Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes thereto and other financial information included elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, some of the information contained in the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. You should review the Risk Factors section of this Annual Report on Form 10-K for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We believe that mental health is as important as physical health. As a global leader in neuroscience, we are delivering more treatment options to patients and healthcare providers by offering exceptional in-office treatments that produce extraordinary results. Our first commercial product, the NeuroStar Advanced Therapy System, is a non-invasive and non-systemic office-based treatment that uses TMS to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The system is cleared by the FDA to treat adult patients with MDD that have failed to achieve satisfactory improvement from prior antidepressant medication in the current MDD episode. It is also cleared by the FDA as an adjunct for adults with OCD and for adolescent patients aged 15-21 with MDD. It is also cleared by the FDA to decrease anxiety symptoms in adult patients with MDD that may exhibit comorbid anxiety symptoms (anxious depression). In addition to selling the NeuroStar Advanced Therapy System and associated treatment sessions to customers, we operate Greenbrook Treatment Centers across the U.S., offering NeuroStar Advanced Therapy. Greenbrook, a leading provider of mental healthcare services, is a wholly owned subsidiary of the Company. The NeuroStar Advanced Therapy System is safe, clinically effective, reproducible and precise and we believe is supported by the largest clinical data set of any competing TMS system. We believe we are the market leader in TMS therapy based on the estimated 237,574 global patients treated with over 8.5 million of our treatment sessions through December 31, 2025. We generated revenues of $149.2 million and $74.9 million for the years ended December 31, 2025 and 2024, respectively.

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

We designed the NeuroStar Advanced Therapy System as a non-invasive therapeutic alternative to treat patients who suffer from MDD and to address many of the key limitations of existing treatment options. 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 clinic revenue and treatment sessions.

We currently operate under in two segments: Medicial device and Clinic services. We generate revenues from clinic operations, initial capital sales of our systems, sales of our recurring treatment sessions and from service and repair and extended warranty contracts.

For the year ended December 31, 2025 revenues from sales of our clinic revenue, treatment sessions and NeuroStar Advanced Therapy Systems represented 59%, 30% and 10% of our U.S. revenues, respectively. For the year ended December 31, 2024, revenues from sales of our clinic, treatment sessions and NeuroStar Advanced Therapy Systems represented 6%, 70% and 21% of our U.S. revenues, respectively.

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

Clinic revenue reimbursements are derived from third-party payors including federal and state agencies (under the Medicare programs), managed care health plans and commercial insurance companies.

We currently sell our NeuroStar Advanced Therapy 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 our NeuroStar Advanced Therapy System to providers and their MDD patients. Some of our customers have purchased or may purchase more than one NeuroStar Advanced Therapy System. Based on our commercial data, we believe providers can recoup their initial capital investment in our system by providing a standard course of treatment to approximately 12 patients. We believe psychiatrists can generate approximately $9,000 of average revenue per patient for a standard course of treatment, which may provide meaningful incremental income to their practices. We have a diverse customer base in the U.S. Patients are reimbursed by federal healthcare programs and the vast majority of commercial payors in the U.S. for treatment sessions utilizing our NeuroStar Advanced Therapy System. For the years ended December 31, 2024 and 2023, one customer Greenbrook, accounted for 12% and 15%, respectively, of the Company's revenue. Following the acquisition of Greenbrook, there are no significant customers.

We market our products in a few select markets outside the United States through independent distributors. International revenues represented 2% and 3% of our total revenues for the years ended December 31, 2025 and 2024, respectively. In October 2017, we entered into an exclusive distribution agreement, for the distribution of our NeuroStar Advanced Therapy Systems and treatment sessions to customers who will treat patients with MDD in Japan. We received regulatory approval for our system in Japan in September 2017. We obtained reimbursement coverage for NeuroStar Advanced Therapy System in Japan, which went into effect on June 1, 2019 and covers patients who are treated in the largest inpatient and outpatient psychiatric facilities in Japan. We expect our international revenues to decrease as a percentage of our total revenue.

