Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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 June 30, 2023

☐

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 July 21, 2023, the number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was 10,821,380.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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:

●

our ability to continue as a going concern;

●

our ability to remain in compliance with the listing requirements of the Nasdaq Capital Market;

●

the outcome of and expectations regarding our current clinical studies and any additional clinical studies we initiate;

●

our plans to modify our current products, or develop new products, to address additional indications;

●

our ability to obtain additional financing through future equity or debt financings;

●

the expected timing of 510(k) clearances by the FDA which may include but are not limited to additional versions of Pantheris, Ocelot, Tigereye and Lightbox;

●

the expected timing of 510(k) submission to the FDA, and associated marketing clearances by the FDA, which may include but are not limited to additional versions of Pantheris, Ocelot, Tigereye and Lightbox;

●

the expected growth in our business and our organization;

●

our expectations regarding government and third-party payor coverage and reimbursement, including the ability of Pantheris to qualify for reimbursement codes used by other atherectomy products;

●

our ability to retain and recruit key personnel, including the continued development of our sales and marketing infrastructure;

●

our ability to obtain and maintain intellectual property protection for our products;

●

our estimates of our expenses, ongoing losses, future revenue, capital requirements and our needs for, or ability to obtain, additional financing;

●

our expectations regarding revenue, cost of revenue, gross margins, and expenses, including research and development and selling, general and administrative expenses;

●

the effects of the COVID-19 pandemic on our business and results of operations;

●

our ability to identify and develop new and planned products and acquire new products, including those for the coronary market;

	●	our financial performance;

	●	our ability to remain in compliance with laws and regulations that currently apply or become applicable to our business, both in the United States and internationally; and

●

developments and projections relating to our competitors or our industry.

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 16, 2023 and amended on March 17, 2023. 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 JUNE 30, 2023

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	5
	Notes to Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30

Part II	Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36

Signatures		37

“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

AVINGER, INC.

CONDENSED BALANCE SHEETS

(unaudited)

(In thousands, except share and per share data)

	June 30,			December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	7,127		$	14,603
Accounts receivable, net of allowance for doubtful accounts of $24 and $73 at June 30, 2023 and December 31, 2022, respectively		920			1,057
Inventories, net		5,519			4,965
Prepaid expenses and other current assets		890			362
Total current assets		14,456			20,987

Right of use asset		1,658			2,194
Property and equipment, net		566			702
Other assets		263			312
Total assets	$	16,943		$	24,195

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	423		$	631
Accrued compensation		2,477			1,401
Series A preferred stock dividends payable		2,435			—
Accrued expenses and other current liabilities		755			657
Leasehold liability, current portion		1,150			1,092
Borrowings		15,203			14,165
Total current liabilities		22,443			17,946

Leasehold liability, long-term portion		508			1,102
Other long-term liabilities		582			1,001
Total liabilities		23,533			20,049

Commitments and contingencies (Note 6)

Stockholders’ (deficit) equity:
Convertible preferred stock issuable in series, par value of $0.001;
Shares authorized: 5,000,000 at June 30, 2023 and December 31, 2022;
Shares issued and outstanding: 60,961 at June 30, 2023 and December 31, 2022; aggregate liquidation preference of $60,876 at June 30, 2023 and December 31, 2022		—			—
Common stock, par value of $0.001;
Shares authorized: 100,000,000 at June 30, 2023 and December 31, 2022;
Shares issued and outstanding: 9,338,645 and 7,832,644 at June 30, 2023 and December 31, 2022, respectively		9			8
Additional paid-in capital		404,597			406,514
Accumulated deficit		(411,196	)		(402,376	)
Total stockholders’ (deficit) equity		(6,590	)		4,146
Total liabilities and stockholders’ (deficit) equity	$	16,943		$	24,195

AVINGER, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(In thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues	$	2,041		$	2,132		$	3,929		$	4,020
Cost of revenues		1,436			1,475			2,688			2,839
Gross profit		605			657			1,241			1,181

Operating expenses:
Research and development		988			1,086			2,344			2,158
Selling, general and administrative		3,346			3,330			6,884			7,478
Total operating expenses		4,334			4,416			9,228			9,636
Loss from operations		(3,729	)		(3,759	)		(7,987	)		(8,455	)

Interest expense, net		(445	)		(440	)		(837	)		(879	)
Other (expense) income, net		(2	)		(15	)		4			(20	)
Net loss and comprehensive loss		(4,176	)		(4,214	)		(8,820	)		(9,354	)
Accretion of preferred stock dividends		(1,218	)		(1,127	)		(2,436	)		(2,254	)
Deemed dividend arising from beneficial conversion feature of convertible preferred stock		—			—			—			(5,111	)
Net loss applicable to common stockholders	$	(5,394	)	$	(5,341	)	$	(11,256	)	$	(16,719	)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.59	)	$	(0.94	)	$	(1.30	)	$	(3.16	)
Weighted average common shares used to compute net loss per share, basic and diluted		9,141			5,702			8,683			5,298

AVINGER, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(unaudited)

(In thousands, except share data)

	Convertible Preferred Stock					Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount		Shares		Amount		Capital			Deficit			Equity
Balance at March 31, 2022		58,851		$	—		5,454,849	$	5	$	400,118		$	(389,893	)	$	10,230
Issuance of common stock in public offerings, net of commissions and issuance costs		—			—		326,466		1		395			—			396
Conversion of Series D preferred stock into common stock		(2,400	)		—		300,000		—		—			—			—
Issuance of common stock upon vesting of restricted stock units		—			—		18		—		—			—			—
Employee stock-based compensation		—			—		—		—		36			—			36
Accretion of Series A preferred stock dividends		—			—		—		—		(1,127	)		—			(1,127	)
Net and comprehensive loss		—			—		—		—		—			(4,214	)		(4,214	)
Balance at June 30, 2022		56,451		$	—		6,081,333	$	6	$	399,422		$	(394,107	)	$	5,321

	Convertible Preferred Stock				Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
Balance at March 31, 2023		60,961	$	—		8,626,828	$	9	$	405,519		$	(407,020	)	$	(1,492	)
Issuance of common stock in public offerings, net of commissions and issuance costs		—		—		89,817		—		58			—			58
Exercise of pre-funded warrants for common stock		—		—		622,000		—		(1	)		—			(1	)
Employee stock-based compensation		—		—		—		—		239			—			239
Accretion of Series A preferred stock dividends		—		—		—		—		(1,218	)		—			(1,218	)
Net and comprehensive loss		—		—		—		—		—			(4,176	)		(4,176	)
Balance at June 30, 2023		60,961	$	—		9,338,645	$	9	$	404,597		$	(411,196	)	$	(6,590	)

AVINGER, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

(unaudited)

(In thousands, except share data)

	Convertible Preferred Stock					Common Stock					Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount		Shares		Amount			Capital			Deficit			Equity
Balance at December 31, 2021		56,451		$	—		4,778,263	$	96		$	394,380		$	(384,753	)	$	9,723
Issuance of common stock in public offerings, net of commissions and issuance costs		—			—		326,466		1			395			—			396
Issuance of Series D preferred stock, net of commissions and issuance costs		7,600			—		—		—			6,721			—			6,721
Conversion of Series D preferred stock into common stock		(7,600	)		—		950,000		1			—			—			1
Reclassifications and adjustments due to rounding impact from reverse stock split for fractional shares		—			—		26,169		(92	)		92			—			—
Issuance of common stock upon vesting of restricted stock units		—			—		435		—			—			—			—
Employee stock-based compensation		—			—		—		—			88			—			88
Accretion of Series A preferred stock dividends		—			—		—		—			(2,254	)		—			(2,254	)
Net and comprehensive loss		—			—		—		—			—			(9,354	)		(9,354	)
Balance at June 30, 2022		56,451		$	—		6,081,333	$	6		$	399,422		$	(394,107	)	$	5,321

	Convertible Preferred Stock				Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Equity (Deficit)
Balance at December 31, 2022		60,961	$	—		7,832,644	$	8	$	406,514		$	(402,376	)	$	4,146
Issuance of common stock in public offerings, net of commissions and issuance costs		—		—		101,720		—		37			—			37
Exercise of pre-funded warrants for common stock		—		—		1,369,864		1		(2	)		—			(1	)
Issuance of common stock upon vesting of restricted stock units		—		—		34,417		—		—			—			—
Employee stock-based compensation		—		—		—		—		484			—			484
Accretion of Series A preferred stock dividends		—		—		—		—		(2,436	)		—			(2,436	)
Net and comprehensive loss		—		—		—		—		—			(8,820	)		(8,820	)
Balance at June 30, 2023		60,961	$	—		9,338,645	$	9	$	404,597		$	(411,196	)	$	(6,590	)

AVINGER, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)

	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(8,820	)	$	(9,354	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		140			79
Amortization of debt issuance costs and debt discount		41			42
Stock-based compensation		484			88
Noncash interest expense and other charges		997			858
Change in right of use asset		28			48
Provision for excess and obsolete inventories		271			86
Other non-cash charges		(52	)		1
Changes in operating assets and liabilities:
Accounts receivable		186			111
Inventories		(828	)		(1,134	)
Prepaid expenses and other current assets		(528	)		(799	)
Other assets		21			15
Accounts payable		(208	)		(668	)
Accrued compensation		352			(116	)
Accrued expenses and other current liabilities		98			26
Other long-term liabilities		305			170
Net cash used in operating activities		(7,513	)		(10,547	)

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

Cash flows from financing activities
Proceeds from the issuance of convertible preferred stock, net of commissions and issuance costs		—			6,721
Proceeds from the issuance of common stock in public offerings, net of commissions and issuance costs		37			399
Net cash provided by financing activities		37			7,120

Net change in cash and cash equivalents		(7,476	)		(3,458	)
Cash and cash equivalents, beginning of period		14,603			19,497
Cash and cash equivalents, end of period	$	7,127		$	16,039

Supplemental disclosure of cash flow information
Noncash investing and financing activities:
Accretion of Series A preferred stock dividends	$	2,436		$	2,254
Reclassification of other long-term liabilities to accrued compensation	$	724		$	—
Transfers between inventory and property and equipment	$	4		$	471

See accompanying notes.

AVINGER, INC.

Notes to Condensed Financial Statements

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”) 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, Lightbox consoles, as well as a variety of disposable catheter products. The Company’s current catheter products include Ocelot and Tigereye, 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 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

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) requires the Company to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within one year from the date of the issuance of these financial statements.

In the course of its activities, the Company has incurred losses and negative cash flows from operations since its inception. As of June 30, 2023, the Company had an accumulated deficit of $411.2 million. The Company expects to incur losses for the foreseeable future. The Company believes that its cash and cash equivalents of $7.1 million at June 30, 2023 and expected revenues and funds from operations will be sufficient to allow the Company to fund its current operations through the end of the third quarter of 2023. The Company received net proceeds of approximately $4.4 million from the sale of its common stock in August 2022, $1.1 million from the sale of its common stock under an At The Market Offering Agreement from the time of activation through the quarter ended June 30, 2023 and $6.7 million from the sale of Series D preferred stock in January 2022. The Company may seek to raise additional funds in future equity 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 its existing stockholders. Given the volatility in the Company’s stock price, any financing that the Company may undertake in the next twelve months could cause substantial dilution to 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. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. In addition, the after-effects of COVID-19 pandemic and the macroeconomic environment have in the past resulted in and could continue to result 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.

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.

Additionally, due to the substantial doubt about the Company’s ability to continue operating as a going concern and the “Material Adverse Change” clause in the Loan Agreement with CRG Partners III L.P. and certain of its affiliated funds (collectively “CRG”), the entire amount of outstanding borrowings at June 30, 2023 and December 31, 2022 has been classified as current in these financial statements. CRG has not purported that an Event of Default (as defined in the Loan Agreement) has occurred due to a Material Adverse Change.

Currently all of our cash and cash equivalents are held at a single financial institution, Silicon Valley Bank. On March 10, 2023, the Federal Deposit Insurance Corporation announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. While we have regained access to our accounts at Silicon Valley Bank and are evaluating our banking relationships, future disruptions of financial institutions where we bank or have credit arrangements, or disruptions of the financial services industry in general, could adversely affect our ability to access our cash and cash equivalents. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business will be adversely affected.

Public Offerings

January 2022 Offering

On January 14, 2022, the Company entered into a 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 7,600 shares of the Company’s Series D Convertible Preferred Stock, par value of $0.001 per share, at an offering price of $1,000 per share which was convertible into common stock at a conversion price of $8.00 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”). As a result, the Company received aggregate net proceeds of approximately $6.7 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.

The 807,500 Common Warrants have an exercise price of $9.60 per share and became 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 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.

August 2022 Offering

On August 4, 2022, the Company entered into a securities purchase agreement with a single institutional investor for the issuance and sale of 1,484,019 shares of its common stock in a registered direct offering (“RD” or “Registered Direct”) at a purchase price of $1.752 per share, or pre-funded warrants in lieu thereof. In a concurrent private placement, the Company also agreed to issue and sell to the investor 1,369,864 shares of common stock at the same purchase price as in the registered direct offering, or pre-funded warrants in lieu thereof (“Private Placement” and together with the Registered Direct offering the “August 2022 Offering”). As a result, the Company received aggregate net proceeds of approximately $4.4 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.

As a result, in the Registered Direct offering, the Company issued (i) 700,000 shares of common stock, (ii) and pre-funded warrants in lieu of common stock to purchase up to an aggregate of 784,019 shares of common stock (the “RD Pre-Funded Warrants”) and in the Private Placement, the Company issued pre-funded warrants to purchase up to an aggregate of 1,369,864 shares of common stock (the “Private Placement Pre-Funded Warrants” and together with the RD Pre-Funded Warrants the “August 2022 Pre-Funded Warrants”). On April 20, 2023, the remaining 622,000 Private Placement Pre-Funded Warrants were exercised leaving none outstanding as of June 30, 2023.

In addition, the Company issued to the investor in the August 2022 Offering Series A preferred investment options to purchase up to 2,853,883 additional shares of the Company’s common stock and Series B preferred investment options to purchase up to 2,853,883 additional shares of the Company’s common stock (the “Preferred Investment Options”). The Series A preferred investment options have an exercise price of $1.502 per share, are immediately exercisable, and will expire five and one-half years from the date of issuance, or February 8, 2028, and the Series B preferred investment options have an exercise price of $1.502 per share, are immediately exercisable, and will expire two years from the date of issuance, or August 8, 2024. The Company also issued to the Placement Agent or its designees preferred investment options to purchase up to an aggregate of 171,233 shares of common stock (the “Placement Agent Preferred Investment Options”). The Placement Agent Preferred Investment Options are subject to the same terms as the Preferred Investment Options, except that the Placement Agent Preferred Investment Options have an exercise price of $2.19 per share and a term of five years from the commencement of the sales pursuant to the August 2022 Offering, or August 3, 2027.

