UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2021~~2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-36817

AVINGER, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-8873453
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

400 Chesapeake Drive

Redwood City, California 94063

(Address of principal executive offices and zip code)

(650) 241-7900

(Telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol(s):		Name of each exchange on which registered:
Common Stock, par value $0.001 per share		AVGR		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☒		Smaller reporting company ☒

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of May ~~4, 2021,~~6, 2022, the number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was ~~95,351,502.~~5,679,849.

This Quarterly Report on Form 10-Q contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the “Risk Factors” section and elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March ~~11, 2021.~~22, 2022. We urge you to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. We assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the United States Securities and Exchange Commission (“SEC”) as exhibits to the Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

AVINGER, INC.

AS OF AND FOR THE QUARTERLY PERIOD ENDED MARCH 31, ~~2021~~2022

TABLE OF CONTENTS

		Page
Part I	Financial Information
Item 1.	Unaudited Financial Statements	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations and Comprehensive Loss	2
	Condensed Statements of Stockholders’ Equity	3
	Condensed Statements of Cash Flows	4
	Notes to Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	2625

Part II	Other Information
Item 1.	Legal Proceedings	2625
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2629
Item 3.	Defaults Upon Senior Securities	2629
Item 4.	Mine Safety Disclosures	2629
Item 5.	Other Information	2629
Item 6.	Exhibits	2730

Signatures		2832

“Avinger,” “Pantheris,” “Lumivascular,” and “Tigereye” are trademarks of our company. Our logo and our other trade names, trademarks and service marks appearing in this Quarterly Report on Form 10-Q are our property. Other trade names, trademarks and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, our trademarks and trade names referred to in this Quarterly Report on Form 10-Q appear without the ™ symbol, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the right of the applicable licensor to these trademarks and trade names.

PART I. FINANCIAL INFORMATION

ITEM 1.~~UNAUDITED FINANCIAL STATEMENTS~~

UNAUDITED FINANCIAL STATEMENTS

AVINGER, INC.

CONDENSED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)

	March 31,			December 31,
	2021			2020			March 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	30,448		$	22,185		$	20,006		$	19,497
Accounts receivable, net of allowance for doubtful accounts of $6 at March 31, 2021 and $19 at December 31, 2020		1,531			1,484
Accounts receivable, net of allowance for doubtful accounts of $6 at March 31, 2022 and December 31, 2021								1,365			1,393
Inventories		3,936			3,876			5,350			4,601
Prepaid expenses and other current assets		1,318			350			1,315			300
Total current assets		37,233			27,895			28,036			25,791

Right of use asset		3,848			4,063			2,940			3,179
Property and equipment, net		552			727			230			95
Other assets		476			510			406			420
Total assets	$	42,109		$	33,195		$	31,612		$	29,485

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	786		$	694		$	1,172		$	1,394
Accrued compensation		1,568			1,703			1,881			1,609
Series A preferred stock dividends payable		1,044			—			1,127			0
Accrued expenses and other current liabilities		856			669			816			718
Leasehold liability, current portion		909			806			1,011			985
Borrowings, current portion		2,072			3,590
Total current liabilities		7,235			7,462			6,007			4,706

Borrowings, long-term portion		11,316			9,400			12,727			12,287
Leasehold liability, long-term portion		2,939			3,257			1,929			2,194
Other long-term liabilities		144			—			719			575
Total liabilities		21,634			20,119			21,382			19,762

Commitments and contingencies (Note 7)
Commitments and contingencies (Note 6)

Stockholders’ equity:
Convertible preferred stock issuable in series, par value of $0.001
Shares authorized: 5,000,000 at March 31, 2021 and December 31, 2020
Shares issued and outstanding: 52,276 and 52,369 at March 31, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $52,276 and $52,369 at March 31, 2021 and December 31, 2020, respectively		—			—
Common stock, par value of $0.001;
Shares authorized: 100,000,000 at March 31, 2021 and December 31, 2020
Shares issued and outstanding: 95,351,502 and 84,926,129 at March 31, 2021 and December 31, 2020, respectively		95			85
Convertible preferred stock issuable in series, par value of $0.001
Shares authorized: 5,000,000 at March 31, 2022 and December 31, 2021
Shares issued and outstanding: 58,851 and 56,451 at March 31, 2022 and December 31, 2021, respectively; aggregate liquidation preference of $56,366 at March 31, 2022 and December 31, 2021								0			0
Common stock, par value of $0.001;
Shares authorized: 100,000,000 at March 31, 2022 and December 31, 2021
Shares issued and outstanding: 5,454,849 and 4,778,263 at March 31, 2022 and December 31, 2021, respectively								5			96
Additional paid-in capital		392,773			380,332			400,118			394,380
Accumulated deficit		(372,393	)		(367,341	)		(389,893	)		(384,753	)
Total stockholders’ equity		20,475			13,076			10,230			9,723
Total liabilities and stockholders’ equity	$	42,109		$	33,195		$	31,612		$	29,485

All share and per share data reflect the impact of the reverse stock split effective March 14, 2022. See accompanying notes.

1. Organization

Organization, Nature of Business

Avinger, Inc. (the “Company”), a Delaware corporation, was incorporated in March 2007. The Company designs, manufactures and sells image-guided, catheter-based systems that are used by physicians to treat patients with peripheral artery disease (“PAD”). Patients with PAD have a build-up of plaque in the arteries that supply blood to areas away from the heart, particularly the pelvis and legs. The Company manufactures and sells a suite of products in the United States (“U.S.”) and in select international markets. The Company has developed its Lumivascular platform, which integrates optical coherence tomography ~~(“OCT”~~( “OCT”) visualization with interventional catheters and is the industry’s only system that provides real-time intravascular imaging during the treatment portion of PAD procedures. The Company’s Lumivascular platform consists of a capital component, our Lightbox ~~console,~~consoles, as well as a variety of disposable catheter products. The Company’s current catheter products include ~~its non-imaging catheters, Wildcat~~Ocelot and ~~Kittycat 2, as well as its Lumivascular platform products, Ocelot, Ocelot PIXL, Ocelot MVRX and~~ Tigereye, ~~all of~~ which are designed to allow physicians to penetrate a total blockage in an artery, known as a chronic total occlusion (“CTO”). The Company also has image-guided atherectomy ~~solutions under its suite of Lumivascular~~ products, Pantheris and Pantheris SV, which are designed to allow physicians to precisely remove arterial plaque in PAD patients. The Company is in the process of developing next-generation CTO crossing devices to target coronary CTO markets. The Company is located in Redwood City, California.

Liquidity Matters

In the course of its activities, the Company has incurred losses and negative cash flows from operations since its inception. As of March 31, ~~2021,~~ 2022, the Company had an accumulated deficit of ~~$372.4~~$389.9 million. The Company expects to incur losses for the foreseeable future. The Company believes that its cash and cash equivalents of ~~$30.4~~$20.0 million at March 31, ~~2021~~ 2022 and expected revenues and funds from operations will be sufficient to allow the Company to fund its current operations ~~through 2022. We~~into the second quarter of 2023. The Company received net proceeds of approximately ~~$3.9~~$6.7 million net proceeds from the January 2022 Series D preferred stock equity financing and $13.0 million from the sale of ~~our~~its common stock in our January 2020 offering, $2.3 million of loan proceeds in April 2020 pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, $3.0 million from the sale of our common stock in April and May 2020, $5.5 million from the sale of our common stock in June and July 2020, $11.3 million from the sale of our common stock in August and September 2020, and approximately $13.1 million from the sale of our common stock in February 2021. The Company ~~does not have any immediate plans~~may decide to raise additional funds ~~through~~in future equity ~~or debt financings. However, the Company may decide to raise additional funds~~offerings to meet its operational needs and capital requirements for product development, clinical trials and commercialization or other strategic objectives.

The Company can provide no assurance that it will be successful in raising funds pursuant to additional equity or debt financings or that such funds will be raised at prices that do not create substantial dilution for ~~our~~its existing stockholders. Given the volatility in the Company’s stock price, any financing that we the Company may undertake in the next twelve months could cause substantial dilution to ~~our~~its existing stockholders, and there can be no assurance that the Company will be successful in acquiring additional funding at levels sufficient to fund its various endeavors. In addition, the ~~COVID-19~~COVID-19 pandemic and responses thereto have resulted in reduced consumer and investor confidence, instability in the credit and financial markets, volatile corporate profits, restrictions on elective medical procedures, and reduced business and consumer spending, which could increase the cost of capital and/or limit the availability of capital to the Company. During the second quarter of 2020 the Company took certain actions to manage available cash and other resources to mitigate the effects of COVID-19 on our business, which included reduction of discretionary costs, reduction of base salaries for all of our non-manufacturing employees by 20% and reduction of hours worked by our manufacturing workers by 20%. Salaries and hours worked largely returned to prior levels by July 2020.

If the Company is unable to raise additional capital in sufficient amounts or on terms acceptable to it, the Company may have to significantly reduce its operations or delay, scale back or discontinue the development and sale of one or more of its products. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s ultimate success will largely depend on its continued development of innovative medical technologies, its ability to successfully commercialize its products and its ability to raise significant additional funding.

On September 22, 2021, the Company received a letter from Nasdaq’s Listing Qualifications Department notifying it that it was not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price for its listed securities was less than $1 for the previous 30 consecutive business days. The Company had a period of 180 calendar days, or until March 21, 2022, to regain compliance with the rule referred to in this paragraph. The Company did not regain compliance with the minimum bid price requirement by March 21, 2022. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company provided written notice to Nasdaq of its intent to cure the deficiency and, on March 22, 2022, the Company received notice that Nasdaq granted the Company an additional 180 calendar days, or until September 19, 2022, to regain compliance.

On March 29, 2022, the Company received a letter from Nasdaq notifying the Company that the Staff had determined that the closing bid price of the Company’s common stock had been at $1.00 per share or greater for at least 10 consecutive business days and, accordingly, that the Company had regained compliance with the minimum bid price requirement for continued listing on the Nasdaq Stock Market and that the matter is now closed. While the Company has regained compliance with the minimum bid price requirement, there can be no assurance that the Company will be able to maintain compliance with the minimum bid price requirement in the future.

Public Offerings

Past Offerings

On ~~January 31, 2020, we~~February 2, 2021, under the shelf registration statement, the Company completed a ~~public~~bought deal offering of ~~6,428,572~~500,000 shares of common stock at an offering price of ~~$0.70~~$28.80 per share. As a result, ~~we received net proceeds of approximately $3.9 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses. Due to anti-dilution provisions,~~ the ~~conversion price of the outstanding shares of Series B preferred stock, which was issued in our February 2018 offering, was reduced to $0.70 per share.~~

On April 30, 2020, we completed a public offering of 12,600,000 shares of common stock at an offering price of $0.25 per share. On May 6, 2020 we issued an additional 1,890,000 shares of common stock at the same offering price pursuant to the exercise in full of the underwriter’s over-allotment option in connection with the aforementioned offering. As a result, weCompany received aggregate net proceeds of approximately $3.0 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses. Due to anti-dilution provisions, the conversion price of the outstanding shares of Series B preferred stock, which was issued in our February 2018 offering, was reduced to $0.25 per share.

On June 26, 2020, we completed a public offering of 20,000,000 shares of common stock at an offering price of $0.27 per share. On July 9, 2020 we issued an additional 3,000,000 shares of common stock at the same offering price pursuant to the exercise in full of the underwriter’s over-allotment option in connection with the aforementioned offering resulting in $0.7 million of additional net proceeds. As a result, we received aggregate net proceeds of approximately $5.5 million including the overallotment option and after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.

On August 6, 2020, under the Shelf Registration Statement, we completed a public offering of 15,789,474 shares of common stock at an offering price of $0.38 per share. On August 11, 2020 we issued an additional 2,368,421 shares of common stock at the same offering price pursuant to the exercise in full of the underwriter’s over-allotment option in connection with the aforementioned offering. As a result, we received aggregate net proceeds of approximately $6.2$13.0 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.

January 2022 Offering

On ~~August 25, 2020, under~~ January 14, 2022, the ~~Shelf Registration Statement, we completed~~Company entered into a ~~public~~securities purchase agreement with several institutional investors pursuant to which the Company agreed to sell and issue, in a registered direct offering ( “January 2022 Offering”), an aggregate of ~~11,063,830~~7,600 shares of ~~common stock~~the Company’s Series D Convertible Preferred Stock, par value of $0.001 per share, at an offering price of ~~$0.47~~$1,000 per ~~share. On September 1, 2020 we issued an additional 1,000,000 shares of~~share which is convertible into common stock at a conversion price of $8.00 per share. Concurrently, the ~~same offering price pursuant~~Company agreed to ~~the exercise in full~~issue to these investors warrants to purchase up to an aggregate of 807,500 shares of the ~~underwriter’s over-allotment option in connection with the aforementioned offering.~~Company’s common stock (the “Common Warrants”). As a result, wethe Company received aggregate net proceeds of approximately ~~$5.1~~$6.7 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.

In connection with the January 2022 Offering and in accordance with the securities purchase agreement, the Company held a special meeting of stockholders on March 11, 2022 to consider a proposal (the “Proposal”) to amend the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Charter”) to effect a reverse split of the outstanding shares of the Company’s common stock at a ratio between 1-for-5 and 1-for-20 (the “Reverse Split Amendment”). The Company’s stockholders approved the Reverse Split Amendment at the special meeting. On ~~February 2, 2021, under~~March 11, 2022, following receipt of stockholder approval, the ~~Shelf Registration Statement, we completed~~Company’s Board of Directors approved a ~~bought deal offering~~reverse split ratio of ~~10,000,000~~1-for-20 and the Company filed an amendment to the Company’s Charter to effect such reverse stock split, effective as of 5:00 pm Eastern Time on March 14, 2022.

