FORM 10-Q Commission file number: 001-34822 Securities registered pursuant to Section 12(b) of the Act: Large accelerated filer o Accelerated filer ☐ Non-accelerated filer þ Smaller reporting company þ Emerging growth company o TABLE OF CONTENTS This Quarterly Report contains "forward-looking statements" as defined under the United States federal securities laws. The forwardlooking statements relate to our expectations for performance, revenues and costs, and the adequacy of cash and cash equivalent balance ...

Financial Data and Key Metrics Changes - ClearPoint Neuro reported total revenues of $20.6 million for the year ended December 31, 2022, representing a 26% increase from $16.3 million in 2021 [11] - Gross margin for the full year 2022 was 66%, down from 68% in 2021, primarily due to increased indirect labor costs and higher inventory reserves [28] - Net interest expense decreased to $0.1 million in 2022 from $1 million in 2021 due to the conversion of convertible debt into equity [30] Business Line Data and Key Metrics Changes - Functional neurosurgery navigation revenue increased 13% to $9.1 million in 2022 from $8.1 million in 2021 [12] - Biologics and drug delivery revenue rose 34% to $9.1 million in 2022, up from $6.8 million in 2021, driven by increased commitments from existing partners and new pharmaceutical partners [27] - Capital equipment and software revenue increased 61% to $2.3 million in 2022 compared to 2021 [28] Market Data and Key Metrics Changes - The company ended 2022 with cash, cash equivalents, and short-term investments of $37.5 million, down from $54.1 million at the end of 2021, primarily due to operating cash needs [33] - The company expects revenue in the range of $25 million to $27 million for 2023, representing growth between 21% and 31% year-over-year [58] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy, which includes biologics and drug delivery, functional neurosurgery navigation, therapy and access products, and achieving global scale [25] - The company plans to continue adding new partners in 2023, aiming to achieve more than 20% growth across all four growth pillars [25][40] - A new 20,000 square foot manufacturing and development facility in Carlsbad, California, is expected to be operational by the end of 2023, aimed at improving product flow and margin [39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging global environment but emphasized their commitment to helping patients and executing their growth strategy [6] - The company anticipates achieving operational cash breakeven by the fourth quarter of 2025 and full-year cash breakeven in 2026, contingent on maintaining patient demand and timely product launches [43] - Management noted that the cancellation and postponement rates for procedures have been elevated, currently sitting in the 25% to 28% range, compared to historical rates of 10% to 15% [82] Other Important Information - Research and development costs increased to $10.9 million in 2022 from $9.3 million in 2021, primarily due to personnel costs and regulatory fees [13] - Sales and marketing expenses rose to $9.4 million in 2022 from $7.2 million in 2021, driven by increased personnel costs and marketing activities [29] Q&A Session Summary Question: What is the status of clinical trials and their potential revenue impact? - Management indicated that several trials are expected to continue in 2023, particularly in rare childhood genetic disorders, which may require less rigorous protocols [45][46] Question: How has the initial commercial launch of the laser therapy system been received? - Feedback has been strong, with initial cases performed under clinical trial protocols in Europe showing positive results [48] Question: What are the expectations for revenue growth across different segments in 2023? - Management expects biologics and drug delivery to be the largest growth contributor, with functional neurosurgery and capital software also experiencing growth in the 15% to 20% range [74]

• properly identify and anticipate customer needs; • identify, retain, and manage third-party design and development firms, where appropriate, to accelerate development; • develop and introduce new products or services in a timely manner; • adequately protect our intellectual property and avoid infringing upon the intellectual property rights of third parties; • obtain and retain third-party licenses required for the development, commercialization, and/or utilization of new products; • demonstrate the safet ...

●● ..... ..... ●● CLEARPOINT® NEURO WHEN YOUR PATH IS UNCLEAR, WE POINT THE WAY." Nasdaq: CLPT November 2022 Statements herein concerning the Company's plans, growth and strategies may include forward-looking statements within the context of the federal securities laws. Statements regarding the Company's future events, developments and future performance, the size of total addressable markets or the market opportunity for the Company's products and services, as well as management's expectations, beliefs, pl ...

