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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______

Commission File Number: 001-38546

NEURONETICS, INC.

(Exact name of registrant as specified in its charter)


Delaware	33-1051425
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

3222 Phoenixville Pike, Malvern, PA	19355
(Address of principal executive offices)	(Zip Code)
(877) 600-7555
(Registrant’s telephone number, including area code)

Not applicable.

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class		Trading Symbol (s)		Name on each exchange on which registered
Common Stock ($0.01 par value)		STIM		The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 69,587,840 shares of the registrant’s common stock outstanding as of May 1, 2026.

Table of Contents

NEURONETICS, INC.

Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026

Table of Contents


		Page
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.	3
	Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	3
	Consolidated Statements of Operations for the Three Months ended March 31, 2026 and 2025	4
	Consolidated Statements of Changes in Equity for the Three Months ended March 31, 2026 and 2025	5
	Consolidated Statements of Cash Flows for the Three Months ended March 31, 2026 and 2025	6
	Notes to Interim Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	36
Item 4.	Controls and Procedures.	37
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	38
Item 1A.	Risk Factors.	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	39
Item 3.	Defaults Upon Senior Securities.	39
Item 4.	Mine Safety Disclosures.	39
Item 5.	Other Information.	40
Item 6.	Exhibits.	40
	SIGNATURES	43

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

NEURONETICS, INC.

Consolidated Balance Sheets

(Unaudited; In thousands, except per share data)


		March 31,			December 31,
		2026			2025
Assets
Current assets:
Cash and cash equivalents		$	13,214		$	28,134
Restricted cash and cash equivalents			5,750			6,000
Accounts receivable, net of allowance for credit losses of $780 and $1,043 as of March 31, 2026 and December 31, 2025, respectively			15,809			16,469
Inventory			4,715			4,327
Current portion of net investments in sales-type leases			257			225
Current portion of prepaid commission expense			2,900			3,050
Current portion of notes receivable			401			424
Prepaid expenses and other current assets			4,129			2,922
Total current assets			47,175			61,551
Property and equipment, net			3,874			4,466
Goodwill			23,622			23,622
Intangible assets, net			17,785			18,149
Operating lease right-of-use assets			23,069			23,560
Net investments in sales-type leases			108			98
Prepaid commission expense			7,464			7,972
Long-term notes receivable			92			151
Other assets			2,251			1,982
Total assets		$	125,440		$	141,551
Liabilities and Equity
Current liabilities:
Accounts payable		$	11,433		$	10,739
Accrued expenses			9,596			12,316
Current portion of deferred revenue			833			753
Deferred and contingent consideration			250			500
Other payables			751			652
Current portion of operating lease liabilities			5,422			5,561
Total current liabilities			28,285			30,521
Long-term debt, net			61,297			65,807
Other long term liabilities			71			—
Deferred revenue			58			48
Operating lease liabilities			18,669			18,935
Total liabilities			108,380			115,311
Commitments and contingencies (Note 18)
Equity:
Preferred stock, $0.01 par value: 10,000 shares authorized; no shares issued or outstanding on March 31, 2026 and December 31, 2025			—			—
Common stock, $0.01 par value: 250,000 shares authorized; 69,583 and 68,994 shares issued and outstanding on March 31, 2026 and December 31, 2025, respectively			696			690
Additional paid-in capital			482,146			480,475
Accumulated deficit			(469,577)			(458,787)
Total Stockholders' equity			13,265			22,378
Non-controlling interest			3,795			3,862
Total equity			17,060			26,240
Total liabilities and equity		$	125,440		$	141,551

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

Table of Contents

NEURONETICS, INC.

Consolidated Statements of Operations

(Unaudited; In thousands, except per share data)


	Three Months Ended
	March 31,
	2026		2025
Revenues
Products and other	$	12,925	$	13,316
Services		21,529		18,659
Total revenue		34,454		31,975
Cost of revenues
Products and other		2,858		3,150
Services		15,442		13,087
Total cost of revenues		18,300		16,237
Gross profit		16,154		15,738
Operating expenses:
Sales and marketing		10,737		11,999
General and administrative		13,048		13,137
Research and development		1,364		1,616
Total operating expenses		25,149		26,752
Loss from operations		(8,995)		(11,014)
Other (income) expense:
Interest expense		2,266		1,922
Loss on extinguishment of debt		539		—
Other income, net		(1,020)		(247)
Net loss	$	(10,780)	$	(12,689)
Less: Net gain (loss) attributable to non-controlling interest		10		(14)
Net loss attributable to Neuronetics stockholders’	$	(10,790)	$	(12,675)
Net loss per share of common stock outstanding, basic and diluted attributable to Neuronetics stockholders	$	(0.16)	$	(0.21)
Weighted average common shares outstanding, basic and diluted		69,589		61,465

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

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NEURONETICS, INC.

Consolidated Statements of Changes in Equity

(Unaudited; In thousands)


							Additional
		Common Stock					Paid-in			Accumulated			Noncontrolling			Total
		Shares		Amount			Capital			Deficit			Interest			Equity
Balance at December 31, 2024		55,679		$	557		$	446,938		$	(419,789)		$	4,093		$	31,799
Share-based awards and option exercises		941			9			(1)			—			—			8
Issuance of common stock, net of issuance costs of $1,731		9,200			92			18,877			—			—			18,969
Share-based compensation expense		—			—			1,444			—			—			1,444
Net loss		—			—			—			(12,675)			(14)			(12,689)
Balance at March 31, 2025		65,820		$	658		$	467,258		$	(432,464)		$	4,079		$	39,531

Balance at December 31, 2025		68,994		$	690		$	480,475		$	(458,787)		$	3,862		$	26,240
Share-based awards and option exercises		589			6			(6)			—			—			—
Share-based compensation expense		—			—			1,677			—			—			1,677
Net income (loss)		—			—			—			(10,790)			10			(10,780)
Distribution to non-controlling interest		—			—			—			—			(77)			(77)
Balance at March 31, 2026		69,583		$	696		$	482,146		$	(469,577)		$	3,795		$	17,060

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

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NEURONETICS, INC.

Consolidated Statements of Cash Flows

(Unaudited; In thousands)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net loss	$	(10,780)	$	(12,689)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		745		911
Allowance for credit losses		(267)		—
Inventory impairment		(30)		5
Share-based compensation		1,677		1,444
Non-cash interest expense		256		189
Loss on extinguishment of debt		539		—
Loss on disposal of property and equipment		270		—
Changes in certain assets and liabilities:
Accounts receivable, net		1,008		(2,627)
Inventory		(432)		175
Net investments in sales-type leases		(43)		14
Prepaid commission expense		658		401
Prepaid expenses and other assets		(1,121)		1,785
Accounts payable		559		(2,638)
Accrued expenses		(2,720)		(3,511)
Other liabilities		170		(193)
Deferred revenue		90		(259)
Net cash used in operating activities		(9,421)		(16,993)

Cash flows from investing activities:
Purchases of property and equipment and capitalized software		(197)		(219)
Proceeds from the sale of property and equipment		25		—
Net cash used in investing activities		(172)		(219)

