UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2020~~2021



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number 001-33351

_________________________________________________

NEUROMETRIX, INC.

(Exact name of registrant as specified in its charter)



Delaware			04-3308180
(State or other jurisdiction of			(I.R.S. Employer Identification No.)
incorporation or organization)

4B Gill Street Woburn, Massachusetts			01801
(Address of principal executive offices)			(Zip Code)

(781) 890-9989

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.0001 par value per share	NURO	The Nasdaq Stock Market LLC
Preferred Stock Purchase Rights

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer¨

Accelerated filer¨

Non-accelerated filer¨

Smaller reporting companyx

Emerging growth company¨

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨☐ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~3,784,657~~5,628,907 shares of common stock, par value $0.0001 per share, were outstanding as of ~~October 21, 2020.~~July 22, 2021.

NeuroMetrix, Inc.

Form 10-Q

Quarterly Period Ended ~~September~~June 30, ~~2020~~2021

TABLE OF CONTENTS



PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Balance Sheets as of ~~September~~June 30, ~~2020~~2021 (unaudited) and December 31, ~~2019~~2020	1

	Statements of Operations (unaudited) for the Quarters and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	2

	~~Statement~~Statements of Changes in Stockholders' Equity (unaudited) for the Quarters and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	3

	Statements of Cash Flows (unaudited) for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	5	4

	Notes to Unaudited Financial Statements	65

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13	10

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21	16

Item 4.	Controls and Procedures	21	16

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	22	17

Item 1A.	Risk Factors	22	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22	17

Item 3.	Defaults Upon Senior Securities	22	17

Item 4.	Mine Safety Disclosures	22	17

Item 5.	Other Information	22	17

Item 6.	Exhibits	22	18

Signatures		23	19

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

NeuroMetrix, Inc.

Balance Sheets


	June 30, 2021		December 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	8,364,197	$	5,226,213
Accounts receivable, net	457,033		334,297
Inventories	1,029,154		1,051,282

Prepaid expenses and other current assets	180,838		478,074
Total current assets	10,031,222		7,089,866

Fixed assets, net	187,256		183,494
Right to use asset	522,131		692,692
Other long-term assets	28,284		28,523
Total assets	$	10,768,893	$	7,994,575

Liabilities and Stockholders’ Equity
Current liabilities:

Accounts payable	$	289,760	$	142,316

Accrued expenses and compensation	790,427		998,442
Accrued product returns	45,000		545,000
Lease obligation, current	457,682		599,632
Total current liabilities	1,582,869		2,285,390

Lease obligation, net of current portion	350,895		461,410
Total liabilities	1,933,764		2,746,800

Commitments and contingencies	0		0

Stockholders’ equity:
Preferred stock	0		0
Convertible preferred stock	1		1
Common stock, $0.0001 par value; 25,000,000 shares authorized at June 30, 2021 and December 31, 2020; 5,046,198 and 3,793,739 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	505		379
Additional paid-in capital	206,307,790		202,129,195
Accumulated deficit	(197,473,167)		(196,881,800)
Total stockholders’ equity	8,835,129		5,247,775
Total liabilities and stockholders’ equity	$	10,768,893	$	7,994,575

September 30, 2020 December 31, 2019
(Unaudited)
Assets

Current assets:

Cash and cash equivalents $ 4,929,175
$ 3,126,206
Accounts receivable, net 633,146
298,967
Inventories 1,050,293
1,163,714
Collaboration receivable —
189,008
Prepaid expenses and other current assets 677,526
652,919
Total current assets 7,290,140
5,430,814

Fixed assets, net 205,676
273,448
Right to use asset 815,558
1,159,774
Other long-term assets 28,664
29,650
Total assets $ 8,340,038
$ 6,893,686

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable $ 192,356
$ 725,658
Accrued expenses and compensation 1,011,228
1,443,574
Accrued product returns 586,000
689,000
Lease obligation, current 596,779
588,546
Total current liabilities 2,386,363
3,446,778

Lease obligation, net of current portion 581,903
916,674
Total liabilities 2,968,266
4,363,452

Commitments and contingencies

Stockholders’ equity:

Preferred stock —
—
Convertible preferred stock 1
1
Common stock, $0.0001 par value; 25,000,000 shares authorized at September 30, 2020 and December 31, 2019; 3,784,657 and 1,400,674 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively 378
140
Additional paid-in capital 201,927,426
197,319,698
Accumulated deficit (196,556,033 ) (194,789,605 )
Total stockholders’ equity 5,371,772
2,530,234
Total liabilities and stockholders’ equity $ 8,340,038
$ 6,893,686

The accompanying notes are an integral part of these interim financial statements.

NeuroMetrix, Inc.

Statements of Operations

(Unaudited)


	Quarters Ended September 30,						Nine Months Ended September 30,							Quarters Ended June 30,				Six Months Ended June 30,
	2020			2019			2020			2019				2021		2020		2021		2020

Revenues	$	2,036,228		$	2,088,001		$	5,568,243		$	7,565,619		Revenues	$	2,213,499	$	1,359,979	$	4,368,971	$	3,532,015

Cost of revenues	537,614			914,322			1,652,890			6,382,340			Cost of revenues	558,221		495,086		1,134,510		1,115,276

Gross profit	1,498,614			1,173,679			3,915,353			1,183,279			Gross profit	1,655,278		864,893		3,234,461		2,416,739

Operating expenses:													Operating expenses:
Research and development	652,671			475,137			1,846,569			2,365,139			Research and development	641,525		660,278		874,802		1,193,898
Sales and marketing	340,927			647,719			1,144,389			4,046,956			Sales and marketing	269,493		379,113		663,318		803,462
General and administrative	762,903			1,462,887			2,693,146			4,646,932			General and administrative	1,276,223		678,497		2,288,499		1,930,243

Total operating expenses	1,756,501			2,585,743			5,684,104			11,059,027			Total operating expenses	2,187,241		1,717,888		3,826,619		3,927,603

Loss from operations	(257,887		)	(1,412,064		)	(1,768,751		)	(9,875,748		)	Loss from operations	(531,963)		(852,995)		(592,158)		(1,510,864)

Other income:
Collaboration income	—			—			—			7,116,667

Other income	774			7,464			2,323			42,797			Other income	379		1,051		791		1,549

Total other income	774			7,464			2,323			7,159,464


Net loss	$	(257,113	)	$	(1,404,600	)	$	(1,766,428	)	$	(2,716,284	)	Net loss	$	(531,584)	$	(851,944)	$	(591,367)	$	(1,509,315)


Net loss per common share applicable to common stockholders, basic and diluted	$	(0.07	)	$	(1.44	)	$	(0.64	)	$	(3.06	)	Net loss per common share applicable to common stockholders, basic and diluted	$	(0.13)	$	(0.28)	$	(0.15)	$	(0.68)

The accompanying notes are an integral part of these interim financial statements.

NeuroMetrix, Inc.

Statements of Changes in Stockholders' Equity

(Unaudited)


	Series B Convertible Preferred Stock			Common Stock			Additional Paid-In Capital				Accumulated Deficit				Total				Series B Convertible Preferred Stock							Common Stock						Additional Paid-In Capital				Accumulated Deficit				Total
	Number of Shares	Amount		Number of Shares	Amount									Number of Shares						Amount				Number of Shares			Amount
Balance at December 31, 2019	200.00	$	1	1,400,674	$	140			$	197,319,698				$			(194,789,605	)	$	2,530,234	Balance at December 31, 2019	200			$	1		1,400,674			$		140			$	197,319,698			$	(194,789,605)			$	2,530,234
Stock-based compensation expense	—	—		—	—		144,047				—				144,047			Stock-based compensation expense	—				—			—			—			144,047				—				144,047
Issuance of common stock under at the market offering	—	—		256,078	25		453,432				—				453,457			Issuance of common stock under at the market offering	—				—			256,078			25			453,432				—				453,457
Issuance of common stock to settle compensation obligations	—	—		31,000	3		43,748				—				43,751			Issuance of common stock to settle compensation obligations	—				—			31,000			3			43,748				—				43,751
Net loss		—									(657,371		)		(657,371		)	Net loss					—													(657,371)				(657,371)
Balance at March 31, 2020	200.00	$	1	1,687,752	$	168	$	197,960,925			$	(195,446,976	)		$	2,514,118		Balance at March 31, 2020	200				1			1,687,752			168			197,960,925				(195,446,976)				2,514,118
Stock-based compensation expense	—	—		—	—		128,862				—				128,862			Stock-based compensation expense	—				—			—			—			128,862				—				128,862
Issuance of common stock under at the market offering	—	—		2,092,541	209		3,689,765				—				3,689,974			Issuance of common stock under at the market offering	—				—			2,092,541			209			3,689,765				—				3,689,974
Issuance of common stock under employee stock purchase plan	—	—		4,364	1		7,605				—				7,606			Issuance of common stock under employee stock purchase plan	—				—			4,364			1			7,605				—				7,606
Net loss	—	—		—	—		—				(851,944		)		(851,944		)	Net loss	—				—			—			—			—				(851,944)				(851,944)
Balance at June 30, 2020	200.00	$	1	3,784,657	$	378	$	201,787,157			$	(196,298,920	)		$	5,488,616		Balance at June 30, 2020	200				$	1		3,784,657			$	378		$	201,787,157			$	(196,298,920)			$	5,488,616

