STIM 10-K & 10-Q changes, risk factors and insider trading

We have incurred net losses since inception, including net losses of $43.7$39.1 million and $30.2$43.7 million for the years ended December 31, 20242025 and 2023,2024, respectively. As a result of ongoing losses, as of December 31, 2024,2025, we had an accumulated deficit of $419.8$458.8 million. We expect to continue to incur significant integration, sales and marketing, product development, regulatory and other expenses as we continue to expand our marketing efforts to increase adoption of our products and services and expand existing relationships with our customers, to obtain regulatory clearances or approvals for our products in additional countries and for additional indications, integrate the Greenbrook business, and to develop new products or add new features to our existing products. The net losses we incur may fluctuate significantly from quarter to quarter. We will need to generate significant additional revenues to achieve and sustain profitability, and even if we achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.

We rely, in part, on the sale of our NeuroStar Advanced Therapy System and treatment sessions to generate revenues, and we expect to generate a substantial portion of our revenues in the foreseeable future from sales of these and any related products and services. Because the market for TMS therapy is still developing and contains a limited number of market participants, sales of our products could be negatively impacted by unfavorable market reactions to our or other TMS devices. If the use of our or other TMS therapies results in serious adverse events, or such products malfunction or are misused, patients and psychiatristsproviders may attribute such negative events to TMS therapy generally, which may adversely affect market adoption of our products.products and services. Additionally, if patients undergoing treatment with a NeuroStar Advanced Therapy System perceive the benefits to be inadequate or adverse events too numerous or severe compared to the relevant rates of alternative TMS therapies or pharmaceutical options, it will be difficult to demonstrate the value of our NeuroStar Advanced Therapy System to patients and psychiatrists.providers. As a result, demand for and the use of our NeuroStar Advanced Therapy System may decline or may not increase at the pace or to the levels we expect.

Our operations and interactions with healthcare systems, providers and patients expose us to risks associated with public health crises, including epidemics and pandemics. The global impact of COVID-19, or otherA global pandemic including corresponding preventative and precautionary measures that we and other businesses, communities and governments may take to mitigate the spread of such disease, may lead to restrictions on, disruptions in, and other related impacts on business and personal activities, which may adversely impact our business and liquidity.

If insurance coverage is unavailable or reimbursement from third-party payors for treatments using our products or services significantly declines, psychiatristsproviders may be reluctant to use our products or services and our revenues, earnings and cash flows at our Treatment Centers would be substantially reduced.

In the United States, sales of our products and services will depend, in part, on the extent to which the treatment sessions using our products and services are covered and reimbursed by third-party payors, including private insurers and government healthcare programs. Even if a third-party payor covers a particular treatment that uses our products, the resulting reimbursement rate may not be adequate to cover a provider’s cost to purchase our products and services or ensure such purchase is profitable for the provider. Further, patients who are treated in-office for a medical condition generally rely on third-party payors to reimburse all or part of the costs associated with the treatment and may be unwilling to undergo such treatment in the absence of coverage and adequate reimbursement, or due to large annual deductibles associated with certain health insurance plans.

Reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that a treatment is neither experimental nor investigational, safe, effective, medically reasonable and necessary (which may include provision of treatment only in the absence of certain alternatives), appropriate for the specific patient, cost-effective, supported by peer-reviewed medical journals and/or included in clinical practice guidelines.

In the United States, there is no uniform policy of coverage and reimbursement among third-party payors. Third-party payors often rely upon Medicare coverage policies and payment limitations in setting their own reimbursement policies, but also have their own methods and approval process apart from Medicare coverage and reimbursement determinations. Therefore, coverage, reimbursement and utilization guidelines for treatments may differ significantly from payor to payor. Decisions regarding the extent of coverage and amount of reimbursement to be provided for an in-office treatment isare made on a plan-by-plan basis. One payor’s determination to provide coverage for a specific treatment does not assureensure that other payors will also provide coverage, and adequate reimbursement.

In addition, the federal government and state legislatures have continued to implement cost containment programs, including price controls and restrictions on coverage and reimbursement. To contain costs, governmental healthcare programs and third-party payors are increasingly challenging the price, scrutinizing the medical necessity and reviewing the cost-effectiveness of medical treatments. Temporary subsidies available in conjunction with the purchase of certain private health insurance have expired and may not be revived. Eligibility for Medicaid has recently been subject to additional restrictions. Reductions in the availability or attainment of health insurance, overall, may impact the number of individuals seeking treatment.

The marketability of our products and services may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future.

If we are unable to adequately train psychiatrists and other treatment providers on the safe and appropriate use of our products,products and services, we may be unable to achieve our expected growth.

There is a learning process involved for treatment providers to become proficient in the use of our products,products and services, which requires us to spend considerable time and resources for training. It is critical to the success of our commercialization efforts to train a sufficient number of psychiatristsproviders and to provide them with adequate, ongoing instruction and training in the use of our products.products and services. This training process generally requires psychiatristsproviders to review and study product materials, engage in multi-day, hands-on training sessions for up to four hours per day and participate in a multi-day observational period prior to treating patients independently. This training process may also take longer than expected or be more complicated than the psychiatristsproviders or their personnel are comfortable with and may therefore affect our ability to increase sales. Convincing psychiatristsproviders to dedicate the time and energy necessary for adequate training is challenging, and we may not be successful in these efforts.

In addition, customers may not derive sufficient cash flow from using the NeuroStar Advanced Therapy Systems due to their own practice economics or otherwise. Failure to achieve economic benefits from the purchase or use of the NeuroStar Advanced Therapy System would adversely affect our customers’ purchase of treatment sessions. These factors could also reduce the number of procedures performed using our NeuroStar Advanced Therapy System, and if we do not facilitate the utilization of our products and services by our customers, our revenues and results of operations could be harmed.

