UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM
(MARKONE)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(Registrant’sTelephone Number, Including Area Code)
Securitiesregistered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Securitiesregistered pursuant to Section 12(g) of the Act: None
Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days.
Indicateby check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T “See 232.405 of this Chapter” during the preceding 12 months (or for such shorter period that the registrantwas required to submit such files).
Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”,“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated Filer ☐ | Smaller reporting company | |
| Emerging growth company |
Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complyingwith any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Thenumber of outstanding shares of the registrant’s common stock on July 31, 2025, was .
STEREOTAXIS,INC.
INDEXTO FORM 10-Q
| Page | ||
| Part I Financial Information | ||
| Item 1. | Consolidated Financial Statements (unaudited) | 3-7 |
| Consolidated Balance Sheets | 3 | |
| Consolidated Statements of Operations | 4 | |
| Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity | 5-6 | |
| Consolidated Statements of Cash Flows | 7 | |
| Notes to Financial Statements | 8-22 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23-29 |
| Item 3. | [Reserved] | 29 |
| Item 4. | Controls and Procedures | 29 |
| Part II Other Information | ||
| Item 1. | Legal Proceedings | 30 |
| Item 1A. | Risk Factors | 30 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 30 |
| Item 3. | Defaults upon Senior Securities | 30 |
| Item 4. | [Reserved] | 30 |
| Item 5. | Other Information | 30 |
| Item 6. | Exhibits | 30 |
| Signatures | 31 | |
| 2 |
ITEM1. CONSOLIDATED FINANCIAL STATEMENTS
STEREOTAXIS,INC.
CONSOLIDATEDBALANCE SHEETS
| (in thousands, except share amounts) | June 30, 2025 | December 31, 2024 | ||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash - current | ||||||||
| Accountsreceivable, net of allowance of $ | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Goodwill | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Prepaid and other non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Deferred revenue | ||||||||
| Current contingent consideration | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term deferred revenue | ||||||||
| Long term contingent consideration | ||||||||
| Operating lease liabilities | ||||||||
| Other liabilities | ||||||||
| Total liabilities | ||||||||
| Series A - Convertible preferred stock: | ||||||||
| Convertible preferred stock, Series A, par value $; shares authorized; | ||||||||
| and shares outstanding at 2025 and 2024, respectively | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock, par value $; shares authorized, | ||||||||
| and shares issued at 2025 and 2024, respectively | ||||||||
| Additional paid in capital | ||||||||
| Treasury stock, shares at 2025 and 2024 | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
Seeaccompanying notes.
| 3 |
STEREOTAXIS,INC.
CONSOLIDATEDSTATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in thousands, except share and per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Revenue: | ||||||||||||||||
| Systems | $ | $ | $ | $ | ||||||||||||
| Disposables, service and accessories | ||||||||||||||||
| Total revenue | ||||||||||||||||
| Cost of revenue: | ||||||||||||||||
| Systems | ||||||||||||||||
| Disposables, service and accessories | ||||||||||||||||
| Total cost of revenue | ||||||||||||||||
| Gross margin | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Other | ( | ) | ( | ) | ||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest income, net | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Cumulative dividend on convertible preferred stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share attributable to common stockholders: | ||||||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares and equivalents: | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
Seeaccompanying notes.
| 4 |
STEREOTAXIS,INC.
CONSOLIDATEDSTATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(Unaudited)
ThreeMonths Ended June 30, 2024
| (in thousands, except share amounts) | Convertible Preferred Stock Series A (Mezzanine) | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Amount | Amount | Amount | Amount | |||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Stock issued for the exercise of stock options | ||||||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||
| Components of net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Employee stock purchase plan | ||||||||||||||||||||||||||||||||
| Preferred stock conversion | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
ThreeMonths Ended June 30, 2025
| (in thousands, except share amounts) | Convertible Preferred Stock Series A (Mezzanine) | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Amount | Amount | Amount | Amount | |||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
| Stock issued for the exercise of stock options | ||||||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||
| Components of net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Employee stock purchase plan | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
Seeaccompanying notes.
| 5 |
STEREOTAXIS,INC.
CONSOLIDATEDSTATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(Unaudited)
SixMonths Ended June 30, 2024
| (in thousands, except share amounts) | Convertible Preferred Stock Series A (Mezzanine) | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Amount | Amount | Amount | Amount | |||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | | |||||||||||||||||||||
| Stock issued for the exercise of stock options | ||||||||||||||||||||||||||||||||
| Stock-based compensation |
| |||||||||||||||||||||||||||||||
| Components of net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Employee stock purchase plan | ||||||||||||||||||||||||||||||||
| Preferred stock conversion | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
SixMonths Ended June 30, 2025
| (in thousands, except share amounts) | Convertible Preferred Stock Series A (Mezzanine) | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Amount | Amount | Amount | Amount | |||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
| Stock issued for the exercise of stock options | ||||||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||
| Components of net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Employee stock purchase plan | ||||||||||||||||||||||||||||||||
| Preferred stock conversion | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||
Seeaccompanying notes.
| 6 |
STEREOTAXIS,INC.
CONSOLIDATEDSTATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended June 30, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of intangibles | ||||||||
| Loss on revaluation of contingent consideration | ||||||||
| Non-cash lease expense | ||||||||
| Stock-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Other assets | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued liabilities | ( | ) | ( | ) | ||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Other liabilities | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of stock, net of issuance costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash, cash equivalents, and restricted cash | ( | ) | ( | ) | ||||
| Cash, cash equivalents, and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Purchase of property and equipment included in accounts payable | $ | $ | ||||||
| Reconciliation of cash, cash equivalents, and restricted cash to consolidated balance sheet as of June 30th: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash - current | ||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||
Seeaccompanying notes.
| 7 |
STEREOTAXIS,INC.