																			Series B Convertible Preferred Stock							Common Stock						Additional Paid-In Capital				Accumulated Deficit				Total
																			Number of Shares				Amount			Number of Shares			Amount
Balance at December 31, 2020																		Balance at December 31, 2020	200				$	1		3,793,739			$	379				$	202,129,195			$	(196,881,800)			$	5,247,775
Stock-based compensation expense	—	—		—	—		140,269				—				140,269			Stock-based compensation expense	—				—			—			—			68,863				—				68,863

Issuance of common stock under employee stock purchase plan																		Issuance of common stock under employee stock purchase plan	—				—			2,408			1			4,196				—				4,197
Net loss	—	—		—	—		—				(257,113		)		(257,113		)	Net loss	—				—			—			—			—				(59,783)				(59,783)
Balance at September 30, 2020	200.00	$	1	3,784,657	$	378	$	201,927,426			$	(196,556,033	)		$	5,371,772
Balance at March 31, 2021																		Balance at March 31, 2021	200				1			3,796,147			380			202,202,254				(196,941,583)				5,261,052
Stock-based compensation expense																		Stock-based compensation expense	—				—			—			—			319,863				—				319,863
Issuance of common stock under at the market offering																		Issuance of common stock under at the market offering	—				—			1,207,681			121			3,766,727				—				3,766,848
Issuance of common stock under employee stock purchase plan																		Issuance of common stock under employee stock purchase plan	—				—			7,055			1			18,949				—				18,950
Vesting of restricted stock under option plan																		Vesting of restricted stock under option plan	—				—			13,911			3			(3)				—				0
Net loss																		Net loss	—				—			—			—			—				(531,584)				(531,584)
Balance at June 30, 2021																		Balance at June 30, 2021	200				$	1		5,024,794			$	505		$	206,307,790			$	(197,473,167)			$	8,835,129

~~NeuroMetrix, Inc.~~

~~Statements of Changes in Stockholders' Equity~~

Series B – F
Convertible Preferred Stock Common
Stock Additional
Paid-In
Capital Accumulated
Deficit Total
Number of
Shares Amount Number of
Shares Amount
Balance at December 31, 2018 17,513.63
$ 18
738,029
$ 74
$ 197,114,310
$ (191,016,591 ) $ 6,097,811
Stock-based compensation expense —
—
—
—
44,093
—
44,093
Issuance of common stock upon conversion of preferred stock (2,445.90 ) (3 ) 93,000
9
(6 ) —
—
Net income —
—
—
—
—
2,050,507
2,050,507
Balance at March 31, 2019 15,067.73
$ 15
831,029
$ 83
$ 197,158,397
$ (188,966,084 ) $ 8,192,411
Stock-based compensation expense —
—
—
—
19,933
—
19,933
Issuance of common stock upon conversion of preferred stock (3,813.00 ) (4 ) 144,981
15
(11 ) —
—
Issuance of common stock under employee stock purchase plan —
—
2,148
1
7,496
—
7,497
Net loss —
—
—
—
—
(3,362,191 ) (3,362,191 )
Balance at June 30, 2019 11,254.73
$ 11
978,158
$ 99
$ 197,185,815
$ (192,328,275 ) $ 4,857,650
Stock-based compensation expense —
—
—
—
120,460
—
120,460
Net loss —
—
—
—
—
(1,404,600 ) (1,404,600 )
Balance at September 30, 2019 11,254.73
$ 11
978,158
$ 99
$ 197,306,275
$ (193,732,875 ) $ 3,573,510

~~The accompanying notes are an integral part of these interim financial statements.~~

Statements of Cash Flows

Nine Months Ended September 30,
2020 2019
Cash flows from operating activities:

Net loss $ (1,766,428 ) $ (2,716,284 )
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation 67,772
98,166
Stock-based compensation 413,178
184,486
Settlement of compensation obligation 43,751
—
Impairment charge against right of use asset 280,000
—
Inventory provision —
2,595,884
Changes in operating assets and liabilities:

Accounts receivable (334,179 ) 558,968
Inventories 113,421
(357,673 )
Collaboration receivable 189,008
(1,174,092 )
Prepaid expenses and other current and long-term assets (23,621 ) 189,092
Accounts payable (533,302 ) (659,538 )
Accrued expenses and compensation (694,668 ) 115,752
Accrued product returns (103,000 ) (438,352 )
Deferred collaboration income —
(1,956,522 )
Net cash used in operating activities (2,348,068 ) (3,560,113 )

Cash flows from investing activities:

Purchases of fixed assets —
(41,177 )
Net cash used in investing activities —
(41,177 )

Cash flows from financing activities:

Net proceeds from issuance of stock 4,151,037
7,497
Proceeds from debt issuance 773,200
—
Repayment of debt (773,200 ) —
Net cash provided by financing activities 4,151,037
7,497

Net increase (decrease) in cash and cash equivalents 1,802,969
(3,593,793 )
Cash and cash equivalents, beginning of period 3,126,206
6,780,429
Cash and cash equivalents, end of period $ 4,929,175
$ 3,186,636
Supplemental disclosure of cash flow information:

Common stock issued to settle employee compensation $ 43,751
$ —


	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(591,367)	$	(1,509,315)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	79,511		45,589
Stock-based compensation	388,726		272,909
Settlement of compensation obligation	0		43,751
Impairment charge against right of use asset	126,748		204,000

Changes in operating assets and liabilities:
Accounts receivable	(122,736)		(108,694)
Inventories	22,128		(28,284)
Collaboration receivable	0		7,678
Prepaid expenses and other current and long-term assets	28,823		465,630
Accounts payable	147,444		(534,823)
Accrued expenses and compensation	(148,015)		(599,201)
Accrued product returns	(500,000)		(91,000)

Net cash used in operating activities	(568,738)		(1,831,760)

Cash flows from investing activities:
Purchases of fixed assets	(83,273)		(10,500)
Net cash used in investing activities	(83,273)		(10,500)

Cash flows from financing activities:
Net proceeds from issuance of stock	3,789,995		4,151,037
Proceeds from debt issuance	0		773,200
Repayment of debt	0		(773,200)
Net cash provided by financing activities	3,789,995		4,151,037

Net increase in cash and cash equivalents	3,137,984		2,308,777
Cash and cash equivalents, beginning of period	5,226,213		3,126,206
Cash and cash equivalents, end of period	$	8,364,197	$	5,434,983
Supplemental disclosure of cash flow information:


Common stock issued to settle employee compensation	$	0	$	43,751

NeuroMetrix, Inc.

Notes to Unaudited Financial Statements

~~September~~June 30, ~~2020~~2021


1.	~~Business and Basis of Presentation~~

1.Business and Basis of Presentation

Our Business-An Overview

NeuroMetrix, Inc.~~, or~~ (the Company) is an innovation-driven company focused on the ~~Company, is a leading developer~~development and ~~manufacturer~~global commercialization of ~~diagnostic and therapeutic neurostimulation based~~non-invasive medical devices ~~that~~for the diagnosis and treatment of pain and neurological disorders. Revenues are ~~used throughout~~derived from the ~~world.~~sale of medical devices and after-market consumable products and accessories. The Company’s products are cleared by the U.S. Food and Drug Administration (FDA) and regulators in foreign jurisdictions where appropriate. The Company has three ~~FDA cleared~~ commercial products. ~~DPNCheck®~~DPNCheck® is a ~~point-of-care test that is used to evaluate peripheral neuropathies.~~ ~~ADVANCE~~^™ ~~is a point-of-care~~diagnostic device that provides rapid, point-of-care detection of peripheral neuropathies. ADVANCE® is a diagnostic device that provides automated, in-office nerve conduction studies ~~as an aid in diagnosing and evaluating patients suspected~~for the evaluation of ~~having~~ focal ~~or systemic~~ neuropathies. Quell^® ~~2.0~~ is a wearable ~~mobile app enabled,~~ neurostimulation device indicated for symptomatic relief ~~and management~~ of lower extremity chronic pain ~~and~~that is available ~~OTC. The Company maintains an active, industry-leading R&D program.~~over-the-counter.

