x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
04-3308180
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
|
|
4B Gill Street Woburn, Massachusetts
|
01801
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of exchange on which registered
|
Common Stock, $0.0001 par value per share
|
NURO
|
The Nasdaq Stock Market LLC
|
Preferred Stock Purchase Rights
|
NUROW
|
|
Warrants to Purchase Common Stock
|
|
|
Large accelerated filer ¨
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Accelerated filer ¨
|
Non-accelerated filer ¨
|
Smaller reporting company x
|
|
|
|
Emerging growth company ¨
|
|
||
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|
|
Item 1.
|
|
|
|
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|
|
Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019
|
|
|
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|
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Statements of Operations (unaudited) for the Quarters Ended March 31, 2020 and 2019
|
|
|
|
|
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Statement of Changes in Stockholders' Equity (unaudited) for the Quarters Ended March 31, 2020 and 2019
|
|
|
|
|
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Statements of Cash Flows (unaudited) for the Quarters Ended March 31, 2020 and 2019
|
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Item 2.
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||
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Item 3.
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||
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Item 4.
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||
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Item 1.
|
||
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Item 1A.
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||
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Item 2.
|
||
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Item 3.
|
||
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Item 4.
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||
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Item 5.
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||
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Item 6.
|
||
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|
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March 31, 2020
|
|
December 31, 2019
|
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
2,816,485
|
|
|
$
|
3,126,206
|
|
Accounts receivable, net
|
386,124
|
|
|
298,967
|
|
||
Inventories
|
1,153,560
|
|
|
1,163,714
|
|
||
Collaboration receivable
|
181,330
|
|
|
189,008
|
|
||
Prepaid expenses and other current assets
|
340,369
|
|
|
652,919
|
|
||
Total current assets
|
4,877,868
|
|
|
5,430,814
|
|
||
|
|
|
|
||||
Fixed assets, net
|
250,041
|
|
|
273,448
|
|
||
Right to use asset
|
1,048,937
|
|
|
1,159,774
|
|
||
Other long-term assets
|
29,650
|
|
|
29,650
|
|
||
Total assets
|
$
|
6,206,496
|
|
|
$
|
6,893,686
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
|
|
|
|
||||
Accounts payable
|
$
|
623,193
|
|
|
$
|
725,658
|
|
Accrued expenses and compensation
|
1,064,580
|
|
|
1,443,574
|
|
||
Accrued product returns
|
603,000
|
|
|
689,000
|
|
||
Lease obligation, current
|
591,370
|
|
|
588,546
|
|
||
Total current liabilities
|
2,882,143
|
|
|
3,446,778
|
|
||
|
|
|
|
||||
Lease obligation, net of current portion
|
810,235
|
|
|
916,674
|
|
||
Total liabilities
|
3,692,378
|
|
|
4,363,452