Financial Data and Key Metrics Changes - In Q3 2022, the company achieved near record revenue of $5.1 million, representing a 13% year-over-year growth compared to $4.6 million in Q3 2021 [6][8] - The company expects total revenue for 2022 to be in the range of $21 million to $22 million, indicating a growth of 30% to 35% for the year [7][37] - Gross margin improved to 72% in Q3 2022, up from 66% in Q3 2021, primarily due to increased service revenue and lower overhead expenses [12] Business Line Data and Key Metrics Changes - Functional neurosurgery navigation revenue increased by 12% to $2.4 million in Q3 2022, up from $2.2 million in Q3 2021 [9] - Biologics and drug delivery revenue rose by 9% to $2.2 million in Q3 2022, compared to $2.1 million in the same period in 2021 [10] - Capital equipment and software revenue increased by 32% to $0.5 million in Q3 2022, up from $0.4 million in Q3 2021 [11] Market Data and Key Metrics Changes - The company has installed 10 systems year-to-date, setting a new record, with over 40 additional hospitals in the active funnel [29] - The cancellation or postponement rate remains high, primarily due to patient or surgeon sickness related to COVID and flu, with rates above 30% compared to the historical range of 8% to 12% [30][54] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy: biologics and drug delivery, functional neurosurgery navigation, therapy and access products, and achieving global scale [6][19] - The company aims to achieve co-labeling globally across multiple partners and indications, positioning ClearPoint as the preferred delivery mechanism for pharma delivery to the brain and spine [26] - A new 20,000 square foot manufacturing facility in San Diego is set to enhance capacity and support a revenue business exceeding $100 million [36] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing challenges from COVID, supply chain disruptions, and staffing issues but remains optimistic about future growth and revenue potential [6][30] - The company expects operational cash burn to decrease in Q4 2022 and believes it is well-capitalized to achieve mid-term growth ambitions [18][37] Other Important Information - The company has received FDA clearance for three new navigation and therapy products and has expanded its partnerships in the biologics and drug delivery space [19][20] - The company has hired additional clinical specialists to enhance its surgical team in preparation for growth in 2023 and 2024 [36] Q&A Session Summary Question: Update on BDD partners and decision-making process - Management reports ongoing daily conversations with BDD partners, with no significant changes in decision-making processes despite some frustrations due to hospital delays and supply chain issues [40][41] Question: Market penetration of Prism Neuro Laser Therapy System - The company plans to operate within a limited market release for the remainder of 2022 and into the first half of 2023, focusing on existing users of ClearPoint navigation [44][46] Question: Domestic vs. international expansion - Domestic revenue growth is expected to be the primary focus, while European expansion is driven by biologics partners interested in clinical trials [47][48] Question: Impact of COVID restrictions - The company has experienced a significant increase in cancellation rates due to COVID, with expectations for this trend to continue into the winter months [52][57] Question: Revenue potential from biologics and drug delivery - Management estimates a potential revenue of $10 million per program from biologics and drug delivery, with a significant portion coming from clinical trial product categories [59][64]