Our research and development efforts are focused on hardware and software product developments and enhancements of our NeuroStar Advanced Therapy System and clinical development relating to additional indications. We outsource the manufacture of components of our NeuroStar Advanced Therapy Systems that are produced to our specifications, and individual components are either shipped directly from our third-party contract manufacturers to our customers or consolidated into pallets at our Malvern, Pennsylvania facility prior to shipment. Final installation of these systems occurs at the customer site.

Our total revenues increased by $74.3 million, or 99%, from $74.9 million for the year ended December 31, 2024 to $149.2 million for the year ended December 31, 2025, due to the inclusion of revenues from our Greenbrook acquisition. For the year ended December 31, 2025, our U.S. revenues were $146.0 million,

compared to $72.5 million for the year ended December 31, 2024, which represented an increase of 101% year over year. As of December 31, 2025, we had an accumulated deficit of $458.8 million.

Components of Our Results of Operations

Revenues

We have generated revenues primarily from the sale of our NeuroStar Advanced Therapy Systems and related sales and rentals of the NeuroStar Advanced Therapy System, clinic revenue and the recurring revenues from our sale of treatment sessions in the U.S.

Clinic Revenues. 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 Advanced Therapy System Revenues. NeuroStar Advanced Therapy System revenues consist primarily of sales or rentals of a capital component, including equipment upgrades to the initial sale of the NeuroStar Advanced Therapy System. NeuroStar Advanced Therapy Systems can be purchased outright or on a rent-to-own basis by certain customers.

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 NeuroStar Advanced Therapy 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.

We refer you to the section titled "Critical Accounting Policies and Use of Estimates-Revenue Recognition" appearing elsewhere in this Annual Report on Form 10-K for additional information regarding how we account for revenues.

Sales in the United States represented 98% of our total revenues for the year ended December 31, 2025 and 97% for the year ended December 31, 2024, and have been generated by our direct sales force. Outside the United States, our sales are made through local third-party distributors. International revenues were 2% for the years ended December 31, 2025 and 3% for the year ended December 31, 2024. We expect our United States revenue will increase in the near term as we continue to expand active customer sites utilizing our NeuroStar Advanced Therapy Systems and increase the related patient utilization in the United States. We expect our revenues to be positively impacted to the extent our direct sales force is successful in increasing the rate of adoption and utilization of treatment with TMS Therapy as an alternative to other MDD treatments.

Cost of Revenues and Gross Margin

Cost of revenues primarily consists of the costs of components and products purchased from our third-party contract manufacturers of our NeuroStar Advanced Therapy Systems as well as the cost of treatment packs for individual treatment sessions. We use third-party contract manufacturing partners to produce the components for and assemble the completed NeuroStar Advanced Therapy Systems. Cost of revenues also includes costs related to personnel, royalties, warranty, shipping, amortization of capitalized software and our operations and field service departments. Our treatment center costs include direct center and patient care

costs, regional employee compensation and depreciation. We expect our cost of revenues to increase mainly for treatment centers, as our product mix changes.

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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 NeuroStar Advanced Therapy Systems and clinic revenue are lower than our gross margins on revenues from sales of treatment sessions and, as a result, the sales mix between NeuroStar Advanced Therapy Systems, clinic revenues and treatment sessions can affect the gross margin in any reporting period.

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Sales and Marketing Expenses

Sales and marketing expenses consist of market research and commercial activities related to the sale of our NeuroStar Advanced Therapy Systems and treatment sessions and personnel costs including salaries and related benefits, sales commissions and share-based compensation for employees focused on these efforts. Other significant sales and marketing costs include conferences and trade shows, promotional and marketing activities, including direct and online marketing, practice support programs, primarily digital media campaigns, travel and training expenses.

We anticipate that our sales and marketing expenses will 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, information technology, legal and human resource functions. General and administrative expenses also include the cost of insurance, outside legal fees, accounting and other consulting services, audit fees from our independent registered public accounting firm, board of directors' 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 increase in 2026 from 2025 due to an increase in the overall size of the general and administrative function within the consolidated company and investments needed to streamline systems and leverage automation.

