Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 07, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | MRI INTERVENTIONS, INC. | |
Entity Central Index Key | 0001285550 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | MRIC | |
Security Exchange Name | NYSE | |
Entity File Number | 001-34822 | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 15,205,867 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 6,235,168 | $ 3,101,133 |
Accounts receivable, net | 2,129,085 | 1,233,896 |
Inventory, net | 3,180,250 | 2,105,976 |
Prepaid expenses and other current assets | 364,273 | 213,684 |
Total current assets | 11,908,776 | 6,654,689 |
Property and equipment, net | 474,226 | 377,706 |
Software license inventory | 451,900 | 801,900 |
Operating lease rights of use | 400,755 | |
Other assets | 153,141 | 22,538 |
Total assets | 13,388,798 | 7,856,833 |
Current liabilities: | ||
Accounts payable | 1,671,722 | 500,929 |
Accrued compensation | 993,150 | 764,960 |
Operating lease liabilities, current portion | 113,263 | |
Other accrued liabilities | 403,054 | 390,838 |
Deferred revenue | 1,097,644 | 350,963 |
Total current liabilities | 4,278,833 | 2,007,690 |
Accrued interest | 934,829 | 857,500 |
Operating lease liabilities | 299,915 | |
Total liabilities | 7,380,842 | 6,345,831 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued and outstanding at September 30, 2019 and December 31, 2018 | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 14,991,892 shares issued and outstanding at September 30, 2019; and 11,018,364 issued and outstanding at December 31, 2018 | 149,918 | 110,183 |
Additional paid-in capital | 116,951,956 | 108,600,405 |
Accumulated deficit | (111,093,918) | (107,199,586) |
Total stockholders' equity | 6,007,956 | 1,511,002 |
Total liabilities and stockholders' equity | 13,388,798 | 7,856,833 |
2014 Junior Secured Notes Payable [Member] | ||
Current liabilities: | ||
Junior secured notes payable, net | 1,939,850 | |
2010 Junior Secured Notes Payable [Member] | ||
Current liabilities: | ||
Junior secured notes payable, net | $ 1,867,265 | $ 1,540,791 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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 | 14,991,892 | 11,018,364 |
Common stock, outstanding | 14,991,892 | 11,018,364 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 2,927,466 | $ 1,807,042 | $ 8,006,382 | $ 5,076,744 |
Cost of revenues | 983,042 | 553,221 | 2,899,837 | 1,743,981 |
Research and development costs | 761,881 | 617,241 | 2,044,224 | 1,828,846 |
Sales and marketing expenses | 1,063,143 | 764,599 | 3,246,912 | 2,653,044 |
General and administrative expenses | 1,029,929 | 1,078,171 | 2,991,305 | 3,119,617 |
Operating loss | (910,529) | (1,206,190) | (3,175,896) | (4,268,744) |
Other income (expense): | ||||
Gain from change in fair value of derivative liabilities | 22,295 | 64,318 | ||
Other income, net | 728 | 2,643 | 8,100 | 1,284 |
Interest expense, net | (213,167) | (246,824) | (726,292) | (742,387) |
Net loss | $ (1,122,968) | $ (1,428,076) | $ (3,894,088) | $ (4,945,529) |
Net loss per share attributable to common stockholders: | ||||
Basic and diluted (in dollars per share) | $ (0.08) | $ (0.13) | $ (0.31) | $ (0.45) |
Weighted average shares outstanding: | ||||
Basic and diluted (in shares) | 14,053,508 | 11,006,959 | 12,477,790 | 10,903,675 |
Product Revenues [Member] | ||||
Revenues: | ||||
Total revenues | $ 2,594,428 | $ 1,739,804 | $ 6,952,575 | $ 4,691,002 |
Service and Other Revenues [Member] | ||||
Revenues: | ||||
Total revenues | $ 333,038 | $ 67,238 | $ 1,053,807 | $ 385,742 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balances at beginning at Dec. 31, 2017 | $ 106,937 | $ 106,757,920 | $ (101,036,117) | $ 5,828,740 |
Balances at beginning (in shares) at Dec. 31, 2017 | 10,693,851 | |||
Issuances of common stock: | ||||
Share-based compensation | $ 93 | 247,372 | 247,465 | |
Share-based compensation (in shares) | 9,298 | |||
Under contractual arrangements | $ 250 | 77,250 | 77,500 | |
Under contractual arrangements (in shares) | 25,000 | |||
Warrant exercises | $ 978 | 235,620 | 236,598 | |
Warrant exercises (in shares) | 97,747 | |||
Net loss for the period | (1,640,917) | (1,640,917) | ||
Balances at ending at Mar. 31, 2018 | $ 108,258 | 107,318,162 | (102,677,034) | 4,749,386 |
Balances at ending (in shares) at Mar. 31, 2018 | 10,825,896 | |||
Balances at beginning at Dec. 31, 2017 | $ 106,937 | 106,757,920 | (101,036,117) | 5,828,740 |
Balances at beginning (in shares) at Dec. 31, 2017 | 10,693,851 | |||
Issuances of common stock: | ||||
Net loss for the period | (4,945,529) | |||
Balances at ending at Sep. 30, 2018 | $ 110,223 | 108,364,065 | (105,981,646) | 2,492,642 |
Balances at ending (in shares) at Sep. 30, 2018 | 11,002,372 | |||
Balances at beginning at Mar. 31, 2018 | $ 108,258 | 107,318,162 | (102,677,034) | 4,749,386 |
Balances at beginning (in shares) at Mar. 31, 2018 | 10,825,896 | |||
Issuances of common stock: | ||||
Share-based compensation | $ 320 | 359,339 | 359,659 | |
Share-based compensation (in shares) | 31,977 | |||
Warrant exercises | $ 1,486 | 325,360 | 326,846 | |
Warrant exercises (in shares) | 148,566 | |||
Net loss for the period | (1,876,536) | (1,876,536) | ||
Balances at ending at Jun. 30, 2018 | $ 110,064 | 108,002,861 | (104,553,570) | 3,559,355 |
Balances at ending (in shares) at Jun. 30, 2018 | 11,006,439 | |||
Issuances of common stock: | ||||
Share-based compensation | $ 159 | 361,204 | 361,363 | |
Share-based compensation (in shares) | 15,933 | |||
Net loss for the period | (1,428,076) | (1,428,076) | ||
Balances at ending at Sep. 30, 2018 | $ 110,223 | 108,364,065 | (105,981,646) | 2,492,642 |
Balances at ending (in shares) at Sep. 30, 2018 | 11,002,372 | |||
Balances at beginning at Dec. 31, 2018 | $ 110,183 | 108,600,405 | (107,199,586) | 1,511,002 |
Balances at beginning (in shares) at Dec. 31, 2018 | 11,018,364 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Cumulative adjustment for adoption of new accounting standard | (244) | (244) | ||
