Full Press Release Details
MRI Interventions, Inc. Reports 79% Revenue
Increase and Record Treatments in
financing completed during the quarter
IRVINE, CA, August 1, 2017 - MRI Interventions,
Inc. (OTCQB: MRIC) (the "Company") today announced financial results for the second quarter ended June 30, 2017.
2017 Second Quarter and Recent Highlights
Frank Grillo, President and Chief Executive
Officer of MRI Interventions, Inc., said "We continue to drive adoption of the ClearPoint System through both increased utilization
at existing sites and the addition of new sites. We completed 162 procedures in the second quarter, our ninth consecutive quarter
of record patient procedures, completed three systems sales, and continued to grow our user base with two new evaluation sites.
This strong execution resulted in a 79% increase in total revenue over the same period in 2016. This revenue growth combined with
our ongoing focus on prudent expense control drove a 35% reduction in cash used in operations compared with the prior year second
quarter. We also have a strong new account pipeline and remain focused on expanding our market penetration across a number of growing
treatment applications where ClearPoint offers compelling benefits to both surgeons and patients.
"Also during the quarter, we
completed a private placement resulting in gross proceeds of $13.25 million before commissions and offering expenses. We believe
this offering will fund the Company to cash flow break-even results, as well as support the commercialization work to enter two
new markets with new therapies. We have commenced work under our joint development agreement with the Mayo Clinic for the treatment
of intra-cranial hemorrhagic stroke, and under our co-development agreement with Acoustic MedSystems for the treatment of nonresectable
pancreatic cancer tumors. We are very pleased with the results this quarter and remain excited about the future of the Company."
Financial Results - Quarter Ended
Total revenues were $2.0 million for the three
months ended June 30, 2017, an increase of $872,000, or 79%, compared with $1.1 million for the same period in 2016. This increase
was due primarily to an increase in the Company's disposable and reusable product sales.
ClearPoint disposable product sales increased
$403,000, or 39%, to $1.4 million for the three months ended June 30, 2017, compared with $1.0 million for the same period in 2016.
This growth in disposable sales reflected a record 162 ClearPoint procedures performed in the 2017 second quarter.
ClearPoint reusable product sales were $457,000
for the three months ended June 30, 2017, compared with $39,000 for the same period in 2016. Reusable products consist primarily
of computer hardware and software bearing sales prices that are appreciably higher than those for disposable products and historically
have fluctuated from period to period.
Gross margin for the three months ended June
30, 2017 was 60%, compared to gross margin of 53% for the same period in 2016. The increase in gross margin primarily reflected
greater production efficiencies achieved during the three months ended June 30, 2017 due to higher sales and production volumes
relative to the same period in 2016.
Research and development costs were $1.1 million
during the three months ended June 30, 2017, compared to $750,000 during the same period in 2016, an increase of $334,000, or 45%.
The increase was due to upfront payments aggregating $522,000, the majority of which was in the form of shares of the Company's
common stock, required under the previously announced development agreements entered into in April 2017 with the Mayo Clinic and
Acoustic MedSystems, Inc. These payments were partially offset by reductions in software development and compensation expenses.
Selling, general and administrative expenses
remained stable at $1.9 million during the three months ended June 30, 2017 and 2016.
The Company's operating loss for the
three months ended June 30, 2017 declined $233,000, or 11%, to $1.8 million, as compared with $2.1 million for the same period
In April 2016, the Company recorded a debt
restructuring gain of $941,000 resulting from the restructuring of a note payable to Brainlab AG ("Brainlab"). In June
2016, the Company recorded a debt restructuring loss of $820,000 resulting from amendments (the "Amendments") to: (a)
the note payable to Brainlab; and (b) two of the 2014 junior secured notes payable (the "2014 Notes"). The Amendments
provided for the conversion into equity of an aggregate of $2.0 million principal amount of the notes in the event the Company
were to have completed a qualified public offering as defined in the Amendments.
During the three months ended June 30, 2017
and 2016, the Company recorded gains of $31,000 and $264,000, respectively, resulting from changes in the fair value of derivative
liabilities. For the three months ended June 30, 2017, such derivative liabilities related to: (a) the issuance of warrants in
connection with 2012 and 2013 private placement transactions; and (b) the amendment entered in with Brainlab in June 2016 as described
above. For the three months ended June 30, 2016, derivative liabilities also included those certain June 2016 amendments to the
Net interest expense during the three months
ended June 30, 2017 and 2016 was $213,000 and $251,000, respectively, a decrease of $39,000, or 15%. This decrease was due to the
reduction of principal balances of the note payable to Brainlab, resulting from the restructuring of that note, and to the 2014
Notes resulting from the conversion into equity of an aggregate $1.75 million principal balance of those notes entered into in
August 2016 in connection with the Company's private offering of equity units in September 2016.
Reflecting the effects of these non-operational
items, net loss for the three months ended June 30, 2017 was $2.0 million, as compared with $1.8 million for the same period in
Financial Results - Six Months
Total revenues were $4.0 million for the six
months ended June 30, 2017, an increase of $1.5 million, or 59%, compared with $2.5 million for the same period in 2016. This increase
was due primarily to an increase in the Company's disposable and reusable product sales.
ClearPoint disposable product sales increased
$965,000, or 45%, to $3.1 million for the six months ended June 30, 2017, compared with $2.1 million for the same period in 2016.
This growth in disposable sales reflected a record 308 ClearPoint procedures performed during the six months ended June 30, 2017.
ClearPoint reusable product sales were $765,000 for the six months ended June 30, 2017, compared with $301,000 for the same period
Gross margin for the six months ended June
30, 2017 was 61%, compared to gross margin of 51% for the same period in 2016.
Research and development costs were $1.6 million
during the six months ended June 30, 2017, compared to $1.4 million during the same period in 2016, an increase of $235,000, or
17%. The increase was due to the upfront payments required under the previously announced development agreements entered into in
April 2017 with the Mayo Clinic and Acoustic MedSystems, Inc. described above, which were partially offset by reductions in software
development and compensation expenses.
Selling, general and administrative expenses
slightly increased to $4.0 million during the six months ended June 30, 2017, compared to $3.9 million for the same period in 2016.
The Company's operating loss for the
six months ended June 30, 2017 declined $813,000, or 20%, to $3.2 million, as compared with $4.0 million for the same period in
During the six months ended June 30, 2016,
the Company recorded a net gain from debt restructuring of $121,000, arising from the restructuring of note payable to Brainlab
and the 2014 Notes described above.
During the six months ended June 30, 2017 and
2016, the Company recorded a loss of $62,000 and a gain of $424,000, respectively, resulting from changes in the fair value of
the derivative liabilities existing at those respective dates as described above.
Net interest expense during the six months
ended June 30, 2017 and 2016 was $426,000 and $596,000, respectively, a decrease of $171,000, or 29%. This decrease was due to
the reduction of principal balances as described above.
Reflecting the effects of these non-operational
items, net loss for the six months ended June 30, 2017 was $3.7 million, as compared with $3.8 million for the same period in 2016.
As previously announced, on May 26, 2017, the
Company completed a private placement of equity units, which resulted in gross proceeds of $13.25 million, before deducting placement
agents' fees and offering expenses.
As previously announced, on July 21, 2016,
the Company's Board of Directors approved a 1-for-40 reverse stock split of its issued common stock, which was effectuated
on July 26, 2016. All disclosure of common shares and per share data in the accompanying condensed consolidated financial statements
have been adjusted retroactively to reflect the reverse stock split for all periods presented.
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