UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 15, 2020
Avinger, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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001-36817
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20-8873453
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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400 Chesapeake Drive
Redwood City, California 94063
(Address of principal executive offices, including zip code)
(650) 241-7900
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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AVGR
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The NASDAQ Capital Market
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).
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. ☒
Item 2.02 Results of Operations and Financial Condition.
On April 15, 2020, Avinger, Inc. (the “Company”) issued a press release announcing preliminary revenue results for the quarter ended March 31, 2020. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.
This information is intended to be furnished under Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In response to the continued global spread of COVID-19 and related economic impacts, Avinger, Inc. (the “Company”) determined to temporarily reduce base salaries by 20% for all salaried employees, including our named executive officers, Jeffrey M. Soinski (Chief Executive Officer), Mark Weinswig (Chief Financial Officer), and Himanshu Patel (Chief Technology Officer), effective April 16, 2020. This temporary reduction in salary for Messrs. Soinski, Weinswig and Patel will not modify other rights under any other agreements or arrangements between such officers and the Company, including but not limited to their respective Change of Control and Severance Agreements.
Item 8.01. Other Events.
COVID-19 Pandemic Update
Below is supplemental disclosure that is intended to be in addition to, not a substitute for, the disclosure provided in the Company’s Form 10-K filed on March 6, 2020.
The continued global spread of COVID-19 and the efforts to control it have slowed global economic activity and disrupted, and reduced the efficiency of, normal business activities in much of the world. The pandemic has resulted in authorities around the world implementing numerous unprecedented measures such as travel restrictions, quarantines, shelter in place orders, and factory and office shutdowns.
As a result of the effects of the COVID-19 pandemic, we expect our sales to decline through at least the second quarter of 2020, particularly as individuals, as well as hospitals and other medical providers, defer elective procedures in response to COVID-19. It is unclear whether this reduction in sales is temporary and whether such sales may be recoverable in the future. If our sales continue to decline, or if such lost sales are not recoverable in the future, our business and results of operations will be significantly adversely affected.
We have undertaken and continue to evaluate further action to manage our available cash and other resources to help mitigate the effects of COVID-19 on our business, including by adjusting production to match demand for our products and reducing discretionary costs. In addition, effective April 16, 2020, base salaries for all of our non-manufacturing employees will be reduced by 20%. We will also reduce hours worked by our manufacturing employees. There can be no assurance that such strategies will be successful in effectively managing our resources and mitigating the negative impact of the COVID-19 on our business and operating results.
On March 27, 2020, the President of the United States signed the Coronavirus Aid Relief, and Economic Security (CARES) Act into law. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. We are evaluating the applicability of the CARES Act to the Company, and the potential impacts on our business. While we have applied for certain of these programs and may determine to apply for additional programs, there is no guarantee that we will meet any eligibility requirements to participate in such programs or, even if we are able to participate, that such programs will provide meaningful benefit to our business.
The degree to which the pandemic ultimately impacts our business and results of operations will depend on future developments beyond our control, including the severity of the pandemic, the extent of actions to contain or treat the virus, how quickly and to what extent normal economic and operating conditions can resume, and the severity and duration of the global economic downturn that results from the pandemic.
Safe Harbor Statement
Certain statements in this current report regarding future events and future financial performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated (expressed or implied) by such forward-looking statements, because of, among other things, the risks and uncertainties related to COVID-19 and the risk factors identified in the “Risk Factors” section of our Annual Report on Form 10-K filed with the SEC on March 6, 2020.
Item 9.01 Financial Statements and Exhibits.
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 hereunto duly authorized.
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AVINGER, INC.
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Date: April 15, 2020
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By:
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/s/ Mark Weinswig
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Mark Weinswig
Chief Financial Officer
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Exhibit 99.1
Avinger Reports Preliminary First Quarter 2020 Revenue Results
Provides Update on COVID-19 Impact and Response
Redwood City, Calif., April 15, 2020 - Avinger, Inc. (Nasdaq: AVGR), a commercial-stage medical device company marketing the first and only intravascular image-guided, catheter-based system for diagnosis and treatment of patients with Peripheral Artery Disease (PAD), today reported preliminary results for the first quarter ended March 31, 2020. The company also provided an update on its operations and response to the COVID-19 pandemic.
Revenue in the first quarter of 2020 is expected to be approximately $2.25 million, an increase of 22% over the first quarter of 2019, representing the company’s third consecutive quarter with greater than 20% year-over-year revenue growth. During the first quarter of 2020, total Pantheris revenue grew 76% over the prior year, to $1.6 million, with new sales of Pantheris SV and increased sales of the Pantheris next generation device both contributing to growth of the product line. Avinger launched 11 new Lumivascular sites during the first quarter in high volume areas, such as Arizona, Michigan, and Louisiana, which also contributed to revenue growth for the quarter.
