stand-alone representation and stand-alone Event of Default (as defined in the Loan Agreement) regarding Material Adverse Change such that any adverse change in or effect upon the revenue of the Company and its subsidiaries due to the outbreak of COVID-19 will not constitute a Material Adverse Change; (9) provided CRG with board observer rights and (10) provide that the board observer may be appointed or removed by written notice from the Majority Lenders (as defined in the Loan Agreement).

 

On January 26, 2024, the Company entered into Amendment No. 8 to the Loan Agreement with CRG, which reduced the minimum liquidity requirement of the Loan Agreement from $3.5 million to $1.0 million until April 1, 2024. Thereafter, the Company was subject to the minimum liquidity requirement of $3.5 million.

 

On March 5, 2024, the Company entered into Amendment No. 9 to the Loan Agreement with CRG, which (1) extended the interest-only period through December 31, 2026; (2) extended the period during which the Company may elect to pay a portion of interest in PIK interest payments through December 31, 2026 so long as no Default (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted the Company to make the entire interest payments in PIK interest payments through December 31, 2026 so long as no Default has occurred and is continuing; and (4) permit the payment of dividends on the preferred stock issued or issuable to the Purchaser. The Company assessed Amendment No. 9 to the Loan Agreement and determined that this represented a loan modification. As such, the unamortized portion of previous issuance costs incurred will be amortized over the modified term, and costs incurred with third parties was expensed as incurred.

 
13
 

 

On June 5, 2024, the Company entered into Amendment No. 10 to the Loan Agreement with CRG, which reduced the minimum liquidity requirement of the Loan Agreement from $3.5 million to $1.5 million for the period commencing June 1, 2024 and ending July 31, 2024. Thereafter, the Company will be subject to the minimum liquidity requirement of $3.5 million.

 

Under the amended Loan Agreement, no cash payments for either principal or interest are required until the first quarter of 2027. The interest will be accrued and included in the debt balance based (to the extent not paid) on principal amounts outstanding at the beginning of the quarter at an interest rate of 12.5%. Beginning in the first quarter of 2027, the Company will be required to make quarterly principal payments (in addition to the interest) of $0.5 million with total principal payments of $1.8 million in 2027 and $1.8 million in 2028. The maturity date of the Loan (as defined in the Loan Agreement) is December 31, 2028.

 

The Company may voluntarily prepay the borrowings in full, with a prepayment premium beginning at 5.0% and declining by 1.0% annually thereafter, with no premium being payable if prepayment occurs after seven and half years of the loan. There is currently no prepayment premium payable. Each tranche of borrowing required the payment, on the borrowing date, of a financing fee equal to 1.5% of the borrowed loan principal, which is recorded as a discount to the debt. In addition, a facility fee equal to 15.0% of the amounts borrowed plus any PIK is to be payable at the end of the term or when the borrowings are repaid in full. A short-term liability is being accreted using the effective interest method for the facility fee over the term of the Loan Agreement with a corresponding discount to the debt. The borrowings are collateralized by a security interest in substantially all of the Company’s assets.

 

The Loan Agreement requires that the Company adheres to certain affirmative and negative covenants, including financial reporting requirements, certain minimum financial covenants for a pre-specified liquidity requirement and a prohibition against the incurrence of indebtedness, or creation of additional liens, other than as specifically permitted by the terms of the Loan Agreement. In particular, the covenants of the amended Loan Agreement included a covenant that the Company maintain a minimum of $3.5 million of cash and certain cash equivalents. The minimum liquidity requirement was temporarily reduced to $1.5 million until July 31, 2024. The Loan Agreement also prohibits the payment of cash dividends on the Company’s capital stock and also places restrictions on mergers, sales of assets, investments, incurrence of liens, incurrence of indebtedness and transactions with affiliates. CRG may accelerate the payment terms of the Loan Agreement upon the occurrence of certain “Events of Default” set forth therein, which include the failure of the Company to make timely payments of amounts due under the Loan Agreement, the failure of the Company to adhere to the covenants set forth in the Loan Agreement, the insolvency of the Company or upon the occurrence of a “Material Adverse Change” thereunder.

 

As of June 30, 2024, the Company was in compliance with all applicable covenants under the Loan Agreement.

 

As of June 30, 2024, principal, final facility fee and PIK payments under the Loan Agreement, as amended, were as follows (in thousands):

 

Year Ending December 31,

        

2024 (remaining six months of the year)

   $ —  

2025

     —  

2026

     —  

2027

     2,176  

2028

     4,060  

Total

     6,236  

Less: Amount of PIK additions and final facility fee to be incurred subsequent to June 30, 2024

     (2,050 )

Less: Amount representing debt issuance costs

     (142 )

Borrowings, current portion, as of June 30, 2024

   $ 4,044  

 

In connection with drawdowns under the Loan Agreement, the Company recorded aggregate debt discounts of $1.3 million as contra-debt. The debt discounts are being amortized as non-cash interest expense using the effective interest method over the term of the Loan Agreement. As of June 30, 2024 and December 31, 2023, the balance of the aggregate debt discount was approximately $142,000 and $166,000, respectively. The Company’s interest expense associated with the amortization of debt discount was approximately $8,000 and $20,000 during the three months ended June 30, 2024 and 2023, respectively. The Company’s interest expense associated with the amortization of debt discount was approximately $24,000 and $41,000 during the six months ended June 30, 2024 and 2023, respectively. For the three months ended June 30, 2024 and 2023, the Company incurred interest expense of approximately $286,000 and $531,000, respectively. For the six months ended June 30, 2024 and 2023, the Company incurred interest expense of approximately $0.7 million and $1.0 million, respectively.

 
14
 

 

While, as of the date hereof, CRG has not purported that an Event of Default has resulted due to a Material Adverse Change (as those terms defined in the Loan Agreement), due to the substantial doubt about the Company’s ability to continue operating as a going concern, the entire outstanding amount of borrowings under the Loan Agreement and associated aggregate debt discount at June 30, 2024 and December 31, 2023 were classified as current in these financial statements.

 

 

5. Leases

 

The Company’s operating lease obligations primarily consist of leased office, laboratory, and manufacturing space under a non-cancelable operating lease. In addition to the minimum future lease commitments presented below, the lease requires the Company to pay property taxes, insurance, maintenance, and repair costs. The most recent amendment also provides an optional one-year extension of the lease following the end of the current term on November 30, 2025, which was not included in the assessment of the lease term as it is not reasonably certain the Company will elect to exercise this option. Rent expense is recognized using the straight-line method over the term of the lease.

 

The current lease was to expire on November 30, 2024. On March 6, 2024, the Company entered into an amendment to the lease which extended the lease term for a period of one year, subsequent to the original expiration. As amended, the lease will expire on November 30, 2025. Under the terms of the amendment, the Company will be obligated to pay an additional $1.3 million in base rent payments through November 2025, beginning on December 1, 2024. In total, the Company is obligated to pay approximately $7.1 million in base rent payments through November 2025, which began on December 1, 2019. The weighted average remaining lease term as of June 30, 2024 is 1.4 years.

 

In connection with the amendment the Company adjusted its right-of-use asset and lease liability to $2.2 million. As of the date of the amendment, the operating lease was included on the balance sheet at the present value of the future base payments discounted at a 6.5% discount rate using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment as the lease does not provide an implicit rate.

 

The Company’s operating lease expense, excluding variable maintenance fees and other expenses on a monthly basis, was approximately $105,000. Rent expense for the three months ended June 30, 2024 and 2023 was approximately $315,000 and $314,000, respectively. Rent expense for the six months ended June 30, 2024 and 2023 was approximately $631,000 and $628,000, respectively. The Company’s variable expenses for the three months ended June 30, 2024 and 2023 were approximately $83,000 and $103,000, respectively. The Company’s variable expenses for the six months ended June 30, 2024 and 2023 were approximately $173,000 and $168,000, respectively. Operating right-of-use asset amortization for the three months ended June 30, 2024 and 2023 was approximately $285,000 and $284,000, respectively. Operating right-of-use asset amortization for the six months ended June 30, 2024 and 2023 was approximately $577,000 and $564,000, respectively. Due to payments being made in excess of operating lease expense recognized, the Company recorded approximately $3,000 and $13,000 as prepaid rent included in other assets on the condensed balance sheet as of June 30, 2024 and December 31, 2023, respectively.

 

The following table presents the future operating lease payments and leasehold liability included on the balance sheet related to the Company’s operating lease as of June 30, 2024 (in thousands):

 

Year Ending December 31,

        

2024 (remaining six months of the year)

   $ 623  

2025

     1,166  

Total

     1,789  

Less: Imputed interest

     (78

)

Leasehold liability as of June 30, 2024

   $ 1,711  

 
15
 

 

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of June 30, 2024 and December 31, 2023 (in thousands):

 

Lease-Related Assets and Liabilities

   Financial Statement Line

Items

   June 30,

2024

     December 31,

2023

  

Right of use assets:

                    

Operating lease

  

Right of use asset

   $ 1,711     $ 1,102  

Total right of use assets

   $ 1,711     $ 1,102  

Lease liabilities:

                    

Operating lease

  

Leasehold liability, current portion

   $ 1,183     $ 1,102  
   

Leasehold liability, long-term portion

     528       —  

Total lease liabilities

   $ 1,711     $ 1,102  

  
 

6. Commitments and Contingencies

 

Purchase Obligations

 

Purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. The Company had non-cancelable commitments to suppliers for purchases totaling approximately $0.7 million as of June 30, 2024. The majority of this amount is related to commitments to purchase inventory components and services related to the manufacturing of inventory.

 

Legal Proceedings

 

The Company is not currently involved in any pending legal proceedings that it believes could have a material adverse effect on our financial condition, results of operations or cash flows. From time to time, the Company may be involved in legal proceedings or investigations, which could harm our reputation, business and financial condition and divert the attention of our management from the operation of our business.

 

 

7. Stockholders’ Equity

 

Convertible Preferred Stock

 

As of June 30, 2024 and December 31, 2023, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 5,000,000 shares of convertible preferred stock with $0.001 par value per share. As of June 30, 2024 and December 31, 2023, 30,229 and 62,881 shares, respectively, were issued and outstanding.

 

Series A Preferred Stock Exchange

 

On March 5, 2024, the Company entered into the A-1 Securities Purchase Agreement with CRG to exchange all 60,876 outstanding shares of Series A preferred stock for 10,000 shares of Series A-1 preferred stock. Consequently, there are no shares of Series A preferred stock outstanding as of June 30, 2024.

 

The exchange was accounted for as a capital transaction constituting an extinguishment of the Series A preferred stock through the issuance of Series A-1 preferred stock with no net impact to stockholders’ deficit. At the time of the exchange, the Series A preferred stock had approximately $1.9 million excess fair value in comparison to the Series A-1. The difference in fair value is treated as an adjustment to net loss applicable to common stockholders for the purpose of calculating earnings per share, see Note 2 for details.

 
16
 

 

Series A-1 Convertible Preferred Stock

 

Each share of Series A-1 preferred stock has a stated value of $1,000 per share and is convertible into 273 shares of the Company’s common stock at $3.664 per share. The Series A-1 preferred stock is convertible into a total of 2,729,257 shares of common stock subject to certain limitations contained in the A-1 Securities Purchase Agreement. Shares of Series A-1 preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 9.99% of the Company’s outstanding voting power and in no case will the beneficial ownership limitation exceed 19.99% of the Company’s outstanding voting power, unless approved by the Company's stockholders in accordance with Nasdaq Listing Rule 5635(b).The Series A-1 preferred stock has no liquidation preference, no voting rights and ranks junior to shares of the Company’s Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and Series H Preferred Stock in terms of repayment and certain other rights. The Series A-1 preferred stock is immediately convertible at the option of the holder, has no stated maturity, and does not pay regularly stated dividends or interest. As of June 30, 2024, 10,000 shares of Series A-1 preferred stock were outstanding.

 

Series B Convertible Preferred Stock

 

The Series B preferred stock has a liquidation preference of $0.001 per share, full ratchet price based anti-dilution protection, has no voting rights and is subject to certain ownership limitations. The Series B preferred stock is immediately convertible at the option of the holder, has no stated maturity, and does not pay regularly stated dividends or interest. As of June 30, 2024 and December 31, 2023, 85 shares of Series B preferred stock remained outstanding, which are currently convertible into shares of the Company’s common stock at $1.66 per share.

 

Series E Convertible Preferred Stock

 

Each share of Series E preferred stock has a stated value of $1,000 per share and is convertible into 93 shares of the Company’s common stock at a conversion price of $10.725 per share. The Series E preferred stock is convertible into a total of 178,560 shares of common stock subject to certain limitations contained in the Series E Purchase Agreement. Shares of Series E preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 9.99% of the Company’s outstanding voting power and in no case will the beneficial ownership limitation exceed 19.99% of the Company’s outstanding voting power, unless approved by the Company's stockholders in accordance with Nasdaq Listing Rule 5635(b). The holders of Series E preferred stock are entitled to receive annual accruing dividends at a rate of 8%, payable in additional shares of Series E preferred stock or cash, at the Company’s option. The shares of Series E preferred stock have full voting rights, on an as-converted basis, subject to certain limitations. The Series E preferred stock rank junior to Series H preferred stock and are senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights. The Series E preferred stock accrued additional dividends of less than $0.1 million and $0.1 million during the three and six months ended June 30, 2024, respectively, which were recognized as a reduction to additional paid-in capital in the statement of stockholders’ equity (deficit). As of June 30, 2024 and December 31, 2023, 1,920 shares of Series E preferred stock were outstanding.

 

Series F Convertible Preferred Stock

 

On March 4, 2024, in connection with the Purchase Agreement (see Note 1), the Company issued 7,224 shares of Series F Preferred Stock, at a purchase price per share of $1,000. Each share of Series F preferred stock is convertible into 273 shares of the Company’s common stock at a conversion price of $3.664 per share. The Series F preferred stock is convertible into a total of 1,972,152 shares of common stock subject to certain limitations contained in the Purchase Agreement. Shares of Series F preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 49.9% of the Company’s outstanding voting power. The holders of Series F preferred stock are entitled to receive annual accruing dividends at a rate of 5% until the third anniversary of their issuance and 8% thereafter. The dividends are payable in additional shares of Series F preferred stock or cash, at the Company’s option through the third anniversary of their issuance, and at the holder’s option thereafter. The shares of Series F preferred stock have full voting rights, on an as-converted basis, subject to certain limitations. The Series F preferred stock ranks junior to Series H preferred stock, pari passu with Series E preferred stock and are senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights. The Series F preferred stock accrued additional dividends of less than $0.1 million and $0.1 million during the three and six months ended June 30, 2024, respectively, which were recognized as a reduction to additional paid-in capital in the statement of stockholders’ deficit. As of June 30, 2024, 7,224 shares of Series F preferred stock were outstanding.

 
17
 

 

Series H Convertible Preferred Stock

 

On May 16, 2024, in connection with the Series H Purchase Agreement (see Note 4), the Company issued 11,000 shares of Series H Preferred Stock, at a purchase price per share of $1,000. Each share of Series H preferred stock is convertible into 259 shares of the Company’s common stock at a conversion price of $3.86 per share. The Series H preferred stock is convertible into a total of 2,849,000 shares of common stock subject to certain limitations contained in the Purchase Agreement. Shares of Series H preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 9.99% of the Company’s outstanding voting power and in no case will such beneficial ownership limitation exceed 19.99%, unless approved by the Company's stockholders in accordance with Nasdaq Listing Rule 5635(b). The holders of Series H preferred stock are entitled to receive annual accruing dividends at a rate of 8%, payable in additional shares of Series E preferred stock or cash, at the Company’s option. The shares of Series H preferred stock have full voting rights, on an as-converted basis, subject to certain limitations. The Series H preferred stock rank senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights. The Series H preferred stock accrued additional dividends of $0.1 million during the three and six months ended June 30, 2024, which were recognized as a reduction to additional paid-in capital in the statement of stockholders’ deficit. As of June 30, 2024, 11,000 shares of Series H preferred stock were outstanding.

 

Common Stock

 

As of June 30, 2024, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 100,000,000 shares of common stock with $0.001 par value per share, of which 1,916,434 shares were issued and outstanding.

 

March 2024 Offering

 

On March 5, 2024, in connection with the Purchase Agreement (see Note 1), the Company issued 75,327 shares of common stock at a purchase price per share of $3.664.

 

June 2024 Offering

 

On June 17, 2024, in connection with the June 2024 Offering (see Note 1), the Company issued 330,000 shares of common stock at a purchase price per share of $1.66.

 
18
 

 

Common Stock Warrants

 

As of June 30, 2024, the Company had outstanding warrants to purchase common stock as follows:

 

   

Total

Outstanding

and

Exercisable

    

Underlying

Shares of

Common

Stock

    

Exercise

Price per

Share

    

Expiration Date

Series 1 Warrants issued in the February 2018 Series B financing

     8,979,000       2,993     $ 6,000.00    

February 2025

Series 2 Warrants issued in the February 2018 Series B financing

     8,709,500       2,903     $ 6,000.00    

February 2025

Placement agent warrants issued in the January 2022 financing

     1,330,000       4,433     $ 150.00    

January 2027

Warrants issued in the January 2022 financing

     16,150,000       53,833     $ 144.00    

July 2027

Series A Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

February 2028

Series B Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

August 2024

Placement agent Preferred Investment Options issued in the August 2022 financing

     171,233       11,416     $ 32.85    

August 2027

Advisor Warrants issued in the March 2024 financing

     40,938       40,938     $ 3.664    

March 2029

Pre-Funded Warrants issued in the June 2024 financing

     3,284,457       3,284,457     $ 0.001     n/a

Series A-1 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (1)

Series A-2 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (2)

Series A-3 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (3)

Placement Agent Warrants issued in the June 2024 financing

     216,867       216,867     $ 2.075    

June 2029

Total as of June 30, 2024

     55,433,132       14,841,729              

 

(1)

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.

(2)

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.

(3)

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 IDE application.

 

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.

 
19
 

 

As of December 31, 2023, the Company had outstanding warrants to purchase common stock as follows:

 

   

Total

Outstanding

and

Exercisable

    

Underlying

Shares of

Common

Stock

    

Exercise

Price per

Share

    

Expiration Date

Series 1 Warrants issued in the February 2018 Series B financing

     8,979,000       2,993     $ 6,000.00    

February 2025

Series 2 Warrants issued in the February 2018 Series B financing

     8,709,500       2,903     $ 6,000.00    

February 2025

Placement agent warrants issued in the January 2022 financing

     1,330,000       4,433     $ 150.00    

January 2027

Warrants issued in the January 2022 financing

     16,150,000       53,833     $ 144.00    

July 2027

Series A Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

February 2028

Series B Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

August 2024

Placement agent Preferred Investment Options issued in the August 2022 financing

     171,233       11,416     $ 32.85    

August 2027

Total as of December 31, 2023

     41,047,499       456,096              

 

March 2024 Private Placement

 

On March 7, 2024, in connection with the closing of the Strategic Partnership and Private Placement, the Company issued warrants to financial advisors to purchase up to an aggregate of 40,938 shares of the Company’s common stock (the “Advisor Warrants”) at an exercise price of $3.664 per share which were immediately exercisable. The Advisor Warrants will expire five years following the time they become exercisable, or March 5, 2029.

 

The exercise price and the number of shares of common stock issuable upon exercise of each Advisor Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. In addition, in certain circumstances, upon a fundamental transaction, a holder of Advisor Warrants will be entitled to receive, upon exercise, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Advisor Warrants prior to the fundamental transaction.

 

The Advisor Warrants can be exercised at the option of the holders at any time after they become exercisable provided that shares cannot be exercised into common stock if the applicable holder would beneficially own in excess of 4.99% of the Company’s outstanding common stock immediately after giving effect to the exercise. A holder of the Advisor Warrants may, upon notice to the Company, increase or decrease such beneficial ownership limitation, but not in excess of 9.99%.

 

June 2024 Offering

 

On June 13, 2024, the Company entered into a securities purchase agreement with two institutional investors resulting in the issuance of among other things, Pre-Funded Warrants in lieu of common stock to purchase up to an aggregate of 3,284,457 shares of common stock of which 3,017,204 remain outstanding. The Pre-Funded Warrants have an exercise price of $0.001 per share, are immediately exercisable, and have no expiration date.

 

In addition, the Company issued to the investors in the Offering (i) Series A-1 Warrants to purchase up to an aggregate of 3,614,457 shares of common stock, (ii) Series A-2 Warrants to purchase up to an aggregate of 3,614,457 shares of common stock, and (iii) Series A-3 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.

 
20
 

 

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 IDE application.

 

The Company, in connection with the Offering, agreed to issue to the Placement Agent or its designees Placement Agent Warrants to purchase up to an aggregate of 216,867 shares of common stock. 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.

 

The exercise price and the number of shares of common stock issuable upon exercise of each Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. In addition, in certain circumstances, upon a fundamental transaction, a holder of Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants will be entitled to receive, upon exercise, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants immediately prior to the fundamental transaction.

 

The Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants can be exercised at the option of the holders at any time after they become exercisable provided that shares of the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants cannot be exercised into common stock if the applicable holder would beneficially own in excess of 4.99% (or, upon election by such holder prior to the issuance of any shares of Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants, 9.99%) of the Company’s outstanding common stock immediately after giving effect to the exercise. A holder of the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants may, upon notice to the Company, increase or decrease such beneficial ownership limitation, but not in excess of 9.99%.

 

In the event of a fundamental transaction in which the holders of our voting securities immediately prior to such fundamental transaction will not, following such fundamental transaction, directly or indirectly own more than 50% of the voting securities of the surviving entity or successor entity, and in which the Company is not the successor entity or does not continue as a reporting issuer under the Exchange Act, then, at the request of the holder, the Company or the successor entity shall purchase the unexercised portion of the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants from the holder by paying to the holder an amount, in cash, equal to the fair value of the remaining unexercised portion of the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants on the date of such fundamental transaction, subject to certain limitations in the event of a fundamental transaction not within our control.

 

 

8. Stock-Based Compensation

 

Stock Plans

 

In January 2015, the Board of Directors adopted and the Company’s stockholders approved the 2015 Equity Incentive Plan (“2015 Plan”). On December 22, 2023, the Company’s stockholders approved an additional 300,000 shares of common stock for issuance under the 2015 Plan, which was later registered in an S-8 registration statement filed on January 10, 2024. The 2015 Plan provides for the grant of incentive stock options (“ISOs”) to employees and for the grant of non-statutory stock options (“NSOs”), restricted stock, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights, performance units and performance shares to employees, directors and consultants. As of June 30, 2024, 71,442 shares were available for grant under the 2015 Plan.

