0001558370-24-015160 | 10-Q | XBRL Viewer

PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE

9 Months Ended

Sep. 30, 2024

PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE

PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE

8. PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE

The following table presents the composition of property and equipment, net, as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30,		December 31,
	2024		2023
Laboratory equipment	$	705	$	702
Office equipment		495		495
Auto		23		23
Computer equipment and software		1,136		1,082
Manufacturing equipment		575		551
Leasehold improvements		1,463		1,436
Rental equipment		598		542
Property and equipment, gross		4,995		4,831
Less: Accumulated depreciation		(3,356)		(2,822)
Property and equipment, net	$	1,639	$	2,009

As of September 30, 2024 and December 31, 2023, the Company had capitalized software costs, net, of $4.5 million and $4.2 million, respectively, which are included in “Prepaid expenses and other current assets” and “Other assets” on the balance sheet.

Depreciation and amortization expense was $0.5 million for the three months ended September 30, 2024 and 2023, respectively, and $1.6 million and $1.5 million for the nine months ended September 30, 2024 and 2023, respectively.

SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2024

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

17. SHARE-BASED COMPENSATION

The amount of share-based compensation expense recognized by the Company by location in its statements of operations for the three and nine months ended September 30, 2024 and 2023 is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenues	$	35	$	38	$	106		109
Sales and marketing		380		590		1,089		1,946
General and administrative		807		1,052		2,560		3,134
Research and development		197		175		565		504

Total

1,419

1,855

4,320

5,693

2018 Equity Incentive Plan

In June 2018, the Company adopted the 2018 Equity Incentive Plan, (the “2018 Plan”), which authorized the issuance of up to 1.4 million shares, subject to an annual 4% increase based on the number of shares of common stock outstanding, in the form of restricted stock, stock appreciation rights and stock options to the Company’s directors, employees and consultants. The amount and terms of grants are determined by the Company’s board of directors. All stock options granted to date have had exercise prices equal to the fair value, as determined by the closing price as reported by the Nasdaq Global Market, of the underlying common stock on the date of grant. The contractual term of stock options is up to 10 years, and stock options are exercisable in cash or as otherwise determined by the board of directors. Generally, stock options vest 25% upon the first anniversary of the date of grant and the remainder ratably monthly thereafter for 36 months. Restricted stock units generally vest ratably in three equal installments on the first, second and third anniversaries of the grant date. PRSUs generally vest based on appreciation of the Company’s common stock to a certain price as determined by the Company’s board of directors measured using a trailing 30-day volume-weighted average price of a share of the Company’s common stock. The fair value of the PRSU awards are determined using a risk neutral Monte Carlo simulation valuation model. As of September 30, 2024, there were 0.7 million shares available for future issuance under the 2018 Plan.

2020 Inducement Incentive Plan

In December 2020, the Company adopted the 2020 Inducement Incentive Plan (the “2020 Plan”), which authorized the issuance of up to 0.4 million shares, subject to increase by approval of the Company’s board of directors, in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards and other stock awards to eligible employees who satisfy the standards for inducement grants under Nasdaq Global Market rules. In March 2022, the Company’s board of directors approved an additional 0.5 million shares for the issuance under the 2020 Plan. An individual who previously served as an employee or director of the Company is not eligible to receive awards under the 2020 Plan. The amount and terms of grants are determined by the Company’s board of directors. As of September 30, 2024, there were 0.1 million shares available for future issuance under the 2020 Plan.

Stock Options

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2024:


				Weighted	Aggregate
	Number of	Weighted		average	average
	Shares under	average		Remaining	Intrinsic
	Option	Exercise Price		Contractual	Value
	(in thousands)	per Option		Life (in years)	(in thousands)
Outstanding at December 31, 2023	1,270	$	3.90
Granted	—	$	—
Exercised	(2)	$	0.96
Forfeited and Expired	(30)	$	9.97
Outstanding at September 30, 2024	1,238	$	3.75	5.3	$	—
Exercisable at September 30, 2024	1,238	$	3.75	5.3	$	—
Vested and expected to vest at September 30, 2024	1,238	$	3.75	5.3	$	—

The Company recognized share-based compensation expense related to stock options of $0.0 million and $0.1 million for the three months ended September 30, 2024 and 2023, respectively, and $0.1 million and $0.3 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, there was no remaining unrecognized compensation cost related to non-vested stock options.

For the nine months ended September 30, 2024 the Company did not grant stock options.

Restricted Stock Units and PRSUs

The following table summarizes the Company’s restricted stock unit and PRSU activity for September 30, 2024:


	Non-vested		Weighted	Non-vested		Weighted
	Restricted		average	PRSUs		average
	Stock Units		Grant-date			Grant-date
	(in thousands)		Fair Value	(in thousands)		Fair Value
Non-vested at December 31, 2023	2,965	$	4.37	395	$	6.77
Granted	1,593	$	3.18	—	$	—
Vested	(1,406)	$	4.35	—	$	—
Forfeited	(273)	$	4.21	—	$	—
Non-vested at September 30, 2024	2,879	$	3.74	395	$	6.77

The Company recognized $1.4 million and $1.8 million in share-based compensation expense related to the restricted stock units and PRSUs for the three months ended September 30, 2024 and 2023, respectively, and $4.2 million and $5.3 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, there was $7.4 million of unrecognized compensation cost related to non-vested restricted stock units and PRSUs, which the Company expects to recognize over a weighted-average period of 1.9 years. The total fair value at the vesting date of restricted stock units and PRSUs vested during the nine months ended September 30, 2024 was $4.3 million.

The Company did not grant PRSUs during the nine months ended September 30, 2024.

REVENUE AND DEFERRED REVENUE - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024 USD ($) customer	Sep. 30, 2023 USD ($) customer	Sep. 30, 2024 USD ($) customer	Sep. 30, 2023 USD ($) customer	Dec. 31, 2023 USD ($)
Disaggregation of Revenue [Line Items]
Revenue recognized	$ 300	$ 400	$ 1,400	$ 1,700
Number of customer accounted for more than 10% of revenues \| customer	1	1	1	1
Accounts receivable	$ 16,825		$ 16,825		$ 15,782
Customer 1
Disaggregation of Revenue [Line Items]
Notes receivable	4,000		4,000		5,200
Credit concentration risk \| Customer 1
Disaggregation of Revenue [Line Items]
Accounts receivable	$ 1,900		$ 1,900		$ 1,900
Revenue \| Customer concentration risk \| Customer 1
Disaggregation of Revenue [Line Items]
Percentage of Revenues	13.00%	15.00%	14.00%	17.00%

COMMON STOCK - Summary of Outstanding Common Stock Warrants (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
COMMON STOCK
Warrants Outstanding	1,146,000	41,000
Perceptive credit facility
COMMON STOCK
Warrant exercisable	1,125,000
Exercise Price $0.94
COMMON STOCK
Warrants Outstanding	1,125,000
Exercise Price	$ 0.94
Expiration Date	2034-07
Exercise Price $9.73
COMMON STOCK
Warrants Outstanding		20,000
Exercise Price		$ 9.73
Expiration Date		2024-03
Exercise Price $9.73
COMMON STOCK
Warrants Outstanding	21,000	21,000
Exercise Price	$ 9.73	$ 9.73
Expiration Date	2024-12	2024-12

Statements of Changes in Stockholders' Equity (Parenthetical) $ in Thousands	3 Months Ended
	Sep. 30, 2024 USD ($)
Statements of Changes in Stockholders' Equity
Warrants issuance costs net	$ 35

DEBT

9 Months Ended

Sep. 30, 2024

DEBT

DEBT

14. DEBT

The following table presents the composition of debt as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30,		December 31,
	2024		2023
Outstanding principal	$	50,000	$	60,000
Accrued final payment fees		—		1,856
Less debt discounts		(3,998)		(2,573)
Total debt, net		46,002		59,283
Less current portion		—		—
Long-term debt, net	$	46,002	$	59,283

For the three months ended September 30, 2024, the Company recognized interest expense of $1.7 million, of which $1.6 million was cash and $0.1 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of final payment fees. For the three months ended September 30, 2023, the Company recognized interest expense of $1.2 million, of which $1.1 million was cash and $0.1 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of final payment fees.

For the nine months ended September 30, 2024, the Company recognized interest expense of $5.5 million, of which $4.9 million was cash and $0.6 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of final payment fees. For the nine months ended September 30, 2023, the Company recognized interest expense of $3.6 million, of which $3.1 million was cash and $0.5 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of final payment fees.

Loss on extinguishment of debt amounting to $4.4 million was recorded during the three months ended September 30, 2024, related to the SLR Facility. This included $1.2 million of early prepayment fees and $3.2 million of deferred financing expense related to extinguishment of debt.

Perceptive Credit Facility

On July 25, 2024, the Company entered into the Perceptive Facility which was used to partially repay the Company’s previous $60.0 million credit facility with SLR Investment Corp.

The Perceptive Facility permits the Company to borrow up to an aggregate amount of $90.0 million in three tranches of term loans, a “Tranche 1 Loan”, a “Tranche 2 Loan” and a “Tranche 3 Loan.” On July 25, 2024, the Company borrowed an aggregate amount of $50.0 million, which was the aggregate amount available under the Tranche 1 Loan portion of the Perceptive Facility. Under the Tranche 2 Loan portion of the Perceptive Facility, the Company is permitted to borrow, at its election, up to an aggregate amount of $15.0 million, (i) upon the Company achieving a specified amount of trailing twelve months net revenue, and (ii) assuming there has been no event of default under the Perceptive Facility prior to such election. The Tranche 2 Loan portion of the Perceptive Facility must be borrowed on or before December 31, 2025. Under the Tranche 3 Loan portion of the Perceptive Facility, the Company may request to borrow, at the consent of the Majority Lenders (as defined in the Perceptive Facility), up to an aggregate amount of $25.0 million. The Tranche 3 Loan portion of the Perceptive Facility must be borrowed on or before June 30, 2026. There will be no scheduled repayments of the principal on the Tranche 1 Loan, Tranche 2 Loan and Tranche 3 Loan prior to the maturity date. All amounts borrowed under the Perceptive Facility are due on July 25, 2029.

Each of the Tranche 1 Loan, Tranche 2 Loan and Tranche 3 Loan accrues interest from the date of borrowing through the date of repayment at a floating per annum rate of interest equal to the sum of 7.00% plus the greater of (a) 4.50% and (b) One-Month Term SOFR (as defined in the Perceptive Facility).

