UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number 001-33351 NEUROMETRIX, INC. (Exact name of registrant as specified in its charter) FORM 10-Q | | | (State or other jurisdiction ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2020 was approximately $2 million, showing a rebound from Q2 2020 [9] - Gross profit was $1.5 million, resulting in a gross margin of 73.6%, exceeding the target of 70% [10] - Operating expenses totaled just under $1.8 million, consistent with the previous two quarters and about one-third lower than Q3 2019 [11] - Net loss for the quarter was $257,000, an improvement of $1.1 million or 82% compared to Q3 2019 [12] - Cash at the end of Q3 was $4.9 million, sufficient to fund operations into and likely through Q4 2021 [13] Business Line Data and Key Metrics Changes - DPNCheck orders were strong, particularly in the Medicare Advantage sector, contributing significantly to revenue [9] - The ADVANCE diagnostic business rebounded from Q2 levels, and Quell contributed to revenue and product line profitability [10] Market Data and Key Metrics Changes - The Japanese business with Fukuda Denshi made a meaningful contribution to the quarter's results [10] - The company is currently capturing less than 5% to 10% of the Medicare Advantage opportunity, indicating significant growth potential [33] Company Strategy and Development Direction - The company prioritizes profitability, having established an efficient cost structure leading to lower operating expenses and improving gross margins [16] - Innovation is a key principle, with ongoing investments in R&D, including the launch of the Quell Watch app and updates to the DPNCheck system [18][20] - A dynamic market strategy is maintained, focusing on specific clinical indications for Quell to enhance recurring revenue [21][22] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about Q3 performance despite uncertainties in customer demand, raw material supply, and staffing [8] - The company is not positioned to specify a crossover quarter into profitability due to overall economic uncertainty [17] Other Important Information - The company has a debt-free capital structure with approximately 3.8 million common shares outstanding [13] Q&A Session Summary Question: Why hasn't there been more recurring revenue from Quell gel packs? - Management acknowledged a recurring revenue stream but noted customer churn and the need for improved consistency in revenue [26][28] Question: What is the market share growth potential for DPNCheck? - Management indicated that there is significant growth potential, estimating they are capturing less than 5% to 10% of the Medicare Advantage market [32][33] Question: How can the company realize growth in DPNCheck? - Management emphasized the importance of education and integration with large Medicare Advantage insurers to drive growth [35][36]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents unaudited interim financial statements and management's discussion and analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited interim financial statements reveal an accumulated deficit and raise going concern doubts [Balance Sheets](index=4&type=section&id=Balance%20Sheets) Balance Sheets show changes in assets, liabilities, and equity, highlighting increased cash and equity | Metric | June 30, 2020 ($) | December 31, 2019 ($) | Change ($) | % Change | | :-------------------------- | :------------ | :---------------- | :----- | :------- | | Cash and cash equivalents | $5,434,983 | $3,126,206 | $2,308,777 | 73.9% | | Total current assets | $7,403,682 | $5,430,814 | $1,972,868 | 36.3% | | Total assets | $8,605,528 | $6,893,686 | $1,711,842 | 24.8% | | Total current liabilities | $2,418,784 | $3,446,778 | $(1,027,994) | -29.8% | | Total liabilities | $3,116,912 | $4,363,452 | $(1,246,540) | -28.6% | | Total stockholders' equity | $5,488,616 | $2,530,234 | $2,958,382 | 116.9% | [Statements of Operations](index=5&type=section&id=Statements%20of%20Operations) Statements of Operations detail revenue, expenses, and net loss for quarterly and six-month periods Quarterly Performance (Q2 2020 vs Q2 2019) | Metric | Q2 2020 ($) | Q2 2019 ($) | Change ($) | % Change | | :------------------------------------------ | :------------ | :------------ | :------------ | :------- | | Revenues | $1,359,979 | $2,354,683 | $(994,704) | -42.2% | | Cost of revenues | $495,086 | $3,143,787 | $(2,648,701) | -84.3% | | Gross profit (loss) | $864,893 | $(789,104) | $1,653,997 | -209.6% | | Total operating expenses | $1,717,888 | $3,973,425 | $(2,255,537) | -56.8% | | Loss from operations | $(852,995) | $(4,762,529) | $3,909,534 | -82.1% | | Collaboration income | $0 | $1,381,818 | $(1,381,818) | -100.0% | | Net loss | $(851,944) | $(3,362,191) | $2,510,247 | -74.6% | | Net loss per common share (basic and diluted) | $(0.28) | $(3.72) | $3.44 | -92.5% | Six Months Performance (6M 2020 vs 6M 2019) | Metric | 6M 2020 ($) | 6M 2019 ($) | Change ($) | % Change | | :------------------------------------------ | :------------ | :------------ | :------------ | :------- | | Revenues | $3,532,015 | $5,477,618 | $(1,945,603) | -35.5% | | Cost of revenues | $1,115,276 | $5,468,018 | $(4,352,742) | -79.6% | | Gross profit (loss) | $2,416,739 | $9,600 | $2,407,139 | 25074.4% | | Total operating expenses | $3,927,603 | $8,473,284 | $(4,545,681) | -53.6% | | Loss from operations | $(1,510,864) | $(8,463,684) | $6,952,820 | -82.1% | | Collaboration income | $0 | $7,116,667 | $(7,116,667) | -100.0% | | Net loss | $(1,509,315) | $(1,311,684) | $(197,631) | 15.1% | | Net loss per common share (basic and diluted) | $(0.68) | $(1.56) | $0.88 | -56.4% | [Statement of Changes in Stockholders' Equity](index=6&type=section&id=Statement%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines changes in stockholders' equity, driven by common stock issuance and net losses - Total stockholders' equity increased from **$2,530,234** at December 31, 2019, to **$5,488,616** at June 30, 2020, primarily due to the issuance of common stock under an at-the-market offering, which generated **$3,689,974** in proceeds during Q2 2020, and stock-based compensation expense, partially offset by net losses[16](index=16&type=chunk)[17](index=17&type=chunk) - Common stock shares outstanding significantly increased from **1,400,674** at December 31, 2019, to **3,784,657** at June 30, 2020, largely due to the at-the-market offering[16](index=16&type=chunk)[17](index=17&type=chunk) [Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) Statements of Cash Flows present cash movements from operating, investing, and financing activities | Cash Flow Activity | 6 Months Ended June 30, 2020 ($) | 6 Months Ended June 30, 2019 ($) | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(1,831,760) | $(1,822,281) | | Net cash used in investing activities | $(10,500) | $(7,587) | | Net cash provided by financing activities | $4,151,037 | $7,497 | | Net increase (decrease) in cash and cash equivalents | $2,308,777 | $(1,822,371) | | Cash and cash equivalents, end of period | $5,434,983 | $4,958,058 | - The significant increase in cash and cash equivalents in 2020 was primarily driven by **$4.15 million** in net proceeds from the issuance of common stock through an at-the-market offering, offsetting cash used in operating activities[19](index=19&type=chunk) [Notes to Unaudited Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Financial%20Statements) Detailed explanations and disclosures support the unaudited interim financial statements [1. Business and Basis of Presentation](index=9&type=section&id=1.%20Business%20and%20Basis%20of%20Presentation) Describes business, products, and financial statement basis, including going concern issues - NeuroMetrix, Inc. develops and manufactures diagnostic and therapeutic neurostimulation medical devices, including DPNCheck® for peripheral neuropathies, ADVANCE™ for nerve conduction studies, and Quell® 2.0 for chronic pain management[21](index=21&type=chunk) - The Company has reported recurring losses and negative operating cash flows, with an accumulated deficit of **$196.3 million** as of June 30, 2020, raising substantial doubt about its ability to continue as a going concern beyond Q3 2021[22](index=22&type=chunk) - The COVID-19 pandemic adversely affected product sales in Q1 and Q2 2020, potentially accelerating the consumption of capital resources and impacting the ability to obtain parts, staff production, and generate future revenues[23](index=23&type=chunk) - The Company plans to seek additional funding through public/private financing, collaborative arrangements, or debt, but faces risks of dilution for existing stockholders or unfavorable terms[24](index=24&type=chunk) [Revenues (Note)](index=10&type=section&id=Revenues%20(Note)) Details revenue recognition policies and significant customer concentration - Revenue is recognized when contractual performance obligations are satisfied and control of the product is transferred to the customer, net of estimated returns[26](index=26&type=chunk) - Customer concentration: Three customers accounted for **42%** of total revenues in Q2 2020, and one customer for **20%** in 6M 2020. Four customers accounted for **89%** of accounts receivable as of June 30, 2020[28](index=28&type=chunk) [Collaboration income (Note)](index=10&type=section&id=Collaboration%20income%20(Note)) Explains the significant decrease in collaboration income for the current periods - Collaboration income, recognized within Other income, was **$0** for both the quarter and six months ended June 30, 2020, a **100% decrease** from **$1,381,818** and **$7,116,667** in the comparable 2019 periods, respectively[29](index=29&type=chunk) [Stock-based Compensation (Note)](index=10&type=section&id=Stock-based%20Compensation%20(Note)) Provides details on unrecognized stock-based compensation costs and their recognition period - Unrecognized stock-based compensation cost was **$270,740** as of June 30, 2020, expected to be recognized over a weighted-average period of **0.5 years**[30](index=30&type=chunk) [3. Net Loss Per Common Share](index=11&type=section&id=3.