Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 16, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | ClearPoint Neuro, Inc. | ||
Entity Central Index Key | 0001285550 | ||
Document Type | 10-K | ||
Entity File Number | 001-34822 | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Public Float | $ 42,520,854 | ||
Entity Common Stock, Shares Outstanding | 15,491,863 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 5,695,722 | $ 3,101,133 |
Accounts receivable, net | 1,089,917 | 1,233,896 |
Inventory, net | 3,240,218 | 2,105,976 |
Prepaid expenses and other current assets | 357,227 | 213,684 |
Total current assets | 10,383,084 | 6,654,689 |
Property and equipment, net | 447,162 | 377,706 |
Operating lease rights of use | 374,218 | |
Software license inventory | 504,400 | 801,900 |
Other assets | 217,573 | 22,538 |
Total assets | 11,926,437 | 7,856,833 |
Current liabilities: | ||
Accounts payable | 965,783 | 500,929 |
Accrued compensation | 1,408,292 | 764,960 |
Other accrued liabilities | 328,460 | 390,838 |
Operating lease liabilities, current portion | 113,520 | |
Deferred product and service revenues | 1,016,892 | 210,768 |
Total current liabilities | 3,832,947 | 1,867,495 |
Accrued interest | 959,659 | 857,500 |
Operating lease liabilities, net of current portion | 276,669 | |
Deferred product and service revenues, net of current portion | 197,862 | 140,195 |
Total liabilities | 7,339,720 | 6,345,831 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized at December 31, 2019 and 2018; none issued and outstanding at December 31, 2019 and 2018 | ||
Common stock, $0.01 par value; 200,000,000 shares authorized at December 31, 2019 and 2018; 15,235,308 and 11,018,364 shares issued and outstanding at December 31, 2019 and 2018, respectively | 152,353 | 110,183 |
Additional paid-in capital | 117,173,984 | 108,600,405 |
Accumulated deficit | (112,739,620) | (107,199,586) |
Total stockholders' equity | 4,586,717 | 1,511,002 |
Total liabilities and stockholders' equity | 11,926,437 | 7,856,833 |
Secured Notes Payable 2010 Net of Unamortized Discount [Member] | ||
Current liabilities: | ||
Secured notes payable, net of amortized discount | 2,072,583 | 1,540,791 |
Junior Secured Notes Payable 2014 Net of Aggregate Unamortized Discount and Deferred Issuance Costs [Member] | ||
Current liabilities: | ||
Secured notes payable, net of amortized discount | $ 1,939,850 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Unamortized discount | $ 765,073 | $ 1,459,209 |
Aggregate unamortized discount and deferred issuance costs | $ 35,149 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 25,000,000 | 25,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 15,235,308 | 11,018,364 |
Common stock, outstanding | 15,235,308 | 11,018,364 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | ||
Total revenues | $ 11,216,937 | $ 7,353,266 |
Cost of revenues | 3,832,884 | 2,433,069 |
Research and development costs | 2,922,279 | 2,310,139 |
Sales and marketing expenses | 4,755,516 | 3,532,040 |
General and administrative expenses | 4,299,936 | 4,325,786 |
Operating loss | (4,593,678) | (5,247,768) |
Other income (expense): | ||
Gain on change in fair value of derivative liabilities | 64,318 | |
Other income, net | 9,054 | 364 |
Interest expense, net | (955,166) | (980,383) |
Net loss | $ (5,539,790) | $ (6,163,469) |
Net loss per share attributable to common stockholders: | ||
Basic and diluted (in dollars per share) | $ (0.42) | $ (0.56) |
Weighted average shares outstanding: | ||
Basic and diluted (in shares) | 13,155,163 | 10,928,213 |
Product Revenue | ||
Revenues: | ||
Total revenues | $ 9,476,364 | $ 6,685,020 |
Service and Other Revenues | ||
Revenues: | ||
Total revenues | $ 1,740,573 | $ 668,246 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (5,539,790) | $ (6,163,469) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization | 143,604 | 109,439 |
Share-based compensation | 799,111 | 1,231,379 |
Expenses paid through the issuance of common stock | 77,500 | |
Gain on change in fair value of derivative liabilities | (64,318) | |
Amortization of debt issuance costs and original issue discounts | 729,287 | 562,529 |
Amortization of lease right of use, net of accretion in lease liabilities | 106,956 | |
Increase (decrease) in cash resulting from changes in: | ||
Accounts receivable | 143,979 | (284,481) |
Inventory | (1,024,612) | 122,220 |
Prepaid expenses and other current assets | (143,543) | (20,957) |
Other assets | 14,965 | (10,897) |
Accounts payable and accrued expenses | 1,165,722 | (284,322) |
Lease liability | (108,985) | |
Deferred revenue | 863,791 | 94,785 |
Net cash flows from operating activities | (2,849,515) | (4,630,592) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (10,190) | (63,490) |
Acquisition of licensing rights | (150,000) | |
Net cash flows from investing activities | (160,190) | (63,490) |
Cash flows from financing activities: | ||
Proceeds from private offering, net of offering costs | 7,427,847 | |
Prepayment of offering costs in connection with January 2020 private placement | (75,000) | |
Proceeds from exercise of warrants | 388,791 | 505,384 |
Principal repayment of 2014 and 2010 notes | (2,137,344) | (2,000,000) |
Net cash flows from financing activities | 5,604,294 | (1,494,616) |
Net change in cash and cash equivalents | 2,594,589 | (6,188,698) |
Cash and cash equivalents, beginning of year | 3,101,133 | 9,289,831 |
Cash and cash equivalents, end of year | 5,695,722 | 3,101,133 |
Cash paid for: | ||
Interest | $ 316,558 | $ 210,722 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balances at beginning at Dec. 31, 2017 | $ 106,937 | $ 106,757,920 | $ (101,036,117) | $ 5,828,740 |
Balances at beginning (in shares) at Dec. 31, 2017 | 10,693,851 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | $ 532 | 1,230,847 | 1,231,379 | |
Share-based compensation (in shares) | 53,200 | |||
Under contractual arrangements | $ 250 | 77,250 | 77,500 | |
Under contractual arrangements (in shares) | 25,000 | |||
Warrant exercises | $ 2,464 | 534,388 | 536,852 | |
Warrant exercises (in shares) | 246,313 | |||
Net loss for the year | (6,163,469) | (6,163,469) | ||
Balances at end at Dec. 31, 2018 | $ 110,183 | 108,600,405 | (107,199,586) | 1,511,002 |
Balances at end (in shares) at Dec. 31, 2018 | 11,018,364 | |||
Cumulative adjustment for adoption of new accounting standard at Dec. 31, 2019 | (244) | (244) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | $ 1,947 | 797,164 | 799,111 | |
Share-based compensation (in shares) | 194,694 | |||
Warrant exercises | $ 15,958 | 372,833 | 388,791 | |
Warrant exercises (in shares) | 1,595,795 | |||
Private placement, net of offering costs | $ 24,265 | 7,403,582 | 7,427,847 | |
Private placement, net of offering costs (in shares) | 2,426,455 | |||
Net loss for the year | (5,539,790) | (5,539,790) | ||
Balances at end at Dec. 31, 2019 | $ 152,353 | $ 117,173,984 | $ (112,739,620) | $ 4,586,717 |
Balances at end (in shares) at Dec. 31, 2019 | 15,235,308 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Offering costs | $ 94,162 |
Description of the Business and
Description of the Business and Financial Condition | 12 Months Ended |
Dec. 31, 2019 | |
Description Of Business And Liquidity | |
Description of the Business and Financial Condition | 1. Description of the Business and Financial Condition ClearPoint Neuro, Inc. (formerly MRI Interventions, Inc.; see Note 11) (the “Company”) is a medical device company focused on the development and commercialization of technology that enables physicians to see inside the brain and heart using direct, intra-procedural magnetic resonance imaging (“MRI”) guidance while performing minimally invasive surgical procedures. The Company was incorporated in the state of Delaware in March 1998. The Company’s principal executive office and principal operations are located in Irvine, California. The Company established MRI Interventions (Canada) Inc., a wholly-owned subsidiary incorporated in Canada, in August 2013. This subsidiary was established primarily for the purpose of performing software development, and its activities are reflected in these consolidated financial statements. The Company’s ClearPoint system, an integrated system comprised of capital equipment and disposable products, is designed to allow minimally invasive procedures in the brain to be performed in an MRI suite. The Company received 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) in 2010 to market the ClearPoint system in the United States for general neurological interventional procedures. The Company’s ClearTrace system is a product candidate that is designed to allow catheter-based minimally invasive procedures in the heart to be performed in an MRI suite. Although still a product candidate, the Company has reduced its efforts to commercialize the ClearTrace system. Liquidity and Management’s Plans The Company has incurred net losses since its inception which has resulted in a cumulative deficit at December 31, 2019 of approximately $113 million. Since inception, the Company has financed its operations principally from the sale of equity securities, the issuance of notes payable and license arrangements. As a result, management historically has expressed substantial doubt as to the Company’s ability to continue as a going concern. As discussed in Note 8, in May 2019, the Company entered into a Securities Purchase Agreement with certain accredited investors under which such investors purchased 2,426,455 shares of the Company’s common stock at $3.10 per share (the “2019 PIPE), resulting in proceeds of approximately $7.5 million, before deducting offering expenses aggregating approximately $94,000. In addition, as discussed in Note 11, in January 2020, the Company entered into a Securities Purchase Agreement with two investors under which the Company issued to such investors an aggregate principal amount of $17.5 million of floating rate secured convertible notes (the “2020 Secured Notes”). From the proceeds received from the issuance of the 2020 Secured Notes, which have a five-year term, the Company repaid and retired the 2010 Junior Secured Notes Payable that otherwise would have matured in October and November 2020. As a result, in management’s opinion, the Company’s cash and cash equivalent balances at December 31, 2019, when combined with the proceeds from