UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended |
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ |
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer Identification No.) |
incorporation or organization) | |
(Address of principal executive offices) | (Zip Code) |
( | |
(Registrant’s telephone number, including area code) |
Not applicable.
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | | Trading | | Name on each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
There were
NEURONETICS, INC.
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
NEURONETICS, INC.
Consolidated Balance Sheets
(Unaudited; In thousands, except per share data)
June 30, | December 31, | |||||
| 2026 | | 2025 | |||
Assets |
| |
| | ||
Current assets: |
| |
| | ||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash and cash equivalents | | | ||||
Accounts receivable, net of allowance for credit losses of $ |
| |
| | ||
Inventory |
| |
| | ||
Current portion of net investments in sales-type leases |
| |
| | ||
Current portion of prepaid commission expense |
| |
| | ||
Current portion of notes receivable | | | ||||
Prepaid expenses and other current assets |
| |
| | ||
Total current assets |
| |
| | ||
Property and equipment, net |
| |
| | ||
Goodwill | | | ||||
Intangible assets, net | | | ||||
Operating lease right-of-use assets |
| |
| | ||
Net investments in sales-type leases |
| |
| | ||
Prepaid commission expense |
| |
| | ||
Long-term notes receivable | |
| | |||
Other assets |
| |
| | ||
Total assets | $ | | $ | | ||
Liabilities and Equity |
| |
| |||
Current liabilities: |
| |
| |||
Accounts payable | $ | | $ | | ||
Accrued expenses |
| |
| | ||
Current portion of deferred revenue |
| |
| | ||
Deferred and contingent consideration | | | ||||
Other payables | | | ||||
Current portion of operating lease liabilities |
| |
| | ||
Total current liabilities |
| |
| | ||
Long-term debt, net |
| |
| | ||
Other long term liabilities | | — | ||||
Deferred revenue |
| |
| | ||
Operating lease liabilities |
| |
| | ||
Total liabilities |
| |
| | ||
Commitments and contingencies (Note 18) |
| |||||
Equity: |
| |
| |||
Preferred stock, $ |
|
| ||||
Common stock, $ |
| |
| | ||
Additional paid-in capital |
| |
| | ||
Accumulated deficit |
| ( |
| ( | ||
Total Stockholders' equity |
| |
| | ||
Non-controlling interest | | | ||||
Total equity | | | ||||
Total liabilities and equity | $ | | $ | | ||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
3
NEURONETICS, INC.
Consolidated Statements of Operations
(Unaudited; In thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||
Revenues | | | | |||||||||
NeuroStar | $ | | $ | | $ | | $ | | ||||
Greenbrook | | | | | ||||||||
Total revenue | | | | | ||||||||
Cost of revenues |
|
|
|
| ||||||||
NeuroStar | | | | | ||||||||
Greenbrook | | | | | ||||||||
Total cost of revenues | | | | | ||||||||
Gross profit |
| |
| |
| |
| | ||||
Operating expenses: |
| |||||||||||
Sales and marketing |
| |
| |
| |
| | ||||
General and administrative |
| |
| |
| |
| | ||||
Research and development |
| |
| |
| |
| | ||||
Total operating expenses |
| |
| |
| |
| | ||||
Loss from operations |
| ( |
| ( |
| ( |
| ( | ||||
Other (income) expense: |
|
| |
| |
| | |||||
Interest expense |
| |
| |
| |
| | ||||
Loss on extinguishment of debt | — | — | | — | ||||||||
Other income, net |
| ( |
| ( |
| ( |
| ( | ||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Less: Net gain (loss) attributable to non-controlling interest | ( | | ( | | ||||||||
Net loss attributable to Neuronetics stockholders | $ | ( | $ | ( | ( | ( | ||||||
Net loss per share of common stock outstanding, basic and diluted attributable to Neuronetics stockholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Weighted average common shares outstanding, basic and diluted |
| |
| |
| |
| | ||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
4
NEURONETICS, INC.
Consolidated Statements of Changes in Equity
(Unaudited; In thousands)
| | | | Additional | | | | | | ||||||||
Common Stock | Paid-in | Accumulated | Noncontrolling | Total | |||||||||||||
| Shares | | Amount | | Capital | | Deficit | | Interest | | Equity | ||||||
Balance at December 31, 2024 |
| | $ | | $ | | $ | ( | $ | | $ | | |||||
Share-based awards and option exercises |
| |
| |
| ( |
| — |
| — |
| | |||||
Issuance of common stock, net of issuance costs of $ | | | | — | — | | |||||||||||
Share-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | |||||
Net loss |
| — |
| — |
| — |
| ( |
| ( |
| ( | |||||
Balance at March 31, 2025 |
| | $ | | $ | | $ | ( | $ | | $ | | |||||
Share-based awards and options exercises |
| |
| |
| ( |
| — |
| — |
| | |||||
Share-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | |||||
Net loss |
| — |
| — |
| — | ( | |
| ( | |||||||
Balance at June 30, 2025 |
| | $ | | $ | | $ | ( | $ | | $ | | |||||
Balance at December 31, 2025 |
| | $ | | $ | | $ | ( | $ | | $ | | |||||
Share-based awards and option exercises |
| |
| |
| ( |
| — |
| — |
| — | |||||
Share-based compensation expense |
| — |
| — |
| |
| — |
| — |
| | |||||
Net income (loss) |
| — |
| — |
| — |
| ( |
| |
| ( | |||||
Distribution to non-controlling interest | — | — | — | — | ( | ( | |||||||||||
Balance at March 31, 2026 |
| | $ | | $ | | $ | ( | $ | | $ | | |||||
Share-based awards and options exercises |
| |
| |
| ( |
| — |
| — |
| — | |||||
Issuance of common stock under ATM offering, net of issuance costs of $ | | | | — | — | | |||||||||||
Share-based compensation expense |
| — |
| — |
| |
| — |
|
| | ||||||
Net loss |
| — |
| — |
| — |
| ( |
| ( |
| ( | |||||
Acquisition of subsidiary non-controlling interest | — |
| — |
| — | ( | | — | |||||||||
Distribution to non-controlling interest | ( | ( | |||||||||||||||
Balance at June 30, 2026 |
| | $ | | $ | | $ | ( | $ | | $ | | |||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
5
NEURONETICS, INC.
Consolidated Statements of Cash Flows
(Unaudited; In thousands)
Six Months Ended June 30, | ||||||
2026 | 2025 | |||||
Cash flows from operating activities: | | | | | ||
Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
| |
| | ||
Depreciation and amortization |
| |
| | ||
Allowance for credit losses | ( | | ||||
Inventory impairment | — | | ||||
Share-based compensation |
| |
| | ||
Non-cash interest expense |
| |
| | ||
Loss on extinguishment of debt | | — | ||||
Loss on disposal of property and equipment | | | ||||
Changes in certain assets and liabilities: |
|
| | |||
Accounts receivable, net |
| |
| ( | ||
Inventory |
| ( |
| ( | ||
Net investments in sales-type leases |
| |
| | ||
Prepaid commission expense |
| |
| | ||
Prepaid expenses and other assets |
| ( |
| | ||
Accounts payable |
| |
| ( | ||
Accrued expenses |
| ( |
| ( | ||
Other liabilities | ( | ( | ||||
Deferred revenue |
| |
| ( | ||
Net cash used in operating activities |
| ( |
| ( | ||
Cash flows from investing activities: |
| |
| | ||
Purchases of property and equipment and capitalized software |
| ( |
| ( | ||
Proceeds from the sale of property and equipment | | — | ||||
Net cash used in investing activities |
| ( |
| ( | ||
| ||||||
Cash flows from financing activities: |
| |
| | ||
Payments of debt issuance costs |
| ( |
| — | ||
Repayment of deferred and contingent consideration | ( | — | ||||
Repayment of long-term debt | ( | — | ||||
Payment for debt extinguishment costs | ( | — | ||||
Proceeds from the issuance of common stock | — | | ||||
Payments of common stock offering issuance costs | — | ( | ||||
Proceeds from issuance of common stock under ATM Program | | — | ||||
Payments of common stock offering issuance costs under ATM Program | ( | — | ||||
Distribution to non-controlling interest | ( | — | ||||
Proceeds from exercises of stock options |
| — |
| | ||
Net cash provided by financing activities |
| |
| | ||
Net decrease in Cash, Cash equivalents and Restricted cash |
| ( |
| ( | ||
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period |
| |
| | ||
Cash and cash equivalents and restricted cash and cash equivalents, end of period | $ | | $ | | ||
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents to the consolidated balance sheet: | ||||||
Cash and cash equivalents | | | ||||
Restricted cash and cash equivalents | | | ||||
Total cash and cash equivalents and restricted cash and cash equivalents | $ | | $ | | ||
Supplemental disclosure of cash flow information: |
|
| | |||
Cash paid for interest | $ | | $ | | ||
Transfer of inventory to property and equipment | $ | | $ | | ||
Supplemental disclosure of non-cash investing and financing activities: | | |||||
Purchases of property and equipment and capitalized software in accounts payable and accrued expenses | $ | | $ | | ||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
6
1. DESCRIPTION OF BUSINESS
Neuronetics, Inc. (the “Company,” “Neuronetics,” “we,” and similar words) believes that mental health is as important as physical health. The Company’s first commercial product, the NeuroStar Advanced Therapy System (the “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 System is cleared by the 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 for adolescent patients aged 15-21 with MDD. It is also cleared by the FDA to decrease anxiety symptoms in adult patients with MDD that may exhibit comorbid anxiety symptoms (anxious depression). In addition to selling the System and associated treatment sessions to customers, the Company operates Greenbrook TMS Inc. (“Greenbrook”) treatment centers (“Treatment Centers”) across the U.S., offering TMS treatment using the Systems. The Company acquired Greenbrook, a provider of mental healthcare services, pursuant to an Arrangement Agreement effective as of December 9, 2024 (the “Arrangement”). The System is safe, clinically effective, reproducible and precise, and the Company believes it is supported by the largest clinical data set of any competing TMS system. Treatment Centers also acquire SPRAVATO® to treat adults with treatment-resistant depression or depressive symptoms in adults suffering from MDD with acute suicidal ideation or behavior.