%20Net%20Loss%20Per%20Common%20Share) Presents basic and diluted net loss per common share and weighted average shares outstanding | Metric | Q2 2020 ($) | Q2 2019 ($) | 6M 2020 ($) | 6M 2019 ($) | | :---------------------------------------------------- | :------ | :------ | :------ | :------ | | Net loss per common share (basic and diluted) | $(0.28) | $(3.72) | $(0.68) | $(1.56) | | Weighted average number of common shares outstanding, basic (shares) | 3,014,523 | 904,824 | 2,235,874 | 839,625 | - Potentially dilutive common stock equivalents (options, warrants, convertible preferred stock) were excluded from diluted EPS calculation for all periods as their effect was anti-dilutive[33](index=33&type=chunk) [4. Inventories](index=11&type=section&id=4.%20Inventories) Details the composition of inventories, including purchased components and finished goods | Inventory Component | June 30, 2020 ($) | December 31, 2019 ($) | | :------------------ | :------------ | :---------------- | | Purchased components | $775,463 | $720,209 | | Finished goods | $416,535 | $443,505 | | Total Inventories | $1,191,998 | $1,163,714 | [5. Accrued Expenses and Compensation](index=12&type=section&id=5.%20Accrued%20Expenses%20and%20Compensation) Provides a breakdown of accrued expenses and compensation by category | Category | June 30, 2020 ($) | December 31, 2019 ($) | | :------------------------ | :------------ | :---------------- | | Technology fees | $450,000 | $450,000 | | Professional services | $293,000 | $454,000 | | Compensation | $111,997 | $62,322 | | Advertising and promotion | $26,000 | $68,000 | | Warranty | $68,700 | $75,300 | | Other | $86,226 | $333,952 | | Total | $1,035,923 | $1,443,574 | [6. Leases](index=12&type=section&id=6.%20Leases) Discusses lease accounting, including an impairment reserve for an inactive facility - The Company recorded an impairment reserve of **$604,000** against the right-of-use asset for its inactive Waltham facility, which had not been sublet as of June 30, 2020[36](index=36&type=chunk)[38](index=38&type=chunk) - Total recorded rent expense for the six months ended June 30, 2020, was **$333,809**, slightly up from **$332,049** in the prior year[37](index=37&type=chunk) [7. Business Restructuring](index=12&type=section&id=7.%20Business%20Restructuring) Outlines the Q2 2019 business restructuring, its costs, and related impairment charges - A business restructuring in Q2 2019 aimed to reduce operating costs, consolidate operations, and reduce headcount. The total 2019 restructuring charge was **$2.3 million**[38](index=38&type=chunk) - Impairment charges related to the idle Waltham facility were **$117,000** for Q2 2020 and **$204,000** for the six months ended June 30, 2020[38](index=38&type=chunk) | Restructuring Obligation | June 30, 2020 ($) | | :----------------------- | :------------ | | Severance obligations | $0 | | Relocation costs | $0 | | Impairment charge for idle facility | $400,000 | | Balance - June 30, 2020 | $400,000 | [8. Fair Value Measurements](index=13&type=section&id=8.%20Fair%20Value%20Measurements) Describes the fair value measurement hierarchy for assets and liabilities - All Company assets and liabilities measured at fair value, specifically cash equivalents, utilize Level 1 inputs (quoted prices in active markets for identical assets)[41](index=41&type=chunk)[42](index=42&type=chunk) [9. Credit Facility and Paycheck Protection Program Loan](index=14&type=section&id=9.%20Credit%20Facility%20and%20Paycheck%20Protection%20Program%20Loan) Details the expiration of the credit facility and the repayment of the PPP loan - The Company's Credit Facility expired on April 30, 2020, and was not renewed, though letters of credit remain outstanding and secured by cash balances[43](index=43&type=chunk) - A **$773,200** Paycheck Protection Program (PPP) loan received on April 28, 2020, was fully repaid on May 6, 2020, following new SBA guidance on eligibility[44](index=44&type=chunk) [10. Stockholders' Equity](index=14&type=section&id=10.%20Stockholders'%20Equity) Explains changes in stockholders' equity, primarily from common stock issuance - During the six months ended June 30, 2020, the Company issued **2,348,619 shares** of common stock under an at-the-market offering for net proceeds of **$4,143,431**[46](index=46&type=chunk) - Additional common stock was issued to settle compensation obligations (**31,000 shares** for **$43,751**) and under an employee stock purchase plan (**4,364 shares** for **$7,606**)[47](index=47&type=chunk) [11. Reverse Stock Split](index=15&type=section&id=11.%20Reverse%20Stock%20Split) Describes the 1-for-10 reverse stock split effected in November 2019 - On November 18, 2019, the Company effected a **1-for-10 reverse stock split** of its Common Stock, retroactively adjusted in financial statements[49](index=49&type=chunk) [12. Commitments and Contingencies](index=16&type=section&id=12.