At The Market Offering Agreement

On May 20, 2022, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”), as sales agent, pursuant to which the Company may offer and sell shares of common stock, par value $0.001 per share (the “Shares”) up to an aggregate offering price of $7,000,000 from time to time, in an at the market public offering. Sales of the Shares are to be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. The Agent will receive a commission from the Company of 3.0% of the gross proceeds of any Shares sold under the ATM Agreement. The Shares sold under the ATM Agreement are offered and sold pursuant to the Company’s shelf registration statement on Form S-3, which was initially filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2022 and declared effective on April 7, 2022, and a prospectus supplement and the accompanying prospectus relating to the At The Market Offering filed with the SEC on May 20, 2022. During the year ended December 31, 2022, the Company sold 585,603 shares of common stock pursuant to the ATM Agreement at an average price of $1.67 per share for aggregate proceeds of $1.0 million, of which approximately $29,000 was paid in the form of commissions to the Agent. On August 3, 2022, the Company suspended sales under the ATM Agreement. On March 17, 2023, the Company reactivated the ATM Agreement. During the quarter ended June 30, 2023, the Company sold 89,817 shares of common stock pursuant to the ATM Agreement at an average price of $0.72 per share for aggregate proceeds of approximately $65,000, of which approximately $2,000 was paid in the form of commissions to the Agent. During the six months ended June 30, 2023, the Company sold 101,720 shares of common stock at an average price of $0.73 per share for aggregate proceeds of approximately $75,000, of which approximately $2,200 was paid in the form of commissions to the Agent. While the Company may attempt additional sales in the future, there can be no assurance that the Company will be successful in acquiring additional funding through these means.

Other than the ATM Agreement, the Company currently does not have any commitments to obtain additional funds.

2. Summary of Significant Accounting Policies

Basis of Presentation

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. 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 and six months ended June 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, or for any other interim period or for any future year. The December 31, 2022 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 for the fiscal year ended December 31, 2022, which was filed with the SEC on March 16, 2023 and amended on March 17, 2023. 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 for the year ended December 31, 2022.

Use of Estimates

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.

Concentration of Credit Risk, and Other Risks and Uncertainties

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, First Citizens Bank. 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 June 30, 2023 and December 31, 2022. On March 10, 2023, the Federal Deposit Insurance Corporation announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. While we have regained access to our accounts at Silicon Valley Bank and are evaluating our banking relationships, future disruptions of financial institutions where we bank or have credit arrangements, or disruptions of the financial services industry in general, could adversely affect our ability to access our cash and cash equivalents. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business will be adversely affected.

The Company’s accounts receivable are due from a variety of healthcare organizations in the United States and select international markets. At June 30, 2023, there were two customers that each represented 14% of the Company’s accounts receivable. At December 31, 2022, there was no customer that represented 10% or more of the Company’s accounts receivable. For the three and six months ended June 30, 2023, there was one customer that represented 17% and 16% of revenues, respectively. For the three and six months ended June 30, 2022, there was one customer that represented 16% and 15% of revenues, respectively. Disruption of sales orders or a deterioration of financial condition of customers would have a negative impact on the Company’s financial position and results of operations.

Product Warranty Costs

The Company typically offers a 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):

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Beginning balance	$	114		$	171		$	109		$	187
Warranty provision		15			—			34			4
Usage/Release		(1	)		(34	)		(15	)		(54	)
Ending balance	$	128		$	137		$	128		$	137

Net Loss per Share Attributable to Common Stockholders

Basic net loss per share attributable to common stockholders is computed by dividing the net loss applicable 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 to common stockholders is computed by dividing the net loss applicable to common stockholders 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 June 30, 2023 and 2022, there were no shares subject to repurchase. Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders as the inclusion of all potentially dilutive common shares would have been anti-dilutive.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net loss applicable to common stockholders	$	(5,394	)	$	(5,341	)	$	(11,256	)	$	(16,719	)
Weighted average common stock outstanding, basic and diluted		9,141			5,702			8,683			5,298
Net loss per share attributable to common stockholders, basic and diluted	$	(0.59	)	$	(0.94	)	$	(1.30	)	$	(3.16	)

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:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Common stock warrants equivalents		7,021,987		1,006,285		7,449,228		939,419
Common stock options		303		303		303		303
Convertible preferred stock		60,961		57,295		60,961		59,636
Unvested restricted stock units		1,418,928		9,077		1,305,548		9,474
		8,502,179		1,072,960		8,816,040		1,008,832

Segment and Geographical Information

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 the three months ended June 30, 2023 and 2022, 92% and 89%, respectively, of the Company’s revenues were in the United States. For each of the six months ended June 30, 2023 and 2022, 92% of the Company’s revenues were in the United States based on the shipping location of the external customer. The remaining revenues for the three and six months ended June 30, 2023 and 2022, were primarily derived in Germany.

As of June 30, 2023 and December 31, 2022, cash equivalents were all categorized as Level 1 and consisted of money market funds. As of June 30, 2023 and December 31, 2022, 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 or six months ended June 30, 2023.

Recent Accounting Pronouncements

Recent accounting standards not yet adopted

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 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 2024 and early adoption is permitted. This new standard is not expected to have a material impact on the Company’s financial statements.

3. Inventories

Inventories consisted of the following (in thousands):

	June 30,		December 31,
	2023		2022
Raw materials	$	3,380	$	3,374
Work-in-process		111		17
Finished products		2,028		1,574
Total inventories	$	5,519	$	4,965

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 the end of the twenty-fourth (24th) month period commencing on the first Borrowing Date (as defined in the Loan Agreement). 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).

The Company has entered into several amendments to the Loan Agreement (the “Amendments”) with CRG since September 2015, the most recent of which was entered into on August 10, 2022. The Amendments, among other things: (1) extended the interest-only period through December 31, 2023; (2) extended the period during which the Company 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 (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted the Company to make the 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 Stated Maturity Date (as defined in the Loan Agreement) to December 31, 2025; (5) reduced the minimum liquidity covenant 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 and 2022; (8) added minimum revenue covenants of $10 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 (as defined in the Loan Agreement) 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; and (11) provided CRG with board observer rights.

Under the amended Loan Agreement, no cash payments for either principal or interest are required until the first quarter of 2024. The 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 (as defined in the Loan Agreement) is December 31, 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 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” thereunder.

As of June 30, 2023, the Company was in compliance with all applicable covenants under the Loan Agreement.

As of June 30, 2023, principal, final facility fee and PIK payments under the Loan Agreement, as amended, were as follows (in thousands):

Year Ending December 31,
2023 (remaining six months of the year)	$	—
2024		9,045
2025		10,339
Total		19,384
Less: Amount of PIK additions and final facility fee to be incurred subsequent to June 30, 2023		(3,973	)
Less: Amount representing debt issuance costs		(208	)
Borrowings, long term portion, as of June 30, 2023	$	15,203

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 June 30, 2023 and December 31, 2022, the balance of the aggregate debt discount was approximately $208,000 and $249,000, respectively. The Company’s interest expense associated with the amortization of debt discount was approximately $20,000 and $21,000 during the three months ended June 30, 2023 and 2022, respectively. The Company’s interest expense associated with the amortization of debt discount was approximately $41,000 and $42,000 during the six months ended June 30, 2023 and 2022, respectively. For the three months ended June 30, 2023 and 2022, the Company incurred interest expense of approximately $531,000 and $440,000, respectively. For the six months ended June 30, 2023 and 2022, the Company incurred interest expense of approximately $1.0 million and $0.9 million, respectively.

While, as of the date hereof, CRG has not purported that an Event of Default has resulted due to a Material Adverse Change (as those terms defined in the Loan Agreement), due to the substantial doubt about the Company’s ability to continue operating as a going concern, the entire outstanding amount of borrowings under the Loan Agreement and associated aggregate debt discount at June 30, 2023 and December 31, 2022 were classified as current in these financial statements.

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 lease will expire on November 30, 2024. 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 June 30, 2023 is 1.4 years.

The operating lease was 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.

The Company’s operating lease expense, excluding variable maintenance fees and other expenses on a monthly basis, was approximately $105,000. Rent expense for both the three months ended June 30, 2023 and 2022 was approximately $314,000. Rent expense for both the six months ended June 30, 2023 and 2022 was approximately $628,000. The Company’s variable expenses for the three months ended June 30, 2023 and 2022 were approximately $103,000 and $71,000, respectively. The Company’s variable expenses for the six months ended June 30, 2023 and 2022 were approximately $168,000 and $137,000, respectively. Operating right-of-use asset amortization for the three months ended June 30, 2023 and 2022 was approximately $284,000 and $265,000, respectively. Operating right-of-use asset amortization for the six months ended June 30, 2023 and 2022 was approximately $564,000 and $531,000, respectively. Due to payments being made in excess of operating lease expense recognized, the Company recorded approximately $37,000 and $65,000 as prepaid rent included in other assets on the condensed balance sheet as of June 30, 2023 and December 31, 2022, respectively.

The following table presents the future operating lease payments and leasehold liability included on the balance sheet related to the Company’s operating lease as of June 30, 2023 (in thousands):

Year Ending December 31,
2023 (remaining six months of the year)	$	603
2024		1,138
Total		1,741
Less: Imputed interest		(83	)
Leasehold liability as of June 30, 2023	$	1,658

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of June 30, 2023 and December 31, 2022 (in thousands):

Lease-Related Assets and Liabilities	Financial Statement Line Items	June 30, 2023		December 31, 2022
Right of use assets:
Operating lease	Right of use asset	$	1,658	$	2,194
Total right of use assets		$	1,658	$	2,194
Lease liabilities:
Operating lease	Leasehold liability, current portion	$	1,150	$	1,092
	Leasehold liability, long-term portion		508		1,102
Total lease liabilities		$	1,658	$	2,194

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 $1.0 million as of June 30, 2023. The majority of this amount is related to commitments to purchase inventory components and services related to the manufacturing of inventory.

Legal Proceedings

The Company is not currently involved in any pending legal proceedings that it believes could have a material adverse effect on our financial condition, results of operations or cash flows. From time to time, 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.

7. Stockholders’ Equity

Convertible Preferred Stock

As of June 30, 2023 and December 31, 2022, 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. As of June 30, 2023 and December 31, 2022, 60,961 shares were issued and outstanding.

Series A Convertible Preferred Stock

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. During the year ended December 31, 2022, 4,510 additional shares were issued to CRG as payment of dividends. As of June 30, 2023 and December 31, 2022, 60,876 shares of Series A preferred stock were 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 $1.2 million and $1.1 million during the quarters ended June 30, 2023 and 2022, respectively and approximately $2.4 million and $2.3 million during the six months ended June 30, 2023 and 2022, respectively.

Series B Convertible Preferred Stock

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. As of June 30, 2023 and December 31, 2022, 85 shares of Series B preferred stock remained outstanding, which are currently convertible into shares of the Company’s common stock at $1.502 per share.

Series D Convertible Preferred Stock

On January 14, 2022, the Company entered into a 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 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 had a stated value of $1,000 per share and were convertible into an aggregate of 950,000 shares of common stock at a conversion price of $8.00 per share. During the year ended December 31, 2022, all 7,600 shares of Series D preferred stock were converted into a total of 950,000 shares of common stock. There are no shares of Series D preferred stock outstanding as of June 30, 2023.

At the time of issuance, the Company evaluated the classification of the Series D preferred stock and determined equity classification was appropriate due to no mandatory or contingently redeemable redemption features. The 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 and the warrants issued to investors using a relative fair value approach, resulting in an initial allocation to each instrument of $4.0 million and $3.6 million, respectively. On the issuance date, the Company estimated the fair value of the Common Warrants issued to investors and warrants issued to the 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 that preferred stock could have been converted into 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 $5.1 million based on the intrinsic value of the beneficial conversion. As the preferred stock was immediately convertible into common stock subject to the consummation of the reverse stock 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 and six months ended June 30, 2022.

Common Stock

As of June 30, 2023, 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 9,338,645 shares were issued and outstanding.

Common Stock Warrants

As of June 30, 2023, 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
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
Series A Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	February 2028
Series B Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	August 2024
Placement agent Preferred Investment Options issued in the August 2022 financing		171,233		171,233	$	2.19	August 2027
Total as of June 30, 2023		49,815,894		6,885,284

As of December 31, 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
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
Pre-funded warrants issued in the August 2022 financing		1,369,864		1,369,864	$	0.0001		n/a
Series A Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	February 2028
Series B Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	August 2024
Placement agent Preferred Investment Options issued in the August 2022 financing		171,233		171,233	$	2.19	August 2027
Total as of December 31, 2022		51,185,758		8,255,148

January 2022 Offering

Pursuant to a purchase agreement entered into on January 14, 2022, the Company issued 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 became exercisable beginning July 14, 2022. The Common Warrants will expire five years following the time they become exercisable, or July 14, 2027.

The Company 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.

August 2022 Offering

Pursuant to a purchase agreement entered into on August 4, 2022, the Company issued, in a registered direct offering, Pre-Funded Warrants to purchase up to 784,019 shares of common stock (the “RD Pre-Funded Warrants”) and, in a concurrent private placement, Pre-Funded Warrants to purchase up to 1,369,864 shares of common stock (the “Private Placement Pre-Funded Warrants” and together with the RD Pre-Funded Warrants the “August 2022 Pre-Funded Warrants”). The August 2022 Pre-Funded Warrants have an exercise price of $0.0001 per share, are immediately exercisable, and have no expiration date. During the year ended December 31, 2022, 784,019 of shares of RD Pre-Funded Warrants were exercised into the equivalent number of the Company’s common stock. During the six months ended June 30, 2023, all the 1,369,864 Private Placement Pre-Funded Warrants were exercised. Consequently, there were no August 2022 Pre-Funded Warrants outstanding as of June 30, 2023.

Also in the August 2022 Offering, the Company issued Series A preferred investment options to purchase up to 2,853,883 additional shares of the Company’s common stock and Series B preferred investment options to purchase up to 2,853,883 additional shares of the Company’s common stock, collectively referred to as Preferred Investment Options. The Series A preferred investment options have an exercise price of $1.502 per share, are immediately exercisable, and will expire five and one-half years from the date of issuance, or February 8, 2028, and the Series B preferred investment options have an exercise price of $1.502 per share, are immediately exercisable, and will expire two years from the date of issuance, or August 8, 2024.

The Company also issued to the placement agent of the August 2022 Offering preferred investment options to purchase up to 171,233 shares of common stock (the “Placement Agent Preferred Investment Options”). The Placement Agent Preferred Investment Options are subject to the same terms as the Preferred Investment Options, except that the Placement Agent Preferred Investment Options have an exercise price of $2.19 per share and a term of five years from the commencement of the sales pursuant to the August 2022 Offering, or August 3, 2027.