Prior to the impact of COVID-19 in March, Avinger was on track to deliver even higher revenue growth in the first quarter. As patients, hospitals and medical providers defer elective procedures in accordance with the guidance from the U.S. Surgeon General and Centers for Medicaid & Medicaid Services (CMS) issued in March, the industry has experienced a decline in elective procedures to treat PAD. Treatment of more urgent cases, such as patients with critical limb ischemia (CLI), continue to be performed in hospitals and office-based labs on a regular basis. Deferral of elective procedures has resulted in a decrease in overall case volume and impacted sales of the company’s products. While clinicians continue to use Avinger’s products to treat more urgent cases on a daily basis, the company expects a decline in overall case volume and sales of its products to continue through the second quarter of 2020.
In response to this deferral of case activity, Avinger has implemented a series of cost reductions in the second quarter, including a 20% salary reduction company-wide, a reduction in hours worked by manufacturing and other hourly employees, and discretionary spending cuts across the organization. Avinger is also pursuing available government programs, such as the federal relief programs offered via the U.S. Small Business Administration.
Avinger continues to advance key product development programs and does not expect timelines for these programs to be impacted by COVID-19. The company anticipates filing a 510(k) submission this quarter for U.S. pre-marketing clearance of Ocelaris, its next generation image-guided CTO-crossing device, with anticipated availability for product launch by the fourth quarter of this year. Avinger anticipates filing a 510(k) submission for the L300 imaging console in the second half of this year, which is expected to provide enhanced imaging capabilities in a much smaller form factor and lower cost.
Avinger continues to make progress on completing its INSIGHT IDE clinical study, which is being conducted to evaluate the safety and effectiveness of Pantheris for treating in-stent restenosis (ISR). Avinger plans to submit a 510(k) application with the U.S. Food and Drug Admission (FDA) to expand Pantheris labeling to include a specific ISR indication later this year. In January, Avinger announced first patient enrollment in its IMAGE-BTK study, designed to evaluate safety and efficacy endpoints for Pantheris SV in the treatment of PAD lesions below-the-knee. In response to the COVID-19 pandemic, additional patient enrollment and site initiation has been paused. The company will provide further updates when the IMAGE-BTK study has been reinitiated.
“We join the nation in thanking those physicians and medical personnel on the front lines as they work tirelessly to prioritize the care of COVID-19 patients,” said Jeff Soinski, Avinger’s President and CEO. “We remain committed to supporting interventionalists in the treatment of critical PAD cases. Their dedication to their patients is inspiring and we stand ready with our products and personnel to support them any way we can.
“During this challenging time, we have taken important steps to reduce cost in our organization while maintaining the employee base and infrastructure to support physicians and customers, as well as continue to make progress on our important strategic initiatives, including our product development and clinical milestones.”
About Avinger, Inc.
Avinger is a commercial-stage medical device company that designs and develops the first and only image-guided, catheter-based system for the diagnosis and treatment of patients with Peripheral Artery Disease (PAD). PAD is estimated to affect over 12 million people in the U.S. and over 200 million worldwide. Avinger is dedicated to radically changing the way vascular disease is treated through its Lumivascular platform, which currently consists of the Lightbox imaging console, the Ocelot family of chronic total occlusion (CTO) catheters, and the Pantheris® family of atherectomy devices. Avinger is based in Redwood City, California. For more information, please visit www.avinger.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our future performance, including relating to our expected revenue, our anticipated 510(k) submissions timing, the anticipated product launch of Ocelaris, and the expected benefits of the L300 imaging console. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include our dependency on a limited number of products; our ability to demonstrate the benefits of our Lumivascular platform; the resource requirements related to Pantheris, Ocelaris and our Lightbox imaging console; the outcome of clinical trial results; potential exposure to third-party product liability, intellectual property and other litigation; lack of long-term data demonstrating the safety and efficacy of our Lumivascular platform products; experiences of high-volume users of our products may lead to better patient outcomes than those of physicians that are less proficient; reliance on third-party vendors; dependency on physician adoption; reliance on key personnel; requirements to obtain regulatory approval to commercialize our products; the impacts of the COVID-19 pandemic and responses thereto; as well as the other risks described in the section entitled "Risk Factors" and elsewhere in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2020. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. Avinger disclaims any obligation to update these forward-looking statements.
Investor Contact:
Mark Weinswig
Chief Financial Officer
Avinger, Inc.
(650) 241-7916
ir@avinger.com
Matt Kreps
Darrow Associates Investor Relations
(214) 597-8200
mkreps@darrowir.com