Pursuant to the purchase agreement, the Company filed a certificate of designation (the “Certificate of Designation”) with the Secretary of State of Delaware designating the rights, preferences and limitations of the shares of Series D preferred stock, which became effective on January 14, 2022. The Certificate of Designation provided, in particular, that the Series D preferred stock will have no voting rights, other than the right to vote as a class on certain matters, except that each share of Series D preferred stock had the right to cast 37,500 votes per share of Series D preferred stock on the Proposal (the “Supermajority Voting Rights”); provided, that the votes cast by the holders of the Series D preferred stock must be counted in the same proportion as the aggregate shares of common stock voted on the Proposal. Because the Proposal was approved by our stockholders at the special meeting held on March 11, 2022, the Series D preferred stock no longer has Supermajority Voting Rights.

The holders of the Series D preferred stock are entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on shares of Common Stock. The Series D preferred stock is convertible into shares of common stock at ~~an offering~~a conversion price of ~~$1.44~~$8.00 per ~~share. As~~share, as adjusted for the most recent reverse stock split. The conversion price can be adjusted pursuant to the Certificate of Designation for stock dividends and stock splits, subsequent rights offerings, pro rata distributions of dividends or the occurrence of a ~~result, we received~~fundamental transaction (as defined in the Certificate of Designation). The Series D preferred stock can be converted at the option of the holders at any time. In addition, subject to the satisfaction of certain conditions, the Company may cause the holders of the Series D preferred stock to convert their shares of Series D preferred stock; provided, that shares of Series D preferred stock cannot be converted to common stock if the applicable holder would beneficially own in excess of 4.99% (or, upon election by such holder prior to the issuance of any shares of Series D preferred stock, 9.99%) of our outstanding common stock. A holder of Series D preferred stock may, upon notice to the Company, increase or decrease such beneficial ownership limitation, but not in excess of 9.99%.

The 807,500 Common Warrants have an exercise price of $9.60 per share and become exercisable beginning July 14, 2022. The Common Warrants will expire five years following the time they become exercisable, or July 14, 2027. The Company also issued to the Placement Agent or its designees warrants to purchase up to an aggregate ~~net proceeds~~ of ~~approximately $13.1 million after underwriting discounts, commissions, legal~~66,500 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants are subject to the same terms as the Common Warrants, except that the Placement Agent Warrants have an exercise price of $10.00 per share and ~~accounting fees, and other ancillary expenses.~~a term of five years from the commencement of the sales pursuant to the January 2022 Offering, or January 12, 2027.

The accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC (“SEC”). The accompanying unaudited condensed interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the Company’s financial information. The results for the three months ended March 31, ~~2021~~ 2022 are not necessarily indicative of results to be expected for the year ending December 31, ~~2021,~~2022, or for any other interim period or for any future year. The December 31, ~~2020~~2021 condensed balance sheet data has been derived from audited financial statements. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements. These unaudited condensed financial statements and notes should be read in conjunction with the financial statements included in the Company’s Form ~~10-K~~10-K for the fiscal year ended December 31, ~~2020,~~2021, which was filed with the SEC on March ~~11, 2021.~~22,2022. The Company’s significant accounting policies are more fully described in Note 2 of the Notes to Financial Statements included in the Company’s Annual Report on Form ~~10-K~~10-K for the year ended December 31, ~~2020.~~2021.

On March 11, 2022, the Company’s Board of Directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1-for-20 reverse stock split of the Company’s issued and outstanding common stock. The reverse stock split became effective on March 14, 2022. The par value of the common stock was not adjusted as a result of the reverse stock split. All common stock, stock options, restricted stock units, and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. Management uses significant judgment when making estimates related to its stock-based compensation, accruals related to compensation, the valuation of the common stock warrants, provisions for doubtful accounts receivable and excess and obsolete inventories, clinical trial accruals, and its reserves for sales returns and warranty costs. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable to the extent of the amounts recorded on the balance sheets.

The Company’s policy is to invest in cash and cash equivalents, consisting of money market funds. These financial instruments are held in Company accounts at one financial institution. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at March 31, ~~2021~~ 2022 and December 31, ~~2020.~~2021.

The Company’s accounts receivable are due from a variety of healthcare organizations in the United States and select international markets. At March 31, 2022 and December 31, 2021, there was no one customer that represented ~~10% or more~~13% and 21% of accounts ~~receivable. At December~~receivable, respectively. For the three months ended March 31, ~~2020,~~ 2022, there was ~~one~~1 customer that represented 14% of ~~the Company’s accounts receivable.~~revenues. For the three months ended March 31,2021, ~~and 2020,~~ there were no0 customers that represented 10% or more of revenues. Disruption of sales orders or a deterioration of financial condition of its customers would have a negative impact on the Company’s financial position and results of operations.

The Company typically offers a ~~one-year~~one-year warranty on its products commencing upon the transfer of title and risk of loss to the customer. The Company accrues for the estimated cost of product warranties upon invoicing its customers, based on historical results. Warranty costs are reflected in the statement of operations and comprehensive loss as a cost of revenues. The warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from these estimates, revisions to the estimated warranty liability would be required. Periodically the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Warranty provisions and claims are summarized as follows (in thousands):

Basic net loss per share ~~attributable~~applicable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Diluted net loss per share ~~attributable~~applicable to common stockholders is computed by dividing the net loss attributable to common stockholder by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Any common stock shares subject to repurchase are excluded from the calculations as the continued vesting of such shares is contingent upon the holders’ continued service to the Company. As of March 31, ~~2021~~ 2022 and ~~2020,~~2021, there were no shares subject to repurchase. Since the Company was in a loss position for both periods presented, basic net loss per share ~~attributable~~applicable to common stockholders is the same as diluted net loss per share ~~attributable~~applicable to common stockholders as the inclusion of all potentially dilutive common shares would have been anti-dilutive.

Net loss per share ~~attributable~~applicable to common stockholders was determined as follows (in thousands, except per share data):

The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted average shares outstanding because such securities have an anti-dilutive impact due to losses reported:

The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Primarily all of the Company’s long-lived assets, which are comprised of property and equipment, are based in the United States. For both the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, 94% ~~and 98%, respectively,~~ of the Company’s revenues were in the United States, based on the shipping location of the external customer.

As of March 31, 2022 and December 31,2021, cash equivalents were all categorized as Level 1 and consisted of money market funds. As of March 31, 2022 and December 31,2021, there were no financial assets and liabilities categorized as Level 2 or 3. There were no transfers between fair value hierarchy levels during the three months ended March 31, 2022.

In ~~December 2019, the FASB issued~~ May 2021, ASU ~~2019-12,~~No.2021-04, ~~Income Taxes (Topic 740): Simplifying the~~Issuer’s Accounting for ~~Income Taxes~~Certain Modifications of Exchanges of Freestanding Equity-Classified Written Call Options, which among other things, eliminates certain exceptions in the current rules regarding the approach for intraperiod tax allocations and the methodology for calculating income taxes in an interim period, and clarifies was issued to clarify the accounting for ~~transactions~~modifications or exchanges of freestanding equity-classified written call options, such was warrants, that ~~result in a step-up in the tax basis of goodwill.~~remain equity classified after modification or exchange. The standard was adopted by the Company on January 1, ~~2021.~~ 2022. This new standard did not have a material impact on the Company’s financial statements.

In August 2020, the FASB issued ASU ~~2020-06,~~No.2020-06, Debt—Debt with Conversion and Other Options (Subtopic ~~470-20)~~470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic ~~815-40)~~815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which among other things, simplifies the accounting models for the allocation of proceeds attributable to the issuance of a convertible debt instrument. As a result, after adopting the ASU’s guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, they will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (i) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (ii) a convertible debt instrument was issued at a substantial premium. The standard becomes effective for the Company, as a smaller reporting company as defined by the SEC, in the first quarter of ~~2022~~2024 and early adoption is permitted. This new standard is not expected to have a material impact on the Company’s financial statements.

5.4. Borrowings

CRG

On September 22,2015, the Company entered into a Term Loan Agreement, as amended (the “Loan Agreement”) with CRG under which, subject to certain conditions, the Company had the right to borrow up to $50 million in principal amount from CRG on or before March 29,2017. The Company borrowed $30 million on September 22,2015. The Company borrowed an additional $10 million on June 15,2016 under the Loan Agreement.

On February 14,2018, the Company and CRG further amended the Loan Agreement concurrent with the conversion of $38 million of the principal amount of the senior secured term loan (plus $3.8 million in back-end fees and prepayment premium applicable thereto) into a newly authorized Series A convertible preferred stock (see below).

~~On March 2, 2020, the Company~~We have entered into ~~Amendment No. 3~~several amendments to the Term Loan Agreement ~~to,~~(the “Amendments”) with CRG since September 2015, the most recent of which, was entered into on January 22, 2021. The Amendments, among other things:

	●	~~extend the period that the Company can make interest payments in payment in kind (“PIK”) to June 30, 2021;~~
	●	~~lower the Minimum Revenue Covenants to $10 million for 2020, $12 million for 2021, and $15 million for 2022;~~
	●	~~insert certain terms to clarify that all fees, including the prepayment premium, are~~ (1) extended the interest-only period through December 31,2023; (2) extended the period during which we may elect to pay a portion of interest in payment-in-kind, or PIK, interest payments through December 31, 2023 so long as no default has occurred and is continuing; (3) permitted us to make our entire interest payments in PIK interest payments for through December 31,2023 so long as no default has occurred and is continuing; (4) extended the maturity date to December 31, 2025; (5) reduced the minimum liquidity requirement to $3.5 million at all times; (6) eliminated the minimum revenue covenant for 2018,2019 and 2020; (7) reduced the minimum revenue covenant to $8 million for 2021, $10 million for 2022; (8) added minimum revenue covenants for of $12 million for 2023, $14.5 million for 2024 and $17 million for 2025; (9) changed the date under the on-going stand-alone representation regarding no “Material Adverse Change” to December 31, 2020; (10) amended the on-going stand-alone representation and stand-alone event of default regarding Material Adverse Change such that any adverse change in or effect upon the revenue of us and our subsidiaries due ~~if the obligations are accelerated; and~~
	●	~~insert a new provision to make clear that to the extent the Company divides its assets/liabilities into divisions, such assets/liabilities will be treated as transferred to a third party.~~

~~On May 12, 2020, the Company entered into Amendment No. 4~~ to the ~~Loan Agreement to, among other things:~~outbreak of COVID-19 will not constitute a Material Adverse Change; and (11) provided CRG with board observer rights.

	●	~~grant to the Company the right to optionally prepay in whole or in part the outstanding principal amount of the Loans for the Redemption Price, subject to certain conditions; and~~
	●	~~waive the Company’s requirement to comply with the Minimum Revenue Covenant for 2020.~~

~~On January 22, 2021, the Company entered into Amendment No. 5 to the Loan Agreement to, among other things:~~

	●	~~extend the maturity date of the Loan Agreement from June 30, 2023 to December 31, 2025;~~
	●	~~extend the interest only payment period and the period that the Company can make interest payments in PIK to December 31, 2023;~~
	●	lower the Minimum Revenue Covenants to $8 million and $10 million for 2021 and 2022, respectively and establish revenue covenants of $12 million for 2023; $14.5 million for 2024, and $17 million for 2025;
	●	~~change the date under the on-going stand-alone representation regarding no Material Adverse Change to December 31, 2020;~~
	●	amend the on-going stand-alone representation and stand-alone event of default regarding “Material Adverse Change” such that any adverse change in or effect upon the revenue of the Company and its subsidiaries due to the outbreak of COVID-19 will not constitute a Material Adverse Change

Under the amended Loan Agreement, no cash payments for either principal or interest are due until the first quarter of 2024. The ~~accrued~~ interest will be accrued and included in the debt balance based (to the extent not paid) on principal amounts outstanding at the beginning of the quarter at an interest rate of 12.5%. Beginning in the first quarter of 2024, the Company will be required to make quarterly principal payments (in addition to the interest) of $1.9 million with total principal payments of $7.5 million in 2024, and $7.5 million in 2025. The maturity date of the Loan is December 31, ~~3025.~~2025.

The Company may voluntarily prepay the borrowings in full, with a prepayment premium beginning at 5.0% and declining by 1.0% annually thereafter, with no premium being payable if prepayment occurs after seven and half years of the loan. Each tranche of borrowing required the payment, on the borrowing date, of a financing fee equal to 1.5% of the borrowed loan principal, which is recorded as a discount to the debt. In addition, a facility fee equal to 15.0% of the amounts borrowed plus any payment-in-kind (“PIK”) is to be payable at the end of the term or when the borrowings are repaid in full. A long-term liability is being accreted using the effective interest method for the facility fee over the term of the Loan Agreement with a corresponding discount to the debt. The borrowings are collateralized by a security interest in substantially all of the Company’s assets.

The Loan Agreement requires that the Company adheres to certain affirmative and negative covenants, including financial reporting requirements, certain minimum financial covenants for pre-specified liquidity and revenue requirements and a prohibition against the incurrence of indebtedness, or creation of additional liens, other than as specifically permitted by the terms of the Loan Agreement. In particular, the covenants of the amended Loan Agreement included a covenant that the Company maintain a minimum of $3.5 million of cash and certain cash equivalents, and the Company has to achieve certain minimum revenues. If the Company fails to meet the applicable minimum revenue target in any calendar year, the Loan Agreement provides the Company with a cure right if it prepays a portion of the outstanding principal equal to 2.0 times the revenue shortfall. In addition, the Loan Agreement prohibits the payment of cash dividends on the Company’s capital stock and also places restrictions on mergers, sales of assets, investments, incurrence of liens, incurrence of indebtedness and transactions with affiliates. CRG may accelerate the payment terms of the Loan Agreement upon the occurrence of certain events of default set forth therein, which include the failure of the Company to make timely payments of amounts due under the Loan Agreement, the failure of the Company to adhere to the covenants set forth in the Loan Agreement, the insolvency of the Company or upon the occurrence of a material adverse change.