issuance of the 2020 Secured Notes (after repayment of the 2010 Secured Notes), are sufficient to support the Company’s operations for at least the next twelve months and to alleviate doubt as to the Company’s ability to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, ClearPoint Neuro (Canada) Inc. All significant inter-company accounts and transactions have been eliminated. Basis of Presentation and Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. Inventory Inventory is carried at the lower of cost (first-in, first-out method) or net realizable value. Items in inventory relate predominantly to the Company’s ClearPoint system. Software license inventory related to ClearPoint systems undergoing on-site customer evaluation is included in inventory in the accompanying consolidated balance sheets. All other software license inventory is classified as a non-current asset. The Company periodically reviews its inventory for obsolete items and provides a reserve upon identification of potential obsolete items. Property and Equipment Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives, principally five to seven years. Leasehold improvements are depreciated on a straight-line basis over the lesser of their estimated useful lives or the term of the related lease. Impairment of Long-Lived Assets The Company periodically evaluates the recoverability of its long-lived assets (finite-lived intangible assets and property and equipment). Whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable, the expected undiscounted future cash flows are compared to the net book value of the related assets. If the net book value of the related assets were to exceed the undiscounted expected future cash flows of the assets, the carrying amount would be reduced to the present value of the expected future cash flows and an impairment loss would be recognized. The Company has not recorded any impairment losses for the years ended December 31, 2019 or 2018. Revenue Recognition Effective January 1, 2018, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which, with subsequent amendments thereto, created a new Topic 606 within the Accounting Standards Codification (“ASC”). Topic 606 is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Prior to adoption, the Company assessed the impact of Topic 606 and determined that adoption would not have a material effect on its consolidated financial statements. The Company adopted Topic 606 in conformity with its provisions on January 1, 2018 under the modified retrospective method. The Company’s revenues are comprised primarily of: (1) product revenues resulting from the sale of functional neurological products, and drug delivery and biologic products; (2) product revenues resulting from the sale of ClearPoint capital equipment; (3) revenues resulting from the rental, service, installation, training and shipping related to ClearPoint capital equipment; and (4) clinical case support revenues in connection with customer-sponsored clinical trials. The Company recognizes revenue when control of the Company’s products and services is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control. Lines of Business; Timing of Revenue Recognition • Functional neurosurgery product, biologics and drug delivery systems product, and therapy product sales • Capital equipment sales o Capital equipment sales preceded by evaluation periods o Capital equipment sales not preceded by evaluation periods: For both types of capital equipment sales described above, the Company’s determination of the point in time at which to recognize revenue represents that point at which the customer has legal title, physical possession, and the risks and rewards of ownership, and the Company has a present right to payment. • Functional neurosurgery and related services: • Biologics and drug delivery services o Outsourced recruitment and/or designation of a clinical services liaison between Company and its customer: o Outsourced technical clinical support of cases performed pursuant to customer-sponsored clinical trials: ▪ Service Access Fees ▪ Procedure-Based o Therapy services • Capital equipment-related services o Rental and equipment service: o Installation, training and shipping: The Company operates in one industry segment, and substantially all its sales are to U.S.-based customers. Payment terms under contracts with customers generally are in a range of 30-60 days after the customers’ receipt of the Company’s invoices. The Company provides a one-year warranty on its functional neurosurgery products, biologics and drug delivery systems products, and capital equipment products that are not otherwise covered by a third-party manufacturer’s warranty. The Company’s contracts with customers do not provide for a right of return other than for product defects. See Note 3 for additional information regarding revenue recognition. Research and Development Costs Costs related to research, design and development of products are charged to research and development expense as incurred. Income Taxes Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Such assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized in the period that includes the enactment date. The Company provides a valuation allowance against net deferred income tax assets unless, based upon available evidence, it is more likely than not the deferred income tax assets will be realized. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2019 and 2018, the Company had no accrued interest or penalties related to uncertain tax positions. Net Loss Per Share The Company computes net loss per share using the weighted-average number of common shares outstanding during the period. Basic and diluted net loss per share are the same because the conversion, exercise or issuance of all potential common stock equivalents, which comprise the entire amount of the Company’s outstanding common stock options and warrants as described in Note 8, would be anti-dilutive. Share-Based Compensation The Company accounts for compensation for all arrangements under which employees, directors and others receive shares of stock or other equity instruments (including options and warrants) based on fair value. The fair value of each award is estimated as of the grant date and amortized as compensation expense over the requisite vesting period. The fair values of the Company’s share-based awards are estimated on the grant dates using the Black-Scholes valuation model. This valuation model requires the input of highly subjective assumptions, including the expected stock volatility, estimated award terms and risk-free interest rates for the expected terms. To estimate the expected terms, the Company utilizes the “simplified” method for “plain vanilla” options discussed in the Staff Accounting Bulletin 107 (“SAB 107”) issued by the Securities and Exchange Commission (the “SEC”). The Company believes that all factors listed within SAB 107 as pre-requisites for utilizing the simplified method apply to the Company and its share-based compensation arrangements. The Company intends to utilize the simplified method for the foreseeable future until more detailed information about exercise behavior becomes available. The Company based its estimate of expected volatility on the average of: (i) historical volatilities of publicly traded companies it deemed similar to the Company; and (ii) the Company’s historical volatility, which is limited, and will consistently apply this methodology until its own sufficient relevant historical data is exists. The Company utilizes risk-free interest rates based on zero-coupon U.S. treasury instruments, the terms of which are consistent with the expected terms of the equity awards. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero. Fair Value Determination of Share-Based Transactions The Company’s common stock is traded on the Nasdaq Capital Market under the symbol “CLPT.” Quoted closing stock prices are used as a key input in determining the fair value for share-based transactions. For the period from December 9, 2019 until the Company’s corporate name change and stock trading symbol change on February 12, 2020 (see Note 11), the Company’s common stock was traded on the Nasdaq Capital Market under the symbol “MRIC.” For the period from July 3, 2019 through December 8, 2019, the Company’s common stock was traded on the NYSE American LLC, and prior to July 3, 2019, the Company’s common stock was traded in the over-the-counter market and was quoted on the OTCQB Marketplace and the OTC Bulletin Board under the symbol “MRIC.” Concentration Risks and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company holds its cash and cash equivalents on deposit with financial institutions in the U.S. insured by the Federal Deposit Insurance Corporation. At December 31, 2019, the Company had approximately $24,000 in bank balances that were in excess of the insured limits. Information with respect to accounts receivable from those customers whose balances comprised more than 10% of accounts receivable at December 31, 2019 and 2018 is as follows: December 31, 2019 2018 Customer – 1 12% 17% Customer – 2 — 12% Sales to one customer comprised 10% of total revenue for the year ended December 31, 2019. No customer accounted for sales in excess of 10% of total revenue for the year ended December 31, 2018. Prior to granting credit, the Company performs credit evaluations of its customers’ financial condition, and generally does not require collateral from its customers. The Company will provide an allowance for doubtful accounts when collections become doubtful. The allowance for doubtful accounts at December 31, 2019 and 2018 was $29,000 and $38,000, respectively. The Company is subject to risks common to emerging companies in the medical device industry, including, but not limited to: new technological innovations; acceptance and competitiveness of its products; dependence on key personnel; dependence on key suppliers; changes in general economic conditions and interest rates; protection of proprietary technology; compliance with changing government regulations; uncertainty of widespread market acceptance of products; access to credit for capital purchases by customers; and product liability claims. Certain components used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such components cannot be accomplished quickly. The inability of any of these suppliers to fulfill the Company’s supply requirements may negatively impact future operating results. Adoption of New Accounting Standard – Leases Effective January 1, 2019, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-02, “Leases,” which created a new Topic 842 within the Accounting Standards Codification. Topic 842 established the core principle that a lessee should recognize the assets, representing rights-of-use, and liabilities to make lease payments that arise from leases. See Note 7 for additional information regarding leases. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Revenue by Service Line Years Ended December 31, 2019 2018 Products: Disposable products: Functional neurosurgery $ 6,884,085 $ 5,351,557 Biologics and drug delivery 1,458,850 913,424 Therapy 96,925 — Capital equipment 1,036,505 420,039 Total product revenue 9,476,365 6,685,020 Services: Biologics and drug delivery 889,702 175,223 Therapy 225,000 100,000 Capital equipment and other 625,870 393,023 Total service revenue 1,740,572 668,246 Total revenue $ 11,216,937 $ 7,353,266 Contract Balances • Contract assets • Contract liabilities – During the year ended December 31, 2019, the Company recognized capital equipment-related service revenue of approximately $228,000 which was previously included in deferred revenue in the accompanying consolidated balance sheet at December 31, 2018. In September 2019, the Company entered into a Development Services Agreement with a customer under which the Company was entitled to bill the customer for an upfront payment of $127,600, of which $102,000 is included in deferred revenue in the accompanying December 31, 2019 consolidated balance sheet. In September 2019, the Company entered into a Letter of Intent (the “LOI”) with a customer who is a stockholder and whose Chief Operating Officer is a member of the Company’s Board of Directors. The purpose of the LOI was to permit the commencement of a product development project in anticipation of negotiating a detailed Statement of Work (the “SOW”) which was entered into in November 2019. Under the terms of the LOI, the Company was entitled to bill the customer for an upfront, nonrefundable payment of $500,000, and under the terms of the SOW, the Company was entitled to bill the customer on a quarterly basis, commencing in the fourth quarter of 2019, for service fees of $500,000. The Company recognizes as revenue each of the upfront payments described in this paragraph in proportional relationship to the transaction prices of the performance obligations contained in the related agreements, and recognizes as revenue the quarterly service fees described in this paragraph as stand-by services which commenced during the fourth quarter of 2019. Based on the foregoing, $625,000 of the aggregate amount of all the payments described in this paragraph were included in deferred revenue in the accompanying consolidated balance sheet at December 31, 2019. During the year ended December 31, 2019, the Company offered an upgraded version of its software at no additional charge to customers purchasing a three-year systems service agreement. The transaction prices of the software and the service agreement were determined through an allocation of the service agreement price based on the standalone prices of the software and the service agreements. The transaction price of the software was recognized as revenue upon its installation and comprised approximately $172,000 of unbilled amounts included in accounts receivable in the accompanying December 31, 2019 consolidated balance sheet. Remaining Performance Obligations The Company’s contracts with customers, other than capital equipment-related service agreements discussed below, are predominantly of terms less than one year. Accordingly, the transaction price of remaining performance obligations related to such contracts at December 31, 2019 are not significant. Revenue with respect to remaining performance obligations related to capital equipment-related service agreements with original terms in excess of one year and the upfront payments discussed under the heading “Contract Balances” above amounted to approximately $1.1 million at December 31, 2019. The Company expects to recognize this revenue within the next three years. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory Inventory consists of the following as of December 31: 2019 2018 Raw materials and work in process $ 1,495,190 $ 1,219,753 Software licenses 332,500 122,500 Finished goods 1,412,528 763,723 Inventory included in current assets 3,240,218 2,105,976 Software licenses – non-current 504,400 801,900 $ 3,744,618 $ 2,907,876 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment consist of the following as of December 31: 2019 2018 Equipment $ 1,195,237 $ 1,176,038 Furniture and fixtures 112,143 112,143 Leasehold improvements 201,065 190,875 Computer equipment and software 148,017 148,017 Loaned systems 584,911 468,782 2,241,373 2,095,855 Less accumulated depreciation and amortization (1,794,211 ) (1,718,149 ) Total property and equipment, net $ 447,162 $ 377,706 Depreciation and amortization expense related to property and equipment for the years ended December 31, 2019 and 2018 was $143,604 and $109,439, respectively. Loaned systems are ClearPoint systems that are in operation at customer sites on an evaluation basis. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | 6. Notes Payable 2014 Junior Secured Notes Payable On June 6, 2019, the Company repaid in full all the outstanding principal, which, together with accrued and unpaid interest, totaled approximately $2.0 million, of its 12% Second-Priority Secured Non-Convertible Promissory Notes due 2019, as amended (the “2014 Secured Notes”). The 2014 Secured Notes had a maturity date of September 30, 2020, and interest was payable semi-annually in arrears. In connection with the repayment, the security agreement under which the 2014 Secured Note had been collateralized by all the assets of the Company was terminated. 2010 Junior Secured Notes Payable The indebtedness outstanding under the 2010 Junior Secured Notes Payable (the “2010 Secured Notes”) at December 31, 2019 and 2018 was $2.8 million and $3.0 million, respectively. As discussed in Note 11, in the Company’s first fiscal quarter of 2020, it repaid in full the aggregate principal amount outstanding of the 2010 Secured Notes which, together with the Company’s payment of the related accrued interest, resulted in the retirement of the 2010 Secured Notes. At each of December 31, 2019 and 2018, the Company’s chairman of the board of directors and one of the Company’s officers held 2010 Secured Notes, which they purchased at the date of original issuance having an aggregate principal balance of $197,000. In January 2020, the 2010 Secured Notes were effectively refinanced through the completion of the 2020 Financing Transaction (see Note 11). Accordingly, the 2010 Secured Notes retained their non-current classification on the accompanying December 31, 2019 consolidated balance sheet as allowed by GAAP. Scheduled Notes Payable Maturities. Scheduled principal payments as of December 31, 2019 with respect to notes payable are summarized as follows: Years ending December 31, 2020 $ 2,837,656 Total scheduled principal payments 2,837,656 Less unamortized discounts (765,073 ) $ 2,072,583 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 7. Leases The Company leases office space in Irvine, California that houses its headquarters and manufacturing facility under a non-cancellable operating lease. The lease term commenced on October 1, 2018 and expires in September 2023. The Company has the option to renew the lease for two additional periods of five years each. The Company also leases office space in Mississauga, Ontario, Canada for its software development personnel. The lease term commenced on August 1, 2018, is set to expire in July 2020, and provides for automatic one-year renewals at the Company’s option. Both office leases are classified as operating leases in conformity with the provisions of Topic 842. The lease cost, included in general and administrative expense, was $113,393 and $106,911 for the years ended December 31, 2019 and 2018, respectively. At December 31, 2019, the weighted average discount rate was 6.69% and the weighted average remaining lease term was 47.36 months with respect to the leases described above. The assumptions used in determining the foregoing information are as follows: • Lease term – Topic 842 provides that the lease term consists of: (a) the non-cancelable period of the Irvine and Mississauga office leases; and (b) the period covered by the Company option to extend each office lease for which the Company is reasonably certain to do so. Based on the foregoing, management determined the lease term to extend to September 2023 for the Irvine office lease, and to July 2020 for the Mississauga office lease. • Discount rate – Topic 842 provides that the discount rate is the rate implicit in the lease unless that rate cannot be determined, in which case the lessee’s incremental borrowing rate shall be used. Because neither the rate implicit in the lease nor the Company’s incremental borrowing rate were determinable, discount rates were obtained with reference to published U.S. High Yield CCC corporate bond rates at the inception dates of each of the leases, which, with respect to the Irvine office lease was 6.7%, and with respect to the Mississauga office lease was 6.9%. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' equity: | |