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 remain consistent during 2026 compared to 2025 expenses.

Interest Expense

Interest expense consists of cash interest payable under our credit facility and the amortization of deferred financing costs related to our indebtedness.

Loss on extinguishment of debt

Loss on debt extinguishment consists of prepayment penalties and impairment of deferred financing costs associated with the extinguishment of debt, as well as fees incurred with third parties in connection with debt extinguishment.

Other Income, Net

Other income, net consists primarily of interest income earned on our money market account balances and notes receivable.

Results of Operations

Comparison of the Years ended December 31, 2025 and 2024

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Revenues

Total revenues increased by $74.3 million, or 99%, from $74.9 million for the year ended December 31, 2024, to $149.2 million for the year ended December 31, 2025. For the year ended December 31, 2025, U.S. revenue increased by 101% and international revenue increased by 29% over the comparative prior year period.

The increase in revenue was primarily attributable to increased U.S. clinic revenue of $82.5 million, added as a result of the acquisition of Greenbrook in December 2024 and an increase in international revenue of $0.7 million, partially offset by the absence of prior year sales to Greenbrook of $8.8 million and a decrease of $0.1 million in all other revenues.

The international revenue growth was primarily driven by an increase in NeuroStar Advanced Therapy System revenue.

U.S. NeuroStar Advanced Therapy System revenue for the year ended December 31, 2025 was $14.3 million, a decrease of 7% compared year ended December 31, 2024 revenue of $15.3 million. The $1.0 million decrease in revenue was directly attributable to a decrease in the number of units sold from 185 units for the year ended December 31, 2024 to 159 units for the year ended December 31, 2025. This decrease in revenue was partially offset by a marginal increase in our average selling price per unit. The Company expects to recognize future recurring treatment session revenue related to the sale of 160 NeuroStar Advanced Therapy Systems for the year ended December 31, 2025 including 1 unit recognized as an operating lease for December 31, 2025.

U.S. treatment session revenue for the year ended December 31, 2025 was $43.3 million, a decrease of 15% compared to year ended December 31, 2024 revenue of $50.8 million. The decline was primarily attributable to the absence of $8.2 million in treatment session revenue to Greenbrook associated with the prior year period, which is offset by an increase in treatment session volume with other customers compared to the prior year period

Cost of Revenues and Gross Margin

Cost of revenues increased by $56.1 million, or 271%, from $20.7 million for the year ended December 31, 2024 to $76.8 million for the year ended December 31, 2025. Gross margin was 48.5% for the year ended December 31, 2025 compared to 72.3% for the year ended December 31, 2024. The decrease in gross margin was primarily a result of the inclusion of Greenbrook's clinic business and reduction in treatment session revenue.

Sales and Marketing Expenses

Sales and marketing expenses increased by $1.8 million, or 4%, from $45.6 million for the year ended December 31, 2024 to $47.5 million for the year ended December 31, 2025. Sales and marketing expense

increased during the period due to the inclusion of Greenbrook, which was offset by the decrease in bad debt expense during the same period.

General and Administrative Expenses

General and administrative expenses increased by $19.4 million, or 64% from $30.3 million for the year ended December 31, 2024 to $49.7 million for the year ended December 31, 2025. The increase was primarily driven by the addition of general and administrative expenses related to post acquistion, partially offset by cost synergies realized following the acquisition of Greenbrook.

Research and Development Expenses

Research and development expenses decreased by $6.2 million, or 48%, from $12.8 million for the year ended December 31, 2024 to $6.6 million for the year ended December 31, 2025. Research and development expenses for 2024 included a $4.0 million non-cash software impairment charge related to the Company's decision to halt development of a product release following a strategic reassessment of product development priorities and strategies after the Greenbrook acquisition.

Excluding the prior-year impairment charge, the decrease in research and development expenses in 2025 was driven by personnel expense savings related to restructuring after the Company's acquisition of Greenbrook.