Cash flows from financing activities:
Repayment of deferred and contingent consideration		(250)		—
Repayment of long-term debt		(5,000)		—
Payment for debt extinguishment cost		(250)		—
Proceeds from the issuance of common stock		—		20,700
Payments of common stock offering issuance costs		—		(1,731)
Distribution to non-controlling interest		(77)		—
Proceeds from exercises of stock options		—		8
Net cash (used in) provided by financing activities		(5,577)		18,977
Net increase (decrease) in Cash, Cash equivalents and Restricted cash		(15,170)		1,765
Cash and cash equivalents and restricted cash and cash equivalents, beginning of period		34,134		19,459
Cash and cash equivalents and restricted cash and cash equivalents, end of period	$	18,964	$	21,224

Reconciliation of cash and cash equivalents and restricted cash and cash equivalents to the consolidated balance sheet:
Cash and cash equivalents		13,214		20,224
Restricted cash and cash equivalents		5,750		1,000
Total cash and cash equivalents and restricted cash and cash equivalents	$	18,964	$	21,224

Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,010	$	1,725
Transfer of inventory to property and equipment	$	75	$	—
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment and capitalized software in accounts payable and accrued expenses	$	—	$	43

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

1. DESCRIPTION OF BUSINESS

Neuronetics, Inc. (the “Company,” “Neuronetics,” “we,” and similar words) believes that mental health is as important as physical health. The Company’s first commercial product, the NeuroStar Advanced Therapy System (the “System”), is a non-invasive and non-systemic office-based treatment that uses transcranial magnetic stimulation (“TMS”) to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The System is cleared by the U.S. Food and Drug Administration (the “FDA”) to treat adult patients with major depressive disorder (“MDD”) who have failed to achieve satisfactory improvement from prior antidepressant medication in the current MDD episode. It is also cleared by the FDA as an adjunct for adults with obsessive-compulsive disorder (“OCD”) and for adolescent patients aged 15-21 with MDD. It is also cleared by the FDA to decrease anxiety symptoms in adult patients with MDD that may exhibit comorbid anxiety symptoms (anxious depression). In addition to selling the System and associated treatment sessions to customers, the Company operates Greenbrook TMS Inc. (“Greenbrook”) treatment centers (“Treatment Centers”) across the U.S., offering TMS treatment using the Systems. The Company acquired Greenbrook, a provider of mental healthcare services, pursuant to an Arrangement Agreement effective as of December 9, 2024 (the “Arrangement”). The System is safe, clinically effective, reproducible and precise, and the Company believes it is supported by the largest clinical data set of any competing TMS system. Treatment Centers also obtain SPRAVATO® to treat adults with treatment-resistant depression or depressive symptoms in adults suffering from MDD with acute suicidal ideation or behavior.

The Company’s shares trade on the Nasdaq Global Market under the ticker “STIM.”

Liquidity and Going concern

As of March 31, 2026, the Company had cash and cash equivalents of $13.2 million and an accumulated deficit of $469.6 million. The Company incurred negative cash flows from operating activities of $9.4 million for the three months ended March 31, 2026 and $20.4 million for the year ended December 31, 2025. The Company has incurred operating losses since its inception, and management anticipates that its operating losses will continue in the near term as the Company continues to invest in sales and marketing and product development activities. The Company’s primary sources of capital to date have been from its initial public offering, borrowings under its credit facility, proceeds from its secondary public offering of common stock (including, without limitation, the ATM Program (as defined below)), and revenues from sales of its products. As of March 31, 2026, the Company had $65.0 million of borrowings outstanding under its credit facility, which matures in July 2029.

On February 10, 2025, the Company completed a secondary public offering of its common stock in which the Company issued and sold 9,200,000 shares of its common stock, which included shares pursuant to an option granted to the underwriter to purchase additional shares, at a public offering price of $2.25 per share. The Company received net proceeds of $18.9 million after deducting underwriting discounts, commissions and estimated offering expenses.

On July 3, 2025, the Company entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Canaccord Genuity LLC, pursuant to which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $50.0 million from time to time through an at-the- market equity offering program (the “ATM Program”). Sales under the Distribution Agreement are made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-288526), and a related prospectus and prospectus supplement.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

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.

As of March 31, 2026, the Company had approximately $41.7 million remaining available for future issuance under the ATM Program.

The Company is subject to certain financial covenants under its credit facility, including a liquidity and trailing twelve-month minimum revenue covenants. On March 12, 2026, the Company amended the terms of its credit arrangement to modify the required quarterly revenue covenants through December 31, 2026 and the liquidity covenants through September 30, 2027. As of March 31, 2026 the Company was in compliance with the financial covenants in accordance with this agreement.

The Company currently projects trailing twelve-month revenue for the period ended March 31, 2027 to be below the minimum required revenue for that period as stated in the credit facility agreement. Should the Company not be able to meet its March 31, 2027 minimum revenue covenant, the lender may at that time and at its discretion, call the credit facility. Should the lender call the facility, the Company is not projected to have the liquidity required to meet its requirement to pay off the loan. Therefore, substantial doubt exists about the Company’s ability to continue as a going concern.

The Company remains actively engaged in ongoing collaborative and constructive discussions with its lender. Additional actions within the Company's control to meet its minimum revenue covenant include improvements to its revenue cycle management, introducing new treatment options at its clinic locations and pursuing new strategies within its medical device business to accelerate sales growth and optimize its product mix. The Company’s ability to meet its liquidity needs, including meeting future revenue and liquidity covenants, is dependent on growth in existing and acquired product and service lines and the realization of synergies related to its acquisition of Greenbrook. However, at this time, these actions do not fully mitigate the risk related to compliance with the revenue covenant for the March 31, 2027 period. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2. BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) promulgated by the Financial Accounting Standards Board (the “FASB”).

Basis of Consolidation

The consolidated financial statements of the Company are presented in U.S. dollars and include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (“VIE”) or voting interest model (“VOE”). The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. ASC Topic 810, Consolidation ("Topic 810") defines the criteria for determining the existence of VIEs and provides guidance for consolidation.

An entity is considered to be a VIE if (i) the entity does not have enough equity to finance its own activities without additional support, (ii) the entity's at-risk equity holders lack the characteristics of a controlling financial interest, or (iii) the entity is structured with non-substantive voting rights. The primary beneficiary of a

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

VIE is the party that has the power to direct the activities that most significantly impact the performance of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. A VIE can have only one primary beneficiary but may not have a primary beneficiary if no party meets the criteria described above.

If the Company determines it does not hold a variable interest in a VIE, the Company applies the VOE model. To the extent the entity does not meet the definition of a VIE, Topic 810 guidance for voting interest entities is applied. The usual condition for a controlling financial interest, and therefore consolidation by the Company, is ownership of a majority voting interest of a corporation or a majority of kick-out rights for a limited partnership. The Company has determined that all its subsidiaries are VOEs primarily because it holds a majority voting interest in the entities.

Interim Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with U.S. GAAP for interim financial information and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”), which permit reduced disclosures for interim periods. All adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the accompanying consolidated balance sheets and consolidated statements of operations and stockholders’ equity and consolidated cash flows have been made. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes the disclosures are adequate to make the information presented not misleading. Unaudited interim consolidated statements of operations and interim consolidated statement of cash flows for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full year. Unaudited interim consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2026, wherein a more complete discussion of significant accounting policies and certain other information can be found.

Reclassifications

Certain prior period amounts have been reclassified for comparative purposes.