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock
|
—
|
|
|
—
|
|
||
Convertible preferred stock
|
1
|
|
|
1
|
|
||
Common stock, $0.0001 par value; 25,000,000 shares authorized at March 31, 2020 and December 31, 2019; 1,687,752 and 1,400,674 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
|
168
|
|
|
140
|
|
||
Additional paid-in capital
|
197,960,925
|
|
|
197,319,698
|
|
||
Accumulated deficit
|
(195,446,976
|
)
|
|
(194,789,605
|
)
|
||
Total stockholders’ equity
|
2,514,118
|
|
|
2,530,234
|
|
||
Total liabilities and stockholders’ equity
|
$
|
6,206,496
|
|
|
$
|
6,893,686
|
|
|
Quarters Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
Revenues
|
$
|
2,172,036
|
|
|
$
|
3,122,935
|
|
|
|
|
|
||||
Cost of revenues
|
620,190
|
|
|
2,324,231
|
|
||
|
|
|
|
||||
Gross profit
|
1,551,846
|
|
|
798,704
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
||
Research and development
|
533,620
|
|
|
855,081
|
|
||
Sales and marketing
|
424,349
|
|
|
2,025,288
|
|
||
General and administrative
|
1,251,746
|
|
|
1,619,490
|
|
||
|
|
|
|
||||
Total operating expenses
|
2,209,715
|
|
|
4,499,859
|
|
||
|
|
|
|
||||
Loss from operations
|
(657,869
|
)
|
|
(3,701,155
|
)
|
||
|
|
|
|
||||
Other income:
|
|
|
|
||||
Collaboration income
|
—
|
|
|
5,734,849
|
|
||
Other income
|
498
|
|
|
16,813
|
|
||
|
|
|
|
||||
Total other income
|
498
|
|
|
5,751,662
|
|
||
|
|
|
|
||||
Net (loss) income
|
$
|
(657,371
|
)
|
|
$
|
2,050,507
|
|
|
|
|
|
||||
Net (loss) income per common share applicable to common stockholders;
|
|
|
|
||||
Basic
|
$
|
(0.45
|
)
|
|
$
|
2.65
|
|
Diluted
|
$
|
(0.45
|
)
|
|
$
|
1.47
|
|
|
Series B – F
Convertible Preferred Stock |
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Accumulated
Deficit |
|
Total
|
||||||||||||||||
|
Number of
Shares |
|
Amount
|
|
Number of
Shares |
|
Amount
|
|
|
|
|||||||||||||||
Balance at December 31, 2018
|
17,813.63
|
|
|
$
|
18
|
|
|
738,029
|
|
|
$
|
74
|
|
|
$
|
197,114,310
|
|
|
$
|
(191,016,591
|
)
|
|
$
|
6,097,811
|
|
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,093
|
|
|
—
|
|
|
44,093
|
|
|||||
Issuance of common stock upon conversion of preferred stock
|
(2,445.90
|
)
|
|
(3
|
)
|
|
93,000
|
|
|
9
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,050,507
|
|
|
2,050,507
|
|
|||||
Balance at March 31, 2019
|
15,367.73
|
|
|
$
|
15
|
|
|
831,029
|
|
|
$
|
83
|
|
|
$
|
197,158,397
|
|
|
$
|
(188,966,084
|
)
|
|
$
|
8,192,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Series B Convertible Preferred Stock
|
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Accumulated
Deficit |
|
Total
|
||||||||||||||||
|
Number of
Shares |
|
Amount
|
|
Number of
Shares |
|
Amount
|
|
|
|
|||||||||||||||
Balance at December 31, 2019
|
200
|
|
|
$
|
1
|
|
|
1,400,674
|
|
|
$
|
140
|
|
|
$
|
197,319,698
|
|
|
$
|
(194,789,605
|
)
|
|
$
|
2,530,234
|
|
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,047
|
|
|
—
|
|
|
144,047
|
|
|||||
Issuance of common stock under at the market offering
|
—
|
|
|
—
|
|
|
256,078
|
|
|
25
|
|
|
453,432
|
|
|
—
|
|
|
453,457
|
|
|||||
Common stock issued to settle compensation obligations
|
—
|
|
|
—
|
|
|
31,000
|
|
|
3
|
|
|
43,748
|
|
|
—
|
|
|
43,751
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(657,371
|
)
|
|
(657,371
|
)
|
|||||
Balance at March 31, 2020
|
200
|
|
|
$
|
1
|
|
|
1,687,752
|
|
|
$
|
168
|
|
|
$
|
197,960,925
|
|
|
$
|
(195,446,976
|
)
|
|
$
|
2,514,118
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net (loss) income