The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has reported recurring losses from operations and negative cash flows from operating activities. At September 30, 2020, the Company had an accumulated deficit of $196.6 million. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the one-year period from the date of issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company held cash and cash equivalents of $4.9 million as of September 30, 2020. The Company believes that these resources and the cash to be generated from future product sales will be sufficient to meet its projected operating requirements into the fourth quarter of 2021. Accordingly, the Company may need to raise additional funds to support its operating and capital needs in the fourth quarter of 2021 and beyond.

The Company continues to face challenges and uncertainties. Among these uncertainties is the future effect on the Company's business of the COVID-19 pandemic which has depressed sales of the Company's products. As a result, the Company’s available capital resources may be consumed more rapidly than currently expected due to (a) decreases in sales of the Company’s products, including decreases in customer orders related to the COVID-19 pandemic, and the uncertainty of future revenues from new products; (b) the effect of the COVID-19 pandemic on the Company's ability to obtain parts and materials from the Company's suppliers while continuing to staff critical production and fulfillment functions; (c) changes the Company may make to the business that affect ongoing operating expenses; (d) changes the Company may make in its business strategy; (e) regulatory developments affecting the Company’s existing products; (f) changes the Company may make in its research and development spending plans; and (g) other items affecting the Company’s forecasted level of expenditures and use of cash resources.

The Company may attempt to obtain additional funding through public or private financing, collaborative arrangements with strategic partners, or through additional credit lines or other debt financing sources to increase the funds available to fund operations. However, the Company may not be able to secure such funding in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity or debt securities to raise additional funds, its existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products or proprietary technologies, or grant licenses on terms that are not favorable to the Company. Without additional funds, the Company may be forced to delay, scale back or eliminate some of its sales and marketing efforts, research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue its operations. If any of these events occurs, the Company’s ability to achieve its development and commercialization goals would be adversely affected.

Unaudited Interim Financial Statements

The accompanying unaudited balance sheet as of ~~September~~June 30, ~~2020,~~2021, unaudited statements of operations, changes in stockholders' equity for the quarters and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 and cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The accompanying balance sheet as of December 31, ~~2019~~2020 has been derived from audited financial statements prepared at that date but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, the financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the Company’s financial position and operating results. Operating results for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020~~2021 or any other period. These financial statements and notes should be read in conjunction with the financial statements for the year ended December 31, ~~2019~~2020 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, or the SEC, on January ~~28, 2020~~29, 2021 (File No. 001-33351)~~, or the Company’s 2019 Form 10-K.~~.

Revenues

Revenues include product sales, net of estimated returns. Revenue is measured as the amount of consideration the Company expects to receive in exchange for product transferred. Revenue is recognized when contractual performance obligations have been satisfied and control of the product has been transferred to the customer. In most cases, the Company has a single product delivery performance obligation. Accrued product returns are estimated based on historical data and evaluation of current information.

Accounts receivable are recorded at the amount the Company expects to collect, net of the allowance for doubtful accounts ~~which represents~~receivable. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit ~~losses.~~losses based on customer past payment history, product usage activity, and recent communications with the customer. Individual customer balances which are over 90 days past due are reviewed individually for collectability and written-off when recovery is not probable. Allowance for doubtful accounts was ~~$70,000~~$25,000 as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

~~For~~One customer accounted for 26% and 31% of total revenues in the ~~quarters~~quarter and six months ended ~~September~~June 30, ~~2020 and 2019, three~~2021, respectively. Three customers accounted for ~~47% of total revenues and one customer accounted for 19% of total revenues, respectively. For the nine months ended September 30, 2020 and 2019, two customers accounted for 34%~~42% and one customer accounted for 20% of total revenues in the quarter and six months ended June 30, 2020, respectively. ~~Three~~Two customers accounted for ~~54%~~25% and two customers accounted for ~~42%~~50% of accounts receivable as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

~~Collaboration Income~~

Collaboration Income is recognized within Other Income when contractual performance obligations, outside the ordinary activities of the Company, have been satisfied and control has been transferred to a collaboration partner. Collaboration Income for each performance obligation is based on the fair value of such performance obligation relative to the total fair value of all performance obligations multiplied by the overall transaction price. A deferred collaboration income liability is recorded when payments are received prior to satisfaction of performance obligations. A collaboration receivable is recorded when amounts are owed to the Company under the collaboration agreements and related support services. The Company recognized Collaboration income net of costs, within Other income in the Statement of Operations of zero and $7,116,667, for the nine months ended September 30, 2020 and 2019, respectively.

Stock-based Compensation

Total compensation cost related to non-vested awards not yet recognized at ~~September~~June 30, ~~2020~~2021 was ~~$136,569.~~$302,249. The total compensation costs are expected to be recognized over a weighted-average period of ~~0.3~~1.1 years.

Liquidity

Our principal source of liquidity is cash and cash equivalents of $8.4 million at June 30, 2021. In addition to our cash resources, funding for our operations largely depends on revenues from the sale of our commercial products. A low level of market interest in our products, a decline in our consumables sales, unanticipated increases in our operating costs, and the effects of the COVID-19 pandemic could have an adverse effect on our liquidity and cash.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual results could differ from those estimates.

2. Comprehensive Loss


2.	~~Comprehensive Income (Loss)~~

For the quarters and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the Company had no0 components of other comprehensive ~~income (loss)~~loss other than net ~~income (loss)~~loss itself.


3.	~~Net Loss Per Common Share~~

3. Net Loss Per Common Share

Basic and dilutive net ~~income (loss)~~loss per common share were as follows:


	Quarters Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net loss applicable to common stockholders	$	(531,584)	$	(851,944)	$	(591,367)	$	(1,509,315)



Weighted average number of common shares outstanding, basic and dilutive	4,155,948		3,014,523		3,977,028		2,235,874

Net loss per common share applicable to common stockholders, basic and diluted	$	(0.13)	$	(0.28)	$	(0.15)	$	(0.68)

Quarters Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Net loss applicable to common stockholders $ (257,113 ) $ (1,404,600 ) $ (1,766,428 ) $ (2,716,284 )

Weighted average number of common shares outstanding, basic 3,784,657
978,175
2,755,903
886,609
Dilutive convertible preferred stock —
—
—
—
Weighted average number of common shares outstanding, dilutive 3,784,657
978,175
2,755,903
886,609

Net loss per common share applicable to common stockholders, basic and diluted $ (0.07 ) $ (1.44 ) $ (0.64 ) $ (3.06 )

Shares underlying the following potentially dilutive weighted average number of common stock equivalents were excluded from the calculation of diluted net loss per common share because their effect was anti-dilutive for each of the periods presented:


	Quarters Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Options	439,410	163,481	404,156	163,774
Warrants	0	27,287	0	34,686
Convertible preferred stock	62	62	62	62
Total	439,472	190,830	404,218	198,522

Quarters Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Options 162,373
40,396
163,303
45,777
Warrants —
44,221
23,040
45,359
Convertible preferred stock 62
420,395
62
510,830
Total 162,435
505,012
186,405
601,966


4.	~~Inventories~~

4. Inventories

Inventories consist of the following:


	June 30, 2021		December 31, 2020
Purchased components	$	755,578	$	716,848

Finished goods	273,576		334,434
	$	1,029,154	$	1,051,282

5. Accrued Expenses and Compensation

September 30, 2020 December 31, 2019
Purchased components $ 690,643
$ 720,209
Finished goods 359,650
443,505
$ 1,050,293
$ 1,163,714


5.	~~Accrued Expenses and Compensation~~

Accrued expenses and compensation consist of the following:


	June 30, 2021		December 31, 2020
Professional services	$	173,000	$	343,000
Compensation	354,422		49,837
Advertising and promotion	1,000		31,000
Warranty	37,600		49,600
Technology fees	0		450,000
Leasehold	60,000		0
Sales tax	127,775		24,493
Other	36,630		50,512