 
21
 

 

The Company’s RSUs and RSAs generally vest annually over two years in equal increments. RSAs and RSUs largely contain the same contractual terms except RSAs have the ability to vote along with common holders as an RSA is considered an outstanding security at the time of grant, subject to certain vesting and other restrictions. The Company measures the fair value of RSAs using the closing stock price of a share of the Company’s common stock on the grant date and is recognized as expense on a straight-line basis over the vesting period of the award. A summary of all RSA activity is presented below:

 

   

Number of

Shares

    

Weighted

Average

Grant Date

Fair Value

    

Weighted

Average

Remaining

Contractual

Term

  

Awards outstanding at December 31, 2023

     90,190     $ 18.45       1.04  

Awarded

     394,105     $ 2.75       —  

Released

     (368,503

)

   $ 4.89       —  

Forfeited

     (3,333

)

   $ 18.45       —  

Awards outstanding at June 30, 2024

     112,459     $ 7.85       0.55  

 

As of June 30, 2024, there was $0.5 million of remaining unamortized stock-based compensation expense associated with RSAs, which will be expensed over a weighted average remaining service period of approximately 0.6 years. The outstanding non-vested and expected to vest RSAs at June 30, 2024 have an aggregate fair value of approximately $0.2 million. The Company used the closing market price of $1.86 per share at June 28, 2024, to determine the aggregate fair value for the RSAs outstanding at that date. For the six months ended June 30, 2024 and 2023, the fair value of RSAs vested was approximately $1.0 million and less than $0.1 million, respectively. For the three months ended June 30, 2024 and 2023, stock-based compensation expense recognized associated with the vesting of RSAs was $207,000 and $239,000, respectively. For the six months ended June 30, 2024 and 2023, stock-based compensation expense recognized associated with the vesting of RSAs was $1.3 million and $0.5 million, respectively.

 

Total noncash stock-based compensation expense relating to the Company’s RSAs recognized, before taxes, during the three and six months ended June 30, 2024 and 2023, is as follows (in thousands):

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Cost of revenues

   $ 35     $ 35     $ 193     $ 63  

Research and development expenses

     41       51       355       134  

Selling, general and administrative expenses

     131       153       755       287  
    $ 207     $ 239     $ 1,303     $ 484  

  
 

9. Restructuring Charges and Expenses

 

In June 2024, the Company undertook an organizational realignment and cost reduction plan which included a reduction in force, lowering its total headcount by approximately 24%, or 17 employees, compared to March 31, 2024. Accordingly, the Company recorded a restructuring charge of approximately $66,000, relating to severance related costs at that time. As of June 30, 2024, 13 out of a total of 17 employees’ severance related costs related to the June 2024 termination had been incurred and paid. As of June 30, 2024, $4,000 of the total severance costs was included within accrued compensation on the condensed balance sheet.

 

In July 2024, the Company incurred and paid an additional $23,000, relating to severance costs for the remaining four affected employees.

 
22
 

  
 

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions, that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the SEC on March 20, 2024, titled “Risk Factors.”

 

Overview

 

We are a commercial-stage medical device company that designs, manufactures, and sells real-time high-definition image-guided, minimally invasive 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. Our mission is to significantly improve the treatment of vascular disease through the introduction of products based on our Lumivascular platform, the only intravascular real-time high-definition image-guided system available in this market.

 

We design, manufacture, and sell a suite of products in the United States and select international markets. We are located in Redwood City, California. Our current Lumivascular platform consists of products including our Lightbox imaging console, the Ocelot and Tigereye family of devices, which are image-guided devices designed to allow physicians to penetrate a total blockage in an artery, known as a chronic total occlusion (“CTO”), and the Pantheris family of catheters, our image-guided atherectomy catheters which are designed to allow physicians to precisely remove arterial plaque in PAD patients.

 

We are in the process of developing CTO crossing devices to target the coronary CTO market. However, the market for medical devices in the coronary artery disease (“CAD”) space is highly competitive, dynamic, and marked by rapid and substantial technological development and product innovation and there is no guarantee that we will be successful in developing and commercializing any new CAD product. At this stage, we are working on understanding market requirements, and initiated the development process for the new CAD product, which we anticipate will require additional expenses.

 

We obtained CE Marking for our original Ocelot product in September 2011 and received from the U.S. Food and Drug Administration (“FDA”), 510(k) clearance in November 2012. We also received 510(k) clearance from the FDA for commercialization of Pantheris in October 2015. We received an additional 510(k) clearance for an enhanced version of Pantheris in March 2016 and commenced sales of Pantheris in the United States and select European countries promptly thereafter. In May 2018, we received 510(k) clearance from the FDA for our current next-generation version of Pantheris. In April 2019, we received 510(k) clearance from the FDA for our Pantheris Small Vessel (“SV”), a version of Pantheris targeting smaller vessels, and commenced sales in July 2019. In September 2020, we received 510(k) clearance for Tigereye, a next-generation CTO crossing system utilizing Avinger’s proprietary image-guided technology platform. Tigereye is a product line extension of Avinger’s Ocelot family of image-guided CTO crossing catheters. In January 2022, we received 510(k) clearance from the FDA for our Lightbox 3 imaging console, an advanced version of our Lightbox that allows for easy portability and offers significant reductions in size, weight, and production cost in comparison to the incumbent version.

 

In April 2023, we received 510(k) clearance from the FDA for Tigereye Spinning Tip (“ST”), a next-generation image-guided CTO crossing system. Tigereye ST is a line extension of our Ocelot and Tigereye family of CTO crossing catheters. This new image-guided catheter incorporates design upgrades to the tip configuration and catheter shaft to increase crossing power and procedural success in challenging lesions, as well as design enhancements for ease of image interpretation during the procedure. The low-profile Tigereye ST has a working length of 140 cm and 5 French sheath. We initiated a limited launch of Tigereye ST in the second quarter of 2023 and subsequently expanded to full commercial availability within the United States during the third quarter of 2023.

 

In June 2023, we received 510(k) clearance from the FDA for Pantheris Large Vessel (“LV”), a next generation image guided atherectomy system for the treatment of larger vessels, such as the superficial femoral artery (“SFA”) and popliteal arteries. Pantheris LV is a line extension of our Pantheris and Pantheris SV family of atherectomy products. This catheter offers higher speed plaque excision for efficient removal of challenging occlusive tissue and multiple features to streamline and simplify user-operation, including enhanced tissue packing and removal, a radiopaque gauge to measure volume of plaque excised during the procedure, and enhanced guidewire management. We initiated a limited launch of the Pantheris LV during the third quarter of 2023 and expect to expand to full commercial availability within the United States in the second half of 2024.

 

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Current treatments for PAD, including bypass surgery, can be costly and may result in complications, high levels of post-surgery pain, and lengthy hospital stays and recovery times. Minimally invasive, or endovascular, treatments for PAD include stenting, angioplasty, and atherectomy, which is the use of a catheter-based device for the removal of plaque. These treatments all have limitations in their safety or efficacy profiles and frequently result in recurrence of the disease, also known as restenosis. We believe one of the main contributing factors to high restenosis rates for PAD patients treated with endovascular technologies is the amount of vascular injury that occurs during an intervention. Specifically, these treatments often disrupt the membrane between the outermost layers of the artery, which is referred to as the external elastic lamina (“EEL”).

 

We believe our Lumivascular platform is the only technology that offers radiation free, high-definition real-time visualization of the inside of the artery during PAD treatment through the use of optical coherence tomography (“OCT”), a high resolution, light-based, radiation-free imaging technology. Our Lumivascular platform provides physicians with high-definition real-time OCT images from the inside of an artery, and we believe Ocelot and Pantheris are the first products to offer intravascular visualization during CTO crossing and atherectomy, respectively. We believe this approach will significantly improve patient outcomes by providing physicians with a clearer picture of the artery using radiation-free image guidance during treatment, enabling them to better differentiate between plaque and healthy arterial structures. Our Lumivascular platform is designed to improve patient safety by enabling physicians to direct treatment towards the plaque, while avoiding damage to healthy portions of the artery.

 

During the first quarter of 2015, we completed enrollment of patients in VISION, a clinical trial designed to support our August 2015 510(k) submission to the FDA for our Pantheris atherectomy device. VISION was designed to evaluate the safety and efficacy of Pantheris to perform atherectomy using intravascular imaging and successfully achieved all primary and secondary safety and efficacy endpoints. We believe the data from VISION allows us to demonstrate that avoiding damage to healthy arterial structures, and in particular disruption of the external elastic lamina, which is the membrane between the outermost layers of the artery, reduces the likelihood of restenosis, or re-narrowing, of the diseased artery. Although the original VISION study protocol was not designed to follow patients beyond six months, we worked with 18 of the VISION sites to re-solicit consent from previous clinical trial patients in order for them to evaluate patient outcomes through 12 and 24 months following initial treatment. Data collection for the remaining patients from participating sites was completed in May 2017, and we released the final 12- and 24-month results for a total of 89 patients in July 2017.

 

During the fourth quarter of 2017, we began enrolling patients in INSIGHT, a clinical trial designed to support a submission to the FDA to expand the indication for our Pantheris atherectomy device to include the treatment of in-stent restenosis. Patient enrollment began in October 2017 and was completed in July 2021. Patient outcomes were evaluated at thirty days, six months and one year following treatment. In November 2021, we received 510(k) clearance from the FDA for this new clinical indication for treating in-stent restenosis with Pantheris using the data collected and analyzed from INSIGHT. We expect this will expand our addressable market for Pantheris to include a high-incidence disease state for which there are few available indicated or effective treatment options.

 

We are pursuing additional clinical data programs including a post-market study, IMAGE-BTK, that is designed to evaluate the safety and efficacy of Pantheris SV in the treatment of PAD lesions below-the-knee. We completed enrollment in 2023. Patient outcomes are being evaluated at thirty days, six months and one year following treatment. We expect this will bolster the application of Pantheris SV as a primary interventional tool to address below-the-knee lesions for which there are few available effective treatment options.

 

We focus our direct sales force, marketing efforts and promotional activities on interventional cardiologists, vascular surgeons and interventional radiologists. We also work on developing strong relationships with physicians and hospitals that we have identified as key opinion leaders. Although our sales and marketing efforts are directed at these physicians because they are the primary users of our technology, we consider the hospitals and medical centers where the procedure is performed to be our customers, as they typically are responsible for purchasing our products. We are designing additional future products to be compatible with our Lumivascular platform, which we expect to enhance the value proposition for hospitals to invest in our technology. Pantheris qualifies for existing reimbursement codes currently utilized by other atherectomy products, further facilitating adoption of our products.

 

We have assembled a team with extensive medical device development and commercialization experience in both start-up and large, multi-national medical device companies. We assemble all of our catheter products at our manufacturing facility but certain critical processes, such as coating and sterilization, are performed by outside vendors. Our Lightbox 3 imaging console is assembled through a qualified contract manufacturer. We expect our current manufacturing facility in California will be sufficient through at least 2025.

 

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We generated revenues of $10.1 million in 2021, $8.3 million in 2022 and $7.7 million in 2023. Revenues during these years were tangentially affected by COVID-19 as hospitals continued to defer elective procedures in certain jurisdictions while increasing volume to accommodate previously deferred procedures in others, which among other things, created unpredictability in case volume. This unpredictability created more volatility in our revenues which continued to affect our business in the aforementioned years. The decline in revenue in 2022 and 2023 was primarily attributable to the adverse effects of staffing shortages, resource constraints on our customers as hospitals deferred elective procedures, and the impact of a very competitive market for talent on the retention of our commercial team.

 

Recent Developments

 

Nasdaq Delisting Notice

 

On April 25, 2023, we received notice (the “Bid Price Deficiency Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”), as the minimum bid price for our listed securities was less than $1.00 for the previous 30 consecutive business days. We had a period of 180 calendar days, or until October 23, 2023, to regain compliance with the rule referred to in this paragraph. As part of our efforts to regain compliance with the aforementioned rule, we effected a 1-for-15 reverse stock split on September 12, 2023.

 

On September 27, 2023, we received a letter from Nasdaq notifying us that the Staff had determined that the closing bid price of our common stock had been at $1.00 per share or greater for at least 10 consecutive business days and, accordingly, that we had regained compliance with the Bid Price Requirement. While we have regained compliance with the Bid Price Requirement, there can be no assurance that we will be able to maintain compliance with the Bid Price Requirement, or other continued listing requirements of Nasdaq, in the future.

 

On May 18, 2023, we received notice (the “Stockholders’ Equity Deficiency Letter”) from the Staff that we no longer satisfy the $2.5 million stockholders’ equity requirement for continued listing on The Nasdaq Capital Market, or the alternatives to that requirements – a $35 million market value of listed securities or $500,000 in net income in the most recent fiscal year or two of the last three fiscal years – as required by Nasdaq Listing Rule 5550(b) (the “Equity Requirement”).

 

As with the Bid Price Deficiency Letter, the Stockholders’ Equity Deficiency Letter had no immediate effect on our continued listing on The Nasdaq Capital Market. In accordance with the Nasdaq Listing Rules, we were provided 45 calendar days, or until July 3, 2023, to submit a plan to regain compliance with the Equity Requirement (the “Compliance Plan”). We submitted the Compliance Plan to Nasdaq on July 3, 2023. On July 31, 2023, we received a letter from Nasdaq notifying us that the Staff had determined to grant us an extension of 180 calendar days from the date of the Staff’s notice, or November 14, 2023, to regain compliance with the Equity Requirement.

 

On November 21, 2023, the Staff formally notified us that the Staff had determined that we were unable to demonstrate compliance with the Equity Requirement and that our securities would be delisted at the open of business on November 30, 2023, unless we timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”). On November 28, 2023, we requested and were granted a hearing before the Panel which took place on February 20, 2024. At the hearing, we presented a plan to regain and sustain compliance with the Equity Requirement and requested an extension to do so. On March 14, 2024, the results from the hearing were rendered in which we were granted an extension by the Panel. This extension stayed any further action by Nasdaq with respect to our continued listing until May 20, 2024.

 

We took definitive steps pursuant to our plan as presented to the Panel to ensure our compliance with the Equity Requirement and all other applicable criteria for continued listing on Nasdaq. We undertook certain actions which included among other things (i) converting $11.0 million of outstanding indebtedness into equity in May 2024, (ii) issuing additional shares of capital stock, (iii) completion of a public equity offering in June 2024 in which we received gross proceeds of $6.0 million through the issuance of a combination of common stock and pre-funded warrants and (iv) entry into a securities purchase agreement in March 2024 as part of a larger strategic partnership and collaboration transaction representing entry into a number of financing, licensing and other agreements (“Strategic Collaboration”) in which we received gross proceeds of $7.5 million and expect to receive another $7.5 million upon the successful completion of certain milestones, discussed in more detail below. This financing transaction was an integral part of the plan presented to the Panel.

 

On May 29, 2024, we were formally notified by Nasdaq that we have regained compliance with the stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) and evidenced compliance with all other applicable criteria for continued listing on The Nasdaq Capital Market. Accordingly, the listing matter, which was reviewed by the Panel has been closed.

 

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We will be subject to a “Mandatory Panel Monitor” as that term is defined in Nasdaq Listing Rule 5815(d)(4)(B), through May 29, 2025. If within the monitoring period we fail to evidence compliance with the Equity Requirement, we would not be allowed to provide to the Staff a plan to regain compliance with the Equity Requirement; rather, the Staff would be required to issue a delist determination. We would in that case have the opportunity to request a new hearing before the Panel, which request would stay any further action by the Staff.

 

We anticipate we will need to issue additional shares of capital stock through various other financing transactions in order to maintain compliance with the Equity Requirement, the most recent of which occurred in June 2024 in a best efforts public offering resulting in gross proceeds of $6.0 million. However, we may not be successful in executing such future transactions on terms favorable to us, or at all, and may not be able to maintain compliance with Nasdaq’s listing requirements, including the Equity Requirement.

 

Global Supply Chain

 

We are closely monitoring the general economic conditions on global supply chain, manufacturing, and logistics operations. As inflationary pressures increase, we anticipate that our production and operating costs may similarly increase, including costs and availability of materials and labor. In addition, port closures and labor shortages have resulted in manufacturing and shipping constraints. While we have had sufficient inventory on-hand to meet our current production requirements and customer demand, we have experienced some constraints with respect to the availability of certain materials and extended lead times from certain key suppliers. We have also experienced some delays in shipping products to our customers. Any significant delay or interruption in our supply chain could impair our ability to meet the demands of our customers in the future and could harm our business.

 

We may need to identify and qualify new suppliers in response to disruptions and difficulties experienced by some of our current suppliers. The process of identifying and qualifying suppliers is lengthy with no guarantee of mitigating the current issues we are experiencing. This process can include but is not limited to delays in qualification, quality issues on components, and higher costs to source these components. All of these issues may impair our ability to meet the demands of our customers in the future.

 

Reverse Stock Split

 

On September 11, 2023, our board of directors approved an amendment to our amended and restated certificate of incorporation to effect a 1-for-15 reverse stock split of our issued and outstanding common stock. The reverse stock split became effective on September 12, 2023. The par value of the common stock was not adjusted as a result of the reverse stock splits. All common stock, stock options, restricted stock units, and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock splits.

 

Strategic Collaboration

 

On March 4, 2024, we entered into a License and Distribution Agreement (the “License Agreement”) with Zylox-Tonbridge, pursuant to which we will license and distribute certain of our 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 our products in the Territory. We will also license our intellectual property and know-how related to our products to Zylox-Tonbridge so that Zylox-Tonbridge can manufacture the localized products in the Territory. All sales of our 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 us at varying percentages depending on the amount of gross revenue and product gross margin.         

 

In connection with the License Agreement, we also entered into a Strategic Cooperation and Framework Agreement with Zylox-Tonbridge (the “Collaboration Agreement” and, together with the License Agreement, the “Strategic Collaboration”), which provides the opportunity for us to access certain Zylox-Tonbridge peripheral vascular products for distribution in the U.S. and Germany. The agreement also provides the option for us to source finished goods inventory from Zylox-Tonbridge following registration of Zylox-Tonbridge’s manufacturing facility with the FDA.

 

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Financing Agreements

 

On March 4, 2024, in connection with the Strategic Collaboration, we 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 our common stock, and shares of two new series of our preferred stock (the “Private Placement”). On March 5, 2024, (the “Initial Closing”), we 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.

 

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”).

 

Upon completion of the following as mutually agreed upon by us 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 our products, and (ii) us 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 us 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 our 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.

 

On May 22, 2024, we 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 our 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 our stockholders. There were no conversions of Series F Preferred Stock during the three or six months ended June 30, 2024.

 

Series A Preferred Stock Exchange

 

On March 5, 2024, we entered into a Securities Purchase Agreement (the “A-1 Securities Purchase Agreement”) 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 our Series E Preferred Stock, Series F Preferred Stock and Series G Preferred Stock.

 

CRG Loan Amendment

 

On March 5, 2024, we also entered into Amendment No. 9 to the Loan Agreement effective as of the Initial Closing with CRG, which amends the Loan Agreement to, among other things: (i) extend the interest-only period through December 31, 2026; (ii) provide that interest payable through December 31, 2026 may be payable in kind rather than in cash; and (iii) permit the payment of dividends on the preferred stock issued or issuable to the Purchaser.

 

Lease Extension

 

On March 6, 2024, we entered into an amendment to the lease which extended the lease term for a period of one year, subsequent to the original expiration of November 30, 2024. As amended, the lease will expire on November 30, 2025. Under the terms of the amendment, we will be obligated to pay approximately $1.3 million in base rent payments through November 2025, beginning on December 1, 2024. This amendment also provides an optional one year extension of the lease following the end of the current term, as amended.

 

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Reduction in Force

 

In June 2024, we undertook a cost reduction plan and concurrent organizational realignment which included a company-wide reduction in force lowering our total headcount by 17 employees. This workforce reduction was designed to reduce operating expenses while continuing to support major product development and clinical initiatives related to our coronary product development program. Our sales personnel headcount dedicated to our peripheral business was reduced to 18, down from 27 as of March 31, 2024, a difference of 33%. The organizational realignment within sales was designed, in part, to focus our commercial efforts on driving catheter utilization in our strongest peripheral markets, around our most productive sales professionals. The strategic reduction in the field sales force and one individual in sales leadership was designed to maintain robust engagement with higher volume users of our Lumivascular technology and position us to maintain and support utilization of our catheters within our installed base of accounts leveraging our existing and next generation products, namely Pantheris LV and Tigereye ST.

 

Financing

 

During the three and six months ended June 30, 2024, our net loss and comprehensive net loss was $4.4 million and $9.9 million, respectively; during the years ended December 31, 2023 and 2022, our net loss and comprehensive loss was $18.3 million and $17.6 million, respectively. We have not been profitable since inception, and as of June 30, 2024, our accumulated deficit was $430.6 million. Since inception, we have financed our operations primarily through private and public placements of our preferred and common securities and, to a lesser extent, debt financing arrangements.

 

In September 2015, we entered into a Term Loan Agreement (the “Loan Agreement”) with CRG Partners III L.P. and certain of its affiliated funds (collectively, “CRG”), under which we were able to borrow up to $50.0 million on or before the end of the twenty-four (24) month period commencing on the first Borrowing Date (as defined in the Loan Agreement), subject to certain terms and conditions. Under the Loan Agreement we borrowed $30.0 million on September 22, 2015 and an additional $10.0 million on June 15, 2016. Contemporaneously with the execution of the Loan Agreement, we entered into a Securities Purchase Agreement with CRG (the “Securities Purchase Agreement”), pursuant to which CRG purchased 3 shares of our common stock on September 22, 2015 at a price of $1,678,920 per share, which represents the 10-day average of closing prices of our common stock ending on September 21, 2015. Pursuant to the Securities Purchase Agreement, we filed a registration statement covering the resale of the shares sold to CRG and must comply with certain affirmative covenants during the time that such registration statement remains in effect.

 

On February 14, 2018, we entered into a Series A preferred stock Purchase Agreement (the “Series A Purchase Agreement”) with CRG, pursuant to which it agreed to convert $38.0 million of the outstanding principal amount of its senior secured term loan (plus the back-end fee and prepayment premium applicable thereto) under the Loan Agreement into newly authorized Series A-1 preferred stock. In March 2024, all outstanding shares of Series A preferred stock were cancelled in exchange for the issuance of Series A-1 preferred stock. The Series A-1 preferred stock, which is immediately convertible, carries no liquidation preference or dividend rights.

 

We have entered into several amendments (collectively, the “Amendments”) to the Loan Agreement with CRG since September 2015. The Amendments, among other things: (1) extended the interest-only period through December 31, 2026; (2) extended the period during which we may elect to pay a portion of interest in payment-in-kind (“PIK”), interest payments through December 31, 2026 so long as no Default (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted us to make our entire interest payments in PIK interest payments through December 31, 2026 so long as no Default has occurred and is continuing; (4) extended the Stated Maturity Date (as defined in the Loan Agreement) to December 31, 2028; (5) reduced the minimum liquidity covenant to $3.5 million at all times; (6) eliminated the minimum revenue covenant for all years; (7) changed the date under the on-going stand-alone representation regarding no “Material Adverse Change” to December 31, 2020; (8) amended the on-going stand-alone representation and stand-alone Event of Default (as defined in the Loan Agreement) regarding Material Adverse Change such that any adverse change in or effect upon the revenue of us and our subsidiaries due to the outbreak of COVID-19 will not constitute a Material Adverse Change; (9) provided CRG with board observer rights; and (10) provide that the board observer may be appointed or removed by written notice from the Majority Lenders (as defined in the Loan Agreement).

