Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 10, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | MRI INTERVENTIONS, INC. | ||
Entity Central Index Key | 0001285550 | ||
Document Type | 10-K | ||
Trading Symbol | MRIC | ||
Document Period End Date | Dec. 31, 2018 | ||
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 | $ 23,033,238 | ||
Entity Common Stock, Shares Outstanding | 11,052,770 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 3,101,133 | $ 9,289,831 |
Accounts receivable, net | 1,233,896 | 949,415 |
Inventory, net | 2,105,976 | 2,314,184 |
Prepaid expenses and other current assets | 213,684 | 192,727 |
Total current assets | 6,654,689 | 12,746,157 |
Property and equipment, net | 377,706 | 267,667 |
Software license inventory | 801,900 | 871,900 |
Other assets | 22,538 | 11,641 |
Total assets | 7,856,833 | 13,897,365 |
Current liabilities: | ||
Accounts payable | 500,929 | 759,445 |
Accrued compensation | 764,960 | 806,445 |
Other accrued liabilities | 390,838 | 480,159 |
Derivative liabilities | 95,786 | |
Deferred product and service revenues | 350,963 | 256,178 |
Senior secured note payable | 2,000,000 | |
Total current liabilities | 2,007,690 | 4,398,013 |
Accrued interest | 857,500 | 752,500 |
Total liabilities | 6,345,831 | 8,068,625 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized at December 31, 2018 and 2017; none issued and outstanding at December 31, 2018 and 2017 | ||
Common stock, $0.01 par value; 200,000,000 shares authorized at December 31, 2018 and 2017; 11,018,364 and 10,693,851 shares issued and outstanding at December 31, 2018 and 2017, respectively | 110,183 | 106,937 |
Additional paid-in capital | 108,600,405 | 106,757,920 |
Accumulated deficit | (107,199,586) | (101,036,117) |
Total stockholders' equity | 1,511,002 | 5,828,740 |
Total liabilities and stockholders' equity | 7,856,833 | 13,897,365 |
Junior Secured Notes Payable 2014 [Member] | ||
Current liabilities: | ||
Junior secured notes payable, net | 1,939,850 | 1,874,570 |
Junior Secured Notes Payable 2010 [Member] | ||
Current liabilities: | ||
Junior secured notes payable, net | $ 1,540,791 | $ 1,043,542 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
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 | 11,018,364 | 10,693,851 |
Common stock, outstanding | 11,018,364 | 10,693,851 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||
Total revenues | $ 7,353,266 | $ 7,379,525 |
Cost of revenues | 2,433,069 | 2,898,808 |
Research and development costs | 2,310,139 | 2,813,733 |
Sales and marketing expenses | 3,532,040 | 3,956,455 |
General and administrative expenses | 4,325,786 | 4,046,366 |
Operating loss | (5,247,768) | (6,335,837) |
Other income (expense): | ||
Gain on change in fair value of derivative liabilities | 64,318 | 24,728 |
Other income, net | 364 | 16,682 |
Interest expense, net | (980,383) | (872,926) |
Net loss | $ (6,163,469) | $ (7,167,353) |
Net loss per share attributable to common stockholders: | ||
Basic and diluted (in dollars per share) | $ (0.56) | $ (0.93) |
Weighted average shares outstanding: | ||
Basic and diluted (in shares) | 10,928,213 | 7,738,343 |
Product Revenue [Member] | ||
Revenues: | ||
Total revenues | $ 6,685,020 | $ 7,024,010 |
Service and Other Revenues [Member] | ||
Revenues: | ||
Total revenues | $ 668,246 | $ 355,515 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balances at beginning at Dec. 31, 2016 | $ 36,220 | $ 93,076,475 | $ (93,868,764) | $ (756,069) |
Balances at beginning (in shares) at Dec. 31, 2016 | 3,622,032 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | $ 3,544 | 1,242,057 | 1,245,601 | |
Share-based compensation (in shares) | 354,391 | |||
Under contractual arrangements | $ 883 | 501,149 | 502,032 | |
Under contractual arrangements (in shares) | 88,333 | |||
Warrant exercises | $ 40 | 11,169 | 11,209 | |
Warrant exercises (in shares) | 4,095 | |||
Private placement, net of offering costs | $ 66,250 | 11,927,070 | 11,993,320 | |
Private placement, net of offering costs (in shares) | 6,625,000 | |||
Net loss for the year | (7,167,353) | (7,167,353) | ||
Balances at end at Dec. 31, 2017 | $ 106,937 | 106,757,920 | (101,036,117) | 5,828,740 |
Balances at end (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 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (6,163,469) | $ (7,167,353) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization | 109,439 | 116,454 |
Share-based compensation | 1,231,379 | 1,245,601 |
Expenses paid through the issuance of common stock | 77,500 | 502,032 |
Gain on change in fair value of derivative liabilities | (64,318) | (24,178) |
Amortization of debt issuance costs and original issue discounts | 562,529 | 426,358 |
Increase (decrease) in cash resulting from changes in: | ||
Accounts receivable | (284,481) | (83,472) |
Inventory | 122,220 | (469,922) |
Prepaid expenses and other current assets | (20,957) | (57,731) |
Other assets | (10,897) | (999) |
Accounts payable and accrued expenses | (284,322) | (512,362) |
Deferred revenue | 94,785 | 33,061 |
Net cash flows from operating activities | (4,630,592) | (5,992,511) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (63,490) | (26,752) |
Net cash flows from investing activities | (63,490) | (26,752) |
Cash flows from financing activities: | ||
Net proceeds from equity private placements and exercise of warrants | 11,993,320 | |
Exercise of warrants | 505,384 | |
Repayment of senior secured note | (2,000,000) | |
Net cash flows from financing activities | (1,494,616) | 11,993,320 |
Net change in cash and cash equivalents | (6,188,698) | 5,974,057 |
Cash and cash equivalents, beginning of year | 9,289,831 | 3,315,774 |
Cash and cash equivalents, end of year | 3,101,133 | 9,289,831 |
Cash paid for: | ||
Income taxes | ||
Interest | $ 210,722 | $ 348,528 |
Description of the Business and
Description of the Business and Financial Condition | 12 Months Ended |
Dec. 31, 2018 | |
Description Of Business And Liquidity | |
Description of the Business and Financial Condition | 1. Description of the Business and Financial Condition MRI Interventions, Inc. (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, 2018 of approximately $107 million. Since inception, the Company has financed its operations principally from the sale of equity securities, the issuance of notes payable and license arrangements, the most recent such financing transaction being a May 2017 private placement of equity, which resulted in net proceeds of $12.0 million (the “2017 PIPE”). The Company’s plans for the next twelve months reflect management’s anticipation of increases in revenues from sales of the ClearPoint system and related disposable products resulting from greater utilization at existing installed sites and the installation of the ClearPoint system at new sites, with resulting decreases in loss from operations and in cash flow used in operations. There is no assurance, however, that the Company will be able to achieve its anticipated results, and even in the event such results are achieved, the Company expects to continue to consume cash in its operations over at least the next twelve months. As a result of the foregoing, the Company believes it will be necessary to seek additional financing from the sale of equity or debt securities, which would result in dilution to its current stockholders, from the establishment of a credit facility, or from the entry into an agreement with a strategic partner or some other form of collaborative relationship. There is no assurance, however, that the Company will be able to obtain such additional financing on commercially reasonable terms, if at all, and there is no assurance that any additional financing that the Company does obtain will be sufficient to meet its needs. If the Company is not able to obtain the additional financing on a timely basis, the Company may be unable to achieve its anticipated results, and the Company may not be able to meet its other obligations as they become due. As such, there is substantial 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, 2018 | |