NOTESTO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Notesto Consolidated Financial Statements
Inthis report, “Stereotaxis”, the “Company”, “Registrant”, “we”, “us”, and“our” refer to Stereotaxis, Inc. and its wholly owned subsidiaries. GenesisX RMN, Genesis RMN®, Niobe®,Navigant®, Synchrony, SynX, Odyssey®, Odyssey Cinema™, MAGiC ™, EMAGIN, Map-iT™,QuikCAS™, Cardiodrive®, Vdrive®, Vdrive Duo™, V-CAS™,V-Loop™, V-Sono™, and NuVizion are trademarks of Stereotaxis, Inc. All other trademarks that appearin this report are the property of their respective owners.
1.Description of Business
Stereotaxisdesigns, manufactures and markets robotic systems, instruments and information systems for the interventional laboratory. Our proprietaryrobotic technology, Robotic Magnetic Navigation, fundamentally transforms endovascular interventions using precise computer-controlledmagnetic fields to directly control the tip of flexible interventional catheters or devices. Direct control of the tip of an interventionaldevice, in contrast to all manual hand-held devices that are controlled from their handle, can improve the precision, stability, reachand safety of these devices during procedures.
Ourprimary clinical focus has been electrophysiology, specifically cardiac ablation procedures for the treatment of arrhythmias. Cardiacablation has become a well-accepted therapy for arrhythmias and a multi-billion-dollar medical device market with expectations for substantiallong-term growth. We have shared our aspirations and a product strategy to expand the clinical focus of our technology to several additionalendovascular indications including coronary, neuro, and peripheral interventions.
Thereis substantial real-world evidence and clinical literature for Robotic Magnetic Navigation in electrophysiology. Hundreds of electrophysiologistsat over one hundred hospitals globally have treated over 150,000 arrhythmia patients with our robotic technology. Clinical use of ourtechnology has been documented in over 500 clinical publications. Robotic Magnetic Navigation is designed to enable physicians to completemore complex interventional procedures with greater success and safety by providing image-guided delivery of catheters through the bloodvessels and chambers of the heart to treatment sites. This is achieved using externally applied computer-controlled magnetic fields thatgovern the motion of the working tip of the catheter, resulting in improved navigation. The more flexible atraumatic design of cathetersdriven using magnetic fields may reduce the risk of patient harm and other adverse events. Performing the procedure from a control cockpitenables physicians to complete procedures in a safe location protected from x-ray exposure, with greater ergonomics, and improved efficiency.We believe these benefits can be applicable in other endovascular indications where navigation through complex vasculature is often challengingor unsuccessful and generates significant x-ray exposure, and we are investing in research and development in these areas.
Ourprimary products include the Genesis RMN System, the GenesisX RMN System, the Odyssey Solution, and other relateddevices. Through our strategic relationships with fluoroscopy system manufacturers, providers of catheters and electrophysiology mappingsystems, and other parties, we offer our customers x-ray systems and other accessory devices.
TheGenesis RMN System is designed to enable physicians to complete more complex interventional procedures by providing image-guideddelivery of catheters through the blood vessels and chambers of the heart to treatment sites. This is achieved using externally appliedmagnetic fields that govern the motion of the working tip of the catheter, resulting in improved navigation, efficient procedures, andreduced x-ray exposure. The GenesisX RMN System, the latest generation of the Genesis RMN System, is designed to significantlyenhance the accessibility of Robotic Magnetic Navigation by eliminating the lengthy construction cycle necessary to install prior generationRMN systems.
TheOdyssey Solution consolidates lab information onto one large integrated display, enabling physicians to view and control all thekey information in the operating room. This is designed to improve lab layout and procedure efficiency. The system also features a remoteviewing and recording capability called Odyssey Cinema, which is an innovative solution that delivers synchronized content foroptimized workflow, advanced care, and improved productivity. This tool includes an archiving capability that allows clinicians to storeand replay entire procedures or segments of procedures. This information can be accessed from locations throughout the hospital localarea network and over the global Odyssey Network providing physicians with a tool for clinical collaboration, remote consultation, andtraining. We are actively developing the next generation imaging and collaboration solutions with Synchrony and SynX.
Wepursue arrangements with fluoroscopy system manufacturers to provide such systems in a bundled purchase offer for hospitals establishingrobotic interventional operating rooms. An integrated x-ray system is critical for customer adoption of RMN systems, and when offeredas a bundled purchase with the RMN System, it may reduce the cost of acquisition, the ongoing cost of ownership, and the complexity ofinstallation of a robotic electrophysiology practice.
Wepromote our full suite of products necessary for a typical hospital implementation, subject to regulatory approvals or clearances. Thisimplementation requires a hospital to agree to an upfront capital payment and recurring payments. The upfront capital payment typicallyincludes equipment and installation charges. The recurring payments typically include disposable costs for each procedure, equipmentservice costs beyond the warranty period, and ongoing software updates. In hospitals where our full suite of products has not been implemented,equipment upgrade or expansion can be implemented upon purchasing of the necessary upgrade or expansion.
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Wehave received regulatory clearances and approvals necessary for us to market the Genesis RMN System in the U.S., Europe, andChina, and we are in the process of obtaining necessary registrations for extending our markets in other countries. The GenesisXRMN System, the latest generation of the Genesis RMN System, has received regulatory clearances and approvals in Europe, and weare in the process of obtaining necessary registrations in the US and other countries. The Niobe System, our prior generationrobotic magnetic navigation system, the Odyssey Solution, Cardiodrive, e-Contact, and various disposableinterventional devices, including the Map-iT family of devices, have received regulatory clearances and approvals in the U.S.,Europe, Canada, China, Japan and various other countries. We have regulatory clearances and approvals that allow us to market the Vdriveand Vdrive Duo Systems with the V-CAS device in the U.S., Canada, and Europe. We have regulatory clearances and approvals that allow us to marketthe SynX collaboration solution in the U.S. and Europe. We have obtained the CE marking for us to market the StereotaxisMAGiC catheter in Europe and are pursuing regulatory approvals in the U.S. and various other global geographies. Approval processes canbe lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications couldbe denied.
