ClearPoint Neuro, Inc.

Previous wording

Currently, we have more than 60 biologics and drug delivery customers who are evaluating using our products and services in trials to inject gene and cell therapies directly into the brain. These partnerships involve drug development programs that are at various stages of development ranging from preclinical research to late-stage regulatory trials for multiple distinct disease states. This part of our business potentially represents the largest opportunity for growth; however, our ability to grow in this market is dependent on our ability to maintain and establish new relationships with pharmaceutical company customers, such customers' continuation of research and product development plans, such customers achieving success in completion of clinical trials and subsequent regulatory approvals of their drugs and biologics, and such customers’ realization of commercial success for their therapies, including overcoming barriers in reimbursement, physician adoption, and patient access to their therapies. In 2024, the U.S. Food and Drug Administration (the “FDA”) granted marketing authorization for our SmartFlow cannula to be used to deliver a gene therapy for the treatment of aromatic L-amino acid decarboxylase deficiency to regions of interest within the brain.

Current wording

Currently, we have more than 60 biologics and drug delivery customers who are evaluating using our products and services in trials to inject gene and cell therapies directly into the brain. These customers have drug development programs at various stages of development, ranging from preclinical research to late-stage regulatory trials for multiple distinct disease states. This part of our business potentially represents the largest opportunity for growth; however, our ability to grow in this market is dependent on our ability to maintain and establish new relationships with pharmaceutical company customers, such customers' continuation of research and product development plans, such customers successfully completing clinical trials and obtaining regulatory approvals of their drugs and biologics, and such customers’ realization of commercial success for their therapies, including overcoming barriers in reimbursement, physician adoption, and patient access to their therapies. In 2024, the U.S. Food and Drug Administration (the “FDA”) granted marketing authorization for our SmartFlow cannula to be used to deliver a gene therapy for the treatment of aromatic L-amino acid decarboxylase deficiency to regions of interest within the brain.

Previous wording

We continue to monitor the impacts of various macroeconomic trends, such as inflationary pressure, changes in monetary policy, decreasing consumer confidence and spending, the introduction of or changes in tariffs or trade barriers, and global or local recession. Such changes in domestic and global macroeconomic conditions may lead to increased costs for our business. Additionally, these macroeconomic trends could adversely affect our customers, which could impact their willingness to spend on our products and services, or their ability to make payments, which could harm our collection of accounts receivable and financial results. The world’s financial markets remain susceptible to significant stresses, resulting in reductions in available credit and government spending, economic downturn or stagnation, foreign currency fluctuations and volatility in the valuations of securities generally. As a result, our ability to access capital markets and other funding sources may not be available in the future on commercially reasonable terms, if at all. The rapid development and fluidity of these situations precludes any prediction as to the ultimate impact they will have on our business, financial condition, results of operation and cash flows, which will depend largely on future developments.

Current wording

We continue to monitor the impacts of various macroeconomic trends, such as inflationary pressure, changes in monetary policy, constraints on hospital capital spending, the introduction of or changes in tariffs or trade barriers, and global or local recession and geopolitical instability. Such changes in domestic and global macroeconomic conditions may lead to increased costs for our business. Additionally, these macroeconomic trends could adversely affect our customers, which could impact their willingness to spend on our products and services, or their ability to make payments, which could harm our collection of accounts receivable and financial results. In particular, a portion of our revenue is derived from products and services supporting pharmaceutical and biotechnology partners' preclinical and clinical development programs, and constraints in the funding environment for these partners, whether due to capital markets conditions or changes in government research funding, could cause partners to delay, scale back or discontinue programs utilizing our products and services. The world’s financial markets remain susceptible to significant stresses, resulting in reductions in available credit and government spending, economic downturn or stagnation, foreign currency fluctuations and volatility in the valuations of securities generally. As a result, our ability to access capital markets and other funding sources may not be available in the future on commercially reasonable terms, if at all. We cannot predict with certainty the ultimate impact of these trends on our business, financial condition, results of operations or cash flows, which will depend on future developments. To date, these trends have not had a material adverse impact on our business, financial condition or results of operations.

