Avinger Announces Conversion of $11 Million of CRG Debt into Preferred Equity

Rhea-AI Summary

Avinger has converted $11 million, or about 80%, of its debt with CRG Partners into convertible preferred stock, reducing outstanding debt to $2.6 million. This move boosts stockholders' equity by $11 million, aiding Avinger's compliance with Nasdaq equity standards. The conversion is part of Avinger's strategy to expand its intravascular image-guided technology and coronary artery disease platform.

Positive

• Converted $11 million of debt into equity, reducing debt burden.
• Increased stockholders' equity by $11 million.
• Remaining debt with CRG Partners reduced to $2.6 million.
• Supports Nasdaq compliance for continued listing.
• Strengthens balance sheet.
• Enhances company's financial flexibility.

Negative

• Significant dilution of existing shareholders due to equity conversion.
• Potential uncertainty regarding the future performance of convertible preferred stock.
• Continued need for strategic financial maneuvers indicating potential underlying financial stress.

Insights

Financial Analyst

Debt Conversion Analysis: Converting $11 million of debt into convertible preferred stock has significant implications for Avinger's financial health. By reducing the outstanding principal debt from $13.6 million to $2.6 million, Avinger improves its balance sheet considerably, which can increase investor confidence and help the company maintain its Nasdaq listing. This move reduces interest expenses, freeing up capital for operational and developmental purposes.

However, while the balance sheet may appear stronger, investors should note the potential dilutive effect on existing shareholders. When the preferred stock is converted to common stock, it can increase the total number of outstanding shares, potentially diluting current share value. Additionally, the preference given to preferred stockholders in terms of dividends and liquidation rights may pose a risk if the company does not perform as expected.

In short-term, this maneuver boosts financial stability and compliance with listing requirements. In the long-term, it sets the groundwork for continued operational and market expansion, but shareholders should remain aware of the dilution risks.

Market Research Analyst

Market Impact: The conversion of debt to equity can signal confidence from CRG Partners in Avinger's future prospects. This kind of support can be seen positively by the market, potentially boosting stock prices in the short term. By reducing debt, the company also enhances its ability to attract new investors who might have been wary of its high leverage ratio.

However, the announcement also indicates that the company is actively seeking ways to stabilize its financials, which could be interpreted as a sign of internal financial stress. Market participants will likely watch the company's next moves closely, especially regarding product development and market expansion efforts, which are important for sustaining long-term growth.

Overall Sentiment: The market's reaction will likely be initially positive due to improved balance sheet metrics, but long-term sentiment will depend on Avinger's ability to capitalize on its strengthened financial position to drive growth.

REDWOOD CITY, CA / ACCESSWIRE / May 16, 2024 / Avinger, Inc. (Nasdaq:AVGR), a commercial-stage medical device company developing and marketing the first and only intravascular image-guided, catheter-based systems for diagnosis and treatment of vascular disease, today announced the conversion of $11 million or approximately 80% of its existing debt with entities affiliated with CRG Partners III L.P. ("CRG") into a shares of a new series of convertible preferred stock.

Following the conversion, the outstanding principal amount of debt with CRG is $2.6 million. The debt conversion results in an $11 million increase in stockholders' equity.

Complete details of the conversion are available in an 8-K filed with the U.S. Securities and Exchange Commission today.

"We appreciate CRG's continued support as we expand our proprietary image-guided technology to new markets and advance the development of our innovative coronary artery disease platform," said Jeff Soinski, Avinger's President and CEO. "Converting the majority of our outstanding debt to equity strengthens our balance sheet and supports Avinger's efforts to regain compliance with the Nasdaq's stockholder equity standard for continued listing."

About Avinger, Inc.

Avinger is a commercial-stage medical device company that designs and develops the first image-guided, catheter-based system for the diagnosis and treatment of patients with vascular disease in the peripheral and coronary arteries. Avinger is dedicated to radically changing the way vascular disease is treated through its Lumivascular platform, which currently consists of the Lightbox series of imaging consoles, the Ocelot and Tigereye® family of chronic total occlusion (CTO) catheters, and the Pantheris® family of atherectomy devices for the treatment of peripheral artery disease (PAD), estimated to affect more than 200 million people worldwide. Avinger is developing its first product application for the treatment of coronary artery disease (CAD), an image-guided system for CTO-crossing in the coronary arteries, which provides the opportunity to redefine a large and underserved market. Avinger is based in Redwood City, California. For more information, please visit www.avinger.com.

Follow Avinger on Twitter and Facebook.

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 regaining compliance with the Nasdaq's stockholder equity standard. 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; the resource requirements related to Pantheris, Tigereye and our Lightbox imaging console; the outcome of clinical trial results; the adoption of our products by physicians; our ability to obtain regulatory approvals for our products; 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 20, 2024, and Quarterly Reports on Form 10-Q. 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:
Matt Kreps
Darrow Associates Investor Relations
(214) 597-8200
mkreps@darrowir.com

Public Relations Contact:
Phil Preuss
Chief Marketing Officer
Avinger, Inc.
(650) 241-7942
pr@avinger.com

SOURCE: Avinger, Inc.

View the original press release on accesswire.com

FAQ

What is the new debt figure for Avinger after converting $11 million to equity?

The new debt figure for Avinger is $2.6 million.

How much of Avinger's debt was converted into equity?

Approximately 80% of Avinger's debt, amounting to $11 million, was converted into equity.

What impact does the debt conversion have on Avinger's stockholders' equity?

The debt conversion increases Avinger's stockholders' equity by $11 million.

How does the conversion of debt into equity affect Avinger's compliance with Nasdaq?

The conversion supports Avinger's efforts to meet Nasdaq's stockholder equity standard for continued listing.

What is the main strategic benefit of Avinger's debt conversion?

The main strategic benefit is the strengthening of Avinger's balance sheet and financial flexibility.