Neuronetics, Inc.

Previous wording

strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The system is cleared by the FDA to treat adult patients with MDD that have failed to achieve satisfactory improvement from prior antidepressant medication in the current MDD episode. It is also cleared by the FDA as an adjunct for adults with OCD and for adolescent patients aged 15-21 with MDD. The NeuroStar Advanced Therapy System is also available in other parts of the world, including Japan, where it is listed under Japan’s national health insurance. NeuroStar Advanced Therapy System is safe, clinically effective, reproducible and precise and we believe is supported by the largest clinical data set of any competing TMS system. We believe we are the market leader in TMS therapy based on 202,318 global patients treated with over 7.4 million of our treatment sessions through March 31, 2025. We generated revenues of $32.0 million and $17.4 million for the three months ended March 31, 2025 and 2024, respectively.

Current wording

strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The system is cleared by the FDA to treat adult patients with MDD that have failed to achieve satisfactory improvement from prior antidepressant medication in the current MDD episode. It is also cleared by the FDA as an adjunct for adults with OCD and for adolescent patients aged 15-21 with MDD. The NeuroStar Advanced Therapy System is also available in other parts of the world. NeuroStar Advanced Therapy System is safe, clinically effective, reproducible and precise and we believe is supported by the largest clinical data set of any competing TMS system. We believe we are the market leader in TMS therapy based on over 209,215 global patients treated with over 7.6 million of our treatment sessions through June 30, 2025. We generated revenues of $38.1 million and $16.5 million for the three months ended June 30, 2025 and 2024, respectively, and $70.1 million and $33.9 million for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

We designed the NeuroStar Advanced Therapy System as a non-invasive therapeutic alternative to treat patients who suffer from MDD and to address many of the key limitations of existing treatment options. We generate revenues from initial capital sales of our systems, sales of our recurring treatment sessions and from service and repair and extended warranty contracts. Additionally, through our acquisition of Greenbrook we now derive revenue directly from our treatment centers, by providing TMS therapy and SPRAVATO for MDD and other mental health disorders. We derive the majority of our revenues from clinic revenue. For the three months ended March 31,2025, revenues from sales of our treatment sessions, clinic revenue and NeuroStar Advanced Therapy Systems represented 31%, 59% and 9% of our U.S. revenues, respectively.

Current wording

We designed the NeuroStar Advanced Therapy System as a non-invasive therapeutic alternative to treat patients who suffer from MDD and to address many of the key limitations of existing treatment options. Additionally through our acquisition of Greenbrook, we now derive revenue directly from our treatment centers, by providing TMS therapy and SPRAVATO for MDD and other mental health disorders. We derive the majority of our revenues from clinic revenue.

Previous wording

Clinic revenue consists of revenue attributable to the performance of treatments to patients operated in 15 states in the U.S. In circumstances where the net patient fees have not yet been received, the amount of revenue recognized is estimated based on an expected value approach. Due to the nature of the industry and complexity of our clinic revenue arrangements, where price lists are subject to the discretion of payors, variable consideration exists that may result in price concessions and constraints to the transaction price for the services rendered.

Current wording

Clinic revenue consists of revenue attributable to the performance of treatments to patients in 15 states in the U.S. In circumstances where the net patient fees have not yet been received, the amount of revenue recognized is estimated based on an expected value approach. Due to the nature of the industry and complexity of our clinic revenue arrangements, where price lists are subject to the discretion of payors, variable consideration exists that may result in price concessions and constraints to the transaction price for the services rendered.

Previous wording

We currently sell our NeuroStar Advanced Therapy System and recurring treatment sessions in the U.S. through our sales and customer support team. Our sales force targets an estimated 53,000 psychiatrists across 26,000 practices. We expect to continue to expand our direct sales and customer support team to further penetrate the market by demonstrating the benefits of our NeuroStar Advanced Therapy System to psychiatrists and their MDD patients. Some of our customers have purchased or may purchase more than one NeuroStar Advanced Therapy System. Based on our commercial data, we believe psychiatrists can recoup their initial capital investment in our system by providing a standard course of treatment to approximately 12 patients. We believe psychiatrists can generate approximately $8,500 of average revenue per patient for a standard course of treatment, which may provide meaningful incremental income to their practices. We have a diverse customer base of psychiatrists in group psychiatric practices in the U.S. Patients are reimbursed by federal healthcare programs and the vast majority of commercial payors in the U.S. for treatment sessions utilizing our NeuroStar Advanced Therapy System. For the three months ended March 31, 2024, one customer Greenbrook, accounted for 10% of the Company’s revenue. Following the acquisition, there are no significant customers.