Previous wording

Generating recurring revenue from the sale of products is an important part of our business model for our ClearPoint system. Future revenue from sales of our ClearPoint platform products and services is difficult to predict and may not be sufficient to offset our continuing research and development expenses and our increasing selling, general and administrative expenses.

Current wording

Our neurosurgery navigation and therapy revenue primarily consists of disposable product commercial sales related to cases utilizing the ClearPoint and IRRA flow systems. Generating recurring revenue from the sale of disposable products is an important part of our business model. Future revenue from sales of such products is difficult to predict and may not be sufficient to offset our continuing research and development expenses and our increasing selling, general and administrative expenses. As a result of the IRRAS acquisition, revenue is expected to grow over the coming years due to a larger combined organization, expanded product offerings, and increased customer reach, both in the U.S. and internationally.

Previous wording

Our revenue from sales of products and services to our biologics and drug delivery customers comes from pharmaceutical and biotech companies, academic institutions, or customer-sponsored contract research organizations that are developing methods to deliver a wide variety of molecules, genes or proteins to targeted brain tissue or structures (our “Partners”) that would need to bypass the blood-brain barrier for the treatment of a variety of disorders. This is a novel area in which commercialization must be preceded by FDA-mandated clinical trials, which are expensive and time consuming to conduct, and for which the commercial success is uncertain, pending, in part, on the outcome of those trials. While our revenue from sales of products and services to our biologics and drug delivery customers is indicative of growth, the number of Partner relationships is also of importance as we recognize the possibility that some Partners’ research will reach commercial success, and others may not. To the extent our Partners achieve commercial success, our expectation is that we will share in such success through our Partners’ use of our products and services in their delivery of therapies. At March 31, 2026, we had more than 60 Partners, similar to the number of Partners as of the same date in 2025.

Current wording

Our biologics and drug delivery revenue comes from sales of products, including disposable products, and services related to customer-sponsored preclinical and clinical trials utilizing our products. Our biologics and drug delivery customers are pharmaceutical and biotech companies, academic institutions, and customer-sponsored contract research organizations that are developing methods to deliver a wide variety of molecules, genes or proteins to targeted brain tissue or structures (our “Partners”) that would need to bypass the blood-brain barrier for the treatment of a variety of disorders. This is a novel area in which commercialization must be preceded by FDA-mandated clinical trials, which are expensive and time consuming to conduct, and for which the commercial success is uncertain, pending, in part, on the outcome of those trials. The number of Partner relationships is of importance as we recognize the possibility that some Partners’ research will reach commercial success, and others may not. To the extent our Partners achieve commercial success, our expectation is that we will share in such success through our Partners’ use of our products and services in their delivery of therapies. At June 30, 2026, we had more than 60 Partners, similar to the number of Partners as of the same date in 2025.

Previous wording

Substantially all our revenue for the three months ended March 31, 2026 and 2025 relates to: (i) sales of our ClearPoint and IRRA flow system products and related services; and (ii) consulting services from our customers in the biologics and drug delivery space. Our product revenue was $8.8 million for the three months ended March 31, 2026, and was almost entirely related to our ClearPoint system. Our service revenue was $3.3 million for the three months ended March 31, 2026, of which 88% was related to the biologics and drug delivery service line.

Current wording

Substantially all our revenue for the three and six months ended June 30, 2026 and 2025 relates to: (i) sales of our ClearPoint and IRRA flow system products and related services; and (ii) consulting services provided to our biologics and drug delivery customers. Our product revenue was $7.4 million and $16.2 million for the three and six months ended June 30, 2026, respectively, and was almost entirely related to our ClearPoint system. Our service revenue was $3.5 million and $6.8 million for the three and six months ended June 30, 2026, respectively, of which 88% was related to the biologics and drug delivery service line.

Previous wording

Cost of revenue includes the direct costs associated with the assembly and purchase of components for neurosurgery navigation products, biologics and drug delivery products, non-neurosurgery therapy products, and capital equipment that we have sold, and for which we have recognized revenue in accordance with our revenue recognition policy, as well as labor hours for the cost of providing preclinical, consulting, and service revenue. Cost of revenue also includes the allocation of manufacturing overhead costs and depreciation of loaned systems installed under our ClearPoint placement program, as well as provisions for obsolete, impaired, or excess inventory.