Financial Performance - Total revenue for the three months ended September 30, 2022, was $5,146, a 12.5% increase from $4,574 in the same period of 2021[21] - Product revenue for the nine months ended September 30, 2022, reached $9,750, up 10% from $8,863 in 2021[21] - Service and other revenue for the nine months ended September 30, 2022, increased to $5,627, a 78.5% rise from $3,154 in 2021[21] - Gross profit for the nine months ended September 30, 2022, was $10,215, compared to $7,939 in 2021, reflecting a 28.7% increase[21] - Total revenue for the three months ended September 30, 2022, was $5,146,000, an increase of 12.5% compared to $4,574,000 for the same period in 2021[83] - For the nine months ended September 30, 2022, total revenue reached $15,377,000, up 28.5% from $12,017,000 in the prior year[86] - Functional neurosurgery navigation and therapy revenue for the three months ended September 30, 2022, was $2,420,000, a 12.4% increase from $2,154,000 in 2021[83] - Biologics and drug delivery revenue for the three months ended September 30, 2022, was $2,246,000, up 9.2% from $2,057,000 in the same period last year[83] - Capital equipment and software revenue for the three months ended September 30, 2022, was $480,000, a 32.3% increase from $363,000 in 2021[83] Losses and Expenses - Operating loss for the nine months ended September 30, 2022, was $(11,863), compared to $(9,392) in 2021, indicating a worsening of 26.3%[21] - Net loss for the nine months ended September 30, 2022, was $(12,050), compared to $(10,261) in 2021, representing a 17.4% increase in losses[21] - The company reported a net loss of $12.05 million for the nine months ended September 30, 2022, compared to a net loss of $10.26 million for the same period in 2021[31] - Cash flows from operating activities resulted in a net cash outflow of $13.1 million for the nine months ended September 30, 2022, compared to $9.145 million for the same period in 2021[31] - The company incurred $22.48 million in cash outflows from investing activities for the nine months ended September 30, 2022[31] - Share-based compensation expense for Q3 2022 was $1.175 million, up from $586,000 in Q3 2021, representing a 100.8% increase[117] Assets and Liabilities - Cash and cash equivalents decreased to $18,712 as of September 30, 2022, from $54,109 as of December 31, 2021[17] - Total current assets decreased to $53,814 as of September 30, 2022, from $61,892 as of December 31, 2021[17] - Total liabilities increased to $17,860 as of September 30, 2022, from $16,794 as of December 31, 2021[17] - Total stockholders' equity decreased to $39,878 as of September 30, 2022, from $48,787 as of December 31, 2021[17] - As of September 30, 2022, the company had approximately $9.9 million in bank balances exceeding insured limits[74] - The company had an outstanding note payable of $10 million as of September 30, 2022, which may be convertible to common stock at a price of $6.00 per share[97] - As of September 30, 2022, there were 1,399,473 stock options outstanding, with a weighted average exercise price of $8.70 and an intrinsic value of $7.251 million[120] Inventory and Receivables - The company’s accounts receivable decreased by $982,000 during the nine months ended September 30, 2022[31] - The company’s inventory decreased by $3.318 million during the nine months ended September 30, 2022[31] - Inventory as of September 30, 2022, totaled $8,769,000, an increase from $5,457,000 as of December 31, 2021[96] - Two customers represented 16% and 15% of accounts receivable as of September 30, 2022, indicating significant concentration risk[75] - A related pharmaceutical customer accounted for 14% and 18% of total sales in the three-month periods ended September 30, 2022 and 2021, respectively[76] - The allowance for doubtful accounts was $0.2 million as of September 30, 2022, down from $0.3 million at December 31, 2021[77] Revenue Recognition and Accounting - The company recognizes revenue from capital equipment and software sales upon receipt of an executed purchase agreement or purchase order following customer evaluation periods[57] - Revenue from service agreements for ClearPoint capital equipment is recognized ratably over the term of the service agreement, typically ranging from one to three years[65] - The company operates primarily in the U.S. market, with payment terms generally ranging from 30 to 60 days after invoice receipt[68] - The company adopted new accounting standards effective January 1, 2021, impacting the accounting for convertible debt instruments[81] - Certain expenses previously classified as sales and marketing and research and development have been reclassified to cost of revenue for the three and nine months ended September 30, 2022[82] Stock and Compensation - Total unrecognized compensation expense related to stock options and restricted stock as of September 30, 2022, was $1.6 million and $6.0 million, respectively, expected to be recognized over 2.0 and 2.3 years[117] - Restricted stock activity showed 655,361 shares outstanding as of September 30, 2022, with a weighted average grant date fair value of $11.27[121] - The Company has a total of 400,000 shares available under the Employee Stock Purchase Plan (ESPP), with 26,354 shares purchased at an average price of $9.86 during the six months ended June 30, 2022[122] - As of September 30, 2022, 36,554 warrants were outstanding with a weighted average exercise price of $16.23[126] Facility and Lease - The Company entered into a lease agreement for a 19,462 square foot facility with a base rent of $36,977.80 per month, subject to annual increases of 3.5%[127] - The outstanding First Closing Note of $10 million bears interest at 5.6% as of September 30, 2022, with potential additional annual interest expense of $0.3 million to $0.4 million if LIBOR increases by 1% to 2%[190] Foreign Currency and Risk - The Company has not recorded significant sales in currencies other than U.S. dollars and does not currently engage in hedging to reduce foreign currency risks[191]

