Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2026
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: 001-38546
NEURONETICS, INC.
(Exact name of registrant as specified in its charter)
Delaware
33-1051425
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
3222 Phoenixville Pike, Malvern, PA
19355
(Address of principal executive offices)
(Zip Code)
(877) 600-7555
(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
TradingSymbol (s)
Name on each exchange on which registered
Common Stock ($0.01 par value)
STIM
The Nasdaq Global Market
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. Yes ☒ No ☐
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). Yes ☒ No ☐
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
Non-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 ☐ No ☒
There were 76,197,222 shares of the registrant’s common stock outstanding as of August 5, 2026.
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026
Page
PART I – FINANCIAL INFORMATION
Item 1.
Financial Statements.
3
Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025
Consolidated Statements of Operations for the Three and Six Months ended June 30, 2026 and 2025
4
Consolidated Statements of Changes in Equity for the Three and Six Months ended June 30, 2026 and 2025
5
Consolidated Statements of Cash Flows for the Six Months ended June 30, 2026 and 2025
6
Notes to Interim Consolidated Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
27
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
37
Item 4.
Controls and Procedures.
38
PART II – OTHER INFORMATION
Legal Proceedings.
39
Item 1A.
Risk Factors.
Unregistered Sales of Equity Securities and Use of Proceeds.
Defaults Upon Senior Securities.
Mine Safety Disclosures.
Item 5.
Other Information.
Item 6.
Exhibits.
40
SIGNATURES
43
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
(Unaudited; In thousands, except per share data)
June 30,
December 31,
2026
2025
Assets
Current assets:
Cash and cash equivalents
$
19,197
28,134
Restricted cash and cash equivalents
5,750
6,000
Accounts receivable, net of allowance for credit losses of $553 and $1,043 as of June 30, 2026 and December 31, 2025, respectively
15,955
16,469
Inventory
5,502
4,327
Current portion of net investments in sales-type leases
233
225
Current portion of prepaid commission expense
2,773
3,050
Current portion of notes receivable
315
424
Prepaid expenses and other current assets
3,505
2,922
Total current assets
53,230
61,551
Property and equipment, net
3,464
4,466
Goodwill
23,622
Intangible assets, net
17,420
18,149
Operating lease right-of-use assets
23,913
23,560
Net investments in sales-type leases
65
98
Prepaid commission expense
6,980
7,972
Long-term notes receivable
151
Other assets
2,792
1,982
Total assets
131,529
141,551
Liabilities and Equity
Current liabilities:
Accounts payable
12,419
10,739
Accrued expenses
8,929
12,316
Current portion of deferred revenue
1,143
753
Deferred and contingent consideration
250
500
Other payables
425
652
Current portion of operating lease liabilities
5,143
5,561
Total current liabilities
28,309
30,521
Long-term debt, net
61,519
65,807
Other long term liabilities
142
—
Deferred revenue
58
48
Operating lease liabilities
19,861
18,935
Total liabilities
109,889
115,311
Commitments and contingencies (Note 18)
Equity:
Preferred stock, $0.01 par value: 10,000 shares authorized; no shares issued or outstanding on June 30, 2026 and December 31, 2025
Common stock, $0.01 par value: 250,000 shares authorized; 76,193 and 68,994 shares issued and outstanding on June 30, 2026 and December 31, 2025, respectively
762
690
Additional paid-in capital
490,239
480,475
Accumulated deficit
(473,151)
(458,787)
Total Stockholders' equity
17,850
22,378
Non-controlling interest
3,790
3,862
Total equity
21,640
26,240
Total liabilities and equity
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
Consolidated Statements of Operations
Three Months Ended
Six Months Ended
Revenues
NeuroStar
14,677
15,084
27,602
28,400
Greenbrook
26,891
23,024
48,420
41,683
Total revenue
41,568
38,108
76,022
70,083
Cost of revenues
3,312
4,311
6,170
7,461
17,033
16,039
32,475
29,126
Total cost of revenues
20,345
20,350
38,645
36,587
Gross profit
21,223
17,758
37,377
33,496
Operating expenses:
Sales and marketing
9,984
11,868
20,721
23,867
General and administrative
11,404
12,150
24,452
25,287
Research and development
1,336
1,798
2,700
3,414
Total operating expenses
22,724
25,816
47,873
52,568
Loss from operations
(1,501)
(8,058)
(10,496)
(19,072)