Current wording

Cost of revenue includes the direct costs associated with the assembly and purchase of components for neurosurgery navigation products, biologics and drug delivery products, non-neurosurgery therapy products, and capital equipment that we have sold, and for which we have recognized revenue in accordance with our revenue recognition policy, as well as labor hours for the cost of providing preclinical and consulting services. Cost of revenue also includes the allocation of manufacturing overhead costs and depreciation of loaned systems installed under our ClearPoint placement program, as well as provisions for obsolete, impaired, or excess inventory.

Previous wording

Our research and development costs consist primarily of costs associated with the conceptualization, design, testing, and prototyping of our ClearPoint system products, cannulas, and enhancements. Such costs include salaries, travel, and benefits for research and development personnel; materials and laboratory supplies in research and development activities; outside consultant costs; and licensing costs related to technology not yet commercialized. We anticipate that, over time, our research and development costs may increase as we: (i) develop devices and services for delivery of therapeutics into the central nervous system, (ii) expand products into the OR and therapeutics space, (iii) expand the application of our technological platforms internationally, and (iv) invest in the IRRA flow product portfolio and clinical evidence.

Current wording

Our research and development costs consist primarily of costs associated with the conceptualization, design, testing, and prototyping of our ClearPoint system products, cannulas, and enhancements. Such costs include salaries, travel, and benefits for research and development personnel; materials and laboratory supplies in research and development activities; outside consultant costs; and licensing costs related to technology not yet commercialized. We anticipate that, over time, our research and development costs may increase as we: (i) develop devices and services for delivery of therapeutics into the central nervous system, (ii) expand products into the operating room and therapeutics space, (iii) expand the application of our technological platforms internationally, (iv) invest in the IRRA flow product portfolio and clinical evidence, and (v) develop robotics and focused ultrasound technologies.

Previous wording

Our sales and marketing, and general and administrative expenses consist primarily of salaries, incentive-based compensation, travel and benefits, including related share-based compensation; marketing costs; professional fees, including fees for outside attorneys and accountants; occupancy costs; insurance; and other general and administrative expenses, which include, but are not limited to, corporate licenses, director fees, hiring costs, taxes, postage, office supplies, information technology and meeting costs. We expect increases in our sales and marketing expenses as a result of the larger combined sales organization, primarily reflecting higher salary and personnel-related costs associated with the larger commercial team following the IRRAS acquisition.

Current wording

Our sales and marketing, and general and administrative expenses consist primarily of salaries, incentive-based compensation, travel and benefits, including related share-based compensation; marketing costs; professional fees, including fees for outside attorneys and accountants; occupancy costs; insurance; and other general and administrative expenses, which include, but are not limited to, corporate licenses, director fees, hiring costs, taxes, postage, office supplies, information technology and meeting costs. We expect increases in our sales and marketing expenses as a result of a larger combined sales organization following the IRRAS acquisition, primarily reflecting higher salary and personnel-related costs associated with the larger commercial team following the IRRAS acquisition.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2026, as compared to the critical accounting policies and estimates described in our 2025 10-K.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2026, as compared to the critical accounting policies and estimates described in our 2025 10-K.

Previous wording

Revenue. Total revenue was $12.1 million for the three months ended March 31, 2026, and $8.5 million for the three months ended March 31, 2025, which represents an increase of $3.6 million, or 43%.

Current wording

Revenue. Total revenue was $10.9 million for the three months ended June 30, 2026, and $9.2 million for the three months ended June 30, 2025, which represents an increase of $1.7 million, or 18%.

Previous wording

Neurosurgery navigation and therapy revenue, which primarily consists of disposable product commercial sales related to cases utilizing the ClearPoint and IRRA flow systems, increased 80% to $5.9 million for the three months ended March 31, 2026, from $3.3 million for the same period in 2025. The increase is driven primarily by additional revenues due to sales of the IRRA flow product as well as the introduction of our 3.0 operating room navigation software, which has positively impacted procedural volumes in the operating room during the three months ended March 31, 2026, compared to the same period in 2025. We acquired the IRRA flow product in connection with our acquisition of IRRAS in the fourth quarter of 2025.