As of March 31, ~~2021,~~ 2022, the Company was in compliance with all applicable covenants under the Loan Agreement.

As of March 31, ~~2021,~~ 2022, principal, final facility fee and PIK payments under the Loan Agreement, which incorporates all aforementioned amendments, were as follows (in thousands):

Year Ending December 31,

2021 (remaining nine months of the year)
$ —
2022
—
2023
—
2024
9,045
2025
10,339
19,384
Less: Amount of PIK additions and final facility fee to be incurred subsequent to March 31, 2021
(7,956
)
Less: Amount representing debt financing costs
(391
)
Borrowings, as of March 31, 2021
$ 11,037

Year Ending December 31,
2022 (remaining nine months of the year)	$	0
2023		0
2024		9,045
2025		10,339
Total		19,384
Less: Amount of PIK additions and final facility fee to be incurred subsequent to March 31, 2022		(6,345	)
Less: Amount representing debt financing costs		(312	)
Borrowings, long-term portion, as of March 31, 2022	$	12,727

In connection with drawdowns under the Loan Agreement, the Company recorded aggregate debt discounts of $1.3 million as contra-debt. The debt discounts are being amortized as non-cash interest expense using the effective interest method over the term of the Loan Agreement. As of March 31, ~~2021~~ 2022 and December 31, ~~2020,~~2021, the balance of the aggregate debt discount was approximately ~~$391,000~~$312,000 and ~~$418,000,~~$333,000, respectively. The Company’s interest expense associated with the amortization of debt discount ~~amounted to~~was approximately $21,000 and $38,000 ~~and $43,000~~ during the three months ended March 31, ~~2021~~ 2022 and ~~2020,~~2021, respectively. For the three months ended March 31, ~~2021~~ 2022 and ~~2020,~~2021, the Company incurred total interest expense of approximately ~~$393,000~~$440,000 and ~~$398,000,~~$393,000, respectively.

As of March 31, ~~2021,~~ 2022, all of the CRG borrowings and associated aggregate debt discount were classified as non-current. ~~Approximately $83,000 and $308,000 of aggregate debt discount was included in the current and non-current amounts, respectively.~~

Paycheck Protection Program

On April 23, 2020, wethe Company received loan proceeds of $2.3 million (the “PPP Loan”) pursuant to the PPP under the CARES Act.

The PPP Loan, which was in the form of a promissory note, dated April 20, 2020 ~~(the~~(the “Promissory Note”), between the Company and Silicon Valley Bank (“SVB”) as the lender, was set to mature on April 20, 2022 and bore interest at a fixed rate of 1% per annum, payable monthly commencing six months from the date of the Loan. The Company may voluntarily prepay the borrowings in full with no associated penalty or premium.

~~As previously disclosed, the~~The PPP Loan was administered by the ~~SBA.~~U.S. Small Business Administration (the “SBA”). The SBA was given the authority under the PPP to forgive loans if all employees were kept on the payroll for a required period and the loan proceeds were used for payroll, rent and utilities. The Company applied for debt forgiveness in December 2020.

On April 17, 2021, ~~we were~~the Company was notified by SVB that ~~the Company’s~~its PPP Loan had been fully forgiven by the ~~U.S. Small Business Administration (the “SBA”)~~SBA and that there was no remaining balance on the PPP Loan. The Company ~~expects to record~~recorded the forgiveness as other income in April ~~2021.~~

2021 in the amount of $2.4 million, of which approximately $23,000 was accrued interest. For the quarter ended March 31, 2021, the Company incurred interest expense of approximately $6,000 related to the PPP Loan. ~~As of March 31, 2021, approximately $2.2 million of borrowings was classified as current, with the remaining $0.2 million classified as non-current.~~

6.5. Leases

The Company’s operating lease obligations primarily consist of leased office, laboratory, and manufacturing space under a non-cancelable operating lease. In addition to the minimum future lease commitments presented below, the lease requires the Company to pay property taxes, insurance, maintenance, and repair costs. The lease includes a rent holiday concession and escalation clauses for increased rent over the lease term. Rent expense is recognized using the straight-line method over the term of the lease. The Company records deferred rent calculated as the difference between rent expense and the cash rental payments.

The lease will expire on November 30, 2024. ~~We are~~The Company is obligated to pay approximately $5.8 million in base rent payments through November 2024, beginning on December 1, 2019. The weighted average remaining lease term as of March 31, ~~2021~~ 2022 is ~~3.7~~2.7 years.

The operating lease iswas included on the balance sheet at the present value of the future base payments discounted at a 6.5% discount rate using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment as the lease does provide an implicit rate.

~~For the three months ended March 31, 2021, our~~The Company’s operating lease expense, excluding variable maintenance fees and other expenses ~~paid by the Company~~ on a monthly basis, was approximately $105,000. Rent expense for both the three months ended March 31, ~~2021~~ 2022 and ~~2020~~2021 was approximately $314,000. The Company’s variable expenses for the three months ended March 31, 2022 and 2021 were approximately $66,000 and $59,000, respectively. Operating right-of-use asset amortization for the three months ended March 31, ~~2021~~ 2022 and ~~2020~~2021 was approximately ~~$249,000~~$264,000 and ~~$236,000,~~$249,000, respectively. Due to payments being made in excess of operating lease expense recognized, the Company recorded approximately ~~$257,000~~$150,000 and $158,000 as prepaid rent included in other assets on the condensed balance sheet as of March 31, ~~2021.~~2022 and December 31, 2021, respectively.

The following table presents the future operating lease payments and ~~lease~~leasehold liability included on the balance sheet related to the Company’s operating lease as of March 31, ~~2021 (in~~2022 (in thousands):

Year Ending December 31,
2021 (remaining nine months of the year)	$	843
2022		1,162
2022 (remaining nine months of the year)				$	873
2023		1,203			1,203
2024		1,138			1,138
Total		4,346			3,214
Less: Imputed interest		(498	)		(274	)
Leasehold liability as of March 31, 2021	$	3,848
Leasehold liability as of March 31, 2022				$	2,940

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of March 31, 2022 and December 31, 2021 (in thousands):

Lease-Related Assets and Liabilities	Financial Statement Line Items	March 31, 2022		December 31, 2021
Right of use assets:
Operating lease	Right of use asset	$	2,940	$	3,179
Total right of use assets		$	2,940	$	3,179
Lease liabilities:
Operating lease	Leasehold liability, current portion	$	1,011	$	985
	Leasehold liability, long-term portion		1,929		2,194
Total lease liabilities		$	2,940	$	3,179

7.6. Commitments and Contingencies

Purchase Obligations

Purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. The Company had non-cancelable commitments to suppliers for purchases totaling approximately ~~$0.9~~$1.2 million as of March 31, ~~2021.~~

~~Indemnification~~

~~In the normal course~~2022. The majority of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and may provide for indemnification of the counterparty. The Company’s exposure under these agreementsthis amount is ~~unknown because it involves claims that may be made against it in the future but have not yet been made. To date, the Company has not been subject to any claims or been required to defend any action~~ related to ~~its indemnification obligations.~~

~~The Company indemnifies each of its directors and officers~~commitments to purchase inventory components for certain events or occurrences, subject to certain limits, while the director is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws. The term of the indemnification period lasts as long as a director may be subject to any proceeding arising out of acts or omissions of such director in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company currently holds director liability insurance. This insurance allows the transfer of risk associated with the Company’s exposure and may enable it to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, it has not recognized any liabilities relating to these obligations for any period presented.our various product lines.

Legal Proceedings

~~We are~~ The Company is not currently involved in any pending legal proceedings that ~~we believe~~the Company believes could have a material adverse effect on our financial condition, results of operations or cash flows. From time to time, we the Company may be involved in legal proceedings or investigations, which could harm our reputation, business and financial condition and divert the attention of our management from the operation of our business.

8.7. Stockholders’ Equity

Convertible Preferred Stock

As of March 31, 2022 and December 31, 2021, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 5,000,000 shares of convertible preferred stock with $0.001 par value per ~~share,~~share. As of ~~which 52,276~~March 31, 2022 and December 31, 2021, 58,851 and 56,451 shares were issued and ~~outstanding.~~outstanding, respectively.

Series A Convertible Preferred Stock

On February 14, 2018, the Company entered into a Series A Purchase Agreement with CRG, pursuant to which it agreed to convert $38.0 million of the outstanding principal amount of its senior secured term loan (plus $3.8 million in back-end fees, accrued interest, debt discount and prepayment premium applicable thereto), totaling $41.8 million, into a newly authorized Series A convertible preferred stock (the “Series A preferred stock”). The Series A preferred stock was initially convertible into 2,090,000 shares of common stock subject to certain limitations contained in the Series A Purchase Agreement. Under the terms of the Series A Purchase Agreement, the holders of Series A preferred stock are entitled to receive annual accruing dividends at a rate of 8%, payable in additional shares of Series A preferred stock or cash, at the Company’s option. The shares of Series A preferred stock have a liquidation preference of $1,000 per share, no voting rights and rank senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights. ~~In January 2019,~~ During the year ended December ~~2019 and December 2020, 2,945, 3,580 and 3,866~~31, 2021, 4,175 additional shares ~~respectively,~~ were issued to CRG as payment of ~~dividends accrued through~~ dividends. As of March 31, 2022 and December 31, ~~2020. As of March 31,~~ 2021, ~~52,191~~56,366 shares of Series A preferred stock were ~~outstanding.~~outstanding, which are currently convertible into shares of the Company’s common stock at $400 per share. The Series A preferred stock accrued additional dividends of approximately ~~$1.0~~$1.1 million and ~~$967,000~~$1.0 million during the quarters ended March 31, ~~2021~~ 2022 and ~~2020,~~2021, respectively.

Series B Convertible Preferred Stock

On February 16, 2018, the Company completed a public offering of 17,979 shares of Series B convertible preferred stock (the “Series B preferred stock”). As a result, the Company received net proceeds of approximately $15.5 million after underwriting discounts, commissions, legal and accounting fees. The Series B preferred stock has a liquidation preference of $0.001 per share, full ratchet price based anti-dilution protection, has no voting rights and is subject to certain ownership limitations. The Series B preferred stock is immediately convertible at the option of the holder, has no stated maturity, and does not pay regularly stated dividends or interest. During the year ended December 31, ~~2019, 1,523 of these shares converted into 380,750 shares of common stock. During the quarter ended March 31,~~ 2021, 93 of these shares converted into ~~372,000~~18,600 shares of common stock. As of March 31, ~~2021~~ 2022 and December 31, ~~2020,~~ 2021, 85 ~~shares and 178~~ shares of Series B preferred stock remained outstanding, ~~respectively,~~ which are currently convertible into shares of the Company’s common stock at ~~$0.25~~$5 per share.

Series CD Convertible Preferred Stock

On ~~November 1, 2018,~~ January 14, 2022, the Company ~~completed~~entered into a ~~public~~security purchase agreement with several institutional investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering ( “January 2022 Offering”), an aggregate of ~~728,500~~7,600 shares of the Company’s Series D convertible preferred stock, par value $0.001 per share at an offering price of $1,000 per share. Concurrently, the Company agreed to issue to these investors warrants to purchase up to an aggregate of 807,500 shares of the Company’s common stock (the “Common Warrants”). The shares of Series D preferred stock has a stated value of $1,000 per share and are convertible into an aggregate of 950,000 shares of common stock ~~and 8,586~~at a conversion price of $8.00 per share. During the three months ended March 31, 2022, 5,200 of these shares converted into 650,000 shares of common stock. As of March 31, 2022, 2,400 shares of Series ~~C convertible~~D preferred stock ~~(the “Series C~~were outstanding, which are currently convertible into shares of the Company’s common stock at $8 per share.

On April 1, 2022 and on May 6, 2022, a holder of Series D preferred ~~stock”). As a~~stock opted to convert some of their Series D preferred stock into common stock. A total of 600 and 1,200 shares of Series D preferred stock were converted resulting in the issuance of an aggregate of 75,000 and 150,000 shares of common stock, respectively. After giving effect to these conversion, there remains 600 shares of Series D preferred stock, which if converted, would result ~~we received net proceeds~~in the issuance of ~~approximately $10.2 million after underwriting discounts, commissions, legal and accounting fees. Upon~~75,000 shares of common stock.

The Series D preferred stock can be converted at the option of the holders at any ~~dissolution, liquidation or winding up, whether voluntary or involuntary,~~time. In addition, subject to the satisfaction of certain conditions, the Company may cause the holders of the Series CD preferred stock ~~will~~to convert their shares of Series D preferred stock; provided, that shares of Series D preferred stock cannot be ~~entitled~~converted to ~~receive distributions out~~common stock if the applicable holder would beneficially own in excess of 4.99% (or, upon election by such holder prior to the issuance of any shares of Series D preferred stock, 9.99%) of our ~~assets, whether capital~~outstanding common stock. A holder of Series D preferred stock may, upon notice to us, increase or ~~surplus,~~decrease such beneficial ownership limitation, but not in excess of ~~an amount~~9.99%. The Series D preferred stock have a liquidation preference equal to ~~$0.001~~$0.01 per share of Series CD preferred stock.

The Series D preferred stock ~~before~~does not have any ~~distributions shall be made on the~~mandatory redemption provisions, contingently redeemable redemption provisions, preferential dividend rights, or voting rights, apart from mirrored, non-discretionary voting rights with common stock ~~but after distributions shall be made~~as a single class, equal to 37,500 votes per share of common stock underlying the preferred stock on ~~any~~a one-time proposal (the “Proposal”) to amend to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Charter”) to effect a reverse split of the outstanding shares of the Company’s common stock at a ratio between 1-for-5 and 1-for-20 (the “Reverse Split Amendment”) which was approved by the Company’s stockholders at a special stockholder meeting on March 11, 2022.