In order to generate repeat and referral business, patients must be satisfied with the effectiveness of our NeuroStar Advanced Therapy System. Clinical studies demonstrate that, in order to be effective, our products must be used for a period of four to six weeks, and require a patient to return to a psychiatrist’sproviders’s office five days a week during that period in order to receive the recommended course of treatment. Since patients who achieve response or remission using our therapy will obtain these results gradually over this treatment period, their perception of their results may vary depending on their compliance with the prescribed treatment course.

We train our customers and our Treatment Centers to select the appropriate patient candidates for treatment using the NeuroStar Advanced Therapy System, explain to their patients the time-period over which the results from a treatment course can be expected to occur, and measure the success of treatments using medical guidelines. However, our customers and Treatment Centers may not select appropriate patient candidates for NeuroStar Advanced Therapy System treatment, which may produce results that may not meet patients’ expectations. In addition, the efficacy of treatment is dependent on proper patient set up at the initial treatment session and duplication of that set up at future treatment sessions. To the extent customers do not make the proper measurements for a specific patient or use the same procedures at each treatment session, it could result in variability of the treatment efficacy and results for the patient. If patients are not satisfied with the results of our NeuroStar Advanced Therapy System, our reputation and future sales will suffer.

Our currently marketed products and services are, and any future products and services we develop and commercialize will be, subject to intense competition. The industry in which we operate is subject to rapid change and is highly sensitive to the introduction of new products and services or other market activities of current or new industry participants. Our ability to compete successfully will depend on our ability to develop products and services that reach the market in a timely manner, to receive adequate coverage and reimbursement from third-party payors, and to successfully demonstrate to psychiatristsproviders and patients the merits of our products and services compared to those of our competitors. If we are not successful in convincing others of the merits of our products,products and services, including in comparison to those of our competitors, or educating them on the use of our products,products and services, they may not use our products and services or use them effectively and we may be unable to increase our sales.

We have competitors that sell other forms of TMS therapy, including Brainsway, Magstim, MagVenture, CloudTMS and Nexstim, that compete directly with the NeuroStar Advanced Therapy System. Competing TMS therapy companies have developed and may develop additional treatments that can be administered for shorter time periods or for indications outside of MDD, or may develop treatments that have improved efficacy when compared to our products and services or that require a less significant investment of resources from psychiatrists.providers. We also face competition from pharmaceutical and other companies that develop competitive products, such as antidepressant medications. Our commercial opportunity could be reduced or eliminated if these competitors develop and commercialize antidepressant medications or other treatments that are safer, more convenient or more effective than the NeuroStar Advanced Therapy System. At any time, these and other potential market entrants may develop treatment alternatives that may render our products and services uncompetitive.

In addition, our competitors may have more established distribution networks than we do, or may be acquired by enterprises that have more established distribution networks than we do. Our competitors may also develop and patent processes or products earlier than we can or obtain domestic or international regulatory clearances or approvals for competing products more rapidly than we can, which could impair our ability to develop and commercialize similar products. We also compete with our competitors in acquiring technologies and technology licenses complementary to our products and services or advantageous to our business. In addition, we compete with our competitors to engage the services of independent distributors outside the United States, both those presently working with us and those with whom we hope to work as we expand.

If we are unable to adequately address our customers’ needs, it could negatively impact sales and market acceptance of our products and services and we may never generate sufficient revenues to achieve or sustain profitability.

Our operating results are directly dependent upon the sales and marketing efforts of our sales and customer support team as well as our field sales personnel in the United States and our independent third-party distributors outside of the United States. If our employees or our independent distributors fail to adequately promote, market and sell our products,products and services, our sales could significantly decrease.

If we launch new products, expand our product offerings to new indications or increase our marketing efforts with respect to existing products, we will need to expand the reach of our marketing and sales networks. Our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled employees, and distributors with significant technical knowledge in various areas. Further, mostmany of the salespersons we recently hiredhire have technical expertise from other industries but no experience within our specific industry. New hires require training and take time to achieve full productivity. If we fail to train new hires adequately, new hires fail to successfully transition to our industry, or we experience high turnover in our sales force in the future, new hires may not become as productive as may be necessary to maintain or increase our sales. If we are unable to expand our sales and marketing capabilities domestically and internationally, we may be unable to effectively commercialize our products.products and services.

Our success depends on the skills, experience and performance of the members of our senior management team. The individual and collective efforts of these employees will be important as we continue to develop our products and services and as we expand our commercial activities. We believe that it is challenging to identify individuals with the requisite skills to serve in many of our key positions, and the loss or incapacity of existing members of our executive management team could negatively impact our operations. We did not maintain key person life insurance on any of our employees in 20242025 and do not expect to in the future. Our Chief Executive Officer’s employment agreement does not guarantee our retention of our Chief Executive Officer for any period of time.

Our long-term growth depends on our ability to commercialize our approved products and services for current and future indications and to develop and commercialize additional products and services through our research and development efforts. If we fail to do soso, we may be unable to compete effectively.

