ClearPoint Neuro Inc.

As a reminder, this conference is being recorded. Comments made on this call may include statements that are forward-looking within the meanings of securities laws. These forward-looking statements may include, without limitation, statements related to anticipated industry trends, the company's plans, prospects, and strategies, both preliminary and projected, and management's expectations, beliefs, estimates, or projections regarding future results of operations. Actual results or trends could differ materially. The company undertakes no obligation to revise forward-looking statements for new information or future events. For more information, please refer to the company's annual report on Form 10-K for the year ended December 31, 2020, and the company's quarterly report on Form 10-Q for the quarter ended June 30, 2021, both of which have been filed with the Securities and Exchange Commission. and the company's quarterly report on Form 10-Q for the quarter ended September 30th, 2021, which the company intends to file with the Securities and Exchange Commission on or before November 15th, 2021. All the company's filings may be obtained from the SEC or the company's website at www.clearpointneuro.com. At this time, I'd like to turn the floor over to Mr. Joe Burnett, Chief Executive Officer. Thank you, Sarah. Please go ahead.

Thank you, Kate, and thank you to all of the investors and analysts on today's call for being a part of the ClearPoint vision and journey. Our mission and our priority is to help restore quality of life to patients and their families who are suffering from some of the most debilitating neurological disorders imaginable. In the third quarter of 2021, we have continued to make progress against our four pillars of growth, including functional neurosurgery navigation, biologics and drug delivery, therapy and access products, and achieving global scale. While elective case volume was once again impacted, this time by the Delta variant in August and September, we still achieved record revenue overall. We also added new partners, both on our medical device navigation portfolio and in our biologics and drug delivery portfolio. These two distinct market categories are both served by the same ClearPoint platform, and we estimate that they each have total annual addressable markets of more than $1 billion each in the years ahead. I will now turn the call over to Danilo, our CFO, to review our financial performance in the quarter, after which I will add some detail to our four pillar growth strategy. Danilo?

Thank you, Joe, and thank you all for joining us today. Looking at the third quarter 2021 results, Total revenue was $4.6 million in the third quarter of 2021, compared to $3.5 million in the third quarter of 2020, an increase of 1.1 million or 30%. Our revenue is made up of three components, functional neurosurgery navigation therapy, biologics and drug delivery, and capital equipment and software. Functional neurosurgery navigation revenue consists of commercial sales of disposable products and services related to cases utilizing the ClearPoint system to deliver medical device therapy to the proper target. This revenue segment increased 17% to 2.2 million for the three months ended September 30th, 2021 from 1.8 million for the same period in 2020. Biologic and drug delivery revenue includes sales of disposable products and services related to customer sponsored preclinical and clinical trials utilizing our products. Biologics and drug delivery sales increased 39% to 2.1 million in the third quarter of 2021 from 1.5 million for the same period in 2020. This increase is attributable to increased investments by both new and existing partners as we progress together through the regulatory process for these new exciting gene and stem cell therapies. Capital equipment and software revenue consisting of sales of ClearPoint reusable hardware and software and of related services was $0.4 million for the third quarter, a 78% increase versus the same period in 2020. Revenue from this product line historically has varied from quarter to quarter. We have started to see a return of some capital spending on systems and service contracts, although delay in capital spending caused by COVID uncertainty still lingers. Gross margin for the three months ended September 30th, 2021 was 68% compared to 74% for the same period in 2020. This decrease was due primarily to an increase in the excess and obsolete inventory reserve of 0.1 million and to an increase in overhead costs allocated to cost of sales during the third quarter. Research and development costs were $2.6 million for the third quarter 2021, compared to $1.1 million for the same period in 2020, an increase of $1.5 million or 130%. This increase was due primarily to increases in personnel costs, including headcount and increase investments in our product and software development. Both increases reflect the acceleration of our pipeline development efforts as communicated in our use of proceeds summary during our last financing in February of 2021. We have been very successful attracting talented hardware, software, and quality engineers during the past six months. Sales and marketing expenses were $1.8 million in the third quarter of 2021, compared to $1.5 million for the same period in 2020, an increase of $0.3 million or 22%. The increase reflects the increased level of marketing activities and travel expenses for our clinical team as procedure volume continues to grow and we train our new higher clinical specialists. General and administrative expenses were $2.4 million for the third quarter of 2021, compared to $1.3 million for the same period in 2020, an increase of $1.2 million. This increase was due primarily to increases in personal costs, share-based compensation, insurance expenses, occupancy costs, IT, and other professional expenses. As a benefit of our last round of financing, we have hired 20 new employees across the organization since the beginning of the year to accelerate product development efforts, commercial support, and global expansion. At September 30th, 2021, we had cash and cash equivalents totaling $57.7 million as compared to $20.1 million at December 31st, 2020, with the increase resulting primarily from the completion of a public offering of the company's common stock in February 2021. I would like to turn now the call back to Joe. Thanks, Danilo.