Spectral AI (MDAI) FY2025 10-K Risk Factors: 78 New, 70 Dropped

What the changes say

The company relies heavily on government contracts like BARDA and DOD for funding its DeepView diagnostic systems.
Regulatory approval from the FDA and international bodies remains a central milestone for commercialization.
Proprietary AI algorithms and extensive wound data repositories form the core of the business model.

What changed since the prior 10-K

New

New
,” elsewhere in this Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission (the “SEC”)
New
Item 1. Business Overview
Our DeepView System uses proprietary AI and multispectral imaging to predict burn wound healing, and received UKCA marking in early 2024.
New
Figure 1 — DeepView Imaging technology
New
Other DeepView Programs in Development
We are developing the handheld DeepView SnapShot M for military use under a $1.1 million DHA contract.
New
3-D Wound Measurement Technology
We are developing 3D wound measurement technology with BARDA funding to calculate %TBSA without reference markers.
New
Business Focus and Milestones
We submitted a De Novo application to the FDA for our burn application in June 2025 and hold ISO 13485:2016 certification.
New
Figure 2 — Illustration of DeepView’s binary decision assist output where the colored region marks the predicted non-healing portion of the wound
Clinical studies across four hundred patients showed our DeepView System has superior sensitivity compared to clinician assessments.
New
Market Leading Technology
New
Significant Market Opportunity
We estimate a total addressable market of over 57,000 clinical sites in the U.S. and over 20,000 across the UK and EU.
New
Existing and future revenue base from long term U.S. Government Contracts — BARDA
A BARDA contract provides up to $150.0 million in non-dilutive funding, including an initial $54.9 million and options for $95.1 million.
New
Significant Wound Data Repository from Artificial Neural Network
Our deep learning algorithms have been trained on over 340 billion pixels of proprietary image data, creating a barrier to entry.
New
Proven Experienced Management Team
New
Commercialization and Revenue Strategy
New
We currently outsource all our manufacturing to a contract manufacturer. Cobalt Product Solutions (“Cobalt”), located in Plano, Texas, is involved with manufacturing the current generation DeepView System and we anticipate that they will continue to do so for the foreseeable future
New
We strive to protect and enhance the proprietary technologies that we believe are important to our business by seeking patents to cover our technology. We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection
New
Human Capital Resources and Employees
NewRisks Related to Our Financial Condition and Capital Requirements
We have incurred significant losses since inception and may not be able to achieve significant revenues or profitability
NewRisks Related to Our Financial Condition and Capital Requirements
We are devoting a significant portion of our efforts towards research and development of our DeepView System
NewRisks Related to Our Financial Condition and Capital Requirements
We may need additional funding to finance our planned operations, and may not be able to raise capital when needed, which could force us to delay clinical trials necessary to market our products or delay establishment of sales and marketing capabilities or other activities necessary to commercialize our products
NewRisks Related to Product Development and Regulatory Review
The regulatory review process is expensive, time-consuming, and uncertain and we may be unable to obtain clearance, approval, De Novo classification, or certification for our DeepView technology
NewRisks Related to Product Development and Regulatory Review
The research, design, testing, manufacturing, labeling, selling, marketing and distribution of medical devices are subject to extensive regulation by country-specific regulatory authorities, which regulations differ from country to country
NewRisks Related to Product Development and Regulatory Review
We may experience significant delays in completing clinical trials, which could prevent or significantly delay our targeted product launch timeframe and impair our viability and business plan
NewRisks Related to Product Development and Regulatory Review
If our clinical trials are delayed, it will take us longer to ultimately launch our DeepView System in the market and generate revenues. Moreover, our development costs will increase if we have material delays in our clinical trials or if we need to perform more or larger clinical trials than planned
NewRisks Related to Product Development and Regulatory Review
In addition, the landscape concerning medical devices in the EU has evolved in recent years
NewRisks Related to Ongoing Government Regulation
The DeepView System requires a De Novo classification
NewRisks Related to Ongoing Government Regulation
Quality problems and product liability claims could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a material adverse effect on our business, results of operations, financial condition, and cash flows
NewRisks Related to Ongoing Government Regulation