The Company evaluated the classification of the Series AD preferred stock and ~~any of our existing~~determined equity classification was appropriate due to no mandatory or ~~future indebtedness.~~contingently redeemable redemption features. The ~~Series C~~warrants issued to the investors were considered freestanding equity classified instruments. The Company first allocated gross proceeds from the registered direct offering between the preferred stock ~~has no voting rights. During~~and the ~~year ended December 31, 2019, all 2,170~~warrants issued to investors using a relative fair value approach, resulting in an initial allocation to each instrument of ~~these~~$4,009 and $3,591, respectively. On the issuance date, the Company estimated the fair value of the warrants issued to investors (the “Common Warrants”) and to placement agent designees using a Black-Scholes option pricing model using the following assumptions: (i) contractual term of 5.5 years, (ii) expected volatility rate of 136.61%, (iii) risk-free interest rate of 1.51%, (iv) expected dividend rate of 0%, and (v) closing price of the Company’s common stock of the day immediately preceding the registered direct offering. The fair value of preferred stock was estimated based upon equivalent common shares ~~were~~that preferred stock could have been converted into ~~542,500 shares~~at the closing price of the day immediately preceding the purchase date.

The embedded conversion feature was evaluated and bifurcation from the preferred stock equity host was not considered necessary. The issuance of the Series D convertible preferred stock generated a beneficial conversion feature (“BCF”) which arose as the equity security was issued with an embedded conversion option that is beneficial to the investor or in the money at inception because the conversion option has an effective conversion price that is less than the market price of the underlying stock at the commitment date. The Company recorded the BCF as a discount to the preferred stock resulting in the amount of $5,111 based on the intrinsic value of the beneficial conversion. As the preferred stock was immediately convertible into common stock ~~leaving no shares~~subject to the consummation of ~~Series C preferred~~the reverse stock ~~outstanding.~~split on March 14, 2022, a deemed dividend related to the discount associated with the beneficial conversion feature was recorded on that date. This one-time, non-cash charge impacted net loss applicable to common stockholders and net loss per share attributable to common stockholders for the three months ended March 31, 2022.

Common Stock

As of March 31, ~~2021,~~ 2022, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 100,000,000 shares of common stock with $0.001 par value per share, of which ~~95,351,502~~5,454,849 shares were issued and outstanding.

Common Stock Warrants

As of March 31, ~~2021 and December 31, 2020, we~~2022, the Company had outstanding warrants to purchase common stock as follows:

	Total Outstanding and Exercisable		Underlying Shares of Common Stock		Exercise Price per Share		Expiration Date
Series 1 Warrants issued in the February 2018 Series B financing		8,979,000		44,895	$	400.00	February 2025
Series 2 Warrants issued in the February 2018 Series B financing		8,709,500		43,548	$	400.00	February 2025
Warrants issued in the November 2018 financing		8,768,395		43,842	$	80.00	November 2023
Total as of December 31, 2021		26,456,895		132,265
Placement agent warrants issued in the January 2022 financing		1,330,000		66,500	$	10.00	January 2027
Warrants issued in the January 2022 financing		16,150,000		807,500	$	9.60	July 2027
Total as of March 31, 2022		43,936,895		1,006,285

Total
Outstanding
and
Exercisable

Underlying
Shares of
Common
Stock

Exercise
Price per
Share

Expiration Date
Series 1 Warrants issued in February 2018 Series B financing
8,979,000 897,900 $ 20.00
February 2025
Series 2 Warrants issued in February 2018 Series B financing
8,709,500 870,950 $ 20.00
February 2025
Warrants issued in July 2018 financing
1,083,091 108,309 $ 15.80
July 2021
Warrants issued in November 2018 financing
8,768,395 876,840 $ 4.00
November 2023
Total
27,539,986 2,753,999

Pursuant to the purchase agreement entered into on January 14, 2022, the Company issued the Common Warrants to purchase up to an aggregate of 807,500 shares of the Company’s common stock at an exercise price of $9.60 per share and which become exercisable beginning July 14, 2022. The Common Warrants will expire five years following the time they become exercisable, or July 14, 2027. The exercise price and the number of shares of common stock issuable upon exercise of each common warrant is subject to appropriate adjustments in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock. In addition, in certain circumstances, upon a fundamental transaction, a holder of Common Warrants will be entitled to receive, upon exercise, the kind and amount of securities, cash or other property that such holder would have received had they exercised the Common Warrants immediately prior to the fundamental transaction.

The Common Warrants can be exercised at the option of the holders at any time after they become exercisable provided that shares of the Common Warrants cannot be exercised into common stock if the applicable holder would beneficially own in excess of 4.99% (or, upon election by such holder prior to the issuance of any shares of Common Warrants, 9.99%) of the Company’s outstanding common stock immediately after giving effect to the exercise. A holder of the Common Warrants may, upon notice to the Company, increase or decrease such beneficial ownership limitation, but not in excess of 9.99%.

The Company also issued to the placement agent of the January 2022 Offering warrants to purchase up to an aggregate of 66,500 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants are subject to the same terms as the Common Warrants, except that the Placement Agent Warrants have an exercise price of $10.00 per share and a term of five years from the commencement of the sales pursuant to the January 2022 Offering, or January 12, 2027.

As of March 31, ~~2021~~ 2022 and December 31, ~~2020,~~ 2021, warrants to purchase an aggregate of ~~2,753,999~~1,006,285 and 132,265 shares of common stock were ~~outstanding.~~outstanding, respectively.

Stock Plans

In January 2015, the Board of Directors adopted and the Company’s stockholders approved the 2015 Equity Incentive Plan (“(“2015 Plan”). As of March 31, ~~2021, 135,048~~2022, 8,564 shares were available for grant under the 2015 Plan.

~~Stock option activity under the Plans is set forth below:~~

Number of
Shares

Weighted
Average
Exercise Price

Weighted
Average
Remaining
Contractual
Life
(in years)

Intrinsic
Value (in
thousands)

Balance at December 31, 2020
6,821 $ 1,241.59 5.81 $ —
Granted
— —
Exercised
— —
Expired
(74
)
2,821.62
Forfeited
— —
Balance at March 31, 2021
6,747 $ 1,224.26 5.62 $ —

Exercisable at March 31, 2021
6,747 $ 1,224.26 5.62 $ —

Vested and expected to vest at March 31, 2021
6,747 $ 1,224.26 5.62 $ —

There were no options granted or exercised during the three months ended March 31, 2021 and 2020. For the three months ended March 31, 2021 and 2020, stock-based compensation expense recognized associated with stock options vesting was approximately $4,000 and $33,000, respectively. As of March 31, 2021, there is no remaining unamortized stock-based compensation expense associated with unvested stock options. Because of theThe Company’s ~~net operating losses, the Company did not realize any tax benefits from share-based payment arrangements for the~~ RSUs generally vest annually over three ~~months ended March 31, 2021 and 2020.~~

years in equal increments. The Company measures the fair value of RSUs using the closing stock price of a share of the Company’s common stock on the grant date and is recognized as expense on a straight-line basis over the vesting period of the award. A summary of all RSU activity is presented below:

	Number of Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term		Number of Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term
Awards outstanding at December 31, 2020		412,642		$	3.84		0.98
Awards outstanding at December 31, 2021									10,060		$	24.39		0.72
Awarded		90,000		$	1.61		—		0		$	0		—
Released		(53,373	)	$	2.44		—		(417	)	$	11.64		—
Forfeited		—		$	—		—		(84	)	$	23.00		—
Awards outstanding at March 31, 2021		449,269		$	3.56		0.86
Awards outstanding at March 31, 2022									9,559		$	24.95		0.48

As of March 31, ~~2021,~~ 2022, there was approximately ~~$0.8~~$0.1 million of remaining unamortized stock-based compensation expense associated with RSUs, which will be expensed over a weighted average remaining service period of approximately ~~0.9~~0.5 years. The ~~449,269~~ outstanding non-vested and expected to vest RSUs at March 31, 2022 have an aggregate fair value of ~~approximately $0.7~~less than $0.1 million. The Company used the closing market price of ~~$1.51~~$3.63 per share at March 31, ~~2021,~~ 2022, to determine the aggregate fair value for the RSUs outstanding at that date. For the three months ended March 31, ~~2021~~ 2022 and ~~2020,~~2021, the fair value of RSUs vested was approximately ~~$87,000~~$3,000 and ~~$38,~~$87,000 respectively. For the three months ended March 31, ~~2021~~ 2022 and ~~2020,~~2021, stock-based compensation expense recognized associated with the vesting of RSUs ~~vested~~ was $52,000 and $0.4 million, ~~for each period.~~respectively.

2018 Officer and Director Share Purchase Plan

On August 22, 2018, the Board of Directors of the Company approved the adoption of an Officer and Director Share Purchase Plan (“ODPP”), which allows executive officers and directors to purchase shares of our common stock at fair market value in lieu of salary or, in the case of directors, director fees. Eligible individuals may voluntarily participate in the ODPP by authorizing payroll deductions or, in the case of directors, deductions from director fees for the purpose of purchasing common stock. The Board of Directors authorized ~~20,000~~1,000 shares to be made available for purchase by officers and directors under the ODPP. Effective on August 28, 2019 and March 10, 2020, the Board of Directors approved an additional ~~40,000~~2,000 and ~~125,000~~6,250 shares, respectively, to be made available under the ODPP. There was no common stock issued under the ODPP during either the three months ended March 31, 2022 or 2021. As of March 31, ~~2021,~~ 2022, there were ~~92,170~~4,609 shares reserved for issuance under the ODPP.

You should read the following discussion and analysis of our financial condition and results of operations together with the unaudited financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions, that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the SEC on March ~~11, 2021~~22, 2022 titled “Risk Factors.”

We are a commercial-stage medical device company that designs, manufactures and sells real-time image-guided, minimally invasive catheter-based systems that are used by physicians to treat patients with peripheral artery disease, or PAD. Patients with PAD have a build-up of plaque in the arteries that supply blood to areas away from the heart, particularly the pelvis and legs. Our mission is to significantly improve the treatment of vascular disease through the introduction of products based on our Lumivascular platform, the only intravascular real-time image-guided system available in this market.

We design, manufacture, and sell a suite of products in the United States and select international markets. We are located in Redwood City, California. Our current Lumivascular platform consists of products ~~include~~including our Lightbox real-time imaging console, the Ocelot family of catheters, which are image-guided catheters designed to allow physicians to penetrate a total blockage in an artery, known as a chronic total occlusion, or CTO, and the Pantheris family of catheters, our image-guided atherectomy family of catheters which is designed to allow physicians to precisely remove arterial plaque in PAD patients.

We are in the process of developing CTO crossing devices to target the coronary CTO market. The market for medical devices in the coronary artery disease (“CAD”) market is highly competitive, dynamic, and marked by rapid and substantial technological development and product innovation and there is no guarantee that we will be successful in developing and marketing any new CAD product. We are working on understanding market requirements and beginning the development process for the new CAD product. We anticipate that we will incur additional expenses as we continue to evaluate and develop potential CAD products.

We received CE Marking for our original Ocelot product in September 2011 and received from the U.S. Food and Drug Administration, or FDA, 510(k) clearance in November 2012. We received 510(k) clearance from the FDA for commercialization of Pantheris in October 2015. We received an additional 510(k) clearance for an enhanced version of Pantheris in March 2016 and commenced sales of Pantheris in the United States and select European countries promptly thereafter.

In May 2018, we received 510(k) clearance from the FDA for our current next-generation version of Pantheris. In April 2019, we received 510(k) clearance from the FDA for our Pantheris SV, a version of Pantheris targeting smaller vessels, and commenced sales in July 2019.

In September 2020, we received 510(k) clearance of Tigereye, a next-generation CTO crossing system utilizing Avinger’s proprietary image-guided technology platform. Tigereye is a product line extension of Avinger’s Ocelot family of image-guided CTO crossing catheters. ~~Its design elements include an upgrade~~In January 2022, we received 510(k) clearance from the FDA for our Lightbox 3 imaging console, a version of ~~the image capture rate to provide high definition, real-time intravascular imaging similar~~our Lightbox presenting significant reductions in size, weight and cost in comparison to the company’s Pantheris image-guided atherectomy system and a user-controlled deflectable tip designed to assist in steerability within the lumen. Tigereye also features a new distal tip configuration with faster rotational speeds designed to penetrate challenging lesions. The Tigereye catheter has a working length of 140 cm and 5 French sheath compatibility for treatment of lesions in the peripheral vessels both above and below the knee. The product became available in October 2020 for first cases in the U.S on a limited basis and launched commercially in January 2021.incumbent version.

Current treatments for PAD, including bypass surgery, can be costly and may result in complications, high levels of post-surgery pain, and lengthy hospital stays and recovery times. Minimally invasive, or endovascular, treatments for PAD include stenting, angioplasty, and atherectomy, which is the use of a catheter-based device for the removal of plaque. These treatments all have limitations in their safety or efficacy profiles and frequently result in recurrence of the disease, also known as restenosis. We believe one of the main contributing factors to high restenosis rates for PAD patients treated with endovascular technologies is the amount of vascular injury that occurs during an intervention. Specifically, these treatments often disrupt the membrane between the outermost layers of the artery, which is referred to as the external elastic lamina, or EEL.

We believe our Lumivascular platform is the only technology that offers real-time visualization of the inside of the artery during PAD treatment through the use of optical coherence tomography, or OCT, a high resolution, light-based, radiation-free imaging technology. Our Lumivascular platform provides physicians with real-time OCT images from the inside of an artery, and we believe Ocelot and Pantheris are the first products to offer intravascular visualization during CTO crossing and atherectomy, respectively. We believe this approach will significantly improve patient outcomes by providing physicians with a clearer picture of the artery using radiation-free image guidance during treatment, enabling them to better differentiate between plaque and healthy arterial structures. Our Lumivascular platform is designed to improve patient safety by enabling physicians to direct treatment towards the plaque, while avoiding damage to healthy portions of the artery.

