Avinger Inc (NASDAQ:AVGR). announced today that it will cease the production and sales of its peripheral artery disease (PAD) products to concentrate on developing devices for treating coronary artery disease (CAD). This decision was made by the company's Board of Directors as part of a resource reallocation to focus on image-guided devices designed to penetrate chronic total occlusions (CTO) in arteries. The move comes as the company, with a market capitalization of just $2.62 million, faces financial challenges, including a negative EBITDA of $17.18 million in the last twelve months.
As a result of the shift, Avinger has terminated 36 employees, including all personnel related to the sales and manufacturing of PAD products, effective immediately. The company has stated that it does not anticipate these terminations and strategic changes to result in material charges. According to InvestingPro data, Avinger's revenue has declined by 6.26% over the past year, highlighting the need for strategic repositioning.
Going forward, Avinger's operations will be dedicated to research and development in an effort to create CTO crossing devices for CAD treatment. The company, however, cautions that there is no assurance of success in developing such products or in the ability to bring them to market successfully. InvestingPro analysis indicates a weak overall financial health score of 1.55, suggesting significant challenges ahead in funding R&D initiatives.
This move comes as Avinger, which is incorporated in Delaware and headquartered in Redwood (NYSE:RWT) City, California, seeks to optimize its resources in a highly competitive medical device sector. The NASDAQ Capital Market-listed company (NASDAQ:AVGR) is known for its innovative approach to medical instrumentation, particularly in the field of vascular interventions. Trading at $0.81, significantly below its 52-week high of $5.45, InvestingPro's Fair Value analysis suggests the stock may be undervalued despite current challenges.
The information disclosed in this article is based on a press release statement.
In other recent news, Avinger Inc has declared dividends on its Series E, F, and H Convertible Preferred Stock, and increased the number of designated shares of Series F Preferred Stock. This is part of the company's ongoing capital management. In addition, Avinger expanded its equity incentive plan and extended its term to 2034, providing incentives to employees, consultants, and non-employee Directors through various forms of grants.
Avinger reported a slight decrease in total revenue to $1.7 million for the third quarter, but improvements in gross margins to 26% and a decrease in operating expenses to $4.1 million were noted. In product and market development, the company launched Pantheris LV, continues to commercialize Tigereye ST, and is progressing with Phase III testing of a new coronary device.
However, Avinger is facing a potential default on its financial obligations due to a liquidity shortfall and is considering liquidation. The company's executive officers have waived rights ahead of this potential liquidation. Avinger also faces a potential delisting from the Nasdaq due to non-compliance with the minimum bid price requirement.
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