Comments made on this call may include statements that are forward looking within the meaning of securities laws. These forward looking statements may include, without limitation, statements related to anticipated industry trends, the company's plans, prospects and strategies, both preliminary and projected and management's expectations, beliefs, estimates or projections regarding future results of operations. Actual results or trends could differ materially. The company undertakes no obligation to revise forward looking statements for new information or future events. For more information, please refer to the company's annual report on Form 10 ks for the year ended December 31, 2019, which has been filed with the Securities and Exchange Commission and the company's quarterly report on Form 10 Q for the quarter ended March 31, 2020, which the company intends to file with the Securities and Exchange Commission on or before May 15, 2020.
All the company's filings may be obtained from the SEC or the company's website at www.clearpointneuro.com. I will now turn the call over to Joe Burnett, Chief Executive Officer.
Thank you, Sachi, and thank you everyone for dialing in today. The impact of the COVID-nineteen crisis is widespread and has touched many of our friends, our families, our patients and surgical sites. We believe it is important to characterize how ClearPoint Neuro has been impacted so that our investors understand the current status of the team as well as our outlook for the post COVID future. We will begin by focusing on our Q1 2020 results and then move on to a more qualitative outlook of the recovery as the significant uncertainty of the post COVID recovery makes quantitative predictions impossible right now. 1st and foremost, our team has continued to support our hospital customers during this crisis, albeit in a much more limited fashion.
Our frontline employees who physically assist in surgeries at hospitals have continued to be viewed as essential employees for hospital credentialing. And to date, we are not aware of any ClearPoint Neuro employees who have fallen ill. I'm incredibly proud of our team for recognizing their importance in the delivery of care to these very sick patients. And I've heard personally from multiple surgeons on how much they appreciate our team's willingness to win during this crisis. Prior to March 15, ClearPoint Neuro was on the pace for our 6th record Neuro.
We finished the quarter at revenues of $3,100,000 which represented 26% growth year over year. On or about March 15, every hospital we work with in United States began canceling or postponing all elective surgeries, which historically have represented approximately 80% of our case volume. In the final 2 weeks of the quarter, I believe we only worked for 2 cases, which were both tumor related and not deemed selective by the hospital. In addition to cases being postponed, all new capital evaluations were also immediately put on hold and some of our biologics partners experienced delays in clinical trial enroll. We believe our Q1 results were impacted by approximately $400,000 to $500,000 in the first quarter, which would have put our Q1 revenues at around $3,500,000 for the quarter or about 40% growth year over year.
Similar to them, we've drilled 180 to support team and technology in the Q1. We were down the pace of completing approximately 225 to 230 cases for the quarter, had COVID-nineteen crisis left the most prominent of these illuminous procedures. As a result of this impact, in a press release in mid April, we suspended our 2020 revenue and case forecast until more information is known about hospital and patient willingness to resume these procedures, which I will talk about a little bit later on the call. To offer a bit more detail on the Q1 2020 results, I will hand the call back to Hal Hurwitz, our CFO.
Hal? Thanks, Joe. Total revenues were $3,100,000 for the 3 months ended March 31, 2020 $2,500,000 for the 3 months ended March 31, 2019, which represents an increase of $643,000 or 26%. Drilling down on these revenue numbers, one can see the effects of the COVID-nineteen pandemic that Joe described in his opening remarks. Functional neurosurgery revenue, which consists of disposable product commercial sales related to cases using our ClearPoint system increased 5% to $1,700,000 for the 3 months ended March 31, 2020 from $1,600,000 for the same period in 2019.
This increase was lower relative to recent quarterly year over year increases due to the effects of the COVID-nineteen pandemic. Biologics and drug delivery revenues, which include sales of disposable products and services related to customer sponsored clinical trials utilizing the ClearPoint system increased 169 percent to $1,000,000 for the 3 months ended March 31, 2020 from $382,000 for the same period in 2019. This increase was due primarily to an increase in biologic and drug delivery service revenues. Capital equipment revenue consisting of sales of ClearPoint Reusable Hardware and Software as well as fees related to capital equipment, decreased 29% to $345,000 for the 3 months ended March 31, 2020 from $486,000 for the same period in 2019, reflecting a decrease in capital equipment sales that were partially offset by an increase in the equipment service contract fees. Cost of revenues was 917,000 dollars representing a gross margin of 71% for the 3 months ended March 31, 2020 and was $886,000 representing a gross margin of 64% for the 3 months ended March 31, 2019.
