Full Press Release Details
MRI Interventions Reports 58% Increase
in 2019 Second Quarter Revenue
$2.6 Million Quarterly Revenue and Case Volume
IRVINE, CA, August 6, 2019 - MRI Interventions,
Inc. (NYSE American: MRIC) (the "Company") today announced financial results for its second fiscal quarter ended June
2019 Second Quarter Highlights
Joe Burnett, President and Chief Executive
Officer of MRI Interventions, Inc., said, "The second quarter showed continued momentum year-to-date in 2019, with revenue
increasing 58% to a record $2.6 million and a record 197 supported cases. We also secured a strategic investment from PTC Therapeutics
as part of a $7.5 million capital infusion and completed a successful uplisting onto the NYSE American exchange. Further, we accomplished
these milestones while continuing to demonstrate the operating leverage in our business, with only 7% year-over-year increase in
quarterly operating expenses."
Mr. Burnett noted further, "We also made
exciting progress on a number of other key initiatives, including our first therapeutic revenues recognized from the sale of CLS's
FDA-cleared laser ablation products for non-neuro applications under our distribution agreement for sales in the U.S. and Canada.
This milestone was achieved one quarter sooner than anticipated. We also fulfilled our first order of drug delivery products to
our strategic partner, PTC Therapeutics, for its planned use in its AADC deficiency program. We have now shipped product or performed
services for ten biologics and drug delivery partners in the first half of 2019. We continue to be committed to our four-pillar
growth strategy, which saw our core functional neurosurgery business grow 46% in the second quarter, supplemented by
the growth in sales of biologics and drug delivery products, and capital equipment and related services.
Financial Results - Three Months
Functional neurosurgery revenue, which consists
of disposable product sales related to cases utilizing the ClearPoint system, increased 46% to a record $1.7 million for the three
months ended June 30, 2019, from $1.2 million for the same period in 2018. The increase was primarily due to an expanded customer
base, increased utilization of MRI scanner availability by existing customers, and resolution of the previously announced FDA actions
taken in early 2018 that adversely affected third-party providers in the laser ablation space.
drug delivery revenue, which include sales of disposable products and services related to customer-sponsored clinical trials and
services, increased 51% to $413,000 for the three months ended June 30, 2019, from $274,000 for the second quarter of 2018 due
primarily to an increase in biologic and drug delivery product revenues.
Musick, Irvine, California 92618 949.900.6833
Capital equipment and related services revenue,
consisting of sales of ClearPoint reusable hardware and software and services (other than those related to biologics and drug delivery),
increased 128% to $485,000 for the three months ended June 30, 2019, from $213,000 for the same period in 2018, due primarily to
an increase in sales of new ClearPoint system installations, ClearPoint 2.0 software upgrades and service contract sales.
Gross margin for the three months ended June
30, 2019 was 60%, a slight decline from gross margin of 63% for the same period in 2018, primarily a reflection of shifts in product
mix that vary on a quarterly basis.
Research and development costs were $698,000
for three months ended June 30, 2019, compared to $665,000 for the same period in 2018, an increase of 5%. Sales and marketing
expenses were $1.1 million for the three months ended June 30, 2019, compared to $926,000 for the same period in 2018, an increase
of 23%. General and administrative expenses were $1.0 million for the three months ended June 30, 2019, compared to $1.1 million
for the same period in 2018, a decrease of 6%. Total operating expenses for the three months ended June 30, 2019 was $2.9 million,
as compared with $2.7 million for the same period in 2018, an increase of 7%.
Teleconference Information
Investors and analysts are invited to listen
to a live broadcast review of the Company's 2019 second 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.mriinterventions.com and selecting "Investors"
/ "News" / "IR Calendar." Investors 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.
For those who cannot access the live broadcast,
a replay will be available shortly after the completion of the call until August 20, 2019 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.mriinterventions.com, on the "Investor Relations"
About MRI Interventions, Inc.