Current wording

We currently sell our NeuroStar Advanced Therapy System and recurring treatment sessions in the U.S. through our sales and customer support team. Our sales force targets an estimated 53,000 psychiatrists across 26,000 practices. We expect to continue to expand our direct sales and customer support team to further penetrate the market by demonstrating the benefits of our NeuroStar Advanced Therapy System to psychiatrists and their MDD patients. Some of our customers have purchased or may purchase more than one NeuroStar Advanced Therapy System. Based on our commercial data, we believe psychiatrists can recoup their initial capital investment in our system by providing a standard course of treatment to approximately 12 patients. We believe psychiatrists can generate approximately $8,500 of average revenue per patient for a standard course of treatment, which may provide meaningful incremental income to their practices. We have a diverse customer base of psychiatrists in group psychiatric practices in the U.S. Patients are reimbursed by federal healthcare programs and the vast majority of commercial payors in the U.S. for treatment sessions utilizing our NeuroStar Advanced Therapy System. For the three months ended June 30, 2024, one customer, Greenbrook, accounted for 14% of the Company’s revenue. Following the acquisition of Greenbrook, there are no significant customers.

Previous wording

We market our products in a few select markets outside the U.S. through independent distributors. International revenues represented 2% and 4% of our total revenues for the three months ended March 31, 2025 and 2024, respectively. In October 2017, we entered into an exclusive distribution agreement with Teijin Pharma Limited for the distribution of our NeuroStar Advanced Therapy Systems and treatment sessions to customers who will treat patients with MDD in Japan. We received regulatory approval for our system in Japan in September 2017. We obtained reimbursement coverage for the NeuroStar Advanced Therapy System in Japan, which went into effect on June 1, 2019 and covers patients who are treated in the

Current wording

We market our products in a few select markets outside the U.S. through independent distributors. International revenues represented 1% and 2% of our total revenues for the three months ended

Previous wording

largest inpatient and outpatient psychiatric facilities in Japan. We expect our international revenues to decrease as a percentage of our total revenue.

Current wording

June 30, 2025 and 2024, respectively and 1% and 3% for the six months ended June 30, 2025 and 2024, respectively. We expect our international revenues to decrease as a percentage of our total revenue.

Previous wording

Total revenues increased by $14.6 million, or 84%, from $17.4 million for the three months ended March 31, 2024 to $32.0 million for the three months ended March 31, 2025. For the three months ended March 31, 2025, our U.S. revenues were $31.5 million compared to $16.8 million representing an increase of 87%. The increase was primarily attributable to an increase in clinic revenue. We incurred net losses of $12.7 million for the three months ended March 31, 2025 compared to net losses of $7.9 million for the three months ended March 31, 2024. As of March 31, 2025, we had an accumulated deficit of $432.5 million.

Current wording

We incurred net losses of $9.8 million and $22.5 million for the three and six months ended June 30, 2025 compared to net losses of $9.8 million and $17.7 million for three and six months ended June 30, 2024. As of June 30, 2025, we had an accumulated deficit of $442.6 million.

Previous wording

We are continuing to closely monitor macroeconomic impacts, including, but not limited to, developments affecting financial institutions, supply chains, unemployment rates, investment values, consumer confidence, inflationary and potential recessionary pressures, on our business, results of operations and financial results, which could adversely affect us.

Current wording

We are continuing to closely monitor macroeconomic impacts, including, but not limited to, developments affecting financial institutions, supply chains, trade and tariff policy, unemployment rates, investment values, consumer confidence, inflationary and potential recessionary pressures, on our business, results of operations and financial results, which could adversely affect us.

Previous wording

General and administrative expenses consist primarily of personnel expenses, including salaries and related benefits, share-based compensation and travel expenses, for employees in executive, finance, information technology, legal and human resource functions. General and administrative expenses also include the cost of insurance, outside legal fees, accounting and other consulting services, audit fees from our independent registered public accounting firm, board of directors fees and other administrative costs, such as corporate facility costs, including rent, utilities, depreciation and maintenance not otherwise included in cost of revenues.

Current wording

General and administrative expenses consist primarily of personnel expenses, including salaries and related benefits, share-based compensation and travel expenses, for employees in executive, finance, information technology, legal, compliance and human resource functions. General and administrative expenses also include the cost of insurance, outside legal fees, accounting and other consulting services, audit fees from our independent registered public accounting firm, board of directors fees and other administrative costs, such as corporate facility costs, including rent, utilities, depreciation and maintenance not otherwise included in cost of revenues.

Previous wording

Total revenue for the three months ended March 31, 2025 was $32.0 million, an increase of $14.6 million or 84% compared to the three months ended March 31, 2024 revenue of $17.4 million.