If the Company prepays either the Tranche 1 Loan, Tranche 2 Loan or Tranche 3 Loan prior to their scheduled maturity date, the Company will also be required to pay prepayment fees to Perceptive equal to 6% of the principal amount of such term loan then-prepaid if prepaid on or before the first anniversary of the closing date, 5% of the principal amount of such term loan then-prepaid if prepaid after the first anniversary and on or before the second anniversary of the closing date, 4% of the principal amount of such term loan then-prepaid if prepaid after the second anniversary and on or before the third anniversary of the closing date, and 3% of the principal amount of such term loan then-prepaid if prepaid after the third anniversary and on or before the fourth anniversary of the closing date.

The Company’s obligations under the Perceptive Facility are secured by a first priority security interest in substantially all of the Company’s assets, including its intellectual property. The Perceptive Facility requires the Company to comply with a quarterly minimum trailing revenue covenant commencing December 2024 and a minimum liquidity covenant as well as affirmative and negative covenants.

The Perceptive Facility contains events of default, including, without limitation, events of default upon: (i) failure to make payment pursuant to the terms of the agreement; (ii) violation of covenants; (iii) material adverse changes to the Company’s business; (iv) insolvency; (v) material cross-defaults; (vi) significant judgments, orders or decrees for payments by the Company; (vii) incorrectness of representations and warranties; (viii) significant adverse ERISA events; (ix) failure by the Company to be registered with the United States Securities and Exchange Commission in good standing; and (x) failure by the Company to maintain a valid and perfected lien on the collateral securing the borrowing.

As consideration for the Perceptive Facility, the Company agreed to issue to Perceptive warrants to purchase up to 1,462,500 shares of the Company’s common stock, with a warrant exercisable into 1,125,000 shares of the Company’s common stock issued on the closing date (the “Initial Warrant”). The per share exercise price for the Initial Warrant is equal to the lower of (x) the 10-day volume weighted average price of the Company’s common stock on the business day immediately prior to the closing date and (y) the 10-day volume weighted average price of the common stock ended on August 31, 2024. In addition to the Initial Warrant, an additional warrant will be issued for 337,500 shares of common stock concurrently with the borrowing of the Tranche 2 Loan. The per share exercise price for the additional warrant will be equal to the exercise price of the Initial Warrant. Each warrant will be exercisable, in whole or in part, until the tenth anniversary of the applicable date of issuance.

The Company was in compliance with the covenants under the Perceptive Facility at September 30, 2024.

SLR Credit Facility

On March 2, 2020 the Company entered into a Loan and Security Agreement with Solar Investment Corp. (formerly known as Solar Capital Ltd) (“SLR”) as collateral agent and other lenders as defined in the agreement (such agreement, as amended, the “SLR Facility”).

On March 7, 2024, the Company entered into a sixth amendment (the “SLR Sixth Amendment”) to the SLR Facility. Under the SLR Sixth Amendment, SLR: (a) waived the specified events with respect to the Company’s non-compliance with the required revenue under the net product revenue covenant; and (b) amended the financial covenants and increased the amount of the liquidity covenant and temporarily decreased the net product revenue covenant to reflect current projections.

On September 29, 2023, the Company entered into a fifth amendment (the “SLR Fifth Amendment”) to the SLR Facility. The SLR Fifth Amendment allowed the Company to draw on the $22.5 million Term C Loan portion of the SLR Facility and revised the required testing levels of the net product revenue and minimum liquidity covenants for certain testing periods. On October 3, 2023, the Company borrowed $22.5 million under the Term C Loan portion of the SLR Facility, resulting in total borrowing of $60 million.

On March 29, 2023, the Company entered into a fourth amendment (the “SLR Fourth Amendment”) to the Loan and Security Agreement dated March 2, 2020 with SLR. The SLR Fourth Amendment increased the borrowings by $2.5 million, extended the interest only period from March 2023 to March 2026, and extended the maturity date from February 2025 to March 2028. In addition, the SLR Fourth Amendment changed the basis of the interest expense from LIBOR to SOFR.

The SLR Facility accrued interest from the date of borrowing through the date of repayment at a floating per annum rate of interest, which reset monthly and was equal to the greater of 5.65% plus (a) 3.95% or (b) daily simple SOFR for a term of one month. Only interest was required to be paid on the SLR Facility until March 1, 2026. Prior to the effectiveness of the SLR Fourth Amendment, the interest only period with respect to the Term A Loan expired on March 1, 2023. Commencing April 1, 2026, the Company was required to make monthly payments of principal and interest on the SLR Facility.

In addition to the principal and interest payments due under the SLR Facility, the Company was required to pay a final payment fee to SLR upon the earlier of prepayment, acceleration or the maturity date of the SLR Facility equal to 4.95% of the principal amount of the term loans actually funded. If the Company prepaid the SLR Facility prior to their respective scheduled maturities, the Company was also be required to pay prepayment fees to SLR equal to 3% of the principal amount of such term loan then-prepaid if prepaid on or before the first anniversary of the Term C Funding Date (as defined in the SLR Facility), 2% of the principal amount of such term loan then-prepaid if prepaid after the first anniversary and on or before the second anniversary of the Term C Funding Date, or 1% of the principal amount of such term loan then-prepaid if prepaid after the second anniversary of the Term C Funding Date.

The Company was also required to pay SLR an exit fee upon the occurrence of (a) any liquidation, dissolution or winding up of the Company, (b) any transaction that results in a person obtaining control over the Company, (c) the Company achieving $100 million in trailing twelve-month net product revenue or (d) the Company achieving $125 million in trailing twelve-month net product revenue. The exit fee for liquidation, dissolution, winding up or change of control of the Company was equal to 2% of the principal amount of the term loans actually funded. The exit fee for achieving either $100 million or $125 million in trailing twelve-month net product revenue was equal to 1% of the principal amount of the term loans actually funded or, if both net product revenue milestones were achieved, 2% of the principal amount of the term loans actually funded. The exit fee was capped at 2% of the principal amount of the term loans actually funded.

On January 31, 2024 and February 29, 2024, the Company was not in compliance with its minimum net product revenue covenant under the SLR Facility. The Company was granted a waiver from SLR in the SLR Sixth Amendment for the covenant violations. The amount of borrowings affected by this noncompliance was $60 million.

As of June 30, 2024, the Company was not in compliance with its minimum net product revenue covenant under the SLR Facility. The amount of borrowing affected by this noncompliance was $60 million.

As previously disclosed on the Company’s Current Report on Form 8-K filed on July 30, 2024, simultaneously with the Company’s entry into the Perceptive Facility, on July 25, 2024, the Company prepaid in full all outstanding obligations under and terminated the SLR Facility. In connection with this prepayment, the Company paid total consideration of $64.6 million, which consisted of (i) $60.0 million of remaining principal amount outstanding, (ii) $0.5 million of accrued and unpaid interest, (iii) $3.0 million in connection with the

final payment fee, and (iv) $1.2 million in connection with the prepayment fee. The Company funded the prepayment of the SLR Facility using proceeds from the Perceptive Facility and cash on hand.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

REVENUE AND DEFERRED REVENUE - Summary of Revenue Generated in Geographic Regions for Years Indicated (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
REVENUE AND DEFERRED REVENUE
Revenues	$ 18,530	$ 17,884	$ 52,397	$ 51,034
Revenue \| Geographic Concentration
REVENUE AND DEFERRED REVENUE
Revenues	$ 18,530	$ 17,884	$ 52,397	$ 51,034
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Revenue \| U.S. \| Geographic Concentration
REVENUE AND DEFERRED REVENUE
Revenues	$ 17,922	$ 17,211	$ 50,845	$ 49,464
Percentage of Revenues	97.00%	96.00%	97.00%	97.00%
Revenue \| International \| Geographic Concentration
REVENUE AND DEFERRED REVENUE
Revenues	$ 608	$ 673	$ 1,552	$ 1,570
Percentage of Revenues	3.00%	4.00%	3.00%	3.00%

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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-Topic 924
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2024

ACCRUED EXPENSES

Schedule of the composition of accrued expenses

The following table presents the composition of accrued expenses as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30,		December 31,
	2024		2023
Compensation and related benefits	$	6,769	$	8,003
Consulting and professional fees		1,702		488
Research and development expenses		556		260
Sales and marketing expenses		397		1,760
Warranty		237		213
Sales and other taxes payable		714		818
Other		1,054		1,053
Accrued expenses	$	11,429	$	12,595

GOVERNMENT ASSISTANCE (Details) $ in Millions	9 Months Ended
GOVERNMENT ASSISTANCE (Details) $ in Millions	Sep. 30, 2024 USD ($)
Employee Retention Credit
GOVERNMENT ASSISTANCE
Government assistance amount recognized in income statement	$ 2.9

SHARE-BASED COMPENSATION - Additional Information (Details) $ in Thousands, shares in Millions	1 Months Ended		3 Months Ended		9 Months Ended
	Mar. 31, 2022 shares	Jun. 30, 2018 installment shares	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($)	Dec. 31, 2020 shares
SHARE-BASED COMPENSATION
Share-based compensation expenses			$ 1,419	$ 1,855	$ 4,320	$ 5,693
Stock options
SHARE-BASED COMPENSATION
Share-based compensation expenses			0	100	100	300
Unrecognized compensation cost related to non-vested stock options			0		0
Restricted Stock Units and PRSUs
SHARE-BASED COMPENSATION
Share-based compensation expenses			1,400	$ 1,800	$ 4,200	$ 5,300
Non-vested awards not yet recognized weighted-average period for recognition					1 year 10 months 24 days
Unrecognized compensation cost related to non-vested restricted stock			$ 7,400		$ 7,400
Fair value of restricted stock vested					$ 4,300
2018 Plan
SHARE-BASED COMPENSATION
Annual percentage increase in number of shares authorized for issuance		4.00%
Vesting terms of stock options		stock options vest 25% upon the first anniversary of the date of grant and the remainder ratably monthly thereafter for 36 months. Restricted stock units generally vest ratably in three equal installments on the first, second and third anniversaries of the grant date.
Number of vesting installments \| installment		3
Shares available for future issuance \| shares			0.7		0.7
2018 Plan \| PRSUs \| Common Stock
SHARE-BASED COMPENSATION
Weighted average price, number of days trailing		30 days
2018 Plan \| First Anniversary of Date of Grant
SHARE-BASED COMPENSATION
Vesting percentage of stock options		25.00%
2018 Plan \| Maximum
SHARE-BASED COMPENSATION
Number of shares authorized for issuance \| shares		1.4
Maximum contractual term of stock options		10 years
2020 Plan
SHARE-BASED COMPENSATION
Number of additional shares authorized for issuance \| shares	0.5
Shares available for future issuance \| shares			0.1		0.1
2020 Plan \| Maximum
SHARE-BASED COMPENSATION
Number of shares authorized for issuance \| shares							0.4

PREPAID COMMISSION EXPENSE

9 Months Ended

Sep. 30, 2024

PREPAID COMMISSION EXPENSE

PREPAID COMMISSION EXPENSE

11. PREPAID COMMISSION EXPENSE

The Company pays a commission on both NeuroStar Advanced Therapy System sales and treatment session sales. Since the commission paid for system sales is not commensurate with the commission paid for treatment sessions, the Company capitalizes commission expense associated with NeuroStar Advanced Therapy System sales commissions paid that is incremental to specifically anticipated future treatment session orders. In developing this estimate, the Company considered its historical treatment session sales and customer retention rates, as well as technology development life cycles and other industry factors. These costs are periodically reviewed for impairment.