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, MRI Interventions (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. Derivative Liabilities Derivative liabilities at December 31, 2017 represented the fair value of conversion features of certain notes and of certain warrants to purchase common stock (see Note 8). These derivative liabilities were calculated utilizing the Monte Carlo simulation valuation method. Changes in the fair values of these warrants were recognized as other income or expense in the related consolidated statements of operations. Fair Value Measurements The Company measures and records certain financial assets and liabilities at fair value on a recurring basis. GAAP provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority, referred to as Level 1, to quoted prices in active markets for identical assets and liabilities. The next priority, referred to as Level 2, is given to quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active; that is, markets in which there are few transactions for the asset or liability, or inputs other than quoted prices that are observable for the asset or liability. The lowest priority, referred to as Level 3, is given to unobservable inputs. There are no amounts in the Company’s consolidated balance sheet at December 31, 2018, that were derived from fair value calculations. The table below reflects the level of the inputs used in the Company’s fair value calculations at December 31, 2017: Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2017 Derivative liabilities – warrants $ — $ — $ 79,286 $ 79,286 Derivative liabilities – debt conversion feature $ — $ — $ 16,500 $ 16,500 Inputs used in the Company’s Level 3 calculation of fair value include the assumed dividend rate on the Company’s common stock, risk-free interest rates stock price volatility and the likelihood of a future equity financing transaction, all of which are further discussed in Note 8. Carrying amounts of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their short maturities. 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, 2018 or 2017. 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) functional neurosurgery and related service revenues resulting from the performance of product line commercialization planning and execution for a third party; (4) clinical case support revenues in connection with customer-sponsored clinical trials; and (5) revenues resulting from the rental, service, installation, training and shipping related to ClearPoint capital equipment. 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, and biologics and drug delivery systems 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: o Other related services ● Capital equipment-related services o Rental, service and other revenues: 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. Other Judgments and Estimates – Transaction price Substantially all the Company’s contracts with customers are based on customer-issued purchase orders for distinct products or services. For these contracts, the transaction price is determined upon establishment of the contract that contains the final terms of the sale. One of the Company’s contracts bundles performance obligations that include biologics and drug delivery system products, capital equipment products and clinical support services, for which the Company estimates the transaction price by allocating among the performance obligations reductions to revenue for discounts given on certain elements with the bundle. 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, 2018 and 2017, 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 7, 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 in the over-the-counter market and is quoted on the OTCQB Marketplace and the OTC Bulletin Board under the symbol “MRIC.” Quoted closing stock prices are used as a key input in determining the fair value for share-based transactions. 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, 2018, the Company had approximately $143,000 in bank balances that were in excess of the insured limits. Information with respect to accounts receivable from those customers who comprised more than 10% of accounts receivable at December 31, 2018 and 2017 is as follows: December 31, 2018 2017 Customer – 1 17% 10% Customer – 2 12% – 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, 2018 and 2017 was $38,000 and $29,000, 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. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases,” which created a new Topic, ASC Topic 842 and 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. For leases with a term of 12 months or less, a lessee is permitted to make an election under which such assets and liabilities would not be recognized, and lease expense would be recognized generally on a straight-line basis over the lease term. This standard is effective for the Company beginning in 2019, and early application is permitted. The Company currently has two leases for manufacturing and office space that would be subject to the provisions of ASU 2016-02. The Company believes that adoption of ASC Topic 842 (as amended by ASC 2017-13) will result in the establishment on the Company’s consolidated balance sheet of an asset and liability for each such lease, but that neither such assets and liabilities nor the resulting lease expense recognition will have a material effect on the Company’s consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception,” which, among other items, changes the classification of certain equity-linked financial instruments (or embedded features) with down round features. The standard is effective for the Company beginning in 2019, and early adoption is permitted. Because the derivative liabilities described in Note 8, all of which the Company believes are included in the scope of the standard, expired during the year ended December 31, 2018, the Company believes that adoption of the standard on its effective date will not have a material effect on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718),” which expanded the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. The standard is effective for the Company beginning in 2019, and early adoption is permitted. The Company believes that adoption of the standard will not have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) – Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which modify the disclosure requirements for fair value measurements. The standard is effective for the Company beginning in 2020, at which time certain modifications are to be applied prospectively and others are to be applied retrospectively, and early adoption is permitted. The Company believes that adoption of the standard will not have a material effect on the Company’s consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Revenue by Service Line Years Ended December 31, 2018 2017 Products: Disposable products: Functional neurosurgery $ 5,313,041 $ 5,233,092 Biologics and drug delivery 951,940 675,809 Capital equipment 420,039 1,115,109 Total product revenue 6,685,020 7,024,010 Services: Functional neurosurgery 100,000 — Biologics and drug delivery 175,223 — Capital equipment and other 393,023 355,515 Total service revenue 668,246 355,515 Total revenue $ 7,353,266 $ 7,379,525 Contract Balances ● Contract assets ● Contract liabilities – During the year ended December 31, 2018, the Company recognized capital equipment-related service revenue of $142,605 which was previously included in deferred revenue in the accompanying consolidated balance sheet at December 31, 2017. In connection with one customer contracts, the Company bills the customer for certain product the customer ordered and is committed to purchase, but which is shipped at a future date. At December 31, 2018, such billings amounted to $8,000, which amount is included in each of accounts receivable and deferred revenue in the accompanying condensed consolidated balance sheet. There were no such billings at December 31, 2017. 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, 2018 are not material. Revenue with respect to remaining performance obligations related to capital equipment-related service agreements with original terms in excess of one year amounted to $303,912 at December 31, 2018. The Company expects to recognize this revenue within the next three years. One contract with a customer has a stated term of three years. However, the customer has the right to terminate the contract for convenience upon a 30-day notice, in which event the customer would be obligated to compensate the Company for up to three months of previously forecast purchases. Based on the foregoing, the Company uses the practical expedient available under Topic 606 pursuant to which such contracts are considered to have a term of less than one year and for which disclosure of the transaction price for the remaining performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue is not required. Accordingly, the Company has not included such disclosure for this contract. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory Inventory consists of the following as of December 31: 2018 2017 Raw materials and work in process $ 1,219,753 $ 1,167,142 Software licenses 122,500 52,500 Finished goods 763,723 1,094,542 Inventory included in current assets 2,105,976 2,314,184 Software licenses – non-current 801,900 871,900 $ 2,907,876 $ 3,186,084 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment consist of the following as of December 31: 2018 2017 Equipment $ 1,176,038 $ 1,151,543 Furniture and fixtures 112,143 112,143 Leasehold improvements 190,875 179,999 Computer equipment and software 148,017 148,017 Loaned systems 468,782 348,473 2,095,855 1,940,175 Less accumulated depreciation and amortization (1,718,149 ) (1,672,508 ) Total property and equipment, net $ 377,706 $ 267,667 Depreciation and amortization expense related to property and equipment for the years ended December 31, 2018 and 2017 was $109,439 and $116,454, 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, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | 6. Notes Payable Senior Secured Note Payable The indebtedness outstanding under the senior secured note payable to Brainlab, originally issued to Brainlab on April 5, 2011, and subsequently amended and restated on March 6, 2013 and April 4, 2016 (the “Brainlab Note”), at December 31, 2017 was $2.0 million and had a maturity date of December 31, 2018. Interest, at an annual rate of 5.5%, was payable quarterly in arrears. On September 25, 2018, the Company repaid all the outstanding debt, together with interest. In connection with the repayment, the security agreement, under which the Brainlab Note had been collateralized by all the assets of the Company, was terminated. 2014 Junior Secured Notes Payable The indebtedness outstanding under the 2014 Junior Secured Notes Payable (the “2014 Secured Notes”) at each of December 31, 2018 and 2017 was $1.975 million. On September 25, 2018, the Company entered into an amendment (the “Third Omnibus Amendment”) with the holder of the 2014 Secured Notes representing a majority of the aggregate principal balance of such notes (the “Majority Note Holder”) who, under the terms of the 2014 Secured Notes, has the ability to amend any term of the 2014 Secured Notes. Pursuant to the Third Omnibus Amendment, the Majority Note Holder and the Company agreed to extend the maturity date of all the 2014 Secured Notes by eighteen months from their original maturity date in March 2019 to September 2020. No other terms of the 2014 Secured Notes were modified. The 2014 Secured Notes bear interest at an annual rate of 12%, payable semi-annually in arrears, and are collateralized by a first-priority security interest in all the Company’s assets. Under the terms of a securities purchase agreement, the 2014 Secured Notes were issued in a private placement that included warrants (the “investor warrants”) to purchase 0.01 shares of the Company’s common stock for each dollar in principal amount. Under GAAP, the Company allocated the private placement proceeds proportionately between the 2014 Secured Notes and the investor warrants based on their relative fair values, with the amount allocated to the fair value of the investor warrants recorded as equity and as a discount to the carrying amount at the date of issuance. This discount is being amortized to interest expense over the contractual life, as amended as described above, of the 2014 Secured Notes using the effective interest method. The unamortized discount at December 31, 2018 and 2017 was $23,719 and $67,770, respectively. The carrying amount of the 2014 Secured Notes in the accompanying consolidated balance sheets is also presented net of deferred financing costs, as discussed further below. The Company’s placement agents earned cash commissions of $145,500 as well as warrants (the “placement agent warrants”) to purchase shares of the Company’s common stock. The placement agent warrants have the same terms and conditions as the investor warrants. The placement agent cash commissions, the fair value of the placement agent warrants, and other offering expenses were recorded as deferred financing costs and are presented as reductions of the carrying amount of the 2014 Secured Notes in the accompanying consolidated balance sheets. These deferred financing costs, having an unamortized balance of $11,430 and $32,660 at December 31, 2018 and 2017, respectively, are being amortized to interest expense over the contractual life, as amended as described above, of the 2014 Secured Notes using the effective interest method. 2010 Junior Secured Notes Payable The indebtedness outstanding under the 2010 Junior Secured Notes Payable (the “2010 Secured Notes”) at each of December 31, 2018 and 2017 was $3.0 million. The 2010 Secured Notes accrue interest at an annual rate of 3.5% and are collateralized by a security interest in all the Company’s assets, which security interest is junior and subordinate to the security interest that collateralizes the 2014 Secured Notes. All outstanding principal and interest on the 2010 Secured Notes will be due and payable in a single payment upon maturity in November 2020. Under the terms of a securities purchase agreement, the 2010 Secured Notes were issued in a private placement of units that included the 2010 Secured Notes and one share of the Company’s common stock. Under GAAP, the Company allocated the $3.0 million in proceeds from the sale of the units between the 2010 Secured Notes and the shares of common stock based on their relative fair values. The amount allocated to the value of the shares of common stock was recorded as equity and as a discount to the carrying value of the 2010 Secured Notes at their date of issuance. The unamortized discount at December 31, 2018 and 2017 was $1,459,209 and $1,956,458, respectively. This discount is being amortized to interest expense over the 10-year term of the notes using the effective interest method. At each of December 31, 2018 and 2017, 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. Scheduled Notes Payable Maturities Scheduled principal payments as of December 31, 2018 with respect to notes payable are summarized as follows: Years ending December 31, 2019 $ — 2020 4,975,000 Total scheduled principal payments 4,975,000 Less unamortized discounts (1,482,929 ) Less unamortized deferred financing costs (11,430 ) $ 3,480,641 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' equity: | |
Stockholders' Equity | 7. Stockholders’ Equity 2017 Private Placement On May 26, 2017, the Company completed the 2017 PIPE pursuant to a Securities Purchase Agreement dated May 25, 2017 (the “2017 PIPE Purchase Agreement”) with certain accredited investors (collectively, the “2017 PIPE Investors”) for the private placement of 6,625,000 units (the “2017 PIPE Units”) at a purchase price of $2.00 per unit, with each unit consisting of: (i) one share of the Company’s common stock; and (ii) a warrant to purchase one share of the Company’s common stock (each, a “2017 PIPE Warrant” and collectively, the “2017 PIPE Warrants”). In connection with the sale of the 2017 PIPE Units, the Company received aggregate gross proceeds of approximately $13.25 million, before deducting placement agents’ fees and offering expenses aggregating approximately $1.3 million. In addition, the placement agents for the 2017 PIPE received, in the aggregate, warrants (“2017 PIPE Placement Agent Warrants”) to purchase up to 509,200 shares of common stock. Purchase Agreement The 2017 PIPE Purchase Agreement contains representations and warranties by the Company and the 2017 PIPE Investors and covenants of the Company and the 2017 PIPE Investors (including indemnification from the Company in the event of breaches of its representations and warranties), which the Company believes are customary for transactions of this type. Warrants The 2017 PIPE Warrants are exercisable, in full or in part, at any time prior to the fifth anniversary of their issuance, at an exercise price of $2.20 per share, subject to provisions for: (a) adjustments in the case of certain corporate transactions; (b) consideration to be received in lieu of shares of the Company’s common stock in the case of certain fundamental transactions; and (c) a “cashless exercise” feature. The 2017 PIPE Placement Agent Warrants have the same terms and conditions as the 2017 PIPE Warrants. 