CBLL

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How CBLL rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

77%

of sentences unchanged

Added

154

new sentences

Dropped

139

sentences removed

Length

+71

words, now 41,395

New in FY2025

Business and Industry Risk Factors We have a limited operating history and have experienced rapid growth, which may strain our resources and make it difficult to evaluate our business and future prospects.
If we are unable to manage our expansion effectively, our business could be materially and adversely affected.
Since our formation in 2014, we have achieved several key operational milestones that we believe position us for continued growth and success, including our receipt of 510(k) clearance from the FDA for our recorder and headband in 2017, our first commercial sales in 2018, our receipt of 510(k) clearance from the FDA for an early version of Clarity in 2019, and our growth to over 300 employees as of December 31, 2025.
In that time, we have experienced periods of significant growth in revenue and employees and rapid changes in our business, which have required us to scale the size of our organization and infrastructure.
Rapid expansion in personnel could impact our capacity to manufacture, market, sell, and support our products, which could result in inefficiencies, unanticipated costs, and disruptions to our operations, and could also pose challenges to retaining our existing employees, including through increased reliance on overtime that could result in greater attrition and reduced productivity.
While our quarterly revenues have generally increased since our commercial launch, our results of operations have fluctuated in the past, and our future quarterly and annual results of operations may fluctuate as we focus on increasing demand for our products.
The challenges we face in managing our business, including the changing reimbursement and regulatory landscapes, place significant demands on our management, financial, operational, manufacturing, technological, and other resources, and we expect that managing our business will continue to require us to develop and improve our operational, financial and other internal controls, reporting systems, and procedures at a pace consistent with our growth.
Continued growth increases challenges in areas such as recruiting and retaining sufficient skilled personnel, providing adequate training and supervision to maintain high-quality product standards and regulatory compliance, and preserving our culture and values.
We cannot assure you that changes in scale, quality, or compliance assurance, including those related to any future additional indications for the Ceribell System, will be successfully implemented or that appropriate personnel will be available to facilitate the management of our business.
If we do not effectively manage our growth and the various challenges we face, we may not be able to execute on our business plan, respond to competitive pressures, take advantage of market opportunities, satisfy customer requirements, or maintain high-quality products, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
For the fiscal year ended December 31, 2025, we incurred a net loss of $53.4 million.
As of December 31, 2025, we had an accumulated deficit of $220.4 million.
We spend significant amounts on marketing and brand-building initiatives to increase market awareness of the Ceribell System, reinforce the importance of prompt diagnosis of non-convulsive status epilepticus, and highlight the limitations of conventional EEG systems.
We believe these programs are essential to increasing adoption; however, these initiatives may not be successful or cost-effective.
If our marketing efforts prove less successful than anticipated, we may not be able to recover our spend, and our rates of customer acquisition or retention may fail to meet market expectations.
Healthcare professionals may perceive the Ceribell System to be less useful if they do not subscribe for access to the Clarity algorithm as part of their use of the Ceribell System, whether because of incremental cost, lack of familiarity or trust in the algorithm’s diagnostic accuracy, or if, for similar reasons, they do not rely on the Clarity algorithm (including automated alerts) to interpret the EEG results produced by the Ceribell System.
In addition, building a strong brand is critical to our success, but negative clinical research results or publicity or an adverse change to published or unpublished guidelines or recommendations from third parties (including, without limitation, medical societies) relating to the use, clinical benefit, or risk profile of the Ceribell System or AI-enabled devices, or reduced montage EEGs or rapid EEGs in general could result in negative perception by healthcare professionals and affect our brand and reputation.
While we constantly work to improve the Ceribell algorithm and overall Ceribell System, the technologies we work with are novel and complex, and we cannot assure you that there will not be additional negative reports on the Ceribell System in the future.
We also face competition from companies that provide or are developing rapid EEG systems, including Nihon Kohden, Natus, and other companies, that can be used in the acute care and other settings (e.g., home and ambulance), or EEG systems specifically for use in the acute care setting, and conventional EEG providers may also seek to develop additional EEG systems.
As a result, even if the Ceribell System is more effective than our competitors’ products, current or potential customers may accept competitive products, including conventional EEG systems and rapid EEG systems that can be used in multiple settings, in lieu of purchasing and using our products.
We may not be able to adequately predict emerging customer trends and may be unable to adjust our production and inventory levels in a timely manner.
We market the Ceribell System directly to potential customers in the United States, where we face the risk of significant changes in the demand for our products, including demand for our disposable Wearables based on usage rates.
For example, a sudden increase in demand could require increased production of components, such as our disposable Wearables that are intended for single patient use, so that our customers can timely deliver care to their patients.
Changes in trade policy, tariffs, and our reliance on international manufacturing and supply chain operations expose us to foreign operational and trade risks that may adversely affect our business, results of operations, and financial condition.
The U.S. government has implemented or proposed changes to international trade policy through the renegotiation or potential termination of existing trade agreements and the imposition of tariffs on a wide range of products from China, Vietnam, countries in EMEA, and other regions.
In response, China and other countries have imposed or proposed additional tariffs and trade restrictions on imports from the United States.
Trade relations between the United States and China remain volatile and uncertain.
In 2025, the U.S. imposed additional tariffs on imports from China, Vietnam, and other regions and announced and subsequently paused implementation of certain tariffs.
These actions and related retaliation have created significant market uncertainty and may affect the prices of and demand for our products, negatively impacting our results of operations.
We rely on manufacturing facilities and third-party suppliers outside the United States, including in China and Vietnam, for the primary assembly and inspection of our Wearables and for a significant portion of our components.
We rely on two primary contract manufacturers in China and maintain contractors in China who perform monitoring and quality inspection services.
Our operations also depend on the availability of raw materials and components.
Our suppliers and manufacturers in China expose us to political, legal, and economic risks, including deterioration of U.S.–China relations and changes in U.S. and Chinese laws and regulations relating to sanctions, taxation, import and export restrictions, tariffs, environmental protection, intellectual property, currency controls, cybersecurity, labor and human rights practices, privacy, and public health.
Tariffs on products imported from China could adversely affect our suppliers’ operations, potentially causing disruptions or requiring us to transition to alternative manufacturers.
In addition, the Uyghur Forced Labor Prevention Act could prohibit the importation of products or components if any portion of our supply chain is determined to involve forced labor in the Xinjiang Uyghur Autonomous Region.
Trade regulations in China remain fluid, and sustained geopolitical tensions could result in additional tariffs, trade restrictions, or a global economic slowdown.
Increased tariffs and countermeasures could raise costs, limit material availability, disrupt global supply chains, increase market volatility, and create operational challenges, materially adversely affecting our sales, gross margins, and customer demand.
Although we have engaged vendors and a contract manufacturer in Vietnam to mitigate certain supply chain risks, these efforts may not be effective, may increase capital and operating costs, and could adversely affect our operating results.
Labor costs in China have increased and may continue to rise, and shortages of qualified workers could further constrain production and increase costs passed on to us.
Our international operations also expose us to risks including logistics disruptions, higher component costs, quality control issues, political and economic instability, outbreaks of contagious diseases, regulatory restrictions, intellectual property protection challenges, currency fluctuations, adverse tax consequences, lack of long-term supplier commitments, supplier failures, and labor disputes or natural disasters.

