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What changed in ClearPoint Neuro, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ClearPoint Neuro, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+437 added−305 removedSource: 10-K (2026-03-17) vs 10-K (2025-02-26)

Top changes in ClearPoint Neuro, Inc.'s 2025 10-K

437 paragraphs added · 305 removed · 257 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

71 edited+28 added−3 removed163 unchanged
Biggest changeDBS works by stimulating a targeted region of the brain through implanted leads that are powered by a device called an implantable pulse generator. We estimate 120,000 Parkinson’s disease and essential tremor patients per year are potential candidates for the implantation of deep brain stimulation electrodes utilizing our ClearPoint system.
Biggest changeThese systems are indicated for Parkinson’s disease and essential tremor. DBS is used to treat the symptoms of Parkinson’s Disease, a degenerative condition that affects a substantial population in the U.S. and worldwide. DBS works by stimulating a targeted region of the brain through implanted leads that are powered by a device called an implantable pulse generator.
Additional regulatory requirements include: • product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; • QMSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design, manufacturing, and distribution process; 11 Table of Contents • labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication; • clearance, authorization, or approval of product modifications; • post-approval restrictions or conditions, including post-approval study commitments; • post-market surveillance regulations, which apply, when necessary, to protect the public health or to provide additional safety and effectiveness data for the device; • the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; • regulations pertaining to voluntary recalls; and • notices of corrections or removals.
Additional regulatory requirements include: • product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action; • QMSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design, manufacturing, and distribution process; 13 Table of Contents • labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication; • clearance, authorization, or approval of product modifications; • post-approval restrictions or conditions, including post-approval study commitments; • post-market surveillance regulations, which apply, when necessary, to protect the public health or to provide additional safety and effectiveness data for the device; • the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations; • regulations pertaining to voluntary recalls; and • notices of corrections or removals.
Manufacturing and Assembly Our ClearPoint system and SmartFlow cannula include off-the-shelf components and custom-made components that are produced to our proprietary specifications by various third parties that we assemble in our Carlsbad, California facility. We use third parties to manufacture certain components to utilize their individual expertise, minimize our capital investment and help control costs.
Manufacturing and Assembly Our ClearPoint system and SmartFlow Neuro Cannula include off-the-shelf components and custom-made components that are produced to our proprietary specifications by various third parties that we assemble in our Carlsbad, California facility. We use third parties to manufacture certain components to utilize their individual expertise, minimize our capital investment and help control costs.
In addition, the FDA will generally conduct a pre-approval inspection of our or our third-party manufacturers’ or suppliers’ manufacturing facility or facilities to ensure compliance with the QMSR. Once a PMA is approved, the FDA may require that certain conditions of approval be met, such as conducting a post market clinical trial.
In addition, the FDA will generally conduct a pre-approval inspection of our own or our third-party manufacturers’ or suppliers’ manufacturing facility or facilities to ensure compliance with the QMSR. Once a PMA is approved, the FDA may require that certain conditions of approval be met, such as conducting a post market clinical trial.
Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, life-supporting or implantable devices, or devices that are not substantially equivalent to that of a legally marketed device, are placed in Class III, requiring approval of a PMA unless they can be reclassified into Class I or II via the de novo classification process. 9 Table of Contents 510(k) Clearance Pathway When a 510(k) clearance is required, we will be required to submit a 510(k) premarket notification demonstrating that our proposed device is substantially equivalent to a legally marketed device, referred to as the “predicate device.” A predicate device may be a previously 510(k) cleared device or a Class III device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for PMA applications, or a product previously placed in Class II or Class I through the de novo classification process.
Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, life-supporting or implantable devices, or devices that are not substantially equivalent to that of a legally marketed device, are placed in Class III, requiring approval of a PMA unless they can be reclassified into Class I or II via the de novo classification process. 11 Table of Contents 510(k) Clearance Pathway When a 510(k) clearance is required, we will be required to submit a 510(k) premarket notification demonstrating that our proposed device is substantially equivalent to a legally marketed device, referred to as the “predicate device.” A predicate device may be a previously 510(k) cleared device or a Class III device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for PMA applications, or a product previously placed in Class II or Class I through the de novo classification process.
In the United States, our SmartFlow cannula has received 510(k) clearance for injection of Cytarabine or for removal of cerebrospinal fluid (“CSF”) from the ventricles and De Novo marketing authorization for intraputaminal administration of eladocagene exuparvovec-tneq for the treatment of adult and pediatric patients with AADC deficiency.
In the United States, our SmartFlow Neuro Cannula has received 510(k) clearance for injection of Cytarabine or for removal of cerebrospinal fluid (“CSF”) from the ventricles and De Novo marketing authorization for intraputaminal administration of eladocagene exuparvovec-tneq for the treatment of adult and pediatric patients with AADC deficiency.
SmartFrame OR is intended to provide stereotactic guidance for the placement and operation of instruments or devices during planning and operation of neurological procedures performed in conjunction with the use of a compatible optical stereotaxic navigation system using preoperative MRI and/or Computed Tomography (“CT”) imaging.
SmartFrame OR is intended to provide stereotactic guidance for the placement and operation of instruments or devices during planning and operation of neurological procedures performed in conjunction with the use of a compatible optical stereotaxic navigation system using preoperative MRI and/or Computed Tomography imaging.
The SmartFrame OR Stereotactic System is a single use disposable that does not require MRI guidance. For drug delivery procedures, our SmartFlow cannula, which is an MRI-compatible injection and aspiration cannula, serves as the vehicle for the delivery of the compound. ClearPoint Software .
The SmartFrame OR Stereotactic System is a single use disposable that does not require MRI guidance. For drug delivery procedures, our SmartFlow Neuro cannula, which is an MRI-compatible injection and aspiration cannula, serves as the vehicle for the delivery of the compound. ClearPoint Software .
Our activities relating to the manner in which we sell our products and document our prices such as the reporting of discount and rebate information and other information affecting federal, state and third-party reimbursement of our products, and the sale and marketing of our products, may be subject to scrutiny under these laws. 15 Table of Contents The Affordable Care Act may increase the number of cases asserting civil False Claims Act violations since it removes a significant defense to such claims and clarifies that a violation of the Anti-Kickback Statute and the retention of a federal healthcare program overpayment are both actionable under the civil False Claims Act.
Our activities relating to the manner in which we sell our products and document our prices such as the reporting of discount and rebate information and other information affecting federal, state and third-party reimbursement of our products, and the sale and marketing of our products, may be subject to scrutiny under these laws. 17 Table of Contents The Affordable Care Act may increase the number of cases asserting civil False Claims Act violations since it removes a significant defense to such claims and clarifies that a violation of the Anti-Kickback Statute and the retention of a federal healthcare program overpayment are both actionable under the civil False Claims Act.
UCSF In 2013, we entered into a license agreement with UCSF that provides for our use of design features developed by UCSF, which we incorporated into our SmartFlow cannula, and for which we are committed to pay royalties based on our sales of the SmartFlow cannula.
UCSF In 2013, we entered into a license agreement with UCSF that provides for our use of design features developed by UCSF, which we incorporated into our SmartFlow Neuro cannula, and for which we are committed to pay royalties based on our sales of the SmartFlow Neuro cannula.
Nonetheless, several of our biologics and drug delivery customers are pursuing preclinical and clinical trials for which we generate revenue through the sale of products, including our SmartFlow cannula, preclinical, development and consulting services, and other partnership arrangements.
Nonetheless, several of our biologics and drug delivery customers are pursuing preclinical and clinical trials for which we generate revenue through the sale of products, including our SmartFlow Neuro cannula, preclinical, development and consulting services, and other partnership arrangements.
If our ClearPoint system and SmartFlow cannula are approved for these drug delivery treatments and become the standard approach to local drug delivery in the brain, we believe the impact on our financial performance could be significant.
If our ClearPoint system and SmartFlow Neuro cannula are approved for these drug delivery treatments and become the standard approach to local drug delivery in the brain, we believe the impact on our financial performance could be significant.
In consideration of the foregoing, we paid fees for development of the software solution and are committed to pay royalties based on (a) per hospital activations of the software solution, and (b) offline applications in which the licensed technology is used.
In consideration of the foregoing, we paid fees for development of the software solution and committed to pay royalties based on (a) per hospital activations of the software solution, and (b) offline applications in which the licensed technology is used.
Most notably, all of our products sold in the U.S. are subject to regulation as medical devices under the federal Food, Drug, and Cosmetic Act (“FDCA”), as implemented and enforced by the FDA.
Most notably, all our products sold in the U.S. are subject to regulation as medical devices under the federal Food, Drug, and Cosmetic Act (“FDCA”), as implemented and enforced by the FDA.
The hand controller attaches to our SmartFrame device, and it is used by the physician to adjust the roll, pitch, and X and Y orientation of the targeting cannula while the patient is in the MRI scanner.
In the MRI, a hand controller attaches to our SmartFrame device, and it is used by the physician to adjust the roll, pitch, and X and Y orientation of the targeting cannula while the patient is in the MRI scanner.
Additionally, some private payors do not follow the Medicare guidelines, and those payors may reimburse only a portion of the costs associated with the use of our products, or none at all. 14 Table of Contents Fraud and Abuse Laws Because of the significant federal funding involved in Medicare and Medicaid, Congress and the states have enacted, and actively enforce a number of laws whose purpose is to eliminate fraud and abuse in federal healthcare programs.
Additionally, some private payors do not follow the Medicare guidelines, and those payors may reimburse only a portion of the costs associated with the use of our products, or none at all. 16 Table of Contents Fraud and Abuse Laws Because of the significant federal funding involved in Medicare and Medicaid, Congress and the states have enacted, and actively enforce a number of laws whose purpose is to eliminate fraud and abuse in federal healthcare programs.
Therefore, the total review time could be up to 360 days or more, if the submission does not require advisory committee input, or 500 days or more if the submission does require advisory committee input. 10 Table of Contents If the FDA’s evaluation of the PMA application is favorable, the FDA will issue a PMA for the approved indications, which can be more limited than those originally sought by the manufacturer.
Therefore, the total review time could be up to 360 days or more, if the submission does not require advisory committee input, or 500 days or more if the submission does require advisory committee input. 12 Table of Contents If the FDA’s evaluation of the PMA application is favorable, the FDA will issue a PMA for the approved indications, which can be more limited than those originally sought by the manufacturer.
Accordingly, acute care hospitals generally do not receive direct Medicare reimbursement under PPS for the specific costs incurred in purchasing medical devices. Rather, reimbursement for these costs is deemed to be included 13 Table of Contents within the MS-DRG-based payments made to hospitals for the services furnished to Medicare-eligible inpatients in which the devices are utilized.
Accordingly, acute care hospitals generally do not receive direct Medicare reimbursement under PPS for the specific costs incurred in purchasing medical devices. Rather, reimbursement for these costs is deemed to be included 15 Table of Contents within the MS-DRG-based payments made to hospitals for the services furnished to Medicare-eligible inpatients in which the devices are utilized.
Business associates are similarly required to notify covered entities of a breach. 16 Table of Contents HITECH has increased civil penalty amounts for violations of HIPAA by either covered entities or business associates up to an annual maximum of $1.5 million for each uncorrected violation based on willful neglect.
Business associates are similarly required to notify covered entities of a breach. 18 Table of Contents HITECH has increased civil penalty amounts for violations of HIPAA by either covered entities or business associates up to an annual maximum of $1.5 million for each uncorrected violation based on willful neglect.
CLS In October 2018, and as amended in August 2020, we entered into a license and collaboration agreement and a distribution agreement with CLS that provides us the exclusive global rights to commercialize and sell CLS’s portfolio of products and to collaborate with CLS on the development and commercialization of new products in the neurosurgical field.
CLS In October 2018, we entered into a license and collaboration agreement and a distribution agreement with CLS, which as amended in August 2020, provides us the exclusive global rights to commercialize and sell CLS’s portfolio of products and to collaborate with CLS on the development and commercialization of new products in the neurosurgical field.
Other companies, such as Brainlab and Renishaw plc, also offer systems such as navigational platforms and cannulas useful for drug delivery under MRI. These offerings are competitive with ClearPoint’s products. These companies have substantially greater marketing, manufacturing, technical, and financial resources than we have.
Other companies, such as Brainlab and Renishaw plc, also offer systems such as navigational platforms and cannulas useful for drug delivery under MRI. These offerings are competitive with our products. These companies have substantially greater marketing, manufacturing, technical, and financial resources than we have.
Trademarks We have registered trademarks in the United States, the European Union, the United Kingdom, and China. 7 Table of Contents Certain License and Royalty Arrangements Philips During 2020, we entered into a worldwide license and research agreement with Philips, under which Philips has licensed to us the use of the technology underlying its Philips Brain Model in our ClearPoint Maestro Brain Model (“Maestro”), the first generation of which received 510(k) clearance in 2022.
Trademarks We have registered trademarks in the United States, the European Union, the United Kingdom, Japan, and China. 9 Table of Contents Certain License and Royalty Arrangements Philips During 2020, we entered into a worldwide license and research agreement with Philips, under which Philips has licensed to us the use of the technology underlying its Philips Brain Model in our ClearPoint Maestro Brain Model (“Maestro”), the first generation of which received 510(k) clearance in 2022.
In addition, compliance with ISO 13485 issued by the International Organization for Standardization, among other standards, establishes the presumption of conformity with the essential requirements or general safety 12 Table of Contents and performance requirements for CE marking.
In addition, compliance with ISO 13485 issued by the International Organization for Standardization, among other standards, establishes the presumption of conformity with the essential requirements or general safety 14 Table of Contents and performance requirements for CE marking.
Our development partner CLS received 510(k) clearance for its laser system to necrotize or coagulate soft tissue through interstitial irradiation or thermal therapy in neuro applications under 3.0T MRI guidance. In the U.S., the laser system is commercialized by us as the ClearPoint Prism Neuro Laser Therapy System. Our SmartFrame OR Stereotactic System received 510(k) clearance in 2024.
Our development partner CLS received 510(k) clearance for its laser system to necrotize or coagulate soft tissue through interstitial irradiation or thermal therapy in neuro applications under 1.5T and 3.0T MRI guidance. In the U.S., the laser system is commercialized by us as the ClearPoint Prism Neuro Laser Therapy System. Our SmartFrame OR Stereotactic System received 510(k) clearance in 2024.
When DBS or RNS is performed in the MRI suite, our ClearPoint system can provide intra-procedural navigation and visualization of the electrode placement and the patient may be placed under general anesthesia for the procedure. Three manufacturers have received FDA clearances for DBS systems: Medtronic, Boston Scientific and Abbott Laboratories.
When DBS or RNS is performed in the MRI suite, our ClearPoint system can provide intra-procedural navigation and visualization of the electrode placement and the patient may be placed under general anesthesia for the procedure. Multiple manufacturers have received FDA clearances for DBS systems, including Medtronic, Boston Scientific and Abbott Laboratories.
The accessories include all other components necessary to facilitate the MRI-guided neurosurgical procedure, such as our SmartGrid patch, which is an MRI-visible marking grid that enables rapid localization of the entry position into the brain, and our customized surgical draping, which creates a sterile field within the MRI scanner.
The accessories include all other components necessary to facilitate the image-guided neurosurgical procedures, such as our SmartGrid patch, which is an MRI-visible marking grid that enables rapid localization of the entry position into the brain, and our customized surgical draping, which creates a sterile field within the MRI scanner.
As required by our quality management system, we undertake an assessment and qualification process for each third-party manufacturer or supplier that we use. Typically, our third-party manufacturers and suppliers are certified to ISO 9001 and/or 13485. We also periodically perform audit procedures on our key third-party manufacturers and suppliers to monitor their activities for compliance with our quality management system.
As required by our quality management system, we undertake an assessment and qualification process for each third-party manufacturer or supplier that we use. Typically, our third-party manufacturers and suppliers are certified to ISO 9001 and/or 13485. We also periodically perform audits on our key third-party manufacturers and suppliers to monitor their activities for compliance with our quality management system.