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, 2018 and 2017, 57,386 shares and 14,650 shares, respectively, were issued to directors as payment for director fees, amounting to $113,665 and $37,740, in 2018 and 2017, 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 June 2015, the Company has granted share-based awards under the MRI Interventions, Inc. 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 181,438 shares have been awarded and option grants, net of options terminated, expired or forfeited, of 903,820 shares were outstanding as of December 31, 2018. Accordingly, 870,992 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 Exercise Prices Weighted- average Exercise price per share Intrinsic Value (1) Outstanding at January 1, 2017 337,441 $ 5.00 $ 385.60 $ 42.07 — Exercisable at January 1, 2017 245,989 $ 5.00 $ 385.60 $ 38.71 — Activity during the year ended December 31, 2017 Granted 940,875 $ 1.95 $ 6.40 $ 2.58 $ 78,486 Cancelled or forfeited (40,117 ) $ 5.00 $ 385.60 $ 35.74 — Outstanding at December 31, 2017 1,238,199 $ 1.95 $ 385.60 $ 12.47 $ 78,486 Exercisable at December 31, 2017 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 1,006,113 (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, 2018 (contractual life expressed in years): Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding Weighted - Average Remaining Contractual Life Weighted - Average Exercise Price Number Exercisable Weighted - Average Remaining Contractual Life Weighted - Average Exercise Price $ 1.40 $ 45.20 1,310,489 8.36 $ 7.70 930,300 8.09 $ 16.08 $ 46.40 $ 83.60 75,771 2.88 $ 69.09 75,677 2.88 $ 69.11 $ 128.00 $ 385.60 136 0.88 $ 385.60 136 0.88 $ 363.21 1,386,396 9.18 $ 12.47 1,006,113 7.70 $ 16.08 The weighted average grant date fair value of options granted during the years ended December 31, 2018 and 2017 was $0.95 and $0.85, respectively. A summary of the status of the Company’s nonvested stock options during the years ended December 31, 2018 and 2017 is presented below: Nonvested Stock Options Shares Weighted - Average Grant Date Fair Value Nonvested, January 1, 2017 91,452 $ 10.53 Activity during the year ended December 31, 2017 Granted 940,875 $ 0.85 Forfeited (17,619 ) $ 16.50 Vested (343,719 ) $ 3.09 Nonvested, December 31, 2017 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 The Company records share-based compensation expense on a straight-line basis over the related vesting period. For the years ended December 31, 2018 and 2017, share-based compensation expense was: Years Ended December 31, 2018 2017 $ 1,231,379 $ 1,245,601 As of December 31, 2018, approximately $523,000 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 1.6 years. The assumptions used in calculating the fair value under the Black-Scholes option-pricing model are as follows: Years Ended December 31, 2018 2017 Dividend yield 0% 0% Expected Volatility 51.58% to 54.21% 51.77% to 52.98% Risk free Interest rates 2.77% to 3.00% 2.04% to 2.25% Expected lives (in years) 5.8 6.0 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, 2018 and 2017 Shares Weighted - Average Exercise Price Outstanding at January 1, 2017 1,991,293 $ 13.00 Activity during the year ended December 31, 2017 Issued 7,134,200 $ 2.20 Exercised (8,207 ) $ 2.00 Terminated (168,208 ) $ 17.64 Outstanding at December 31, 2017 8,949,078 $ 4.12 (1) Activity during the year ended December 31, 2018 Issued — — Exercised (221,773 ) $ 2.15 Terminated (50,824 ) $ 6.64 Outstanding at December 31, 2018 8,676,481 $ 4.17 (1) The weighted-average exercise price reflects exercise price adjustments triggered by the 2017 PIPE. Information regarding outstanding warrants at December 31, 2018 is as follows (contractual life expressed in years): Exercise Price Number Weighted - Intrinsic $ 1.83 1,540 1.96 $ — $ 2.20 6,953,848 3.40 — $ 5.50 1,123,705 2.67 — $ 16.23 242,021 1.96 — $ 21.10 152,084 1.96 — $ 34.32 185,779 0.98 — $ 40.00 875 1.07 — $ 70.00 16,629 0.23 — 8,676,481 3.18 $ — (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at December 31, 2018 less the warrant exercise price of in-the-money warrants. |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | 8. Derivative Liabilities Derivative liabilities at December 31, 2017 arose from an amendment the Company entered into with Brainlab, with respect to the Brainlab Note and related warrants (the “Brainlab warrants”), the provisions of which created: (a) a conversion feature allowing for $500,000 the principal balance of the Brainlab Note to be converted in a Qualified Public Offering, as defined in the amendment, at a public offering price that may be less than market value per share of the Company’s common stock; (b) down round strike price protection with respect to Brainlab warrants; and (c) warrants, issued in 2013, that contained net-cash settlement and down-round provisions (the “2013 warrants”). The conversion feature and the Brainlab warrants described herein terminated unexercised pursuant to the Company’s September 2018 repayment of the Brainlab Note as discussed in Note 6. The 2013 warrants expired in January 2018. The fair values and the changes in fair values of derivative liabilities during the years ended December 31, 2018 and 2017 are as follows: Years Ended December 31, 2018 2017 Balance, beginning of period $ 95,786 $ 131,173 Reduction from warrant exercise (31,468 ) (11,209 ) Gain on change in fair value for the period (64,318 ) (24,178 ) Balance, end of period $ — $ 95,786 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The Company had no income tax expense for the years ended December 31, 2018 and 2017. 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 year ended December 31, 2018, the valuation allowance increased by $2.8 million, based on changes in deferred tax assets and liabilities. For the year ended December 31, 2017, the valuation allowance decreased by approximately $14.9 million, due primarily to the effects of reduced corporate income tax rates effected under the Tax Act, which were partially offset by 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, 2018 2017 Deferred income tax assets (liabilities): Property and equipment $ 74,447 $ 58,036 Accrued expenses 297,700 224,546 Share based compensation 1,926,408 1,803,943 Other 90,910 (912,575 ) Net operating loss carryforwards 20,080,697 18,535,794 22,470,162 19,709,744 Less valuation allowance (22,470,162 ) (19,709,744 ) $ — $ — The Company had a cumulative federal net operating loss of approximately $86 million as of December 31, 2018, which will begin expiring in 2019. Under Sections 382 and 383 of the Internal Revenue Code, if an ownership change occurs with respect to a “loss corporation,” as defined, there are annual limitations on the amount of the net operating loss and other deductions which are available to the Company. 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 2015 and subsequent years remain open for examination. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | 10. Commitments Leases The Company leases space in Irvine, California that houses its headquarters and manufacturing facility under a non-cancellable operating lease. The lease expires in September 2023. The Company has the option to renew the lease for two additional periods of five years each. Future minimum lease payments for operating leases having an initial or remaining non-cancellable lease term in excess of one year are as follows: Years ending December 31, 2019 $ 102,942 2020 106,030 2021 109,211 2022 112,487 2023 86,249 Total minimum payments $ 516,919 Rent expense under all operating leases was $94,907 and $91,513 for the years ended December 31, 2018 and 2017, respectively. Licenses Certain license arrangements require minimum royalty payments. As of December 31, 2018, future minimum payments under these arrangements are as follows: Years ending December 31, 2019 $ 60,000 2020 60,000 2021 50,000 2022 50,000 2023 50,000 Thereafter 260,000 Total minimum payments $ 530,000 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 agreement described above, the Company incurred royalty expense of $40,000 for each of the years ended December 31, 2018 and 2017. Technical Service and Training Agreements The Company is a party to agreements with a university, which agreements were amended in January 2018, under which the Company may receive technical and training services. Pursuant to the terms of the amended agreements, the Company incurred expense of approximately $37,146 and $35,561 for technical research services during the years ended December 31, 2018 and 2017, 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 ClearPoint 2.0, the Company’s most recent software platform, which received FDA clearance in November 2018 and is in limited market release, 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 2.0, for which the Company is committed to pay royalties for each copy of its ClearPoint 2.0 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, 2018 and 2017 amounted to $107,200 and $122,500, respectively. Minimum Purchase Commitments On October 16, 2018 (the “Effective Date”), 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 the next five years following the Effective Date. 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, 2018, the participation interest was 0.47%. 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, KPIP will terminate. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, MRI Interventions (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. |
Derivative Liabilities | Derivative Liabilities Derivative liabilities at December 31, 2017 represented the fair value of conversion features of certain notes and of certain warrants to purchase common stock (see Note 8). These derivative liabilities were calculated utilizing the Monte Carlo simulation valuation method. Changes in the fair values of these warrants were recognized as other income or expense in the related consolidated statements of operations. |
Fair Value Measurements | Fair Value Measurements The Company measures and records certain financial assets and liabilities at fair value on a recurring basis. GAAP provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority, referred to as Level 1, to quoted prices in active markets for identical assets and liabilities. The next priority, referred to as Level 2, is given to quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active; that is, markets in which there are few transactions for the asset or liability, or inputs other than quoted prices that are observable for the asset or liability. The lowest priority, referred to as Level 3, is given to unobservable inputs. There are no amounts in the Company’s consolidated balance sheet at December 31, 2018, that were derived from fair value calculations. The table below reflects the level of the inputs used in the Company’s fair value calculations at December 31, 2017: Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2017 Derivative liabilities – warrants $ — $ — $ 79,286 $ 79,286 Derivative liabilities – debt conversion feature $ — $ — $ 16,500 $ 16,500 Inputs used in the Company’s Level 3 calculation of fair value include the assumed dividend rate on the Company’s common stock, risk-free interest rates stock price volatility and the likelihood of a future equity financing transaction, all of which are further discussed in Note 8. Carrying amounts of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their short maturities. |
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, 2018 or 2017. |
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) functional neurosurgery and related service revenues resulting from the performance of product line commercialization planning and execution for a third party; (4) clinical case support revenues in connection with customer-sponsored clinical trials; and (5) revenues resulting from the rental, service, installation, training and shipping related to ClearPoint capital equipment. 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, and biologics and drug delivery systems 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: o Other related services ● Capital equipment-related services o Rental, service and other revenues: 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. |
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, 2018 and 2017, 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 7, 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 in the over-the-counter market and is quoted on the OTCQB Marketplace and the OTC Bulletin Board under the symbol “MRIC.” Quoted closing stock prices are used as a key input in determining the fair value for share-based transactions. |
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, 2018, the Company had approximately $143,000 in bank balances that were in excess of the insured limits. Information with respect to accounts receivable from those customers who comprised more than 10% of accounts receivable at December 31, 2018 and 2017 is as follows: December 31, 2018 2017 Customer – 1 17% 10% Customer – 2 12% – 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, 2018 and 2017 was $38,000 and $29,000, 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases,” which created a new Topic, ASC Topic 842 and 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. For leases with a term of 12 months or less, a lessee is permitted to make an election under which such assets and liabilities would not be recognized, and lease expense would be recognized generally on a straight-line basis over the lease term. This standard is effective for the Company beginning in 2019, and early application is permitted. The Company currently has two leases for manufacturing and office space that would be subject to the provisions of ASU 2016-02. The Company believes that adoption of ASC Topic 842 (as amended by ASC 2017-13) will result in the establishment on the Company’s consolidated balance sheet of an asset and liability for each such lease, but that neither such assets and liabilities nor the resulting lease expense recognition will have a material effect on the Company’s consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception,” which, among other items, changes the classification of certain equity-linked financial instruments (or embedded features) with down round features. The standard is effective for the Company beginning in 2019, and early adoption is permitted. Because the derivative liabilities described in Note 8, all of which the Company believes are included in the scope of the standard, expired during the year ended December 31, 2018, the Company believes that adoption of the standard on its effective date will not have a material effect on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, “Compensation – Stock Compensation (Topic 718),” which expanded the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. The standard is effective for the Company beginning in 2019, and early adoption is permitted. The Company believes that adoption of the standard will not have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) – Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement,” which modify the disclosure requirements for fair value measurements. The standard is effective for the Company beginning in 2020, at which time certain modifications are to be applied prospectively and others are to be applied retrospectively, and early adoption is permitted. The Company believes that adoption of the standard will not have a material effect on the Company’s consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of the level of the inputs used in the company's fair value calculation for instruments carried at fair value | The table below reflects the level of the inputs used in the Company’s fair value calculations at December 31, 2017: Quoted Prices in Active Markets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Fair Value December 31, 2017 Derivative liabilities – warrants $ — $ — $ 79,286 $ 79,286 Derivative liabilities – debt conversion feature $ — $ — $ 16,500 $ 16,500 |