%20Commitments%20and%20Contingencies) Details the settlement of the FTC investigation regarding Quell® product claims - The Federal Trade Commission (FTC) investigation regarding Quell® product claims was settled in March 2020. The Company and CEO agreed to advertising modifications and a **$4 million** payment by the CEO, with the Company pledging future commercial milestone payments from a collaboration agreement[50](index=50&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on financial performance, liquidity, and future funding needs, including COVID-19 impacts [Overview](index=16&type=section&id=Overview) Introduces the company's products, market strategies, and potential future monetization plans - NeuroMetrix develops and commercializes non-invasive neurostimulation and digital medicine products, with core expertise in biomedical engineering[52](index=52&type=chunk) - The Company's principal product lines are point-of-care neuropathy diagnostic tests (DPNCheck, ADVANCE) and wearable neurostimulation devices (Quell)[52](index=52&type=chunk)[53](index=53&type=chunk) - DPNCheck provides rapid, low-cost quantitative tests for peripheral nerve disease, with a next-generation version forecast for late 2020 or early 2021[53](index=53&type=chunk) - Quell, an app-enabled wearable for chronic pain, has restructured its commercial model to achieve a positive net operating contribution, with most sales direct-to-consumer[57](index=57&type=chunk) - The collaboration with GlaxoSmithKline (GSK) on Quell for markets outside the U.S. continues, having delivered approximately **$20.5 million** in development milestones[59](index=59&type=chunk) - The Company may consider monetizing either product line, in whole or in part, in the future[60](index=60&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) Compares financial results for the quarter and six months ended June 30, 2020, versus 2019 [Comparison of Quarters Ended June 30, 2020 and 2019](index=18&type=section&id=Comparison%20of%20Quarters%20Ended%20June%2030%2C%202020%20and%202019) Details quarterly revenue, gross margin, operating expenses, and collaboration income changes Revenues (Q2 2020 vs Q2 2019) | Product Line | Q2 2020 (in millions $) | Q2 2019 (in millions $) | Change (in millions $) | % Change | | :----------- | :-------------------- | :-------------------- | :------------------- | :------- | | Total Revenues | $1.4 | $2.4 | $(1.0) | -42.2% | | Quell | $0.4 | $0.8 | $(0.4) | -50.0% | | DPNCheck | $0.8 | $1.2 | $(0.4) | -33.3% | | ADVANCE | $0.1 | $0.3 | $(0.2) | -66.7% | - Gross margin improved significantly to **63.6%** in Q2 2020 from **(33.5)%** in Q2 2019, primarily due to the absence of a **$1.9 million** inventory write-down for Quell Classic in 2020 and improved profitability of Quell sales[62](index=62&type=chunk) Operating Expenses (Q2 2020 vs Q2 2019) | Expense Category | Q2 2020 (in millions $) | Q2 2019 (in millions $) | Change (in millions $) | % Change | | :-------------------- | :-------------------- | :-------------------- | :------------------- | :------- | | Research and development | $0.66 | $1.03 | $(0.37) | -36.2% | | Sales and marketing | $0.38 | $1.37 | $(0.99) | -72.4% | | General and administrative | $0.68 | $1.56 | $(0.88) | -56.6% | | Total operating expenses | $1.72 | $3.97 | $(2.25) | -56.8% | - Collaboration income decreased by **100%** to **$0** in Q2 2020 from **$1.38 million** in Q2 2019, as it includes development milestones funded by GSK[67](index=67&type=chunk) [Comparison of Six Months Ended June 30, 2020 and 2019](index=19&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030%2C%202020%20and%202019) Details six-month revenue, gross margin, operating expenses, and collaboration income changes Revenues (6M 2020 vs 6M 2019) | Product Line | 6M 2020 (in millions $) | 6M 2019 (in millions $) | Change (in millions $) | % Change | | :----------- | :-------------------- | :-------------------- | :------------------- | :------- | | Total Revenues | $3.53 | $5.48 | $(1.95) | -35.5% | | Quell | $1.0 | $2.5 | $(1.5) | -59.1% | | DPNCheck | $2.2 | $2.4 | $(0.2) | -8.3% | | ADVANCE | $0.4 | $0.6 | $(0.2) | -33.3% | - Gross profit margin increased significantly to **68.4%** in 6M 2020 from **0.2%** in 6M 2019, primarily due to the absence of a **$2.6 million** inventory write-down in 2020 and improved Quell sales profitability[70](index=70&type=chunk) Operating Expenses (6M 2020 vs 6M 2019) | Expense Category | 6M 2020 (in millions $) | 6M 2019 (in millions $) | Change (in millions $) | % Change | | :-------------------- | :-------------------- | :-------------------- | :------------------- | :------- | | Research and development | $1.19 | $1.89 | $(0.70) | -36.8% | | Sales and marketing | $0.80 | $3.40 | $(2.60) | -76.4% | | General and administrative | $1.93 | $3.18 | $(1.25) | -39.4% | | Total operating expenses | $3.93 | $8.47 | $(4.54) | -53.6% | - Collaboration income decreased by **100%** to **$0** in 6M 2020 from **$7.12 million** in 6M 2019[75](index=75&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses cash position, going concern issues, and future funding strategies amidst the COVID-19 pandemic - Cash and cash equivalents increased by **73.9%** to **$5.4 million** at June 30, 2020, from **$3.1 million** at December 31, 2019, primarily due to **$4.1 million** in net proceeds from common stock sales[77](index=77&type=chunk)[78](index=78&type=chunk) - The Company reported recurring losses and negative operating cash flows, raising substantial doubt about its ability to continue as a going concern beyond Q3 2021, necessitating additional funding[82](index=82&type=chunk) - The COVID-19 pandemic continues to pose significant challenges, potentially accelerating capital consumption due to decreased sales, supply chain disruptions, and changes in operating expenses[83](index=83&type=chunk) - The Company may seek additional funding through public/private financing, collaborations, or debt, but warns of potential dilution for existing stockholders or unfavorable terms[83](index=83&type=chunk) Working Capital Metrics | Metric | Q2 2020 | Q2 2019 | FY 2019 | | :---------------------- | :------ | :------ | :------ | | Days sales outstanding (days) | 26 | 33 | 27 | | Inventory turnover rate (times per year) | 1.7 | 5.5 | 3.5 | [Off-Balance Sheet Arrangements, Contractual Obligation and Contingent Liabilities and Commitments](index=22&type=section&id=Off-Balance%20Sheet%20Arrangements%2C%20Contractual%20Obligation%20and%20Contingent%20Liabilities%20and%20Commitments) Confirms the absence of off-balance sheet financing arrangements as of June 30, 2020 - As of June 30, 2020, the Company did not have any off-balance sheet financing arrangements[84](index=84&type=chunk) [Recent Accounting Pronouncements](index=23&type=section&id=Recent%20Accounting%20Pronouncements) Outlines the adoption of ASU 2016-02, Leases (Topic 842), and its financial impact - The Company adopted ASU 2016-02, Leases (Topic 842), on January 1, 2019, using the modified retrospective method, resulting in an approximate **$1.9 million** increase to long-term assets and total liabilities[85](index=85&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=24&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Advises on inherent risks and uncertainties associated with forward-looking statements in the report - The report contains forward-looking statements regarding future expectations, operating losses, revenues, expenses, liquidity, capital needs, COVID-19 impact, product development, regulatory approvals, and market acceptance, which are subject to risks and uncertainties[86](index=86&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Addresses market risk exposure, primarily interest rate risk, and investment strategy - The Company does not use derivative financial instruments and has no foreign exchange contracts[87](index=87&type=chunk) - Investments are primarily in cash equivalents and short-term instruments (maturity of 12 months or less) to preserve principal and maintain liquidity[87](index=87&type=chunk) - A hypothetical **10% change** in interest rates is not expected to have a material impact on the fair value of the investment portfolio or interest income[87](index=87&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms effective disclosure controls and procedures and no material internal control changes - Disclosure controls and procedures were evaluated as effective as of June 30, 2020, ensuring timely and accurate reporting of required information[88](index=88&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2020[89](index=89&type=chunk) [PART II – OTHER INFORMATION](index=25&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) Covers legal proceedings, risk factors, equity sales, defaults, and other required disclosures [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) No material legal proceedings are expected to significantly impact the company's financial position - The Company is not currently involved in any material legal proceedings[90](index=90&type=chunk) - No expected significant impact on financial position from potential ordinary course legal proceedings[90](index=90&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors primarily relate to the adverse impacts of the COVID-19 pandemic on operations - No material changes to risk factors from the 2019 Form 10-K, except for updates regarding the COVID-19 pandemic[91](index=91&type=chunk) - The COVID-19 pandemic has adversely impacted product orders and could continue to affect business operations, including restrictions, diversion of healthcare resources, supply chain disruptions, employee limitations, and distribution channel issues[92](index=92&type=chunk)[93](index=93&type=chunk)[97](index=97&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - No unregistered sales of equity securities or use of proceeds[94](index=94&type=chunk) [Item 3. Defaults Upon Senior Securities](index=25&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities[95](index=95&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable to the Company[96](index=96&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) No other information required under this item was reported - No other information to report[97](index=97&type=chunk) [Item 6. Exhibits](index=26&type=section&id=Item%206.