The Company’s shares trade on the Nasdaq Global Market under the ticker “STIM.”
Liquidity and Going concern
As of June 30, 2026, the Company had cash and cash equivalents of $
On February 10, 2025, the Company completed a secondary public offering of its common stock in which the Company issued and sold
On July 3, 2025, the Company entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Canaccord Genuity LLC, pursuant to which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $
During the three and six months ended June 30, 2026, the Company sold an aggregate of
7
additional offering-related expenses of $
As of June 30, 2026, the Company had approximately $
The Company is subject to certain financial covenants under its credit facility, including a liquidity and quarterly trailing twelve-month minimum revenue covenants. On March 12, 2026, the Company amended the terms of its credit agreement to modify the required quarterly revenue covenants through December 31, 2026 and the liquidity covenants through September 30, 2027. As of June 30, 2026 the Company was in compliance with the financial covenants in this agreement.
The Company currently projects trailing twelve-month revenue for the period ended March 31, 2027 to be below the minimum required revenue for that period as stated in the credit agreement. Should the Company not be able to meet its March 31, 2027 minimum revenue covenant, the lender may at that time and at its discretion, call the credit facility. Should the lender call the facility, the Company is not projected to have the liquidity required to meet its requirement to pay off the loan. Therefore, substantial doubt exists about the Company’s ability to continue as a going concern.
Actions within the Company's control to meet its minimum revenue covenant include improvements to its revenue cycle management, introducing new treatment options at its clinic locations and pursuing new strategies within its NeuroStar business to accelerate sales growth and optimize its product mix. The Company’s ability to meet its liquidity needs, including meeting future revenue and liquidity covenants, is dependent on growth in existing and acquired product and service lines and the realization of synergies related to its acquisition of Greenbrook. However, at this time, these actions do not fully mitigate the risk related to compliance with the revenue covenant for the March 31, 2027 period. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
2. BASIS OF PRESENTATION
The accompanying consolidated 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 (“ASC”) and Accounting Standards Updates (“ASUs”) promulgated by the Financial Accounting Standards Board (the “FASB”).
Basis of Consolidation
The consolidated financial statements of the Company are presented in U.S. dollars and include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or voting interest model (“VOE”). The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. ASC Topic 810, Consolidation ("Topic 810") defines the criteria for determining the existence of VIEs and provides guidance for consolidation.
An entity is considered to be a VIE if (i) the entity does not have enough equity to finance its own activities without additional support, (ii) the entity's at-risk equity holders lack the characteristics of a controlling financial interest, or (iii) the entity is structured with non-substantive voting rights. The primary beneficiary of a VIE is the party that has the power to direct the activities that most significantly impact the performance of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to
8
the entity. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. A VIE can have only one primary beneficiary but may not have a primary beneficiary if no party meets the criteria described above.
If the Company determines it does not hold a variable interest in a VIE, the Company applies the VOE model. To the extent the entity does not meet the definition of a VIE, Topic 810 guidance for voting interest entities is applied. The usual condition for a controlling financial interest, and therefore consolidation by the Company, is ownership of a majority voting interest of a corporation or a majority of kick-out rights for a limited partnership. The Company has determined that all its subsidiaries are VOEs primarily because it holds a majority voting interest in the entities.
Interim Consolidated Financial Statements
The accompanying unaudited interim consolidated 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 consolidated balance sheets and consolidated statements of operations and stockholders’ equity and consolidated cash flows have been made. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes the disclosures are adequate to make the information presented not misleading. Unaudited interim consolidated statements of operations for the three and six months ended June 30, 2026 and interim consolidated statements of cash flows for the six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the full year. Unaudited interim consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2026, wherein a more complete discussion of significant accounting policies and certain other information can be found.
Reclassifications
Certain prior period amounts have been reclassified for comparative purposes.
Currency Risk
Currency risk is the risk to the Company’s earnings that arises from fluctuations in foreign exchange rates and the degree of volatility of those rates. The Company has minimal exposure to currency risk as substantially all of the Company’s revenue, expenses, assets and liabilities are denominated in U.S. dollars. The Company pays certain vendors and payroll costs in Canadian dollars from time to time, but due to the limited size and nature of these payments, it does not give rise to significant currency risk.
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 consolidated 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
9
conditions, and given the subjective element of the estimates and assumptions made, actual results may differ materially from estimated results.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company’s complete summary of significant accounting policies can be found in “Summary of Significant Accounting Policies” in the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2026.
4. RECENT ACCOUNTING PRONOUNCEMENTS
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. ASU 2023-09 was adopted in the annual period ended December 31, 2025 using the retrospective method. Accordingly, we have expanded our consolidated financial statement disclosures to comply with the guidance.
In November 2024, the FASB issued ASU 2024-03, Income Statements–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires enhanced disclosure of income statement expense categories to improve transparency and provide financial statement users with more detailed information about the nature, amount, and timing of expenses impacting financial performance. ASU 2024-03 is effective for the Company for the annual reporting period beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2024-03 may be adopted either on a prospective basis to financial statements issued for reporting periods after the effective date or on a retrospective basis to all periods presented. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. The guidance provides a practical expedient that an entity may assume that conditions as of the balance sheet date remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. The guidance is effective in the first quarter of 2026 with early adoption permitted, to be applied on a prospective basis. The Company adopted this guidance in the first quarter of 2026. The adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software Targeted Improvements to the Accounting for Internal-Use Software. The amendments modify the accounting for internal-use software development costs by replacing the existing project stage framework with a principles-based model for determining when capitalization of development costs should begin. The guidance is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.
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 material impact, or potential material impact, to our unaudited interim consolidated financial statements.
10
5. INTANGIBLE ASSETS
Intangible assets consist of the following as of June 30, 2026 and December 31, 2025 (in thousands):
| As of June 30, 2026 | ||||||||||||
Useful Life | Gross Value | Accumulated Amortization | Net Carrying Value | Weighted Average Remaining Useful Life | |||||||||
Management services agreements | $ | $ | ( | $ | | ||||||||
Trade name | ( | | |||||||||||
$ | $ | ( | $ | ||||||||||
| As of December 31, 2025 | ||||||||||||
Useful Life | Gross Value | Accumulated Amortization | Net Carrying Value | Weighted Average Remaining Useful Life | |||||||||
Management services agreements | $ | $ | ( | $ | | ||||||||
Trade name | ( | | |||||||||||
$ | $ | ( | $ | ||||||||||
Amortization expense for intangible assets was $
Amortization expense for intangible assets was $
Amortization expense over the remaining life of the intangible assets will be recognized as follows (in thousands):
Year | | Amortization expense | |
Remainder of 2026 | $ | ||
2027 | |||
2028 | |||
2029 | |||
2030 | |||
Thereafter | |||
$ |
6. 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 June 30, 2026 and December 31, 2025 due to their short-term nature. The carrying values of the Perceptive Facility (as defined below) approximated its fair value as of June 30, 2026 and December 31, 2025 due to its variable interest rate. The carrying value of the Company’s notes receivable approximated its fair value as of June 30, 2026 and December 31, 2025 due to its variable interest rate.