Schedule of concentration of risk | Information with respect to accounts receivable from those customers who comprised more than 10% of accounts receivable at December 31, 2018 and 2017 is as follows: December 31, 2018 2017 Customer – 1 17% 10% Customer – 2 12% – |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Schedule of revenue recognition | Revenue by Service Line Years Ended December 31, 2018 2017 Products: Disposable products: Functional neurosurgery $ 5,313,041 $ 5,233,092 Biologics and drug delivery 951,940 675,809 Capital equipment 420,039 1,115,109 Total product revenue 6,685,020 7,024,010 Services: Functional neurosurgery 100,000 — Biologics and drug delivery 175,223 — Capital equipment and other 393,023 355,515 Total service revenue 668,246 355,515 Total revenue $ 7,353,266 $ 7,379,525 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consists of the following as of December 31: 2018 2017 Raw materials and work in process $ 1,219,753 $ 1,167,142 Software licenses 122,500 52,500 Finished goods 763,723 1,094,542 Inventory included in current assets 2,105,976 2,314,184 Software licenses – non-current 801,900 871,900 $ 2,907,876 $ 3,186,084 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following as of December 31: 2018 2017 Equipment $ 1,176,038 $ 1,151,543 Furniture and fixtures 112,143 112,143 Leasehold improvements 190,875 179,999 Computer equipment and software 148,017 148,017 Loaned systems 468,782 348,473 2,095,855 1,940,175 Less accumulated depreciation and amortization (1,718,149 ) (1,672,508 ) Total property and equipment, net $ 377,706 $ 267,667 |
Notes Payable (Tables)
Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable maturities | Scheduled principal payments as of December 31, 2018 with respect to notes payable are summarized as follows: Years ending December 31, 2019 $ — 2020 4,975,000 Total scheduled principal payments 4,975,000 Less unamortized discounts (1,482,929 ) Less unamortized deferred financing costs (11,430 ) $ 3,480,641 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' equity: | |
Schedule of stock options issued by the Company | Activity with respect to stock options issued by the Company is summarized as follows: Options Outstanding Options Exercisable Range of Exercise Prices Weighted- average Exercise price per share Intrinsic Value (1) Outstanding at January 1, 2017 337,441 $ 5.00 $ 385.60 $ 42.07 — Exercisable at January 1, 2017 245,989 $ 5.00 $ 385.60 $ 38.71 — Activity during the year ended December 31, 2017 Granted 940,875 $ 1.95 $ 6.40 $ 2.58 $ 78,486 Cancelled or forfeited (40,117 ) $ 5.00 $ 385.60 $ 35.74 — Outstanding at December 31, 2017 1,238,199 $ 1.95 $ 385.60 $ 12.47 $ 78,486 Exercisable at December 31, 2017 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 1,006,113 (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) | The following table summarizes information about stock options at December 31, 2018 (contractual life expressed in years): Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding Weighted - Average Remaining Contractual Life Weighted - Average Exercise Price Number Exercisable Weighted - Average Remaining Contractual Life Weighted - Average Exercise Price $ 1.40 $ 45.20 1,310,489 8.36 $ 7.70 930,300 8.09 $ 16.08 $ 46.40 $ 83.60 75,771 2.88 $ 69.09 75,677 2.88 $ 69.11 $ 128.00 $ 385.60 136 0.88 $ 385.60 136 0.88 $ 363.21 1,386,396 9.18 $ 12.47 1,006,113 7.70 $ 16.08 |
Schedule of company's nonvested stock options during the years | The weighted average grant date fair value of options granted during the years ended December 31, 2018 and 2017 was $0.95 and $0.85, respectively. A summary of the status of the Company’s nonvested stock options during the years ended December 31, 2018 and 2017 is presented below: Nonvested Stock Options Shares Weighted - Average Grant Date Fair Value Nonvested, January 1, 2017 91,452 $ 10.53 Activity during the year ended December 31, 2017 Granted 940,875 $ 0.85 Forfeited (17,619 ) $ 16.50 Vested (343,719 ) $ 3.09 Nonvested, December 31, 2017 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 |
Schedule of share-based compensation expense | The Company records share-based compensation expense on a straight-line basis over the related vesting period. For the years ended December 31, 2018 and 2017, share-based compensation expense was: Years Ended December 31, 2018 2017 $ 1,231,379 $ 1,245,601 |
Schedule of assumptions used in calculating the fair value under the Black-Scholes option-pricing model | The assumptions used in calculating the fair value under the Black-Scholes option-pricing model are as follows: Years Ended December 31, 2018 2017 Dividend yield 0% 0% Expected Volatility 51.58% to 54.21% 51.77% to 52.98% Risk free Interest rates 2.77% to 3.00% 2.04% to 2.25% Expected lives (in years) 5.8 6.0 |
Schedule of common stock warrant activity | 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, 2018 and 2017 Shares Weighted - Average Exercise Price Outstanding at January 1, 2017 1,991,293 $ 13.00 Activity during the year ended December 31, 2017 Issued 7,134,200 $ 2.20 Exercised (8,207 ) $ 2.00 Terminated (168,208 ) $ 17.64 Outstanding at December 31, 2017 8,949,078 $ 4.12 (1) Activity during the year ended December 31, 2018 Issued — — Exercised (221,773 ) $ 2.15 Terminated (50,824 ) $ 6.64 Outstanding at December 31, 2018 8,676,481 $ 4.17 (1) The weighted-average exercise price reflects exercise price adjustments triggered by the 2017 PIPE. |
Schedule of information regarding outstanding warrants | Information regarding outstanding warrants at December 31, 2018 is as follows (contractual life expressed in years): Exercise Price Number Weighted - Intrinsic $ 1.83 1,540 1.96 $ — $ 2.20 6,953,848 3.40 — $ 5.50 1,123,705 2.67 — $ 16.23 242,021 1.96 — $ 21.10 152,084 1.96 — $ 34.32 185,779 0.98 — $ 40.00 875 1.07 — $ 70.00 16,629 0.23 — 8,676,481 3.18 $ — (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at December 31, 2018 less the warrant exercise price of in-the-money warrants. |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values and the changes in fair values of derivative liabiliti | The fair values and the changes in fair values of derivative liabilities during the years ended December 31, 2018 and 2017 are as follows: Years Ended December 31, 2018 2017 Balance, beginning of period $ 95,786 $ 131,173 Reduction from warrant exercise (31,468 ) (11,209 ) Gain on change in fair value for the period (64,318 ) (24,178 ) Balance, end of period $ — $ 95,786 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred income 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, 2018 2017 Deferred income tax assets (liabilities): Property and equipment $ 74,447 $ 58,036 Accrued expenses 297,700 224,546 Share based compensation 1,926,408 1,803,943 Other 90,910 (912,575 ) Net operating loss carryforwards 20,080,697 18,535,794 22,470,162 19,709,744 Less valuation allowance (22,470,162 ) (19,709,744 ) $ — $ — |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments for operating leases | Future minimum lease payments for operating leases having an initial or remaining non-cancellable lease term in excess of one year are as follows: Years ending December 31, 2019 $ 102,942 2020 106,030 2021 109,211 2022 112,487 2023 86,249 Total minimum payments $ 516,919 |
Schedule of future minimum payments under license arrangements | Certain license arrangements require minimum royalty payments. As of December 31, 2018, future minimum payments under these arrangements are as follows: Years ending December 31, 2019 $ 60,000 2020 60,000 2021 50,000 2022 50,000 2023 50,000 Thereafter 260,000 Total minimum payments $ 530,000 |
Description of the Business a_2
Description of the Business and Financial Condition (Details Narrative) - USD ($) | 1 Months Ended | ||
May 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cumulative net loss | $ 107,199,586 | $ 101,036,117 | |
2017 Private Placement [Member] | |||
Proceeds from issuance of private placement | $ 12,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Warrant [Member] - Fair Value, Measurements, Recurring [Member] | Dec. 31, 2017USD ($) |
Derivative liabilities - warrants | $ 79,286 |
Derivative liabilities - debt conversion feature | 16,500 |
Quoted Prices In Active Markets (Level 1) [Member] | |
Derivative liabilities - warrants | |
Derivative liabilities - debt conversion feature | |
Significant Observable Inputs (Level 2) [Member] | |
Derivative liabilities - warrants | |
Derivative liabilities - debt conversion feature | |
Significant Unobservable Inputs (Level 3) [Member] | |
Derivative liabilities - warrants | 79,286 |
Derivative liabilities - debt conversion feature | $ 16,500 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - Accounts Receivable [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Customer - 1 [Member] | ||