Issuances of common stock: | ||||
Share-based compensation | $ 285 | 152,301 | 152,586 | |
Share-based compensation (in shares) | 28,462 | |||
Cashless warrant exercises | $ 204 | (204) | ||
Cashless warrant exercises (in shares) | 20,381 | |||
Net loss for the period | (1,220,725) | (1,220,725) | ||
Balances at ending at Mar. 31, 2019 | $ 110,672 | 108,752,502 | (108,420,555) | 442,619 |
Balances at ending (in shares) at Mar. 31, 2019 | 11,067,207 | |||
Balances at beginning at Dec. 31, 2018 | $ 110,183 | 108,600,405 | (107,199,586) | $ 1,511,002 |
Balances at beginning (in shares) at Dec. 31, 2018 | 11,018,364 | |||
Issuances of common stock: | ||||
Stock option exercise (in shares) | 2,500 | |||
Net loss for the period | $ (3,894,088) | |||
Balances at ending at Sep. 30, 2019 | $ 149,918 | 116,951,956 | (111,093,918) | 6,007,956 |
Balances at ending (in shares) at Sep. 30, 2019 | 14,991,892 | |||
Balances at beginning at Mar. 31, 2019 | $ 110,672 | 108,752,502 | (108,420,555) | 442,619 |
Balances at beginning (in shares) at Mar. 31, 2019 | 11,067,207 | |||
Issuances of common stock: | ||||
Share-based compensation | $ 32 | 203,962 | 203,994 | |
Share-based compensation (in shares) | 3,251 | |||
Warrant exercises | $ 1,894 | 381,182 | 383,076 | |
Warrant exercises (in shares) | 189,407 | |||
May 2019 private placement, net of offering costs of $94,162 | $ 24,265 | 7,403,583 | 7,427,848 | |
May 2019 private placement, net of offering costs of $94,162 (in shares) | 2,426,455 | |||
Net loss for the period | (1,550,395) | (1,550,395) | ||
Balances at ending at Jun. 30, 2019 | $ 136,863 | 116,741,229 | (109,970,950) | 6,907,142 |
Balances at ending (in shares) at Jun. 30, 2019 | 13,686,320 | |||
Issuances of common stock: | ||||
Share-based compensation | $ 1,571 | 217,861 | 219,432 | |
Share-based compensation (in shares) | 157,169 | |||
Cashless warrant exercises | $ 11,459 | (11,459) | ||
Cashless warrant exercises (in shares) | 1,145,903 | |||
Stock option exercise | $ 25 | 4,325 | 4,350 | |
Stock option exercise (in shares) | 2,500 | |||
Net loss for the period | (1,122,968) | (1,122,968) | ||
Balances at ending at Sep. 30, 2019 | $ 149,918 | $ 116,951,956 | $ (111,093,918) | $ 6,007,956 |
Balances at ending (in shares) at Sep. 30, 2019 | 14,991,892 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) | 3 Months Ended |
Jun. 30, 2019USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Offering costs | $ 94,162 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (3,894,088) | $ (4,945,529) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation | 105,310 | 81,206 |
Share-based compensation | 576,012 | 968,488 |
Expenses paid through the issuance of common stock | 77,500 | |
Gain from change in fair value of derivative liabilities | (64,318) | |
Amortization of debt issuance costs and original issue discounts | 523,969 | 409,287 |
Amortization of lease rights of use, net of accretion in lease liabilities | 76,871 | |
Increase (decrease) in cash resulting from changes in: | ||
Accounts receivable | (895,189) | (105,911) |
Inventory, net | (908,413) | (204,171) |
Prepaid expenses and other current assets | (150,589) | (69,130) |
Other assets | 11,899 | 1,000 |
Accounts payable and accrued expenses | 1,506,279 | (361,886) |
Lease liabilities | (82,448) | |
Deferred revenue | 746,682 | 165,254 |
Net cash flows from operating activities | (2,383,705) | (4,048,210) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (10,190) | (62,651) |
Acquisition of licensing rights | (150,000) | |
Net cash flows from investing activities | (160,190) | (62,651) |
Cash flows from financing activities: | ||
Proceeds from private offering, net of offering costs | 7,427,848 | |
Proceeds from warrant and option exercises | 387,426 | 531,977 |
Repayment of senior secured note payable | (2,000,000) | |
Repayment of 2014 junior secured notes payable | (1,975,000) | |
Repayment of 2010 junior secured notes payable | (162,344) | |
Net cash flows from financing activities | 5,677,930 | (1,468,023) |
Net change in cash and cash equivalents | 3,134,035 | (5,578,884) |
Cash and cash equivalents, beginning of period | 3,101,133 | 9,289,831 |
Cash and cash equivalents, end of period | 6,235,168 | 3,710,947 |
Cash paid for: | ||
Income taxes | ||
Interest | 82,621 | 92,222 |
NON-CASH TRANSACTIONS: | ||
Operating lease right-of-use assets | 480,395 | |
Operating lease liabilities | 480,395 | |
Net book value from loan system | $ 191,647 | $ 72,746 |
Description of the Business and
Description of the Business and Liquidity | 9 Months Ended |
Sep. 30, 2019 | |
Description Of Business And Liquidity [Abstract] | |
Description of the Business and Liquidity | 1. Description of the Business and Liquidity 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’s ClearPoint system, an integrated system comprised of reusable 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 September 30, 2019 of $111 million. Since inception, the Company has financed its operations principally from the sale of equity securities, the issuance of notes payable, product and service contracts and license arrangements. The Company’s plans for the next twelve months reflect management’s anticipation of: (a) 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, and from expansion of its product and service platforms; (b) growth in operating expenses that will be modest in comparison to the anticipated growth in revenues, with resulting decreases in loss from operations and in cash used in operations, albeit continuing to result in operations consuming cash over at least the next twelve months; and (c) financing activities to support repayment of debt obligations maturing in 2020 as discussed in Note 5. In management’s opinion, cash and cash equivalent balances at September 30, 2019, when combined with the Company’s operational and financing plans as set forth herein, are sufficient to support the Company’s operations and meet its obligations for at least the next twelve months. There is no assurance, however, that the Company will be able to achieve the objectives set forth in such plans. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the Company’s December 31, 2018 audited consolidated financial statements, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth therein. These condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) Securities and Exchange Commission (“SEC”) rules for interim financial information, and, therefore, omit certain information and footnote disclosures necessary to present such statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2018 Form 10-K. The accompanying condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for a complete set of financial statements. The results of operations for the three and nine months ended September 30, 2019 may not be indicative of the results to be expected for the entire year or any future periods. 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 condensed 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. Intangible Assets In June 2019, the Company entered into an Exclusive License Agreement (the “License Agreement”) that provides exclusive rights to the Company for the development and commercialization of products in the functional neurosurgery field. Under the terms of the License Agreement, the Company paid $150,000 to the licensor upon execution of the License Agreement and will make future payments based on the achievement of regulatory and commercialization milestones as defined in the License Agreement. In conformity with Accounting Standards Codification Section 350, “Intangibles – Goodwill and Other,” the Company amortizes its investment in the license rights described above over an expected useful life of 10 years. Revenue Recognition The Company’s revenues are comprised primarily of: (1) product revenues resulting from the sale of functional neurosurgical 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, biologics and drug delivery systems product, and therapy product sales ● Capital equipment sales ○ Capital equipment sales preceded by evaluation periods ○ 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: ○ Outsourced recruitment and/or designation of a clinical services liaison between Company and its customer: ○ Outsourced technical clinical support of cases performed pursuant to customer-sponsored clinical trials: ○ Other related services: ● Capital equipment-related services ○ Rental and equipment service: ○ Installation, training and shipping: The Company operates in one industry segment, and substantially all its sales are to U.S.-based customers. Payment terms under contracts with customers generally are in a range of 30-60 days after the customers’ receipt of the Company’s invoices. The Company provides a one-year warranty on its functional neurosurgery products, biologics and drug delivery systems products, and capital equipment products that are not otherwise covered by a third-party manufacturer’s warranty. The Company’s contracts with customers do not provide for a right of return other than for product defects. See Note 3 for additional information regarding revenue recognition. 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. 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 September 30, 2019, the Company had approximately $280,000 in bank balances that were in excess of the insured limits. No customer accounted for sales in excess of 10% of total sales in any of the nine-month or three-month periods ended September 30, 2019 or 2018. At September 30, 2019, an account receivable, related to the Letter of Intent discussed in Note 3, comprised 28% total accounts receivable at that date. Information with respect to accounts receivable from those customers who comprised more than 10% of accounts receivable at December 31, 2018 is as follows: Customer – 1 17% 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 was approximately $45,000 and $38,000 at September 30, 2019 and December 31, 2018, respectively. The Company is subject to risks common to emerging companies in the medical device industry, including, but not limited to: new technological innovations; acceptance and competitiveness of its products; dependence on key personnel; dependence on key suppliers; changes in general economic conditions and interest rates; protection of proprietary technology; compliance with changing government regulations; uncertainty of widespread market acceptance of products; access to credit for capital purchases by customers; and product liability claims. Certain components used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such components cannot be accomplished quickly. The inability of any of these suppliers to fulfill the Company’s supply requirements may negatively impact future operating results. Adoption of New Accounting Standard – Leases Effective January 1, 2019, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-02, “Leases,” which created a new Topic 842 within the Accounting Standards Codification. Topic 842 established the core principle that a lessee should recognize the assets, representing rights-of-use, and liabilities to make lease payments that arise from leases. See Note 6 for additional information regarding leases. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Revenue by Service Line Three Months Ended September 30, 2019 2018 Products: Disposable products: Functional neurosurgery $ 1,854,251 $ 1,448,850 Biologics and drug delivery 491,257 190,993 Therapy 64,095 - Capital equipment 184,825 99,961 Total product revenue 2,594,428 1,739,804 Services: Capital equipment and other 210,538 62,238 Biologics and drug delivery 72,500 5,000 Therapy 50,000 - Total service revenue 333,038 67,238 Total revenue $ 2,927,466 $ 1,807,042 Nine Months Ended September 30, 2019 2018 Products: Disposable products: Functional neurosurgery $ 5,212,460 $ 3,787,712 Biologics and drug delivery 957,673 483,251 Therapy 81,925 - Capital equipment 700,517 420,039 Total product revenue 6,952,575 4,691,002 Services: Capital equipment and other 515,695 218,742 Biologics and drug delivery 335,500 167,000 Therapy 202,612 - Total service revenue 1,053,807 385,742 Total revenue $ 8,006,382 $ 5,076,744 Contract Balances ● Contract assets ● Contract liabilities – During the three and nine months ended September 30, 2019, the Company recognized capital equipment-related service revenue of $38,093 and $173,247, respectively, which was previously included in deferred revenue in the accompanying condensed consolidated balance sheet at December 31, 2018. In September 2019, the Company entered into a Development Services Agreement with a customer under which the Company was entitled to bill the customer for an upfront payment of $127,600, which the Company received in September 2019 and which is included in accounts receivable and deferred revenue in the accompanying consolidated balance sheet. Also, in September 2019, the Company entered into a Letter of Intent (the “LOI”) with a customer who is a stockholder and whose Chief Operating Officer is a member of the Company’s Board of Directors. The purpose of the LOI is to permit the commencement of a product development project in anticipation of negotiating a detailed Statement of Work (as described in the LOI) by December 31, 2019. Under the terms of the LOI, the Company was entitled to bill the customer for an upfront, nonrefundable payment of $500,000, which amount is included in accounts receivable and deferred revenue in the accompanying September 30, 2019 condensed consolidated balance sheet. The Company intends to recognize each of the upfront payments described in this paragraph in proportional relationship to the transaction prices of the performance obligations contained in the related agreements. During the three and nine months ended September 30, 2019, the Company offered an upgraded version of its software at no additional charge to customers purchasing a three-year systems service agreement. The transaction prices of the software and the service agreement were determined through an allocation of the service agreement price based on the standalone prices of the software and the service agreements. The transaction price of the software was recognized as revenue upon its installation and comprised approximately $113,000 of unbilled accounts receivable at September 30, 2019. 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 September 30, 2019 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 $398,943 at September 30, 2019. The Company expects to recognize this revenue within the next three years. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory Inventory consists of the following as of: September 30, 2019 December 31, 2018 Raw materials and work in process $ 1,624,342 $ 1,219,753 Software licenses 402,500 122,500 Finished goods 1,153,408 763,723 Inventory, net, included in current assets 3,180,250 2,105,976 Software licenses – non-current 451,900 801,900 Total $ 3,632,150 $ 2,907,876 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | 5. Notes Payable Senior Secured Note Payable On September 25, 2018, the Company repaid in full all the outstanding debt, together with accrued and unpaid interest, under the senior secured note payable to Brainlab (the “Brainlab Note”). The Brainlab Note had a maturity date of December 31, 2018, and interest was payable quarterly in arrears at an annual rate of 5.5%. 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 On June 6, 2019, the Company repaid in full all the outstanding principal, which, together with accrued and unpaid interest, totaled approximately $2.0 million, of its 12% Second-Priority Secured Non-Convertible Promissory Notes due 2019, as amended (the “2014 Secured Notes”). The 2014 Secured Notes had a maturity date of September 30, 2020, and interest was payable semi-annually in arrears. In connection with the repayment, the security agreement under which the 2014 Secured Note had been collateralized by all the assets of the Company was terminated. 2010 Junior Secured Notes Payable The Junior Secured Promissory Notes Due 2020 (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, subsequent to the repayments of the Brainlab Notes and the 2014 Secured Notes described above, is the senior such interest. All outstanding principal and interest on the 2010 Secured Notes will be due and payable upon maturities in October and November 2020. The carrying amount of the 2010 Secured Notes in the accompanying condensed consolidated balance sheets is presented net of a discount arising from shares issued to the noteholders at issuance of the 2010 Secured Notes. The unamortized discount at September 30, 2019 and December 31, 2018 was $970,390 and $1,459,209, respectively. This discount is being amortized to interest expense over the term of the notes using the effective interest method. At each of September 30, 2019 and December 31, 2018, the Company’s Chairman and one of the Company’s officers held 2010 Secured Notes purchased at the date of original issuance having an aggregate principal balance of $197,000. In July 2019, the Company repaid, at a negotiated discount, two of the 2010 Secured Notes having an aggregate principal amount of approximately $162,000, at the request of the holders of such 2010 Secured Notes. Scheduled Notes Payable Maturities Scheduled principal payments as of September 30, 2019 with respect to notes payable are summarized as follows: Years ending December 31, 2019 $ - 2020 2,837,655 Total scheduled principal payments 2,837,655 Less: Unamortized discount (970,390 ) Total $ 1,867,265 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 6. Leases The Company leases office space in Irvine, California that houses its headquarters and manufacturing facility under a non-cancellable operating