CBLL 10-K & 10-Q changes, risk factors and insider trading

We have a limited operating history and have experienced periodsrapid ofgrowth, significantwhich businessmay changesstrain inour aresources shortand time, makingmake it difficult for you to evaluate our business and future prospects. If we are unable to manage our business and any fluctuations in our businessexpansion effectively, our business and growth prospects could be materially and adversely affected.

We were founded in 2014 and began selling Ceribell headbands, recorder, and portal in 2018. 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, growingand our growth to 281over 300 employees inas 2024.of December 31, 2025. Accordingly, we have a limited operating history, which makes evaluation of our future prospects difficult. In that time, we have hadexperienced periods of significant growth in revenue and employees,employees and rapid changes in our business, which have required us to scale the size of our organization as our business has rapidly changed. Any growth that we experience in the future will require us to further expand our sales and marketing and research and development personnel (including those with software and hardware expertise), our manufacturing operations, and our general and administrative infrastructure. 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. We may need to make business decisions that could adversely affect our results of operations and prospects, such as modifications to our pricing and reimbursement strategy, business structure, or operations.

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 developingdevelop and improvingimprove our operational, financial and other internal controls, reporting systems, and procedures.procedures Inat particular,a continuedpace consistent with our growth. Continued growth increases the challenges involved in aareas numbersuch of areas, includingas 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 have also had, and may in the future experience, delays with onboarding new accounts due to scheduling and other logistical issues. We may not be able to address these challenges in a cost-effective manner, or at all. As we grow, we may also need to invest significant resources to improve and expand our manufacturing capabilities and technology, and we may not be able to do so in a cost-effective manner or at all. 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. Failure to implement necessary quality and compliance procedures, transition to new manufacturing processes or supply chains, or hire or maintain necessary personnel could result in higher costs or an inability to meet demand. In addition, our business is affected by general macroeconomic and business conditions around the world, including the impacts of inflation, increased interest rates, market instability, geopolitical conditions and conflicts, health crises, and natural disasters. If we do not effectively manage our businessgrowth throughand 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.

We have incurred net losses since inception, and we expect to incur additional substantial losses in the foreseeable future. For the fiscal yearsyear ended December 31, 2024 and 2023,2025, we incurred a net lossesloss of $40.5$53.4 million and $29.5 million, respectively.million. As of December 31, 2024,2025, we had an accumulated deficit of $166.9$220.4 million. We also expect our operating expenses to increase in future periods, and if our revenue growth does not increase to more than offset these anticipated increases in our operating expenses, we may not be able to achieve or maintain profitability, and our business, financial condition, results of operations, and prospects will be harmed. Since inception, we have spent significant amounts to develop the Ceribell System and related algorithms, to fund clinical studies, to develop and build our manufacturing capacities, to scale our commercial operations, and to recruit and retain key talent.

Various factors can contribute to our ability to effectively engage and retain customers and their use of our products. For example, hospitals and healthcare professionals may be reluctant to purchase or use the Ceribell System due to familiarity with conventional EEG systems that are well-established and known to them, and because they must continue to use conventional EEG systems outside of the acute care setting. Our ability to grow sales of the Ceribell System and drive market acceptance will depend on successfully educating hospitals and healthcare professionals of the relative benefits of the Ceribell System compared to the standard of care, which includes conventional EEG systems in the acute care setting, as well as educating such hospitals or healthcare professionals regarding the uses and limitations of the Ceribell System. If healthcare professionals do not perceive our products to be useful, effective, reliable, and trustworthy, or if we are unable to provide sufficient training to healthcare professionals or harmonize our products with hospital information technology systems, we may not be able to attract or retain customers. 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 producesproduced 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. For example, Villamar et al. (2023), a study that retrospectively reviewed EEG recordings for 21 patients who were admitted to a medical intensive care unit after cardiac arrest, found that the Clarity algorithm that was in use at the time of the study did not detect seizures in the four patients who were experiencing them. While we constantly work to improve ourthe Ceribell algorithm and overall system,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. Further, customers who are dissatisfied with their experiences with the Ceribell System may post negative reviews, and we have been, and may in the future become, the subject of blog, forum, or other social media postings that contain negative statements about us, which are outside of our control and may be inaccurate. Any negative publicity, whether real or perceived, disseminated by word-of-mouth, the general media, electronic or social networking platforms, competitor materials, or other methods, could harm our reputation and brand and could severely diminish consumer confidence in our products. Further, a shortage of neurologists or other clinicians (if any) available to read the results of the Ceribell System, could negatively affect the timely assessment of data from the Ceribell System. Lack of support for our products from healthcare professionals can affect how receptive physicians will be to use our products for their patients and could result in decreased demand for our products. Negative healthcare professional perception could also render us less attractive to future hospital customers, which could result in decreased sales of our products. A number of other factors, including the impacts of economic conditions and regulatory changes on hospital budgets and spending patterns, could potentially negatively affect new customer acquisitions and demand for our products.