	$	790,427	$	998,442

September 30, 2020 December 31, 2019
Technology fees $ 450,000
$ 450,000
Professional services 291,000
454,000
Compensation 109,896
62,322
Advertising and promotion 6,000
68,000
Warranty 62,200
75,300
Other 92,132
333,952
$ 1,011,228
$ 1,443,574


6.	~~Leases~~

6. Operating Leases

The Company's lease on its Woburn, Massachusetts corporate office and manufacturing facilities (the “Woburn Lease”) extends through September 2025 with a monthly base rent of $13,846 and a 5-year extension option. The Company's lease on its former corporate office in Waltham, Massachusetts ~~facilities, now inactive and offered for sublet,~~(the "Waltham Lease") extends through February 2022 with an average monthly base rent of $41,074 and a 5-year extension option. ~~At September 30, 2020, an impairment reserve~~A letter of ~~$400,000 reduced~~credit in the ~~right~~amount of ~~use~~$226,731, secured by the Company's cash balances, was issued by a bank in favor on the Waltham Lease landlord. While the Company continues to actively seek a sublet for the Waltham Lease under difficult market conditions, the Company has written off the value of its right-to-use asset ~~for~~in the Waltham ~~idle facility costs.~~facility. The impairment ~~reserve was increased during the nine months ended September 30, 2020 by a charge of $280,000~~charges recorded within the Company's Statement of Operations ~~as follows: $98,000 within research~~for the quarters ended June 30, 2021 and ~~development, $56,000 within sales~~2020 were 0 and ~~marketing,~~$117,000, respectively and ~~$126,000 within general~~$126,748 and ~~administrative.~~$204,000 for the six months ended June 30, 2021 and 2020, respectively.

Future minimum lease payments under non-cancellable operating leases as of ~~September~~June 30, ~~2020~~2021 are as follows:




2021	$	327,580
2022	247,347
2023	165,785
2024	165,785
2025	117,431
Total minimum lease payments	$	1,023,928

Weighted-average discount rate, 14.7%	$	215,351
Lease obligation, current portion	457,682
Lease obligation, net of current portion	350,895
	$	1,023,928

2020 160,797
2021 653,164
2022 247,347
2023 165,785
2024 165,785
2025 117,431
Total minimum lease payments $ 1,510,309

Weighted-average discount rate, 14.7% $ 331,627
Lease obligation, current portion 596,779
Lease obligation, net of current portion 581,903
$ 1,510,309

Total recorded rent expense was ~~$166,905~~$57,453 and ~~$166,025,~~$166,905, for the quarters ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Total recorded rent expense was ~~$500,713~~$224,357 and ~~$498,073,~~$333,809, for the ~~nine~~six months ended ~~September 30,~~June 30. 2021 and 2020, ~~and 2019,~~ respectively. The Company records rent expense on its facility leases on a straight-line basis over the lease term. Weighted average remaining operating lease term was ~~3.1~~2.9 years as of ~~September~~June 30, ~~2020.~~2021.


7.	~~Business Restructuring~~

In the second quarter of 2019, the Company was restructured to reduce operating costs and improve efficiency. Operations were consolidated in a single location, headcount was reduced, and excess inventory was written down to net realizable value. Total 2019 restructuring charges were $2.5 million. During 2020 revised estimates of idle facility costs at the Company's Waltham location resulted in impairment charges in the quarter and nine months ended September 30, 2020 of $76,000 and $280,000, respectively. The impairment reserve against the right to use asset was $400,000 at September 30, 2020.

7. Fair Value Measurements

~~The obligations relating to the business restructuring outstanding as of September 30, 2020 are presented below.~~

September 30, 2020
Severance obligations:
Provision $ 224,773
Amounts paid out (224,773 )
Total —
Relocation costs:
Provision 100,000
Amounts paid out (100,000 )
Total —
Impairment charge for idle facility 680,000
Amounts paid out (280,000 )
Total 400,000

Balance - September 30, 2020 $ 400,000


8.	~~Fair Value Measurements~~

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis for the periods presented and indicates the fair value hierarchy of the valuation techniques it utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates, and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. All Company assets and liabilities measured at fair value utilize Level 1 inputs.


			Fair Value Measurements at September 30, 2020 Using									Fair Value Measurements at June 30, 2021 Using
	September 30, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			June 30, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:									Assets:
Cash equivalents	$	2,159,475	$	2,159,475	$	—	$	—	Cash equivalents	$	5,463,532	$	5,463,532	$	0	$	0
Total	$	2,159,475	$	2,159,475	$	—	$	—	Total	$	5,463,532	$	5,463,532	$	0	$	0

Fair Value Measurements at December 31, 2019 Using
December 31, 2019 Quoted Prices in
Active Markets
for Identical
Assets (Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets:

Cash equivalents $ 698,807
$ 698,807
$ —
$ —
Total $ 698,807
$ 698,807
$ —
$ —


9.	~~Credit Facility and Debt~~


			Fair Value Measurements at December 31, 2020 Using
	December 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	2,374,216	$	2,374,216	$	0	$	0
Total	$	2,374,216	$	2,374,216	$	0	$	0

~~The Company's Loan and Security Agreement (the “Credit Facility”) with a bank expired April~~

As of June 30, 2020 and was not renewed. The Credit Facility had previously supported letters of credit in the amount of $226,731 issued in favor of the Company's landlords. These letters of credit remain outstanding and are secured by2021, the Company's cash ~~balances.~~equivalents consisted of money market accounts.

~~In April 2020 the Company received a loan of $773,200 under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act and fully repaid the loan in May 2020.~~

8. Stockholders’ Equity


~~10.~~	~~Stockholders’ Equity~~

Preferred stock and convertible preferred stock consist of the following:

September 30, 2020 December 31, 2019
Preferred stock, $0.001 par value; 5,000,000 shares authorized at September 30, 2020 and December 31, 2019; no shares issued and outstanding at September 30, 2020 and December 31, 2019 $ —
$ —
Series B convertible preferred stock, $0.001 par value; 147,000 shares designated at September 30, 2020 and December 31, 2019; 200 shares issued and outstanding at September 30, 2020 and December 31, 2019 $ 1
$ 1
Series D convertible preferred stock, $0.001 par value; 21,300 shares designated at September 30, 2020 and December 31, 2019; no shares issued and outstanding at September 30, 2020 and December 31, 2019 $ —
$ —
Series E convertible preferred stock, $0.001 par value; 7,000 shares designated at September 30, 2020 and December 31, 2019; no shares issued and outstanding at September 30, 2020 and December 31, 2019 $ —
$ —
Series F convertible preferred stock, $0.001 par value; 10,621 shares designated at September 30, 2020 and December 31, 2019; no shares issued and outstanding at September 30, 2020 and December 31, 2019 $ —
$ —


	June 30, 2021		December 31, 2020
Preferred stock, $0.001 par value; 5,000,000 shares authorized at June 30, 2021 and December 31, 2020; 0 shares issued and outstanding at June 30, 2021 and December 31, 2020	$	0	$	0
Series B convertible preferred stock, $0.001 par value; 147,000 shares designated at June 30, 2021 and December 31, 2020; 200 shares issued and outstanding at June 30, 2021 and December 31, 2020	$	1	$	1

~~2020~~2021 equity activity

In ~~February 2020,~~January 2021, the Company entered into an At Market Issuance Sales Agreement (the "Agreement") with respect to an at-the-market offering program ("ATM program"), under which the Company may offer and sell, from time to time at its sole discretion,issued 2,408 shares of ~~its~~fully vested common stock, par value $0.0001 per share ~~(the "Common Stock"~~("common stock"), ~~having an aggregate offering price~~with a value of ~~up to $4,482,000 (the "Placement Shares"). The issuance and sale of the Placement Shares by the Company under the Agreement will be made~~$4,197 pursuant to the Company's ~~effective~~2010 Employee Stock Purchase Plan.

In May 2021, the Company issued 42,808 shares of restricted common stock with a value of $125,000 under its 2004 Stock Option Plan. As of June 30, 2021, 13,911 were vested, 7,493 were forfeited in lieu of paying withholding taxes on the vesting of the restricted stock and 21,404 remain restricted.

In June 2021, the Company issued 7,055 shares of fully vested common stock with a value of $18,950 pursuant to the Company's 2010 Employee Stock Purchase Plan.