The exercise price and the number of shares of common stock issuable upon exercise of each Common Warrants, August 2022 Pre-Funded Warrants, Preferred Investment Options, and Placement Agent Preferred Investment Options are 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, August 2022 Pre-Funded Warrants, Preferred Investment Options, or Placement Agent Preferred Investment Options 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, August 2022 Pre-Funded Warrants, Preferred Investment Options, or Placement Agent Preferred Investment Options immediately prior to the fundamental transaction.

The Common Warrants, August 2022 Pre-Funded Warrants, Preferred Investment Options, and Placement Agent Preferred Investment Options can be exercised at the option of the holders at any time after they become exercisable provided that shares of the Common Warrants, August 2022 Pre-Funded Warrants, Preferred Investment Options, or Placement Agent Preferred Investment Options 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, Preferred Investment Options, or Placement Agent Preferred Investment Options, 9.99%) of the Company’s outstanding common stock immediately after giving effect to the exercise. A holder of the Common Warrants, August 2022 Pre-Funded Warrants, Preferred Investment Options or Placement Agent Preferred Investment Options may, upon notice to the Company, increase or decrease such beneficial ownership limitation, but not in excess of 9.99%.

In the event of a fundamental transaction in which the holders of our voting securities immediately prior to such fundamental transaction will not, following such fundamental transaction, directly or indirectly own more than 50% of the voting securities of the surviving entity or successor entity, and in which the Company is not the successor entity or does not continue as a reporting issuer under the Exchange Act, then, at the request of the holder, the Company or the successor entity shall purchase the unexercised portion of the Common Warrants, Preferred Investment Options, and Placement Agent Preferred Investment Options from the holder by paying to the holder an amount, in cash, equal to the fair value of the remaining unexercised portion of the Common Warrants, Preferred Investment Options, and Placement Agent Preferred Investment Options on the date of such fundamental transaction, subject to certain limitations in the event of a fundamental transaction not within our control.

As of June 30, 2023 and December 31, 2022, warrants and preferred investment options to purchase an aggregate of 6,885,284 and 8,255,148 shares of common stock were outstanding, respectively, all of which were classified as equity.

8. Stock-Based Compensation

Stock Plans

In January 2015, the Board of Directors adopted, and the Company’s stockholders approved the 2015 Equity Incentive Plan (“2015 Plan”). On October 14, 2022, the Company’s stockholders approved an additional 1,750,000 shares of common stock for issuance under the 2015 Plan. The 2015 Plan provides for the grant of incentive stock options (“ISOs”) to employees and for the grant of non-statutory stock options (“NSOs”), restricted stock, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights, performance units and performance shares to employees, directors and consultants. As of June 30, 2023, 306,638 shares were available for grant under the 2015 Plan.

The Company’s RSUs and RSAs generally vest annually over two years in equal increments. RSAs and RSUs largely contain the same contractual terms except RSAs have the ability to vote along with common holders as it is considered an outstanding security at the time of grant, subject to certain vesting and other restrictions. The Company measures the fair value of RSAs 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. As of December 31, 2022, the Company had 417 shares of RSUs and no shares of RSAs outstanding. A summary of all RSA and RSU activity is presented below:

	Number of Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term
Awards outstanding at December 31, 2022		417		$	11.64		0.17
Awarded		1,502,928		$	1.23		—
Released		(34,417	)	$	1.36		—
Forfeited		(50,000	)	$	1.23		—
Awards outstanding at June 30, 2023		1,418,928		$	1.23		1.46

As of June 30, 2023, there was $1.3 million of remaining unamortized stock-based compensation expense associated with RSAs, which will be expensed over a weighted average remaining service period of approximately 1.5 years. The outstanding non-vested and expected to vest RSAs at June 30, 2023 have an aggregate fair value of approximately $1.0 million. The Company used the closing market price of $0.73 per share at June 30, 2023, to determine the aggregate fair value for the RSAs outstanding at that date. For the six months ended June 30, 2023 and 2022, the fair value of RSAs and RSUs vested was approximately $42,000 and $3,000, respectively. For the three months ended June 30, 2023 and 2022, stock-based compensation expense recognized associated with the vesting of RSAs and RSUs was $239,000 and $36,000, respectively. For the six months ended June 30, 2023 and 2022, stock-based compensation expense recognized associated with the vesting of RSAs and RSUs was $0.5 million and $0.1 million, respectively.

Total noncash stock-based compensation expense relating to the Company’s RSAs and RSUs recognized, before taxes, during the three and six months ended June 30, 2023 and 2022, is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenues	$	35	$	7	$	63	$	14
Research and development expenses		51		13		134		26
Selling, general and administrative expenses		153		16		287		48
	$	239	$	36	$	484	$	88

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 16, 2023 and amended on March 17, 2023, titled “Risk Factors.”

Overview

We are a commercial-stage medical device company that designs, manufactures, and sells real-time high-definition image-guided, minimally invasive 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. 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 high-definition 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 including our Lightbox imaging console, the Ocelot and Tigereye family of devices, which are image-guided devices designed to allow physicians to penetrate a total blockage in an artery, known as a chronic total occlusion (“CTO”), and the Pantheris family of catheters, our image-guided atherectomy catheters which are 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. However, the market for medical devices in the coronary artery disease (“CAD”) space 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 commercializing any new CAD product. At this stage, we are working on understanding market requirements, and initiated the development process for the new CAD product, which we anticipate will require additional expenses.

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 Small Vessel (“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. In January 2022, we received 510(k) clearance from the FDA for our Lightbox 3 imaging console, an advanced version of our Lightbox that allows for easy portability and offers significant reductions in size, weight, and production cost in comparison to the incumbent version.

In April 2023, we received 510(k) clearance from the FDA for Tigereye Spinning Tip (“ST”), a next-generation image-guided CTO crossing system. Tigereye ST is a line extension of our Ocelot and Tigereye family of CTO crossing catheters. This new image-guided catheter incorporates design upgrades to the tip configuration and catheter shaft to increase crossing power and procedural success in challenging lesions, as well as design enhancements for ease of image interpretation during the procedure. The low-profile Tigereye ST has a working length of 140 cm and 5 French sheath. We initiated a limited launch of Tigereye ST in the second quarter of 2023 and expect to subsequently expand to full commercial availability within the United States during the third quarter of 2023.

In June 2023, we received 510(k) clearance from the FDA for Pantheris Large Vessel (“LV”), a next generation image guided atherectomy system for the treatment of larger vessels, such as the superficial femoral artery (“SFA”) and popliteal arteries. Pantheris LV is a line extension of our Pantheris and Pantheris SV family of atherectomy products. This catheter offers higher speed plaque excision for efficient removal of challenging occlusive tissue and multiple features to streamline and simplify user-operation, including enhanced tissue packing and removal, a radiopaque gauge to measure volume of plaque excised during the procedure, and enhanced guidewire management. We initiated a limited launch of the Pantheris LV during the third quarter of 2023 and expect to expand to full commercial availability within the United States during the second half of 2023.

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 (“EEL”).

We believe our Lumivascular platform is the only technology that offers radiation free, high-definition real-time visualization of the inside of the artery during PAD treatment through the use of optical coherence tomography (“OCT”), a high resolution, light-based, radiation-free imaging technology. Our Lumivascular platform provides physicians with high-definition 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 the treatment of in-stent restenosis. Patient enrollment began in October 2017 and was completed in July 2021. Patient outcomes were evaluated at thirty days, six months and one year following treatment. In November 2021, we received 510(k) clearance from the FDA for this new clinical indication for treating in-stent restenosis with Pantheris using the data collected and 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 indicated or effective treatment options.

We are pursuing additional clinical data programs including a post-market study, IMAGE-BTK, that is designed to evaluate the safety and efficacy of Pantheris SV in the treatment of PAD lesions below-the-knee. We are currently enrolling patients, and we expect to complete enrollment during 2023.

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 catheter products at our manufacturing facility but certain critical processes, such as coating and sterilization, are performed by outside vendors. Our Lightbox 3 imaging console is assembled through a qualified contract manufacturer. We expect our current manufacturing facility in California will be sufficient through at least 2023. We generated revenues of $8.8 million in 2020, $10.1 million in 2021 and $8.3 million in 2022. Revenue in 2020 was adversely affected by COVID-19 as hospitals deferred elective procedures, which among other things, created unpredictability in case volume. This unpredictability created more volatility in our revenues which continued to adversely affect our business in 2021 and 2022. The decline in revenue in 2022 was also attributable to the adverse effects of staffing shortages, resource constraints on our customers as hospitals deferred elective procedures, and the impact of a very competitive market for talent on the retention of our commercial team.

Recent Developments

Hospital Capacity and Resource Constraints Update

As a result of the effects of hospital staffing shortages, we have continued to experience significant volatility in sales, particularly as individuals, as well as hospitals and other medical providers, deferred elective procedures in response to resource constraints and capacity issues. We have continued to experience fluctuating sales as practitioners in certain jurisdictions were able to perform elective procedures while other jurisdictions were continuing to experience capacity issues. Hospital staffing shortages have had and are likely to continue to have adverse impacts on our business and results of operations. This situation has created a significant amount of volatility in the medical industry which makes future developments and results difficult to predict.

We believe capacity issues and resource constraints and the related increased cost pressures and burdens on the hospital systems have had and may 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 since 2020. In addition, we have 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.

Nasdaq Delisting Notice

On April 25, 2023, we received notice (the “Bid Price Deficiency Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”), as the minimum bid price for our listed securities was less than $1.00 for the previous 30 consecutive business days. We have a period of 180 calendar days, or until October 23, 2023, to regain compliance with the rule referred to in this paragraph. To regain compliance, during the 180 day period, the bid price of our Common Stock must close at $1.00 or more for a minimum of ten consecutive business days. The notice has no present impact on the listing of our securities on Nasdaq.

If we do not regain compliance during such 180-day period, we may be eligible for an additional 180 calendar days, provided that we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq except for Nasdaq Listing Rule 5550(a)(2), and provide a written notice of our intention to cure this deficiency during the second compliance period, including by effecting a reverse stock split, if necessary. If it appears to Nasdaq that we will not be able to cure the deficiency, or if we are otherwise not eligible, we will receive written notification that our securities are subject to delisting. At that time, we may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules.

In addition, on May 18, 2023, we received notice (the “Stockholders’ Equity Deficiency Letter”) from the Staff that we no longer satisfy the $2.5 million stockholders’ equity requirement for continued listing on The Nasdaq Capital Market, or the alternatives to that requirements – a $35 million market value of listed securities or $500,000 in net income in the most recent fiscal year or two of the last three fiscal years – as required by Nasdaq Listing Rule 5550(b) (the “Equity Requirement”).

As with the Bid Price Deficiency Letter, the Stockholders’ Equity Deficiency Letter has no immediate effect on our continued listing on The Nasdaq Capital Market. In accordance with the Nasdaq Listing Rules, we were provided 45 calendar days, or until July 3, 2023, to submit a plan to regain compliance with the Equity Requirement (the “Compliance Plan”). We submitted the Compliance Plan to Nasdaq on July 3, 2023. If the Compliance Plan is accepted, the Staff has the discretion to grant the Company an extension of up to 180 calendar days from the date of the Staff’s notice, or November 14, 2023, to regain compliance with the Equity Requirement. However, there can be no guarantee that the Staff will accept the Compliance Plan, or that we will be able to regain compliance with the Bid Price Requirement or the Equity Requirement.

If the Staff does not accept the Compliance Plan, the Staff will provide written notification to the Company that the Compliance Plan has been rejected, which determination may be appealed to a Nasdaq Hearings Panel (the “Panel”). The request for a hearing would stay any further action by the Staff at least pending a hearing before the Panel and the expiration of any extension period that the Panel may grant to the Company following the hearing.

We intend to actively monitor our bid price and stockholders’ equity and will consider available options to resolve these deficiencies and regain compliance with the Nasdaq Listing Rules. We expect that we will be required to effect a reverse stock split in order to regain compliance with the Bid Price Requirement. We also expect that regaining compliance with the Equity Requirement will require us to take actions such as converting outstanding indebtedness into equity or issuing additional shares of capital stock. However, we may not be successful in executing such transactions on terms favorable to us, or at all. In addition, there can be no guarantee that such efforts will succeed in helping us regain compliance with the Nasdaq Listing Rules.

Global Supply Chain

We are closely monitoring the 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, port closures and 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 we are experiencing. 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.

Reverse Stock Split

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.

Financing

During the three and six months ended June 30, 2023, our net loss and comprehensive net loss was $4.2 million and $8.8 million, respectively; during the years ended December 31, 2022 and 2021, it was $17.6 million and $17.4 million, respectively. We have not been profitable since inception, and as of June 30, 2023, our accumulated deficit was $411.2 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 (the “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 the end of the twenty-four (24) month period commencing on the first Borrowing Date (as defined in the Loan Agreement), subject to certain terms and conditions. Under the Loan Agreement we borrowed $30.0 million on September 22, 2015 and an additional $10.0 million on June 15, 2016. Contemporaneously with the execution of the Loan Agreement, we entered into a Securities Purchase Agreement with CRG (the “Securities Purchase Agreement”), pursuant to which CRG purchased 44 shares of our common stock on September 22, 2015 at a price of $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 (collectively, the “Amendments”) to the Loan Agreement with CRG since September 2015, the most recent of which, was entered into on August 10, 2022. The Amendments, among other things: (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 (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted us to make our entire interest payments in PIK interest payments through December 31, 2023 so long as no Default has occurred and is continuing; (4) extended the Stated Maturity Date (as defined in the Loan Agreement) to December 31, 2025; (5) reduced the minimum liquidity covenant 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 and 2022; (8) added minimum revenue covenants of $10 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 (as defined in the Loan Agreement) regarding Material Adverse Change such that any adverse change in or effect upon the revenue of us and our subsidiaries due to the outbreak of COVID-19 will not constitute a Material Adverse Change; and (11) provided CRG with board observer rights.

Critical Accounting Policies and Estimates

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. GAAP. 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 June 30, 2023, 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 16, 2023 and amended on March 17, 2023.

Components of Our Results of Operations

Revenues

All of our revenues are currently derived from sales of our various PAD catheters in the United States and select international markets, Lightbox consoles, and related services. We expect our revenues to increase in 2023 due to the introduction of our Tigereye ST and Pantheris LV products, investments in sales personnel and easing conditions involving hospital resource and capacity issues. For the three and six months ended June 30, 2023, there was one customer that represented 17% and 16% of revenues, respectively. For the three and six months ended June 30, 2022, one customer represented 16% and 15% of revenues, respectively.

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 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 hospital capacity and resource constraints have 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 and Gross Margin

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 Expenses

Research and development (“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 Expenses

Selling, general and administrative (“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 and additional costs related to corporate matters.