The FDA and other regulatory enforcement agencies actively enforce the laws and regulations prohibiting the promotion of off-label or unapproved uses. If we are found to have improperly promoted off-label or unapproved uses, we may become subject to significant liability
NewRisks Related to Ongoing Government Regulation
We must comply with anti-kickback, fraud and abuse, false claims, transparency, and other healthcare laws and regulations
NewRisks Related to Ongoing Government Regulation
Healthcare reform measures could hinder or prevent the commercial success of our DeepView System
NewRisks Related to Ongoing Government Regulation
We currently outsource all of our manufacturing to a contract manufacturer and as such we are not in direct control of the manufacture of our products and are, therefore, exposed to the risk of poor product quality, non-adherence to applicable standards, disruptions in supply chain, or other matters
NewRisks Related to Ongoing Government Regulation
Actual or perceived failure to comply with data protection, privacy and security laws, regulations, standards and other requirements could negatively affect our business, financial condition or results of operations
NewRisks Related to Ongoing Government Regulation
Our employees, collaborators, independent contractors and consultants may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
NewRisks Related to Ongoing Government Regulation
As the regulatory framework for AI technology evolves, our business, financial condition and results of operation may be adversely affected
NewRisks Related to Ongoing Government Regulation
We must comply with environmental and occupational safety laws
NewRisks Related to the Commercialization of our DeepView System
If approved, the commercial success of our DeepView System will depend upon the degree of market acceptance by clinicians
NewRisks Related to the Commercialization of our DeepView System
We have no experience in marketing and selling our DeepView System and we may provide inadequate training, fail to increase our sales and marketing capabilities, or fail to develop and maintain broad brand awareness in a cost-effective manner
NewRisks Related to the Commercialization of our DeepView System
If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration with third parties, we may not be successful in commercializing our DeepView System, if approved
NewRisks Related to the Commercialization of our DeepView System
If third-party payors do not provide coverage and reimbursement for the use of our DeepView System, our business and prospects will be negatively impacted
NewRisks Related to the Commercialization of our DeepView System
We may not be able to achieve or maintain satisfactory pricing and margins for our DeepView technology
NewRisks Related to the Commercialization of our DeepView System
We will face competition from many sources, including larger companies, and we may be unable to compete successfully
NewRisks Related to the Commercialization of our DeepView System
We may also compete with additional competitors and products outside the United States as well. Among other competitive advantages, such companies may have more established sales and marketing programs and networks, established relationships with clinicians and greater name recognition in such markets
NewRisks Related to the Commercialization of our DeepView System
If we are unable to continue to innovate and improve our products and services, we could lose market share
NewRisks Related to the Commercialization of our DeepView System
We will depend upon third-party suppliers, including contract manufacturers and single and sole source suppliers, making us vulnerable to supply shortages and price fluctuations that could negatively affect our business, financial condition and results of operations
NewRisks Related to the Commercialization of our DeepView System
To utilize other sources, we would need to identify and qualify new providers to our quality standards and obtain any additional regulatory clearances or approvals required to change providers, which could result in manufacturing delays and increase our expenses
NewRisks Related to the Commercialization of our DeepView System
If we receive a significant number of warranty claims or our DeepView System requires significant amounts of service after sale, our operating expenses may substantially increase and our business and financial results will be adversely affected
NewRisks Related to the Commercialization of our DeepView System
We need to ensure strong product performance and reliability to maintain and grow our business
NewRisks Related to the Commercialization of our DeepView System
Our results of operations will be materially harmed if we are unable to accurately forecast demand for, and utilization of, our DeepView System and manage our inventory
NewRisks Related to Our Business Operations
We may encounter difficulties in managing our growth, which could disrupt our operations
NewRisks Related to Our Business Operations
We are highly dependent on our senior management, directors and key personnel, and our business could be harmed if we are unable to attract and retain personnel necessary for our success
NewRisks Related to Our Business Operations
If we are not able to attract and retain highly skilled managerial, scientific and technical personnel, we may not be able to implement our business model successfully