MRI Interventions is a leading platform company
for MRI-guided neurosurgery procedures, including deep-brain stimulation, ablation, aspiration, biopsy, and gene therapy delivery.
The ClearPoint Neuro Navigation System is FDA cleared and CE marked, and is installed in more than 55 surgical centers in the
U.S. To date, nearly 3,000 procedures have been performed leveraging the sub-millimetric accuracy of the ClearPoint platform.
For more information, please visit www.mriinterventions.com.
Forward-Looking Statements
Statements herein concerning
MRI Interventions, Inc.'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; 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, 2018 and the company's Quarterly Report on Form 10-Q for the period ended March 31, 2019, both of
which have been filed with the Securities and Exchange Commission, and the company's Quarterly Report on Form 10-Q for the
period ended June 30, 2019, which the company intends to file with the Securities and Exchange Commission on or before August 14,
Harold A. Hurwitz, Chief Financial Officer
Darrow Associates Investor Relations
MRI INTERVENTIONS, INC.
Condensed Consolidated Statements of Operations
| For The Three Months Ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Product revenues | $ | 2,194,194 | $ | 1,412,599 | ||||
| Service and other revenues | 412,204 | 233,736 | ||||||
| Total revenues | 2,606,398 | 1,646,335 | ||||||
| Cost of revenues | 1,030,316 | 602,236 | ||||||
| Research and development costs | 697,803 | 665,310 | ||||||
| Sales and marketing expenses | 1,143,056 | 926,231 | ||||||
| General and administrative expenses | 1,028,291 | 1,088,496 | ||||||
| Operating loss | (1,293,068 | ) | (1,635,938 | ) | ||||
| Other income (expense): | ||||||||
| Gain from change in fair value of derivative liabilities | - | 7,580 | ||||||
| Other income (expense), net | 1,693 | (87 | ) | |||||
| Interest expense, net | (259,020 | ) | (248,091 | ) | ||||
| Net loss | $ | (1,550,395 | ) | $ | (1,876,536 | ) | ||
| Net loss per share attributable to common stockholders: | ||||||||
| Basic and diluted | $ | (0.13 | ) | $ | (0.17 | ) | ||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted | 12,302,667 | 10,959,532 |
| For The Six Months Ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Product revenues | $ | 4,358,148 | $ | 2,951,198 | ||||
| Service and other revenues | 720,767 | 318,504 | ||||||
| Total revenues | 5,078,915 | 3,269,702 | ||||||
| Cost of revenues | 1,916,798 | 1,191,203 | ||||||
| Research and development costs | 1,282,343 | 1,211,638 | ||||||
| Sales and marketing expenses | 2,183,769 | 1,888,445 | ||||||
| General and administrative expenses | 1,961,323 | 2,041,446 | ||||||
| Operating loss | (2,265,317 | ) | (3,063,030 | ) | ||||
| Other income (expense): | ||||||||
| Gain from change in fair value of derivative liabilities | - | 42,023 | ||||||
| Other income (expense), net | 7,322 | (883 | ) | |||||
| Interest expense, net | (513,125 | ) | (495,563 | ) | ||||
| Net loss | $ | (2,771,120 | ) | $ | (3,517,453 | ) | ||
| Net loss per share attributable to common stockholders: | ||||||||
| Basic and diluted | $ | (0.24 | ) | $ | (0.32 | ) | ||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted | 11,676,872 | 10,851,177 |
MRI INTERVENTIONS, INC.