Interest Expense, Net

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 debt agreement.

Other (Expense) Income, Net

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

Results of Operations:

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	(in thousands, except percentages)
Revenues	$	2,041		$	2,132		$	3,929		$	4,020
Cost of revenues		1,436			1,475			2,688			2,839
Gross profit		605			657			1,241			1,181
Gross margin		30	%		31	%		32	%		29	%
Operating expenses:
Research and development		988			1,086			2,344			2,158
Selling, general and administrative		3,346			3,330			6,884			7,478
Total operating expenses		4,334			4,416			9,228			9,636
Loss from operations		(3,729	)		(3,759	)		(7,987	)		(8,455	)
Interest expense, net		(445	)		(440	)		(837	)		(879	)
Other (expense) income, net		(2	)		(15	)		4			(20	)
Net loss and comprehensive loss	$	(4,176	)	$	(4,214	)	$	(8,820	)	$	(9,354	)

Comparison of Three Months Ended June 30, 2023 and 2022

Revenues.

For the three months ended June 30, 2023, revenue decreased by approximately $0.1 million or 4% compared to the three months ended June 30, 2022. Our revenues reflect the fluctuating demand partially due to the adverse impacts of hospital staffing shortages as capacity limitations in hospitals have limited the ability of practitioners to perform elective surgical procedures using our products in certain jurisdictions. In addition, we have experienced and expect that we will continue to experience attrition and turnover of our sales professionals which has resulted in a less experienced sales team and limited our ability to maintain an adequate presence in some markets. The attrition and turnover are largely attributable to the increasingly competitive labor market landscape, which has had an adverse effect on our ability to generate revenues for the quarter ended June 30, 2023.

Cost of Revenues and Gross Margin.

For the three months ended June 30, 2023, cost of revenues decreased by less than $0.1 million or 3% compared to the three months ended June 30, 2022. This decrease was primarily attributable to the decrease in revenues. Stock-based compensation expense within cost of revenues totaled $35,000 and $7,000 for the three months ended June 30, 2023 and 2022, respectively.

Gross margin for the three months ended June 30, 2023 decreased to 30%, compared to 31% during the three months ended June 30, 2022. The decrease in gross margin was primarily due to the decrease in revenues which resulted in a decline in economies of scale.

Research and Development Expenses.

R&D expense for the three months ended June 30, 2023 decreased $0.1 million or 9% compared to the three months ended June 30, 2022 primarily due to the completion of our development efforts of Tigereye ST and Pantheris LV, partially offset by ongoing product development of our coronary device program. Stock-based compensation expense within R&D totaled approximately $51,000 and $13,000 for the three months ended June 30, 2023 and 2022, respectively. We expect R&D expense to fluctuate based on the ongoing product development of our coronary device.

Selling, General and Administrative Expenses.

SG&A expense for the three months ended June 30, 2023 remained flat compared to the three months ended June 30, 2022 resulting from a decrease in sales personnel costs and third-party professional services, offset by increases in certain variable compensation. Stock-based compensation expense within SG&A totaled approximately $153,000 and $16,000 for the three months ended June 30, 2023 and 2022, respectively.

Interest Expense, Net.

Interest expense, net is comprised of interest expense net of interest income. Interest Expense, net for the three months ended June 30, 2023 remained flat compared to the three months ended June 30, 2022, which resulted from increases in interest income due to the recent rising money market interest rates, offset by the higher CRG loan balance from PIK interest being compounded.

Other (Expense) Income, Net.

Other (expense) income, net primarily consists of gains and losses resulting from the remeasurement of foreign exchange transactions, which are typically a small percentage of transaction volume, and other miscellaneous income and expenses. Other (expense) income, net for the three months ended June 30, 2023 remained flat in comparison to the three months ended June 30, 2022 as both periods consisted primarily of remeasurement gains and losses from foreign exchange transactions, resulting in nominal changes between periods.

Comparison of Six Months Ended June 30, 2023 and 2022

Revenues.

For the six months ended June 30, 2023, revenue decreased by approximately $0.1 million or 2% compared to the six months ended June 30, 2022. Our revenues reflect the fluctuating demand partially due to the adverse impacts of hospital staffing shortages as capacity limitations in hospitals have limited the ability of practitioners to perform elective surgical procedures using our products in certain jurisdictions. In addition, we have experienced and expect that we will continue to experience attrition and turnover of our sales professionals which has resulted in a less experienced sales team and limited our ability to maintain an adequate presence in some markets. The attrition and turnover are largely attributable to the increasingly competitive labor market landscape, which has had an adverse effect on our ability to generate revenues for the six months ended June 30, 2023.

Cost of Revenues and Gross Margin.

For the six months ended June 30, 2023, cost of revenues decreased by less than $0.2 million or 5% compared to the six months ended June 30, 2022. This decrease was primarily attributable to the decrease in revenues, compounded by certain cost efficiencies and continuing optimization of processes. Stock-based compensation expense within cost of revenues totaled $63,000 and $14,000 for the six months ended June 30, 2023 and 2022, respectively.

Gross margin for the six months ended June 30, 2023 increased to 32%, compared to 29% during the six months ended June 30, 2022. The increase in gross margin was primarily due to cost efficiencies and optimizations as well as favorable changes in product mix, partially offset by declines in economies of scale in the second quarter of 2023.

Research and Development Expenses.

R&D expense for the six months ended June 30, 2023 increased $0.2 million or 9% compared to the six months ended June 30, 2022 primarily due to the ongoing product development of our coronary device program, partially offset by the completion of our development efforts of Tigereye ST and Pantheris LV. Stock-based compensation expense within R&D totaled approximately $134,000 and $26,000 for the six months ended June 30, 2023 and 2022, respectively. We expect R&D expenses to fluctuate based on the ongoing product development of our coronary device.

Selling, General and Administrative Expenses.

SG&A expense for the six months ended June 30, 2023 decreased by $0.6 million or 8% compared to the six months ended June 30, 2022 primarily due to decreases in sales personnel costs and decreases in third-party professional services and other ancillary expenses, partially offset by increases in certain variable compensation. Stock-based compensation expense within SG&A totaled approximately $287,000 and $48,000 for the six months ended June 30, 2023 and 2022, respectively.

Interest Expense, Net.

Interest Expense, net for the six months ended June 30, 2023 remained flat compared to the six months ended June 30, 2022, which resulted from increases in interest income due to the recent rising money market interest rates, offset by the higher CRG loan balance from PIK interest being compounded.

Other (Expense) Income, Net.

Other (expense) income, net primarily consists of gains and losses resulting from the remeasurement of foreign exchange transactions, which are typically a small percentage of transaction volume, and other miscellaneous income and expenses. Other (expense) income, net for the six months ended June 30, 2023 remained flat in comparison to the six months ended June 30, 2022 as both periods consisted primarily of remeasurement gains and losses from foreign exchange transactions, resulting in nominal changes between periods.

Liquidity and Capital Resources

As of June 30, 2023, we had cash and cash equivalents of $7.1 million and an accumulated deficit of $411.2 million, compared to cash and cash equivalents of $14.6 million and an accumulated deficit of $402.4 million as of December 31, 2022. We expect to incur losses for the foreseeable future. We believe that our cash and cash equivalents of $7.1 million at June 30, 2023 and expected revenues, debt and financing activities and funds from operations will be sufficient to allow us to fund our current operations through the end of the third quarter of 2023.

To date, we have financed our operations primarily through net proceeds from the issuance of our preferred stock, common stock and debt financings, our “at-the-market” program, our initial public offering (“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. We will need to raise additional capital through future equity or debt financings in the near future to meet our operational needs and capital requirements for product development, clinical trials and commercialization, and to regain compliance with the Equity Requirement of the Nasdaq Listing Rules. 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 the event we determine that additional sources of liquidity will not be available to us or will not allow us to meet our obligations as they become due, we may need to file a voluntary petition for relief under the United States Bankruptcy Code in order to implement a restructuring plan or liquidation. Our financial statements for the three and six-months ended June 30, 2023 do not include any adjustments that might result from the outcome of this uncertainty.

Currently all of our cash and cash equivalents are held at a single financial institution, First Citizens Bank. On March 10, 2023, the Federal Deposit Insurance Corporation announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. While we have regained access to our accounts at First Citizens Bank, formerly, Silicon Valley Bank, and are evaluating our banking relationships, future disruptions of financial institutions where we bank or have credit arrangements, or disruptions of the financial services industry in general, could adversely affect our ability to access our cash and cash equivalents. If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business will be adversely affected.

Equity Financings

January 2022 Offering

On January 14, 2022, we entered into a 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 7,600 shares of our Series D Convertible Preferred Stock, par value of $0.001 per share, at an offering price of $1,000 per share which was convertible into common stock at a conversion price of $8.00 per share. Concurrently, we agreed to issue to these investors warrants to purchase up to an aggregate of 807,500 shares of our common stock (the “Common Warrants”). As a result, we received aggregate net proceeds of approximately $6.7 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses. During the year ended December 31, 2022, all 7,600 shares issued of Series D preferred stock were converted into a total of 950,000 shares of common stock.

The 807,500 Common Warrants have an exercise price of $9.60 per share and became exercisable beginning July 14, 2022. The Common Warrants will expire five years following the 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 a term of five years from the commencement of the sales pursuant to the January 2022 Offering, or January 12, 2027.

At The Market Offering Agreement

On May 20, 2022, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Agent”), as sales agent, pursuant to which we may offer and sell shares of common stock, par value $0.001 per share (the “Shares”) up to an aggregate offering price of $7,000,000 from time to time, in an at the market public offering. Sales of the Shares are to be made at prevailing market prices at the time of sale, or as otherwise agreed with the Agent. The Agent will receive a commission from us of 3.0% of the gross proceeds of any Shares sold under the ATM Agreement. The Shares sold under the ATM Agreement are offered and sold pursuant to our shelf registration statement on Form S-3, which was initially filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2022 and declared effective on April 7, 2022, and a prospectus supplement and the accompanying prospectus relating to the At The Market Offering filed with the SEC on May 20, 2022. During the year ended December 31, 2022, we sold 585,603 shares of common stock pursuant to the ATM Agreement at an average price of $1.67 per share for aggregate proceeds of $1.0 million, of which approximately $29,000 was paid in the form of commissions to the Agent. On August 3, 2022, we suspended sales under the ATM Agreement. On March 17, 2023, we reactivated the ATM Agreement. During the quarter ended June 30, 2023, we sold 89,817 shares of common stock pursuant to the ATM Agreement at an average price of $0.72 per share for aggregate proceeds of approximately $65,000, of which approximately $2,000 was paid in the form of commissions to the Agent. During the six months ended June 30, 2023, we sold 101,720 shares of common stock at an average price of $0.73 per share for aggregate proceeds of approximately $75,000, of which approximately $2,200 was paid in the form of commissions to the Agent. While we may attempt additional sales in the future, there can be no assurance that we will be successful in acquiring additional funding through these means.

Other than the ATM Agreement, we currently do not have any commitment to obtain additional funds.

August 2022 Offering

On August 4, 2022, we entered into a securities purchase agreement with a single institutional investor for the issuance and sale of 1,484,019 shares of its common stock in a registered direct offering (“RD” or “Registered Direct”) at a purchase price of $1.752 per share, or pre-funded warrants in lieu thereof. In a concurrent private placement, we also agreed to issue and sell to the investor 1,369,864 shares of common stock at the same purchase price as in the registered direct offering, or pre-funded warrants in lieu thereof (“Private Placement” and together with the Registered Direct offering the “August 2022 Offering”). As a result, we received aggregate net proceeds of approximately $4.4 million after underwriting discounts, commissions, legal and accounting fees, and other ancillary expenses.

As a result, in the Registered Direct offering, we issued (i) 700,000 shares of common stock, (ii) and pre-funded warrants in lieu of common stock to purchase up to an aggregate of 784,019 shares of common stock (the “RD Pre-Funded Warrants”) and in the Private Placement, we issued pre-funded warrants to purchase up to an aggregate of 1,369,864 shares of common stock (the “Private Placement Pre-Funded Warrants” and together with the RD Pre-Funded Warrants the “August 2022 Pre-Funded Warrants”). On April 20, 2023, the remaining 622,000 Private Placement Pre-Funded Warrants were exercised leaving none outstanding as of June 30, 2023.

In addition, we issued to the investor in the August 2022 Offering Series A preferred investment options to purchase up to 2,853,883 additional shares of our common stock and Series B preferred investment options to purchase up to 2,853,883 additional shares of our common stock (the “Preferred Investment Options”). The Series A preferred investment options have an exercise price of $1.502 per share, are immediately exercisable, and will expire five and one-half years from the date of issuance, or February 8, 2028, and the Series B preferred investment options have an exercise price of $1.502 per share, are immediately exercisable, and will expire two years from the date of issuance, or August 8, 2024. We also issued to the Placement Agent or its designees preferred investment options to purchase up to an aggregate of 171,233 shares of common stock (the “Placement Agent Preferred Investment Options”). The Placement Agent Preferred Investment Options are subject to the same terms as the Preferred Investment Options, except that the Placement Agent Preferred Investment Options have an exercise price of $2.19 per share and a term of five years from the commencement of the sales pursuant to the August 2022 Offering, or August 3, 2027.

Contractual Obligations

Our principal obligations consist of the operating lease for our facility, our Loan Agreement with CRG and non-cancelable purchase commitments. The following table sets out, as of June 30, 2023, our contractual obligations due by period (in thousands):

	Payments Due by Period
	Less Than 1 Year		2 - 3 Years		4-5 Years		More Than 5 Years		Total
Operating lease obligations ⁽¹⁾	$	1,224	$	517	$	—	$	—	$	1,741
CRG Loan ⁽²⁾		4,637		14,747		—		—		19,384
Noncancelable purchase commitments ⁽³⁾		989		18		—		—		1,007
	$	6,850	$	15,282	$	—	$	—	$	22,132

(1)

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 above, the lease requires the Company to pay property taxes, insurance, maintenance, and repair costs. The lease will expire on November 30, 2024.

(2)

The total CRG Loan amount, shown as borrowings on the balance sheet as of June 30, 2023, is $15.2 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 4. Borrowings.”

(3)

Noncancelable purchase commitments consist of agreements to purchase goods and services entered into in the ordinary course of business.

Lease Agreements

Our 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 above, the lease requires us 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 lease will expire on November 30, 2024. We are obligated to pay a total approximately $5.8 million in base rent payments through November 2024, which began on December 1, 2019. The weighted average remaining lease term as of June 30, 2023 is 1.4 years.