Current wording

Total revenue for the three months ended June 30, 2025 was $38.1 million, an increase of 132% compared to the three months ended June 30, 2024 revenue of $16.5 million. During the quarter, total U.S. revenue increased by 133% and international revenue decreased marginally compared to prior year quarter.

Previous wording

U.S. NeuroStar Advanced Therapy System revenue for the three months ended March 31, 2025 was $2.8 million, a decrease of 14% compared to $3.3 million in the first quarter of 2024. For the three months ended March 31, 2025, and 2024, the Company sold 31 and 40 systems, respectively. While the number of systems decreased, the average selling price per system increased by 9%.

Current wording

U.S. NeuroStar Advanced Therapy System revenue for the three months ended June 30, 2025 was $3.5 million, a decrease of 13% compared to the three months ended June 30, 2024 revenue of $4.0 million. For the three months ended June 30, 2025 and 2024, the Company sold 41 and 49 systems, respectively, that were recognized as NeuroStar Advanced Therapy System capital revenue during each period. While the number of systems decreased, the average selling price per system increased by 6%.

Previous wording

U.S. treatment session revenue for the three months ended March 31, 2025 was $9.6 million, a decrease of 26% compared to $13 million in the first quarter of 2024.The decline was primarily attributable to the absence of $2.8 million in treatment session revenue to Greenbrook associated with the prior year quarter and a decrease in treatment session volume over the prior year quarter.

Current wording

U.S. treatment session revenue for the three months ended June 30, 2025 was $10.8 million, a decrease of 8% compared to the three months ended June 30, 2024 revenue of $11.7 million. The decline was primarily attributable to the absence of $2.1 million in treatment session revenue to Greenbrook associated with the prior year quarter, which was partially offset by an increase in treatment session volume with other customers, over the prior year quarter.

Previous wording

Cost of revenues increased by $11.9 million, or 275%, from $4.3 million for the three months ended March 31, 2024 to $16.2 million for the three months ended March 31, 2025. Gross margin decreased from 75.1% for the three months ended March 31, 2024 to 49.2% for the three months ended March 31, 2025. The decrease in gross margin was primarily a result of the inclusion of Greenbrook’s clinic business and reduction in treatment session revenue.

Current wording

Cost of revenues increased by $16.1 million, or 376%, from $4.3 million for the three months ended June 30, 2024 to $20.4 million for the three months ended June 30, 2025. Gross margin decreased from 74.0% for the three months ended June 30, 2024 to 46.6% for the three months ended June 30, 2025. The decrease in gross margin was primarily a result of the inclusion of Greenbrook’s clinic business and reduction in treatment session revenue.

Previous wording

General and administrative expenses increased by $7.1 million, or 118%, from $6.0 million for the three months ended March 31, 2024 to $13.1 million for the three months ended March 31, 2025. The increase was primarily driven by the addition of Greenbrook general and administrative expenses of $6.2 million.

Current wording

General and administrative expenses increased by $6.1 million, or 98%, from $6.1 million for the three months ended June 30, 2024 to $12.2 million for the three months ended June 30, 2025. The increase was primarily driven by the addition of Greenbrook general and administrative expenses of $6.1 million.

Previous wording

Research and development expenses decreased by $0.7 million, or 31%, from $2.3 million for the three months ended March 31, 2024 to $1.6 million for the three months ended March 31, 2025. The decrease in research and development was driven by personnel expense savings related to restructuring post-acquisition.

Current wording

Research and development expenses decreased by $0.4 million, or 20%, from $2.2 million for the three months ended June 30, 2024 to $1.8 million for the three months ended June 30, 2025. The decrease in research and development was driven by personnel expense savings related to restructuring after the Company’s acquisition of Greenbrook.

Previous wording

Other income, net, decreased by $0.6 million from $0.8 million for the three months ended March 31, 2024 to $0.2 million for the three months ended March 31, 2025, primarily as a result of decreased interest income earned on the Company’s money market accounts and notes receivable interest.

Current wording

Other income, net decreased by $0.5 million, or 71%, from $0.7 million for the three months ended June 30, 2024 to $0.2 million for the three months ended June 30, 2025, primarily as a result of decreased interest income earned on the Company’s money market accounts and notes receivable interest.

Previous wording

The revenue growth was primarily due to the inclusion of clinic revenue of $18.7 million as a result of the acquisition of Greenbrook, partially offset by the absence of sales to Greenbrook of $2.9 million and a decrease of sales of $1.1 million relating to NeuroStar Advanced Therapy Systems and treatment session revenue.