Interest Expense

Interest expense increased by $1.1 million, or 15%, from $7.3 million for the year ended December 31, 2024 to $8.4 million for the year ended December 31, 2025 primarily due to a higher outstanding debt balance.

Loss on extinguishment of debt

No loss on extinguishment of debt was recorded during the year ended December 31, 2025. During the year ended December 31, 2024, the Company recorded a loss on extinguishment of debt of $4.4 million related to the Solar Facility, which consisted of $1.2 million in early prepayment fees and $3.2 million related to the write-off of deferred financing costs.

Other Income, Net

Other income, net decreased by $1.8 million from $2.5 million for the year ended December 31, 2024 to $0.7 million for the year ended December 31, 2025, primarily as a result of decreased interest income earned on the Company's money market accounts and notes receivable interest.

Comparison of the Years ended December 31, 2024 and 2023

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The information required within this section is incorporated by reference to the information set forth in the section titled "Comparison of the Years ended December 31, 2024 and 2023" in "Management's Discussion and Analysis of our Financial Condition and Results of Operations" in our 2024 Annual Report on Form 10-K filed on March 27, 2025.

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Liquidity and Capital Resources

Overview

As of December 31, 2025, we had cash and cash equivalents of $28.1 million and an accumulated deficit of $458.8 million, compared to cash and cash equivalents of $18.5 million and an accumulated deficit of $419.8

million as of December 31, 2024. We incurred negative cash flows from operating activities of $20.4 million and $31.0 million for the years ended December 31, 2025 and 2024, respectively. We have incurred operating losses since our inception, and we anticipate that our operating losses will continue in the near term as we seek to expand our sales and marketing initiatives to support our growth in existing and new markets, invest funds in additional research and development activities and utilize cash for other corporate purposes. The Company's primary sources of capital to date have been from its initial public offering ("IPO"), borrowings under its credit facility, proceeds from its secondary public offering of common stock (including, without limitation, our ATM Program), and revenues from sales of its products. The Company entered into a Credit Agreement and Guaranty with Perceptive as collateral agent and other lenders defined in the Perceptive Facility. As of December 31, 2025, the Company had $70.0 million of borrowings outstanding under the Perceptive Facility, which has a final maturity on July 25, 2029. The Perceptive Facility is subject to certain financial covenants including a minimum net revenue covenant that escalates over the term of the Perceptive Facility and a minimum liquidity covenant.

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 $19.0 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 ("Canaccord"), 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 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 year ended December 31, 2025, the Company sold an aggregate of 2,261,835 shares of its common stock under the ATM Program at an average price of $3.68 per share, generating gross proceeds of approximately $8.3 million. The Company paid aggregate sales commissions of $0.3 million and incurred additional offering-related expenses of $0.2 million. As a result, net proceeds from the offering were $7.8 million.

As of December 31, 2025, the Company had approximately $41.7 million remaining available for future issuance under the ATM Program.

On March 12, 2026, the Company amended the terms of its credit arrangement to modify the required revenue covenants through December 31, 2026 and the liquidity covenants through September 30, 2027. 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 lines and the realization of synergies subsequent to its acquisition of Greenbrook. Management believes that the Company's cash and cash equivalents as of December 31, 2025 and anticipated revenues from sales of our products and services are sufficient to fund the Company's operations for at least the next 12 months from the issuance of these consolidated financial statements.

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If our cash and cash equivalents and anticipated revenues from sales of our products and services are insufficient to satisfy our liquidity requirements, we may seek to sell additional common or preferred equity or debt securities or enter into a new credit facility or another form of third-party funding or seek other debt financing. If we raise additional funds by issuing equity or equity-linked securities, our stockholders would experience dilution and any new equity securities could have rights, preferences and privileges superior to those of holders of our common stock. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. We cannot be assured that additional equity, equity-linked or debt financing will be available on terms favorable to us or our stockholders, or at all. It is also possible that

we may allocate significant amounts of capital towards products or technologies for which market demand is lower than expected and, as a result, abandon such efforts. If we are unable to maintain our current financing or obtain adequate additional financing when we require it, or if we obtain financing on terms which are not favorable to us, or if we expend capital on products or technologies that are unsuccessful, our ability to continue to support our business growth and to respond to business challenges could be significantly limited, or we may be required to delay the development, commercialization and marketing of our products and services.

