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Avinger Reports First Quarter 2021 Financial Results

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13% Year-over-Year Revenue Growth Driven by Tigereye™ Commercial Launch and Pantheris SV Sales Growth

REDWOOD CITY, CA / ACCESSWIRE / May 6, 2021 / 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 Peripheral Artery Disease (PAD), today reported results for the first quarter ended March 31, 2021.

First Quarter and Recent Highlights

  • Revenue increased 13% year-over-year to $2.6 million, reflecting commercial launch of the new Tigereye™ CTO-crossing device and strong Pantheris SV sales growth

  • Gross margin improved 13 percentage points year-over-year to 35%, driven by increased volume as Avinger continues to scale its operations

  • Progressed Tigereye to full commercial launch in January 2021, with more than 30 accounts utilizing the device

  • Image-guided CTO revenue increased 62% year-over-year, driven by early success of the Tigereye launch

  • Shipped record number of Pantheris SV devices as sites continue to increase adoption of Avinger's highly differentiated small-vessel catheter

  • Opened 8 new Lumivascular accounts in the first quarter, following the launch of 9 new accounts in the fourth quarter of 2020

  • Extended the maturity date of Avinger's existing loan agreement to 2025

  • Increased cash to $30.4 million at March 31, 2021, anticipated to fully fund sales expansion, new product development and clinical plans through 2022

Jeff Soinski, Avinger's President and CEO, commented, "This year is off to a strong start as Avinger reported substantial growth in our first quarter results over the prior year. The commercial launch of Tigereye and increasing market adoption of our highly differentiated Pantheris SV device were particularly notable growth drivers. First quarter disposable sales were the highest in the past four years as we accelerate top-line growth through our expanded product line, the addition of new accounts and increased utilization at existing sites.

"Early adoption of Tigereye, our next generation CTO-crossing device, is moving quickly, with 30 sites using the device by early April and a steady backlog of additional sites scheduled for first cases. Users are excited about Tigereye's compelling feature profile, including high-definition OCT imaging, enhanced steerability and a new distal tip design, all of which are designed to meet user needs in the real-world clinical setting for the treatment of CTOs.

"We also continue to make strides with our Pantheris line of image-guided atherectomy devices, and in particular the adoption of our Pantheris SV catheter for the treatment of small vessels, including those below-the-knee (BTK). In addition to record Pantheris SV sales, we recently announced that more than 100 accounts have used the device, a key milestone demonstrating the market's enthusiasm for this innovative new product. Pantheris SV's rapid increase in utilization is driven by compelling clinical advantages, as illustrated in the recent publication of a clinical study reporting positive clinical results for treatment of below-the-knee disease in critical limb ischemia (CLI) patients. We are excited to add to the clinical body of evidence in support of Pantheris SV with the anticipated completion of enrollment in our IMAGE-BTK post-market clinical study this year.

"We expect to expand our commercial sales organization during 2021 to reach more accounts, widen our geographic base and drive increased utilization. We launched 8 new sites in the first quarter, adding to the 9 new sites launched in the fourth quarter of 2020.

"After the release of three new image-guided catheter products in the past three years, we are excited about the current development work on our next generation Lightbox imaging console, the Lightbox 3. We expect to submit a 510(k) application for Lightbox 3 by mid-year 2021 and believe this proprietary new console with a radically reduced footprint and lower cost will position us for accelerated growth by providing enhanced capabilities for our physician users and reducing barriers to adoption. We are also moving forward with the opportunity to expand our technology platform into the coronary artery disease (CAD) market through development of proprietary new image-guided products for the treatment of chronic total occlusions, a highly challenging and underserved market."

First Quarter 2021 Financial Results
Total revenue was $2.6 million for the first quarter of 2021, an increase of 13% from the first quarter of 2020. Catheter sales, reflecting use of Avinger's devices in patient cases, continued to grow, increasing 15% year-over-year and 8% sequentially from the fourth quarter 2020 to the highest level in almost 4 years. The continued sequential increase in catheter sales reflected recovery of patient activity from the effects of the COVID-19 pandemic and the addition of Avinger's Tigereye CTO crossing catheter, which entered full commercial launch in January 2021. Tigereye has now been launched at more than 30 sites, providing an additional growth opportunity in 2021 as the user base and case activity continue to climb.

Gross margin for the first quarter of 2021 was 35%, an increase of 13 percentage points from 22% in the first quarter of 2020. Operating expenses for the first quarter of 2021 were $5.5 million, compared with $6.0 million in the first quarter of 2020. Avinger continues to invest in clinical activities and new development programs, such as the Lightbox 3 next generation imaging console.

Net loss and comprehensive loss for the first quarter of 2021 was $5.1 million, compared with $5.9 million in the first quarter of 2020.

Adjusted EBITDA, as defined under non-GAAP measures in this press release, was a loss of $4.0 million, compared with a loss of $4.8 million in the first quarter of 2020.

For more information regarding non-GAAP financial measures discussed in this press release, please see "Non-GAAP Financial Measures" below, as well as the reconciliation of GAAP to non-GAAP measures provided in the tables below.