In order to increase our future revenues, we must successfully enhance our existing product offerings and introduce new products or new treatment modalities in response to changing customer demands and competitive pressures and technologies. Our industry is characterized by intense competition, including from lower-cost competitors, rapid technological changes, new product introductions and enhancements and evolving industry standards. We also face competition from pharmaceutical companies, including large pharmaceutical companies with greater capital. Our business prospects depend in part on our ability to develop and commercialize new products, services and applications for our technology, including in new markets that develop as a result of technological, pharmaceutical and scientific advances, while improving the performance and cost-effectiveness of our products.products and services. New pharmaceutical products, technologies, techniques or other products could emerge that might offer better combinations of price and performance than our products.products and services. It is important that we anticipate changes in technology and market demand, as well as psychiatristprovider practices to successfully develop, obtain clearance or approval, if required, and successfully introduce new, enhanced and competitive technologies to meet our prospective customers’ needs on a timely and cost-effective basis.

We might be unable to successfully further commercialize or develop or obtain regulatory clearances or approvals to market new products and services or our existing products and services for additional indications. Future products, even if cleared, might not be accepted by psychiatristsprovider or the third-party payors who reimburse for the procedures performed with our products.products and services. The success of any new product offering or enhancement to an existing product will depend on numerous additional factors, including our ability to:

Any transition to a new supplier or contract manufacturer could be time-consuming and expensive, may result in interruptions in our operations and product delivery, could affect the performance specifications of our NeuroStar Advanced Therapy System or could require that we modify its design. If we are required to change our contract manufacturer, we will be required to verify that the new manufacturer maintains facilities, procedures and operations that comply with our quality and applicable regulatory requirements, which could further impede our ability to manufacture our products in a timely manner. If the change in manufacturer results in a significant change to any product, a new 510(k) clearance from the FDA or similar non-U.S. regulatory authorization may be necessary before we implement the change, which could cause a substantial delay. We cannot assure you that we will be able to identify and engage alternative suppliers or contract manufacturers on similar terms or without delay. Furthermore, our contract manufacturer could require us to move to a different production facility. The occurrence of any of these events could harm our ability to meet the demand for our NeuroStar Advanced Therapy System in a timely and cost-effective manner. During 2023, we transitioned to a new contract manufacturer for our console in a planned process.

We have a relatively short history of operating as a commercialcombined companymedical device and clinic service company, as such our growth rate may be volatile. For example for 2024,2025, 20232024 and 20222023 our growth rate was 5%,99%, 9%5% and 18%9% respectively. We intend to grow our business operations and may experience periods of rapid growth and expansion. This anticipated growth could create a strain on our organizational, administrative and operational infrastructure, including our supply chain operations, quality control, technical support and customer service, sales force management and general and financial administration. We may be unable to maintain the quality, or delivery timelines, of our products and services or customer service or satisfy customer demand if our business grows too rapidly. Our ability to manage our growth properly will require us to continue to improve our operational, financial and management controls, and our reporting systems and procedures. We may implement new enterprise software systems in a number of areas affecting a broad range of business processes and functional areas. The time and resources required to implement these new systems is uncertain and failure to complete this in a timely and efficient manner could harm our business.

As our commercial operations and sales volume grow, we will need to continue to increase our workflow capacity for our supply chain, customer service, training and education personnel, billing, accounting reporting and general process improvements and expand our internal quality assurance program, among other things. Because our products and services require us to devote significant resources to training our customers on the use, and educating our customers on the benefits, of our products,products and services, we will be required to expand these personnel as we increase our sales efforts. We may not successfully implement these increases in scale or the expansion of our personnel, which could harm our business.

We rely on a network of third-party distributors to market and distribute our products in international markets. We currently sell our products in five countries outside of the United States and plan to market and sell our products through our exclusive distribution agreement in Japan once we attain reimbursement approval. We are assessing the opportunity to continue expanding into other international markets. We may face significant challenges and risks in managing a geographically dispersed distribution network. We have limited ability to control any third-party distributors. Our distributors may be unable to successfully market and sell our products and may not devote sufficient time and resources to support the marketing, sales, education and training efforts that we believe enable the products to develop, achieve or sustain market acceptance. Additionally, in some international jurisdictions, we rely on our distributors to manage the regulatory process, while complying with all applicable rules and regulations, and we are dependent on their ability to do so effectively. In addition, if a dispute arises with a distributor or if a distributor is terminated by us or goes out of business, it may take time to locate an alternative distributor, to seek appropriate regulatory approvals and to train new personnel to market our products, and our ability to sell those systems in the region formerly serviced by such terminated distributor could be harmed. Any of these factors could reduce our revenues from affected markets, increase our costs in those markets or damage our reputation. In addition, if an independent distributor were to depart and be retained by one of our competitors, we may be unable to prevent that distributor from helping competitors solicit business from our existing customers, which could further adversely affect our sales. As a result of our reliance on third-party distributors, we may be subject to disruptions and increased costs due to factors beyond our control, including labor strikes, third-party error and other issues. If the services of any of these third-party distributors become unsatisfactory, we may experience delays in meeting our customers’ demands and we may be unable to find a suitable replacement on a timely basis or on commercially reasonable terms. Any failure to deliver products in a timely manner may damage our reputation and could cause us to lose potential customers.

We currently market and sell our products outside of the United States, including in Japan, and plan to market and sell our products through our exclusive distribution agreement in Japan. Once we attain satisfactory reimbursement approval, we expect that sales of our NeuroStar Advanced Therapy System in Japan will increase.

We areregularly assessingreassess the opportunityopportunities to expand into other international markets. However, ourany expansion plans may not be realized, or if realized, may not be successful. We expect each market to have particular regulatory hurdles to overcome, and future developments in these markets, including the uncertainty relating to governmental policies and regulations, could harm our business.