Notall products have and/or require regulatory clearance in all the markets we serve. Please refer to “Regulatory Approval”in Item 1 for a description of the regulatory clearance, licensing, and/or approvals we currently have or are pursuing.
Wehave strategic relationships with technology leaders and innovators in the global interventional market. Through these strategic relationshipswe provide compatibility with our robotic magnetic navigation system, integrated x-ray systems, digital imaging and 3D catheter locationsensing technology, and compatible disposable interventional devices. The maintenance of these strategic relationships, or the establishmentof equivalent alternatives, is critical to our commercialization efforts. There are no guarantees that any existing strategic relationshipswill continue, and efforts are ongoing to ensure the availability of compatible systems and devices and/or equivalent alternatives. Wecannot provide assurance as to the timeline of the ongoing availability of such compatible systems or our ability to obtain equivalentalternatives on competitive terms or at all.
OnJuly 31, 2024, the Company completed its acquisition of all the shares of capital stock of Access Point Technologies EP, Inc., a Minnesotacorporation (“APT”), from APT Holding Company, Inc., a Minnesota corporation. APT, based in Rogers, Minnesota, designs, manufactures,and commercializes a portfolio of differentiated high-quality diagnostic catheters, branded as Map-iT catheters, used during cardiacablation procedures that are commercially available across key global geographies.
Theintegration with APT provides in-house catheter development, manufacturing expertise and specialized knowledge that will further Stereotaxis’innovation efforts in developing a broad family of interventional devices navigated by our robots within electrophysiology and acrossa range of endovascular procedures.
Stereotaxishas continued to advance development and regulatory approval of its Robotic Magnetic Navigation systems and proprietary interventionaldevices. In the third quarter of 2024, we attained CE Mark for the GenesisX RMN System and are working towards FDA 510(k) regulatoryclearance within the United States. This latest generation of the RMN System is designed to significantly enhance the accessibility ofRobotic Magnetic Navigation by eliminating the lengthy construction cycle necessary to install prior generation RMN systems. In November2024, the Genesis RMN system, our current generation system, received regulatory approval from China’s National MedicalProducts Administration (NMPA), and our partner MicroPort received the regulatory clearances for their integrated mapping system andnovel ablation catheter making available the most current advanced minimally invasive robotic technology to physicians and patients inChina.
TheStereotaxis MAGiC catheter, a robotically navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablationprocedures, obtained the CE marking in Europe during the first quarter, 2025, and the MAGiC Sweep™ catheter, the first roboticallynavigated high-density EP mapping catheter, received U.S. Food and Drug Administration (FDA) 510(k) clearance in July 2025. We are inthe process of obtaining necessary approvals for both devices in other geographies. We are also currently seeking regulatory clearancesfor the EMAGIN 5F catheter guide designed to robotically navigate tortuous venous and arterial vasculature.
2.Summary of Significant Accounting Policies
Basisof Presentation
Theaccompanying unaudited consolidated financial statements of Stereotaxis, Inc. have been prepared in accordance with U.S. generally acceptedaccounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they donot include all the disclosures required by GAAP for complete consolidated financial statements. In the opinion of management, they includeall adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periodspresented. Operating results for the six-month period ended June 30, 2025, are not necessarily indicative of the results that may beexpected for the year ending December 31, 2025, or for future operating periods.
Theseinterim consolidated financial statements and the related notes should be read in conjunction with the annual consolidated financialstatements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with theSecurities and Exchange Commission (SEC) on March 14, 2025.
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Risksand Uncertainties
Tariffand Trade Regulation Update
Theglobal tariff environment remains fluid and, particularly the potential expiration on November 12, 2025, of the reciprocalU.S.-China tariffs, the proposed increase in the universal baseline tariff, and the outcome of U.S. negotiationswith the EU, could materially affect our cost structure, gross margins, and success and timing of product launches.
OtherRisks and Uncertainties
Futureresults of operations and liquidity could be materially adversely impacted by uncertainties in macroeconomic and geopolitical factorsin both the U.S. and globally including continuing introduction of new or modification of existing tariffs or trade barriers, supplychain challenges, inflationary pressures, elevated interest rates, and disruptions in commodity markets stemming from conflicts, suchas those between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran. The Company continues to experiencedifficulties with periodic worldwide supply chain disruptions, including shortages and inflationary pressures, tariffs and other traderegulations that are or may be imposed, and logistics delays which make it difficult for us to source parts and ship our products. Wecontinue to evaluate the macroeconomics business environment, taking action to increase inventory levels where appropriate and engagingin discussions with our vendors on contractual obligations, but we cannot guarantee that our business activities will not be impactedmore severely in the future. Our suppliers and contract manufacturers have experienced, and may continue to experience, similar difficulties.If our manufacturing operations or supply chains are materially interrupted, it may not be possible for us to timely manufacture or serviceour products at required levels, or at all. Changes in economic conditions, tariff escalation, retaliatory measures and new import restrictionscould lead to higher inflation than previously experienced or expected, which could, in turn create supply shortages as companies seekalternative sources of supply and adjust their logistics and transportation routes. As a result of these factors, we may be unable toraise the prices of our products sufficiently to keep up with the rate of inflation, especially tariff induced inflation. A materialreduction or interruption in any of our manufacturing processes or a substantial increase in costs would have a material adverse effecton our business, operating results, and financial condition.
