Avinger(US:AVGR)2023-03-15 16:00Financial Performance - The company generated revenues of $8.8 million in 2020, $10.1 million in 2021, and $8.3 million in 2022, with the decline in 2022 attributed to COVID-19 impacts and staffing shortages[308] - The company has an accumulated deficit of $402.4 million as of December 31, 2022, with net losses of $17.6 million and $17.4 million for the years ended December 31, 2022 and 2021, respectively[315] - Revenues decreased by $1.9 million, or 18%, to $8.3 million for the year ended December 31, 2022, primarily due to COVID-19 impacts and hospital staffing shortages[329] - Gross margin for the year ended December 31, 2022 decreased to 32% compared to 34% in the prior year, attributed to reduced production levels and economies of scale[331] - Research and development expenses decreased by $1.5 million, or 26%, to $4.4 million during the year ended December 31, 2022, mainly due to the completion of prior development efforts[332] - Selling, general and administrative expenses decreased by $1.4 million, or 9%, to $14.2 million for the year ended December 31, 2022, primarily due to decreased variable compensation and marketing costs[333] - The company reported net cash used in operating activities of $16.8 million for the year ended December 31, 2022, compared to $15.7 million in 2021[354] Regulatory Approvals and Product Development - The company received 510(k) clearance from the FDA for the Pantheris LV device in January 2023, targeting larger vessels such as the superficial femoral artery and popliteal arteries[300] - The company is developing CTO crossing devices for the coronary artery disease market, which is highly competitive and requires additional expenses for market understanding and product development[297] - The company is pursuing additional clinical data programs, including a post-market study, IMAGE-BTK, to evaluate the safety and efficacy of Pantheris SV in treating below-the-knee PAD lesions, with enrollment expected to complete in 2023[306] - The company received CE Marking for the original Ocelot product in September 2011 and has since expanded its product offerings with multiple 510(k) clearances for various devices[298] Market Conditions and Challenges - The company has experienced significant sales declines due to COVID-19, with fluctuating sales as hospitals deferred elective procedures, impacting future sales predictability[310] - The company anticipates ongoing impacts from COVID-19 and staffing challenges on product demand in the foreseeable future[330] - The company has faced supply chain disruptions and increased production costs due to inflationary pressures and COVID-19 impacts, which could affect its ability to meet customer demands[312] Financing and Cash Management - The company has financed operations primarily through equity and debt financing, with uncertainty regarding future cash generation to fund ongoing operations[337] - In January 2022, the company raised approximately $6.7 million from the sale of 7,600 shares of Series D Convertible Preferred Stock, which were converted into 950,000 shares of common stock by December 31, 2022[341] - The company sold 585,603 shares of common stock under the At The Market Offering Agreement in 2022, generating aggregate proceeds of $1.0 million at an average price of $1.67 per share[343] - The August 2022 Offering resulted in net proceeds of approximately $4.4 million from the issuance of 1,484,019 shares of common stock at a purchase price of $1.752 per share[344] - As of December 31, 2022, the company had a total CRG Loan obligation of $19.4 million, which includes future interest and a $2.2 million back-end fee due in December 2025[352] - Net cash provided by financing activities for 2022 was $11.9 million, primarily from the issuance of preferred stock and common stock[359] - The company plans to reactivate the At The Market Offering Agreement in March 2023, although there is no assurance of success in acquiring additional funding[343] Operational Obligations and Assets - The company’s operating lease obligations total approximately $5.8 million through November 2024, with a weighted average remaining lease term of 1.9 years as of December 31, 2022[353] - The company has contractual obligations totaling $22.8 million due by period, including operating lease obligations and non-cancelable purchase commitments[349] - The company maintains cash and cash equivalents with one financial institution, with deposits exceeding insured limits, indicating low credit risk[371] - The company evaluates inventories for excess quantities and obsolescence, adjusting carrying values to estimated net realizable value when necessary[368] Revenue Recognition - The company's revenues are derived from three main sources: sales of Lightbox consoles, disposables (catheters and accessories), and customer service contracts[362] - Revenue from Lightbox console sales is recognized upon delivery and acceptance, while disposable revenues are recognized when the product has shipped and collectability is assured[362][363] - Service revenue has been insignificant to date, with maintenance contract revenue recognized when work is completed[363] - As of December 31, 2022, there were no customers representing 10% or more of the company's accounts receivable, compared to one customer representing 21% in 2021[371] Interest and Financial Risk - Interest expense, net remained flat compared to the prior year, primarily due to higher loan balances from PIK interest being compounded[334] - Other income, net for the year ended December 31, 2022 decreased by approximately $2.3 million, or 100%, compared to the prior year due to the forgiveness of a PPP loan[335] - An immediate 100 basis point change in interest rates would not materially affect the fair value of the company's cash equivalents due to their short-term maturities[370] - The company does not currently use or plan to use financial derivatives in its investment portfolio[370] - The company’s business is primarily conducted in U.S. dollars, minimizing foreign currency risk[372]