Full Press Release Details
ClearPoint Neuro Reports First Quarter 2020 Results
Update on Effects of COVID-19 Pandemic
CA, May 12, 2020 - ClearPoint Neuro, Inc. (Nasdaq: CLPT) today announced financial results for its first fiscal quarter
ended March 31, 2020.
revenues were approximately $3.1 million and $2.5 million for the three months ended March 31, 2020 and 2019, respectively, an
increase of 26% year-over-year.
neurosurgery revenue, which consists of disposable product commercial sales related to cases utilizing the ClearPoint system,
increased 5% to $1.7 million for the three months ended March 31, 2020, from $1.6 million for the same period in 2019. This increase
was lower, relative to recent quarterly year-over-year increases, due to the effects of the COVID-19 pandemic, in which elective
surgical procedures, historically representing approximately 80% of the Company's ClearPoint system case volume, were temporarily
suspended commencing in the second half of March 2020.
and drug delivery revenues, which include sales of disposable products and services related to customer-sponsored clinical trials
utilizing the ClearPoint system, increased 169% to $1.0 million for the three months ended March 31, 2020, from $382,000 for the
same period in 2019.
Capital equipment revenue, consisting of sales of ClearPoint reusable hardware and software, as well as fees
related to capital equipment, decreased 29% to $345,000 for the three months ended March 31, 2020, from $486,000 for the same period
margin for the three months ended March 31, 2020 was 71%, as compared to 64% in 2019, due primarily to a shift in the mix of revenues
by line of business that resulted in service revenues, which bear higher gross margins in comparison to other product lines, representing
a greater contribution to total sales for the three months ended March 31, 2020, relative to the same period in 2019.
expenses for the three months ended March 31, 2020 were $3.4 million, a 33% increase from operating expenses of $2.6 million for
the same period in 2019. This increase was comprised of: (a) research and development costs, which increased 42% resulting primarily
from increases in product development costs and departmental compensation; (b) sales and marketing expenses, which increased 25%
resulting primarily from expansion of the Company's team of clinical specialists and marketing leadership; and (c) general
and administrative expenses, which increased 37% resulting primarily from increases in share-based compensation and outside professional
were on-track for another record quarter before the measures implemented in March 2020 to address the COVID-19 crisis resulted
in the postponement of elective surgeries, historically constituting approximately 80% of our case volume," commented
Joe Burnett, President and CEO of ClearPoint Neuro. "With the significant impact felt by patients, providers and other businesses
from the pandemic, it seems hollow to celebrate our pre-COVID-19 successes. Rather, we want to focus on the new reality our employees
and our patients face. April 2020 has been the first month in which we experienced the full impact of the COVID-19 measures. In
April, we performed a total of eleven surgical cases compared to a forecast of 80 procedures, which represents an approximate
85% reduction in case volume. The eleven cases took place at sites that perform mostly urgent tumor biopsy and ablation procedures.
Hospitals that perform mostly drug delivery and deep brain stimulation procedures have had to postpone them. As a result, on April
16, 2020, we withdrew our case and revenue forecast for 2020.
see a number of challenges to the resumption of elective procedures in the months ahead, which include the limited access to personal
protective equipment and ventilators," Mr. Burnett continued. "Our procedures are primarily performed under general
anesthesia, thus requiring the use of ventilators. However these ventilators are currently in demand to treat COVID-19 patients.
Further, even if some hospitals restart elective procedures, patients might have reluctance
to enter the hospital environment because their families are not allowed to be with them."
previously disclosed, in January 2020, the Company completed a financing transaction with two investors whereby the Company issued
an aggregate principal amount of $17,500,000 of senior secured convertible notes, resulting in net proceeds of approximately $16.8
million. From the net proceeds, the Company repaid principal and accrued interest aggregating $3.8 million to retire secured notes
that otherwise would have been due in October and November 2020 (the "2010 Notes"). As a result, the Company's cash and cash equivalent balances at March 31, 2020 aggregated approximately
$17.0 million. During the quarter ended March 31, 2020, the Company's operational cash burn was $2.3 million, of which $960,000
represented the payment of accrued interest related to the retirement of the 2010 Notes.