This increase in gross margin was due primarily to a shift in the mix of revenues by line of business that resulted in service revenues, which bear higher gross margins in comparison to other product lines, representing a greater contribution to total sales for the 3 months ended March 31, 2020, relative to the same period in 2019. Thus, the pandemic, we believe, partially contributed to a higher gross margin as a result of a lower than normal contribution of product sales to the overall revenue mix. Turning to operating expenses. Total operating expenses for the 3 months ended March 31, 2020 were $3,400,000 a 33% increase from operating expenses of 2 point $6,000,000 for the same period in 2019. Breaking down the components of operating expenses, research and development costs were $830,000 for the 3 months ended March 31, 2020 compared to 500 and $85,000 for the same period in 2019, an increase of $245,000 or 42%.
The increase was due primarily to increases in headcount and compensation, intellectual property costs resulting primarily from new project initiation and software development costs related to increases in project activity. Sales and marketing expenses were $1,300,000 for the 3 months ended March 31, 2020, compared to $1,000,000 for the same period in 2019, an increase of $258,000 or 28%. This increase was primarily due to an increase in our clinical and marketing teams, which was partially offset by reductions in travel costs and sales incentive compensation, consistent, as Joe mentioned, with the reduced number of cases covered in the latter half of March. General and administrative expenses were $1,300,000 for the 3 months ended March 31, 2020, compared to $933,000 for the same period in 2019, an increase of $345,000 or 37%. This increase was due primarily to increases in share based compensation and professional fees.
Net interest expense for the 3 months ended March 31, 2020 was $813,000 compared with $254,000 for the same period in 2019. This increase was primarily due to the charge to interest expense in the Q1 of 20 20 of the unamortized balance of the discount associated with the secured notes we issued in 2010 that we repaid and retired in January 2020 with a portion of the proceeds raised in January 2020 from the issuance of the $17,500,000 of senior secured convertible notes. Cash used in operations for the 3 months ended March 31, 2020 was $2,300,000 Of this amount, the accrued interest that was paid along with the note repayment and retirement I previously mentioned amounted to $960,000 Our cash balance at March 31, 2020 was $17,000,000 I will now turn the call back to Joe.
Thank you, Hal. As you can see from the details, Q1 was shaping up to be an excellent quarter for us from a revenue and case volume standpoint. Furthermore, we did a lot of cleanup of our balance sheet in the quarter by consolidating all remaining debt into a convertible instrument and pushing that to date up until January of 2025. Of course, the business has changed dramatically around the world and I want to provide a qualitative view of our recovery expectations and plans. The most important question for us to answer is when will elective cases resume?
Since the crisis began, more than 85% of our total case volume has been postponed as it has been launched into elective cases. The surgeries we have participated in since the crisis have primarily been cancer or tumor related, where surgeons felt a speed or aggressiveness of the tumor made weight is simply not an option for that particular patient. To provide the most up to date information as possible, in April of this year, we completed 11 total cases versus the forecast of 80 for the month. Again, the vast majority of cases completed in April were tumor laser ablation or tumor biopsy with deep brain stimulation and gene therapy cases effectively being postponed altogether. This reduction in case volume not only has a significant impact on revenue, but also impacts inventory as well, which is the increase in the 1st quarter and will like in the Q2 as well.
A recovery of elective seizures at U. S. Hospitals is paramount for our recovery. The return is multifaceted and certainly not one size fits all as many cities are dealing with different challenges and stages of the pandemic. Before a full recovery can take place to a pre COVID volume, we see a few crucial challenges that need to be overcome.
Number 1, hospitals need to have a surplus of personal protective equipment, hospital beds and ventilators available. Now keep in mind, our patients are put under general anesthesia. If a fraud hospital uses a ventilator for one of our elective surgeries, there will have to be a surplus available for potential COVID patients. Number 2, once the hospitals return to allowing elective procedures, which has begun in some parts of the country, the patient needs to feel comfortable staying in the hospital that has treated COVID patients as well. I can tell you that we have had a number of cases postponed not because the hospital was unwilling, but because the patient was not comfortable moving forward at this time.
Patients need to feel that safety measures are robust enough that they do not risk catching the virus at a time they are going through such complex surgery. Number 3, undergoing a neurosurgery is not a small decision in the eyes of many patients. Some have been surprised that even if they have the courage to go to the surgery, they've learned that their family and their support network will not be allowed into the hospital at this time. In some cases, patients will continue to postpone surgeries until that network is allowed to help them recover there at the hospital. Furthermore, we do not believe that our collective emergence from the efforts of the COVID-nineteen pandemic will occur as a single event.
Many experts have warned about the potential of second and third waves of the pandemic, which would likely cause starts and stops in different parts of the country and around the world. That being said, there are a number of things that work in our favor as well. First, our procedures are viewed as minimally invasive compared to an open craniotomy. Having recovery times are shorter because of the smaller incision. And doing a procedure using ClearPoint can, we believe, lead to shorter recovery times in hospital stays, freeing up resources and operating room time.