Consolidated Balance Sheets
| June 30, 2019 (Unaudited) | December 31, 2018 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 7,461,648 | $ | 3,101,133 | ||||
| Accounts receivable, net | 1,371,827 | 1,233,896 | ||||||
| Inventory, net | 2,529,159 | 2,105,976 | ||||||
| Prepaid expenses and other current assets | 430,638 | 213,684 | ||||||
| Total current assets | 11,793,272 | 6,654,689 | ||||||
| Property and equipment, net | 471,427 | 377,706 | ||||||
| Software license inventory | 416,900 | 801,900 | ||||||
| Operating lease rights of use | 427,927 | - | ||||||
| Other assets | 160,010 | 22,538 | ||||||
| Total assets | $ | 13,269,536 | $ | 7,856,833 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,302,456 | $ | 500,929 | ||||
| Accrued compensation | 711,623 | 764,960 | ||||||
| Operating lease liabilities, current portion | 113,914 | - | ||||||
| Other accrued liabilities | 382,872 | 390,838 | ||||||
| Deferred revenue | 740,163 | 350,963 | ||||||
| Total current liabilities | 3,251,028 | 2,007,690 | ||||||
| Accrued interest | 910,000 | 857,500 | ||||||
| 2014 junior secured notes payable, net | - | 1,939,850 | ||||||
| Operating lease liabilities | 332,261 | - | ||||||
| 2010 junior secured notes payable, net | 1,869,105 | 1,540,791 | ||||||
| Total liabilities | 6,362,394 | 6,345,831 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued and outstanding at June 30, 2019 and December 31, 2018 | - | - | ||||||
| Common stock, $0.01 par value; 200,000,000 shares authorized; 13,686,320 shares issued and outstanding at June 30, 2019; and 11,018,364 issued and outstanding at December 31, 2018 | 136,863 | 110,183 | ||||||
| Additional paid-in capital | 116,741,229 | 108,600,405 | ||||||
| Accumulated deficit | (109,970,950 | ) | (107,199,586 | ) | ||||
| Total stockholders' equity | 6,907,142 | 1,511,002 | ||||||
| Total liabilities and stockholders' equity | $ | 13,269,536 | $ | 7,856,833 |
MRI INTERVENTIONS, INC.
Consolidated Statements of Cash Flows
| For The Six Months Ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,771,120 | ) | $ | (3,517,453 | ) | ||
| Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||||
| Depreciation | 69,600 | 55,418 | ||||||
| Share-based compensation | 356,580 | 607,124 | ||||||
| Expenses paid through the issuance of common stock | - | 77,500 | ||||||
| Gain from change in fair value of derivative liabilities | - | (42,023 | ) | |||||
| Amortization of debt issuance costs and original issue discounts | 363,465 | 272,858 | ||||||
| Amortization of lease rights of use, net of accretion in lease liabilities | 51,255 | - | ||||||
| Increase (decrease) in cash resulting from changes in: | ||||||||
| Accounts receivable | (137,931 | ) | 178,629 | |||||
| Inventory, net | (201,503 | ) | (337,807 | ) | ||||
| Prepaid expenses and other current assets | (216,953 | ) | (128,823 | ) | ||||
| Other assets | 11,899 | 1,001 | ||||||
| Accounts payable and accrued expenses | 716,222 | (197,888 | ) | |||||
| Lease liabilities | (50,285 | ) | - | |||||
| Deferred revenue | 389,201 | (41,477 | ) | |||||
| Net cash flows from operating activities | (1,419,570 | ) | (3,072,941 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | - | (51,497 | ) | |||||
| Acquisition of licensing rights | (150,000 | ) | - | |||||
| Net cash flows from investing activities | (150,000 | ) | (51,497 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from private offering | 7,522,010 | - | ||||||
| Proceeds from warrant exercises | 383,075 | 531,977 | ||||||
| Repayment of 2014 junior secured notes payable | (1,975,000 | ) | - | |||||
| Net cash flows from financing activities | 5,930,085 | 531,977 | ||||||
| Net change in cash and cash equivalents | 4,360,515 | (2,592,461 | ) | |||||
| Cash and cash equivalents, beginning of period | 3,101,133 | 9,289,831 | ||||||
| Cash and cash equivalents, end of period | $ | 7,461,648 | $ | 6,697,370 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
| Cash paid for: | ||||||||
| Income taxes | $ | - | $ | - | ||||
| Interest | $ | 164,157 | $ | 146,611 |