When performed in the MRI suite, the ClearPoint system software is installed 3 Table of Contents on a computer workstation networked with an MRI scanner, for which we use a commercially available laptop computer. The in-room monitor allows the physician to view the display of our ClearPoint system workstation from the scanner room while performing the procedure. ClearPoint Disposables .
When performed in the MRI suite, the ClearPoint system software is installed on a computer workstation networked with an MRI scanner, for which we use a commercially available laptop computer. The in-room monitor allows the physician to view the display of our ClearPoint system workstation from the scanner room while performing the procedure. ClearPoint Disposables .
In addition, patients suffering from drug resistant epilepsy, refractory essential tremor, dystonia, severe obsessive compulsion disorder, severe major depressive disorder, paralysis, Huntington’s disease, auditory nerve implantation, Alzheimer’s disease and stroke rehabilitation may create additional potential procedure opportunities in the future. The only commercially available RNS system on the market is manufactured by NeuroPace.
In addition, patients suffering from drug resistant epilepsy, refractory essential tremor, dystonia, severe obsessive compulsion disorder, severe major depressive disorder, paralysis, Huntington’s disease, auditory nerve implantation, Alzheimer’s disease and stroke rehabilitation may create additional potential procedure opportunities in 6 Table of Contents the future. The only commercially available RNS system on the market is manufactured by NeuroPace.
In January 2023, the Addendum to Supply Agreement was further amended and restated to allow for the Company to provide regulatory support to PTC in additional agreed geographies. We also entered into a Second Source Manufacturing Agreement in connection with the PTC Supply Agreement (the “Second Source Manufacturing Agreement”).
In January 2023, the addendum to the PTC Supply Agreement was further amended and restated to allow us to provide regulatory support to PTC in additional agreed geographies. We also entered into a Second Source Manufacturing Agreement in connection with the PTC Supply Agreement (the “Second Source Manufacturing Agreement”).
This is the same general indication for use that applies to other devices that have traditionally been used in the performance of stereotactic neurosurgical procedures. In the EU, UK, Israel, Taiwan, Turkey, and Brazil, our approval carries a similar indication for use.
This is the same general indication for use that applies to other devices that have traditionally been used in the performance of stereotactic neurosurgical procedures. In the EU, UK, and Brazil, our approval carries a similar indication for use.
These devices and systems are competitive with our ClearPoint system. Also, Zimmer Biomet Holdings, Inc.’s ROSA® robot is an operating room alternative to the ClearPoint system. Additionally, we could also face competition from other medical device, biotechnology and pharmaceutical companies that have the technology, experience and capital resources to develop alternative therapy methods, including MRI-guided technologies.
These devices and systems are competitive with our ClearPoint system. Also, Zimmer Biomet Holdings, Inc.’s ROSA® robot is an operating room alternative to the ClearPoint system. Additionally, we could also face competition from other medical device, biotechnology and pharmaceutical companies that have the technology, experience and capital resources to develop alternative navigation and therapy methods.
Our facilities, and the facilities of the third-party manufacturers and suppliers we use, are subject to periodic inspections by regulatory authorities, including the FDA and other governmental agencies. 6 Table of Contents Customers Medical Devices for Neurosurgical Application A small number of our hospital customers account for a substantial portion of our revenues from sales of ClearPoint products.
Our facilities, and the facilities of the third-party manufacturers and suppliers we use, are subject to periodic inspections by regulatory authorities, including the FDA and other governmental agencies. 8 Table of Contents Customers Medical Devices for Neurosurgical Application A small number of our hospital customers account for a substantial portion of our revenues from sales of ClearPoint System products and IRRA flow system products.
In 2021, we expanded our expertise to include in vivo biology services in large and small research models to assist our customers with establishing drug safety prior to and in support of human clinical trials.
In 2021, we expanded our expertise to include nonclinical contract research services in large and small research models to assist our customers with establishing drug safety prior to and in support of human clinical trials.
The disposable components of our ClearPoint system consist primarily of our SmartFrame trajectory device, a hand controller and related accessories, and our SmartFlow cannula. Our SmartFrame device is an adjustable trajectory guide that attaches to the patient’s skull and holds the targeting cannula.
The disposable components of our ClearPoint system consist primarily of our series of SmartFrame trajectory device, a hand controller and related accessories, and our SmartFlow Neuro cannula. Our SmartFrame devices are an adjustable trajectory guide that attaches to the patient’s skull and holds the targeting cannula.
ClearPoint Therapeutic Solutions Our ClearPoint Prism Neuro Laser Therapy System is indicated for use to necrotize or coagulate soft tissue through interstitial irradiation or thermal therapy for neuro applications under 3.0T MRI guidance.
ClearPoint Prism Neuro Laser Therapy System Our ClearPoint Prism Neuro Laser Therapy System is indicated for use to necrotize or coagulate soft tissue through interstitial irradiation or thermal therapy for neuro applications under 1.5T and 3.0T MRI guidance.
It has also received CE mark for the injection of approved fluids into the brain. Delivery of other therapeutic agents using our SmartFlow cannula is investigational. The SmartFlow cannula is a disposable device intended for single patient use only and is not intended for implant.
It has also received CE mark for the injection of approved fluids into the brain. Delivery of other therapeutic agents using our SmartFlow Neuro Cannula is investigational. The SmartFlow Neuro Cannula is also registered in Brazil, Canada, Turkey, and Taiwan. The device is a disposable intended for single patient use only and is not intended for implant.
We also require our employees and consultants to disclose and assign to us all inventions conceived during the term of their employment or engagement which relate to our business. Patents We have a significant patent portfolio in the field of neurosurgical and MRI-guided interventions. As of February 18, 2025, we own or license over 100 issued patents.
We also require our employees and consultants to disclose and assign to us all inventions conceived during the term of their employment or engagement which relate to our business. Patents We have a significant patent portfolio in the field of neurosurgical and MRI-guided interventions.
In addition, we may install the ClearPoint reusable components at a hospital, but retain title, either for an agreed-upon period of time while the hospital evaluates and processes the purchase opportunity, or for a rental fee.
In addition, we may install the ClearPoint reusable components at a hospital, but retain title, either for an agreed-upon period of time while the hospital evaluates and processes the purchase opportunity, for a rental fee, or for an agreed-upon period of time for a placement fee bundled into the price of a disposable products stocking order.
The Second Source Manufacturing Agreement shall continue for the term of the PTC Supply Agreement, subject to certain early termination rights. Intellectual Property We believe that, in order to maintain a competitive advantage in the marketplace, we must develop and maintain the proprietary aspects of our technologies.
The Second Source Manufacturing Agreement will continue for the term of the PTC Supply Agreement, subject to certain early termination rights. Intellectual Property To maintain a competitive advantage in the marketplace, we seek to develop, maintain and protect the proprietary aspects of our technologies.
As a small, innovative company focused on the development and commercialization of technology, we believe that cultural fit and energy are important considerations in recruiting employees. We assess the likelihood that a particular candidate will contribute to our overall goals, and beyond their specifically assigned tasks. We aim to provide market-based compensation to retain our employees.
None of our employees are covered by a collective bargaining agreement. As a small, innovative company focused on the development and commercialization of technology, we believe that cultural fit and energy are important considerations in recruiting employees. We assess the likelihood that a particular candidate will contribute to our overall goals, and beyond their specifically assigned tasks.
ITEM 1. BU SINESS Overview We are a commercial-stage medical device company, incorporated in 1998 as a Delaware corporation, that develops and commercializes innovative platforms for performing minimally invasive surgical procedures in the brain.
ITEM 1. BU SINESS Overview We are a commercial-stage medical device company, incorporated in 1998 as a Delaware corporation, that develops and commercializes integrated systems used in minimally invasive neurosurgical procedures in the brain.
Their brain-responsive neuromodulation system is currently approved for use in patients with drug resistant epilepsy and refractory idiopathic generalized epilepsy. • LITT – LITT is a minimally-invasive MRI-guided technique to treat primary and metastatic brain tumors, as well as patients with drug-resistant epilepsy. The treatment uses heat to treat and ablate the tumor or regions where seizures begin.
Their brain-responsive neuromodulation system is currently approved for use in patients with drug resistant focal epilepsy. • LITT – LITT is a minimally-invasive MRI-guided technique to treat primary and metastatic brain tumors, as well as patients with drug-resistant epilepsy. The treatment uses heat to treat and ablate the tumor or networks that propagate seizure activity.
Many of our competitors have substantially greater financial, manufacturing, marketing, and technical resources than we have. Biologics and Drug Delivery Drug delivery can be divided into two categories, those that use image-guidance and those that do not. Our main area of focus and expertise is on image-guided drug delivery, in particular as it relates to the use of MRI technology.
Biologics and Drug Delivery Drug delivery can be divided into two categories, those that use image-guidance and those that do not. Our main area of focus and expertise is on image-guided drug delivery, in particular as it relates to the use of MRI technology.
Since 2020, we have evolved to become a company comprised of two components: (i) a business providing medical devices for neurosurgical applications, and (ii) a business focused on partnerships in the biologics and drug delivery space. Medical Devices for Neurosurgical Application The first foundational component of our business is focused on providing medical devices for neurosurgical applications.
Our business consists of two integrated components: (i) a business providing medical devices for neurosurgical applications, and (ii) a business focused on partnerships in the biologics and drug delivery space. Medical Devices for Neurosurgical Application The first foundational component of our business is focused on providing medical devices for neurosurgical applications.
SmartFrame OR is a disposable device intended for single patient use only. 4 Table of Contents Market Discussion Medical Devices for Neurosurgical Application We believe there are more than 140,000 potential neurosurgical procedures per year in the U.S. in which our ClearPoint products could be used as a navigational platform for functional stereotactic neurosurgery in indications currently approved by the FDA or as a therapy device for performance of laser interstitial thermal therapy (“LITT”): • Electrode Placement – The current standard of care for the placement of the DBS or responsive neurostimulation (“RNS”) electrodes in the operating room requires the patient to be awake during surgery in order to verify proper placement.
Market Discussion Medical Devices for Neurosurgical Application ClearPoint Navigational Platform and Therapy Applications We believe there are a significant number of potential neurosurgical procedures in the U.S. in which our ClearPoint products could be used as a navigational platform for functional stereotactic neurosurgery in FDA-cleared indications or as a therapy device for performance of laser interstitial thermal therapy (“LITT”): • Electrode Placement – The current standard of care for the placement of the DBS or responsive neurostimulation (“RNS”) electrodes in the operating room requires the patient to be awake during surgery in order to verify proper placement.
We have exclusive global rights to commercialize the system for neuro applications. Biologics and Drug Delivery The second component of our business is focused on partnerships in the biologics and drug delivery space, supporting our customers from the earliest stages of their research through their clinical study and commercialization process.
Biologics and Drug Delivery The second component of our business is focused on partnerships in the biologics and drug delivery space, supporting our customers from the earliest stages of their research through their clinical study and commercialization process.
Several pharmaceutical and biotech companies are developing methods to deliver a wide variety of molecules, genes or proteins to targeted brain tissue or structures that would need to bypass the blood-brain barrier.
Biologics and Drug Delivery The blood-brain barrier prevents large-molecule, and nearly all small-molecule, neurotherapeutics from reaching the brain. Several pharmaceutical and biotech companies are developing methods to deliver a wide variety of molecules, genes or proteins to targeted brain tissue or structures that would need to bypass the blood-brain barrier.
This part of our business potentially represents the largest opportunity for growth, which we estimate could have an approximately $7 billion market potential; however, our ability to grow in this market is dependent on our ability to maintain and establish new relationships with pharmaceutical company customers, such customers' continuation of research and product development plans, and such customers achieving success in completion of clinical trials and subsequent regulatory approvals of their drugs and biologics.
This part of our business potentially represents the largest opportunity for growth; however, our ability to grow in this market is dependent on our ability to maintain and establish new relationships with pharmaceutical company customers, such customers' continuation of research and product development plans, such customers achieving success in completion of clinical trials and subsequent regulatory approvals of their drugs and biologics, and such customers’ realization of commercial success for their therapies, including overcoming barriers in reimbursement, physician adoption, and patient access to their therapies.
In 2024, the SmartFlow cannula was granted De Novo marketing authorization for intraputaminal administration of eladocagene exuparvovec-tneq for the treatment of adult and pediatric patients with AADC deficiency. 5 Table of Contents Sales and Marketing Medical Devices for Neurosurgical Application Commercializing our ClearPoint products and services for neurosurgery applications, primarily involves marketing and selling directly to: • physicians who care for patients suffering from neurological disorders, including stereotactic or functional neurosurgeons, who perform the neurosurgical procedures, and neurologists, who interact with patients prior to and following surgery and who refer patients for surgery; and • hospitals involved in the treatment of neurological disorders, including the opinion leaders at these hospitals.
Sales and Marketing Medical Devices for Neurosurgical Application Commercializing our ClearPoint products and services for neurosurgery applications, primarily involves marketing and selling directly to: • physicians who care for patients suffering from neurological disorders, including stereotactic or functional neurosurgeons, who perform the neurosurgical procedures, and neurologists, who interact with patients prior to and following surgery and who refer patients for surgery; and • hospitals involved in the treatment of neurological disorders, including the opinion leaders at these hospitals. 7 Table of Contents Our business model for the ClearPoint products includes producing high margin revenue from sales of the disposable components.
To the extent we conduct such operations outside the U.S., we would be subject to international regulatory requirements. Our facilities are FDA-registered, and we believe they are compliant with the FDA’s QMSR. We are also certified to ISO 13485 and the Medical Device Single Audit Program (“MDSAP”).
Our facilities are FDA-registered, and we believe they are compliant with the FDA’s QMSR. We are also certified to ISO 13485 and the Medical Device Single Audit Program (“MDSAP”).
The head fixation frame immobilizes the patient’s head during the procedure, and it is designed to optimize the placement of an imaging head coil in proximity to the patient’s head.
ClearPoint Hardware . Our hardware components consist primarily of a head fixation frame, computer workstation and in-room monitor. The head fixation frame immobilizes the patient’s head during the procedure, and it is designed to optimize the placement of an imaging head coil in proximity to the patient’s head.
Regulatory Status Our ClearPoint system 510(k) clearance from the FDA permits us to market and promote our ClearPoint system in the U.S. for use in general neurosurgical procedures, which includes procedures such as biopsies, laser catheter insertions, and deep brain stimulation lead and electrode insertions.
In 2025, we expanded our preclinical services business through the lease of a facility to enable increased operational capabilities and service capacity. 5 Table of Contents Regulatory Status Our ClearPoint System 510(k) clearance from the FDA permits us to market and promote our ClearPoint System in the U.S. for use in general neurosurgical procedures, which includes procedures such as biopsies, laser catheter insertions, and deep brain stimulation lead and electrode insertions.
ClearPoint Services We provide consulting services to our pharmaceutical and other medical technology partners for improving outcome predictability and optimizing preclinical and clinical workflows. Our expertise is concentrated in benchtop testing, preclinical studies, clinical trial support, regulatory consultation, and over-arching translation from the preclinical to the clinical setting to enhance accuracy and precision of drug delivery.
Our expertise is concentrated in benchtop testing, preclinical studies, clinical trial support, regulatory consultation, and over-arching translation from the preclinical to the clinical setting to enhance accuracy and precision of drug delivery.
Our business model for the ClearPoint products includes producing high margin revenue from sales of the disposable components. Given that focus on disposable product sales, we sell our reusable components at lower margins in order to secure installations within hospitals.
Given that focus on disposable product sales, we sell our reusable components at lower margins in order to secure installations within hospitals.
In 2024, the U.S. Food and Drug Administration (the “FDA”) granted marketing authorization for our SmartFlow cannula to be used to deliver a gene therapy for the treatment of aromatic L-amino acid decarboxylase (“AADC”) deficiency directly to regions of interest within the brain.