We are exposed to the risk that our employees, consultants, distributors and other commercial partners may engage in inappropriate, fraudulent or illegal activity. Misconduct by these parties could include intentional, reckless or negligent conduct or other unauthorized activities that violate the regulations of the FDA and other U.S. healthcare regulators, as well as non-U.S. regulators, including by violating laws requiring the reporting of true, complete and accurate information to such regulators, manufacturing standards, healthcare fraud and abuse laws and regulations in the United States and abroad or laws that require the true, complete and accurate reporting of financial information or data. In particular, sales, marketing and business arrangements in the healthcare industry, including the sale of medical devices, are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealingself-referral and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programsprograms, referral and other business arrangements. It is not always possible to identify and deter misconduct by our employees, distributors and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. These risks may be more pronounced, and we may find that the processes and policies we have implemented are not effective at preventing misconduct. If any actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, individual imprisonment, disgorgement, possible exclusion from participation in government healthcare programs, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings and the curtailment of our operations. Whether or not we are successful in defending against such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations.

Our clinical trials are managed by our own staff and personnel, but we rely in part upon certain third parties, including clinical trial sites, medical institutions, clinical research organizations, (“CROs”), and private practices, for, among other things, site monitoring, statistical work and electronic data capture in our clinical trials. Nevertheless, we are responsible for ensuring that each of our clinical trials is conducted in accordance with applicable protocols, and legal, regulatory and scientific standards, including current good clinical practices, (“CGCPs”), which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for clinical trials. If we or any such third parties fail to comply with applicable CGCPs, the clinical data generated in such trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving a marketing application for any particular indication. In addition, if such third parties do not devote sufficient time and resources to our clinical trials or otherwise carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they assist in obtaining is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates in a specified indication.

Our business exposes us to potential product liability claims that are inherent in the testing, manufacture, sale and use of medical devices for the treatment of MDD. Our treatments are designed for patients who suffer from significant neurohealth disorders, and these patients are more likely to experience significant adverse health outcomes, which could increase the risk of product liability lawsuits. Furthermore, if psychiatristsproviders are not sufficiently trained in the use of our products,products and services, they may misuse or ineffectively use our products,products and services, which may result in unsatisfactory patient outcomes. We could become the subject of product liability lawsuits alleging that component failures, malfunctions, manufacturing flaws, design defects or inadequate disclosure of product-related risks or product-related information resulted in an unsafe condition or injury to patients.

Any violation of the FCPA or any similar anti-corruption law or regulation could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certain jurisdictions and might harm our business, financial condition or results of operations.

We are subject to taxation in numerous U.S. states and territories. As a result, our effective tax rate is derived from a combination of applicable tax rates in the various places that we operate. In preparing our consolidated financial statements, we estimate the amount of tax that will become payable in each of such places. Nevertheless, our effective tax rate may be different than experienced in the past due to numerous factors, including passage of theany newlynew enacted federal income tax law,laws, changes in the mix of our profitability from state to state, the results of examinations and audits of our tax filings, our inability to secure or sustain acceptable agreements with tax authorities, changes in accounting for income taxes and changes in tax laws. Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations and may result in tax obligations in excess of amounts accrued in our consolidated financial statements.

Generally accepted accounting principles in the United States, (“U.S. GAAP”), are subject to interpretation by the Financial Accounting Standards Board,Board (the“FASB”), or SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.

We have experienced and may continue to experience meaningful variability in our sales and gross profit among fiscal quarters. In the first quarter, our results can be impacted by the resetting of annual U.S. patient healthcare insurance plan deductibles, which may cause delays in patients seeking NeuroStar Advanced Therapy System treatments. Historically, we have seen a sequential decline in third quarter revenues, which we believe is attributable to summer vacation plans of psychiatristsproviders and patients. In addition, the fourth quarter has consistently been a strong revenue quarter on a sequential basis primarily due to U.S. psychiatrists’providers’ historical timing for capital expenditures and patients’ needs to exhaust remaining balances in flexible spending accounts.

The combinationintegration with Greenbrook may be more difficult, costly or time-consuming than expected, and theour combined companybusiness may fail to realize the anticipated benefits of the Arrangement.benefits.

The success of the Arrangementintegration with Greenbrook will depend, in part, on the ability to realize the anticipated revenue and cost synergies from combining the businesses of Neuronetics and Greenbrook. To realize the anticipated revenue and cost synergies from the Arrangement,integration, we and Greenbrook must successfully integrate and combine businesses in a manner that permits those revenue and cost synergies to be realized without adversely affecting current revenues and future growth. If we are not able to successfully achieve these objectives, the anticipated benefits of theour Arrangementbusiness may not be realized fully or at all or may take longer to realize than expected. In addition, the revenue and cost synergies of theour Arrangementbusiness could be less than anticipated, and integration may result in additional and unforeseen expenses.

The pro forma financial information incorporated herein wereis presented for illustrative purposes only and may not be an indication of the Company’s financial condition or results of operations following the Arrangement for a number of reasons. For example, the pro forma financial information has been derived from the historical financial information of Greenbrook and Neuronetics and certain adjustments and assumptions have been made regarding the Company after giving effect to the Arrangement. The information upon which these adjustments and assumptions have been made is preliminary, and these types of adjustments and assumptions are difficult to make with complete accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the Company in connection with the Arrangement. As a result, the actual financial condition and results of operations of the Company following the Arrangement may not be consistent with, or evident from, the pro forma financial information. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the Company’s financial condition or results of operations following the Arrangement. Any potential decline in the Company’s financial condition or results of operations may cause a significant decrease in the trading price of our common stock.