Currency Risk

Currency risk is the risk to the Company’s earnings that arises from fluctuations in foreign exchange rates and the degree of volatility of those rates. The Company has minimal exposure to currency risk as substantially all of the Company’s revenue, expenses, assets and liabilities are denominated in U.S. dollars. The Company pays certain vendors and payroll costs in Canadian dollars from time to time, but due to the limited size and nature of these payments, it does not give rise to significant currency risk.

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP and the rules and regulations of the SEC requires the use of estimates and assumptions, based on judgments considered reasonable, which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience, known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Although management believes its estimates and assumptions

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

are reasonable when made, they are based upon information available at the time they are made. Management evaluates the estimates and assumptions on an ongoing basis and, if necessary, makes adjustments. Due to the risks and uncertainties involved in the Company’s business and evolving market conditions, and given the subjective element of the estimates and assumptions made, actual results may differ materially from estimated results.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s complete summary of significant accounting policies can be found in “Summary of Significant Accounting Policies” in the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2026.

4. RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public business entities to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. ASU 2023-09 was adopted in the annual period ended December 31, 2025 using the retrospective method. Accordingly, we have expanded our consolidated financial statement disclosures to comply with the guidance.

In November 2024, the FASB issued ASU 2024-03, Income Statements–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires enhanced disclosure of income statement expense categories to improve transparency and provide financial statement users with more detailed information about the nature, amount, and timing of expenses impacting financial performance. ASU 2024-03 is effective for the Company for the annual reporting period beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2024-03 may be adopted either on a prospective basis to financial statements issued for reporting periods after the effective date or on a retrospective basis to all periods presented. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. The guidance provides a practical expedient that an entity may assume that conditions as of the balance sheet date remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. The guidance is effective in the first quarter of 2026 with early adoption permitted, to be applied on a prospective basis. The Company adopted this guidance in the first quarter of 2026. The adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software Targeted Improvements to the Accounting for Internal-Use Software. The amendments modify the accounting for internal-use software development costs by replacing the existing project stage framework with a principles-based model for determining when capitalization of development costs should begin. The guidance is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.

Other than the items noted above, there have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a material impact, or potential material impact, to our unaudited interim consolidated financial statements.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

5. INTANGIBLE ASSETS

Intangible assets consist of the following as of March 31, 2026 and December 31, 2025 (in thousands):


		As of March 31, 2026
	Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted Average Remaining Useful Life
Management services agreements	17-21 years	$	17,100	$	(1,228)	$	15,872	17.75 years
Trade name	5 years		2,590		(677)		1,913	3.75 years
		$	19,690	$	(1,905)	$	17,785


		As of December 31, 2025
	Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted Average Remaining Useful Life
Management services agreements	17-21 years	$	17,100	$	(993)	$	16,107	18 years
Trade name	5 years		2,590		(548)		2,042	4 years
		$	19,690	$	(1,541)	$	18,149

Amortization expense for intangible assets was $0.4 million for the three months ended March 31, 2026 and 2025, respectively.

Amortization expense over the remaining life of the intangible assets will be recognized as follows (in thousands):


Year			Amortization expense
Remainder of 2026		$	1,093
2027			1,457
2028			1,457
2029			1,428
2030			939
Thereafter			11,411
		$	17,785

6. FAIR VALUE MEASUREMENT AND FINANCIAL INSTRUMENTS

The carrying values of cash equivalents, accounts receivable, prepaids and other current assets, and accounts payable on the Company’s balance sheets approximated their fair values as of March 31, 2026 and December 31, 2025 due to their short-term nature. The carrying values of the Perceptive Facility (as defined below) approximated its fair value as of March 31, 2026 and December 31, 2025 due to its variable interest rate. The carrying value of the Company’s notes receivable approximated its fair value as of March 31, 2026 and December 31, 2025 due to its variable interest rate.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

Certain of the Company’s financial instruments are measured at fair value using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1:

Inputs are quoted prices for identical instruments in active markets.

Level 2:

Inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3:

Inputs are unobservable and reflect the Company’s own assumptions, based on the best information available, including the Company’s own data.

The following tables set forth the carrying amounts and fair values of the Company’s financial instruments as of March 31, 2026 and December 31, 2025 (in thousands):


		March 31, 2026
								Fair Value Measurement Based on
								Quoted			Significant
								Prices In			Other		Significant
								Active			Observable		Unobservable
		Carrying						Markets			Inputs		Inputs
		Amount			Fair Value			(Level 1)			(Level 2)		(Level 3)
Assets
Money market funds (cash equivalents)		$	440		$	440		$	440		$	—	$	—
Money market funds (restricted cash and cash equivalents)		$	5,500		$	5,500		$	5,500		$	—	$	—


		December 31, 2025
								Fair Value Measurement Based on
								Quoted			Significant
								Prices In			Other			Significant
								Active			Observable			Unobservable
		Carrying						Markets			Inputs			Inputs
		Amount			Fair Value			(Level 1)			(Level 2)			(Level 3)
Assets
Money market funds (cash equivalents)		$	436		$	436		$	436		$	—		$	—
Money market funds (restricted cash and cash equivalents)		$	5,500		$	5,500		$	5,500		$	—		$	—

7. ACCOUNTS RECEIVABLE

The following table presents the composition of accounts receivable, net, as of March 31, 2026 and December 31, 2025 (in thousands):


	March 31,		December 31,
	2026		2025
Gross accounts receivable - trade	$	16,589	$	17,512
Less: Allowances for credit losses		(780)		(1,043)
Accounts receivable, net	$	15,809	$	16,469

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

The following table presents a roll forward of the allowance for credit losses related to accounts receivable and notes receivable (in thousands):


		Balance at			Bad Debt		Write-offs of		Balance at
		Beginning of			Expense		Uncollectible		End of
		Period			Reversed		Balances		Period
Three months ended March 31, 2025		$	(1,930)		—		527		$	(1,403)
Three months ended March 31, 2026		$	(1,043)		267		(4)		$	(780)

8. INVENTORY

Inventory is stated at the lower of cost and net realizable value, with cost being determined on a first in, first out basis. The Company’s inventory is primarily comprised of finished goods and work-in-process.

9. PROPERTY AND EQUIPMENT AND CAPITALIZED SOFTWARE

The following table presents the composition of property and equipment, net, as of March 31, 2026 and December 31, 2025 (in thousands):


		March 31,			December 31,
		2026			2025
Laboratory equipment		$	676		$	676
Office equipment			495			495
Auto			—			23
Computer equipment and software			883			873
Manufacturing equipment			618			618
Clinical equipment			278			278
Leasehold improvements			1,490			1,608
TMS devices			3,046			3,790
Rental equipment			213			157
Property and equipment, gross			7,699			8,518
Less: Accumulated depreciation			(3,825)			(4,052)
Property and equipment, net		$	3,874		$	4,466

As of March 31, 2026 and December 31, 2025, the Company had capitalized software costs, net, of $0.3 million and $0.8 million, respectively, which are included in “Prepaid expenses and other current assets” and “Other assets” on the consolidated balance sheets.

The Company disposed of $0.9 million of rental equipment, TMS devices, leasehold improvements and auto with a net book value of $0.3 million during the three months ended March 31, 2026. For the three months ended March 31, 2025, the Company had not disposed of any property and equipment.