lease. The lease term commenced on October 1, 2018 and expires in September 2023. The Company has the option to renew the lease for two additional periods of five years each. The Company also leases office space in Mississauga, Ontario, Canada for its software development personnel. The lease term commenced on August 1, 2018, was set to expire in July 2019, was renewed for a one-year period at the Company’s option, and provides for automatic one-year renewals at the Company’s option. Both office leases are classified as operating leases in conformity with the provisions of Topic 842. The lease cost, included in general and administrative expense, was $27,468 and $82,405 for the three and nine months ended September 30, 2019, respectively. At September 30, 2019, the weighted average discount rate was 6.7% and the weighted average remaining lease term was 47.36 months with respect to the leases described above. The assumptions used in determining the foregoing information are as follows: ● Lease term – Topic 842 provides that the lease term consists of: (a) the non-cancelable period of the Irvine and Mississauga office leases; and (b) the period covered by the Company option to extend each office lease for which the Company is reasonably certain to do so. Based on the foregoing, management determined the lease term to extend to September 2023 for the Irvine office lease, and to July 2020 for the Mississauga office lease. ● Discount rate – Topic 842 provides that the discount rate is the rate implicit in the lease unless that rate cannot be determined, in which case the lessee’s incremental borrowing rate shall be used. Because neither the rate implicit in the lease nor the Company’s incremental borrowing rate were determinable, discount rates were obtained with reference to published U.S. High Yield CCC corporate bond rates at the inception dates of each of the leases, which, with respect to the Irvine office lease was 6.7%, and with respect to the Mississauga office lease was 6.9%. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity 2019 Private Placement On May 9, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (collectively, the “Investors”) for the private placement of 2,426,455 shares of the Company’s common stock at $3.10 per share (the “2019 PIPE”). The Company received aggregate gross proceeds of approximately $7.5 million, before deducting offering expenses aggregating approximately $94,000. The Purchase Agreement also contains representations and warranties by the Company and the Investors and covenants of the Company and the Investors (including indemnification from the Company in the event of breaches of its representations and warranties), certain information rights and other rights, obligations and restrictions, which the Company believes are customary for transactions of this type. Issuance of Common Stock in Lieu of Cash Payments Under the terms of the Amended and Restated Non-Employee Director Compensation Plan, each non-employee member of the Company’s Board of Directors may elect to receive all or part of his or her director fees in shares of the Company’s common stock. Director fees, whether paid in cash or in shares of common stock, are payable quarterly on the last day of each fiscal quarter. The number of shares of common stock issued to directors is determined by dividing the product of: (i)(a) the fees otherwise payable to each director in cash, times (b) the percentage of fees the director elected to receive in shares of common stock, by (ii) the volume weighted average price per share of common stock over the last five trading days of the quarter. Following is information regarding the number of shares issued to directors as payment for director fees in lieu of cash: Three Months Ended September 30, 2019 2018 5,720 15,933 Nine Months September 30, 2019 2018 23,459 38,341 Stock Incentive Plans The Company has various share-based compensation plans and share-based compensatory contracts (collectively, the “Plans”) under which it has granted share-based awards, such as stock grants, and incentive and non-qualified stock options, to employees, directors, consultants and advisors. Awards may be subject to a vesting schedule as set forth in individual award agreements. Certain of the Plans also have provided for cash-based performance bonus awards. Since October 2017, the Company has granted share-based awards under the MRI Interventions, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (the “2013 Plan”). Under the 2013 Plan, a total of 1,956,250 shares of the Company’s common stock are reserved for issuance. Of this amount, stock grants of 387,975 shares have been awarded and option grants, net of options terminated, expired or forfeited, of 1,042,166 shares were outstanding as of September 30, 2019. Accordingly, 523,609 shares remained available for grants under the 2013 Plan as of that date. Stock option activity under all of the Company’s Plans during the nine months ended September 30, 2019 is summarized below: Shares Weighted - Average Exercise Price Outstanding at January 1, 2019 1,386,396 $ 11.09 Granted 216,046 3.34 Exercised (2,500 ) 1.74 Expired / forfeited (12 ) 385.60 Outstanding at September 30, 2019 1,599,930 $ 9.79 As of September 30, 2019, there was unrecognized compensation expense of $587,431 related to outstanding stock options, which is expected to be recognized over a weighted average period of 1.7 years. Warrants Warrants have generally been issued for terms of up to five years. Common stock warrant activity for the nine months ended September 30, 2019 was as follows: Shares Weighted - Average Exercise Price Outstanding at January 1, 2019 8,676,481 $ 4.17 Exercised (2,437,755 ) 2.20 Expired / Terminated (29,754 ) 41.55 Outstanding at September 30, 2019 6,208,972 $ 4.76 |
Derivative Liabilities