Current wording

Neurosurgery navigation and therapy revenue increased 62% to $5.6 million for the three months ended June 30, 2026, from $3.4 million for the same period in 2025. The increase is driven primarily by additional revenues due to sales of the IRRA flow product as well as the introduction of our 3.0 operating room navigation software, which has positively impacted procedural volumes in the operating room during the three months ended June 30, 2026, compared to the same period in 2025. We acquired the IRRA flow product in connection with our acquisition of IRRAS in the fourth quarter of 2025.

Previous wording

Capital equipment and software revenue, consisting of sales of ClearPoint and IRRA flow reusable hardware and software and related services, increased 177% to $1.4 million for the three months ended March 31, 2026, from $0.5 million for the same period in 2025 primarily due to an increase in placements of ClearPoint navigation capital and software, IRRA flow control units, and Prism laser units.

Current wording

Capital equipment and software revenue increased 24% to $1.3 million for the three months ended June 30, 2026, from $1.0 million for the same period in 2025 primarily due to an increase in placements of ClearPoint navigation capital and software, IRRA flow control units, and Prism laser units.

Previous wording

Cost of Revenue and Gross Profit. Cost of revenue was $4.4 million, resulting in gross profit of $7.8 million for the three months ended March 31, 2026, and was $3.4 million, resulting in gross profit of $5.1 million for the three months ended March 31, 2025. Gross margin was 64% for the three months ended March 31, 2026, as compared to 60% in the same period in 2025. The increase in gross margin is primarily due to lower excess and obsolete inventory for the three months ended March 31, 2026, as compared to the same period in 2025.

Current wording

Cost of Revenue and Gross Profit. Cost of revenue was $4.2 million, resulting in gross profit of $6.7 million for the three months ended June 30, 2026, and was $3.7 million, resulting in gross profit of $5.6 million for the three months ended June 30, 2025. Gross margin was 62% for the three months ended June 30, 2026, as compared to 60% in the same period in 2025. The increase in gross margin is primarily due to lower excess and obsolete inventory for the three months ended June 30, 2026, as compared to the same period in 2025.

Previous wording

Research and Development Costs. Research and development costs were $4.5 million for the three months ended March 31, 2026, compared to $3.4 million for the same period in 2025, an increase of $1.1 million, or 34%. The increase was due primarily to higher personnel costs of $0.6 million, and higher product and software development costs of $0.3 million.

Current wording

Research and Development Costs. Research and development costs were $4.6 million for the three months ended June 30, 2026, compared to $3.8 million for the same period in 2025, an increase of $0.8 million, or 21%. The increase was due primarily to higher personnel costs of $0.8 million.

Previous wording

Sales and Marketing Expenses. Sales and marketing expenses were $6.7 million for the three months ended March 31, 2026, compared to $3.8 million for the same period in 2025, an increase of $2.9 million, or 75%. This increase was due primarily to additional personnel costs of $1.9 million and increases in travel costs of $0.5 million, resulting from the expansion of our clinical and sales teams, as well as additional amortization expense of acquired intangibles of $0.2 million.

Current wording

Sales and Marketing Expenses. Sales and marketing expenses were $6.8 million for the three months ended June 30, 2026, compared to $4.0 million for the same period in 2025, an increase of $2.7 million, or 68%. This increase was due primarily to additional personnel costs of $1.8 million and increases in travel costs of $0.3 million, resulting from the expansion of our clinical and sales teams. The increase was also driven by additional amortization expense of acquired intangible assets of $0.2 million and marketing material costs of $0.2 million.

Previous wording

General and Administrative Expenses. General and administrative expenses were $5.0 million for the three months ended March 31, 2026, compared to $4.1 million for the same period in 2025, an increase of $0.9 million, or 22%. This increase was due primarily to higher occupancy costs of $0.7 million and higher personnel costs of $0.2 million.