Manyof our hospital customers, for whom the purchase of our system involves a significant capital purchase which may be part of a largerconstruction project at the customer site (typically the construction of a new building), may themselves be under similar pressures.Hospitals continue to experience challenges with staffing and cost pressures as supply chain constraints and inflation drive up operatingcosts. Hospitals may also be adversely affected by the liquidity concerns driven by elevated interest rates and the broader macroeconomicenvironment. These factors could cause delays or cancellations of current purchase orders and other commitments and may exacerbate thelong and variable sales and installation cycles for our robotic magnetic navigation systems. Our hospital customers have also experiencedchallenges in sourcing supplies, such as catheters, needed to perform procedures. Such shortages have, and may continue to, put pressureon procedures and our disposable revenue. Delays in order placement, cancellation of existing orders and reduced demand or availabilityof our disposable products all would have a material adverse effect on our business, financial condition, and results of operations.
Anydisruption to the capital markets could negatively impact our ability to raise capital. If the capital markets are disrupted for an extendedperiod and we need to raise additional capital, such capital may not be available on acceptable terms, or at all. Disruptions to thecapital markets and other financing sources could also negatively impact our hospital customers’ ability to raise capital or otherwiseobtain financing to fund their operations and capital projects. Such could result in delayed spending on current projects, a longer salescycle for new projects where a large capital commitment is required, and decreased demand for our disposable products as well as an increasedrisk of customer defaults or delays in payments for our system installations, service contracts and disposable products.
Inaddition to the macroeconomic factors, occurrences similar to the COVID-19 pandemic may negatively affect demand for both our systemsand our disposable products. In the past, we have experienced business disruptions, including travel restrictions on us and our third-partydistributors, which negatively affected our complex sales, marketing, installation, distribution and service network relating to ourproducts and services. We also experienced reductions in demand for our disposable products as our healthcare customers (physicians andhospitals) re-prioritized the treatment of patients and diverted resources away from non-pandemic areas, leading to the performance offewer procedures in which our disposable products are used. The impact varied widely over time by individual geography. For instance,in 2022, procedure volumes were challenged by periodic resurgences of COVID-19, ongoing hospital staffing issues and other factors. Inthe first quarter of 2023, COVID-19 resurgences in China continued to negatively impact our procedure volumes in that region, but asinfections and hospitalization decreased, we saw a recovery of procedure volumes with no further impacts in the year. Significant decreasesto our capital or recurring revenues could have a material adverse effect on our business, operating results, and financial condition.We continue to anticipate periodic disruptions to our manufacturing operations, supply chains, procedures volumes, service activities,and capital system orders and placements relating to new or ongoing periodic resurgences of pandemic-related issues, any of which couldhave a material adverse effect on our business, financial condition, results of operations, or cash flows
Asa result of the acquisition of APT EP in July, 2024, we are managing APT’s ongoing business of manufacturing, commercializing, development andsales of APT’s catheters and related products and services. The manufacturing process of catheters is complex, highlytechnical, and our prior experience in this field is dated. The process can be subject to periodic worldwide supply chaindisruptions, including labor shortages and inflationary pressures, tariffs or other trade restrictions, and logistics delays whichmake it difficult for us to source parts and ship our products. We may require a higher level of overhead than currentlyanticipated. Our ability to successfully manage this new aspect of our business will depend, in part, upon management’sability to design and implement strategic initiatives that address not only the integration of APT into us, but also the increasedscope of the combined business with its associated increased costs and complexity. We are still integrating the businesses andimplementing safeguards to minimize any negative impacts on our financial position, results of operations and cash flowspost-acquisition.
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Sinceour inception, we have generated significant losses. As of June 30, 2025, we have incurred cumulative net losses of approximately $
Whilewe believe our existing cash and cash equivalents, including the proceeds from our July 2025 equity raise, will be sufficient to fundour operating expenses and capital equipment requirements, in light of the macroeconomic environment, we cannot guarantee that we willnot need additional funding in the future. We will continue to explore financing alternatives, and we cannot assure you that additionalfinancing will be available on acceptable terms or that such financing will not be dilutive to our stockholders. If adequate funds arenot available to us, we could be required to delay development or commercialization of new products, to license to third parties therights to commercialize products or technologies that we would otherwise seek to commercialize ourselves, or to reduce the sales, marketing,customer support or other resources devoted to our products, any of which could have a material adverse effect on our business, financialcondition, and operational results. In addition, we could be required to cease operations.
Cashand Cash Equivalents
Cashand cash equivalents include cash on hand, money market instruments, and other highly liquid investments with original maturities ofthree months or less from the date of purchase. Accrued interest receivable on money market instruments, included in other current assets,was less than $
RestrictedCash
Restrictedcash primarily consists of cash that the Company is obligated to maintain in accordance with contractual obligations. The Company didnot have any restricted cash as of June 30, 2025. The company’s restricted cash was $
Investments
Ourinvestments may include, at any time, a diversified portfolio of cash equivalents and short-term and long-term investments in a varietyof high-quality securities, including money market funds, U.S. treasury and U.S. government agency securities, corporate notes and bonds,commercial paper, non-U.S. government agency securities, and municipal notes. As of June 30, 2025, and December 31, 2024, the Companyhad short-term investments.
Amortizedcost of U.S. treasury securities and marketable debt securities are based on the Company’s purchase price adjusted for accrualof discount, or amortization of premium, and recognition of impairment charges, if any. The amortized cost of securities the Companypurchases at a discount or premium will equal the face or par value at maturity or the call date, if applicable. Stated interest on investmentsis reported as income when earned and is adjusted for amortization or accretion of any premium or discount.
TheCompany segments its portfolio based on the underlying risk profiles of the securities and has a zero-loss expectation for U.S. treasuryand U.S. government agency securities. The Company regularly reviews the securities using the probability of default method and analyzesthe unrealized loss positions and evaluates the current expected credit loss by considering factors such as credit ratings, issuer-specificfactors, current economic conditions, and reasonable and supportable forecasts.
FairValue Measurements
Financialinstruments consist of cash and cash equivalents, restricted cash, investments, accounts receivable, and accounts payable.