Concentration risk, percentage | 17.00% | 10.00% |
Customer - 2 [Member] | ||
Concentration risk, percentage | 12.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
FDIC insured limit | $ 143,000 | |
Allowance for doubtful accounts | $ 38,000 | $ 29,000 |
Payment terms under contracts with customers | A range of 30-60 days after the customers’ receipt of the Company’s invoices. | |
Minimum [Member] | ||
Term of service agreements (in years) | 1 year | |
Property and equipment, estimated useful lives | 5 years | |
Maximum [Member] | ||
Term of service agreements (in years) | 3 years | |
Property and equipment, estimated useful lives | 7 years |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenues | $ 7,353,266 | $ 7,379,525 |
Functional Neurology [Member] | ||
Total revenues | 5,313,041 | 5,233,092 |
Biologics And Drug Delivery [Member] | ||
Total revenues | 951,940 | 675,809 |
Capital Equipment [Member] | ||
Total revenues | 420,039 | 1,115,109 |
Capital Equipment and Other [Member] | ||
Total revenues | 393,023 | 355,515 |
Service and Other Revenues [Member] | ||
Total revenues | 668,246 | 355,515 |
Product Revenue [Member] | ||
Total revenues | 6,685,020 | 7,024,010 |
Functional Neurology [Member] | ||
Total revenues | 100,000 | |
Biologics And Drug Delivery [Member] | ||
Total revenues | 175,223 | |
Capital Equipment and Other [Member] | ||
Total revenues | $ 393,023 | $ 355,515 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total revenues | $ 7,353,266 | $ 7,379,525 |
Accounts receivable | 8,000 | |
Remaining Performance Obligations Capital Equipment-Related Service Revenue Member] | ||
Total revenues | 303,912 | |
Capital Equipment-Related Service Revenue Member] | ||
Total revenues | $ 142,605 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in process | $ 1,219,753 | $ 1,167,142 |
Software licenses | 122,500 | 52,500 |
Finished goods | 763,723 | 1,094,542 |
Inventory included in current assets | 2,105,976 | 2,314,184 |
Software licenses - non-current | 801,900 | 871,900 |
Total inventory | $ 2,907,876 | $ 3,186,084 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 2,095,855 | $ 1,940,175 |
Less accumulated depreciation and amortization | (1,718,149) | (1,672,508) |
Total property and equipment, net | 377,706 | 267,667 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,176,038 | 1,151,543 |
Furniture And Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 112,143 | 112,143 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 190,875 | 179,999 |
Computer Equipment And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 148,017 | 148,017 |
Loaned Systems [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 468,782 | $ 348,473 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 109,439 | $ 116,454 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Debt Disclosure [Abstract] | ||
2019 | ||
2020 | 4,975,000 | |
Total scheduled principal payments | 4,975,000 | |
Less unamortized discounts | (1,482,929) | $ (1,647,601) |
Less unamortized deferred financing costs | (11,430) | |
Total | $ 3,480,641 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Unamortized discount | $ 1,647,601 | $ 1,482,929 | |
12% Junior Secured Notes Payable 2014 [Member] | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 1,975,000 | ||
Maturity date | Mar. 25, 2019 | Mar. 25, 2019 | |
12% Junior Secured Notes Payable 2014 [Member] | Private Placement (Securities Purchase Agreements) [Member] | |||
Debt Instrument [Line Items] | |||
Unamortized discount | $ 67,770 | 23,719 | |
12% Junior Secured Notes Payable 2014 [Member] | Placement Agents [Member] | Private Placement (Securities Purchase Agreements) [Member] | |||
Debt Instrument [Line Items] | |||
Placement agents cash commission | $ 145,500 | ||
Other offering expenses | 32,660 | 11,430 | |
2010 Junior Secured Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Debt face amount | 3,000,000 | 3,000,000 | |
2010 Junior Secured Notes Payable [Member] | Chairman and Officer [Member] | |||
Debt Instrument [Line Items] | |||
Debt face amount | 197,000 | $ 197,000 | |
2010 Junior Secured Notes Payable [Member] | Private Placement (Securities Purchase Agreements) [Member] | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 3.50% | ||
Description of collateral terms | Collateralized by a security interest in all the Company’s assets, which security interest is junior and subordinate to the security interest that collateralizes the 2014 Secured Notes. | ||
Unamortized discount | 1,956,458 | $ 1,459,209 | |
Interest expense terms | 10-year term of the notes using the effective interest method. | ||
Description of payment terms | Interest on the 2010 Secured Notes will be due and payable in a single payment upon maturity in November 2020. | ||
Brainlab Senior Secured Note Payable [Member] | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.50% | ||
Debt face amount | $ 2,000,000 | ||
Maturity date | Dec. 31, 2018 | Dec. 31, 2018 | |
Warrant [Member] | 12% Junior Secured Notes Payable 2014 [Member] | Private Placement (Securities Purchase Agreements) [Member] | |||
Debt Instrument [Line Items] | |||
Number of each common stock called | 0.01 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at beginning | 1,238,199 | 337,441 | |
Exercisable at beginning | 567,210 | 245,989 | |
Granted | 167,500 | 940,875 | |
Cancelled or forfeited | (19,303) | (40,117) | |
Outstanding at ending | 1,386,396 | 1,238,199 | |
Exercisable at ending | 567,210 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning | $ 12.47 | $ 42.07 | |
Exercisable at beginning | 38.71 | ||
Granted | 1.81 | 2.58 | |
Cancelled or forfeited | 18.77 | 35.74 | |
Outstanding at ending | $ 11.09 | $ 12.47 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Intrinsic Value [Abstract] | |||
Outstanding at beginning | [1] | $ 78,486 | |
Exercisable at beginning | [1] | ||
Granted | [1] | 11,050 | $ 78,486 |
Outstanding at ending | [1] | 11,050 | 78,486 |
Exercisable at ending | [1] | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning | $ 385.60 | $ 385.60 | |
Exercisable at beginning | 385.60 | ||
Granted | 2.18 | 6.40 | |
Cancelled or forfeited | 385.60 | 385.60 | |
Outstanding at ending | 385.60 | 385.60 | |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning | 1.95 | 5 | |
Exercisable at beginning | 5 | ||
Granted | 1.40 | 1.95 | |
Cancelled or forfeited | 1.95 | 5 | |
Outstanding at ending | $ 1.40 | $ 1.95 | |
[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 (Details 1
Stockholders' Equity (Details 1) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of Options Outstanding | shares | 1,386,396 |
Options Outstanding Weighted - Average Remaining Contractual Life (in years) | 9 years 2 months 5 days |
Options Outstanding Weighted - Average Exercise Price | $ / shares | $ 12.47 |
Number of Options Exercisable | shares | 1,006,113 |
Options Exercisable Weighted - Average Remaining Contractual Life (in years) | 7 years 8 months 12 days |
Options Exercisable Weighted - Average Exercise Price | $ / shares | $ 16.08 |
Exercise Price $1.40 - $45.20 [Member] | |
Number of Options Outstanding | shares | 1,310,489 |
Options Outstanding Weighted - Average Remaining Contractual Life (in years) | 8 years 4 months 10 days |
Options Outstanding Weighted - Average Exercise Price | $ / shares | $ 7.70 |
Number of Options Exercisable | shares | 930,300 |
Options Exercisable Weighted - Average Remaining Contractual Life (in years) | 8 years 1 month 2 days |
Options Exercisable Weighted - Average Exercise Price | $ / shares | $ 16.08 |
Exercise Price $46.40 - $83.60 [Member] | |
Number of Options Outstanding | shares | 75,771 |
Options Outstanding Weighted - Average Remaining Contractual Life (in years) | 2 years 10 months 17 days |
Options Outstanding Weighted - Average Exercise Price | $ / shares | $ 69.09 |
Number of Options Exercisable | shares | 75,677 |
Options Exercisable Weighted - Average Remaining Contractual Life (in years) | 2 years 10 months 17 days |
Options Exercisable Weighted - Average Exercise Price | $ / shares | $ 69.11 |
Exercise Price $128.00 - $385.60 [Member] | |
Number of Options Outstanding | shares | 136 |
Options Outstanding Weighted - Average Remaining Contractual Life (in years) | 10 months 17 days |
Options Outstanding Weighted - Average Exercise Price | $ / shares | $ 385.60 |