and analysts are invited to listen to a live broadcast review of the Company's 2020 first quarter financial results today at 4:30
p.m. Eastern time (1:30 p.m. Pacific time) that may be accessed by visiting the Company's website at www.clearpointneuro.com
and selecting "Investors" / "News" / "IR Calendar."
and analysts who would like to participate in the conference call may do so via telephone at (877) 407-9034, or at (201) 493-6737
if calling from outside the U.S. or Canada.
those who cannot access the live broadcast, a replay will be available shortly after the completion of the call until May 28,
2020 by calling (877) 660-6853, or (201) 612-7415 if calling from outside the U.S. or Canada, and then entering conference I.D.
number 413671. An online archive of the broadcast will be available on the Company's website at www.clearpointneuro.com,
on the "Investor Relations" page.
Neuro's mission is to improve and restore quality of life to patients and their families by enabling therapies for the most
complex neurological disorders with pinpoint accuracy. Applications of the Company's current product portfolio include deep-brain
stimulation, laser ablation, biopsy, neuro-aspiration, and delivery of drugs, biologics and gene therapy to the brain. The ClearPoint
Neuro Navigation System has FDA clearance, is CE-marked, and is installed in 60 active clinical sites in the United States.
The Company's SmartFlow cannula is being used in partnership or evaluation with more than 20 individual
biologics and drug delivery companies in various stages from preclinical research to late stage regulatory trials. To date, more
than 3,500 cases have been performed and supported by the Company's field-based clinical specialist team which offers support
and services for our partners. For more information, please visit www.clearpointneuro.com.
herein concerning the Company's plans, growth and strategies may include forward-looking statements within the context of
the federal securities laws. Statements regarding the Company's future events, developments and future performance, as well as
management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within
the meaning of these laws. Uncertainties and risks may cause the Company's actual results to differ materially from those expressed
in or implied by forward-looking statements. Particular uncertainties and risks include those relating to: future revenues from
sales of the Company's ClearPoint Neuro Navigation System products; the Company's ability to market, commercialize
and achieve broader market acceptance for the Company's ClearPoint Neuro Navigation System products; the impact of COVID-19
and the measures adopted to contain its spread; and estimates regarding the sufficiency of the Company's cash resources.
More detailed information on these and additional factors that could affect the Company's actual results are described in
the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2019,
which has been filed with the Securities and Exchange Commission, and the Company's Quarterly Report on Form 10-Q for the
three months ended March 31, 2020, which the Company intends to file with the Securities and Exchange Commission on or before
Harold A. Hurwitz, Chief Financial Officer
Keller, Vice President, Marketing
Consolidated Balance Sheets
| March 31, 2020 (Unaudited) | December 31, 2019 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 16,976,329 | $ | 5,695,722 | ||||
| Accounts receivable, net | 984,866 | 1,089,917 | ||||||
| Inventory, net | 3,650,282 | 3,240,218 | ||||||
| Prepaid expenses and other current assets | 188,429 | 357,227 | ||||||
| Total current assets | 21,799,906 | 10,383,084 | ||||||
| Property and equipment, net | 389,223 | 447,162 | ||||||
| Operating lease rights of use | 347,685 | 374,218 | ||||||
| Software license inventory | 489,300 | 504,400 | ||||||
| Licensing rights | 546,744 | 135,000 | ||||||
| Other assets | 12,469 | 82,573 | ||||||
| Total assets | $ | 23,585,327 | $ | 11,926,437 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,435,613 | $ | 965,783 | ||||
| Accrued compensation | 826,486 | 1,408,292 | ||||||
| Other accrued liabilities | 411,491 | 328,460 | ||||||
| Operating lease liabilities, current portion | 110,349 | 113,520 | ||||||
| Deferred product and service revenue | 857,813 | 1,016,892 | ||||||
| Total current liabilities | 3,641,752 | 3,832,947 | ||||||
| Accrued interest | - | 959,659 | ||||||
| Operating lease liabilities, net of current portion | 255,364 | 276,669 | ||||||
| Deferred product and service revenue, net of current portion | 148,150 | 197,862 | ||||||
| 2020 senior secured convertible notes payable, net | 16,780,201 | - | ||||||
| 2010 junior secured notes payable, net | - | 2,072,583 | ||||||
| Total liabilities | 20,825,467 | 7,339,720 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued and outstanding at March 31, 2020 and December 31, 2019 | - | - | ||||||
| Common stock, $0.01 par value; 200,000,000 shares authorized; 15,507,149 shares issued and outstanding at March 31, 2020; and 15,235,308 issued and outstanding at December 31, 2019 | 155,071 | 152,353 | ||||||
| Additional paid-in capital | 117,399,234 | 117,173,984 | ||||||
| Accumulated deficit | (114,794,445 | ) | (112,739,620 | ) | ||||
| Total stockholders' equity | 2,759,860 | 4,586,717 | ||||||
| Total liabilities and stockholders' equity | $ | 23,585,327 | $ | 11,926,437 |
Consolidated Statements of Operations
| For The Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenues: | ||||||||
| Product revenues | $ | 2,103,384 | $ | 2,163,953 | ||||
| Service and other revenues | 1,012,209 | 308,564 | ||||||
| Total revenues | 3,115,593 | 2,472,517 | ||||||
| Cost of revenues | 917,336 | 886,481 | ||||||
| Research and development costs | 829,528 | 584,540 | ||||||
| Sales and marketing expenses | 1,298,594 | 1,040,712 | ||||||
| General and administrative expenses | 1,278,509 | 933,033 | ||||||
| Operating loss | (1,208,374 | ) | (972,249 | ) | ||||
| Other income (expense): | ||||||||
| Other income (expense), net | (33,304 | ) | 5,629 | |||||
| Interest expense, net | (813,147 | ) | (254,105 | ) | ||||
| Net loss | $ | (2,054,825 | ) | $ | (1,220,725 | ) | ||
| Net loss per share attributable to common stockholders: | ||||||||
| Basic and diluted | $ | (0.13 | ) | $ | (0.11 | ) | ||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted | 15,438,276 | 11,044,125 |
Consolidated Statements of Cash Flows
| For The Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,054,825 | ) | $ | (1,220,725 | ) | ||
| Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||||
| Depreciation and amortization | 57,972 | 34,640 | ||||||
| Share-based compensation | 227,968 | 152,586 | ||||||
| Amortization of debt issuance costs and original issue discounts | 787,403 | 169,179 | ||||||
| Amortization of lease rights of use, net of accretion in lease liabilities | 25,077 | 25,630 | ||||||
| Increase (decrease) in cash resulting from changes in: | ||||||||
| Accounts receivable | 105,051 | (32,901 | ) | |||||
| Inventory, net | (365,430 | ) | 47,824 | |||||
| Prepaid expenses and other current assets | 168,798 | 14,108 | ||||||
| Other assets | 70,135 | 11,899 | ||||||
| Accounts payable and accrued expenses | (161,074 | ) | (148,562 | ) | ||||
| Accrued interest | (959,661 | ) | 34,625 | |||||
| Lease liabilities | (23,019 | ) | (26,289 | ) | ||||
| Deferred revenue | (208,791 | ) | 328,523 | |||||
| Net cash flows from operating activities | (2,330,396 | ) | (609,463 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Acquisition of licensing rights | (441,341 | ) | - | |||||
| Net cash flows from investing activities | (441,341 | ) | - | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of 2020 senior secured convertible notes, net of financing costs and discount | 16,890,000 | - | ||||||
| Repayment of 2010 junior secured notes payable | (2,837,656 | ) | - | |||||
| Net cash flows from financing activities | 14,052,344 | - | ||||||
| Net change in cash and cash equivalents | 11,280,607 | (609,463 | ) | |||||
| Cash and cash equivalents, beginning of period | 5,695,722 | 3,101,133 | ||||||
| Cash and cash equivalents, end of period | $ | 16,976,329 | $ | 2,491,670 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
| Cash paid for: | ||||||||
| Income taxes | $ | - | $ | - | ||||
| Interest | $ | 1,043,371 | $ | 291,032 |