ClearPoint Neuro, Inc.

Previous wording

The second part of our business is focused on partnerships in the biologics drug and delivery space. Our services include protocol consultation and solutions for preclinical study design and execution for the delivery of pharmaceutical agents to the brain. 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 customers, such customers' continuation of research and development plans, and such customers' achievement of success in completion of clinical trials and subsequent regulatory approvals of their biologics and drugs.

Current wording

The second part of our business is focused on partnerships in the biologics and drug delivery space. Our services include protocol consultation and solutions for preclinical study design and execution for studies relating to the delivery of pharmaceutical agents to the brain. 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 customers, such customers' continuation of research and development plans, and such customers' achievement of success in completion of clinical trials and subsequent regulatory approvals of their biologics and drugs.

Previous wording

Substantially all our revenue for the three months ended March 31, 2025 and 2024 relates to (i) sales of our ClearPoint system products and related services and (ii) consulting services from our customers in the biologics and drug delivery space. We have financed our operations and internal growth primarily through the sale of equity securities and the issuance of notes payable. We have incurred significant losses since our inception in 1998 as we have devoted substantial efforts to research and development. As of March 31, 2025, we had accumulated losses of $197.4 million. We may continue to incur operating losses as we expand our ClearPoint system platform, consulting services to our pharmaceutical and other medical technology customers, and our business generally.

Current wording

Substantially all our revenue for the three and six months ended June 30, 2025 and 2024 relates to (i) sales of our ClearPoint system products and related services and (ii) consulting services from our customers in the biologics and drug delivery space. We have financed our operations and internal growth primarily through the sale of equity securities and the issuance of notes payable. We have incurred significant losses since our inception in 1998 as we have devoted substantial efforts to research and development. As of June 30, 2025, we had accumulated losses of $203.2 million. We may continue to incur operating losses as we expand our ClearPoint system platform, consulting services to our pharmaceutical and other medical technology customers, and our business generally.

Previous wording

Generating recurring revenue from the sale of products is an important part of our business model for our ClearPoint system. Our product revenue was $5.3 million for the three months ended March 31, 2025, and was almost entirely related to our ClearPoint system. Our service revenue was $3.2 million for the three months ended March 31, 2025, of which 91% is related to the biologics and drug delivery service line.

Current wording

Generating recurring revenue from the sale of products is an important part of our business model for our ClearPoint system. Our product revenue was $6.0 million and $11.3 million for the three and six months ended June 30, 2025, respectively, and was almost entirely related to our ClearPoint system. Our service revenue was $3.2 million and $6.4 million for the three and six months ended June 30, 2025, respectively, of which 89% and 91%, respectively, is 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 functional neurosurgery navigation products, biologics and drug delivery products, non-neurosurgery therapy products, and ClearPoint capital equipment and software that we have sold, and for which we have recognized the revenue in accordance with our revenue recognition policy, as well as labor hours and materials for the cost of providing pre-clinical, 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 functional neurosurgery navigation products, biologics and drug delivery products, non-neurosurgery therapy products, and ClearPoint capital equipment and software that we have sold, and for which we have recognized the revenue in accordance with our revenue recognition policy, as well as labor hours and materials 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.

Previous wording

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2025, as compared to the critical accounting policies and estimates described in our 2024 Form 10-K.

Current wording

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2025, as compared to the critical accounting policies and estimates described in our 2024 Form 10-K.

Previous wording

Revenue. Total revenue was $8.5 million for the three months ended March 31, 2025, and $7.6 million for the three months ended March 31, 2024, which represents an increase of $0.8 million, or 11%.

Current wording

Revenue. Total revenue was $9.2 million for the three months ended June 30, 2025, and $7.9 million for the three months ended June 30, 2024, which represents an increase of $1.4 million, or 17%.

Previous wording

Cost of Revenue and Gross Profit. Cost of revenue was $3.4 million, resulting in gross profit of $5.1 million for the three months ended March 31, 2025, and was $3.1 million, resulting in gross profit of $4.5 million for the three months ended March 31, 2024. Gross margin was 60% for the three months ended March 31, 2025, as compared to 59% in the same period in 2024. The increase in gross margin is due to lower excess and obsolete inventory for the three months ended March 31, 2025, as compared to the same period in 2024.

Current wording

Cost of Revenue and Gross Profit. Cost of revenue was $3.7 million, resulting in gross profit of $5.6 million for the three months ended June 30, 2025, and was $2.9 million, resulting in gross profit of $5.0 million for the three months ended June 30, 2024. Gross margin was 60% for the three months ended June 30, 2025, as compared to 63% in the same period in 2024. The decrease in gross margin is primarily due to higher excess and obsolete inventory reserves for the three months ended June 30, 2025, as compared to the same period in 2024.

Previous wording

Research and Development Costs. Research and development costs were $3.4 million for the three months ended March 31, 2025, compared to $2.6 million for the same period in 2024, an increase of $0.8 million, or 29%. The increase was due primarily to higher product development costs of $0.4 million, higher personnel costs, including share-based compensation of $0.2 million, and higher regulatory fees of $0.1 million.