Stockholders' Equity | 8. Stockholders’ Equity 2019 Private Placement On May 9, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (collectively, the “Investors”) for the private placement of 2,426,455 shares of the Company’s common stock at $3.10 per share (the “2019 PIPE”). The Company received aggregate gross proceeds of approximately $7.5 million, before deducting offering expenses aggregating approximately $94,000. The Purchase Agreement also contains representations and warranties by the Company and the Investors and covenants of the Company and the Investors (including indemnification from the Company in the event of breaches of its representations and warranties), certain information rights and other rights, obligations and restrictions, which the Company believes are customary for transactions of this type. Issuance of Common Stock in Lieu of Cash Payments Under the terms of the Amended and Restated Non-Employee Director Compensation Plan, each non-employee member of the Company’s Board of Directors may elect to receive all or part of his or her director fees in shares of the Company’s common stock. Director fees, whether paid in cash or in shares of common stock, are payable quarterly on the last day of each fiscal quarter. The number of shares of common stock issued to directors is determined by dividing the product of: (i)(a) the fees otherwise payable to each director in cash, times (b) the percentage of fees the director elected to receive in shares of common stock, by (ii) the volume weighted average price per share of common stock over the last five trading days of the quarter. During the years ended December 31, 2019 and 2018, 29,861 shares and 57,386 shares, respectively, were issued to directors as payment for director fees, amounting to $117,163 and $113,665, in 2019 and 2018, respectively, in lieu of cash. Stock Incentive Plans The Company has various share-based compensation plans and share-based compensatory contracts (collectively, the “Plans”) under which it has granted share-based awards, such as stock grants, and incentive and non-qualified stock options, to employees, directors, consultants and advisors. Awards may be subject to a vesting schedule as set forth in individual award agreements. Certain of the Plans also have provided for cash-based performance bonus awards. Since October 2017, the Company has granted share-based awards under the Company’s Second Amended and Restated 2013 Incentive Compensation Plan (the “2013 Plan”). Under the 2013 Plan, a total of 1,956,250 shares of the Company’s common stock are reserved for issuance. Of this amount, stock grants of 394,377 shares have been awarded and option grants, net of options terminated, expired or forfeited, of 1,086,234 shares were outstanding as of December 31, 2019. Accordingly, 475,639 shares remained available for grants under the 2013 Plan as of that date. Activity with respect to stock options issued by the Company is summarized as follows: Options Outstanding Options Exercisable Range of Weighted- Intrinsic Outstanding at January 1, 2018 1,238,199 $ 1.95 $ 385.60 $ 12.47 $78,486 Exercisable at January 1, 2018 567,210 Activity during the year ended December 31, 2018 Granted 167,500 $ 1.40 $ 2.18 $ 1.81 $11,050 Cancelled or forfeited (19,303 ) $ 1.95 $ 385.60 $ 18.77 Outstanding at December 31, 2018 1,386,396 $ 1.40 $ 385.60 $ 11.09 $11,050 Exercisable at December 31, 2018 973,498 - Activity during the year ended December 31, 2019 Granted 256,601 $ 1.65 $ 4.11 $ 3.44 $348,828 Exercised (3,025 ) $ 1.74 $ 2.60 $ 1.89 Cancelled or forfeited (805 ) $ 2.60 $ 385.60 $ 95.37 Outstanding at December 31, 2019 1,639,167 $ 1.40 $ 83.60 $ 9.87 $2,892,027 Exercisable at December 31, 2019 1,293,121 $2,244,783 (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options. The following table summarizes information about stock options at December 31, 2019 (contractual life expressed in years): Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted - Weighted - Number Weighted - Weighted - $1.40-$45.20 1,563,540 7.72 $ 7.01 1,217,494 7.42 $ 8.17 $46.40--$83.60 75,627 1.88 $ 69.09 75,627 1.88 $ 69.09 1,639,167 7.45 $ 9.87 1,293,121 7.10 $ 11.73 The per share weighted average grant date fair value of options granted during the years ended December 31, 2019 and 2018 was $1.72 and $0.95, respectively. A summary of the status of the Company’s nonvested stock options during the years ended December 31, 2019 and 2018 is presented below: Nonvested Stock Options Shares Weighted - Nonvested, January 1, 2018 670,989 $ 1.45 Activity during the year ended December 31, 2018 Granted 167,500 0.95 Forfeited (15,327 ) 25.22 Vested (442,879 ) 1.71 Nonvested, December 31, 2018 380,283 0.94 Activity during the year ended December 31, 2019 Granted 256,601 1.72 Exercised (2,725 ) 1.89 Forfeited (580 ) 42.66 Vested (287,533 ) 1.35 Nonvested, December 31, 2019 346,046 $ 1.46 The Company records share-based compensation expense on a straight-line basis over the related vesting period. For the years ended December 31, 2019 and 2018, share-based compensation expense was: Years Ended December 31, 2019 2018 $ 799,111 $ 1,231,379 As of December 31, 2019, approximately $553,221 of unrecognized compensation cost related to share-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average period of 1.71 years. The assumptions used in calculating the fair value under the Black-Scholes option-pricing model are as follows: Years Ended December 31, 2019 2018 Dividend yield 0% 0% Expected Volatility 52.17% to 52.90% 51.58% to 54.21% Risk free Interest rates 1.39% to 1.72% 2.77% to 3.00% Expected lives (in years) 5.5 to 6.0 5.8 Warrants Warrants have generally been issued in connection with financing transactions and for terms of up to five years. Common stock warrant activity for the years ended December 31, 2019 and 2018 is as follows: Shares Weighted - Outstanding at January 1, 2018 8,949,078 $ 4.12 Activity during the year ended December 31, 2018 Exercised (221,773 ) $ 2.15 Terminated (50,824 ) $ 6.64 Outstanding at December 31, 2018 8,676,481 $ 4.17 Activity during the year ended December 31, 2019 Exercised (2,928,681 ) $ 2.20 Terminated (215,533 ) $ 35.32 Outstanding at December 31, 2019 5,532,267 $ 4.00 Information regarding outstanding warrants at December 31, 2019 is as follows (contractual life expressed in years): Exercise Number Weighted - Intrinsic Value $ 1.83 1,540 0.96 $ 4,574 $ 2.20 4,025,167 2.40 10,465,434 $ 5.50 1,110,580 1.67 — $ 16.23 242,021 0.96 — $ 21.10 152,084 0.96 — $ 40.00 875 0.07 — 5,532,267 2.15 $ 10,470,008 (1) Intrinsic value is calculated as the estimated fair value of the Company's stock at December 31, 2019 less the warrant exercise price of in-the-money warrants. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The Company had no income tax expense for the years ended December 31, 2019 and 2018. Due to uncertainties surrounding the realization of its deferred income tax assets in future periods, the Company has recorded a 100% valuation allowance against its net deferred income tax assets. If it is determined in the future that it is more likely than not that any deferred income tax assets are realizable, the valuation allowance will be reduced by the estimated net realizable amounts. For the years ended December 31, 2019 and 2018, the valuation allowance increased by $1.3 million and $2.8 million, respectively, based on changes in deferred tax assets and liabilities. The tax effect of temporary differences and net operating losses that give rise to components of deferred income tax assets and liabilities consist of the following: As of December 31, 2019 2018 Deferred income tax assets: Net operating loss carryforwards $ 21,062,933 $ 20,080,697 Share based compensation 1,985,627 1,926,408 Accrued expenses 778,903 297,700 Property and equipment — 74,447 Other 2,798 90,910 23,830,261 22,470,162 Less valuation allowance (23,745,060 ) (22,470,162 ) Total deferred income tax assets 85,201 — Deferred tax liability - depreciation (85,201 ) — Net deferred tax assets $ — $ — Approximately $1.3 million of federal net operating loss carryforwards expired in 2019; no state net operating loss carryforwards expired during 2019. At December 31, 2019, the Company had cumulative federal and state net operating losses of approximately $89.6 million and $30.3 million, respectively, available to reduce future taxable income, if any. The federal net operating loss carryforward begins expiring in 2020, and the state net operating loss carryforward begins expiring in 2028. It is possible that the Company will not generate taxable income in time to use these net operating loss carryforwards before their expiration. In addition, under Sections 382 of the Internal Revenue Code of 1986 (the “Code”), as amended, if a corporation undergoes an “ownership change” (as defined in the Code), the corporation’s ability to use its pre-change tax attributes to offset its post-change income may be limited. In general, an “ownership change” occurs if there is a cumulative change in a “loss corporation’s” (as defined in the Code) ownership by 5% shareholders that exceeds 50 percentage points over a rolling three-year period. The Company has not determined whether such an ownership change has occurred. However, given the equity transactions in which the Company has engaged, the Company believes that the use of the net operating losses shown as deferred tax assets will be significantly limited. Management has evaluated the effect of guidance provided by GAAP regarding accounting for uncertainty in income taxes and determined the Company has no uncertain tax positions that could have a significant impact on its consolidated financial statements. The Company’s federal income tax return for 2016 and subsequent years remain open for examination. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | 10. Commitments Licenses Certain license arrangements require minimum royalty payments. As of December 31, 2019, future minimum payments under these arrangements are as follows: Years ending December 31, 2020 $ 60,000 2021 85,000 2022 150,000 2023 200,000 2024 200,000 Thereafter 1,710,000 Total minimum payments $ 2,405,000 Royalty payment amounts may be greater than the minimum required payment amounts based on the negotiated royalty rates. If the Company sublicenses the intellectual property that is licensed from the licensor and the Company receives any royalty payment under, or with respect to, such sublicense, the Company is obligated to pay the licensor an agreed upon percentage of any such payments. Under the terms of these license agreements, the Company is required to reimburse the licensor for costs incurred by the licensor associated with patent filing, prosecution and maintenance. The Company may terminate these license agreements for any reason, upon giving the licensor either 60 or 90 days written notice, depending on the agreement. Under the license agreements described above, the Company incurred royalty expense of $40,000 for each of the years ended December 31, 2019 and 2018. Technical Service and Training Agreements The Company is a party to agreements with a university under which the Company may receive technical and training services. Pursuant to the terms of the amended agreements, the Company incurred expense of approximately $26,347 and $37,146 for technical research services during the years ended December 31, 2019 and 2018, respectively. Software License Agreements The Company is a party to a Master Services and Licensing Agreement (as amended, the “Master Software Agreement”) with Merge Healthcare Canada Corp. f/k/a Cedara Software Corp. (“Merge”) under which the Company may internally perform development, maintenance and support of its ClearPoint system software that was originally developed for the Company by Merge, utilizing certain of its own pre-existing software code. Under the Master Software Agreement, the Company received a non-exclusive, worldwide license to Merge’s software code, in exchange for which the Company agreed to pay Merge a license fee for each copy of the ClearPoint system software that the Company sells in which the Merge code is embedded, subject to a minimum license purchase commitment (the “Minimum License Purchase”) that the Company satisfied in 2013. The per license cost is charged to costs of sales based on the Company’s sales of the ClearPoint system software in which the Merge code is embedded. The Company will have an obligation to pay Merge a license fee for each copy of the ClearPoint system software in which the Merge code is embedded that the Company sells in excess of the licenses it purchased under the Minimum License Purchase. In connection with the development of the Company’s most recent software platform (“ClearPoint v2”), the Company entered into two additional agreements under which it received worldwide, non-exclusive licenses to software code related to certain functional elements of ClearPoint v2, for which the Company is committed to pay royalties for each copy of its ClearPoint v2 system sold, or in certain cases, loaned by to end-users. Royalties incurred by the Company under the software license agreements described above during the years ended December 31, 2019 and 2018 amounted to $138,000 and $107,200, respectively. Minimum Purchase Commitments On October 16, 2018, the Company entered into a distribution agreement and a license agreement with a third-party for the purchase of integrated hardware and software systems and related disposable products. The agreements subject the Company to minimum purchase commitments for the systems and disposable products for approximately five years following the date such systems and products are made commercially available by the third party, which has not yet occurred. Cardiac EP Business Participation Plan The Company is party to agreements under which it may provide a key product development advisor and consultant with financial rewards in the event that the Company sells its business operations relating to catheter-based MRI-guided cardiac ablation to treat cardiac arrhythmias (“Cardiac EP Operations”). In the event the Company sells its Cardiac EP Operations, whether on a stand-alone basis or as part of the sale of the Company, the participant will receive a payment under the plan equal to: (i) the transaction value paid for or allocated to the Cardiac EP Operations in the sale, multiplied by (ii) the participant’s “participation interest” at the time of the sale. The participant was initially awarded a participation interest of 6.6%. However, pursuant to the terms of the plan, the participation interest is equitably reduced from time to time to take into account equity financing transactions in which the Company issues shares of its common stock, or securities convertible into shares of its common stock, in exchange for cash proceeds. At December 31, 2019, the participation interest was 0.38%. The plan will terminate in June 2025. Employment Agreements The Company has employment agreements with its executive officers that, among other provisions customary for agreements of this nature, provide for severance payments in the event the Company terminates the officer’s employment without cause. The agreements also provide for certain payments in connection with a change of control transaction and a termination of employment following a change of control transaction. Key Personnel Incentive Program Under the terms of the Company’s Key Personnel Incentive Program (as amended, “KPIP”), two participants, one a consultant to the Company and a former non-employee director of the Company, and the other a former employee of the Company, will each be entitled to receive a $1 million payment in the event of a sale of the Company. In addition, one of the participants will be entitled to receive a payment equal to $700,000 in the event the net proceeds from a sale of the Company exceeds $50,000,000. If a sale of the Company has not occurred by December 31, 2025, the KPIP will terminate. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events 2020 Financing Transaction On January 29, 2020 (the “Closing Date”), the Company completed a financing transaction (the “2020 Financing Transaction”) with two investors (the “2020 Convertible Noteholders”), whereby the Company issued an aggregate principal amount of $17,500,000 of floating rate secured convertible notes (the “2020 Secured Notes”) pursuant to a Securities Purchase Agreement (the “SPA”) dated January 11, 2020. Unless earlier converted or redeemed, the 2020 Secured Notes will mature on the fifth anniversary of the Closing Date, and bear interest at a rate equal to the sum of (i) the greater of (x) the three (3)-month London Interbank Offered Rate and (y) two percent (2%), plus (ii) a margin of 2% on the outstanding balance of the 2020 Notes, payable quarterly on the first business day of each calendar quarter. The 2020 Secured Notes may not be pre-paid without the consent of the noteholder, provided that the Company must offer to pre-pay such other noteholder on the same terms and conditions. Prior to maturity, the 2020 Convertible Noteholders will have the right to convert all or any portion of the outstanding balance of their notes, including any accrued but unpaid interest, into shares of the Company’s common stock at a conversion price of $6.00 per share, subject to certain adjustments as set forth in the note agreements. The 2020 Secured Notes are collateralized by all the assets of the Company. Pursuant to the terms and subject to the conditions of the SPA, at any time on or prior to January 11, 2022, the Company shall have the right, but not the obligation, to request that one of the 2020 Convertible Noteholders purchase an additional $5,000,000 in aggregate principal amount of Second Closing Notes (as defined in the SPA) and an additional $10,000,000 in aggregate principal amount of additional Third Closing Notes (as defined in the SPA) (together, the “Additional Convertible Notes”), provided that the such 2020 Convertible Noteholder has the right, but not the obligation, to purchase such notes. There is no principal amount outstanding under the Additional Convertible Notes. The terms of the Additional Convertible Notes are the same as the terms of the 2020 Secured Notes, except that: (a) the Additional Convertible Notes would bear interest at a rate equal to the sum of (i) the greater of (x) the three (3)-month London Interbank Offered Rate and (y) 2%, plus (ii) a margin of 7% on their outstanding balance; and (b) only 70% of the Additional Convertible Notes’ principal amount outstanding would be convertible into shares of the Company’s common stock. The Chief Operating Officer of one of the 2020 Convertible Noteholders is a member of the Company’s Board of Directors, and, pursuant to the terms of the SPA and a Board Observer Agreement entered into by the other 2020 Convertible Noteholder and the Company, such 2020 Convertible Noteholder appointed an individual to attend and observe meetings of the Company’s Board of Directors (the “Observer”). On January 27, 2020, as a condition to completion of the 2020 Financing Transaction, the Company entered into the Fourth Omnibus Amendment to the 2010 Secured Notes, whereby the 2010 Secured Notes were subordinated to the Company’s obligations under the terms of the 2020 Secured Notes and the Additional Convertible Notes, as applicable. During the Company’s first fiscal quarter of 2020, the Company repaid in full the aggregate outstanding principal amount of the 2010 Secured Notes, amounting to approximately $2.8 million, which, along with the Company’s payment of accrued interest amounting to approximately $920,000, resulted in the retirement of the 2010 Secured Notes. Corporate Name Change On February 12, 2020, the Company changed its corporate name from MRI Interventions, Inc. to ClearPoint Neuro, Inc. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, ClearPoint Neuro (Canada) Inc. All significant inter-company accounts and transactions have been eliminated. |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. |