Derivative Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | 8. Derivative Liabilities Derivative liabilities 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; and (b) down round strike price protection with respect to Brainlab 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 5, and, accordingly, the Company had no derivative liabilities thereafter. The fair values and the changes in fair values of derivative liabilities during the nine months ended September 30, 2018 are as follows: Balance, January 1, 2018 $ 95,786 Reduction from warrant exercise (31,468 ) Gain on change in fair value for the period (64,318 ) Balance, September 30, 2018 $ - |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the Company’s December 31, 2018 audited consolidated financial statements, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth therein. These condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) Securities and Exchange Commission (“SEC”) rules for interim financial information, and, therefore, omit certain information and footnote disclosures necessary to present such statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2018 Form 10-K. The accompanying condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for a complete set of financial statements. The results of operations for the three and nine months ended September 30, 2019 may not be indicative of the results to be expected for the entire year or any future periods. |
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 condensed 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. |
Intangible Assets | Intangible Assets In June 2019, the Company entered into an Exclusive License Agreement (the “License Agreement”) that provides exclusive rights to the Company for the development and commercialization of products in the functional neurosurgery field. Under the terms of the License Agreement, the Company paid $150,000 to the licensor upon execution of the License Agreement and will make future payments based on the achievement of regulatory and commercialization milestones as defined in the License Agreement. In conformity with Accounting Standards Codification Section 350, “Intangibles – Goodwill and Other,” the Company amortizes its investment in the license rights described above over an expected useful life of 10 years. |
Revenue Recognition | Revenue Recognition The Company’s revenues are comprised primarily of: (1) product revenues resulting from the sale of functional neurosurgical 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, biologics and drug delivery systems product, and therapy product sales ● Capital equipment sales ○ Capital equipment sales preceded by evaluation periods ○ 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: ○ Outsourced recruitment and/or designation of a clinical services liaison between Company and its customer: ○ Outsourced technical clinical support of cases performed pursuant to customer-sponsored clinical trials: ○ Other related services: ● Capital equipment-related services ○ Rental and equipment service: ○ Installation, training and shipping: The Company operates in one industry segment, and substantially all its sales are to U.S.-based customers. Payment terms under contracts with customers generally are in a range of 30-60 days after the customers’ receipt of the Company’s invoices. The Company provides a one-year warranty on its functional neurosurgery products, biologics and drug delivery systems products, and capital equipment products that are not otherwise covered by a third-party manufacturer’s warranty. The Company’s contracts with customers do not provide for a right of return other than for product defects. See Note 3 for additional information regarding revenue recognition. |
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. |
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 September 30, 2019, the Company had approximately $280,000 in bank balances that were in excess of the insured limits. No customer accounted for sales in excess of 10% of total sales in any of the nine-month or three-month periods ended September 30, 2019 or 2018. At September 30, 2019, an account receivable, related to the Letter of Intent discussed in Note 3, comprised 28% total accounts receivable at that date. Information with respect to accounts receivable from those customers who comprised more than 10% of accounts receivable at December 31, 2018 is as follows: Customer – 1 17% 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 was approximately $45,000 and $38,000 at September 30, 2019 and December 31, 2018, respectively. The Company is subject to risks common to emerging companies in the medical device industry, including, but not limited to: new technological innovations; acceptance and competitiveness of its products; dependence on key personnel; dependence on key suppliers; changes in general economic conditions and interest rates; protection of proprietary technology; compliance with changing government regulations; uncertainty of widespread market acceptance of products; access to credit for capital purchases by customers; and product liability claims. Certain components used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such components cannot be accomplished quickly. The inability of any of these suppliers to fulfill the Company’s supply requirements may negatively impact future operating results. |
Adoption of New Accounting Standard - Leases | Adoption of New Accounting Standard – Leases Effective January 1, 2019, the Company adopted the provisions of Accounting Standards Update (“ASU”) 2016-02, “Leases,” which created a new Topic 842 within the Accounting Standards Codification. Topic 842 established the core principle that a lessee should recognize the assets, representing rights-of-use, and liabilities to make lease payments that arise from leases. See Note 6 for additional information regarding leases. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
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 is as follows: Customer – 1 17% Customer – 2 12% |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue Recognition [Abstract] | |
