ClearPoint Neuro(CLPT) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION The first part details ClearPoint Neuro, Inc.'s unaudited financial statements, management's discussion, market risks, and internal controls for the period ended June 30, 2025 Item 1. Financial Statements (unaudited) Unaudited Q2 2025 financial statements reflect increased total assets to $62.9 million, driven by cash and a new note payable, alongside a widened net loss of $11.9 million for the six-month period Condensed Consolidated Balance Sheets As of June 30, 2025, the balance sheet shows a substantial increase in cash and total assets, accompanied by a significant rise in total liabilities due to a new long-term note payable Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $41,541 | $20,104 | | Total current assets | $53,991 | $33,363 | | Total assets | $62,869 | $39,189 | | Liabilities & Equity | | | | Total current liabilities | $7,398 | $10,353 | | Long-term note payable, net | $28,845 | $— | | Total liabilities | $43,126 | $13,800 | | Total stockholders' equity | $19,743 | $25,389 | | Total liabilities and stockholders' equity | $62,869 | $39,189 | Condensed Consolidated Statements of Operations For Q2 2025, revenue increased to $9.2 million, and for the six-month period, revenue grew to $17.7 million, though net losses widened due to higher operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $9,215 | $7,858 | $17,700 | $15,497 | | Gross profit | $5,556 | $4,988 | $10,688 | $9,513 | | Operating loss | $(5,680) | $(4,724) | $(11,843) | $(8,941) | | Net loss | $(5,837) | $(4,408) | $(11,863) | $(8,554) | | Net loss per share | $(0.21) | $(0.16) | $(0.42) | $(0.32) | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased to $19.7 million at June 30, 2025, primarily due to the net loss, partially offset by proceeds from a registered direct offering and share-based compensation - Total stockholders' equity declined to $19.7 million at June 30, 2025, from $25.4 million at January 1, 2025, mainly due to the net loss for the period[19] - During the first six months of 2025, the company issued common stock through a registered direct offering, share-based compensation, option exercises, and its employee stock purchase plan[19] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $8.7 million for the six months ended June 30, 2025, while significant financing activities resulted in a net increase in cash of $21.6 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $(8,724) | $(6,508) | | Net cash from investing activities | $(274) | $— | | Net cash from financing activities | $30,615 | $16,213 | | Net change in cash | $21,617 | $9,705 | | Cash, end of period | $41,541 | $32,845 | - Financing activities in the first half of 2025 were driven by net proceeds of $28.7 million from a new note payable and $3.3 million from a common stock offering[23][162] Notes to Condensed Consolidated Financial Statements Notes detail the company's neurosurgery and biologics business, confirm sufficient liquidity for 12 months post-financing, and provide revenue breakdowns and details on the new $105 million note purchase agreement - The company's business is focused on minimally invasive neurosurgical platforms and providing consulting services to over 60 biologics and drug delivery customers[28][29] - Despite a cumulative deficit of $203.2 million, management has determined that existing cash of $41.5 million is sufficient to fund operations for at least the next twelve months, supported by recent financing[31][33] Revenue by Service Line - Six Months Ended June 30 (in thousands) | Service Line | 2025 | 2024 | | :--- | :--- | :--- | | Biologics and drug delivery | $9,430 | $8,634 | | Neurosurgery navigation and therapy | $6,709 | $4,513 | | Capital equipment and software | $1,561 | $2,350 | | Total revenue | $17,700 | $15,497 | - In May 2025, the company entered into a note purchase agreement for up to $105.0 million, with an initial tranche of $30.0 million funded, providing net proceeds of approximately $28.7 million[35][81] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 revenue growth of 17% and a 14% increase for six months, driven by neurosurgery and biologics, but notes widened net losses due to higher operating expenses, with recent financing ensuring liquidity Overview The company operates two main business lines: minimally invasive brain surgery platforms and preclinical/clinical trial support for biologics, with the latter identified as the largest growth opportunity despite a history of losses - The company's business is structured around two core areas: medical devices for neurosurgery (e.g., ClearPoint system) and services for the biologics and drug delivery space[115][116] - The biologics and drug delivery business, with over 60 partners, is considered the company's largest growth opportunity, contingent on partners' clinical and regulatory success[116][126] Results of Operations Q2 2025 revenue grew 17% to $9.2 million, driven by neurosurgery, but gross margin declined and net loss increased by 32% to $5.8 million due to higher operating expenses Q2 2025 vs Q2 2024 Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $9,215 | $7,858 | 17% | | Gross Profit | $5,556 | $4,988 | 11% | | Net Loss | $(5,837) | $(4,408) | 32% | - Q2 2025 revenue growth was led by a 33% increase in Neurosurgery navigation and therapy revenue, attributed to new offerings like SmartFrame OR and Prism Laser Therapy[135] Six Months 2025 vs Six Months 2024 Performance (in thousands) | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $17,700 | $15,497 | 14% | | Gross Profit | $10,688 | $9,513 | 12% | | Net Loss | $(11,863) | $(8,554) | 39% | - The 34% increase in G&A expenses for the first six months of 2025 was primarily due to higher bad debt expense, personnel costs, and professional service fees[151] Liquidity and Capital Resources The company bolstered its liquidity in May 2025 with $3.3 million from a stock offering and $28.7 million from a note agreement, bringing cash to $41.5 million, deemed sufficient for the next twelve months - The company's cash and cash equivalents increased to $41.5 million at June 30, 2025, which management deems sufficient to support operations for at least the next 12 months[158] - In May 2025, the company raised approximately $3.3 million net from a registered direct stock offering and $28.7 million net from an initial note issuance under a new purchase agreement[154][155] - Net cash used in operating activities increased to $8.7 million for the first six months of 2025, up from $6.5 million in the same period of 2024, primarily due to a higher net loss and increased working capital needs[159] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate sensitivity on its new note payable, which has a capped variable rate, while foreign currency risk is not considered material - The company's main market risk is interest rate sensitivity from its $30.2 million note payable, which bears a variable interest rate[166][168] - The interest rate on the note is capped at 9.50%, limiting the maximum potential annual interest expense increase to approximately $0.4 million based on the current principal balance[168] - Foreign currency risk is not considered material at this time due to limited transactions in currencies other than the U.S. dollar[169] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[171] - No material changes to the company's internal control over financial reporting occurred during the quarter ended June 30, 2025[172] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, other information, and exhibits for ClearPoint Neuro, Inc.'s Q2 2025 report Item 1. Legal Proceedings A previously disclosed lawsuit was settled in August 2025, with the settlement amount expected to be covered by insurance and not anticipated to materially impact financial statements - A lawsuit involving a patient who suffered an adverse outcome was settled in August 2025[95] - The settlement is expected to be paid by insurance and is not anticipated to have a material impact on the company's financial condition[95][174] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes have been made to the risk factors disclosed in the 2024 Form 10-K[175] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[176] Item 5. Other Information During Q2 2025, CEO Joseph M. Burnett and Director Lynnette C. Fallon adopted Rule 10b5-1 trading arrangements in accordance with the company's insider trading policy - CEO Joseph M. Burnett and Director Lynnette C. Fallon adopted new Rule 10b5-1 trading plans on June 11, 2025[182] Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report, including corporate governance documents, recent financing agreements, lease agreements, and required officer certifications - The report includes exhibits for the Stock Purchase Agreement and Note Purchase Agreement, both dated May 12, 2025[184] - A new lease agreement dated June 16, 2025, for a facility in San Diego, California, is also filed as an exhibit[184]