AsOur abusiness resulthas of the pursuit and completion of the Arrangement,placed significant demands have been placed on the managerial, operational and financial personnel and systems of the Company. The Company cannot provide any assurance that management of Neuronetics and the operations teams of Neuronetics and Greenbrook will be adequate to support the expansion of operations and associated increased costs and complexity following and resulting fromin the consummation of the Arrangement.future. The future operating results of the Company will be affected by the ability of its officers and key employees to manage changing business conditions, integrate the acquisition of Greenbrookconditions and implement a new business strategy that includes expanding Neuronetics therapeutic offerings to include esketamine nasal spray.

Our common stock is currently listed on Nasdaq. To maintain the listing of our common stock on Nasdaq, the Company will be required to meet Nasdaq’s continued listing requirements, including, among others, a minimum bid price of $1.00 per share,share or (the “Minimum Bid Price Requirement.Requirement”). On October 3, 2024, we received a notice from Nasdaq of our failure to satisfy the Minimum Bid Price Requirement. On November 12, 20242024, we received notice from Nasdaq that we had regained compliance with the Minimum Bid Price Requirement.

Medicare and Medicaid reimbursement rules impose extensive requirements upon healthcare providers that furnish services to Medicare and/or Medicaid beneficiaries, including our healthcare provider practices. Moreover, additional laws and regulations potentially affecting healthcare providers participating in the Medicare and Medicaid programs continue to be promulgated that may impact us in the future. From time to time, in the ordinary course of business, we may conduct internal compliance reviews on behalf of our healthcare provider practices, the results of which may involve the identification of errors in the manner in which our healthcare provider practices submit claims to the Medicare or Medicaid program. Our healthcare provider practices may also be subject to periodic audits by insurance companies, including, but not limited to, those associated with the Medicare or Medicaid program. These reviews may result in the identification of errors in the manner in which we or our healthcare provider practices bill such insurance programs for services, which may result in the receipt of incorrect payments from the insurance companies, including those associated with the Medicare program, that our healthcare provider practices are required to repay. Incorrect payments may subject healthcare provider practices to repayment or pre-billing requirements, which may result in financial loss or administrative delay in obtaining payment. Failure to report and return Medicare overpayments, or otherwise causing the billing of improper claims, can lead to liability under the FCA and associated penalties, including exclusion from Medicare or Medicaid and other federal health care programs. In addition, private payors may on occasion amend their coverage policies in a way that may impact our operations.

Certain insurance companies only provide reimbursement for SPRAVATO only under what is referred to as the Buy & Bill model, as opposed to the Administer & Observe model. Under the Administer & Observe model, SPRAVATO is acquired under the patient’s pharmacy benefit without cost to us, and we receive payment for administering the drug and observing the patient. Although we generate more revenue from the Buy & Bill model, it is more capital intensive because we are required to purchase SPRAVATO and bill insurance for the cost of the drug along with our medical services. Unless we have the capacity to front the cash to purchase SPRAVATO while awaiting insurance reimbursement, we are limited in how widely we can implement the Buy & Bill model by the amount of credit, if any, the distributors of SPRAVATO will extend to us. The SPRAVATO distributors are not under any obligation to extend credit to us.

Commercial payors, Medicare and other non-Medicare government programs set requirements that must be met for services to be deemed reimbursable. The imposition of additional requirements related to the provision of TMS and/or esketamine nasal spray therapy by commercial insurance plans, Medicare and other non-Medicare government insurance plans that increase the cost or complexity of furnishing these therapies to patients may result in increased costs. For example, certain commercial payors are increasing the levels of clinician supervision that must be provided to patients receiving TMS therapy, thereby restraining our ability to provide patient care when these increased levels of clinician supervision are not available and/or resulting in the incurrence of additional clinician compensation costs for ensuring the requisite level of supervision as a result of these increased requirements. The imposition of such requirements and any additional requirements by third-party payors may impact our revenues and costs, which could materially adversely affect our business, prospects, financial condition, results of operations or cash flows.

MostMany insurance companies require that TMS be prescribed and performed by psychiatrists. Certain insurance companies also impose this requirement on the administration of SPRAVATO. The United States faces a shortage of psychiatrists and the number of licensed psychiatrists is shrinking. The lack of available properly licensed medical professionals could limit our growth opportunities and negatively impact our financial results.

These issues also affect other NeuroStar providers and may affect our ability to sell NeuroStar devices and/or Treatmenttreatment Sessions.sessions.

Technological change in our industry or novel drug treatments for MDD could reduce the demand for our services or require us to incur significant cost to incorporate new technology into our centers.Treatment Centers.

Tariffs implemented by the newcurrent presidential administration could adversely affect our business and financial results, if we are not able to sufficiently offset increased supply prices caused by any such tariffs.

We believe that mental health is as important as physical health. As a global leader in neuroscience, we are delivering more treatment options to patients and healthcare providers by offering exceptional in-office treatments that produce extraordinary results. Our first commercial product, the NeuroStar Advanced Therapy 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 that have failed to achieve satisfactory improvement from prior antidepressant medication in the current MDD episode. It is also cleared by the FDA,FDA as an adjunct for adults with 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 NeuroStar Advanced Therapy System and associated treatment sessions to customers, we operate Greenbrook Treatment Centers across the U.S., offering NeuroStar Advanced Therapy. Greenbrook, a leading provider of mental healthcare services, is a wholly owned subsidiary of the Company. The NeuroStar Advanced Therapy System is safe, clinically effective, reproducible and precise and we believe is supported by the largest clinical data set of any competing TMS system. We believe we are the market leader in TMS therapy based on the estimated 195,356237,574 global patients treated with over 7.18.5 million of our treatment sessions through December 31, 2024.2025. We generated revenues of $74.9$149.2 million and $71.3$74.9 million for the years ended December 31, 20242025 and 2023,2024, respectively.