Number of Options Exercisable | shares | 136 |
Options Exercisable Weighted - Average Remaining Contractual Life (in years) | 10 months 17 days |
Options Exercisable Weighted - Average Exercise Price | $ / shares | $ 363.21 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Balance at beginning | 670,989 | 91,452 |
Granted | 167,500 | 940,875 |
Forfeited | (15,327) | (17,619) |
Vested | (442,879) | (343,719) |
Balance at ending | 380,283 | 670,989 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Balance at beginning | $ 1.45 | $ 10.53 |
Granted | 0.95 | 0.85 |
Forfeited | 25.22 | 16.50 |
Vested | 1.71 | 3.09 |
Balance at ending | $ 0.94 | $ 1.45 |
Stockholders' Equity (Details
Stockholders' Equity (Details 3) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stockholders' equity: | ||
Share-based compensation expense | $ 1,231,379 | $ 1,245,601 |
Stockholders' Equity (Details 4
Stockholders' Equity (Details 4) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Dividend yield | 0.00% | 0.00% |
Expected lives (in years) | 5 years 9 months 18 days | 6 years |
Minimum [Member] | ||
Expected Volatility | 51.58% | 51.77% |
Risk free Interest rates | 2.77% | 2.04% |
Maximum [Member] | ||
Expected Volatility | 54.21% | 52.98% |
Risk free Interest rates | 3.00% | 2.25% |
Stockholders' Equity (Details 5
Stockholders' Equity (Details 5) - Common Stock Warrants [Member] - $ / shares | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at beginning | 8,949,078 | 1,991,293 | ||
Issued | 7,134,200 | |||
Exercised | (221,773) | (8,207) | ||
Terminated | (50,824) | (168,208) | ||
Outstanding at ending | 8,676,481 | 8,949,078 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||||
Outstanding at beginning | $ 4.12 | [1] | $ 13 | |
Issued | 2.20 | |||
Exercised | 2.15 | 2 | ||
Terminated | 6.64 | 17.64 | ||
Outstanding at ending | $ 4.17 | $ 4.12 | [1] | |
[1] | The weighted-average exercise price reflects exercise price adjustments triggered by the 2017 PIPE. |
Stockholders' Equity (Details 6
Stockholders' Equity (Details 6) | 12 Months Ended | |
Dec. 31, 2018USD ($)shares | ||
Number Outstanding | 1,386,396 | |
Weighted - Average Remaining Contractual Life | 9 years 2 months 5 days | |
Common Stock Warrants [Member] | ||
Number Outstanding | 8,676,481 | |
Weighted - Average Remaining Contractual Life | 3 years 2 months 5 days | |
Intrinsic Value | $ | [1] | |
Common Stock Warrants [Member] | Exercise Price $1.83 [Member] | ||
Number Outstanding | 1,540 | |
Weighted - Average Remaining Contractual Life | 1 year 11 months 16 days | |
Intrinsic Value | $ | [1] | |
Common Stock Warrants [Member] | Exercise Price $2.20 [Member] | ||
Number Outstanding | 6,953,848 | |
Weighted - Average Remaining Contractual Life | 3 years 4 months 24 days | |
Intrinsic Value | $ | [1] | |
Common Stock Warrants [Member] | Exercise Price $5.50 [Member] | ||
Number Outstanding | 1,123,705 | |
Weighted - Average Remaining Contractual Life | 2 years 8 months 1 day | |
Intrinsic Value | $ | [1] | |
Common Stock Warrants [Member] | Exercise Price $16.23 [Member] | ||
Number Outstanding | 242,021 | |
Weighted - Average Remaining Contractual Life | 1 year 11 months 16 days | |
Intrinsic Value | $ | [1] | |
Common Stock Warrants [Member] | Exercise Price $21.10 [Member] | ||
Number Outstanding | 152,084 | |
Weighted - Average Remaining Contractual Life | 1 year 11 months 16 days | |
Intrinsic Value | $ | [1] | |
Common Stock Warrants [Member] | Exercise Price $34.32 [Member] | ||
Number Outstanding | 185,779 | |
Weighted - Average Remaining Contractual Life | 11 months 23 days | |
Intrinsic Value | $ | [1] | |
Common Stock Warrants [Member] | Exercise Price $40.00 [Member] | ||
Number Outstanding | 875 | |
Weighted - Average Remaining Contractual Life | 1 year 26 days | |
Intrinsic Value | $ | [1] | |
Common Stock Warrants [Member] | Exercise Price $70.00 [Member] | ||
Number Outstanding | 16,629 | |
Weighted - Average Remaining Contractual Life | 2 months 23 days | |
Intrinsic Value | $ | [1] | |
[1] | Intrinsic value is calculated as the estimated fair value of the Company's stock at December 31, 2018 less the warrant exercise price of in-the-money warrants. |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | May 26, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Number of awards oustanding | 1,386,396 | 1,238,199 | 337,441 | |
Number of awards granted | 167,500 | 940,875 | ||
Granted | $ 0.95 | $ 0.85 | ||
Warrant [Member] | ||||
Term of warrant | 5 years | |||
Amended and Restated 2013 Incentive Compensation Plan [Member] | ||||
Common stock reserved for issuance | 1,956,250 | |||
Number of share available for grant | 870,992 | |||
Number of awards oustanding | 903,820 | |||
Number of awards granted | 181,438 | |||
Unrecognized compensation expense | $ 523,000 | |||
Weighted average period | 1 year 7 months 6 days | |||
Director [Member] | ||||
Number of shares issued for services | 57,386 | 14,650 | ||
Number of shares issued for services in lieu of cash | $ 113,665 | $ 37,740 | ||
Securities Purchase Agreement (the "2017 PIPE Purchase Agreement") [Member] | Warrant [Member] | ||||
Warrant exercise price (in dollars per share) | $ 2.20 | |||
Securities Purchase Agreement (the "2017 PIPE Purchase Agreement") [Member] | 2017 PIPE Investors [Member] | ||||
Number of shares issued | 1 | |||
Number of unit issued | 6,625,000 | |||
Value of unit issued | 13,250,000 | |||
Other offering expenses | $ 1,300,000 | |||
Share purchase price per share (in dollars per share) | $ 2 | |||
Securities Purchase Agreement (the "2017 PIPE Purchase Agreement") [Member] | 2017 PIPE Investors [Member] | Warrant [Member] | ||||
Number of shares issued | 1 | |||
Securities Purchase Agreement (the "2017 PIPE Purchase Agreement") [Member] | Placement Agents [Member] | Warrant [Member] | ||||
Number of shares issued | 509,200 |
Derivative Liabilities (Details
Derivative Liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments and Hedges, Liabilities [Roll Forward] | ||
Balance, beginning of period | $ 95,786 | $ 131,173 |
Reduction from warrant exercise | (31,468) | (11,209) |
Gain on change in fair value for the period | (64,318) | (24,728) |
Balance, end of period | $ 95,786 |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Warrant [Member] | Brainlab Senior Secured Note Payable [Member] | |
Amount of conversion feature | $ 500,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred income tax assets (liabilities): | ||
Property and equipment | $ 74,447 | $ 58,036 |
Accrued expenses | 297,700 | 224,546 |
Share based compensation | 1,926,408 | 1,803,943 |
Other | 90,910 | (912,575) |
Net operating loss carryforwards | 20,080,697 | 18,535,794 |
Deferred income tax assets (liabilities), gross | 22,470,162 | 19,709,744 |
Less valuation allowance | (22,470,162) | (19,709,744) |
Deferred income tax assets (liabilities), Net |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Percentage of valuation allowance | 100.00% | |
Decrease in valuation allowance | $ (14,900,000) | |
Increase in valuation allowance | $ 2,800,000 | |
Federal [Member] | ||
Operating loss carryforwards | $ 86,000,000 |
Commitments (Details)
Commitments (Details) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 102,942 |
2020 | 106,030 |
2021 | 109,211 |
2022 | 112,487 |
2023 | 86,249 |
Total minimum payments | $ 516,919 |
Commitments (Details 1)
Commitments (Details 1) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 60,000 |
2020 | 60,000 |
2021 | 50,000 |
2022 | 50,000 |
2023 | 50,000 |
Thereafter | 260,000 |
Total minimum payments | $ 530,000 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Rent expense | $ 94,907 | $ 91,513 |
Description of lease renewal terms | The option to renew the lease for two additional periods of five years each. | |
Key Personnel Incentive Program [Member] | ||
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. | |
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. | |
License Agreement [Member] | ||
Royalty expenses | $ 40,000 | 40,000 |
Software License Agreement [Member] | ||
Royalty expenses | 107,200 | 122,500 |
Technical Service and Training Agreements [Member] | ||
Technical research services fees payable in future | $ 37,146 | $ 35,561 |
Cardiac EP Business Participation Plan Agreements [Member] | ||
Initial participation interest | 6.60% | |
Revised participation interest | 0.47% |