%20Exhibits) Lists exhibits filed as part of the quarterly report, including certifications and XBRL financial statements - Exhibits include certifications of principal executive and financial officers (31.1, 31.2, 32) and XBRL formatted financial statements (101)[104](index=104&type=chunk) [Signatures](index=27&type=section&id=Signatures) Contains official signatures of the company's principal executive and financial officers - The report was signed on July 23, 2020, by Shai N. Gozani, M.D., Ph. D., Chairman, President and Chief Executive Officer, and Thomas T. Higgins, Senior Vice President, Chief Financial Officer and Treasurer[102](index=102&type=chunk)

NeuroMetrix, Inc. (NASDAQ:NURO) Q2 2020 Earnings Conference Call July 23, 2020 8:00 AM ET Company Participants Thomas Higgins - SVP & CFO Shai Gozani - President & CEO Conference Call Participants Operator Good morning and welcome to the NeuroMetrix Second Quarter 2020 Earnings Call. My name is Carla and I'll be your moderator on the call. On this call, the company may make statements which are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Re ...

Part I [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's Q1 2020 financial statements reflect decreased assets and liabilities, a net loss, negative operating cash flow, and a going concern uncertainty [Balance Sheets](index=4&type=section&id=Balance%20Sheets) Total assets decreased to **$6.2 million** by March 31, 2020, driven by reduced cash, while total liabilities also declined Balance Sheet Highlights (in USD) | Balance Sheet Highlights | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,816,485 | $3,126,206 | | Total current assets | $4,877,868 | $5,430,814 | | Total assets | $6,206,496 | $6,893,686 | | Total current liabilities | $2,882,143 | $3,446,778 | | Total liabilities | $3,692,378 | $4,363,452 | | Total stockholders' equity | $2,514,118 | $2,530,234 | [Statements of Operations](index=5&type=section&id=Statements%20of%20Operations) Q1 2020 revenues decreased to **$2.2 million**, but gross profit more than doubled, resulting in a net loss compared to prior-year income Statement of Operations (in USD) | Statement of Operations | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Revenues | $2,172,036 | $3,122,935 | | Gross profit | $1,551,846 | $798,704 | | Loss from operations | ($657,869) | ($3,701,155) | | Collaboration income | $0 | $5,734,849 | | Net (loss) income | ($657,371) | $2,050,507 | | Basic EPS | ($0.45) | $2.65 | | Diluted EPS | ($0.45) | $1.47 | [Statements of Cash Flows](index=7&type=section&id=Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$763,178** in Q1 2020, leading to a **$309,721** decrease in cash despite financing inflows Cash Flow Summary (in USD) | Cash Flow Summary | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($763,178) | $420,366 | | Net cash provided by financing activities | $453,457 | $0 | | Net (decrease) increase in cash | ($309,721) | $420,366 | | Cash and cash equivalents, end of period | $2,816,485 | $7,200,795 | [Notes to Unaudited Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Financial%20Statements) Notes highlight a 'going concern' uncertainty, an FTC settlement, and recent capital raises through stock offerings - The company's ability to continue as a going concern is in substantial doubt, as it has recurring losses and negative cash flows[22](index=22&type=chunk) - Current cash of **$2.8 million** is projected to fund operations only into the first quarter of 2021, necessitating additional fundraising[22](index=22&type=chunk) - In March 2020, the company settled an investigation by the Federal Trade Commission (FTC) regarding advertising for its Quell® product[49](index=49&type=chunk) - The settlement involved a **$4 million** payment by the CEO and a pledge of future commercial milestone payments by the company[49](index=49&type=chunk) - During Q1 2020, the company raised **$453,457** in proceeds by issuing 256,078 shares through its at-the-market (ATM) offering program[45](index=45&type=chunk) - Subsequent to the quarter end, from April 1 to April 16, 2020, the company raised an additional **$1,680,356** in net proceeds by issuing 1,048,455 shares under its ATM program[50](index=50&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **30.4%** revenue decline, significant gross margin improvement, reduced operating expenses, and reiterates the 'going concern' risk [Overview](index=15&type=section&id=Overview) NeuroMetrix focuses on DPNCheck and Quell