CRG Loan

We have entered into several amendments to the Loan Agreement (the “Amendments”) with CRG since September 2015, the most recent of which was entered into on August 10, 2022. The Amendments, among other things: (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 (as defined in the Loan Agreement) has occurred and is continuing; (3) permitted us to make the 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 Stated Maturity Date (as defined in the Loan Agreement) to December 31, 2025; (5) reduced the minimum liquidity covenant 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 and 2022; (8) added minimum revenue covenants of $10 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 (as defined in the Loan Agreement) regarding Material Adverse Change such that any adverse change in or effect upon our revenue and our subsidiaries due to the outbreak of COVID-19 will not constitute a Material Adverse Change; and (11) provided CRG with board observer rights. The total Loan amount under the Loan Agreement (the “CRG Loan”), shown as short-term borrowings on the balance sheet as of June 30, 2023, is $15.2 million. However, upon maturity of the obligations under the Loan Agreement in December 2025, we will be obligated to pay $19.4 million under the Loan Agreement, which 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 to the maturity date. Due to the substantial doubt about our ability to continue operating as a going concern and the “Material Adverse Change” clause under the Loan Agreement, the entire amount of outstanding borrowings at June 30, 2023 and December 31, 2022 are classified as current. CRG has not purported that any Event of Default (as defined in the Loan Agreement) has occurred as a result a “Material Adverse Change” under the Loan Agreement. Refer to Part 1, Item 1, “Unaudited Financial Statements,” Footnote 4 for additional details.

Cash Flows

	Six Months Ended June 30,
	2023			2022
	(in thousands)
Net cash (used in) provided by:
Operating activities	$	(7,513	)	$	(10,547	)
Investing activities		—			(31	)
Financing activities		37			7,120
Net change in cash and cash equivalents	$	(7,476	)	$	(3,458	)

Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended June 30, 2023 was $7.5 million, consisting primarily of a net loss of $8.8 million and an increase in net operating assets of $0.6 million, partially offset by non-cash charges of $1.9 million. Non-cash charges largely related to non-cash interest expense of $1.0 million, excess and obsolete charges related to inventory of $0.3 million, and stock-based compensation of $0.5 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 in anticipation of (i) forecasted demand in light of extended lead times and (ii) building inventory in anticipation of the Tigereye ST and Pantheris LV product launches in the second half of 2023. These increases were partially offset by the increase in other long-term liabilities as certain variable compensation continues to accrue and accrued compensation due to timing of payments.

Net cash used in operating activities for the six months ended June 30, 2022 was $10.5 million, consisting primarily of a net loss of $9.4 million and an increase in net operating assets of $2.4 million, partially offset by non-cash charges of $1.2 million. Non-cash charges largely related to non-cash interest expense of $0.9 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. Other increases included purchases of inventory components and a decrease in accounts payable due to the timing of payments. These increases were partially offset by the increase in other long-term liabilities as they continue to accrue.

Net Cash Used in Investing Activities

Net cash used in investing activities during the six months ended June 30, 2022 consisted of purchases of property and equipment.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2023 of less than $0.1 million primarily relates to proceeds of approximately $0.1 million from the sale of common stock pursuant to the ATM Agreement, net of commissions and various issuance costs.

Net cash provided by financing activities in the six months ended June 30, 2022 of $7.1 million primarily relates to proceeds of $6.7 million from the issuance of preferred stock and warrants in the January 2022 Offering, net of commissions and various issuance costs. We also received approximately $0.4 million, net of commissions and various issuance costs, from the sale of common stock pursuant to the ATM Agreement.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

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.

Credit Risk

As of June 30, 2023, our cash and cash equivalents were maintained with one financial institution in the United States, and our current deposits are 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. At June 30, 2023, there were two customers that each represented 14% of the Company’s accounts receivable. At December 31, 2022, there was no customer that represented 10% or more of the Company’s accounts receivable.

Foreign Currency Risk

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.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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 June 30, 2023. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of June 30, 2023, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

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 June 30, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS

None.

ITEM 1A.

RISK FACTORS

Except as described below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K filed with the SEC on March 16, 2023 and amended on March 17, 2023.The disclosure of risks identified below does not imply that the risk has not already materialized.

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.

On April 25, 2023, we received a letter from Nasdaq’s Listing Qualifications Department of notifying us that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), as the minimum bid price for our listed securities was less than $1 for the previous 30 consecutive business days. We have a period of 180 calendar days, or until October 23, 2023, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the bid price of our common stock must close at $1 or more for a minimum of ten consecutive business days during the 180-day compliance period. The notice has no present impact on the listing of securities on Nasdaq.

We have not yet regained compliance with the Minimum Bid Price Requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A). If we do not regain compliance during such 180-day compliance period, we may be eligible for an additional 180 calendar days, provided that we meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq except for Nasdaq Listing Rule 5550(a)(2), and provide a written notice of our intention to cure this deficiency during the second compliance period, including by effecting a reverse stock split, if necessary. While we have obtained reverse stock splits in the past to regain compliance with the Minimum Bid Price Requirement, there can be no guarantee that we would be able to obtain shareholder approval of and effect a reverse stock split within the compliance period.

If it appears to Nasdaq that we will not be able to cure the deficiency, or if we are otherwise not eligible for a second compliance period, we will receive written notification that our securities are subject to delisting. At that time, we may appeal the delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules. We intend to actively monitor our bid price and will consider available options to resolve the deficiency and regain compliance with the Nasdaq Listing Rules, including considering whether to conduct a reverse stock split.

We intend to actively monitor our bid price and stockholders’ equity and will consider available options to resolve these deficiencies and regain compliance with the Nasdaq Listing Rules. We expect that we will be required to effect a reverse stock split in order to regain compliance with the Bid Price Requirement. We also expect that regaining compliance with the Equity Requirement will require us to take actions such as converting outstanding indebtedness into equity or issuing additional shares of capital stock, which could result in significant dilution to our current stockholders. However, we may not be successful in executing such transactions on terms favorable to us, or at all. In addition, there can be no guarantee that such efforts will succeed in helping us regain compliance with the Nasdaq Listing Rules

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:

●

a limited availability of market quotations for our securities;

●

reduced liquidity for our securities;

●

a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

●

a limited amount of news and analyst coverage; and

●

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If our common stock continues to be listed on NASDAQ, our common stock will be a covered security. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.

There is substantial doubt about our ability to continue as a going concern, and we will need additional financing to execute our business plan, to fund our operations and to continue as a going concern, and, if we are unable to obtain additional financing, may be required to pursue a reorganization proceeding under applicable bankruptcy or insolvency laws, including under Chapter 11 of the U.S. Bankruptcy Code.

Since inception, we have experienced recurring operating losses and negative cash flows and we expect to continue to generate operating losses and consume significant cash resources for the foreseeable future. There is substantial doubt regarding our ability to continue as a going concern. Our independent registered public accounting firm has expressed in its auditors’ report on our 2022 financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2022, an emphasis of matter paragraph relating to our ability to continue as a “going concern,” meaning that our recurring losses from operations and negative cash flows from operations raise substantial doubt regarding our ability to continue as a going concern. We have prepared our financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Our financial statements do not include any adjustment to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty, with the exception that all borrowings are classified as current on the balance sheets.

Under our Term Loan Agreement (the “Loan Agreement”) with CRG Partners III L.P. and certain of its affiliated funds (collectively “CRG”), a “Material Adverse Change” or “Material Adverse Effect” (each as defined in the Loan Agreement) is an “Event of Default” thereunder, which gives Majority Lenders (as defined in the Loan Agreement) the right to declare amounts outstanding under the Loan Agreement immediately due and payable. Due to the substantial doubt about our ability to continue operating as a going concern and the Event of Default that could result due to a Material Adverse Change under the Loan Agreement, the entire amount of borrowings at June 30, 2023 and December 31, 2022 is classified as current. In addition, we may not be able to generate sufficient liquidity or revenue to satisfy minimum liquidity and minimum revenue covenants under the Loan Agreement. If we fail to satisfy such requirements, we will be in default under the Loan Agreement and all outstanding amounts under the Loan Agreement will become immediately due.

Majority Lenders have not purported that an Event of Default has occurred as a result of a Material Adverse Change or breach of other financial covenants. However, there can be no guarantee that Majority Lenders will not invoke such Event of Default in the future, or that we will not experience other Material Adverse Changes or other Material Adverse Effects, or otherwise breach our financial or other covenants under the Loan Agreement, that could give rise to an Event of Default under the Loan Agreement.

If we are unable to generate sufficient revenue and liquidity to service our debt, we may be required to pursue a reorganization proceeding under applicable bankruptcy or insolvency laws, including protection (“Bankruptcy Protection”) under Chapters 7 or 11 of the U.S. Bankruptcy Code. Holders of our common stock will likely not receive any value or payments in a restructuring or similar scenario.

In the event we pursue Bankruptcy Protection, we will be subject to the risks and uncertainties associated with such proceedings.

In the event we file for relief under the United States Bankruptcy Code, our operations, our ability to develop and execute our business plan and our continuation as a going concern will be subject to the risks and uncertainties associated with bankruptcy proceedings, including, among others: our ability to execute, confirm and consummate a plan of reorganization; the high costs of bankruptcy proceedings and related fees; our ability to obtain sufficient financing to allow us to emerge from bankruptcy and execute our business plan post-emergence, and our ability to comply with terms and conditions of that financing; our ability to continue our operations in the ordinary course; our ability to maintain our relationships with our customers, business partners, counterparties, employees and other third parties; our ability to obtain, maintain or renew contracts that are critical to our operations on reasonably acceptable terms and conditions; our ability to attract, motivate and retain key employees; the ability of third parties to use certain limited safe harbor provisions of the United States Bankruptcy Code to terminate contracts without first seeking Bankruptcy Court approval; and the actions and decisions of our stakeholders and other third parties who have interests in our bankruptcy proceedings that may be inconsistent with our operational and strategic plans. Any delays in our bankruptcy proceedings would increase the risks of our being unable to reorganize our business and emerge from bankruptcy proceedings and may increase our costs associated with the bankruptcy process or result in prolonged operational disruption for us. Also, we would need the prior approval of the bankruptcy court for transactions outside the ordinary course of business during the course of any bankruptcy proceedings, which may limit our ability to respond timely to certain events or take advantage of certain opportunities. Because of the risks and uncertainties associated with any bankruptcy proceedings, we cannot accurately predict or quantify the ultimate impact of events that could occur during any such proceedings. There can be no guarantees that if we seek Bankruptcy Protection we will emerge from Bankruptcy Protection as a going concern or that holders of our common stock will receive any recovery from any bankruptcy proceedings.

In the event we are unable to pursue Bankruptcy Protection under Chapter 11 of the United States Bankruptcy Code, or, if pursued, successfully emerge from such proceedings, it may be necessary for us to pursue Bankruptcy Protection under Chapter 7 of the United States Bankruptcy Code for all or a part of our businesses. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the United States Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our stakeholders than those we might obtain under Chapter 11 primarily because of the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than in a controlled manner and as a going concern.

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:

●

incur or assume liens;

●

incur additional debt or provide guarantees in respect of obligations of other persons;

●

issue redeemable stock and preferred stock;

●

pay dividends or make distributions on capital stock, repurchase, redeem or make payments on capital stock or repay, repurchase, redeem, retire, defease, acquire or cancel debt prior to the stated maturity thereof;

●

make loans, investments or acquisitions;

●

create or permit restrictions on the ability of our subsidiaries to pay dividends or make other distributions to us or to guarantee our debt, limit our or any of our subsidiary’s ability to create liens, or make or pay intercompany loans or advances;

●

enter into certain transactions with affiliates;

●

sell, transfer, license, lease or dispose of our or our subsidiaries’ assets, including the capital stock of our subsidiaries; and

●

dissolve, liquidate, consolidate or merge with or into, or sell substantially all of our assets to another person.

In particular, the Loan Agreement, as most recently amended in August 2022, 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 2023, $14.5 million in 2024 and $17.0 million in 2025. 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 covenants under the Loan Agreement, as amended. We currently anticipate that, if we are unable to raise additional capital, our cash balance will fall below the required minimum of $3.5 million in the third quarter of 2023. If our cash balance falls below the required minimum and we are unable to negotiate a waiver or amendment to the Loan Agreement, we would be in default of our covenants under the Loan Agreement, which would adversely affect on our financial position and operations.

The covenants contained in the Loan Agreement could also 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 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 may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs and our failure to obtain additional financing when needed could force us to delay, reduce or eliminate our product development programs and commercialization efforts or cause us to become insolvent.

We believe that our cash and cash equivalents at June 30, 2023, together with debt and financing activities and expected revenues from operations, will be sufficient to satisfy our capital requirements and fund our operations through at least the third quarter of 2023. Even though we received net proceeds of approximately $6.7 million from the sale of our Series D Convertible Preferred Stock in January 2022, $4.4 million from the sale of our common stock in August 2022, and $1.1 million from the sale of our common stock under our at-the-market program that we entered into on May 20, 2022, we will need to raise additional funds through future equity or debt financings in the near future to meet our operational needs and capital requirements for product development, clinical trials and commercialization, and to regain compliance with the Equity Requirement under the Nasdaq Listing Rules. We can provide no assurance that we 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 existing stockholders. Given the volatility of our stock price, any financing that we undertake could cause substantial dilution to our existing stockholders. Macroeconomic challenges and volatility in capital markets could further limit our ability to raise capital when needed on terms favorable to us, or at all. In addition, while we have been able to raise capital from the sale of shares under our at-the-market program, the limitations under instruction I.B.6 of Form S-3, as well as possible low volume of trading in our securities, will limit our ability to continue raising funds through such program.

To date, we have financed our operations primarily through sales of our products and net proceeds from the issuance of our preferred stock and debt financings, our initial public offering (“IPO”), and our follow-on public offerings of our securities. We do not know when or if our operations will generate sufficient cash to fund our ongoing operations. We cannot be certain that additional capital will be available as needed on acceptable terms, or at all. In the future, we may require additional capital in order to (i) continue to conduct research and development activities, (ii) conduct post-market clinical studies, as well as clinical trials to obtain regulatory clearances and approvals necessary to commercialize our Lumivascular platform products, (iii) expand our sales and marketing infrastructure, (iv) acquire complementary businesses technologies or products; or (v) respond to business opportunities, challenges, a decline in sales, increased regulatory obligations or unforeseen circumstances. Our future capital requirements will depend on many factors, including:

●

the degree of success we experience in commercializing our Lumivascular platform products, particularly Pantheris, Ocelot, Tigereye and any future versions of such products;

●

the costs, timing and outcomes of clinical trials and regulatory reviews associated with our future products;

●

the costs and expenses of maintaining or expanding our sales and marketing infrastructure and our manufacturing operations;

●

the costs and timing of developing variations of our Lumivascular platform products and, if necessary, obtaining FDA clearance of such variations;

●

the extent to which our Lumivascular platform is adopted by hospitals for use by interventional cardiologists, vascular surgeons and interventional radiologists in the treatment of PAD;

●

the number and types of future products we develop and commercialize;

●

the costs of defending ourselves against future litigation;

●

the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; and

●

the extent and scope of our general and administrative expenses.