Current wording

The revenue growth was primarily due to the inclusion of clinic revenue of $ 41.7 million as a result of the acquisition of Greenbrook, partially offset by the absence of sales to Greenbrook of $5.2 million and a $0.3 million decline in sales of NeuroStar Advanced Therapy Systems and treatment session revenue to customers other than Greenbrook.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $20.2 million and an accumulated deficit of $432.5 million, compared to cash and cash equivalents of $18.5 million and an accumulated deficit of $419.8 million as of December 31, 2024. We incurred negative cash flows from operating activities of $17.0 million and $12.0 million for the three months ended March 31, 2025 and 2024, respectively. We have incurred operating losses since our inception, and we anticipate that our operating losses will lessen in the near term due to revenue growth and the pursuit of ongoing cost efficiencies in connection with our Greenbrook acquisition. The Company’s primary sources of capital to date have been proceeds from its IPO, private placements of its convertible preferred securities, borrowings under its credit facility, proceeds from its secondary public offerings of common stock and revenues from sales of its products. As of March 31, 2025, the Company had $60.0 million of borrowings outstanding under the Perceptive Facility, which has a final maturity on July 25, 2029. The Perceptive Facility is subject to certain financial covenants including a minimum net revenue covenant that escalates over the term of the Perceptive Facility and a minimum liquidity covenant.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $11.0 million and an accumulated deficit of $442.6 million, compared to cash and cash equivalents of $18.5 million and an accumulated deficit of $419.8 million as of December 31, 2024. We incurred negative cash flows from operating activities of $20.5 million and $17.0 million for the six months ended June 30, 2025 and 2024, respectively. We have incurred operating losses since our inception, and we anticipate that our operating losses will lessen in the near term due to revenue growth and the pursuit of ongoing cost efficiencies in connection with our Greenbrook acquisition. The Company’s primary sources of capital to date have been proceeds from its IPO, private placements of its convertible preferred securities, borrowings under its credit facility, proceeds from its secondary public offerings of common stock and revenues from sales of its products. As of June 30, 2025, the Company had $60.0 million of borrowings outstanding under the Perceptive Facility, which have a final maturity on July 25, 2029. The Perceptive Facility is subject to certain financial covenants including a minimum net revenue covenant that escalates over the term of the Perceptive Facility and a minimum liquidity covenant.

Previous wording

The following table sets forth a summary of our cash flows for the three months ended March 31, 2025 and 2024:

Current wording

The following table sets forth a summary of our cash flows for the six months ended June 30, 2025 and 2024:

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025 was $17.0 million, consisting primarily of a net loss of $12.7 million, and an increase in net operating assets of $6.9 million, partially offset by non-cash charges of $2.5 million, primarily consisting of depreciation and amortization and share-based compensation. The increase in net operating assets was primarily due to increases in accounts receivable, and decreases in accounts payable, accrued expenses, prepaid expenses and other assets and prepaid commission expense.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025 was $20.5 million, consisting primarily of a net loss of $22.5 million and an increase in net operating assets of $3.7 million, offset by non-cash charges of $5.7 million primarily consisting of depreciation and amortization and share-based compensation. The increase in net operating assets was primarily due to increases in accounts receivable, and decreases in accounts payable, accrued expenses, prepaid expenses and other assets and prepaid commission expense.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 was $12.0 million, consisting primarily of a net loss of $7.9 million, an increase in accounts receivable of $2.7 million, a decrease in accrued bonus and accounts payable of $4.5 million and a decrease in other assets of $0.4 million, partially offset by non-cash charges of $2.7 million. Non-cash charges consisted of depreciation, allowance for credit losses and share-based compensation.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024 was $17.0 million, consisting primarily of a net loss of $17.7 million and an increase in net operating assets of $5.1 million, offset by non-cash charges of $5.8 million. The increase in net operating assets was primarily due to decreases in our accrued expenses mainly from the 2024 bonus payment accrued as of December 31, 2023, increases in our accounts receivable offset by lower inventory levels from the prior year. Non-cash charges primarily consisted of depreciation and amortization, non-cash interest expense, allowance for credit losses and share-based compensation.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 was $0.2 million, which was primarily due to purchases of property and equipment and capitalized software costs.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 was $0.5 million, which was attributable to purchases of property and equipment and capitalized software costs.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2024 was $0.1 million. Net cash provided by investing activities for the three months ended March 31, 2024 was primarily due to repayment of notes receivable, partially offset by purchases of property and equipment and capitalized software costs.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 was $0.1 million, which was attributable to purchase of property and equipment and capitalized software costs, partially offset by the repayment of notes receivable.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $19.0 and primarily consisted of net proceeds from our secondary public offering. There were no cash flows from financing activities for the three months ended March 31, 2024.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2025 was $19.0 million and primarily consisted of net proceeds from our secondary public offering. There were no cash flows from financing activities for the six months ended June 30, 2024.