During the six months ended June 30, 2021, the Company issued 1,207,681 shares of its common stock, under an at-the-market offering program ("ATM Agreement") for net proceeds of $3,766,848. The ATM Agreement was entered into in 2020 and permits the sale and issuance of the Company's common stock subject to regulatory limitations imposed by the Securities and Exchange Commission and pursuant to a "shelf" registration statement on Form S-3. ~~During the nine months ended September 30,~~

2020 ~~2,348,619 shares of common stock were issued pursuant to the Agreement for net proceeds of $4,143,431.~~equity activity

In March 2020, the Company issued 31,000 shares of fully vested common stock with a value of $43,751 pursuant to a Separation Agreement between the Company and an employee. The shares issued reflected the $1.41 closing price of the Company's common stock as reported on the Nasdaq Capital Market on March 11, 2020.

In June 2020, the Company issued 4,364 shares of fully vested common stock with a value of $7,606 pursuant to the Company's 2010 Employee Stock Purchase Plan.

~~2019 equity activity~~

During the ~~nine~~six months ended ~~September~~June 30, ~~2019, 2,998.2~~2020, 2,348,619 shares of common stock were issued pursuant to the ~~Company's Series D Preferred Stock were converted~~ATM Agreement for net proceeds of $4,143,431.

9. Termination Agreement

On June 30, 2021, the Company entered into a ~~total of 114,000 shares of Common Stock~~Termination Agreement with GSK Consumer Healthcare S.A. ("GSK") pursuant to which the parties terminated the 2018 Development and ~~3,260.70 shares~~Services Agreement which provided GSK with license and intellectual property rights for the commercialization of the ~~Company's Series E Preferred Stock were converted into a total of 123,981 shares of Common Stock.~~


~~11.~~	~~Reverse Stock Split~~

~~On November 18, 2019,~~Quell technology for markets outside the ~~Company effected a 1-for-10 reverse stock split of its Common Stock, or the Reverse Stock Split. The par value and other~~United States. Under terms of the Termination Agreement, GSK transferred back to NeuroMetrix all of GSK's rights in the Quell technology related to markets outside the United States, including technology improvements and intellectual property. NeuroMetrix agreed to make royalty payments to GSK ranging between 5% and 8% for a ten-year period based on net sales of Quell devices that are available to consumers for purchase without a prescription from a licensed medical professional outside the United States.

10. Subsequent Event

From July 1, 2021 to July 20, 2021, the Company issued 582,709 shares of common stock were not affected by the Reverse Stock Split. Share, per share, and stock option amounts for all periods presented within the financial statements contained in the Quarterly Report on Form 10-Q, including the December 31, 2019 Balance Sheet amounts for Common Stock and additional paid-in capital, have been retroactively adjusted to reflect the Reverse Stock Split.under its ATM program. Net proceeds from this activity was $2,239,607.

~~12. Commitments and Contingencies~~

The previously reported investigation by the Federal Trade Commission (the “Commission”) regarding Quell® advertising was settled in March 2020. The Company did not admit to any of the Commission's allegations, agreed to certain modifications of Quell advertising claims, and pledged to pay to the Commission future commercial milestone payments, if and when received, pursuant to a collaboration agreement with a third party.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with our financial statements and the accompanying notes to those financial statements included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. For a description of factors that may cause our actual results to differ materially from those anticipated in these forward-looking statements, please refer to the below section of this Quarterly Report on Form 10-Q titled “Cautionary Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references to “we”, “us”, the “Company”, or “NeuroMetrix” in this Quarterly Report on Form 10-Q refer to NeuroMetrix, Inc.

Overview

NeuroMetrix develops and commercializes health care products that utilize non-invasive ~~neurostimulation and digital medicine.~~neurostimulation. Our core expertise in biomedical engineering has been refined over two decades of designing, building and marketing medical devices that stimulate nerves and analyze nerve response for diagnostic and therapeutic purposes. We created the market for point-of-care nerve testing and were first to market with sophisticated wearable technology for symptomatic relief of chronic pain. Our business is fully integrated with in-house capabilities spanning research and development, manufacturing, regulatory affairs and compliance, sales and marketing, product fulfillment and customer support. We derive revenues from the sale of medical devices and after-market consumable products and accessories. Our products are sold in the United States and select overseas markets. They are cleared by the U.S. Food and Drug Administration (FDA) and regulators in foreign jurisdictions where appropriate. We have two principal product ~~lines:~~categories:

•Point-of-care neuropathy diagnostic tests

•Wearable neurostimulation devices

Peripheral neuropathies, also called polyneuropathies, are diseases of the peripheral nerves. They affect about 10% of adults in the United States, with the prevalence rising to 25-50% among individuals 65 years and older. Peripheral neuropathies are associated with loss of sensation, pain, increased risk of falling, weakness, and other complications. People with peripheral neuropathies generally have a diminished quality of life, poor overall health and higher mortality. The most common specific cause of peripheral neuropathies, accounting for about one-third of cases, is diabetes. Diabetes is a worldwide epidemic with an estimated affected population of over 400 million people. Within the United States there are over 30 million people with diabetes and another 80 million people with pre-diabetes. The annual direct cost of treating diabetes in the United States exceeds $100 billion. Although there are dangerous acute manifestations of diabetes, the primary burden of the disease is in its long-term complications, which include cardiovascular disease, nerve disease and resulting conditions such as foot ulcers which may require amputation, eye disease leading to blindness, and kidney failure. The most common long-term complication of diabetes, affecting over 50% of the diabetic population, is ~~nerve disease or~~peripheral neuropathy. Diabetic peripheral neuropathy (DPN) is the primary trigger for diabetic foot ulcers, which may progress to the point of requiring amputation. People with diabetes have a 15-25% lifetime risk of foot ulcers and approximately 15% of foot ulcers lead to amputation. Foot ulcers are the most expensive complication of diabetes with a typical cost of $5,000 to $50,000 per episode. In addition, between 16% and 26% of people with diabetes suffer from chronic pain in the feet and lower legs.

Early detection of peripheral neuropathies, such as DPN, is important because there are no treatment options once the nerves have degenerated. Today’s diagnostic methods for ~~DPN~~peripheral neuropathies range from a simple monofilament test for lack of sensory perception in the feet to a nerve conduction study performed by a specialist. Our DPNCheck nerve conduction technology provides a rapid, low cost, quantitative test for peripheral ~~nerve disease,~~neuropathies, including DPN. It addresses an important medical need and is particularly effective in screening large populations. DPNCheck has been validated in numerous clinical studies. We are investing R&D resources in the next generation technology to enhance the user experience, improve manufacturing, and restrict the potential use of non-compliant biosensors. Release of the new DPNCheck, forecast for the second half of 2021, may also provide the opportunity for customer upgrades and expansion of product margins.

Chronic pain is a significant public health problem. It is defined by the National Institutes of Health (NIH) as pain lasting more than 12 weeks. This contrasts with acute pain which is a normal bodily response to injury or trauma. Chronic pain conditions include low back pain, arthritis, fibromyalgia, neuropathic pain, cancer pain and many others. Chronic pain may be triggered by an injury or there may be an ongoing cause such as disease or illness. There may also be no clear cause. ~~Pain signals continue to be transmitted in the nervous system over extended periods of time often leading~~Chronic pain can also lead to other health problems.

These can include fatigue, sleep disturbance ~~decreased appetite,~~ and mood changes which cause difficulty in carrying out important activities and ~~can~~may contribute to disability and despair. In general, chronic pain cannot be cured. Treatment of chronic pain is focused on reducing pain and improving function. The goal is effective pain management.

Chronic pain affects ~~over~~nearly 100 million adults in the United States and more than 1.5 billion people worldwide. The estimated incremental impact of chronic pain on health care costs in the United States is over $250 billion per year and lost productivity is estimated to exceed $300 billion per year. The most common approach to chronic pain management is pain medication. This includes over-the-counter (OTC) internal and external analgesics as well as prescription pain medications, both non-opioid and ~~opioid.~~opioids. The approach to treatment is individualized, drug combinations may be employed, and the results are often inadequate. Side effects, including the potential for addiction are substantial. Increasingly, restrictions are being imposed on access to prescription opioids. Reflecting the complexity of chronic pain and the difficulty in treating it, we believe that inadequate relief leads 25% to 50% of pain sufferers to seek alternatives to prescription pain medications. These alternatives include nutraceuticals, acupuncture, chiropractic care, non-prescription analgesics, electrical stimulators, braces, sleeves, pads and other items. In total these pain relief products and services account for approximately $20 billion in annual out-of-pocket spending in the United States.