Current wording

Research and Development Costs. Research and development costs were $3.8 million for the three months ended June 30, 2025, compared to $3.1 million for the same period in 2024, an increase of $0.7 million, or 23%. The increase was due primarily to higher product and software development costs of $0.8 million, partially offset by lower personnel costs, including share-based compensation of $0.1 million.

Previous wording

Sales and Marketing Expenses. Sales and marketing expenses were $3.8 million for the three months ended March 31, 2025, compared to $3.3 million for the same period in 2024, an increase of $0.5 million, or 17%. This increase was due primarily to additional personnel costs, including share-based compensation, resulting from increases in headcount.

Current wording

Sales and Marketing Expenses. Sales and marketing expenses were $4.0 million for the three months ended June 30, 2025, compared to $3.8 million for the same period in 2024, an increase of $0.2 million, or 5%. This increase was due primarily to additional personnel costs, including share-based compensation, resulting from increases in headcount of $0.4 million, partially offset by lower travel costs and other marketing costs of $0.2 million.

Previous wording

General and Administrative Expenses. General and administrative expenses were $4.1 million for the three months ended March 31, 2025, compared to $2.8 million for the same period in 2024, an increase of $1.3 million, or 44%. This increase was due primarily to higher bad debt expense, higher personnel costs, including share-based compensation, and higher professional service fees, each in the amount of $0.4 million.

Current wording

General and Administrative Expenses. General and administrative expenses were $3.4 million for the three months ended June 30, 2025, compared to $2.8 million for the same period in 2024, an increase of $0.6 million, or 23%. This increase was due primarily to higher bad debt expense of $0.4 million and higher personnel costs, including share-based compensation, of $0.2 million.

Previous wording

Interest Income, net. Net interest income was $0.2 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively. The increase in net interest income is a result of having no interest expense in the three months ended March 31, 2025 due to the full repayment of the First Closing note in August 2024, partially offset by lower interest income as a result of decreased investment in U.S. Government securities. See Note 6 to the Condensed Consolidated Financial Statements included in Part 1, Item 1 in this Quarterly Report for additional information with respect to the First Closing Note.

Current wording

Interest Income (Expense), net. Net interest expense was $0.1 million for the three months ended June 30, 2025, compared to net interest income of $0.3 million for the three months ended June 30, 2024. Interest income decreased in the three months ended June 30, 2025 as a result of lower investment in U.S. Government securities as compared with the same period in 2024. Additionally, interest expense increased in the three months ended June 30, 2025 as a result of the note payable entered into in May 2025. See Note 6 to the Condensed Consolidated Financial Statements included in Part 1, Item 1 in this Quarterly Report for additional information with respect to the note payable.

Previous wording

Biologics and drug delivery revenue, which includes sales of disposable products and services related to customer-sponsored preclinical and clinical trials, increased 9% to $4.7 million for the three months ended March 31, 2025, from $4.3 million for the same period in 2024. This increase is attributable to $1.2 million of higher product revenue resulting from greater demand for disposables as multiple partners progress in their trials, partially offset by a $0.8 million decrease in service revenue and other revenue due to less work performed in preclinical trials and consulting during the three months ended March 31, 2025, compared to the same period in 2024.

Current wording

Biologics and drug delivery revenue, which includes sales of disposable products and services related to customer-sponsored preclinical and clinical trials, increased 9% to $9.4 million for the six months ended June 30, 2025, from $8.6 million for the same period in 2024. This increase is attributable to $1.4 million of higher product revenue resulting from greater demand for disposables as multiple partners progress in their trials, partially offset by $0.6 million decrease in service revenue and other revenue due to less work performed in preclinical trials and consulting during the six months ended June 30, 2025, compared to the same period in 2024.

Previous wording

Neurosurgery navigation and therapy revenue, which primarily consists of disposable product commercial sales related to cases utilizing the ClearPoint system, increased 70% to $3.3 million for the three months ended March 31, 2025, from $1.9 million for the same period in 2024. The increase is driven by higher sales for new product offerings of SmartFrame OR and Prism Laser Therapy as well as an increased customer base, during the three months ended March 31, 2025, compared to the same period in 2024.

Current wording

Neurosurgery navigation and therapy revenue, which primarily consists of disposable product commercial sales related to cases utilizing the ClearPoint system, increased 49% to $6.7 million for the six months ended June 30, 2025, from $4.5 million for the same period in 2024. The increase is driven by an increased customer base, and higher sales for new offerings of SmartFrame OR, Prism Laser Therapy, and introduction of our 3.0 operating room software, during the six months ended June 30, 2025, compared to the same period in 2024.

Previous wording

Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software and related services, decreased 63% to $0.5 million for the three months ended March 31, 2025, from $1.4 million for the same period in 2024 due to a decrease in the placements of ClearPoint navigation capital and software and Prism laser units.

Current wording

Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software and related services, decreased 34% to $1.6 million for the six months ended June 30, 2025, from $2.4 million for the same period in 2024 due to a decrease in the placements of ClearPoint navigation capital and software and Prism laser units.