Food and Drug Administration (the “FDA”) granted marketing authorization for our SmartFlow Neuro cannula to be used to deliver a gene therapy for the treatment of aromatic L-amino acid decarboxylase (“AADC”) deficiency directly to regions of interest within the brain. 4 Table of Contents Our Products and Services The ClearPoint System Our ClearPoint system is an integrated system comprised of hardware components, disposable components and intuitive, menu-driven software.
Our five largest hospital customers accounted for approximately 31% of our neurosurgery navigation disposable product revenues in 2024. Biologics and Drug Delivery As of February 18, 2025, we had commercial relationships with over 60 pharma/biotech, academic, and contract research organization partners who have either evaluated or used our SmartFlow cannula or our consulting services.
Biologics and Drug Delivery As of March 6, 2026, we had commercial relationships with over 60 pharma/biotech, academic, and contract research organization partners who have either evaluated or used our SmartFlow Neuro cannula or our consulting services.
Our disposable and reusable ClearPoint products are tightly integrated, which allows us to leverage each new installation of a system to generate recurring sales of our disposable products.
Our disposable and reusable ClearPoint products are tightly integrated, which allows us to leverage each new installation of a system to generate recurring sales of our disposable products. With the acquisition of IRRAS, we have expanded our commercial reach into the neurocritical care and acute intracranial fluid management market.
GLP compliance is required by such regulatory agencies as the FDA, European Medicines Agency and similar monitoring authorities in other countries where we operate. Human Capital Resources As of February 18, 2025, we had 115 full-time employees. None of our employees are covered by a collective bargaining agreement.
GLP compliance is required by such regulatory agencies as the FDA, European Medicines Agency and similar monitoring authorities in other countries where we operate. Human Capital Resources As of March 6, 2026, we had 172 full-time employees, including the 37 employees who joined us in connection with the IRRAS acquisition.
In 2021, our efforts expanded beyond the MRI suite to encompass development and commercialization of neurosurgical device products for the operating room setting, as well as consulting services for pharmaceutical companies. Our products have been installed or used at over 90 centers globally.
In 2021, our efforts expanded beyond the MRI suite to encompass development and commercialization of neurosurgical device products for the operating room setting, as well as consulting services for pharmaceutical companies. In 2025, through our acquisition of IRRAS Holdings, Inc. (“IRRAS”), we expanded our portfolio into neurocritical care.
In 2024, we introduced the SmartFrame OR Stereotactic System to the market, which allows for complete procedures to be performed in the operating room. In 2022, we commenced commercialization of the ClearPoint Prism Neuro Laser Therapy System, a laser ablation system. The ClearPoint Prism Neuro Laser Therapy System was developed and is manufactured for us by CLS.
In 2022, we commenced commercialization of the ClearPoint Prism Neuro Laser Therapy System, a laser ablation system. The ClearPoint Prism Neuro Laser Therapy System was developed and is manufactured for us by CLS. We have exclusive global rights to commercialize the system for neuro applications.
The assembly process is performed in a controlled environment as required by applicable regulation for medical device assembly. Our operations are subject to extensive regulation by the FDA’s Quality Management System Regulation (“QMSR”), which requires that manufacturers have a quality management system for the design and production of medical devices.
Our operations are subject to extensive regulation by the FDA’s Quality Management System Regulation (“QMSR”), which requires that manufacturers have a quality management system for the design and production of medical devices. To the extent we conduct such operations outside the U.S., we would be subject to international regulatory requirements.
New employees are provided industry-relevant compliance training and are introduced to our Code of Business Conduct and Ethics, which is posted on our website at www.clearpointneuro.com. The inclusion of our website address in this Annual Report does not include or incorporate by reference the information on our website into this Annual Report.
We aim to provide market-based compensation to retain our employees. New employees are provided industry-relevant compliance training and are introduced to our Code of Business Conduct and Ethics, which is posted on our website at www.clearpointneuro.com.
Therefore, our currently marketed products are, and future products we commercialize will be, subject to competition. 8 Table of Contents Currently, we are aware of two companies, Monteris Medical, Inc. and Medtronic, which offer devices for laser ablation under direct MRI guidance.
Many of our competitors have substantially greater financial, manufacturing, marketing, and technical resources than we have. 10 Table of Contents Currently, we are aware of two companies, Monteris Medical, Inc. and Medtronic, which offer devices for laser ablation under direct MRI guidance.
For small, deep-seated tumors, navigating a device to the exact target is challenging and necessary to avoid the inadvertent destruction of healthy brain tissue. We estimate brain tumor applications represent the potential for approximately 15,000 procedures per year. Biologics and Drug Delivery The blood-brain barrier prevents large-molecule, and nearly all small-molecule, neurotherapeutics from reaching the brain.
For small, deep-seated tumors, navigating a device to the exact target is challenging and necessary to avoid the inadvertent destruction of healthy brain tissue. We believe brain tumor applications represent a meaningful potential procedural opportunity for our platform.
One of these companies, PTC Therapeutics, Inc. and its affiliates (“PTC”), a related party who is a significant stockholder and former noteholder with a Board representative, accounted for approximately 17% of our biologics and drug delivery revenues in 2024.
One of these companies, PTC Therapeutics, Inc. and its affiliates (“PTC”), accounted for approximately 15% of our biologics and drug delivery revenues in 2025. One of our directors is PTC's Chief Executive Officer and President.
In the U.S. approximately 35,000 patients have brain tumors that could benefit from LITT and up to one million suffer from drug-resistant epilepsy. Historically two manufacturers have FDA cleared laser therapy systems in North America – Medtronic’s Visualase system and Monteris Medical’s NeuroBlate system.
A substantial number of patients with brain tumors or drug-resistant epilepsy may be candidates for LITT. Historically, manufacturers with FDA cleared laser therapy systems in North America have included Medtronic’s Visualase system and Monteris Medical’s NeuroBlate system.
The laser system can be used in conjunction with the ClearPoint navigation platform to refine the desired trajectory for the laser therapy catheter and to confirm accurate laser catheter placement. The laser system consists of a mobile laser unit, Thermoguide software to monitor changes in tissue temperature during therapy, and disposable laser applicator and magnetic resonance (“MR”) introducer components.
The laser system can be used in conjunction with the ClearPoint navigation platform or other third party cranial navigation platforms to refine the desired trajectory for the laser therapy catheter and to confirm accurate laser catheter placement.
Generally, we purchase our components through purchase orders and do not have long-term contracts with most of our suppliers. Our ClearPoint Prism Neuro Laser Therapy System is manufactured exclusively by CLS. Our facilities are structured to complete component processing, final assembly, packaging and distribution activities for our products.
Generally, we purchase our components through purchase orders and do not have material long-term contracts with our suppliers for our ClearPoint system or SmartFlow Neuro Cannula. Our ClearPoint Prism Neuro Laser Therapy System is manufactured exclusively by CLS. Our IRRA flow system includes a reusable control unit and related hardware accessories, which are manufactured at our San Diego, California facility.
Some of our patents and patent applications are subject to licensing and cross-licensing arrangements in place with third parties.
The acquisition of IRRAS added ten additional patent families with patents in the field of fluid exchange systems, neuromonitoring, and processes. As of March 6, 2026, we own or license over 130 issued patents. Some of our patents and patent applications are subject to licensing and cross-licensing arrangements in place with third parties.
These procedures include biopsies, catheter placement and electrode introduction, including the placement of deep brain stimulation (“DBS”) leads.
These procedures include biopsies, catheter placement and electrode introduction, including the placement of deep brain stimulation (“DBS”) leads. SmartFrame OR is a disposable device intended for single patient use only. Our ClearPoint Navigation Software Version 3.0 received 510(k) clearance in 2025.
Removed
Our Products and Services The ClearPoint System Our ClearPoint system is an integrated system comprised of hardware components, disposable components and intuitive, menu-driven software. ClearPoint Hardware . Our hardware components consist primarily of a head fixation frame, computer workstation and in-room monitor.
Added
IRRAS is a commercial-stage medical technology company focused on treatments for intracerebral hemorrhage, intraventricular hemorrhage, and other conditions requiring intracranial fluid management. The IRRAS products complement our existing neurosurgical technologies and broaden our reach into acute care settings, enabling us to offer an expanded set of solutions spanning functional neurosurgery, neurocritical care, and intracranial drug delivery.
Removed
All three have products that are indicated for Parkinson’s disease, essential tremor, and drug resistant epilepsy. DBS is used to treat the symptoms of Parkinson’s Disease, a degenerative condition that affects more than one million people in the U.S. and 10 million people worldwide.
Added
In 2024, we introduced the SmartFrame OR Stereotactic System to the market, which allows for complete procedures to be performed in the operating room. In 2025, we released the ClearPoint Navigation Software Version 3.0, which allows for the ClearPoint system navigation software to support end-to-end procedures in the operating room.
Removed
In 2023, we entered into a license agreement with UCSF to use technology developed by UCSF to develop and commercialize a radially branching cellular delivery device, for which we are committed to pay royalties based on the sales of any future commercialized device.
Added
In 2025, through the acquisition of IRRAS, we added the IRRA flow Active Fluid Exchange System (the “IRRA flow system”) to our portfolio of medical devices. The IRRA flow system integrates continuous irrigation, drainage, and real-time intracranial pressure monitoring to provide controlled, automated intracranial fluid management within neurocritical care and operating room settings.
Added
The laser system consists of a mobile laser unit, Thermoguide software to monitor changes in tissue temperature during therapy, and disposable laser applicator and magnetic resonance (“MR”) introducer components. The IRRAflow System Our IRRA flow system is an active fluid exchange platform designed for use in neurocritical care and neurosurgical operating room environments.
Added
The system integrates continuous irrigation, drainage, and real time intracranial pressure monitoring to actively manage intracranial fluid in patients with conditions such as intracranial hemorrhage and intraventricular hemorrhage.
Added
The use of IRRA flow Active Fluid Exchange System is indicated when intracranial pressure monitoring is required, and for externally draining intracranial fluid, as a means of reducing intracranial pressure in patients where an external drainage and monitoring system is needed. The IRRA flow system consists of a control unit, proprietary dual-lumen catheters, and procedure-specific disposables.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeMoreover, even if physicians and hospitals understand the benefits of our ClearPoint system, they still may elect not to use our ClearPoint system for a variety of reasons, such as: • demand for the MRI suite within the hospital, which may result in limited or no MRI scanner availability for certain MRI-based procedures in which our ClearPoint system would be used; • the familiarity of the established physician with other devices and surgical approaches; • lack of exposure to the ClearPoint system in the fellowship training period where preferences for surgical methods are formed; • the physician’s perception that there are insufficient benefits of our ClearPoint system relative to those other devices and surgical approaches; • budgetary constraints with respect to the purchase of our ClearPoint system hardware and software; • hospital infection control procedures; • the price of our ClearPoint system disposable products, which may be higher than devices used with other surgical approaches; and • the physician’s perception that there is a lack of clinical data on the use of our ClearPoint system.
Biggest changeMoreover, even if physicians and hospitals understand the potential benefits of our systems, they may still elect not to use them for a variety of reasons, such as: • the familiarity of physicians with other devices, drainage systems, or established surgical approaches; • lack of exposure to the ClearPoint system or the IRRA flow system during residency or fellowship training, when preferences for surgical and critical care methods are formed; • perceptions that there are insufficient clinical benefits of our systems compared to competing technologies or traditional approaches; • budgetary constraints with respect to the purchase or placement of our ClearPoint system hardware or the IRRA flow control unit; • the pricing of our disposable products, which may be higher than devices used with alternative approaches; and • physician perceptions that additional clinical data or real-world evidence is needed to support broader adoption of our technologies.
If the actual number of patients with indications who would benefit from our products, the price at which we can sell our products or the annual total addressable market for our products is smaller than we have estimated, it may impair our prospective market and revenue opportunity. Our ClearPoint system may not achieve broad market adoption.
If the actual number of patients with indications who would benefit from our products, the price at which we can sell our products or the annual total addressable market for our products is smaller than we have estimated, it may impair our prospective market and revenue opportunity. Our ClearPoint system and our IRRAflow system may not achieve broad market adoption.
Accordingly, in these cases, we bear the risk if we underprice our contracts, overrun our cost estimates, or if there is a failure by us or our customer to achieve the development milestones. Such events could have an adverse effect on our business, results of operations, financial condition and cash flows.
Accordingly, in these cases, we bear the risk if we underprice our contracts, overrun our cost estimates, or if there is a failure by us or our customer to achieve the development milestones. Any such events could have an adverse effect on our business, results of operations, financial condition and cash flows.
In the United States, our SmartFlow cannula has received 510(k) clearance from the FDA for the aspiration of CSF, or injection of Cytarabine into the ventricles and a De Novo marketing authorization for the intraputaminal administration of eladocagene exuparvovec-tneq for the treatment of adult and pediatric patients with AADC deficiency.
In the United States, our SmartFlow Neuro cannula has received 510(k) clearance from the FDA for the aspiration of CSF, or injection of Cytarabine into the ventricles and a De Novo marketing authorization for the intraputaminal administration of eladocagene exuparvovec-tneq for the treatment of adult and pediatric patients with AADC deficiency.
As a result, our Board will be able to issue a substantial number of additional shares of common stock, without seeking stockholder approval. In addition, provisions in our certificate of incorporation and bylaws, as well as provisions of Delaware law, may discourage, delay or prevent a merger, acquisition or change of control.
As a result, our Board of Directors will be able to issue a substantial number of additional shares of common stock, without seeking stockholder approval. In addition, provisions in our certificate of incorporation and bylaws, as well as provisions of Delaware law, may discourage, delay or prevent a merger, acquisition or change of control.
Disruptions to our service providers could impact our ability to provide critical services to our customers, damage our customer relationships, and cause material adverse impacts to our financial results. The delays associated with the verification of a new supplier or service provider could also adversely affect our ability to meet demand for our products and services.
Disruptions to our service providers could impact our ability to provide products to our customers, damage our customer relationships, and cause material adverse impacts to our financial results. The delays associated with the verification of a new supplier or service provider could also adversely affect our ability to meet demand for our products and services.
Furthermore, our drug delivery customers may decide to decrease or discontinue their use of our products and services due to changes in research and product development plans, failures in their clinical trials, financial constraints, utilization of internal resources or services performed by other parties.
Our drug delivery customers may decide to decrease or discontinue their use of our products and services due to changes in research and product development plans, failures in their clinical trials, financial constraints, utilization of internal resources or services performed by other parties.
There is no assurance that any of these conversations will result in an agreement, or if an agreement is reached, that the resulting relationship will be successful or that preclinical, clinical, or research studies conducted as part of the engagement will be continued or will produce successful outcomes.
There is no assurance that any of these conversations will result in an agreement, or if an agreement is reached, that the resulting relationship will be successful or that preclinical, clinical, or research studies conducted as part of the engagement will be continued or will produce successful commercial outcomes.
The growth of our drug delivery and biologics business is dependent upon our pharmaceutical company customers’ ability to obtain regulatory approval for the use of the SmartFlow cannula for delivery of their therapeutic agent, and/or our ability to expand the cleared indications for our SmartFlow cannula to include delivery of our pharmaceutical company customers’ therapeutic agents.
The growth of our drug delivery and biologics business is dependent upon our pharmaceutical company customers’ ability to obtain regulatory approval for the use of the SmartFlow Neuro cannula for delivery of their therapeutic agent, and/or our ability to expand the cleared indications for our SmartFlow Neuro cannula to include delivery of our pharmaceutical company customers’ therapeutic agents.
Changes to the federal false claims law enacted as part of the Affordable Care Act will likely increase the number of whistleblower cases brought against providers and suppliers of health care items and services. • The federal Health Insurance Portability and Accountability Act of 1996, as amended, or HIPAA, which established new federal crimes for knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services. • State and foreign law equivalents of each of the above federal laws, such as: (i) anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers; and (ii) the Foreign Corrupt Practices Act, which may apply to interactions with foreign government officials, including physician employees of a foreign government entity, by our employees and third-party business partners. • The Affordable Care Act, which imposes certain reporting obligations on manufacturers of drugs, devices and biologics.