|
$
|
(657,371
|
)
|
|
$
|
2,050,507
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
23,407
|
|
|
31,778
|
|
||
Stock-based compensation
|
144,047
|
|
|
44,093
|
|
||
Expense related to settlement of compensation obligation
|
43,751
|
|
|
—
|
|
||
Impairment charge against right of use asset
|
87,000
|
|
|
—
|
|
||
Inventory provision
|
—
|
|
|
700,000
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(87,157
|
)
|
|
110,605
|
|
||
Inventories
|
10,154
|
|
|
(182,404
|
)
|
||
Collaboration receivable
|
7,678
|
|
|
—
|
|
||
Prepaid expenses and other current and long-term assets
|
312,550
|
|
|
(101,579
|
)
|
||
Accounts payable
|
(102,465
|
)
|
|
(740,223
|
)
|
||
Accrued expenses and compensation
|
(458,772
|
)
|
|
657,059
|
|
||
Accrued product returns
|
(86,000
|
)
|
|
(374,766
|
)
|
||
Deferred collaboration income
|
—
|
|
|
(1,774,704
|
)
|
||
Net cash (used in) provided by operating activities
|
(763,178
|
)
|
|
420,366
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Net proceeds from issuance of stock
|
453,457
|
|
|
—
|
|
||
Net cash provided by financing activities
|
453,457
|
|
|
—
|
|
||
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(309,721
|
)
|
|
420,366
|
|
||
Cash and cash equivalents, beginning of period
|
3,126,206
|
|
|
6,780,429
|
|
||
Cash and cash equivalents, end of period
|
$
|
2,816,485
|
|
|
$
|
7,200,795
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Common stock issued to settle employee compensation
|
$
|
43,751
|
|
|
$
|
—
|
|
1.
|
Business and Basis of Presentation
|
2.
|
Comprehensive Income (Loss)
|
3.
|
Net (Loss) Income Per Common Share
|
|
Quarters Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income (loss) applicable to common stockholders
|
$
|
(657,371
|
)
|
|
$
|
2,050,507
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding, basic
|
1,457,224
|
|
|
774,146
|
|
||
Dilutive convertible preferred stock
|
—
|
|
|
622,720
|
|
||
Weighted average number of common shares outstanding, dilutive
|
1,457,224
|
|
|
1,396,866
|
|
||
|
|
|
|
||||
Net income (loss) per common share applicable to common stockholders, basic
|
$
|
(0.45
|
)
|
|
$
|
2.65
|
|
Net income (loss) per common share applicable to common stockholders, diluted
|
$
|
(0.45
|
)
|
|
$
|
1.47
|
|
|
Quarters Ended March 31,
|
||||
|
2020
|
|
2019
|
||
Options
|
164,091
|
|
|
48,849
|
|
Warrants
|
42,086
|
|
|
45,937
|
|
Convertible preferred stock
|
62
|
|
|
—
|
|
Total
|
206,239
|
|
|
94,786
|
|
4.
|
Inventories
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Purchased components
|
$
|
736,791
|
|
|
$
|
720,209
|
|
Finished goods
|
416,769
|
|
|
443,505
|
|
||
|
$
|
1,153,560
|
|
|
$
|
1,163,714
|
|
5.
|
Accrued Expenses and Compensation
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Technology fees
|
$
|
450,000
|
|
|
$
|
450,000
|
|
Professional services
|
292,000
|
|
|
454,000
|
|
||
Compensation
|
92,758
|
|
|
62,322
|
|
||
Advertising and promotion
|
60,000
|
|
|
68,000
|
|
||
Warranty
|
63,700
|
|
|
75,300
|
|
||
Other
|
106,122
|
|
|
333,952
|
|
||
|
$
|
1,064,580
|
|
|
$
|
1,443,574
|
|
6.
|
Leases
|
2020
|
|
482,391
|
|
|
2021
|
|
653,164
|
|
|
2022
|
|
247,347
|
|
|
2023
|
|
165,785
|
|
|
2024
|
|
165,785
|
|
|
2025
|
|
117,431
|
|
|
Total minimum lease payments
|
|
$
|
1,831,903
|
|
|
|
|
||
Weighted-average discount rate, 14.7%
|
|
$
|
430,298
|
|
Lease obligation, current portion
|
|
591,370
|
|
|
Lease obligation, net of current portion
|
|
810,235
|
|
|
|
|
$
|
1,831,903
|
|
7.