TheCompany measures certain financial assets and liabilities at fair value on a recurring basis. General accounting principles for fairvalue measurement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (“Level1”) and the lowest priority to unobservable inputs (“Level 3”). The three levels of the fair value hierarchy are describedbelow:
| Level 1: | Values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |
| Level 2: | Values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or other model-based valuation techniques for which all significant assumptions are observable in the market. | |
| Level 3: | Values are generated from model-based techniques that use significant assumptions not observable in the market. |
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Asof June 30, 2025, and December 31, 2024, financial assets classified as Level 2 consisted of money market funds. The Company reviewstrading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securitiesis not available, the Company uses market pricing and other observable market inputs for similar securities. These inputs either representquoted prices for similar assets in active markets or have been derived from observable market data. This approach results in the Level2 classification of these securities within the fair value hierarchy.
Asof June 30, 2025, and December 31, 2024, financial liabilities classified as Level 3 consisted of the contingent consideration due tothe APT acquisition. The Company reviews the change in the fair value of contingent consideration, which is performed by a third-partyvaluation firm. See Note 3 for further information regarding the valuation methods used by the third-party valuation firm. The approachresults in the Level 3 classification of the contingent consideration within the fair value hierarchy.
AccountsReceivable, Contract Assets, and Allowance for Credit Losses
Accountsreceivable primarily include amounts due from hospitals and distributors for acquisition of magnetic systems, associated disposable devicesales and service contracts, net of allowances for expected credit losses. Credit is granted on a limited basis, with balances due generallywithin 30 days of billing. Contract assets primarily represent the difference between the revenue that was earned but not billed on servicecontracts and revenue from system contracts that was recognized based on the relative selling price of the related performance obligationsand the contractual billing terms in the arrangements. The Company reports accounts receivable and contract assets net of an allowancefor expected credit losses in accordance with Accounting Standards Codification Topic 326, Financial Instruments – Credit Losses(“ASC 326”). The provision for credit loss is based upon management’s assessment of historical and expected net collectionsconsidering business and economic conditions and other collection indicators. We assess collectability by reviewing the accounts receivableaging schedule on an aggregated basis where similar characteristics exist and on an individual basis when we identify specific customerswith known disputes or collectability issues. Amounts deemed uncollectible are recorded as an allowance for expected credit losses.
Revenueand Costs of Revenue
TheCompany accounts for revenue in accordance with Accounting Standards Codification Topic 606 (“ASC 606”), Revenue fromContracts with Customers.
Wegenerate revenue from the initial capital sales of systems as well as recurring revenue from the sale of our proprietary disposable devices,from royalties paid to the Company on the sale of various devices as provided by co-development and co-placement arrangements, and fromother recurring revenue including ongoing software updates and service contracts.
Weaccount for a contract with a customer when there is a legally enforceable contract between the Company and the customer, the rightsof the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. Werecord our revenue based on consideration specified in the contract with each customer, net of any taxes collected from customers thatare remitted to government authorities.
Forcontracts containing multiple products and services, the Company accounts for individual products and services as separate performanceobligations if they are distinct, which is if a product or service is separately identifiable from other items in the bundled package,and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company recognizesrevenues as the performance obligations are satisfied by transferring control of the product or service to a customer.
Forarrangements with multiple performance obligations, revenue is allocated to each performance obligation based on its relative standaloneselling price. Standalone selling prices are based on observable prices at which the Company separately sells the products or services.If a standalone selling price is not directly observable, then the Company estimates the standalone selling price considering marketconditions and entity-specific factors including, but not limited to, features and functionality of the products and services and marketconditions. The Company regularly reviews standalone selling prices and updates these estimates if necessary.
Ourrevenue recognition policy affects the following revenue streams in our business as follows:
Systems:
Contractsrelated to the sale of systems typically contain separate obligations for the delivery of system(s), installation, service-type warranty,and an implied obligation to provide software enhancements if and when available for one year following installation. Revenue is recognizedwhen the Company transfers control to the customer, which is generally at the point when acceptance occurs that indicates customer acknowledgmentof delivery or installation, depending on the terms of the arrangement. Revenue from service-type warranties and the implied obligationto deliver software enhancements if and when available is included in Other Recurring Revenue and is recognized ratably typically overthe first year following installation of the system as the customer receives the service-type warranty and right to software updatesthroughout the period. The Company’s system contracts generally do not provide a right of return. Systems may be covered by a one-yearassurance-type warranty in lieu of a service-type warranty. Assurance-type warranty costs were less than $
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Disposables:
Revenuefrom sales of disposable products is recognized when control is transferred to the customers, which generally occurs at the time of shipment,but can also occur at the time of delivery depending on the customer arrangement. Disposable products are covered by an assurance typewarranty that provides for the return of defective products. Warranty costs were not material for the six months ended June 30, 2025,and 2024. Disposable revenue represented
Royalty:
TheCompany receives royalties on the sale of various devices as provided by co-development and co-placement arrangements with various manufacturers.There was
OtherRecurring Revenue:
Otherrecurring revenue includes revenue from product maintenance plans, service-type warranties, other post warranty maintenance, and theimplied obligation to provide software enhancements if and when available for a specified period, typically one year following installationof our systems. Revenue from services and software enhancements, service-type warranties, and the implied obligation to provide softwareenhancements are deferred and amortized over the service or update period, which is typically one year. Revenue related to services performedon a time-and-materials basis is recognized when performed. Other recurring revenue represented
Thefollowing table summarizes the Company’s revenue for systems, disposables, and service and accessories for the six months endedJune 30, 2025, and 2024 (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Systems | $ | $ | $ | $ | ||||||||||||
| Disposables, service and accessories | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
Transactionprice allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue hasnot yet been recognized. A significant portion of this amount relates to the Company’s systems contracts and obligations that willbe recognized as revenue in future periods. These obligations are generally satisfied within two years after contract inception but mayoccasionally extend longer. Transaction price representing revenue to be earned on remaining performance obligations on system contractswas approximately $
Thefollowing table summarizes the Company’s contract assets and liabilities (in thousands):
| June 30, 2025 | December 31, 2024 | |||||||
| Contract Assets - unbilled receivables | $ | $ | ||||||
| Total unbilled receivables | $ | $ | ||||||
| Customer deposits | $ | $ | ||||||
| Product shipped, revenue deferred | ||||||||
| Deferred service and license fees | ||||||||
| Total deferred revenue | $ | $ | ||||||
| Less: Long-term deferred revenue | ( | ) | ( | ) | ||||
| Total current deferred revenue | $ | $ | ||||||
TheCompany invoices its customers based on the billing schedules in its sales arrangements. Contract assets primarily represent the differencebetween the revenue that was earned but not billed on service contracts and revenue from system contracts that was recognized based onthe relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Customer depositsprimarily relate to future system sales but can also include deposits on disposable sales. Deferred revenue is primarily related to servicecontracts, for which the service fees are billed up-front, generally quarterly or annually, and for amounts billed in advance for systemcontracts for which some performance obligations remain outstanding. For service contracts, the associated deferred revenue is generallyrecognized ratably over the service period. For system contracts, the associated deferred revenue is recognized when the remaining performanceobligations are satisfied. The Company did not have any impairment losses on its contract assets for the periods presented.