 

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On August 2, 2023, we entered into a Series E preferred stock Purchase Agreement (the “Series E Purchase Agreement”) with CRG, pursuant to which we issued 1,920 shares of newly authorized Series E convertible preferred stock in exchange for CRG surrendering for cancellation $1.92 million of outstanding principal and accrued interest of the senior secured term loan. Each share of Series E preferred stock has a stated value of $1,000 per share and is convertible into 93 shares of our common stock at a conversion price of $10.725 per share. The Series E preferred stock is initially convertible into 178,560 shares of common stock subject to certain limitations contained in the Series E Purchase Agreement. Under the terms of the Series E Purchase Agreement, the holders of Series E preferred stock are entitled to receive annual accruing dividends at a rate of 8%, payable in additional shares of Series E preferred stock or cash, at our option. The shares of Series E preferred stock have full voting rights, on an as-converted basis, subject to certain limitations. The Series E preferred stock rank junior to Series H preferred stock and senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights.

 

On September 29, 2023, the Company entered into the Waiver Agreement with CRG, who held all of the outstanding shares of the Company’s Series A and Series E preferred stock. Pursuant to the Waiver Agreement, CRG waived their rights to receive the Series A and Series E preferred dividends for the year ending December 31, 2023. Such waived preferred dividends were not cumulative or accrued.

 

On January 26, 2024, we entered into Amendment No. 8 to the Loan Agreement with CRG, which reduced the minimum liquidity requirement of the Loan Agreement from $3.5 million to $1.0 million until April 1, 2024. Thereafter, we would be subject to the minimum liquidity requirement of $3.5 million.

 

On May 16, 2024, we entered into a Series H preferred stock Purchase Agreement (the “Series H Purchase Agreement”) with CRG pursuant to which we issued 11,000 shares of a newly authorized Series H convertible preferred stock in exchange for CRG surrendering for cancellation $11.0 million of outstanding principal and accrued interest of the senior secured term loan under the Loan Agreement. Each share of Series H preferred stock has a stated value of $1,000 per share and is convertible into 259 shares of our common stock at a conversion price of $3.86 per share. The Series H preferred stock is initially convertible into 2,849,000 shares of common stock subject to certain limitations contained in the Series H Purchase Agreement. Under the terms of the Series H Purchase Agreement, the holders of Series H preferred stock are entitled to receive annual accruing dividends at a rate of 8%, payable in additional shares of Series H preferred stock or cash, at our option. The shares of Series H preferred stock have full voting rights, on an as-converted basis, subject to certain limitations. The Series H preferred stock rank senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights.

 

The shares of Series A-1 preferred stock, Series E preferred stock and Series H preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 9.99% of the Company’s outstanding voting power and in no case will the beneficial ownership limitation exceed 19.99% of the Company’s outstanding voting power on a combined basis (as CRG collectively holds all of the issued and outstanding shares of the Company’s Series A-1 convertible preferred stock, Series E convertible preferred stock and Series H convertible preferred stock), unless approved by our stockholders in accordance with Nasdaq Listing Rule 5635(b).

 

As part of our Strategic Collaboration, we entered into Amendment No. 9 to the Loan Agreement with CRG, which amends the Loan Agreement to, among other things: (i) extend the interest-only period through December 31, 2026; (ii) provide that interest payable through December 31, 2026 may be payable in kind rather than in cash; and (iii) permit the payment of dividends on the preferred stock issued or issuable to the Purchaser. In addition, we completed the Private Placement for gross proceeds, before expenses, of $7.5 million.

 

On June 5, 2024, we entered into Amendment No. 10 to the Loan Agreement with CRG, which reduced the minimum liquidity requirement of the Loan Agreement from $3.5 million to $1.5 million for the period commencing June 1, 2024 and ending July 31, 2024. Thereafter, we will be subject to the minimum liquidity requirement of $3.5 million.

 

Critical Accounting Policies and Estimates

 

Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenues, expenses and related disclosures of contingent assets and liabilities. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. There have been no significant and material changes in our critical accounting policies during the three months ended June 30, 2024, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies and Significant Judgments and Estimates” in our most recent Annual Report on Form 10-K, as filed with the SEC on March 20, 2024.

 

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Components of Our Results of Operations

 

Revenues

 

All of our revenues are currently derived from sales of our various PAD catheters in the United States and select international markets, Lightbox consoles, and related services. We expect our revenues to decrease in 2024 due to reductions in sales personnel resulting from reductions in force (“RIF”), attrition, competitive labor market, and other factors, partially offset by the expansion of market presence of our Tigereye ST and Pantheris LV products. There was one customer that represented 16% of revenues for each of the three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, there was one customer that represented 17% and 16% of revenues, respectively.

 

Revenues may fluctuate from quarter to quarter due to a variety of factors including capital equipment purchasing patterns that are typically increased towards the end of the calendar year and decreased in the first quarter and our ability to have product available in light of supply chain challenges. In addition, during the first quarter, our results can be harmed by adverse weather and by resetting of annual patient healthcare insurance plan deductibles, both of which may cause patients to delay elective procedures. In the third quarter, the number of elective procedures nationwide is historically lower than other quarters throughout the year, which we believe is primarily attributable to the summer vacations of physicians and their patients. Additionally, we believe hospital capacity and resource staffing issues have had an adverse effect on our ability to generate sales in past periods due to the fluctuating and unpredictable levels of capacity medical providers have to perform procedures that require the use of our products.

 

Cost of Revenues and Gross Margin

 

Cost of revenues consists primarily of costs related to manufacturing overhead, materials and direct labor. We expense all warranty costs and inventory provisions as cost of revenues. We periodically write-down inventory for estimated excess, obsolete and non-sellable inventories based on assumptions about future demand, past usage, changes to manufacturing processes and overall market conditions. A significant portion of our cost of revenues currently consists of manufacturing overhead costs. These overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment and operations supervision and management. We expect overhead costs as a percentage of revenues to become less significant as our production volume increases. Cost of revenues also includes depreciation expense for production equipment, depreciation and related maintenance expense for placed Lightboxes held by customers and certain direct costs such as those incurred for shipping our products.

 

We calculate gross margin as gross profit divided by revenues. Our gross margin has been and will continue to be affected by a variety of factors, primarily production volumes, manufacturing costs, product yields, headcount, charges for excess and obsolete inventories and cost-reduction strategies. We intend to use our design, engineering and manufacturing capabilities to further advance and improve the efficiency of our manufacturing processes, which we believe will reduce costs and increase our gross margin. In the future, we may seek to manufacture certain of our products outside the United States to further reduce costs. Our gross margin will likely fluctuate from quarter to quarter as we continue to introduce new products and sales channels, and as we adopt new manufacturing processes and technologies.

 

Research and Development Expenses

 

Research and development (“R&D”), expenses consist primarily of engineering, product development, clinical and regulatory affairs, consulting services, materials, depreciation and other costs associated with products and technologies in development. These expenses include employee compensation, including stock-based compensation, supplies, materials, quality assurance expenses allocated to R&D programs, consulting, related travel expenses and facilities expenses. Clinical expenses include clinical trial design, clinical site reimbursement, data management, travel expenses and the cost of manufacturing products for clinical trials. We expect R&D expenses to vary over time depending on the level and timing of our new product development efforts, as well as our clinical development, clinical trial and other related activities.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative (“SG&A”), expenses consist primarily of compensation for personnel, including stock-based compensation, selling and marketing functions, physician education programs, business development, finance, information technology and human resource functions. Other SG&A expenses include commissions, training, travel expenses, educational and promotional activities, marketing initiatives, market research and analysis, conferences and trade shows, professional services fees, including legal, audit and tax fees, insurance costs and general corporate expenses. We expect SG&A expenses to increase as we expand our commercial efforts and additional costs related to corporate matters.

 

30
 

 

Interest Expense, Net

 

Interest expense, net consists primarily of interest incurred on our outstanding indebtedness and non-cash interest related to the amortization of debt discount and issuance costs associated with our debt agreement.

 

Other (Expense) Income, Net

 

Other (expense) income, net primarily consists of gains and losses resulting from the remeasurement of foreign exchange transactions and other miscellaneous income and expenses.

 

Results of Operations:

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  
   

(in thousands, except percentages)

  

Revenues

   $ 1,847     $ 2,041     $ 3,706     $ 3,929  

Cost of revenues

     1,469       1,436       2,985       2,688  

Gross profit

     378       605       721       1,241  

Gross margin

     20 %     30 %     19 %     32 %

Operating expenses:

                                

Research and development

     904       988       1,966       2,344  

Selling, general and administrative

     3,601       3,346       7,971       6,884  

Total operating expenses

     4,505       4,334       9,937       9,228  

Loss from operations

     (4,127 )     (3,729 )     (9,216 )     (7,987 )

Interest expense, net

     (234 )     (445 )     (650 )     (837 )

Other (expense) income, net

     (1 )     (2 )     (13 )     4  

Net loss and comprehensive loss

   $ (4,362 )   $ (4,176 )   $ (9,879 )   $ (8,820 )

 

Comparison of Three Months Ended June 30, 2024 and 2023

 

Revenues.

 

For the three months ended June 30, 2024, revenues decreased by approximately $0.2 million or 10% compared to the three months ended June 30, 2023. Revenues related to sales of our disposable catheters decreased by 9% to $1.7 million while revenues related to our Lightbox and other revenues decreased by 19% to $0.1 million. The decreased revenues reflects the impact of the reduced size of our field sales force, as well as a strategic decision we made in June 2024 to realign the focus of our sales force on driving the utilization at our current active user base in our strongest markets rather than on building new active users in other peripheral markets.

 

Cost of Revenues and Gross Margin.

 

For the three months ended June 30, 2024, cost of revenues increased by less than $0.1 million or 2% compared to the three months ended June 30, 2023. This increase was primarily attributable fluctuations in labor costs and inventory production, increased material costs and other ancillary expenditures. Stock-based compensation expense within cost of revenues totaled $35,000 for each the three months ended June 30, 2024 and 2023.

 

Gross margin for the three months ended June 30, 2024 decreased to 20%, compared to 30% during the three months ended June 30, 2023. There are significant amounts of overhead costs, specifically in the form of labor, associated with manufacturing and production of inventory embedded in cost of revenues that will typically fluctuate due to the levels of inventory being produced, production schedule changes, lead times and other factors. The decrease in gross margin was primarily due to the decrease in the production levels of inventory and rising costs of materials. This decrease was compounded by the decrease in revenues which resulted in a decline in economies of scale.

 

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Research and Development Expenses.

 

R&D expense for the three months ended June 30, 2024 decreased by approximately $0.1 million or 9% compared to the three months ended June 30, 2023. The decrease is primarily due to the completion of our development efforts of Tigereye ST and Pantheris LV occurring during 2023, partially offset by ongoing product development of our coronary device program. Stock-based compensation expense within R&D totaled approximately $41,000 and $51,000 for the three months ended June 30, 2024 and 2023, respectively. We expect R&D expense to fluctuate based on the ongoing product development of our coronary device.

 

Selling, General and Administrative Expenses.

 

SG&A expense for the three months ended June 30, 2024 increased by $0.3 million or 8%, compared to the three months ended June 30, 2023. This increase was primarily attributable to increases in third-party professional services and other ancillary expenses related to the administration of the special proxy resulting from the closing of the Zylox-Tonbridge transaction and other corporate activities. We also experienced increases of quality assurance expenses related to regulatory and compliance activities. Stock-based compensation expense within SG&A totaled $131,000 and $153,000 for the three months ended June 30, 2024 and 2023, respectively. We expect SG&A expense to decline based on the impact of the reduced size of our field sales force deployed within the United States, and other cost reduction measures we undertook in the strategic realignment in June 2024, potentially offset by fluctuations in revenues and consequently variable compensation, and other corporate activities that we undertake.

 

Interest Expense, Net.

 

Interest expense, net is comprised of interest expense net of interest income. Interest Expense, net for the three months ended June 30, 2024 decreased by approximately $0.2 million or 47% compared to the three months ended June 30, 2023, which resulted from lower PIK interest due to a smaller CRG loan balance resulting from the conversion of $11.0 million of principal and accrued interest in May 2024. This was partially offset by a decrease in interest income due to a lower average cash balance.

 

Other (Expense) Income, Net.

 

Other (expense) income, net primarily consists of gains and losses resulting from the remeasurement of foreign exchange transactions, which are typically a small percentage of transaction volume, and other miscellaneous income and expenses. Other (expense) income, net for the three months ended June 30, 2024 remained relatively flat in comparison to the three months ended June 30, 2023 as both periods consisted primarily of remeasurement gains and losses from foreign exchange transactions, resulting in nominal changes between periods.

 

Comparison of Six Months Ended June 30, 2024 and 2023

 

Revenues.

 

For the six months ended June 30, 2024, revenue decreased by approximately $0.2 million or 6% compared to the six months ended June 30, 2023. Revenues related to sales of our disposable catheters decreased by 6% to $3.4 million while revenues related to our Lightbox and other revenues increased by 1% to $0.3 million. The decreased revenues reflects the impact of the reduced size of our field sales force, as well as a strategic decision we made in June 2024 to realign the focus of our sales force on driving the utilization at our current active user base in our strongest markets rather than on building new active users in other peripheral markets.

 

Cost of Revenues and Gross Margin.

 

For the six months ended June 30, 2024, cost of revenues increased by $0.3 million or 11% compared to the six months ended June 30, 2023. This increase was primarily attributable fluctuations in labor costs and inventory production, increased material costs and other ancillary expenditures. Stock-based compensation expense within cost of revenues totaled $193,000 and $63,000 for the six months ended June 30, 2024 and 2023, respectively.

 

Gross margin for the six months ended June 30, 2024 decreased to 19%, compared to 32% during the six months ended June 30, 2023. There are significant amounts of overhead costs, specifically in the form of labor, associated with manufacturing and production of inventory embedded in cost of revenues that will typically fluctuate due to the levels of inventory being produced, production schedule changes, lead times and other factors. The decrease in gross margin was primarily due to the decrease in the production levels of inventory and rising costs of materials. This decrease was compounded by the decrease in revenues which resulted in a decline in economies of scale.

 

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Research and Development Expenses.

 

R&D expense for the three months ended June 30, 2024 decreased by approximately $0.4 million or 16% compared to the six months ended June 30, 2023. The decrease is primarily due to the completion of our development efforts of Tigereye ST and Pantheris LV occurring during 2023 and reduced headcount, partially offset by ongoing product development of our coronary device program. Stock-based compensation expense within R&D totaled approximately $355,000 and $134,000 for the six months ended June 30, 2024 and 2023, respectively. We expect R&D expense to fluctuate based on the ongoing product development of our coronary device.

 

Selling, General and Administrative Expenses.

 

SG&A expense for the six months ended June 30, 2024 increased by $1.1 million or 16%, compared to the six months ended June 30, 2023. This increase was primarily attributable to increases in third-party professional services and other ancillary expenses related to the consummation of the Zylox-Tonbridge transaction administration, the special proxy resulting from the closing of the Zylox-Tonbridge transaction, increases in franchise and other taxes, and other corporate activities. There were also increased allocations of quality assurance expenses related to regulatory and compliance activities. Stock-based compensation expense within SG&A totaled $755,000 and $287,000 for the six months ended June 30, 2024 and 2023, respectively. We expect SG&A expense to decline based on the impact of the reduced size of our field sales force deployed within the United States, and other cost reduction measures we undertook in the strategic realignment in June 2024, potentially offset by fluctuations in revenues and consequently variable compensation, and other corporate activities that we undertake.

 

Interest Expense, Net.

 

Interest expense, net is comprised of interest expense net of interest income. Interest Expense, net for the six months ended June 30, 2024 decreased by approximately $0.2 million or 22% compared to the six months ended June 30, 2023, which resulted from lower PIK interest due to a smaller CRG loan balance resulting from the conversion of $11.0 million of principal and accrued interest in May 2024. This was partially offset by a decrease in interest income due to a lower average cash balance.

 

Other (Expense) Income, Net.

 

Other (expense) income, net primarily consists of gains and losses resulting from the remeasurement of foreign exchange transactions, which are typically a small percentage of transaction volume, and other miscellaneous income and expenses. Other (expense) income, net for the six months ended June 30, 2024 remained relatively flat in comparison to the six months ended June 30, 2023 as both periods consisted primarily of remeasurement gains and losses from foreign exchange transactions, resulting in nominal changes between periods.

 

Liquidity and Capital Resources

 

As of June 30, 2024, we had cash and cash equivalents of $8.8 million and an accumulated deficit of $430.6 million, compared to cash and cash equivalents of $5.3 million and an accumulated deficit of $420.7 million as of December 31, 2023. We expect to incur losses for the foreseeable future. We believe that our cash and cash equivalents of $8.8 million at June 30, 2024 and expected revenues, debt and financing activities and funds from operations will be sufficient to allow us to fund our current operations through the end of the fourth quarter of 2024.

 

To date, we have financed our operations primarily through net proceeds from the issuance of our preferred stock, common stock and debt financings, our “at-the-market” program, our initial public offering (“IPO”), our follow-on public offerings and warrant issuances. We do not know when or if our operations will generate sufficient cash to fund our ongoing operations. We will need to raise additional capital through future equity or debt financings in the near future to meet our operational needs and capital requirements for product development, clinical trials and commercialization, and to regain compliance with the Equity Requirement of the Nasdaq Listing Rules. Additional debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders and require significant debt service payments, which divert resources from other activities. Additional financing may not be available at all, or if available, may not be in amounts or on terms acceptable to us. If we are unable to obtain additional financing, we may be required to delay the development, commercialization and marketing of our products and we may be required to significantly scale back our business and operations. In the event we determine that additional sources of liquidity will not be available to us or will not allow us to meet our obligations as they become due, we may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a restructuring plan or liquidation. Our financial statements for the three and six months ended June 30, 2024 do not include any adjustments that might result from the outcome of this uncertainty.

 

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Currently substantially all of our cash and cash equivalents are held at a single financial institution, First Citizens Bank, which acquired our 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 we have regained access to our accounts at Silicon Valley Bank, now a division of First Citizens Bank, we are evaluating our banking relationships, future disruptions of financial institutions where we bank or have credit arrangements, or disruptions of the financial services industry in general, that could adversely affect our ability to access our cash and cash equivalents. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business will be adversely affected.

 

Equity Financings

 

March 2024 Financing

 

In connection with our the Strategic Collaboration, we entered into the Purchase Agreement with the Purchaser, pursuant to which the Purchaser agreed to purchase, in two tranches, up to an aggregate of $15 million in shares of our common stock, and shares of two new series of our preferred stock. On March 5, 2024, we issued to the Purchaser 75,327 shares of the common stock at a purchase price per share of $3.664, and 7,224 shares of a newly authorized Series F convertible preferred stock, par value $0.001 per share, for an aggregate purchase price of $7.5 million. 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 Series F Certificate of Designation.

 

Upon completion of the following as mutually agreed upon by us 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 our products, and (ii) our achieving an aggregate of $10 million in gross revenue within any four consecutive fiscal quarters after the Initial Closing, excluding any gross revenue related to sales of our products to Zylox-Tonbridge (together, the “Milestones”), the Purchaser will invest an additional $7.5 million (the “Milestone Closing”) to purchase shares of our new 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. There can be no guarantee that such Milestone Closing will occur.

 

June 2024 Offering

 

On June 13, 2024, we 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. We received aggregate net proceeds of approximately $5.2 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.

 

As a result, we 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.

 

In addition, we 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”).

 

34
 

 

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 us of us 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 us of the occurrence of us 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 us of the occurrence of us receiving FDA approval of image-guided Coronary CTO investigational device exemption (“IDE”) application.

 

Pursuant to an engagement letter (the “Engagement Letter”) with H.C. Wainwright & Co., LLC (the “Agent”), we, in connection with the Offering, agreed to issue to the Agent or its designees warrants (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.

 

At The Market Offering Agreement

 

On May 20, 2022, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with the Agent, as sales agent, pursuant to which we 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 us 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 our shelf registration statement on Form S-3, which was initially filed with 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, we suspended sales under the ATM Agreement. On March 17, 2023, we reactivated the ATM Agreement. During the year ended December 31, 2023, we 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 no sales under the ATM Agreement during the six months ended June 30, 2024. While we may attempt additional sales in the future, there can be no assurance that we will be successful in acquiring additional funding through these means.

 

Other than the ATM Agreement, we currently do not have any commitment to obtain additional funds.

 

Contractual Obligations

 

Our principal obligations consist of the operating lease for our facility, our Loan Agreement with CRG and non-cancelable purchase commitments. The following table sets out, as of June 30, 2024, our contractual obligations due by period (in thousands):

 

   

Payments Due by Period

  
   

Less Than
1 Year

    

2 - 3
Years

    

4-5 Years

    

More
Than 5
Years

    

Total

  

Operating lease obligations (1)

   $ 1,260     $ 529     $ —     $ —     $ 1,789  

CRG Loan (2)

     —       1,115       5,121       —       6,236  

Non-cancelable purchase commitments (3)

     656       21       —       —       677  
    $ 1,916     $ 1,665     $ 5,121     $ —     $ 8,702  

 

(1)

Operating lease obligations primarily consist of leased office, laboratory, and manufacturing space under a non-cancelable operating lease. In addition to the minimum future lease commitments presented above, the lease requires the Company to pay property taxes, insurance, maintenance, and repair costs. The lease will expire on November 30, 2025.

(2)

The total CRG Loan amount, shown as borrowings on the balance sheet as of June 30, 2024, is $4.0 million. The contractual obligation in the table above of $6.2 million under the CRG Loan includes future interest to be accrued but not paid in cash as well as a $2.1 million back-end fee to be paid in December 2028 upon maturity of the CRG Loan which is being accreted. For more information, see Part I, Item 1 “Unaudited Financial Statements, Note 4. Borrowings.”

(3)

Non-cancelable purchase commitments consist of agreements to purchase goods and services entered into in the ordinary course of business.