Nerve stimulation is a long-established category of treatment for chronic pain. This treatment approach is available through implantable ~~spinal cord~~devices which have both surgical and ongoing risks, such as migration of the implanted nerve stimulation ~~requiring surgery with its attendant risks.~~leads. Non-invasive approaches involving transcutaneous electrical nerve stimulation (TENS) have achieved limited efficacy in practice due to ~~device~~power limitations, ineffective dosing and low patient adherence. We believe that our Quell wearable technology for chronic pain is designed to address many of the limitations of traditional TENS.

Quell is our wearable TENS device for knee, foot and leg pain that is available over-the-counter and is sold primarily via our e-commerce platform, www.QuellRelief.com. It can be used during the day while active and at night while sleeping. Users can personalize and manage therapy discreetly via the mobile app for iPhone and Android smartphones. Quell is also a pain management solution with pain, activity, and gait tracking. It is covered by 15 U.S. patents and is currently employed in two clinical studies funded by the National Institutes of Health (NIH) addressing fibromyalgia and chemotherapy induced peripheral neuropathy (CIPN). Over the past year we restructured the Quell commercial model to achieve a positive net operating contribution after direct costs. As we gain confidence with our core commercial model and demonstrate our capability to promote Quell in a cost-efficient manner, our focus will shift to expanding the Quell user group. This may involve disease-specific application of this technology in areas related to our current clinical study program.

Both DPNCheck and Quell are sophisticated neurotechnology products that are unique in their markets. Our goal for both products is the same: to optimize market positioning and financial performance for the benefit of our shareholders. We also continue to supply consumables for ADVANCE, our legacy nerve conduction testing system.

Results of Operations

Comparison of Quarters Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

Revenues

Quarters Ended September 30,
2020 2019 Change % Change
(in thousands)
Revenues $ 2,036.2
$ 2,088.0
$ (51.8 ) (2.5 )%


	Quarters Ended June 30,
	2021		2020		Change		% Change
	(in thousands)



Revenues	$	2,213.5	$	1,360.0	$	853.5	62.8	%

Revenues include sales of ~~Quell, DPNCheck~~our wearable technologies for chronic pain and ~~ADVANCE~~our nerve conduction technologies to physician offices, clinics, hospitals, other healthcare providers and insurers, as well as domestic and international distributors. Revenues comprise sales of medical devices as well as aftermarket electrodes and other supplies. Revenues were ~~$2.0~~approximately $2.2 million during the ~~third quarters~~second quarter of 2021 compared with $1.4 million during the second quarter of 2020 ~~and 2019. Revenues during the quarter ending September 30, 2020 were~~which was adversely affected by the economic effects of the COVID-19 pandemic. A recovery trend in customer orders and shipment volume was observed beginning late in the second quarter which continued during the third quarter of 2020. This trend particularly benefited DPNCheck sales into U.S. Medicare Advantage accounts.

Cost of Revenues and Gross Profit


	Quarters Ended September 30,										Quarters Ended June 30,
	2020		2019		Change			% Change			2021		2020		Change		% Change
	(in thousands)										(in thousands)
Cost of revenues	$	537.6	$	914.3	$	(376.7	)	(41.2	)%	Cost of revenues	$	558.2	$	495.1	$	63.1	12.7	%

Gross profit	$	1,498.6	$	1,173.7	$	324.9		27.7	%	Gross profit	$	1,655.3	$	864.9	$	790.4	91.4	%

Gross margin was ~~73.6%~~74.8% in the ~~third~~second quarter of ~~2020~~2021 versus ~~56.2%~~63.6% in the same period in the prior year. The margin improvement in ~~2020~~2021 was due to ~~improved profitability of Quell sales and~~ increased weighting of ~~DPNCheck~~our nerve conduction testing technologies within total revenue.

Operating Expenses


	Quarters Ended September 30										Quarters Ended June 30,
	2020		2019		Change			% Change			2021		2020		Change		% Change
	(in thousands)										(in thousands)
Operating expenses:										Operating expenses:
Research and development	$	652.7	$	475.1	$	177.6		37.4	%	Research and development	$	641.5	$	660.3	$	(18.8)	(2.8)	%
Sales and marketing	340.9		647.7		(306.8		)	(47.4	)%	Sales and marketing	269.5		379.1		(109.6)		(28.9)	%
General and administrative	762.9		1,462.9		(700.0		)	(47.9	)%	General and administrative	1,276.2		678.5		597.7		88.1	%
Total operating expenses	$	1,756.5	$	2,585.7	$	(829.2	)	(32.1	)%	Total operating expenses	$	2,187.2	$	1,717.9	$	469.3	27.3	%

Research and Development

Research and development expense in the ~~third~~second quarter of ~~2020 increased~~2021 decreased by ~~37.4%~~2.8% from the same period in the prior year due to ~~increased spending~~a decrease of ~~$144,000 on consulting~~$35,000 in personnel costs and ~~$74,000 on~~a decrease of $64,000 in consulting and professional services offset by an increase of $86,000 in clinical ~~costs~~ and ~~fees. Personnel related costs decreased by $28,000 and facility and supply costs decreased by $10,000.~~development costs.

Sales and marketing expense in the ~~third~~second quarter of ~~2020~~2021 decreased by 47.4% from the same period in the prior year due to a $141,000 reduction in advertising spending and a $26,000 reduction in consulting spending. In addition, personnel related costs decreased by $130,000 and facility and supply costs decreased by $10,000.

~~General and Administrative~~

~~General and administrative expense in the third quarter of 2020 decreased by 47.9%~~28.9% from the same period in the prior year due to a reduction of ~~$85,000~~$61,000 in ~~personnel related~~advertising spending and $40,000 in consulting costs.

General and Administrative

General and administrative expense in the second quarter of 2021 increased by 88.1% from the same period in the prior year due to an increase of $56,000 in consulting costs, ~~a reduction~~an increase of ~~$393,000~~$105,000 in outside professional service costs, ~~primarily legal, a decrease of $165,000~~$110,000 in ~~consulting spending~~sales tax and fee related costs and a ~~reduction of facility and supply~~$335,000 increase in non-cash personnel costs ~~of $57,000.~~relating to executive officers who took significant compensation reductions in the prior year.


	Quarters Ended June 30,
	2021		2020		Change		% Change
	(in thousands)



Other income	$	0.4	$	1.1	$	(0.7)	(63.6)	%

Quarters Ended September 30,
2020 2019 Change % Change
(in thousands)

Other income $ 0.8
$ 7.5
$ (6.7 ) (89.3 )%

Other income primarily includes interest income.

Comparison of ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

Nine Months Ended September 30,
2020 2019 Change % Change
(in thousands)
Revenues $ 5,568.2
$ 7,565.6
$ (1,997.4 ) (26.4 )%


	Six Months Ended June 30,
	2021		2020		Change		% Change
	(in thousands)



Revenues	$	4,369.0	$	3,532.0	$	837.0	23.7	%

Revenues include sales of ~~Quell, DPNCheck~~our wearable technologies for chronic pain and ~~ADVANCE~~our nerve conduction technologies to physician offices, clinics, hospitals, other healthcare providers and insurers, as well as domestic and international distributors. Revenues comprise sales of medical devices as well as aftermarket electrodes and other supplies. Revenues ~~were $5.6 million and $7.6 million during~~in the ~~nine~~six months ended ~~September~~June 30, 2021 were approximately $837,000 higher than the six months ended June 30, 2020, ~~and 2019, respectively. Revenues during the nine month period ended September 30, 2020 were~~which was adversely affected by the economic effects of the COVID-19 pandemic. A recovery trend in customer orders and shipment volume was observed beginning late in the second quarter which continued during the third quarter of 2020. This trend particularly benefited DPNCheck sales in U.S. Medicare Advantage accounts.

Cost of Revenues and Gross Profit

~~Our gross profit~~Gross margin was ~~70.3%~~74.0% in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 versus ~~15.6%~~68.4% in the same period in the prior year. The ~~unusually low gross margin in 2019 reflected an inventory charge of $2.6 million as part of restructuring the Quell business. Excluding this charge, the gross margin rate in 2019 was 50.0%. The~~ margin improvement in ~~2020~~2021 was due to ~~improved profitability of Quell sales and higher~~increased weighting of ~~DPNCheck business~~our nerve conduction testing technologies within total revenue.

Research and Development

Research and development expense in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 decreased by ~~21.9%~~26.7% from the same period in the prior year due to ~~reduced personnel related costs~~the reversal of ~~$676,000,~~ a ~~reduction~~$450,000 technology fee accrual in ~~professional fees~~the first quarter of ~~$105,000 and a decrease~~2021 offset by an increase of ~~facility and supply costs of $105,000. The reductions were offset with increased~~$50,000 in consulting and professional costs and $84,000 in clinical ~~spending of $378,000.~~and development costs.

