Cerebral Inc., a behavioral health tech startup once hailed as one of the fastest-growing players in the telehealth industry, is now facing intense public attention over an ongoing Cerebral loan dispute with its co-founder and former CEO, Kyle Robertson. The company has asked a New York state judge to enforce repayment of a $49.8 million loan that Robertson received in early 2023. Court filings reveal Cerebral is demanding at least $25.4 million from Robertson after he allegedly refused to repay the funds under the terms of the agreement.
The Loan at the Center of the Dispute
At the heart of the Cerebral loan dispute is a nearly $50 million promissory note issued to Robertson in January 2023. The purpose of the loan was to help Robertson exercise his option to purchase over one million shares of Cerebral stock, ultimately giving him a total of 5.28 million shares. Like many executive loans, the deal tied repayment to Robertson’s continued employment at the company, with specific conditions designed to protect Cerebral in the event of leadership changes.
The agreement included a clear clause: if Robertson were terminated, repayment would be required within six months. When Cerebral’s board removed him from the CEO position on May 18, that condition was triggered. Despite this, court documents claim Robertson has not repaid the money, which led to the filing of the Cerebral loan dispute in court.
Alleged Refusal to Repay
Current CEO David Mou stated in a sworn affidavit that Robertson “repeatedly asserted that he refused to repay the loan” during mediation efforts. Legal filings show Robertson is personally responsible for 51% of the principal, while the rest is partly secured by the stock purchased with the loan. Cerebral also retained the right to repurchase those shares to offset the debt, but the standoff has escalated into a full-blown Cerebral loan dispute that could drag out in court for months.
A spokesperson for Cerebral noted the company has a contractual obligation to pursue repayment. “Because the loan is past due and Kyle has not paid it back, Cerebral has an obligation to enforce its contractual rights,” the statement read. Robertson has not publicly commented on the case.
Escalating Tensions Between Founder and Company
The legal battle comes at a time when relations between Robertson and Cerebral appear to have soured significantly. Just one week before the lawsuit was filed, Robertson issued a books-and-records inspection notice to the company, a step often taken by shareholders preparing to bring litigation of their own. In that notice, Robertson alleged that his termination was not performance-related but instead motivated by his sexual orientation. He also claimed that he had been pressured by individuals inside the company to expand the prescribing of controlled substances—an issue that has been at the center of Cerebral’s regulatory troubles.
If these allegations gain traction in court, the Cerebral loan dispute may evolve into a broader conflict involving claims of discrimination, corporate misconduct, and questions about who ultimately bears responsibility for the company’s controversial practices.
Cerebral’s Rise and Growing Pains
Founded in 2020, Cerebral entered the telehealth landscape with an ambitious mission: to expand access to mental health care by providing online therapy and medication management. The timing coincided with the COVID-19 pandemic, when demand for virtual care skyrocketed and regulations around telehealth prescribing were relaxed. Cerebral quickly attracted investors, achieving a multibillion-dollar valuation within just two years.
However, rapid growth came with significant challenges. By mid-2022, Cerebral faced investigations from the Department of Justice and other federal agencies regarding its prescribing practices, particularly around ADHD medications and other controlled substances. Reports suggested the company had scaled too quickly, prioritizing patient acquisition and revenue growth while raising red flags about safety and oversight. The increased scrutiny damaged Cerebral’s reputation and raised questions about its leadership.
Robertson, as the company’s co-founder and CEO, became closely associated with both its meteoric rise and the controversies that followed. His termination in 2023 marked a pivotal turning point for Cerebral, as the board sought to stabilize operations and rebuild trust with regulators, patients, and investors.
Why This Case Matters
The Cerebral loan dispute highlights more than a disagreement over repayment—it underscores the financial and governance pressures that fast-growing startups face once they encounter regulatory and operational headwinds. For Cerebral, the lawsuit is not only about recovering millions of dollars but also about demonstrating accountability and enforcing leadership agreements. Failing to act could have raised doubts among investors and partners about the company’s ability to enforce contracts and safeguard its financial health.
For Robertson, the stakes are equally high. Beyond the financial obligation, his resistance to repayment and his counterclaims of wrongful termination may shape how his leadership legacy is viewed in both the healthcare and tech industries. If his claims about discrimination and internal pressure are pursued, they could shed light on the inner workings of Cerebral during its most turbulent years.
The Broader Digital Health Context
The legal clash also illustrates a larger trend within the digital health sector. Many startups experienced explosive growth during the pandemic, only to face challenges when temporary regulatory flexibilities expired and oversight increased. Companies that expanded aggressively are now being forced to confront sustainability, compliance, and governance issues. The Cerebral loan dispute is a stark reminder that the financial arrangements made during periods of rapid expansion can resurface as liabilities when leadership changes and scrutiny intensifies.
Other behavioral health startups are watching closely, as the outcome could set precedents for how executive loans, stock options, and leadership accountability are handled in high-growth digital health companies. Investors may also become more cautious about financing similar arrangements, knowing that repayment can become contentious if leadership turnover occurs.
Conclusion
The Cerebral loan dispute between the company and Kyle Robertson represents far more than a disagreement over money. It reflects the challenges of rapid growth, the risks of ambitious leadership, and the consequences of regulatory scrutiny in the digital health industry. As the case unfolds, it is likely to expose further details about the company’s decision-making, the dynamics between its leadership and board, and the difficult balance between innovation and accountability.
For Cerebral, the lawsuit is an attempt to enforce order and financial responsibility after years of turbulence. For Robertson, it may be an opportunity to push back against the narrative of his ouster and raise questions about how Cerebral operated during his tenure. However it ends, the dispute underscores the growing pains of an industry still learning how to balance scale, compliance, and trust in an increasingly regulated landscape.
