ClearPoint Neuro Inc.

Greetings and welcome to ClearPoint Neuro Inc.'s first quarter 2025 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note 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, 2024, 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 March 31st, 2025, which the company intends to file with the Securities and Exchange Commission on or before May 15th, 2025. All the company's filings may be obtained from the SEC or the company's website at www.clearpointneuro.com. I will now turn the conference over to your host, Joe Burnett, Chief Executive Officer. Thank you, Mr. Burnett. You may begin.

Thank you, Joe. And thank you to all of the investors, partners, and analysts joining us on today's call. 2025 is off to a terrific start here at ClearPoint Neuro, as we have officially entered the third phase of our company history, a phase we refer to as fast forward. As a brief reminder, this new stage at ClearPoint has three primary tenets. First, we will extend our lead in cell and gene therapy by leveraging our complete and unique drug delivery ecosystem including navigation hardware, predictive modeling and monitoring software, cannula-based routes of administration, preclinical and clinical drug discovery services, and best-in-class clinical field personnel. We will use this ecosystem to support our more than 60 active biopharma partners on their path to regulatory clearance and commercialization, many of which have already been selected for some form of expedited review by the FDA. Second, we will evolve our portfolio to focus not only on accuracy and precision but also on fast, simple, predictable workflows. These new product introductions are designed to increase hospital efficiency and throughput and to create capacity for the significant demand that we believe is coming when patients learn that these new restorative therapies are available and have been proven effective. And third, we will expand our global install base and generate scale to enable more patients around the world access to the ClearPoint ecosystem that will be used for these novel treatments. Let's remember, the first of these neuro cell and gene therapies is already commercially available in the United States, the EU, and beyond. And there's the potential of additional approvals in the next two years for much larger patient populations. There's no time to waste. The time to hit fast forward for us is now. As announced yesterday, despite unpredictable market conditions, we have now successfully secured the foundational funding necessary to execute on this strategy for many years to come. This capital, in the form of both debt and equity, has been provided by our new partner, Oberlin Capital, which we will discuss a bit more later on today's call. With that backdrop for context, I will now turn the call over to Danilo D'Alessandro, our CFO, to discuss the financial details of the first quarter, after which I will provide additional commentary on our progress in these three fast-forward initiatives. Danilo?

Thank you, Joe, and thank you all for joining us today. Looking at the first quarter 2025 results, total revenue was $8.5 million for the three months ended March 31st, 2025. and $7.6 million for the three months ended March 31st, 2024, which represents 11% growth versus the first quarter of 2024. 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 sales of disposable products and services related to customer sponsored preclinical and clinical trials utilizing our products, Biologics and drug delivery revenue increased 9% to $4.7 million in the first quarter, up from $4.3 million in 2024. This increase was fueled by a $1.2 million increase in product revenue as numerous partners progress in their preclinical development and regulatory clinical trials. The product growth was partially offset by a $0.8 million decrease in biologics and drug delivery services. Neurosurgery navigation revenue consists of commercial sales of disposable products for the ClearPoint navigation system and the PRISM laser units. This revenue segment grew 70% to $3.3 million for the first quarter 2025. This large increase is driven by higher sales for new product offerings, as well as an increased customer base and adoption. Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software and of related service contracts, decreased 63% to $0.5 million in the quarter, from $1.4 million for the same period in 2024. This decrease is due to fewer new placements of ClearPoint navigation and PRISM laser units, primarily driven by installation timing and other new product introduction priorities that occurred in the first quarter. Gross margin for the first quarter of 2025 was 60%, an increase of 1% compared to 59% in Q1 2024. Research and development costs were $3.4 million for the three months ended March 31, 2025, compared to $2.6 million for the same period in 2024, an increase of $0.8 million, or 29%. The increase was primarily due to higher product development costs as we continue to invest in expanding our product offering and expanding our lead in drug delivery innovation. Sales and marketing expenses were $3.8 million for Q1 compared to $3.3 million for the same period in 2004, an increase of $0.5 million or 17%. This increase was due primarily to additional personal costs, including share-based compensation, as we invest in our commercial reach and in-hospital support. General administrative expenses were $4.1 million for the first quarter, an increase of $1.3 million, or 44%. This increase was due primarily to $0.4 million higher bed debt expense, $0.4 million higher personal costs, including share-based compensation, and $0.4 million higher professional service fees. As of March 31st, 2025, we had cash and cash equivalents totaling $12.4 million as compared to $20.1 million at December 31st, 2024. The cash reduction was primarily due to the operational cash burn increasing by $2.3 million in Q1 2025 versus Q1 of 2024. This increase is mostly related to the reduction in personnel accrued expenses and its relative timing in Q1. For the full year, we continue to expect our expense growth to be lower than our revenue growth and to keep achieving operating leverage. Our March cash balance of $12.4 million does not include the $32 million net proceeds from the recently announced new credit facility and equity investment of Oberlin Capital. We are very excited to have the backing of a strong long-term financial partner in Oberlin Capital. Our new credit facility gives us the flexibility to access an additional $25 million in additional credit between now and December 2026. This credit facility has advantageous terms that suit our company's growth profile, allowing us to focus on executing our strategy in the coming years with significant flexibility. I'd like now to turn the call back to Joe.