Depreciation and amortization expense related to property and equipment and capitalized software costs was $0.4 million and $0.5 million for the three months ended March 31, 2026 and 2025, respectively.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

10. LEASES

Lessee:

The Company has operating leases for its corporate headquarters, Treatment Centers, a training facility, and office equipment. The corporate headquarters is located in Malvern, Pennsylvania, where the Company leases an approximately 42,000 square foot facility comprising office and warehouse space.

In 2025, the Company executed a lease modification for its Malvern, Pennsylvania facility, extending the lease term through June 2033 for 32,000 square feet of the premises.

The Company leases an approximately 9,600 square foot facility in Charlotte, North Carolina as a training facility for the Systems. The lease ends in September 2027. The Company has an option to extend the lease on its training facility for an additional one-year term; however, the Company has determined it is not reasonably certain to exercise the option at this time after assessing contract, asset, entity and market conditions present upon lease commencement.

The Company has lease agreements related to its Treatment Centers. These lease agreements range from month-to-month to six years in length.

Operating lease rent expense was $2.4 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the weighted average remaining lease term of operating leases was 5.5 years and the weighted average discount rate was 11.6%.

The following table presents the supplemental cash flow information as a lessee related to leases (in thousands):


		Three Months Ended
		March 31, 2026			March 31, 2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	2,196		$	2,074

The following table sets forth by year the required future payments of operating lease liabilities as of March 31, 2026 (in thousands):



		Amount
Remainder of 2026		$	5,879
2027			6,597
2028			5,109
2029			4,496
2030			3,532
Thereafter			8,197
Total lease payments			33,810
Less imputed interest			(9,719)
Present value of operating lease liabilities		$	24,091

Lessor sales-type leases:

Certain customers have purchased the Systems on a rent-to-own basis. The lease term is two to four years with a customer option to purchase the System at the end of the lease or automatic transfer of ownership of the System at the end of the lease.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

The following table sets forth a maturity analysis of the undiscounted lease receivables related to sales-type leases (in thousands):


		March 31, 2026
Remainder of 2026		$	215
2027			150
Total sales-type lease receivables		$	365

As of March 31, 2026 and December 31, 2025, the carrying amount of the lease receivables was $0.4 million and $0.3 million, respectively. The Company does not have any unguaranteed residual assets.

Lessor operating leases:

The Systems leased to customers subsequent to January 1, 2019 for which collection is not probable are accounted for as operating leases. For the three months ended March 31, 2026 and 2025, the Company recognized operating lease income of $0.07 million and $0.05 million, respectively.

The Company maintained rental equipment, net, of $0.2 million and $0.1 million as of March 31, 2026 and December 31, 2025, respectively which are included in property and equipment, net on the consolidated balance sheets. Rental equipment depreciation expense was $0.02 million for the three months ended March 31, 2026 and 2025, respectively.

11. PREPAID COMMISSION EXPENSE

The Company pays a commission on both System sales and treatment session sales. Since the commission paid for the System sales is not commensurate with the commission paid for treatment sessions, the Company capitalizes commission expense associated with the System commissions paid that is incremental to specifically anticipated future treatment session orders. In developing this estimate, the Company considered its historical treatment session sales and customer retention rates, as well as technology development life cycles and other industry factors. These costs are periodically reviewed for impairment.

The System commissions are deferred and amortized on a straight-line basis over a seven year period equal to the average customer term, which the Company deems to be the expected period of benefit for these costs.

On the Company’s consolidated balance sheets, the current portion of capitalized contract costs is presented in current portion of prepaid commission expense, while the long-term portion is included in prepaid commission expense. Amortization expense was $0.8 million for the three months ended March 31, 2026 and 2025, respectively, and presented within sales and marketing in the consolidated statements of operations.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

12. ACCRUED EXPENSES

The following table presents the composition of accrued expenses as of March 31, 2026 and December 31, 2025 (in thousands):


		March 31,			December 31,
		2026			2025
Compensation and related benefits		$	5,854		$	8,610
Consulting and professional fees			1,247			1,122
Research and development expenses			742			156
Sales and marketing expenses			449			724
Warranty			174			179
Sales and other taxes payable			510			611
Other			620			914
Accrued expenses		$	9,596		$	12,316

13. REVENUE AND DEFERRED REVENUE

Contract terms typically require payment upon shipment or installation of the System and additional payments as access codes for treatment sessions are delivered, which can span several years after the System is first delivered and installed. The timing of revenue recognition compared to billings and cash collections typically results in accounts receivable. However, sometimes customer advances and deposits may be required for certain customers and are recorded as contract liabilities (deferred revenue). For multi-year agreements, the Company generally invoices customers annually at the beginning of each annual coverage period and recognizes revenue over the term of the coverage period.

As of March 31, 2026, the Company expects to recognize approximately the following percentages of deferred revenue by year:


		Revenue
Year:		Recognition
Remainder of 2026		78	%
2027		15	%
2028		—	%
2029		7	%
Total		100	%

Revenue recognized for the three months ended March 31, 2026 and 2025 that was included in the contract liability balance at the beginning of the year was $0.4 million and $0.5 million, respectively, and primarily represented revenue earned from separately priced extended warranties, customer deposits, milestone revenue, and clinical training.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

Geographical information

The following geographic data includes revenue generated from the Company’s third-party distributors. The Company’s revenue was generated in the following geographic regions and by product line and service for the periods indicated:


	Revenues by Geography
	Three Months Ended March 31,
	2026				2025
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
U.S.	$	34,226	99	%	$	31,483	98	%
International		228	1	%		492	2	%
Total revenues	$	34,454	100	%	$	31,975	100	%


	U.S. Revenues by Product Category
	Three Months Ended March 31,
	2026				2025
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	3,203	9	%	$	2,846	9	%
Treatment sessions		9,122	27	%		9,612	31	%
Clinic revenue		21,529	63	%		18,659	59	%
Other		372	1	%		366	1	%
Total U.S. revenues	$	34,226	100	%	$	31,483	100	%


	International Revenues by Product Category
	Three Months Ended March 31,
	2026				2025
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	46	20	%	$	164	33	%
Treatment sessions		124	54	%		150	31	%
Other		58	26	%		178	36	%
Total international revenues	$	228	100	%	$	492	100	%

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

14. DEBT

The following table presents the composition of debt as of March 31, 2026 and December 31, 2025 (in thousands):


		March 31,			December 31,
		2026			2025
Outstanding principal		$	65,000		$	70,000
Less debt discounts			(3,703)			(4,193)
Total debt, net			61,297			65,807
Less current portion			—			—
Long-term debt, net		$	61,297		$	65,807

For the three months ended March 31, 2026, the Company recognized interest expense of $2.3 million, of which $2.0 million was cash and $0.3 million was non-cash interest expense related to the amortization of deferred debt issuance costs. For the three months ended March 31, 2025, the Company recognized interest expense of $1.9 million, of which $1.7 million was cash and $0.2 million was non-cash interest expense related to the amortization of deferred debt issuance costs.

Perceptive Credit Facility

On July 25, 2024, the Company entered into a Credit Agreement and Guaranty with Perceptive Credit Holding IV, LP (“Perceptive”) as collateral agent and other lenders defined in the agreement (the “Perceptive Facility”) which was used to partially repay the Company’s previous $60.0 million credit facility with SLR Investment Corp. (formerly known as Solar Capital Ltd.).