NewRisks Related to Our Business Operations
We expect to significantly increase the size of our organization over the next several years. As a result, we may encounter difficulties in managing our growth, which could disrupt our operations and/or increase our net losses
NewRisks Related to Our Business Operations
Our software and our internal computer systems may fail and such failure could negatively affect our business, financial condition and results of operations
NewRisks Related to Our Business Operations
The use of artificial intelligence, including machine learning, in our analytics platforms may result in reputational harm or liability
NewRisks Related to Our Business Operations
Product liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of our DeepView System. These suits could result in expensive and time-consuming litigation, payment of substantial damages, and an increase in our insurance rates
NewRisks Related to Our Business Operations
Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilities
NewRisks Related to Our Business Operations
The success of our algorithms depends on our significant repository of proprietary image data
NewRisks Related to Our Business Operations
We may further seek strategic alliances, joint ventures or collaborations, or enter into licensing or partnership arrangements in the future and may not be successful in doing so, and even if we are, we may not realize the benefits or costs of such relationships
NewRisks Related to Our Business Operations
As international expansion of our business occurs in future years, it will expose us to market, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States
NewRisks Related to Our Intellectual Property
We may, in the future, be a party to intellectual property litigation or administrative proceedings that are very costly and time-consuming and could interfere with our ability to sell and market our products
NewRisks Related to Our Intellectual Property
Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time
NewRisks Related to Our Intellectual Property
Changes in patent law or its interpretation could diminish the value of patents in general, thereby impairing our ability to protect our existing and future products
NewRisks Related to Our Intellectual Property
Our patent rights and other intellectual property may be subject to priority, ownership or inventorship disputes, interferences, and similar proceedings
NewRisks Related to Our Intellectual Property
We may not be able to enforce our intellectual property rights throughout the world
NewRisks Related to Our Intellectual Property
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
NewRisks Related to Our Intellectual Property
If we are unable to obtain licenses from third parties on commercially reasonable terms or fail to comply with our obligations under such agreements, our business could be harmed
NewRisks Related to Our Intellectual Property
If our third-party manufacturers do not respect our intellectual property and trade secrets and produce or sell competitive products using our designs or intellectual property, our business, financial condition, prospects and results of operation would be harmed
NewRisks Related to Our Intellectual Property
Intellectual property rights do not necessarily address all potential threats, and limitations in intellectual property rights could harm our business, financial condition, prospects and results of operations
NewRisks Related to Our Intellectual Property
Our contracts with BARDA and DHA may affect our intellectual property rights
NewRisks Related to Our Intellectual Property
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions
NewRisks Related to Our Intellectual Property
The failure of any bank in which we deposit our funds could have an adverse effect on our financial condition
NewRisks Relating to the Ownership of Our Securities
The price of Common Stock and Warrants may be volatile
NewRisks Relating to the Ownership of Our Securities
Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations
NewRisks Relating to the Ownership of Our Securities
If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting, and the trading price of our Common Stock may decline
NewRisks Relating to the Ownership of Our Securities
If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our Common Stock, the price of our Common Stock could decline
NewRisks Relating to the Ownership of Our Securities
Sales, or the perception of sales, of our common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline
NewRisks Relating to the Ownership of Our Securities
Warrants are exercisable for Company Common Stock, which would increase the number of shares eligible for resale in the public market and result in dilution to our stockholders
NewRisks Relating to the Ownership of Our Securities
The Company manages cybersecurity risk as part of our overall enterprise risk management strategy, which is overseen by the Audit Committee and the Board. The Company employs robust cybersecurity and data privacy programs to assess, identify and manage material risks from cybersecurity threats
NewRisks Relating to the Ownership of Our Securities
We maintain relationships with legal counsel to inform our cybersecurity and data privacy programs