NeuroStar Advanced Therapy System commissions are deferred and amortized on a straight-line basis over a seven year period equal to the average customer term, which the Company deems to be the expected period of benefit for these costs.

On the Company’s balance sheets, the current portion of capitalized contract costs is represented by the “Current portion of prepaid commission expense”, while the long-term portion is included in “Prepaid commission expense”. Amortization expense was $0.7 million and $0.6 million for the three months ended September 30, 2024 and 2023, respectively, and $2.1 million and $1.7 million for the nine months ended September 30, 2024 and 2023, respectively.

FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS - Schedule of Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Assets
Investment, Type [Extensible Enumeration]	us-gaap:MoneyMarketFundsMember	us-gaap:MoneyMarketFundsMember
Carrying Amount
Assets
Total assets	$ 13,488	$ 27,507
Fair Value
Assets
Total assets	13,488	27,507
Quoted Prices In Active Markets (Level 1)
Assets
Total assets	$ 13,488	$ 27,507

- Definition

Indicates type of investment. Includes, but is not limited to, common stock, preferred stock, convertible security, fixed income security, government security, option purchased, warrant, loan participation and assignment, commercial paper, bankers' acceptance, certificates of deposit, short-term security, repurchase agreement, and other investment company.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480524/946-210-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480524/946-210-50-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.12-12A(Column A)(Footnote 2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 6
-Subparagraph (SX 210.12-14(Column A)(Footnote 2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.12-12(Column A)(Footnote 2)(i))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.12-12(Column C)(Footnote 5))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-12B(Column A)(Footnote 1)(a))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-3

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-12B(Column C)(Footnote 2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-3

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 6
-Subparagraph (SX 210.12-14(Column F)(Footnote 7))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-6

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 320
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.12-12A(Column C)(Footnote 4))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480032/946-320-S99-2

+ Details

SHARE-BASED COMPENSATION - Summary of Stock Option Activity (Details) - Stock options - $ / shares shares in Thousands	9 Months Ended
	Sep. 30, 2024
SHARE-BASED COMPENSATION
Number of Shares under Option, Outstanding, Beginning balance	1,270
Number of Shares under Option, Granted	0
Number of Shares under Option, Exercised	(2)
Number of Shares under Option, Forfeited and Expired	(30)
Number of Shares under Option, Outstanding, Ending balance	1,238
Number of Shares under Option, Exercisable	1,238
Number of Shares under Option, Vested and expected to vest	1,238
Weighted average Exercise Price per Option, Outstanding, Beginning balance	$ 3.90
Weighted average Exercise Price per Option, Exercised	0.96
Weighted average Exercise Price per Option, Forfeited and Expired	9.97
Weighted average Exercise Price per Option, Outstanding, Ending balance	3.75
Weighted average Exercise Price per Option, Exercisable	3.75
Weighted average Exercise Price per Option, Vested and expected to vest	$ 3.75
Weighted average Remaining Contractual Life, Outstanding	5 years 3 months 18 days
Weighted average Remaining Contractual Life, Exercisable	5 years 3 months 18 days
Weighted average Remaining Contractual Life, Vested and expected to vest	5 years 3 months 18 days

INVENTORY

9 Months Ended

Sep. 30, 2024

INVENTORY

INVENTORY

7. INVENTORY

Inventory is stated at the lower of cost and net realizable value, with cost being determined on a first in, first out basis. The Company’s inventory is primarily comprised of finished goods and work-in-process.

REVENUE AND DEFERRED REVENUE - Summary of Percentages of Deferred Revenue by Year (Details)	Sep. 30, 2024
REVENUE AND DEFERRED REVENUE
Revenue, remaining performance obligation	100.00%
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Start Date [Axis]: 2024-10-01
REVENUE AND DEFERRED REVENUE
Revenue, remaining performance obligation	43.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	9 months
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Start Date [Axis]: 2025-01-01
REVENUE AND DEFERRED REVENUE
Revenue, remaining performance obligation	54.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Start Date [Axis]: 2026-01-01
REVENUE AND DEFERRED REVENUE
Revenue, remaining performance obligation	2.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction Start Date [Axis]: 2027-01-01
REVENUE AND DEFERRED REVENUE
Revenue, remaining performance obligation	1.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year

FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2024

FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS

Schedule of carrying amounts and fair values of financial instruments

The following tables set forth the carrying amounts and fair values of the Company’s financial instruments as of September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024

Fair Value Measurement Based on

Quoted

Significant

Prices In

other

Significant

Active

Observable

Unobservable

Carrying

Markets

Inputs

Amount

Fair Value

(Level 1)

(Level 2)

(Level 3)

Assets

Money market funds (cash equivalents)

13,488

—

December 31, 2023

Fair Value Measurement Based on

Quoted

Significant

Prices In

other

Significant

Active

Observable

Unobservable

Carrying

Markets

Inputs

Amount

Fair Value

(Level 1)

(Level 2)

(Level 3)

Assets

Money market funds (cash equivalents)

27,507

—

GOVERNMENT ASSISTANCE

9 Months Ended

Sep. 30, 2024

GOVERNMENT ASSISTANCE

GOVERNMENT ASSISTANCE

20. GOVERNMENT ASSISTANCE

Employee Retention Credit

The Coronavirus Aid, Relief and Economic Security Act provided an Employee Retention Credit (the “ERC”), which was a refundable tax credit related to certain payroll taxes. The Company applied the grant model and determined that the criteria for recognition of the ERC was met during the year ended December 31, 2023 based on the Company’s determination of eligibility and filing of the ERC claim. As of September 30, 2024, the $2.9 million ERC receivable is reported within “Prepaid expenses and other current assets” on the Company’s balance sheets.

BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2024

BASIS OF PRESENTATION

BASIS OF PRESENTATION

2. BASIS OF PRESENTATION

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification and Accounting Standards Updates (“ASUs”) promulgated by the Financial Accounting Standards Board (the “FASB”).

Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared from the books and records of the Company in accordance with U.S. GAAP for interim financial information and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”), which permit reduced disclosures for interim periods. All adjustments, consisting only of normal recurring adjustments, necessary

for a fair presentation of the accompanying balance sheets and statements of operations and stockholders’ equity and cash flows have been made. Although these interim financial statements do not include all of the information and footnotes required for complete annual financial statements, management believes the disclosures are adequate to make the information presented not misleading. Unaudited interim results of operations and cash flows for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the full year. Unaudited interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 8, 2024, wherein a more complete discussion of significant accounting policies and certain other information can be found.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP and the rules and regulations of the SEC, requires the use of estimates and assumptions, based on judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience, known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Although management believes its estimates and assumptions are reasonable when made, they are based upon information available at the time they are made. Management evaluates the estimates and assumptions on an ongoing basis and, if necessary, makes adjustments. Due to the risks and uncertainties involved in the Company’s business and evolving market conditions, and given the subjective element of the estimates and assumptions made, actual results may differ materially from estimated results.

PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Depreciation and amortization expense	$ 0.5	$ 0.5	$ 1.6	$ 1.5
Prepaid expenses and other current assets
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Capitalized software cost, net	$ 4.5		$ 4.5		$ 4.2

COMMON STOCK - Summary of Perceptive Warrants Using Black-Scholes Pricing Model (Details)	Sep. 30, 2024 item Y
Estimated fair value of common stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and rights outstanding	0.0161
Exercise price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and rights outstanding	0.0192
Expected term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and rights outstanding \| Y	9.4
Risk-free interest rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and rights outstanding	0.042
Expected volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and rights outstanding	0.880

REVENUE AND DEFERRED REVENUE (Tables)

9 Months Ended

Sep. 30, 2024

Schedule of percentages of deferred revenue by year

As of September 30, 2024, the Company expects to recognize approximately the following percentages of deferred revenue by year:


	Revenue
Year:	Recognition
Remainder of 2024	43	%
2025	54	%
2026	2	%
2027	1	%
Total	100	%

Schedule of revenue generated in geographic regions for years indicated


	Revenues by Geography
	Three Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
U.S.	$	17,922	97	%	$	17,211	96	%
International		608	3	%		673	4	%
Total revenues	$	18,530	100	%	$	17,884	100	%


	Revenues by Geography
	Nine Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
U.S.	$	50,845	97	%	$	49,464	97	%
International		1,552	3	%		1,570	3	%
Total revenues	$	52,397	100	%	$	51,034	100	%

U.S.

Schedule of revenue generated in product category for years indicated


	U.S. Revenues by Product Category
	Three Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	4,108	23	%	$	3,597	21	%
Treatment sessions		13,326	74	%		13,060	76	%
Other		488	3	%		554	3	%
Total U.S. revenues	$	17,922	100	%	$	17,211	100	%


	U.S. Revenues by Product Category
	Nine Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	11,418	22	%	$	11,936	24	%
Treatment sessions		37,974	75	%		36,018	73	%
Other		1,453	3	%		1,510	3	%
Total U.S. revenues	$	50,845	100	%	$	49,464	100	%

International

Schedule of revenue generated in product category for years indicated


	International Revenues by Product Category
	Three Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	244	40	%	$	258	38	%
Treatment sessions		90	15	%		280	42	%
Other		274	45	%		135	20	%
Total international revenues	$	608	100	%	$	673	100	%


	International Revenues by Product Category
	Nine Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	502	32	%	$	573	36	%
Treatment sessions		400	26	%		589	38	%
Other		650	42	%		408	26	%
Total International revenues	$	1,552	100	%	$	1,570	100	%

ACCOUNTS RECEIVABLE - Composition of Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
ACCOUNTS RECEIVABLE
Gross accounts receivable - trade	$ 18,825	$ 16,577
Less: Allowances for credit losses	(2,000)	(795)
Accounts receivable, net	$ 16,825	$ 15,782

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

21. SUBSEQUENT EVENTS

On October 3, 2024, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market LLC (the “Staff”) notifying the Company that, for the 30 consecutive business days prior to such letter, the closing bid price for the Company’s common stock had been below the minimum $1.00 per share required for continued listing on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given until April 1, 2025 to regain compliance with the Minimum Bid Price Requirement. If at any time before April 1, 2025, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance.

