Full Press Release Details
MRI Interventions Reports 62% Increase
in 2019 Third Quarter Revenue
marks fourth consecutive quarter of record revenue and case volume
IRVINE, CA, November 12, 2019 - MRI Interventions,
Inc. (NYSE American: MRIC) (the "Company") today announced financial results for its third fiscal quarter ended September
2019 Third Quarter Highlights
Joe Burnett, President and Chief Executive
Officer of MRI Interventions, Inc., said, "The third quarter continued our string of setting quarterly revenue and ClearPoint
case records in 2019, with revenue increasing 62% to a record $2.9 million and the supported case total reaching 233. We also crossed
a major milestone, reporting our 3,000th ClearPoint case during the quarter, which further demonstrates the maturity
of our ClearPoint system in the clinical environment. In addition to new site launches, the strong case growth this year has been
driven in part by a growing number of centers adopting our two case per day protocol, which leverages best practices in patient
case management and tools in our ClearPoint 2.0 software platform to maximize the economic value of MRI scanner time available
at those centers. We now have 10 centers using this protocol, and we continue to
work with additional centers' transition to this approach. Currently 29 of our installed base of 57 active surgical centers
have our ClearPoint 2.0 software installed, continuing the rapid adoption since its full market release earlier this year."
Mr. Burnett further noted, "We also made
exciting progress on a number of other key initiatives, including continued growth in 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. We signed an additional co-development agreement with a new partner in the biologics and drug delivery space
and have now shipped product or performed services for 15 biologics and drug delivery partners in 2019. We continue to be committed
to our four-pillar growth strategy, which saw our core functional neurosurgery business grow 28% in the third quarter, supplemented
by the growth in sales of biologics and drug delivery products, and capital equipment and related services. In fact, all four of
our product segments saw significant revenue growth in the third quarter, which demonstrates our diversification into a platform
company, with all elements of our business contributing to this result."
Financial Results - Three Months
Ended September 30, 2019
Functional neurosurgery revenue, which consists
of disposable product sales related to cases utilizing the ClearPoint system, increased 28% to a record $1.9 million for the three
months ended September 30, 2019, from $1.4 million for the same period in 2018. The increase was primarily due to an expanded customer
base and increased utilization by our existing customers of MRI scanner availability.
Biologics and drug delivery revenue, which
include sales of disposable products and services related to customer-sponsored clinical trials and services, increased 188% to
$564,000 for the three months ended September 30, 2019, from $196,000 for the third quarter of 2018.
Capital equipment revenue, consisting of sales
of ClearPoint reusable hardware and software, and related service revenue, increased 144% to $395,000 for the three months ended
September 30, 2019, from $162,000 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 September
30, 2019 was 66%, a slight decline from gross margin of 69% for the same period in 2018, but an increase from 60% in the second
quarter of 2019, primarily due to shifts in product mix that vary on a quarterly basis between high-margin single use disposable
sales and capital equipment sales which carry a lower margin.
Research and development costs were $762,000
for three months ended September 30, 2019, compared to $617,000 for the same period in 2018, an increase of 23%. Sales and marketing
expenses were $1.1 million for the three months ended September 30, 2019, compared to $765,000 for the same period in 2018, an
increase of 39%, attributable primarily to increases in incentive compensation tied to increased sales, and in the expansion of
our field clinical team. General and administrative expenses were $1.0 million for the three months ended September 30, 2019, compared
to $1.1 million for the same period in 2018, a decrease of 4%.
"Based on our strong third quarter and
year-to-date results combined with confidence in our anticipated fourth quarter sales, we are increasing our full-year 2019 revenue
forecast to a range of $10.5 million to $11.5 million, from our previous forecast calling for a range of $10.0 million to $11.0
million," said Mr. Burnett.
Teleconference Information
Investors and analysts are invited to listen
to a live broadcast review of the Company's 2019 third 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 November 26, 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 57 active surgical centers in the U.S.
To date, more than 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, the company's Quarterly Report on Form 10-Q for the period ended June 30, 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 September 30, 2019, which the company intends to file with the Securities and Exchange Commission on or before November 14,
Harold A. Hurwitz, Chief Financial Officer
Darrow Associates Investor Relations
MRI INTERVENTIONS, INC.
Condensed Consolidated Statements of Operations
| For The Three Months Ended September 30, | ||||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Product revenues | $ | 2,594,428 | $ | 1,739,804 | ||||
| Service and other revenues | 333,038 | 67,238 | ||||||
| Total revenues | 2,927,466 | 1,807,042 | ||||||
| Cost of revenues | 983,042 | 553,221 | ||||||
| Research and development costs | 761,881 | 617,241 | ||||||
| Sales and marketing expenses | 1,063,143 | 764,599 | ||||||
| General and administrative expenses | 1,029,929 | 1,078,171 | ||||||
| Operating loss | (910,529 | ) | (1,206,190 | ) | ||||
| Other income (expense): | ||||||||
| Gain from change in fair value of derivative liabilities | - | 22,295 | ||||||
| Other income, net | 728 | 2,643 | ||||||
| Interest expense, net | (213,167 | ) | (246,824 | ) | ||||
| Net loss | $ | (1,122,968 | ) | $ | (1,428,076 | ) | ||
| Net loss per share attributable to common stockholders: | ||||||||
| Basic and diluted | $ | (0.08 | ) | $ | (0.13 | ) | ||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted | 14,053,508 | 11,006,959 |
| For The Nine Months Ended September 30, | ||||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Product revenues | $ | 6,952,575 | $ | 4,691,002 | ||||
| Service and other revenues | 1,053,807 | 385,742 | ||||||
| Total revenues | 8,006,382 | 5,076,744 | ||||||
| Cost of revenues | 2,899,837 | 1,743,981 | ||||||
| Research and development costs | 2,044,224 | 1,828,846 | ||||||
| Sales and marketing expenses | 3,246,912 | 2,653,044 | ||||||
| General and administrative expenses | 2,991,305 | 3,119,617 | ||||||
| Operating loss | (3,175,896 | ) | (4,268,744 | ) | ||||
| Other income (expense): | ||||||||
| Gain from change in fair value of derivative liabilities | - | 64,318 | ||||||
| Other income, net | 8,100 | 1,284 | ||||||
| Interest expense, net | (726,292 | ) | (742,387 | ) | ||||
| Net loss | $ | (3,894,088 | ) | $ | (4,945,529 | ) | ||
| Net loss per share attributable to common stockholders: | ||||||||
| Basic and diluted | $ | (0.31 | ) | $ | (0.45 | ) | ||
| Weighted average shares outstanding: | ||||||||
| Basic and diluted | 12,477,790 | 10,903,675 |
MRI INTERVENTIONS, INC.