Other (income) expense:
Interest expense
2,125
1,969
4,391
3,891
Loss on extinguishment of debt
539
Other income, net
(162)
(188)
(1,182)
(435)
Net loss
(3,464)
(9,839)
(14,244)
(22,528)
Less: Net gain (loss) attributable to non-controlling interest
(25)
281
(15)
267
Net loss attributable to Neuronetics stockholders
(3,439)
(10,120)
(14,229)
(22,795)
Net loss per share of common stock outstanding, basic and diluted attributable to Neuronetics stockholders
(0.05)
(0.15)
(0.20)
(0.36)
Weighted average common shares outstanding, basic and diluted
73,129
66,180
71,369
63,835
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
55,679
557
446,938
(419,789)
4,093
31,799
Share-based awards and option exercises
941
9
(1)
8
Issuance of common stock, net of issuance costs of $1,731
9,200
92
18,877
18,969
Share-based compensation expense
1,444
(12,675)
(14)
(12,689)
Balance at March 31, 2025
65,820
658
467,258
(432,464)
4,079
39,531
Share-based awards and options exercises
293
(2)
1
1,814
Balance at June 30, 2025
66,113
661
469,070
(442,584)
4,360
31,507
Balance at December 31, 2025
68,994
589
(6)
1,677
Net income (loss)
(10,790)
10
(10,780)
Distribution to non-controlling interest
(77)
Balance at March 31, 2026
69,583
696
482,146
(469,577)
3,795
17,060
Issuance of common stock under ATM offering, net of issuance costs of $483
6,053
60
7,411
7,471
688
Acquisition of subsidiary non-controlling interest
(135)
135
(115)
Balance at June 30, 2026
76,193
Consolidated Statements of Cash Flows
Six Months Ended June 30,
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
1,474
1,812
Allowance for credit losses
(160)
83
Inventory impairment
177
Share-based compensation
2,365
3,258
Non-cash interest expense
478
388
Loss on disposal of property and equipment
369
Changes in certain assets and liabilities:
Accounts receivable, net
893
(2,479)
(1,289)
(791)
24
12
1,268
613
Prepaid expenses and other assets
(647)
3,356
1,572
(1,803)
(3,386)
(2,236)
Other liabilities
(85)
(320)
400
(82)
Net cash used in operating activities
(10,429)
(20,497)
Cash flows from investing activities:
Purchases of property and equipment and capitalized software
(614)
(471)
Proceeds from the sale of property and equipment
25
Net cash used in investing activities
(589)
Cash flows from financing activities:
Payments of debt issuance costs
(55)
Repayment of deferred and contingent consideration
(250)
Repayment of long-term debt
(5,000)
Payment for debt extinguishment costs
Proceeds from the issuance of common stock
20,700
Payments of common stock offering issuance costs
(1,731)
Proceeds from issuance of common stock under ATM Program
7,954
Payments of common stock offering issuance costs under ATM Program
(376)
(192)
Proceeds from exercises of stock options
Net cash provided by financing activities
1,831
18,978
Net decrease in Cash, Cash equivalents and Restricted cash
(9,187)
(1,990)
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period
34,134
19,459
Cash and cash equivalents and restricted cash and cash equivalents, end of period
24,947
17,469
Reconciliation of cash and cash equivalents and restricted cash and cash equivalents to the consolidated balance sheet:
10,969
6,500
Total cash and cash equivalents and restricted cash and cash equivalents
Supplemental disclosure of cash flow information:
Cash paid for interest
3,918
3,488
Transfer of inventory to property and equipment
114
36
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment and capitalized software in accounts payable and accrued expenses
103
(Unaudited)
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 $19.2 million and an accumulated deficit of $473.2 million. The Company incurred negative cash flows from operating activities of $10.4 million for the six months ended June 30, 2026 and $20.4 million for the year ended December 31, 2025. 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 (as defined below)), and revenues from NeuroStar and Greenbrook. As of June 30, 2026, the Company had $65.0 million of borrowings outstanding under its credit facility, which matures in July 2029.
On February 10, 2025, the Company completed a secondary public offering of its common stock in which the Company issued and sold 9,200,000 shares of its common stock, which included shares pursuant to an option granted to the underwriter to purchase additional shares, at a public offering price of $2.25 per share. The Company received net proceeds of $18.9 million after deducting underwriting discounts, commissions and estimated offering expenses.