Schedule of revenue recognition | Revenue by Service Line Three Months Ended September 30, 2019 2018 Products: Disposable products: Functional neurosurgery $ 1,854,251 $ 1,448,850 Biologics and drug delivery 491,257 190,993 Therapy 64,095 - Capital equipment 184,825 99,961 Total product revenue 2,594,428 1,739,804 Services: Capital equipment and other 210,538 62,238 Biologics and drug delivery 72,500 5,000 Therapy 50,000 - Total service revenue 333,038 67,238 Total revenue $ 2,927,466 $ 1,807,042 Nine Months Ended September 30, 2019 2018 Products: Disposable products: Functional neurosurgery $ 5,212,460 $ 3,787,712 Biologics and drug delivery 957,673 483,251 Therapy 81,925 - Capital equipment 700,517 420,039 Total product revenue 6,952,575 4,691,002 Services: Capital equipment and other 515,695 218,742 Biologics and drug delivery 335,500 167,000 Therapy 202,612 - Total service revenue 1,053,807 385,742 Total revenue $ 8,006,382 $ 5,076,744 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consists of the following as of: September 30, 2019 December 31, 2018 Raw materials and work in process $ 1,624,342 $ 1,219,753 Software licenses 402,500 122,500 Finished goods 1,153,408 763,723 Inventory, net, included in current assets 3,180,250 2,105,976 Software licenses – non-current 451,900 801,900 Total $ 3,632,150 $ 2,907,876 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable maturities | Scheduled principal payments as of September 30, 2019 with respect to notes payable are summarized as follows: Years ending December 31, 2019 $ - 2020 2,837,655 Total scheduled principal payments 2,837,655 Less: Unamortized discount (970,390 ) Total $ 1,867,265 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Scheduleof shares issued to directors | Following is information regarding the number of shares issued to directors as payment for director fees in lieu of cash: Three Months Ended September 30, 2019 2018 5,720 15,933 Nine Months September 30, 2019 2018 23,459 38,341 |
Schedule of stock options issued by the Company | Stock option activity under all of the Company’s Plans during the nine months ended September 30, 2019 is summarized below: Shares Weighted - Average Exercise Price Outstanding at January 1, 2019 1,386,396 $ 11.09 Granted 216,046 3.34 Exercised (2,500 ) 1.74 Expired / forfeited (12 ) 385.60 Outstanding at September 30, 2019 1,599,930 $ 9.79 |
Schedule of common stock warrant activity | Common stock warrant activity for the nine months ended September 30, 2019 was as follows: Shares Weighted - Average Exercise Price Outstanding at January 1, 2019 8,676,481 $ 4.17 Exercised (2,437,755 ) 2.20 Expired / Terminated (29,754 ) 41.55 Outstanding at September 30, 2019 6,208,972 $ 4.76 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values and the changes in fair values of derivative liabilities | The fair values and the changes in fair values of derivative liabilities during the nine months ended September 30, 2018 are as follows: Balance, January 1, 2018 $ 95,786 Reduction from warrant exercise (31,468 ) Gain on change in fair value for the period (64,318 ) Balance, September 30, 2018 $ - |
Description of the Business a_2
Description of the Business and Liquidity (Details Narrative) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Description Of Business And Liquidity [Abstract] | |
Cumulative deficit | $ 111,000,000 |
Operations consuming obligations period | 12 months |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - Accounts Receivable [Member] | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Concentration risk, percentage | 28.00% | |
Customer - 1 [Member] | ||
Concentration risk, percentage | 17.00% | |
Customer - 2 [Member] | ||
Concentration risk, percentage | 12.00% |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
FDIC insured limit | $ 280,000 | ||
Allowance for doubtful accounts | $ 45,000 | $ 38,000 | |
Sales in excess | 10.00% | ||
Payment terms under contracts with customers | A range of 30-60 days after the customers’ receipt of the Company’s invoices. | ||
Accounts Receivable [Member] | |||
Concentration risk, percentage | 28.00% | ||
License Agreement Terms [Member] | |||
Payment terms under license agreement | $ 150,000 | ||
Useful life | 10 years | ||
Minimum [Member] | |||
Term of service agreements (in years) | 1 year | ||
Maximum [Member] | |||
Term of service agreements (in years) | 3 years |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total revenues | $ 2,927,466 | $ 1,807,042 | $ 8,006,382 | $ 5,076,744 |
Functional Neurology [Member] | ||||
Total revenues | 1,854,251 | 1,448,850 | 5,212,460 | 3,787,712 |
Biologics and Drug Delivery [Member] | ||||
Total revenues | 491,257 | 190,993 | 957,673 | 483,251 |
Therapy [Member] | ||||
Total revenues | 64,095 | 81,925 | ||
Capital Equipment [Member] | ||||
Total revenues | 184,825 | 99,961 | 700,517 | 420,039 |
Product Revenues [Member] | ||||
Total revenues | 2,594,428 | 1,739,804 | 6,952,575 | 4,691,002 |
Capital Equipment and Other [Member] | ||||
Total revenues | 210,538 | 62,238 | 515,695 | 218,742 |
Biologics And Drug Delivery [Member] | ||||
Total revenues | 72,500 | 5,000 | 335,500 | 167,000 |
Therapy [Member] | ||||
Total revenues | 50,000 | 202,612 | ||
Service and Other Revenues [Member] | ||||
Total revenues | $ 333,038 | $ 67,238 | $ 1,053,807 | $ 385,742 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total revenues | $ 2,927,466 | $ 1,807,042 | $ 8,006,382 | $ 5,076,744 |
Accounts receivable and deferred revenue | 127,600 | 127,600 | ||
Unbilled accounts receivable | 113,000 | $ 113,000 | ||
Service Agreement [Member] | ||||
Additional term | 3 years | |||
Nonrefundable Payment [Member] | ||||
Accounts receivable and deferred revenue | 500,000 | $ 500,000 | ||
Remaining Performance Obligations Capital Equipment-Related Service Revenue Member] | ||||
Total revenues | 398,943 | |||
Capital Equipment-Related Service Revenue Member] | ||||
