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MRI Interventions, Inc. Announces 2016 First Quarter Results

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Company Sets Quarterly Records in Number of ClearPoint® Procedures and Disposable Product Revenues

IRVINE, Calif., April 28, 2016 (GLOBE NEWSWIRE) -- MRI Interventions, Inc. (OTCQB:MRIC) today announced financial results for the quarter ended March 31, 2016.

Revenues were $1.4 million for the three months ended March 31, 2016, and $1.0 million for the same period in 2015, an increase of $384,000, or 38%, attributable to increases in the Company’s ClearPoint® system reusable and disposable products.

ClearPoint disposable product sales for the three months ended March 31, 2016 were $1.1 million, compared with $840,000 for the same period in 2015, representing an increase of $264,000, or 31%. This increase was due primarily to a greater number of procedures performed using the ClearPoint system within a larger installed base for ClearPoint in the three months ended March 31, 2016, relative to the same period in 2015.

ClearPoint reusable product sales for the three months ended March 31, 2016 were $262,000, compared with $137,000 for the same period in 2015.  Reusable products consist primarily of computer hardware and software bearing sales prices that are appreciably higher than those for disposable products and historically have fluctuated from quarter to quarter.  

Gross margin on product revenues was 49% for the three months ended March 31, 2016, compared to 61% for the same period in 2015.  The decrease in gross margin was due primarily to: (a) an increase in the three months ended March 31, 2016, relative to the same period in 2015, in the allocation of indirect labor to production activities, commensurate with the Company’s transition from a focus on research and development to commercial activities; and (b) an unfavorable product mix related to reusable product sales.

Research and development costs were $657,000 for the three months ended March 31, 2016, compared to $528,000 for the same period in 2015, an increase of $129,000, or 25%. The increase was due primarily to increases in the three months ended March 31, 2016, relative to the same period in 2015, in: (a) software development costs incurred in connection with the Company’s development of the next generation of the ClearPoint operating system; (b) compensation and recruiting costs related to new personnel; (c) project research costs undertaken in connection with government grants; and (d) licensing fees.  These increases were partially offset by: (i) an increase in the three months ended March 31, 2016, relative to the same period in 2015, in the allocation of research and development personnel costs to manufacturing in connection with the Company’s transition from a focus on research and development to that commercial activities; and (ii) a reduction in travel costs.

Selling, general and administrative expenses were $2.0 million for the three months ended March 31, 2016, compared to $2.3 million in the same period in 2015, a decrease of $314,000, or 14%. This decrease was attributable primarily to decreases in: (a) compensation costs, both cash and stock-based; and (b) professional fees.  Also contributing to the decrease was the allocation of costs, in the three months ended March 31, 2016, to manufacturing in connection with the Company’s transition from a research and development focus to commercial activities. These fluctuations were partially offset by an increase in other general and administrative costs such as public company and investor relations expenses. 

During the three months ended March 31, 2016, the Company recorded a gain of $160,000, and during the same period in 2015, the Company recorded a loss of $783,000, from changes in the fair value of derivative liabilities associated with certain warrants the Company issued in the 2012 and 2013 private placement transactions.

The Company’s operating loss for the three months ended March 31, 2016 was $1.9 million, as compared with $2.9 million for the same period in 2015, an improvement of $1.0 million, or 34%. Net loss for the three months ended March 31, 2016 was $2.0 million, as compared with $3.9 million for the same period in 2015, an improvement of $1.9 million, or 48%.

Management’s Comments

“We had another strong quarter of growth,” said Frank Grillo, President and Chief Executive Officer of MRI Interventions.  “Our technology was utilized in 122 procedures, and our disposable product revenue reached a new high of more than $1.1 million.  With two capital sales and an additional three sites starting evaluations, our installed base now consists of 45 hospitals, and interest continues to grow.  Word is out among surgeons and neurologists regarding our more patient friendly approach to deep brain stimulation, better accuracy during laser ablation, and precision in biopsy. 

“Our efforts to reduce our cash utilization continue to payoff.  Our operating loss declined 34% from the first quarter of 2015, and our use of cash for operations declined 43%.  We continue to focus on growing our business efficiently, and we are achieving our goals.

“This coming quarter, we have two of our largest trade shows of the year, where we will have the opportunity to show our technology to surgeons in hands-on workshops, in sponsored lectures and on the exhibit floor.  We believe these events will be a great opportunity to educate more surgeons regarding our technology and its positive impact on patient care.

“With 31% growth in disposable revenue, adoption is clearly on the rise, and momentum continues to build. We believe our customers are realizing the benefits our technology brings to hospitals, physicians and their patients.”

Teleconference Information

Investors and analysts are invited to listen to a live broadcast review of the Company's 2016 first quarter financial results today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) that may be accessed by visiting the Company's website at www.mriinterventions.com and selecting “Investors” / “News” / “IR Calendar.” The conference call may also be accessed at http://mriinterventions.equisolvewebcast.com/q1-2016. Investors and analysts who would like to participate in the conference call may do so via telephone at (877) 407-9034, or at (201) 493-6737 if calling from outside the U.S. or Canada.

For those who cannot access the live broadcast, a replay will be available shortly after the completion of the call until May 5, 2016 by calling (877) 660-6853, or (201) 612-7415 if calling from outside the U.S. or Canada, and then entering conference I.D. number 413671. An online archive of the broadcast will be available on the Company's website at www.mriinterventions.com, on the “Investor Relations” page.

About MRI Interventions, Inc.

Building on the imaging power of magnetic resonance imaging, or MRI, MRI Interventions is creating innovative platforms for performing the next generation of minimally invasive surgical procedures.  The ClearPoint® system, which has received 510(k) clearance and is CE marked, utilizes a hospital’s existing diagnostic or intraoperative MRI suite to enable a range of minimally invasive procedures in the brain.  For more information, please visit www.mriinterventions.com.

Forward-Looking Statements

Statements herein concerning the Company's plans, growth and strategies may include “forward-looking statements” within the context of the federal securities laws. Statements regarding the Company's future events, developments and future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. The Company's actual results may differ materially from those suggested as a result of various factors. Particular uncertainties and risks include those relating to: the Company’s ability to obtain additional financing; estimates regarding the sufficiency of the Company’s cash resources; future revenues from sales of the Company’s ClearPoint system products; and the Company’s ability to market, commercialize and achieve broader market acceptance for the Company’s ClearPoint system products. More detailed information on these and additional factors that could affect the Company's actual results are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 which has been filed with the Securities and Exchange Commission, as well as the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2016, which the Company expects to file in May 2016 with the Securities and Exchange Commission.

 (tables follow)


MRI INTERVENTIONS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
 
    For The Three Months Ended
March 31,
    2016   2015  
Revenues:            
Product revenues   $ 1,366,153     $ 976,871  
Other service revenues       27,981       33,532  
Total revenues       1,394,134       1,010,403  
Cost of product revenues       696,546       385,609  
Research and development costs       657,192       527,512  
Selling, general, and administrative expenses       1,974,249       2,288,660  
Restructuring charges       -        753,400  
Operating loss       (1,933,853 )     (2,944,778 )
Other income (expense):            
Gain (loss) on change in fair value of derivative liabilities       160,118       (782,802 )
Other income, net       75,142       82,688  
Interest income       4,333       7,451  
Interest expense       (349,558 )     (307,813 )
Net loss   $  (2,043,818 )   $ (3,945,254 )
Net loss per share attributable to common stockholders:            
Basic and diluted   $ (0.02 )   $ (0.05 )
Weighted average shares outstanding:            
Basic and diluted       91,645,881       74,842,841  


MRI INTERVENTIONS, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
 
    March 31,
2016
  December 31,
2015
 
ASSETS              
Current Assets:              
Cash and cash equivalents   $ 3,582,227   $ 5,408,523  
Accounts receivable     1,497,537     1,218,043  
Inventory, net     1,570,078     1,807,895  
Prepaid expenses and other current assets     115,364     97,249  
Total current assets     6,765,206     8,531,710  
Property and equipment, net     459,259     440,606  
Software license inventory     989,600     937,100  
Other assets     77,446     27,306  
Total assets   $ 8,291,511   $ 9,936,722  
               
LIABILITIES AND STOCKHOLDERS’ DEFICIT              
Current liabilities:              
Accounts payable   $   818,047    $ 697,807  
Accrued compensation       455,915     557,784  
Other accrued liabilities       1,305,943     1,398,707  
Derivative liabilities       498,168     658,286  
Deferred product and service revenues       151,706     116,009  
Senior secured note payable, net of unamortized discount of $64,835 at December 31, 2015     -     4,224,609  
Total current liabilities       3,229,779     7,653,202  
               
Accrued interest       577,125     542,500  
Senior secured note payable       4,289,444     -  
2014 junior secured notes payable, net of unamortized discount and deferred issuance costs of $434,408 and $467,611 at March 31, 2016 and December 31, 2015,respectively       3,290,592     3,257,389  
2010 junior secured notes payable, net of unamortized discount of $2,535,230 and $2,481,510 at March 31, 2016 and December 31, 2015, respectively       518,490     464,770  
Total liabilities      11,905,430     11,917,861  
Commitments and contingencies              
Stockholders’ deficit:              
Common stock, $0.01 par value; 200,000,000 shares authorized; 91,916,634 shares issued and outstanding at March 31, 2016; and 91,381,488 issued and outstanding at December 31, 2015       919,165     913,814  
Additional paid-in capital      83,237,314     82,831,627  
Accumulated deficit      (87,770,398 )   (85,726,580 )
Total stockholders’ deficit       (3,613,919 )   (1,981,139 )
Total liabilities and stockholders’ deficit   $ 8,291,511   $ 9,936,722  


MRI INTERVENTIONS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
  For The Three Months Ended
March 31,
 
  2016   2015  
Cash flows from operating activities:              
Net loss $ (2,043,818 )   $ (3,945,254 )
Adjustments to reconcile net loss to net cash flows from operating activities:              
Depreciation and amortization   41,022       86,680  
Share-based compensation   260,149       377,892  
Expenses paid through the issuance of common stock   192,166       37,583  
(Gain) loss on change in fair value of derivative liabilities   (160,118 )     782,802  
Amortization of debt issuance costs and original issue discounts   151,759       110,015  
Increase (decrease) in cash resulting from changes in:              
Accounts receivable   (279,494 )     (136,769 )
Inventory   217,873       (109,994 )
Prepaid expenses and other current assets   (18,114 )     (6,909 )
               
Other assets   (58,473 )     (4,000 )
Accounts payable and accrued expenses   52,790       13,782  
Deferred revenue   35,697       (4,870 )
Net cash flows from operating activities   (1,608,561 )     (2,799,042 )
Cash flows from investing activities:              
Purchases of property and equipment   (77,649 )     (6,635 )
Net cash flows from investing activities   (77,649 )     (6,635 )
Cash flows from financing activities              
Payment of 2015 private placement financing costs   (140,086 )     -  
Net cash flows from financing activities   (140,086 )     -  
Net change in cash and cash equivalents   (1,826,296 )     (2,805,677 )
Cash and cash equivalents, beginning of period   5,408,523       9,244,006  
Cash and cash equivalents, end of period $ 3,582,227     $ 6,438,329  
               
SUPPLEMENTAL CASH FLOW INFORMATION              
Cash paid for:              
Income taxes $ -     $ -  
Interest $ 223,500     $ 223,500  

 

Contact:  Harold A. Hurwitz, Chief Financial Officer
(949) 900-6833

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Source: MRI Interventions, Inc.