ClearPoint Neuro Inc.

Greetings, and welcome to the ClearPoint Neuro, Inc. Third Quarter 2024 Financial Results Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your cell phone keypad. As a reminder, this conference is being recorded. Comments made on this call may include statements that are forward-looking within the meaning 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, the size of total addressable markets or the market opportunity for the company's products and services, and management's expectations, beliefs, estimates, or projections regarding future revenue, results of operations, or the adequacy of cash and cash equivalent balances to support operations and meet future obligations. 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, 2023, and the company's quarterly report on Form 10-Q for the three months ended June 30, 2024, both of which have been filed with the Securities and Exchange Commission, and the company's quarterly report on Form 10-Q for the three months ended September 30, 2024, which the company intends to file with the Securities and Exchange Commission on or before November 14, 2024. All the company's filings may be obtained from the SEC or the company's website at www.ClearPointNeuro.com. And now, I would like to turn the call over to Joe Burnett, President and CEO. Please go ahead, sir.

Thank you. And thank you to all of the investors and analysts on today's call for being a part of the ClearPoint Neuro 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 2024, the entire ClearPoint Neuro team contributed to a record revenue quarter of 8.1 million, and in our view, the strongest financial and strategic performance in our history. We made significant progress across all four of our growth pillars, including number one, biologics and drug delivery, number two, neurosurgery navigation, Number three, therapy and access products. And number four, in achieving global scale. As we commented on our last earnings call, we are beginning to see the return on the investments we made over the past three years in the form of growth across all four of our pillars and not only biologics and drug delivery. We are thrilled to report that all four of our growth pillars grew more than 20% in the third quarter, with each segment contributing to the overall top line result, while at the same time achieving scale and continuing our reduction in operational cash burn. And as continued from the second quarter, we believe we have entered an exciting next phase of ClearPoint Neuro. We have gone beyond being just an MRI navigation focused company. We have added operating room navigation with SmartFrame OR, We have added our own laser therapy solution with Prism. We have added significant preclinical services to support early partnership with Biopharma. And we continue to see progress with our cell and gene therapy partners through the clinical and regulatory pathways to commercial approval on a global basis. The first of such gene therapy approvals has the potential of FDA clearance in the months ahead. We are very excited about how these new products and initiatives are performing in the field as well. 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 details to our four-pillar growth strategy.

Danilo? Thank you, Joe, and thank you, ladies and gentlemen, for joining us today. Looking at the third quarter 2024 results, total revenue was $8.1 million for the three months ended September 30th, 2024, in comparison to $5.8 million for the three months ended September 30th, 2023. which represents an acceleration to 41% growth versus the third quarter of 2023, and the fourth quarter in a row of growth above 30%. As a reminder, our revenue is made up of three components, biologics and drug delivery, neurosurgery navigation and therapy, and capital equipment and software. Biologics and drug delivery revenue includes the sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products. Biologics and drug delivery revenue grew 27%, or $4.4 million in the third quarter, up from $3.5 million in 2023. This increase was fueled by a 353% increase in biologics and drug delivery product revenue as our pharmaceutical customers progress in their preclinical and clinical trials. The biologics and drug delivery product growth was partially offset by a $0.7 million decrease in service revenue. Neurosurgery Navigation Therapy revenue consists of commercial sales of disposable products related to ClearPoint Navigation System, our Smart Primoire product, and Prism Laser Therapy disposables. This revenue segment grew 49% to $2.9 million for the third quarter as we activated new accounts and expanded the introduction of Smart Primoire and the Prism Laser Therapy. Capital equipment and software revenue consists of sales of ClearPoint Neuronavigation hardware and software and the PRISM laser system and of related services increased 133% to $0.8 million in the third quarter from $0.4 million for the same period in 2023. Gross margin for the third quarter 2024 was 60% as compared to a gross margin of 57% for the third quarter of 2023. The increase in gross margin was primarily due to an increase in volume and lower costs related to the transition of our manufacturing facility in 2023. Research and development costs were $3.3 million for the three months ended September 30th, 2024, compared to $2.4 million for the same period in 2023, an increase of $0.9 million or 36%. The increase was due primarily to an expansion of our research and development initiatives and investments in further innovation. Sales and marketing expenses were $3.5 million for the third quarter compared to $2.8 million for the same period in 2023, an increase of $0.7 million or 25%. This increase was mainly due to additional personnel costs as we expand our commercial reach to support and accelerate our product launches. General administrative expenses were 3.2 million for the third quarter compared to 2.9 million for the same period in 2023, an increase of 0.3 million or 9%. This increase was mostly due to higher headcount costs. With respect to our cash position, as of September 30th, 2024, we held cash and cash equivalents of $21.6 million compared to $32.8 million as of June 30th, 2024. In August 2024, we proceeded with an early repayment of the entire principal and interest outstanding on our existing convertible loan for a total amount of $10.1 million. As of September 30, 2024, we have no outstanding debt. In line with the prior quarters, we continue to meaningfully reduce our operational cash burn. Our operational cash burn in Q3 was down to $1.2 million, a 33% reduction from the prior year's third quarter. In the past trailing 12 months, our operational cash burn was $8.9 million. This represents a 43% reduction compared to the corresponding prior 12 months period, that is from October 2022 to September 2023. With that, I'd like now to turn the call back to Joe.