Changes to the federal false claims law enacted as part of the Affordable Care Act will likely increase the number of whistleblower cases brought against providers and suppliers of health care items and services. 40 Table of Contents • The federal Health Insurance Portability and Accountability Act of 1996, as amended, or HIPAA, which established new federal crimes for knowingly and willfully executing a scheme to defraud any healthcare benefit program or making false statements in connection with the delivery of or payment for healthcare benefits, items or services. • State and foreign law equivalents of each of the above federal laws, such as: (i) anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers; and (ii) the Foreign Corrupt Practices Act, which may apply to interactions with foreign government officials, including physician employees of a foreign government entity, by our employees and third-party business partners. • The Affordable Care Act, which imposes certain reporting obligations on manufacturers of drugs, devices and biologics.
However, any future natural disaster, such as an earthquake or a wildfire, pandemics, or other unanticipated catastrophes, such as telecommunications failures, cyberattacks, or terrorist attacks, at any of the locations in which we or our key partners, suppliers and customers do business, could significantly disrupt our operations, and delay or prevent product assembly and shipment during the time required to repair, rebuild or replace our facility, which could be lengthy and result in significant expenses.
However, any future natural disaster, such as an earthquake or a wildfire, pandemics, or other unanticipated catastrophes, such as telecommunications failures, cyberattacks, or terrorist attacks, at any of the locations in which we or our key partners, suppliers and customers do business, could significantly disrupt our operations, and delay or prevent product assembly, performance of services, and product shipment during the time required to repair, rebuild or replace our facility, which could be lengthy and result in significant expenses.
Engaging in business outside of the U.S. inherently involves a number of other difficulties and risks, including, but not limited to: • export restrictions and controls relating to technology; • pricing pressure that we may experience internationally; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • political and economic instability; • consequences arising from natural disasters and other similar catastrophes, such as hurricanes, tornados, earthquakes, floods and tsunamis; • potentially adverse tax consequences, tariffs and other trade barriers; • the need to hire additional personnel to promote our products outside of the U.S.; • international terrorism and anti-American sentiment; • fluctuations in exchange rates for future sales denominated in foreign currency; • difficulty in obtaining and enforcing intellectual property rights; and • changing regulatory environments such as the European Medical Device Regulation.
Engaging in business outside of the U.S. inherently involves a number of other difficulties and risks, including, but not limited to: • export restrictions and controls relating to technology; • pricing pressure that we may experience internationally; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • political and economic instability; • consequences arising from natural disasters and other similar catastrophes, such as hurricanes, tornados, earthquakes, floods and tsunamis; • potentially adverse tax consequences, tariffs and other trade barriers; 29 Table of Contents • the need to hire additional personnel to promote and support our products outside of the U.S.; • international terrorism and anti-American sentiment; • fluctuations in exchange rates for future sales denominated in foreign currency; • difficulty in obtaining and enforcing intellectual property rights; and • changing regulatory environments such as the European Medical Device Regulation.
We have incurred losses in each year since our inception in 1998 that have resulted principally from costs incurred in connection with our sales and marketing activities, research and development efforts, manufacturing activities and other general and administrative expenses associated with our operations, and we may continue to incur losses as we continue to invest capital in the sales and marketing of our ClearPoint platform products and services, and growth of our business generally.
We have incurred losses in each year since our inception in 1998 that have resulted principally from costs incurred in connection with our sales and marketing activities, research and development efforts, manufacturing activities and other general and administrative expenses associated with our operations, and we may continue to incur losses as we continue to invest capital in the sales and marketing of our products and services, and growth of our business generally.
We conduct many of our activities, including research and development, component processing, final assembly, packaging and distribution activities for most of our products, at our facility located in Southern California, which is a seismically active area that has experienced major earthquakes in the past, as well as other natural disasters, including wildfires.
We conduct many of our activities, including research and development, component processing, final assembly, packaging and distribution activities for most of our products, at our facilities located in Southern California, which is a seismically active area that has experienced major earthquakes in the past, as well as other natural disasters, including wildfires.
Regulatory agencies, including the FDA, may impose more stringent requirements on these novel therapies, and the evolving regulatory landscape may create additional hurdles, including longer review 18 Table of Contents times, requests for additional data, or the need for post-approval monitoring, which would significantly impact development timelines.
Regulatory agencies, including the FDA, may impose more stringent 21 Table of Contents requirements on these novel therapies, and the evolving regulatory landscape may create additional hurdles, including longer review times, requests for additional data, or the need for post-approval monitoring, which would significantly impact development timelines.
Our ClearPoint system, ClearPoint Prism Neuro Laser Therapy System, and other products may incorporate mechanical and electrical parts, complex computer software and other sophisticated components, any of which can have defective or inferior parts or contain defects, errors or failures. Complex computer software is particularly vulnerable to errors and failures, especially when first introduced.
Our ClearPoint system, ClearPoint Prism Neuro Laser Therapy System, IRRA flow system, and other products may incorporate mechanical and electrical parts, complex computer software and other sophisticated components, any of which can have defective or inferior parts or contain defects, errors or failures. Complex computer software is particularly vulnerable to errors and failures, especially when first introduced.
Furthermore, the insurance coverage we maintain may not be adequate to cover our losses in any particular case or continue to be available at commercially reasonable rates and terms. In addition, our facility may be subject to shortages of electrical power, natural gas, water and other energy supplies.
Furthermore, the insurance coverage we maintain may not be adequate to cover our losses in any particular case or continue to be available at commercially reasonable rates and terms. In addition, our facilities may be subject to shortages of electrical power, natural gas, water and other energy supplies.
Any of these events could materially and adversely affect our business, financial condition and results of operations. 30 Table of Contents Risks Related to Legal and Regulatory Compliance We operate in a highly-regulated industry and any failure to comply with the extensive government regulations may subject us to fines, injunctions and other penalties that could harm our business.
Any of these events could materially and adversely affect our business, financial condition and results of operations. Risks Related to Legal and Regulatory Compliance We operate in a highly-regulated industry and any failure to comply with the extensive government regulations may subject us to fines, injunctions and other penalties that could harm our business.
Since enactment of the Affordable Care Act in 2010, there have been a number of legal challenges as well as other legislative and regulatory changes to the healthcare system that could limit the acceptance and availability of our products, which would have an adverse effect on our financial results and business.
Since enactment of the Affordable Care Act in 2010, there have been a number of legal challenges as well as other legislative and regulatory changes to the healthcare system that could limit the acceptance and availability of our products, which would have an adverse 37 Table of Contents effect on our financial results and business.
If the need to replace any of our key employees arises, the search and recruiting process likely would involve significant time and costs, and may significantly delay or prevent the achievement of our business objectives. Risks Related to Our Financial Position We have incurred losses since our inception, and we may continue to incur losses.
If the need to replace any of our key employees arises, the search and recruiting process likely would involve significant time and costs, and may significantly delay or prevent the achievement of our business objectives. 31 Table of Contents Risks Related to Our Financial Position We have incurred losses since our inception, and we may continue to incur losses.
We may also be subject to professional liability for errors in the clinical support that we provide to clinicians in connection with our products or for a misunderstanding of, or inappropriate reliance upon, the information we provide. 38 Table of Contents The medical device industry has historically been subject to extensive litigation over product liability and professional liability claims.
We may also be subject to professional liability for errors in the clinical support that we provide to clinicians in connection with our products or for a misunderstanding of, or inappropriate reliance upon, the information we provide. The medical device industry has historically been subject to extensive litigation over product liability and professional liability claims.
As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained or maintained if obtained.
As a result, the coverage determination process is often a time-consuming 24 Table of Contents and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained or maintained if obtained.
Historically, research activities with animals have been the subject of adverse attention, including shareholder proposals and attempts to disrupt such services, impacting the industry. This may, in the future, include periodic demonstrations near facilities operated or utilized by us.
Historically, research activities with animals have been the subject 44 Table of Contents of adverse attention, including shareholder proposals and attempts to disrupt such services, impacting the industry. This may, in the future, include periodic demonstrations near facilities operated or utilized by us.
Our reliance on single-source suppliers for components, finished products and services could harm our ability to meet demand for our products or services in a timely manner or within budget. Many of our components, component assemblies, and finished products are provided to us by single-source suppliers.
Our reliance on single-source suppliers for components, finished products and services could harm our ability to meet demand for our products or services in a timely manner or within budget. 25 Table of Contents Many of our components, component assemblies, and finished products are provided to us by single-source suppliers.
The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Dodd-Frank Act requires the SEC to adopt certain rules and regulations relating to our public disclosures, corporate governance and executive compensation, among other things, and such rules and regulations require significant attention from management.
The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Dodd-Frank Act requires the SEC to adopt certain rules and 45 Table of Contents regulations relating to our public disclosures, corporate governance and executive compensation, among other things, and such rules and regulations require significant attention from management.
Currently, final assembly of many of our products’ components occurs at our Carlsbad, California facility, in an area that is at risk of experiencing serious fires and power outages and is considered to lie in an earthquake risk zone.
Currently, final assembly of many of our products’ components for our ClearPoint System occurs at our Carlsbad, California facility, in an area that is at risk of experiencing serious fires and power outages and is considered to lie in an earthquake risk zone.
We sell our products outside of the U.S., and we are subject to various economic, political, regulatory, and other risks relating to international operations, which could harm our revenue and profitability. 24 Table of Contents We sell our products in several countries outside of the U.S.
We sell our products outside of the U.S., and we are subject to various economic, political, regulatory, and other risks relating to international operations, which could harm our revenue and profitability. We sell our products in several countries outside of the U.S.
Our business results may vary significantly from such guidance or that consensus due to a number of factors, many of which are outside 37 Table of Contents of our control, and which could adversely affect our operations and operating results.
Our business results may vary significantly from such guidance or that consensus due to a number of factors, many of which are outside of our control, and which could adversely affect our operations and operating results.
Given the amount of time required for the development, testing and regulatory review of potential new medical technologies, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
Given the amount of time required for the 35 Table of Contents development, testing and regulatory review of potential new medical technologies, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
Depending on the relevant conformity assessment procedure, the Notified Body would typically audit 23 Table of Contents and examine the technical file and the quality system for the manufacture, design and final inspection of our devices.
Depending on the relevant conformity assessment procedure, the Notified Body would typically audit and examine the technical file and the quality system for the manufacture, design and final inspection of our devices.
To the extent that our pharmaceutical partners are not successful in obtaining 22 Table of Contents regulatory approval, or if we are unable to expand the cleared indications for use of our SmartFlow cannula, we may not be able to grow our business.
To the extent that our pharmaceutical partners are not successful in obtaining regulatory approval, or if we are unable to expand the cleared indications for use of our SmartFlow Neuro cannula, we may not be able to grow our business.
In 2024, one pharmaceutical customer, a related party as described in Note 2 to the consolidated financial statements included elsewhere in this Annual Report, for whom we provide clinical services in support of the customer’s clinical trials and earn a quarterly fee, accounted for 9% of our total revenues, and 17% of our biologics and drug delivery revenue.
In 2025, one pharmaceutical customer, a related party as described in Note 2 to the consolidated financial statements included elsewhere in this Annual Report, for whom we provide clinical services in support of the customer’s clinical trials and earn a quarterly fee, accounted for 8% of our total revenues, and 15% of our biologics and drug delivery revenue.
If we are unable to attract and retain qualified personnel, including our senior management team, our sales, clinical support and marketing team and our engineering team, our business and growth could be seriously harmed. Our performance depends on the talents and efforts of our employees.
We need to hire and retain additional qualified personnel to grow and manage our business. If we are unable to attract and retain qualified personnel, including our senior management team, our sales, clinical support and marketing team and our engineering team, our business and growth could be seriously harmed. Our performance depends on the talents and efforts of our employees.
Our stock price could be subject to wide fluctuations in response to a variety of factors, including the following: • Failure to successfully develop our products; • Changes in laws or regulations applicable to future products; • Inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices; • Adverse regulatory decisions; • Introduction of new products, services or technologies by our competitors; • Failure to meet or exceed financial projections we may provide to the public; • Inability to obtain additional funding; • Failure to meet or exceed the financial projections of the investment community; • Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • Additions or departures of key personnel; • Significant lawsuits, including patent or stockholder litigation; • Changes in the market valuations of similar companies; • Purchases and sales of our common stock resulting from, related to or arising out of (i) recent stock run-ups or recent divergences in valuations relative to those seen during traditional markets, (ii) high short interest or reported short squeezes, or (iii) reports of strong and atypical retail investor interest (whether on social media or otherwise); • Sales of our common stock by us or our stockholders in the future; and • Trading volume of our common stock. 36 Table of Contents Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.
Our stock price could be subject to wide fluctuations in response to a variety of factors, including the following: • Failure to successfully develop our products; • Changes in laws or regulations applicable to future products; • Inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices; • Adverse regulatory decisions; • Introduction of new products, services or technologies by our competitors; • Failure to meet or exceed financial projections we may provide to the public; • Inability to obtain additional funding; • Failure to meet or exceed the financial projections of the investment community; • Disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • Additions or departures of key personnel; • Significant lawsuits, including patent or stockholder litigation; • Changes in the market valuations of similar companies; • Purchases and sales of our common stock resulting from, related to or arising out of (i) recent stock run-ups or recent divergences in valuations relative to those seen during traditional markets, (ii) high short interest or reported short squeezes, or (iii) reports of strong and atypical retail investor interest (whether on social media or otherwise); • Sales of our common stock by us or our stockholders in the future; • Risks, uncertainties, or unexpected developments related to our acquisition of IRRAS, including challenges with integration, realization of anticipated synergies, assumptions of liabilities, impacts on our financial results, or market perceptions of the acquisition and its success or failure; and • Trading volume of our common stock. 42 Table of Contents Our ability to use net operating losses to offset future taxable income may be subject to certain limitations.
With or without insurance, damage to our facility or our other property due to a natural disaster or casualty event could have a material adverse effect on our business, financial condition and results of operations.
With or without insurance, damage to our facilities due to a natural disaster or casualty event could have a material adverse effect on our business, financial condition and results of operations.
In addition, market uncertainty and volatility in various geographies may be magnified as a result of potential shifts in U.S. and foreign trade, economic and other policies following the recent U.S elections.
In addition, market uncertainty and volatility in various geographies may be magnified as a result of shifts in U.S. and foreign trade, economic, and regulatory policies following recent elections.
We have taken precautions to safeguard our facility, including obtaining business interruption insurance.
We have taken precautions to safeguard our facilities, including obtaining business interruption insurance.
Cancellation or renegotiation of a large agreement could adversely affect our business and, therefore, may adversely affect our operating results. In addition, we may enter into agreements with customers to provide services on a fixed fee basis. We may also enter into agreements with customers for which we are paid a lump sum conditioned upon the achievement of development milestones.
Cancellation or renegotiation of a large agreement could adversely affect our business and, therefore, may adversely affect our operating results. In addition, we may also enter into agreements with customers for which we are paid a lump sum conditioned upon the achievement of development milestones.
It is often difficult to hire and retain these persons, and we may be unable to replace key persons if they leave or fill new positions requiring key persons with appropriate experience, particularly in light of current labor market conditions. If we experience difficulties locating and hiring suitable personnel in the future, our growth may be hindered.
It is often difficult to hire and retain these persons, and we may be unable to replace key persons if they leave or fill new positions requiring key persons with appropriate experience. If we experience difficulties locating and hiring suitable personnel in the future, our growth may be hindered.
Our internal manufacturing operations are generally conducted at a single location, which may limit our ability to provide an adequate supply of our products, and any disruption at our manufacturing facility could render us unable to produce our products, increase our expenses and decrease our revenue.
Our internal manufacturing operations are generally conducted at single locations, which may limit our ability to provide an adequate supply of our products, and any disruption at these facilities could render us unable to produce our products, increase our expenses and decrease our revenue.