Current wording

General and Administrative Expenses. General and administrative expenses were $5.6 million for the three months ended June 30, 2026, compared to $3.4 million for the same period in 2025, an increase of $2.2 million, or 64%. This increase was due primarily to increases in occupancy costs of $0.7 million, professional service fees of $0.5 million, personnel costs of $0.3 million, general corporate costs of $0.3 million, and information technology and software costs of $0.2 million.

Previous wording

Interest Expense. Interest expense was $1.4 million for the three months ended March 31, 2026, compared to no interest expense for the three months ended March 31, 2025. Interest expense increased due to the issuance of notes payable in May and November 2025. See Note 8 to the condensed consolidated financial statements included in Part I, Item 1 in this Quarterly Report for additional information with respect to the notes payable issued in May and November 2025.

Current wording

Interest Expense. Interest expense was $1.4 million for the three months ended June 30, 2026, compared to $0.4 million for the same period in 2025, an increase of $1.0 million. Interest expense increased due to the issuance of notes payable in May and November 2025. See Note 8 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information with respect to the notes payable issued in May and November 2025.

Previous wording

Interest Income. Interest income was $0.4 million for the three months ended March 31, 2026, compared to $0.2 million for the three months ended March 31, 2025. The increase is due to higher investment in U.S. government debt securities.

Current wording

Interest Income. Interest income was $0.6 million for the six months ended June 30, 2026, compared to $0.4 million for the same period in 2025, an increase of $0.2 million, or 47%. The increase is due to higher investment in U.S. government debt securities.

Previous wording

We have incurred net losses since our inception as we have devoted substantial efforts to research and development, which has resulted in a cumulative deficit at March 31, 2026 of $226.5 million. Our use of cash from operations amounted to $8.0 million for the three months ended March 31, 2026, and $23.9 million for the year ended December 31, 2025. Since inception, we have financed our operations principally from the sale of equity securities and the issuance of notes payable.

Current wording

We have incurred net losses since our inception as we have devoted substantial efforts to research and development, which has resulted in a cumulative deficit at June 30, 2026 of $237.8 million. Our use of cash from operations amounted to $15.0 million for the six months ended June 30, 2026, and $23.9 million for the year ended December 31, 2025. Our primary uses of cash and operating expenses relate to paying employees and consultants, marketing our products, and supporting our research and development of future product offerings. Since inception, we have financed our operations principally from the sale of equity securities and the issuance of notes payable.

Previous wording

In November 2024, we established an at-the-market equity offering program under which we may offer and sell, from time to time, shares of our common stock having aggregate sales proceeds of up to $50 million. As of March 31, 2026, we did not sell any shares of common stock under our at-the-market equity offering program. See Note 10 to the condensed consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

In November 2024, we established an at-the-market equity offering program under which we may offer and sell, from time to time, shares of our common stock having aggregate sales proceeds of up to $50.0 million. As of June 30, 2026, we had not sold any shares of common stock under our at-the-market equity offering program. See Note 10 to the condensed consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

Our cash and cash equivalents totaled $35.6 million at March 31, 2026. In management’s opinion, based on our current forecasts, our cash and cash equivalent balances at March 31, 2026 are sufficient to support our operations and meet our obligations for at least the next twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

Our cash and cash equivalents totaled $29.4 million at June 30, 2026. In management’s opinion, based on our current forecasts, our cash and cash equivalent balances at June 30, 2026 are sufficient to support our operations and meet our obligations for at least the next twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

We may offer and sell additional equity or issue additional notes payable to raise funds for working capital, capital expenditures, or other general corporate purposes. Our primary uses of cash and operating expenses relate to paying employees and consultants, marketing our products, and supporting our research and development of future product offerings.

Current wording

We may offer and sell additional equity or issue additional notes payable to raise funds for working capital, capital expenditures, or other general corporate purposes.