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 $50.0 million from time to time through an at-the-market equity offering program (the “ATM Program”). Sales under the Distribution Agreement are made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-288526), and a related prospectus and prospectus supplement.
During the three and six months ended June 30, 2026, the Company sold an aggregate of 6,052,953 shares of its common stock under the ATM Program at an average price of $1.31 per share, generating gross proceeds of $8.0 million. The Company paid aggregate sales commissions of $0.2 million and incurred
additional offering-related expenses of $0.2 million. As a result, net proceeds from the offering are $7.6 million. The Company also amortized $0.1 million of shelf related expenses for the ATM Program.
As of June 30, 2026, the Company had approximately $33.7 million remaining available for future issuance under the ATM Program.
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
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
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.
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
17-21 years
17,100
(1,463)
15,637
17.5 years
Trade name
5 years
2,590
(807)
1,783
3.5 years
19,690
(2,270)
As of December 31, 2025
(993)
16,107
18 years
(548)
2,042
4 years
(1,541)
Amortization expense for intangible assets was $0.4 million for the three months ended June 30, 2026 and 2025, respectively.
Amortization expense for intangible assets was $0.7 million for the six months ended June 30, 2026 and 2025, respectively.
Amortization expense over the remaining life of the intangible assets will be recognized as follows (in thousands):
Year
Amortization expense
Remainder of 2026
728
2027
1,457
2028
2029
1,428
2030
939
Thereafter
11,411
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
Active
Observable
Unobservable
Carrying
Markets
Inputs
Fair Value
(Level 1)
(Level 2)
(Level 3)
Money market funds (cash equivalents)
432
Money market funds (restricted cash and cash equivalents)
5,500
December 31, 2025
436
7. ACCOUNTS RECEIVABLE
The following table presents the composition of accounts receivable, net, as of June 30, 2026 and December 31, 2025 (in thousands):
Gross accounts receivable - trade
16,508
17,512
Less: Allowances for credit losses
(553)
(1,043)
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
Beginning of
(Expense)/
Uncollectible
End of
Period
Reversal
Balances
Six months ended June 30, 2025
(1,930)
(83)
1,093
(920)
Six months ended June 30, 2026
160
330
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):
Laboratory equipment
680
676
Office equipment
495
Auto
23
Computer equipment and software
896
873
Manufacturing equipment
618
Clinical equipment
278
Leasehold improvements
1,490
1,608
TMS devices
2,796
Rental equipment
213
157
Property and equipment, gross
7,466
8,518
Less: Accumulated depreciation
(4,002)
(4,052)
As of June 30, 2026 and December 31, 2025, the Company had capitalized software costs, net, of $1.5 million and $0.8 million, respectively, which are included in “Prepaid expenses and other current assets” and “Other assets” on the consolidated balance sheets.
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The Company disposed of $1.2 million of rental equipment, TMS devices, leasehold improvements and auto with a net book value of $0.4 million during the six months ended June 30, 2026. For the six months ended June 30, 2025, the Company had not disposed of any property and equipment.
Depreciation and amortization expense related to property and equipment and capitalized software costs was $0.4 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively and $0.8 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively.
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 32,000 square foot facility comprising office and warehouse space.
In 2025, the Company executed a lease modification for its Malvern, Pennsylvania facility, extending the lease term through June 2033.
The Company leases an approximately 9,600 square foot facility in Charlotte, North Carolina as a training facility for the Systems. The lease ends in September 2027. The Company has an option to extend the lease on its training facility for an additional one-year term; however, the Company has determined it is not reasonably certain to exercise the option at this time after assessing contract, asset, entity and market conditions present upon lease commencement.
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 $2.4 million and $2.1 million for the three months ended June 30, 2026 and 2025, respectively and $4.9 million and $4.4 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the weighted average remaining lease term of operating leases was 6.0 years, and the weighted average discount rate was 12.0%.
The following table presents the supplemental cash flow information as a lessee related to leases (in thousands):
June 30, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
4,551
3,983
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The following table sets forth by year the required future payments of operating lease liabilities as of June 30, 2026 (in thousands):
4,813
7,022
5,617
5,056
4,121
10,973
Total lease payments
37,602
Less imputed interest
(12,598)
Present value of operating lease liabilities
25,004
Lessor sales-type leases:
Certain customers have purchased the Systems on a rent-to-own basis. The lease term is two to four years with a customer option to purchase the System at the end of the lease or automatic transfer of ownership of the System at the end of the lease.