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Revenuerecognized for the six months ended June 30, 2025, and 2024, that was included in the deferred revenue balance at the beginning of eachreporting period was $
AssetsRecognized from the Costs to Obtain a Contract with a Customer
TheCompany has determined that sales incentive programs for the Company’s sales team meet the requirements to be capitalized as theCompany expects to generate future economic benefits from the related revenue generating contracts after the initial capital sales transaction.The costs capitalized as contract acquisition costs included in prepaid expenses and other assets, in the Company’s consolidatedbalance sheet were approximately $
Costof Contracts
Costsof systems revenue include direct product costs, installation labor and other costs including estimated assurance-type warranty costs,and initial training costs, when applicable. These costs are recognized at the time of sale. Costs of disposable revenue include directproduct costs and estimated warranty costs and are recognized at the time of sale. Cost of revenue from services and license fees arerecognized when incurred.
Goodwilland Intangible Assets
Goodwillrepresents the excess of the purchase price over the fair value of the net assets acquired in business combinations and is allocatedto the appropriate reporting unit when acquired. Other acquired intangible assets are stated at the fair value acquired. Goodwill isnot amortized; rather, it is evaluated for impairment annually and whenever events or changes in circumstances indicate that the valueof the asset may be impaired. Definite-lived intangible assets are considered long-lived assets and are amortized on a straight-linebasis over the periods that expected economic benefits will be provided. See Note 3, Acquisitions for further discussion of thegoodwill and intangible assets recorded as of the acquisition date and as of June 30, 2025.
ContingentLiabilities- Earnout Consideration
TheCompany has determined that the contingent consideration due under the terms of its July 31, 2024, acquisition agreement with APT HoldingCompany, Inc. represents a contingent liability in accordance with the provisions of Accounting Standard 805, Business Combinations.The Company has established short-term and long-term contingent liabilities for the net present fair value of contingent payments whichare both probable of occurrence and reasonably estimable. The initial fair value of the contingent consideration was determined by athird-party valuation firm using both a Monte Carlo simulation and probability-based approaches. The contingent consideration is remeasuredto fair value at each reporting date until the contingency is resolved. Changes in fair value are recognized in the Company’s earningsas a charge to General and Administrative expenses. See Note 3, Acquisitions for further discussion of the contingent considerationrecorded as of the acquisition date and as of June 30, 2025.
LeasingArrangements
Alease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipmentfor a period of time in exchange for consideration. The Company accounts for leases in accordance with Accounting Standards Update No.2016-02 “Leases” (Topic 842) and all subsequent ASUs that modified Topic 842 (“ASC 842”). The Company determinesif an arrangement contains a lease at inception.
TheCompany leases its facilities under operating leases. In accordance with ASC 842, operating lease agreements are recognized on the consolidatedbalance sheet as a right-of-use (“ROU”) asset and a corresponding lease liability. These leases generally do not have significantrent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the leases do not containcontingent rent provisions. Many of our leases include both lease (i.e., fixed payments including rent, taxes, and insurance costs) andnon-lease components (i.e., common-area or other maintenance costs) which are accounted for as a single lease component as we have electedthe practical expedient to group lease and non-lease components for all leases.
TheCompany’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception,the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in thecalculation of the ROU asset and lease liability. The Company elected not to include short-term leases (i.e., leases with initial termsof twelve months or less) on the consolidated balance sheet.
Thecalculated amounts of the ROU assets and lease liabilities are impacted by the length of the lease term and the discount rate used tocalculate the present value of the minimum lease payments. ASC 842 requires the use of the discount rate implicit in the lease wheneverthis rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at leaseinception.
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TheCompany accounts for its grants of stock options, non-qualified stock options, stock appreciation rights, restricted shares, restrictedstock units and for its employee stock purchase plan in accordance with the provisions of general accounting principles for share-basedpayments. These accounting principles require the determination of the fair value of the stock-based compensation at the grant date andthe recognition of the related expense over the period in which the stock-based compensation vests.
Fortime-based awards, the Company utilizes the Black-Scholes valuation model to determine the fair value of stock options and stock appreciationrights at the date of grant. The weighted average assumptions and fair value for options granted during the six months ended June 30,2025, were 1) expected dividend rate of %; 2) expected volatility of % based on the Company’s historical volatility; 3) risk-freeinterest rate based on the Treasury yield on the date of grant; and 4) expected term of years. The resulting compensation expenseis recognized over the requisite service period, which is generally four years, net of actual forfeitures. Restricted shares and unitsgranted to employees and non-employee directors are valued at the fair market value at the date of grant. The Company amortizes the fairmarket value to expense over the service period, which is generally four years except for grants to directors which are generally earnedover a period of six months. If the shares are subject to performance objectives, the resulting compensation expense is amortized overthe anticipated vesting period and is subject to adjustment based on the actual achievement of objectives.
