CeriBell, Inc.(CBLL) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) CeriBell, Inc. reported Q1 2025 total revenue of $20.5 million, a 42% increase year-over-year, with a net loss of $12.8 million Condensed Balance Sheet Data (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $153,360 | $194,370 | | Total current assets | $205,420 | $217,272 | | Total assets | $213,471 | $225,412 | | Liabilities & Equity | | | | Total current liabilities | $11,831 | $12,989 | | Total liabilities | $32,590 | $34,247 | | Total stockholders' equity | $180,881 | $191,165 | Condensed Statements of Operations Data (in thousands, except per share data) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $20,491 | $14,400 | | Gross profit | $18,007 | $12,342 | | Loss from operations | $(14,207) | $(8,453) | | Net loss | $(12,777) | $(8,521) | | Net loss per share (basic and diluted) | $(0.36) | $(1.56) | Condensed Statements of Cash Flows Data (in thousands) | | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,403) | $(9,550) | | Net cash used in investing activities | $(29,609) | $(132) | | Net cash provided by financing activities | $2 | $7,678 | | Net decrease in cash and cash equivalents | $(41,010) | $(2,004) | Notes to Condensed Financial Statements Notes detail liquidity, revenue disaggregation, new debt facilities, and increased stock-based compensation for Q1 2025 - The company has incurred operating losses since inception, with an accumulated deficit of $179.7 million as of March 31, 2025, but management believes existing cash and cash equivalents of $182.7 million are sufficient to fund operations for at least the next 12 months[30][31][32] Disaggregation of Revenue (in thousands) | Revenue Source | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | EEG headbands, point in time | $15,608 | $11,035 | | EEG portal and Clarity subscriptions, over time | $4,883 | $3,365 | | Total Revenue | $20,491 | $14,400 | - In February 2024, the company executed a Venture Loan and Security Agreement for a $50 million term loan commitment, drawing an initial $20 million, and secured a $10 million senior revolving line of credit[75][76][81] - Total stock-based compensation expense was $2.3 million for Q1 2025, a significant increase from $0.8 million in Q1 2024, primarily driven by higher expenses in general & administrative and sales & marketing functions[100] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses 42% revenue growth driven by Ceribell System adoption, 55% operating expense increase, and $12.8 million net loss for Q1 2025 Overview CeriBell's core Ceribell System, an AI-powered EEG platform, has expanded to over 550 active accounts and served over 200,000 patients - The company's core product is the Ceribell System, an AI-powered, point-of-care EEG platform designed for rapid diagnosis and continuous monitoring of neurological conditions in acute care settings[110][112] - As of March 31, 2025, the company has expanded its customer base to over 550 active accounts and its system has been used to care for over 200,000 patients[111] - The company's primary commercial focus is the U.S. market, which has approximately 6,000 acute care facilities, and it also holds a CE Mark for Europe with plans for further international expansion[113] Results of Operations Q1 2025 revenue grew 42% to $20.5 million, gross profit 46% to $18.0 million, but operating expenses surged 55% to $32.2 million, widening loss to $14.2 million Results of Operations Comparison (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $20,491 | $14,400 | $6,091 | 42% | | Product revenue | $15,608 | $11,035 | $4,573 | 41% | | Subscription revenue | $4,883 | $3,365 | $1,518 | 45% | | Gross profit | $18,007 | $12,342 | $5,665 | 46% | | Total operating expenses | $32,214 | $20,795 | $11,419 | 55% | | Sales and marketing | $18,033 | $10,576 | $7,457 | 71% | | Loss from operations | $(14,207) | $(8,453) | $(5,754) | 68% | | Net loss | $(12,777) | $(8,521) | $(4,256) | 50% | - Revenue growth was driven by the addition of new customers and increased utilization of headbands by existing customers[134][135] - The increase in operating expenses was primarily due to higher personnel-related costs from increased headcount, with sales and marketing expenses rising by $7.5 million (71%)[139][140][141] Liquidity and Capital Resources Liquidity of $182.7 million from October 2024 IPO proceeds and new debt facilities is deemed sufficient for the next 12 months - The company completed its IPO on October 15, 2024, receiving net proceeds of $187.8 million[149] - As of March 31, 2025, principal sources of liquidity consisted of $182.7 million in cash, cash equivalents, and short-term marketable securities[151] - Management believes existing cash and expected revenue will be sufficient to fund planned operating expenses and capital expenditure requirements for at least the next 12 months[154] Quantitative and Qualitative Disclosures About Market Risk The company has determined that quantitative and qualitative disclosures about market risk are not applicable - The company has determined that quantitative and qualitative disclosures about market risk are not applicable[160] Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[161] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[162] PART II. OTHER INFORMATION Legal Proceedings The company is not currently involved in any litigation expected to have a material adverse effect on its business - The company is not currently a party to any litigation that is expected to have a material adverse effect on its business[167] Risk Factors The company faces significant business, regulatory, and intellectual property risks, including a history of losses, dependence on a single product, intense competition, and complex healthcare compliance Business and Industry Risk Factors Business risks include a history of net losses, dependence on the Ceribell System, intense competition, and reliance on Chinese manufacturers - The company has a history of net losses, incurring a loss of $40.5 million in fiscal year 2024, and expects to incur substantial losses in the foreseeable future[173] - The company faces competition from conventional EEG providers like Natus and Nihon Kohden, which have greater resources and brand recognition[180] - The company relies on manufacturers and suppliers in China for headband assembly and components, exposing it to foreign operational, political, and trade risks, including tariffs[184][187][188] Risks Related to Regulatory Matters Regulatory risks involve uncertain third-party reimbursement, compliance with fraud and abuse laws, and stringent FDA regulations for medical devices - The ability to sell the Ceribell System profitably depends on adequate reimbursement from third-party payers, and the company's new Clarity algorithm received a New Technology Add-on Payment (NTAP) designation, which lasts for no more than three years[223][224] - The company is subject to numerous federal and state healthcare fraud and abuse laws, including the Anti-Kickback Statute and False Claims Act, which constrain business and marketing practices[233][236] - Products are regulated as medical devices by the FDA and require marketing authorization (e.g., 510(k) clearance), and any modifications may require new submissions, with adherence to the Quality System Regulation (QSR) for manufacturing[248][254][273] Risks Related to Our Intellectual Property IP risks include protecting patents and trade secrets, potential infringement litigation, and dependence on an in-license from Stanford University - The company's success depends on its ability to obtain, maintain, and enforce its intellectual property rights, including patents, trademarks, and trade secrets[332] - The company may become party to expensive and time-consuming intellectual property litigation, and could be forced to cease commercializing products or pay substantial damages if found to be infringing on third-party rights[359][361] - The company's "brain stethoscope" EEG sonification technology is protected by intellectual property rights in-licensed from Stanford University, and the business is subject to compliance with the terms of this license agreement[370] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales occurred; IPO proceeds of $188.2 million are used for sales, R&D, and general corporate purposes - On October 15, 2024, the company completed its IPO, receiving net proceeds of approximately $188.2 million[437] - The IPO proceeds are being used to fund sales and marketing, research and product development, and for general corporate purposes, with no material change from the intended use described in the prospectus[438][439] Defaults Upon Senior Securities The company reports no defaults upon its senior securities - None[440] Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable[441] Other Information This section details the adoption and termination of Rule 10b5-1 trading plans by company executives in March 2025 Rule 10b5-1 Trading Plans Activity | Name | Action | Date | Total Shares to be Sold | | :--- | :--- | :--- | :--- | | David Foehr | Terminate | Mar 4, 2025 | 17,223 | | David Foehr | Adopt | Mar 11, 2025 | 15,071 | | Scott Blumberg | Adopt | Mar 14, 2025 | 93,000 | | Rebecca Robertson | Adopt | Mar 14, 2025 | 40,426 | Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents and officer certifications - The report includes several exhibits, such as corporate governance documents, a separation agreement with Joshua Copp dated March 28, 2025, and required officer certifications[446]