Inventory | Inventory Inventory is carried at the lower of cost (first-in, first-out method) or net realizable value. Items in inventory relate predominantly to the Company’s ClearPoint system. Software license inventory related to ClearPoint systems undergoing on-site customer evaluation is included in inventory in the accompanying consolidated balance sheets. All other software license inventory is classified as a non-current asset. The Company periodically reviews its inventory for obsolete items and provides a reserve upon identification of potential obsolete items. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives, principally five to seven years. Leasehold improvements are depreciated on a straight-line basis over the lesser of their estimated useful lives or the term of the related lease. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company periodically evaluates the recoverability of its long-lived assets (finite-lived intangible assets and property and equipment). Whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable, the expected undiscounted future cash flows are compared to the net book value of the related assets. If the net book value of the related assets were to exceed the undiscounted expected future cash flows of the assets, the carrying amount would be reduced to the present value of the expected future cash flows and an impairment loss would be recognized. The Company has not recorded any impairment losses for the years ended December 31, 2019 or 2018. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” which, with subsequent amendments thereto, created a new Topic 606 within the Accounting Standards Codification (“ASC”). Topic 606 is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Prior to adoption, the Company assessed the impact of Topic 606 and determined that adoption would not have a material effect on its consolidated financial statements. The Company adopted Topic 606 in conformity with its provisions on January 1, 2018 under the modified retrospective method. The Company’s revenues are comprised primarily of: (1) product revenues resulting from the sale of functional neurological products, and drug delivery and biologic products; (2) product revenues resulting from the sale of ClearPoint capital equipment; (3) revenues resulting from the rental, service, installation, training and shipping related to ClearPoint capital equipment; and (4) clinical case support revenues in connection with customer-sponsored clinical trials. The Company recognizes revenue when control of the Company’s products and services is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control. Lines of Business; Timing of Revenue Recognition • Functional neurosurgery product, biologics and drug delivery systems product, and therapy product sales • Capital equipment sales o Capital equipment sales preceded by evaluation periods o Capital equipment sales not preceded by evaluation periods: For both types of capital equipment sales described above, the Company’s determination of the point in time at which to recognize revenue represents that point at which the customer has legal title, physical possession, and the risks and rewards of ownership, and the Company has a present right to payment. • Functional neurosurgery and related services: • Biologics and drug delivery services o Outsourced recruitment and/or designation of a clinical services liaison between Company and its customer: o Outsourced technical clinical support of cases performed pursuant to customer-sponsored clinical trials: ▪ Service Access Fees ▪ Procedure-Based o Therapy services • Capital equipment-related services o Rental and equipment service: o Installation, training and shipping: The Company operates in one industry segment, and substantially all its sales are to U.S.-based customers. Payment terms under contracts with customers generally are in a range of 30-60 days after the customers’ receipt of the Company’s invoices. The Company provides a one-year warranty on its functional neurosurgery products, biologics and drug delivery systems products, and capital equipment products that are not otherwise covered by a third-party manufacturer’s warranty. The Company’s contracts with customers do not provide for a right of return other than for product defects. See Note 3 for additional information regarding revenue recognition. |
Research and Development Costs | Research and Development Costs Costs related to research, design and development of products are charged to research and development expense as incurred. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Such assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized in the period that includes the enactment date. The Company provides a valuation allowance against net deferred income tax assets unless, based upon available evidence, it is more likely than not the deferred income tax assets will be realized. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2019 and 2018, the Company had no accrued interest or penalties related to uncertain tax positions. |
Net Loss Per Share | Net Loss Per Share The Company computes net loss per share using the weighted-average number of common shares outstanding during the period. Basic and diluted net loss per share are the same because the conversion, exercise or issuance of all potential common stock equivalents, which comprise the entire amount of the Company’s outstanding common stock options and warrants as described in Note 8, would be anti-dilutive. |
Share-Based Compensation | Share-Based Compensation The Company accounts for compensation for all arrangements under which employees, directors and others receive shares of stock or other equity instruments (including options and warrants) based on fair value. The fair value of each award is estimated as of the grant date and amortized as compensation expense over the requisite vesting period. The fair values of the Company’s share-based awards are estimated on the grant dates using the Black-Scholes valuation model. This valuation model requires the input of highly subjective assumptions, including the expected stock volatility, estimated award terms and risk-free interest rates for the expected terms. To estimate the expected terms, the Company utilizes the “simplified” method for “plain vanilla” options discussed in the Staff Accounting Bulletin 107 (“SAB 107”) issued by the Securities and Exchange Commission (the “SEC”). The Company believes that all factors listed within SAB 107 as pre-requisites for utilizing the simplified method apply to the Company and its share-based compensation arrangements. The Company intends to utilize the simplified method for the foreseeable future until more detailed information about exercise behavior becomes available. The Company based its estimate of expected volatility on the average of: (i) historical volatilities of publicly traded companies it deemed similar to the Company; and (ii) the Company’s historical volatility, which is limited, and will consistently apply this methodology until its own sufficient relevant historical data is exists. The Company utilizes risk-free interest rates based on zero-coupon U.S. treasury instruments, the terms of which are consistent with the expected terms of the equity awards. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero. |
Fair Value Determination of Share-Based Transactions | Fair Value Determination of Share-Based Transactions The Company’s common stock is traded on the Nasdaq Capital Market under the symbol “CLPT.” Quoted closing stock prices are used as a key input in determining the fair value for share-based transactions. For the period from December 9, 2019 until the Company’s corporate name change and stock trading symbol change on February 12, 2020 (see Note 11), the Company’s common stock was traded on the Nasdaq Capital Market under the symbol “MRIC.” For the period from July 3, 2019 through December 8, 2019, the Company’s common stock was traded on the NYSE American LLC, and prior to July 3, 2019, the Company’s common stock was traded in the over-the-counter market and was quoted on the OTCQB Marketplace and the OTC Bulletin Board under the symbol “MRIC.” |
Concentration Risks and Other Risks and Uncertainties | Concentration Risks and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company holds its cash and cash equivalents on deposit with financial institutions in the U.S. insured by the Federal Deposit Insurance Corporation. At December 31, 2019, the Company had approximately $24,000 in bank balances that were in excess of the insured limits. Information with respect to accounts receivable from those customers whose balances comprised more than 10% of accounts receivable at December 31, 2019 and 2018 is as follows: December 31, 2019 2018 Customer – 1 12% 17% Customer – 2 — 12% Sales to one customer comprised 10% of total revenue for the year ended December 31, 2019. No customer accounted for sales in excess of 10% of total revenue for the year ended December 31, 2018. Prior to granting credit, the Company performs credit evaluations of its customers’ financial condition, and generally does not require collateral from its customers. The Company will provide an allowance for doubtful accounts when collections become doubtful. The allowance for doubtful accounts at December 31, 2019 and 2018 was $29,000 and $38,000, respectively. The Company is subject to risks common to emerging companies in the medical device industry, including, but not limited to: new technological innovations; acceptance and competitiveness of its products; dependence on key personnel; dependence on key suppliers; changes in general economic conditions and interest rates; protection of proprietary technology; compliance with changing government regulations; uncertainty of widespread market acceptance of products; access to credit for capital purchases by customers; and product liability claims. Certain components used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such components cannot be accomplished quickly. The inability of any of these suppliers to fulfill the Company’s supply requirements may negatively impact future operating results. |
Adoption of New Accounting Standard, Leases | Adoption of New Accounting Standard – Leases Effective January 1, 2019, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-02, “Leases,” which created a new Topic 842 within the Accounting Standards Codification. Topic 842 established the core principle that a lessee should recognize the assets, representing rights-of-use, and liabilities to make lease payments that arise from leases. See Note 7 for additional information regarding leases. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of concentration of risk | December 31, 2019 2018 Customer – 1 12% 17% Customer – 2 — 12% |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Schedule of revenue recognition | Years Ended December 31, 2019 2018 Products: Disposable products: Functional neurosurgery $ 6,884,085 $ 5,351,557 Biologics and drug delivery 1,458,850 913,424 Therapy 96,925 — Capital equipment 1,036,505 420,039 Total product revenue 9,476,365 6,685,020 Services: Biologics and drug delivery 889,702 175,223 Therapy 225,000 100,000 Capital equipment and other 625,870 393,023 Total service revenue 1,740,572 668,246 Total revenue $ 11,216,937 $ 7,353,266 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | 2019 2018 Raw materials and work in process $ 1,495,190 $ 1,219,753 Software licenses 332,500 122,500 Finished goods 1,412,528 763,723 Inventory included in current assets 3,240,218 2,105,976 Software licenses – non-current 504,400 801,900 $ 3,744,618 $ 2,907,876 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | 2019 2018 Equipment $ 1,195,237 $ 1,176,038 Furniture and fixtures 112,143 112,143 Leasehold improvements 201,065 190,875 Computer equipment and software 148,017 148,017 Loaned systems 584,911 468,782 2,241,373 2,095,855 Less accumulated depreciation and amortization (1,794,211 ) (1,718,149 ) Total property and equipment, net $ 447,162 $ 377,706 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable maturities | Years ending December 31, 2020 $ 2,837,656 Total scheduled principal payments 2,837,656 Less unamortized discounts (765,073 ) $ 2,072,583 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' equity: | |