If the Company does not regain compliance with the Minimum Bid Price Requirement by April 1, 2025, the Company may be afforded a second 180 calendar day period to regain compliance. To qualify, the Company would be required to transfer to The Nasdaq Capital Market and meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, except for the Minimum Bid Price Requirement. In addition, the Company would be required to notify Nasdaq of its intent to cure the deficiency during the second compliance period. Following a transfer to The Nasdaq Capital Market, the Company will be afforded a second 180 calendar day period to regain compliance, unless it does not appear to Nasdaq that it is possible for the Company to cure the deficiency. If the Company does not regain compliance with the Minimum Bid Price Requirement by the end of the compliance period (or the second compliance period, if applicable), the Company’s common stock will become subject to delisting. In the event that the Company receives notice that its common stock is being delisted, the Nasdaq listing rules permit the Company to appeal a delisting determination by the Staff to a hearings panel.

The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement, including initiating a reverse stock split. However, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq listing rules.

On November 8, 2024, Greenbrook Shareholders approved the Greenbrook Arrangement Resolution and Neuronetics Stockholders approved the Neuronetics Charter Amendment Proposal and Neuronetics Share Issuance Proposal (as such terms are defined in the Company’s Definitive Proxy Statement on Schedule 14A filed on October 4, 2024).

On November 8, 2024, the Company implemented a strategic reorganization to sharpen the Company’s focus on growth. This reorganization resulted in a workforce reduction of approximately 10% and will focus the Company’s commercial strategy on the highest growth drivers. The reorganization will also improve operational efficiency, with anticipated post-reorganization annualized cash savings of more than $3.5 million.

The Company expects to recognize approximately $0.4 million in total expenses for severance and related benefits for employees impacted by the reduction in force, consisting primarily of severance payments and related benefits. The Company may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the reduction in force.

FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2024

FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS

FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS

5. FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS

The carrying values of cash equivalents, accounts receivable, prepaids and other current assets, and accounts payable on the Company’s balance sheets approximated their fair values as of September 30, 2024 and December 31, 2023 due to their short-term nature. The carrying values of the Company’s credit facility approximated its fair value as of September 30, 2024 and December 31, 2023 due to its variable interest rate. The carrying value of the Company’s notes receivable approximated its fair value as of September 30, 2024 and December 31, 2023 due to their variable interest rates.

Certain of the Company’s financial instruments are measured at fair value using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1:

Inputs are quoted prices for identical instruments in active markets.

Level 2:

Inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3:

Inputs are unobservable and reflect the Company’s own assumptions, based on the best information available, including the Company’s own data.

The following tables set forth the carrying amounts and fair values of the Company’s financial instruments as of September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024

Fair Value Measurement Based on

Quoted

Significant

Prices In

other

Significant

Active

Observable

Unobservable

Carrying

Markets

Inputs

Amount

Fair Value

(Level 1)

(Level 2)

(Level 3)

Assets

Money market funds (cash equivalents)

13,488

—

December 31, 2023

Fair Value Measurement Based on

Quoted

Significant

Prices In

other

Significant

Active

Observable

Unobservable

Carrying

Markets

Inputs

Amount

Fair Value

(Level 1)

(Level 2)

(Level 3)

Assets

Money market funds (cash equivalents)

27,507

—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

ACCOUNTS RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2024

ACCOUNTS RECEIVABLE

Schedule of composition of accounts receivable, net

The following table presents the composition of accounts receivable, net, as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30,		December 31,
	2024		2023
Gross accounts receivable - trade	$	18,825	$	16,577
Less: Allowances for credit losses		(2,000)		(795)
Accounts receivable, net	$	16,825	$	15,782

LEASES - Schedule of Future Payments of Operating Lease Liabilities (Details) $ in Thousands	Sep. 30, 2024 USD ($)
LEASES
Remainder of 2024	$ 221
2025	898
2026	921
2027	882
2028	116
Total lease payments	3,038
Less imputed interest	(343)
Present value of operating lease liabilities	$ 2,695

COMMON STOCK - Summary of Common Stock Issued and Reserved for Issuance (Details) - shares shares in Thousands	Sep. 30, 2024	Dec. 31, 2023
COMMON STOCK
Shares of common stock issued	30,317	29,092
Shares of common stock reserved for issuance for:
Total shares of common stock issued and reserved for issuance	38,451	36,076
Common stock warrants outstanding
Shares of common stock reserved for issuance for:
Shares of common stock reserved for issuance	1,146	41
Stock options outstanding
Shares of common stock reserved for issuance for:
Shares of common stock reserved for issuance	1,238	1,270
Restricted stock units outstanding
Shares of common stock reserved for issuance for:
Shares of common stock reserved for issuance	3,274	3,360
Shares available for grant under stock incentive plans
Shares of common stock reserved for issuance for:
Shares of common stock reserved for issuance	852	978
Shares available for sale under employee stock purchase plan
Shares of common stock reserved for issuance for:
Shares of common stock reserved for issuance	1,624	1,335

COMMON STOCK

9 Months Ended

Sep. 30, 2024

COMMON STOCK

COMMON STOCK

15. COMMON STOCK

Common Stock

The following table summarizes the total number of shares of the Company’s common stock issued and reserved for issuance as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30, 2024	December 31, 2023
Shares of common stock issued	30,317	29,092
Shares of common stock reserved for issuance for:
Common stock warrants outstanding	1,146	41
Stock options outstanding	1,238	1,270
Restricted stock units outstanding	3,274	3,360
Shares available for grant under stock incentive plans	852	978
Shares available for sale under employee stock purchase plan	1,624	1,335
Total shares of common stock issued and reserved for issuance	38,451	36,076

Common Stock Warrants

During the three and nine months ended September 30, 2024, the Company issued 1,125,000 warrants as stated within “Note 14. Debt”.

The following tables summarizes the Company’s outstanding common stock warrants as of September 30, 2024, and December 31, 2023:


September 30, 2024
Warrants
Outstanding
(in thousands)	Exercise Price		Expiration Date
1,125	$	0.94	July-2034
21	$	9.73	Dec-2024
1,146


December 31, 2023
Warrants
Outstanding
(in thousands)	Exercise Price		Expiration Date
20	$	9.73	Mar-2024
21	$	9.73	Dec-2024
41

The Company valued warrants issued during the three and nine months ended September 30, 2024 using the Black-Scholes option pricing model using the following assumptions:


	2024
Estimated fair value of common stock	$	1.61
Exercise price	$	1.92
Expected term (in years)		9.4
Risk-free interest rate		4.2	%
Expected volatility		88.0	%
Dividend yield		—	%

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
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+ Details

Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2024	Dec. 31, 2023
Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000	10,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	200,000	200,000
Common stock, shares issued (in shares)	30,317	29,092
Common stock, shares outstanding (in shares)	30,317	29,092

PREPAID COMMISSION EXPENSE - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
PREPAID COMMISSION EXPENSE
Amortization period of deferred commissions			7 years
Amortization expense	$ 0.7	$ 0.6	$ 2.1	$ 1.7

Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statements of Operations
Revenues	$ 18,530	$ 17,884	$ 52,397	$ 51,034
Cost of revenues	4,529	6,120	13,129	15,100
Gross profit	14,001	11,764	39,268	35,934
Operating expenses:
Sales and marketing	11,877	12,141	35,820	35,602
General and administrative	7,436	6,339	19,540	19,151
Research and development	2,416	2,155	6,999	7,308
Total operating expenses	21,729	20,635	62,359	62,061
Loss from operations	(7,728)	(8,871)	(23,091)	(26,127)
Other (income) expense:
Interest expense	1,725	1,184	5,529	3,580
Loss on extinguishment of debt	4,427		4,427
Other income, net	(539)	(664)	(2,001)	(4,895)
Net loss	$ (13,341)	$ (9,391)	$ (31,046)	$ (24,812)
Net loss per share of common stock outstanding, basic	$ (0.44)	$ (0.33)	$ (1.04)	$ (0.87)
Net loss per share of common stock outstanding, diluted	$ (0.44)	$ (0.33)	$ (1.04)	$ (0.87)
Weighted average common shares outstanding, basic	30,267	28,876	29,931	28,505
Weighted average common shares outstanding, diluted	30,267	28,876	29,931	28,505

LEASES - Schedule of Supplemental Cash Flow Information as Lessee Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 827	$ 807

PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE (Tables)

9 Months Ended

Sep. 30, 2024

PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE

Schedule of composition of property and equipment, net

The following table presents the composition of property and equipment, net, as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30,		December 31,
	2024		2023
Laboratory equipment	$	705	$	702
Office equipment		495		495
Auto		23		23
Computer equipment and software		1,136		1,082
Manufacturing equipment		575		551
Leasehold improvements		1,463		1,436
Rental equipment		598		542
Property and equipment, gross		4,995		4,831
Less: Accumulated depreciation		(3,356)		(2,822)
Property and equipment, net	$	1,639	$	2,009

SHARE-BASED COMPENSATION - Summary of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
SHARE-BASED COMPENSATION
Total	$ 1,419	$ 1,855	$ 4,320	$ 5,693
Cost of revenues
SHARE-BASED COMPENSATION
Total	35	38	106	109
Sales and marketing
SHARE-BASED COMPENSATION
Total	380	590	1,089	1,946
General and administrative
SHARE-BASED COMPENSATION
Total	807	1,052	2,560	3,134
Research and development
SHARE-BASED COMPENSATION
Total	$ 197	$ 175	$ 565	$ 504

COMMON STOCK (Tables)

9 Months Ended

Sep. 30, 2024

COMMON STOCK

Schedule of common stock issued and reserved for issuance

The following table summarizes the total number of shares of the Company’s common stock issued and reserved for issuance as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30, 2024	December 31, 2023
Shares of common stock issued	30,317	29,092
Shares of common stock reserved for issuance for:
Common stock warrants outstanding	1,146	41
Stock options outstanding	1,238	1,270
Restricted stock units outstanding	3,274	3,360
Shares available for grant under stock incentive plans	852	978
Shares available for sale under employee stock purchase plan	1,624	1,335
Total shares of common stock issued and reserved for issuance	38,451	36,076