11
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 June 30, 2026 and December 31, 2025 (in thousands):
| June 30, 2026 | ||||||||||||||
Fair Value Measurement Based on | |||||||||||||||
Quoted | Significant | ||||||||||||||
Prices In | Other | Significant | |||||||||||||
Active | Observable | Unobservable | |||||||||||||
Carrying | Markets | Inputs | Inputs | ||||||||||||
| Amount | | Fair Value | | (Level 1) | | (Level 2) | | (Level 3) | ||||||
Money market funds (cash equivalents) | $ | | $ | | $ | | $ | — | $ | — | |||||
Money market funds (restricted cash and cash equivalents) | $ | | $ | | $ | | $ | — | $ | — | |||||
| December 31, 2025 | ||||||||||||||
Fair Value Measurement Based on | |||||||||||||||
Quoted | Significant | ||||||||||||||
Prices In | Other | Significant | |||||||||||||
Active | Observable | Unobservable | |||||||||||||
Carrying | Markets | Inputs | Inputs | ||||||||||||
Amount | Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||
| | | | | | | | | | ||||||
Money market funds (cash equivalents) | $ | | $ | | $ | | $ | — | $ | — | |||||
Money market funds (restricted cash and cash equivalents) | $ | $ | | $ | | $ | — | $ | — | ||||||
12
7. ACCOUNTS RECEIVABLE
The following table presents the composition of accounts receivable, net, as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, | December 31, | ||||||
| 2026 | | 2025 | ||||
Gross accounts receivable - trade | $ | | $ | | |||
Less: Allowances for credit losses |
| ( |
| ( | |||
Accounts receivable, net | $ | | $ | | |||
The following table presents a roll forward of the allowance for credit losses related to accounts receivable and notes receivable (in thousands):
Balance at | Bad Debt | Write-offs of | Balance at | |||||||
Beginning of | (Expense)/ | Uncollectible | End of | |||||||
| Period | | Reversal | | Balances | | Period | |||
Six months ended June 30, 2025 | $ | ( |
| ( |
| | $ | ( | ||
Six months ended June 30, 2026 | $ | ( |
| |
| | $ | ( | ||
8. 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.
9. PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE
The following table presents the composition of property and equipment, net, as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, | December 31, | ||||||
| 2026 | | 2025 | ||||
Laboratory equipment | $ | | $ | | |||
Office equipment |
| |
| | |||
Auto | — | | |||||
Computer equipment and software |
| |
| | |||
Manufacturing equipment |
| |
| | |||
Clinical equipment | | | |||||
Leasehold improvements |
| |
| | |||
TMS devices | | | |||||
Rental equipment |
| |
| | |||
Property and equipment, gross |
| |
| | |||
Less: Accumulated depreciation |
| ( |
| ( | |||
Property and equipment, net | $ | | $ | | |||
As of June 30, 2026 and December 31, 2025, the Company had capitalized software costs, net, of $
13
The Company disposed of $
Depreciation and amortization expense related to property and equipment and capitalized software costs was $
10. LEASES
Lessee:
The Company has operating leases for its corporate headquarters, Treatment Centers, a training facility, and office equipment. The corporate headquarters is located in Malvern, Pennsylvania, where the Company leases an approximately
In 2025, the Company executed a lease modification for its Malvern, Pennsylvania facility, extending the lease term through .
The Company leases an approximately
The Company has lease agreements related to its Treatment Centers. These lease agreements range from month-to-month to six years in length.
Operating lease rent expense was $
The following table presents the supplemental cash flow information as a lessee related to leases (in thousands):
| Six Months Ended | ||||||
June 30, 2026 | | June 30, 2025 | |||||
Cash paid for amounts included in the measurement of lease liabilities: |
| |
| | |||
Operating cash flows from operating leases | $ | | $ | | |||
14
The following table sets forth by year the required future payments of operating lease liabilities as of June 30, 2026 (in thousands):
| ||||
Amount | ||||
Remainder of 2026 | $ | | ||
2027 | | |||
2028 |
| | ||
2029 |
| | ||
2030 | | |||
Thereafter |
| | ||
Total lease payments |
| | ||
Less imputed interest |
| ( | ||
Present value of operating lease liabilities | $ | | ||
Lessor sales-type leases:
Certain customers have purchased the Systems on a rent-to-own basis. The lease term is to
The following table sets forth a maturity analysis of the undiscounted lease receivables related to sales-type leases (in thousands):
| June 30, 2026 | |||
Remainder of 2026 | $ | | ||
2027 | | |||
Total sales-type lease receivables | $ | | ||
As of June 30, 2026 and December 31, 2025 the carrying amount of the lease receivables was $
Lessor operating leases:
The Systems leased to customers subsequent to January 1, 2019 for which collection is not probable are accounted for as operating leases. For the three months ended June 30, 2026 and 2025, the Company recognized operating lease income of $
The Company maintained rental equipment, net, of $
11. PREPAID COMMISSION EXPENSE
The Company pays a commission on both System sales and treatment session sales. Since the commission paid for the System sales is not commensurate with the commission paid for treatment sessions, the Company capitalizes commission expense associated with the System commissions paid that is incremental to specifically anticipated future treatment session orders. In developing this estimate, the Company
15
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.
The System commissions are deferred and amortized on a straight-line basis over a
On the Company’s consolidated balance sheets, the current portion of capitalized contract costs is presented in current portion of prepaid commission expense, while the long-term portion is included in prepaid commission expense. Amortization expense was $
12. ACCRUED EXPENSES
The following table presents the composition of accrued expenses as of June 30, 2026 and December 31, 2025 (in thousands):
| June 30, | | December 31, | |||
2026 | 2025 | |||||
Compensation and related benefits | $ | | $ | | ||
Consulting and professional fees |
| |
| | ||
Research and development expenses |
| |
| | ||
Sales and marketing expenses | | | ||||
Warranty |
| |
| | ||
Sales and other taxes payable |
| |
| | ||
Other |
| |
| | ||
Accrued expenses | $ | | $ | | ||
13. REVENUE AND DEFERRED REVENUE
Contract terms typically require payment upon shipment or installation of the System and additional payments as access codes for treatment sessions are delivered, which can span several years after the 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. Deferred revenue also includes amounts received in advance of the Company completing performance obligations in relation to the research collaboration agreement with Compass Pathways on COMP360 psilocybin for treatment resistant depression.
As of June 30, 2026, the Company expects to recognize approximately the following percentages of deferred revenue by year:
| | Revenue |
|
Year: | Recognition |
| |
| % | ||
| | % | |
| — | % | |
| | % | |
Total |
| | % |
Revenue recognized during both the three months ended June 30, 2026 and 2025 that was included in the contract liability balance at the beginning of the year was $
16
was $
Geographical information
Revenues generated to customers outside of the United States were $
14. DEBT
The following table presents the composition of debt as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, | December 31, | ||||||
| 2026 | | 2025 | ||||
Outstanding principal | $ | | $ | | |||
Less debt discounts |
| ( |
| ( | |||
Total debt, net |
| |
| | |||
Less current portion |
| — |
| — | |||
Long-term debt, net | $ | | $ | | |||
For the three months ended June 30, 2026, the Company recognized interest expense of $
For the six months ended June 30, 2026, the Company recognized interest expense of $
Perceptive Credit Facility
On July 25, 2024, the Company entered into a Credit Agreement and Guaranty with Perceptive Credit Holding IV, LP (“Perceptive”) as collateral agent and other lenders defined in the agreement (the “Perceptive Facility”) which was used to partially repay the Company’s previous $
17
The Perceptive Facility permits the Company to borrow up to an aggregate amount of $
Each of the Tranche 1 Loan, the Tranche 2 Loan and the 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
If the Company prepays Tranche 1 Loan, the Tranche 2 Loan, or the Tranche 3 Loan prior to the maturity date, the Company will also be required to pay prepayment fees to Perceptive equal to
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 March 2025 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 events related to the Employee Retirement Income Security Act of 1974; (ix) failure by the Company to be registered with the SEC in good standing; or (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
Effective as of December 9, 2024, the Company amended the Perceptive Facility and borrowed against the Tranche 3 Loan in a principal amount of $
18
included in the Arrangement. As consideration for Tranche 3 Loan borrowing, the Company issued warrants to purchase
The Company calculated the issuance date fair value of the warrants using the Black-Scholes option pricing model, which resulted in a fair value of $
On March 26, 2025, the Company entered into Amendment No. 2 to Credit Agreement and Guaranty by and between the Company, as the borrower, and Perceptive, in its capacities as administrative agent for the lenders and the majority lender, in which the parties agreed to revise the net revenue covenant to align with the Company’s pre-existing operating plan for the first quarter of 2025.
On August 1, 2025, the Company entered into Amendment No. 3 to Credit Agreement and Guaranty (the “Perceptive Third Amendment”). Pursuant to the Perceptive Third Amendment, the Company borrowed $
On January 15, 2026, the Company entered into Amendment No. 4 to Credit Agreement and Guaranty (the “Perceptive Fourth Amendment”). The Perceptive Fourth Amendment amended the Perceptive Facility to modify the requirements of subsidiaries joining as an obligor and subsidiary guarantor thereunder.