The following table sets forth a maturity analysis of the undiscounted lease receivables related to sales-type leases (in thousands):
148
150
Total sales-type lease receivables
298
As of June 30, 2026 and December 31, 2025 the carrying amount of the lease receivables was $0.3 million, for both periods. The Company does not have any unguaranteed residual assets.
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 $0.06 million and $0.05 million, respectively. For the six months ended June 30, 2026 and 2025, the Company recognized operating lease income of $0.1 million, for both periods.
The Company maintained rental equipment, net, of $0.1 million for both June 30, 2026 and December 31, 2025, which are included in property and equipment, net on the consolidated balance sheets. Rental equipment depreciation expense was $0.01 million and $0.14 million for the three months ended June 30, 2026 and 2025, respectively and $0.03 million and $0.16 million for the six months ended June 30, 2026 and 2025, respectively.
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
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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 seven year period equal to the average customer term, which the Company deems to be the expected period of benefit for these costs.
On the Company’s 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 $0.8 million for both of the three months ended June 30, 2026 and 2025 and $1.6 million for both of the six months ended June 30, 2026 and 2025.
12. ACCRUED EXPENSES
The following table presents the composition of accrued expenses as of June 30, 2026 and December 31, 2025 (in thousands):
Compensation and related benefits
5,158
8,610
Consulting and professional fees
1,001
1,122
Research and development expenses
356
156
Sales and marketing expenses
972
724
Warranty
197
179
Sales and other taxes payable
595
611
650
914
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
78
%
100
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 $0.3 million. Revenue recognized for the six months ended June 30, 2026 and 2025 that was included in the contract liability balance at the beginning of the year
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was $0.7 million and $0.9 million, respectively, and, in each case, primarily represented revenue earned from separately priced extended warranties, customer deposits, milestone revenue, and clinical training.
Geographical information
Revenues generated to customers outside of the United States were $1.0 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively, and $1.2 million and $0.9 million for the six months ended June 30, 2026 and 2025, respectively.
14. DEBT
The following table presents the composition of debt as of June 30, 2026 and December 31, 2025 (in thousands):
Outstanding principal
65,000
70,000
Less debt discounts
(3,481)
(4,193)
Total debt, net
Less current portion
For the three months ended June 30, 2026, the Company recognized interest expense of $2.1 million, of which $1.9 million was cash and $0.2 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of final payment fees. For the three months ended June 30, 2025, the Company recognized interest expense of $2.0 million, of which $1.8 million was cash and $0.2 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of final payment fees.
For the six months ended June 30, 2026, the Company recognized interest expense of $4.4 million, of which $3.9 million was cash and $0.5 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of final payment fees. For the six months ended June 30, 2025, the Company recognized interest expense of $3.9 million, of which $3.5 million was cash and $0.4 million was non-cash interest expense related to the amortization of deferred debt issuance costs and accrual of final payment fees.
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 $60.0 million credit facility with SLR Investment Corp. (formerly known as Solar Capital Ltd.).
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The Perceptive Facility permits the Company to borrow up to an aggregate amount of $90.0 million in three tranches of term loans, a “Tranche 1 Loan”, a “Tranche 2 Loan” and a “Tranche 3 Loan.” On July 25, 2024, the Company borrowed an aggregate amount of $50.0 million, which was the aggregate amount available under the Tranche 1 Loan. Under the Tranche 2 Loan, the Company was permitted to borrow, at its election, up to an aggregate amount of $15.0 million (i) upon the Company achieving a specified amount of trailing twelve months net revenue, and (ii) assuming there had been no event of default under the Perceptive Facility prior to such election. The Tranche 2 Loan was available until January 31, 2026. Under the Tranche 3 Loan, the Company was permitted to borrow, at the consent of the Majority Lenders (as defined in the Perceptive Facility), up to an aggregate amount of $25.0 million. The Tranche 3 Loan was available until June 30, 2026. There are no scheduled repayments of the principal on the Tranche 1 Loan, the Tranche 2 Loan or the Tranche 3 Loan prior to the maturity date. All amounts borrowed under the Perceptive Facility are due on July 25, 2029.