Formarket-based awards, stock-based compensation expense is recognized over the minimum service period regardless of whether the markettarget is probable of being achieved. The fair value of such awards is estimated on the grant date using Monte Carlo simulations.
Sharespurchased by employees under the 2022 Employee Stock Purchase Plans are considered to be non-compensatory.
Basicearnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of commonshares outstanding during the period. In periods where there is net income, we apply the two-class method to calculate basic and dilutednet income (loss) per share of common stock, as our convertible preferred stock is a participating security. The two-class method isan earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been availableto common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply asour convertible preferred stock does not contractually participate in our losses. We compute diluted net income (loss) per common shareusing net income (loss) as the “control number” in determining whether potential common shares are dilutive, after givingconsideration to all potentially dilutive common shares, including stock options, warrants, unvested restricted stock units outstandingduring the period and potential issuance of stock upon the conversion of our convertible preferred stock issued and outstanding duringthe period, except where the effect of such securities would be antidilutive.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Cumulative dividend on convertible preferred stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares and equivalents: | ||||||||||||||||
| Basic EPS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted EPS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
TheCompany did not include any portion of unearned restricted shares, outstanding options, stock appreciation rights, warrants or convertiblepreferred stock in the calculation of diluted loss per common share because all such securities are anti-dilutive for all periods presented.The application of the two-class method of computing earnings per share under general accounting principles for participating securitiesis not applicable during these periods because those securities do not contractually participate in its losses.
Asof June 30, 2025, the Company had shares of common stock issuable upon the exercise of outstandingoptions and stock appreciation rights at a weighted average exercise price of $per share under its 2012 and 2022 Stock PurchasePlans, shares of our common stock issuable upon conversion of ourSeries A Convertible Preferred Stock, shares of unvested restricted share units awarded under the2022 Stock Purchase Plan, and unvested share units relating to the 2021 CEO Performance AwardUnit Grant. The Company had unearned restricted shares outstanding as of June 30, 2025.
RecentlyIssued Accounting Pronouncements
InDecember 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”),which requires enhanced income tax disclosures, primarily related to the effective tax rate reconciliation and income taxes paid. TheCompany does not expect a significant impact on its income tax disclosures upon adoption of the ASU which will be effective at the Company’syear end December 31, 2025.
InMarch 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest andSimilar Awards (“ASU 2024-01”). This ASU provides illustrative examples to clarify how entities should determine whetherprofits interest and similar awards are within the scope of Topic 718 or other compensation guidance, such as Topic 710. Amendments inASU 2024-01 are effective for public business entities for annual periods beginning after December 15, 2024, and for all other entitiesfor annual periods beginning after December 15, 2025. The Company does not expect the adoption to have a material impact on its consolidatedfinancial statements and related disclosures.
| 15 |
3.Acquisitions
Acquisitionof Access Point Technologies EP, Inc. (“APT”)
OnJuly 31, 2024, the Company acquired all the shares of capital stock of Access Point Technologies EP, Inc. (“APT”), a Minnesotacorporation, from APT Holding Company, Inc., a Minnesota corporation. APT designs, manufactures, and commercializes a portfolio of differentiatedhigh-quality diagnostic catheters used during cardiac ablation procedures that are commercially available across key global geographies.
Theacquisition of APT was accounted for as a business combination using the acquisition method of accounting. The consideration includedan upfront payment and additional contingent payments based upon the achievement of key regulatory and commercial milestones. At closing,the Company issued shares of its common stock (the “Upfront Stock Consideration”) with a value of $
Thefollowing table summarizes the estimated fair value of the assets acquired and liabilities assumed for APT as of the acquisition date(in thousands):
| (in thousands) | July 31, 2024 | |||
| Assets acquired: | ||||
| Current assets | ||||
| Cash | $ | |||
| Accounts receivable, net of allowance of $ | ||||
| Inventories, net | ||||
| Prepaid expenses and other current assets | ||||
| Total current assets | ||||
| Property and equipment | ||||
| Goodwill | ||||
| Intangible assets | ||||
| Total assets acquired | $ | |||
| Liabilities assumed: | ||||
| Current liabilities | ||||
| Accounts payable | $ | |||
| Accrued liabilities | ||||
| Total liabilities assumed | $ | |||
| Net assets acquired | $ | |||
Theabove purchase price allocation is final as of June 30, 2025. No measurement period adjustments were recognized during the six monthsended June 30, 2025.
Forpurposes of the above allocation, we based our estimate of the fair values for contingent consideration, intangible assets, and propertyand equipment on valuation studies performed by third-party valuation firms. We used various valuation methods, including discountedcash flows, distributor method, excess earnings, and relief from royalty method to estimate the fair value of the identified intangibleassets. The fair value of the contingent consideration was determined using a Monte Carlo simulation and probability based approaches.The Cost approach was utilized to determine the fair value of property and equipment. Goodwill and other intangible assets reflectedabove were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwillis primarily attributable to APT’s in-house research and development team versus using third party developers and the expansionof manufacturing capacity. The tax basis in the acquired goodwill is zero.