Our current and future funding requirements will depend on many factors, including:

The Company's material cash requirements include the following contractual and other obligations.

Debt

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

On March 7, 2024, the Company entered into the "Solar Sixth Amendment".

Under the Solar Sixth Amendment, Solar (i) waived the specified events with respect to the Company's non-compliance with the required revenue under the net product revenue covenant and (ii) amended the financial covenants to reflect current projections.

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

On July 25, 2024, the Company entered into a Credit Agreement and Guaranty with Perceptive and used the proceeds to partially prepay in full all outstanding obligations under our Solar Facility. In connection with this prepayment, the Company paid Solar $64.7 million, which consisted of (i) $60.0 million of remaining principal amount outstanding, (ii) $0.5 million of accrued and unpaid interest, (iii) $3.0 million in connection with the final payment fee, and (iv) $1.2 million in connection with the prepayment fee. The Company funded the prepayment of the Solar Facility using proceeds from the Perceptive Facility and cash on hand.

In connection with the Perceptive Facility and closure of the Solar Facility, the Company recorded a loss on extinguishment of $4.4 million. This included $1.2 million of early prepayment fees and $3.2 million of deferred financing expense related to extinguishment of debt.

In July 2025 the Company borrowed an additional $10 million under the Perceptive Facility.

As of December 31, 2025, the Company had $70.0 million of borrowings outstanding under the Perceptive Facility, which has a final maturity on July 25, 2029. The interest rate on borrowings under the Perceptive Facility is the sum of 7.00% plus the greater of (a) 4.50% and (b) One-Month Term SOFR (as defined in the Perceptive Facility).

Leases

The Company has lease arrangements for equipment and certain facilities, including our corporate headquarters and warehouse in Malvern, Pennsylvania and a training facility in Charlotte, North Carolina. Additionally the Company has lease agreements related to its treatment centers. These lease agreements range from "month-to-month" to seven years in length. As of December 31, 2025, the Company had fixed lease payment obligations of $34.8 million, including $7.9 million due within the next twelve months.

Cash Flows

The following table sets forth a summary of our cash flows for the years ended December 31, 2025, 2024, and 2023:

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Net Cash Used in Operating Activities

Net cash used in operating activities for 2025 was $20.4 million, consisting primarily of a net loss of $39.1 million which is partially offset with a decrease in net operating assets of $6.6 million, and non-cash charges of $12.1 million, primarily consisting of depreciation and amortization, allowance for credit losses, share-based compensation and non-cash interest expense. The decrease in net operating assets was primarily due to decreases in accounts receivable, prepaid expense and other assets, partially offset with decreases in accounts payable and accrued expenses.

Net cash used in operating activities for 2024 was $31.0 million, consisting primarily of a net loss of $43.7 million and an increase in net operating assets of $6.8 million, partially offset by non-cash charges of $19.5 million, primarily consisting of depreciation and amortization, capitalized software impairment, allowance for credit losses, share-based compensation, non-cash interest expense and loss on extinguishment of debt. The

increase in net operating assets was primarily due to increases in accounts receivable, prepaid expenses and other assets, prepaid commission expense and decreases in accounts payable and accrued expenses.

Net cash used in operating activities for 2023 was $32.0 million, consisting primarily of a net loss of $30.2 million and an increase in net operating assets of $14.1 million, partially offset by non-cash charges of $12.3 million. The increase in net operating assets was primarily due to increases in accounts receivable and prepaid commission expense, and decreases in accrued compensation. Non-cash charges consisted of depreciation and amortization, non-cash interest expense, share-based compensation, and the cost of rental units purchased by customers.

Net Cash Used in Investing Activities

Net cash used in investing activities for the years ended December 31, 2025, 2024 and 2023 was $(0.8) million, $(2.4) million and $(1.3) million, respectively.