On March 12, 2026, the Company entered into Amendment No. 5 to the Credit Agreement and Guaranty (the “Perceptive Fifth Amendment”). Under the Perceptive Fifth Amendment, Neuronetics made a one-time principal payment of $
As of June 30, 2026, the Company had $
The Company was in compliance with the covenants under the Perceptive Facility as of June 30, 2026.
15. COMMON STOCK
Common Stock Offering
On July 3, 2025, the Company entered into the Distribution Agreement, pursuant to which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $
During the three and six months ended June 30, 2026, the Company sold an aggregate of
19
As of June 30, 2026, the Company had approximately $
Common Stock
The following table summarizes the total number of shares of the Company’s common stock issued and reserved for issuance as of June 30, 2026 and December 31, 2025 (in thousands):
| June 30, 2026 | | December 31, 2025 | ||
Shares of common stock issued |
| |
| | |
Shares of common stock reserved for issuance for: |
| |
| | |
Common stock warrants outstanding |
| |
| | |
Stock options outstanding |
| |
| | |
Restricted stock units outstanding |
| |
| | |
Shares available for grant under stock incentive plans |
| |
| | |
Shares available for sale under employee stock purchase plan |
| |
| | |
Total shares of common stock issued and reserved for issuance |
| |
| |
Common Stock Warrants
The following table summarizes the Company’s outstanding common stock warrants as of June 30, 2026 and December 31, 2025:
Warrants | | | | | |
Outstanding | |||||
(in thousands) | Exercise Price | Expiration Date | |||
| $ | | |||
| $ | | |||
| $ | | |||
|
| |
| | |
There have been
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, in the future, the Company achieves profitability, 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 awards 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.
20
The following potentially dilutive securities outstanding as of June 30, 2026 and 2025 have been excluded from the denominator of the diluted loss per share of common stock outstanding calculation (in thousands):
June 30, | |||||
| 2026 | | 2025 | ||
Stock options | | | |||
Non-vested PRSUs |
| |
| | |
Non-vested restricted stock units |
| |
| | |
Common stock warrants |
| |
| | |
17. SHARE-BASED COMPENSATION
The amount of share-based compensation expense recognized by the Company by location in its consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 is as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2026 | | 2025 | | 2026 | | 2025 | |||||||
Cost of revenues | $ | | $ | | $ | | | ||||||
Sales and marketing |
| |
| |
| | | ||||||
General and administrative |
| |
| |
| | | ||||||
Research and development |
| |
| |
| | | ||||||
Total | $ | | $ | | $ | | $ | | |||||
2026 Equity Incentive Plan
On May 28, 2026 (the “Stockholder Approval Date”), the Company’s stockholders approved the 2026 Equity Incentive Plan (the “2026 Plan”), which was previously approved by the Company’s Board of Directors (the “Board”) on March 18, 2026, and which provides for the issuance of the number of shares of common stock that were available for issuance under the 2018 Plan as of the Stockholder Approval Date. The number of shares available for issuance under the 2026 Plan may be increased annually at the discretion of the Board from January 1, 2027 through January 1, 2036, by an amount equal to
2018 Equity Incentive Plan
In June 2018, the Board adopted, and the Company’s stockholders approved, the 2018 Equity Incentive Plan (the “2018 Plan”), which authorized the issuance of up to
21
2020 Inducement Incentive Plan
In December 2020, the Board adopted the 2020 Inducement Incentive Plan (the “2020 Inducement Plan”), which authorized the issuance of up to
Stock Options
The following table summarizes the Company’s stock option activity for the six months ended June 30, 2026:
| | | | | 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, 2025 |
| | $ | |
|
| ||||
Granted |
| — | $ | — |
| |
| | ||
Exercised |
| — | $ | — |
|
| | |||
Forfeited and Expired |
| ( | $ | |
| |
| | ||
Outstanding at June 30, 2026 |
| | $ | |
|
| $ | — | ||
Exercisable at June 30, 2026 |
| | $ | |
|
| $ | — | ||
Vested and expected to vest at June 30, 2026 |
| | $ | |
|
| $ | — | ||
The Company did not recognize any share-based compensation expense related to stock options for the three and six months ended June 30, 2026 and 2025. As of June 30, 2026, there was
Restricted Stock Units and PRSUs
The following table summarizes the Company’s restricted stock unit and PRSU activity for June 30, 2026:
| 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, 2025 | | $ | |
| | $ | | |||
Granted |
| | $ | |
| — | $ | — | ||
Vested |
| ( | $ | |
| — | $ | — | ||
Forfeited |
| ( | $ | |
| ( | $ | | ||
Non-vested at June 30, 2026 |
| | $ | |
| | $ | |
The Company recognized $
22
value at the vesting date of restricted stock units and PRSUs vested during the six months ended June 30, 2026 was $
The Company has granted PRSUs to certain key employees of the Company, with vesting subject to the recipient’s continued service with the Company through the applicable vesting date and the achievement of certain performance conditions as outlined in the award document. For legacy Greenbrook employees who became Neuronetics employees in connection with the Arrangement, the awards are subject to the terms of the 2020 Inducement Plan. For legacy Neuronetics employees, the awards are subject to the 2018 Plan.
The Company offers the Board the opportunity to defer restricted stock units into an equity-based deferred equity compensation plan known as the restricted stock unit deferral election plan (the “RSUDEP”). The Company offered certain employees the opportunity to defer into the RSUDEP restricted stock units with grant dates in 2024 and 2025, and discontinued employee eligibility beginning with restricted stock units with grant dates in 2026.
Benefits from these plans are payable in shares of Neuronetics stock and the awards under these plans are unfunded to the plans’ participants. Restricted stock units deferred under the RSUDEP are counted against the total shares available for future issuance under the 2018 Plan. As of June 30, 2026, there were
The Company did
18. COMMITMENTS AND CONTINGENCIES
Executive Employment Agreements
The Company has entered into an employment agreement and offer letters with certain key executives, providing for compensation and severance in certain circumstances, as defined in the agreements.
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.
Other Matters
We are subject to various audits from government agencies including Medicaid and Medicare which involve the potential recoupment of reimbursements received from these agencies. These audits occur in the ordinary course of business. As of June 30, 2026 the Company had $
19. SEGMENT INFORMATION
The Company reports the results of its operations as
The determination of its reporting segments was made based on its strategic priorities, which corresponds to the way the Company’s chief operating decision maker (“CODM”) reviews and evaluates operating performance to make decisions about resources to be allocated. For our operating segments, the CODM
23
uses segment gross profit and segment loss before unallocated general and administrative as the primary measure of segment performance because it reflects results that are directly attributable to each reportable segment and is the measure most consistent with the Company’s consolidated results prepared in accordance with U.S. GAAP. The CODM does not regularly review any other measures of segment profit or loss for purposes of assessing segment performance or allocating resources.
On a monthly basis, the CODM considers month-to-month and budget-to-actual variances for both measures when allocating resources to segments. The accounting policies of its segment are the same as those described in the summary of significant accounting policies. The CODM is regularly provided information on total consolidated assets and liquidity; however, the CODM is not provided asset information at the reportable segment level. Accordingly, segment assets have not been disclosed.
Significant segment expenses regularly reviewed by the CODM for both segments include directly attributable cost of revenues, selling, general and administrative and research and development expenses. Unallocated general and administrative costs include corporate support functions such as executive management, corporate accounting, information technology, legal, human resources and Board fees. Additionally, unallocated general and administrative costs may include expenses such as litigation and merger and acquisition related costs, which are not specific to a segment and thus not allocated to the reportable segments.