Each of the Tranche 1 Loan, 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 7.00% plus the greater of (a) 4.50% and (b) One-Month Term SOFR (as defined in the Perceptive Facility).
If the Company prepays 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 6% of the principal amount of such term loan then-prepaid if prepaid on or before the first anniversary of the closing date, 5% of the principal amount of such term loan then-prepaid if prepaid after the first anniversary and on or before the second anniversary of the closing date, 4% of the principal amount of such term loan then-prepaid if prepaid after the second anniversary and on or before the third anniversary of the closing date, and 3% of the principal amount of such term loan then-prepaid if prepaid after the third anniversary and on or before the fourth anniversary of the closing date.
The Company’s obligations under the Perceptive Facility are secured by a first priority security interest in substantially all of the Company’s assets, including its intellectual property. The Perceptive Facility requires the Company to comply with a quarterly minimum trailing revenue covenant commencing 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 1,462,500 shares of the Company’s common stock, with a warrant exercisable into 1,125,000 shares of the Company’s common stock issued on the closing date (the “Initial Warrant”). The per share exercise price for the Initial Warrant is equal to the lower of (x) the 10-day volume weighted average price of the Company’s common stock on the business day immediately prior to the closing date and (y) the 10-day volume weighted average price of the common stock ended on August 31, 2024. In addition to the Initial Warrant, an additional warrant was issued for 225,000 shares of common stock concurrently with the borrowing of the Tranche 2 Loan. The per share exercise price for the additional warrant will be equal to the exercise price of the Initial Warrant. Each warrant will be exercisable, in whole or in part, until the tenth anniversary of the applicable date of issuance.
Effective as of December 9, 2024, the Company amended the Perceptive Facility and borrowed against the Tranche 3 Loan in a principal amount of $10.0 million and used the proceeds thereof to finance, in part, the operations of the combined enterprise after the acquisition of Greenbrook and the related transactions
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included in the Arrangement. As consideration for Tranche 3 Loan borrowing, the Company issued warrants to purchase 600,000 shares of the Company’s common stock at a per share exercise price of $0.94.
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 $2.6 million. Accordingly, the Company allocated the proceeds from the Perceptive Facility on a relative fair value basis resulting in $2.5 million allocated to the warrants.
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 $10.0 million under Tranche 2, lowered the minimum liquidity balance requirement to $2.0 million through September 30, 2026, and issued Perceptive a warrant certificate exercisable into 225,000 shares of the Company’s common stock.
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 $5.0 million, and Neuronetics and Perceptive agreed to adjustments to the existing debt covenants. In connection with the amendment, the Company incurred a prepayment penalty of $0.3 million, which, together with the proportional write-off of unamortized debt issuance costs and discounts, resulted in a total loss on partial debt extinguishment of approximately $0.5 million for accounting purposes.
As of June 30, 2026, the Company had $65.0 million of borrowings outstanding under the Perceptive Facility, which has a final maturity in July 2029. The interest rate on borrowings under the credit facility is variable and resets monthly.
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 $50.0 million from time to time through the ATM Program. Sales under the Distribution Agreement will be made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-288526) and a related prospectus and prospectus supplement.
During the three and six months ended June 30, 2026, the Company sold an aggregate of 6,052,953 shares of its common stock under the ATM Program at an average price of $1.31 per share, generating gross proceeds of approximately $8.0 million. The Company paid aggregate sales commissions of $0.2 million and incurred additional offering-related expenses of $0.2 million. As a result, net proceeds from the offering are $7.6 million. The Company also amortized $0.1 million of shelf related expenses for the ATM Program.There were no sales under the ATM Program for the three and six months ended June 30, 2025.
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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):
Shares of common stock issued
Shares of common stock reserved for issuance for:
Common stock warrants outstanding
1,950
Stock options outstanding
1,089
1,099
Restricted stock units outstanding
5,483
5,627
Shares available for grant under stock incentive plans
7,412
4,314
Shares available for sale under employee stock purchase plan
2,871
2,181
Total shares of common stock issued and reserved for issuance
94,998
84,165
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
1,125
0.94
July-2034
600
Dec-2034
August-2035
There have been no grants, exercises, or cancellations of warrants during the three and six months ended June 30, 2026 and 2025.
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.
