On July 11, 2017, MRI Interventions Inc (OTCMKTS:MRIC), the medical device company designing minimally invasive surgical procedures in the brain, announced promising preliminary results for its second quarter ended June 30, 2017. The market pushed up the share price on the following trading day. Additionally, the market got to know that a big stake was acquired recently. We will discuss the acquisition in this piece, so our readers could get to know the name of this shareholder. Have a look at the recent share price action:
MRI Interventions, Inc. was founded in 1998. Between 1998 and 2002, MRIC raised capital and invested in research and development to build intangible assets. Finally, in 2003, the company commenced to focus on building commercial applications for the technologies developed. Two products are featured in the annual report: ClearPoint, and ClearTrace systems. ClearPoint system “is used to perform minimally invasive surgical procedures in the brain“. It is already being used in the US. The following video shows how ClearPoint is used with patients:
ClearTrace system is still a product candidate. The goal is to use the know-how accumulated by the ClearPoint system to perform minimally invasive surgical procedures on the heart. The applications of both systems are described very well in the following text from the last 10-k:
“Our ClearPoint system is a neuro-navigation system designed for placing catheters, electrodes and laser fibers to treat a variety of neurological diseases and conditions and for performing biopsies. Our ClearTrace system is designed to deliver catheter-based therapies to treat certain cardiac diseases.” Source
Why are these products better than the devices being used at the moment? The company states that both platforms “will provide better patient outcomes“, the revenues for hospitals and doctors will increase, and costs will be reduced.
On July 11, 2017, the company put out preliminary results for its second quarter ended June 30, 2017. The most outstanding results were the following:
- Total revenue is $2.0 million, which represents 79% increase over the last year.
- Ninth consecutive quarter of record procedures, at 162 ClearPoint Neuro Navigation System procedures, a 30% increase.
Frank Grillo, President, and CEO of MRIC, explained the results in the following way:
“We are very pleased to report further acceleration in the utilization of the ClearPoint System, leading to 162 procedures in the second quarter. This is our ninth consecutive quarter of record patient procedures. We also secured an additional three ClearPoint System sales, leading to a 79% increase in total revenue year-over-year as we further expand our penetration in the neurosurgery market. With an installed base of 50 sites and a strong new account pipeline, we remain focused on increased utilization of the ClearPoint System. We are finding strong success in a number of applications where ClearPoint offers compelling benefits to both surgeons and patients, including growing treatment markets such as laser ablation and deep brain stimulation. “ Source
In addition, it commented a $13 million private placement:
“Also during the quarter, we completed a $13 million private placement, for which the registration statement was recently declared effective. We believe this offering funds the Company to cash flow break-even, as well as the commercialization efforts of our entry into new markets with unmet medical needs.” Source
This private placement is key to comprehend the recent share price decline.
$13 million private placement
On July 7, 2017, the company put out that it was offering 6,693,333 outstanding shares, and warrants. The prospectus is this document. The following information is valuable:
|Common stock offered by the selling securityholders||13,807,533 shares (1)|
|Common stock outstanding prior to this offering||10,335,365 shares (2)|
|Common stock to be outstanding after the offering, assuming the exercise of all warrants for the shares covered by this prospectus||17,449,565 shares (2)|
On July 10, 2017, the market reacted by pushing the share price down. Obviously, the reaction was expected, as this transaction increased the dilution of previous shareholders.
Shareholders buying the dip
Some people in the market seem to be profiting the situation. The Hewlett Fund LP acquired 562,500 shares of common stock. The market got to know this information thanks to this document that became public on July 11, 2017. Other insiders also bought recently:
|Purchase||Direct||May 25, 2017||7,500|
|Purchase||Direct||May 25, 2017||12,500|
|Acquisition (Non Open Market) at $2.64 per share.||Indirect||6,256||Dec 29, 2016||2,370|
|Acquisition (Non Open Market) at $2.64 per share.||Direct||1,850||Dec 29, 2016||701|
|Acquisition (Non Open Market) at $2.64 per share.||Direct||4,754||Dec 29, 2016||1,801|
|Acquisition (Non Open Market) at $2.64 per share.||Direct||7,257||Dec 29, 2016||2,749|
|Acquisition (Non Open Market) at $2.64 per share.||Direct||5,256||Dec 29, 2016||1,991|
|Acquisition (Non Open Market) at $2.64 per share.||Direct||5,005||Dec 29, 2016||1,896|
MRI Interventions, Inc. recently delivered a lot of news to the market. Its second quarter results were released recently, which made the market push up the share price. Additionally, two days before, the company noted an offering of stock and warrants, which was disliked by the market. The share price declined. We had a look at what insiders and other shareholders are doing and saw them buying. To sum up, it seems that MRIC is growing, thus we encourage readers to be alert on this one.
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Image courtesy of Nonlocal11 via Flickr
Disclosure: We have no position in MRIC and have not been compensated for this article.