Segment information for prior periods has been recast to conform to the current year reportable segment structure. There were no intercompany transactions between the Company’s reportable segments during the periods presented. Reportable segment information is presented below (in thousands):
Three months ended June 30, 2026 | NeuroStar | Greenbrook | Total | ||||||
Revenue | $ | | $ | | $ | | |||
Cost of revenues | | | | ||||||
Segment gross profit | $ | | $ | | $ | | |||
Significant Segment Expense | |||||||||
Selling, General and Administrative | |||||||||
Direct | $ | | $ | | $ | | |||
Research and development | |||||||||
Direct | | | | ||||||
Segment profit/(loss) | $ | | $ | | $ | | |||
Unallocated expenses | |||||||||
General and Administrative | $ | | |||||||
Other income, net | ( | ||||||||
Interest expense | | ||||||||
Net loss | $ | ( | |||||||
24
Three months ended June 30, 2025 | NeuroStar | Greenbrook | Total | ||||||
Revenue | $ | | $ | | $ | | |||
Cost of revenues | | | | ||||||
Segment gross profit | $ | | $ | | $ | | |||
Significant Segment Expense | |||||||||
Selling, General and Administrative | |||||||||
Direct | $ | | $ | | $ | | |||
Research and development | |||||||||
Direct | | | | ||||||
Segment profit/(loss) | $ | | $ | ( | $ | ( | |||
Unallocated expenses | |||||||||
General and Administrative | $ | | |||||||
Other income, net | ( | ||||||||
Interest expense | | ||||||||
Net loss | $ | ( | |||||||
Six months ended June 30, 2026 | NeuroStar | Greenbrook | Total | ||||||
Revenue | $ | | $ | | $ | | |||
Cost of revenues | | | | ||||||
Segment gross profit | $ | | $ | | $ | | |||
Significant Segment Expense | |||||||||
Selling, General and Administrative | |||||||||
Direct | $ | | $ | | $ | | |||
Research and development | |||||||||
Direct | | | | ||||||
Segment profit/(loss) | $ | | $ | | $ | | |||
Unallocated expenses | |||||||||
General and Administrative | $ | | |||||||
Other income, net | ( | ||||||||
Loss on extinguishment of debt | | ||||||||
Interest expense | | ||||||||
Net loss | $ | ( |
25
Six months ended June 30, 2025 | NeuroStar | Greenbrook | Total | ||||||
Revenue | $ | | $ | | $ | | |||
Cost of revenues | | | | ||||||
Segment gross profit | $ | | $ | | $ | | |||
Significant Segment Expense | |||||||||
Selling, General and Administrative | |||||||||
Direct | $ | | $ | | $ | | |||
Research and development | |||||||||
Direct | | | | ||||||
Segment profit/(loss) | $ | | $ | ( | $ | ( | |||
Unallocated expenses | |||||||||
General and Administrative | $ | | |||||||
Other income, net | ( | ||||||||
Interest expense | | ||||||||
Net loss | $ | ( |
20. NONCONTROLLING INTEREST
The Company has operating agreements with several non-wholly owned entities. The non-controlling interest percentages range from
21. GOVERNMENT ASSISTANCE
Employee Retention Credit
The Coronavirus Aid, Relief and Economic Security Act provided an employee retention credit (the “ERC”), 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 were met based on its eligibility assessment and filing of the ERC claim.
During the six months ended June 30, 2025, Neuronetics received $
During the six months ended June 30, 2026, Greenbrook received $
26
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations, as well as other sections in this Quarterly Report on Form 10-Q, should be read in conjunction with our unaudited interim consolidated financial statements and related notes thereto included elsewhere herein. In addition to historical financial information, some of the information contained in the following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts, including statements regarding our future results of operations and financial position, business strategy, current and prospective products, product approvals, research and development costs, current and prospective collaborations, timing and likelihood of success, plans and objectives of management for future operations and future results of current and anticipated products, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “would,” “should,” “expect,” “plan,” “design,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “outlook” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 17, 2026. These risks and uncertainties include, without limitation, risks and uncertainties related to: the effect of the transaction with Greenbrook on our business relationships; operating results and business generally; our ability to execute our business strategy; our ability to achieve or sustain profitable operations due to our history of losses; our reliance on the sale and usage of the System to generate revenues; the scale and efficacy of our salesforce; our ability to retain talent; availability of coverage and reimbursement from third-party payors for treatments using our products; physician and patient demand for treatments using our products; developments in respect of competing technologies and therapies for the indications that our products treat; product defects; our ability to obtain and maintain intellectual property protection for our technology; developments in clinical trials or regulatory review of the System for additional indications; developments in regulation in the U.S. and other applicable jurisdictions; potential effects of evolving and/or extensive government regulation; the terms of our credit facility; and our self-sustainability;existing cash balances; our ability to achieve positive cash flows; and our ability to continue as a going concern. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. The Company cautions investors not to place undue reliance on these forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for us to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q as a result of any new information, future events or changed circumstances or otherwise.
Overview
We believe that mental health is as important as physical health. The Company’s first commercial product, the System, is a non-invasive and non-systemic office-based treatment that uses 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 System is cleared by the FDA to treat adult patients with 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 OCD and for adolescent patients aged 15-21 with MDD. It is
27
also cleared by the FDA to decrease anxiety symptoms in adult patients with MDD that may exhibit comorbid anxiety symptoms (anxious depression). In addition to selling the System and associated treatment sessions to customers, the Company operates Greenbrook Treatment Centers across the U.S., offering TMS therapy using the Systems. The Company acquired Greenbrook, a provider of mental healthcare services, pursuant to the Arrangement. The System is safe, clinically effective, reproducible and precise, and the Company believes it is supported by the largest clinical data set of any competing TMS system. Treatment Centers also acquire SPRAVATO® to treat adults with treatment-resistant depression or depressive symptoms in adults suffering from MDD with acute suicidal ideation or behavior.
Effective as of December 9, 2024, Neuronetics and Greenbrook completed the Arrangement. Each share of Greenbrook common stock outstanding immediately prior to the effective time of the Arrangement was exchanged for shares of Neuronetics common stock at a specified exchange ratio upon closing of the Arrangement. We continue to operate as Neuronetics, Inc., and the Company’s shares trade on the NASDAQ Global Market under the ticker “STIM.”
We designed the System as a non-invasive therapeutic alternative to treat patients who suffer from MDD and to address many of the key limitations of existing treatment options. Additionally, through our acquisition of Greenbrook, we now derive revenue directly from our Treatment Centers, by providing TMS therapy and SPRAVATO® for MDD and other mental health disorders. We derive the majority of our revenues from Greenbrook revenue,treatment session sales, and sales of the System.
We currently operate in two segments: NeuroStar, formerly known as medical device and Greenbrook, formerly known as clinic services. We generate revenues from clinic operations, initial capital sales of our systems, sales of our recurring treatment sessions, service and repair, clinic collaboration services and extended warranty contracts.
For the three months ended June 30, 2026, our Greenbrook revenue and our NeuroStar revenue represented 65% and 35% of our revenues, respectively. For the six months ended June 30, 2026, Greenbrook revenue and our NeuroStar revenue represented 64%and 36% of our revenues, respectively.
Greenbrook revenue consists of revenue attributable to the performance of treatments to patients in the U.S. In circumstances where the net patient fees have not yet been received, the amount of revenue recognized is estimated based on an expected value approach. Due to the nature of the industry and complexity of our Greenbrook revenue arrangements, where price lists are subject to the discretion of payors, variable consideration exists that may result in price concessions and constraints to the transaction price for the services rendered.
Greenbrook revenue reimbursements are derived from third-party payors including federal and state agencies (under the federal healthcare programs), managed care health plans and commercial insurance companies.
We currently sell the System and recurring treatment sessions in the U.S. through our sales and customer support team. Our sales force targets an estimated 53,000 psychiatrists across 26,000 practices. We expect to continue to expand our direct sales and customer support team to further penetrate the market by demonstrating the benefits of the System to providers and their patients. Some of our customers have purchased or may purchase more than one of the Systems. Based on our commercial data, we believe many providers can recoup their initial capital investment in a System by providing a standard course of treatment to approximately 12 patients. We believe psychiatrists can generate approximately $9,000 of average revenue per patient for a standard course of treatment, which may provide meaningful incremental income to their practices. We serve a diverse customer base. In the U.S., providers are reimbursed by federal healthcare programs, as well as the vast majority of commercial payors, for treatment sessions utilizing our System.
Our research and development efforts are primarily focused on hardware and software product developments and enhancements of the System and clinical development relating to additional indications. We outsource the manufacture of components of the Systems that are produced to our specifications, and individual
28
components are either shipped directly from our third-party contract manufacturers to our customers or consolidated into pallets at our Malvern, Pennsylvania facility prior to shipment. Final installation of these systems occurs at the customer site.
Total revenues increased by $3.5 million, or 9%, from $38.1 million for the three months ended June 30, 2025 to $41.6 million for the three months ended June 30, 2026 and increased by $5.9 million, or 8%, from $70.1 million for the six months ended June 30, 2025 to $76.0 million for the six months ended June 30, 2026. The increase was primarily attributable to an increase in Greenbrook revenue. We incurred net losses of $3.5 million and $14.2 million for the three and six months ended June 30, 2026, respectively compared to net losses of $9.8 million and $22.5 million for three and six months ended June 30, 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $473.2 million.
Global Economic Conditions
We are continuing to closely monitor macroeconomic impacts, including but not limited to developments affecting financial institutions, supply chains, unemployment rates, investment values, consumer confidence, inflationary and potential recessionary pressures, on our business, results of operations and financial results, which could adversely affect us.
Components of Our Results of Operations
Revenues
We have generated revenues primarily from the sale of the Systems and related sales and rentals of the System, clinic revenue and the recurring revenues from our sale of treatment sessions in the U.S.
Greenbrook Revenues. Greenbrook revenue, formerly known as service or clinic revenue, consisting of TMS services, SPRAVATO® sales and other mental wellness services is determined based on net patient fees, which includes estimates for contractual allowances and discounts. Net patient fees are estimated using an expected value approach where management considers such variables as the average of previous net patient fees received by the applicable payor and fees received by other patients for similar services and the Company’s best estimate leveraging industry knowledge and expectations of third-party payors’ fee schedules. We expect clinic revenue to increase in 2026.