The success of any new product offering will depend on numerous factors, including our ability to: • properly identify and anticipate customer needs; • identify, retain, and manage third-party design and development firms, where appropriate, to accelerate development; • develop and introduce new products or services in a timely manner; • adequately protect our intellectual property and avoid infringing upon the intellectual property rights of third parties; • obtain and retain third-party licenses required for the development, commercialization, and/or utilization of new products; • demonstrate the safety and efficacy of new products; • obtain the necessary regulatory authorizations to market new products or product enhancements; • deliver products and services at a price point that is both profitable and acceptable to the market; and • secure our supply chain to ensure we can continue to deliver products in a timely fashion to all geographies.
The success of any new product offering, including enhancements or next generation versions of the IRRAflow system, will depend on numerous factors, including our ability to: 23 Table of Contents • properly identify and anticipate customer needs across neurosurgery and neurocritical care; • identify, retain, and manage third-party design and development firms, where appropriate, to accelerate development; • develop and introduce new products, enhancements, or modifications in a timely manner; • adequately protect our intellectual property and avoid infringing upon the intellectual property rights of third parties; • obtain and retain third-party licenses required for the development, commercialization, and/or utilization of new products; • demonstrate the safety and efficacy of new products; • obtain the necessary regulatory authorizations to market new products, including any enhancements or expanded indications for the IRRA flow system; • deliver products and services at a price point that is both profitable and acceptable to the market; and • secure our supply chain to ensure we can continue to deliver products in a timely fashion to all geographies.
We believe that this increased transparency may also result in a heightened level of government scrutiny of the relationships between physicians and medical device companies.
The Affordable Care Act mandates increased transparency of arrangements between physicians and medical device companies. We believe that this increased transparency may also result in a heightened level of government scrutiny of the relationships between physicians and medical device companies.
We may from time to time have agreements with physicians that could be scrutinized or could be subject to reporting requirements in the future, including consulting contracts in which we compensate physicians for various services, which could include: • providing training and other similar services on the proper use of our products; • advising us with respect to the commercialization of products in their respective fields; • keeping us informed of new developments in their respective fields of practice; • advising us on our research and development projects related to their respective fields; • advising us on improvements to methods, processes and devices related to their respective fields (such as advice on the development of prototype devices); and • assisting us with the technical evaluation of our methods, processes and devices related to their respective fields. 34 Table of Contents The Affordable Care Act mandates increased transparency of arrangements between physicians and medical device companies.
We may from time to time have agreements with physicians that could be scrutinized or could be subject to reporting requirements in the future, including consulting contracts in which we compensate physicians for various services, which could include: • providing training and other similar services on the proper use of our products; • advising us with respect to the commercialization of products in their respective fields; • keeping us informed of new developments in their respective fields of practice; • advising us on our research and development projects related to their respective fields; • advising us on improvements to methods, processes and devices related to their respective fields (such as advice on the development of prototype devices); and • assisting us with the technical evaluation of our methods, processes and devices related to their respective fields.
Changes in domestic and global economic conditions, such as inflationary pressure, changes in monetary policy, decreasing consumer confidence and spending, the introduction of or changes in tariffs or trade barriers, and global or local recession may adversely impact the demand for our products and services, which could negatively impact our business, financial conditions, and results of operations.
Changes in domestic and global economic conditions, such as persistent inflationary pressure, higher interest rates, changes in monetary policy, declining consumer and business confidence and spending, supply chain disruptions, the introduction of or changes in tariffs or trade barriers, and the potential for global or local recession may adversely impact the demand for our products and services, which could negatively impact our business, financial conditions, and results of operations.
Geopolitical changes and trends such as populism, protectionism, economic nationalism, as well as trade barriers, sanctions, and regulations may become disruptive and costly to our business.
Geopolitical changes and trends such as populism, protectionism, economic nationalism, as well as tariffs, sanctions, and other trade restrictions may become disruptive and costly to our business.
Our five largest hospital customers account for approximately 31% of our neurosurgery navigation revenues. Revenues from almost all our customers are not based on long-term, committed volume purchase contracts, and 21 Table of Contents we may not continue to generate a similar level of revenues from our largest customers, or any other customer.
Our five largest hospital customers account for approximately 21% of our revenues from selling medical devices for neurosurgical applications. Revenues from almost all our customers are not based on long-term, committed volume purchase contracts, and we may not continue to generate a similar level of revenues from our largest customers, or any other customer.
If we do not pay dividends, a return on our stockholders’ investment will only occur if our stock price appreciates. Anti-takeover provisions in our certificate of incorporation, bylaws and Delaware law could prevent or delay a change in control. We have 90,000,000 shares of common stock authorized, and 27,632,332 shares outstanding as of February 18, 2025.
If we do not pay dividends, a return on our stockholders’ investment will only occur if our stock price appreciates. Anti-takeover provisions in our certificate of incorporation, bylaws and Delaware law could prevent or delay a change in control. We have 90,000,000 shares of common stock authorized, and 29,663,875 shares outstanding as of March 6, 2026.
We also may pursue strategic alliances and joint ventures that leverage our core technology and industry experience to expand our offerings or distribution. We have no experience with acquiring or investing in other companies and limited experience in forming strategic alliances and joint ventures.
As part of our business strategy, we may pursue acquisitions or investments in other companies or technologies. We also may pursue strategic alliances and joint ventures that leverage our core technology and industry experience to expand our offerings or distribution. We have limited experience with acquiring or investing in other companies and forming strategic alliances and joint ventures.
The funding requirements for our business will depend on many factors, including: • the timing of broader market acceptance and adoption of our ClearPoint platform products and services; • the scope, rate of progress and cost of our ongoing product development activities relating to our ClearPoint system; • the cost and timing of expanding our sales, clinical support, marketing and distribution capabilities and other corporate infrastructure; • the cost and timing of establishing inventories at levels sufficient to support our sales; • the scope, rate of progress and cost of our research and development activities relating to new products; • the effect of competing technological and market developments; • the costs, terms and timing of any future investments or acquisitions, or collaborative, licensing or other arrangements that we may establish; • the cost and timing of any clinical trials; • the cost and timing of regulatory filings, clearances and approvals; and • the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.
The funding requirements for our business will depend on many factors, including: • the timing of broader market acceptance and adoption of our ClearPoint platform and IRRA flow system products and services; • the timing of approval, commercialization, and successful adoption of gene and cell therapies delivered using our ClearPoint platform; • the scope, rate of progress, and cost of our ongoing product development activities relating to the ClearPoint system and the IRRA flow system; • the cost and timing of integrating and expanding our sales, clinical support, marketing, and distribution capabilities and other corporate infrastructure, including those required for the combined ClearPoint system and IRRA flow product lines; • the cost and timing of establishing inventories at levels sufficient to support our expanded product portfolio; • the scope, rate of progress, and cost of research and development activities relating to new products; • the effect of competing technological and market developments; • the costs, terms, and timing of any future investments or acquisitions, or collaborative, licensing, or other arrangements that we may establish; • the cost and timing of currently initiated and future clinical studies for both ClearPoint and IRRAflow technologies; • the cost and timing of regulatory filings, clearances, and approvals across our combined product portfolio; and • the cost of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights.
Moreover, some specific ClearPoint system claims could require clinical trials to support regulatory clearance or approval. In the event we seek a new indication for use of, or new claims for, the ClearPoint system that we believe are necessary or desirable for successful commercialization, the FDA may refuse our requests for 510(k) clearance or PMA approval.
In the event we seek a new indication for use of, or new claims for, the ClearPoint system that we believe are necessary or desirable for successful commercialization, the FDA may refuse our requests for 510(k) clearance or PMA approval.
There may be U.S. and foreign patents issued to third parties that relate to our business. Some of these patents may be broad enough to cover one or more aspects of our present technologies and/or may cover aspects of our future technologies. We do not know whether any of these patents, if asserted, would be held valid, enforceable and infringed.
Some of these patents may be broad enough to cover one or more aspects of our present technologies and/or may cover aspects of our future technologies. We do not know whether any of these patents, if asserted, would be held valid, enforceable and infringed.
Our dependence on a limited number of third-party suppliers and service providers and the challenges we may face in obtaining adequate supplies and services involve several risks, including limited control over pricing, availability, quality and delivery schedules.
We also depend on single-source service providers for many of the services that we need to produce our products. Our dependence on a limited number of third-party suppliers and service providers and the challenges we may face in obtaining adequate supplies and services involve several risks, including limited control over pricing, availability, quality and delivery schedules.
Our licensors may have relied on third-party consultants or collaborators or on funds from third parties such that our licensors are not in sole and exclusive control or may not be the sole owners of the patents we in-license. This could materially and adversely affect our business, financial condition and results of operations.
Our licensors may have relied on third-party consultants or collaborators or on funds from third parties such that our licensors are not in sole and exclusive control or may not be the sole owners of the patents we in-license.
We and our suppliers will also be subject to the regulations of foreign jurisdictions regarding the manufacturing process to the extent we market our products in these jurisdictions. The FDA enforces the QMSR through periodic and unannounced inspections of manufacturing facilities. Our facilities were last subject to an ISO 13485 surveillance audit and MDSAP surveillance audit in October 2024.
We and our suppliers will also be subject to the regulations of foreign jurisdictions regarding the manufacturing process to the extent we market our products in these jurisdictions. The FDA enforces the QMSR through periodic and unannounced inspections of manufacturing facilities.
Third parties may attempt to commercialize competitive products in foreign countries where we do not have any patents or patent applications and/or where legal recourse may be limited.
Third parties may attempt to commercialize competitive products in foreign countries where we do not have any patents or patent applications and/or where legal recourse may be limited. This may have a significant commercial impact on our foreign business operations.
Raising additional funds may cause dilution to existing stockholders, restrict our operations, or require us to relinquish proprietary rights. To the extent we raise additional capital through the sale of equity or convertible debt securities, existing ownership interests will be diluted, and the terms may include liquidation or other preferences that adversely affect such existing stockholders’ rights.
To the extent we raise additional capital through the sale of equity or convertible debt securities, existing ownership interests will be diluted, and the terms may include liquidation or other preferences that adversely affect such existing stockholders’ rights.
This may have a significant commercial impact on our foreign business operations. 29 Table of Contents Filing, prosecuting and defending patents on our products in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.
Filing, prosecuting and defending patents on our products in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.
To finance any investments, acquisitions or joint ventures, it may be necessary for us to raise additional funds through public or private financings. Additional funds may not be available on terms that are favorable to us, or at all. We need to hire and retain additional qualified personnel to grow and manage our business.
To finance any investments, acquisitions or joint ventures, it may be necessary for us to raise additional funds through public or private financings. Additional funds may not be available on terms that are favorable to us, or at all.
The FDA and other regulatory agencies actively enforce regulations prohibiting promotion of off-label uses and the promotion of products for which marketing clearance or approval has not been obtained.
Therefore, a physician could use our products for uses not covered by the cleared labeling. The FDA and other regulatory agencies actively enforce regulations prohibiting promotion of off-label uses and the promotion of products for which marketing clearance or approval has not been obtained.
Our internal research and development efforts and our outsourced third-party design and development initiatives may require a substantial investment of time and resources before we are adequately able to determine the commercial viability of a new product, technology, material or other innovation.
Our internal research and development efforts and our outsourced design and development initiatives may require substantial investment of time and resources before we can determine the commercial viability of a new product, technology, or modification.
We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation (“FDIC”), and the loss of such assets could have a negative effect on our operations and liquidity. 27 Table of Contents In early 2023, multiple banks were closed by regulatory agencies and swept into receivership.
We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation (“FDIC”), and the loss of such assets could have a negative effect on our operations and liquidity.
There is no assurance, however, that we will be able to obtain such additional financing on commercially reasonable terms, if at all, and there is no assurance that any additional financing we do obtain will be sufficient to meet our needs.
There is no assurance that we will be able to obtain additional financing on commercially reasonable terms, if at all, or that any financing we obtain will be sufficient to meet the needs of the combined company.
Others may assert that our products infringe their intellectual property rights, which may cause us to engage in costly disputes and, if we are not successful in defending ourselves, could also cause us to pay substantial damages and prohibit us from selling our marketed products.
Others may assert that our products infringe their intellectual property rights, which may cause us to engage in costly disputes and, if we are not successful in defending ourselves, could also cause us to pay substantial damages and prohibit us from selling our marketed products. 34 Table of Contents There may be U.S. and foreign patents issued to third parties that relate to our business.
Any failure to achieve and maintain profitability would continue to have an adverse effect on our stockholders’ equity and working capital and could result in a decline in our stock price or cause us to cease operations.
We may make errors in predicting and reacting to relevant business trends, which could harm our business and financial condition. Any failure to achieve and maintain profitability would continue to have an adverse effect on our stockholders’ equity and working capital and could result in a decline in our stock price or cause us to cease operations.
Delays in patient enrollment or failure of patients to continue to participate in a clinical trial could cause an increase in costs and delays in the approval and attempted commercialization of our product candidates or result in the failure of the clinical trial. Such increased costs and delays or failures could adversely affect our business, operating results and prospects.
Delays in patient enrollment or failure of patients to continue to participate in a clinical trial 27 Table of Contents could cause an increase in costs and delays in the approval and attempted commercialization of our product candidates or result in the failure of the clinical trial.
While alternative suppliers exist and have been identified for substantially all components, the disruption or termination of the supply of components and component assemblies could cause a significant increase in the cost of these components, which could affect our operating results. We also depend on single-source service providers for many of the services that we perform for our customers.
While alternative suppliers exist and have been identified for substantially all components of the ClearPoint System, the disruption or termination of the supply of components and component assemblies could cause a significant increase in the cost of these components, which could affect our operating results.
New technologies, techniques or products could emerge from competitors that might offer better combinations of price and performance than our products and services. It is important that we anticipate changes in technology and market demand, as well as customer preferences and practices, to successfully commercialize new technologies to meet our prospective customers’ needs on a timely and cost-effective basis.
It is important that we anticipate changes in technology and market demand, as well as customer preferences and practices, to successfully commercialize new technologies to meet our prospective customers’ needs on a timely and cost-effective basis. We might be unable to successfully commercialize our marketed products or services or obtain authorization to market new products.
The SmartFlow cannula has also been CE marked for use in the EU for the delivery of approved fluids into the brain or aspiration of CSF. The SmartFlow cannula is being utilized in approved combination product clinical and preclinical studies by pharmaceutical companies and academic research customers for various research and clinical trials in connection with delivery of therapeutic agents.
The SmartFlow Neuro cannula is being utilized in approved combination product clinical and preclinical studies by pharmaceutical companies and academic research customers for various research and clinical trials in connection with delivery of therapeutic agents.
The Affordable Care Act may continue to be periodically subject to legal challenges or a continuing political effort to limit its scope, and the Affordable Care Act may change in the future in ways that could have a material adverse effect on our business or results of operations. 31 Table of Contents The Medicare Access and CHIP Reauthorization Act, or the Medicare Access Act, removed the sustainable growth rate or SGR, methodology applicable to fees for physician services.
The Affordable Care Act may continue to be periodically subject to legal challenges or a continuing political effort to limit its scope, and the Affordable Care Act may change in the future in ways that could have a material adverse effect on our business or results of operations.
Our long-term growth depends on our ability to compete effectively in the neurosurgery market by developing and commercializing new products and services through our research and development efforts, independently and through third-party collaborations.
Our long-term growth depends on our ability to compete effectively in the neurosurgery and neurocritical care markets by developing and commercializing new products and services through our research and development efforts, independently and through third-party collaborations, including key development work required to support broader adoption of the IRRAflow system.
A natural or other disaster could damage or destroy our manufacturing equipment and cause substantial delays in our manufacturing operations, which could lead to additional expense and decreased revenue due to lack of supply. The insurance we maintain may not cover, in whole or in part, our losses in any particular case.
A disaster or disruption could damage, destroy, or delay our manufacturing or service operations, which could lead to additional expenses and decreased revenue due to our inability to supply products and services. The insurance we maintain may not cover, in whole or in part, our losses in any particular case.
Many factors have the potential to impact such collaborations, including the ability to deliver therapies to our drug delivery customers’ satisfaction, regulatory approval, perceptions in connection with the safety of therapies or delivery mechanisms, our customers’ ability to access adequate and sustainable financing, and other factors that may be beyond our control.