The market for EEG alternatives is competitive in terms of development, availability, pricing, product quality, and time-to-market. Our primary competition is from conventional EEG systems, which are used in the majority of hospitals in the United States that have resources to purchase and support EEG systems. These competitors have greater name and brand recognition, greater market share, greater resources, stronger financial profiles, and may have larger sales forces than we do, as well as legacy status among hospitals. For example, the two primary conventional EEG providers in the United States are Natus and Nihon Kohden, both of which have much longer operating histories than we do. We also face competition from companies that provide or are developing rapid EEG systems, including Nihon KohdenKohden, Natus, and a number of smallerother 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. Our competitors may be able to offer products similar or superior to ours at a more attractive price than we can. Our competitors could also be better positioned to serve certain segments of our market, which could create additional price pressure. In light of these factors, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements. 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. In addition, because the Ceribell System is supplemental to, and not a replacement for, conventional EEG systems for rapid acute care diagnosis, customers may view our products as an additional expense and choose to purchase and maintain only conventional EEG systems. If we are unable to successfully compete, our business, financial condition, results of operations, and prospects could be materially and adversely affected.

Adapting our manufacturing and production capacities to evolving patterns of demand is expensive, time-consuming, and subject to significant uncertainties. We may not be able to adequately predict existingemerging 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 headbandsWearables based on usage rates. If demand decreases, we will need to implement capacity and cost reduction measures involving restructuring costs. If demand increases, we will be required to make capital expenditures related to increased production and expenditures to hire and train production, sales and marketing, and product support personnel. This would put pressure on our internal and third-party manufacturing capabilities. For example, a sudden increase in demand could require increased production of components, such as our disposable headbandsWearables that are intended for single patient use, so that our customers can timely deliver care to their patients. Adapting to changes in demand inherently lags behind the actual changes because it takes time to identify the change the market is undergoing and to implement any measures to take as a result. Finally, capacity adjustments are inherently risky because there is imperfect information, and sales trends may rapidly intensify, ebb, or even reverse. We may be unable to accurately or timely predict trends in demand and customer behavior or to take appropriate measures to mitigate risks and react to opportunities resulting from such trends. Any inability in the future to identify or to adequately and effectively react to changes in demand could have a material adverse effect on our business, financial condition, results of operations, and prospects.

WeChanges arein dependenttrade policy, tariffs, and our reliance on international manufacturersmanufacturing and suppliers,supply whichchain exposesoperations expose us to foreign operational and trade risks that may harmadversely affect our business.business, results of operations, and financial condition.

The U.S. government has recentlyimplemented signaledor itsproposed intentionchanges to change U.S.international trade policy,policy includingthrough potentiallythe renegotiatingrenegotiation or terminatingpotential termination of existing trade agreements and leveragingthe tariffs.imposition of tariffs on a wide range of products from China, Vietnam, countries in EMEA, and other regions. In Februaryresponse, 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 ChinaChina, Vietnam, and other regions and announced and subsequently paused implementation of tariffscertain ontariffs. importsThese from Canadaactions and Mexico. These additional tariffs, as well as a government’s adoption of “buy national” policies orrelated retaliation by another government against such tariffs or policies have introducedcreated significant market uncertainty into the market and may affect the prices of and demand for the Company’sour products, whichnegatively couldimpacting have a negative impact on the Company’sour results of operations.

We currentlyrely sourceon manufacturing facilities and manufacturethird-party asuppliers substantialoutside numberthe United States, including in China and Vietnam, for the primary assembly and inspection of our products from third-party suppliersWearables and manufacturersfor ina China.significant portion of our components. 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 ofmaintain contractors who are employed by an agency in China andwho perform monitoring and quality inspection servicesservices. atOur operations also depend on the facilitiesavailability of ourraw manufacturersmaterials inand China.components.

For us to remain competitive, it is essential to be at the forefront of new technologies, including in the rapidly evolving area of AI. If we are unable to meet customer demands for new technology, or if the technologies we introduce are viewed less favorably than our competitors’ products, our results of operations and future prospects may be negatively affected. To meet our customers’ needs in these areas, we must continuously work on our product design, develop our algorithms, and invest in and develop new technologies. We will also need to anticipate customer demand with respect to these technologies and which technological advances are most desirable in the EEG monitoring products and any future additional products we market. This need will result in requiringrequire our employees to continue learning and adapting to new technologies, and will require us competingto compete for highly skilled talent in a competitive market. Our operating results depend to a significant extent on our ability to anticipate and adapt to technological changes in the EEG monitoring market, maintain innovation, maintain a strong product pipeline, and reduce or maintain low costs for producing high-quality EEG monitoring products. Any inability to do so could have a material adverse effect on our business, financial condition, results of operations, and prospects.

In Septemberaddition, 2022,in January 2026, we received Breakthrough Device Designation from the FDA for theour Ceribell LVO System, a portable EEG-based stroke detection and monitoring system in development intended for use in hospital settings to monitor adult patients for whom a reliable neurological exam for LVO stroke are often challenging and to notify medical professionals of deliriumsuspected usingLVO ourstroke, Ceribellwhich System.notifications are intended to be confirmed by CT or MR angiography prior to initiation of treatment. Breakthrough Device Designation provides certain benefits, including more interactive and timely communications with FDA staff, potential use of post-market data collection to facilitate expedited development and review, opportunities for more efficient and flexible clinical study design, and prioritized review of premarket submissions. However, there can be no guarantee that these benefits will materialize or significantly impact our development and regulatory approval process. WeEven where our product candidates have received Breakthrough Device Designation, we may not experience a faster development process, review, or approval compared to conventional FDA procedures. Breakthrough Device Designation does not alter the regulatory standards for marketing authorization or guarantee that we will ultimately obtain FDA clearance or approval for the detectiondesignated and monitoring of delirium using our Ceribell System.indication. Furthermore, the FDA may rescind Breakthrough Device Designation if it believes that the designation is no longer supported by data from our clinical development program. As with all FDA marketing authorizations, we will need to continue to comply with applicable regulations and standards, which may change over time.