During the first quarter of 2015, we completed enrollment of patients in VISION, a clinical trial designed to support our August 2015 510(k) submission to the FDA for our Pantheris atherectomy device. VISION was designed to evaluate the safety and efficacy of Pantheris to perform atherectomy using intravascular imaging and successfully achieved all primary and secondary safety and efficacy endpoints. We believe the data from VISION allows us to demonstrate that avoiding damage to healthy arterial structures, and in particular disruption of the external elastic lamina, which is the membrane between the outermost layers of the artery, reduces the likelihood of restenosis, or re-narrowing, of the diseased artery. Although the original VISION study protocol was not designed to follow patients beyond six months, we worked with 18 of the VISION sites to re-solicit consent from previous clinical trial patients in order for them to evaluate patient outcomes through 12 and 24 months following initial treatment. Data collection for the remaining patients from participating sites was completed in May 2017, and we released the final 12- and 24-month results for a total of 89 patients in July 2017.

During the fourth quarter of 2017, we began enrolling patients in INSIGHT, a clinical trial designed to support a submission to the FDA to expand the indication for our Pantheris atherectomy device to include in-stent restenosis. Patient enrollment began in October 2017 and ~~is expected to continue through~~was completed in July 2021. Patient outcomes ~~will be~~are being evaluated at thirty days, six months and one year following treatment. ~~We plan to submit a~~In November 2021, we received 510(k) ~~application with~~clearance from the FDA ~~seeking~~for a ~~specific~~new clinical indication for treating in-stent restenosis with Pantheris ~~once~~using the ~~trial is fully enrolled~~data collected and ~~follow-up data through six months~~analyzed from INSIGHT. We expect this will expand our addressable market for Pantheris to include a high-incidence disease state for which there are few available ~~and analyzed.~~

We continue development efforts on the next-generation of the Lightbox imaging console, the Lightbox 3, which is being designed to provide enhanced real-time video imaging capabilities in a much smaller form factor and at a lower cost. We anticipate filing a 510(k) submission for the Lightbox 3 during 2021.indicated treatment options.

We focus our direct sales force, marketing efforts and promotional activities on interventional cardiologists, vascular surgeons and interventional radiologists. We also work on developing strong relationships with physicians and hospitals that we have identified as key opinion leaders. Although our sales and marketing efforts are directed at these physicians because they are the primary users of our technology, we consider the hospitals and medical centers where the procedure is performed to be our customers, as they typically are responsible for purchasing our products. We are designing additional future products to be compatible with our Lumivascular platform, which we expect to enhance the value proposition for hospitals to invest in our technology. Pantheris qualifies for existing reimbursement codes currently utilized by other atherectomy products, further facilitating adoption of our products.

We have assembled a team with extensive medical device development and commercialization experience in both start-up and large, multi-national medical device companies. We assemble all of our products at our manufacturing facility but certain critical processes, such as coating and sterilization, are performed by outside vendors. We expect our current manufacturing facility in California, will be sufficient through at least ~~2021.~~2022. We generated revenues of ~~$9.1 million in 2019 and~~ $8.8 million in ~~2020.~~2020 and $10.1 million in 2021. The ~~decline~~lower revenues in 2020 was primarily due to the adverse effects of COVID-19 on our customers as hospitals deferred elective procedures. Revenues in 2021 and 2022 continue to fluctuate due to COVID-19.

As a result of the effects of the COVID-19 pandemic, we experienced a significant decline in sales, ~~in the second quarter of 2020,~~ particularly as individuals, as well as hospitals and other medical providers, deferred elective procedures in response to COVID-19. ~~Starting in the third quarter of 2020, we experienced a rebound of~~We have continued to experience fluctuating sales as practitioners ~~began~~in certain jurisdictions were able to ~~once again~~ perform elective ~~procedures.~~procedures while other jurisdictions were continuing to experience capacity issues. While ~~certain~~at present, a majority of jurisdictions have eased or are ~~easing~~in the process of lifting restrictions on performing elective procedures, we cannot be certain that other jurisdictions in the United States will do so in the near future, or that such restrictions will not be adopted again in the future. ~~Furthermore, some~~Some jurisdictions have experienced and continue to experience a resurgence in COVID-19 cases, which has prompted certain hospitals and other medical providers in such areas to again defer elective procedures or further prolong or reinstate existing restrictions on such procedures. If other jurisdictions experience a resurgence in COVID-19 cases, these jurisdictions may also prolong restrictions on elective procedures. This situation has created a significant amount of volatility in the medical industry which makes future developments and results difficult to predict. We believe COVID-19 has had and will continue to have an adverse effect on our ability to generate sales due to the fluctuating and unpredictable levels of capacity medical providers have to perform procedures that require the use of our products as was the case during the three months ended March 31, 2022. Consequently, it is unclear whether any reduction in sales from levels experienced prior to COVID-19 is temporary and whether such sales may be recoverable in the future. In addition, ~~to the effects on sales,~~ we have ~~also~~ experienced disruptions in our manufacturing and supply chain, as well as delays in site initiation and patient enrollment for our clinical studies. If we are unable to successfully complete these or other clinical studies, our business and results of operations could be harmed.

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. During the second quarter of 2020 we reduced base salaries for all of our non-manufacturing employees by 20% and reduction of hours worked by our manufacturing workers by 20%. Salaries and hours worked, have returned to prior levels. The COVID-19 pandemic and responses thereto have resulted in reduced consumer and investor confidence, instability in the credit and financial markets, volatile corporate profits, and reduced business and consumer spending, which could increase the cost of capital and/or limit the availability of capital to ~~the Company~~us in the future. These and other factors could adversely affect our ability to effectively manage our available cash and other resources.

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 applied for and, on April 23, 2020, received loan proceeds of $2.3 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the CARES Act. On April~~

~~As previously reported, on March 10, 2020, Avinger, Inc. (the “Company”)~~On September 22, 2021, we received a letter from ~~the~~Nasdaq’s Listing Qualifications Department ~~(the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”)~~ notifying ~~the Company~~us that ~~the Company was~~we were not in compliance with Nasdaq Listing Rule 5550(a)(2) ~~(the “Minimum Bid Price Requirement”)~~, as the minimum bid price for ~~the Company’s~~our listed securities was less than ~~$1.00~~$1 for the previous 30 consecutive business days. ~~The Company initially~~We had a period of 180 calendar days, or until ~~September 8, 2020,~~March 21, 2022, to regain compliance with the ~~Minimum Bid Price Requirement.~~

~~Also as previously reported, on April 20, 2020, the Company received notification from Nasdaq indicating that Nasdaq filed an immediately effective~~ rule ~~change with the SEC on April 16, 2020, pursuant~~referred to which the compliance periods for bid price and market value of publicly held shares requirements were tolled through June 30, 2020. As a result, the Company had until November 20, 2020 to regain compliance with Nasdaq’s Minimum Bid Price Requirement.

~~The Company~~in this paragraph. We did not regain compliance with the ~~Minimum Bid Price Requirement~~minimum bid price requirement by ~~November 20, 2020.~~March 21, 2022. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), ~~the Company~~we provided written notice to Nasdaq of ~~its~~our intent to cure the deficiency and, on ~~November 24, 2020, the Company~~March 22, 2022, we received notice that Nasdaq granted ~~the Company~~us an additional 180 calendar days, or until ~~May~~September 19, ~~2021,~~2022, to regain compliance.

On ~~January 26, 2021, the Company~~March 29, 2022, we received a letter from Nasdaq notifying ~~the Company~~us that the Staff had determined that the closing bid price of ~~the Company’s~~our common stock had been at $1.00 per share or greater for at least 10 consecutive business days and, accordingly, that ~~the Company~~we had regained compliance with the ~~Minimum Bid Price Requirement~~minimum bid price requirement for continued listing on the Nasdaq Stock Market and that the matter is now closed. While ~~the Company has~~we have regained compliance with the ~~Minimum Bid Price Requirement,~~minimum bid price requirement, there can be no assurance that ~~the Company~~we will be able to maintain compliance with the ~~Minimum Bid Price Requirement~~minimum bid price requirement or Nasdaq’s other continued listing requirements in the future.

We are closely monitoring the impacts of COVID-19 and general economic conditions on global supply chain, manufacturing, and logistics operations. As inflationary pressures increase, we anticipate that our production and operating costs may similarly increase, including costs and availability of materials and labor. In addition, COVID-19 and other events, including port closures or labor shortages, have resulted in manufacturing and shipping constraints generally. While we have had sufficient inventory on-hand to meet our current production requirements and customer demand, we have experienced some constraints with respect to the availability of certain materials and extended lead times from certain key suppliers. We have also experienced some delays in shipping products to our customers. Any significant delay or interruption in our supply chain could impair our ability to meet the demands of our customers in the future and could harm our business.

We may need to identify and qualify new suppliers in response to disruptions and difficulties experienced by some of our current suppliers. The process of identifying and qualifying suppliers is lengthy with no guarantee of ultimately mitigating the current issues experience by the Company. This process can include but is not limited to delays in qualification, quality issues on components, and higher costs to source these components. All of these issues may impair our ability to meet the demands of our customers in the future.

On March 11, 2022, our Board of Directors approved an amendment to our amended and restated certificate of incorporation to effect a 1-for-20 reverse stock split of our issued and outstanding common stock. The reverse stock split became effective on March 14, 2022. The par value of the common stock and preferred stock was not adjusted as a result of the reverse stock split. All common stock, stock options, and restricted stock units, and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock splits.

During the three months ended March 31, ~~2021,~~2022, our net loss and comprehensive net loss was $5.1 million; during the years ended December 31, ~~2020~~2021 and ~~2019,~~2020, it was ~~$19.0~~$17.4 million and ~~$19.5~~$19.0 million, respectively. We have not been profitable since inception, and as of March 31, ~~2021,~~2022, our accumulated deficit was ~~$372.4~~$389.9 million. Since inception, we have financed our operations primarily through private and public placements of our preferred and common securities and, to a lesser extent, debt financing arrangements.

In September 2015, we entered into a Term Loan Agreement, or Loan Agreement, with CRG Partners III L.P. and certain of its affiliated funds, collectively CRG, under which we were able to borrow up to $50.0 million on or before March 29, 2017, subject to certain terms and conditions. We borrowed $30.0 million on September 22, 2015 and an additional $10.0 million on June 15, 2016 under the Loan Agreement. Contemporaneously with the execution of the Loan Agreement, we entered into a Securities Purchase Agreement with CRG, pursuant to which CRG purchased ~~870~~44 shares of our common stock on September 22, 2015 at a price of ~~$5,596.40~~$111,928 per share, which represents the 10-day average of closing prices of our common stock ending on September 21, 2015. Pursuant to the Securities Purchase Agreement, we filed a registration statement covering the resale of the shares sold to CRG and must comply with certain affirmative covenants during the time that such registration statement remains in effect.

On February 14, 2018, we entered into a Series A preferred stock Purchase Agreement (the “Series A Purchase Agreement”) with CRG, pursuant to which it agreed to convert $38.0 million of the outstanding principal amount of its senior secured term loan (plus the back-end fee and prepayment premium applicable thereto) under the Loan Agreement into a newly authorized Series A preferred stock. As discussed in the section of this report titled “Dividend Policy,” the holders of Series A preferred stock are entitled to receive annual accruing dividends at a rate of 8%, payable in additional shares of Series A preferred stock or cash, at our option. The shares of Series A preferred stock have no voting rights and rank senior to all other classes and series of the Company’s equity in terms of repayment and certain other rights.

We have entered into several amendments to the Term Loan Agreement (the “Amendments”) with CRG since September 2015, the most recent of which, was entered into on January 22, 2021. The Amendments, among other things: (1) extended the interest-only period through December 31, 2023; (2) extended the period during which ~~the Company~~we may elect to pay a portion of interest in payment-in-kind, or PIK, interest payments through December 31, 2023 so long as no default has occurred and is continuing; (3) permitted ~~the Company~~us to make ~~its~~our entire interest payments in PIK interest payments for through December 31, 2023 so long as no default has occurred and is continuing; (4) extended the maturity date to December 31, 2025; (5) reduced the minimum liquidity requirement to $3.5 million at all times; (6) eliminated the minimum revenue covenant for 2018, 2019 and 2020; (7) reduced the minimum revenue covenant to $8 million for 2021, $10 million for 2022; (8) added minimum revenue covenants for of $12 million for 2023, $14.5 million for 2024 and $17 million for 2025; (9) changed the date under the on-going stand-alone representation regarding no “Material Adverse Change” to December 31, 2020; (10) amended the on-going stand-alone representation and stand-alone event of default regarding Material Adverse Change such that any adverse change in or effect upon the revenue of ~~the Company~~us and ~~its~~our subsidiaries due to the outbreak of COVID-19 will not constitute a Material Adverse Change; and (11) provided CRG with board observer rights.

On April 23, 2020, we received loan proceeds of $2.3 million pursuant to the Paycheck Protection Program under the CARES Act. The Loan, which was in the form of a promissory note, dated April 20, 2020, between the Company and SVB as the lender, matured on April 20, 2022 and bears interest at a fixed rate of 1% per annum. As previously disclosed, the PPP was administered by the SBA. The SBA was given the authority under the PPP to forgive loans if all employees were kept on the payroll for a required period and the loan proceeds were used for payroll, rent and utilities. The Company applied for debt forgiveness in December 2020. On April 17, 2021, we were notified by SVB, that the Company’s PPP Loan had been fully forgiven by the SBA and that there was no remaining balance on the PPP Loan.

Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenues, expenses and related disclosures of contingent assets and liabilities. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. There have been no significant and material changes in our critical accounting policies during the three months ended March 31, ~~2021,~~2022, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies and Significant Judgments and Estimates” in our most recent Annual Report on Form 10-K, as filed with the SEC on March ~~11, 2021.~~22, 2022.

All of our revenues are currently derived from sales of our various PAD catheters in the United States and select international markets, Lightbox consoles, ~~as well as~~and related services. ~~We expect our revenues to increase in 2021 due to~~For the ~~availability~~three months ended March 31, 2022, there was one customer that represented 14% of ~~our Tigereye launch in late 2020 and easing of restrictions on elective procedures due to the diminishing impact of COVID-19. No single customer accounted for more than 10% of our revenues during~~revenues. For the three months ended March 31, 2021, there were no customers that represented 10% or ~~2020.~~more of revenues.

Revenues may fluctuate from quarter to quarter due to a variety of factors including capital equipment purchasing patterns that are typically increased towards the end of the calendar year and decreased in the first ~~quarter.~~quarter and our ability to have product available in light of supply chain challenges. In addition, during the first quarter, our results can be harmed by adverse weather and by resetting of annual patient healthcare insurance plan deductibles, both of which may cause patients to delay elective procedures. In the third quarter, the number of elective procedures nationwide is historically lower than other quarters throughout the year, which we believe is primarily attributable to the summer vacations of physicians and their patients. Additionally, we believe COVID-19 has had and will continue to have an adverse effect on our ability to generate sales due to the fluctuating and unpredictable levels of capacity medical providers have to perform procedures that require the use of our products.

Cost of revenues consists primarily of costs related to manufacturing overhead, materials and direct labor. We expense all warranty costs and inventory provisions as cost of revenues. We periodically write-down inventory for estimated excess, obsolete and non-sellable inventories based on assumptions about future demand, past usage, changes to manufacturing processes and overall market conditions. A significant portion of our cost of revenues currently consists of manufacturing overhead costs. These overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment and operations supervision and management. We expect overhead costs as a percentage of revenues to become less significant as our production volume increases. Cost of revenues also includes depreciation expense for production equipment, depreciation and related maintenance expense for placed Lightboxes held by customers and certain direct costs such as those incurred for shipping our products.

We calculate gross margin as gross profit divided by revenues. Our gross margin has been and will continue to be affected by a variety of factors, primarily production volumes, manufacturing costs, product yields, headcount, charges for excess and obsolete inventories and cost-reduction strategies. We intend to use our design, engineering and manufacturing capabilities to further advance and improve the efficiency of our manufacturing processes, which we believe will reduce costs and increase our gross margin. In the future, we may seek to manufacture certain of our products outside the United States to further reduce costs. Our gross margin will likely fluctuate from quarter to quarter as we continue to introduce new products and sales channels, and as we adopt new manufacturing processes and technologies.

Research and development, or R&D, expenses consist primarily of engineering, product development, clinical and regulatory affairs, consulting services, materials, depreciation and other costs associated with products and technologies in development. These expenses include employee compensation, including stock-based compensation, supplies, materials, quality assurance expenses allocated to R&D programs, consulting, related travel expenses and facilities expenses. Clinical expenses include clinical trial design, clinical site reimbursement, data management, travel expenses and the cost of manufacturing products for clinical trials. We expect R&D expenses to vary over time depending on the level and timing of our new product development efforts, as well as our clinical development, clinical trial and other related activities.

Selling, general and administrative, or SG&A, expenses consist primarily of compensation for personnel, including stock-based compensation, selling and marketing functions, physician education programs, business development, finance, information technology and human resource functions. Other SG&A expenses include commissions, training, travel expenses, educational and promotional activities, marketing initiatives, market research and analysis, conferences and trade shows, professional services fees, including legal, audit and tax fees, insurance costs and general corporate expenses. We expect SG&A expenses to increase as we expand our commercial efforts ~~whilst navigating through the effects of COVID-19.~~and additional costs related to corporate matters.

Interest expense, net consists primarily of interest incurred on our outstanding indebtedness and non-cash interest related to the amortization of debt discount and issuance costs associated with our various debt agreements.

Other income, net primarily consists of gains and losses resulting from the remeasurement of foreign exchange ~~transactions.~~transactions and other miscellaneous income and expenses.

For the three months ended March 31, ~~2021,~~2022, revenue ~~increased~~decreased by ~~$0.3~~$0.7 million or ~~13%~~26% compared to the three months ended March 31, ~~2020.~~2021. The ~~increased~~decrease in revenues reflect the fluctuating demand primarily resulting from uncertainties due to COVID-19 as capacity limitations in hospitals have limited the ability of practitioners to perform elective surgical procedures using our products in certain jurisdictions. We anticipate that COVID-19 could continue to impact ofhospital capacities, and related demand for our products, for the ~~commercial release of our Tigereye product in January 2021.~~foreseeable future.

For the three months ended March 31, ~~2021,~~2022, cost of revenues decreased by ~~$0.1~~$0.3 million or 5%18% compared to the three months ended March 31, ~~2020.~~2021. This decrease was primarily attributable to the ~~lower variable costs.~~decrease in revenues. Stock-based compensation expense within cost of revenues totaled $7,000 and $34,000 for ~~both~~ the three months ended March 31, 2022 and 2021, ~~and 2020.~~respectively.

Gross margin for the three months ended March 31, ~~2021 increased~~2022 decreased to ~~35%~~28%, compared to ~~22%~~35% in the three months ended March 31, ~~2020.~~2021. The ~~increase~~decrease in gross margin was primarily due to the decrease in revenues and consequently a decrease in economies of scale relating to ~~increased~~the decreased levels of ~~production, lower excess and obsolete charges and favorable customer mix shift.~~production.

R&D expense for the three months ended March 31, ~~2021 remained flat~~2022 decreased $0.5 million or 33% compared to the three months ended March 31, ~~2020.~~2021 primarily due to the completion of our development efforts on the Lightbox 3 last fiscal year. Stock-based compensation expense within R&D totaled approximately $13,000 and $0.1 million for ~~both~~ the three months ended March 31, ~~2020~~2022 and ~~2019.~~2021, respectively.

SG&A expense for the three months ended March 31, ~~2021 decreased~~2022 increased by ~~$0.4~~$0.2 million or ~~10%~~5%, compared to the three months ended March 31, ~~2020~~2021 primarily due to ~~a decrease~~an increase in ~~personnel-related expenses and~~third-party professional services and other ancillary expenses. Stock-based compensation expense within SG&A totaled approximately $33,000 and $0.3 million for ~~both~~ the three months ended March 31, 2022 and 2021, ~~and 2020.~~respectively.

Interest expense, net for the three months ended March 31, ~~2021~~2022 increased by 8%11% or ~~$28,000,~~$42,000, compared to the three months ended March 31, ~~2020,~~2021, primarily due to the higher CRG loan balance from interest being ~~compounded and lower interest~~compounded. Interest income ~~as compared to the prior year period,~~remains low due to the decline in the money market interest ~~rates during the period.~~rates.

Other expense, net primarily consists of gains and losses resulting from the remeasurement of foreign exchange transactions and other miscellaneous income and expenses. Other expense, net for the three months ended March 31, ~~2021~~2022 remained flat in comparison to the three months ended March 31, ~~2020~~2021 as both periods consisted primarily of remeasurement gains and losses from foreign exchange transactions which are typically a small percentage of transaction volume, thus resulting in nominal changes between periods.

As of March 31, ~~2021,~~2022, we had cash and cash equivalents of ~~$30.4~~$20.0 million and an accumulated deficit of ~~$372.4~~$389.9 million, compared to cash and cash equivalents of ~~$22.2~~$19.5 million and an accumulated deficit of ~~$367.3~~$384.8 million as of December 31, ~~2020. The Company expects~~2021. We expect to incur losses for the foreseeable future. ~~The Company believes~~We believe that ~~its~~our cash and cash equivalents of ~~$30.4~~$20.0 million at March 31, ~~2021~~2022 and expected revenues, debt and financing activities and funds from operations will be sufficient to allow ~~the Company~~us to fund ~~its~~our current operations into the second quarter of 2023.

To date, we have financed our operations primarily through ~~2022.~~net proceeds from the issuance of our preferred stock and debt financings, our “at-the-market” program, our initial public offering, or IPO, our follow-on public offerings and warrant issuances. We do not know when or if our operations will generate sufficient cash to fund our ongoing operations. Additional debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any additional debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders and require significant debt service payments, which divert resources from other activities. Additional financing may not be available at all, or if available, may not be in amounts or on terms acceptable to us. If we are unable to obtain additional financing, we may be required to delay the development, commercialization and marketing of our products and we may be required to significantly scale back our business and operations.

In addition, the COVID-19 pandemic and responses thereto have resulted in reduced consumer and investor confidence, instability in the credit and financial markets, volatile corporate profits, restrictions on elective medical procedures, and reduced business and consumer spending, which could increase the cost of capital and/or limit the availability of capital to ~~the Company.~~us. While we have taken certain actions to manage our available cash and other resources to mitigate the effects of COVID-19 on our business, there can be no assurance that such strategies will be successful in mitigating the negative impacts of the COVID-19 pandemic on our liquidity and capital resources.

To date, we have financed our operations primarily through net proceeds from the issuance of our preferred stock and debt financings, our “at-the-market” program, our initial public offering, or IPO, our follow-on public offerings and warrant issuances. The warrants issued pursuant to the Series B Purchase Agreement entered into in connection with the Series B preferred stock follow-on in February 2018, or the Series B Offering, prohibited us from entering into certain transactions involving the issuance of securities for a price determined by reference to the trading price of our common stock or otherwise subject to modification following the date of issuance, in each case for a period of three years from the closing date of the Series B Offering (and excluding purchases pursuant to the Series B Purchase Agreement, which may be made on the 120 day anniversary of the closing date of the offering).

On ~~March 7, 2019, we filed a universal~~February 2, 2021, under the shelf registration statement, (the “Shelf Registration Statement”) to offer up to $50.0 million of our securities. We have established, and may in the future establish, “at-the-market” programs pursuant to which we may offer and sell shares of our common stock pursuant to the Shelf Registration Statement. Due to the SEC’s “baby shelf rules,” which prohibit companies with a public float of less than $75 million from issuing securities under a shelf registration statement in excess of one-third of such company’s public float in a twelve-month period, we are only able to issue a limited number of shares using the Shelf Registration Statement at this time. Under the Shelf Registration Statement, on August 26, 2019, we completed a ~~public~~bought deal offering of ~~3,813,559~~500,000 shares of common stock at an offering price of ~~$1.18~~$28.80 per share. As a result, we received net proceeds of approximately $3.8 million after underwriting discounts, commissions, legal and accounting fees. Due to anti-dilution provisions, the conversion price of the outstanding shares of Series B preferred stock, which was issued in our February 2018 offering, was reduced to $1.18 per share.

On January 31, 2020, we completed a public offering of 6,428,572 shares of common stock at an offering price of $0.70 per share. As a result, we received net proceeds of approximately $3.9 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses. Due to anti-dilution provisions, the conversion price of the outstanding shares of Series B preferred stock, which was issued in our February 2018 offering, was reduced to $0.70 per share.

On April 30, 2020, we completed a public offering of 12,600,000 shares of common stock at an offering price of $0.25 per share. On May 6, 2020 we issued an additional 1,890,000 shares of common stock at the same offering price pursuant to the exercise in full of the underwriter’s over-allotment option in connection with the aforementioned offering. As a result, we received aggregate net proceeds of approximately $3.0 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses. Due to anti-dilution provisions, the conversion price of the outstanding shares of Series B preferred stock, which was issued in our February 2018 offering, was reduced to $0.25 per share.

On ~~August 25, 2020, under the Shelf Registration Statement,~~January 14, 2022, we ~~completed~~entered into a ~~public~~securities purchase agreement with several institutional investors pursuant to which we agreed to sell and issue, in a registered direct offering (“January 2022 Offering”), an aggregate of ~~11,063,830~~7,600 shares of ~~common~~our Series D convertible preferred stock, par value of $0.001 per share, at an offering price of ~~$0.47~~$1,000 per share. ~~On September 1, 2020~~Concurrently, we ~~issued~~agreed to issue to these investors warrants to purchase up to an ~~additional 1,000,000~~aggregate of 807,500 shares of our common stock ~~at the same offering price pursuant to the exercise in full of the underwriter’s over-allotment option in connection with the aforementioned offering.~~(the “Common Warrants”). As a result, we received aggregate net proceeds of approximately ~~$5.1~~$6.7 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.

In connection with the January 2022 Offering and in accordance with the securities purchase agreement, we held a special meeting of stockholders on March 11, 2022 to consider a proposal (the “Proposal”) to amend to our Amended and Restated Certificate of Incorporation, as amended (the “Charter”) to effect a reverse split of the outstanding shares of our common stock at a ratio between 1-for-5 and 1-for-20 (the “Reverse Split Amendment”). Our stockholders approved the Reverse Split Amendment at the special meeting. On ~~February 2, 2021, under~~March 11, 2022, following receipt of stockholder approval, our Board of Directors approved a reverse split ratio of 1-for-20 and we filed an amendment to our Charter to effect such reverse stock split, effective as of 5:00 pm Eastern Time on March 14, 2022.

Pursuant to the ~~Shelf Registration Statement,~~purchase agreement, we ~~completed~~filed a ~~bought deal offering~~certificate of ~~10,000,000~~designation (the “Certificate of Designation”) with the Secretary of State of Delaware designating the rights, preferences and limitations of the shares of Series D preferred stock, which became effective on January 14, 2022. The Certificate of Designation provided, in particular, that the Series D preferred stock will have no voting rights, other than the right to vote as a class on certain matters, except that each share of Series D preferred stock had the right to cast 37,500 votes per share of Series D preferred stock on the Proposal (the “Supermajority Voting Rights”); provided, that the votes cast by the holders of the Series D preferred stock must be counted in the same proportion as the aggregate shares of common stock voted on the Proposal. Because the Proposal was approved by our stockholders at the special meeting held on March 11, 2022, the Series D preferred stock no longer has Supermajority Voting Rights.

The holders of the Series D preferred stock are entitled to dividends, on an as-if converted basis, equal to dividends actually paid, if any, on shares of Common Stock. The Series D preferred stock is convertible into shares of common stock at ~~an offering~~a conversion price of ~~$1.44~~$8.00 per ~~share. As~~share, as adjusted for the most recent reverse stock split. The conversion price can be adjusted pursuant to the Certificate of Designation for stock dividends and stock splits, subsequent rights offerings, pro rata distributions of dividends or the occurrence of a ~~result,~~fundamental transaction (as defined in the Certificate of Designation). The Series D preferred stock can be converted at the option of the holders at any time. In addition, subject to the satisfaction of certain conditions, we ~~received~~may cause the holders of the Series D preferred stock to convert their shares of Series D preferred stock; provided, that shares of Series D preferred stock cannot be converted to common stock if the applicable holder would beneficially own in excess of 4.99% (or, upon election by such holder prior to the issuance of any shares of Series D preferred stock, 9.99%) of our outstanding common stock. A holder of Series D preferred stock may, upon notice to us, increase or decrease such beneficial ownership limitation, but not in excess of 9.99%. In March 2022, after the effectiveness of the Reverse Split Amendment, 5,200 shares of Series D preferred stock were converted into an aggregate ~~net proceeds~~ of ~~approximately $13.1 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.~~650,000 shares of common stock.

~~On March 2, 2020,~~The Common Warrants have an exercise price of $9.60 per share and become exercisable beginning July 14, 2022. The Common Warrants will expire five years following the ~~Company~~time they become exercisable, or July 14, 2027. We also issued to the Placement Agent or its designees warrants to purchase up to an aggregate of 66,500 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants are subject to the same terms as the Common Warrants, except that the Placement Agent Warrants have an exercise price of $10.00 per share and ~~CRG further amended the Loan Agreement to change the date upon which cash payments for interest will commence~~a term of five years from the ~~first quarter~~commencement of ~~2020~~the sales pursuant to the ~~third quarter of 2021. No cash payments for principal will be made until the final two years of the loan, which matures in June 2023. On May~~January 2022 Offering, or January 12, 2020, the Company and CRG entered into another amendment to waive the Company’s requirement to comply with the minimum required revenue covenant for 2020 and granted to Company the ability to optionally prepay in whole or in part the outstanding principal amount of the Loans for the Redemption Price. The total CRG Loan amount, shown as borrowings on the balance sheet as of March 31, 2021, is $11.1 million. However, upon maturity of the debt in December 2025, the Company will be obligated to pay $19.4 million under the CRG Loan, which includes future interest to be accrued but not paid in cash as well as a $2.2 million back-end fee which is being accreted to the maturity date. Refer to Part I, Item 1 “Unaudited Financial Statements, Footnote 5. Borrowings” for additional details.2027.

On April 23, 2020, we received loan proceeds of $2.3 million (the “PPP Loan”) pursuant to the ~~Paycheck Protection Program~~PPP under the CARES Act. The PPP Loan, which was in the form of a promissory note, dated April 20, 2020 (the “Promissory Note”), between ~~the Company~~us and Silicon Valley Bank (“SVB”) as the lender, ~~matures~~was set to mature on April 20, 2022 and ~~bears~~bore interest at a fixed rate of 1% per ~~annum, payable monthly commencing one month after~~annum.

As previously disclosed, the PPP was administered by the U.S. Small Business Administration (the “SBA”). The SBA ~~delivers conclusions~~was given the authority under the PPP to forgive loans if all employees were kept on the ~~amount of~~payroll for a required period and the loan to be forgiven. The conclusion from the SBA will be delivered once an audit of our application for forgiveness along with ancillary materials provided has been completed. Under the terms of the PPP, the principal may be forgiven if the Loan proceeds ~~are~~were used for ~~qualifying expenses as described in the CARES Act and the PPPFA, such as~~ payroll, ~~costs, benefits mortgage interest,~~ rent and utilities. ~~We submitted our application~~The Company applied for debt forgiveness ~~to the SBA~~ in December 2020. On April 17, 2021, ~~we were~~the Company was notified by SVB that ~~the Company’s~~its PPP Loan had been fully forgiven by the SBA and that there was no remaining balance on the PPP Loan. The Company recorded the forgiveness as other income in April 2021 in the amount of $2.4 million, of which approximately $23,000 was accrued interest.

Our principal obligations consist of the operating lease for our facility, our Loan Agreement with CRG and may still apply for additional programs under the CARES Act or other legislation passed into law from time to time, however, 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 tonon-cancelable purchase commitments. The following table sets out, as of March 31, 2022, our contractual obligations due by period (in thousands):

Net cash used in operating activities for the three months ended March 31, 2022 was $6.2 million, consisting primarily of a net loss of $5.1 million and an increase in net operating assets of $1.6 million, partially offset by non-cash charges of $0.5 million. Non-cash charges largely related to non-cash interest expense of $0.4 million. The increase in net operating assets was primarily due to the increase in prepaid expenses and other current assets due to annual renewals of certain expenses, including insurance coming due; and purchases of inventory components. These increases were partially offset by the increase in accrued compensation and other long-term liabilities due to timing of payments.

Net cash used in operating activities for the three months ended March 31, 2021 was $4.8 million, consisting primarily of a net loss of $5.1 million and an increase in net operating assets of $0.8 million, offset by non-cash charges of $1.1 million. Non-cash charges largely related to stock-based compensation of $0.4 million, non-cash interest expense of $0.4 million, and depreciation and amortization of $0.2 million. The increase in net operating assets was primarily due to the increase in prepaid expenses and other current assets due to annual renewals of certain expenses, including insurance coming due; partially offset by the increase in accrued expenses and other current liabilities due to timing of payments.

Net cash used in operating activities for the three months ended March 31, 2020 was $5.0 million, consisting primarily of a net loss of $5.9 million and an increase in net operating assets of $0.4 million, offset by non-cash charges of $1.3 million. Non-cash charges largely related to stock-based compensation of $0.5 million, non-cash interest expense of $0.4 million, and depreciation of $0.2 million. The increase in net operating assets was primarily due to the increase in prepaid expenses and decreases in accrued compensation and our leasehold liability; partially offset by the increase in accounts payable and other assets.

Net cash used in investing activities during both the three months ended March 31, 2022 and 2021 consisted of purchases of property and equipment.

~~There were no investing activities during the three months ended March 31, 2020.~~

Net cash provided by financing activities in the three months ended March 31, 2022 of $6.7 million relates to proceeds from the issuance of preferred stock and warrants in the January 2022 Offering, net of commissions and various issuance costs.

Net cash provided by financing activities in the three months ended March 31, 2021 of $13.1 million relates to proceeds from the issuance of common stock in our January 2021 public offering, net of commissions and various issuance costs.

Net cash provided by financing activities in the three months ended March 31, 2020 of $3.9 million primarily relates to proceeds from the issuance of common stock in our January 2020 public offering, net of various issuance costs.

~~We currently have no off-balance sheet arrangements, such as structured finance, special purpose entities, or variable interest entities.~~

Our principal obligations consist of the operating lease for our facility, our Loan Agreement with CRG, our PPP Loan and non-cancelable purchase commitments. The following table sets out, as of March 31, 2021, our contractual obligations due by period (in thousands):

The total CRG Loan amount, shown as borrowings on the balance sheet as of March 31, 2021, is $11.0 million. The contractual obligation in the table above of $19.4 million under the CRG Loan includes future interest to be accrued but not paid in cash as well as a $2.2 million back-end fee to be paid in December 2025 upon maturity of the CRG Loan which is being accreted. For more information, see Part I, Item 1 “Unaudited Financial Statements, Footnote 5. Borrowings.”

On April 17, 2021, we were notified by SVB, that the Company’s PPP Loan had been fully forgiven by the SBA and that there was no remaining balance on the PPP Loan. As previously disclosed, the PPP was administered by the SBA. The SBA was given the authority under the PPP to forgive loans if all employees were kept on the payroll for a required period and the loan proceeds were used for payroll, rent and utilities.

The risk associated with fluctuating interest rates is primarily limited to our cash equivalents, which are carried at quoted market prices. Due to the short-term maturities and low risk profile of our cash equivalents, an immediate 100 basis point change in interest rates would not have a material effect on the fair value of our cash equivalents. We do not currently use or plan to use financial derivatives in our investment portfolio.

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, our cash and cash equivalents were maintained with one financial institution in the United States, and our current deposits are likely in excess of insured limits. We have reviewed the financial statements of this institution and believe it has sufficient assets and liquidity to conduct its operations in the ordinary course of business with little or no credit risk to us.

Our accounts receivable primarily relate to revenues from the sale of our Lumivascular platform products to hospitals and medical centers in the United States. ~~None of our customers represented more than 10% of our accounts receivable as of~~At March 31, ~~2021. One customer represented 14% of our accounts receivable as of~~2022 and December 31, ~~2020.~~2021, there was one customer that represented 13% and 21% of accounts receivable.

Our business is primarily conducted in U.S. dollars. Any transactions that may be conducted in foreign currencies are not expected to have a material effect on our results of operations, financial position or cash flows.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations thereunder, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, ~~2021.~~2022. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of March 31, ~~2021,~~2022, our disclosure controls and procedures were effective.

There were no changes in our internal controls over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended March 31, ~~2021~~2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~There have been no material changes from the risk~~Our business, financial condition and results of operations can be affected by a number of factors, ~~previously disclosed~~whether currently known or unknown, including but not limited to those described in Part I, Item 1A of our ~~Annual Report~~annual report on Form 10-K ~~filed~~for the year ended December 31, 2021 under the heading “Risk Factors.” In addition to those risk factors, the below risk factors are applicable to us. Any one or more of these risk factors could, in whole or in part, directly or indirectly, materially adversely impact our business and stock price and cause our actual financial condition and results of operations to vary materially from its past, or its anticipated future, financial condition and results of operations.

Nasdaq may delist our securities from its exchange, which could harm our business and limit our stockholders’ liquidity.

Our common stock is currently listed on the Nasdaq Capital Market (“Nasdaq”), which has qualitative and quantitative listing criteria. However, we cannot assure you that our common stock will continue to be listed on Nasdaq in the future. In order to continue listing our common stock on Nasdaq, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity, a minimum number of holders of our common stock and a minimum bid price.

In particular, Nasdaq Listing Rule 5550(a) and 5550(b)(1) require us to maintain a minimum stockholders’ equity of $2.5 million. While we are currently in compliance with this rule, we may not be able to maintain compliance in the future. We have, since our inception, incurred net losses and expect we will continue to incur net losses. The decline in our equity is a direct result of our net loss. As we continue to incur losses, our accumulated deficit will continue to increase, which will have a negative impact on our equity balance. Therefore, if we do not continually raise funds through various equity offerings that have an accretive value to our equity, our equity balances will continue to decline. If we are unable to raise capital in a manner that provides accretive value to our equity, our stockholders’ equity may decrease below the minimum required by Nasdaq, which could result in Nasdaq delisting our common stock.

If Nasdaq delists our common stock from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

Covenants under the Loan Agreement will restrict our business in many ways.

The Loan Agreement contains various covenants that limit, subject to certain exceptions, our ability to, among other things:

In particular, the Loan Agreement, as most recently amended in January 2021, includes a covenant that we maintain a minimum of $3.5 million of cash and certain cash equivalents, and we will have to achieve minimum revenues of $10.0 million in 2022, $12.0 million in 2023, $14.5 million in 2024 and $17.0 million in 2025. Our revenue for the quarter ended March 31, 2022 was approximately $1.9 million. Based on our annualized revenue as of March 31, 2022, we are not currently on-track to satisfy the minimum revenue covenant for 2022. If we fail to meet the applicable minimum revenue target in any calendar year, the Loan Agreement provides a cure right if we prepay a portion of the outstanding principal equal to 2.0 times the revenue shortfall. Such prepayment would use capital resources that are otherwise required for us to operate our business and, therefore, if we are required to pay such amounts our liquidity and operations could be adversely affected. In addition, if we are unable to make such required prepayment and, as a result, default on our obligations under the Loan Agreement, our business will be adversely affected. There can be no assurance as to our future compliance with the ~~Securities~~covenants under the Loan Agreement, as amended.

The covenants contained in the Loan Agreement could adversely affect our ability to execute our business strategies by restricting our ability to make capital expenditures, engage in strategic acquisitions, refinance our outstanding indebtedness, or obtain additional financing. Such restrictions may make it difficult to plan for or react to changes in market conditions, such as future downturns in our business or the economy in general.

In addition, potential sources of equity financing may decline to invest in our company given the amount of debt and ~~Exchange Commission~~the rights that debt holders have to get paid before equity holders. In order to facilitate equity investments, future equity investors may require that we convert all or a portion of our debt to equity, and our debtholders may not agree to such terms. The amount of debt could therefore affect our ability to finance our company and prevent us from obtaining necessary operating capital as a result.

We depend on ~~March 11, 2021.~~our senior management team and the loss of one or more key employees or an inability to attract and retain highly skilled employees could harm our business.

Our success largely depends upon the continued services of our executive management team and key employees and the loss of one or more of our executive officers or key employees could harm us and directly impact our financial results. Our employees may terminate their employment with us at any time. Changes in our executive management team resulting from the hiring or departure of executives could disrupt our business. For example, our Chief Financial Officer recently provided notice to us that he is resigning effective May 12, 2022. If we are unable to hire one or more replacement employees or otherwise fill his responsibilities, our ability to effectively manage our business could be adversely affected.

We must attract and retain highly qualified personnel. Competition for skilled personnel is intense, especially for engineers with high levels of experience in designing and developing medical devices and for sales professionals. We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources and, potentially, damages. In addition, job candidates and existing employees, particularly in the San Francisco Bay Area, often consider the value of the stock awards they receive in connection with their employment. If the perceived value of our stock awards declines or if we do not make grants of stock-based incentive awards, it may harm our ability to recruit and retain highly skilled employees. In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business would be harmed.

We depend on third-party vendors to manufacture some of our components, coating and sub-assemblies, including some single source suppliers, which could make us vulnerable to supply shortages and price fluctuations that could harm our business.

We currently manufacture some of our components and sub-assemblies at our Redwood City facility and rely on third-party vendors for other components and sub-assemblies used in our Lumivascular platform. For several of our components and sub-assemblies we rely on single and limited source suppliers. For example, we rely on single vendors for our optical fiber, coatings and drive cables that are key components of our catheters, and we rely on single vendors for our laser and data acquisition card that are key components of our Lightbox. These components are critical to our products and there are relatively few, and in some cases, no alternative sources of supply. Further, we do not carry a significant inventory of these components. If our suppliers of these materials cease doing business, reduce their production capacity, or otherwise limit the amount of materials we can purchase, we may be unable to acquire necessary materials on favorable terms, or at all. If we are unable to purchase required inputs for our production, our business will be adversely affected.

Our reliance on third-party vendors subjects us to a number of risks that could impact our ability to manufacture our products and harm our business.

We rely on third-party vendors to supply us with raw materials, as well as certain components and sub-assemblies used in the manufacture of our products. Our reliance on such third parties subjects us to a number of risks that could adversely affect our operations, including:

The ongoing COVID-19 pandemic, including subsequent variants, and measures taken in response by governments and businesses worldwide to contain its spread, including quarantines, facility closures, travel and logistics restrictions, border controls, and shelter in place or stay at home and social distancing orders, have adversely impacted and are expected to continue to adversely impact global supply chain, manufacturing, and logistics operations. Shipping and freight delays have also been increasing in response to port closures, port congestion, shipping container and ship shortages, and global conflicts. To the extent the COVID-19 pandemic and other events result in continuation or worsening of manufacturing and shipping delays and constraints, our suppliers of raw materials and other components may have difficulty obtaining and providing the materials we require to manufacture our products, which could adversely affect our ability to acquire and maintain adequate inventory and meet demand for our products.

Some of our suppliers have begun requiring us to provide longer-term forecasts of our supply requirements. If our assumptions about customer demand are incorrect, the forecasts we provide to our suppliers may result in excess inventory due to reduced demand or insufficient inventory to meet demand, which would adversely affect our business and results of operations. We also compete with other manufacturers who require the same components as us, or inputs used in producing the components that we purchase. Other purchasers may be able to leverage stronger relationships or greater purchasing power than we have to gain advantages over us in the supply chain.

In addition, any significant delay or interruption in the supply of components or sub-assemblies, or our inability to obtain substitute components, sub-assemblies or materials from alternate sources at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers and harm our business.

Disruptions of supply chains could have a material adverse effect on our operating and financial results

Disruption of supply chains due to trade restrictions, political instability, severe weather, natural disasters, public health crises such as the ongoing COVID-19 pandemic, terrorism, product recalls, port closures, labor supply or stoppages, the financial or operational instability of key suppliers and carriers, government restrictions or measures, or other reasons could impair our ability to distribute our products, or cause the demand for our products to decrease. Many industries, including our own, face supply chain challenges as a result of COVID-19 and other macroeconomic issues, including reduced freight availability and increased costs, port disruption, manufacturing facility closures, labor shortages and other supply chain disruptions. For example, hospitals are currently reporting a shortage of an iodinated contract medium used in X-rays, radiography and CT scans due to Shanghai’s lock-downs. A shortage of such product could lead to a reduced number of surgeries and decrease the demand for our products.

In addition, we have and continue to experience supply chain challenges related to extended lead times from certain key suppliers. Should these challenges persist or worsen, we may be unable to manufacture enough inventory to meet the current demand for our Lumivascular products and consequently incur significant adverse effects on our operating and financial results. To the extent we are unable to mitigate the likelihood or potential impact of such events, there could be a material adverse effect on our operating and financial results.

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 thereunto duly authorized.

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Revenues	$	2,559		$	2,261		$	1,888		$	2,559
Cost of revenues		1,665			1,760			1,364			1,665
Gross profit		894			501			524			894

Operating expenses:
Research and development		1,598			1,594			1,072			1,598
Selling, general and administrative		3,945			4,386			4,148			3,945
Total operating expenses		5,543			5,980			5,220			5,543
Loss from operations		(4,649	)		(5,479	)		(4,696	)		(4,649	)

Interest income		2			30
Interest expense		(398	)		(398	)
Interest expense, net								(439	)		(396	)
Other expense, net		(7	)		(4	)		(5	)		(7	)
Net loss and comprehensive loss		(5,052	)		(5,851	)		(5,140	)		(5,052	)
Accretion of preferred stock dividends		(1,044	)		(967	)		(1,127	)		(1,044	)
Deemed dividend arising from beneficial conversion feature of convertible preferred stock								(5,111	)		0
Net loss applicable to common stockholders	$	(6,096	)	$	(6,818	)	$	(11,378	)	$	(6,096	)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.07	)	$	(0.47	)	$	(2.33	)	$	(1.33	)
Weighted average common shares used to compute net loss per share, basic and diluted		91,435			14,616			4,889			4,572

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Cash flows from operating activities
Net loss	$	(5,052	)	$	(5,851	)	$	(5,140	)	$	(5,052	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		194			225			15			194
Amortization of debt issuance costs and debt discount		28			43			21			28
Stock-based compensation		418			451			52			418
Noncash interest expense and other charges		370			356			419			370
Change in right of use asset		34			43			24			34
Provision for excess and obsolete inventories		7			104			8			7
Other non-cash charges		2			(1	)		1			2
Changes in operating assets and liabilities:
Accounts receivable		(49	)		105			28			(49	)
Inventories		(67	)		(17	)		(875	)		(67	)
Prepaid expenses and other current assets		(968	)		(722	)		(1,015	)		(968	)
Other assets		—			5			(10	)		0
Accounts payable		84			722			(223	)		84
Accrued compensation		(135	)		(476	)		272			(135	)
Accrued expenses and other current liabilities		187			41			98			187
Other long-term liabilities		144			2			144			144
Net cash used in operating activities		(4,803	)		(4,970	)		(6,181	)		(4,803	)

Cash flows from investing activities
Purchase of property and equipment		(11	)		—			(31	)		(11	)
Net cash used in investing activities		(11	)		—			(31	)		(11	)

Cash flows from financing activities
Proceeds from the issuance of common stock under officers’ and directors’ purchase plan		—			27
Proceeds from the issuance of common stock in public offerings, net		13,077			3,862
Proceeds from the issuance of convertible preferred stock, net of commissions and issuance costs								6,721			0
Proceeds from the issuance of common stock in public offerings, net of commissions and issuance costs								0			13,077
Net cash provided by financing activities		13,077			3,889			6,721			13,077

Net change in cash and cash equivalents		8,263			(1,081	)		509			8,263
Cash and cash equivalents, beginning of period		22,185			10,943			19,497			22,185
Cash and cash equivalents, end of period	$	30,448		$	9,862		$	20,006		$	30,448

Supplemental disclosure of cash flow information
Noncash investing and financing activities:
Accretion of Series A preferred stock dividends	$	1,044		$	967		$	1,127		$	1,044
Transfers between inventory and property and equipment	$	—		$	(49	)	$	118		$	0
Reclassification of right of use asset to prepaid rent	$	(34	)	$	(43	)	$	(24	)	$	(34	)

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Beginning balance	$	193		$	215		$	187		$	193
Warranty provision		20			61			4			20
Usage/Release		(2	)		(55	)		(20	)		(2	)
Ending balance	$	211		$	221		$	171		$	211

	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Net loss attributable to common stockholders	$	(6,096	)	$	(6,818	)
Net loss applicable to common stockholders							$	(11,378	)	$	(6,096	)
Weighted average common stock outstanding, basic and diluted		91,435			14,616			4,889			4,572
Net loss per share attributable to common stockholders, basic and diluted	$	(0.07	)	$	(0.47	)	$	(2.33	)	$	(1.33	)

	Three Months Ended March 31,				Three Months Ended March 31,
	2021		2020		2022		2021
Common stock warrants equivalents		2,753,999		2,753,999		871,808		137,700
Common stock options		6,771		7,267		331		339
Convertible preferred stock		52,328		48,503		62,002		2,617
Unvested restricted stock units		420,856		873,693		9,866		21,043
		3,233,954		3,683,462		944,007		161,699

	Convertible Preferred Stock				Common Stock				Additional Paid-in			Accumulated			Total Stockholders’			Convertible Preferred Stock				Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Equity			Shares		Amount		Shares		Amount		Capital			Deficit			Equity
Balance at December 31, 2019		48,503	$	—		10,364,663	$	10	$	355,220		$	(348,335	)	$	6,895
Balance at December 31, 2020																		52,369		$	0		4,246,306	$	85	$	380,332		$	(367,341	)	$	13,076
Issuance of common stock in public offerings, net of commissions and issuance costs		—		—		6,428,572		7		3,855			—			3,862		0			0		500,000		10		13,067			0			13,077
Conversion of Series B preferred stock into common stock																		(93	)		—		18,600		—		—			—			—
Issuance of common stock under officers and directors purchase plan and vesting of restricted stock units		—		—		28,124		—		18			—			18		0			—		2,669		—		—			—			—
Employee stock-based compensation		—		—		—		—		451			—			451		—			0		—		0		418			0			418
Accretion of Series A preferred stock dividends		—		—		—		—		(967	)		—			(967	)	—			0		—		0		(1,044	)		0			(1,044	)
Net and comprehensive loss		—		—		—		—		—			(5,851	)		(5,851	)	—			0		—		0		0			(5,052	)		(5,052	)
Balance at March 31, 2020		48,503	$	—		16,821,359	$	17	$	358,577		$	(354,186	)	$	4,408
Balance at March 31, 2021																		52,276		$	0		4,767,575	$	95	$	392,773		$	(372,393	)	$	20,475

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Intrinsic Value (in thousands)
Balance at December 31, 2020		6,821		$	1,241.59		5.81	$	—
Granted		—			—
Exercised		—			—
Expired		(74	)		2,821.62
Forfeited		—			—
Balance at March 31, 2021		6,747		$	1,224.26		5.62	$	—

Exercisable at March 31, 2021		6,747		$	1,224.26		5.62	$	—

Vested and expected to vest at March 31, 2021		6,747		$	1,224.26		5.62	$	—

	Payments Due by Period
	Less Than 1 Year		2 - 3 Years		4-5 Years		More Than 5 Years		Total
Operating lease obligations ⁽¹⁾	$	1,173	$	2,041	$	—	$	—	$	3,214
CRG Loan ⁽²⁾		—		11,153		8,230		—		19,383
Noncancelable purchase commitments ⁽³⁾		1,158		30		26		—		1,214
	$	2,331	$	13,224	$	8,256	$	—	$	23,811

Exhibit Number		Exhibit Title

~~10.1(1)~~3.1(1)		Amended and Restated Certificate of Incorporation of the registrant.

3.2(2)		Certificate of Amendment ~~No. 5~~ to ~~Term Loan~~the Amended and Restated Certificate of Incorporation.

3.3(3)		Avinger, Inc. Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock

3.4(4)		Avinger, Inc. Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock

3.5(5)		Certificate of Amendment to the Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock

3.6(6)		Certificate of Amendment to the Restated Certificate of Incorporation of Avinger, Inc.

3.7(7)		Avinger, Inc. Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock.

3.8(8)		Certificate of Amendment to the Restated Certificate of Incorporation Avinger, Inc. dated March 11, 2022.

4.1(9)		Form of Common Stock Purchase Warrant.

4.2(9)		Form of Placement Agent Warrant.

10.1(9)		Form of Securities Purchase Agreement, dated January ~~22, 2021, made~~12, 2022 by and ~~among~~between Avinger, Inc. and ~~GRG Partners III L.P. and certain of its affiliated funds, as lenders.~~the purchasers party thereto.

31.1		Certification of the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)and 15d-14(a), as adopted pursuant to Section302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)and 15d-14(a), as adopted pursuant to Section302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document and contained in Exhibit 101.

*	The certifications filed as Exhibits 32.1 are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the Company under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference.

(1)	Previously filed as an Exhibit to the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 6, 2015, and incorporated by reference herein.
(2)	Previously filed as an Exhibit to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2018.
(3)	Previously filed as an Exhibit to Amendment No. 2 to the registrant’s Registration Statement on Form S-1 (File No. 333-222517) filed with the Securities and Exchange Commission on February 12, 2018, and incorporated by reference herein.
(4)	Previously filed as an Exhibit to Amendment No. 3 to the registrant’s Registration Statement on Form S-1 (File No. 333-222517) filed with the Securities and Exchange Commission on February 13, 2018, and incorporated by reference herein.
(5)	Previously filed as an Exhibit to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 6, 2018, and incorporated by reference herein.
(6)	Previously filed as an Exhibit to the registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on ~~January 26, 2021,~~June 21, 2019, and incorporated by reference herein.
(7)	Previously filed as an Exhibit to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 18, 2022, and incorporated by reference herein.
(8)	Previously filed as an Exhibit to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2022, and incorporated by reference herein.
(9)	Previously filed as an Exhibit to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 12, 2022, and incorporated by reference herein.

	Avinger, Inc.
	(Registrant)


Date: May ~~6, 2021~~10, 2022	/s/ JEFFERY M. SOINSKI
	Jeffrey M. Soinski
	Chief Executive Officer
	(Principal Executive Officer)

Date: May ~~6, 2021~~10, 2022	/s/ MARK WEINSWIG
	Mark Weinswig
	Chief Financial Officer
	~~Chief Financial Officer~~
	(Principal Financial and Accounting Officer)