NeuroStar Revenues. NeuroStar revenue, formerly known as products and other revenue, consists of System revenues,treatment session revenues, and other revenues.
System Revenues. System revenues consist primarily of sales or rentals of a capital component, including equipment upgrades to the initial sale of the System. The Systems can be purchased outright or on a sales type lease basis by certain customers. Additionally, Systems may be sold as unlocked Systems, which do not require the customer to purchase treatment sessions for the life of the System.
Treatment Session Revenues. Treatment session revenues primarily include sales of treatment sessions and SenStar treatment links. The treatment sessions are access codes that are delivered electronically in the U.S. The SenStar treatment links are disposable units containing single-use access codes that are sold and used outside the U.S. Access codes are purchased separately by our customers, primarily on an as-needed basis, and are required by the System in order to deliver treatment sessions.
Other Revenues. Other revenues are derived primarily from service and repair, research collaboration agreements and extended warranty contracts with our existing customers.
Refer to the section titled “Critical Accounting Policies and Use of Estimates—Revenue Recognition” in our Annual Report on Form 10-K filed with the SEC on March 17, 2026. Also, refer to “Summary of Significant Accounting Policies” in Notes to Interim Consolidated Financial Statements located in Part I – FINANCIAL INFORMATION, Item 1. Financial Statements.
29
Cost of Revenues and Gross Margin
Cost of revenues consists of the costs of components and products purchased from our third-party contract manufacturers of the Systems. We use third-party contract manufacturing partners to produce the components for and assemble the Systems. Cost of revenues also includes costs related to personnel, warranty, shipping, amortization of capitalized software and our operations and field service departments. Our clinic costs primarily include direct center and patient care/treatment costs, regional employee compensation and depreciation. We expect our cost of revenues to increase mainly for Greenbrook, as our product mix changes.
Our gross profit is calculated by subtracting our cost of revenues from our revenues. We calculate our gross margin as our gross profit divided by our revenues. Our gross margin has been and will continue to be affected by a variety of factors, primarily product sales mix, pricing and third-party contract manufacturing costs. Our gross margins on revenues from sales of the Systems and Greenbrook revenue are lower than our gross margins on revenues from sales of treatment sessions and sale of unlocked systems. As a result, the sales mix between the Systems, Greenbrook revenues and treatment sessions can affect the gross margin in any reporting period.
Sales and Marketing Expenses
Sales and marketing expenses consist of commercial activities related to the sale of the Systems and clinic services and personnel costs including salaries and related benefits, sales commissions and share-based compensation for employees focused on these efforts. Other significant sales and marketing costs include conferences and trade shows, promotional and marketing activities, including direct and online marketing and practice support programs.
We anticipate that our sales and marketing expenses will decrease in 2026 relative to 2025 as a result of the cost efficiencies realized post-acquisition across the sales and marketing divisions.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel expenses, including salaries and related benefits, share-based compensation and travel expenses, for employees in executive, finance, clinic support, information technology, legal and human resource functions. General and administrative expenses also include insurance, outside legal fees, accounting and other consulting services, audit fees from our independent registered public accounting firm, Board fees and other administrative costs, such as corporate facility costs, including rent, utilities, depreciation and maintenance not otherwise included in cost of revenues.
We anticipate that our general and administrative expenses will decrease during 2026 compared to 2025 expenses.
Research and Development Expenses
Research and development expenses consist primarily of personnel expenses, including salaries and related benefits and share-based compensation for employees in clinical development, product development, regulatory and quality assurance functions, as well as expenses associated with outsourced professional scientific development services and costs of investigative sites and consultants that conduct our preclinical and clinical development programs. We typically use our employee, consultant and infrastructure resources across our research and development programs.
We expect our research and development expenses to decrease during 2026 compared to 2025 expenses.
30
Interest Expense
Interest expense consists of cash interest payable under our credit facility and the amortization of deferred financing costs related to our indebtedness.
Other Income, Net
Other income, net, consists primarily of interest income earned on our money market account balances and notes receivable and ERC payments.
Loss on extinguishment of debt
Loss on debt extinguishment consists of prepayment penalties and impairment of deferred financing costs associated with the extinguishment of debt, as well as fees incurred with third parties in connection with debt extinguishment.
Results of Operations
Comparison of the three months ended June 30, 2026 and 2025
Three Months Ended |
| |||||||||||
June 30, | Increase / (Decrease) | |||||||||||
| 2026 | | 2025 | | Dollars | | Percentage |
| ||||
(in thousands, except percentages) |
| |||||||||||
Revenues | $ | 41,568 | $ | 38,108 | $ | 3,460 |
| 9 | % | |||
Cost of revenues |
| 20,345 |
| 20,350 |
| (5) |
| (0) | % | |||
Gross Profit |
| 21,223 |
| 17,758 |
| 3,465 |
| 20 | % | |||
Gross Margin |
| 51.1 | % |
| 46.6 | % |
|
| | |||
| ||||||||||||
Operating expenses: |
| |
| |
|
| | |||||
Sales and marketing |
| 9,984 |
| 11,868 |
| (1,884) |
| (16) | % | |||
General and administrative |
| 11,404 |
| 12,150 |
| (746) |
| (6) | % | |||
Research and development |
| 1,336 |
| 1,798 |
| (462) |
| (26) | % | |||
Total operating expenses |
| 22,724 |
| 25,816 |
| (3,092) | (12) | % | ||||
Loss from Operations |
| (1,501) | (8,058) |
| 6,557 |
| 81 | % | ||||
Other (income) expense: |
|
| |
|
| | ||||||
Interest expense |
| 2,125 |
| 1,969 |
| 156 |
| 8 | % | |||
Other income, net |
| (162) |
| (188) |
| 26 |
| (14) | % | |||
Net Loss | $ | (3,464) | $ | (9,839) | $ | 6,375 |
| 65 | % | |||
Revenues by Segment |
| ||||||||||
Three Months Ended June 30, |
| ||||||||||
2026 | 2025 |
| |||||||||
% of | % of |
| |||||||||
| Amount | | Revenues | | Amount | | Revenues |
| |||
(in thousands, except percentages) |
| ||||||||||
NeuroStar revenue | $ | 14,677 | 35 | % | $ | 15,084 | 40 | % | |||
Greenbrook revenue |
| 26,891 |
| 65 | % |
| 23,024 |
| 60 | % | |
Total revenues | $ | 41,568 |
| 100 | % | $ | 38,108 |
| 100 | % | |
31
Revenues
Total revenue for the three months ended June 30, 2026 was $41.6 million, an increase of $3.5 million, or 9%, compared to the three months ended June 30, 2025 revenue of $38.1 million.
The increase in revenue was primarily driven by higher Greenbrook revenue, which increased $3.9 million, or 17%, to $26.9 million in the second quarter of 2026 from $23.0 million in the second quarter of 2025, reflecting continued contributions from clinics acquired in connection with the Greenbrook transaction and improved revenue cycle management within our Greenbrook segment. The growth was partially offset by a decline in NeuroStar revenue, which decreased $0.4 million to $14.7 million for the three months ended June 30, 2026 from $15.1 million for the three months ended June 30, 2025.
Cost of Revenues and Gross Margin
Cost of revenues remained relatively consistent at $20.3 million for the three months ended June 30, 2026, compared to $20.4 million for the three months ended June 30, 2025. Gross margin increased from 46.6% for the three months ended June 30, 2025 to 51.1% for the three months ended June 30, 2026. The increase in gross margin was primarily due to sales of unlocked capital systems, which carry a higher average selling price, as well as improved revenue cycle management within the Greenbrook clinics.
Sales and Marketing Expenses
Sales and marketing expenses decreased by $1.9 million, or 16.0%, from $11.9 million for the three months ended June 30, 2025 to $10.0 million for the three months ended June 30, 2026. The decrease was primarily driven by lower personnel costs and reduced marketing program spend.
General and Administrative Expenses
General and administrative expenses decreased by $0.8 million, or 6%, from $12.2 million for the three months ended June 30, 2025 to $11.4 million for the three months ended June 30, 2026. The decrease was due to a decrease in stock based expense within the general and administrative function.
Research and Development Expenses
Research and development expenses decreased by $0.5 million, or 26%, from $1.8 million for the three months ended June 30, 2025 to $1.3 million for the three months ended June 30, 2026. The decrease in research and development was driven by personnel expense.
Interest Expense
Interest expense increased by $0.1 million, or 8%, from $2.0 million for the three months ended June 30, 2025 to $2.1 million for the three months ended June 30, 2026, primarily due to a higher outstanding debt balance.
Other Income, Net
Other income, net decreased by $0.03 million, or 14%, primarily due to lower interest income earned on the Company's money market accounts and notes receivable.