We conduct our own clinical studies and provide support for third party–initiated trials that evaluate different aspects of the Ceribell System. Clinical testing is difficult to design and implement, can take many years, can be expensive, and carries uncertain outcomes. The results of preclinical studies and clinical trials of our products conducted to date and ongoing or future studies and trials of our current, planned, or future products may not be predictive of the results of later clinical trials or real-world performance, and interim results of a clinical trial do not necessarily predict final results. The data and results from our clinical studies do not ensure that we will achieve similar results in future clinical trials, are not head to head studies and not directly comparable with each other, as they have different sample sizes, designs, limitations, assumptions, and objectives, and are conducted on different patient populations at different sites by different researchers. In addition, as some of these studies are prospective studies, they may not reflect real-world performance. Some of our studies have not been peer reviewed or published, and peer reviewers may disagree with the methodologies or conclusions of such studies and may not deem them worthy of publication. In addition, preclinical and clinical data are often susceptible to various interpretations and analyses, and many companies that have believed their products performed satisfactorily in preclinical studies and earlier clinical trials have nonetheless failed to replicate results in later clinical trials, or have viewed such data in different ways than regulators. The risk that future trials and studies of the Ceribell System fail to replicate positive results observed to date is increased because most of our studies and trials are conducted on small samples, not powered for statistical significance, controlled for other clinical variables, or have other design limitations and almost all such studies were conducted or sponsored by us. Independent studies with larger samples or different designs may not replicate results observed to date. In addition, the performance of the Clarity algorithm is typically evaluated by comparing the algorithm results to a retrospective review of the EEG by a panel of neurologists. There is a high degree of inter-rater variability in the interpretation of EEGs by clinicians, such that Ceribell System study results may vary from study to study depending on the size and composition of the neurologist panel. Clinical studies or investigations on the Ceribell System have produced, and may in the future produce, negative or inconclusive results. Furthermore, others, including healthcare professionals and regulators, may perceive a conflict of interest with studies supported, sponsored, or funded by us or conducted by our employees or consultants, and may not find results of such studies to be compelling or credible. As a result of the foregoing, we may decide, or regulators may require us, to conduct additional clinical and nonclinical testing in addition to those we have planned. The initiation and completion of clinical studies may be prevented, delayed, or halted for numerous reasons. We may experience delays in our clinical trials for a number of reasons, which could adversely affect the costs, timing, or successful completion of our clinical trials, including related to the following:

Interim, “top-linetop-line,” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

We are a medical technology company focused on transforming the diagnosis and management of patients with serious neurological conditions. We have developed the Ceribell System, a novel, point-of-care EEG platform specifically designed to address the unmet needs of patients in the acute care setting. By combining proprietary, highly portable, and rapidly deployable hardware with sophisticated artificial intelligence (“AI”)-powered algorithms, the Ceribell System enables rapid diagnosis and continuous monitoring of patients with neurological conditions. We initially focused on becoming the standard of care for the detection and management of seizures in the acute care setting, where the technological and operational limitations of conventional EEG systems have contributed to significant delays in seizure and delirium diagnosis and suboptimal patient care and clinical outcomes, as well as a high economic burden for hospitals and the healthcare system. By making EEG more accessible and enabling continuous monitoring through the power of AI, the Ceribell System enables clinicians to more rapidly and accurately diagnose and manage patients at risk of seizure and delirium in the acute care setting, resulting in improved patient outcomes and hospital and payer economics. ToAs date,of December 31, 2025, the Ceribell System has been adopted by more than 500600 active accounts,hospitals, ranging from top academic centers to small community hospitals, and has been used to care for over 200,000 patients.hospitals. For information regarding how patient care and clinical outcomes are measured, see “Business—Market Overview—Challenges of Managing Seizures in the Acute Care Setting” included elsewhere in this Annual Report.Report on Form 10-K.

We specifically designed the Ceribell System to address the limitations of conventional EEG in the acute care setting and dramatically improve clinical outcomes of critically ill patients at high risk of seizures. The Ceribell System integrates proprietary, highly portable hardware with AI-powered algorithms to aid in the detection and management of seizures. Our hardware is composed of a disposable, flexible headbandheadbands and headcaps (“Wearables”) and a pocket-sized, rechargeable battery-operated recorder used to capture and wirelessly transmit EEG signals. The hardware is simple to use and, after approximately one hour of training, can be applied within minutes by any non-specialized healthcare professional. The recorder is integrated with a proprietary web-based portal that allows neurologists to remotely access EEG data in real time from any web-enabled device. EEG data captured by the recorder is interpreted by our proprietary AI-powered seizure detection algorithm, ClarityTM,algorithms, which continuously monitorsmonitor the patient’s EEG signal and can support the clinician’s real-time assessment of seizure activity.activity and delirium.

We are currently focused on becoming the standard of care for the detection and management of seizures in the acute care setting. There are approximately 6,000 acute care facilities in the United States that we believe could benefit from ourthe Ceribell system. We intend to expand the size of our direct sales organization in the United States to support our efforts to drive further adoption and utilization of the Ceribell System. While our current commercial focus is on the United States, we have received a CE Mark for the Ceribell System in Europe, and we intend to pursue additional regulatory clearances in Europe and elsewhere outside of the United States. We also plan to engageStates in marketthe access initiatives in attractive international regions in which we see significant opportunity.future.