|
Business Restructuring
|
|
|
March 31, 2020
|
||
Severance obligations:
|
|
|
||
Provision
|
|
$
|
224,773
|
|
Amounts paid out
|
|
(224,773
|
)
|
|
Total
|
|
—
|
|
|
Relocation costs:
|
|
|
||
Provision
|
|
100,000
|
|
|
Amounts paid out
|
|
(100,000
|
)
|
|
Total
|
|
—
|
|
|
Impairment charge for idle facility
|
|
487,000
|
|
|
Amounts paid out
|
|
(87,000
|
)
|
|
Total
|
|
400,000
|
|
|
|
|
|
||
Balance - March 31, 2020
|
|
$
|
400,000
|
|
8.
|
Fair Value Measurements
|
|
|
|
Fair Value Measurements at March 31, 2020 Using
|
||||||||||||
|
March 31, 2020
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at December 31, 2019 Using
|
||||||||||||
|
December 31, 2019
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents
|
$
|
698,807
|
|
|
$
|
698,807
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
698,807
|
|
|
$
|
698,807
|
|
|
$
|
—
|
|
|
$
|
—
|
|
9.
|
Credit Facility
|
10.
|
Stockholders’ Equity
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized at March 31, 2020 and December 31, 2019; no shares issued and outstanding at March 31, 2020 and December 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
Series B convertible preferred stock, $0.001 par value; 147,000 shares designated at March 31, 2020 and December 31, 2019; 200 shares issued and outstanding at March 31, 2020 and December 31, 2019
|
$
|
1
|
|
|
$
|
1
|
|
Series D convertible preferred stock, $0.001 par value; 21,300 shares designated at March 31, 2020 and December 31, 2019; no shares issued and outstanding at March 31, 2020 and December 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
Series E convertible preferred stock, $0.001 par value; 7,000 shares designated at March 31, 2020 and December 31, 2019; no shares issued and outstanding at March 31, 2020 and December 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
Series F convertible preferred stock, $0.001 par value; 10,621 shares designated at March 31, 2020 and December 31, 2019; no shares issued and outstanding at March 31, 2020 and December 31, 2019
|
$
|
—
|
|
|
$
|
—
|
|
11.
|
Reverse Stock Split
|
|
Quarters Ended March 31
|
|
|
|||||||||||
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Revenues
|
$
|
2,172.0
|
|
|
$
|
3,122.9
|
|
|
$
|
(950.9
|
)
|
|
(30.4
|
)%
|
|
Quarters Ended March 31,
|
|
|
|||||||||||
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Cost of revenues
|
$
|
620.2
|
|
|
$
|
2,324.2
|
|
|
$
|
(1,704.0
|
)
|
|
(73.3
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Gross profit
|
$
|
1,551.8
|
|
|
$
|
798.7
|
|
|
$
|
753.1
|
|
|
94.3
|
%
|
|
Quarters Ended March 31
|
|
|
|||||||||||
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Research and development
|
$
|
533.6
|
|
|
$
|
855.1
|
|
|
$
|
(321.5
|
)
|
|
(37.6
|
)%
|
Sales and marketing
|
424.3
|
|
|
2,025.3
|
|
|
(1,601.0
|
)
|
|
(79.1
|
)%
|
|||
General and administrative
|
1,251.7
|
|
|
1,619.5
|
|
|
(367.8
|
)
|
|
(22.7
|
)%
|
|||
Total operating expenses
|
$
|
2,209.6
|
|
|
$
|
4,499.9
|
|
|
$
|
(2,290.3
|
)
|
|
(50.9
|
)%
|
|
Quarters Ended March 31,
|
|
|
|||||||||||
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||
Collaboration income
|
$
|
—
|
|
|
$
|
5,734.8
|
|
|
$
|
(5,734.8
|
)
|
|
(100.0
|
)%
|
|
Quarters Ended March 31,
|
|
|
|||||||||||
|
2020
