ClearPoint Neuro (CLPT) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01Our business, financial condition, and results of operations may be adversely affected by general economic and financial market conditions and current and future social and geopolitical instability
2. 02If we cannot maintain our current relationships or programs, or enter into new relationships or programs, with drug delivery customers, our revenue prospects could be meaningfully reduced
3. 03The sizes of the markets for our products and services and any future products and services may be smaller than we estimate and may decline
4. 04Our ClearPoint system may not achieve broad market adoption
5. 05the physician’s perception that there is a lack of clinical data on the use of our ClearPoint system
6. 06Our 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
7. 07secure our supply chain to ensure we can continue to deliver products in a timely fashion to all geographies
8. 08If coverage and reimbursement from third-party payors for procedures utilizing our products are inadequate, adoption of our products will be adversely affected and our revenues and prospects for profitability will suffer
9. 09We currently have significant customer concentration, so economic difficulties or changes in the purchasing policies or patterns of our key customers could have a significant impact on our business and operating results
10. 10Our 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
11. 11Our 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
12. 12To the extent we seek a new indication for use of, or new claims for, our products, the FDA may not grant 510(k) clearance or PMA approval of such new use or claims, which may affect our ability to grow our business
13. 13regulatory 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
14. 14If we fail to obtain the necessary clearances, certifications or approvals for our new products, our ability to grow our business globally could be harmed
15. 15The results of our clinical trials may not support our product candidate claims or any additional claims we may seek for our products and may result in the discovery of adverse side effects
16. 16The markets for medical devices are highly competitive, and we may not be able to compete effectively against the larger, well-established companies in our markets or emerging and small innovative companies that may seek to obtain or increase their share of the market
17. 17significantly greater name recognition and more recognizable trademarks
18. 18We 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
19. 19changing regulatory environments such as the European Medical Device Regulation
20. 20Disruptions of critical information systems or material breaches in the security of our systems could harm our business, customer relations and financial condition
21. 21We may acquire other businesses, form joint ventures, or make investments in other companies or technologies that could harm our operating results, dilute our stockholders’ ownership, increase our debt, or cause us to incur significant expense
22. 22We 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

Risks Related to Our Financial Position

1. 23We have incurred losses since our inception, and we may continue to incur losses. If we fail to generate significant revenue from sales of our products and services, we may never achieve or sustain profitability
2. 24We expect to need additional funding for our business, and we may not be able to raise capital when needed or on terms that are acceptable to us, which could force us to delay, reduce or eliminate our commercialization efforts or our product development programs
3. 25Raising additional funds may cause dilution to existing stockholders, restrict our operations, or require us to relinquish proprietary rights
4. 26Our cash, cash equivalents and short-term marketable securities are subject to economic risk
5. 27We 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

Risks Related to Our Intellectual Property

1. 28If we, or the third parties from whom we license intellectual property, are unable to secure and maintain patent or other intellectual property protection for the intellectual property covering our marketed products or our product candidates, our ability to compete will be harmed
2. 29Others 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
3. 30If 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
4. 31We rely on patent rights and licenses from third parties which are subject to termination or expiration
5. 32Third 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
6. 33If we lose access to third-party software that is integrated into our products, our costs could increase and new installations of our products could be delayed, potentially hurting our competitive position
7. 34Our rights to develop and commercialize our products are subject, in part, to the terms and conditions of licenses granted to us by others

Risks Related to Legal and Regulatory Compliance

1. 35We 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
2. 36refusing to grant export approval for our products
3. 37Federal legislation and other payment and policy changes may have a material adverse effect on our business
4. 38If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to Medical Device Reporting regulations, which can result in voluntary corrective actions or agency enforcement actions
5. 39We have obtained 510(k) clearance of the products that we commercialize for defined indications. Promotion or marketing of our products for any indications for use other than that cleared by the FDA would be considered off-label use
6. 40If we or our third-party suppliers fail to comply with the FDA’s QMSR or any applicable state equivalent, our manufacturing operations could be interrupted, and our potential product sales and operating results could suffer
7. 41We 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
8. 42assisting us with the technical evaluation of our methods, processes and devices related to their respective fields
9. 43We are subject to various laws and regulations protecting the confidentiality and security of certain patient health information, and our failure to comply with such laws and regulations could result in penalties and reputational damage
10. 44Our Fourth Amended and Restated Bylaws further provide that the federal district courts of the U.S. will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933

Risks Related to Our Common Stock

1. 45The market price of our common stock may be volatile, and a stockholder may not be able to resell their shares at or above the price at which the shares were purchased
2. 46Changes in the market valuations of similar companies;
3. 47Our ability to use net operating losses to offset future taxable income may be subject to certain limitations
4. 48We have not paid dividends in the past and do not expect to pay dividends in the future
5. 49Anti-takeover provisions in our certificate of incorporation, bylaws and Delaware law could prevent or delay a change in control
6. 50provide that stockholders will be permitted to amend our bylaws only upon receiving at least 66 2/3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class
7. 51We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which could cause a decline in our stock price
8. 52Securities analysts may not continue, or additional securities analysts may not initiate, coverage for our common stock or may issue negative reports. This may have a negative impact on the market price of our common stock
9. 53Damage to our reputation could harm our businesses, including our competitive position and business prospects
10. 54We have been, and could in the future become, subject to product liability or professional liability claims that could be expensive, divert management’s attention and harm our business
11. 55We 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
12. 56Our operations are vulnerable to interruption or loss due to natural disasters, power loss and other events beyond our control, which would adversely affect our business
13. 57The requirements of being a public company may strain our resources and distract management