We manage all aspects of manufacturing, supply chain, and distribution of the headbandWearables and recorder from our facilities in Sunnyvale, California. Contract manufacturers in China and Vietnam assemble the Ceribell headband,headbands, with final inspection and labeling completed at our California facilities. We have dual sources for major components of the headband.Wearables. The components for our recorder are procured from various suppliers and shipped to our facilities for final testing and assembly.

As of December 31, 2024,2025, we had an accumulated deficit of $166.9$220.4 million. To date, we have funded our operations primarily through proceeds from the sale of shares of our stock, including common stock and redeemable convertible preferred stock, term loan proceeds, and cash generated from the sale of headbandsWearables and subscriptions. As of December 31, 2024,2025, we had $194.4$159.3 million in cash and cash equivalents. On October 15, 2024, we closed our initial public offering (our “IPO”) pursuant to which we sold 12,196,969 shares of our common stock at a price to the public of $17.00 per share. We received net proceeds of $187.8 million from the IPO after deducting underwriting discountsequivalents and commissionsmarketable and offering expenses.securities. Based on our current operating plan, we believe that the net proceeds from our IPO, together with the expected cash generated from revenue transactions with customers and our existing cash and cash equivalents, will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of revenue, or operating expenses, and may need to raise additional capital to fund operations, further research and development activities, or acquire, invest in, or in-license other businesses, assets, or technologies.

Utilization of the Ceribell System within our existing customer base. OurWe revenuebelieve isthere impactedare byover three million acute care patients in the utilizationUnited States who should be monitored with EEG each year due to high risk of the headband component of the Ceribell System within hospitals. Because the headbands used as part of the Ceribell System are designed to be used only once by a single patient, utilization has a direct relationship with our product revenue. Within each hospital, we are initially focused on site onboarding and launch.seizures. Currently, many of these patients are not promptly monitored by EEG, as a physician may not be aware of the risk of seizures in a given patient population. Our CAMs work to educate our customers to raise awareness of our technology as well as,technology, non-convulsive seizures generally,seizures, and the risks of delayed treatment. Even at facilities with access to the Ceribell System, clinicians may not use Ceribell on all eligible patients if they are not fully aware of the risks of seizures and the benefits of our solution. OnceWe aaim launchto issupport complete,hospitals in their efforts to integrate Ceribell into protocols for different patient populations, based on established guidelines. We are also continuing our CAMsefforts driveto greaterexpand utilizationto of the Ceribell System within thenew hospital by reinforcing our value proposition, increasing disease state awareness,departments and supportingprovide the integration of standard protocols or workflows for monitoring at-risk patients. CAMs also are focused on expanding the use of our system into additional departments within the hospital. As hospitals and physicians gain exposuretraining to ourmore system, we expect to leverage their experiences to increase usage and establish rapid EEG as the standard of care for the detection and management of seizures in the acute care setting.providers.

Investment in research and development to drive innovation and expand our addressable market. Our research and development initiatives are focused on introducing enhancements, features, and improvements aimed at increasing the value provided by ourthe systemCeribell System for diagnosing and monitoring seizures and delirium in the acute care setting. We believe the platform nature of ourthe systemCeribell System will enable us to efficiently deploy it for use in other serious neurological conditions beyond seizures,seizures and wedelirium have begun the technical validation process for severalto additional indications.

We generate revenue from two recurring sources. Product revenue is generated by the sale of our disposable headbandsWearables that are intended for single patient use. Subscription revenue is generated by monthly subscription fees charged to our hospital customers for use of Clarity, recorders, and our portal. Revenue from sales of headbandsWearables is recognized at a point in time upon transfer of control of the product. We generally recognize subscription revenue ratably over the related contractual term beginning on the date that the systemCeribell System is made available to a customer. Our revenue fluctuates primarily based on the number of active accounts and the volume of headbandWearable usage.

We expect that our revenue will continue to fluctuate quarter-to-quarter due to a variety of factors, including the potential success of our sales force in extending adoption of the Ceribell System to new accounts and expanding the utilization of ourthe systemCeribell System in existing accounts. For purposes of managing our business, we do not separately track increases in revenue solely attributable to new accounts. We may experience fluctuations in the number of headbands used by our customers based on seasonal factors that impact the number of patients in the acute care setting. For example, the number of patients in the intensive care unit is typically lower during the summer months.

Cost of revenue consists primarily of the cost of materials and labor to manufacture headbandsWearables and depreciation of the manufacturing cost of recorders, as well as third-party hosting fees and personnel-related expenses for our subscription cost of revenue. Cost of revenue also includes expenses related to manufacturing overhead comprising compensation for personnel, manufacturing supervision, facilities, utilities, quality assurance, property tax, and certain direct costs such as tariffs and shipping costs. As we acquire new customers and existing customers increase their use of our product and software, we expect that our cost of revenue will continue to increase.

Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, have been and will continue to be affected by various factors that may cause gross margins to fluctuate. These include the product mix between product and subscription revenues, potential changes to sales prices, the timing of our acquisition of new customers, renewals of and follow-on sales to existing customers, costs associated with third-party hosting fees, costs associated with third party manufacturing and supply chain purchases of inventory, and other direct costs such as tariffs and shipping. Our gross margin may fluctuate from period to period, based upon the factors described above and in the section titled “Risk Factors” included elsewhere in this Annual Report.Report on Form 10-K.

