Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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 should be read together with our unaudited condensed consolidated financial statements and the related notes thereto appearing in Part I, Item 1 of this Quarterly Report. This discussion and analysis contains forward-looking statements that are based upon current expectations and involve risks, assumptions and uncertainties. You should review the section titled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 10-K") and in Part II, Item 1.A of this Quarterly Report for a discussion of important risk factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements described in the following discussion and analysis. In addition, historical results and trends that might appear in this Quarterly Report should not be interpreted as being indicative of future operations.

Overview

We are a commercial-stage medical device company that develops and commercializes integrated systems used in minimally invasive neurosurgical procedures in the brain. We have deployed significant resources to fund our efforts to develop the foundational capabilities for enabling MRI-guided interventions, building an intellectual property portfolio, and identifying and building out commercial applications for the technologies developed by our company. Over the past several years, we have expanded our capabilities beyond the MRI suite to include operating room based neurosurgical device products and a growing portfolio of services that support pharmaceutical and biotechnology partners developing gene and cell therapies. In 2025, with the acquisition of IRRAS, we expanded our portfolio into neurocritical care, focusing on treatments for intracerebral hemorrhage, intraventricular hemorrhage, and other conditions requiring intracranial fluid management.

Our business today consists of two integrated components: (i) a business providing medical devices for neurosurgical applications, and (ii) a business focused on partnerships in the biologics and drug delivery space.

Our primary medical device product, the ClearPoint system, is an integrated system comprised of hardware components, disposable components, and intuitive, menu-driven software. The primary applications for the ClearPoint system are to target and guide: (a) the insertion of deep brain stimulation electrodes, biopsy needles, and laser catheters; and (b) the infusion of pharmaceuticals into the brain. The ClearPoint system was originally designed for use in an MRI setting. In 2021, we launched the SmartFrame Array Neuro Navigation System and Software, which allows for operating room placement of the ClearPoint system and completion of the procedure in the MRI suite. In 2024, we introduced the SmartFrame OR Stereotactic System to the market, which allows for complete procedures to be performed in the operating room. In 2025, we released the ClearPoint Navigation Software Version 3.0, which allows for the ClearPoint system navigation software to support end-to-end procedures in the operating room.

In 2022, we commenced commercialization of the ClearPoint Prism Neuro Laser Therapy System, a laser ablation system. The ClearPoint Prism Neuro Laser Therapy System was developed and is manufactured for us by CLS. We have exclusive global rights to commercialize the system for neuro applications.

In 2025, through the acquisition of IRRAS, we added the IRRAflow system to our portfolio of medical devices. The IRRAflow system integrates continuous irrigation, drainage, and real-time intracranial pressure monitoring to provide controlled, automated intracranial fluid management within neurocritical care and operating room settings.

The second component of our business is focused on partnerships in the biologics and drug delivery space, supporting our customers from the earliest stages of their research through their clinical study and commercialization process. Since 2021, a growing and significant part of the revenue from our business has been derived from preclinical development services, which include protocol consultation and solutions for preclinical study design and execution. Our consulting services include a core competency of in vivo biology services in large and small research models to assist our customers with establishing drug safety prior to and in support of their human clinical trials.

Currently, we have more than 60 biologics and drug delivery customers who are evaluating using our products and services in trials to inject gene and cell therapies directly into the brain. These customers have drug development programs at various stages of development, ranging from preclinical research to late-stage regulatory trials for multiple distinct disease states. This part of our business potentially represents the largest opportunity for growth; however, our ability to grow in this market is dependent on our ability to maintain and establish new relationships with pharmaceutical company customers, such customers' continuation of research and product development plans, such customers successfully completing clinical trials and obtaining regulatory approvals of their drugs and biologics, and such customers' realization of commercial success for their therapies, including overcoming barriers in reimbursement, physician adoption, and patient access to their therapies. In 2024, the U.S. Food and Drug Administration (the "FDA") granted marketing authorization for our SmartFlow cannula to be used to deliver a gene therapy for the treatment of aromatic L-amino acid decarboxylase deficiency to regions of interest within the brain.

Factors Which May Influence Future Results of Operations

The following is a description of factors that may influence our future results of operations, and that we believe are important to an understanding of our business and results of operations.