The Perceptive Facility permits the Company to borrow up to an aggregate amount of $90.0 million in three tranches of term loans, a “Tranche 1 Loan”, a “Tranche 2 Loan” and a “Tranche 3 Loan.” On July 25, 2024, the Company borrowed an aggregate amount of $50.0 million, which was the aggregate amount available under the Tranche 1 Loan. Under the Tranche 2 Loan, the Company was permitted to borrow, at its election, up to an aggregate amount of $15.0 million (i) upon the Company achieving a specified amount of trailing twelve months net revenue, and (ii) assuming there had been no event of default under the Perceptive Facility prior to such election. The Tranche 2 Loan must have been borrowed on or before January 31, 2026. Under the Tranche 3 Loan, the Company may request to borrow, at the consent of the Majority Lenders (as defined in the Perceptive Facility), up to an aggregate amount of $25.0 million. The Tranche 3 Loan is available until June 30, 2026. There are no scheduled repayments of the principal on the Tranche 1 Loan, the Tranche 2 Loan or the Tranche 3 Loan prior to the maturity date. All amounts borrowed under the Perceptive Facility are due on July 25, 2029.

Each of the Tranche 1 Loan, the Tranche 2 Loan and the Tranche 3 Loan accrues interest from the date of borrowing through the date of repayment at a floating per annum rate of interest equal to the sum of 7.00% plus the greater of (a) 4.50% and (b) One-Month Term SOFR (as defined in the Perceptive Facility).

If the Company prepays Tranche 1 Loan, the Tranche 2 Loan, or the Tranche 3 Loan prior to the maturity date, the Company will also be required to pay prepayment fees to Perceptive equal to 6% of the principal amount of such term loan then-prepaid if prepaid on or before the first anniversary of the closing date, 5% of the principal amount of such term loan then-prepaid if prepaid after the first anniversary and on or before the second anniversary of the closing date, 4% of the principal amount of such term loan then-prepaid if prepaid after the second anniversary and on or before the third anniversary of the closing date, and 3% of the principal amount of such term loan then-prepaid if prepaid after the third anniversary and on or before the fourth anniversary of the closing date.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

The Company’s obligations under the Perceptive Facility are secured by a first priority security interest in substantially all of the Company’s assets, including its intellectual property. The Perceptive Facility requires the Company to comply with a quarterly minimum trailing revenue covenant commencing March 2025 and a minimum liquidity covenant as well as affirmative and negative covenants.

The Perceptive Facility contains events of default, including, without limitation, events of default upon: (i) failure to make payment pursuant to the terms of the agreement; (ii) violation of covenants; (iii) material adverse changes to the Company’s business; (iv) insolvency; (v) material cross-defaults; (vi) significant judgments, orders, or decrees for payments by the Company; (vii) incorrectness of representations and warranties; (viii) significant adverse events related to the Employee Retirement Income Security Act of 1974; (ix) failure by the Company to be registered with the SEC in good standing; or (x) failure by the Company to maintain a valid and perfected lien on the collateral securing the borrowing.

As consideration for the Perceptive Facility, the Company agreed to issue to Perceptive warrants to purchase up to 1,462,500 shares of the Company’s common stock, with a warrant exercisable into 1,125,000 shares of the Company’s common stock issued on the closing date (the “Initial Warrant”). The per share exercise price for the Initial Warrant is equal to the lower of (x) the 10-day volume weighted average price of the Company’s common stock on the business day immediately prior to the closing date and (y) the 10-day volume weighted average price of the common stock ended on August 31, 2024. In addition to the Initial Warrant, an additional warrant was issued for 225,000 shares of common stock concurrently with the borrowing of the Tranche 2 Loan. The per share exercise price for the additional warrant will be equal to the exercise price of the Initial Warrant. Each warrant will be exercisable, in whole or in part, until the tenth anniversary of the applicable date of issuance.

Effective as of December 9, 2024, the Company amended the Perceptive Facility and borrowed against the Tranche 3 Loan in a principal amount of $10.0 million and used the proceeds thereof to finance, in part, the operations of the combined enterprise after the acquisition of Greenbrook and the related transactions included in the Arrangement. As consideration for Tranche 3 Loan borrowing, the Company issued warrants to purchase 600,000 shares of the Company’s common stock at a per share exercise price of $0.94.

The Company calculated the issuance date fair value of the warrants using the Black-Scholes option pricing model, which resulted in a fair value of $2.6 million. Accordingly, the Company allocated the proceeds from the Perceptive Facility on a relative fair value basis resulting in $2.5 million allocated to the warrants.

On March 26, 2025, the Company entered into Amendment No. 2 to Credit Agreement and Guaranty by and between the Company, as the borrower, and Perceptive, in its capacities as administrative agent for the lenders and the majority lender, in which the parties agreed to revise the net revenue covenant to align with the Company’s pre-existing operating plan for the first quarter of 2025.

On August 1, 2025, the Company entered into Amendment No. 3 to Credit Agreement and Guaranty (the “Perceptive Third Amendment”). Pursuant to the Perceptive Third Amendment, the Company borrowed $10.0 million under Tranche 2, lowered the minimum liquidity balance requirement to $2.0 million through September 30, 2026, and issued Perceptive a warrant certificate exercisable into 225,000 shares of the Company’s common stock.

On January 15, 2026, the Company entered into Amendment No. 4 to Credit Agreement and Guaranty (the “Perceptive Fourth Amendment”). The Perceptive Fourth Amendment amended the Perceptive Facility to modify the requirements of subsidiaries joining as an obligor and subsidiary guarantor thereunder.

On March 12, 2026, the Company entered into Amendment No. 5 to the Credit Agreement and Guaranty (the “Perceptive Fifth Amendment”). Under the Perceptive Fifth Amendment, Neuronetics made a one-time principal payment of $5.0 million, and Neuronetics and Perceptive agreed to adjustments to the existing debt

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

covenants. In connection with the amendment, the Company incurred a prepayment penalty of $0.3 million, which, together with the proportional write-off of unamortized debt issuance costs and discounts, resulted in a total loss on partial debt extinguishment of approximately $0.5 million for accounting purposes.

As of March 31, 2026, the Company had $65.0 million of borrowings outstanding under the Perceptive Facility, which has a final maturity in July 2029. The interest rate on borrowings under the credit facility is variable and resets monthly.

The Company was in compliance with the covenants under the Perceptive Facility as of March 31, 2026.

15. COMMON STOCK

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 approximately $18.9 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 may offer and sell shares of its common stock having an aggregate offering price of up to $50.0 million from time to time through the ATM Program. Sales under the Distribution Agreement will be made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-288526) and a related prospectus and prospectus supplement.

In 2025, the Company sold 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 March 31, 2026, the Company had approximately $41.7 million remaining available for future issuance under the ATM Program.

Common Stock

The following table summarizes the total number of shares of the Company’s common stock issued and reserved for issuance as of March 31, 2026 and December 31, 2025 (in thousands):


		March 31, 2026		December 31, 2025
Shares of common stock issued		69,583		68,994
Shares of common stock reserved for issuance for:
Common stock warrants outstanding		1,950		1,950
Stock options outstanding		1,091		1,099
Restricted stock units outstanding		6,511		5,627
Shares available for grant under stock incentive plans		6,920		4,314
Shares available for sale under employee stock purchase plan		2,871		2,181
Total shares of common stock issued and reserved for issuance		88,926		84,165

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

Common Stock Warrants

The following table summarizes the Company’s outstanding common stock warrants as of March 31, 2026 and December 31, 2025:


Warrants
Outstanding
(in thousands)	Exercise Price		Expiration Date
1,125	$	0.94	July-2034
600	$	0.94	Dec-2034
225	$	0.94	August-2035
1,950

There have been no grants, exercises, or cancellations of warrants during the three months ended March 31, 2026 and 2025.