Sales and marketing expense in the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 decreased by ~~71.7%~~17.4% from the same period in the prior year ~~reflecting~~due to a $236,000 reduction in personnel spending offset by an increase in advertising ~~and promotion~~ spending of ~~$1.4 million. In addition, consulting costs decreased by $751,000, personnel related costs decreased by $621,000 and facility and supply costs decreased by $130,000.~~$116,000.

General and Administrative

General and administrative expense in the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased~~2021 increased by ~~42.0%~~18.6% from the same period in the prior year due to a reduction of ~~$156,000~~$62,000 in ~~personnel related~~consulting costs and a reduction of ~~$1.5 million~~$50,000 in outside professional service costs. This was offset by a $372,000 increase in non-cash personnel costs ~~primarily legal,~~relating to executive officers who took significant compensation reductions in the prior year and ~~a decrease~~by $95,000 in ~~facility~~sales tax and ~~supply costs of $462,000. The reductions were partially offset with increased insurance costs of $238,000.~~fee related costs.

~~Collaboration income~~

Nine Months Ended September 30,
2020 2019 Change % Change
(in thousands)

Collaboration income $ —
$ 7,116.7
$ (7,116.7 ) (100.0 )%

Collaboration income in 2019 included development milestones funded by GlaxoSmithKline (GSK) under a Quell collaboration agreement. Total development milestones received under the GSK collaboration since initiation in early 2018 were approximately $20.5 million.


	Six Months Ended June 30,
	2021		2020		Change		% Change
	(in thousands)



Other income	$	0.8	$	1.5	$	(0.8)	(51.6)	%

Nine Months Ended September 30,
2020 2019 Change % Change
(in thousands)

Other income $ 2.3
$ 42.8
$ (40.5 ) (94.6 )%

Other income primarily includes interest income.

Liquidity and Capital Resources

Our principal source of liquidity is cash and cash equivalents of ~~$4.9~~$8.4 million at ~~September~~June 30, ~~2020. Funding~~2021. In addition to our cash resources, funding for our operations largely depends on revenues from the sale of our commercial products. A low level of market interest in our products, a decline in our consumables sales, unanticipated increases in our operating costs, and the ~~adverse~~ effects of the COVID-19 pandemic could have an adverse effect on our liquidity and cash.

September 30, 2020 December 31, 2019 Change % Change
(in thousands)

Cash and cash equivalents $ 4,929.2
$ 3,126.2
$ 1,803
57.7 %


	June 30, 2021		December 31, 2020		Change		% Change
	(in thousands)

Cash and cash equivalents	$	8,364.2	$	5,226.2	$	3,138.0	60.0	%

During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, our cash and cash equivalents increased by ~~$1.8 million~~$3,138.0 thousand reflecting ~~net proceeds of $4.1 million from common stock sales under our ATM program partially offset by $2.3 million~~$568.7 thousand in cash used in operating activities and $83.3 thousand in cash used in investing activities, offset by $3,785.0 thousand in cash provided by financing activities.


	Quarters Ended June 30,		Year Ended December 31,
	2021	2020	2020

Days sales outstanding (days)	19	26	15
Inventory turnover rate (times per year)	2.2	1.7	1.9

Quarters Ended September 30, Year Ended
December 31,
2020 2019 2019

Days sales outstanding (days) 23 27 27
Inventory turnover rate (times per year) 1.9 2.3 3.5

Days sales outstanding (DSO) reflect customer payment terms which vary from payment on order to 60 days from invoice date. DSO ~~improved~~decreased to 2319 days during the quarter ended ~~September~~June 30, ~~2020 versus 27~~2021 compared to 26 days in the prior year period. This was primarily attributable to ~~improved collection rates on receivables with payment terms.~~the timing of sales within the respective quarters.

The inventory turnover rate ~~decelerated~~increased to ~~1.9~~2.2 turns in the ~~third~~second quarter of ~~2020 versus 2.3~~2021 compared to 1.7 turns in the prior year period. ~~This reflected lower~~The increase was due to higher sales in the second quarter of 2021 on approximately constant inventory ~~levels in the comparable periods.~~

Nine Months Ended September 30,
2020 2019
(in thousands)
Net cash used in operating activities (excluding collaboration income) $ (2,348.1 ) $ (6,582.4 )
Net cash provided by collaboration income —
4,760.1
Net cash used in operating activities (2,348.1 ) (3,560.1 )
Net cash used in investing activities —
(41.2 )
Net cash provided by financing activities 4,151.0
7.5
Net cash (used) provided $ 1,802.9
$ (3,593.8 )

~~During the nine months ended September 30, 2020, our operating activities consumed $2.3 million of cash offset by $4.1 million in net proceeds from sales of common stock.~~


	Six Months Ended June 30,
	2021		2020
	(in thousands)


Net cash used in operating activities	$	(568.7)	$	(1,831.8)
Net cash used in investing activities	(83.3)		(10.5)
Net cash provided by financing activities	3,790.0		4,151.0
Net cash provided	$	3,138.0	$	2,308.7

We have reported recurring losses from operations and negative cash flows from operating activities. These factors raise substantial doubt about our ability to continue as a going concern for the one-year period from the date of issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. We held cash and cash equivalents of $4.9 million as of September 30, 2020. We believe that these resources and the cash to be generated from future product sales will be sufficient to meet our projected operating requirements into the fourth quarter of 2021. Accordingly, we may need to raise additional funds to support our operating and capital needs in the fourth quarter of 2021 and beyond.

We continue to face challenges and uncertainties. Among these uncertainties is the future effect on the Company's business of the COVID-19 pandemic which, from late in the first quarter of 2020 through the third quarter of 2020, depressed sales of the Company's products. As a result, our available capital resources may be consumed more rapidly than currently expected due to (a) decreases in sales of our products, including decreases in customer orders related to the COVID-19 pandemic, and the uncertainty of future revenues from new products; (b) the effect of the COVID-19 pandemic on our ability to obtain parts and materials from our suppliers while continuing to staff critical production and fulfillment functions, (c) changes we may make to the business that affect ongoing operating expenses; (d) changes we may make in our business strategy; (e) regulatory developments affecting our existing products; (f) changes we may make in our research and development spending plans; and (g) other items affecting our forecasted level of expenditures and use of cash resources. We may attempt to obtain additional funding through public or private financing, collaborative arrangements with strategic partners, or through additional credit lines or other debt financing sources. However, we may not be able to secure such funding in a timely manner or on favorable terms, if at all.

~~We maintain a~~an effective shelf registration statement on Form S-3 on file with the SEC covering the sales of shares of our common stock and other ~~securities for sale, giving~~securities. This shelf registration statement gives us the opportunity to raise funding when needed or otherwise considered appropriate at prices and on terms to be determined at the time of any such offerings. Pursuant to the instructions to Form S-3, we have the ability to sell shares under the shelf registration statement, during any 12-month period, in an amount less than or equal to one-third of the aggregate market value of our common stock held by non-affiliates. If we raise additional funds by issuing equity or debt securities, either through the sale of securities pursuant to a registration statement or by other means, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. If we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our potential products or proprietary technologies, or grant licenses on terms that are not favorable to us. Without additional funds, we may be forced to delay, scale back or eliminate some of our sales and marketing efforts, research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue our operations. If any of these events occurs, our ability to achieve our development and commercialization goals would be adversely affected.

~~Off-Balance Sheet Arrangements, Contractual Obligation and Contingent Liabilities and Commitments~~

~~As of September 30, 2020, we did not have any off-balance sheet financing arrangements.~~

~~Recent Accounting Pronouncements~~

~~In February 2016, the FASB issued Accounting Standards Update No. 2016-02,~~ ~~Leases (Topic 842)~~ (“ASU 2016-02”). ASU 2016-02 required that lessees recognize virtually all of their leases on the balance sheet, by recording a right-of-use asset and lease liability. We adopted ASU 2016-02, using the modified retrospective method, upon its effective date of January 1, 2019. The impact of adoption was an increase to long-term assets and total liabilities of approximately $1.9 million as of January 1, 2019.