Balance Sheet
Cash and cash equivalents totaled $30.4 million as of March 31, 2021, compared with $22.2 million as of December 31, 2020. Avinger raised approximately $13.1 million in net proceeds from a bought deal offering in the first quarter of 2021.

Additionally, Avinger amended the CRG loan agreement in January 2021, including the extension of the interest only period and maturity date of the term loan by 2 ½ years. The maturity date is extended to December 31, 2025. In April 2021, Avinger received confirmation that its $2.3 million Paycheck Protection Program Loan was fully forgiven by the U.S. Small Business Administration and that there was no remaining balance on the PPP Loan. Avinger expects to record a gain on debt forgiveness in the second quarter of 2021 as a result of this forgiveness.

Conference Call
Avinger will hold a conference call today, May 6, 2021 at 4:30 pm ET to discuss its first quarter 2021 financial results.

Individuals interested in listening to the conference call may do so by dialing +1-862-298-0850. To listen to a live webcast, please visit http://www.avinger.com and select Investor Relations. A webcast replay of the call will be available on Avinger's website following completion of the call at www.avinger.com.

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 and TigereyeTM 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.

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 our future performance, patient and physician benefits of our products, the timing and results of clinical trials, expansion of our sales organization and related impacts on our customer base and utilization, the submission of our 510(k) application for Lightbox 3, the impact of Lightbox 3 on our growth, our ability to expand into the CAD market, our ability to develop new products, and expected increases in addressable procedures for our Lumivascular technology. 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 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 11, 2021. 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.

Non-GAAP Financial Measures
Avinger has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The Company uses these non-GAAP financial measures internally in analyzing its financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing the Company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's financial statements prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.

Adjusted EBITDA. Avinger defines Adjusted EBITDA as net loss and comprehensive loss plus interest expense, net, plus other income, net, plus stock-based compensation expense plus certain inventory charges plus certain depreciation and amortization expense. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures as analytical tools. Furthermore, these non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP, and the components that Avinger excludes in its calculation of non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP results of operations. Avinger compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. In the future, the Company may also exclude other non-recurring expenses and other expenses that do not reflect the Company's core business operating results.

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

Statements of Operations and Comprehensive Loss
(in thousands) (unaudited)

For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Revenue

$

2,559

$

2,732

$

2,261

Cost of revenue

1,665

1,751

1,760

Gross profit

894

981

501

Operating expense

Research and development

1,598

1,387

1,594

Selling, general, and administrative

3,945

3,826

4,386

Total operating expense

5,543

5,213

5,980

Operating loss

(4,649

)

(4,232

)

(5,479

)

Other (expense) income, net:

Interest expense, net

(396

)

(446

)

(368

)

Other income (expense), net

(7

)

48

(4

)

Net loss and comprehensive loss

(5,052

)

(4,630

)

(5,851

)

Accretion of preferred stock dividends

(1,044

)

(965

)

(967

)

Net loss attributable to common stockholders

$

(6,096

)

$

(5,595

)

$

(6,818

)

Net loss per share attributable to common stockholders

basic and diluted

$

(0.07

)

$

(0.07

)

$

(0.47

)

Weighted average common shares used to compute

net loss per share, basic and diluted

91,435

84,923

14,616

Balance Sheets
(in thousands, except per share amounts)

Condensed Balance Sheets

(in thousands, except per share amounts) (unaudited)

March 31,

December 31,

Assets

2021

2020

Current assets:

Cash and cash equivalents

$

30,448

$

22,185

Accounts receivable, net of allowance for doubtful accounts of $19

at both December 31, 2020 and 2019

1,531

1,484

Inventories

3,936

3,876

Prepaid expenses and other current assets

1,318

350

Total current assets

37,233

27,895

Right of use asset

3,848

4,063

Property and equipment, net

552

727

Other assets

476

510

Total assets

$

42,109

$

33,195

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

786

$

694

Accrued compensation

1,568

1,703

Accrued expenses and other current liabilities

856

669

Leasehold liability, current portion

909

806

Borrowings, current portion

2,072

3,590

Preferred stock dividends payable

1,044

-

Total current liabilities

7,235

7,462

Leasehold liability, long-term portion

2,939

3,257

Borrowings, long-term portion

11,316

9,400

Other long-term liabilities

144

-

Total liabilities

21,634

20,119

Stockholders' equity:

Convertible preferred stock, par value $0.001

-

-

Common stock, par value $0.001

95

85

Additional paid-in capital

392,773

380,332

Accumulated deficit

(372,393

)

(367,341

)

Total stockholders' equity

20,475

13,076

Total liabilities and stockholders' equity

$

42,109

$

33,195

Reconciliation of Adjusted EBITDA to Net loss and comprehensive loss
(in thousands) (unaudited)

For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Net loss and comprehensive loss

$

(5,052

)

$

(4,630

)

$

(5,851

)

Add: Interest expense, net

396

446

368

Add: Other (income) expense, net

7

(48

)

4

Add: Stock-based compensation

418

353

451

Add: Certain inventory charges

-

-

-

Add: Certain depreciation and amortization charges

194

221

225

Adjusted EBITDA

$

(4,037

)

$

(3,658

)

$

(4,803

)

SOURCE: Avinger, Inc.



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