Macroeconomic Trends

We continue to monitor the impacts of various macroeconomic trends, such as inflationary pressure, changes in monetary policy, constraints on hospital capital spending, the introduction of or changes in tariffs or trade barriers, and global or local recession and geopolitical instability. Such changes in domestic and global macroeconomic conditions may lead to increased costs for our business. Additionally, these macroeconomic trends could adversely affect our customers, which could impact their willingness to spend on our products and services, or their ability to make payments, which could harm our collection of accounts receivable and financial results. In particular, a portion of our revenue is derived from products and services supporting pharmaceutical and biotechnology partners' preclinical and clinical development programs, and constraints in the funding environment for these partners, whether due to capital markets conditions or changes in government research funding, could cause partners to delay, scale back or discontinue programs utilizing our products and services. The world's financial markets remain susceptible to significant stresses, resulting in reductions in available credit and government spending, economic downturn or stagnation, foreign currency fluctuations and volatility in the valuations of securities generally. As a result, our ability to access capital markets and other funding sources may not be available in the future on commercially reasonable terms, if at all. We cannot predict with certainty the ultimate impact of these trends on our business, financial condition, results of operations or cash flows, which will depend on future developments. To date, these trends have not had a material adverse impact on our business, financial condition or results of operations.

Revenue

In 2010, we received 510(k) clearance from the FDA to market our ClearPoint system in the U.S. for general neurosurgical procedures; in February 2011 and May 2018, we also obtained CE marking for our ClearPoint system and SmartFlow Neuro cannula, respectively; and in June 2020 we obtained CE marking for version 2.0 of our ClearPoint software and our Inflexion head fixation frame. In January 2021, we received 510(k) clearance for the SmartFrame Array Neuro Navigation System. In September 2022, the ClearPoint Prism Neuro Laser Therapy System, for which we have exclusive global rights to commercialize, received 510(k) clearance through our Swedish partner, CLS. The Prism laser is the first therapy product we have commercialized. In January 2024, we received 510(k) clearance from the FDA for the SmartFrame OR Stereotactic System.

In 2021, we started providing consulting services to our pharmaceutical and other medical technology customers for improving outcome predictability and optimizing preclinical and clinical workflows. Our expertise is concentrated in

benchtop testing, preclinical studies, clinical trial support, regulatory consultation, and over-arching translation from the preclinical to the clinical setting to enhance accuracy and precision of drug delivery.

Our neurosurgery navigation and therapy revenue primarily consists of disposable product commercial sales related to cases utilizing the ClearPoint and IRRAflow systems. Generating recurring revenue from the sale of disposable products is an important part of our business model. Future revenue from sales of such products is difficult to predict and may not be sufficient to offset our continuing research and development expenses and our increasing selling, general and administrative expenses. As a result of the IRRAS acquisition, revenue is expected to grow over the coming years due to a larger combined organization, expanded product offerings, and increased customer reach, both in the U.S. and internationally.

Our biologics and drug delivery revenue comes from sales of products, including disposable products, and services related to customer-sponsored preclinical and clinical trials utilizing our products. Our biologics and drug delivery customers are pharmaceutical and biotech companies, academic institutions, and customer-sponsored contract research organizations that are developing methods to deliver a wide variety of molecules, genes or proteins to targeted brain tissue or structures (our "Partners") that would need to bypass the blood-brain barrier for the treatment of a variety of disorders. This is a novel area in which commercialization must be preceded by FDA-mandated clinical trials, which are expensive and time consuming to conduct, and for which the commercial success is uncertain, pending, in part, on the outcome of those trials. The number of Partner relationships is of importance as we recognize the possibility that some Partners' research will reach commercial success, and others may not. To the extent our Partners achieve commercial success, our expectation is that we will share in such success through our Partners' use of our products and services in their delivery of therapies. At June 30, 2026, we had more than 60 Partners, similar to the number of Partners as of the same date in 2025.

Our capital equipment and software revenue consists of sales of ClearPoint and IRRAflow reusable hardware and software and related services.

Substantially all our revenue for the three and six months ended June 30, 2026 and 2025 relates to: (i) sales of our ClearPoint and IRRAflow system products and related services; and (ii) consulting services provided to our biologics and drug delivery customers. Our product revenue was $7.4 million and $16.2 million for the three and six months ended June 30, 2026, respectively, and was almost entirely related to our ClearPoint system. Our service revenue was $3.5 million and $6.8 million for the three and six months ended June 30, 2026, respectively, of which 88% was related to the biologics and drug delivery service line.

Our revenue recognition policies are more fully described in Note 2 to the condensed consolidated financial statements included above in Part I, Item 1 in this Quarterly Report.

