Item 1.01. Entry Into a Material Definitive Agreement.
Securities Purchase Agreement
On January 12, 2022, Avinger, Inc. (the "Company") entered into a Securities
Purchase Agreement (the "Purchase Agreement") with several institutional
investors (the "Investors"), pursuant to which the Company agreed to issue and
sell to the Investors in a registered direct offering (the "Offering") (i) 7,600
shares of the Company's Series D Convertible Preferred Stock, par value $0.001
per share (the "Preferred Stock"), and (ii) warrants (the "Common Warrants") to
purchase up to an aggregate of 16,150,000 shares of the Company's common stock
("Common Stock") at an exercise price of $0.48 per share, subject to the terms
of the Common Warrants. The shares of Preferred Stock will have a stated value
of $1,000 per share and are convertible into an aggregate of 19,000,000 shares
of Common Stock at a conversion price of $0.40 per share, subject to the terms
of the Certificate of Designation of the Preferred Stock.
Pursuant to an engagement letter entered into with H.C. Wainwright & Co., LLC
(the "Placement Agent") on December 8, 2021, the Company agreed to pay to the
Placement Agent, (i) a placement agent fee equal to 7.0% of the gross proceeds
received in the Offering, (ii) a management fee equal to 1.0% of the gross
proceeds raised in the Offering, and (iii) $35,000 for non-accountable expenses.
The Company also agreed to reimburse the Placement Agent for fees and expenses
of legal counsel and other out-of-pocket expenses up to $80,000. The Company
also agreed to issue to the Placement Agent or its designees warrants to
purchase up to an aggregate of 1,330,000 shares of Common Stock (the "Placement
Agent Warrants"). The Placement Agent Warrants will be subject to the same terms
as the Common Warrants, except that the Placement Agent Warrants will have an
exercise price of $0.50 per share and a term of five years from the commencement
of the sales pursuant to the Offering. The Company has also granted to the
Placement Agent, subject to certain exceptions, a right of first refusal for a
period of twelve (12) months following the closing of the Offering to act as
sole book-running manager, sole underwriter or sole placement agent for any
public offering, private placement, or other capital-raising financing of
equity, equity-linked, or debt securities by the Company or any of its
subsidiaries.
The Company expects to receive aggregate gross proceeds from the Offering of
$7.6 million before deducting the Placement Agent's fees and the Company's
Offering expenses. The Offering is expected to close on or about January 14,
2022, subject to satisfaction of customary closing conditions.
In connection with the Offering and in accordance with the Purchase Agreement,
the Company plans to call a special meeting of stockholders to consider a
proposal (the "Proposal") to amend to the Company's Amended and Restated
Certificate of Incorporation, as amended (the "Charter") to effect a reverse
split of the outstanding shares of the Company's Common Stock at a ratio between
1-for-5 and 1-for-20 (the "Reverse Split Amendment").
Pursuant to the Purchase Agreement, the Company will file a certificate of
designation (the "Certificate of Designation") with the Secretary of State of
Delaware designating the rights, preferences and limitations of the shares of
Preferred Stock. The Certificate of Designation will provide, in particular,
that the Preferred Stock will have no voting rights, other than the right to
vote as a class on certain matters, except that each share of Preferred Stock
will have the right to cast 750,000 votes per share of Preferred Stock on the
Proposal (the "Supermajority Voting Rights"); provided, that the votes cast by
the holders of the Preferred Stock must be counted by the Company in the same
proportion as the aggregate shares of Common Stock voted on the Proposal. These
Supermajority Voting Rights mean that the Proposal could be approved if a
majority of the shares of Common Stock voting at the Special Meeting vote in
favor of the Proposal, even if less than a majority of the outstanding shares of
Common Stock vote in favor of the Proposal.
The holders of Preferred Stock will be entitled to dividends, on an as-if
converted basis, equal to dividends actually paid, if any, on shares of Common
Stock. The Preferred Stock is convertible into shares of Common Stock at a
conversion price of $0.40 per share. The conversion price can be adjusted
pursuant to the Certificate of Designation for stock dividends and stock splits,
subsequent rights offerings, pro rata distributions of dividends or the
occurrence of a fundamental transaction (as defined in the Certificate of
Designation). The Preferred Stock can be converted at the option of the holders
at any time after the Company has filed an amendment to the Company's Charter to
effect the Reverse Split Amendment. In addition, following the filing of such
amendment to the Company's Charter, and subject to the satisfaction of certain
conditions, the Company can cause the holders of the Preferred Stock to convert
their shares of Preferred Stock; provided, that shares of Preferred Stock cannot
be converted to Common Stock if the applicable holder would beneficially own in
excess of 4.99% (or, upon election by such holder prior to the issuance of any
shares of Preferred Stock, 9.99%) of the Company's outstanding Common Stock. A
holder of Preferred Stock may, upon notice to the Company, increase or decrease
such beneficial ownership limitation, but not in excess of 9.99%.
--------------------------------------------------------------------------------
The Common Warrants will have an exercise price of $0.48 per share, will be
exercisable on the later of six months following the date of issuance and date
on which an amendment to the Company's Charter to effect the Reverse Split
Amendment becomes effective. The Common Warrants will expire five years
following the initial exercise date. The exercise price and the number of shares
of Common Stock issuable upon exercise of each Common Warrant is subject to
appropriate adjustments in the event of certain stock dividends and
distributions, stock splits, stock combinations, reclassifications or similar
events affecting the Common Stock. In addition, in certain circumstances, upon a
fundamental transaction, a holder of Warrants will be entitled to receive, upon
exercise of the Common Warrants, the kind and amount of securities, cash or
other property that such holder would have received had they exercised the
Common Warrants immediately prior to the fundamental transaction.
In the event of a fundamental transaction other than one in which a successor
entity that is a publicly traded corporation whose stock is quoted or listed on
a trading market assumes the Common Warrants such that the Common Warrants shall
be exercisable for the publicly traded common stock of such successor entity and
only if such fundamental transaction is within the Company's control and the
consideration is in all stock in the successor entity, then, at the request of
the holder, we or the successor entity shall purchase the unexercised portion of
the Common Warrants from the holder by paying to the holder, on or prior to the
second trading day after such request (or, if later, on the effective date of
. . .
Item 3.03. Material Modifications to Rights of Security Holders.
The disclosure required by this Item and included in Item 1.01 of this Current
Report is incorporated herein by reference.
Item 8.01. Other Events.
On January 12, 2022, the Company issued a press release announcing the Offering
and the entry into the Purchase Agreement. A copy of such press release is
attached to this Current Report on Form 8-K as Exhibits 99.1.
The legal opinion, including the related consent, of Dorsey & Whitney LLP
relating to the issuance and sale of the Preferred Stock, the Common Warrants,
the Placement Agent Warrants, and the shares issuable upon the conversion of the
Preferred Stock and the exercise of the Common Warrants and the Placement Agent
Warrants is filed as Exhibit 5.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed herewith:
3.1 Form of Certificate of Designation of Preferences, Rights and
Limitations of Series D Convertible Preferred Stock.
4.1 Form of Common Stock Purchase Warrant.
4.2 Form of Placement Agent Warrant
5.1 Opinion of Dorsey & Whitney LLP.
10.1 Form of Securities Purchase Agreement, dated January 12, 2022 by and
between Avinger, Inc. and the purchasers party thereto.
23.1 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1).
99.1 Press release dated January 12, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
Additional Information and Where to Find It
The Reverse Split Amendment proposal described above will be submitted to the
Company's stockholders for their consideration. The Company intends to file a
proxy statement (the "Proxy Statement") that will be sent to all holders of
record of the Company's Common Stock and Series D Preferred Stock in connection
with the Reverse Split Amendment. This press release does not contain all the
information that should be considered concerning the Reverse Split Amendment and
is not intended to form the basis of any investment decision or any other
decision in respect of the Reverse Split Amendment. The Company's stockholders
and other interested persons are advised to read, when available, the
preliminary Proxy Statement and the amendments thereto and the definitive Proxy
Statement and other documents filed in connection with the Reverse Split
Amendment, as these materials will contain important information about the
Company and the Reverse Split Amendment. When available, the definitive Proxy
Statement and other relevant materials for the proposed Reverse Split Amendment
will be provided to stockholders of the Company as of a record date to be
established for voting on the Reverse Split Amendment. The Company's
stockholders will also be able to obtain copies of the preliminary Proxy
Statement, the definitive Proxy Statement and other documents filed with the
SEC, without charge, once available, at the SEC's website at www.sec.gov, or by
directing a request to the Company at Avinger, Inc., Attention: Investors
Relations, 400 Chesapeake Drive, Redwood City, California 94063.
Participants in Solicitation
The Company and its directors and executive officers may be deemed participants
in the solicitation of proxies from the Company's stockholders with respect to
the proposed Reverse Split Amendment. A list of the names of those directors and
executive officers and a description of their interests in the Company is
contained in the Company's definitive proxy statement for its 2021 Annual
Meeting of Stockholders, which was filed with the SEC and is available free of
charge at the SEC's web site at www.sec.gov. To the extent such holdings of the
Company's securities may have changed since that time, such changes have been or
will be reflected on Statements of Change in Ownership on Form 4 filed with the
SEC. Additional information regarding the interests of such participants will be
contained in the Proxy Statement for the proposed Reverse Split Amendment when
available.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses
AVINGER, INC. 