Schedule of outstanding warrants

The following tables summarizes the Company’s outstanding common stock warrants as of September 30, 2024, and December 31, 2023:


September 30, 2024
Warrants
Outstanding
(in thousands)	Exercise Price		Expiration Date
1,125	$	0.94	July-2034
21	$	9.73	Dec-2024
1,146


December 31, 2023
Warrants
Outstanding
(in thousands)	Exercise Price		Expiration Date
20	$	9.73	Mar-2024
21	$	9.73	Dec-2024
41

Schedule of perceptive warrants using the black-scholes pricing model

The Company valued warrants issued during the three and nine months ended September 30, 2024 using the Black-Scholes option pricing model using the following assumptions:


	2024
Estimated fair value of common stock	$	1.61
Exercise price	$	1.92
Expected term (in years)		9.4
Risk-free interest rate		4.2	%
Expected volatility		88.0	%
Dividend yield		—	%

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

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+ Details

LEASES - Schedule of Maturity Analysis of Undiscounted Lease Receivables Related to Sales-type Leases (Details) $ in Thousands	Sep. 30, 2024 USD ($)
LEASES
Remainder of 2024	$ 232
2025	402
2026	78
Total sales-type lease receivables	$ 712

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 07, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	001-38546
Entity Registrant Name	NEURONETICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	33-1051425
Entity Address, Postal Zip Code	19355
Entity Address, Address Line One	3222 Phoenixville Pike
Entity Address, City or Town	Malvern
Entity Address, State or Province	PA
City Area Code	610
Local Phone Number	640-4202
Title of 12(b) Security	Common Stock ($0.01 par value)
Trading Symbol	STIM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		30,347,504
Entity Central Index Key	0001227636
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

REVENUE AND DEFERRED REVENUE

9 Months Ended

Sep. 30, 2024

REVENUE AND DEFERRED REVENUE

REVENUE AND DEFERRED REVENUE

13. REVENUE AND DEFERRED REVENUE

Payment terms typically require payment upon shipment or installation of the NeuroStar Advanced Therapy System and additional payments as access codes for treatment sessions are delivered, which can span several years after the NeuroStar Advanced Therapy System is first delivered and installed. The timing of revenue recognition compared to billings and cash collections typically results in accounts receivable.

However, sometimes customer advances and deposits may be required for certain customers and are recorded as contract liabilities (deferred revenue). For multi-year agreements, the Company generally invoices customers annually at the beginning of each annual coverage period and recognizes revenue over the term of the coverage period.

As of September 30, 2024, the Company expects to recognize approximately the following percentages of deferred revenue by year:


	Revenue
Year:	Recognition
Remainder of 2024	43	%
2025	54	%
2026	2	%
2027	1	%
Total	100	%

Revenue recognized for the three months ended September 30, 2024 and 2023 that was included in the contract liability balance at the beginning of the year was $0.3 million and $0.4 million, respectively. Revenue recognized for the nine months ended September 30, 2024 and 2023 that was included in the contract liability balance at the beginning of the year was $1.4 million and $1.7 million, respectively, and primarily represented revenue earned from separately priced extended warranties, customer deposits, milestone revenue, and clinical training.

Customers

Significant customers are those that represent more than 10% of the Company’s total revenue. For the three months ended September 30, 2024 and 2023, one customer accounted for 13% and 15% of the Company’s revenue, respectively. For the nine months ended September 30, 2024 and 2023, one customer accounted for 14% and 17% of the Company’s revenue, respectively.

Accounts receivable outstanding related to that customer was $1.9 million as of September 30, 2024 and December 31, 2023.

Notes receivable outstanding related to that customer was $4.0 million and $5.2 million as of September 30, 2024 and December 31, 2023, respectively.

Geographical information

The following geographic data includes revenue generated from the Company’s third-party distributors. The Company’s revenue was generated in the following geographic regions and by product line for the periods indicated (in thousands):


	Revenues by Geography
	Three Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
U.S.	$	17,922	97	%	$	17,211	96	%
International		608	3	%		673	4	%
Total revenues	$	18,530	100	%	$	17,884	100	%


	U.S. Revenues by Product Category
	Three Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	4,108	23	%	$	3,597	21	%
Treatment sessions		13,326	74	%		13,060	76	%
Other		488	3	%		554	3	%
Total U.S. revenues	$	17,922	100	%	$	17,211	100	%


	International Revenues by Product Category
	Three Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	244	40	%	$	258	38	%
Treatment sessions		90	15	%		280	42	%
Other		274	45	%		135	20	%
Total international revenues	$	608	100	%	$	673	100	%


	Revenues by Geography
	Nine Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
U.S.	$	50,845	97	%	$	49,464	97	%
International		1,552	3	%		1,570	3	%
Total revenues	$	52,397	100	%	$	51,034	100	%


	U.S. Revenues by Product Category
	Nine Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	11,418	22	%	$	11,936	24	%
Treatment sessions		37,974	75	%		36,018	73	%
Other		1,453	3	%		1,510	3	%
Total U.S. revenues	$	50,845	100	%	$	49,464	100	%


	International Revenues by Product Category
	Nine Months Ended September 30,
	2024				2023
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	502	32	%	$	573	36	%
Treatment sessions		400	26	%		589	38	%
Other		650	42	%		408	26	%
Total International revenues	$	1,552	100	%	$	1,570	100	%

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//606/tableOfContent

+ Details

NOTES RECEIVABLE

9 Months Ended

Sep. 30, 2024

NOTES RECEIVABLE

NOTES RECEIVABLE

9. NOTES RECEIVABLE

Greenbrook TMS Inc.

On March 31, 2023, the Company entered into a Secured Promissory Note and Guaranty Agreement (the “Promissory Note”) with TMS Neurohealth Centers Inc. (the “Maker”) and Greenbrook TMS Inc. (“Greenbrook”) and its subsidiaries, excluding the Maker (the “Guarantors”), in the principal amount of $6.0 million for a period of four years.

Notes receivable outstanding from Greenbrook was $4.0 million and $5.2 million as of September 30, 2024 and December 31, 2023, respectively.

The Promissory Note bears interest at a rate equal to the sum of (a) the floating interest rate of daily secured overnight financing rate as administered by the Federal Reserve Bank of New York on its website (“SOFR”) plus (b) 7.65%.

Pursuant to the terms of the Promissory Note, in the event of an event of default thereunder, the Maker will be required to issue common share purchase warrants to the Company equal to (i) 200% of the unpaid amount of any delinquent amount or payment due and payable under the Promissory Note, together with all outstanding and unpaid accrued interest, fees, charges and costs, divided by (ii) the exercise price of the warrants, which will represent (i) if the Maker’s common shares are traded on the Nasdaq Stock Market (“Nasdaq”), a 20% discount to the 30-day volume-weighted average closing price of Greenbrook’s common shares traded on the Nasdaq prior to the date of issuance (subject to any limitations that may be required by Nasdaq), (ii) if the Maker’s common shares are not then traded on Nasdaq, but are traded on the Toronto Stock Exchange (“TSX”) or another nationally recognized U.S. or Canadian securities exchange, inter-dealer quotation system or over-the-counter market (an “Other Market”), a 20% discount to the 30-day volume-weighted average closing of Greenbrook’s common shares traded on the TSX or Other Market, as elected by the Company, or (iii) if the Maker’s common shares are not traded on any of the above trading markets, a 20% discount to the fair market value of a common share as determined pursuant to the Promissory Note.

Under the Promissory Note and related loan documents, the Maker and the Guarantors have granted to the Company a security interest in substantially all of the Maker’s and the Guarantors’ assets and the Guarantors have guaranteed the Maker’s obligations under the Promissory Note. The Company’s security interest pursuant to the Promissory Note and related loan documents ranks pari passu with the Maker’s senior lender, Madryn Fund Administration, LLC, and is subject to an intercreditor agreement.

Interest income recognized by the Company related to notes receivable was $0.1 million and $0.2 million for the three months ended September 30, 2024 and 2023. Interest income recognized by the Company related to notes receivable was $0.5 million and $0.4 million for the nine months ended September 30, 2024 and 2023, respectively, and is included within “Other income, net” on the statements of operations.

LOSS PER SHARE

9 Months Ended

Sep. 30, 2024

LOSS PER SHARE

LOSS PER SHARE

16. LOSS PER SHARE

The Company’s basic loss per common share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. The Company’s restricted stock awards (non-vested shares) are issued and outstanding at the time of grant but are excluded from the Company’s computation of weighted-average shares outstanding in the determination of basic loss per share until vesting occurs.

A net loss cannot be diluted, so when the Company is in a net loss position, basic and diluted loss per common share are the same. If the Company achieves profitability in the future, the denominator of a diluted earnings per common share calculation will include both the weighted average number of shares outstanding and the number of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive. Dilutive common stock equivalents potentially include warrants, stock options, non-vested restricted stock units and non-vested performance restricted stock units (“PRSUs”) using the treasury stock method, along with the effect, if any, from the potential conversion of outstanding securities, such as convertible preferred stock.

The following potentially dilutive securities outstanding as of September 30, 2024 and 2023 have been excluded from the denominator of the diluted loss per share of common stock outstanding calculation (in thousands):


	September 30,
	2024	2023
Stock options	1,238	1,271
Non-vested PRSUs	395	395
Non-vested restricted stock units	2,879	3,239
Common stock warrants	1,146	41

REVENUE AND DEFERRED REVENUE - Summary of Revenue Generated in Product Category for Years Indicated (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
REVENUE AND DEFERRED REVENUE
Revenues	$ 18,530	$ 17,884	$ 52,397	$ 51,034
Product Category \| U.S. \| Revenue
REVENUE AND DEFERRED REVENUE
Revenues	$ 17,922	$ 17,211	$ 50,845	$ 49,464
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Product Category \| U.S. \| Revenue \| NeuroStar Advanced Therapy System
REVENUE AND DEFERRED REVENUE
Revenues	$ 4,108	$ 3,597	$ 11,418	$ 11,936
Percentage of Revenues	23.00%	21.00%	22.00%	24.00%
Product Category \| U.S. \| Revenue \| Treatment Sessions
REVENUE AND DEFERRED REVENUE
Revenues	$ 13,326	$ 13,060	$ 37,974	$ 36,018
Percentage of Revenues	74.00%	76.00%	75.00%	73.00%
Product Category \| U.S. \| Revenue \| Other
REVENUE AND DEFERRED REVENUE
Revenues	$ 488	$ 554	$ 1,453	$ 1,510
Percentage of Revenues	3.00%	3.00%	3.00%	3.00%
Product Category \| International \| Revenue
REVENUE AND DEFERRED REVENUE
Revenues	$ 608	$ 673	$ 1,552	$ 1,570
Percentage of Revenues	100.00%	100.00%	100.00%	100.00%
Product Category \| International \| Revenue \| NeuroStar Advanced Therapy System
REVENUE AND DEFERRED REVENUE
Revenues	$ 244	$ 258	$ 502	$ 573
Percentage of Revenues	40.00%	38.00%	32.00%	36.00%
Product Category \| International \| Revenue \| Treatment Sessions
REVENUE AND DEFERRED REVENUE
Revenues	$ 90	$ 280	$ 400	$ 589
Percentage of Revenues	15.00%	42.00%	26.00%	38.00%
Product Category \| International \| Revenue \| Other
REVENUE AND DEFERRED REVENUE
Revenues	$ 274	$ 135	$ 650	$ 408
Percentage of Revenues	45.00%	20.00%	42.00%	26.00%