Cost of Revenue

Cost of revenue includes the direct costs associated with the assembly and purchase of components for neurosurgery navigation products, biologics and drug delivery products, non-neurosurgery therapy products, and capital equipment that we have sold, and for which we have recognized revenue in accordance with our revenue recognition policy, as well as labor hours for the cost of providing preclinical and consulting services. Cost of revenue also includes the allocation of manufacturing overhead costs and depreciation of loaned systems installed under our ClearPoint placement program, as well as provisions for obsolete, impaired, or excess inventory.

Research and Development Costs

Our research and development costs consist primarily of costs associated with the conceptualization, design, testing, and prototyping of our ClearPoint system products, cannulas, and enhancements. Such costs include salaries, travel, and benefits for research and development personnel; materials and laboratory supplies in research and development activities; outside consultant costs; and licensing costs related to technology not yet commercialized. We anticipate that, over time, our research

and development costs may increase as we: (i) develop devices and services for delivery of therapeutics into the central nervous system, (ii) expand products into the operating room and therapeutics space, (iii) expand the application of our technological platforms internationally, (iv) invest in the IRRAflow product portfolio and clinical evidence, and (v) develop robotics and focused ultrasound technologies.

Product development timelines, likelihood of success, and total costs can vary widely by product candidate. There are also risks inherent in the regulatory clearance and approval process. At this time, we are unable to estimate with any certainty the costs that we will incur in our efforts to expand the application of our technological platforms.

Sales and Marketing, and General and Administrative Expenses

Our sales and marketing, and general and administrative expenses consist primarily of salaries, incentive-based compensation, travel and benefits, including related share-based compensation; marketing costs; professional fees, including fees for outside attorneys and accountants; occupancy costs; insurance; and other general and administrative expenses, which include, but are not limited to, corporate licenses, director fees, hiring costs, taxes, postage, office supplies, information technology and meeting costs. We expect increases in our sales and marketing expenses as a result of a larger combined sales organization following the IRRAS acquisition, primarily reflecting higher salary and personnel-related costs associated with the larger commercial team following the IRRAS acquisition.

Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2026, as compared to the critical accounting policies and estimates described in our 2025 10-K.

Results of Operations

Three Months Ended June 30, 2026, Compared to the Three Months Ended June 30, 2025

NM - The percentage change is not meaningful.

Revenue. Total revenue was $10.9 million for the three months ended June 30, 2026, and $9.2 million for the three months ended June 30, 2025, which represents an increase of $1.7 million, or 18%.

Biologics and drug delivery revenue decreased to $4.0 million for the three months ended June 30, 2026 from $4.7 million for the three months ended June 30, 2025. This decrease is attributable to lower product revenue due to a single customer order that occurred in the quarter of the prior year and did not recur in the current quarter.

Neurosurgery navigation and therapy revenue increased 62% to $5.6 million for the three months ended June 30, 2026, from $3.4 million for the same period in 2025. The increase is driven primarily by additional revenues due to sales of the IRRAflow product as well as the introduction of our 3.0 operating room navigation software, which has positively impacted procedural volumes in the operating room during the three months ended June 30, 2026, compared to the same period in 2025. We acquired the IRRAflow product in connection with our acquisition of IRRAS in the fourth quarter of 2025.

Capital equipment and software revenue increased 24% to $1.3 million for the three months ended June 30, 2026, from $1.0 million for the same period in 2025 primarily due to an increase in placements of ClearPoint navigation capital and software, IRRAflow control units, and Prism laser units.

Cost of Revenue and Gross Profit. Cost of revenue was $4.2 million, resulting in gross profit of $6.7 million for the three months ended June 30, 2026, and was $3.7 million, resulting in gross profit of $5.6 million for the three months ended June 30, 2025. Gross margin was 62% for the three months ended June 30, 2026, as compared to 60% in the same period in 2025. The increase in gross margin is primarily due to lower excess and obsolete inventory for the three months ended June 30, 2026, as compared to the same period in 2025.

Research and Development Costs. Research and development costs were $4.6 million for the three months ended June 30, 2026, compared to $3.8 million for the same period in 2025, an increase of $0.8 million, or 21%. The increase was due primarily to higher personnel costs of $0.8 million.

Sales and Marketing Expenses. Sales and marketing expenses were $6.8 million for the three months ended June 30, 2026, compared to $4.0 million for the same period in 2025, an increase of $2.7 million, or 68%. This increase was due primarily to additional personnel costs of $1.8 million and increases in travel costs of $0.3 million, resulting from the expansion of our clinical and sales teams. The increase was also driven by additional amortization expense of acquired intangible assets of $0.2 million and marketing material costs of $0.2 million.