Dropped

Dropped
Remediation Plan for Material Weaknesses
Dropped
Based on this assessment, our management concluded that, as of December 31, 2024, our internal control over financial reporting was not effective at the reasonable assurance level, due to the material weakness outlined above
Management concluded internal controls over financial reporting were not effective as of December 31, 2024 due to material weaknesses.
Dropped
Changes in Internal Control over Financial Reporting
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Item 10. Directors, Executive Officers and Corporate Governance
Dropped
As an “emerging growth company” as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have opted to comply with the scaled disclosure requirements applicable to emerging growth companies
Emerging growth company status exempts us from providing a Compensation Discussion and Analysis section.
Dropped
of Certain Beneficial Owners and Management and Related Stockholder Matters
Dropped
Item 13. Certain Relationships and Related Transactions, and Director Independence
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Item 14. Principal Accountant Fees and Services
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Item 15. Exhibits, Financial Statement Schedules
Exhibits and financial statement schedules filed as part of the annual report.
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Opinion on the Consolidated Financial Statements
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Total current assets 10,122 9,902
Summary of total current assets, property and equipment, and right-of-use assets.
Dropped
Liabilities and Stockholders’ Equity (Deficit)
Breakdown of current liabilities including accounts payable, accrued expenses, deferred revenue, and warrant liabilities.
Dropped
Gross profit 13,274 7,880
Dropped
Operating loss (6,582 ) (12,984 )
Dropped
Basic and Diluted 17,934,218 14,087,586
Dropped
Net loss $ (15,315 ) $ (20,854 )
Dropped
Issuance of shares for borrowing related costs 1,143
Dropped
Net cash used in operating activities (9,199 ) (13,240 )
Dropped
Cash paid for taxes $ 11 $ 114
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In March 2024, the Company received an additional $0.5 million award from the Defense Health Agency to further the development related to the DHA Agreement
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The Company’s consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) or an Accounting Standards Update (“ASU”)
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(v) Legacy Spectral’s operations comprise the ongoing operations of Spectral AI
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Principles of Consolidation
Dropped
The Company has one operating segment. The accounting policies of the Company’s single operating and reportable segment are the same as those described in the summary of significant accounting policies
Dropped
Accounts receivable represent amounts due from US government agencies pursuant to research and development contracts associated with the Company’s DeepView® System
Dropped
Concentrations of Credit Risk
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Property and Equipment, Net
Dropped
Leasehold improvements Shorter of remaining lease term or useful life
Dropped
Impairment of Long-Lived Assets
Dropped
Research and Development Revenue
Dropped
The Company generates research and development revenue, primarily from the contracts with BARDA and MTEC. Each contract for BARDA and MTEC has a single performance obligation
Dropped
Research and Development Expense
Dropped
Net Loss per Share of Common Stock
Dropped
Comprehensive Income (Loss)
Dropped
Recently Adopted Accounting Standards
Dropped
Recently Issued Accounting Standards
Dropped
As discussed in Note 1, on September 11, 2023, the Company consummated the Business Combination, with Legacy Spectral surviving the merger as a wholly-owned subsidiary of the Company
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Upon the Closing, the Company issued 33,333 shares of Company Common Stock, with a fair value of $0.2 million, to settle an assumed liability to the Sponsor as a payment for an administrative fee
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4. FAIR VALUE MEASUREMENTS
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There were no transfers between Level 1, 2 or 3 during the years ended December 31, 2024 and 2023
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Balance - December 31, 2024 $ 41
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Valuation of short-term notes payable – Yorkville
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Balance as of December 31, 2024 2,365
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Valuation of forward options in B. Riley ELOC and Yorkville SEPA
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5. RESEARCH AND DEVELOPMENT REVENUE
Dropped
Total revenue $ 29,581 $ 18,056
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Yorkville Convertible Notes
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During 2023, the Company entered into a lease for office space in the United Kingdom for annual payments of $0.1 million under a lease that expired in March 2024. The lease was renewed in March 2024, however the Company has excluded this lease from the tables below as the term is twelve months
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Weighted average discount rate 8.5 % 8.5 %
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Variable lease cost is primarily attributable to amounts paid to lessors for utility charges, parking, and property taxes under an office space lease
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11. STOCK-BASED COMPENSATION
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2018 Long Term Incentive Plan
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2022 Long Term Incentive Plan
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2023 Long Term Incentive Plan
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Nonvested as of December 31, 2024 169,401 $ 1.73
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Options vested and exercisable as of December 31, 2024 2,941,842 $ 1.87 5.5 3,285
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The Company recorded stock-based compensation expense for stock options, RSUs, and restricted stock awards of $1.03 million for the year ended December 31, 2024 and $1.2 million for the year ended December 31, 2023 in general and administrative expenses in the consolidated statements of operations
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Components of Income Tax Expense/(Benefit)
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Total provision for income taxes $ 271 $ 10
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Total deferred income tax assets 6,661 4,512
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Valuation Allowance Considerations
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Section 174 Capitalization
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Basic and diluted net loss per common share attributable to common stockholders are the same for the years ended December 31, 2024 and 2023, since the inclusion of all potential shares of common stock outstanding would have been anti-dilutive due to the Company’s net loss
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14. RELATED PARTY TRANSACTIONS
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Exhibit Number Description
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3.2** Amended and Restated Bylaws of Spectral AI, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on September 15, 2023)
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4.3** Amended and Restated Registration Rights & Lock-up Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on September 15, 2023)
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10.1** Form of Indemnification Agreement (incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on September 15, 2023)
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10.8** Sponsor Letter Agreement, dated April 11, 2023, by and among Rosecliff Acquisition I Sponsor LLC, Spectral MD Holdings, Ltd., and Rosecliff Acquisition Corp I (incorporated by reference to Annex F of the Registration Statement on Form S-4 (File No. 333-271566))
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104 Cover Page Interactive Data File

All 78 risk factors

Headings as the filing states them, in filing order.