Research and development expenses are incurred in connection with the advancement of the Ceribell System with the goal to improve and expand on ourthe existing systemCeribell System and indications. Research and development expenses consist primarily of engineering, product development, regulatory activities, consulting services, materials, depreciation, and other costs associated with products and technologies being developed. These expenses include employee and non-employee compensation, including benefits, stock-based compensation, supplies, materials, consulting, related travel expenses, and facilities expenses. Our research and development team includes clinical study experts as well as hardware and software engineers with deep expertise in mechanical and electrical engineering, data science, AI, embedded software design, and cloud-based data and security architecture. We invest in research and development efforts with the goal of driving continuous improvements in our current system and solutions and expanding the clinical application of ourthe systemCeribell System and AI algorithms, in the acute care setting and beyond. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized and are recognized as expense as the goods are delivered or as related services are performed.

We expect our research and development expenses to increase as we continue to improve and optimize our algorithm,products, leverage our platform to expand indications, and develop products for use beyond the acute care setting.

Sales and marketing expenses consist primarily of employee-related costs, including salaries, commissions, bonuses, benefits, travel, and stock-based compensation as well as investments in marketing initiatives to increase market awareness of our technology and the prevalence of seizures and delirium in critically ill patient populations, including expenses related to travel, conferences, trade shows, and consulting services.

We expect our sales and marketing expenses to increase for the foreseeable future as we continue to increase the size of our sales organization and market penetration in the United States, seek to expand indications, and potentially establish an international presence by pursuing marketing authorizations and engaging in other market access initiatives in international regions in which we see significant potential opportunity.

We expect that our general and administrative expenses will increase in the foreseeable future as we increase our headcount to support the continued growth of our business. We also anticipate incurring additional expenses associated with operating as a public company, including increased expenses related to audit, legal, regulatory, compliance, director and officer insurance, investor and public relations, and tax-related services associated with maintaining compliance with the rules and regulations of the SEC and standards applicable to companies listed on a national securities exchange.exchange and intellectual property enforcement activities.

Interest and other income (expense), net is primarily interest income on our cash and cash equivalents, interest expense on our term loans,equivalents and changemarketable in the fair value of the warrant liability.securities. Interest expense primarily consists of interest on our term loans and a non-cash interest charge related to amortization of debt issuance costs. Gains and losses related to the change in fair value of the redeemable convertible preferred stock warrant liability issued as a part of our term loans arewere recognized in the income statement each quarter until the warrants arewere exercised,converted expire, or become exercisable into shares ofto common stock.stock warrants immediately prior to the IPO.

Product cost of revenue for fiscal year 2024,2025 increased $1.6$1.9 million, or 24%,23%, compared to fiscal year 2023.2024. The increase in cost of goods sold for products was primarily due to an increase in headband sales to new and existing active accounts, partially offset by a decrease in the unit cost of materials.accounts.

General and administrative expenses increased $13.6$10.6 million, or 67%,31%, for fiscal year 2024,2025, compared to fiscal year 2023.2024. The increase was primarily due to an increase of $7.9$5.6 million in personnel and related expenses directly associated with an increase in headcount and stock-based compensation, an increase of $4.3$4.7 million in legal, accounting, and professional service fees related to our transition to a public company, and ancosts increaseassociated ofwith $1.1intellectual millionproperty enforcement activities, including a new patent infringement claim initiated in administrativeJuly expenses driven by increased software, facilities, and other administrative expenses.2025.

Interest and other income (expense), net decreasedincreased $1.3$5.7 million for fiscal year 2024,2025, compared to fiscal year 2023.2024. The decreaseincrease in interest income was primarily due to ahigher $0.4balances millionof increasecash in interest expense related to debtequivalents and $1.5marketable millionsecurities, inresulting otherfrom expensethe as a resultinvestment of theIPO change in fair value of the warrant liability, offset by an increase of $0.5 million interest income related to an increase in cash.proceeds.

As of December 31, 2024,2025, our principal sources of liquidity consisted of $194.4$159.3 million of cash and cash equivalents and marketable securities and $20.0 million of term loans.

On February 6, 2024, we entered into the VLSA with SVB and Horizon. The VLSA provides a term loan commitment of $50.0 million. We drew $20.0 million of the $50.0 million term loan commitment at closing,closing (consisting of $6.0 million from SVB and $14.0 million from Horizon), which was used to retire our existing debt with Horizon, pay transaction fees, and for general corporate purposes. The remaining $30.0 million term loan commitment consists of three tranches of $10.0 million commitments. The maturity date of the VLSA is March 1, 2029.

Concurrent with the VLSA, we also entered into the Revolving Facility for a line of credit of up to $10.0 million. The Revolving Facility maturesmatured on February 6, 2026.

Based on our current operating plan, we believe that the net proceeds from our IPO together with the expected cash generated from revenue transactions with customers and our existing cash and cash equivalents,equivalents and marketable securities will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of revenue, or operating expenses, and may need to raise additional capital to fund operations, further research and development activities, or acquire, invest in, or in-license other businesses, assets, or technologies.