Schedule of stock options issued by the Company | Options Outstanding Options Exercisable Range of Weighted- Intrinsic Outstanding at January 1, 2018 1,238,199 $ 1.95 $ 385.60 $ 12.47 $78,486 Exercisable at January 1, 2018 567,210 Activity during the year ended December 31, 2018 Granted 167,500 $ 1.40 $ 2.18 $ 1.81 $11,050 Cancelled or forfeited (19,303 ) $ 1.95 $ 385.60 $ 18.77 Outstanding at December 31, 2018 1,386,396 $ 1.40 $ 385.60 $ 11.09 $11,050 Exercisable at December 31, 2018 973,498 - Activity during the year ended December 31, 2019 Granted 256,601 $ 1.65 $ 4.11 $ 3.44 $348,828 Exercised (3,025 ) $ 1.74 $ 2.60 $ 1.89 Cancelled or forfeited (805 ) $ 2.60 $ 385.60 $ 95.37 Outstanding at December 31, 2019 1,639,167 $ 1.40 $ 83.60 $ 9.87 $2,892,027 Exercisable at December 31, 2019 1,293,121 $2,244,783 (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options. |
Schedule of stock options (contractual life expressed in years) | Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted - Weighted - Number Weighted - Weighted - $1.40-$45.20 1,563,540 7.72 $ 7.01 1,217,494 7.42 $ 8.17 $46.40--$83.60 75,627 1.88 $ 69.09 75,627 1.88 $ 69.09 1,639,167 7.45 $ 9.87 1,293,121 7.10 $ 11.73 |
Schedule of company's nonvested stock options | Nonvested Stock Options Shares Weighted - Nonvested, January 1, 2018 670,989 $ 1.45 Activity during the year ended December 31, 2018 Granted 167,500 0.95 Forfeited (15,327 ) 25.22 Vested (442,879 ) 1.71 Nonvested, December 31, 2018 380,283 0.94 Activity during the year ended December 31, 2019 Granted 256,601 1.72 Exercised (2,725 ) 1.89 Forfeited (580 ) 42.66 Vested (287,533 ) 1.35 Nonvested, December 31, 2019 346,046 $ 1.46 |
Schedule of share-based compensation expense | Years Ended December 31, 2019 2018 $ 799,111 $ 1,231,379 |
Schedule of assumptions used in calculating the fair value under the Black-Scholes option-pricing model | Years Ended December 31, 2019 2018 Dividend yield 0% 0% Expected Volatility 52.17% to 52.90% 51.58% to 54.21% Risk free Interest rates 1.39% to 1.72% 2.77% to 3.00% Expected lives (in years) 5.5 to 6.0 5.8 |
Schedule of common stock warrant activity | Shares Weighted - Outstanding at January 1, 2018 8,949,078 $ 4.12 Activity during the year ended December 31, 2018 Exercised (221,773 ) $ 2.15 Terminated (50,824 ) $ 6.64 Outstanding at December 31, 2018 8,676,481 $ 4.17 Activity during the year ended December 31, 2019 Exercised (2,928,681 ) $ 2.20 Terminated (215,533 ) $ 35.32 Outstanding at December 31, 2019 5,532,267 $ 4.00 |
Schedule of information regarding outstanding warrants | Exercise Number Weighted - Intrinsic Value $ 1.83 1,540 0.96 $ 4,574 $ 2.20 4,025,167 2.40 10,465,434 $ 5.50 1,110,580 1.67 — $ 16.23 242,021 0.96 — $ 21.10 152,084 0.96 — $ 40.00 875 0.07 — 5,532,267 2.15 $ 10,470,008 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred income tax assets and liabilities | As of December 31, 2019 2018 Deferred income tax assets: Net operating loss carryforwards $ 21,062,933 $ 20,080,697 Share based compensation 1,985,627 1,926,408 Accrued expenses 778,903 297,700 Property and equipment — 74,447 Other 2,798 90,910 23,830,261 22,470,162 Less valuation allowance (23,745,060 ) (22,470,162 ) Total deferred income tax assets 85,201 — Deferred tax liability - depreciation (85,201 ) — Net deferred tax assets $ — $ — |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments under license arrangements | Years ending December 31, 2020 $ 60,000 2021 85,000 2022 150,000 2023 200,000 2024 200,000 Thereafter 1,710,000 Total minimum payments $ 2,405,000 |
Description of the Business a_2
Description of the Business and Financial Condition (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cumulative net loss | $ 112,739,620 | $ 107,199,586 | |
Offering costs | $ 94,162 | ||
Securities Purchase Agreement (the "2019 PIPE") | Accredited Investors | |||
Sale of stock, number of shares issued | 2,426,455 | ||
Share price (in dollars per share) | $ 3.10 | ||
Offering costs | $ 94,000 | ||
Proceeds from issuance of stock | $ 7,500,000 | ||
Security Purchase Agreement | Subsequent Event | Secured Convertible Notes (the "2020 Secured Notes") | |||
Secured convertible notes | $ 17,500,000 | ||
Term of secured convertible notes | 5 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Concentration of Risk (Details) - Accounts Receivable | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Customer #1 | ||
Concentration risk, percentage | 12.00% | 17.00% |
Customer #2 | ||
Concentration risk, percentage | 12.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Bank balances in excess of insured limits | $ 24,000 | |
Allowance for doubtful accounts | $ 29,000 | $ 38,000 |
Payment terms under contracts with customers | A range of 30-60 days after the customers' receipt of the Company's invoices. | |
Minimum | ||
Term of service agreements (in years) | 1 year | |
Property and equipment, estimated useful lives | 5 years | |
Maximum | ||
Term of service agreements (in years) | 3 years | |
Property and equipment, estimated useful lives | 7 years |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenues | $ 11,216,937 | $ 7,353,266 |
Product - Functional Neurosurgery | ||
Total revenues | 6,884,085 | 5,313,041 |
Product - Biologics and Drug Delivery | ||
Total revenues | 1,458,850 | 913,424 |
Products - Therapy | ||
Total revenues | 96,925 | |
Product - Capital Equipment | ||
Total revenues | 1,036,505 | 420,039 |
Product - Product Revenue | ||
Total revenues | 9,476,365 | 6,685,020 |
Services - Biologics and Drug Delivery | ||
Total revenues | 889,702 | 175,223 |
Service - Therapy | ||
Total revenues | 225,000 | 100,000 |
Services - Capital Equipment and Other | ||
Total revenues | 625,870 | 393,023 |
Services - Service Revenue | ||
Total revenues | $ 1,740,572 | $ 668,246 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenues | $ 11,216,937 | $ 7,353,266 |
Deferred revenue | 625,000 | |
Unbilled accounts receivable | 172,000 | |
Development Services Agreement | ||
Accounts receivable | 127,600 | |
Deferred revenue | 102,000 | |
Letter of Intent | Investor | ||
Service fees receivable, quarterly | 500,000 | |
Remaining Performance Obligations Capital Equipment-Related Service Revenue | ||
Total revenues | 1,100,000 | |
Capital Equipment-Related Service Revenue | ||
Total revenues | $ 228,000 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in process | $ 1,495,190 | $ 1,219,753 |
Software licenses | 332,500 | 122,500 |
Finished goods | 1,412,528 | 763,723 |
Inventory included in current assets | 3,240,218 | 2,105,976 |
Software licenses - non-current | 504,400 | 801,900 |
Total inventory | $ 3,744,618 | $ 2,907,876 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 2,241,373 | $ 2,095,855 |
Less accumulated depreciation and amortization | (1,794,211) | (1,718,149) |
Total property and equipment, net | 447,162 | 377,706 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,195,237 | 1,176,038 |
Furniture And Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 112,143 | 112,143 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 201,065 | 190,875 |
Computer Equipment And Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 148,017 | 148,017 |
Loaned Systems | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 584,911 | $ 468,782 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 143,604 | $ 109,439 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable Maturities (Details) | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 2,837,656 |
Total scheduled principal payments | 2,837,656 |
Less unamortized discounts | (765,073) |
Total | $ 2,072,583 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
2014 Junior Secured Notes Payable | ||
Debt Instrument [Line Items] | ||
Repayment of notes payable | $ 2,000,000 | |
Stated interest rate | 12.00% | |
Maturity date | Sep. 30, 2020 | |
2010 Junior Secured Notes Payable | ||
Debt Instrument [Line Items] | ||
Debt face amount | $ 2,800,000 | $ 3,000,000 |
2010 Junior Secured Notes Payable | Chairman and Officer | ||
Debt Instrument [Line Items] | ||
Debt face amount | $ 197,000 | $ 197,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Lease cost (included in general and administrative expense) | $ 113,393 | $ 106,911 |
Weighted-average discount rate | 6.69% | |
Weighted-average remaining lease term (months) | 47 months 11 days | |
Office Lease - Irvine, California | ||
Commenced date | Oct. 1, 2018 | |
Lease expiration date | Sep. 30, 2023 | |
Lease term | 5 years | |
Lease renewal term | 5 years | |
Discount rate | 6.70% | |
Office Lease - Mississauga, Ontario, Canada | ||
Commenced date | Aug. 1, 2018 | |
Lease expiration date | Jul. 31, 2020 | |
Lease term | 1 year | |
Lease renewal term | 1 year | |
Discount rate | 6.90% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options Issued by the Company (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at beginning | 1,386,396 | 1,238,199 | |
Exercisable at beginning | 973,498 | 567,210 | |
Granted | 256,601 | 167,500 | |
Exercised | (3,025) | ||
Cancelled or forfeited | (805) | (19,303) | |
Outstanding at ending | 1,639,167 | 1,386,396 | |
Exercisable at ending | 1,293,121 | 973,498 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning | $ 11.09 | $ 12.47 | |
Granted | 3.44 | 1.81 | |
Exercised | 1.89 | ||
Cancelled or forfeited | 95.37 | 18.77 | |
Outstanding at ending | $ 9.87 | $ 11.09 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Intrinsic Value [Abstract] | |||
Outstanding at beginning | [1] | $ 11,050 | $ 78,486 |
Granted | [1] | 348,828 | 11,050 |
Outstanding at ending | [1] | 2,892,027 | $ 11,050 |
Exercisable at ending | [1] | $ 2,244,783 | |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning | $ 1.40 | $ 1.95 | |
Granted | 1.65 | 1.40 | |
Exercised | 1.74 | ||
Cancelled or forfeited | 2.60 | 1.95 | |
Outstanding at ending | 1.40 | 1.40 | |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning | 385.60 | 385.60 | |