and 114 more.

Gone since FY2024

Business and Industry Risk Factors We have a limited operating history and have experienced periods of significant business changes in a short time, making it difficult for you to evaluate our business and future prospects.
If we are unable to manage our business and any fluctuations in our business effectively, our business and growth prospects could be materially and adversely affected.
Since our formation in 2014, we have achieved several key operational milestones that we believe position us for continued growth and success, including our receipt of 510(k) clearance from the FDA for our recorder and headband in 2017, our first commercial sales in 2018, our receipt of 510(k) clearance from the FDA for an early version of Clarity in 2019, growing to 281 employees in 2024.
In that time, we have had periods of significant growth in revenue and employees, which have required us to scale the size of our organization as our business has rapidly changed.
While our quarterly revenues have generally increased each quarter since our commercial launch, our results of operations have fluctuated in the past, and our future quarterly and annual results of operations may fluctuate as we focus on increasing the demand for our products.
The challenges we face in managing our business, including the changing reimbursement and regulatory landscapes, place significant demands on our management, financial, operational, manufacturing, technological, and other resources, and we expect that managing our business will continue to place significant demands on our management and other resources and will require us to continue developing and improving our operational, financial and other internal controls, reporting systems, and procedures.
In particular, continued growth increases the challenges involved in a number of areas, including recruiting and retaining sufficient skilled personnel, providing adequate training and supervision to maintain our high-quality product standards and regulatory compliance, and preserving our culture and values.
We cannot assure you that any changes in scale, related quality, or compliance assurance, including those related to any future additional indications for the Ceribell System, will be successfully implemented or that appropriate personnel will be available to facilitate the management of and changes to our business.
If we do not effectively manage our business through the various challenges we face, we may not be able to execute on our business plan, respond to competitive pressures, take advantage of market opportunities, satisfy customer requirements, or maintain high-quality products, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
For the fiscal years ended December 31, 2024 and 2023, we incurred net losses of $40.5 million and $29.5 million, respectively.
As of December 31, 2024, we had an accumulated deficit of $166.9 million.
Healthcare professionals may perceive the Ceribell System to be less useful if they do not subscribe for access to the Clarity algorithm as part of their use of the Ceribell System, whether because of incremental cost, lack of familiarity or trust in the algorithm’s diagnostic accuracy, or if, for similar reasons, they do not rely on the Clarity algorithm (including automated alerts) to interpret the EEG results produces by the Ceribell System.
In addition, negative clinical research results or publicity or an adverse change to published or unpublished guidelines or recommendations from third parties (including, without limitation, medical societies) relating to the use, clinical benefit, or risk profile of the Ceribell System or AI-enabled devices, or reduced montage EEGs or rapid EEGs in general could result in negative perception by healthcare professionals and affect our brand and reputation.
While we constantly work to improve our algorithm and overall system, the technologies we work with are novel and complex, and we cannot assure you that there will not be additional negative reports on the Ceribell System in the future.
We also face competition from companies that provide or are developing rapid EEG systems, including Nihon Kohden and a number of smaller companies, that can be used in the acute care and other settings (e.g., home and ambulance), or EEG systems specifically for use in the acute care setting, and conventional EEG providers may also seek to develop additional EEG systems.
As a result, our competitors may be able to offer products that are more technologically advanced, cost-effective, or attractive than the Ceribell System, and even if the Ceribell System is more effective than our competitors’ products, current or potential customers may accept competitive products, including conventional EEG systems and rapid EEG systems that can be used in multiple settings, in lieu of purchasing and using our products.
We may not be able to adequately predict existing customer trends and may be unable to adjust our production and inventory levels in a timely manner.
We market the Ceribell System directly to potential customers in the United States, where we face the risk of significant changes in the demand for our products, including demand for our disposable headbands based on usage rates.
For example, a sudden increase in demand could require increased production of components, such as our disposable headbands that are intended for single patient use, so that our customers can timely deliver care to their patients.
We are dependent on international manufacturers and suppliers, which exposes us to foreign operational risks that may harm our business.
We rely on manufacturers and third-party suppliers that are based outside of the United States, including in China, who complete the primary assembly and initial inspection of all of our headbands and supply a significant portion of the components used in the manufacturing of our products.
Our reliance on an international supply chain and operations exposes us to risks and uncertainties, including: • product or material delays or disruption, including logistics challenges such as delays or disruptions in shipping; • higher prices for components used in the manufacturing of our products; • controlling quality of supplies and finished product; • trade protection measures, tariffs, and other duties, especially in light of trade disputes between the United States and several foreign countries, including China; • political, social, and economic instability; • the outbreak of contagious diseases; • laws and business practices that favor local companies; • interruptions and limitations in telecommunication services; • import and export license requirements and restrictions; • difficulties in the protection of intellectual property; • inflation and/or deflation; • the threat of nationalization and expropriation; • exchange controls, currency restrictions, and fluctuations in currency values; • potential adverse tax consequences; • supplies being purchased through purchase orders without long-term guaranteed commitments from our suppliers; • suppliers ceasing to do business with us; and • labor disputes, terrorism, vandalism, natural disasters, or work stoppages.
The U.S. has recently signaled its intention to change U.S. trade policy, including potentially renegotiating or terminating existing trade agreements and leveraging tariffs.
In February 2025, the U.S. imposed additional tariffs on imports from China and announced and subsequently paused implementation of tariffs on imports from Canada and Mexico.
These additional tariffs, as well as a government’s adoption of “buy national” policies or retaliation by another government against such tariffs or policies have introduced significant uncertainty into the market and may affect the prices of and demand for the Company’s products, which could have a negative impact on the Company’s results of operations.
If any of these risks were to materialize, it could have a material adverse effect on our business, financial condition, results of operations, and prospects, including the potential costs of identifying new suppliers and/or new manufacturing partners and relocating operations.
We source and manufacture a substantial number of our products from third-party suppliers and manufacturers in China, which exposes us to risks inherent in doing business in China.
We currently source and manufacture a substantial number of our products from third-party suppliers and manufacturers in China.
We rely on two primary contract manufacturers in China to complete the manufacturing, primary assembly, and inspection of our headband.
In addition, we have a team of contractors who are employed by an agency in China and perform monitoring and quality inspection services at the facilities of our manufacturers in China.
Our third-party suppliers and manufacturers in China expose us to political, legal, and economic risks.
Our operations and the operations of our third-party suppliers and manufacturers in China may be adversely affected by deterioration of the U.S.-China relationship; adverse changes in U.S. economic and political policies relating to China (and vice versa), such as policies favoring domestically manufactured products; and changes in the United States and Chinese laws and regulations such as those related to, among other things, sanctions, taxation, import and export restrictions, tariffs, environmental protection, land use rights, intellectual property, currency controls, network security, labor and human rights practices, privacy, public health, and other matters.
Congress enacted the Uyghur Forced Labor Prevention Act in an effort to prevent what it viewed as forced labor and human rights abuses in the Xinjiang Uyghur Autonomous Region (“XUAR”).
In addition, the political, legal, and economic climate in China, both nationally and regionally, is fluid and unpredictable.
Chinese trade regulations are in a state of flux, and we or our third-party suppliers and manufacturers in China may become subject to additional taxation, tariffs, and duties, including retaliatory trade restrictions.
Sustained uncertainty about or worsening of tensions between the United States and China could also result in a global economic slowdown and long-term changes to global trade.
Furthermore, the third parties we rely on in China may disclose our confidential information or intellectual property to competitors or third parties, which could result in the illegal distribution and sale of counterfeit versions of our products.
If any of these events occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected.
In addition, with the rapid development of the Chinese economy, the cost of labor has increased and may continue to increase in the future.
Our results of operations will be materially and adversely affected if the labor costs of our suppliers and manufacturers increase significantly and are passed on to us.

and 99 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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