General and Administrative Expenses. General and administrative expenses were $5.6 million for the three months ended June 30, 2026, compared to $3.4 million for the same period in 2025, an increase of $2.2 million, or 64%. This increase was due primarily to increases in occupancy costs of $0.7 million, professional service fees of $0.5 million, personnel costs of $0.3 million, general corporate costs of $0.3 million, and information technology and software costs of $0.2 million.

Interest Income. Interest income was $0.3 million for each of the three months ended June 30, 2026 and 2025.

Interest Expense. Interest expense was $1.4 million for the three months ended June 30, 2026, compared to $0.4 million for the same period in 2025, an increase of $1.0 million. Interest expense increased due to the issuance of notes payable in May and November 2025. See Note 8 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information with respect to the notes payable issued in May and November 2025.

Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025

NM - The percentage change is not meaningful.

Revenue. Total revenue was $23.0 million for the six months ended June 30, 2026, and $17.7 million for the six months ended June 30, 2025, which represents an increase of $5.3 million, or 30%.

Biologics and drug delivery revenue decreased to $8.8 million for the six months ended June 30, 2026 from $9.4 million for the six months ended June 30, 2025. This decrease is attributable to lower product revenue due to a single customer order that occurred in the six-month period of the prior year and did not recur in the current period. In general, this category of revenue is impacted by timing of our Partners' drug development programs and tends to be uneven quarter to quarter.

Neurosurgery navigation and therapy revenue increased 71% to $11.4 million for the six months ended June 30, 2026, from $6.7 million for the same period in 2025. The increase is driven primarily by additional revenues due to sales of the IRRAflow product as well as the introduction of our 3.0 operating room navigation software, which has positively impacted procedural

volumes in the operating room during the six months ended June 30, 2026, compared to the same period in 2025. We acquired the IRRAflow product in connection with our acquisition of IRRAS in the fourth quarter of 2025.

Capital equipment and software revenue increased 75% to $2.7 million for the six months ended June 30, 2026, from $1.6 million for the same period in 2025 primarily due to an increase in placements of ClearPoint navigation capital and software, IRRAflow control units, and Prism laser units.

Cost of Revenue and Gross Profit. Cost of revenue was $8.5 million, resulting in gross profit of $14.5 million for the six months ended June 30, 2026, and was $7.0 million, resulting in gross profit of $10.7 million for the six months ended June 30, 2025. Gross margin was 63% for the six months ended June 30, 2026, as compared to 60% in the same period in 2025. The increase in gross margin is primarily due to lower excess and obsolete inventory for the six months ended June 30, 2026, as compared to the same period in 2025.

Research and Development Costs. Research and development costs were $9.2 million for the six months ended June 30, 2026, compared to $7.2 million for the same period in 2025, an increase of $1.9 million, or 27%. The increase was due primarily to increases in personnel costs of $1.4 million, repair costs of $0.2 million, quality audit fees of $0.1 million, and travel costs of $0.1 million.

Sales and Marketing Expenses. Sales and marketing expenses were $13.5 million for the six months ended June 30, 2026, compared to $7.9 million for the same period in 2025, an increase of $5.6 million, or 72%. This increase was due primarily to additional personnel costs of $3.7 million and increases in travel costs of $0.8 million, resulting from the expansion of our clinical and sales teams. The increase was also driven by additional amortization expense of acquired intangible assets of $0.4 million and marketing material costs of $0.4 million.

General and Administrative Expenses. General and administrative expenses were $10.6 million for the six months ended June 30, 2026, compared to $7.5 million for the same period in 2025, an increase of $3.1 million, or 41%. This increase was due primarily to increases in occupancy costs of $1.3 million, personnel costs of $0.5 million, professional service fees of $0.5 million, information technology and software costs of $0.4 million, and general corporate costs of $0.4 million.

Interest Income. Interest income was $0.6 million for the six months ended June 30, 2026, compared to $0.4 million for the same period in 2025, an increase of $0.2 million, or 47%. The increase is due to higher investment in U.S. government debt securities.

Interest Expense. Interest expense was $2.8 million for the six months ended June 30, 2026, compared to $0.4 million for the same period in 2025, an increase of $2.4 million. Interest expense increased due to the issuance of notes payable in May and November 2025. See Note 8 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information with respect to the notes payable issued in May and November 2025.