SHARE-BASED COMPENSATION - Summary of Restricted Stock Units and PRSUs Activity (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Restricted stock units
SHARE-BASED COMPENSATION
Non-vested, Beginning balance	2,965
Granted	1,593
Vested	(1,406)
Forfeited	(273)
Non-vested, Ending balance	2,879
Weighted average Grant-date Fair Value, Non-vested, Beginning balance \| $ / shares	$ 4.37
Weighted average Grant-date Fair Value, Granted \| $ / shares	3.18
Weighted average Grant-date Fair Value, Vested \| $ / shares	4.35
Weighted average Grant-date Fair Value, Forfeited \| $ / shares	4.21
Weighted average Grant-date Fair Value, Non-vested, Ending balance \| $ / shares	$ 3.74
PRSUs
SHARE-BASED COMPENSATION
Non-vested, Beginning balance	395
Granted	0
Non-vested, Ending balance	395
Weighted average Grant-date Fair Value, Non-vested, Beginning balance \| $ / shares	$ 6.77
Weighted average Grant-date Fair Value, Non-vested, Ending balance \| $ / shares	$ 6.77

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Cash flows from Operating activities:
Net loss		$ (31,046)	$ (24,812)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,627	1,503
Allowance for credit losses		1,947	369
Inventory impairment		346	1,905
Share-based compensation		4,320	5,693
Non-cash interest expense		580	460
Loss on extinguishment of debt	$ 4,427	4,427
Changes in certain assets and liabilities:
Accounts receivable, net		(3,834)	(7,933)
Inventory		2,718	(2,742)
Net investments in sales-type leases		854	1,092
Prepaid commission expense		(770)	(804)
Prepaid expenses and other assets		(374)	(3,338)
Accounts payable		(1,524)	54
Accrued expenses		(1,166)	(4,801)
Deferred revenue		(506)	(817)
Net Cash used in Operating activities		(22,401)	(34,171)	$ (32,000)
Cash flows from Investing activities:
Purchases of property and equipment and capitalized software		(1,377)	(1,490)
Repayment of notes receivable		1,340	731
Net Cash used in Investing activities		(37)	(759)
Cash flows from Financing activities:
Payments of debt issuance costs		(2,188)	(863)
Proceeds from issuance of long-term debt		48,084	2,500
Proceeds from issuance of warrants		1,916
Repayment of long-term debt		(60,000)	(1,200)
Payment for debt extinguishment cost		(4,185)
Proceeds from exercises of stock options		1
Net Cash (used in) provided by Financing activities		(16,372)	437
Net decrease in Cash and Cash equivalents		(38,810)	(34,493)
Cash and Cash equivalents, Beginning of Period		59,677	70,340	70,340
Cash and Cash equivalents, End of Period	$ 20,867	20,867	35,847	$ 59,677
Supplemental disclosure of cash flow information:
Cash paid for interest		4,948	3,120
Transfer of inventory to property and equipment		92
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment and capitalized software in accounts payable and accrued expenses		67	335
Reduction of accounts receivable in current and long-term notes receivable		$ 606	$ 6,330

LEASES - Schedule of Profit Recognized on Sales-type Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
LEASES
Profit recognized at commencement, net	$ 21	$ 13	$ 45	$ 60
Total sales-type lease income	$ 21	$ 13	$ 45	$ 60

DEBT - Summary of Composition of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Feb. 29, 2024	Jan. 31, 2024	Dec. 31, 2023
DEBT
Outstanding principal	$ 50,000	$ 60,000	$ 60,000	$ 60,000	$ 60,000
Accrued final payment fees					1,856
Less debt discounts	(3,998)				(2,573)
Total debt, net	46,002				59,283
Long-term debt, net	$ 46,002				$ 59,283

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

NOTES RECEIVABLE - Additional Information (Details) - Secured Promissory Note $ in Millions		3 Months Ended		9 Months Ended
	Mar. 31, 2023 USD ($) D	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
If Maker's Common Shares Are Not Traded On Any Stock Markets
NOTES RECEIVABLE
Discount rate	20.00%
Greenbrook TMS Inc
NOTES RECEIVABLE
Principal amount of notes receivable	$ 6.0
Term of notes receivable	4 years
Notes receivable outstanding		$ 4.0		$ 4.0		$ 5.2
Percentage of unpaid amount	200.00%
Greenbrook TMS Inc \| If Maker's Common Shares Are Traded On Nasdaq Stock Market
NOTES RECEIVABLE
Discount rate	20.00%
Number of day volume-weighted average closing price \| D	30
Greenbrook TMS Inc \| If Maker's Common Shares Are Traded On Stock Markets Other Than Nasdaq
NOTES RECEIVABLE
Discount rate	20.00%
Number of day volume-weighted average closing price \| D	30
Greenbrook TMS Inc \| Secured Overnight Financing Rate
NOTES RECEIVABLE
Interest rate (as a percent)	7.65%
Success TMS \| Other income, net
NOTES RECEIVABLE
Interest income recognized		$ 0.1	$ 0.2	$ 0.5	$ 0.4

DEBT (Tables)

9 Months Ended

Sep. 30, 2024

DEBT

Schedule of composition of debt

The following table presents the composition of debt as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30,		December 31,
	2024		2023
Outstanding principal	$	50,000	$	60,000
Accrued final payment fees		—		1,856
Less debt discounts		(3,998)		(2,573)
Total debt, net		46,002		59,283
Less current portion		—		—
Long-term debt, net	$	46,002	$	59,283

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
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+ Details

LEASES (Tables)

9 Months Ended

Sep. 30, 2024

LEASES

Schedule of supplemental cash flow information as a lessee related to leases

The following table presents the supplemental cash flow information as a lessee related to leases (in thousands):


	Nine Months Ended
	September 30, 2024		September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	827	$	807

Schedule of future payments of operating lease liabilities

The following table sets forth by year the required future payments of operating lease liabilities (in thousands):


	September 30, 2024
Remainder of 2024	$	221
2025		898
2026		921
2027		882
2028		116
Total lease payments		3,038
Less imputed interest		(343)
Present value of operating lease liabilities	$	2,695

Schedule of profit recognized on sales-type leases

The following table sets forth the profit recognized on sales-type leases (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Profit recognized at commencement, net	$	21	$	13	$	45	$	60
Interest income		—		—		—		—
Total sales-type lease income	$	21	$	13	$	45	$	60

Schedule of maturity analysis of the undiscounted lease receivables related to sales-type leases

The following table sets forth a maturity analysis of the undiscounted lease receivables related to sales-type leases (in thousands):


	September 30, 2024
Remainder of 2024	$	232
2025		402
2026		78
Total sales-type lease receivables	$	712

Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 20,867	$ 59,677
Accounts receivable, net	16,825	15,782
Inventory	4,960	8,093
Current portion of net investments in sales-type leases	572	905
Current portion of prepaid commission expense	2,921	2,514
Current portion of notes receivable	2,477	2,056
Prepaid expenses and other current assets	4,837	4,766
Total current assets	53,459	93,793
Property and equipment, net	1,639	2,009
Operating lease right-of-use assets	2,328	2,773
Net investments in sales-type leases	140	661
Prepaid commission expense	8,733	8,370
Long-term notes receivable	2,878	3,795
Other assets	4,940	4,430
Total assets	74,117	115,831
Current liabilities:
Accounts payable	3,295	4,752
Accrued expenses	11,429	12,595
Deferred revenue	1,311	1,620
Current portion of operating lease liabilities	862	845
Total current liabilities	16,897	19,812
Long-term debt, net	46,002	59,283
Deferred revenue	4	200
Operating lease liabilities	1,833	2,346
Total liabilities	64,736	81,641
Commitments and contingencies (Note 18)
Stockholders' equity:
Preferred stock, $0.01 par value: 10,000 shares authorized; no shares issued or outstanding on September 30, 2024 and December 31, 2023
Common stock, $0.01 par value: 200,000 shares authorized; 30,317 and 29,092 shares issued and outstanding on September 30, 2024 and December 31, 2023, respectively	303	291
Additional paid-in capital	416,205	409,980
Accumulated deficit	(407,127)	(376,081)
Total Stockholders' equity	9,381	34,190
Total liabilities and Stockholders' equity	$ 74,117	$ 115,831

PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE - Summary of Composition of Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Property and equipment, gross	$ 4,995	$ 4,831
Less: Accumulated depreciation	(3,356)	(2,822)
Property and equipment, net	1,639	2,009
Laboratory Equipment
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Property and equipment, gross	705	702
Office Equipment
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Property and equipment, gross	495	495
Auto
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Property and equipment, gross	23	23
Computer Equipment and Software
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Property and equipment, gross	1,136	1,082
Manufacturing Equipment
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Property and equipment, gross	575	551
Leasehold Improvements
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Property and equipment, gross	1,463	1,436
Rental Equipment
PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
Property and equipment, gross	598	542
Property and equipment, net	$ 300	$ 300

LOSS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2024

LOSS PER SHARE

Schedule of potentially dilutive securities outstanding excluded from diluted loss per share calculation


	September 30,
	2024	2023
Stock options	1,238	1,271
Non-vested PRSUs	395	395
Non-vested restricted stock units	2,879	3,239
Common stock warrants	1,146	41

SEGMENT INFORMATION - Additional Information (Details)	9 Months Ended
SEGMENT INFORMATION - Additional Information (Details)	Sep. 30, 2024 segment
SEGMENT INFORMATION
Number of operating business segment	1