|
|
2019
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Other income
|
$
|
0.5
|
|
|
$
|
16.8
|
|
|
$
|
(16.3
|
)
|
|
(97.0
|
)%
|
|
March 31, 2020
|
|
December 31, 2019
|
|
Change
|
|
% Change
|
|||||||
|
(in thousands)
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
$
|
2,816.5
|
|
|
$
|
3,126.2
|
|
|
$
|
(309.7
|
)
|
|
(9.9
|
)%
|
|
Quarters Ended March 31,
|
|
Year Ended
December 31, |
||
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
Days sales outstanding (days)
|
14
|
|
30
|
|
27
|
Inventory turnover rate (times per year)
|
2.1
|
|
3.5
|
|
3.5
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Net cash used in operating activities (excluding collaboration income)
|
$
|
(763.2
|
)
|
|
$
|
(3,539.7
|
)
|
Net cash provided by collaboration income
|
—
|
|
|
3,960.1
|
|
||
Net cash (used in) provided by operating activities
|
(763.2
|
)
|
|
420.4
|
|
||
Net cash provided by financing activities
|
453.5
|
|
|
—
|
|
||
Net cash used (provided)
|
$
|
(309.7
|
)
|
|
$
|
420.4
|
|
•
|
restrictions on the conduct of our business imposed by governmental regulators;
|
•
|
diversion or prioritization of healthcare resources away from diagnostic testing which uses our medical devices by physician clinics, hospitals, home testing services and other healthcare providers;
|
•
|
supply chain disruption, including delays in fulfillment or cancellations of purchase orders by our parts and services suppliers which would hamper our manufacturing capabilities;
|
•
|
limitations on employee resources that would otherwise be focused on our business activities, including because of sickness of employees or their families or requirements imposed on employees to avoid contact with large groups of people; and
|
•
|
disruption in our distribution channels, including shipping providers and distributors.
|
|
|
NEUROMETRIX, INC.
|
|
|
|
April 23, 2020
|
/s/
|
SHAI N. GOZANI, M.D., PH. D.
|
|
|
Shai N. Gozani, M.D., Ph. D.
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
April 23, 2020
|
/s/
|
THOMAS T. HIGGINS
|
|
|
Thomas T. Higgins
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
Exhibit No.
|
|
Description
|
|
|
|
|
Separation Agreement dated March 12, 2020, between NeuroMetrix, Inc. and Francis X. McGillin. Filed herewith.
|
|
|
|
|
|
At Market Issuance Sales Agreement dated February 19, 2020 by and between NeuroMetrix, Inc. and Ladenburg Thalmann & Co. Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (File No. 001-33351) filed on February 19, 2020).
|
|
|
|
|
|
Certification of Principal Executive Officer Under Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. Filed herewith.
|
|
|
|
|
|
Certification of Principal Financial Officer Required Under Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
|
|
|
|
|
|
Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350. Furnished herewith.
|
|
|
|
|
101
|
|
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets at March 31, 2020 and December 31, 2019, (ii) Statements of Operations for the quarters ended March 31, 2020 and 2019, (iii) Statements of Changes in Stockholders' Equity for the quarters ended March 31, 2020 and 2019, (iv) Statements of Cash Flows for the quarters ended March 31, 2020 and 2019, and (v) Notes to Financial Statements.
|
|
|
1.