Other

01,” elsewhere in this Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission (the “SEC”)New
02Item 1. Business OverviewNew
03Figure 1 — DeepView Imaging technologyNew
04Other DeepView Programs in DevelopmentNew
053-D Wound Measurement TechnologyNew
06Business Focus and MilestonesNew
07Figure 2 — Illustration of DeepView’s binary decision assist output where the colored region marks the predicted non-healing portion of the woundNew
08Market Leading TechnologyNew
09Significant Market OpportunityNew
10Existing and future revenue base from long term U.S. Government Contracts — BARDANew
11Significant Wound Data Repository from Artificial Neural NetworkNew
12Proven Experienced Management TeamNew
13Commercialization and Revenue StrategyNew
14We currently outsource all our manufacturing to a contract manufacturer. Cobalt Product Solutions (“Cobalt”), located in Plano, Texas, is involved with manufacturing the current generation DeepView System and we anticipate that they will continue to do so for the foreseeable futureNew
15We strive to protect and enhance the proprietary technologies that we believe are important to our business by seeking patents to cover our technology. We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protectionNew
16Human Capital Resources and EmployeesNew

Risks Related to Our Financial Condition and Capital Requirements

17We have incurred significant losses since inception and may not be able to achieve significant revenues or profitabilityNew
18We are devoting a significant portion of our efforts towards research and development of our DeepView SystemNew
19We may need additional funding to finance our planned operations, and may not be able to raise capital when needed, which could force us to delay clinical trials necessary to market our products or delay establishment of sales and marketing capabilities or other activities necessary to commercialize our productsNew

Risks Related to Product Development and Regulatory Review

20The regulatory review process is expensive, time-consuming, and uncertain and we may be unable to obtain clearance, approval, De Novo classification, or certification for our DeepView technologyNew
21The research, design, testing, manufacturing, labeling, selling, marketing and distribution of medical devices are subject to extensive regulation by country-specific regulatory authorities, which regulations differ from country to countryNew
22We may experience significant delays in completing clinical trials, which could prevent or significantly delay our targeted product launch timeframe and impair our viability and business planNew
23If our clinical trials are delayed, it will take us longer to ultimately launch our DeepView System in the market and generate revenues. Moreover, our development costs will increase if we have material delays in our clinical trials or if we need to perform more or larger clinical trials than plannedNew
24In addition, the landscape concerning medical devices in the EU has evolved in recent yearsNew

Risks Related to Ongoing Government Regulation

25The DeepView System requires a De Novo classificationNew
26Quality problems and product liability claims could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a material adverse effect on our business, results of operations, financial condition, and cash flowsNew
27The FDA and other regulatory enforcement agencies actively enforce the laws and regulations prohibiting the promotion of off-label or unapproved uses. If we are found to have improperly promoted off-label or unapproved uses, we may become subject to significant liabilityNew
28We must comply with anti-kickback, fraud and abuse, false claims, transparency, and other healthcare laws and regulationsNew
29Healthcare reform measures could hinder or prevent the commercial success of our DeepView SystemNew
30We currently outsource all of our manufacturing to a contract manufacturer and as such we are not in direct control of the manufacture of our products and are, therefore, exposed to the risk of poor product quality, non-adherence to applicable standards, disruptions in supply chain, or other mattersNew
31Actual or perceived failure to comply with data protection, privacy and security laws, regulations, standards and other requirements could negatively affect our business, financial condition or results of operationsNew
32Our employees, collaborators, independent contractors and consultants may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirementsNew
33As the regulatory framework for AI technology evolves, our business, financial condition and results of operation may be adversely affectedNew
34We must comply with environmental and occupational safety lawsNew

Risks Related to the Commercialization of our DeepView System

35If approved, the commercial success of our DeepView System will depend upon the degree of market acceptance by cliniciansNew
36We have no experience in marketing and selling our DeepView System and we may provide inadequate training, fail to increase our sales and marketing capabilities, or fail to develop and maintain broad brand awareness in a cost-effective mannerNew
37If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration with third parties, we may not be successful in commercializing our DeepView System, if approvedNew
38If third-party payors do not provide coverage and reimbursement for the use of our DeepView System, our business and prospects will be negatively impactedNew
39We may not be able to achieve or maintain satisfactory pricing and margins for our DeepView technologyNew
40We will face competition from many sources, including larger companies, and we may be unable to compete successfullyNew
41We may also compete with additional competitors and products outside the United States as well. Among other competitive advantages, such companies may have more established sales and marketing programs and networks, established relationships with clinicians and greater name recognition in such marketsNew
42If we are unable to continue to innovate and improve our products and services, we could lose market shareNew
43We will depend upon third-party suppliers, including contract manufacturers and single and sole source suppliers, making us vulnerable to supply shortages and price fluctuations that could negatively affect our business, financial condition and results of operationsNew
44To utilize other sources, we would need to identify and qualify new providers to our quality standards and obtain any additional regulatory clearances or approvals required to change providers, which could result in manufacturing delays and increase our expensesNew
45If we receive a significant number of warranty claims or our DeepView System requires significant amounts of service after sale, our operating expenses may substantially increase and our business and financial results will be adversely affectedNew
46We need to ensure strong product performance and reliability to maintain and grow our businessNew
47Our results of operations will be materially harmed if we are unable to accurately forecast demand for, and utilization of, our DeepView System and manage our inventoryNew