32
Comparison of the six months ended June 30, 2026 and 2025
Six Months Ended |
| ||||||||||||
June 30, | Increase / (Decrease) | ||||||||||||
| 2026 | | 2025 | | Dollars | | Percentage |
| |||||
(in thousands, except percentages) |
| ||||||||||||
Revenues | $ | 76,022 | $ | 70,083 | $ | 5,939 |
| 8 | % | ||||
Cost of revenues |
| 38,645 |
| 36,587 |
| 2,058 |
| 6 | % | ||||
Gross Profit |
| 37,377 |
| 33,496 |
| 3,881 |
| 12 | % | ||||
Gross Margin |
| 49.2 | % |
| 47.8 | % |
|
| | ||||
| |||||||||||||
Operating expenses: |
| |
| |
|
| | ||||||
Sales and marketing |
| 20,721 |
| 23,867 |
| (3,146) |
| (13) | % | ||||
General and administrative |
| 24,452 |
| 25,287 |
| (835) |
| (3) | % | ||||
Research and development |
| 2,700 |
| 3,414 |
| (714) |
| (21) | % | ||||
Total operating expenses |
| 47,873 |
| 52,568 |
| (4,695) |
| (9) | % | ||||
Loss from Operations |
| (10,496) |
| (19,072) |
| 8,576 |
| 45 | % | ||||
Other (income) expense: |
| |
| |
|
| | ||||||
Interest expense |
| 4,391 |
| 3,891 |
| 500 |
| 13 | % | ||||
Loss on extinguishment of debt |
| 539 |
| — |
| 539 |
| 100 | % | ||||
Other income, net |
| (1,182) |
| (435) |
| (747) |
| (172) | % | ||||
Net loss | $ | (14,244) | $ | (22,528) | $ | 8,284 |
| 37 | % | ||||
Revenues by Segment |
| |||||||||||
Six Months Ended June 30, |
| |||||||||||
2026 | 2025 |
| ||||||||||
% of | % of |
| ||||||||||
| Amount | | Revenues | | Amount | | Revenues |
| ||||
(in thousands, except percentages) |
| |||||||||||
NeuroStar revenue | $ | 27,602 | 36 | % | $ | 28,400 | 41 | % | ||||
Greenbrook revenue |
| 48,420 |
| 64 | % |
| 41,683 |
| 59 | % | ||
Total revenues | $ | 76,022 |
| 100 | % | $ | 70,083 |
| 100 | % | ||
Revenues
Total revenue for the six months ended June 30, 2026 was $76.0 million, an increase of 8% compared to the six months ended June 30, 2025 revenue of $70.1 million.
The increase in revenue was primarily driven by higher Greenbrook revenue, which increased $6.7 million, or 16%, to $48.4 million for the six months ended June 30, 2026 from $41.7 million for the six months ended June 30, 2025. The increase in Greenbrook revenue was primarily attributable to contributions from clinics acquired in connection with the Greenbrook transaction, as well as continued growth in clinic operations and improved revenue cycle management within the Greenbrook segment. This growth was partially offset by a decrease in NeuroStar revenue, which declined $0.8 million, or 3%, to $27.6 million for the six months ended June 30, 2026 from $28.4 million for the six months ended June 30, 2025. Greenbrook revenue represented 64% of total revenue for the six months ended June 30, 2026 compared to 59% for the six months ended June 30, 2025, while NeuroStar revenue represented 36% of total revenue compared to 41% in the prior-year period.
Cost of Revenues and Gross Margin
Cost of revenues increased by $2.0 million, or 6%, from $36.6 million for the six months ended June 30, 2025 to $38.6 million for the six months ended June 30, 2026. Gross margin increased from 47.8% for the six months ended June 30, 2025 to 49.2% for the six months ended June 30, 2026. The increase in gross margin
33
was primarily due to sales of unlocked capital systems, which carry a higher average selling price, as well as improved revenue cycle management within the Greenbrook clinics.
Sales and Marketing Expenses
Sales and marketing expenses decreased by $3.2 million, or 13%, from $23.9 million for the six months ended June 30, 2025 to $20.7 million for the six months ended June 30, 2026. The decrease was primarily driven by lower personnel costs, reduced marketing program spend, and a favorable bad debt adjustment related to the current expected credit loss reserve.
General and Administrative Expenses
General and administrative expenses decreased by $0.8 million, or 3%, from $25.3 million for the six months ended June 30, 2025 to $24.5 million for the six months ended June 30, 2026. The decrease was due to a decrease in stock based expense within the general and administrative function.
Research and Development Expenses
Research and development expenses decreased by $0.7 million, or 21%, from $3.4 million for the six months ended June 30, 2025 to $2.7 million for the six months ended June 30, 2026. The decrease in research and development was primarily driven by lower personnel expense.
Interest Expense
Interest expense increased by $0.5 million, or 13%, from $3.9 million for the six months ended June 30, 2025 to $4.4 million for the six months ended June 30, 2026, primarily due to a higher outstanding debt balance.
Loss on extinguishment of debt
Loss on extinguishment of debt amounting to $0.5 million was recorded during the six months ended June 30, 2026, related to the Perceptive Facility. This included $0.3 million of early prepayment fees and $0.2 million of deferred financing expense related to extinguishment of debt.
Other Income, Net
Other income, net increased by $0.8 million, or 172%, from $0.4 million for the six months ended June 30, 2025 to $1.2 million for the six months ended June 30, 2026, primarily due to higher interest income earned on the Company's money market accounts, notes receivable and ERC payments.
Liquidity and Capital Resources
Overview
As of June 30, 2026, we had cash and cash equivalents of $19.2 million and an accumulated deficit of $473.2 million, compared to cash and cash equivalents of $28.1 million and an accumulated deficit of $458.8 million as of December 31, 2025. We incurred negative cash flows from operating activities of $10.4 million and $20.5 million for the six months ended June 30, 2026 and 2025, respectively. 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 and marketing and product development activities. The Company’s primary sources of capital to date have been from its initial public offering, borrowings under its credit facility, proceeds from its secondary public offerings of common stock (including, without limitation, the ATM Program), and revenues from Greenbrook and NeuroStar. As of June 30, 2026, the Company had $65.0 million of borrowings outstanding under the Perceptive Facility, which has a final maturity on July 25, 2029. The Perceptive Facility is subject to certain financial covenants including a minimum net revenue covenant that escalates over the term of the Perceptive Facility and a minimum liquidity covenant.
34
If our cash and cash equivalents and anticipated revenues from Greenbrook and NeuroStar are insufficient to satisfy our liquidity requirements, we may seek to sell additional common or preferred equity or debt securities or enter into a new credit facility or another form of third-party funding or seek other debt financing. If we raise additional funds by issuing equity or equity-linked securities, our stockholders would experience dilution and any new equity securities could have rights, preferences and privileges superior to those of holders of our common stock. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. We cannot be assured that additional equity, equity-linked or debt financing will be available on terms favorable to us or our stockholders, or at all. It is also possible that we may allocate significant amounts of capital towards products or technologies for which market demand is lower than expected and, as a result, abandon such efforts. If we are unable to maintain our current financing or obtain adequate additional financing when we require it, or if we obtain financing on terms which are not favorable to us, or if we expend capital on products or technologies that are unsuccessful, our ability to continue to support our business growth and to respond to business challenges could be significantly limited, or we may be required to delay the development, commercialization and marketing of our products.
The Company is subject to certain financial covenants under its credit facility, including a liquidity and quarterly trailing twelve-month minimum revenue covenants. On March 12, 2026, the Company amended the terms of its credit agreement to modify the required quarterly revenue covenants through December 31, 2026 and the liquidity covenants through September 30, 2027. As of June 30, 2026 the Company was in compliance with the financial covenants in accordance with this agreement. The Company currently projects trailing twelve-month revenue for the period ended March 31, 2027 to be below the minimum required revenue for that period as stated in the credit facility agreement. Should the Company not be able to meet its March 31, 2027 minimum revenue covenant, the lender may at that time and at its discretion, call the credit facility. Should the lender call the facility, the Company is not projected to have the liquidity required to meet its requirement to pay off the loan. Therefore, substantial doubt exists about the Company’s ability to continue as a going concern.
Actions within the Company's control to meet its minimum revenue covenant include improvements to its revenue cycle management to increase collections, introducing new treatment options at its clinic locations and pursuing new strategies within its NeuroStar business to accelerate sales growth and optimize its product mix. The Company’s ability to meet its liquidity needs, including meeting future revenue and liquidity covenants, is dependent on growth in existing and acquired product and service lines and the realization of synergies related to its acquisition of Greenbrook. However, at this time, these actions do not fully mitigate the risk related to compliance with the revenue covenant for the March 31, 2027 period. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our current and future funding requirements will depend on many factors, including:
| ● | our ability to achieve revenue growth and improve operating margins; |
| ● | compliance with the terms and conditions, including covenants, set forth in our credit facility; |
| ● | the cost of expanding our operations and offerings, including our sales and marketing efforts; |
| ● | our ability to improve or maintain coverage and reimbursement arrangements with domestic third-party and government payors; |
| ● | our rate of progress in establishing coverage and reimbursement arrangements from international commercial third-party and government payors; |
| ● | our rate of progress in, and cost of the sales and marketing activities associated with, establishing adoption of our products and maintaining or improving our sales to our current customers; |
| ● | the cost of research and development activities, including research and development relating to additional indications of neurohealth disorders; |
35
| ● | the effect of competing technological and market developments; |
| ● | efficiency of our Greenbrook operations; and |
| ● | the potential cost of and delays in product development as a result of any regulatory oversight applicable to our products. |
As of June 30, 2026, there were no significant changes to our material cash requirements as set forth in our Annual Report on Form 10-K filed with the SEC on March 17, 2026.