products, aiming for DPNCheck growth and Quell profitability through commercial restructuring - The company's two principal product lines are point-of-care neuropathy diagnostic tests and wearable neurostimulation devices[52](index=52&type=chunk) - The primary commercial products and strategic focus are DPNCheck, a test for diabetic peripheral neuropathy (DPN), and Quell, a wearable technology for chronic pain[57](index=57&type=chunk) - The company is restructuring the Quell commercial model to achieve a positive net operating contribution during 2020, with most sales now direct-to-consumer via its e-commerce platform[59](index=59&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Q1 2020 revenues declined **30.4%** due to reduced Quell sales, while gross margin surged to **71.4%** and operating expenses halved Financial Performance (in USD) | Financial Metric | Q1 2020 | Q1 2019 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $2.2M | $3.1M | (30.4)% | | Gross Profit | $1.55M | $0.8M | 94.3% | | Gross Margin | 71.4% | 25.6% | N/A | | Total Operating Expenses | $2.21M | $4.5M | (50.9)% | - The decrease in revenue was primarily due to Quell revenues declining from **$1.6 million** to **$0.6 million**, reflecting reduced advertising spending[63](index=63&type=chunk) - Sales and marketing expenses decreased by **79.1%** (**$1.6 million**), mainly from a **$1.2 million** reduction in Quell advertising[67](index=67&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 2020 with **$2.8 million** cash, facing 'going concern' doubt and needing additional capital beyond Q1 2021 - Cash and cash equivalents stood at **$2.8 million** as of March 31, 2020[71](index=71&type=chunk) - The company has substantial doubt about its ability to continue as a going concern and will need to raise additional funds to support operations beyond the first quarter of 2021[76](index=76&type=chunk) Working Capital Metrics | Working Capital Metrics | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Days sales outstanding (DSO) | 14 days | 30 days | | Inventory turnover rate | 2.1x | 3.5x | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk is minimal, primarily related to interest rate fluctuations on cash, with no material impact expected from rate changes - The company's market risk is primarily related to interest rate fluctuations on its cash and cash equivalents, but this exposure is not considered material[81](index=81&type=chunk) [Item 4. Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of the end of the quarter[82](index=82&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[83](index=83&type=chunk) Part II [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, with no significant financial impact expected from ordinary course items - As of the report date, the company is not involved in any material legal proceedings[84](index=84&type=chunk) [Item 1A. Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors except for new risks related to the COVID-19 pandemic, potentially impacting operations and supply chain - A new risk factor has been added regarding the potential adverse effects of the COVID-19 outbreak on the company's financial condition and results of operations[85](index=85&type=chunk)[86](index=86&type=chunk) - Potential COVID-19 impacts include disruptions to the supply chain, manufacturing, distribution, and employee resources, as well as a diversion of healthcare resources away from the company's products[87](index=87&type=chunk)[90](index=90&type=chunk) [Item 5. Other Information](index=23&type=section&id=Item%205.%20Other%20Information) Key events include the March 2020 FTC settlement regarding Quell advertising and a separation agreement with the former Chief Commercial Officer - The company finalized a settlement with the FTC regarding an investigation into Quell® advertising[91](index=91&type=chunk) - The settlement involved a **$4 million** payment by the CEO and a company pledge of future milestone payments[91](index=91&type=chunk) - The company entered into a Separation Agreement with Francis X. McGillin, the former Chief Commercial Officer, effective March 31, 2020, which included cash and stock benefits[92](index=92&type=chunk) [Item 6. Exhibits](index=23&type=section&id=Item%206.%20Exhibits) This section refers to the Exhibit Index, which lists all exhibits filed as part of the quarterly report - A list of exhibits filed with the Form 10-Q is provided in the Exhibit Index[93](index=93&type=chunk)

NeuroMetrix, Inc. (NASDAQ:NURO) Q1 2020 Earnings Conference Call April 23, 2020 8:00 AM ET Company Participants Thomas Higgins - Senior Vice President and Chief Financial Officer Shai Gozani - President and Chief Executive Officer Conference Call Participants William Church - TGRA Capital Management LLC Operator Good morning and welcome to the NeuroMetrix First Quarter 2020 Earnings Call. My name is Justin and I'll be your moderator on the call. On this call, the company may make statements which are not hi ...