We may attempt to raise additional funds in equity or debt financings or enter into credit facilities in order to access funds for our capital needs. Any debt financing obtained by us in the future would cause us to incur additional debt service expenses and could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and pursue business opportunities. In addition, due to our current level of debt, 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. If we raise additional funds through further issuances of equity or convertible debt securities, and/or if we convert all or a portion of our existing debt to equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock.

If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may terminate or delay the development of one or more of our products, delay clinical trials necessary to market our products, delay establishment of sales and marketing capabilities or other activities necessary to commercialize our products, and significantly scale back our operations, or we may become insolvent. In addition, as described above under the risk factor “Nasdaq may delist our securities from its exchange, which could harm our business and limit our stockholders’ liquidity,” if we are unable to raise capital in a manner accretive to our stockholders’ equity, our common stock could be delisted from Nasdaq. If this were to occur, our ability to continue to grow and support our business and to respond to business challenges could be significantly limited.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are being filed herewith:

Exhibit Number		Exhibit Title

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 Section 302 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 Section 302 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 Section 906 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.

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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Avinger, Inc.
	(Registrant)


Date: July 27, 2023	/s/ JEFFERY M. SOINSKI
	Jeffrey M. Soinski
	Chief Executive Officer
	(Principal Executive Officer)

Date: July 27, 2023	/s/ NABEEL SUBAINATI
	Nabeel Subainati
	Vice President, Finance
	(Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
Pursuant to

Securities Exchange Act Rules 13a-14(a) and 15d-14(a),

As Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey Soinski, hereby certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Avinger, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: July 27, 2023

	/s/ Jeffrey M. Soinski
	Jeffrey M. Soinski
	Chief Executive Officer
	(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
Pursuant to

Securities Exchange Act Rules 13a-14(a) and 15d-14(a),

As Adopted Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Nabeel Subainati, hereby certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Avinger, Inc.;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: July 27, 2023

	/s/ Nabeel Subainati
	Nabeel Subainati
	Vice President, Finance
	(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Avinger, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023, as filed with the Securities and Exchange Commission (the “Report”), Jeffrey Soinski, as Chief Executive Officer of the Company, and Nabeel Subainati, Vice President, Finance of the Company, each hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), to his knowledge:

The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 27^th day of July, 2023.

/s/ Jeffrey M. Soinski		/s/ Nabeel Subainati
Jeffrey M. Soinski		Nabeel Subainati
Chief Executive Officer		Vice President, Finance
(Principal Executive Officer)		(Principal Financial and Accounting Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	Jun. 30, 2023	Jul. 21, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-36817
Entity Registrant Name	AVINGER, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-8873453
Entity Address, Address Line One	400 Chesapeake Drive
Entity Address, City or Town	Redwood City
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94063
City Area Code	650
Local Phone Number	241-7900
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	AVGR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		10,821,380
Entity Central Index Key	0001506928
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 7,127	$ 14,603
Accounts receivable, net of allowance for doubtful accounts of $24 and $73 at June 30, 2023 and December 31, 2022, respectively	920	1,057
Inventories, net	5,519	4,965
Prepaid expenses and other current assets	890	362
Total current assets	14,456	20,987
Right of use asset	1,658	2,194
Property and equipment, net	566	702
Other assets	263	312
Total assets	16,943	24,195
Current liabilities:
Accounts payable	423	631
Accrued compensation	2,477	1,401
Series A preferred stock dividends payable	2,435	0
Accrued expenses and other current liabilities	755	657
Leasehold liability, current portion	1,150	1,092
Borrowings	15,203	14,165
Total current liabilities	22,443	17,946
Leasehold liability, long-term portion	508	1,102
Other long-term liabilities	582	1,001
Total liabilities	23,533	20,049
Stockholders’ (deficit) equity:
Convertible preferred stock issuable in series, par value of $0.001; Shares authorized: 5,000,000 at June 30, 2023 and December 31, 2022; Shares issued and outstanding: 60,961 at June 30, 2023 and December 31, 2022; aggregate liquidation preference of $60,876 at June 30, 2023 and December 31, 2022	$ 0	$ 0
Common Stock, Shares Authorized (in shares)	100,000,000	100,000,000
Common stock, par value of $0.001; Shares authorized: 100,000,000 at June 30, 2023 and December 31, 2022; Shares issued and outstanding: 9,338,645 and 7,832,644 at June 30, 2023 and December 31, 2022, respectively	$ 9	$ 8
Additional paid-in capital	404,597	406,514
Accumulated deficit	(411,196)	(402,376)
Total stockholders’ (deficit) equity	(6,590)	4,146
Total liabilities and stockholders’ (deficit) equity	$ 16,943	$ 24,195

Condensed Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Accounts Receivable, Allowance for Credit Loss, Current	$ 24	$ 73
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized (in shares)	5,000,000	5,000,000
Preferred Stock, Shares Outstanding (in shares)	60,961	60,961
Preferred Stock, Shares Issued (in shares)	60,961	60,961
Preferred Stock, Liquidation Preference, Value	$ 60,876	$ 60,876
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001	$ 0.001
Common Stock, Shares Authorized (in shares)	100,000,000	100,000,000
Common Stock, Shares, Outstanding (in shares)	9,338,645	7,832,644
Common Stock, Shares, Issued (in shares)	9,338,645	7,832,644

Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues	$ 2,041	$ 2,132	$ 3,929	$ 4,020
Cost of revenues	1,436	1,475	2,688	2,839
Gross profit	605	657	1,241	1,181
Operating expenses:
Research and development	988	1,086	2,344	2,158
Selling, general and administrative	3,346	3,330	6,884	7,478
Total operating expenses	4,334	4,416	9,228	9,636
Loss from operations	(3,729)	(3,759)	(7,987)	(8,455)
Interest expense, net	(445)	(440)	(837)	(879)
Other (expense) income, net	(2)	(15)	4	(20)
Net loss and comprehensive loss	(4,176)	(4,214)	(8,820)	(9,354)
Accretion of preferred stock dividends	(1,218)	(1,127)	(2,436)	(2,254)
Deemed dividend arising from beneficial conversion feature of convertible preferred stock	0	0	0	(5,111)
Net loss applicable to common stockholders	$ (5,394)	$ (5,341)	$ (11,256)	$ (16,719)
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (0.59)	$ (0.94)	$ (1.30)	$ (3.16)
Weighted average common shares used to compute net loss per share, basic and diluted (in shares)	9,141	5,702	8,683	5,298

Condensed Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Preferred Stock [Member] January 2022 Public Offering [Member]	Preferred Stock [Member] Series D Preferred Stock [Member]	Preferred Stock [Member]	Common Stock [Member] January 2022 Public Offering [Member]	Common Stock [Member] Series D Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member] January 2022 Public Offering [Member]	Additional Paid-in Capital [Member] Series D Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member] January 2022 Public Offering [Member]	Retained Earnings [Member] Series D Preferred Stock [Member]	Retained Earnings [Member]	January 2022 Public Offering [Member]	Series D Preferred Stock [Member]	Total
Balance (in shares) at Dec. 31, 2021			56,451			4,778,263
Balance at Dec. 31, 2021						$ 96			$ 394,380			$ (384,753)			$ 9,723
Issuance of common stock in public offerings, net of commissions and issuance costs (in shares)		7,600	0		0	326,466
Issuance of common stock in public offerings, net of commissions and issuance costs			$ 0		$ 0	$ 1		$ 6,721	395		$ 0	0		$ 6,721	396
Conversion of Series D preferred stock into common stock (in shares)			(7,600)			950,000
Conversion of Series D preferred stock into common stock						$ 1			0			0			1
Issuance of common stock upon vesting of restricted stock units (in shares)			0			435
Issuance of common stock upon vesting of restricted stock units						$ 0			0			0			0
Employee stock-based compensation			$ 0			0			88			0			88
Accretion of Series A preferred stock dividends			0			0			(2,254)			0			(2,254)
Net and comprehensive loss			$ 0			$ 0			0			(9,354)			(9,354)
Balance (in shares) at Jun. 30, 2022			56,451			6,081,333
Balance at Jun. 30, 2022						$ 6			399,422			(394,107)			5,321
Reclassifications and adjustments due to rounding impact from reverse stock split for fractional shares (in shares)			0			26,169
Reclassifications and adjustments due to rounding impact from reverse stock split for fractional shares			$ 0			$ (92)			92			0			0
Balance (in shares) at Dec. 31, 2021			56,451			4,778,263
Balance at Dec. 31, 2021						$ 96			394,380			(384,753)			9,723
Balance (in shares) at Dec. 31, 2022			60,961			7,832,644
Balance at Dec. 31, 2022						$ 8			406,514			(402,376)			4,146
Balance (in shares) at Mar. 31, 2022			58,851			5,454,849
Balance at Mar. 31, 2022						$ 5			400,118			(389,893)			10,230
Issuance of common stock in public offerings, net of commissions and issuance costs (in shares)			0			326,466
Issuance of common stock in public offerings, net of commissions and issuance costs			$ 0			$ 1			395			0			396
Conversion of Series D preferred stock into common stock (in shares)			(2,400)			300,000
Conversion of Series D preferred stock into common stock						$ 0			0			0			0
Issuance of common stock upon vesting of restricted stock units (in shares)			0			18
Issuance of common stock upon vesting of restricted stock units						$ 0			0			0			0
Employee stock-based compensation			$ 0			0			36			0			36
Accretion of Series A preferred stock dividends			0			0			(1,127)			0			(1,127)
Net and comprehensive loss			$ 0			$ 0			0			(4,214)			(4,214)
Balance (in shares) at Jun. 30, 2022			56,451			6,081,333
Balance at Jun. 30, 2022						$ 6			399,422			(394,107)			5,321
Balance (in shares) at Dec. 31, 2022			60,961			7,832,644
Balance at Dec. 31, 2022						$ 8			406,514			(402,376)			4,146
Issuance of common stock in public offerings, net of commissions and issuance costs (in shares)	0			101,720
Issuance of common stock in public offerings, net of commissions and issuance costs				$ 0			$ 37			$ 0			$ 37
Issuance of common stock upon vesting of restricted stock units (in shares)			0			34,417
Issuance of common stock upon vesting of restricted stock units						$ 0			0			0			0
Employee stock-based compensation						0			484			0			484
Accretion of Series A preferred stock dividends						0			(2,436)			0			(2,436)
Net and comprehensive loss						$ 0			0			(8,820)			(8,820)
Exercise of pre-funded warrants for common stock (in shares)			0			1,369,864
Exercise of pre-funded warrants for common stock						$ 1			(2)			0			(1)
Balance (in shares) at Jun. 30, 2023			60,961			9,338,645
Balance at Jun. 30, 2023						$ 9			404,597			(411,196)			(6,590)
Balance (in shares) at Mar. 31, 2023			60,961			8,626,828
Balance at Mar. 31, 2023						$ 9			405,519			(407,020)			(1,492)
Issuance of common stock in public offerings, net of commissions and issuance costs (in shares)	0			89,817
Issuance of common stock in public offerings, net of commissions and issuance costs				$ 0			$ 58			$ 0			$ 58
Employee stock-based compensation						0			239			0			239
Accretion of Series A preferred stock dividends						0			(1,218)			0			(1,218)
Net and comprehensive loss						$ 0			0			(4,176)			(4,176)
Exercise of pre-funded warrants for common stock (in shares)			0			622,000
Exercise of pre-funded warrants for common stock						$ 0			(1)			0			(1)
Balance (in shares) at Jun. 30, 2023			60,961			9,338,645
Balance at Jun. 30, 2023						$ 9			$ 404,597			$ (411,196)			$ (6,590)

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities
Net loss	$ (8,820)	$ (9,354)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	140	79
Amortization of debt issuance costs and debt discount	41	42
Stock-based compensation	484	88
Noncash interest expense and other charges	997	858
Change in right of use asset	28	48
Provision for excess and obsolete inventories	271	86
Other non-cash charges	(52)	1
Changes in operating assets and liabilities:
Accounts receivable	186	111
Inventories	(828)	(1,134)
Prepaid expenses and other current assets	(528)	(799)
Other assets	21	15
Accounts payable	(208)	(668)
Accrued compensation	352	(116)
Accrued expenses and other current liabilities	98	26
Other long-term liabilities	305	170
Net cash used in operating activities	(7,513)	(10,547)
Cash flows from investing activities
Purchase of property and equipment	0	(31)
Net cash used in investing activities	0	(31)
Cash flows from financing activities
Net cash provided by financing activities	37	7,120
Net change in cash and cash equivalents	(7,476)	(3,458)
Cash and cash equivalents, beginning of period	14,603	19,497
Cash and cash equivalents, end of period	7,127	16,039
Noncash investing and financing activities:
Accretion of Series A preferred stock dividends	2,436	2,254
Reclassification of other long-term liabilities to accrued compensation	724	0
Transfers between inventory and property and equipment	4	471
Common Stock [Member]
Cash flows from financing activities
Proceeds from the issuance of convertible preferred stock, net of commissions and issuance costs	0	6,721
Preferred Stock [Member]
Cash flows from financing activities
Proceeds from the issuance of convertible preferred stock, net of commissions and issuance costs	$ 37	$ 399

Note 1 - Organization

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Nature of Operations [Text Block]

1. Organization

Organization, Nature of Business

Liquidity Matters

Public Offerings

January 2022 Offering

August 2022 Offering

At The Market Offering Agreement

Other than the ATM Agreement, the Company currently does not have any commitments to obtain additional funds.

Note 2 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Concentration of Credit Risk, and Other Risks and Uncertainties

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.

Product Warranty Costs

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Beginning balance	$	114		$	171		$	109		$	187
Warranty provision		15			—			34			4
Usage/Release		(1	)		(34	)		(15	)		(54	)
Ending balance	$	128		$	137		$	128		$	137

Net Loss per Share Attributable to Common Stockholders

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net loss applicable to common stockholders	$	(5,394	)	$	(5,341	)	$	(11,256	)	$	(16,719	)
Weighted average common stock outstanding, basic and diluted		9,141			5,702			8,683			5,298
Net loss per share attributable to common stockholders, basic and diluted	$	(0.59	)	$	(0.94	)	$	(1.30	)	$	(3.16	)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Common stock warrants equivalents		7,021,987		1,006,285		7,449,228		939,419
Common stock options		303		303		303		303
Convertible preferred stock		60,961		57,295		60,961		59,636
Unvested restricted stock units		1,418,928		9,077		1,305,548		9,474
		8,502,179		1,072,960		8,816,040		1,008,832

Segment and Geographical Information

Recent Accounting Pronouncements

Recent accounting standards not yet adopted

Note 3 - Inventories

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Inventory Disclosure [Text Block]

3. Inventories

Inventories consisted of the following (in thousands):

	June 30,		December 31,
	2023		2022
Raw materials	$	3,380	$	3,374
Work-in-process		111		17
Finished products		2,028		1,574
Total inventories	$	5,519	$	4,965

Note 4 - Borrowings

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

4. Borrowings

CRG

As of June 30, 2023, the Company was in compliance with all applicable covenants under the Loan Agreement.