Total revenues | $ 38,093 | $ 173,247 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in process | $ 1,624,342 | $ 1,219,753 |
Software licenses | 402,500 | 122,500 |
Finished goods | 1,153,408 | 763,723 |
Inventory, net, included in current assets | 3,180,250 | 2,105,976 |
Software licenses - non-current | 451,900 | 801,900 |
Total | $ 3,632,150 | $ 2,907,876 |
Notes Payable (Details)
Notes Payable (Details) | Sep. 30, 2019USD ($) |
Years ending December 31, | |
2019 | |
2020 | 2,837,655 |
Total scheduled principal payments | 2,837,655 |
Less: Unamortized discount | (970,390) |
Total | $ 1,867,265 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Jun. 06, 2019 | Sep. 25, 2018 | Sep. 30, 2019 | Jul. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||||
Unamortized discount | $ 970,390 | ||||
12% Second-Priority Secured Non-Convertible Promissory Notes 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 12.00% | ||||
Debt face amount | $ 2,000,000 | ||||
Maturity date | Sep. 30, 2020 | ||||
Debt frequency of periodic payment | Semi-annually | ||||
Junior Secured Promissory Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 3.50% | ||||
Maturity description | October and November 2020. | ||||
Description of collateral terms | Collateralized by a security interest in all the Company’s assets, which, subsequent to the repayments of the Brainlab Notes and the 2014 Secured Notes | ||||
Unamortized discount | $ 970,390 | $ 1,459,209 | |||
Description of payment terms | Interest on the 2010 Secured Notes will be due and payable in a single payment upon maturities in October and November 2020. | ||||
Principal amount | $ 162,000 | ||||
Junior Secured Promissory Notes Due 2020 [Member] | Chairman and Officer [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt face amount | $ 197,000 | $ 197,000 | |||
Brainlab Senior Secured Note Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.50% | ||||
Maturity date | Dec. 31, 2018 |
Leases (Details Narrative)
Leases (Details Narrative) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Description of lease discount rate | Discount rate – Topic 842 provides that the discount rate is the rate implicit in the lease unless that rate cannot be determined, in which case the lessee’s incremental borrowing rate shall be used. Because neither the rate implicit in the lease nor the Company’s incremental borrowing rate were determinable, discount rates were obtained with reference to published U.S. High Yield CCC corporate bond rates at the inception dates of each of the leases, which, with respect to the Irvine office lease was 6.7%, and with respect to the Mississauga office lease was 6.9%. | |
Lease cost (included in general and administrative expense) | $ 27,468 | $ 82,405 |
Weighted-average discount rate | 6.70% | 6.70% |
Weighted-average remaining lease term (months) | 47 months 11 days | 47 months 11 days |
Office [Member] | Irvine, California [Member] | ||
Commenced date | Oct. 1, 2018 | |
Expire date | Sep. 30, 2023 | |
Lease term | 5 years | 5 years |
Lease renewal term | 5 years | 5 years |
Discount rate | 6.70% | 6.70% |
Office [Member] | Mississauga, Ontario [Member] | ||
Commenced date | Aug. 1, 2018 | |
Expire date | Jul. 30, 2019 | |
Lease term | 1 year | 1 year |
Lease renewal term | 1 year | 1 year |
Discount rate | 6.90% | 6.90% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Director [Member] | ||||
Number of shares issued for services | 5,720 | 15,933 | 23,459 | 38,341 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Balance at beginning | shares | 1,386,396 |
Granted | shares | 216,046 |
Exercised | shares | (2,500) |
Expired / forfeited | shares | (12) |
Balance at ending | shares | 1,599,930 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Balance at beginning | $ / shares | $ 11.09 |
Granted | $ / shares | 3.34 |
Exercised | $ / shares | 1.74 |
Expired / forfeited | $ / shares | 385.60 |
Balance at ending | $ / shares | $ 9.79 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - Common Stock Warrants [Member] | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Balance at beginning | shares | 8,676,481 |
Exercised | shares | (2,437,755) |
Expired / Terminated | shares | (29,754) |
Balance at ending | shares | 6,208,972 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Balance at beginning | $ / shares | $ 4.17 |
Exercised | $ / shares | 2.20 |
Expired / Terminated | $ / shares | 41.55 |
Balance at ending | $ / shares | $ 4.76 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | May 09, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Number of awards outstanding | 1,599,930 | 1,386,396 | |
Number of awards granted | 216,046 | ||
Maximum [Member] | |||
Warrant term | 5 years | ||
Second Amended and Restated 2013 Incentive Compensation Plan [Member] | |||
Common stock reserved for issuance | 1,956,250 | ||
Number of share available for grant | 523,609 | ||
Number of awards outstanding | 1,042,166 | ||
Number of awards granted | 387,975 | ||
Unrecognized compensation expense | $ 587,431 | ||
Weighted average period | 1 year 8 months 12 days | ||
Securities Purchase Agreement [Member] | Investor [Member] | Private Placement [Member] | |||
Number of share issued | 2,426,455 | ||
Share price (in dollars per share) | $ 3.10 | ||
Other offering expenses | $ 94,000 | ||
Minimum proceeds | $ 7,500,000 |
Derivative Liabilities (Details
Derivative Liabilities (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Derivative Instruments and Hedges, Liabilities [Roll Forward] | ||
Balance, beginning of period | $ 95,786 | |
Reduction from warrant exercise | (31,468) | |
Gain on change in fair value for the period | $ (22,295) | (64,318) |
Balance, end of period |
Derivative Liabilities (Detai_2
Derivative Liabilities (Details Narrative) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Brainlab Senior Secured Note Payable [Member] | Warrant [Member] | |
Amount of conversion feature | $ 500,000 |