 

35
 

 

CRG Loan

 

We have entered into several amendments to the Loan Agreement (the “Amendments”) with CRG since September 2015. The Amendments, among other things: (1) extended the interest-only period through December 31, 2026; (2) extended the period during which we may elect to pay a portion of interest in payment-in-kind, or PIK, interest payments through December 31, 2026 so long as no Default (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted us to make the entire interest payments in PIK interest payments through December 31, 2026 so long as no Default has occurred and is continuing; (4) extended the  Stated Maturity Date (as defined in the Loan Agreement) to December 31, 2028; (5) reduced the minimum liquidity covenant to $3.5 million at all times; (6) eliminated the minimum revenue covenant for all years; (7) changed the date under the on-going stand-alone representation regarding no “Material Adverse Change” to December 31, 2020; (8) amended the on-going stand-alone representation and stand-alone Event of Default (as defined in the Loan Agreement)  regarding Material Adverse Change such that any adverse change in or effect upon the revenue of us and our subsidiaries due to the outbreak of COVID-19 will not constitute a Material Adverse Change; (9) provided CRG with board observer rights, and (10) provide that the board observer may be appointed or removed by written notice from the Majority Lenders (as defined in the Loan Agreement). The total Loan amount under the Loan Agreement (the “CRG Loan”), shown as short-term borrowings on the balance sheet as of June 30, 2024, is $4.0 million. However, upon maturity of the obligations under the Loan Agreement in December 2028, we will be obligated to pay $6.2 million under the Loan Agreement, which includes future interest to be accrued but not paid in cash as well as a $2.1 million back-end fee to be paid in December 2028 upon maturity of the CRG Loan which is being accreted to the maturity date. Due to the substantial doubt about our ability to continue operating as a going concern and the “Material Adverse Change” clause under the Loan Agreement, the entire amount of outstanding borrowings at June 30, 2024 and December 31, 2023 is classified as current. CRG has not purported that any Event of Default (as defined in the Loan Agreement) has occurred as a result a “Material Adverse Change” under the Loan Agreement. Refer to Part 1, Item 1, “Unaudited Financial Statements,” Note 4 for additional details.

 

On January 26, 2024, we entered into Amendment No. 8 to the Loan Agreement with CRG, which reduces the minimum liquidity requirement of the Loan Agreement from $3.5 million to $1.0 million until April 1, 2024. Thereafter, we will be subject to the minimum liquidity requirement of $3.5 million.

 

As part of our Strategic Collaboration, we entered into Amendment No. 9 to the Loan Agreement with CRG, which amends the Loan Agreement to, among other things: (i) extend the interest-only period through December 31, 2026; (ii) provide that interest payable through December 31, 2026 may be payable in kind rather than in cash; and (iii) permit the payment of dividends on the preferred stock issued or issuable to the Purchaser.

 

On June 5, 2024, we entered into Amendment No. 10 to the Loan Agreement with CRG, which reduced the minimum liquidity requirement of the Loan Agreement from $3.5 million to $1.5 million for the period commencing June 1, 2024 and ending July 31, 2024. Thereafter, we will be subject to the minimum liquidity requirement of $3.5 million.

 

Lease Agreements

 

Our operating lease obligations primarily consist of leased office, laboratory, and manufacturing space under a non-cancelable operating lease. In addition to the minimum future lease commitments presented above, the lease requires us to pay property taxes, insurance, maintenance, and repair costs. Rent expense is recognized using the straight-line method over the term of the lease.

 

The lease will expire on November 30, 2025. We are obligated to pay a total of approximately $7.1 million in base rent payments through November 2025. The weighted average remaining lease term as of June 30, 2024 is 1.4 years.

 

On March 6, 2024, we entered into an amendment to the lease which extended the lease term for a period of one year, subsequent to the original expiration of November 30, 2024. As amended, the lease will expire on November 30, 2025. Under the terms of the amendment, we will be obligated to pay approximately $1.3 million in base rent payments through November 2025, beginning on December 1, 2024. This amendment also provides an optional one year extension of the lease following the end of the current term, as amended.

 

36
 

 

Cash Flows

 

   

Six Months Ended June 30,

  
   

2024

    

2023

  
   

(in thousands)

  

Net cash (used in) provided by:

                

Operating activities

   $ (8,302 )   $ (7,513 )

Investing activities

     —       —  

Financing activities

     11,833       37  

Net change in cash and cash equivalents

   $ 3,531     $ (7,476 )

 

Net Cash Used in Operating Activities

 

Net cash used in operating activities for the six months ended June 30, 2024 was $8.3 million, consisting primarily of a net loss of $9.9 million and an increase in net operating assets of $0.8 million, partially offset by non-cash charges of $2.3 million. Non-cash charges primarily related to non-cash interest expense of $0.7 million and stock-based compensation of $1.3 million. The increase in net operating assets was primarily due to the increase in prepaid expenses and other current assets due to annual renewals of certain expenses, including insurance coming due; decrease in accrued compensation as certain bonuses relating to retention of key individuals and company-wide bonuses were paid; and a decrease in long-term liabilities relating to certain retention bonuses being reclassified to accrued compensation as they became due within less than one year. These increases were partially offset by a decline in inventory which include components and labor, in an effort to optimize inventory levels in anticipation of forecasted demand in light of extended lead times and shifting product mix primarily related to new product introductions of Tigereye ST and Pantheris LV.

 

Net cash used in operating activities for the six months ended June 30, 2023 was $7.5 million, consisting primarily of a net loss of $8.8 million and an increase in net operating assets of $0.6 million, partially offset by non-cash charges of $1.9 million. Non-cash charges largely related to non-cash interest expense of $1.0 million, excess and obsolete charges related to inventory of $0.3 million, and stock-based compensation of $0.5 million. The increase in net operating assets was primarily due to the increase in prepaid expenses and other current assets due to annual renewals of certain expenses, including insurance coming due; and purchases of inventory components in anticipation of (i) forecasted demand in light of extended lead times and (ii) building inventory in anticipation of the Tigereye ST and Pantheris LV product launches in the second half of 2023. These increases were partially offset by the increase in other long-term liabilities as certain variable compensation continues to accrue and accrued compensation due to timing of payments.

 

Net Cash Provided by Financing Activities

 

Net cash provided by financing activities for the six months ended June 30, 2024 of $11.8 million relates to $7.0 million of proceeds, net of commissions and various issuance costs, from the issuance of preferred stock and common stock in the Private Placement in March 2024 and $5.2 million of proceeds, net of commissions and various issuance costs from the issuance of a combination of common stock and pre-funded warrants in June 2024. This was partially offset by the payment of approximately $0.4 million in satisfaction of certain tax obligations related to net share settlement on restricted stock awards vesting during the quarter.

 

Net cash provided by financing activities for the six months ended June 30, 2023 of less than $0.1 million primarily relates to proceeds of approximately $0.1 million from the sale of common stock pursuant to the ATM Agreement, net of commissions and various issuance costs.

 

37
 

 

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Interest Rate Risk

 

The risk associated with fluctuating interest rates is primarily limited to our cash equivalents, which are carried at quoted market prices. Due to the short-term maturities and low risk profile of our cash equivalents, an immediate 100 basis point change in interest rates would not have a material effect on the fair value of our cash equivalents. We do not currently use or plan to use financial derivatives in our investment portfolio.

 

Credit Risk

 

As of June 30, 2024, our cash and cash equivalents were maintained with one financial institution in the United States, and our current deposits are in excess of insured limits. We have reviewed the financial statements of this institution and believe it has sufficient assets and liquidity to conduct its operations in the ordinary course of business with little or no credit risk to us.

 

Our accounts receivable primarily relate to revenues from the sale of our Lumivascular platform products to hospitals and medical centers in the United States. At June 30, 2024, there was one customer that represented 20% of the Company’s accounts receivable. At December 31, 2023, there was one customer that represented 24% of the Company’s accounts receivable.

 

Foreign Currency Risk

 

Our business is primarily conducted in U.S. dollars. Any transactions that may be conducted in foreign currencies are not expected to have a material effect on our results of operations, financial position or cash flows.

 

ITEM 4.

CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations thereunder, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2024. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of June 30, 2024, our disclosure controls and procedures were effective.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal controls over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended June 30, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. 

OTHER INFORMATION
 

 

ITEM 1. 

LEGAL PROCEEDINGS

   

None.

 

38
 

 

ITEM 1A.

RISK FACTORS

 

Except as described below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K filed with the SEC on March 20, 2024.The disclosure of risks identified below does not imply that the risk has not already materialized.

 

Nasdaq may delist our securities from its exchange, which could harm our business and limit our stockholders’ liquidity.

 

Our common stock is currently listed on the Nasdaq Capital Market, which has qualitative and quantitative listing criteria. However, we cannot assure you that our common stock will continue to be listed on Nasdaq in the future. In order to continue listing our common stock on Nasdaq, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity, a minimum number of holders of our common stock and a minimum bid price.

 

On April 25, 2023, we received notice (the “Bid Price Deficiency Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”), as the minimum bid price for our listed securities was less than $1.00 for the previous 30 consecutive business days. We had a period of 180 calendar days, or until October 23, 2023, to regain compliance with the rule referred to in this paragraph. As part of our efforts to regain compliance with the aforementioned rule, we effected a 1-for-15 reverse stock split on September 12, 2023.

 

On September 27, 2023, we received a letter from Nasdaq notifying us that the Staff had determined that the closing bid price of our common stock had been at $1.00 per share or greater for at least 10 consecutive business days and, accordingly, that we had regained compliance with the Bid Price Requirement. While we have regained compliance with the Bid Price Requirement, there can be no assurance that we will be able to maintain compliance with the Bid Price Requirement, or other continued listing requirements of Nasdaq, in the future.

 

On May 18, 2023, we received notice (the “Stockholders’ Equity Deficiency Letter”) from the Staff that we no longer satisfy the $2.5 million stockholders’ equity requirement for continued listing on The Nasdaq Capital Market, or the alternatives to that requirements - a $35 million market value of listed securities or $500,000 in net income in the most recent fiscal year or two of the last three fiscal years - as required by Nasdaq Listing Rule 5550(b) (the “Equity Requirement”).

 

As with the Bid Price Deficiency Letter, the Stockholders’ Equity Deficiency Letter had no immediate effect on our continued listing on The Nasdaq Capital Market. In accordance with the Nasdaq Listing Rules, we were provided 45 calendar days, or until July 3, 2023, to submit a plan to regain compliance with the Equity Requirement (the “Compliance Plan”). We submitted the Compliance Plan to Nasdaq on July 3, 2023. On July 31, 2023, we received a letter from Nasdaq notifying us that the Staff had determined to grant us an extension of 180 calendar days from the date of the Staff’s notice, or November 14, 2023, to regain compliance with the Equity Requirement.

 

On November 21, 2023, the Staff formally notified us that the Staff had determined that we were unable to demonstrate compliance with the Equity Requirement and that our securities would be delisted at the open of business on November 30, 2023, unless we timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”). On November 28, 2023, we requested and were granted a hearing before the Panel which took place on February 20, 2024. At the hearing, we presented a plan to regain and sustain compliance with the Equity Requirement and requested an extension to do so. On March 14, 2024, the results from the hearing were rendered in which we were granted an extension by the Panel. This extension stayed any further action by Nasdaq with respect to our continued listing until May 20, 2024.

 

On May 29, 2024, we were formally notified by Nasdaq that we have regained compliance with the stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) and evidenced compliance with all other applicable criteria for continued listing on The Nasdaq Capital Market. Accordingly, the listing matter, which was reviewed by the Panel has been closed.

 

We will be subject to a “Mandatory Panel Monitor” as that term is defined in Nasdaq Listing Rule 5815(d)(4)(B), through May 29, 2025. If within the monitoring period we fail to evidence compliance with the Equity Requirement, we would not be allowed to provide to the Staff a plan to regain compliance with the Equity Requirement; rather, the Staff would be required to issue a delist determination. We would in that case have the opportunity to request a new hearing before the Panel, which request would stay any further action by the Staff.

 

39
 

 

We anticipate we will need to issue additional shares of capital stock through various other financing transactions in order to maintain compliance with the Equity Requirement, the most recent of which occurred in June 2024 in a best efforts public offering resulting in gross proceeds of $6.0 million. However, we may not be successful in executing such future transactions on terms favorable to us, or at all. In addition, there can be no guarantee that such efforts will succeed in helping us maintain compliance with the Nasdaq Listing Rules.

 

If Nasdaq delists our common stock from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 

 

●

a limited availability of market quotations for our securities;

 

 

●

reduced liquidity for our securities;

 

 

●

a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

 

●

a limited amount of news and analyst coverage; and

 

 

●

a decreased ability to issue additional securities or obtain additional financing in the future.

 

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If our common stock continues to be listed on NASDAQ, our common stock will be a covered security. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.

 

There is substantial doubt about our ability to continue as a going concern, and we will need additional financing to execute our business plan, to fund our operations and to continue as a going concern, and, if we are unable to obtain additional financing, may be required to pursue a reorganization proceeding under applicable bankruptcy or insolvency laws, including under Chapter 11 of the U.S. Bankruptcy Code.

 

Since inception, we have experienced recurring operating losses and negative cash flows and we expect to continue to generate operating losses and consume significant cash resources for the foreseeable future. There is substantial doubt regarding our ability to continue as a going concern. Our independent registered public accounting firm has expressed in its auditors’ report on our 2023 financial statements, included our Annual Report on Form 10-K filed on March 20, 2024, an emphasis of matter paragraph relating to our ability to continue as a “going concern,” meaning that our recurring losses from operations and negative cash flows from operations raise substantial doubt regarding our ability to continue as a going concern. We have prepared our financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Our financial statements do not include any adjustment to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty, with the exception that all borrowings are classified as current on the balance sheets.

 

Under our Term Loan Agreement (the “Loan Agreement”) with CRG Partners III L.P. and certain of its affiliated funds (collectively “CRG”), a “Material Adverse Change” or “Material Adverse Effect” (each as defined in the Loan Agreement) is an “Event of Default” thereunder, which gives Majority Lenders (as defined in the Loan Agreement) the right to declare amounts outstanding under the Loan Agreement immediately due and payable. Due to the substantial doubt about our ability to continue operating as a going concern and the Event of Default that could result due to a Material Adverse Change under the Loan Agreement, the entire amount of borrowings at June 30, 2024 and December 31, 2023 are classified as current. In addition, we may not be able to generate sufficient liquidity or revenue to satisfy minimum liquidity and minimum revenue covenants under the Loan Agreement. If we fail to satisfy such requirements, we will be in default under the Loan Agreement and all outstanding amounts under the Loan Agreement will become immediately due.

 

Majority Lenders have not purported that an Event of Default has occurred as a result of a Material Adverse Change or breach of other financial covenants. However, there can be no guarantee that Majority Lenders will not invoke such Event of Default in the future, or that we will not experience other Material Adverse Changes or other Material Adverse Effects, or otherwise breach our financial or other covenants under the Loan Agreement, that could give rise to an Event of Default under the Loan Agreement.

 

40
 

 

If we are unable to generate sufficient revenue and liquidity to service our debt, we may be required to pursue a reorganization proceeding under applicable bankruptcy or insolvency laws, including protection (“Bankruptcy Protection”) under Chapters 7 or 11 of the U.S. Bankruptcy Code. Holders of our common stock will likely not receive any value or payments in a restructuring or similar scenario.

 

In the event we pursue Bankruptcy Protection, we will be subject to the risks and uncertainties associated with such proceedings.

 

In the event we file for relief under the United States Bankruptcy Code, our operations, our ability to develop and execute our business plan and our continuation as a going concern will be subject to the risks and uncertainties associated with bankruptcy proceedings, including, among others: our ability to execute, confirm and consummate a plan of reorganization; the high costs of bankruptcy proceedings and related fees; our ability to obtain sufficient financing to allow us to emerge from bankruptcy and execute our business plan post-emergence, and our ability to comply with terms and conditions of that financing; our ability to continue our operations in the ordinary course; our ability to maintain our relationships with our customers, business partners, counterparties, employees and other third parties; our ability to obtain, maintain or renew contracts that are critical to our operations on reasonably acceptable terms and conditions; our ability to attract, motivate and retain key employees; the ability of third parties to use certain limited safe harbor provisions of the United States Bankruptcy Code to terminate contracts without first seeking Bankruptcy Court approval; and the actions and decisions of our stakeholders and other third parties who have interests in our bankruptcy proceedings that may be inconsistent with our operational and strategic plans. Any delays in our bankruptcy proceedings would increase the risks of our being unable to reorganize our business and emerge from bankruptcy proceedings and may increase our costs associated with the bankruptcy process or result in prolonged operational disruption for us. Also, we would need the prior approval of the bankruptcy court for transactions outside the ordinary course of business during the course of any bankruptcy proceedings, which may limit our ability to respond timely to certain events or take advantage of certain opportunities. Because of the risks and uncertainties associated with any bankruptcy proceedings, we cannot accurately predict or quantify the ultimate impact of events that could occur during any such proceedings. There can be no guarantees that if we seek Bankruptcy Protection, we will emerge from Bankruptcy Protection as a going concern or that holders of our common stock will receive any recovery from any bankruptcy proceedings.

 

In the event we are unable to pursue Bankruptcy Protection under Chapter 11 of the United States Bankruptcy Code, or, if pursued, successfully emerge from such proceedings, it may be necessary to pursue Bankruptcy Protection under Chapter 7 of the United States Bankruptcy Code for all or a part of our businesses.

 

In the event we are unable to pursue Bankruptcy Protection under Chapter 11 of the United States Bankruptcy Code, or, if pursued, successfully emerge from such proceedings, it may be necessary for us to pursue Bankruptcy Protection under Chapter 7 of the United States Bankruptcy Code for all or a part of our businesses. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the United States Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our stakeholders than those we might obtain under Chapter 11 primarily because of the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than in a controlled manner and as a going concern.

 

We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs and our failure to obtain additional financing when needed could force us to delay, reduce or eliminate our product development programs and commercialization efforts or cause us to become insolvent.

 

Even though we received net proceeds of approximately $7.0 million from the sale of our common stock and Series F Convertible Preferred Stock in the Private Placement in March 2024 and $5.2 million from the sale of a combination of our common stock and Pre-Funded Warrants in a public offering in June 2024, we believe that our cash and cash equivalents at June 30, 2024, together with the aforementioned financing, debt and other financing activities and expected revenues from operations, will not be sufficient to satisfy our capital requirements and fund our operations beyond the fourth quarter of 2024. We will need to raise additional funds through future equity or debt financings in the near future to meet our operational needs and capital requirements for product development, clinical trials and commercialization, and to regain compliance with the Equity Requirement under the Nasdaq Listing Rules. We can provide no assurance that we 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 our existing stockholders. Given the volatility of our stock price, any financing that we undertake could cause substantial dilution to our existing stockholders. Macroeconomic challenges and volatility in capital markets could further limit our ability to raise capital when needed on terms favorable to us, or at all. In addition, while we have been able to raise capital from the sale of shares under our at-the-market program, the limitations under instruction I.B.6 of Form S-3, as well as possible low volume of trading in our securities, will limit our ability to continue raising funds through such program.

 

41
 

 

To date, we have financed our operations primarily through sales of our products and net proceeds from the issuance of our preferred stock and debt financings, our initial public offering (“IPO”), private offerings, strategic investment, and our follow-on public offerings of our securities. We do not know when or if our operations will generate sufficient cash to fund our ongoing operations. We cannot be certain that additional capital will be available as needed on acceptable terms, or at all. In the future, we may require additional capital in order to (i) continue to conduct research and development activities, (ii) conduct post-market clinical studies, as well as clinical trials to obtain regulatory clearances and approvals necessary to commercialize our Lumivascular platform products, (iii) expand our sales and marketing infrastructure, (iv) acquire complementary businesses technologies or products; or (v) respond to business opportunities, challenges, a decline in sales, increased regulatory obligations or unforeseen circumstances. Our future capital requirements will depend on many factors, including:

 

 

●

the degree of success we experience in commercializing our Lumivascular platform products, particularly Pantheris, Ocelot, Tigereye and any future versions of such products;

 

 

●

the costs, timing and outcomes of clinical trials and regulatory reviews associated with our future products;

 

 

●

the costs and expenses of maintaining or expanding our sales and marketing infrastructure and our manufacturing operations;

 

 

●

the costs and timing of developing variations of our Lumivascular platform products and, if necessary, obtaining FDA clearance of such variations;

 

 

●

the costs and timing of developing our Coronary products, timing and outcomes of clinical trials and regulatory reviews associated with this product and eventual timing and expenses related to obtaining FDA clearance;

 

 

●

the extent to which our Lumivascular platform is adopted by hospitals for use by interventional cardiologists, vascular surgeons and interventional radiologists in the treatment of PAD;

 

 

●

the number and types of future products we develop and commercialize;

 

 

●

the costs of defending ourselves against future litigation;

 

 

●

the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; and

 

 

●

the extent and scope of our general and administrative expenses.

 

We may attempt to raise additional funds in equity or debt financings or enter into credit facilities in order to access funds for our capital needs. Any debt financing obtained by us in the future would cause us to incur additional debt service expenses and could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and pursue business opportunities. In addition, due to our current level of debt, future equity investors may require that we convert all or a portion of our debt to equity, and our debtholders may not agree to such terms. If we raise additional funds through further issuances of equity or convertible debt securities, and/or if we convert all or a portion of our existing debt to equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock.

 

If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may terminate or delay the development of one or more of our products, delay clinical trials necessary to market our products, delay establishment of sales and marketing capabilities or other activities necessary to commercialize our products, and significantly scale back our operations, or we may become insolvent. In addition, as described above under the risk factor “Nasdaq may delist our securities from its exchange, which could harm our business and limit our stockholders’ liquidity,” if we are unable to raise capital in a manner accretive to our stockholders’ equity, our common stock could be delisted from Nasdaq. If this were to occur, our ability to continue to grow and support our business and to respond to business challenges could be significantly limited.

 

42
 

 

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4.

MINE SAFETY DISCLOSURES

 

Not applicable.

 

 

ITEM 5.

OTHER INFORMATION

 

10b5-1 Trading Plans

 

During the second quarter of 2024, none of our directors or executive officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K).

 

Officer Compensation Adjustment

 

Effective July 1, 2024, Nabeel Subainati, our Vice President of Finance who serves as the Principal Financial Officer and Principal Accounting Officer received an increase to his base salary to $280,800, an increase of $10,800 or 4%. Concurrently, Mr. Subainati received an increase to his discretionary bonus to 45%, an increase of 5%. The discretionary bonus is subject to the achievement of certain company-wide goals established by our board of directors and payable semi-annually.

 
43
 

  
 

ITEM 6.

EXHIBITS

 

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q:

 

Exhibit
Number

  

Exhibit Title

3.1

  

Certificate of Designation of Preferences, Rights, and Limitations of Series H Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed May 16, 2024).

     

4.1

  

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed June 17, 2024).
     

4.2

  

Form of Series A-1 Warrant (incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed June 17, 2024).
     

4.3

  

Form of Series A-2 Warrant (incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed June 17, 2024).
     

4.4

  

Form of Series A-3 Warrant (incorporated by reference to Exhibit 4.4 to our Current Report on Form 8-K filed June 17, 2024).
     

4.5

  

Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.5 to our Current Report on Form 8-K filed June 17, 2024).
     

10.1

  

Securities Purchase Agreement, dated May 16, 2024, by and between the Company and the Lenders party thereto (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed May 16, 2024).
     

10.2

  

Consent to Term Loan Agreement, dated May 16, 2024, by and between the Company and the Lenders (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed May 16, 2024).
     

10.3

  

Amendment No. 10 to Term Loan Agreement dated June 5, 2024 by and among the Company and the lenders party thereto (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 7, 2024).
     

10.4

  

Form of Securities Purchase Agreement (incorporated by reference to Exhibit 19.1 to our Current Report on Form 8-K filed June 17, 2024).
     