Previous wording

Cash activity for the three months ended March 31, 2026 and 2025 is summarized as follows:

Current wording

Cash activity for the six months ended June 30, 2026 and 2025 is summarized as follows:

Previous wording

Net Cash Flows Used in Operating Activities. Net cash flows used in operating activities for the three months ended March 31, 2026 were $8.0 million, an increase of $1.8 million from the three months ended March 31, 2025. This increase was primarily due to a higher net loss of $3.5 million, which was partially offset by higher non-cash expenses of $1.3 million attributed to amortization of intangible assets, share-based compensation, and payment-in-kind interest. The changes in operating assets and liabilities of $0.4 million were driven primarily by increased accounts receivable balances, reflecting higher revenues and slower collections, partially offset by lower cash use in paying down liabilities.

Current wording

Net Cash Used in Operating Activities. Net cash used in operating activities for the six months ended June 30, 2026 was $15.0 million, an increase of $6.3 million from the six months ended June 30, 2025. This increase was primarily due to a higher net loss of $9.0 million, which was partially offset by higher non-cash expenses of $2.5 million attributed to amortization of intangible assets, share-based compensation, and payment-in-kind interest. We expect our net cash used in operating activities to decrease during the remainder of 2026 as we benefit from the completion of the IRRAS integration.

Previous wording

Net Cash Flows Used in Investing Activities. Net cash flows used in investing activities for the three months ended March 31, 2026 and March 31, 2025 were $0.6 million and $0.2 million, respectively, and related to equipment acquisitions.

Current wording

Net Cash Used in Investing Activities. Net cash used in investing activities for the six months ended June 30, 2026 and June 30, 2025 was $0.9 million and $0.3 million, respectively, and related to equipment acquisitions.

Previous wording

Net Cash Flows Used in Financing Activities. Net cash flows used in financing activities for the three months ended March 31, 2026 and March 31, 2025 consisted primarily of $2.0 million and $1.3 million, respectively, in payments for taxes related to shares withheld in connection with the vesting of restricted stock.

Current wording

Net Cash (Used in) Provided by Financing Activities. Net cash used in financing activities for the six months ended June 30, 2026 consisted primarily of $2.0 million in payments for taxes related to shares withheld in connection with the vesting of restricted stock awards; partially offset by $0.6 million of proceeds from stock option exercises and $0.5 million of proceeds from the issuance of common stock under our employee stock purchase plan.

Previous wording

Our short- and long-term liquidity requirements include the obligations under notes payable and under lease arrangements related to our office and manufacturing facilities under non-cancellable operating leases. See Notes 8 and 9 to the consolidated financial statements included elsewhere in this Quarterly Report. We typically enter into short-term agreements with vendors and suppliers of goods and services in the normal course of business through purchase orders, which are settled in cash upon our receipt of such goods or services. We may also at times enter into long-term commitments or license and collaboration agreements which require commitments that are noncancellable. See Note 10 to the consolidated financial statements included in our 2025 10-K.

Current wording

Our short- and long-term liquidity requirements include the obligations under notes payable and under lease arrangements related to our office and manufacturing facilities under non-cancellable operating leases. See Notes 8, 9, and 12 to the condensed consolidated financial statements included elsewhere in this Quarterly Report. We typically enter into short-term agreements with vendors and suppliers of goods and services in the normal course of business through purchase orders, which are settled in cash upon our receipt of such goods or services. We may also at times enter into long-term commitments or license and collaboration agreements which require commitments that are noncancellable. See Note 10 to the consolidated financial statements included in our 2025 10-K.

Previous wording

the scope, rate of progress and cost of our ongoing product development activities relating to our products;

Current wording

the scope, rate of progress and cost of our ongoing product development activities relating to our products, including our development of robotics and focused ultrasound technologies;

Previous wording

the cost and timing of expanding our sales, clinical support, marketing and distribution capabilities, and other corporate infrastructure;

Current wording

the cost and timing of expenditures for sales, clinical support, marketing and distribution capabilities, and other corporate infrastructure;

Previous wording

the duration and impact of macroeconomic trends, including inflationary pressures, changes in monetary policy, decreasing consumer confidence and spending, the introduction of or changes in tariffs or trade barriers, global or local recession and geopolitical instability; and

Current wording

the duration and impact of macroeconomic trends, including inflationary pressures, changes in monetary policy, constraints on hospital capital spending, the introduction of or changes in tariffs or trade barriers, global or local recession and geopolitical instability; and