2nd, we have started to hear the term pseudo elective in describing certain procedures, including deep brain stimulation to treat Parkinson's disease. It is one thing to postpone a deep brain stimulation case for a few weeks until situation at the hospital improves. However, if the surgeon feels the postponement could be 6 months, then stakes get much higher in postponing a very beneficial surgery for that long as these patients may move to the front of the line. Same fact, these types of different accounts, we do not believe recovery will be like flipping a switch by any stretch. Rather, we believe it will be a month by month improvement in volumes with the potential of some starts and stops along the way.
In the most recent month of April, we did not see that recovery begin. However, we have seen hospitals begin to schedule elective cases in May, June July. We will be watching very closely how many of these cases stay on the schedule or end up being postponed for 1 or more of the reasons already mentioned. As a company, we have done what we can to reduce expenditures and cash burn. This includes eliminating trade shows and advertising, stopping travel pretty much altogether except for surgical case support and slowing hiring for key development and field clinical roles.
We are looking at every spend in our budget and identifying which ones are essential to keep our overall strategy intact and continue to make progress on our 4 pillar growth strategy, which remains our compass during this time. In summary, if I leave you with a key message, it is that our strategy and our excitement is intact. COVID-nineteen is not the first challenge that we've overcome and it will not be our last. We believe it has certainly impacted our current business. However, it does not take away from the long term potential of the strategy of the company.
To some extent, we have simply had to hit the pause button for a yet to be determined amount of time. However, we very much look forward to the day when we are able to take our finger off of that pause button and start operating at full speed once again. With that, I will turn the call over to our operator to begin our question and answer session.
Thank you. At this time, we
will be conducting the question and answer The first question is from Sally Yankis of Brookline Capital. Please go ahead.
Hi, Joe. Thanks for joining the call. I'm curious, your Biologics and Drug Delivery revenue was really strong this quarter. Can you talk about specific clinical trials that are going on that have fueled this, specific programs that are ordering a lot of the cannulas?
Yes, sure. I can give as much commentary as possible, Sally. I think it's a very important question that you asked. As a reminder, we do try to keep some of this information confidential on behalf of our partners. But when we were putting our plan together for 2020, it's actually not a very substantial amount of our annual revenue that was attributed directly to clinic trial involvement.
As I mentioned in a number of companies, the reluctance is some of these patients are very expensive parts of a clinical trial and the risk not only the complex procedure, but also at risk that one of your one of the patients in your trial catches the virus and somehow can found the results in a different way, but it can be a bit challenging. That being said, a lot of the other work we're doing in the biologic side as far as product development, as far as preclinical work, toxicity studies, things like that, really not been interrupted to a significant extent. Of that. Some state home orders have caused some testing labs to have to postpone certain things. But the bulk of the revenue, I think about $1,000,000 in the first quarter, we saw was from a lot of these actual development activities that we are continuing to make progress on.
Okay, good. Okay. And I think you just said that on the neuro procedures, you've seen cases rescheduled, cases that were supposed to happen in March April have been rescheduled for May, June July. Is that correct? I just want to make sure I have that right.
That's correct. Now there are still some hospitals that we work with that have not they still said these postponements are indefinite. However, I would say that the majority of hospitals have started scheduling elective procedures again. Okay, good. Some portion in May, some portion in June and some portion of those sort of cases for now in July.
Okay. All right. I mean, no, that's promising. I mean, because these are your procedures are I mean, they're not totally elective. I mean, it's not like a cosmetic surgery procedure anyways.
No, it's necessary. But anyways, okay, well, thank you very much.
Val, I think it's a really good point. I mean, that's a term in my prepared remarks about pseudo elective procedure. And I think that how people are viewing it. If you have a patient with Parkinson's disease that can be treated today and be able to be able to sleep, sleep does tremendous things for recovery and everything else that leaving patients untreated for 6 months is really not ideal. And a lot of these surgeons are very much fighting on behalf of their patients to get them into the hospital again
at all. Yes, of course. Okay, well thank you so much and good luck with everything.
Okay, thank you, Val.
You're working hard. Okay, thanks.
This concludes the question and answer session. I would like to turn the call back over to Joe Burnett for closing remarks.
Perfect. Thank you, Sachi. And thank you again for your interest, your support and your confidence in this team and our strategy. We believe that eventually the COVID-nineteen crisis will be overcome and that there is nothing about our business that leads us to believe the current impact is permanent. The patients we treat today and plan to treat tomorrow are very ill and very much need our help.
These treatments are not incremental improvements, but capable of truly changing a patient and their family's quality of life in a very meaningful way. This need and the impact of the care that we help provide is not something that the current crisis can diminish. Again, thank you very much and I look forward to speaking with you again in the future.
This concludes today's conference. You may disconnect your lines at this time.