Net cash used in investing activities for the year ended December 31, 2025 was attributable to purchases of property and equipment and capitalized software costs.

Net cash used in investing activities for the year ended December 31, 2024 was due to cash paid for acquisition, net of cash and restricted cash acquired, purchases of property and equipment and capitalized software costs partially offset by payment received on our promissory notes.

Net cash used in investing activities for the year ended December 31, 2023 was due to payments received on our promissory notes offset partially by purchases of property and equipment and capitalized software.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025 was $35.9 million. This primarily reflected proceeds from the issuance of common stock of $20.7 million and proceeds from the issuance of long-term debt of $10.0 million. In addition, the Company received approximately $8.3 million in proceeds from the issuance of common stock under the ATM Program. These proceeds were partially offset by common stock offering issuance costs of $1.7 million, payments of issuance costs under the ATM Program of $0.5 million, and debt issuance costs. Further, the Company made payments on a promissory note, deferred and contingent consideration and distributions to non-controlling interests totaling $0.8 million.

Net cash used in financing activities for the year ended December 31, 2024 was $6.8 million and primarily consisted of the repayment of the Solar Facility, proceeds from the Perceptive Facility, issuance of long-term debt and warrants and payment of debt issuance costs related to the Perceptive Facility.

Net cash provided by financing activities for the year ended December 31, 2023 was $22.7 million attributable primarily to additional debt net of final payment and amendment fee paid in connection with the two amendments of the Solar Facility in 2023.

Indebtedness

Refer to Note 14. Debt in our audited financial statements and related notes thereto appearing elsewhere in this Annual Report on Form 10-K for information regarding our current Perceptive Facility.

Perceptive Credit Facility

The following table sets forth by year our required future principal payments under the term loan portion of the Perceptive Facility (as discussed in Note 14. Debt) (in thousands):

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Common Stock Offering

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 $19.0 million after deducting underwriting discounts, commissions and estimated offering expenses.

On July 3, 2025, the Company entered into the Distribution Agreement, pursuant to which the Company could 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 year ended December 31, 2025, the Company sold an aggregate of 2,261,835 shares of its common stock under the ATM Program at an average price of $3.68 per share, generating gross proceeds of approximately $8.3 million. The Company paid aggregate sales commissions of $0.3 million and incurred additional offering-related expenses of $0.2 million resulting in, net proceeds from the offering of $7.8 million.

As of December 31, 2025, the Company had approximately $41.7 million remaining available for future issuance under the ATM Program.

Critical Accounting Policies and Use of Estimates

The preparation of our consolidated financial statements in accordance with U.S. GAAP and the rules and regulations of the SEC requires us to make 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. We base our estimates and assumptions on historical experience, known trends and events and various other factors that we believe 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 we believe our estimates and assumptions are reasonable when made, they are based upon information available to us at the time they are made. We evaluate our estimates and assumptions on an ongoing basis and, if necessary, make adjustments. Due to the risks and uncertainties involved in our business and evolving market conditions and given the subjective element of the estimates and assumptions made, actual results may differ from estimated results.

We define our critical accounting policies as those accounting policies that are most important to the portrayal of our financial condition and results of operations and require our most difficult and subjective judgments. While our significant accounting policies are more fully described in Note 3. Summary of Significant Accounting Policies in our audited consolidated financial statements and related notes thereto appearing

elsewhere in this Annual Report on Form 10-K, we believe the following discussion addresses our most critical accounting policies.

Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. Under ASC 606, we recognize revenue when control of the promised good or service is transferred to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those good or services. Accordingly, we determine revenue recognition by applying the following steps:

We primarily earn revenues from clinic revenue, the sale of NeuroStar Advanced Therapy Systems, consumable use treatment sessions, and accessory products. A contract's transaction price is allocated to each performance obligation and recognized as revenue when, or as, the performance obligation is satisfied, which generally is the point in time when the product is shipped or control is transferred. We sell to end users in the United States and to third-party distributors outside the United States and do not provide return rights. Sales to distributors outside the United States are made in U.S. dollars.

Revenue attributable to the NeuroStar Advanced Therapy Systems purchased on a rent-to-own basis are accounted for either (1) as operating leases and revenue is recognized on a straight-line basis over the term of the lease; or (2) as a sales-type lease and revenue is recognized upon installation.

Our NeuroStar Advanced Therapy System sales in the United States typically have a post-sale training obligation. This obligation is fulfilled after product shipment, and we defer recognizing revenue until training occurs. We defer the fair value attributable to the post shipment training and recognize such revenue when the obligation is fulfilled. We base the fair value of the training using stand-alone service rates. Our sales to our third-party distributors outside the United States do not have these post-sale obligations.

In addition, we provide a one-year warranty for systems sold in the United States. Terms of product warranty differ amongst our third-party distributors outside the United States, but are generally one year. We provide for the estimated cost to repair or replace products under any warranty at the time of sale. We also offer our customers in the United States annual service contracts. Revenue from the sale of annual service contracts is recognized on a straight-line basis over the period of the applicable contract. We also earn revenue from customers from services outside of their warranty term or annual service contracts. Such service revenue is recognized as the services are provided.

Clinic revenue is recognized at a point in time upon the performance of services under contracts with customers and represents the consideration to which the Company expects to be entitled. Clinic revenue 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 management's best estimate leveraging industry knowledge and

expectations of third-party payors' fee schedules. Third-party payors include federal and state agencies (under the Medicare programs), managed care health plans and commercial insurance companies.

Business Combinations

We allocate the total purchase price of tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the business combination date, with the excess purchase price recorded as goodwill. The purchase price allocation process requires us to use significant estimates and assumptions, including fair value estimates, as of the business combination date. Although we believe the assumptions and estimates we have made are reasonable and appropriate, they are based in part on historical experience and information obtained from management of the acquired company. Our assumptions and estimates are also partially based on valuation models that incorporate projections of expected future cash flows and operating plans and are inherently uncertain. Valuations are performed by management or third-party valuation specialists under management's supervision. In determining the fair value of assets acquired and liabilities assumed in business combinations, as appropriate, we may use one of the following recognized valuation methods: the income approach (including discounted cash flows, relief from royalty and excess earnings model), the market approach, or the replacement cost approach.

Examples of significant estimates used to value certain intangible assets acquired include but are not limited to:

Different assumptions regarding projected performance and other factors associated with the acquired assets may affect the amount recorded under each type of asset and liability. The valuations of lease properties, intangible assets, goodwill and non-controlling interests depend heavily on assumptions. Subsequent assessment could result in future impairment charges. We refine these estimates over a measurement period not to exceed one year to reflect new information obtained surrounding facts and circumstances existing at the acquisition date.

Accounting for Goodwill and Other Intangible Assets

Our goodwill represents the excess of the cost over the fair value of net assets acquired. The determination of the value of goodwill and intangibles assets arising from acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of net tangible and intangible assets acquired. Goodwill is not amortized and is assessed for impairment using fair value measurement techniques on an annual basis or more frequently if facts and circumstances warrant such a review. Goodwill is considered to be impaired if we determine that the carrying value of our reporting unit exceeds its respective fair value.

We have finite-lived intangible assets that are reviewed for impairment whenever indicators of impairment exist such as changes in circumstances that indicate the carrying value of the assets may not be recoverable. Recoverability is measured by a comparison of the carrying amount of future net undiscounted cash flows expected to be generated by the associated asset. If the asset's carrying value is determined to not be recoverable, the impairment to be recognized is measured by the amount by which the carrying amount

exceeds the fair market value of the intangible asset. Calculating cash flows for this measurement requires is to make significant estimates and assumptions related to forecasts of futures revenues, expenses and discount rates. Changes in these assumptions could have a significant impact on the fair value of the intangible asset. If such assets are determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Any impairment recognized could significantly impact our results of operations in the period of impairment.

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Recent Accounting Pronouncements

We refer you to Note 4. Recent Accounting Pronouncements in our audited consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.

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