As of June 30, 2023, principal, final facility fee and PIK payments under the Loan Agreement, as amended, were as follows (in thousands):

Year Ending December 31,
2023 (remaining six months of the year)	$	—
2024		9,045
2025		10,339
Total		19,384
Less: Amount of PIK additions and final facility fee to be incurred subsequent to June 30, 2023		(3,973	)
Less: Amount representing debt issuance costs		(208	)
Borrowings, long term portion, as of June 30, 2023	$	15,203

Note 5 - Leases

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

5. Leases

The following table presents the future operating lease payments and leasehold liability included on the balance sheet related to the Company’s operating lease as of June 30, 2023 (in thousands):

Year Ending December 31,
2023 (remaining six months of the year)	$	603
2024		1,138
Total		1,741
Less: Imputed interest		(83	)
Leasehold liability as of June 30, 2023	$	1,658

The following table shows ROU assets and lease liabilities, and the associated financial statement line items, as of June 30, 2023 and December 31, 2022 (in thousands):

Lease-Related Assets and Liabilities	Financial Statement Line Items	June 30, 2023		December 31, 2022
Right of use assets:
Operating lease	Right of use asset	$	1,658	$	2,194
Total right of use assets		$	1,658	$	2,194
Lease liabilities:
Operating lease	Leasehold liability, current portion	$	1,150	$	1,092
	Leasehold liability, long-term portion		508		1,102
Total lease liabilities		$	1,658	$	2,194

Note 6 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

6. Commitments and Contingencies

Purchase Obligations

Legal Proceedings

Note 7 - Stockholders' Equity

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Equity [Text Block]

7. Stockholders’ Equity

Convertible Preferred Stock

Series A Convertible Preferred Stock

Series B Convertible Preferred Stock

Series D Convertible Preferred Stock

Common Stock

Common Stock Warrants

As of June 30, 2023, 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
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
Series A Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	February 2028
Series B Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	August 2024
Placement agent Preferred Investment Options issued in the August 2022 financing		171,233		171,233	$	2.19	August 2027
Total as of June 30, 2023		49,815,894		6,885,284

As of December 31, 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
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
Pre-funded warrants issued in the August 2022 financing		1,369,864		1,369,864	$	0.0001		n/a
Series A Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	February 2028
Series B Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	August 2024
Placement agent Preferred Investment Options issued in the August 2022 financing		171,233		171,233	$	2.19	August 2027
Total as of December 31, 2022		51,185,758		8,255,148

January 2022 Offering

August 2022 Offering

Note 8 - Stock-based Compensation

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

8. Stock-Based Compensation

Stock Plans

	Number of Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term
Awards outstanding at December 31, 2022		417		$	11.64		0.17
Awarded		1,502,928		$	1.23		—
Released		(34,417	)	$	1.36		—
Forfeited		(50,000	)	$	1.23		—
Awards outstanding at June 30, 2023		1,418,928		$	1.23		1.46

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenues	$	35	$	7	$	63	$	14
Research and development expenses		51		13		134		26
Selling, general and administrative expenses		153		16		287		48
	$	239	$	36	$	484	$	88

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

Concentration of Credit Risk and Other Risks and Uncertainties [Policy Text Block]

Concentration of Credit Risk, and Other Risks and Uncertainties

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.

Standard Product Warranty, Policy [Policy Text Block]

Product Warranty Costs

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Beginning balance	$	114		$	171		$	109		$	187
Warranty provision		15			—			34			4
Usage/Release		(1	)		(34	)		(15	)		(54	)
Ending balance	$	128		$	137		$	128		$	137

Earnings Per Share, Policy [Policy Text Block]

Net Loss per Share Attributable to Common Stockholders

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net loss applicable to common stockholders	$	(5,394	)	$	(5,341	)	$	(11,256	)	$	(16,719	)
Weighted average common stock outstanding, basic and diluted		9,141			5,702			8,683			5,298
Net loss per share attributable to common stockholders, basic and diluted	$	(0.59	)	$	(0.94	)	$	(1.30	)	$	(3.16	)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Common stock warrants equivalents		7,021,987		1,006,285		7,449,228		939,419
Common stock options		303		303		303		303
Convertible preferred stock		60,961		57,295		60,961		59,636
Unvested restricted stock units		1,418,928		9,077		1,305,548		9,474
		8,502,179		1,072,960		8,816,040		1,008,832

Segment Reporting, Policy [Policy Text Block]

Segment and Geographical Information

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

Recent accounting standards not yet adopted

Note 2 - Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Schedule of Product Warranty Liability [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Beginning balance	$	114		$	171		$	109		$	187
Warranty provision		15			—			34			4
Usage/Release		(1	)		(34	)		(15	)		(54	)
Ending balance	$	128		$	137		$	128		$	137

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net loss applicable to common stockholders	$	(5,394	)	$	(5,341	)	$	(11,256	)	$	(16,719	)
Weighted average common stock outstanding, basic and diluted		9,141			5,702			8,683			5,298
Net loss per share attributable to common stockholders, basic and diluted	$	(0.59	)	$	(0.94	)	$	(1.30	)	$	(3.16	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Common stock warrants equivalents		7,021,987		1,006,285		7,449,228		939,419
Common stock options		303		303		303		303
Convertible preferred stock		60,961		57,295		60,961		59,636
Unvested restricted stock units		1,418,928		9,077		1,305,548		9,474
		8,502,179		1,072,960		8,816,040		1,008,832

Note 3 - Inventories (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	June 30,		December 31,
	2023		2022
Raw materials	$	3,380	$	3,374
Work-in-process		111		17
Finished products		2,028		1,574
Total inventories	$	5,519	$	4,965

Note 4 - Borrowings (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Schedule of Debt [Table Text Block]

Year Ending December 31,
2023 (remaining six months of the year)	$	—
2024		9,045
2025		10,339
Total		19,384
Less: Amount of PIK additions and final facility fee to be incurred subsequent to June 30, 2023		(3,973	)
Less: Amount representing debt issuance costs		(208	)
Borrowings, long term portion, as of June 30, 2023	$	15,203

Note 5 - Leases (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Year Ending December 31,
2023 (remaining six months of the year)	$	603
2024		1,138
Total		1,741
Less: Imputed interest		(83	)
Leasehold liability as of June 30, 2023	$	1,658

Right of Use Asset and Liabilities [Table Text Block]

Lease-Related Assets and Liabilities	Financial Statement Line Items	June 30, 2023		December 31, 2022
Right of use assets:
Operating lease	Right of use asset	$	1,658	$	2,194
Total right of use assets		$	1,658	$	2,194
Lease liabilities:
Operating lease	Leasehold liability, current portion	$	1,150	$	1,092
	Leasehold liability, long-term portion		508		1,102
Total lease liabilities		$	1,658	$	2,194

Note 7 - Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

	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
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
Series A Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	February 2028
Series B Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	August 2024
Placement agent Preferred Investment Options issued in the August 2022 financing		171,233		171,233	$	2.19	August 2027
Total as of June 30, 2023		49,815,894		6,885,284

	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
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
Pre-funded warrants issued in the August 2022 financing		1,369,864		1,369,864	$	0.0001		n/a
Series A Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	February 2028
Series B Preferred Investment Options issued in August 2022 financing		2,853,883		2,853,883	$	1.502	August 2024
Placement agent Preferred Investment Options issued in the August 2022 financing		171,233		171,233	$	2.19	August 2027
Total as of December 31, 2022		51,185,758		8,255,148

Note 8 - Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Notes Tables

Share-Based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]

	Number of Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term
Awards outstanding at December 31, 2022		417		$	11.64		0.17
Awarded		1,502,928		$	1.23		—
Released		(34,417	)	$	1.36		—
Forfeited		(50,000	)	$	1.23		—
Awards outstanding at June 30, 2023		1,418,928		$	1.23		1.46

Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cost of revenues	$	35	$	7	$	63	$	14
Research and development expenses		51		13		134		26
Selling, general and administrative expenses		153		16		287		48
	$	239	$	36	$	484	$	88

Note 1 - Organization (Details Textual) - USD ($)				1 Months Ended		3 Months Ended	6 Months Ended	12 Months Ended
Note 1 - Organization (Details Textual) - USD ($)	Apr. 20, 2023	Aug. 04, 2022	Jan. 14, 2022	Aug. 31, 2022	Jan. 31, 2022	Jun. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	May 20, 2022
Retained Earnings (Accumulated Deficit)						$ (411,196,000)	$ (411,196,000)	$ (402,376,000)
Cash and Cash Equivalents, at Carrying Value						$ 7,127,000	$ 7,127,000	$ 14,603,000
Preferred Stock, Par or Stated Value Per Share						$ 0.001	$ 0.001	$ 0.001
Class of Warrant or Right, Number of Securities Called by Warrants or Rights						6,885,284	6,885,284	8,255,148
Class of Warrant or Right, Outstanding						49,815,894	49,815,894	51,185,758
Common Stock, Par or Stated Value Per Share (in dollars per share)						$ 0.001	$ 0.001	$ 0.001
Common Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			807,500
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 9.60
Warrants and Rights Outstanding, Term			5 years
Placement agent warrants issued in the January 2022 financing [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			66,500			66,500	66,500	66,500
Class of Warrant or Right, Outstanding						1,330,000	1,330,000	1,330,000
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 10.00			$ 10.00	$ 10.00	$ 10.00
Warrants and Rights Outstanding, Term			5 years
Registered Direct Pre-funded Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		784,019
Pre-funded Warrants [Member]
Class of Warrant or Right, Exercised	622,000
Series A Preferred Investment Options [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				2,853,883
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 1.502
Warrants and Rights Outstanding, Term				5 years 6 months
Series B Preferred Investment Options [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				2,853,883
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 1.502
Warrants and Rights Outstanding, Term				2 years
Placement Agent Preferred Investment Options [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights				171,233
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 2.19
Warrants and Rights Outstanding, Term				5 years
Series D Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share			$ 0.001
Series D Preferred Stock [Member] \| Common Warrants [Member]
Class of Warrant or Right, Outstanding			807,500
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 9.60
Warrants and Rights Outstanding, Term			5 years
Series D Preferred Stock [Member] \| Placement agent warrants issued in the January 2022 financing [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			66,500
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 10.00
Warrants and Rights Outstanding, Term			5 years
August 2022 Public Offering [Member]
Proceeds from Issuance or Sale of Equity, Net				$ 4,400,000
The Market Offering Agreement (the “ATM Agreement”) [Member]
Proceeds from Issuance or Sale of Equity, Net							$ 1,100,000
Stock Issued During Period, Shares, New Issues						89,817	101,720
Proceeds from Issuance or Sale of Equity, Total						$ 65,000	$ 75,000
Payments of Stock Issuance Costs						$ 2,000	$ 2,200
Stock Issued During Period, Average Price Per Share						$ 0.72	$ 0.73
January 2022 Public Offering [Member]
Proceeds from Issuance or Sale of Equity, Net			$ 6,700,000		$ 6,700,000
January 2022 Public Offering [Member] \| Series D Preferred Stock [Member]
Stock Issued During Period, Shares, New Issues			7,600
Preferred Stock, Par or Stated Value Per Share			$ 1,000
Preferred Stock, Convertible, Conversion Price			$ 8.00
August 2022 Purchase Agreement [Member]
Stock Issued During Period, Shares, New Issues		700,000
Sale of Stock, Number of Shares (in shares)		1,484,019
Shares Issued, Price Per Share (in dollars per share)		$ 1.752
Proceeds from Issuance or Sale of Equity, Total		$ 4,400,000
Private Placement [Member]
Stock Issued During Period, Shares, New Issues		1,369,864
Shares Issued, Price Per Share (in dollars per share)		$ 1.752
Private Placement [Member] \| Registered Direct Pre-funded Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		1,369,864
Common Stock in June, 2022 [Member]
Stock Issued During Period, Shares, New Issues								585,603
Shares Issued, Price Per Share (in dollars per share)								$ 1.67
Proceeds from Issuance or Sale of Equity, Total								$ 1,000,000.0
Common Stock, Par or Stated Value Per Share (in dollars per share)									$ 0.001
Share Offering Agreement, Aggregate Offering									$ 7,000,000
Commission Percentage									3.00%
Payments of Stock Issuance Costs								$ 29,000

Note 2 - Summary of Significant Accounting Policies (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Warranty Period (Year)			1 year
Number of Reportable Segments			1
Customer Concentration Risk [Member] \| Accounts Receivable [Member]
Number of Major Customers			2		0
Customer Concentration Risk [Member] \| Accounts Receivable [Member] \| One Customer [Member]
Concentration Risk, Percentage			14.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member]
Number of Major Customers	1	1	1	1
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| UNITED STATES
Concentration Risk, Percentage	92.00%	89.00%	92.00%	92.00%
Customer Concentration Risk [Member] \| Revenue Benchmark [Member] \| One Customer [Member]
Concentration Risk, Percentage	17.00%	16.00%	16.00%	15.00%

Note 2 - Summary of Significant Accounting Policies - Product Warranty (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Beginning balance	$ 114	$ 171	$ 109	$ 187
Warranty provision	15	0	34	4
Usage/Release	(1)	(34)	(15)	(54)
Ending balance	$ 128	$ 137	$ 128	$ 137

Note 2 - Summary of Significant Accounting Policies - Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Net loss applicable to common stockholders	$ (5,394)	$ (5,341)	$ (11,256)	$ (16,719)
Weighted average common stock outstanding, basic and diluted (in shares)	9,141	5,702	8,683	5,298
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share)	$ (0.59)	$ (0.94)	$ (1.30)	$ (3.16)

Note 2 - Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Potentially dilutive securities (in shares)	8,502,179	1,072,960	8,816,040	1,008,832
Common Stock Warrants [Member]
Potentially dilutive securities (in shares)	7,021,987	1,006,285	7,449,228	939,419
Common Stock Options [ member]
Potentially dilutive securities (in shares)	303	303	303	303
Preferred Stock [Member]
Potentially dilutive securities (in shares)	60,961	57,295	60,961	59,636
Restricted Stock Units (RSUs) [Member]
Potentially dilutive securities (in shares)	1,418,928	9,077	1,305,548	9,474

Note 3 - Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Raw materials	$ 3,380	$ 3,374
Work-in-process	111	17
Finished products	2,028	1,574
Total inventories	$ 5,519	$ 4,965

Note 4 - Borrowings (Details Textual) - CRG [Member] - Loan Agreement [Member] - USD ($)			3 Months Ended		6 Months Ended
	Aug. 10, 2022	Feb. 14, 2018	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Jun. 15, 2016	Sep. 22, 2015
Debt Agreement, Maximum Borrowing Capacity									$ 50,000,000
Debt Instrument, Covenant Compliance, Minimum Liquidity Requirement		$ 3,500,000
Debt Instrument, Covenant Compliance, Target Minimum Revenue, Past Twelve Months	$ 8,000,000
Debt Instrument, Covenant Compliance Target Minimum Revenue, Next Twelve Months	8,000,000
Debt Instrument Covenant Compliance Target Minimum Revenue Second Year	10,000,000
Debt Instrument Covenant Compliance Target Minimum Revenue Third Year	14,500,000
Debt Instrument, Covenant Compliance Target Minimum Revenue Fourth Year	$ 17,000,000
Debt Instrument, Interest Rate, Stated Percentage	12.50%
Debt Instrument, Periodic Payment	$ 1,900,000
Long-Term Debt, Maturity, Year Four	7,500,000
Long-Term Debt, Maturity, Year Five	$ 7,500,000
Debt Instrument, Redemption Initial Prepayment Premium Percentage	5.00%
Debt Instrument, Redemption Annual Decline in Prepayment Premium Percentage	1.00%
Debt Instrument, Financing Fee Percentage	1.50%
Debt Instrument, Final Facility Fee Percentage	15.00%
Debt Instrument, Covenant Compliance Cash and Certain Cash Equivalents Minimum	$ 3,500,000
Debt Instrument, Covenant Compliance Prepayment Multiplier for Revenue Shortfall	2.0
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net			$ 208,000		$ 208,000		$ 249,000		1,300,000
Amortization of Debt Discount (Premium)			20,000	$ 21,000	41,000	$ 42,000
Interest Expense, Debt			$ 531,000	$ 440,000	$ 1,000,000.0	$ 900,000
Series A Preferred Stock Purchase Agreement with CRG [Member]
Debt Conversion, Original Debt, Amount		38,000,000
Debt Conversion, Fees and Prepayment Premium Amount		$ 3,800,000
First Tranche, Borrowed on September 22, 2015 [Member]
Debt Instrument, Face Amount									$ 30,000,000
Second Tranche, Borrowed on June 15, 2016 [Member]
Debt Instrument, Face Amount								$ 10,000,000

Note 4 - Borrowings - Schedule of Debt (Details) $ in Thousands	Jun. 30, 2023 USD ($)
2023 (remaining nine months of the year)	$ 0
CRG [Member] \| Loan Agreement [Member]
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, 2023	(3,973)
Less: Amount representing debt issuance costs	(208)
Borrowings, long term portion, as of June 30, 2023	$ 15,203

Note 5 - Leases (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
Note 5 - Leases (Details Textual) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Apr. 01, 2019
Lessee, Operating Lease, Liability, to be Paid	$ 1,741,000		$ 1,741,000			$ 5,800,000
Operating Lease, Weighted Average Remaining Lease Term	1 year 4 months 24 days		1 year 4 months 24 days
Lessee, Operating Lease, Discount Rate	6.50%		6.50%
Operating Lease, Expense, Excluding Maintenance Fee and Other Expense, Monthly			$ 105,000
Operating Lease, Expense	$ 314,000	$ 314,000	628,000	$ 628,000
Variable Lease, Cost	103,000	71,000	168,000	137,000
Operating Lease, Right-of-Use Asset, Periodic Reduction	284,000	$ 265,000	564,000	$ 531,000
Prepaid Rent	$ 37,000		$ 37,000		$ 65,000

Note 5 - Leases - Future Operating Lease Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Apr. 01, 2019
2023 (remaining nine months of the year)	$ 603
2024	1,138
Total	1,741		$ 5,800
Less: Imputed interest	(83)
Leasehold liability as of June 30, 2023	$ 1,658	$ 2,194

Note 5 - Leases - ROU Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Operating lease	$ 1,658	$ 2,194
Total right of use assets	1,658	2,194
Leasehold liability, current portion	1,150	1,092
Leasehold liability, long-term portion	508	1,102
Total lease liabilities	$ 1,658	$ 2,194

Note 6 - Commitments and Contingencies (Details Textual) $ in Millions	Jun. 30, 2023 USD ($)
Purchase Commitment [Member]
Purchase Obligation	$ 1

Note 7 - Stockholders' Equity (Details Textual) - USD ($)			3 Months Ended			6 Months Ended		12 Months Ended
	Jan. 14, 2022	Feb. 14, 2018	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Aug. 31, 2022	Aug. 04, 2022	Feb. 16, 2018	Jun. 30, 2003
Preferred Stock, Shares Authorized (in shares)			5,000,000			5,000,000		5,000,000
Preferred Stock, Par or Stated Value Per Share			$ 0.001			$ 0.001		$ 0.001
Preferred Stock, Shares Outstanding, Ending Balance (in shares)			60,961			60,961		60,961
Preferred Stock, Shares Issued			60,961			60,961		60,961				60,961
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			6,885,284			6,885,284		8,255,148
Preferred Stock Redemption Discount			$ (0)		$ (0)	$ (0)	$ 5,111,000
Common Stock, Shares Authorized			100,000,000			100,000,000		100,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)			$ 0.001			$ 0.001		$ 0.001
Common Stock, Shares, Outstanding, Ending Balance (in shares)			9,338,645			9,338,645		7,832,644
Common Stock, Shares, Issued (in shares)			9,338,645			9,338,645		7,832,644
Measurement Input, Expected Term [Member]
Warrants and Rights Outstanding, Measurement Input	5.5
Measurement Input, Price Volatility [Member]
Warrants and Rights Outstanding, Measurement Input	1.3661
Measurement Input, Discount Rate [Member]
Warrants and Rights Outstanding, Measurement Input	0.0151
Measurement Input, Expected Dividend Rate [Member]
Warrants and Rights Outstanding, Measurement Input	0
Conversion of Series D Preferred Stock into Common Stock [Member]
Conversion of Stock, Shares Converted								7,600
Conversion of Stock, Shares Issued								950,000
Common Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	807,500
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 9.60
Warrants and Rights Outstanding, Term	5 years
Common Stock Warrants, Issued with Series D Convertible Preferred Stock [Member]
Proceeds from Issuance of Warrants	$ 3,600,000
Placement agent warrants issued in the January 2022 financing [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	66,500		66,500			66,500		66,500
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 10.00		$ 10.00			$ 10.00		$ 10.00
Warrants and Rights Outstanding, Term	5 years
Registered Direct Pre-funded Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights										784,019
Stock Issued During Period, Shares, Warrants Exercised								784,019
Private Pre-funded Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights										1,369,864
Pre-funded Warrants Issued in August 2022 Financing [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights								1,369,864
Class of Warrant or Right, Exercise Price of Warrants or Rights								$ 0.0001		$ 0.0001
Stock Issued During Period, Shares, Warrants Exercised						1,369,864
Series A Preferred Investment Options [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights									2,853,883
Class of Warrant or Right, Exercise Price of Warrants or Rights									$ 1.502
Warrants and Rights Outstanding, Term									5 years 6 months
Series B Financing Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights									2,853,883
Class of Warrant or Right, Exercise Price of Warrants or Rights									$ 1.502
Warrants and Rights Outstanding, Term									2 years
Placement Agent Preferred Investment Options [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights									171,233
Class of Warrant or Right, Exercise Price of Warrants or Rights									$ 2.19
Warrants and Rights Outstanding, Term									5 years
January 2022 Public Offering [Member]
Proceeds from Issuance of Convertible Preferred Stock	$ 4.0
Series A Preferred Stock [Member]
Preferred Stock, Shares Outstanding, Ending Balance (in shares)			60,876			60,876		60,876
Preferred Stock, Liquidation Preference Per Share			$ 1,000			$ 1,000
Preferred Stock, Convertible, Conversion Price			$ 400			$ 400
Dividends, Preferred Stock			$ 1,200,000		$ 1,100,000	$ 2,400,000	$ 2,300,000
Series A Preferred Stock [Member] \| CRG [Member]
Preferred Stock Dividends, Shares								4,510
Series A Preferred Stock [Member] \| Conversion of Principal Amount of Senior Secured Loan to Newly Authorized Series A Preferred Stock [Member]
Preferred Stock, Dividend Rate, Percentage		8.00%
Series B Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share											$ 0.001
Preferred Stock, Shares Outstanding, Ending Balance (in shares)			85			85		85
Preferred Stock, Convertible, Conversion Price			$ 1.502			$ 1.502		$ 1.502
Series D Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.001
Preferred Stock, Shares Outstanding, Ending Balance (in shares)			0			0
Preferred Stock Redemption Discount				$ 5,100,000
Series D Preferred Stock [Member] \| Common Warrants [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 9.60
Warrants and Rights Outstanding, Term	5 years
Series D Preferred Stock [Member] \| Placement agent warrants issued in the January 2022 financing [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	66,500
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 10.00
Warrants and Rights Outstanding, Term	5 years
Series D Preferred Stock [Member] \| January 2022 offering [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.001
Preferred Stock, Convertible, Conversion Price	$ 8.00
Stock Issued During Period, Shares, New Issues	7,600
Shares Issued, Price Per Share (in dollars per share)	$ 1,000
Preferred Stock, Convertible, Shares Issuable	950,000
Series D Preferred Stock [Member] \| January 2022 offering [Member] \| Common Warrants [Member]
Conversion of Warrants Allowed Maximum Ownership of Common Stock Percentage	4.99%
Conversion of Warrants Allowed Maximum Ownership of Common Stock Percentage upon Election	9.99%
Series D Preferred Stock [Member] \| January 2022 Public Offering [Member]
Preferred Stock, Par or Stated Value Per Share	$ 1,000
Preferred Stock, Convertible, Conversion Price	$ 8.00
Stock Issued During Period, Shares, New Issues	7,600

Note 7 - Stockholder's Equity - Outstanding Warrants (Details) - $ / shares	Jun. 30, 2023	Dec. 31, 2022	Aug. 04, 2022	Jan. 14, 2022
Total outstanding and exercisable (in shares)	49,815,894	51,185,758
Underlying shares of common stock (in shares)	6,885,284	8,255,148
Series 1 February 2018 Warrants [Member]
Total outstanding and exercisable (in shares)	8,979,000	8,979,000
Underlying shares of common stock (in shares)	44,895	44,895
Exercise price per share (in dollars per share)	$ 400.00	$ 400.00
Series 2 February 2018 Warrants [Member]
Total outstanding and exercisable (in shares)	8,709,500	8,709,500
Underlying shares of common stock (in shares)	43,548	43,548
Exercise price per share (in dollars per share)	$ 400.00	$ 400.00
November 2018 Warrants [Member]
Total outstanding and exercisable (in shares)	8,768,395	8,768,395
Underlying shares of common stock (in shares)	43,842	43,842
Exercise price per share (in dollars per share)	$ 80.00	$ 80.00
Placement agent warrants issued in the January 2022 financing [Member]
Total outstanding and exercisable (in shares)	1,330,000	1,330,000
Underlying shares of common stock (in shares)	66,500	66,500		66,500
Exercise price per share (in dollars per share)	$ 10.00	$ 10.00		$ 10.00
Warrants Issued in the January 2022 Financing [Member]
Total outstanding and exercisable (in shares)	16,150,000	16,150,000
Underlying shares of common stock (in shares)	807,500	807,500
Exercise price per share (in dollars per share)	$ 9.60	$ 9.60
Pre-funded Warrants Issued in August 2022 Financing [Member]
Total outstanding and exercisable (in shares)		1,369,864
Underlying shares of common stock (in shares)		1,369,864
Exercise price per share (in dollars per share)		$ 0.0001	$ 0.0001
Series A Private Investment Options Issued in August 2022 Financing [Member]
Total outstanding and exercisable (in shares)	2,853,883	2,853,883
Underlying shares of common stock (in shares)	2,853,883	2,853,883
Exercise price per share (in dollars per share)	$ 1.502	$ 1.502
Series B Private Investment Options Issued in August 2022 Financing [Member]
Total outstanding and exercisable (in shares)	2,853,883	2,853,883
Underlying shares of common stock (in shares)	2,853,883	2,853,883
Exercise price per share (in dollars per share)	$ 1.502	$ 1.502
Placement Agent Private Investment Options Issued in August 2022 Financing [Member]
Total outstanding and exercisable (in shares)	171,233	171,233
Underlying shares of common stock (in shares)	171,233	171,233
Exercise price per share (in dollars per share)	$ 2.19	$ 2.19

Note 8 - Stock-based Compensation (Details Textual) - USD ($)		3 Months Ended		6 Months Ended
	Oct. 14, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share Price		$ 0.73		$ 0.73
Share-Based Payment Arrangement, Expense		$ 239,000	$ 36,000	$ 484,000	$ 88,000
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding, Number		417		417
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount		$ 1,300,000		$ 1,300,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition				1 year 6 months
Sharebased Compensation Arrangement by Sharebased Payment Award Equity Instruments Other than Options Nonvested Fair Value		1,000,000.0		$ 1,000,000.0
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value				42,000,000,000	3,000,000,000
Share-Based Payment Arrangement, Expense		$ 239,000	$ 36,000	$ 500,000	$ 100,000
The 2015 Employee Stock Purchase Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized	1,750,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant		306,638		306,638

Note 8 - Stock-Based Compensation - Stock Option Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Awards outstanding, shares (in shares)	417
Awards outstanding, Weighted Average Grant Date Fair Value (in dollars per share)	$ 11.64
Awards outstanding, Weighted Average Remaining Contractual Term (Year)	1 year 5 months 15 days	2 months 1 day
Awarded, shares (in shares)	1,502,928
Awarded, Weighted Average Grant Date Fair Value (in dollars per share)	$ 1.23
Released, shares (in shares)	(34,417)
Released, Weighted Average Grant Date Fair Value (in dollars per share)	$ 1.36
Forfeited, shares (in shares)	(50,000)
Forfeited, , Weighted Average Grant Date Fair Value (in dollars per share)	$ 1.23
Awards outstanding, shares (in shares)	1,418,928	417
Awards outstanding, Weighted Average Grant Date Fair Value (in dollars per share)	$ 1.23	$ 11.64

Note 8 - Stock-based Compensation - Noncash Stock-based Compensation Expense Related to Stock Options, ESPP, and RSUs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Allocated Share-based Compensation Expense	$ 239	$ 36	$ 484	$ 88
Cost of Sales [Member]
Allocated Share-based Compensation Expense	35	7	63	14
Research and Development Expense [Member]
Allocated Share-based Compensation Expense	51	13	134	26
Selling, General and Administrative Expenses [Member]
Allocated Share-based Compensation Expense	$ 153	$ 16	$ 287	$ 48

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