|
Salary and Benefits Continuation. Upon the execution of this Agreement, the parties agree as follows:
|
•
|
Mr. McGillin’s employment with NeuroMetrix shall end on March 31, 2020 (“Separation Date”). Prior to the Separation Date, NeuroMetrix shall continue to provide Mr. McGillin his regular salary, compensation and all other benefits. Mr. McGillin is entitled to these payments regardless of whether or not he signs this Separation Agreement. NeuroMetrix shall pay Mr. McGillin any outstanding accrued, but unused, vacation days in his final paycheck. If Mr. McGillin will have used more PTO than accrued at that date, Mr. McGillin will not be required to pay it back.
|
•
|
Additionally, Mr. McGillin will receive from NeuroMetrix a separation payment of $75,000, reduced by appropriate taxes which shall be paid in one lump sum within 8 calendar days of signing this agreement.
|
•
|
Additionally, Mr. McGillin will receive an unrestricted separation grant in shares of NeuroMetrix common stock with a value of $75,000, reduced by appropriate taxes to be paid in cash by NeuroMetrix. The number of shares will be set as of the closing price on the business day immediately preceding the signing date.
|
•
|
As Mr. McGillin elects to continue health insurance coverage under the NeuroMetrix health insurance plan, in accordance with the health care continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), NeuroMetrix will directly pay to ADP TotalSource the full cost of such insurance during the period from April 1, 2020 through December 31, 2020. Continuation of COBRA coverage beyond this period, if available, will be Mr. McGillin’s responsibility. NeuroMetrix shall provide Mr. McGillin with additional information regarding COBRA benefits under separate cover.
|
•
|
Mr. McGillin agrees that, within fifteen (15) days of the Separation Date, he will submit his final documented expense reimbursement statement reflecting all business expenses he incurred through the Separation Date, if any, for which he seeks reimbursement. NeuroMetrix will reimburse him for these expenses pursuant to its regular business practice.
|
2.
|
Employee Release. In consideration of the agreement of NeuroMetrix, Inc. to make payment and to provide separation benefits to Mr. McGillin, and for other good and valuable consideration, Mr. McGillin, for himself and for his agents, heirs, executors, legatees, administrators, successors and assigns, hereby irrevocably and unconditionally releases and discharges NeuroMetrix, Inc. and its current and former shareholders, directors, officers, agents and employees, and their respective successors, assigns, representatives, agents, heirs, executors, and administrators (“Releasees”) of and from any and all claims of any kind (including claims for attorney’s fees and costs), charges, actions and causes of action, whether in law or in equity, with respect to, or arising out of, Mr. McGillin’s employment by one or more of the Releasees or the cessation of that employment. This includes but is not limited to any and all claims in contract or tort and claims arising under federal, state or other local laws prohibiting discrimination, including age discrimination under the Age Discrimination in Employment Act (“ADEA”).
|
3.
|
Nothing contained in this paragraph and/or this Agreement is intended, nor shall be construed: (i) to waive or release any future claim arising after the date Mr. McGillin signs this Agreement; (ii) to limit Mr. McGillin’s right to enforce
|
4.
|
Mr. McGillin agree to provide transitional support to NeuroMetrix as reasonably needed and agreed upon during the period of April 1 to June 30, 2020. At the present time the Company and Mr. McGillin estimate that this will involve consulting services of one day per week during April and one day per month during May and June 2020. Compensation for this transition support is included within the consideration that NeuroMetrix is providing Mr. McGillin under this Agreement.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of NeuroMetrix, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
April 23, 2020
|
/s/ SHAI N. GOZANI, M.D., PH.D.
|
|
|
Shai N. Gozani, M.D., Ph.D.
|
|
|
Chairman, President and Chief Executive Officer
|
I, Thomas T. Higgins, certify that:
|
||
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of NeuroMetrix, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
April 23, 2020
|
/s/ THOMAS T. HIGGINS
|
|
|
Thomas T. Higgins
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
/s/ SHAI N. GOZANI, M.D., PH.D.
|
|
Shai N. Gozani, M.D., Ph.D.
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
/s/ THOMAS T. HIGGINS
|
|
Thomas T. Higgins
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|