Previous wording

We have incurred net losses since our inception, which has resulted in a cumulative deficit at March 31, 2025 of $197.4 million. In addition, our use of cash from operations amounted to $6.2 million for the three months ended March 31, 2025, and $9.0 million for the year ended December 31, 2024. 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, which has resulted in a cumulative deficit at June 30, 2025 of $203.2 million. In addition, our use of cash from operations amounted to $8.7 million for the six months ended June 30, 2025, and $9.0 million for the year ended December 31, 2024. Since inception, we have financed our operations principally from the sale of equity securities and the issuance of notes payable.

Previous wording

In March 2024, we completed a public offering of 2,653,848 shares of our common stock from which the net proceeds totaled approximately $16.2 million after deducting our payment of underwriting discounts and commissions and other offering expenses. In November 2024, we entered into an ATM Agreement pursuant to which we may offer and sell, from time to time, shares of our common stock, having aggregate sales proceeds of up to $50 million, subject to the terms and conditions of the ATM Agreement. Through March 31, 2025, we did not issue any shares of common stock under the ATM Agreement.

Current wording

In March 2024, we completed a public offering of 2,653,848 shares of our common stock from which the net proceeds totaled approximately $16.2 million after deducting our payment of underwriting discounts and commissions and other offering expenses. In November 2024, we entered into an ATM Agreement pursuant to which we may offer and sell, from time to time, shares of our common stock, having aggregate sales proceeds of up to $50 million, subject to the terms and conditions of the ATM Agreement. We have not issued any shares of common stock under the ATM Agreement.

Previous wording

Additional information with respect to the public offerings and 2020 secured convertible notes is in Notes 8 and 6, respectively, to the condensed consolidated financial statements included in Part 1, Item 1 in this Quarterly Report.

Current wording

Additional information with respect to the stock offerings and the 2025 NPA is in Notes 8 and 6, respectively, to the condensed consolidated financial statements included in Part 1, Item 1 in this Quarterly Report.

Previous wording

As a result of these transactions and our business operations, our cash and cash equivalents totaled $12.4 million at March 31, 2025. In management’s opinion, based on our current forecasts for revenue, expense and cash flows, our existing cash and cash equivalent balances at March 31, 2025, are sufficient to support our operations and meet our obligations for at least the next twelve months.

Current wording

As a result of these transactions and our business operations, our cash and cash equivalents totaled $41.5 million at June 30, 2025. In management’s opinion, based on our current forecasts for revenue, expense and cash flows, our existing cash and cash equivalent balances at June 30, 2025, are sufficient to support our operations and meet our obligations for at least the next twelve months.

Previous wording

Cash activity for the three months ended March 31, 2025 and 2024 is summarized as follows:

Current wording

Cash activity for the six months ended June 30, 2025 and 2024 is summarized as follows:

Previous wording

Net Cash Flows from Operating Activities. Net cash flows used in operating activities for the three months ended March 31, 2025, were $6.2 million, an increase of $2.3 million from the three months ended March 31, 2024. This increase was primarily due to a higher net loss of $1.9 million and higher payments made against accrued liabilities, mainly as a result of bonus payouts, partially offset by higher share-based compensation expense and deferred revenue.

Current wording

Net Cash Flows from Operating Activities. Net cash flows used in operating activities for the six months ended June 30, 2025 were $8.7 million, an increase of $2.2 million from the six months ended June 30, 2024. This increase was primarily due to a higher net loss of $3.3 million and increased working capital requirements, mainly due to higher payments made as a result of bonus payouts. This was partially offset by an increase in non-cash expenses, including share-based compensation and the allowance for credit losses.

Previous wording

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

Current wording

Net Cash Flows from Investing Activities. Net cash flows used in investing activities for the six months ended June 30, 2025 were $0.3 million and related to equipment acquisitions.

Previous wording

The Company did not have any net cash flows from investing activities for the three months ended March 31, 2024.

Current wording

The Company did not have any net cash flows from investing activities for the six months ended June 30, 2024.

Previous wording

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

Current wording

Net Cash Flows from Financing Activities. Net cash flows provided by financing activities for the six months ended June 30, 2025 consisted primarily of proceeds, net of financing costs and discount, of $28.7 million from the issuance of the note payable; proceeds, net of offering costs, of $3.3 million from the registered direct offering of common stock; partially offset by $1.7 million in payments for taxes related to shares withheld in connection with the vesting of restricted stock awards.

Previous wording

Net cash flows provided by financing activities for the three months ended March 31, 2024, consisted of proceeds, net offering costs, of $16.2 million received from the public offering of our common stock, partially offset by payments for taxes related to shares withheld in connection with the vesting of restricted stock awards of $0.2 million.

Current wording

Net cash flows provided by financing activities for the six months ended June 30, 2024 consisted of proceeds, net offering costs, of $16.2 million received from the public offering of our common stock and $0.3 million in proceeds from the issuance of common stock under the employee stock purchase plan. This is partially offset by payments of $0.3 million for taxes related to shares withheld in connection with the vesting of restricted stock awards.