Avinger(US:AVGR)2022-11-08 16:00Financial Performance - The company generated revenues of $10.1 million in 2021, an increase from $8.8 million in 2020, despite fluctuations due to COVID-19 impacts [121]. - The accumulated deficit as of September 30, 2022, was $398.2 million, with a net loss of $4.1 million for the three months ended September 30, 2022, and $13.4 million for the nine months ended [130]. - For the three months ended September 30, 2022, revenue decreased by approximately $0.1 million or 5% compared to the same period in 2021, reflecting fluctuating demand due to COVID-19 and hospital staffing shortages [144]. - For the nine months ended September 30, 2022, revenue decreased by $1.5 million or 19% compared to the same period in 2021, primarily due to the adverse impacts of COVID-19 and hospital capacity limitations [151]. - As of September 30, 2022, the company had cash and cash equivalents of $17.3 million and an accumulated deficit of $398.2 million, compared to $19.5 million and $384.8 million as of December 31, 2021 [157]. - The company expects to incur losses for the foreseeable future and believes its current cash and expected revenues will fund operations through Q3 2023 [157]. - Net cash used in operating activities for the nine months ended September 30, 2022 was $14.0 million, consisting primarily of a net loss of $13.4 million [174]. - The company raised approximately $6.7 million from the January 2022 Offering and $4.4 million from the August 2022 Offering, contributing to net cash provided by financing activities of $11.9 million for the nine months ended September 30, 2022 [178]. - The company sold 259,137 shares of common stock at an average price of $1.56 per share during the quarter ended September 30, 2022, generating aggregate proceeds of $0.4 million [164]. - Other income, net for the nine months ended September 30, 2022 decreased approximately $2.4 million or 101% compared to the same period in 2021, as the prior year included a one-time gain from the forgiveness of a PPP loan [156]. Research and Development - The company received 510(k) clearance from the FDA for the Pantheris device in October 2015, and for the next-generation version in May 2018, indicating ongoing product development and regulatory progress [113]. - The company is developing CTO crossing devices targeting the coronary artery disease market, which is highly competitive and requires significant investment [112]. - The Tigereye ST catheter, a next-generation CTO crossing system, was submitted for FDA clearance in July 2022, showcasing the company's commitment to innovation [114]. - The company completed patient enrollment for the INSIGHT clinical trial in July 2021, which supports the expansion of Pantheris for treating in-stent restenosis, potentially broadening its market [118]. - The company’s Lightbox 3 imaging console received FDA clearance in January 2022, reflecting advancements in its imaging technology [113]. Expenses and Cost Management - Gross margin for the three months ended September 30, 2022 increased to 35%, compared to 34% during the same period in 2021, driven by changes in product mix [146]. - Gross margin for the nine months ended September 30, 2022 decreased to 31%, compared to 35% in the same period in 2021, primarily due to decreased revenues and economies of scale [152]. - Research and development (R&D) expenses for the three months ended September 30, 2022 decreased by $0.3 million or 22% compared to the same period in 2021, mainly due to the completion of development efforts on the Lightbox 3 [145]. - R&D expenses for the nine months ended September 30, 2022 decreased by $1.3 million or 28% compared to the same period in 2021, attributed to the completion of previous development efforts [153]. - Selling, general and administrative (SG&A) expenses for the three months ended September 30, 2022 decreased by approximately $0.5 million or 13% compared to the same period in 2021, primarily due to decreased variable compensation [149]. - SG&A expenses for the nine months ended September 30, 2022 decreased by $0.9 million or 8% compared to the same period in 2021, mainly due to reduced variable compensation and selling costs [154]. - Interest expense, net for the three months ended September 30, 2022 decreased by less than $0.1 million or 3% compared to the same period in 2021, primarily due to increases in interest income [149]. Operational Challenges - The company has experienced supply chain disruptions and increased production costs due to inflation and COVID-19, which may impact future operations [126]. - The company suspended sales under the ATM Agreement on August 3, 2022, with no current commitments to obtain additional funds [164]. - The company has an operating lease obligation of $2.6 million due within one year and a total of $23.5 million in contractual obligations as of September 30, 2022 [171]. - The total CRG Loan amount is $13.7 million, with contractual obligations including future interest and a $2.2 million back-end fee due in December 2025 [171]. Financial Position and Risk - As of September 30, 2022, cash and cash equivalents were maintained with one financial institution in the U.S., with current deposits likely exceeding insured limits [181]. - Accounts receivable primarily relate to revenues from the sale of Lumivascular platform products, with one customer representing 11% of accounts receivable as of September 30, 2022, down from 21% at December 31, 2021 [181]. - The company believes the financial institution has sufficient assets and liquidity, posing little to no credit risk [181]. - The business is primarily conducted in U.S. dollars, with foreign currency transactions not expected to materially affect results [182]. - An immediate 100 basis point change in interest rates would not have a material effect on the fair value of the company's cash equivalents [180].