Granted | 4.11 | 2.18 | |
Exercised | 2.60 | ||
Cancelled or forfeited | 385.60 | 385.60 | |
Outstanding at ending | $ 83.60 | $ 385.60 | |
[1] | Intrinsic value is calculated as the estimated fair value of the Company's stock at the end of the related period less the option exercise price of in-the-money options. |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Stock Options (Contractual Life Expressed in Years) (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of Options Outstanding | shares | 1,639,167 |
Options Outstanding Weighted - Average Remaining Contractual Life (in years) | 7 years 5 months 1 day |
Options Outstanding Weighted - Average Exercise Price | $ / shares | $ 9.87 |
Number of Options Exercisable | shares | 1,293,121 |
Options Exercisable Weighted - Average Remaining Contractual Life (in years) | 7 years 1 month 6 days |
Options Exercisable Weighted - Average Exercise Price | $ / shares | $ 11.73 |
Exercise Price $1.40 - $45.20 | |
Number of Options Outstanding | shares | 1,563,540 |
Options Outstanding Weighted - Average Remaining Contractual Life (in years) | 7 years 8 months 19 days |
Options Outstanding Weighted - Average Exercise Price | $ / shares | $ 7.01 |
Number of Options Exercisable | shares | 1,217,494 |
Options Exercisable Weighted - Average Remaining Contractual Life (in years) | 7 years 5 months 1 day |
Options Exercisable Weighted - Average Exercise Price | $ / shares | $ 8.17 |
Exercise Price $46.40 - $83.60 | |
Number of Options Outstanding | shares | 75,627 |
Options Outstanding Weighted - Average Remaining Contractual Life (in years) | 1 year 10 months 17 days |
Options Outstanding Weighted - Average Exercise Price | $ / shares | $ 69.09 |
Number of Options Exercisable | shares | 75,627 |
Options Exercisable Weighted - Average Remaining Contractual Life (in years) | 1 year 10 months 17 days |
Options Exercisable Weighted - Average Exercise Price | $ / shares | $ 69.09 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Company's Nonvested Stock Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Balance at beginning | 380,283 | 670,989 |
Granted | 256,601 | 167,500 |
Exercised | (2,725) | |
Forfeited | (580) | (15,327) |
Vested | (287,533) | (442,879) |
Balance at ending | 346,046 | 380,283 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Balance at beginning | $ 0.94 | $ 1.45 |
Granted | 1.72 | 0.95 |
Exercised | 1.89 | |
Forfeited | 42.66 | 25.22 |
Vested | 1.35 | 1.71 |
Balance at ending | $ 1.46 | $ 0.94 |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Share-Based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stockholders' equity: | ||
Share-based compensation expense | $ 799,111 | $ 1,231,379 |
Stockholders' Equity - Schedu_5
Stockholders' Equity - Schedule of Assumptions Used in Calculating the Fair Value (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Dividend yield | 0.00% | 0.00% |
Expected lives (in years) | 5 years 10 months | |
Minimum | ||
Expected Volatility | 52.17% | 51.58% |
Risk free Interest rates | 1.39% | 2.77% |
Expected lives (in years) | 5 years 6 months | |
Maximum | ||
Expected Volatility | 52.90% | 54.21% |
Risk free Interest rates | 1.72% | 3.00% |
Expected lives (in years) | 6 years |
Stockholders' Equity - Schedu_6
Stockholders' Equity - Schedule of Common Stock Warrant Activity (Details) - Common Stock Warrants - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding at beginning | 8,676,481 | 8,949,078 |
Exercised | (2,928,681) | (221,773) |
Terminated | (215,533) | (50,824) |
Outstanding at ending | 5,532,267 | 8,676,481 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding at beginning | $ 4.17 | $ 4.12 |
Exercised | 2.20 | 2.15 |
Terminated | 35.32 | 6.64 |
Outstanding at ending | $ 4 | $ 4.17 |
Stockholders' Equity - Schedu_7
Stockholders' Equity - Schedule of Information Regarding Outstanding Warrants (Details) - Common Stock Warrants | 12 Months Ended | |
Dec. 31, 2019USD ($) | ||
Number Outstanding | $ 5,532,267 | |
Weighted - Average Remaining Contractual Life | 2 years 1 month 2 days | |
Intrinsic Value | $ 10,470,008 | [1] |
Exercise Price $1.83 | ||
Number Outstanding | $ 1,540 | |
Weighted - Average Remaining Contractual Life | 11 months 15 days | |
Intrinsic Value | $ 4,574 | [1] |
Exercise Price $2.20 | ||
Number Outstanding | $ 4,025,167 | |
Weighted - Average Remaining Contractual Life | 2 years 4 months 3 days | |
Intrinsic Value | $ 10,465,434 | [1] |
Exercise Price $5.50 | ||
Number Outstanding | $ 1,110,580 | |
Weighted - Average Remaining Contractual Life | 1 year 8 months 1 day | |
Intrinsic Value | [1] | |
Exercise Price $16.23 | ||
Number Outstanding | $ 242,021 | |
Weighted - Average Remaining Contractual Life | 11 months 15 days | |
Intrinsic Value | [1] | |
Exercise Price $21.10 | ||
Number Outstanding | $ 152,084 | |
Weighted - Average Remaining Contractual Life | 11 months 15 days | |
Intrinsic Value | [1] | |
Exercise Price $40.00 | ||
Number Outstanding | $ 875 | |
Weighted - Average Remaining Contractual Life | 25 days | |
Intrinsic Value | [1] | |
[1] | Intrinsic value is calculated as the estimated fair value of the Company's stock at December 31, 2019 less the warrant exercise price of in-the-money warrants. |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of awards oustanding | 1,639,167 | 1,386,396 | 1,238,199 |
Number of awards granted | 256,601 | 167,500 | |
Unrecognized compensation expense | $ 553,221 | ||
Compensation expense, period for recognition | 1 year 9 months | ||
Offering costs | $ 94,162 | ||
Per share weighted average grant date fair value of options granted | $ 1.72 | $ 0.95 | |
Amended and Restated 2013 Incentive Compensation Plan | |||
Common stock reserved for issuance | 1,956,250 | ||
Number of share available for grant | 475,639 | ||
Number of awards oustanding | 1,086,234 | ||
Number of awards granted | 394,377 | ||
Director | |||
Number of shares issued for services | 29,861 | 57,386 | |
Number of shares issued for services in lieu of cash | $ 117,163 | $ 113,665 | |
Securities Purchase Agreement (the "2019 PIPE") | Accredited Investors | |||
Sale of stock, number of shares issued | 2,426,455 | ||
Offering costs | $ 94,000 | ||
Share price (in dollars per share) | $ 3.10 | ||
Proceeds from issuance of stock | $ 7,500,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred income tax assets: | ||
Net operating loss carryforwards | $ 21,062,933 | $ 20,080,697 |
Share based compensation | 1,985,627 | 1,926,408 |
Accrued expenses | 778,903 | 297,700 |
Property and equipment | 74,447 | |
Other | 2,798 | 90,910 |
Deferred income tax assets (liabilities), gross | 23,830,261 | 22,470,162 |
Less valuation allowance | (23,745,060) | (22,470,162) |
Total deferred income tax assets | 85,201 | |
Deferred tax liability, depreciation | (85,201) | |
Net deferred tax assets |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Percentage of valuation allowance | 100.00% | |
Increase in valuation allowance | $ 1,300,000 | $ 2,800,000 |
Operating loss carryforward expirations | 1,300,000 | |
Federal | ||
Operating loss carryforwards | 89,600,000 | |
State | ||
Operating loss carryforwards | $ 30,300,000 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Payments under License Arrangements (Details) | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 60,000 |
2021 | 85,000 |
2022 | 150,000 |
2023 | 200,000 |
2024 | 200,000 |
Thereafter | 1,710,000 |
Total minimum payments | $ 2,405,000 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
License Agreement | ||
Royalty expenses | $ 40,000 | $ 40,000 |
Technical Service and Training Agreements | ||
Technical research services fees payable in future | 26,347 | 37,146 |
Software License Agreement | ||
Royalty expenses | $ 138,000 | $ 107,200 |
Cardiac EP Business Participation Plan Agreements | ||
Initial participation interest | 6.60% | |
Revised participation interest | 0.38% | |
Termination date | Jun. 30, 2025 | |
Key Personnel Incentive Program | ||
Description of participants | Two participants, one a consultant to the Company and a former non-employee director of the Company, and the other a former employee of the Company. | |
Payment in the event of a sale of the company | $ 1,000,000 | |
Description of sale of company transaction | One of the participants will be entitled to receive a payment equal to $700,000 in the event the net proceeds from a sale of the Company exceeds $50,000,000. If a sale of the Company has not occurred by December 31, 2025, KPIP will terminate. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event | 1 Months Ended |
Jan. 31, 2020USD ($)$ / shares | |
2010 Junior Secured Notes Payable | |
Repayment of secured notes | $ 2,800,000 |
Payments for accrued interest | 920,000 |
Security Purchase Agreement | Secured Convertible Notes (the "2020 Secured Notes") | |
Secured convertible notes | $ 17,500,000 |
Term of secured convertible notes | 5 years |
Interest rate terms | Bears interest at a rate equal to the sum of (i) the greater of (x) the three (3)-month London Interbank Offered Rate and (y) two percent (2%), plus (ii) a margin of 2% on the outstanding balance of the 2020 Notes, payable quarterly on the first business day of each calendar quarter. |
Conversion price, per share | $ / shares | $ 6 |
Secured convertible notes, terms and conditions | At any time on or prior to January 11, 2022, the Company shall have the right, but not the obligation, to request that one of the 2020 Convertible Noteholders purchase an additional $5,000,000 in aggregate principal amount of Second Closing Notes (as defined in the SPA) and an additional $10,000,000 in aggregate principal amount of additional Third Closing Notes (as defined in the SPA) (together, the “Additional Convertible Notes”), provided that the such 2020 Convertible Noteholder has the right, but not the obligation, to purchase such notes. The terms of the Additional Convertible Notes are the same as the terms of the 2020 Secured Notes, except that: (a) the Additional Convertible Notes would bear interest at a rate equal to the sum of (i) the greater of (x) the three (3)-month London Interbank Offered Rate and (y) 2%, plus (ii) a margin of 7% on their outstanding balance; and (b) only 70% of the Additional Convertible Notes’ principal amount outstanding would be convertible into shares of the Company’s common stock. |