Cash Flows
The following table sets forth a summary of our cash flows for the six months ended June 30, 2026 and 2025:
Six Months Ended June 30, | |||||||
| 2026 | | 2025 | ||||
(in thousands) | |||||||
Net Cash used in Operating activities | $ | (10,429) | $ | (20,497) | |||
Net Cash used in Investing activities |
| (589) |
| (471) | |||
Net Cash provided by Financing activities |
| 1,831 |
| 18,978 | |||
Net decrease in Cash, Cash equivalents and Restricted cash | $ | (9,187) | $ | (1,990) | |||
Net Cash used in Operating Activities
Net cash used in operating activities for the six months ended June 30, 2026 was $10.4 million, consisting primarily of a net loss of $14.2 million and an unfavorable change in net operating assets and liabilities of $1.3 million, partially offset by non-cash charges of $5.1 million primarily consisting of depreciation and amortization, loss on disposal of property and equipment, non-cash interest expense, share-based compensation and loss on extinguishment of debt. The increase in net operating assets was primarily due to decreases in accrued expenses, an increase inventory, partially offset by a decrease in accounts receivable and prepaid commission.
Net cash used in operating activities for the six months ended June 30, 2025 was $20.5 million, consisting primarily of a net loss of $22.5 million and an increase in net operating assets of $3.7 million, offset by non-cash charges of $5.7 million primarily consisting of depreciation and amortization and share-based compensation. The increase in net operating assets was primarily due to increases in accounts receivable, and decreases in accounts payable, accrued expenses, prepaid expenses and other assets and prepaid commission expense.
Net Cash used in Investing Activities
Net cash used in investing activities for the six months ended June 30, 2026 was $0.6 million, which was primarily due to purchases of property and equipment and capitalized software costs, partially offset by proceeds from the sale of property and equipment.
Net cash used in investing activities for the six months ended June 30, 2025 was $0.5 million, which was attributable to purchases of property and equipment and capitalized software costs.
Net Cash provided by Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2026 was $1.8 million. This primarily reflected proceeds of $8.0 million from the issuance of common stock under the ATM Program. These inflows were partially offset by the repayment of $5.0 million of long-term debt, repayment of deferred and contingent consideration of $0.3 million, payment of debt extinguishment costs of $0.3 million, payments
36
of common stock offering issuance costs under the ATM Program of $0.4 million, debt issuance costs of $0.1 million, and distributions to non-controlling interest holders of $0.2 million.
Net cash provided by financing activities for the six months ended June 30, 2025 was $19.0 million and primarily consisted of net proceeds from our secondary public offering.
Indebtedness
For information regarding the Perceptive Facility, refer to “Debt” in Notes to Interim Consolidated Financial Statements located in Part I – FINANCIAL INFORMATION, Item 1. Financial Statements.
Recent Accounting Pronouncements
Refer to “Summary of Significant Accounting Policies” and “Recent Accounting Pronouncements” in Notes to Interim Consolidated Financial Statements located in Part I – FINANCIAL INFORMATION, Item 1. Financial Statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Refer to the information described in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” section of the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2026. There have been no material changes to our market risk described therein.
We are continuing to closely monitor macroeconomic impacts, including but not limited to tariffs, developments affecting financial institutions, supply chains, unemployment rates, investment values, consumer confidence, inflationary and potential recessionary pressures, on our business, results of operations and financial results, which could adversely affect us. Although we do not believe inflation or tariffs have had a material impact on our financial condition, results of operations or cash flows to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain and increase our gross margin or decrease our operating expenses as a percentage of our revenues if the selling prices of our products do not increase as much or more than our costs increase.
37
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management, with the participation of our principal executive officer and principal financial and accounting officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our principal executive officer and our principal financial and accounting officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2026.
Changes in Internal Control over Financial Reporting
For the quarter ended June 30, 2026, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
38
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
We are subject from time to time to various claims and legal actions arising during the ordinary course of our business. We believe that there are currently no claims or legal actions that would reasonably be expected to have a material adverse effect on our results of operations, financial condition, or cash flows.
Item 1A. Risk Factors.
You should carefully consider the information described in the “Risk Factors” section of the Company’s Annual Report on Form 10 K filed with the SEC on March 17, 2026 and the Company’s Quarterly Report on form 10-Q filed with the SEC on May 5, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Not applicable.
39
Item 6. Exhibits.
The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q. Where so indicated, exhibits that were previously filed are incorporated by reference. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated.
40
Exhibit | | Description | ||||
10.1 | ||||||
10.2◊ | ||||||
10.3◊ | ||||||
10.4 | ||||||
10.5 | ||||||
10.6◊ | ||||||
10.7 | ||||||
10.8 | ||||||
10.9* | ||||||
10.10 | ||||||
10.11 | ||||||
23.1 | ||||||
31.1* | ||||||
31.2* | ||||||
32.1** | ||||||
32.2** | ||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL document. | |||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||
41
104 | Cover Page Interactive Data File (Formatted as Inline XBRL and contained Exhibit 101). | |||||
* | Filed herewith. |
◊ | Certain portions of this exhibit have been omitted to preserve the confidentiality of such information. The Company will furnish copies of any such information to the SEC or its staff upon request. |
** | This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C Section 1350 and is not being filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing of the registrant under the Securities Act or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |
42
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NEURONETICS, INC. | ||
(Registrant) | |||
Date: August 11, 2026 | By: | /s/ Daniel L. Reuvers | |
Name: | Daniel L. Reuvers | ||
Title: | President and Chief Executive Officer | ||
(Principal Executive Officer) | |||
Date: August 11, 2026 | By: | /s/ Francis X. Brown III | |
Name: | Francis X. Brown III | ||
Title: | Interim Principal Financial and Accounting Officer | ||
(Principal Financial and Accounting Officer) | |||
43
Neuronetics, Inc.
2026 Equity Incentive Plan
Adopted by the Board of Directors: March 18, 2026
Approved by the Stockholders: May 28, 2026
2
3
In addition, the Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1st of the year following the year in which the Stockholder Approval Date occurs and ending on (and including) January 1, 2036, in
4
an amount equal to 4% of the total number of shares of Capital Stock outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence.
For clarity, the Share Reserve in this Section 3(a) is a limitation on the number of shares of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by Nasdaq Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.
5
Each Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical; provided, however, that each Award Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:
6
7
8
9
10
11
12
13
14
15
16
17
The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants. The Board may take different actions with respect to the vested and unvested portions of a Stock Award.
The Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier of (i) the date the Plan is adopted by the Board (the “Board Adoption Date”), or (ii) the date the Plan is approved by the Stockholders. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
The Plan will be effective on the Stockholder Approval Date. No Stock Award will be exercised (or, in the case of a Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, or Other Stock Award, no Stock Award will be granted) and no Performance Cash Award will be settled until the Stockholder Approval Date.
The law of the State of Delaware will govern all questions concerning the construction, validity and interpretation of the Plan, without regard to that state’s conflict of laws rules.
18
19
Notwithstanding the foregoing definition or any other provision of the Plan, the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company and the definition of Change in Control (or
20
any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.
21
22
23
24
25
26
27
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Dan Reuvers, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Neuronetics, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report, any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 11, 2026 | By: | /s/ Dan Reuvers |
| Name: | Dan Reuvers |
| Title: | President and Chief Executive Officer |
| | (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Francis X. Brown III, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Neuronetics, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report, any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 11, 2026 | By: | /s/ Francis X. Brown III |
| Name: | Francis X. Brown III |
| Title: | Interim Principal Financial and Accounting Officer |
| | (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of Neuronetics, Inc. (the “Company”) for the fiscal quarter ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: August 11, 2026 | By: | /s/ Dan Reuvers |
| Name: | Dan Reuvers |
| Title: | President and Chief Executive Officer |
| | (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report on Form 10-Q of Neuronetics, Inc. (the “Company”) for the fiscal quarter ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: August 11, 2026 | By: | /s/ Francis X. Brown III |
| Name: | Francis X. Brown III |
| Title: | Interim Principal Financial and Accounting Officer |
| | (Principal Financial and Accounting Officer) |