Net cash used in operating activities during fiscal year 2024,2025 consisted primarily of our net loss of $40.5$53.4 million, offset by non-cash charges of stock-based compensation of $5.4$12.2 million,million and depreciation and amortization of $1.1$1.3 million, and the change in fair value of our redeemable convertible preferred stock warrants.million. Additionally we had a net increase in operating assets of $5.8$5.3 million and a net decreaseincrease in operating liabilities of $2.6$5.9 million. Net operating assets increased due to the timing of inventory purchases and accounts receivable due to the overall increase in sales in fiscal year 2024.2025. Net operating liabilities decreasedincreased primarily due to timing of payments.

Net cash used in operating activities during fiscal year 2023,2024 consisted primarily of our net loss of $29.5$40.5 million, offset by non-cash charges of stock-based compensation of $2.7$5.4 million, depreciation and amortization of $1.1 million, and the change in fair value of our redeemable convertible preferred stock warrants. Additionally, we had a net increase in operating assets of $6.1$5.8 million,million partially offset byand a net increasedecrease in operating liabilities of $2.4$2.6 million. Net operating assets increased due to the timing of inventory purchases and accounts receivable due to the overall increase in sales in fiscal year 2023.2024. Net operating liabilities increaseddecreased primarily due to increasedtiming accruedof payroll, bonus, and commissions due to increased headcount.payments.

Net cash used in investing activities during fiscal years 20242025 and 20232024 was $1.6$118.1 million and $1.8$1.6 million, respectively, and consisted of purchases of marketable securities in 2025 and equipment and purchases of components for recorders provided to customers.customers for both periods. This was offset by the maturity of marketable securities in 2025.

Net cash usedprovided inby financing activities during fiscal year 2023,2025 consisted primarily of $3.8proceeds millionfrom inthe exercise of options, offset by debt repayment.issuance costs.

Critical Accounting Policies, Significant Judgments, and Use of Estimates

See NoteNotes 2 and 3 to our financial statements elsewhere in this Annual Report for information about our significant accounting policies and how estimates are involved in the preparation of our financial statements. We believe the following reflect the critical accounting policies and estimates used in the preparation of our financial statements.

We have incurred net losses since inception, and we expect to incur additional substantial losses in the foreseeable future. For the quartersix months ended MarchJune 31,30, 2026, we incurred a net loss of $19.7$39.0 million. As of MarchJune 31,30, 2026, we had an accumulated deficit of $240.1$259.4 million. We also expect our operating expenses to increase in future periods, and if our revenue growth does not increase to more than offset these anticipated increases in our operating expenses, we may not be able to achieve or maintain profitability, and our business, financial condition, results of operations, and prospects will be harmed. Since inception, we have spent significant amounts to develop the Ceribell System and related algorithms, to fund clinical studies, to develop and build our manufacturing capacities, to scale our commercial operations, and to recruit and retain key talent.

We expect the Ceribell System will continue to be purchased by hospitals who will then seek reimbursement from third-party payers. Reimbursement for the hospital services during an inpatient stay generally is made under a prospective payment system that is determined by a classification system known as diagnosis-related groups, which are assigned using a number of factors including the principal diagnosis, major procedures, discharged status, patient age, and complicating secondary diagnoses, among other things. In August 2023, CMS approved an NTAP under the Medicare inpatient prospective payment system for our newest Clarity algorithm, effective October 1, 2023. In August 2026, CMS granted an NTAP under the Medicare inpatient prospective payment system for eligible Medicare patient cases utilizing our Delirium Monitor System, effective October 1, 2026. The NTAP designation for a product lasts for no more than three years for a specific indication. Once an applicable NTAP expires or our newproducts Clarityare algorithm isotherwise no longer eligible for such NTAP, our customers may no longer receive additional reimbursement to offset the additional costcosts associated with the use of our productsproducts, which could adversely affect our customers’their profit margin.margins. In light of the potential additionalunreimbursed associated cost,costs, some of our target customers may be unwilling to adopt our products and some of our existing customers may terminate their contracts with us.

Our ventureCredit loanAgreement contains financial covenants and security agreement containsother restrictions that limit our flexibility in operating our business.

sell, transfer, lease, license or otherwise dispose of ourassets, assetsother subjectthan topermitted certainasset exclusionsdispositions;

create, incur, assume, guarantee,guarantee or assumeotherwise become liable with respect to additional indebtedness,indebtedness or contingent obligations, other than certain permitted indebtedness and contingent obligations;

encumbercreate or permit liens on any of our assetsassets, other than certain permitted liens;

make restricted payments,distributions, including paying dividends on, repurchasing,repurchasing or making distributionsother payments with respect to any of our capital stockstock, other than permitted distributions;

consolidate,enter mergeinto with,joint ventures or acquire any other entity, or sell or otherwise dispose of all or substantially all of our assetspartnerships; and enter into certain transactions with our affiliates.

See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations”—“Liquidity and Capital Resources” for more information regarding the covenants under the VLSACredit and the Revolving Facility.Agreement. The covenants in the VLSACredit and the Revolving FacilityAgreement limit our ability to take certain actions and,and could adversely affect our ability to finance our operations, make needed capital expenditures, engage in thebusiness eventcombinations thator otherwise pursue our business strategies. In addition, if we breachfail oneto comply with a covenant or moreother covenants,obligation under the lendersCredit mayAgreement choose to declareand an event of default occurs and requirecontinues, thatthe welenders immediatelymay repaysuspend or terminate their lending commitments, accelerate all or a portion of the amounts outstanding ofunder the aggregateCredit principalAgreement, amount,together pluswith accrued interest, and forecloseexercise onremedies against the collateral granted to it to securesecuring such indebtedness.indebtedness, Suchincluding repaymentsubstantially all of our assets and intellectual property. Any such acceleration or exercise of remedies could have a material adverse effect on our business, financial condition, results of operations,operations and prospects.