Effective as of December 9, 2024, Neuronetics and Greenbrook completed the Arrangement. Each Greenbrook Share outstanding immediately prior to the effective time of the Arrangement was exchanged for Neuronetics Shares at the Exchange Ratio upon closing of the Arrangement. We continue to operate as Neuronetics, Inc., and the Neuronetics Shares continue to trade on the NASDAQ Global Market under the ticker “STIM”.

We designed the NeuroStar Advanced Therapy System as a non-invasive therapeutic alternative to treat patients who suffer from MDD and to address many of the key limitations of existing treatment options. We generate revenues from initial capital sales of our systems, sales of our recurring treatment sessions and from service and repair and extended warranty contracts. Additionally,Additionally through our acquisition of GreenbrookGreenbrook, we now derive revenue directly from our Treatment Centers, by providing TMS therapy and SPRAVATO therapy for MDD and other mental health disorders. We derive the majority of our revenues from recurringclinic revenue and treatment sessions. For the year ended December 31, 2024, revenues from sales of our treatment sessions and NeuroStar Advanced Therapy Systems represented 70% and 21% of our U.S. revenues, respectively. For the year ended December 31, 2023, revenues from sales of our treatment sessions and NeuroStar Advanced Therapy Systems represented 73% and 24% of our U.S. revenues, respectively.

We currently sell our NeuroStar Advanced Therapy System and recurring treatment sessions in the United StatesU.S. through our sales and customer support team. Our sales force targets an estimated 53,000 psychiatrists across 26,000 practices. We expect to continue to expand our direct sales and customer support team to further penetrate the market by demonstrating the benefits of our NeuroStar Advanced Therapy System to psychiatristsproviders and their MDD patients. Some of our customers have andpurchased or may purchase more than one NeuroStar Advanced Therapy System. Based on our commercial data, we believe psychiatristsproviders can recoup their initial capital investment in our system by providing a standard course of treatment to approximately 12 patients. We believe psychiatrists can generate approximately $8,500$9,000 of average revenue per patient for a standard course of treatment, which may provide meaningful incremental income to their practices. We have a diverse customer base of psychiatrists in group psychiatric practices in the United States. For the years ended December 31, 2024, 2023 and 2022 one customer Greenbrook accounted for 12%,15% and 17% respectively, of the Company’s revenue. Following the acquisition, Greenbrook is no longer a customer.U.S. Patients are reimbursed by federal healthcare programs and the vast majority of commercial payors in the United StatesU.S. for treatment sessions utilizing our NeuroStar Advanced Therapy System. For the years ended December 31, 2024 and 2023, one customer Greenbrook, accounted for 12% and 15%, respectively, of the Company’s revenue. Following the acquisition of Greenbrook, there are no significant customers.

We market our products in a few select markets outside the United States through independent distributors. International revenues represented 2% and 3% of our total revenues for the years ended December 31, 20242025 and 2023,2024, respectively. In October 2017, we entered into an exclusive distribution agreement, for the distribution of our NeuroStar Advanced Therapy Systems and treatment sessions to customers who will treat patients with MDD in Japan. We received regulatory approval for our system in Japan in September 2017. We obtained reimbursement coverage for NeuroStar Advanced Therapy System in Japan, which went into effect on June 1, 2019 and covers patients who are treated in the largest inpatient and outpatient psychiatric facilities in Japan. We expect our international revenues to decrease as a percentage of our total revenue.

Our research and development efforts are focused on the following: hardware and software product developments and enhancements of our NeuroStar Advanced Therapy System and clinical development relating to additional indications. We outsource the manufacture of components of our NeuroStar Advanced Therapy Systems that are produced to our specifications, and individual 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.

Our total revenues increased by $3.6$74.3 million, or 5%,99%, from $71.3 million for the year ended December 31, 2023 to $74.9 million for the year ended December 31, 2023. For the year ended December 31, 2024, our U.S. revenues were $72.5 million, compared2024 to $69.3$149.2 million for the year ended December 31, 2023,2025, due to the inclusion of revenues from our Greenbrook acquisition. For the year ended December 31, 2025, our U.S. revenues were $146.0 million, compared to $72.5 million for the year ended December 31, 2024, which represented an increase of 5%101% periodyear over period.year. As of December 31, 2024,2025, we had an accumulated deficit of $419.8$458.8 million.

To date, weWe have generated revenues primarily from the capital portionsale of our businessNeuroStar Advanced Therapy Systems and related sales and rentals of the NeuroStar Advanced Therapy SystemSystem, clinic revenue and the recurring revenues from our sale of treatment sessions in the United States.U.S.

Clinic Revenue.Revenues. Clinic revenuerevenue, 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 2025.2026.

Other Revenues. Other revenues are derived primarily from service and repairrepair, research collaboration agreements and extended warranty contracts with our existing customers.

Sales in the United States represented 97%98% of our total revenues for the yearsyear endingended December 31, 20242025 and 2023,97% respectively,for the year ended December 31, 2024, and have been generated by our direct sales force. Outside the United States, our sales are made through local third-party distributors. International revenues were 3%2% for the years ended December 31, 20242025 and 2023,3% respectively.for the year ended December 31, 2024. We expect that both our United States and international revenuesrevenue will increase in the near term as we continue to expand active customer sites utilizing our NeuroStar Advanced Therapy Systems and increase the related patient utilization in the United States, as well as grow our presence in Japan.States. We expect our revenues to be positively impacted to the extent our direct sales force is successful in increasing the rate of adoption and utilization of treatment with TMS Therapy as an alternative to other MDD treatments.