31.1*

  

Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     

31.2*

  

Certification of the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     

32.1*#

  

Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     

101.INS

  

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
     

101.SCH

  

Inline XBRL Taxonomy Extension Schema Document
     

101.CAL

  

Inline XBRL Taxonomy Extension Calculation Linkbase Document
     

101.DEF

  

Inline XBRL Taxonomy Extension Definition Linkbase Document
     

101.LAB

  

Inline XBRL Taxonomy Extension Label Linkbase Document
     

101.PRE

  

Inline XBRL Taxonomy Extension Presentation Linkbase Document
     

104

  

Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

 

#

The certifications filed as Exhibits 32.1 are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the Company under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference.

 

44
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Avinger, Inc.
 

(Registrant)
   
   

Date: August 8, 2024

/s/ JEFFERY M. SOINSKI
 

Jeffrey M. Soinski
 

Chief Executive Officer
 

(Principal Executive Officer)
   

Date: August 8, 2024

/s/ NABEEL SUBAINATI
 

Nabeel Subainati
 

Vice President, Finance
 

(Principal Financial and Accounting Officer)

 

 

45

Exhibit 31.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
Pursuant to

Securities Exchange Act Rules 13a-14(a) and 15d-14(a),

As Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Jeffrey Soinski, hereby certify that:

 

1.     I have reviewed this Quarterly Report on Form 10-Q of Avinger, Inc.;

 

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)     designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)     designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)     evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)     disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)     all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

b)     any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: August 8, 2024

 

 

/s/ Jeffrey M. Soinski
 

Jeffrey M. Soinski
 

Chief Executive Officer
 

(Principal Executive Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
Pursuant to

Securities Exchange Act Rules 13a-14(a) and 15d-14(a),

As Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Nabeel Subainati, hereby certify that:

 

1.     I have reviewed this Quarterly Report on Form 10-Q of Avinger, Inc.;

 

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)     designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)     designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)     evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)     disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)     all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

b)     any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: August 8, 2024

 

 

/s/ Nabeel Subainati
 

Nabeel Subainati
 

Vice President, Finance
 

(Principal Financial and Accounting Officer)

 

 

 

Exhibit 32.1

 

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Avinger, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024, as filed with the Securities and Exchange Commission (the “Report”), Jeffrey Soinski, as Chief Executive Officer of the Company, and Nabeel Subainati, Vice President, Finance of the Company, each hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), to his knowledge:

 

 

1.

The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

 

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 8th day August, 2024.

 

/s/ Jeffrey M. Soinski

  

/s/ Nabeel Subainati

Jeffrey M. Soinski

  

Nabeel Subainati

Chief Executive Officer

  

Vice President, Finance

(Principal Executive Officer)

  

(Principal Financial and Accounting Officer)

 

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

 

 

 
v3.24.2.u1
Document And Entity Information - shares
 6 Months Ended
Jun. 30, 2024
Aug. 02, 2024
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2024  
Document Transition Report false  
Entity File Number 001-36817  
Entity Registrant Name AVINGER, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 20-8873453  
Entity Address, Address Line One 400 Chesapeake Drive  
Entity Address, City or Town Redwood City  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 94063  
City Area Code 650  
Local Phone Number 241-7900  
Title of 12(b) Security Common Stock, par value $0.001 per share  
Trading Symbol AVGR  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding (in shares)   2,296,146
Entity Central Index Key 0001506928  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Amendment Flag false  
v3.24.2.u1
Condensed Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 8,806 $ 5,275
Accounts receivable, net of allowance for doubtful accounts of $56 and $41 at June 30, 2024 and December 31, 2023, respectively 931 1,014
Inventories, net 4,120 5,298
Prepaid expenses and other current assets 1,043 575
Total current assets 14,900 12,162
Right of use asset 1,711 1,102
Property and equipment, net 455 487
Other assets 229 19
Total assets 17,295 13,770
Current liabilities:    
Accounts payable 725 777
Accrued compensation 1,943 2,311
Preferred stock dividends payable 303 0
Accrued expenses and other current liabilities 804 817
Leasehold liability, current portion 1,183 1,102
Borrowings 4,044 14,293
Total current liabilities 9,002 19,300
Leasehold liability, long-term portion 528 0
Other long-term liabilities 12 672
Total liabilities 9,542 19,972
Commitments and contingencies (Note 6)  
Shares issued and outstanding: 30,229 and 62,881 at June 30, 2024 and December 31, 2023, respectively; aggregate liquidation preference related to Series E, Series F, and Series H convertible preferred stock of $18,338 at June 30, 2024 and $62,796 at December 31, 2023 related to Series A and Series E convertible preferred stock 0 0
Shares issued and outstanding: 1,916,434 and 1,279,928 at June 30, 2024 and December 31, 2023, respectively 2 1
Additional paid-in capital 438,326 414,493
Accumulated deficit (430,575) (420,696)
Total stockholders’ equity (deficit) 7,753 (6,202)
Total liabilities and stockholders’ equity (deficit) $ 17,295 $ 13,770
v3.24.2.u1
Condensed Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Accounts Receivable, Allowance for Credit Loss, Current $ 56 $ 41
Preferred Stock, Par or Stated Value Per Share (in dollars per share) $ 0.001 $ 0.001
Preferred Stock, Shares Authorized (in shares) 5,000,000 5,000,000
Preferred Stock, Shares Issued (in shares) 30,229 62,881
Preferred Stock, Shares Outstanding (in shares) 30,229 62,881
Preferred Stock, Liquidation Preference, Value $ 18,338 $ 62,796
Common Stock, Par or Stated Value Per Share (in dollars per share) $ 0.001 $ 0.001
Common Stock, Shares Authorized (in shares) 100,000,000 100,000,000
Common Stock, Shares, Issued (in shares) 1,916,434 1,279,928
Common Stock, Shares, Outstanding (in shares) 1,916,434 1,279,928
v3.24.2.u1
Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Revenues $ 1,847 $ 2,041 $ 3,706 $ 3,929
Cost of revenues 1,469 1,436 2,985 2,688
Gross profit 378 605 721 1,241
Operating expenses:        
Research and development 904 988 1,966 2,344
Selling, general and administrative 3,601 3,346 7,971 6,884
Total operating expenses 4,505 4,334 9,937 9,228
Loss from operations (4,127) (3,729) (9,216) (7,987)
Interest expense, net (234) (445) (650) (837)
Other (expense) income, net (1) (2) (13) 4
Net loss and comprehensive loss (4,362) (4,176) (9,879) (8,820)
Accretion of preferred stock dividends (238) (1,218) (303) (2,436)
Gain on exchange of Series A for Series A-1 convertible preferred stock 0 0 1,908 0
Net loss applicable to common stockholders $ (4,600) $ (5,394) $ (8,274) $ (11,256)
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) $ (2.82) $ (8.86) $ (5.32) $ (19.44)
Weighted average common shares used to compute net loss per share, basic and diluted (in shares) 1,634 609 1,555 579
v3.24.2.u1
Condensed Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)
$ in Thousands
Preferred Stock [Member]
Private Placement [Member]
Preferred Stock [Member]
Series A-1 Preferred Stock [Member]
Preferred Stock [Member]
Common Stock [Member]
Private Placement [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Private Placement [Member]
Additional Paid-in Capital [Member]
Series A-1 Preferred Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Private Placement [Member]
Retained Earnings [Member]
Series A-1 Preferred Stock [Member]
Retained Earnings [Member]
Private Placement [Member]
Series A-1 Preferred Stock [Member]
Total
Balance (in shares) at Dec. 31, 2022     60,961   522,177                  
Balance at Dec. 31, 2022         $ 8     $ 406,514     $ (402,376)     $ 4,146
Issuance of common stock in public offerings, net of commissions and issuance costs (in shares)     0   6,782                  
Issuance of common stock in public offerings, net of commissions and issuance costs     $ 0   $ 0     37     0     37
Exercise of pre-funded warrants for common stock (in shares)     0   91,325                  
Exercise of pre-funded warrants for common stock     $ 0   $ 1     (2)     0     (1)
Employee stock-based compensation     0   0     484     0     484
Accretion of Series A preferred stock dividends     0   0     (2,436)     0     (2,436)
Net and comprehensive loss     $ 0   $ 0     0     (8,820)     (8,820)
Balance (in shares) at Jun. 30, 2023     60,961   622,578                  
Balance at Jun. 30, 2023     $ 0   $ 9     404,597     (411,196)     (6,590)
Issuance of common stock upon vesting of restricted stock units (in shares)     0   2,294                  
Issuance of common stock upon vesting of restricted stock units         $ 0     0     0     0
Balance (in shares) at Dec. 31, 2022     60,961   522,177                  
Balance at Dec. 31, 2022         $ 8     406,514     (402,376)     4,146
Balance (in shares) at Dec. 31, 2023     62,881   1,279,928                  
Balance at Dec. 31, 2023     $ 0   $ 1     414,493     (420,696)     (6,202)
Balance (in shares) at Mar. 31, 2023     60,961   575,123                  
Balance at Mar. 31, 2023         $ 9     405,519     (407,020)     (1,492)
Issuance of common stock in public offerings, net of commissions and issuance costs (in shares)     0   5,988                  
Issuance of common stock in public offerings, net of commissions and issuance costs     $ 0   $ 0     58     0     58
Exercise of pre-funded warrants for common stock (in shares)     0   41,467                  
Exercise of pre-funded warrants for common stock     $ 0   $ 0     (1)     0     (1)
Employee stock-based compensation     0   0     239     0     239
Accretion of Series A preferred stock dividends     0   0     (1,218)     0     (1,218)
Net and comprehensive loss     $ 0   $ 0     0     (4,176)     (4,176)
Balance (in shares) at Jun. 30, 2023     60,961   622,578                  
Balance at Jun. 30, 2023     $ 0   $ 9     404,597     (411,196)     (6,590)
Balance (in shares) at Dec. 31, 2023     62,881   1,279,928                  
Balance at Dec. 31, 2023     $ 0   $ 1     414,493     (420,696)     (6,202)
Issuance of common stock in public offerings, net of commissions and issuance costs (in shares) 7,224 10,000 0 75,327 330,000                  
Issuance of common stock in public offerings, net of commissions and issuance costs   $ 0 $ 0 $ 0 $ 0 $ 6,880 $ 0 5,200 $ 0 $ 0 0 $ 6,880 $ 0 5,200
Employee stock-based compensation         0     1,303     0     1,303
Accretion of Series A preferred stock dividends     $ 0   0     (303)     0     (303)
Net and comprehensive loss         $ 0     0     (9,879)     (9,879)
Conversion of CRG loan principal into Series H convertible preferred stock (in shares)     11,000   0                  
Conversion of CRG loan principal into Series H convertible preferred stock     $ 0   $ 0     11,000     0     11,000
Balance (in shares) at Jun. 30, 2024     30,229   1,916,434                  
Balance at Jun. 30, 2024         $ 2     438,326     (430,575)     7,753
Issuance of common stock warrants in connection with the Private Placement     $ 0   $ 0     127     0     127
Cancellation of Series A preferred stock (in shares)     (60,876)   0                  
Cancellation of Series A preferred stock     $ 0   $ 0     0     0     0
Issuance of common stock upon vesting of restricted stock awards (in shares)     0   368,503                  
Issuance of common stock upon vesting of restricted stock awards     $ 0   $ 1     0     0     1
Net share settlement of restricted stock awards in satisfaction of tax obligations (in shares)     0   (137,324)                  
Net share settlement of restricted stock awards in satisfaction of tax obligations     $ 0   $ 0     (374)     0     (374)
Balance (in shares) at Mar. 31, 2024     19,229   1,586,434                  
Balance at Mar. 31, 2024         $ 2     422,157     (426,213)     (4,054)
Issuance of common stock in public offerings, net of commissions and issuance costs (in shares)     0   330,000                  
Issuance of common stock in public offerings, net of commissions and issuance costs     $ 0   $ 0     5,200     0     5,200
Employee stock-based compensation     0   0     207     0     207
Accretion of Series A preferred stock dividends     0   0     (238)     0     (238)
Net and comprehensive loss     $ 0   $ 0     0     (4,362)     (4,362)
Conversion of CRG loan principal into Series H convertible preferred stock (in shares)     11,000   0                  
Conversion of CRG loan principal into Series H convertible preferred stock     $ 0   $ 0     11,000     0     11,000
Balance (in shares) at Jun. 30, 2024     30,229   1,916,434                  
Balance at Jun. 30, 2024         $ 2     $ 438,326     $ (430,575)     $ 7,753
v3.24.2.u1
Condensed Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities    
Net loss $ (9,879) $ (8,820)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 169 140
Amortization of debt issuance costs and debt discount 24 41
Stock-based compensation 1,303 484
Noncash interest expense and other charges 728 997
Change in right of use asset 10 28
Provision for excess and obsolete inventories 97 271
Other non-cash charges 14 (52)
Changes in operating assets and liabilities:    
Accounts receivable 68 186
Inventories 945 (828)
Prepaid expenses and other current assets (468) (528)
Other assets (220) 21
Accounts payable (52) (208)
Accrued compensation (368) 352
Accrued expenses and other current liabilities (13) 98
Other long-term liabilities (660) 305
Net cash used in operating activities (8,302) (7,513)
Cash flows from financing activities    
Net share settlement on restricted stock awards in satisfaction of tax obligations (374) 0
Net cash provided by financing activities 11,833 37
Net change in cash and cash equivalents 3,531 (7,476)
Cash and cash equivalents, beginning of period 5,275 14,603
Cash and cash equivalents, end of period 8,806 7,127
Supplemental disclosure of cash flow information    
Increase to right of use asset and leasehold liability arising from lease amendment 1,177 0
Conversion of CRG loan principal and accrued interest into Series H convertible preferred stock 11,000 0
Accretion of preferred stock dividends 303 2,436
Reclassification of other long-term liabilities to accrued compensation 0 724
Transfers between inventory and property and equipment 136 4
Private Placement [Member]    
Cash flows from financing activities    
Proceeds from the issuance of common stock and convertible preferred stock, net of commissions and issuance costs 7,007 0
Public Offering [Member]    
Cash flows from financing activities    
Proceeds from the issuance of common stock and convertible preferred stock, net of commissions and issuance costs $ 5,200 $ 37
v3.24.2.u1
Note 1 - Organization
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Nature of Operations [Text Block]

1. Organization

 

Organization, Nature of Business

 

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.

 

Liquidity Matters

 

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, Presentation of Financial Statements - Going Concern (Subtopic 205-40) 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.

 

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.

 

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.

 

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.

 

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.

 

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.

 

Public Offerings

 

June 2024 Offering

 

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.

 

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.

 

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”).

 

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.

 

Pursuant to an engagement letter (the “Engagement Letter”) with H.C. Wainwright & 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.

 

At The Market Offering Agreement

 

On May 20, 2022, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & 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 no 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.

 

Other than the ATM Agreement, the Company currently does not have any commitments to obtain additional funds.

 

Strategic Partnership and Private Placement

 

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.

 

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.

 

Private Placement

 

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.

 

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”).

 

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.

 

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.

 

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.

 

Series A Preferred Stock Exchange

 

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.

 

CRG Loan Amendment

 

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:

 

 

-

extend the interest-only period through December 31, 2026;
 

-

provide that interest payable through December 31, 2026 may be payable in kind rather than in cash; and
 

-

permit the payment of dividends on the preferred stock issued or issuable to the Purchaser.

  
v3.24.2.u1
Note 2 - Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Basis of Presentation and Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. The accompanying unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company’s financial information. The results for the three and six months ended June 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, or for any other interim period or for any future year. The December 31, 2023 condensed balance sheet data has been derived from audited financial statements. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements. These unaudited condensed financial statements and notes should be read in conjunction with the financial statements included in the Company’s Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 20, 2024. The Company’s significant accounting policies are more fully described in Note 2 of the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

 

On September 8, 2023, the Company’s Board of Directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1-for-15 reverse stock split of the Company’s issued and outstanding common stock. The reverse stock split became effective on September 12, 2023.

 

Use of Estimates

 

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.

 

Concentration of Credit Risk, and Other Risks and Uncertainties

 

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable to the extent of the amounts recorded on the balance sheets.

 

The Company’s policy is to invest in cash and cash equivalents, consisting of money market funds. These financial instruments are held in Company accounts at one financial institution, First Citizens Bank, which acquired the Company’s prior banking partner, Silicon Valley Bank, in March 2023. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at June 30, 2024 and December 31, 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, a division of First Citizens Bank, future disruptions of financial institutions where it banks or have 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, the Company’s financial position and ability to operate its business will be adversely affected.

 

The Company’s accounts receivable are due from a variety of healthcare organizations in the United States and select international markets. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at June 30, 2024 and December 31, 2023. At June 30, 2024, there was one customer that represented 20% of the Company’s accounts receivable. At December 31, 2023, there was one customer that represented 24% of the Company’s accounts receivable. There was one customer that represented 16% of revenues for each of the three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, there was one customer that represented 17% and 16% of revenues, respectively. Disruption of the Company’s sales orders or a deterioration of financial condition of its customers would have a negative impact on the Company’s financial position and results of operations.

 

Product Warranty Costs

 

The Company typically offers a one-year warranty on its products commencing upon the transfer of title and risk of loss to the customer. The Company accrues for the estimated cost of product warranties upon invoicing its customers, based on historical results. Warranty costs are reflected in the statement of operations and comprehensive loss as a cost of revenues. The warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from these estimates, revisions to the estimated warranty liability would be required. Periodically the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts, as necessary. Warranty provisions and claims are summarized as follows (in thousands):

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Beginning balance

   $ 182     $ 114     $ 193     $ 109  

Warranty provision

     17       15       32       34  

Usage/Release

     (49

)

     (1

)

     (75 )     (15 )

Ending balance

   $ 150     $ 128     $ 150     $ 128  

 

Net Loss per Share Attributable to Common Stockholders

 

Basic net loss per share attributable to common stockholders is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Any common stock shares subject to repurchase are excluded from the calculations as the continued vesting of such shares is contingent upon the holders’ continued service to the Company. As of June 30, 2024 and 2023, there were no shares subject to repurchase. Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders as the inclusion of all potentially dilutive common shares would have been anti-dilutive.

 

Net loss per share applicable to common stockholders was determined as follows (in thousands, except per share data):

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net loss applicable to common stockholders

   $ (4,600

)

   $ (5,394

)

   $ (8,274 )   $ (11,256 )

Weighted average common stock outstanding, basic and diluted

     1,634       609       1,555       579  

Net loss per share attributable to common stockholders, basic and diluted

   $ (2.82

)

   $ (8.86

)

   $ (5.32 )   $ (19.44 )

 

The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted average shares outstanding because such securities have an anti-dilutive impact due to losses reported:

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Common stock warrants equivalents

     2,546,276       468,132       1,330,718       496,615  

Common stock options

     15       15       15       15  

Convertible preferred stock

     24,669       60,961       37,594       60,961  

Unvested restricted stock units

     114,840       94,590       115,878       87,032  
      2,685,800       623,698       1,484,205       644,623  

 

Segment and Geographical Information

 

The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Primarily all of the Company’s long-lived assets, which are comprised of property and equipment, are based in the United States. For each of the three months ended June 30, 2024 and 2023, 92% of the Company’s revenues were in the United States. For the six months ended June 30, 2024 and 2023, 93% and 92%, respectively, of the Company’s revenues were in the United States based on the shipping location of the external customer. The remaining revenues for the three and six months ended June 30, 2024 and 2023, were primarily derived in Germany.

 

Fair Value Measurements

 

As of June 30, 2024 and December 31, 2023, cash equivalents were all categorized as Level 1 and consisted of money market funds. As of June 30, 2024 and December 31, 2023, there were no financial assets and liabilities categorized as Level 2 or 3. There were no transfers between fair value hierarchy levels during the three or six months ended June 30, 2024 and June 30, 2023.

 

Recent Accounting Pronouncements

 

Recent accounting standards adopted

 

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which among other things, simplifies the accounting models for the allocation of proceeds attributable to the issuance of a convertible debt instrument.  As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (i) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (ii) a convertible debt instrument was issued at a substantial premium. The standard becomes effective for the Company, as a smaller reporting company as defined by the SEC, in the first quarter of 2024 and early adoption is permitted.  This new standard did not have a material impact on the Company’s financial statements.

 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures. This ASU requires that a public entity provide additional segment disclosures on an interim and annual basis. The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements unless impracticable. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. This new standard did not have a material impact on the Company’s financial statements.

 

Recent accounting standards not yet adopted

 

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU No. 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, if any, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its first quarter of 2025. ASU No. 2023-09 allows for adoption using either a prospective or retrospective transition method.
v3.24.2.u1
Note 3 - Inventories
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Inventory Disclosure [Text Block]

3. Inventories

 

Inventories consisted of the following (in thousands):

 

   

June 30,

    

December 31,

  
   

2024

    

2023

  

Raw materials

   $ 2,102     $ 3,203  

Work-in-process

     90       25  

Finished products

     1,928       2,070  

Total inventories

   $ 4,120     $ 5,298  

  
v3.24.2.u1
Note 4 - Borrowings
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

4. Borrowings

 

CRG

 

On September 22, 2015, the Company entered into a Term Loan Agreement, as amended (the “Loan Agreement”) with CRG under which, subject to certain conditions, the Company had the right to borrow up to $50 million in principal amount from CRG on or before the end of the twenty-fourth (24th) month period commencing on the first Borrowing Date (as defined in the Loan Agreement). The Company borrowed $30 million on September 22, 2015. The Company borrowed an additional $10 million on June 15, 2016 under the Loan Agreement.

 

On February 14, 2018, the Company and CRG further amended the Loan Agreement concurrent with the conversion of $38 million of the principal amount of the senior secured term loan (plus $3.8 million in back-end fees and prepayment premium applicable thereto) into a newly authorized Series A convertible preferred stock.

 

On August 2, 2023, the Company and CRG entered into a Securities Purchase Agreement (“Series E Purchase Agreement”) pursuant to which the Company issued 1,920 shares of a newly authorized Series E convertible preferred stock (“Series E Preferred Stock”) in exchange for CRG surrendering for cancellation $1.92 million of outstanding principal and accrued interest of the senior secured term loan under the Loan Agreement. Each share of Series E preferred stock has a stated value of $1,000 per share and is convertible into 93 shares of the Company’s common stock at a conversion price of $10.725 per share.

 

On May 16, 2024, the Company and CRG entered into another Securities Purchase Agreement (“Series H Purchase Agreement”) pursuant to which the Company issued 11,000 shares of a newly authorized Series H convertible preferred stock (“Series H Preferred Stock”) in exchange for CRG surrendering for cancellation $11.0 million of outstanding principal and accrued interest of the senior secured term loan under the Loan Agreement. Each share of Series H preferred stock has a stated value of $1,000 per share and is convertible into 259 shares of the Company’s common stock at a conversion price of $3.86 per share. Both the shares of Series E preferred stock and Series H preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess 9.99% of the Company’s outstanding voting power and in no case will the beneficial ownership limitation exceed 19.99% of the Company’s outstanding voting power on a combined basis (as CRG collectively holds all of the issued and outstanding shares of the Company’s Series A-1 Convertible Preferred Stock, Series E Convertible Preferred Stock and Series H Convertible Preferred Stock), unless approved by the Company's stockholders in accordance with Nasdaq Listing Rule 5635(b).