16. LOSS PER SHARE

The Company’s basic loss per common share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the period. The Company’s restricted stock awards (non-vested shares) are issued and outstanding at the time of grant but are excluded from the Company’s computation of weighted average shares outstanding in the determination of basic loss per share until vesting occurs.

A net loss cannot be diluted so, when the Company is in a net loss position, basic and diluted loss per common share are the same. If, in the future, the Company achieves profitability, the denominator of a diluted earnings per common share calculation will include both the weighted average number of shares outstanding and the number of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive. Dilutive common stock equivalents potentially include warrants, stock options, non-vested restricted stock awards and non-vested performance restricted stock units (“PRSUs”) using the treasury stock method, along with the effect, if any, from the potential conversion of outstanding securities, such as convertible preferred stock.

The following potentially dilutive securities outstanding as of March 31, 2026 and 2025 have been excluded from the denominator of the diluted loss per share of common stock outstanding calculation (in thousands):


		March 31,
		2026		2025
Stock options		1,091		1,223
Non-vested PRSUs		995		1,980
Non-vested restricted stock units		5,516		3,389
Common stock warrants		1,950		1,725

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

17. SHARE-BASED COMPENSATION

The amount of share-based compensation expense recognized by the Company by location in its consolidated statements of operations for the three months ended March 31, 2026 and 2025 is as follows (in thousands):


		Three Months Ended March 31,
		2026			2025
Cost of revenues		$	22		$	27
Sales and marketing			326			84
General and administrative			1,264			1,157
Research and development			65			176
Total		$	1,677		$	1,444

2018 Equity Incentive Plan

In June 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”), which authorized the issuance of up to 1.4 million shares, subject to an annual 4% increase based on the number of shares of common stock outstanding, in the form of restricted stock, stock appreciation rights and stock options to the Company’s directors, employees and consultants. The amount and terms of grants are determined by the Company’s board of directors (the “Board”). All stock options granted to date have had exercise prices equal to the fair value, as determined by the closing price as reported by the Nasdaq Global Market, of the underlying common stock on the date of grant. The contractual term of stock options is up to 10 years, and stock options are exercisable in cash or as otherwise determined by the Board. Generally, stock options vest 25% upon the first anniversary of the date of grant and the remainder ratably monthly thereafter for 36 months. Restricted stock units generally vest ratably in three equal installments on the first, second and third anniversaries of the grant date. PRSUs generally vest based on attainment of performance metrics, such as achievement of cash flow breakeven or retention of key employees as determined by the Board. The fair value of the PRSUs based upon the achievement of certain share prices are determined using a risk neutral Monte Carlo simulation valuation model. As of March 31, 2026, there were 5.8 million shares available for future issuance under the 2018 Plan.

2020 Inducement Incentive Plan

In December 2020, the Company adopted the 2020 Inducement Incentive Plan (the “2020 Inducement Plan”), which authorized the issuance of up to 0.4 million shares in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards and other stock awards to eligible employees who satisfy the standards for inducement grants under Nasdaq Global Market rules. In March 2022, the Board approved an additional 0.5 million shares for issuance under the 2020 Inducement Plan. In October 2025, the Board approved an additional 0.6 million shares for issuance under the 2018 Inducement Plan. An individual who previously served as an employee or director of the Company is not eligible to receive awards under the 2020 Inducement Plan other than following a bona fide period of non-employment. The amount and terms of grants are determined by the Board. As of March 31, 2026, there were 1.1 million shares available for future issuance under the 2020 Inducement Plan.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

Stock Options

The following table summarizes the Company’s stock option activity for the three months ended March 31, 2026:


				Weighted	Aggregate
	Number of	Weighted		average	average
	Shares under	average		Remaining	Intrinsic
	Option	Exercise Price		Contractual	Value
	(in thousands)	per Option		Life (in years)	(in thousands)
Outstanding at December 31, 2025	1,099	$	2.89
Granted	—	$	—
Exercised	—	$	—
Forfeited and Expired	(8)	$	5.46
Outstanding at March 31, 2026	1,091	$	2.87	3.9	$	—
Exercisable at March 31, 2026	1,091	$	2.87	3.9	$	—
Vested and expected to vest at March 31, 2026	1,091	$	2.87	3.9	$	—

The Company recognized share-based compensation expense related to stock options of $0 for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, there was no remaining unrecognized compensation cost related to non-vested stock options.

For the three months ended March 31, 2026, the Company did not grant stock options.

Restricted Stock Units and PRSUs

The following table summarizes the Company’s restricted stock unit and PRSU activity for March 31, 2026:


		Non-vested			Weighted		Non-vested			Weighted
		Restricted			average		PRSUs			average
		Stock Units			Grant-date					Grant-date
		(in thousands)			Fair Value		(in thousands)			Fair Value
Non-vested at December 31, 2025		4,229		$	3.33		1,398		$	3.81
Granted		2,392		$	1.47		—		$	—
Vested		(774)		$	4.38		—		$	—
Forfeited		(331)		$	2.30		(403)		$	2.82
Non-vested at March 31, 2026		5,516		$	2.44		995		$	4.24

The Company recognized $1.7 million and $1.4 million in share-based compensation expense related to the restricted stock units and PRSUs for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, there was $11.8 million of unrecognized compensation cost related to non-vested restricted stock units and PRSUs, which the Company expects to recognize over a weighted average period of 2.1 years. The total fair value at the vesting date of restricted stock units and PRSUs vested during the three months ended March 31, 2026 was $1.1 million.

The Company has granted PRSUs to certain key employees of the Company, with vesting subject to the recipient’s continued service with the Company through the applicable vesting date and the achievement of certain performance conditions as outlined in the award document. For legacy Greenbrook employees who became Neuronetics employees in connection with the Arrangement, the awards are subject to the terms of the 2020 Inducement Plan. For legacy Neuronetics employees, the awards are subject to the 2018 Plan.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

The Company offers the Board and certain employees the opportunity to defer restricted stock units into an equity-based deferred equity compensation plan, the Restricted Stock Unit Deferral Election Plan (“RSUDEP”).

Benefits from these plans are payable in shares of Neuronetics stock and the awards under this plan are unfunded to the plans’ participants. Restricted stock units deferred under the RSUDEP are counted against the total shares available for future issuance under the 2018 Plan. As of March 31, 2026, there were 0.4 million shares deferred under the RSUDEP.

The Company did not grant PRSUs during the period ended March 31, 2026.

18. COMMITMENTS AND CONTINGENCIES

Executive Employment Agreements

The Company has entered into an employment agreement and offer letters with certain key executives, providing for compensation and severance in certain circumstances, as defined in the agreements.

Legal Matters

The Company is subject from time to time to various claims and legal actions arising during the ordinary course of its business. Management believes that there are currently no claims or legal actions that would reasonably be expected to have a material adverse effect on the Company’s results of operations, financial condition, or cash flows.