Cost of revenues primarily consists of the costs of components and products purchased from our third-party contract manufacturers of our NeuroStar Advanced Therapy Systems as well as the cost of treatment packs for individual treatment sessions. We use third-party contract manufacturing partners to produce the components for and assemble the completed NeuroStar Advanced Therapy Systems. Cost of revenues also includes costs related to personnel, royalties, warranty, shipping, amortization of capitalized software and our operations and field service departments. Our newtreatment Treatment Centercenter costs include direct center and patient care costs, regional employee compensation, regional marketing expenses,compensation and depreciation. We expect our cost of revenues to increase mainly for Treatmenttreatment Centers,centers, as our product mix changes. We expect to realize efficiencies with our new contract manufacturer.

Sales and marketing expenses consist of market research and commercial activities related to the sale of our NeuroStar Advanced Therapy Systems and treatment sessions 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, practice support programs, primarily digital media campaigns, travel and training expenses.

We anticipate that our sales and marketing expenses will increasedecrease in 20252026 relative to 20242025 as a result of the additioncost ofefficiencies realized post-acquisition across the Greenbrook sales personneland tomarketing our company.divisions.

We anticipate that our general and administrative expenses will increase in 20252026 from 20242025 due to an increase in the overall size of the general and administrative function within the consolidated company.company and investments needed to streamline systems and leverage automation.

We expect our research and development expenses to decreaseremain consistent during 20252026 compared to our 20242025 expenses.

Interest expense consists of cash interest payable under our credit facility and non-cash interest attributable to the accrual of final payment fees and the amortization of deferred financing costs related to our indebtedness.

As of December 31, 2024,2025, we had cash and cash equivalents of $28.1 million and an accumulated deficit of $458.8 million, compared to cash and cash equivalents of $18.5 million and an accumulated deficit of $419.8 million, compared to cash and cash equivalents of $59.7 million and an accumulated deficit of $376.1 million as of December 31, 2023.2024. We incurred negative cash flows from operating activities of $31.0$20.4 million and $32.0$31.0 million for the years ended December 31, 20242025 and 2023,2024, respectively. We have incurred operating losses since our inception, and we anticipate that our operating losses will continue in the near term as we seek to expand our sales and marketing initiatives to support our growth in existing and new markets, invest funds in additional research and development activities and utilize cash for other corporate purposes. OurThe Company’s primary sources of capital to date have been from ourits IPO,initial privatepublic placementsoffering of our convertible preferred securities,(“IPO”), borrowings under ourits credit facility, salesproceeds offrom our products and aits secondary public offering of common stock (including, without limitation, our commonATM stock.Program), and revenues from sales of its products. The Company entered into a Credit Agreement and Guaranty with Perceptive as collateral agent and other lenders defined in the Perceptive Facility. As of December 31, 2024,2025, the Company had $60.0$70.0 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.

If our cash and cash equivalents and anticipated revenues from sales orof our products and services 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.products and services.

On March 2, 2020 the Company entered into a Loan and Security Agreement with Solar as collateral agent and other lenders as defined in the Solar Facility. As of December 31, 2023 the Solar Facility was $60 million.

You should carefully consider the information described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K10 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.

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 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 obtainacquire 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 Sharecommon 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 clinicGreenbrook revenuerevenue,treatment session sales, and treatmentsales sessions.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.

ClinicGreenbrook revenue consists of revenue attributable to the performance of treatments to patients in 15 states in the U.S. In circumstances where the net patient fees have not yet been received, the amount of revenue recognized is estimated based on an expected value approach. Due to the nature of the industry and complexity of our clinicGreenbrook 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.

ClinicGreenbrook revenue reimbursements are derived from third-party payors including federal and state agencies (under the Medicarefederal 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 haveserve a diverse customer basebase. inIn the U.S.U.S., providers are reimbursed by federal healthcare programsprograms, andas well as the vast majority of commercial payors in the U.S.payors, for treatment sessions utilizing theour System.

Total revenues increased by $2.5$3.5 million, or 8%,9%, from $32.0$38.1 million for the three months ended MarchJune 31,30, 2025 to $34.5$41.6 million for the three months ended MarchJune 31,30, 2026.2026 Forand theincreased threeby months$5.9 endedmillion, Marchor 31,8%, 2026,from our U.S. revenues were $34.2 million compared to $31.5$70.1 million for the threesix months ended MarchJune 31,30, 2025,2025 representingto an$76.0 increasemillion offor 9%.the six months ended June 30, 2026. The increase was primarily attributable to an increase in clinicGreenbrook revenue. We incurred net losses of $10.8$3.5 million and $14.2 million for the three and six months ended MarchJune 31,30, 20262026, respectively compared to net losses of $12.7$9.8 million and $22.5 million for thethree threeand six months ended MarchJune 31,30, 2025.2025, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $469.6$473.2 million.

ClinicGreenbrook Revenues. ClinicGreenbrook 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.

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.

Cost of revenues primarily consists of the costs of components and products purchased from our third-party contract manufacturers of the Systems as well as the cost of treatment packs for individual treatment sessions.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, royalties, warranty, shipping, amortization of capitalized software and our operations and field service departments. Our Treatment Centerclinic 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 Treatment Centers,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 clinicGreenbrook revenue are lower than our gross margins on revenues from sales of treatment sessions and,and assale of unlocked systems. As a result, the sales mix between the Systems, clinicGreenbrook revenues and treatment sessions can affect the gross margin in any reporting period.