Many factors have the potential to impact such collaborations, including our customer’s satisfaction with our performance of services and our products, force majeure, regulatory approval, perceptions in connection with the safety of therapies or delivery mechanisms, our customers’ ability to access adequate and sustainable financing, our customers’ ability to achieve commercial success for their therapies, including overcoming barriers in reimbursement, physician adoption, and patient access to their therapies, and other factors that may be beyond our control.
If we fail to comply with the FDA’s QMSR or any applicable state equivalent, we would be required to incur the costs and take the actions necessary to bring our operations into compliance, which may have a negative impact on our future sales and our ability to generate a profit. 33 Table of Contents We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws and regulations and could face substantial penalties if we are unable to fully comply with such laws.
If we fail to comply with the FDA’s QMSR or any applicable state equivalent, we would be required to incur the costs and take the actions necessary to bring our operations into compliance, which may have a negative impact on our future sales and our ability to generate a profit.
Although the majority of our operations take place in the U.S., further escalation of geopolitical tensions could make it more costly to continue our current international business or expand to serve other markets, which may adversely affect our business, financial condition and results of operations.
Although the majority of our operations are based in the United States, further escalation of geopolitical tensions could make it more costly or difficult to maintain our current international business or expand into additional markets, which could adversely affect our business, financial condition, and results of operations.
The agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
This could materially and adversely affect our business, financial condition and results of operations. 36 Table of Contents The agreements under which we currently license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.
In addition, any public announcements related to litigation or administrative proceedings initiated by us, or initiated or threatened against us, could negatively impact our business. 28 Table of Contents If the combination of patents, trade secrets and contractual provisions that we rely on to protect our intellectual property is inadequate, our ability to successfully commercialize our marketed products and product candidates will be harmed, and we may not be able to operate our business profitably.
If the combination of patents, trade secrets and contractual provisions that we rely on to protect our intellectual property is inadequate, our ability to successfully commercialize our marketed products and product candidates will be harmed, and we may not be able to operate our business profitably.
We could seek to obtain additional, more specific indications for use of our ClearPoint system beyond the general neurosurgical intervention claim. To the extent we seek expanded claims for our ClearPoint system, such claims could, depending on their nature, require 510(k) clearance or FDA approval of a PMA.
To the extent we seek expanded claims for our ClearPoint system, such claims could, depending on their nature, require 510(k) clearance or FDA approval of a PMA. Moreover, some specific ClearPoint system claims could require clinical trials to support regulatory clearance or approval.
On November 7, 2024, we entered into an At-The-Market Equity Offering Sales Agreement to sell shares of our common stock having aggregate sales proceeds of up to $50 million.
On November 7, 2024, we entered into an At-The-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated, as sales agent, to sell shares of our common stock having aggregate sales proceeds of up to $50 million. As of December 31, 2025, we have not sold any shares of common stock under this agreement.
If we do not develop and obtain regulatory authorization to market new products in time to meet market demand, or if there is insufficient demand for these products, our results of operations will suffer.
If we do not develop and obtain regulatory authorization to market new products in time to meet market demand, or if demand for these products, including future versions or enhancements of the IRRA flow system, does not materialize as expected, our results of operations will suffer.
We publicly provide financial guidance about our business and future operating results. In developing this guidance, our management makes certain assumptions and judgments about our future operating performance, including projected hiring of personnel, continued increase of our revenue, and continued stability of the macro-economic environment in our key markets.
In developing this guidance, our management makes certain assumptions and judgments about our future operating performance, including projected hiring of personnel, continued increase of our revenue, and continued stability of the macro-economic environment in our key markets. Furthermore, analysts and investors may develop and publish their own projections of our business, which may form a consensus about our future performance.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn addition to utilizing internal Company resources, the Cybersecurity Steering Committee also regularly consults with external advisors and specialists regarding opportunities and enhancements to strengthen its practices and policies. We also engage with third-party consultants to manage the infrastructure and security of our information technology landscape.
Biggest changeHe has led the integration of our medical device software into hospital and research institutions in compliance with the extensive cybersecurity requirements of those institutions. In addition to our internal Company resources, the Cybersecurity Steering Committee also regularly consults with external advisors and specialists regarding opportunities and enhancements to strengthen its practices and policies.
Our Audit Committee is also responsible for ensuring that the Board of Directors also receives periodic reports with respect to the status and management of our cybersecurity risks.
Our Audit Committee is also responsible for ensuring that our Board of Directors also receives periodic reports with respect to the status and management of our cybersecurity risks.
Our cybersecurity program includes: • Penetration testing of internal information technology systems and review of program maturity based on the National Institute of Standards and Technology (“NIST”) cybersecurity framework; • Phishing, social engineering, and cyber hygiene training; • Continuous security event monitoring, management, and incident response plans; • Continuous enhancements to security capabilities based on evolving threats; • Information security policies and procedures; • Privacy controls and compliance with applicable legislative and regulatory requirements; • Assessment of applicable third-party vendors’ cybersecurity and information security practices; and • A cross-functional approach to addressing cybersecurity risk with participation from representatives across the business and functions.
Our cybersecurity program includes: • Penetration testing of internal information technology systems and review of program maturity based on the National Institute of Standards and Technology cybersecurity framework; • Phishing, social engineering, and cyber hygiene training; • Continuous security event monitoring, management, and incident response plans; • Continuous enhancements to security capabilities based on evolving threats; • Information security policies and procedures; • Privacy controls and compliance with applicable legislative and regulatory requirements; • Assessment of applicable third-party vendors’ cybersecurity and information security practices; and • A cross-functional approach to addressing cybersecurity risk with participation from representatives across the business and functions.
The Cybersecurity Steering Committee, in collaboration with delegates from our business and functions, is responsible for implementing the Company’s enterprise-wide cyber security and information security strategy, employee training and compliance, and managing policies and processes for the Company’s information technology standards, product security, and privacy.
The Cybersecurity Steering Committee, in collaboration with delegates from our business and functions, is responsible for implementing our enterprise-wide cyber security and information security strategy, employee training and compliance, and managing policies and processes for our information technology standards, product security, and privacy.
As part of our cybersecurity program, we have adopted an incident response plan, under which the Chairs of our Board of Directors and Audit Committee are informed by the Cybersecurity Steering Committee of any cybersecurity incidents that have the potential to materially adversely impact the Company or its information systems.
As part of our cybersecurity program, we have adopted an incident response plan, under which the Chairs of our Board of Directors and Audit Committee are informed by the Cybersecurity Steering Committee of any cybersecurity incidents that have the potential to materially adversely impact us or our information systems.
To date, no attempted cyber-attack or other attempted intrusion on our information technology networks has resulted in a material adverse impact on our operations or financial results, or in any penalties or settlements.
To date, no attempted cyber-attack or other attempted intrusion on our 46 Table of Contents information technology networks has resulted in a material adverse impact on our operations or financial results, or in any penalties or settlements.
ITEM 1C. CY BERSECURITY. Our Company places a high priority on cybersecurity, information security, and securing confidential business information and personal information that we receive and store related to our customers and employees. Our Company’s Audit Committee oversees the cybersecurity risks faced by the Company.
ITEM 1C. CY BERSECURITY. We place a high priority on cybersecurity, information security, and securing confidential business information and personal information that we receive and store related to our customers and employees. Our Audit Committee oversees the cybersecurity risks we face.
Removed
He has led the integration of our medical device software into some of the largest hospital and research institutions in the world in compliance with the extensive cybersecurity requirements of these institutions.
Added
We also engage with third-party consultants to manage the infrastructure and security of our information technology landscape.
Added
Our acquisition of IRRAS in November 2025 did not result in any changes to our cybersecurity governance structure, oversight responsibilities, or risk management framework. We expect to integrate IRRAS into our cybersecurity program during 2026.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that these facilities are sufficient to meet our current purposes, and that additional space can be obtained on commercially reasonable terms as needed.
Biggest changeIn connection with the IRRAS acquisition, we also assumed a lease for a facility located in San Diego, California, consisting of approximately 21,200 square feet used for manufacturing and office purposes. We believe that these facilities are sufficient to meet our current purposes, and that additional space can be obtained on commercially reasonable terms as needed.
Added
In 2025, we entered into a lease of approximately 30,000 square feet of space within a life science building in San Diego, California to perform research and development services for our pharmaceutical and biotech customers.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
See Note 8 to the consolidated financial statements included elsewhere in this Annual Report for further disclosure.
Added
Regardless of outcome, litigation and other legal proceedings can have an adverse impact on us because of defense and settlement costs, diversions of management resources and other factors. As of the date of filing this Annual Report, there is no material pending legal proceeding to which we are a party or to which any of our property is subject.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe currently intend to retain all future earnings for the operation and expansion of our business and, therefore, do not anticipate declaring or paying cash dividends in the foreseeable future.
Biggest changeDividend Policy We have never declared or paid cash dividends on our capital stock. We currently intend to retain all future earnings for the operation and expansion of our business and, therefore, do not anticipate declaring or paying cash dividends in the foreseeable future.
ITEM 5. MA RKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol “CLPT.” Holders As of February 18, 2025, we had 27,632,332 shares of common stock outstanding and no shares of preferred stock outstanding.
ITEM 5. MA RKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol “CLPT.” Holders As of March 6, 2026, we had 29,663,875 shares of common stock outstanding and no shares of preferred stock outstanding.
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As of February 18, 2025, we had approximately 206 stockholders of record. In addition, as of February 18, 2025, options to purchase 1,363,865 shares of common stock and restricted stock units representing 1,636,611 shares of common stock were outstanding. Dividend Policy We have never declared or paid cash dividends on our capital stock.
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As of March 6, 2026, we had approximately 184 stockholders of record. The approximate number of stockholders of record is based upon the actual number of holders registered in our records at such date and excludes holders in “street name” or persons, partnerships, associations, corporations, or other entities identified in security positions listings maintained by depository trust companies.
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Securities Authorized for Issuance Under Equity Compensation Plans Information relating to our equity compensation plans as of December 31, 2024, under which our equity securities were authorized for issuance, is included in Item 12 of Part III of this Annual Report and such information is incorporated herein by reference.
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Recent Sales of Unregistered Securities We did not sell any unregistered securities during the period covered by this report that were not previously reported in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.
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Issuer Purchases of Equity Securities The table below is a summary of purchases of our common stock we made during the quarter ended December 31, 2025. Other than as reported in the table below, we did not purchase any shares of our common stock during the quarter. We do not have any publicly announced repurchase plans or programs.
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Period Total Number of Shares Purchased (1) Average Price Paid per Share October 1 - October 31 7,480 $ 26.11 November 1 - November 30 - $ - December 1 - December 31 - $ - (1) These shares were surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of restricted stock awards.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur future capital requirements will depend on many factors, including, but not limited to, the following: • the ultimate duration and impact of macroeconomic trends, including inflationary pressures, changes in monetary policy, decreasing consumer confidence and spending, the introduction of or changes in tariffs or trade barriers, global or local recession, and geopolitical instability; • the timing of broader market acceptance and adoption of our products; • the scope, rate of progress and cost of our ongoing product development activities relating to our products; • the ability of our Partners to achieve commercial success, including their use of our products and services in their preclinical studies, clinical trials and delivery of therapies; • the cost and timing of expanding our sales, clinical support, marketing and distribution capabilities, and other corporate infrastructure; • the cost and timing of establishing inventories at levels sufficient to support our sales; • the effect of competing technological and market developments; • the cost of pursuing additional applications of our technology platforms under current collaborative arrangements, and the terms and timing of any future collaborative, licensing or other arrangements that we may establish; • the cost and timing of any clinical trials; • the cost and timing of regulatory filings, clearances and approvals; and • the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.
Biggest changeOur future capital requirements will depend on many factors, including, but not limited to, the following: • the ability of our Partners to achieve commercial success, including their use of our products and services in their preclinical studies, clinical trials and delivery of therapies; • the timing of broader market acceptance and adoption of our products; • the scope, rate of progress and cost of our ongoing product development activities relating to our products; • the cost and timing of expanding our sales, clinical support, marketing and distribution capabilities, and other corporate infrastructure; • the cost of pursuing additional applications of our technology platforms under current collaborative arrangements, and the terms and timing of any future collaborative, licensing or other arrangements that we may establish; • the cost and timing of any clinical trials; • the cost and timing of regulatory filings, clearances and approvals; • the cost and timing of establishing inventories at levels sufficient to support our sales; • the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; • the duration and impact of macroeconomic trends, including inflationary pressures, changes in monetary policy, decreasing consumer confidence and spending, the introduction of or changes in tariffs or trade barriers, global or local recession, and geopolitical instability; and • the effect of competing technological and market developments.
A revenue reversal is possible if it is determined that achievement of a milestone which was previously deemed probable, will not occur. Inventory . Inventory is carried at the lower of cost (first-in, first-out method) or net realizable value. Items in inventory relate predominantly to our neurosurgical products, drug delivery and biologic products, therapy products and ClearPoint capital equipment.
A revenue reversal is possible if it is determined that achievement of a milestone which was previously deemed probable, will not occur. Inventory . Inventory is carried at the lower of cost (first-in, first-out method) or net realizable value. Items in inventory relate predominantly to our neurosurgical products, drug delivery and biologic products, therapy products and capital equipment.
Revenues In 2010, we received 510(k) clearance from the FDA to market our ClearPoint system in the U.S. for general neurosurgical procedures; in February 2011 and May 2018, we also obtained CE marking for our ClearPoint system and SmartFlow cannula, respectively; and in June 2020 we obtained CE marking for version 2.0 of our ClearPoint software and our Inflexion head fixation frame.
Revenues In 2010, we received 510(k) clearance from the FDA to market our ClearPoint system in the U.S. for general neurosurgical procedures; in February 2011 and May 2018, we also obtained CE marking for our ClearPoint system and SmartFlow Neuro cannula, respectively; and in June 2020 we obtained CE marking for version 2.0 of our ClearPoint software and our Inflexion head fixation frame.
Cost of Revenue Cost of revenue includes the direct costs associated with the assembly and purchase of components for neurosurgery navigation products, biologics and drug delivery products, non-neurosurgery therapy products, and ClearPoint capital equipment that we have sold, and for which we have recognized revenue in accordance with our revenue recognition policy, as well as labor hours for the cost of providing preclinical, consulting, and service revenue.
Cost of Revenue Cost of revenue includes the direct costs associated with the assembly and purchase of components for neurosurgery navigation products, biologics and drug delivery products, non-neurosurgery therapy products, and capital equipment that we have sold, and for which we have recognized revenue in accordance with our revenue recognition policy, as well as labor hours for the cost of providing preclinical, consulting, and service revenue.
See Note 8 to the consolidated financial statements included elsewhere in this Annual Report. • We typically enter into short-term agreements with vendors and suppliers of goods and services in the normal course of business through purchase orders, which are settled in cash upon our receipt of such goods or services.
See Note 9 to the consolidated financial statements included elsewhere in this Annual Report. • We typically enter into short-term agreements with vendors and suppliers of goods and services in the normal course of business through purchase orders, which are settled in cash upon our receipt of such goods or services.
We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. 44 Table of Contents Under certain agreements, we are entitled to receive event-based payments subject to our customer's achievement of specified development and regulatory milestones.
We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. 52 Table of Contents Under certain agreements, we are entitled to receive event-based payments subject to our customer's achievement of specified development and regulatory milestones.
We could continue to incur net losses as we continue our efforts to expand the commercialization of our products and services and pursue additional applications for our technology platforms. Our cash balances are primarily held in a variety of demand accounts with a view to liquidity and capital preservation.
We expect to continue to incur net losses as we continue our efforts to expand the commercialization of our products and services and pursue additional applications for our technology platforms. Our cash balances are primarily held in a variety of demand accounts with a view to liquidity and capital preservation.
These estimates could vary from actual amounts based upon future economic conditions, customer inventory levels, or competitive factors that were not foreseen or did not exist when the estimated write-downs were made. Share-Based Compensation.