Cautionary Note Regarding Forward-Looking Statements

The statements contained in this Quarterly Report on Form 10-Q, including under the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this Quarterly Report, include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, including, without limitation, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future, such as our estimates regarding anticipated operating losses, future revenues and projected expenses, the effect of the COVID-19 pandemic on our operating capabilities, our future liquidity and our expectations regarding our needs for and ability to raise additional capital; our ability to manage our expenses effectively and raise the funds needed to continue our business; our belief that there are unmet needs for the management of chronic pain and in the diagnosis and treatment of diabetic neuropathy; our expectations surrounding ~~Quell~~our commercialized neurostimulation and ~~DPNCheck;~~neuropathy diagnostic products; our expected timing and our plans to develop and commercialize our products; our ability to meet our proposed timelines for the commercial availability of our products; our ability to obtain and maintain regulatory approval of our existing products and any future products we may develop; regulatory and legislative developments in the United States and foreign countries; the performance of our third-party manufacturers; our ability to obtain and maintain intellectual property protection for our products; the successful development of our sales and marketing capabilities; the size and growth of the potential markets for our products and our ability to serve those markets; our estimate of our customer returns of our products; the rate and degree of market acceptance of any future products; our reliance on key scientific management or personnel; the payment and reimbursement methods used by private or government third party payers; and other factors discussed elsewhere in this Quarterly Report on Form 10-Q. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this quarterly report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the section titled “Risk Factors” in our Annual Report on Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We do not use derivative financial instruments in our investment portfolio and have no foreign exchange contracts. Our financial instruments consist of cash and cash equivalents. We consider investments that, when purchased, have a remaining maturity of 90 days or less to be cash equivalents. The primary objectives of our investment strategy are to preserve principal, maintain proper liquidity to meet operating needs, and maximize yields. To minimize our exposure to an adverse shift in interest rates, we invest mainly in cash equivalents and short-term investments with a maturity of twelve months or less and maintain an average maturity of twelve months or less. We do not believe that a notional or hypothetical 10% change in interest rate percentages would have a material impact on the fair value of our investment portfolio or our interest income.

Item 4. Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures. Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~September~~June 30, ~~2020,~~2021, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in Internal Controls. There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during the quarter ended ~~September~~June 30, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

While we are not currently a party to any material legal proceedings, we could become subject to legal proceedings in the ordinary course of business. We do not expect any such potential items to have a significant impact on our financial position.

Item 1A. Risk Factors

There have been no material changes in the risk factors described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 ~~or our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.~~.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~Amendment to the Shareholders Rights Agreement

On July 20, 2021, NeuroMetrix, Inc. entered into Amendment No. 14 (“Amendment No. 14”) to the Shareholder Rights Agreement with American Stock Transfer & Trust Company, LLC dated as of March 7, 2007, as amended (the “Rights Plan”), to amend certain of the provisions of the Rights Plan. Any capitalized term used herein that is not defined shall have the meaning ascribed to it in Amendment No. 14 or the Rights Plan, as the case may be.

As in past years, the primary purpose of Amendment No. 14 is to extend the term of the Rights Plan by an incremental one-year period, i.e., from an expiry of March 7, 2022 to March 7, 2023. In addition, Amendment No. 14 also makes certain amendments to update provisions of the Rights Plan that have been unchanged since their original adoption, including: (1) expanding the definition of “Beneficial Ownership” to account for current types of derivative contracts and synthetic equity, and (2) including a trust feature in Section 24 of the Rights Plan.

The foregoing description of Amendment No. 14 is subject to, and is qualified in its entirety by reference to, and the fully text of Amendment No. 14, a copy of which is set forth as Exhibit 4.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Item 6. Exhibits

~~See the Exhibit Index on the page immediately preceding the exhibits for a list of exhibits filed as part of this quarterly report, which Exhibit Index is incorporated herein by this reference.~~


Exhibit No.						Description

4.1						Amendment No. 14 to Shareholder Rights Agreement by and between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent, dated July 20, 2021. Filed herewith.

10.1						Termination Agreement by and between NeuroMetrix, Inc. and GSK Consumer Healthcare S.A. dated June 30, 2021. Filed herewith.

31.1						Certification of Principal Executive Officer Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. Filed herewith.

31.2						Certification of Principal Financial Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

32						Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350. Furnished herewith.

101						The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets at June 30, 2021 and December 31, 2020, (ii) Statements of Operations for the quarters ended June 30, 2021 and 2020, (iii) Statements of Changes in Stockholders' Equity for the quarters ended June 30, 2021 and 2020, (iv) Statements of Cash Flows for the quarters ended June 30, 2021 and 2020, and (v) Notes to Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		NEUROMETRIX, INC.

~~October~~July 22, ~~2020~~2021	/s/	SHAI N. GOZANI, M.D., PH. D.
		Shai N. Gozani, M.D., Ph. D.
		Chairman, President and Chief Executive Officer

~~October~~July 22, ~~2020~~2021	/s/	THOMAS T. HIGGINS
		Thomas T. Higgins
		Senior Vice President, Chief Financial Officer and Treasurer

2319

~~EXHIBIT INDEX~~



~~Exhibit No.~~		~~Description~~

~~31.1~~		~~Certification of Principal Executive Officer Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. Filed herewith.~~

~~31.2~~		Certification of Principal Financial Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

32		Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350. Furnished herewith.

~~101~~		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets at September 30, 2020 and December 31, 2019, (ii) Statements of Operations for the quarter and nine months ended September 30, 2020 and 2019, (iii) Statements of Changes in Stockholders' Equity for the nine months ended September 30, 2020 and 2019, (iv) Statements of Cash Flows for the nine months ended September 30, 2020 and 2019, and (v) Notes to Financial Statements.


	Nine Months Ended September 30,										Six Months Ended June 30,
	2020		2019		Change			% Change			2021		2020		Change		% Change
	(in thousands)										(in thousands)
Operating expenses:										Operating expenses:
Research and development	$	1,846.6	$	2,365.1	(518.5		)	(21.9	)%	Research and development	$	874.8	$	1,193.9	$	(319.1)	(26.7)	%
Sales and marketing	1,144.4		4,047.0		(2,902.6		)	(71.7	)%	Sales and marketing	663.3		803.5		(140.2)		(17.4)	%
General and administrative	2,693.1		4,646.9		(1,953.8		)	(42.0	)%	General and administrative	2,288.5		1,930.2		358.3		18.6	%
Total operating expenses	$	5,684.1	$	11,059.0	$	(5,374.9	)	(48.6	)%	Total operating expenses	$	3,826.6	$	3,927.6	$	(101.0)	(2.6)	%



	September 30, 2020			December 31, 2019
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,929,175		$	3,126,206
Accounts receivable, net	633,146			298,967
Inventories	1,050,293			1,163,714
Collaboration receivable	—			189,008
Prepaid expenses and other current assets	677,526			652,919
Total current assets	7,290,140			5,430,814

Fixed assets, net	205,676			273,448
Right to use asset	815,558			1,159,774
Other long-term assets	28,664			29,650
Total assets	$	8,340,038		$	6,893,686

Liabilities and Stockholders’ Equity
Current liabilities:

Accounts payable	$	192,356		$	725,658
Accrued expenses and compensation	1,011,228			1,443,574
Accrued product returns	586,000			689,000
Lease obligation, current	596,779			588,546
Total current liabilities	2,386,363			3,446,778

Lease obligation, net of current portion	581,903			916,674
Total liabilities	2,968,266			4,363,452

Commitments and contingencies

Stockholders’ equity:
Preferred stock	—			—
Convertible preferred stock	1			1
Common stock, $0.0001 par value; 25,000,000 shares authorized at September 30, 2020 and December 31, 2019; 3,784,657 and 1,400,674 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	378			140
Additional paid-in capital	201,927,426			197,319,698
Accumulated deficit	(196,556,033		)	(194,789,605		)
Total stockholders’ equity	5,371,772			2,530,234
Total liabilities and stockholders’ equity	$	8,340,038		$	6,893,686



2020	160,797
2021	653,164
2022	247,347
2023	165,785
2024	165,785
2025	117,431
Total minimum lease payments	$	1,510,309

Weighted-average discount rate, 14.7%	$	331,627
Lease obligation, current portion	596,779
Lease obligation, net of current portion	581,903
	$	1,510,309



	September 30, 2020
Severance obligations:
Provision	$	224,773
Amounts paid out	(224,773		)
Total	—
Relocation costs:
Provision	100,000
Amounts paid out	(100,000		)
Total	—
Impairment charge for idle facility	680,000
Amounts paid out	(280,000		)
Total	400,000

Balance - September 30, 2020	$	400,000