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 was $5.2 million, representing a 52% increase from $3.4 million in Q2 2021 [6][8] - The company expects total revenue for 2022 to be in the range of $21 million to $22 million, indicating an annualized growth of 30% to 35% [7][43] - Gross margin for Q2 2022 was 63%, slightly down from 67% in Q2 2021 due to increased overhead expenses [11] Business Line Data and Key Metrics Changes - Biologics and drug delivery revenue grew 73% year-over-year to $2.4 million, surpassing functional neurosurgery revenue for the first time [6][9] - Functional neurosurgery navigation revenue increased 17% to $2.2 million in Q2 2022 [10] - Capital equipment and software revenue nearly tripled to $0.6 million from $0.2 million in the same period last year [11] Market Data and Key Metrics Changes - The company has over 45 active partners in the biologics and drug delivery space, adding approximately one new partner every month [19] - The potential market for ClearPoint's enabling technology is estimated to exceed $12 billion annually, with over one million new patients diagnosed each year in the U.S. alone [41][42] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy: biologics and drug delivery, functional neurosurgery navigation, therapy and access products, and achieving global scale [6][18] - Achieving MDSAP certification allows the company to conduct a single regulatory audit for multiple countries, enhancing its global footprint [25] - The company aims to be the go-to delivery mechanism for pharma delivery to the brain and spine, with a strategy to have its SmartFlow Cannula referenced in multiple therapy labels [20][22] Management Comments on Operating Environment and Future Outlook - Management acknowledges challenges from COVID-related procedure cancellations and supply chain issues but remains confident in achieving mid and long-term growth ambitions [16][18] - The company expects a reduction in operational cash burn in the second half of the year [16] - Management emphasizes the importance of maintaining a strong partnership with pharma companies to support global therapy supply [25][70] Other Important Information - Research and development costs increased by 8% to $2.3 million, primarily due to product development efforts [12] - Sales and marketing expenses rose by 38% to $2.2 million, reflecting increased personnel costs and marketing activities [13] - General and administrative expenses increased by 51% to $3 million, mainly due to higher share-based compensation and personnel costs [14] Q&A Session Summary Question: PTC partnership commercialization details - The company will be hands-on in the commercialization process, providing the SmartFlow Cannula and navigation services to PTC [46][50] Question: Impact of PTC's success on partner conversations - The approval of the SmartFlow Cannula builds credibility and confidence among current and potential partners [51][52] Question: Expectations for capital equipment placements in H2 2022 - The company anticipates at least four additional units to be installed in the second half of 2022, focusing on installations rather than immediate revenue [56][57] Question: Commercial launch of Upstaza and center requirements - The company is actively negotiating with PTC regarding regulatory pathways and the establishment of centers of excellence for the commercial launch [68][69] Question: Emerging applications in neurosurgery - The company sees significant opportunities in emerging applications like DBS for depression and OCD, although many are still in early stages [71][72] Question: Environment for BDD clinical services - The biologics and drug delivery segment is the fastest-growing area, with plans to continue hiring to support expected growth [78][80]