These estimates could vary from actual amounts based upon future economic conditions, customer inventory levels, or competitive factors that were not foreseen or did not exist when the estimated write-downs were made.
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies and estimates are most critical to a full understanding and evaluation of our reported financial results. Revenue Recognition .
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies and estimates are most critical to a full understanding and evaluation of our reported financial results. Business Combinations.
In January 2021, we received 510(k) clearance for the SmartFrame Array Neuro Navigation System. In September 2022, the ClearPoint Prism Neuro Laser Therapy System, for which we have exclusive global right to commercialize, received 510(k) clearance through our Swedish partner, CLS. The Prism laser represents the first therapy product we have commercialized.
In January 2021, we received 510(k) clearance for the SmartFrame Array Neuro Navigation System. In September 2022, the ClearPoint Prism Neuro Laser Therapy System, for which we have exclusive global rights to commercialize, received 510(k) clearance through our Swedish partner, CLS. The Prism laser is the first therapy product we have commercialized.
The accounting estimates that require our most significant, difficult and subjective judgments are discussed below. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ materially from these estimates under different assumptions or conditions.
The accounting estimates that require our most significant, 51 Table of Contents difficult and subjective judgments are discussed below. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ materially from these estimates under different assumptions or conditions.
Our service revenue was approximately $12.8 million and $13.4 million for the years ended December 31, 2024 and 2023, respectively, of which 92% and 86%, respectively, related to the biologics and drug delivery service line. Our revenue recognition policies are more fully described in Note 2 to the consolidated financial statements elsewhere in this Annual Report.
Our service revenue was approximately $13.1 million and $12.8 million for the years ended December 31, 2025 and 2024, respectively, of which 89% and 92%, respectively, related to the biologics and drug delivery service line. Our revenue recognition policies are more fully described in Note 2 to the consolidated financial statements elsewhere in this Annual Report.
Overview We are a commercial-stage medical device company that develops and commercializes innovative platforms for performing minimally invasive surgical procedures in the brain. We have deployed significant resources to fund our efforts to develop the foundational capabilities for enabling MRI-guided interventions, building an intellectual property portfolio, and identifying and building out commercial applications for the technologies developed by our company.
Overview We are a commercial-stage medical device company that develops and commercializes integrated systems used in minimally invasive neurosurgical procedures in the brain. We have deployed significant resources to fund our efforts to develop the foundational capabilities for enabling MRI-guided interventions, building an intellectual property portfolio, and identifying and building out commercial applications for the technologies developed by our company.
To the extent our Partners achieve commercial success, our expectation is that we will share in such success through our Partners’ use of our products and services in their delivery of therapies. At December 31, 2024, we had more than 60 Partners, as compared to over 50 Partners as of the same date in 2023.
To the extent our Partners achieve commercial success, our expectation is that we will share in such success through our Partners’ use of our products and services in their delivery of therapies. At December 31, 2025, we had more than 60 Partners, similar to the number of Partners as of the same date in 2024.
Our product revenue was approximately $18.6 million and $10.6 million for the years ended December 31, 2024 and 2023, respectively, and was almost entirely related to our ClearPoint system.
Our product revenue was approximately $23.9 million and $18.6 million for the years ended December 31, 2025 and 2024, respectively, and was almost entirely related to our ClearPoint system.
We may also at times enter into long-term commitments or license and collaboration agreements which require commitments that are noncancellable. The total amount as of December 31, 2024 for unfulfilled purchase orders and long-term purchase commitments is $5.4 million, of which approximately 28% is expected to be paid in 2025.
We may also at times enter into long-term commitments or license and collaboration agreements which require commitments that are noncancellable. The total amount as of December 31, 2025 for unfulfilled purchase orders and long-term purchase commitments was $9.0 million, of which approximately 55% is expected to be paid in 2026.
We anticipate that, over time, our research and development costs may increase as we: (i) develop devices and services for delivery of therapeutics into the central nervous system, (ii) expand products into the OR and therapeutics space, and (iii) expand the application of our technological platforms internationally.
We anticipate that, over time, our research and development costs may increase as we: (i) develop devices and services for delivery of therapeutics into the central nervous system, (ii) expand products into the OR and therapeutics space, (iii) expand the application of our technological platforms internationally, and (iv) invest in the IRRA flow product portfolio and clinical evidence.
Total revenue was approximately $31.4 million and $24.0 million for the years ended December 31, 2024 and 2023, respectively.
Revenue. Total revenue was approximately $37.0 million and $31.4 million for the years ended December 31, 2025 and 2024, respectively.
Neurosurgery navigation and therapy revenue, which primarily consists of disposable product commercial sales related to cases utilizing the ClearPoint system, increased 21% to $10.3 million during the year ended December 31, 2024, from $8.5 million for the same period in 2023.
Neurosurgery navigation and therapy revenue, which primarily consists of disposable product commercial sales related to cases utilizing the ClearPoint system, increased 44% to $14.8 million during the year ended December 31, 2025, from $10.3 million for the year ended December 31, 2024.
Because of the numerous risks and uncertainties associated with the development and commercialization of medical devices, we are unable to estimate the exact amounts of capital outlays and operating expenditures necessary to successfully commercialize our products and pursue additional applications for our technology platforms.
See Note 10 to the consolidated financial statements included elsewhere in this Annual Report. Because of the numerous risks and uncertainties associated with the development and commercialization of medical devices, we are unable to estimate the exact amounts of capital outlays and operating expenditures necessary to successfully commercialize our products and pursue additional applications for our technology platforms.
Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software and related services, increased 107% to $3.8 million for the year ended December 31, 2024, from $1.8 million for the same period in 2023, due to an increase in the placements of ClearPoint navigation capital equipment and software and Prism laser units.
Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software and related services, decreased 18% to $3.1 million for the year ended December 31, 2025, from $3.8 million for the year ended December 31, 2024, due to a decrease in the placements of ClearPoint navigation capital and software and Prism laser units.
This increase was primarily due to higher personnel costs, including share-based compensation expense, of $1.6 million resulting from increases in headcount in our clinical team, increases in travel expense of $0.4 million, partially offset by $0.1 million in other marketing activities. General and Administrative Expenses .
This increase was due to higher personnel costs, including share-based compensation expense, of $1.4 million resulting from increases in headcount in our clinical team, as well as increased costs of $0.9 million due to the acquisition of IRRAS, partially offset by decreased marketing costs of $0.2 million and decreased travel costs of $0.2 million. General and Administrative Expenses .
Such changes in domestic and global macroeconomic conditions may lead to increased costs for our business. Additionally, these macroeconomic trends could adversely affect our customers, which could impact their willingness to spend on our products and services, or their ability to make payments, which could harm our collection of accounts receivable and financial results.
Additionally, these macroeconomic trends could adversely affect our customers, which could impact their willingness to spend on our products and services, or their ability to make payments, which could harm our collection of accounts receivable and financial results.
Future revenue from sales of our ClearPoint platform products and services is difficult to predict and may not be sufficient to offset our continuing research and development expenses and our increasing selling, general and administrative expenses. Generating recurring revenue from the sale of products remains an important part of our business model for our ClearPoint system.
Future revenue from sales of our ClearPoint platform products and services is difficult to predict and may not be sufficient to offset our continuing research and development expenses and our increasing selling, general and administrative expenses.
Cost of Revenue and Gross Profit. Cost of revenue was $12.3 million, resulting in gross profit of $19.1 million and gross margin of 61%, for the year ended December 31, 2024, compared to $10.3 million, resulting in gross profit of $13.6 million and gross margin of 57% for the year ended December 31, 2023.
Cost of Revenue and Gross Profit. Cost of revenue was $14.3 million, resulting in gross profit of $22.7 million for the year ended December 31, 2025, compared to $12.3 million, resulting in gross profit of $19.1 million for the year ended December 31, 2024. Gross margin was 61% for both the years ended December 31, 2025 and December 31, 2024.
This is partially offset by the repayment of the remaining $10 million outstanding under the secured convertible notes issued in 2020 and payments of $0.4 million for taxes related to shares withheld in connection with vesting of restricted stock awards.
These proceeds were partially offset by the repayment of the remaining $10 million outstanding under secured convertible notes issued in 2020 and payments of $0.4 million for taxes related to shares withheld in connection with vesting of restricted stock awards. Operating Capital and Capital Expenditure Requirements To date, we have not achieved profitability.
Cash Flows Cash activity for the years ended December 31, 2024 and 2023 is summarized as follows: Years Ended December 31, (in thousands) 2024 2023 Cash used in operating activities $ (8,950 ) $ (13,720 ) Cash (used in) provided by investing activities (275 ) 8,949 Cash provided by financing activities 6,189 296 Net change in cash and cash equivalents $ (3,036 ) $ (4,475 ) Net Cash Flows from Operating Activities.
Cash Flows Cash activity for the years ended December 31, 2025 and 2024 is summarized as follows: Year Ended December 31, (in thousands) 2025 2024 Net cash flows used in operating activities $ (23,925 ) $ (8,950 ) Net cash provided by (used in) investing activities 615 (275 ) Net cash provided by financing activities 50,179 6,189 Net change in cash and cash equivalents $ 26,869 $ (3,036 ) Net Cash Flows Used in Operating Activities.
In management’s opinion, based on our current forecasts for revenue, expense and cash flows, our existing cash and cash equivalent balances at December 31, 2024, are sufficient to support our operations and meet our obligations for at least the next twelve months.
In management’s opinion, based on our current forecasts, our existing cash and cash equivalent balances at December 31, 2025 are sufficient to support our operations and meet our obligations for at least the next twelve months from the date of issuance of the financial statements included elsewhere in this Annual Report.
Our short- and long-term liquidity requirements include the following obligations: • We have lease arrangements related to our office and manufacturing facilities under non-cancellable operating leases.
Our short- and long-term liquidity requirements include the following obligations: • We have lease arrangements related to our office and manufacturing facilities under non-cancellable operating leases. The total undiscounted aggregate future operating lease obligations under all of our operating leases as of December 31, 2025 are $14.2 million.
General and administrative expenses were $12.0 million for the year ended December 31, 2024, compared to $11.8 million for the same period in 2023, an increase of $0.2 million, or 2%.
General and administrative expenses were $16.5 million for the year ended December 31, 2025, compared to $12.0 million for the year ended December 31, 2024, an increase of $4.5 million, or 38%.
Cost of revenue also includes the allocation of manufacturing overhead costs and depreciation of loaned systems installed under our ClearPoint placement program, as well as provisions for obsolete, impaired, or excess inventory. 43 Table of Contents Research and Development Costs Our research and development costs consist primarily of costs associated with the conceptualization, design, testing, and prototyping of our ClearPoint system products, cannulas, and enhancements.
Cost of revenue also includes the allocation of manufacturing overhead costs and depreciation of loaned systems installed under our ClearPoint placement program, as well as provisions for obsolete, impaired, or excess inventory.
Research and development costs were $12.4 million for the year ended December 31, 2024, compared to $11.7 million for the same period in 2023, an increase of $0.7 million, or 6%.
Research and Development Costs. Research and development costs were $13.9 million for the year ended December 31, 2025, compared to $12.4 million for the year ended December 31, 2024, an increase of $1.5 million, or 12%.
Sales and marketing expenses were $14.5 million for the year ended December 31, 2024, compared to $12.6 million for the same period in 2023, an increase of $1.9 million, or 15%.
Sales and marketing expenses were $16.5 million for the year ended December 31, 2025, compared to $14.5 million for the year ended December 31, 2024, an increase of $2.0 million, or 14%.
Net cash flows used in operating activities for the year ended December 31, 2024 were $9.0 million, a decrease of $4.8 million from the year ended December 31, 2023.
Net cash flows used in operating activities for the year ended December 31, 2025 was $23.9 million, an increase of $15.0 million from the year ended December 31, 2024.
Years Ended December 31, Percentage (Dollars in thousands) 2024 2023 Change Biologics and drug delivery Disposable products $ 5,606 $ 2,154 160 % Services and license fees 11,704 11,448 2 % Subtotal – Biologics and drug delivery revenue 17,310 13,602 27 % Neurosurgery navigation and therapy Disposable products 10,285 7,589 36 % Services - 931 (100 )% Subtotal – Neurosurgery navigation and therapy revenue 10,285 8,520 21 % Capital equipment and software Systems and software products 2,735 860 218 % Services 1,060 973 9 % Subtotal – Capital equipment and software revenue 3,795 1,833 107 % Total revenue $ 31,390 $ 23,955 31 % Biologics and drug delivery revenue, which include sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products, increased 27% to $17.3 million for the year ended December 31, 2024, from $13.6 million for the same period in 2023.
Year Ended December 31, Percentage (Dollars in thousands) 2025 2024 Change Biologics and drug delivery Disposable products $ 7,338 $ 5,606 31 % Services and license fees 11,702 11,704 (0 )% Subtotal – Biologics and drug delivery revenue 19,040 17,310 10 % Neurosurgery navigation and therapy Disposable products 14,831 10,285 44 % Subtotal – Neurosurgery navigation and therapy revenue 14,831 10,285 44 % Capital equipment and software Systems and software products 1,690 2,735 (38 )% Services 1,410 1,060 33 % Subtotal – Capital equipment and software revenue 3,100 3,795 (18 )% Total revenue $ 36,971 $ 31,390 18 % 53 Table of Contents Biologics and drug delivery revenue, which include sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products, increased 10% to $19.0 million for the year ended December 31, 2025, from $17.3 million for the year ended December 31, 2024.
Factors Which May Influence Future Results of Operations The following is a description of factors which may influence our future results of operations, and that we believe are important to an understanding of our business and results of operations. 42 Table of Contents Macroeconomic Trends We continue to monitor the impacts of various macroeconomic trends, such as inflationary pressure, changes in monetary policy, decreasing consumer confidence and spending, the introduction of or changes in tariffs or trade barriers, and global or local recession.
Macroeconomic Trends We continue to monitor the impacts of various macroeconomic trends, such as inflationary pressure, changes in monetary policy, decreasing consumer confidence and spending, the introduction of or changes in tariffs or trade barriers, and global or local recession. Such changes in domestic and global macroeconomic conditions may lead to increased costs for our business.
In 2021, we launched the SmartFrame Array Neuro Navigation System and Software, which allows for operating room placement of the ClearPoint system, and in 2024, we launched limited market release of the SmartFrame OR Stereotactic System, which allows for complete procedures to be performed in the operating room.
In 2024, we introduced the SmartFrame OR Stereotactic System to the market, which allows for complete procedures to be performed in the operating room. In 2025, we released the ClearPoint Navigation Software Version 3.0, which allows for the ClearPoint system navigation software to support end-to-end procedures in the operating room.
Net cash provided by financing activities in 2023 consisted of proceeds of $0.5 million from the issuance of common stock under the employee stock purchase plan, partially offset by payments of $0.2 million for taxes related to shares withheld in connection with vesting of restricted stock awards. Operating Capital and Capital Expenditure Requirements To date, we have not achieved profitability.
Net cash provided by financing activities in 2025 consisted primarily of proceeds, net of financing costs and discount, of $48.1 million from the issuance of the notes payable; proceeds, net of offering costs, of $3.3 million from our common stock offering; partially offset by $1.9 million in payments for taxes related to shares withheld in connection with the vesting of restricted stock awards. 55 Table of Contents Net cash provided by financing activities in 2024 consisted of proceeds, net of offering costs, of $16.2 million from the public offering of our common stock and $0.4 million from the issuance of common stock under our employee stock purchase plan.
Additional information with respect to the public offerings and 2020 secured convertible notes is in Note 9 and 7, respectively, to the consolidated financial statements included elsewhere in this Annual Report. As a result of these transactions and our business operations, our cash and cash equivalents totaled $20.1 million at December 31, 2024.
See Note 11 to our consolidated financial statements included elsewhere in this Annual Report for more information regarding our at-the-market equity offering program. As a result of these transactions and our business operations, our cash and cash equivalents totaled $45.9 million at December 31, 2025.
In November 2024, we entered into an ATM Agreement pursuant to which we may offer and sell, from time to time, shares of our common stock, having aggregate sales proceeds of up to $50 million, subject to the terms and conditions of the ATM Agreement.
In November 2024, we established an at-the-market equity offering program under which we may offer and sell, from time to time, shares of our common stock having aggregate sales proceeds of up to $50 million. As of December 31, 2025, we did not sell any shares of common stock under our at-the-market equity offering program.
Our services include protocol consultation and solutions for preclinical study design and execution. Currently, we have more than 60 biologics and drug delivery customers who are evaluating using our products and services in trials to inject gene and cell therapies directly into the brain.
Currently, we have more than 60 biologics and drug delivery customers who are evaluating using our products and services in trials to inject gene and cell therapies directly into the brain. These partnerships involve drug development programs that are at various stages of development ranging from preclinical research to late-stage regulatory trials for multiple distinct disease states.
Results of Operations Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 Year Ended December 31, Percentage (Dollars in thousands) 2024 2023 Change Product revenue $ 18,626 $ 10,603 76 % Service and other revenue 12,764 13,352 (4 )% Total revenue 31,390 23,955 31 % Cost of revenue 12,268 10,341 19 % Gross profit 19,122 13,614 40 % Research and development costs 12,392 11,709 6 % Sales and marketing expenses 14,478 12,595 15 % General and administrative expenses 11,998 11,756 2 % Other income (expense): Other expense, net (40 ) (29 ) NM Interest income, net 872 386 126 % Net loss $ (18,914 ) $ (22,089 ) (14 )% NM - The percentage change is not meaningful. 45 Table of Contents Revenue.
Results of Operations Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 Year Ended December 31, Percentage (Dollars in thousands) 2025 2024 Change Product revenue $ 23,859 $ 18,626 28 % Service and other revenue 13,112 $ 12,764 3 % Total revenue 36,971 31,390 18 % Cost of revenue 14,279 12,268 16 % Gross profit 22,692 19,122 19 % Research and development costs 13,897 12,392 12 % Sales and marketing expenses 16,461 14,478 14 % General and administrative expenses 16,498 11,986 38 % Other income (expense): Other expense, net (146 ) (40 ) NM Interest income 1,213 1,390 (13 )% Interest expense (2,388 ) (518 ) 361 % Net loss before income taxes (25,485 ) (18,902 ) 35 % Income tax expense 55 12 NM Net loss $ (25,540 ) $ (18,914 ) 35 % NM - The percentage change is not meaningful.
The primary applications for the ClearPoint system are to target and guide the insertion of deep brain stimulation electrodes, biopsy needles, and laser catheters, as well as the infusion of pharmaceuticals into the brain. The ClearPoint system was originally designed for use in an MRI setting.
Our primary medical device product, the ClearPoint system, is an integrated system comprised of hardware components, disposable components, and intuitive, menu-driven software. The primary applications for the ClearPoint system are to target and guide: (a) the insertion of deep brain stimulation electrodes, biopsy needles, and laser catheters; and (b) the infusion of pharmaceuticals into the brain.
Since inception, we have financed our operations principally from the sale of equity securities and the issuance of notes payable. In March 2024, we completed a public offering of 2,653,848 shares of our common stock from which the net proceeds totaled approximately $16.2 million after deducting our payment of underwriting discounts and commissions and other offering expenses.
In March 2024, we completed a public offering of 2,653,848 shares of our common stock for net proceeds of approximately $16.2 million after deducting our payment of underwriting discounts and commissions and other offering expenses. See Note 11 to our consolidated financial statements included elsewhere in this Annual Report for more information.
The increase was due primarily to increases in personnel costs, including share-based compensation expense, of $1.2 million due to growth in headcount, partially offset by a decrease of $0.5 million in research costs as a result of reprioritization of certain initiatives. Sales and Marketing Expenses.
The increase was due to higher product and software development costs of $1.2 million, an increase in personnel costs, including share-based compensation expense, of $0.2 million, and additional costs due to the acquisition of IRRAS. Sales and Marketing Expenses.
Liquidity and Capital Resources We have incurred net losses since our inception, which has resulted in a cumulative deficit at December 31, 2024 of $191.4 million. In addition, our use of cash from operations amounted to $9.0 million for the year ended December 31, 2024.
See Note 9 to the consolidated financial statements included elsewhere in this Annual Report for more information regarding the notes payable issued in May and November 2025. Liquidity and Capital Resources We have incurred net losses since our inception, which has resulted in a cumulative deficit at December 31, 2025 of $216.9 million.
Net cash flows provided by investing activities in 2024 were $0.3 million and related to equipment acquisitions. 47 Table of Contents Net cash flows provided by investing activities in 2023 were $8.9 million and consisted of proceeds from the maturities of short-term investments, partially offset by equipment acquisitions related to our new manufacturing site in Carlsbad, California, and acquisition of licensing rights.
Net cash flows provided by investing activities in 2025 were $0.6 million and related to cash acquired from the IRRAS acquisition, partially offset by equipment acquisitions. Net cash flows used in investing activities in 2024 were $0.3 million and related to equipment acquisitions. Net Cash Flows Provided by Financing Activities .
Net interest income for the year ended December 31, 2024 was $0.9 million, compared with $0.4 million for the same period in 2023, as a result of increased investment in U.S. Government debt securities stemming from the capital raise in March 2024 as well as lower interest expense due to the early repayment of the First Closing Note.
Interest Income. Interest income for the year ended December 31, 2025 was $1.2 million, compared with $1.4 million for the year ended December 31, 2024. The decrease in interest income is primarily due to decreased investment in U.S. Government securities due to lower cash balances in the first half of 2025. Interest Expense.
This increase is attributable to a $3.5 million increase in product revenue resulting from higher demand for disposables as multiple partners progress in their trials, and a $0.3 million increase in service and other revenue related to new preclinical trials and service agreements entered into with our partners for the year ended December 31, 2024, compared to the same period in 2023.
This increase is attributable to $1.7 million of higher product revenue resulting from greater demand for disposables as multiple partners progress in their trials.
In 2022, we commercialized the ClearPoint Prism Neuro Laser Therapy System as our first therapy product offering. We have exclusive global commercialization rights to the ClearPoint Prism Neuro Laser Therapy System through our Swedish partner, CLS. The second component of our business is focused on partnerships in the biologics drug and delivery space.
In 2022, we commenced commercialization of the ClearPoint Prism Neuro Laser Therapy System, a laser ablation system. The ClearPoint Prism Neuro Laser Therapy System was developed and is manufactured for us by CLS. We have exclusive global rights to commercialize the system for neuro applications.
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The first foundational component of our business is a medical device company providing medical devices for neurosurgery applications. Our primary medical device product, the ClearPoint system, is an integrated system comprised of hardware components, disposable components, and intuitive, menu-driven software, which is in commercial use globally.
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Over the past several years, we have expanded our capabilities beyond the MRI suite to include operating room based neurosurgical device products and a growing portfolio of services that support pharmaceutical and biotechnology partners developing gene and cell therapies.
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These partnerships involve drug development programs that are at various stages of development ranging from preclinical research to late-stage regulatory trials for multiple distinct disease states.
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In 2025, with the acquisition of IRRAS, we expanded our portfolio into neurocritical care, focusing on treatments for intracerebral hemorrhage, intraventricular hemorrhage, and other conditions requiring intracranial fluid management. Our business today consists of two integrated components: (i) a business providing medical devices for neurosurgical applications, and (ii) a business focused on partnerships in the biologics and drug delivery space.
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This part of our business potentially represents the largest opportunity for growth; however, our ability to grow in this market is dependent on our ability to maintain and establish new relationships with customers, such customers' continuation of research and development plans, and such customers achieving success in completion of clinical trials and subsequent regulatory approvals of their drugs and biologics. 2024 Developments • Activated 25 new global centers for the year, reflecting an increase in demand driven by new product offerings, including the PRISM Laser Therapy System and SmartFrame OR. • Completed a follow-on public offering of common stock, resulting in net proceeds of approximately $16.2 million, and entered into an At-the-Market (“ATM”) Equity Offering Sales Agreement (the "ATM Agreement") pursuant to which we may offer and sell, from time to time, shares of our common stock, having aggregate sales proceeds of up to $50 million. • Repaid prior to maturity all remaining principal and interest on secured convertible notes issued in 2020, resulting in no outstanding debt at December 31, 2024. • Reduced cash used in operating activities to $9.0 million in 2024, a 35% year-over-year decrease. • Several of our partners advanced through preclinical and clinical review, with seven pharmaceutical partners receiving expedited US FDA review designations. • Received the following regulatory approvals: o US FDA 510(k) clearance for SmartFrame OR Stereotactic System to support expansion into the operating room; o Taiwan Food and Drug Administration approval of SmartFlow cannula for commercial use in Taiwan; and o US FDA De Novo marketing authorization of the SmartFlow Neuro Cannula for intraputaminal administration of eladocagene exuparvovec-tneq for the treatment of adult and pediatric patients with AADC deficiency, representing the first-ever FDA marketing authorization of a device used to deliver gene therapy directly to regions of interest in the brain.
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The ClearPoint system was originally designed for use in an MRI setting. In 2021, we launched the SmartFrame Array Neuro Navigation System and Software, which allows for operating room placement of the ClearPoint system and completion of the procedure in the MRI suite.
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Software license inventory related to ClearPoint systems undergoing on-site customer evaluation is included in inventory in the accompanying consolidated balance sheets. All other software license inventory is classified as a non-current asset.
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In 2025, through the acquisition of IRRAS, we added the IRRA flow system to our portfolio of medical devices. The IRRA flow system integrates continuous irrigation, drainage, and real-time intracranial pressure monitoring to provide controlled, automated intracranial fluid management within neurocritical care and operating room settings.
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We account for compensation for all arrangements under which employees and others receive shares of stock or other equity instruments (such as restricted stock and options) based on fair value. The fair value of each award is estimated as of the grant date and amortized as compensation expense over the requisite vesting period.
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The second component of our business is focused on partnerships in the biologics drug and delivery space, supporting our customers from the earliest stages of their research through their clinical study and commercialization process.
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In the case of stock options, the fair value is estimated on the grant dates using the Black-Scholes valuation model. This valuation model requires the input of highly subjective assumptions, including the expected stock volatility, estimated award terms and risk-free interest rates for the expected terms.
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Since 2021, a growing and significant part of the revenue from our business has been derived from preclinical development services, which include protocol consultation and solutions for preclinical study design and execution.
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To estimate the expected terms, we utilize the simplified method for “plain vanilla” options discussed in the SEC’s Staff Accounting Bulletin 107, or SAB 107. We believe that all factors listed within SAB 107 as prerequisites for utilizing the simplified method apply to us and to our share-based compensation arrangements.
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Our consulting services include a core competency of in vivo biology services in large and small research models to assist our customers with establishing drug safety prior to and in support of their human clinical trials.
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We intend to utilize the simplified method for the foreseeable future until more detailed information about exercise behavior becomes available. Expected volatility is based on historical volatility of our common stock. We utilize risk-free interest rates based on U.S. treasury instruments, the term of which is consistent with the expected term of the share-based award.
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This part of our business potentially represents the largest opportunity for growth; however, our ability to grow in this market is dependent on our ability to maintain and establish new relationships with pharmaceutical company customers, such customers' continuation of research and product development plans, such customers achieving success in completion of clinical trials and subsequent regulatory approvals of their drugs and biologics, and such customers’ realization of commercial success for their therapies, including overcoming barriers in reimbursement, physician adoption, and patient access to their therapies.
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We have not paid, and do not anticipate paying, cash dividends on shares of our common stock; therefore, the expected dividend yield is assumed to be zero. We do not believe there is a reasonable likelihood that there will be a material change in estimates or assumptions used to determine share-based compensation expense.
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Food and Drug Administration (the “FDA”) granted marketing authorization for our SmartFlow cannula to be used to deliver a gene therapy for the treatment of aromatic L-amino acid decarboxylase deficiency to regions of interest within the brain. 49 Table of Contents 2025 Milestones and Developments • Completed the acquisition of IRRAS, which brings the IRRA flow active fluid-exchange system into our product portfolio, a differentiated technology designed to modernize the management of intracranial bleeding. • Entered into a debt financing arrangement with an affiliate of Oberland Capital Management under which we may borrow up to $105.0 million from time to time in tranches; we raised approximately $48.1 million in net proceeds under this arrangement during 2025. • Raised approximately $3.3 million in net proceeds from the sale of shares of our common stock to an affiliate of Oberland Capital Management. • Entered into a lease for the new preclinical research facility named ClearPoint Advanced Laboratories (CAL) located in San Diego, California, allowing for additional capacity to perform larger studies, and the ability to offer additional services to biopharma partners. • Several of our partners advanced through preclinical and clinical review, with over ten pharmaceutical partners receiving expedited US FDA review designations. • Received the following regulatory approvals: o FDA Clearance for the ClearPoint 3.0 Software which includes both operating room navigation capability and features enhanced for laser therapy applications; o FDA 510(k) clearance expanding compatibility of the ClearPoint PRISM Neuro Laser Therapy System with 1.5T scanners in addition to the previously cleared 3T compatible system; o European Medical Device Regulation (EU MDR) certification for the SmartFlow Neuro Cannula; and o Several expanded regulatory approvals for product use in Canada, Hong Kong, and Taiwan, bringing the total number of international clearances for key therapy delivery products to 34 countries worldwide.
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Product revenue increased $2.7 million, or 36%, resulting from newly activated accounts, increased case count, and new product offerings, including SmartFrame OR and Prism Laser Therapy, compared to the same period in 2023.
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Factors Which May Influence Future Results of Operations The following is a description of factors which may influence our future results of operations, and that we believe are important to an understanding of our business and results of operations.
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This was partially offset by a decrease in service and other revenue of $0.9 million primarily as a result of pausing a co-development program with one of our Brain Computer Interface partners.
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As a result of the IRRAS acquisition, revenue is expected to grow over the coming years due to a larger combined organization, expanded product offerings, and increased customer reach, both in the U.S. and internationally. 50 Table of Contents Generating recurring revenue from the sale of products remains an important part of our business model for our ClearPoint system.
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The increase in gross margin was primarily due to lower costs for the year ended December 31, 2024 due to the transition to the new manufacturing facility, occurring in 2023, and higher volumes for the year ended December 31, 2024. Research and Development Costs.
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The IRRAS acquisition is expected to impact cost of revenue and reduce overall gross margins in the near term as IRRA flow currently operates at sub-scale production levels, resulting in higher per-unit manufacturing costs compared to the existing product portfolio.
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This increase was due primarily to higher personnel costs, including share-based compensation of $1.2 million, an increase in rent and occupancy costs as a result of the new Carlsbad site of $0.5 million, partially offset by a decrease in the allowance for credit losses of $1.5 million mainly as a result of subsequent recoveries. 46 Table of Contents Interest Income (Expense).
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Research and Development Costs Our research and development costs consist primarily of costs associated with the conceptualization, design, testing, and prototyping of our ClearPoint system products, cannulas, and enhancements.
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As of December 31, 2024, we did not issue any shares of common stock under the ATM Agreement. In August 2024, we repaid in full the remaining $10 million outstanding under the secured convertible notes issued in 2020 to two investors raising gross proceeds of $25 million, of which $15 million had been previously converted to common stock.
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We expect increases in our sales and marketing expenses as a result of the larger combined sales organization, primarily reflecting higher salary and personnel-related costs associated with the larger commercial team following the IRRAS acquisition.
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This decrease was due to a lower net loss of $3.2 million, and a net decrease in operating assets and liabilities of $1.8 million, partially offset by a net decrease in non-cash items of $0.2 million. The change in operating assets and liabilities is primarily due to higher accounts payable and accrued liabilities, partially offset by lower deferred revenue.
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The IRRAS acquisition has been accounted for under the acquisition method of accounting in accordance with ASC 805. Under the acquisition method of accounting, we record the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.

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