Consolidated Balance Sheets
| September 30, 2019 (Unaudited) | December 31, 2018 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 6,235,168 | $ | 3,101,133 | ||||
| Accounts receivable, net | 2,129,085 | 1,233,896 | ||||||
| Inventory, net | 3,180,250 | 2,105,976 | ||||||
| Prepaid expenses and other current assets | 364,273 | 213,684 | ||||||
| Total current assets | 11,908,776 | 6,654,689 | ||||||
| Property and equipment, net | 474,226 | 377,706 | ||||||
| Software license inventory | 451,900 | 801,900 | ||||||
| Operating lease rights of use | 400,755 | - | ||||||
| Other assets | 153,141 | 22,538 | ||||||
| Total assets | $ | 13,388,798 | $ | 7,856,833 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,671,722 | $ | 500,929 | ||||
| Accrued compensation | 993,150 | 764,960 | ||||||
| Operating lease liabilities, current portion | 113,263 | - | ||||||
| Other accrued liabilities | 403,054 | 390,838 | ||||||
| Deferred revenue | 1,097,644 | 350,963 | ||||||
| Total current liabilities | 4,278,833 | 2,007,690 | ||||||
| Accrued interest | 934,829 | 857,500 | ||||||
| 2014 junior secured notes payable, net | - | 1,939,850 | ||||||
| 2010 junior secured notes payable, net | 1,867,265 | 1,540,791 | ||||||
| Operating lease liabilities | 299,915 | - | ||||||
| Total liabilities | 7,380,842 | 6,345,831 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued and outstanding at September 30, 2019 and December 31, 2018 | - | - | ||||||
| Common stock, $0.01 par value; 200,000,000 shares authorized; 14,991,892 shares issued and outstanding at September 30, 2019; and 11,018,364 issued and outstanding at December 31, 2018 | 149,918 | 110,183 | ||||||
| Additional paid-in capital | 116,951,956 | 108,600,405 | ||||||
| Accumulated deficit | (111,093,918 | ) | (107,199,586 | ) | ||||
| Total stockholders' equity | 6,007,956 | 1,511,002 | ||||||
| Total liabilities and stockholders' equity | $ | 13,388,798 | $ | 7,856,833 |
MRI INTERVENTIONS, INC.
Consolidated Statements of Cash Flows
| For The Nine Months Ended September 30, | ||||||||
| 2019 | 2018 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (3,894,088 | ) | $ | (4,945,529 | ) | ||
| Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||||
| Depreciation | 105,310 | 81,206 | ||||||
| Share-based compensation | 576,012 | 968,488 | ||||||
| Expenses paid through the issuance of common stock | - | 77,500 | ||||||
| Gain from change in fair value of derivative liabilities | - | (64,318 | ) | |||||
| Amortization of debt issuance costs and original issue discounts | 523,969 | 409,287 | ||||||
| Amortization of lease rights of use, net of accretion in lease liabilities | 76,871 | - | ||||||
| Increase (decrease) in cash resulting from changes in: | ||||||||
| Accounts receivable | (895,189 | ) | (105,911 | ) | ||||
| Inventory, net | (908,413 | ) | (204,171 | ) | ||||
| Prepaid expenses and other current assets | (150,589 | ) | (69,130 | ) | ||||
| Other assets | 11,899 | 1,000 | ||||||
| Accounts payable and accrued expenses | 1,506,279 | (361,886 | ) | |||||
| Lease liabilities | (82,448 | ) | - | |||||
| Deferred revenue | 746,682 | 165,254 | ||||||
| Net cash flows from operating activities | (2,383,705 | ) | (4,048,210 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (10,190 | ) | (62,651 | ) | ||||
| Acquisition of licensing rights | (150,000 | ) | - | |||||
| Net cash flows from investing activities | (160,190 | ) | (62,651 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from private offering, net of offering costs | 7,427,848 | - | ||||||
| Proceeds from warrant and option exercises | 387,426 | 531,977 | ||||||
| Repayment of senior secured note payable | - | (2,000,000 | ) | |||||
| Repayment of 2014 junior secured notes payable | (1,975,000 | ) | - | |||||
| Repayment of 2010 junior secured notes payable | (162,344 | ) | - | |||||
| Net cash flows from financing activities | 5,677,930 | (1,468,023 | ) | |||||
| Net change in cash and cash equivalents | 3,134,035 | (5,578,884 | ) | |||||
| Cash and cash equivalents, beginning of period | 3,101,133 | 9,289,831 | ||||||
| Cash and cash equivalents, end of period | $ | 6,235,168 | $ | 3,710,947 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
| Cash paid for: | ||||||||
| Income taxes | $ | - | $ | - | ||||
| Interest | $ | 82,621 | $ | 92,222 |