On July 21, 2016 NeuroMetrix, Inc. (Nasdaq: NURO), reported financial and business highlights for the quarter and six month periods ended June 30, 2016 (Press release, Neurometrix, JUL 21, 2016, View Source [SID:1234513991]).

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The Company operates in two markets – wearable therapeutic technology and point-of-care diagnostic tests. The Company’s two primary products are Quell and DPNCheck. Quell is an over-the-counter wearable neurostimulation device for treating chronic pain that was launched in Q2 2015. DPNCheck is a point-of-care diagnostic device that provides accurate and cost-effective screening, diagnosis and monitoring of peripheral neuropathies including diabetic peripheral neuropathy (DPN).

Recent Highlights:

Quell shipments totaled 11,201 devices and 9,676 electrode reorder packages with a total invoiced value of $2.53 million. This was an increase from 8,138 devices and 7,902 electrode reorder packages with a total invoiced value of $1.70 million in Q1 2016.
Quell distribution expanded with initial orders for pilot programs at two major drug store chains. Quell is now available in over 1,500 retail locations.
Online and retail sales have been supported by a national TV promotion campaign primarily utilizing high-impact cable channels.
Quell technology advanced with the launch of an updated Android app providing support for the Quell Health Cloud and release of a Sport Electrode for situations of high humidity and perspiration.
The Company announced that a clinical study by the Scripps Translational Science Institute will assess the impact of Quell technology on opioid use and pain in cancer patients.
A CE Marking application for Quell was submitted to allow marketing directly to consumers within the European Union.
An at-the-money private placement of equity securities raised new funding of $7.5 million, before costs.
"We are pleased with our progress in Q2 2016. Our plans for penetration of the retail sector are on schedule and, largely due to increasing Quell shipments, total company revenue growth during the past four quarters has averaged 83% year-on-year. Our current marketing focus for Quell is on building widespread brand awareness through our TV and on-line promotion efforts, as well as developing retail channel experience," said Shai N. Gozani, M.D., Ph.D., President and Chief Executive Officer of NeuroMetrix. "The next potential phase of retail expansion will occur in 2017 following several quarters of experience within the retail stores currently stocking Quell. Our DPNCheck efforts remain centered on building our Medicare Advantage business along with international expansion in partnership with local distributors."

Financial Results:

The Company reported its financial results for Q2 2016. Total revenues were $2.65 million versus $1.22 million for Q2 2015, an increase of 116%. Gross margin was 40.6% of total revenues, reduced from 51.4% in Q2 2015, reflecting a higher weighting of lower margin Quell devices as the Company builds its installed base. Operating expenses increased to $5.25 million compared to $3.97 million in Q2 2015, reflecting Quell marketing and promotion. The Company recorded a non-cash credit of $0.08 million at June 30, 2016 for the revaluation at fair value of outstanding common stock warrants compared to a $2.14 million revaluation credit at June 30, 2015. Net loss was $4.10 million or $5.37 per common share in Q2 2016, including a deemed dividend charge to earnings per share of $4.45 resulting from the June equity offering. This compared to a net loss of $1.20 million or $2.07 per common share for Q2 2015, also including a deemed dividend charge to earnings per share of $1.55 related to a May 2015 equity offering. NeuroMetrix reported Q2 2016 net cash usage of $4.20 million and ended the period with cash and cash equivalents of $11.3 million.

For the six months ended June 30, total revenues were $4.92 million in 2016 compared to $2.51 million in 2015. Net loss was $8.19 million or $6.56 per common share in 2016, including a $4.64 deemed dividend earnings per share charge related to an equity offering, compared to $3.27 million or $3.13 per common share in 2015, also including a deemed dividend charge to earnings per share of $1.63 related to an equity offering.