 

The Company has entered into several amendments to the Loan Agreement (the “Amendments”) with CRG since September 2015. The Amendments, among other things: (1) extended the interest-only period through December 31, 2026; (2) extended the period during which the Company may elect to pay a portion of interest in payment-in-kind (“PIK”), interest payments through December 31, 2026 so long as no Default (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted the Company to make the entire interest payments in PIK interest payments through December 31, 2026 so long as no Default has occurred and is continuing; (4) extended the Stated Maturity Date (as defined in the Loan Agreement) to December 31, 2028; (5) reduced the minimum liquidity covenant to $3.5 million at all times; (6) eliminated the minimum revenue covenants for all years (7) changed the date under the on-going stand-alone representation regarding no “Material Adverse Change” to December 31, 2020; (8) amended the on-going stand-alone representation and stand-alone Event of Default (as defined in the Loan Agreement) regarding Material Adverse Change such that any adverse change in or effect upon the revenue of the Company and its subsidiaries due to the outbreak of COVID-19 will not constitute a Material Adverse Change; (9) provided CRG with board observer rights and (10) provide that the board observer may be appointed or removed by written notice from the Majority Lenders (as defined in the Loan Agreement).

 

On January 26, 2024, the Company entered into Amendment No. 8 to the Loan Agreement with CRG, which reduced the minimum liquidity requirement of the Loan Agreement from $3.5 million to $1.0 million until April 1, 2024. Thereafter, the Company was subject to the minimum liquidity requirement of $3.5 million.

 

On March 5, 2024, the Company entered into Amendment No. 9 to the Loan Agreement with CRG, which (1) extended the interest-only period through December 31, 2026; (2) extended the period during which the Company may elect to pay a portion of interest in PIK interest payments through December 31, 2026 so long as no Default (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted the Company to make the entire interest payments in PIK interest payments through December 31, 2026 so long as no Default has occurred and is continuing; and (4) permit the payment of dividends on the preferred stock issued or issuable to the Purchaser. The Company assessed Amendment No. 9 to the Loan Agreement and determined that this represented a loan modification. As such, the unamortized portion of previous issuance costs incurred will be amortized over the modified term, and costs incurred with third parties was expensed as incurred.

 

On June 5, 2024, the Company entered into Amendment No. 10 to the Loan Agreement with CRG, which reduced the minimum liquidity requirement of the Loan Agreement from $3.5 million to $1.5 million for the period commencing June 1, 2024 and ending July 31, 2024. Thereafter, the Company will be subject to the minimum liquidity requirement of $3.5 million.

 

Under the amended Loan Agreement, no cash payments for either principal or interest are required until the first quarter of 2027. The interest will be accrued and included in the debt balance based (to the extent not paid) on principal amounts outstanding at the beginning of the quarter at an interest rate of 12.5%. Beginning in the first quarter of 2027, the Company will be required to make quarterly principal payments (in addition to the interest) of $0.5 million with total principal payments of $1.8 million in 2027 and $1.8 million in 2028. The maturity date of the Loan (as defined in the Loan Agreement) is December 31, 2028.

 

The Company may voluntarily prepay the borrowings in full, with a prepayment premium beginning at 5.0% and declining by 1.0% annually thereafter, with no premium being payable if prepayment occurs after seven and half years of the loan. There is currently no prepayment premium payable. Each tranche of borrowing required the payment, on the borrowing date, of a financing fee equal to 1.5% of the borrowed loan principal, which is recorded as a discount to the debt. In addition, a facility fee equal to 15.0% of the amounts borrowed plus any PIK is to be payable at the end of the term or when the borrowings are repaid in full. A short-term liability is being accreted using the effective interest method for the facility fee over the term of the Loan Agreement with a corresponding discount to the debt. The borrowings are collateralized by a security interest in substantially all of the Company’s assets.

 

The Loan Agreement requires that the Company adheres to certain affirmative and negative covenants, including financial reporting requirements, certain minimum financial covenants for a pre-specified liquidity requirement and a prohibition against the incurrence of indebtedness, or creation of additional liens, other than as specifically permitted by the terms of the Loan Agreement. In particular, the covenants of the amended Loan Agreement included a covenant that the Company maintain a minimum of $3.5 million of cash and certain cash equivalents. The minimum liquidity requirement was temporarily reduced to $1.5 million until July 31, 2024. The Loan Agreement also prohibits the payment of cash dividends on the Company’s capital stock and also places restrictions on mergers, sales of assets, investments, incurrence of liens, incurrence of indebtedness and transactions with affiliates. CRG may accelerate the payment terms of the Loan Agreement upon the occurrence of certain “Events of Default” set forth therein, which include the failure of the Company to make timely payments of amounts due under the Loan Agreement, the failure of the Company to adhere to the covenants set forth in the Loan Agreement, the insolvency of the Company or upon the occurrence of a “Material Adverse Change” thereunder.

 

As of June 30, 2024, the Company was in compliance with all applicable covenants under the Loan Agreement.

 

As of June 30, 2024, principal, final facility fee and PIK payments under the Loan Agreement, as amended, were as follows (in thousands):

 

Year Ending December 31,

        

2024 (remaining six months of the year)

   $ —  

2025

     —  

2026

     —  

2027

     2,176  

2028

     4,060  

Total

     6,236  

Less: Amount of PIK additions and final facility fee to be incurred subsequent to June 30, 2024

     (2,050 )

Less: Amount representing debt issuance costs

     (142 )

Borrowings, current portion, as of June 30, 2024

   $ 4,044  

 

In connection with drawdowns under the Loan Agreement, the Company recorded aggregate debt discounts of $1.3 million as contra-debt. The debt discounts are being amortized as non-cash interest expense using the effective interest method over the term of the Loan Agreement. As of June 30, 2024 and December 31, 2023, the balance of the aggregate debt discount was approximately $142,000 and $166,000, respectively. The Company’s interest expense associated with the amortization of debt discount was approximately $8,000 and $20,000 during the three months ended June 30, 2024 and 2023, respectively. The Company’s interest expense associated with the amortization of debt discount was approximately $24,000 and $41,000 during the six months ended June 30, 2024 and 2023, respectively. For the three months ended June 30, 2024 and 2023, the Company incurred interest expense of approximately $286,000 and $531,000, respectively. For the six months ended June 30, 2024 and 2023, the Company incurred interest expense of approximately $0.7 million and $1.0 million, respectively.

 

While, as of the date hereof, CRG has not purported that an Event of Default has resulted due to a Material Adverse Change (as those terms defined in the Loan Agreement), due to the substantial doubt about the Company’s ability to continue operating as a going concern, the entire outstanding amount of borrowings under the Loan Agreement and associated aggregate debt discount at June 30, 2024 and December 31, 2023 were classified as current in these financial statements.
v3.24.2.u1
Note 5 - Leases
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

5. Leases

 

The Company’s operating lease obligations primarily consist of leased office, laboratory, and manufacturing space under a non-cancelable operating lease. In addition to the minimum future lease commitments presented below, the lease requires the Company to pay property taxes, insurance, maintenance, and repair costs. The most recent amendment also provides an optional one-year extension of the lease following the end of the current term on November 30, 2025, which was not included in the assessment of the lease term as it is not reasonably certain the Company will elect to exercise this option. Rent expense is recognized using the straight-line method over the term of the lease.

 

The current lease was to expire on November 30, 2024. On March 6, 2024, the Company entered into an amendment to the lease which extended the lease term for a period of one year, subsequent to the original expiration. As amended, the lease will expire on November 30, 2025. Under the terms of the amendment, the Company will be obligated to pay an additional $1.3 million in base rent payments through November 2025, beginning on December 1, 2024. In total, the Company is obligated to pay approximately $7.1 million in base rent payments through November 2025, which began on December 1, 2019. The weighted average remaining lease term as of June 30, 2024 is 1.4 years.

 

In connection with the amendment the Company adjusted its right-of-use asset and lease liability to $2.2 million. As of the date of the amendment, the operating lease was included on the balance sheet at the present value of the future base payments discounted at a 6.5% discount rate using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment as the lease does not provide an implicit rate.

 

The Company’s operating lease expense, excluding variable maintenance fees and other expenses on a monthly basis, was approximately $105,000. Rent expense for the three months ended June 30, 2024 and 2023 was approximately $315,000 and $314,000, respectively. Rent expense for the six months ended June 30, 2024 and 2023 was approximately $631,000 and $628,000, respectively. The Company’s variable expenses for the three months ended June 30, 2024 and 2023 were approximately $83,000 and $103,000, respectively. The Company’s variable expenses for the six months ended June 30, 2024 and 2023 were approximately $173,000 and $168,000, respectively. Operating right-of-use asset amortization for the three months ended June 30, 2024 and 2023 was approximately $285,000 and $284,000, respectively. Operating right-of-use asset amortization for the six months ended June 30, 2024 and 2023 was approximately $577,000 and $564,000, respectively. Due to payments being made in excess of operating lease expense recognized, the Company recorded approximately $3,000 and $13,000 as prepaid rent included in other assets on the condensed balance sheet as of June 30, 2024 and December 31, 2023, respectively.

 

The following table presents the future operating lease payments and leasehold liability included on the balance sheet related to the Company’s operating lease as of June 30, 2024 (in thousands):

 

Year Ending December 31,

        

2024 (remaining six months of the year)

   $ 623  

2025

     1,166  

Total

     1,789  

Less: Imputed interest

     (78

)

Leasehold liability as of June 30, 2024

   $ 1,711  

 

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of June 30, 2024 and December 31, 2023 (in thousands):

 

Lease-Related Assets and Liabilities

   Financial Statement Line

Items

   June 30,

2024

     December 31,

2023

  

Right of use assets:

                    

Operating lease

  

Right of use asset

   $ 1,711     $ 1,102  

Total right of use assets

   $ 1,711     $ 1,102  

Lease liabilities:

                    

Operating lease

  

Leasehold liability, current portion

   $ 1,183     $ 1,102  
   

Leasehold liability, long-term portion

     528       —  

Total lease liabilities

   $ 1,711     $ 1,102  

  
v3.24.2.u1
Note 6 - Commitments and Contingencies
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

6. Commitments and Contingencies

 

Purchase Obligations

 

Purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. The Company had non-cancelable commitments to suppliers for purchases totaling approximately $0.7 million as of June 30, 2024. The majority of this amount is related to commitments to purchase inventory components and services related to the manufacturing of inventory.

 

Legal Proceedings

 

The Company is not currently involved in any pending legal proceedings that it believes could have a material adverse effect on our financial condition, results of operations or cash flows. From time to time, the Company may be involved in legal proceedings or investigations, which could harm our reputation, business and financial condition and divert the attention of our management from the operation of our business.
v3.24.2.u1
Note 7 - Stockholders' Equity
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

7. Stockholders’ Equity

 

Convertible Preferred Stock

 

As of June 30, 2024 and December 31, 2023, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 5,000,000 shares of convertible preferred stock with $0.001 par value per share. As of June 30, 2024 and December 31, 2023, 30,229 and 62,881 shares, respectively, were issued and outstanding.

 

Series A Preferred Stock Exchange

 

On March 5, 2024, the Company entered into the A-1 Securities Purchase Agreement with CRG to exchange all 60,876 outstanding shares of Series A preferred stock for 10,000 shares of Series A-1 preferred stock. Consequently, there are no shares of Series A preferred stock outstanding as of June 30, 2024.

 

The exchange was accounted for as a capital transaction constituting an extinguishment of the Series A preferred stock through the issuance of Series A-1 preferred stock with no net impact to stockholders’ deficit. At the time of the exchange, the Series A preferred stock had approximately $1.9 million excess fair value in comparison to the Series A-1. The difference in fair value is treated as an adjustment to net loss applicable to common stockholders for the purpose of calculating earnings per share, see Note 2 for details.

 

Series A-1 Convertible Preferred Stock

 

Each share of Series A-1 preferred stock has a stated value of $1,000 per share and is convertible into 273 shares of the Company’s common stock at $3.664 per share. The Series A-1 preferred stock is convertible into a total of 2,729,257 shares of common stock subject to certain limitations contained in the A-1 Securities Purchase Agreement. Shares of Series A-1 preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 9.99% of the Company’s outstanding voting power and in no case will the beneficial ownership limitation exceed 19.99% of the Company’s outstanding voting power, unless approved by the Company's stockholders in accordance with Nasdaq Listing Rule 5635(b).The Series A-1 preferred stock has no liquidation preference, no voting rights and ranks junior to shares of the Company’s Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock and Series H Preferred Stock in terms of repayment and certain other rights. The Series A-1 preferred stock is immediately convertible at the option of the holder, has no stated maturity, and does not pay regularly stated dividends or interest. As of June 30, 2024, 10,000 shares of Series A-1 preferred stock were outstanding.

 

Series B Convertible Preferred Stock

 

The Series B preferred stock has a liquidation preference of $0.001 per share, full ratchet price based anti-dilution protection, has no voting rights and is subject to certain ownership limitations. The Series B preferred stock is immediately convertible at the option of the holder, has no stated maturity, and does not pay regularly stated dividends or interest. As of June 30, 2024 and December 31, 2023, 85 shares of Series B preferred stock remained outstanding, which are currently convertible into shares of the Company’s common stock at $1.66 per share.

 

Series E Convertible Preferred Stock

 

Each share of Series E preferred stock has a stated value of $1,000 per share and is convertible into 93 shares of the Company’s common stock at a conversion price of $10.725 per share. The Series E preferred stock is convertible into a total of 178,560 shares of common stock subject to certain limitations contained in the Series E Purchase Agreement. Shares of Series E preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 9.99% of the Company’s outstanding voting power and in no case will the beneficial ownership limitation exceed 19.99% of the Company’s outstanding voting power, unless approved by the Company's stockholders in accordance with Nasdaq Listing Rule 5635(b). The holders of Series E preferred stock are entitled to receive annual accruing dividends at a rate of 8%, payable in additional shares of Series E preferred stock or cash, at the Company’s option. The shares of Series E preferred stock have full voting rights, on an as-converted basis, subject to certain limitations. The Series E preferred stock rank junior to Series H preferred stock and are senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights. The Series E preferred stock accrued additional dividends of less than $0.1 million and $0.1 million during the three and six months ended June 30, 2024, respectively, which were recognized as a reduction to additional paid-in capital in the statement of stockholders’ equity (deficit). As of June 30, 2024 and December 31, 2023, 1,920 shares of Series E preferred stock were outstanding.

 

Series F Convertible Preferred Stock

 

On March 4, 2024, in connection with the Purchase Agreement (see Note 1), the Company issued 7,224 shares of Series F Preferred Stock, at a purchase price per share of $1,000. Each share of Series F preferred stock is convertible into 273 shares of the Company’s common stock at a conversion price of $3.664 per share. The Series F preferred stock is convertible into a total of 1,972,152 shares of common stock subject to certain limitations contained in the Purchase Agreement. Shares of Series F preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 49.9% of the Company’s outstanding voting power. The holders of Series F preferred stock are entitled to receive annual accruing dividends at a rate of 5% until the third anniversary of their issuance and 8% thereafter. The dividends are payable in additional shares of Series F preferred stock or cash, at the Company’s option through the third anniversary of their issuance, and at the holder’s option thereafter. The shares of Series F preferred stock have full voting rights, on an as-converted basis, subject to certain limitations. The Series F preferred stock ranks junior to Series H preferred stock, pari passu with Series E preferred stock and are senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights. The Series F preferred stock accrued additional dividends of less than $0.1 million and $0.1 million during the three and six months ended June 30, 2024, respectively, which were recognized as a reduction to additional paid-in capital in the statement of stockholders’ deficit. As of June 30, 2024, 7,224 shares of Series F preferred stock were outstanding.

 

Series H Convertible Preferred Stock

 

On May 16, 2024, in connection with the Series H Purchase Agreement (see Note 4), the Company issued 11,000 shares of Series H Preferred Stock, at a purchase price per share of $1,000. Each share of Series H preferred stock is convertible into 259 shares of the Company’s common stock at a conversion price of $3.86 per share. The Series H preferred stock is convertible into a total of 2,849,000 shares of common stock subject to certain limitations contained in the Purchase Agreement. Shares of Series H preferred stock cannot be converted into common stock to the extent the applicable holder would beneficially own in excess of 9.99% of the Company’s outstanding voting power and in no case will such beneficial ownership limitation exceed 19.99%, unless approved by the Company's stockholders in accordance with Nasdaq Listing Rule 5635(b). The holders of Series H preferred stock are entitled to receive annual accruing dividends at a rate of 8%, payable in additional shares of Series E preferred stock or cash, at the Company’s option. The shares of Series H preferred stock have full voting rights, on an as-converted basis, subject to certain limitations. The Series H preferred stock rank senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights. The Series H preferred stock accrued additional dividends of $0.1 million during the three and six months ended June 30, 2024, which were recognized as a reduction to additional paid-in capital in the statement of stockholders’ deficit. As of June 30, 2024, 11,000 shares of Series H preferred stock were outstanding.

 

Common Stock

 

As of June 30, 2024, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 100,000,000 shares of common stock with $0.001 par value per share, of which 1,916,434 shares were issued and outstanding.

 

March 2024 Offering

 

On March 5, 2024, in connection with the Purchase Agreement (see Note 1), the Company issued 75,327 shares of common stock at a purchase price per share of $3.664.

 

June 2024 Offering

 

On June 17, 2024, in connection with the June 2024 Offering (see Note 1), the Company issued 330,000 shares of common stock at a purchase price per share of $1.66.

 

Common Stock Warrants

 

As of June 30, 2024, the Company had outstanding warrants to purchase common stock as follows:

 

   

Total

Outstanding

and

Exercisable

    

Underlying

Shares of

Common

Stock

    

Exercise

Price per

Share

    

Expiration Date

Series 1 Warrants issued in the February 2018 Series B financing

     8,979,000       2,993     $ 6,000.00    

February 2025

Series 2 Warrants issued in the February 2018 Series B financing

     8,709,500       2,903     $ 6,000.00    

February 2025

Placement agent warrants issued in the January 2022 financing

     1,330,000       4,433     $ 150.00    

January 2027

Warrants issued in the January 2022 financing

     16,150,000       53,833     $ 144.00    

July 2027

Series A Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

February 2028

Series B Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

August 2024

Placement agent Preferred Investment Options issued in the August 2022 financing

     171,233       11,416     $ 32.85    

August 2027

Advisor Warrants issued in the March 2024 financing

     40,938       40,938     $ 3.664    

March 2029

Pre-Funded Warrants issued in the June 2024 financing

     3,284,457       3,284,457     $ 0.001     n/a

Series A-1 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (1)

Series A-2 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (2)

Series A-3 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (3)

Placement Agent Warrants issued in the June 2024 financing

     216,867       216,867     $ 2.075    

June 2029

Total as of June 30, 2024

     55,433,132       14,841,729              

 

(1)

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.

(2)

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.

(3)

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 IDE application.

 

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.

 

As of December 31, 2023, the Company had outstanding warrants to purchase common stock as follows:

 

   

Total

Outstanding

and

Exercisable

    

Underlying

Shares of

Common

Stock

    

Exercise

Price per

Share

    

Expiration Date

Series 1 Warrants issued in the February 2018 Series B financing

     8,979,000       2,993     $ 6,000.00    

February 2025

Series 2 Warrants issued in the February 2018 Series B financing

     8,709,500       2,903     $ 6,000.00    

February 2025

Placement agent warrants issued in the January 2022 financing

     1,330,000       4,433     $ 150.00    

January 2027

Warrants issued in the January 2022 financing

     16,150,000       53,833     $ 144.00    

July 2027

Series A Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

February 2028

Series B Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

August 2024

Placement agent Preferred Investment Options issued in the August 2022 financing

     171,233       11,416     $ 32.85    

August 2027

Total as of December 31, 2023

     41,047,499       456,096              

 

March 2024 Private Placement

 

On March 7, 2024, in connection with the closing of the Strategic Partnership and Private Placement, the Company issued warrants to financial advisors to purchase up to an aggregate of 40,938 shares of the Company’s common stock (the “Advisor Warrants”) at an exercise price of $3.664 per share which were immediately exercisable. The Advisor Warrants will expire five years following the time they become exercisable, or March 5, 2029.

 

The exercise price and the number of shares of common stock issuable upon exercise of each Advisor Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. In addition, in certain circumstances, upon a fundamental transaction, a holder of Advisor Warrants will be entitled to receive, upon exercise, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Advisor Warrants prior to the fundamental transaction.

 

The Advisor Warrants can be exercised at the option of the holders at any time after they become exercisable provided that shares cannot be exercised into common stock if the applicable holder would beneficially own in excess of 4.99% of the Company’s outstanding common stock immediately after giving effect to the exercise. A holder of the Advisor Warrants may, upon notice to the Company, increase or decrease such beneficial ownership limitation, but not in excess of 9.99%.

 

June 2024 Offering

 

On June 13, 2024, the Company entered into a securities purchase agreement with two institutional investors resulting in the issuance of among other things, Pre-Funded Warrants in lieu of common stock to purchase up to an aggregate of 3,284,457 shares of common stock of which 3,017,204 remain outstanding. The Pre-Funded Warrants have an exercise price of $0.001 per share, are immediately exercisable, and have no expiration date.

 

In addition, the Company issued to the investors in the Offering (i) Series A-1 Warrants to purchase up to an aggregate of 3,614,457 shares of common stock, (ii) Series A-2 Warrants to purchase up to an aggregate of 3,614,457 shares of common stock, and (iii) Series A-3 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.

 

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 IDE application.

 

The Company, in connection with the Offering, agreed to issue to the Placement Agent or its designees Placement Agent Warrants to purchase up to an aggregate of 216,867 shares of common stock. 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.

 

The exercise price and the number of shares of common stock issuable upon exercise of each Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants are subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. In addition, in certain circumstances, upon a fundamental transaction, a holder of Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants will be entitled to receive, upon exercise, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants immediately prior to the fundamental transaction.

 

The Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants can be exercised at the option of the holders at any time after they become exercisable provided that shares of the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants cannot be exercised into common stock if the applicable holder would beneficially own in excess of 4.99% (or, upon election by such holder prior to the issuance of any shares of Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants, 9.99%) of the Company’s outstanding common stock immediately after giving effect to the exercise. A holder of the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants may, upon notice to the Company, increase or decrease such beneficial ownership limitation, but not in excess of 9.99%.