NEUROMETRIX, INC. (Exact name of registrant as specified in its charter) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33351 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K _____________________________ (Mark One) Delaware 04-3308180 (Sta ...

Financial Data and Key Metrics Changes - Q4 revenues were $1.7 million, down from the prior year quarter, reflecting a focus on gross margins and product line profitability rather than top-line growth [8] - Gross profit was $1.1 million with a gross margin rate of 62.2%, improving by 15 percentage points over the prior year quarter [8] - Operating expenses totaled $2.7 million, a reduction of $1.8 million or 40% from the prior year quarter [9] - Net loss was $1.1 million, down by $1.7 million or 62% from a loss of $2.8 million in the prior year quarter [9] - The company ended the year with $3.1 million in cash, approximately level with cash at the end of Q3 [16] Business Line Data and Key Metrics Changes - DPNCheck revenue for Q4 was $900,000, up 51% year-on-year, driven by a 78% growth in the U.S. Medicare Advantage market [10] - For the full year, DPNCheck revenue was $4.2 million, up a couple of percent, with the U.S. market up 25% and international down 44% [11] - ADVANCE revenue was $280,000 in Q4 and $1.2 million for the full year, compared to $300,000 and $1.4 million in the prior year [13] - Quell posted revenue of $500,000, down from $2.8 million in the prior year quarter, with ad spending lower by $1.5 million or nearly 86% [14] Market Data and Key Metrics Changes - The U.S. market for DPNCheck is roughly two-thirds of the business, with new customer accounts contributing to growth [10] - International sales for DPNCheck were down 44%, entirely attributable to Mexico [11] - Asian markets for DPNCheck were flat year-on-year [11] Company Strategy and Development Direction - The company is focused on profitable growth, emphasizing gross margins and product line profitability [8] - A major upgrade of the DPNCheck device is expected to launch in Q4 2020 to fuel future growth [20] - The Quell business is being operated at reduced promotional spending levels to move towards profitability [21] - The company is committed to identifying commercial strategies and clinical applications for Quell that deliver consistent profitability [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued growth in the Medicare Advantage market and increased sales in Asia for DPNCheck [19] - The company is actively engaged with the FTC regarding earlier Quell advertising [22] - Management believes NeuroMetrix has excellent products targeting large markets and is structured to support growth and profitability [23] Other Important Information - The capital structure remains simple, consisting only of common stock and being debt-free [17] - All previously outstanding convertible preferred shares were converted to common stock during the quarter [17] Q&A Session Summary Question: How much of Quell revenue was recurring from electrode reorders versus new system purchases? - Management indicated that it was about 50/50 [29]

NeuroMetrix, Inc. (NASDAQ:NURO) Q3 2019 Earnings Conference Call October 17, 2019 8:00 AM ET Company Participants Thomas Higgins - SVP & CFO Shai Gozani - President & CEO Conference Call Participants Jared Cohen - JM Cowen & Company Operator Good morning, and welcome to the NeuroMetrix Third Quarter 2019 Earnings Call. My name is Crystal and I'll be your moderator on the call. On this call, the company may make statements which are not historical facts and are considered forward-looking within the meaning o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR (Exact name of registrant as specified in its charter) Delaware 04-3308180 (State or other jurisdiction of (I.R.S. Employer Identification No.) ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to __ ...