Sales and marketing expenses consist of market research and commercial activities related to the sale of the Systems and treatmentclinic sessionsservices 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,marketing and practice support programs, primarily digital media campaigns, travel and training expenses.programs.

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 the cost of 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 expect our research and development expenses to remain consistentdecrease during 2026 compared to 2025 expenses.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

Total revenue for the three months ended MarchJune 31,30, 2026 was $34.5$41.6 million, an increase of $2.5$3.5 million, or 8%,9%, compared to the three months ended MarchJune 31,30, 2025 revenue of $32.0$38.1 million.

The increase in revenue was primarily driven by higher U.S. clinicGreenbrook revenue, which increased $2.8$3.9 million, or 15%,17%, to $21.5$26.9 million in the firstsecond quarter of 2026 from $18.7$23.0 million in the firstsecond quarter of 2025, reflecting continued contributions from clinics acquired in connection with the Greenbrook transaction.transaction Thisand improved revenue cycle management within our Greenbrook segment. The growth was partially offset by a decline in U.S. treatment sessionNeuroStar revenue, which decreased $0.5$0.4 million to $9.1$14.7 million for the three months ended MarchJune 31,30, 2026 from $9.6$15.1 million for the three months ended MarchJune 31,30, 2025, primarily due to lower treatment volumes.2025.

Cost of revenues increasedremained byrelatively $2.1consistent million,at or 13%, from $16.2$20.3 million for the three months ended MarchJune 31,30, 20252026, compared to $18.3$20.4 million for the three months ended MarchJune 31,30, 2026.2025. Gross margin decreasedincreased from 49.2%46.6% for the three months ended MarchJune 31,30, 2025 to 46.9%51.1% for the three months ended MarchJune 31,30, 2026. The decreaseincrease in gross margin iswas mainlyprimarily attributabledue to thesales of unlocked capital systems, which carry a higher average selling price, as well as improved revenue mixcycle management within the ClinicGreenbrook revenue segment.clinics.

Sales and marketing expenses decreased by $1.3$1.9 million, or 11%,16.0%, from $12.0$11.9 million for the three months ended MarchJune 31,30, 2025 to $10.7$10.0 million for the three months ended MarchJune 31,30, 2026. The decrease was primarily driven by lower personnel costs,costs and reduced marketing program spend, and a favorable bad debt adjustment related to the current expected credit loss reserve.spend.

General and administrative expenses decreased by $0.1$0.8 million, or 1%,6%, from $13.1$12.2 million for the three months ended MarchJune 31,30, 2025 to $13.0$11.4 million for the three months ended MarchJune 31,30, 2026. The decrease was due to a decrease in stock based expense within the general and administrative function.

Research and development expenses decreased by $0.3$0.5 million, or 16%,26%, from $1.6$1.8 million for the three months ended MarchJune 31,30, 2025 to $1.4$1.3 million for the three months ended MarchJune 31,30, 2026. The decrease in research and development was driven by personnel expense.

Interest expense increased by $0.4$0.1 million, or 18%,8%, from $1.9$2.0 million for the three months ended MarchJune 31,30, 2025 to $2.3$2.1 million for the three months ended MarchJune 31,30, 20262026, primarily due to a higher outstanding debt balance.

OtherSales income,and net,marketing increasedexpenses decreased by $0.8$3.2 millionmillion, or 13%, from $0.2$23.9 million for the threesix months ended MarchJune 31,30, 2025 to $1.0$20.7 million for the threesix months ended MarchJune 31,30, 2026,2026. The decrease was primarily asdriven by lower personnel costs, reduced marketing program spend, and a resultfavorable ofbad debt adjustment related to the ERCcurrent claimexpected netcredit proceeds,loss and updated estimates regarding the audits from government agencies including Medicaid and Medicare.reserve.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $13.2$19.2 million and an accumulated deficit of $469.6$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 $9.4$10.4 million and $17.0$20.5 million for the threesix months ended MarchJune 31,30, 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 offeringofferings of common stock (including, without limitation, the ATM Program), and revenues from salesGreenbrook ofand its products.NeuroStar. As of MarchJune 31,30, 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.

If our cash and cash equivalents and anticipated revenues from sales or our productsGreenbrook and servicesNeuroStar 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 arrangementagreement to modify the required quarterly revenue covenants through December 31, 2026 and the liquidity covenants through September 30, 2027. As of MarchJune 31,30, 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.

The Company remains actively engaged in ongoing collaborative and constructive discussions with its lender. Additional actionsActions 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 medical deviceNeuroStar 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.

As of MarchJune 31,30, 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.

The following table sets forth a summary of our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $9.4$10.4 million, consisting primarily of a net loss of $10.8$14.2 million,million and an increaseunfavorable change in net operating assets and liabilities of $1.8$1.3 million, partially offset by non-cash charges of $3.2$5.1 million,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 in prepaid commission expense,inventory, partially offset by a decrease in accounts receivable.receivable and prepaid commission.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 was $17.0$20.5 million, consisting primarily of a net loss of $12.7$22.5 million,million and an increase in net operating assets of $6.9$3.7 million, partially offset by non-cash charges of $2.5$5.7 million,million primarily consisting of depreciation and amortization and share-based compensation. The increase in net operating assets was primarily due to increaseincreases 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 for the threesix months ended MarchJune 31,30, 2026 was $0.2$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 threesix months ended MarchJune 31,30, 2025 was $0.2$0.5 million, which was primarily dueattributable to purchases of property and equipment and capitalized software costs.

Net Cash (used in) provided by Financing Activities