 

In the event of a fundamental transaction in which the holders of our voting securities immediately prior to such fundamental transaction will not, following such fundamental transaction, directly or indirectly own more than 50% of the voting securities of the surviving entity or successor entity, and in which the Company is not the successor entity or does not continue as a reporting issuer under the Exchange Act, then, at the request of the holder, the Company or the successor entity shall purchase the unexercised portion of the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants from the holder by paying to the holder an amount, in cash, equal to the fair value of the remaining unexercised portion of the Pre-Funded Warrants, Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants, and Placement Agent Warrants on the date of such fundamental transaction, subject to certain limitations in the event of a fundamental transaction not within our control.
v3.24.2.u1
Note 8 - Stock-based Compensation
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

8. Stock-Based Compensation

 

Stock Plans

 

In January 2015, the Board of Directors adopted and the Company’s stockholders approved the 2015 Equity Incentive Plan (“2015 Plan”). On December 22, 2023, the Company’s stockholders approved an additional 300,000 shares of common stock for issuance under the 2015 Plan, which was later registered in an S-8 registration statement filed on January 10, 2024. The 2015 Plan provides for the grant of incentive stock options (“ISOs”) to employees and for the grant of non-statutory stock options (“NSOs”), restricted stock, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights, performance units and performance shares to employees, directors and consultants. As of June 30, 2024, 71,442 shares were available for grant under the 2015 Plan.

 

The Company’s RSUs and RSAs generally vest annually over two years in equal increments. RSAs and RSUs largely contain the same contractual terms except RSAs have the ability to vote along with common holders as an RSA is considered an outstanding security at the time of grant, subject to certain vesting and other restrictions. The Company measures the fair value of RSAs using the closing stock price of a share of the Company’s common stock on the grant date and is recognized as expense on a straight-line basis over the vesting period of the award. A summary of all RSA activity is presented below:

 

   

Number of

Shares

    

Weighted

Average

Grant Date

Fair Value

    

Weighted

Average

Remaining

Contractual

Term

  

Awards outstanding at December 31, 2023

     90,190     $ 18.45       1.04  

Awarded

     394,105     $ 2.75       —  

Released

     (368,503

)

   $ 4.89       —  

Forfeited

     (3,333

)

   $ 18.45       —  

Awards outstanding at June 30, 2024

     112,459     $ 7.85       0.55  

 

As of June 30, 2024, there was $0.5 million of remaining unamortized stock-based compensation expense associated with RSAs, which will be expensed over a weighted average remaining service period of approximately 0.6 years. The outstanding non-vested and expected to vest RSAs at June 30, 2024 have an aggregate fair value of approximately $0.2 million. The Company used the closing market price of $1.86 per share at June 28, 2024, to determine the aggregate fair value for the RSAs outstanding at that date. For the six months ended June 30, 2024 and 2023, the fair value of RSAs vested was approximately $1.0 million and less than $0.1 million, respectively. For the three months ended June 30, 2024 and 2023, stock-based compensation expense recognized associated with the vesting of RSAs was $207,000 and $239,000, respectively. For the six months ended June 30, 2024 and 2023, stock-based compensation expense recognized associated with the vesting of RSAs was $1.3 million and $0.5 million, respectively.

 

Total noncash stock-based compensation expense relating to the Company’s RSAs recognized, before taxes, during the three and six months ended June 30, 2024 and 2023, is as follows (in thousands):

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Cost of revenues

   $ 35     $ 35     $ 193     $ 63  

Research and development expenses

     41       51       355       134  

Selling, general and administrative expenses

     131       153       755       287  
    $ 207     $ 239     $ 1,303     $ 484  

  
v3.24.2.u1
Note - 9 Restructuring Charges and Expenses
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Restructuring and Related Activities Disclosure [Text Block]

9. Restructuring Charges and Expenses

 

In June 2024, the Company undertook an organizational realignment and cost reduction plan which included a reduction in force, lowering its total headcount by approximately 24%, or 17 employees, compared to March 31, 2024. Accordingly, the Company recorded a restructuring charge of approximately $66,000, relating to severance related costs at that time. As of June 30, 2024, 13 out of a total of 17 employees’ severance related costs related to the June 2024 termination had been incurred and paid. As of June 30, 2024, $4,000 of the total severance costs was included within accrued compensation on the condensed balance sheet.

 

In July 2024, the Company incurred and paid an additional $23,000, relating to severance costs for the remaining four affected employees.

  
v3.24.2.u1
Insider Trading Arrangements
 6 Months Ended
Jun. 30, 2024
Insider Trading Arr Line Items  
Material Terms of Trading Arrangement [Text Block]

ITEM 5.

OTHER INFORMATION

 

10b5-1 Trading Plans

 

During the second quarter of 2024, none of our directors or executive officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K).

 

Officer Compensation Adjustment

 

Effective July 1, 2024, Nabeel Subainati, our Vice President of Finance who serves as the Principal Financial Officer and Principal Accounting Officer received an increase to his base salary to $280,800, an increase of $10,800 or 4%. Concurrently, Mr. Subainati received an increase to his discretionary bonus to 45%, an increase of 5%. The discretionary bonus is subject to the achievement of certain company-wide goals established by our board of directors and payable semi-annually.

  
Rule 10b5-1 Arrangement Adopted [Flag] false
Non-Rule 10b5-1 Arrangement Adopted [Flag] false
Rule 10b5-1 Arrangement Terminated [Flag] false
Non-Rule 10b5-1 Arrangement Terminated [Flag] false
v3.24.2.u1
Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

 

The accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. The accompanying unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company’s financial information. The results for the three and six months ended June 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, or for any other interim period or for any future year. The December 31, 2023 condensed balance sheet data has been derived from audited financial statements. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements. These unaudited condensed financial statements and notes should be read in conjunction with the financial statements included in the Company’s Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 20, 2024. The Company’s significant accounting policies are more fully described in Note 2 of the Notes to Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

 

On September 8, 2023, the Company’s Board of Directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1-for-15 reverse stock split of the Company’s issued and outstanding common stock. The reverse stock split became effective on September 12, 2023.
Use of Estimates, Policy [Policy Text Block]

Use of Estimates

 

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.
Concentration of Credit Risk and Other Risks and Uncertainties [Policy Text Block]

Concentration of Credit Risk, and Other Risks and Uncertainties

 

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable to the extent of the amounts recorded on the balance sheets.

 

The Company’s policy is to invest in cash and cash equivalents, consisting of money market funds. These financial instruments are held in Company accounts at one financial institution, First Citizens Bank, which acquired the Company’s prior banking partner, Silicon Valley Bank, in March 2023. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at June 30, 2024 and December 31, 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, a division of First Citizens Bank, future disruptions of financial institutions where it banks or have 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, the Company’s financial position and ability to operate its business will be adversely affected.

 

The Company’s accounts receivable are due from a variety of healthcare organizations in the United States and select international markets. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at June 30, 2024 and December 31, 2023. At June 30, 2024, there was one customer that represented 20% of the Company’s accounts receivable. At December 31, 2023, there was one customer that represented 24% of the Company’s accounts receivable. There was one customer that represented 16% of revenues for each of the three and six months ended June 30, 2024. For the three and six months ended June 30, 2023, there was one customer that represented 17% and 16% of revenues, respectively. Disruption of the Company’s sales orders or a deterioration of financial condition of its customers would have a negative impact on the Company’s financial position and results of operations.
Standard Product Warranty, Policy [Policy Text Block]

Product Warranty Costs

 

The Company typically offers a one-year warranty on its products commencing upon the transfer of title and risk of loss to the customer. The Company accrues for the estimated cost of product warranties upon invoicing its customers, based on historical results. Warranty costs are reflected in the statement of operations and comprehensive loss as a cost of revenues. The warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from these estimates, revisions to the estimated warranty liability would be required. Periodically the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts, as necessary. Warranty provisions and claims are summarized as follows (in thousands):

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Beginning balance

   $ 182     $ 114     $ 193     $ 109  

Warranty provision

     17       15       32       34  

Usage/Release

     (49

)

     (1

)

     (75 )     (15 )

Ending balance

   $ 150     $ 128     $ 150     $ 128  

 
Earnings Per Share, Policy [Policy Text Block]

Net Loss per Share Attributable to Common Stockholders

 

Basic net loss per share attributable to common stockholders is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Any common stock shares subject to repurchase are excluded from the calculations as the continued vesting of such shares is contingent upon the holders’ continued service to the Company. As of June 30, 2024 and 2023, there were no shares subject to repurchase. Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders as the inclusion of all potentially dilutive common shares would have been anti-dilutive.

 

Net loss per share applicable to common stockholders was determined as follows (in thousands, except per share data):

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net loss applicable to common stockholders

   $ (4,600

)

   $ (5,394

)

   $ (8,274 )   $ (11,256 )

Weighted average common stock outstanding, basic and diluted

     1,634       609       1,555       579  

Net loss per share attributable to common stockholders, basic and diluted

   $ (2.82

)

   $ (8.86

)

   $ (5.32 )   $ (19.44 )

 

The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted average shares outstanding because such securities have an anti-dilutive impact due to losses reported:

 

   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Common stock warrants equivalents

     2,546,276       468,132       1,330,718       496,615  

Common stock options

     15       15       15       15  

Convertible preferred stock

     24,669       60,961       37,594       60,961  

Unvested restricted stock units

     114,840       94,590       115,878       87,032  
      2,685,800       623,698       1,484,205       644,623  
Segment Reporting, Policy [Policy Text Block]

Segment and Geographical Information

 

The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Primarily all of the Company’s long-lived assets, which are comprised of property and equipment, are based in the United States. For each of the three months ended June 30, 2024 and 2023, 92% of the Company’s revenues were in the United States. For the six months ended June 30, 2024 and 2023, 93% and 92%, respectively, of the Company’s revenues were in the United States based on the shipping location of the external customer. The remaining revenues for the three and six months ended June 30, 2024 and 2023, were primarily derived in Germany.
Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

 

As of June 30, 2024 and December 31, 2023, cash equivalents were all categorized as Level 1 and consisted of money market funds. As of June 30, 2024 and December 31, 2023, there were no financial assets and liabilities categorized as Level 2 or 3. There were no transfers between fair value hierarchy levels during the three or six months ended June 30, 2024 and June 30, 2023.
New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

 

Recent accounting standards adopted

 

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which among other things, simplifies the accounting models for the allocation of proceeds attributable to the issuance of a convertible debt instrument.  As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (i) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (ii) a convertible debt instrument was issued at a substantial premium. The standard becomes effective for the Company, as a smaller reporting company as defined by the SEC, in the first quarter of 2024 and early adoption is permitted.  This new standard did not have a material impact on the Company’s financial statements.

 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures. This ASU requires that a public entity provide additional segment disclosures on an interim and annual basis. The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements unless impracticable. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. This new standard did not have a material impact on the Company’s financial statements.

 

Recent accounting standards not yet adopted

 

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU No. 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, if any, with further disaggregation required for significant individual jurisdictions. The Company will adopt ASU 2023-09 in its first quarter of 2025. ASU No. 2023-09 allows for adoption using either a prospective or retrospective transition method.
v3.24.2.u1
Note 2 - Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Product Warranty Liability [Table Text Block]
   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Beginning balance

   $ 182     $ 114     $ 193     $ 109  

Warranty provision

     17       15       32       34  

Usage/Release

     (49

)

     (1

)

     (75 )     (15 )

Ending balance

   $ 150     $ 128     $ 150     $ 128  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net loss applicable to common stockholders

   $ (4,600

)

   $ (5,394

)

   $ (8,274 )   $ (11,256 )

Weighted average common stock outstanding, basic and diluted

     1,634       609       1,555       579  

Net loss per share attributable to common stockholders, basic and diluted

   $ (2.82

)

   $ (8.86

)

   $ (5.32 )   $ (19.44 )
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Common stock warrants equivalents

     2,546,276       468,132       1,330,718       496,615  

Common stock options

     15       15       15       15  

Convertible preferred stock

     24,669       60,961       37,594       60,961  

Unvested restricted stock units

     114,840       94,590       115,878       87,032  
      2,685,800       623,698       1,484,205       644,623  
v3.24.2.u1
Note 3 - Inventories (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
   

June 30,

    

December 31,

  
   

2024

    

2023

  

Raw materials

   $ 2,102     $ 3,203  

Work-in-process

     90       25  

Finished products

     1,928       2,070  

Total inventories

   $ 4,120     $ 5,298  
v3.24.2.u1
Note 4 - Borrowings (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Debt [Table Text Block]

Year Ending December 31,

        

2024 (remaining six months of the year)

   $ —  

2025

     —  

2026

     —  

2027

     2,176  

2028

     4,060  

Total

     6,236  

Less: Amount of PIK additions and final facility fee to be incurred subsequent to June 30, 2024

     (2,050 )

Less: Amount representing debt issuance costs

     (142 )

Borrowings, current portion, as of June 30, 2024

   $ 4,044  
v3.24.2.u1
Note 5 - Leases (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Year Ending December 31,

        

2024 (remaining six months of the year)

   $ 623  

2025

     1,166  

Total

     1,789  

Less: Imputed interest

     (78

)

Leasehold liability as of June 30, 2024

   $ 1,711  
Right of Use Asset and Liabilities [Table Text Block]

Lease-Related Assets and Liabilities

   Financial Statement Line

Items

   June 30,

2024

     December 31,

2023

  

Right of use assets:

                    

Operating lease

  

Right of use asset

   $ 1,711     $ 1,102  

Total right of use assets

   $ 1,711     $ 1,102  

Lease liabilities:

                    

Operating lease

  

Leasehold liability, current portion

   $ 1,183     $ 1,102  
   

Leasehold liability, long-term portion

     528       —  

Total lease liabilities

   $ 1,711     $ 1,102  
v3.24.2.u1
Note 7 - Stockholders' Equity (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]
   

Total

Outstanding

and

Exercisable

    

Underlying

Shares of

Common

Stock

    

Exercise

Price per

Share

    

Expiration Date

Series 1 Warrants issued in the February 2018 Series B financing

     8,979,000       2,993     $ 6,000.00    

February 2025

Series 2 Warrants issued in the February 2018 Series B financing

     8,709,500       2,903     $ 6,000.00    

February 2025

Placement agent warrants issued in the January 2022 financing

     1,330,000       4,433     $ 150.00    

January 2027

Warrants issued in the January 2022 financing

     16,150,000       53,833     $ 144.00    

July 2027

Series A Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

February 2028

Series B Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

August 2024

Placement agent Preferred Investment Options issued in the August 2022 financing

     171,233       11,416     $ 32.85    

August 2027

Advisor Warrants issued in the March 2024 financing

     40,938       40,938     $ 3.664    

March 2029

Pre-Funded Warrants issued in the June 2024 financing

     3,284,457       3,284,457     $ 0.001     n/a

Series A-1 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (1)

Series A-2 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (2)

Series A-3 Warrants issued in the June 2024 financing

     3,614,457       3,614,457     $ 1.66    

See note (3)

Placement Agent Warrants issued in the June 2024 financing

     216,867       216,867     $ 2.075    

June 2029

Total as of June 30, 2024

     55,433,132       14,841,729              
   

Total

Outstanding

and

Exercisable

    

Underlying

Shares of

Common

Stock

    

Exercise

Price per

Share

    

Expiration Date

Series 1 Warrants issued in the February 2018 Series B financing

     8,979,000       2,993     $ 6,000.00    

February 2025

Series 2 Warrants issued in the February 2018 Series B financing

     8,709,500       2,903     $ 6,000.00    

February 2025

Placement agent warrants issued in the January 2022 financing

     1,330,000       4,433     $ 150.00    

January 2027

Warrants issued in the January 2022 financing

     16,150,000       53,833     $ 144.00    

July 2027

Series A Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

February 2028

Series B Preferred Investment Options issued in August 2022 financing

     2,853,883       190,259     $ 22.53    

August 2024

Placement agent Preferred Investment Options issued in the August 2022 financing

     171,233       11,416     $ 32.85    

August 2027

Total as of December 31, 2023

     41,047,499       456,096              
v3.24.2.u1
Note 8 - Stock-based Compensation (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Share-Based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]
   

Number of

Shares

    

Weighted

Average

Grant Date

Fair Value

    

Weighted

Average

Remaining

Contractual

Term

  

Awards outstanding at December 31, 2023

     90,190     $ 18.45       1.04  

Awarded

     394,105     $ 2.75       —  

Released

     (368,503

)

   $ 4.89       —  

Forfeited

     (3,333

)

   $ 18.45       —  

Awards outstanding at June 30, 2024

     112,459     $ 7.85       0.55  
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]
   

Three Months Ended

June 30,

    