LEASES - Additional Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
LEASES - Additional Information (Details) $ in Thousands	Sep. 30, 2024 USD ($) ft²	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) ft²	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)
LEASES
Lessee, finance lease, lease not yet commenced, description			The Company does not currently have any finance leases or executed leases that have not yet commenced.
Operating lease, rent expense, net	$ 200	$ 200	$ 600	$ 600
Operating lease, weighted-average remaining lease term	3 years 3 months 18 days		3 years 3 months 18 days
Operating lease, weighted-average discount rate	7.20%		7.20%
Carrying amount of lease receivables	$ 700		$ 700
Unguaranteed residual assets	0		0
Operating lease income	40	20	100	100
Property and equipment, net	$ 1,639		$ 1,639		$ 2,009
NeuroStar Advanced Therapy Systems \| Minimum
LEASES
Lessor sales-type lease, Term	3 years		3 years
NeuroStar Advanced Therapy Systems \| Maximum
LEASES
Lessor sales-type lease, Term	4 years		4 years
Headquarters and Office Equipment, Including Copiers
LEASES
Area of lease facility \| ft²	32,000		32,000
Rental Equipment
LEASES
Property and equipment, net	$ 300		$ 300		$ 300
Rental equipment depreciation expense	$ 20	$ 20	$ 70	$ 70
Charlotte, North Carolina
LEASES
Area of lease facility \| ft²	9,600		9,600

ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2024

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

6. ACCOUNTS RECEIVABLE

The following table presents the composition of accounts receivable, net, as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30,		December 31,
	2024		2023
Gross accounts receivable - trade	$	18,825	$	16,577
Less: Allowances for credit losses		(2,000)		(795)
Accounts receivable, net	$	16,825	$	15,782

ACCRUED EXPENSES - Summary of Composition of Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
ACCRUED EXPENSES
Compensation and related benefits	$ 6,769	$ 8,003
Consulting and professional fees	1,702	488
Research and development expenses	556	260
Sales and marketing expenses	397	1,760
Warranty	237	213
Sales and other taxes payable	714	818
Other	1,054	1,053
Accrued expenses	$ 11,429	$ 12,595

DEBT - Additional Information (Details) $ in Thousands					3 Months Ended		9 Months Ended
DEBT - Additional Information (Details) $ in Thousands	Jul. 25, 2024 USD ($) D tranche shares	Feb. 29, 2024 USD ($)	Jan. 31, 2024 USD ($)	Mar. 29, 2023 USD ($)	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)	Oct. 03, 2023 USD ($)	Sep. 29, 2023 USD ($)
DEBT
Interest expense					$ 1,700	$ 1,200	$ 5,500	$ 3,600
Cash interest expense					1,600	1,100	4,900	3,100
Non-cash interest expense					100	$ 100	600	$ 500
Total borrowing amount		$ 60,000	$ 60,000		50,000		50,000		$ 60,000	$ 60,000
Debt Instrument, Covenant Compliance		On January 31, 2024 and February 29, 2024, the Company was not in compliance with its minimum net product revenue covenant under the SLR Facility. The Company was granted a waiver from SLR in the SLR Sixth Amendment for the covenant violations. The amount of borrowings affected by this noncompliance was $60 million	On January 31, 2024 and February 29, 2024, the Company was not in compliance with its minimum net product revenue covenant under the SLR Facility. The Company was granted a waiver from SLR in the SLR Sixth Amendment for the covenant violations. The amount of borrowings affected by this noncompliance was $60 million
Loss on extinguishment of debt					(4,427)		$ (4,427)
$22.5 Million Credit Facility \| Term C Loan
DEBT
Line of credit facility, maximum borrowing capacity												$ 22,500
Borrowings outstanding under credit facility											$ 22,500
SLR Credit Facility
DEBT
Trailing twelve month net product revenue first threshold limit to pay exit fee				$ 100,000
Trailing twelve month net product revenue Second threshold limit to pay exit fee				$ 125,000
Solar investment corp
DEBT
Line of credit facility, maximum borrowing capacity	$ 60,000
Prepayment fees percentage				2.00%
Trailing twelve month net product revenue first threshold limit to pay exit fee				$ 100,000
Trailing twelve month net product revenue Second threshold limit to pay exit fee				$ 125,000
Percentage of exit fee for liquidation, dissolution, winding up or change of control of the Company				4.95%
Percentage of exit fee upon achievement of any trailing twelve month revenues				1.00%
Percentage of exit fee upon achievement of both trailing twelve month revenues				2.00%
Loss on extinguishment of debt					4,400
Early prepayment fees					1,200
Deferred financing expense					$ 3,200
Repayments of lines of credit	64,600
Principal repayments	60,000
Accrued interest	500
Final payment fee	3,000
Prepayment fee	1,200
Solar investment corp \| Prepaid on or Before First Anniversary of Funding
DEBT
Prepayment fees percentage				3.00%
Solar investment corp \| Prepaid After First and on or Before Second Anniversary of Funding
DEBT
Prepayment fees percentage				2.00%
Solar investment corp \| Prepaid After Second Anniversary of Funding
DEBT
Prepayment fees percentage				1.00%
Solar investment corp \| Term A Loan
DEBT
Interest rate during the period				3.95%
Solar investment corp \| Term A Loan \| Minimum
DEBT
Interest rate during the period				5.65%
Solar investment corp \| Term C Loan
DEBT
Borrowings outstanding under credit facility				$ 2,500
Total borrowing amount											$ 60,000
Perceptive credit facility
DEBT
Line of credit facility, maximum borrowing capacity	$ 90,000
Term loans number of tranches \| tranche	3
Basis spread on variable rate	7.00%
Threshold rate considered for calculating floating interest rate	4.50%
Number of warrants issued \| shares	1,462,500
Warrant exercisable \| shares					1,125,000		1,125,000
Number of days volume weighted average price prior to closing date \| D	10
Number of days volume weighted average price on specific date \| D	10
Perceptive credit facility \| Prepaid on or Before First Anniversary of Funding
DEBT
Prepayment fees percentage	6.00%
Perceptive credit facility \| Prepaid After First and on or Before Second Anniversary of Funding
DEBT
Prepayment fees percentage	5.00%
Perceptive credit facility \| Prepaid After Second Anniversary of Funding
DEBT
Prepayment fees percentage	4.00%
Perceptive credit facility \| Prepaid After the Third Anniversary of Funding
DEBT
Prepayment fees percentage	3.00%
Perceptive, Tranche One
DEBT
Borrowings outstanding under credit facility	$ 50,000
Warrant exercisable \| shares	1,125,000
Perceptive, Tranche Two
DEBT
Borrowings outstanding under credit facility	$ 15,000
Warrant exercisable \| shares	337,500
Perceptive, Tranche Three
DEBT
Borrowings outstanding under credit facility	$ 25,000

SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2024

SEGMENT INFORMATION

SEGMENT INFORMATION

19. SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company currently operates in one business segment as it is managed and operated as one business. A single management team that reports to the chief operating decision maker comprehensively manages the entire business. The Company does not operate any material separate lines of business or separate business entities with respect to its products or product development.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

SHARE-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2024

SHARE-BASED COMPENSATION

Schedule of share-based compensation expense


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of revenues	$	35	$	38	$	106		109
Sales and marketing		380		590		1,089		1,946
General and administrative		807		1,052		2,560		3,134
Research and development		197		175		565		504

Total

1,419

1,855

4,320

5,693

Schedule of stock option activity

The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2024:


				Weighted	Aggregate
	Number of	Weighted		average	average
	Shares under	average		Remaining	Intrinsic
	Option	Exercise Price		Contractual	Value
	(in thousands)	per Option		Life (in years)	(in thousands)
Outstanding at December 31, 2023	1,270	$	3.90
Granted	—	$	—
Exercised	(2)	$	0.96
Forfeited and Expired	(30)	$	9.97
Outstanding at September 30, 2024	1,238	$	3.75	5.3	$	—
Exercisable at September 30, 2024	1,238	$	3.75	5.3	$	—
Vested and expected to vest at September 30, 2024	1,238	$	3.75	5.3	$	—

Schedule of restricted stock units and performance restricted stock units activity

The following table summarizes the Company’s restricted stock unit and PRSU activity for September 30, 2024:


	Non-vested		Weighted	Non-vested		Weighted
	Restricted		average	PRSUs		average
	Stock Units		Grant-date			Grant-date
	(in thousands)		Fair Value	(in thousands)		Fair Value
Non-vested at December 31, 2023	2,965	$	4.37	395	$	6.77
Granted	1,593	$	3.18	—	$	—
Vested	(1,406)	$	4.35	—	$	—
Forfeited	(273)	$	4.21	—	$	—
Non-vested at September 30, 2024	2,879	$	3.74	395	$	6.77

DESCRIPTION OF BUSINESS (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
DESCRIPTION OF BUSINESS (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
DESCRIPTION OF BUSINESS
Cash and cash equivalents	$ 20,867		$ 59,677
Accumulated deficit	407,127		376,081
Cash flows from operating activities	22,401	$ 34,171	$ 32,000
$60.0 Million Credit Facility \| Oxford Finance LLC
DESCRIPTION OF BUSINESS
Borrowings outstanding under credit facility	$ 50,000
Credit facility maturity date	Jul. 25, 2029

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2024

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS

1. DESCRIPTION OF BUSINESS

Neuronetics, Inc. (the “Company”) is a commercial stage medical technology company focused on designing, developing and marketing products that improve the quality of life for patients who suffer from neurohealth disorders. The Company’s first commercial product, the NeuroStar Advanced Therapy System, is a non-invasive and non-systemic office-based treatment that uses transcranial magnetic stimulation (“TMS”) to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The NeuroStar Advanced Therapy System was cleared in 2008 by the United States (“U.S.”) Food and Drug Administration (the “FDA”) to treat adult patients with major depressive disorder (“MDD”) who 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 obsessive-compulsive disorder (“OCD”), and to decrease anxiety symptoms in adult patients with MDD that may exhibit comorbid anxiety symptoms (anxious depression), and as an adjunct for the treatment of MDD in adolescent patients aged 15-21. 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. The Company intends to continue to pursue development of its NeuroStar Advanced Therapy System for additional indications.