Liquidity and Capital Resources

We have incurred net losses since our inception as we have devoted substantial efforts to research and development, which has resulted in a cumulative deficit at June 30, 2026 of $237.8 million. Our use of cash from operations amounted to $15.0 million for the six months ended June 30, 2026, and $23.9 million for the year ended December 31, 2025. Our primary uses of cash and operating expenses relate to paying employees and consultants, marketing our products, and supporting our research and development of future product offerings. Since inception, we have financed our operations principally from the sale of equity securities and the issuance of notes payable.

In May 2025, we received net proceeds of approximately $3.3 million, after deducting offering expenses payable by the Company, from a registered direct offering. See Note 10 to the condensed consolidated financial statements included elsewhere in this Quarterly Report.

Also in May 2025, we entered into a note purchase agreement under which we may sell tranches of notes in an aggregate principal amount of up to $105.0 million. As of June 30, 2026, we have received net proceeds of approximately $48.1 million from the sale of two notes thereunder. See Note 8 to the condensed consolidated financial statements included elsewhere in this Quarterly Report.

In November 2024, we established an at-the-market equity offering program under which we may offer and sell, from time to time, shares of our common stock having aggregate sales proceeds of up to $50.0 million. As of June 30, 2026, we had not sold any shares of common stock under our at-the-market equity offering program. See Note 10 to the condensed consolidated financial statements included elsewhere in this Quarterly Report.

Our cash and cash equivalents totaled $29.4 million at June 30, 2026. In management's opinion, based on our current forecasts, our cash and cash equivalent balances at June 30, 2026 are sufficient to support our operations and meet our obligations for at least the next twelve months from the date of issuance of the condensed consolidated financial statements included elsewhere in this Quarterly Report.

We may offer and sell additional equity or issue additional notes payable to raise funds for working capital, capital expenditures, or other general corporate purposes.

Cash Flows

Cash activity for the six months ended June 30, 2026 and 2025 is summarized as follows:

Net Cash Used in Operating Activities. Net cash used in operating activities for the six months ended June 30, 2026 was $15.0 million, an increase of $6.3 million from the six months ended June 30, 2025. This increase was primarily due to a higher net loss of $9.0 million, which was partially offset by higher non-cash expenses of $2.5 million attributed to amortization of intangible assets, share-based compensation, and payment-in-kind interest. We expect our net cash used in operating activities to decrease during the remainder of 2026 as we benefit from the completion of the IRRAS integration.

Net Cash Used in Investing Activities. Net cash used in investing activities for the six months ended June 30, 2026 and June 30, 2025 was $0.9 million and $0.3 million, respectively, and related to equipment acquisitions.

Net Cash (Used in) Provided by Financing Activities. Net cash used in financing activities for the six months ended June 30, 2026 consisted primarily of $2.0 million in payments for taxes related to shares withheld in connection with the vesting of restricted stock awards; partially offset by $0.6 million of proceeds from stock option exercises and $0.5 million of proceeds from the issuance of common stock under our employee stock purchase plan.

Net cash provided by financing activities for the six months ended June 30, 2025 consisted primarily of proceeds, net of financing costs and discount, of $28.7 million from the issuance of a note payable; proceeds, net of offering costs, of $3.3

million from the registered direct offering of common stock; partially offset by $1.7 million in payments for taxes related to shares withheld in connection with the vesting of restricted stock awards.

Operating Capital and Capital Expenditure Requirements

To date, we have not achieved profitability. We expect to continue to incur net losses as we continue our efforts to expand the commercialization of our products and services and pursue additional applications for our technology platforms. Our cash balances are primarily held in a variety of demand accounts with a view to liquidity and capital preservation.

Our short- and long-term liquidity requirements include the obligations under notes payable and under lease arrangements related to our office and manufacturing facilities under non-cancellable operating leases. See Notes 8, 9, and 12 to the condensed consolidated financial statements included elsewhere in this Quarterly Report. We typically enter into short-term agreements with vendors and suppliers of goods and services in the normal course of business through purchase orders, which are settled in cash upon our receipt of such goods or services. We may also at times enter into long-term commitments or license and collaboration agreements which require commitments that are noncancellable. See Note 10 to the consolidated financial statements included in our 2025 10-K.

Because of the numerous risks and uncertainties associated with the development and commercialization of medical devices, we are unable to estimate the exact amounts of capital outlays and operating expenditures necessary to successfully commercialize our products and pursue additional applications for our technology platforms. Our future capital requirements will depend on many factors, including, but not limited to, the following: