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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

MRI Interventions Reports 62% Increase in 2019 Third Quarter Revenue

November 12, 2019

IRVINE, Calif., Nov. 12, 2019 (GLOBE NEWSWIRE) -- MRI Interventions, Inc. (NYSE American: MRIC) (the “Company”) today announced financial results for its third fiscal quarter ended September 30, 2019.

2019 Third Quarter Highlights

-- Increased revenue 62% year-over-year to a record $2.9 million. -- Functional neurosurgery revenue increased 28% to $1.9 million. -- Biologics and drug delivery revenue increased 188% to $564,000. -- Therapy revenue increased to $64,000. -- Capital equipment sales and related service revenue increased 144% to $395,000; resulting in 57 active surgical centers. -- Supported a record 233 cases, compared with 197 in the preceding quarter and 175 in the 2018 third quarter, a year-over-year growth of 33%. -- Increased to 10 centers using the Company’s two cases per day protocol. -- Completed the 3,000th ClearPoint Neuro Navigation System case. -- Signed an additional product development agreement in the biologics and drug delivery space; shipped product or performed services for 15 programs during 2019. -- Continued cash management program, using cash in operations of $964,000, a significant portion of which was used to support our continued growth. -- Appointed healthcare veteran B. Kristine Johnson to the board of directors. -- Increased full-year 2019 revenue forecast to a range of $10.5 million to $11.5 million.

Joe Burnett, President and Chief Executive Officer of MRI Interventions, Inc., said, “The third quarter continued our string of setting quarterly revenue and ClearPoint case records in 2019, with revenue increasing 62% to a record $2.9 million and the supported case total reaching 233. We also crossed a major milestone, reporting our 3,000th ClearPoint case during the quarter, which further demonstrates the maturity of our ClearPoint system in the clinical environment. In addition to new site launches, the strong case growth this year has been driven in part by a growing number of centers adopting our two case per day protocol, which leverages best practices in patient case management and tools in our ClearPoint 2.0 software platform to maximize the economic value of MRI scanner time available at those centers. We now have 10 centers using this protocol, and we continue to work with additional centers’ transition to this approach. Currently 29 of our installed base of 57 active surgical centers have our ClearPoint 2.0 software installed, continuing the rapid adoption since its full market release earlier this year.”

Mr. Burnett further noted, “We also made exciting progress on a number of other key initiatives, including continued growth in therapeutic revenues recognized from the sale of CLS’s FDA-cleared laser ablation products for non-neuro applications under our distribution agreement for sales in the U.S. and Canada. We signed an additional co-development agreement with a new partner in the biologics and drug delivery space and have now shipped product or performed services for 15 biologics and drug delivery partners in 2019. We continue to be committed to our four-pillar growth strategy, which saw our core functional neurosurgery business grow 28% in the third quarter, supplemented by the growth in sales of biologics and drug delivery products, and capital equipment and related services. In fact, all four of our product segments saw significant revenue growth in the third quarter, which demonstrates our diversification into a platform company, with all elements of our business contributing to this result.”

Financial Results – Three Months Ended September 30, 2019

Functional neurosurgery revenue, which consists of disposable product sales related to cases utilizing the ClearPoint system, increased 28% to a record $1.9 million for the three months ended September 30, 2019, from $1.4 million for the same period in 2018. The increase was primarily due to an expanded customer base and increased utilization by our existing customers of MRI scanner availability.

Biologics and drug delivery revenue, which include sales of disposable products and services related to customer-sponsored clinical trials and services, increased 188% to $564,000 for the three months ended September 30, 2019, from $196,000 for the third quarter of 2018.

Capital equipment revenue, consisting of sales of ClearPoint reusable hardware and software, and related service revenue, increased 144% to $395,000 for the three months ended September 30, 2019, from $162,000 for the same period in 2018, due primarily to an increase in sales of new ClearPoint system installations, ClearPoint 2.0 software upgrades and service contract sales.

Gross margin for the three months ended September 30, 2019 was 66%, a slight decline from gross margin of 69% for the same period in 2018, but an increase from 60% in the second quarter of 2019, primarily due to shifts in product mix that vary on a quarterly basis between high-margin single use disposable sales and capital equipment sales which carry a lower margin.

Research and development costs were $762,000 for three months ended September 30, 2019, compared to $617,000 for the same period in 2018, an increase of 23%. Sales and marketing expenses were $1.1 million for the three months ended September 30, 2019, compared to $765,000 for the same period in 2018, an increase of 39%, attributable primarily to increases in incentive compensation tied to increased sales, and in the expansion of our field clinical team. General and administrative expenses were $1.0 million for the three months ended September 30, 2019, compared to $1.1 million for the same period in 2018, a decrease of 4%.

Outlook

“Based on our strong third quarter and year-to-date results combined with confidence in our anticipated fourth quarter sales, we are increasing our full-year 2019 revenue forecast to a range of $10.5 million to $11.5 million, from our previous forecast calling for a range of $10.0 million to $11.0 million,” said Mr. Burnett.

Teleconference Information

Investors and analysts are invited to listen to a live broadcast review of the Company’s 2019 third 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.” 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 November 26, 2019 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.

MRI Interventions is a leading platform company for MRI-guided neurosurgery procedures, including deep-brain stimulation, ablation, aspiration, biopsy, and gene therapy delivery. The ClearPoint Neuro Navigation System is FDA cleared and CE marked, and is installed in 57 active surgical centers in the U.S. To date, more than 3,000 procedures have been performed leveraging the sub-millimetric accuracy of the ClearPoint platform. For more information, please visit www.mriinterventions.com.

Forward-Looking Statements

Statements herein concerning MRI Interventions, Inc.’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. Uncertainties and risks may cause the company’s actual results to differ materially from those expressed in or implied by forward-looking statements. Particular uncertainties and risks include those relating to: future revenues from sales of the company’s ClearPoint Neuro Navigation System products; the company’s ability to market, commercialize and achieve broader market acceptance for the company’s ClearPoint Neuro Navigation System products; and estimates regarding the sufficiency of the company’s cash resources. More detailed information on these and additional factors that could affect the company’s actual results are described in the “Risk Factors” section of the company’s Annual Report on Form 10-K for the year ended December 31, 2018, the company’s Quarterly Report on Form 10-Q for the period ended June 30, 2019, both of which have been filed with the Securities and Exchange Commission, and the company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019, which the company intends to file with the Securities and Exchange Commission on or before November 14, 2019.

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

Matt Kreps Darrow Associates Investor Relations (214) 597-8200 mkreps@darrowir.com

MRI INTERVENTIONS, INC. Condensed Consolidated Statements of Operations(Unaudited)

For The Three Months Ended September 30, --------------------------- - 2019 2018 ------------ ------------ - Revenues: Product revenues $ 2,594,428 $ 1,739,804 Service and other revenues 333,038 67,238 - ---------- - ---------- Total revenues 2,927,466 1,807,042 Cost of revenues 983,042 553,221 Research and development costs 761,881 617,241 Sales and marketing expenses 1,063,143 764,599 General and administrative expenses 1,029,929 1,078,171 - ---------- - ---------- Operating loss (910,529 ) (1,206,190 ) Other income (expense): Gain from change in fair value of derivative liabilities - 22,295 Other income, net 728 2,643 Interest expense, net (213,167 ) (246,824 ) - ---------- - ---------- Net loss $ (1,122,968 ) $ (1,428,076 ) - ---------- - ---------- Net loss per share attributable to common stockholders: Basic and diluted $ (0.08 ) $ (0.13 ) - ---------- - ---------- Weighted average shares outstanding: Basic and diluted 14,053,508 11,006,959 - ---------- - ----------

For The Nine Months Ended September 30, --------------------------- - 2019 2018 ------------ ------------ - Revenues: Product revenues $ 6,952,575 $ 4,691,002 Service and other revenues 1,053,807 385,742 - ---------- - ---------- Total revenues 8,006,382 5,076,744 Cost of revenues 2,899,837 1,743,981 Research and development costs 2,044,224 1,828,846 Sales and marketing expenses 3,246,912 2,653,044 General and administrative expenses 2,991,305 3,119,617 - ---------- - ---------- Operating loss (3,175,896 ) (4,268,744 ) Other income (expense): Gain from change in fair value of derivative liabilities - 64,318 Other income, net 8,100 1,284 Interest expense, net (726,292 ) (742,387 ) - ---------- - ---------- Net loss (3,894,088 ) $ (4,945,529 ) - ---------- - ---------- Net loss per share attributable to common stockholders: Basic and diluted (0.31 ) $ (0.45 ) - ---------- - ---------- Weighted average shares outstanding: Basic and diluted 12,477,790 10,903,675 - ---------- - ----------

MRI INTERVENTIONS, INC. Consolidated Balance Sheets

September 30, December 31, 2019 2018 (Unaudited) -------------- -------------- ASSETS 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 - ------------ - ------------ LIABILITIES AND STOCKHOLDERS’ EQUITY 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 2014 junior secured notes payable, net - 1,939,850 2010 junior secured notes payable, net 1,867,265 1,540,791 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 149,918 110,183 and outstanding at December 31, 2018 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 - ------------ - ------------

MRI INTERVENTIONS, INC. Consolidated Statements of Cash Flows(Unaudited)

For The Nine Months Ended September 30, ---------------------------- 2019 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 - ---------- - ---------- SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for: Income taxes $ - $ - - ---------- - ---------- Interest $ 82,621 $ 92,222 - ---------- - ----------