Liquidity

As of September 30, 2024, the Company had cash and cash equivalents of $20.9 million and an accumulated deficit of $407.1 million. The Company incurred negative cash flows from operating activities of $22.4 million for the nine months ended September 30, 2024 and $32.0 million for the year ended December 31, 2023. The Company has incurred operating losses since its inception, and management anticipates that its operating losses will continue in the near term as the Company continues to invest in sales, marketing and product development activities. The Company’s primary sources of capital to date have been proceeds from its initial public offering (“IPO”), private placements of its convertible preferred securities, borrowings under its credit facility, proceeds from its secondary public offering of common stock and revenues from sales of its products. On July 25, 2024, the Company entered into a Credit Agreement and Guaranty with Perceptive Credit Holdings IV, LP (“Perceptive”) as collateral agent and other lenders defined in the agreement (the “Perceptive Facility”). As of September 30, 2024, the Company had $50.0 million of borrowings outstanding under its credit 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. Our future ability to comply with these financial covenants is subject to risks, including our ability to continue to generate sufficient revenue growth and operating efficiencies to achieve cash flow breakeven. Management believes that the Company’s cash and cash equivalents as of September 30, 2024, anticipated revenues from sales of its products, and operational cash savings from the actions described in “Note 21. Subsequent Events” are sufficient to fund the Company’s operations for at least the next 12 months from the issuance of these financial statements.

LOSS PER SHARE - Schedule of Potentially Dilutive Securities Outstanding Excluded from Diluted Loss Per Share Calculation (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Stock options
LOSS PER SHARE
Potentially dilutive securities outstanding excluded from diluted loss per share	1,238	1,271
Non-vested PRSUs
LOSS PER SHARE
Potentially dilutive securities outstanding excluded from diluted loss per share	395	395
Non-vested restricted stock units
LOSS PER SHARE
Potentially dilutive securities outstanding excluded from diluted loss per share	2,879	3,239
Common stock warrants
LOSS PER SHARE
Potentially dilutive securities outstanding excluded from diluted loss per share	1,146	41

SUBSEQUENT EVENTS - Additional Information (Details) - Subsequent Event $ in Millions	Nov. 08, 2024 USD ($)
SUBSEQUENT EVENTS
Percentage of reduction in workforce by reorganization	10.00%
Cash savings on reorganization	$ 3.5
Total expenses for severance and benefits for employees	$ 0.4

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2024

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

18. COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is subject from time to time to various claims and legal actions arising during the ordinary course of its business. Management believes that there are currently no claims or legal actions that would reasonably be expected to have a material adverse effect on the Company’s results of operations, financial condition, or cash flows.

ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2024

ACCRUED EXPENSES

ACCRUED EXPENSES

12. ACCRUED EXPENSES

The following table presents the composition of accrued expenses as of September 30, 2024 and December 31, 2023 (in thousands):


	September 30,		December 31,
	2024		2023
Compensation and related benefits	$	6,769	$	8,003
Consulting and professional fees		1,702		488
Research and development expenses		556		260
Sales and marketing expenses		397		1,760
Warranty		237		213
Sales and other taxes payable		714		818
Other		1,054		1,053
Accrued expenses	$	11,429	$	12,595

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2024
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements	Interim Financial Statements The accompanying unaudited interim financial statements have been prepared from the books and records of the Company in accordance with U.S. GAAP for interim financial information and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”), which permit reduced disclosures for interim periods. All adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the accompanying balance sheets and statements of operations and stockholders’ equity and cash flows have been made. Although these interim financial statements do not include all of the information and footnotes required for complete annual financial statements, management believes the disclosures are adequate to make the information presented not misleading. Unaudited interim results of operations and cash flows for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the full year. Unaudited interim financial statements and footnotes should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 8, 2024, wherein a more complete discussion of significant accounting policies and certain other information can be found.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with U.S. GAAP and the rules and regulations of the SEC, requires the use of estimates and assumptions, based on judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience, known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Although management believes its estimates and assumptions are reasonable when made, they are based upon information available at the time they are made. Management evaluates the estimates and assumptions on an ongoing basis and, if necessary, makes adjustments. Due to the risks and uncertainties involved in the Company’s business and evolving market conditions, and given the subjective element of the estimates and assumptions made, actual results may differ materially from estimated results.

Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2022	$ 273	$ 402,679	$ (345,892)	$ 57,060
Beginning balance, shares at Dec. 31, 2022	27,268
Share-based awards and options exercises	$ 12	(12)
Share-based awards and options exercises (in shares)	1,197
Share-based compensation expense		1,805		1,805
Net loss			(10,520)	(10,520)
Ending balance at Mar. 31, 2023	$ 285	404,472	(356,412)	48,345
Ending balance, shares at Mar. 31, 2023	28,465
Beginning balance at Dec. 31, 2022	$ 273	402,679	(345,892)	57,060
Beginning balance, shares at Dec. 31, 2022	27,268
Net loss				(24,812)
Ending balance at Sep. 30, 2023	$ 289	408,356	(370,704)	37,941
Ending balance, shares at Sep. 30, 2023	28,902
Beginning balance at Mar. 31, 2023	$ 285	404,472	(356,412)	48,345
Beginning balance, shares at Mar. 31, 2023	28,465
Share-based awards and options exercises	$ 3	(3)
Share-based awards and options exercises (in shares)	348
Share-based compensation expense		2,033		2,033
Net loss			(4,901)	(4,901)
Ending balance at Jun. 30, 2023	$ 288	406,502	(361,313)	45,477
Ending balance, shares at Jun. 30, 2023	28,813
Share-based awards and options exercises	$ 1	(1)
Share-based awards and options exercises (in shares)	89
Share-based compensation expense		1,855		1,855
Net loss			(9,391)	(9,391)
Ending balance at Sep. 30, 2023	$ 289	408,356	(370,704)	37,941
Ending balance, shares at Sep. 30, 2023	28,902
Beginning balance at Dec. 31, 2023	$ 291	409,980	(376,081)	34,190
Beginning balance, shares at Dec. 31, 2023	29,092
Share-based awards and options exercises	$ 9	(9)
Share-based awards and options exercises (in shares)	883
Share-based compensation expense		1,338		1,338
Net loss			(7,873)	(7,873)
Ending balance at Mar. 31, 2024	$ 300	411,309	(383,954)	27,655
Ending balance, shares at Mar. 31, 2024	29,975
Beginning balance at Dec. 31, 2023	$ 291	409,980	(376,081)	34,190
Beginning balance, shares at Dec. 31, 2023	29,092
Net loss				(31,046)
Ending balance at Sep. 30, 2024	$ 303	416,205	(407,127)	9,381
Ending balance, shares at Sep. 30, 2024	30,317
Beginning balance at Mar. 31, 2024	$ 300	411,309	(383,954)	27,655
Beginning balance, shares at Mar. 31, 2024	29,975
Share-based awards and options exercises	$ 1	(1)
Share-based awards and options exercises (in shares)	161
Share-based compensation expense		1,563		1,563
Net loss			(9,832)	(9,832)
Ending balance at Jun. 30, 2024	$ 301	412,871	(393,786)	19,386
Ending balance, shares at Jun. 30, 2024	30,136
Share-based awards and options exercises	$ 2	(2)
Share-based awards and options exercises (in shares)	181
Issuance of warrants, net of issuance costs of $35		1,917		1,917
Share-based compensation expense		1,419		1,419
Net loss			(13,341)	(13,341)
Ending balance at Sep. 30, 2024	$ 303	$ 416,205	$ (407,127)	$ 9,381
Ending balance, shares at Sep. 30, 2024	30,317

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482765/220-10-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
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- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s complete summary of significant accounting policies can be found in “Note 3. Summary of Significant Accounting Policies” in the audited financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on March 8, 2024.

LEASES

9 Months Ended

Sep. 30, 2024

LEASES

LEASES

10. LEASES

Lessee:

The Company has operating leases for its corporate headquarters, a training facility and office equipment, including copiers. The Company leases an approximately 32,000 square foot facility in Malvern, Pennsylvania for its corporate headquarters, which includes office and warehouse space. The Company leases an approximately 9,600 square foot facility in Charlotte, North Carolina as a training facility for its NeuroStar Advanced Therapy Systems. The Company does not currently have any finance leases or executed leases that have not yet commenced.

Operating lease rent expense was $0.2 million for the three months ended September 30, 2024 and 2023, and $0.6 million for the nine months ended September 30, 2024 and 2023. As of September 30, 2024, the weighted-average remaining lease term of operating leases was 3.3 years and the weighted-average discount rate was 7.2%.

The following table presents the supplemental cash flow information as a lessee related to leases (in thousands):


	Nine Months Ended
	September 30, 2024		September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	827	$	807

The following table sets forth by year the required future payments of operating lease liabilities (in thousands):


	September 30, 2024
Remainder of 2024	$	221
2025		898
2026		921
2027		882
2028		116
Total lease payments		3,038
Less imputed interest		(343)
Present value of operating lease liabilities	$	2,695

Lessor sales-type leases:

Certain customers have purchased NeuroStar Advanced Therapy Systems on a rent-to-own basis. The lease term is three or four years with a customer option to purchase the NeuroStar Advanced Therapy System at the end of the lease or automatic transfer of ownership of the NeuroStar Advanced Therapy System at the end of the lease.

The following table sets forth the profit recognized on sales-type leases (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Profit recognized at commencement, net	$	21	$	13	$	45	$	60
Interest income		—		—		—		—
Total sales-type lease income	$	21	$	13	$	45	$	60

The following table sets forth a maturity analysis of the undiscounted lease receivables related to sales-type leases (in thousands):


	September 30, 2024
Remainder of 2024	$	232
2025		402
2026		78
Total sales-type lease receivables	$	712

As of September 30, 2024, the carrying amount of the lease receivables is $0.7 million. The Company does not have any unguaranteed residual assets.

Lessor operating leases:

NeuroStar Advanced Therapy Systems sold for which collection is not probable are accounted for as operating leases. For the three months ended September 30, 2024 and 2023, the Company recognized operating lease income of $0.04 million and $0.02 million, respectively. For the nine months ended September 30, 2024 and 2023, the Company recognized operating lease income of $0.1 million.

The Company maintained rental equipment, net, of $0.3 million as of September 30, 2024 and December 31, 2023, which are included in “Property and equipment, net” on the balance sheet. Rental equipment depreciation expense was $0.02 million for the three months ended September 30, 2024 and 2023, and $0.07 million and $0.07 million for the nine months ended September 30, 2024 and 2023, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2024

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

4. RECENT ACCOUNTING PRONOUNCEMENTS

New Accounting Standards Adopted by the Company

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public companies to disclose for each reportable segment the significant expense categories and amounts for such expenses. ASU 2023-07 is effective for annual periods beginning December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. This ASU will be effective for our annual period ended December 31, 2024. The Company believes that the adoption of ASU 2023-07 will not have a material effect on the Company’s financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public business entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. This ASU will be effective for our annual period ended December 31, 2025. The Company is currently evaluating the impacts of ASU 2023-09 on its disclosures.

Other than the items noted above, there have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact, or potential significant impact, to our unaudited interim financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details