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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):
Stock options
1,223
Non-vested PRSUs
727
1,622
Non-vested restricted stock units
4,756
3,645
Common stock warrants
1,725
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,
22
47
74
199
377
525
461
403
1,214
1,667
2,371
64
176
130
352
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 4% of the Company’s outstanding shares of common stock on the applicable date. The 2026 Plan permits the grant of stock options, stock appreciation rights, restricted stock units, PRSUs, and other stock-based awards to the Company’s directors, employees, consultants, and other eligible service providers. The terms and conditions of awards granted under the 2026 Plan are determined by the Board. As of June 30, 2026, 6.0 million shares remained available for future issuance under the 2026 Plan.
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 1.4 million shares, subject to an annual 4% increase based on the number of shares of common stock outstanding, in the form of restricted stock, stock appreciation rights and stock options to the Company’s directors, employees and consultants. The amount and terms of grants were determined by the Board. All stock options granted to date have had exercise prices equal to the fair value, as determined by the closing price as reported by the Nasdaq Global Market, of the underlying common stock on the date of grant. As of June 30, 2026, there were no shares available for future issuance under the 2018 Plan because the share reserve under the 2018 Plan was decreased to the number of shares of common stock reserved for all outstanding awards under the 2018 Plan.
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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 0.4 million shares in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards and other stock awards to eligible employees who satisfy the standards for inducement grants under Nasdaq Global Market rules. In March 2022, the Board approved an additional 0.5 million shares for issuance under the 2020 Inducement Plan. In October 2025, the Board approved an additional 0.6 million shares for issuance under the plan. An individual who previously served as an employee or director of the Company is not eligible to receive awards under the 2020 Inducement Plan other than following a bona fide period of non-employment. The amount and terms of grants are determined by the Board. As of June 30, 2026, there were 1.4 million shares available for future issuance under the 2020 Inducement Plan.
Stock Options
The following table summarizes the Company’s stock option activity for the six months ended June 30, 2026:
Weighted
Aggregate
Number of
average
Shares under
Remaining
Intrinsic
Option
Contractual
Value
per Option
Life (in years)
Outstanding at December 31, 2025
2.89
Granted
Exercised
Forfeited and Expired
(10)
5.94
Outstanding at June 30, 2026
2.86
0.4
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 no remaining unrecognized compensation cost related to non-vested stock options.
Restricted Stock Units and PRSUs
The following table summarizes the Company’s restricted stock unit and PRSU activity for June 30, 2026:
Non-vested
Restricted
PRSUs
Stock Units
Grant-date
Non-vested at December 31, 2025
4,229
3.33
1,398
3.81
3,376
1.53
Vested
(1,312)
4.16
Forfeited
(1,537)
2.54
(671)
2.95
Non-vested at June 30, 2026
2.08
4.64
The Company recognized $0.7 million and $1.8 million in share-based compensation expense related to the restricted stock units and PRSUs for the three months ended June 30, 2026 and 2025, respectively and $2.4 million and $3.3 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was $8.0 million of unrecognized compensation cost related to non-vested restricted stock units and PRSUs, which the Company expects to recognize over a weighted average period of 2.3 years. The total fair
value at the vesting date of restricted stock units and PRSUs vested during the six months ended June 30, 2026 was $2.0 million.
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 0.3 million shares deferred under the RSUDEP.
The Company did not grant PRSUs during the three and six months ended June 30, 2026.
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 $0 of expenses recorded within other payables on the consolidated balance sheets. As of December 31, 2025, the Company had $0.8 million of expenses recorded within accrued expenses on the consolidated balance sheets.
19. SEGMENT INFORMATION
The Company reports the results of its operations as two segments in its consolidated financial statements: (i) NeuroStar, formerly known as medical device and (ii) Greenbrook, formerly known as clinic services.
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
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
Segment gross profit
11,365
9,858
Significant Segment Expense
Selling, General and Administrative
Direct
6,987
7,579
14,566
1,248
88
Segment profit/(loss)
3,130
2,191
5,321
Unallocated expenses
General and Administrative
6,822
Three months ended June 30, 2025
10,773
6,985
8,888
7,331
16,219
1,739
59
146
(405)
(259)
7,799
21,432
15,945
14,406
15,462
29,868
2,553
2,701
4,473
335
4,808
15,304
20,939
12,557
17,625
15,265
32,890
3,304
110
(2,818)
(2,808)
16,264
20. NONCONTROLLING INTEREST
The Company has operating agreements with several non-wholly owned entities. The non-controlling interest percentages range from 7% to 49%. The Company has control over these entities under U.S. GAAP as the Company has power over all significant decisions made by these entities. Thus, 100% of the financial results of these subsidiaries are included in the Company’s consolidated financial results.
