ClearPoint Neuro Inc

ITEM 1A.RISK FACTORS.

There have been no material changes to the risk factors disclosed iunder Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 Form 10-K, other than the risks discussed below:

The success of our biologics and drug delivery business is dependent on timely regulatory approval and commercialization of cell and gene therapies.

A significant portion of our growth strategy depends on the continued clinical progress, regulatory approval, and commercial launch of cell and gene therapies (CGTs) that use our delivery-related medical devices and systems. The U.S. Food and Drug Administration (FDA) maintains an evolving regulatory framework for CGTs and related delivery devices. Any material change in FDA policy, guidance, or review practices; adjustments in the agencys risk tolerance or evidentiary standards; reduced availability of expedited review pathways; or extended review timelines could delay or prevent approval of our customers products and adversely affect our business.

The FDA may modify eligibility or evidentiary criteria for expedited programs, limit their use, or require additional data before or after approval. Even when such programs are granted, limited agency resources may reduce their impact on review timelines. The FDAs expectations for clinical trial design, long-term safety follow-up, manufacturing controls, labeling, and post-marketing obligations for CGTs continue to evolve and may result in additional studies, data requirements, or delays for our customers programs. Similar developments relating to device-drug or device-biologic combinations may require new data or supplemental submissions by our customers and, in some cases, by us.

As sponsors pursue indications beyond rare or severe diseases, the FDA may apply more conservative benefit-risk standards, require larger or longer trials, or seek additional evidence of long-term efficacy and safety. In addition, periodic resource or staffing constraints at the FDA can extend timelines for review, inspections, or regulatory correspondence. Any such changes or delays may postpone approvals or commercial launches of CGTs that rely on our products, which could delay adoption of our products, push out anticipated order volumes, and reduce the magnitude of our projected growth.

We currently have significant debt and may incur additional debt. Failure by us to fulfill our obligations under the 2025 NPA may cause repayment obligations to accelerate.

We entered into the 2025 NPA in May 2025 providing for our sale of up to $105 million in notes. The aggregate amount of our indebtedness under such notes as of September 30, 2025 was $30.5 million. For additional information on the 2025 NPA, see Note 6 in the accompanying notes to the condensed consolidated financial statements.

Our indebtedness may:

make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on our indebtedness;

limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general corporate purposes;

limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions, or other general business purposes;

require us to use a portion of our cash flow from operations to make interest payments;

limit our flexibility to plan for, or react to, changes in our business and industry;

place us at a competitive disadvantage compared to our less leveraged competitors; and

increase our vulnerability to the impact of adverse economic and industry conditions.

In addition, the 2025 NPA includes certain affirmative and negative non-financial covenants, that limit our ability to dispose of assets, undergo a change of control, merge with or acquire other entities, incur debt, incur liens, pay dividends 

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or other distributions to our stockholders, repurchase stock and make investments, in each case subject to certain exceptions. 

Our ability to make payments on our existing or any future debt will depend on our future operating performance and ability to generate cash and may also depend on our ability to obtain additional debt or equity financing. It will also depend on financial, business or other factors affecting our operations, many of which are beyond our control. We will need to use cash to pay principal and interest on our debt, thereby reducing the funds available to fund operations, strategic initiatives and working capital requirements. If we are unable to generate sufficient cash to service our debt obligations, or if we breach a covenant, an event of default may occur under the 2025 NPA which could result in an acceleration of such debt upon which we may be required to repay all the amounts outstanding under our debt instruments. Such an acceleration of our debt obligations would significantly impair our financial condition. 

We may fail to realize the benefits expected from our acquisition of IRRAS and the combined company may not perform as we or the market expects, which could have an adverse effect on the price of our common stock.

 On November 6, 2025, the Company entered into a Agreement and Plan of Merger and Reorganization (the Merger Agreement) with IRRAS Holdings, Inc. (IRRAS), a medical technology company selling products used in neurocritical care, with an emphasis on treatments for intracerebral hemorrhage, chronic subdural hematoma, and other conditions requiring intracranial fluid management. Pursuant to the terms of the Merger Agreement, Ignite Merger Sub, Inc., a Delaware corporation and a direct wholly-owned subsidiary of the Company (First Merger Sub), will be merged with and into IRRAS (the First Merger), with IRRAS surviving the First Merger, and, immediately following the First Merger, IRRAS will merge with and into ClearPoint Holdings, LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of the Company (Second Merger Sub), (the Second Merger and together with the First Merger, the Merger), with the Second Merger Sub surviving the Second Merger. If the Merger is completed, the Company will deliver closing consideration of: (i) $5.0 million in cash, payable at closing and; (ii) 1,325,000 shares of the Company's common stock, issued at closing. As additional consideration for IRRAS stockholders, the Merger Agreement provides for the Company to pay earnout consideration during three one-year earnout periods equal to 25% of net sales of certain IRRAS products above certain thresholds. The transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions. The anticipated benefits we expect from this acquisition include, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company and operating efficiencies and these benefits are, necessarily, based on projections and assumptions about the combined businesses of our Company and IRRAS, which may not materialize as expected or which may prove to be inaccurate. The value of our common stock could be adversely affected if we are unable to realize the anticipated benefits from the Merger on a timely basis or at all. Achieving the benefits of the Merger will depend, in part, on our ability to close the transaction and integrate the business, operations and products of IRRAS successfully and efficiently with our business.

The combined company may not perform as we or the market expects. Risks associated with the combined company following the Merger include:

integrating businesses is a difficult, expensive, and time-consuming process, and the failure to successfully integrate our businesses with the business of IRRAS timely would adversely affect our financial condition and results of operation;

there may be inconsistencies in standards, controls, procedures and policies that will need to be reconciled;

it is possible that our key employees or key employees of IRRAS might decide not to remain with us, and the loss of such personnel could have a material adverse effect on the financial condition, results of operations, and growth prospects of the combined company;

the success of the combined company will also depend upon relationships with third parties and IRRASs or our pre-existing customers, which relationships may be affected by customer preferences or public attitudes about the Merger. Any adverse changes in these relationships could adversely affect the combined companys business, financial condition, and results of operations;

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incurrence of significant costs in connection with consummating the Merger and integrating the operations of IRRAS into our business;

our failure to identify or accurately assess the magnitude of certain liabilities we assumed in the Merger could result in unexpected litigation or regulatory exposure, unfavorable accounting charges, unexpected increases in taxes due, a loss of anticipated tax benefits or other known and unknown liabilities which could result in adverse effects on our business, operating results or financial condition.

 The occurrence of any of these Merger-related events individually or in combination could materially and adversely affect our business, results of operations, financial condition and the market price of our common stock.