Six Months Ended

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Cost of revenues

   $ 35     $ 35     $ 193     $ 63  

Research and development expenses

     41       51       355       134  

Selling, general and administrative expenses

     131       153       755       287  
    $ 207     $ 239     $ 1,303     $ 484  
v3.24.2.u1
Note 1 - Organization (Details Textual)
 1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 25 Months Ended
Jun. 17, 2024
USD ($)
$ / shares
shares
Jun. 13, 2024
USD ($)
$ / shares
shares
Mar. 05, 2024
USD ($)
shares
Mar. 04, 2024
USD ($)
$ / shares
shares
Jul. 31, 2024
shares
Jun. 30, 2024
USD ($)
$ / shares
shares
Jun. 30, 2023
USD ($)
shares
Jun. 30, 2024
USD ($)
$ / shares
shares
Jun. 30, 2023
USD ($)
shares
Dec. 31, 2023
USD ($)
$ / shares
shares
Jun. 30, 2024
USD ($)
$ / shares
shares
May 16, 2024
$ / shares
Dec. 23, 2023
shares
May 20, 2022
USD ($)
$ / shares
Retained Earnings (Accumulated Deficit) | $           $ (430,575,000)   $ (430,575,000)   $ (420,696,000) $ (430,575,000)      
Cash and Cash Equivalents, at Carrying Value | $           $ 8,806,000   $ 8,806,000   $ 5,275,000 $ 8,806,000      
Proceeds from Issuance or Sale of Equity | $       $ 7,500,000                    
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares       40,938   14,841,729   14,841,729     14,841,729   456,096  
Class of Warrant or Right, Outstanding (in shares) | shares           55,433,132   55,433,132     55,433,132   41,047,499  
Common Stock, Par or Stated Value Per Share (in dollars per share)           $ 0.001   $ 0.001   $ 0.001 $ 0.001      
Agreement to Purchase Common Stock, Maximum Amount | $       $ 15,000,000                    
Preferred Stock, Par or Stated Value Per Share           $ 0.001   $ 0.001   $ 0.001 0.001      
Milestone Payment, Additional Authorized Amount | $       7,500,000                    
Fair Value Adjustment of Warrants | $       500,000                    
Gain (Loss) On Convertible Preferred Stock Converted to Other Securities | $       $ 100,000   $ 0 $ 0 $ 1,908,000 $ 0          
Securities Purchase Agreement, Number of Shares to Convert | shares     10,000                      
Loan Agreement [Member]                            
Debt Instrument, Financing Fee Percentage       2.00%                    
Loan Agreement [Member]                            
Debt Instrument, Financing Fee Percentage       7.00%                    
Series F Preferred Stock [Member]                            
Stock Issued During Period, Shares, New Issues (in shares) | shares       7,224                    
Shares Issued, Price Per Share       $ 1,000                    
Preferred Stock, Par or Stated Value Per Share       0.001                    
Preferred Stock, Stated Value       $ 1,000                    
Preferred Stock, Convertible, Conversion Ratio       273                    
Series G Preferred Stock [Member]                            
Preferred Stock, Stated Value       $ 1,000                    
Preferred Stock, Par Value       $ 0.001                    
Series A-1 Preferred Stock [Member]                            
Preferred Stock, Stated Value           $ 1,000   $ 1,000     $ 1,000      
Preferred Stock, Convertible, Conversion Ratio           273   273     273      
Securities Purchase Agreement, Number of Shares to Convert | shares           10,000   10,000     10,000      
Preferred Stock, Convertible, Shares Issuable | shares     2,729,257     2,729,257   2,729,257     2,729,257      
Common Stock [Member]                            
Stock Issued During Period, Shares, New Issues (in shares) | shares       75,327   330,000 5,988 330,000 6,782          
Stock Issued During Period, Shares, Warrants Exercised (in shares) | shares             41,467   91,325          
Shares Issued, Price Per Share       $ 3.664   $ 3.664   $ 3.664     $ 3.664 $ 3.86    
License and Distribution Agreement [Member]                            
License Agreement, Term       20 years                    
Pre-funded Warrants [Member]                            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   $ 0.001                        
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   0.001                        
Pre-funded Warrants [Member] | Subsequent Event [Member]                            
Class of Warrant or Right, Exercised (in shares) | shares         267,253                  
Stock Issued During Period, Shares, Warrants Exercised (in shares) | shares         267,253                  
Class of Warrant or Right, Outstanding (in shares) | shares         3,017,204                  
Series A-1 Warrants [Member]                            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   1.66                        
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   1.66                        
Series A-2 Warrants [Member]                            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   1.66                        
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   1.66                        
Series A-3 Warrants [Member]                            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   1.66                        
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   1.66                        
Placement Agent Warrants [Member]                            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   2.075                        
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)   $ 2.075                        
Maximum [Member] | Pre-funded Warrants [Member]                            
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares   3,284,457                        
Maximum [Member] | Series A-1 Warrants [Member]                            
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares   3,614,457                        
Maximum [Member] | Series A-2 Warrants [Member]                            
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares   3,614,457                        
Maximum [Member] | Series A-3 Warrants [Member]                            
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares   3,614,457                        
Maximum [Member] | Placement Agent Warrants [Member]                            
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares   216,867                        
Securities Purchase Agreement [Member]                            
Proceeds from Issuance or Sale of Equity | $     $ 7,500,000                      
Public Offering [Member]                            
Proceeds from Issuance or Sale of Equity | $ $ 6,000,000                          
The Market Offering Agreement (the “ATM Agreement”) [Member]                            
Proceeds from Issuance or Sale of Equity | $                   $ 5,500,000        
Proceeds from Issuance of Common Stock, Net | $                     $ 6,500,000      
Stock Issued During Period, Shares, New Issues (in shares) | shares           0   0   607,241        
Stock Issued During Period, Average Price Per Share                   $ 9.01        
Payments of Stock Issuance Costs | $                   $ 164,000        
June 2024 Offering [Member]                            
Share Offering, Shares Issuable in Best Efforts (in shares) | shares   3,614,457                        
Share Offering, Purchase Price Per Share (in dollars per share)   $ 1.66                        
Proceeds from Issuance or Sale of Equity, Net | $   $ 5,200,000                        
Stock Issued During Period, Shares, New Issues (in shares) | shares 330,000 330,000                        
Shares Issued, Price Per Share $ 1.66                          
Common Stock in June, 2022 [Member]                            
Common Stock, Par or Stated Value Per Share (in dollars per share)                           $ 0.001
Share Offering Agreement, Aggregate Offering | $                           $ 7,000,000
Commission Percentage                           3.00%
v3.24.2.u1
Note 2 - Summary of Significant Accounting Policies (Details Textual)
shares in Thousands
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
shares
Jun. 30, 2023
shares
Dec. 31, 2023
Warranty Period (Year)     1 year    
Weighted Average Number of Shares, Common Stock Subject to Repurchase or Cancellation     0 0  
Number of Reportable Segments     1    
Customer Concentration Risk [Member] | Accounts Receivable [Member]          
Number of Major Customers     1   1
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member]          
Concentration Risk, Percentage     20.00%   24.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member]          
Number of Major Customers 1 1 1 1  
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | UNITED STATES          
Concentration Risk, Percentage 92.00% 92.00% 93.00% 92.00%  
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member]          
Concentration Risk, Percentage 16.00% 17.00% 16.00% 16.00%  
v3.24.2.u1
Note 2 - Summary of Significant Accounting Policies - Product Warranty (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Beginning balance $ 182 $ 114 $ 193 $ 109
Warranty provision 17 15 32 34
Usage/Release (49) (1) (75) (15)
Ending balance $ 150 $ 128 $ 150 $ 128
v3.24.2.u1
Note 2 - Summary of Significant Accounting Policies - Net Loss Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Net loss applicable to common stockholders $ (4,600) $ (5,394) $ (8,274) $ (11,256)
Weighted average common stock outstanding, basic and diluted (in shares) 1,634 609 1,555 579
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) $ (2.82) $ (8.86) $ (5.32) $ (19.44)
v3.24.2.u1
Note 2 - Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Potentially dilutive securities (in shares) 2,685,800 623,698 1,484,205 644,623
Common Stock Warrants [Member]        
Potentially dilutive securities (in shares) 2,546,276 468,132 1,330,718 496,615
Common Stock Options [ member]        
Potentially dilutive securities (in shares) 15 15 15 15
Preferred Stock [Member]        
Potentially dilutive securities (in shares) 24,669 60,961 37,594 60,961
Restricted Stock Units (RSUs) [Member]        
Potentially dilutive securities (in shares) 114,840 94,590 115,878 87,032
v3.24.2.u1
Note 3 - Inventories - Schedule of Inventory (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Raw materials $ 2,102 $ 3,203
Work-in-process 90 25
Finished products 1,928 2,070
Total inventories $ 4,120 $ 5,298
v3.24.2.u1
Note 4 - Borrowings (Details Textual)
 3 Months Ended 6 Months Ended 9 Months Ended
May 16, 2024
USD ($)
$ / shares
shares
Aug. 02, 2023
USD ($)
$ / shares
shares
Aug. 10, 2022
USD ($)
Feb. 14, 2018
USD ($)
Jun. 30, 2024
USD ($)
$ / shares
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
$ / shares
Jun. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
$ / shares
Aug. 01, 2024
USD ($)
Jul. 31, 2024
USD ($)
Jun. 05, 2024
USD ($)
Apr. 02, 2024
USD ($)
Mar. 04, 2024
Jan. 26, 2024
USD ($)
Jun. 15, 2016
USD ($)
Sep. 22, 2015
USD ($)
Preferred Stock, Par or Stated Value Per Share | $ / shares         $ 0.001   $ 0.001   $ 0.001                
Series E Preferred Stock [Member]                                  
Preferred Stock, Par or Stated Value Per Share | $ / shares $ 1,000 $ 1,000                              
Preferred Stock, Convertible, Conversion Ratio 93 93                              
Preferred Stock, Convertible, Conversion Price (in dollars per share) | $ / shares $ 10.725 $ 10.725                              
Preferred Stock, Convertible, Beneficial Ownership Percentage 9.99% 9.99%                              
Series H Preferred Stock [Member]                                  
Preferred Stock, Par or Stated Value Per Share | $ / shares $ 1,000                                
Preferred Stock, Convertible, Conversion Ratio 259                                
Preferred Stock, Convertible, Conversion Price (in dollars per share) | $ / shares $ 3.86                                
Preferred Stock, Convertible, Beneficial Ownership Percentage 9.99%       9.99%   9.99%                    
Conversion of CRG Loan Into Series E Convertible Preferred Stock [Member]                                  
Debt Conversion, Original Debt, Amount $ 11,000,000 $ 1,920,000                              
Debt Conversion, Converted Instrument, Shares Issued (in shares) | shares 11,000 1,920                              
Loan Agreement [Member]                                  
Debt Instrument, Financing Fee Percentage                           7.00%      
CRG [Member] | Loan Agreement [Member]                                  
Debt Agreement, Maximum Borrowing Capacity                                 $ 50,000,000
Debt Instrument, Covenant Compliance, Minimum Liquidity Requirement       $ 3,500,000                 $ 3,500,000        
Debt Instrument, Interest Rate, Stated Percentage     12.50%                            
Debt Instrument, Periodic Payment     $ 500,000                            
Long-Term Debt, Maturity, Year Four     1,800,000                            
Long-Term Debt, Maturity, Year Five     $ 1,800,000                            
Debt Instrument, Redemption Initial Prepayment Premium Percentage     5.00%                            
Debt Instrument, Redemption Annual Decline in Prepayment Premium Percentage     1.00%                            
Debt Instrument, Financing Fee Percentage     1.50%                            
Debt Instrument, Final Facility Fee Percentage     15.00%                            
Debt Instrument, Covenant Compliance Cash and Certain Cash Equivalents Minimum     $ 3,500,000                            
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net         $ 142,000   $ 142,000   $ 166,000               1,300,000
Amortization of Debt Discount (Premium)         8,000   24,000 $ 41,000 $ 20,000                
Interest Expense, Debt         $ 286,000 $ 531,000 $ 700,000 $ 1,000,000                  
CRG [Member] | Loan Agreement [Member] | Forecast [Member]                                  
Debt Instrument, Covenant Compliance, Minimum Liquidity Requirement                   $ 3,500,000              
CRG [Member] | Loan Agreement [Member] | Series A Preferred Stock Purchase Agreement with CRG [Member]                                  
Debt Conversion, Original Debt, Amount       38,000,000                          
Debt Conversion, Fees and Prepayment Premium Amount       $ 3,800,000                          
CRG [Member] | Loan Agreement [Member] | First Tranche, Borrowed on September 22, 2015 [Member]                                  
Debt Instrument, Face Amount                                 $ 30,000,000
CRG [Member] | Loan Agreement [Member] | Second Tranche, Borrowed on June 15, 2016 [Member]                                  
Debt Instrument, Face Amount                               $ 10,000,000  
CRG [Member] | Loan Agreement Amendment No 8 [Member]                                  
Debt Instrument, Covenant Compliance, Minimum Liquidity Requirement                             $ 1,000,000    
CRG [Member] | Loan Agreement Amendment No 10 [Member]                                  
Debt Instrument, Covenant Compliance, Minimum Liquidity Requirement                       $ 1,500,000          
CRG [Member] | Loan Agreement Amendment No. 7 [Member]                                  
Debt Instrument, Covenant Compliance, Minimum Liquidity Requirement                     $ 1,500,000            
v3.24.2.u1
Note 4 - Borrowings - Schedule of Debt (Details) - CRG [Member] - Loan Agreement [Member]
$ in Thousands
Jun. 30, 2024
USD ($)
2024 (remaining six months of the year) $ 0
2025 0
2026 0
2027 2,176
2028 4,060
Total 6,236
Less: Amount of PIK additions and final facility fee to be incurred subsequent to June 30, 2024 (2,050)
Less: Amount representing debt issuance costs (142)
Borrowings, current portion, as of June 30, 2024 $ 4,044
v3.24.2.u1
Note 5 - Leases (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Mar. 06, 2024
Dec. 31, 2023
Dec. 31, 2019
Lessee, Operating Lease, Liability, to be Paid $ 1,789,000   $ 1,789,000   $ 1,300,000   $ 7,100,000
Operating Lease, Weighted Average Remaining Lease Term 1 year 4 months 24 days   1 year 4 months 24 days        
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability     $ 2,200,000        
Lessee, Operating Lease, Discount Rate 6.50%   6.50%        
Operating Lease, Expense, Excluding Maintenance Fee and Other Expense, Monthly     $ 105,000        
Operating Lease, Expense $ 315,000 $ 314,000 631,000 $ 628,000      
Operating Lease, Cost 83,000 103,000 173,000 168,000      
Operating Lease, Right-of-Use Asset, Periodic Reduction 285,000 $ 284,000 577,000 $ 564,000      
Prepaid Rent $ 3,000   $ 3,000     $ 13,000  
v3.24.2.u1
Note 5 - Leases - Future Operating Lease Payments (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Mar. 06, 2024
Dec. 31, 2023
Dec. 31, 2019
2024 (remaining six month of the year) $ 623      
2025 1,166      
Total 1,789 $ 1,300   $ 7,100
Less: Imputed interest (78)      
Leasehold liability as of June 30, 2024 $ 1,711   $ 1,102  
v3.24.2.u1
Note 5 - Leases - ROU Assets and Lease Liabilities (Details) - USD ($)
$ in Thousands
Jun. 30, 2024
Dec. 31, 2023
Operating lease $ 1,711 $ 1,102
Total right of use assets 1,711 1,102
Leasehold liability, current portion 1,183 1,102
Leasehold liability, long-term portion 528 0
Total lease liabilities $ 1,711 $ 1,102
v3.24.2.u1
Note 6 - Commitments and Contingencies (Details Textual)
$ in Millions
Jun. 30, 2024
USD ($)
Purchase Commitment [Member]  
Purchase Obligation $ 0.7
v3.24.2.u1
Note 7 - Stockholders' Equity (Details Textual)
$ / shares in Units, $ in Millions
 1 Months Ended 3 Months Ended 6 Months Ended
Jun. 17, 2024
$ / shares
shares
Jun. 13, 2024
$ / shares
shares
May 16, 2024
$ / shares
shares
Mar. 05, 2024
$ / shares
shares
Mar. 04, 2024
$ / shares
shares
Jul. 31, 2024
shares
Jun. 30, 2024
USD ($)
$ / shares
shares
Jun. 30, 2023
shares
Jun. 30, 2024
USD ($)
$ / shares
shares
Jun. 30, 2023
shares
Mar. 07, 2024
$ / shares
shares
Dec. 31, 2023
$ / shares
shares
Dec. 23, 2023
shares
Aug. 02, 2023
$ / shares
Feb. 16, 2018
$ / shares
Preferred Stock, Shares Authorized (in shares)             5,000,000   5,000,000     5,000,000      
Preferred Stock, Par or Stated Value Per Share | $ / shares             $ 0.001   $ 0.001     $ 0.001      
Preferred Stock, Shares Outstanding (in shares)             30,229   30,229     62,881      
Preferred Stock, Shares Issued             30,229   30,229     62,881      
Securities Purchase Agreement, Number of Shares to Convert       10,000                      
Common Stock, Shares Authorized             100,000,000   100,000,000     100,000,000      
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares             $ 0.001   $ 0.001     $ 0.001      
Common Stock, Shares, Outstanding, Ending Balance (in shares)             1,916,434   1,916,434     1,279,928      
Common Stock, Shares, Issued (in shares)             1,916,434   1,916,434     1,279,928      
Class of Warrant or Right, Outstanding (in shares)             55,433,132   55,433,132       41,047,499    
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)         40,938   14,841,729   14,841,729       456,096    
Pre-funded Warrants [Member]                              
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares   $ 0.001                          
Pre-funded Warrants [Member] | Subsequent Event [Member]                              
Class of Warrant or Right, Exercised (in shares)           267,253                  
Stock Issued During Period, Shares, Warrants Exercised (in shares)           267,253                  
Class of Warrant or Right, Outstanding (in shares)           3,017,204                  
Common Warrants [Member]                              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)                     40,938        
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares                     $ 3.664        
Warrants and Rights Outstanding, Term                     5 years        
Series A-1 Warrants [Member]                              
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares   1.66                          
Series A-2 Warrants [Member]                              
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares   1.66                          
Series A-3 Warrants [Member]                              
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares   1.66                          
Placement Agent Warrants [Member]                              
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares   $ 2.075                          
March 2024 Offering [Member]                              
Shares Issued, Price Per Share | $ / shares       $ 3.664                      
Stock Issued During Period, Shares, New Issues (in shares)       75,327                      
June 2024 Offering [Member]                              
Shares Issued, Price Per Share | $ / shares $ 1.66                            
Stock Issued During Period, Shares, New Issues (in shares) 330,000 330,000                          
June 2024 Offering [Member] | Pre-Funded, Series A-1, Series A-2, Series A-3 and Placement Agent Warrants [Member]                              
Conversion of Warrants Allowed Maximum Ownership of Common Stock Percentage   4.99%                          
Conversion of Warrants Allowed Maximum Ownership of Common Stock Percentage upon Election   9.99%                          
Maximum [Member] | Pre-funded Warrants [Member]                              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)   3,284,457                          
Maximum [Member] | Series A-1 Warrants [Member]                              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)   3,614,457                          
Maximum [Member] | Series A-2 Warrants [Member]                              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)   3,614,457                          
Maximum [Member] | Series A-3 Warrants [Member]                              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)   3,614,457                          
Maximum [Member] | Placement Agent Warrants [Member]                              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)   216,867                          
Common Stock [Member]                              
Shares Issued, Price Per Share | $ / shares     $ 3.86   $ 3.664   $ 3.664   $ 3.664            
Stock Issued During Period, Shares, New Issues (in shares)         75,327   330,000 5,988 330,000 6,782          
Stock Issued During Period, Shares, Warrants Exercised (in shares)               41,467   91,325          
Series A Preferred Stock [Member]                              
Preferred Stock, Shares Outstanding (in shares)       60,876                      
Series A-1 Preferred Stock [Member]                              
Preferred Stock, Shares Authorized (in shares)       10,000                      
Preferred Stock, Excess Fair Value | $             $ 1.9   $ 1.9            
Preferred Stock, Stated Value | $ / shares             $ 1,000   $ 1,000            
Preferred Stock, Convertible, Conversion Ratio             273   273            
Preferred Stock, Convertible, Shares Issuable       2,729,257     2,729,257   2,729,257            
Securities Purchase Agreement, Number of Shares to Convert             10,000   10,000            
Series E Preferred Stock [Member]                              
Preferred Stock, Par or Stated Value Per Share | $ / shares     $ 1,000                     $ 1,000  
Preferred Stock, Shares Outstanding (in shares)             1,920   1,920            
Preferred Stock, Convertible, Conversion Ratio     93                     93  
Preferred Stock, Convertible, Shares Issuable     178,560                        
Preferred Stock, Convertible, Beneficial Ownership Percentage     9.99%                     9.99%  
Preferred Stock, Convertible, Conversion Price (in dollars per share) | $ / shares     $ 10.725                     $ 10.725  
Preferred Stock, Dividend Rate, Percentage     8.00%                        
Dividends, Preferred Stock | $             $ 0.1   $ 0.1            
Series B Preferred Stock [Member]                              
Preferred Stock, Par or Stated Value Per Share | $ / shares                             $ 0.001
Preferred Stock, Shares Outstanding (in shares)             85   85     85      
Preferred Stock, Convertible, Conversion Price (in dollars per share) | $ / shares             $ 1.66   $ 1.66     $ 1.66      
Series F Preferred Stock [Member]                              
Preferred Stock, Par or Stated Value Per Share | $ / shares         $ 0.001                    
Preferred Stock, Shares Outstanding (in shares)             7,224   7,224            
Preferred Stock, Stated Value | $ / shares         $ 1,000                    
Preferred Stock, Convertible, Conversion Ratio         273                    
Shares Issued, Price Per Share | $ / shares         $ 1,000                    
Preferred Stock, Convertible, Beneficial Ownership Percentage         49.90%                    
Preferred Stock, Dividend Rate, Percentage         5.00%                    
Dividends, Preferred Stock | $             $ 0.1   $ 0.1            
Stock Issued During Period, Shares, New Issues (in shares)         7,224                    
Preferred Stock Dividend Rate, Percentage, Thereafter Third Anniversary Of Issuance         8.00%                    
Series F Convertible Preferred Stock [Member]                              
Preferred Stock, Convertible, Shares Issuable         1,972,152                    
Series H Preferred Stock [Member]                              
Preferred Stock, Par or Stated Value Per Share | $ / shares     $ 1,000                        
Preferred Stock, Shares Outstanding (in shares)             11,000   11,000            
Preferred Stock, Convertible, Conversion Ratio     259                        
Shares Issued, Price Per Share | $ / shares     $ 1,000                        
Preferred Stock, Convertible, Shares Issuable     2,849,000                        
Preferred Stock, Convertible, Beneficial Ownership Percentage     9.99%       9.99%   9.99%            
Preferred Stock, Convertible, Conversion Price (in dollars per share) | $ / shares     $ 3.86                        
Preferred Stock, Dividend Rate, Percentage     8.00%                        
Dividends, Preferred Stock | $             $ 0.1   $ 0.1            
Stock Issued During Period, Shares, New Issues (in shares)     11,000                        
Series H Preferred Stock [Member] | Maximum [Member]                              
Preferred Stock, Convertible, Beneficial Ownership Percentage     1999.00%                        
Series D Preferred Stock [Member] | January 2022 offering [Member] | Common Warrants [Member]                              
Conversion of Warrants Allowed Maximum Ownership of Common Stock Percentage                     4.99%        
Conversion of Warrants Allowed Maximum Ownership of Common Stock Percentage upon Election                     9.99%        
v3.24.2.u1
Note - 7 Stockholder's Equity - Outstanding Warrants (Details) - $ / shares
Jun. 30, 2024
Mar. 04, 2024
Dec. 23, 2023
Total Outstanding and Exercisable (in shares) 55,433,132   41,047,499
Underlying Shares of Common Stock (in shares) 14,841,729 40,938 456,096
Series 1 February 2018 Warrants [Member]      
Total Outstanding and Exercisable (in shares) 8,979,000   8,979,000
Underlying Shares of Common Stock (in shares) 2,993   2,993
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 6,000   $ 6,000
Series 2 February 2018 Warrants [Member]      
Total Outstanding and Exercisable (in shares) 8,709,500   8,709,500
Underlying Shares of Common Stock (in shares) 2,903   2,903
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 6,000   $ 6,000
Placement agent warrants issued in the January 2022 financing [Member]      
Total Outstanding and Exercisable (in shares) 1,330,000   1,330,000
Underlying Shares of Common Stock (in shares) 4,433   4,433
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 150   $ 150
Warrants Issued in the January 2022 Financing [Member]      
Total Outstanding and Exercisable (in shares) 16,150,000   16,150,000
Underlying Shares of Common Stock (in shares) 53,833   53,833
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 144   $ 144
Series A Private Investment Options Issued in August 2022 Financing [Member]      
Total Outstanding and Exercisable (in shares) 2,853,883   2,853,883
Underlying Shares of Common Stock (in shares) 190,259   190,259
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 22.53   $ 22.53
Series B Private Investment Options Issued in August 2022 Financing [Member]      
Total Outstanding and Exercisable (in shares) 2,853,883   2,853,883
Underlying Shares of Common Stock (in shares) 190,259   190,259
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 22.53   $ 22.53
Placement Agent Private Investment Options Issued in August 2022 Financing [Member]      
Total Outstanding and Exercisable (in shares) 171,233   171,233
Underlying Shares of Common Stock (in shares) 11,416   11,416
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 32.85   $ 32.85
Advisor Warrants Issued In The March 2024 Financing [Member]      
Total Outstanding and Exercisable (in shares) 40,938    
Underlying Shares of Common Stock (in shares) 40,938    
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 3.664    
Prefunded Warrants Issued in June 2024 [Member]      
Total Outstanding and Exercisable (in shares) 3,284,457    
Underlying Shares of Common Stock (in shares) 3,284,457    
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 0.001    
Series A-1 Warrants Issued in June 2024 [Member]      
Total Outstanding and Exercisable (in shares) 3,614,457    
Underlying Shares of Common Stock (in shares) [1] 3,614,457    
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) [1] $ 1.66    
Series A-2 Warrants Issued in June 2024 [Member]      
Total Outstanding and Exercisable (in shares) 3,614,457    
Underlying Shares of Common Stock (in shares) 3,614,457    
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) [2] $ 1.66    
Series A-3 Warrants Issued in June 2024 [Member]      
Total Outstanding and Exercisable (in shares) 3,614,457    
Underlying Shares of Common Stock (in shares) 3,614,457    
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) [3] $ 1.66    
Placement Agent Warrants Issued in June 2024 [Member]      
Total Outstanding and Exercisable (in shares) 216,867    
Underlying Shares of Common Stock (in shares) 216,867    
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) $ 2.075    
[1] 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.
[2] 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.
[3] 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 IDE application.
v3.24.2.u1
Note 8 - Stock-based Compensation (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
Dec. 22, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 28, 2024
Share Price           $ 1.86
Share-Based Payment Arrangement, Expense   $ 207,000 $ 239,000 $ 1,303,000 $ 484,000  
Restricted Stock Units (RSUs) [Member]            
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount   500,000   $ 500,000    
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition       7 months 6 days    
Sharebased Compensation Arrangement by Sharebased Payment Award Equity Instruments Other than Options Nonvested Fair Value   200,000   $ 200,000    
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value       1,000,000 100,000  
Share-Based Payment Arrangement, Expense   $ 207,000 $ 239,000 $ 1,300,000 $ 500,000  
The 2015 Employee Stock Purchase Plan [Member]            
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized 300,000          
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant   71,442   71,442    
v3.24.2.u1
Note 8 - Stock-Based Compensation - Stock Option Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares
 6 Months Ended 12 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Awards outstanding, shares (in shares) 90,190  
Awards outstanding, Weighted Average Grant Date Fair Value (in dollars per share) $ 18.45  
Awards outstanding, Weighted Average Remaining Contractual Term (Year) 6 months 18 days 1 year 14 days
Awarded, shares (in shares) 394,105  
Awarded, Weighted Average Grant Date Fair Value (in dollars per share) $ 2.75  
Released, shares (in shares) (368,503)  
Released, Weighted Average Grant Date Fair Value (in dollars per share) $ 4.89  
Forfeited, shares (in shares) (3,333)  
Forfeited, , Weighted Average Grant Date Fair Value (in dollars per share) $ 18.45  
Awards outstanding, shares (in shares) 112,459 90,190
Awards outstanding, Weighted Average Grant Date Fair Value (in dollars per share) $ 7.85 $ 18.45
v3.24.2.u1
Note 8 - Stock-based Compensation - Noncash Stock-based Compensation Expense Related to Stock Options, ESPP, and RSUs (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Allocated Share-based Compensation Expense $ 207 $ 239 $ 1,303 $ 484
Cost of Sales [Member]        
Allocated Share-based Compensation Expense 35 35 193 63
Research and Development Expense [Member]        
Allocated Share-based Compensation Expense 41 51 355 134
Selling, General and Administrative Expenses [Member]        
Allocated Share-based Compensation Expense $ 131 $ 153 $ 755 $ 287
v3.24.2.u1
Note - 9 Restructuring Charges and Expenses (Details Textual)
 1 Months Ended
Jul. 31, 2024
USD ($)
Jun. 30, 2024
USD ($)
Restructuring and Related Cost, Number of Positions Eliminated, Period Percent   24.00%
Restructuring and Related Cost, Number of Positions Eliminated   17
Severance Costs   $ 66,000
Restructuring and Related Cost, Number of Positions Eliminated, Severance Paid   13
Severance Costs, Included in Accrued Compensation   $ 4,000
Subsequent Event [Member]    
Severance Costs $ 23,000  
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