We have never declared or paid cash dividends on our capital stock, and we do not currently intend to pay any cash dividends on our capital stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and expansion of our business. Any future determination related to dividend policy will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend upon, among other factors, our results of operations, prospects, financial condition, contractual restrictions and capital requirements. In addition, our ability to pay cash dividends on our capital stock is limited by the terms of the VLSA,Credit Agreement, and may be limited by the terms of any future debt or preferred securities we issue or any future credit facilities we enter into. Accordingly, investors must for the foreseeable future rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

We are a medical technology company focused on transforming the diagnosis and management of patients with serious neurological conditions. We have developed the Ceribell System, a novel, point-of-care EEG platform specifically designed to address the unmet needs of patients in the acute care setting. By combining proprietary, highly portable, and rapidly deployable hardware with sophisticated artificial intelligence (“AI”)-powered algorithms, the Ceribell System enables rapid diagnosis and continuous monitoring of patients with neurological conditions. We initially focused on becoming the standard of care for the detection and management of seizures in the acute care setting, where the technological and operational limitations of conventional EEG systems have contributed to significant delays in seizure and delirium diagnosis and suboptimal patient care and clinical outcomes, as well as a high economic burden for hospitals and the healthcare system. By making EEG more accessible and enabling continuous monitoring through the power of AI, the Ceribell System enables clinicians to more rapidly and accurately diagnose and manage patients at risk of seizure and delirium in the acute care setting, resulting in improved patient outcomes and hospital and payer economics. As of MarchJune 31,30, 2026, the Ceribell System has been adopted by more than 650700 hospitals, ranging from top academic centers to small community hospitals. For information regarding how patient care and clinical outcomes are measured, see “Business—Market Overview—Challenges of Managing Seizures in the Acute Care Setting” included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 24, 2026.

We are currently focused on becoming the standard of care for the detection and management of seizures in the acute care setting. In May 2023, Clarity® became the first device to receive 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) for diagnosing electrographic status epilepticus. In December 2025, the FDA granted 510(k) clearance for Ceribell’s proprietary deliriumDelirium monitoringMonitor solution,System, the first and only FDA cleared delirium screening and monitoring device. In June 2026, we received a new FDA 510(k) clearance that encompasses two separate neurology focused algorithms, EEG Artifact Reduction and Epileptiform Abnormality Detection. We also received FDA clearance on the full next-generation hardware platform that we anticipate will support our expansion into new indications and new application areas.

As of MarchJune 31,30, 2026, we had an accumulated deficit of $240.1$259.4 million. To date, we have funded our operations primarily through proceeds from the sale of shares of our stock, including common stock and redeemable convertible preferred stock, term loan proceeds, and cash generated from the sale of Wearables and subscriptions. As of MarchJune 31,30, 2026, we had $141.2$129.3 million in cash, cash equivalents, and marketable securities. Based on our current operating plan, we believe that the net proceeds from our IPO, together with the expected cash generated from revenue transactions with customers and our existing cash and cash equivalents,equivalents and marketable securities, will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of revenue, or operating expenses, and may need to raise additional capital to fund operations, further research and development activities, or acquire, invest in, or in-license other businesses, assets, or technologies.

Adoption of the Ceribell System by new accounts. There are approximately 6,000 acute care facilities with an Intensive Care Unit (“ICU”) or Emergency Department (“ED”) or both in the United States that we believe could benefit from the Ceribell System because the patients arriving at such facilities may experience seizures or delirium triggered by the conditions leading them to seek acute medical care. As of MarchJune 31,30, 2026, we have successfully deployed the Ceribell System to more than 650700 hospitals, ranging from top academic centers to small community hospitals. We believe that all acute care facilities in the United States can benefit from the Ceribell System, and our goal is to establish the Ceribell System as the standard of care for the detection and management of seizures in critically ill patients. To drive further adoption of the Ceribell System, we leverage our commercial infrastructure including Territory Managers (“TMs”), who focus on new account acquisition and onboarding, and Clinical Account Managers (“CAMs”), who focus on ongoing account coverage to increase utilization and further support hospital onboarding. Our commercial team engages with customers to communicate the value proposition of the Ceribell System, leveraging our large base of clinical evidence.

Results of Operations for the Threethree Monthsand Endedsix Marchmonths 31,ended June 30, 2026 and 2025

Comparison of the Threethree Monthsand Endedsix Marchmonths 31,ended June 30, 2026 and 2025

Product revenue for the three and six months ended MarchJune 31,30, 2026, increased $4.6$5.3 million and $9.9 million, or 29%,33% and 31%, respectively, compared to the same period of fiscal year 2025. Product revenue growth was primarily driven by the addition of new customers and an increase in utilization of Wearables and resulting sales of Wearables, driven by continued customer education that resulted in increased awareness and adoption of our products.

Subscription revenue for the three and six months ended MarchJune 31,30, 2026, increased $1.4$1.6 million and $3.0 million, respectively, or 29%,30%, compared to the same period of fiscal year 2025. Subscription revenue growth was primarily driven by the addition of new customers.