Financial Performance - Total revenue for the three months ended June 30, 2022, was $5,200,000, representing a 52.4% increase from $3,413,000 in the same period of 2021[19] - Product revenue for the six months ended June 30, 2022, was $6,620,000, up 19.8% from $5,525,000 in 2021[19] - Service and other revenue for the six months ended June 30, 2022, reached $3,611,000, a significant increase from $1,918,000 in 2021[19] - Gross profit for the six months ended June 30, 2022, was $6,503,000, compared to $4,888,000 in 2021, reflecting a 33.0% increase[19] - Net loss for the six months ended June 30, 2022, was $(8,262,000), compared to $(6,281,000) in 2021, representing a 31.7% increase in losses[19] - Total revenue for the six months ended June 30, 2022, was $10,231,000, up 37.7% from $7,443,000 for the same period in 2021[82] - Revenue from Functional neurosurgery navigation and therapy for the three months ended June 30, 2022, was $2,173,000, compared to $1,861,000 in the prior year, reflecting a 16.7% increase[79] - Revenue from Biologics and drug delivery for the three months ended June 30, 2022, was $2,408,000, a 73.1% increase from $1,390,000 in the same period last year[79] - Capital equipment and software revenue for the three months ended June 30, 2022, was $619,000, significantly up from $162,000 in the prior year[79] Operating Loss and Cash Flow - Operating loss for the six months ended June 30, 2022, was $(8,068,000), compared to $(5,588,000) in 2021, indicating a worsening of 44.4%[19] - Cash flows from operating activities resulted in a net cash outflow of $9.250 million for the six months ended June 30, 2022, compared to a net cash outflow of $5.849 million for the same period in 2021, reflecting a worsening cash position[25] - The company incurred $21.851 million in cash outflows from investing activities for the six months ended June 30, 2022, primarily due to the purchase of short-term investments[25] Assets and Liabilities - Cash and cash equivalents decreased to $23,524,000 as of June 30, 2022, down from $54,109,000 at December 31, 2021[16] - Total current assets decreased to $56,641,000 as of June 30, 2022, from $61,892,000 at December 31, 2021[16] - Total liabilities increased to $17,420,000 as of June 30, 2022, compared to $16,794,000 at December 31, 2021[16] - Stockholders' equity decreased to $42,820,000 as of June 30, 2022, down from $48,787,000 at December 31, 2021[16] - The company had a cumulative deficit of $142.2 million as of June 30, 2022, highlighting ongoing financial challenges since inception[37] Equity and Financing - Total common shares outstanding increased from 23,665,991 on January 1, 2022, to 24,480,600 by June 30, 2022, reflecting ongoing equity financing efforts[22] - The company raised $256,000 from stock option and warrant exercises during the six months ended June 30, 2022, contributing to its financing activities[25] - The company completed a public offering of 2,127,660 shares of common stock, generating net proceeds of approximately $46.8 million after expenses[42] Compensation and Employee Costs - The company’s share-based compensation expense increased to $1.779 million for the six months ended June 30, 2022, compared to $567,000 for the same period in 2021, reflecting increased employee compensation costs[25] - Share-based compensation expense for Q2 2022 was $880,000, up from $247,000 in Q2 2021, representing a 256% increase[114] - Total unrecognized compensation expense related to stock options and restricted stock as of June 30, 2022, was $1.8 million and $6.6 million, respectively, expected to be recognized over 2.2 years and 2.4 years[114] Inventory and Investments - Inventory as of June 30, 2022, totaled $7,143,000, an increase from $5,457,000 as of December 31, 2021[92] - The company amortizes its investment in license rights over an expected useful life of five years[49] Market and Operational Challenges - The company has focused on the development and commercialization of new neurosurgical device products for operating room settings, expanding its product offerings beyond MRI suites[33] - The company has been impacted by COVID-19, which has historically affected approximately 80% of the surgical procedures using its ClearPoint system[36] - The company is subject to risks common to emerging companies in the medical device industry, including technological innovations and dependence on key personnel[73] Accounting and Compliance - The company adopted new accounting standards effective January 1, 2021, impacting the accounting for convertible instruments[74] - The company reclassified certain expenses previously classified as sales and marketing and research and development to cost of revenue for the three and six months ended June 30, 2022[78] Currency and Foreign Exchange - The company has not recorded significant sales in currencies other than U.S. dollars and does not currently engage in hedging to reduce foreign currency risks[188]

●● ..... ..... ●● CLEARPOINT® NEURO WHEN YOUR PATH IS UNCLEAR, WE POINT THE WAY." Nasdaq: CLPT May 2022 Statements herein concerning the Company's plans, growth and strategies may include forward-looking statements within the context of the federal securities laws. Statements regarding the Company's future events, developments and future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of the ...

Company Overview - ClearPoint Neuro operates with a common installed base platform and clinical specialist support team, targeting over 1 million patients diagnosed annually across 35+ active indications[3] - The company estimates a potential total addressable market exceeding $12 billion[3, 22] - ClearPoint Neuro has established a growing global installed base of over 60 centers[4] and expects to reach 100+ centers by 2025[12] - The company has approximately 45 active Pharma and Academic partners[3, 13] Financial Performance & Model - The company anticipates FY22 revenue of $22 million[14] - A razor/razorblade model generates over 95% of revenue from single-use disposables and services[5] - Capital equipment accounts for approximately 5% of revenue[5] Growth Strategy - A four-pillar growth strategy aims to target indications affecting over 1 million patients diagnosed each year[20] - The company intends to expand its global footprint, launch a robotic platform, and release a digital health patient portal application[20] - ClearPoint Neuro plans to enter the neuro laser ablation market and launch the Maestro Brain Model and therapy apps[20] Market Opportunity - The company identifies a US market opportunity ranging from $42 billion to $208 billion across various neurological indications[16]