Other Matters

We are subject to various audits from government agencies including Medicaid and Medicare which involve the potential recoupment of reimbursements received from these agencies. These audits occur in the ordinary course of business. As of March 31, 2026 the Company had $0.6 million of expenses recorded within other payables on the consolidated balance sheets. As of December 31, 2025, the Company had $0.8 million of expenses recorded within accrued expenses on the consolidated balance sheets.

19. SEGMENT INFORMATION

The Company reports the results of our operations as two segments in our consolidated financial statements: (i) medical device and (ii) clinic services.

The determination of our reporting segments was made based on our strategic priorities, which corresponds to the way the Company’s chief operating decision maker (“CODM”) reviews and evaluates operating performance to make decisions about resources to be allocated. For our operating segments, the CODM uses segment gross profit and segment loss before unallocated general and administrative as the primary measure of segment performance because it reflects results that are directly attributable to each reportable segment and is the measure most consistent with the Company’s consolidated results prepared in accordance with U.S. GAAP. The CODM does not regularly review any other measures of segment profit or loss for purposes of assessing segment performance or allocating resources.

On a monthly basis, the CODM considers month-to-month and budget-to-actual variances for both measures when allocating resources to segments. The accounting policies of its segment are the same as those described in the summary of significant accounting policies. The CODM is regularly provided information on total consolidated assets and liquidity; however, the CODM is not provided asset information at the reportable segment level. Accordingly, segment assets have not been disclosed.

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)

Significant segment expenses regularly reviewed by CODM for both segments include directly attributable cost of revenues, selling, general and administrative and research and development expenses. Unallocated general and administrative costs include corporate support functions such as executive management, corporate accounting, information technology, legal, human resources and Board fees. Additionally, unallocated general and administrative costs may include expenses such as litigation and merger and acquisition related costs, which are not specific to a segment and thus not allocated to the reportable segments.

Segment information for prior periods has been recast to conform to the current year reportable segment structure. There were no intercompany transactions between the Company’s reportable segments during the periods presented. Reportable segment information is presented below (in thousands):


Quarter ended March 31, 2026		Med Device		Clinic Service		Total
Revenue	$	12,925	$	21,529	$	34,454
Cost of revenues		2,858		15,442		18,300
Segment gross profit	$	10,067	$	6,087	$	16,154

Significant Segment Expense
Selling, General and Administrative
Direct	$	7,419	$	7,883	$	15,302

Research and development
Direct		1,305		60		1,365

Segment profit/(loss)	$	1,343	$	(1,856)	$	(513)

Unallocated expenses
General and Administrative					$	8,482
Other income, net						(1,020)
Loss on extinguishment of debt						539
Interest expense						2,266

Net loss					$	(10,780)

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NEURONETICS, INC.

Notes to Interim Consolidated Financial Statements

(Unaudited)


Quarter ended March 31, 2025		Med Device		Clinic Service		Total
Revenue	$	13,316	$	18,659	$	31,975
Cost of revenues		3,150		13,087		16,237
Segment gross profit	$	10,166	$	5,572	$	15,738

Significant Segment Expense
Selling, General and Administrative
Direct	$	8,737	$	7,934	$	16,671

Research and development
Direct		1,565		51		1,616

Segment profit/(loss)	$	(136)	$	(2,413)	$	(2,549)

Unallocated expenses
General and Administrative					$	8,465
Other income, net						(247)
Interest expense						1,922

Net loss					$	(12,689)

20. NONCONTROLLING INTEREST

The Company has operating agreements with several non-wholly owned entities. The non-controlling interest percentages range from 10% to 49%. The Company has control over these entities under U.S. GAAP as the Company has power over all significant decisions made by these entities. Thus, 100% of the financial results of these subsidiaries are included in the Company’s consolidated financial results.

21. GOVERNMENT ASSISTANCE

Employee Retention Credit

The Coronavirus Aid, Relief and Economic Security Act provided an Employee Retention Credit (the “ERC”), a refundable tax credit related to certain payroll taxes. The Company applied the grant model and determined that the criteria for recognition of the ERC were met based on its eligibility assessment and filing of the ERC claim.

During the period ended March 31, 2025, Neuronetics received $2.6 million related to its ERC claim, consisting of $2.3 million of claims related to fiscal year 2021 and interest of $0.3 million.

During the three months ended March 31, 2026, Greenbrook received $2.2 million related to its ERC claim. On March 2, 2026, the Company entered into an agreement with Madryn Asset Management, LP and its affiliates (collectively, “Madryn”), pursuant to which it paid $1.1 million of the ERC proceeds to Madryn. The Company incurred $0.3 million of professional fees and recognized net other income of $0.8 million. This payment to Madryn related to the Term Loan and Exchange Agreement previously executed between Madryn and Greenbrook prior to the completion of the Arrangement. Madryn is the Company’s largest stockholder, and Avinash Amin, M.D., a representative of Madryn, serves on the Board.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations, as well as other sections in this Quarterly Report on Form 10-Q, should be read in conjunction with our unaudited interim consolidated financial statements and related notes thereto included elsewhere herein. In addition to historical financial information, some of the information contained in the following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts, including statements regarding our future results of operations and financial position, business strategy, current and prospective products, product approvals, research and development costs, current and prospective collaborations, timing and likelihood of success, plans and objectives of management for future operations and future results of current and anticipated products, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “would,” “should,” “expect,” “plan,” “design,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “outlook” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 17, 2026. These risks and uncertainties include, without limitation, risks and uncertainties related to: the effect of the transaction with Greenbrook on our business relationships; operating results and business generally; our ability to execute our business strategy; our ability to achieve or sustain profitable operations due to our history of losses; our reliance on the sale and usage of the System to generate revenues; the scale and efficacy of our salesforce; our ability to retain talent; availability of coverage and reimbursement from third-party payors for treatments using our products; physician and patient demand for treatments using our products; developments in respect of competing technologies and therapies for the indications that our products treat; product defects; our ability to obtain and maintain intellectual property protection for our technology; developments in clinical trials or regulatory review of the System for additional indications; developments in regulation in the U.S. and other applicable jurisdictions; potential effects of evolving and/or extensive government regulation; the terms of our credit facility; and our self-sustainability;existing cash balances; our ability to achieve positive cash flows; and our ability to continue as a going concern. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. The Company cautions investors not to place undue reliance on these forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for us to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q as a result of any new information, future events or changed circumstances or otherwise.

Overview

We believe that mental health is as important as physical health. The Company’s first commercial product, the System, is a non-invasive and non-systemic office-based treatment that uses TMS to create a pulsed, MRI-strength magnetic field that induces electrical currents designed to stimulate specific areas of the brain associated with mood. The System is cleared by the FDA to treat adult patients with MDD who have failed to achieve satisfactory improvement from prior antidepressant medication in the current MDD episode. It is also

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cleared by the FDA as an adjunct for adults with OCD and for adolescent patients aged 15-21 with MDD. It is also cleared by the FDA to decrease anxiety symptoms in adult patients with MDD that may exhibit comorbid anxiety symptoms (anxious depression). In addition to selling the System and associated treatment sessions to customers, the Company operates Greenbrook Treatment Centers across the U.S., offering TMS therapy using the Systems. The Company acquired Greenbrook, a provider of mental healthcare services, pursuant to the Arrangement. The System is safe, clinically effective, reproducible and precise, and the Company believes it is supported by the largest clinical data set of any competing TMS system. Treatment Centers also obtain SPRAVATO® to treat adults with treatment-resistant depression or depressive symptoms in adults suffering from MDD with acute suicidal ideation or behavior.