Product cost of revenue for the three months ended MarchJune 31,30, 2026, increaseddecreased $0.7$0.5 million, or 30%,22% compared to the same period of fiscal year 2025. Product cost of revenue for the six months ended June 30, 2026 increased $0.2 million, or 4%, compared to the same period of fiscal year 2025. The decrease in cost of goods sold for products for the three months ended June 30, 2026 was primarily due to tariff refund of $1.0 million, offset by an increase in Wearables sales to new and existing active accounts. The increase in cost of goods sold for products for the six months ended June 30, 2026 was primarily due to an increase in headbandWearables sales to new and existing active accounts, partially offset by a decrease in the costtariff of goods sold per unit, as non-variable costs are allocated among a larger number of units.refund.

Subscription cost of revenue for three and six months ended MarchJune 31,30, 2026, increased $0.2 million and $0.3 million, or 145%,98% and 118%, respectively, compared to the same period of fiscal year 2025. The increase in subscription cost of revenue was primarily due to increased hosting costs for new and existing active accounts for subscriptions and incremental recorder depreciation associated with new subscriptions.

Gross profit for the three and six months ended MarchJune 31,30, 2026 increased $5.1$7.3 million and $12.4 million, or 28%,39% and 34%, respectively, compared to the same period of fiscal year 2025. The increase is primarily due to increased revenue and decreased cost of goods sold perdue unitto forcost Wearables,reduction asstrategies non-variableand coststariff are allocated among a larger number of units.refunds.

Research and development expenses for the increased $1.9 million, or 45%,39%, for the three months ended MarchJune 31,30, 2026, compared to the same period of fiscal year 2025. The increase was primarily due to an increase of $1.7$1.5 million in personnel and related expenses directly associated with an increase in headcount.

Sales and marketing expenses increased $4.4$7.0 million, or 24%,40%, for the three months ended MarchJune 31,30, 2026, compared to the same period of fiscal year 2025. The increase was primarily due to an increase in personnel and related expenses directly associated with an increase in headcount.

General and administrative expenses increased $5.4$3.4 million, or 54%,30%, for the three months ended MarchJune 31,30, 2026, compared to the same period of fiscal year 2025. The increase was primarily due to an increase of $0.6$1.4 million in personnel and related expenses directly associated with an increase in headcount, as well as an increase in professional services of $4.8$2.0 million driven by legal costs associated with intellectual property enforcement activities, including a patent infringement suit initiated in July 2025.

Interest and other income, net decreased $0.4$0.6 millionmillion, or 46% for the three months ended MarchJune 31,30, 2026, compared to the same period for fiscal year 2025. The decrease in interest income was primarily due to lower balances of cash equivalents and marketable securities, compared to the same period of the prior year.

Net cash used in operating activities during the threesix months ended MarchJune 31,30, 2025,2026, consisted primarily of our net loss of $12.8$39.0 million and net amortization premiums on marketable securities of $1.3 million, offset by non-cash charges of stock-based compensation of $2.3$9.7 million,million and depreciation and amortization of $0.3$0.5 million. Additionally we had a net increase in operating assets of $0.1$0.5 million and a net decrease in operating liabilities of $1.3$1.8 million. Net operating assets increased due to increases in accounts receivable and contract costs due to the overall increase in sales in the three months ended March 31, 2025. Netnet operating liabilities decreased primarily due to timing of payments.

Net cash provided by investing activities during the threesix months ended MarchJune 31,30, 2026 was $22.4$21.8 million, and consisted of maturities of marketable securities, offset by purchases of marketable securities, equipment, and recorders provided to customers.

Net cash used in investing activities during the threesix months ended MarchJune 31,30, 2025 was $29.6$137.3 million, and consisted of purchases of marketable securities, equipment, and recorders provided to customers.

Net cash provided by financing activities during the threesix months ended MarchJune 31,30, 2026, consisted of proceeds from the exercise of options and purchase of shares in accordance with our ESPP.

Net cash provided byin financing activities during the threesix months ended MarchJune 31,30, 2025, consisted of proceeds from the exercise of options, and offset by debt issuance costs.

As of MarchJune 31,30, 2026, our principal sources of liquidity consisted of $141.2$129.3 million of cash, cash equivalents, and marketable securities and $20.0 million of term loans.

On February 6, 2024, we entered into the VLSA with SVB and Horizon. The VLSA provides a term loan commitment of $50.0 million. We drew $20.0 million of the $50.0 million term loan commitment at closing (consisting of $6.0 million from SVB and $14.0 million from Horizon), which was used to retire our existing debt with Horizon, pay transaction fees, and for general corporate purposes. The remaining $30.0 million term loan commitment consists of three tranches of $10.0 million commitments. The first $10.0 million tranche expired on June 30, 2026 and no amount was drawn. The maturity date of VLSA is March 1, 2029.

Our contractual obligations at MarchJune 31,30, 2026 include:

Operating leases — As of MarchJune 31,30, 2026, estimated contractual obligations for operating lease payments were $2.4$2.0 million due within 2219 months.

Information about our significant accounting policies and how estimates are involved in the preparation of our financial statements are described in our Annual Report on Form 10-K filed with the SEC on February 24, 2026. There have been no material changes to our significant accounting policies and estimates during the threesix months ended MarchJune 31,30, 2026.