Risks Related to Our Business Operations

48We may encounter difficulties in managing our growth, which could disrupt our operationsNew
49We are highly dependent on our senior management, directors and key personnel, and our business could be harmed if we are unable to attract and retain personnel necessary for our successNew
50If we are not able to attract and retain highly skilled managerial, scientific and technical personnel, we may not be able to implement our business model successfullyNew
51We expect to significantly increase the size of our organization over the next several years. As a result, we may encounter difficulties in managing our growth, which could disrupt our operations and/or increase our net lossesNew
52Our software and our internal computer systems may fail and such failure could negatively affect our business, financial condition and results of operationsNew
53The use of artificial intelligence, including machine learning, in our analytics platforms may result in reputational harm or liabilityNew
54Product liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of our DeepView System. These suits could result in expensive and time-consuming litigation, payment of substantial damages, and an increase in our insurance ratesNew
55Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilitiesNew
56The success of our algorithms depends on our significant repository of proprietary image dataNew
57We may further seek strategic alliances, joint ventures or collaborations, or enter into licensing or partnership arrangements in the future and may not be successful in doing so, and even if we are, we may not realize the benefits or costs of such relationshipsNew
58As international expansion of our business occurs in future years, it will expose us to market, regulatory, political, operational, financial and economic risks associated with doing business outside of the United StatesNew

Risks Related to Our Intellectual Property

59We may, in the future, be a party to intellectual property litigation or administrative proceedings that are very costly and time-consuming and could interfere with our ability to sell and market our productsNew
60Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of timeNew
61Changes in patent law or its interpretation could diminish the value of patents in general, thereby impairing our ability to protect our existing and future productsNew
62Our patent rights and other intellectual property may be subject to priority, ownership or inventorship disputes, interferences, and similar proceedingsNew
63We may not be able to enforce our intellectual property rights throughout the worldNew
64If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affectedNew
65If we are unable to obtain licenses from third parties on commercially reasonable terms or fail to comply with our obligations under such agreements, our business could be harmedNew
66If our third-party manufacturers do not respect our intellectual property and trade secrets and produce or sell competitive products using our designs or intellectual property, our business, financial condition, prospects and results of operation would be harmedNew
67Intellectual property rights do not necessarily address all potential threats, and limitations in intellectual property rights could harm our business, financial condition, prospects and results of operationsNew
68Our contracts with BARDA and DHA may affect our intellectual property rightsNew
69Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictionsNew
70The failure of any bank in which we deposit our funds could have an adverse effect on our financial conditionNew

Risks Relating to the Ownership of Our Securities

71The price of Common Stock and Warrants may be volatileNew
72Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operationsNew
73If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting, and the trading price of our Common Stock may declineNew
74If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our Common Stock, the price of our Common Stock could declineNew
75Sales, or the perception of sales, of our common stock by us or our existing stockholders in the public market could cause the market price for our common stock to declineNew
76Warrants are exercisable for Company Common Stock, which would increase the number of shares eligible for resale in the public market and result in dilution to our stockholdersNew
77The Company manages cybersecurity risk as part of our overall enterprise risk management strategy, which is overseen by the Audit Committee and the Board. The Company employs robust cybersecurity and data privacy programs to assess, identify and manage material risks from cybersecurity threatsNew
78We maintain relationships with legal counsel to inform our cybersecurity and data privacy programsNew

Other Spectral AI 10-Ks

FY2024 10-K risk factors
70 risks
Spectral AI relies heavily on government contracts from BARDA, MTEC, and DHA to fund the development of its DeepView System. The company faces significant financial pressures, including material weaknesses in internal controls and Nasdaq listing compliance risks.
Filed Mar 31, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.