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 $2.6 million related to its ERC claim, consisting of $2.3 million of claims related to fiscal year 2021 and interest of $0.3 million.
During the six months ended June 30, 2026, Greenbrook received $2.2 million related to its ERC claim. On March 2, 2026, the Company entered into an agreement with Madryn Asset Management, LP and its affiliates (collectively, “Madryn”), pursuant to which it paid $1.1 million of the ERC proceeds to Madryn. The Company incurred $0.3 million of professional fees and recognized net other income of $0.8 million. This payment to Madryn related to the Term Loan and Exchange Agreement previously executed between Madryn and Greenbrook prior to the completion of the Arrangement. Madryn is the Company’s largest stockholder, and Avinash Amin, M.D., a representative of Madryn, serves on the Board.
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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
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
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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
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.
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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.
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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 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
Increase / (Decrease)
Dollars
Percentage
(in thousands, except percentages)
3,460
(5)
(0)
Gross Profit
3,465
Gross Margin
51.1
46.6
(1,884)
(16)
(746)
(462)
(26)
(3,092)
(12)
Loss from Operations
6,557
81
Net Loss
6,375
Revenues by Segment
% of
NeuroStar revenue
35
Greenbrook revenue
Total revenues
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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 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 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 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 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 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 decreased by $0.03 million, or 14%, primarily due to lower interest income earned on the Company's money market accounts and notes receivable.
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Comparison of the six months ended June 30, 2026 and 2025
5,939
2,058
3,881
49.2
47.8
(3,146)
(13)
(835)
(3)
(714)
(21)
(4,695)
(9)
8,576
45
(747)
(172)
8,284
41
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 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
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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 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 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 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 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 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 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
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.
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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:
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:
Net Cash used in Operating activities
Net Cash used in Investing activities
Net Cash provided by Financing activities
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
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.
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.
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.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
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.
ExhibitNumber
Description
10.1
Credit Agreement and Guaranty, dated July 25, 2024, by and among Neuronetics, Inc., as the borrower, certain Subsidiaries of Neuronetics, Inc. from time to time party thereto, as guarantors, the lenders from time to time party thereto, and PERCEPTIVE CREDIT HOLDINGS IV, LP, in its capacity as the administrative agent for the lenders (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on July 30, 2024)
10.2◊
Consent and Amendment No. 1 to Credit Agreement and Guaranty and Warrant Certificate dated December 9, 2024 (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on December 10, 2024)
10.3◊
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 dated March 26, 2025 (incorporated by reference to Exhibit 10.52 of the Registrant’s Annual Report on Form 10-K filed on March 27, 2025)
10.4
Amendment No. 3 to Credit Agreement and Guaranty, dated August 1, 2025 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on August 5, 2025)
10.5
Amendment No. 4 to Credit Agreement and Guaranty, dated January 15, 2026 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 22, 2026)
10.6◊
Amendment No. 5 and Waiver to Credit Agreement and Guaranty, dated March 12, 2026 (incorporated by reference to Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K filed on March 17, 2026).
10.7
Underwriting Agreement, dated as of February 7, 2025, by and between Neuronetics, Inc. and Canaccord Genuity LLC (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on February 10, 2025).
10.8
Executive Consulting and Release Agreement by and between the Company and Keith J. Sullivan dated April 1, 2026 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 6, 2026).
10.9*
Neuronetics, Inc. 2026 Equity Incentive Plan
10.10
Offer Letter, effective as of July 10, 2026, by and between the Company and Nir Naor (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 20, 2026)
10.11
Separation Agreement dated July 17, 2026 by and between the Company and W. Andrew Macan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 20, 2026)
23.1
Consent of Ballard Spahr LLP (incorporated by reference to Exhibit 23.1 to the Registrant’s Current Report on Form 8-K filed on February 10, 2025).
31.1*
Certification of the Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of the Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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
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
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.
(Registrant)
Date: August 11, 2026
By:
/s/ Daniel L. Reuvers
Name:
Daniel L. Reuvers
Title:
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Francis X. Brown III
Francis X. Brown III
Interim Principal Financial and Accounting Officer
(Principal Financial and Accounting Officer)