Effective as of December 9, 2024, Neuronetics and Greenbrook completed the Arrangement. Each Greenbrook Share outstanding immediately prior to the effective time of the Arrangement was exchanged for shares of Neuronetics common stock at a specified exchange ratio upon closing of the Arrangement. We continue to operate as Neuronetics, Inc., and the Company’s shares trade on the NASDAQ Global Market under the ticker “STIM.”

We designed the System as a non-invasive therapeutic alternative to treat patients who suffer from MDD and to address many of the key limitations of existing treatment options. Additionally, through our acquisition of Greenbrook, we now derive revenue directly from our Treatment Centers, by providing TMS therapy and SPRAVATO® for MDD and other mental health disorders. We derive the majority of our revenues from clinic revenue and treatment sessions.

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

For the three months ended March 31, 2026, revenues from sales of our treatment sessions, clinic revenue and the Systems represented 27%, 63% and 9% 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 the System and recurring treatment sessions in the U.S. through our sales and customer support team. Our sales force targets an estimated 53,000 psychiatrists across 26,000 practices. We expect to continue to expand our direct sales and customer support team to further penetrate the market by demonstrating the benefits of the System to providers and their patients. Some of our customers have purchased or may purchase more than one of the Systems. Based on our commercial data, we believe many providers can recoup their initial capital investment in a System by providing a standard course of treatment to approximately 12 patients. We believe psychiatrists can generate approximately $9,000 of average revenue per patient for a standard course of treatment, which may provide meaningful incremental income to their practices. We have a diverse customer base in the U.S. providers are reimbursed by federal healthcare programs and the vast majority of commercial payors in the U.S. for treatment sessions utilizing the System.

We market our products in a few select markets outside the U.S. through independent distributors. International revenues represented 1% and 2% of our total revenues for the three months ended March 31, 2026 and 2025, respectively. We expect our international revenues to decrease as a percentage of our total revenue.

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

Total revenues increased by $2.5 million, or 8%, from $32.0 million for the three months ended March 31, 2025 to $34.5 million for the three months ended March 31, 2026. For the three months ended March 31, 2026, our U.S. revenues were $34.2 million compared to $31.5 million for the three months ended March 31, 2025, representing an increase of 9%. The increase was primarily attributable to an increase in clinic revenue. We incurred net losses of $10.8 million for the three months ended March 31, 2026 compared to net losses of $12.7 million for the three months ended March 31, 2025. As of March 31, 2026, we had an accumulated deficit of $469.6 million.

Global Economic Conditions

We are continuing to closely monitor macroeconomic impacts, including but not limited to developments affecting financial institutions, supply chains, unemployment rates, investment values, consumer confidence, inflationary and potential recessionary pressures, on our business, results of operations and financial results, which could adversely affect us.

Components of Our Results of Operations

Revenues

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

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.

System Revenues. System revenues consist primarily of sales or rentals of a capital component, including equipment upgrades to the initial sale of the System. The Systems can be purchased outright or on a sales type lease basis by certain customers.

Treatment Session Revenues. Treatment session revenues primarily include sales of treatment sessions and SenStar treatment links. The treatment sessions are access codes that are delivered electronically in the U.S. The SenStar treatment links are disposable units containing single-use access codes that are sold and used outside the U.S. Access codes are purchased separately by our customers, primarily on an as-needed basis, and are required by the System in order to deliver treatment sessions.

Other Revenues. Other revenues are derived primarily from service and repair, research collaboration agreements and extended warranty contracts with our existing customers.

Refer to the section titled “Critical Accounting Policies and Use of Estimates—Revenue Recognition” in our Annual Report on Form 10-K filed with the SEC on March 17, 2026. Also, refer to “Summary of Significant Accounting Policies” in Notes to Interim Consolidated Financial Statements located in Part I – FINANCIAL INFORMATION, Item 1. Financial Statements.

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Cost of Revenues and Gross Margin

Cost of revenues primarily consists of the costs of components and products purchased from our third-party contract manufacturers of the 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 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.

Our gross profit is calculated by subtracting our cost of revenues from our revenues. We calculate our gross margin as our gross profit divided by our revenues. Our gross margin has been and will continue to be affected by a variety of factors, primarily product sales mix, pricing and third-party contract manufacturing costs. Our gross margins on revenues from sales of the Systems and clinic revenue are lower than our gross margins on revenues from sales of treatment sessions and, as a result, the sales mix between the Systems, clinic revenues and treatment sessions can affect the gross margin in any reporting period.

Sales and Marketing Expenses

Sales and marketing expenses consist of market research and commercial activities related to the sale of the 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 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.

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Interest Expense

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

Other Income, Net

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

Loss on 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.

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025


	Three Months Ended
	March 31,						Increase / (Decrease)
	2026			2025			Dollars		Percentage

	(in thousands, except percentages)
Revenues	$	34,454		$	31,975		$	2,479	8	%
Cost of revenues		18,300			16,237			2,063	13	%
Gross Profit		16,154			15,738			416	3	%
Gross Margin		46.9	%		49.2	%

Operating expenses:
Sales and marketing		10,737			11,999			(1,262)	(11)	%
General and administrative		13,048			13,137			(89)	(1)	%
Research and development		1,364			1,616			(252)	(16)	%
Total operating expenses		25,149			26,752			(1,603)	(6)	%
Loss from Operations		(8,995)			(11,014)			2,019	18	%
Other (income) expense:
Interest expense		2,266			1,922			344	18	%
Loss on extinguishment of debt		539			—			539	100	%
Other income, net		(1,020)			(247)			(773)	313	%
Net Loss	$	(10,780)		$	(12,689)		$	1,909	15	%


	Revenues by Geography
	Three Months Ended March 31,
	2026				2025
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
U.S.	$	34,226	99	%	$	31,483	98	%
International		228	1	%		492	2	%
Total revenues	$	34,454	100	%	$	31,975	100	%

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	U.S. Revenues by Product Category
	Three Months Ended March 31,
	2026				2025
			% of				% of
	Amount		Revenues		Amount		Revenues

	(in thousands, except percentages)
NeuroStar Advanced Therapy System	$	3,203	9	%	$	2,846	9	%
Treatment sessions		9,122	27	%		9,612	31	%
Clinic revenue		21,529	63	%		18,659	59	%
Other		372	1	%		366	1	%
Total U.S. revenues	$	34,226	100	%	$	31,483	100	%

Revenues

Total revenue for the three months ended March 31, 2026 was $34.5 million, an increase of $2.5 million, or 8%, compared to the three months ended March 31, 2025 revenue of $32.0 million.

The increase in revenue was primarily driven by higher U.S. clinic revenue, which increased $2.8 million, or 15%, to $21.5 million in the first quarter of 2026 from $18.7 million in the first quarter of 2025, reflecting continued contributions from clinics acquired in connection with the Greenbrook transaction. This growth was partially offset by a decline in U.S. treatment session revenue, which decreased $0.5 million to $9.1 million for the three months ended March 31, 2026 from $9.6 million for the three mo

Neuronetics, Inc. 10-Q