Avinger

Kurta Law is investigating potentially unsuitable recommendations of Avinger (AVGR) stock to investors. Companies describe their business plan and the risks associated with investing in their stock in their prospectus, a document filed with the SEC. Avinger’s prospectus discloses significant risks that 

If you suffered losses on your investment in Avinger, a securities attorney can help you recover financially through FINRA arbitration. Speak to a securities attorney today by contacting our team at (877) 600-0098 or emailing info@kurtalawfirm.com for a free case evaluation.

What is Avinger?

Avinger, Inc. (AVGR) is a medical device company that develops and sells “image-guided, catheter-based systems” used to treat peripheral artery disease (PAD). PAD involves the buildup of plaque in arteries, especially in areas further from the heart.

The company’s products include the following:

• Lumivascular and Lightbox, imaging technology for capturing arterial interiors
• Ocelot catheters, designed for penetrating arterial blockages
• Wildcat and Kittycat catheters, which lack imaging technology
• Pantheris, image-guided atherectomy devices for the removal of arterial plaque

In its prospectus, Avinger describes the many risks associated with investing in its stock.

What are the Risks Associated with Avinger?

Biotechnology companies like Avinger can be especially risky investments. They often face significant difficulties in raising capital while conducting clinical trials and seeking federal approval for their products.

Avinger states that it has a “history of net losses” and “a significant amount of debt,” and that it may struggle to become profitable and to maintain profitability.

Share Price Volatility

The company states that its trading price has been volatile and that it expects this to continue. Influences on the trading price include:

• Current financial situation and financial projections
• Product announcements by competitors
• Ability to raise capital on favorable terms

The prospectus warns that this volatility could cause a significant decline in the value of investors’ shares.

Need for Additional Financing

At the writing of this prospectus, Avinger stated that it “will need to raise additional funds through future equity or debt financings in approximately twelve months” to continue operations. It would also need to raise even more funds for the development and commercialization of its products and for clinical trials.

The company notes that it covers most of its operating expenses through sales, debt financing, and stock offerings.

Future Dilution of Share Value

As of June 30, 2019, Avinger had 178 outstanding shares of Series B convertible preferred stock able to be converted into a total of 44,500 shares of common stock, as well as 44,745 outstanding shares of Series A convertible preferred stock able to be converted into over 2 million shares of common stock.

The conversion of these shares would dilute the ownership interest of existing stockholders and could also decrease the common stock’s market price.

Avinger also states that its Series A preferred stock contains “a liquidation preference that gets paid prior to any payment on our common stock.” If the company were to liquidate or otherwise sell its assets in full, holders of Series A preferred stock could receive up to approximately $41.8 million as well as unpaid dividends before any payments are made to other stockholders.

Other Risks

Avinger also identifies additional risks that investors should be aware of:

• Product liability lawsuits following the potential “use, misuse or off-label use of the products in [the] Lumivascular platform” may not be fully covered by the company’s liability insurance.
• Delayed or unsuccessful clinical trials may harm their business prospects.
• Avinger has “limited experience” manufacturing its products in commercial quantities and relies on “single and limited source suppliers” and on third-party vendors for certain product components.

Aegis Capital Corp. Underwriting

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Do You Have Concerns About Your Investment in Avinger?

If you have concerns about your investment in Avinger, reach out to a Kurta Law securities attorney today. Our securities attorneys have 5-star reviews on Google and regularly win fair settlements for clients who have suffered losses due to unsuitable investment recommendations. Call (877) 600-0098 or email info@kurtalawfirm.com.