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TheCompany’s consolidated statement of earnings for the six months ended June 30, 2025, includes APT post-acquisition revenue of $
| Six Months Ended June 30, | ||||
| 2025 | ||||
| (in thousands) | (Unaudited) | |||
| Revenue | $ | |||
| Net loss | $ | ( | ) | |
Thefollowing represents the pro forma consolidated revenue as if APT had been included in the consolidated results of the Company. Revenuewas $
Theintangible assets related to the acquisition consisted of the following:
| Fair Value | Amortization Period | |||||||
| (in thousands) | (in years) | |||||||
| Intangible assets subject to amortization: | ||||||||
| Developed technology | $ | |||||||
| Customer relationships | ||||||||
| Trademark | ||||||||
| Total intangible assets subject to amortization | $ | |||||||
| Intangible assets not subject to amortization | ||||||||
| In process research and development | N/A | |||||||
| Goodwill | $ | N/A | ||||||
| Total intangible assets not subject to amortization | ||||||||
| Total intangible assets | $ | |||||||
| Weighted average amortization period | ||||||||
4.Financial Instruments
Thefollowing table summarizes the Company’s cash and cash equivalents, amortized cost, gross unrealized gains, gross unrealized losses,and fair value by significant category reported as cash and cash equivalents and restricted cash as of June 30, 2025, and December 31,2024:
| June 30, 2025 | ||||||||
| Reported as: | ||||||||
| (in thousands) | Cash and Cash Equivalents | Restricted Cash- current | ||||||
| Cash | $ | $ | ||||||
| Level 2 | ||||||||
| Money market funds | . | |||||||
| Subtotal | ||||||||
| Total assets measured at fair value | $ | $ | ||||||
| December 31, 2024 | ||||||||
| Reported as: | ||||||||
| (in thousands) | Cash and Cash Equivalents | Restricted Cash- current | ||||||
| Cash | $ | $ | ||||||
| Level 2 | ||||||||
| Money market funds | ||||||||
| Subtotal | ||||||||
| Total assets measured at fair value | $ | $ | ||||||
Interestincome recorded for these cash and investments was $
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Asof June 30, 2025, and December 31, 2024, the Company did not have any financial assets classified as Level 1 or Level 3. The contingentconsideration is carried at fair value and is a Level 3 financial liability. See further discussion of the contingent consideration inNote 3.
5.Inventories
Inventoriesconsist of the following (in thousands):
| June 30, 2025 | December 31, 2024 | |||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Reserve for excess and obsolescence | ( | ) | ( | ) | ||||
| Total inventory | $ | $ | ||||||
Atthe closing of the acquisition, GAAP accounting required us to record all acquired inventory at its market value.
TheCompany had approximately $
6.Prepaid Expenses and Other Assets
Prepaidexpenses and other assets consist of the following (in thousands):
| June 30, 2025 | December 31, 2024 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Prepaid commissions | ||||||||
| Deposits | ||||||||
| Deferred cost of revenue | ||||||||
| Other assets | ||||||||
| Total prepaid expenses and other assets | ||||||||
| Less: Noncurrent prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Total current prepaid expenses and other assets | $ | $ | ||||||
Deferredcost of revenue represents the cost of systems for which the system has been delivered to the customer but for which revenue has notbeen recognized.
7.Property and Equipment
Propertyand Equipment consist of the following (in thousands):
| June 30, 2025 | December 31, 2024 | |||||||
| Equipment | $ | $ | ||||||
| Leasehold improvements | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Net property and equipment | $ | $ | ||||||
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8.Goodwill and Intangible Assets
Goodwilland Intangible Assets consist of the following (in thousands):
| June 30, 2025 | December 31, 2024 | |||||||
| Goodwill | $ | $ | ||||||
| Developed technology | ||||||||
| In process research and development | ||||||||
| Customer relationships | ||||||||
| Trademark | ||||||||
| Total intangibles | ||||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| Net intangibles | $ | $ | ||||||
9.Leases
OnMarch 1, 2021, the Company entered into an office lease agreement (the “Globe Lease”) with Globe Building Company, underwhich the Company leases executive office space and manufacturing facilities of approximately
OnJuly 31, 2024, the Company entered into a lease agreement (the “Talulla Lease”) with Talulla Group LLC, under which the Companywill lease office space and manufacturing facilities of approximately
Asof June 30, 2025, the weighted average discount rate for operating leases was
Thefollowing table represents lease costs and other lease information (in thousands):
Variablelease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities and equipmentwhich are paid based on actual costs incurred.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating lease cost | $ | $ | $ | $ | ||||||||||||
| Short-term lease cost | ||||||||||||||||
| Total net lease cost | $ | $ | $ | $ | ||||||||||||
| Cash paid within operating cash flows | $ | $ | $ | $ | ||||||||||||
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Futureminimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2025, were as follows (in thousands):
| June 30, 2025 | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and thereafter | ||||
| Total lease payments | ||||
| Less: Interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
10.Accrued Liabilities
Accruedliabilities consist of the following (in thousands):
| June 30, 2025 | December 31, 2024 | |||||||
| Accrued salaries, bonus, and benefits | $ | $ | ||||||
| Accrued warranties | ||||||||
| Accrued professional services | ||||||||
| Accrued investigational sites | ||||||||
| Deferred contract obligation | ||||||||
| Other | ||||||||
| Total accrued liabilities | ||||||||
| Less: Long term accrued liabilities | ( | ) | ( | ) | ||||
| Total current accrued liabilities | $ | $ | ||||||
SeriesA Convertible Preferred Stock and Warrants
InSeptember 2016, the Company issued (i) shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”),par value $ per share, with a stated value of $ per share, which are convertible into shares of the Company’s commonstock at an initial conversion rate of $ per share, subject to adjustment for events such as stock splits, combinations and the likeas provided in the certificate of designations covering such Series A Preferred Stock, and (ii) (the SPA Warrants) to purchase an aggregateof
2021CEO Performance Award Unit Grant
OnFebruary 23, 2021, the Company`s Board of Directors, upon recommendation of the Compensation Committee, approved the grant of the CEOPerformance Award to the Company’s Chief Executive Officer. The CEO Performance award is a -year performance award of up to shares, tied to the achievement of market capitalization milestones and subject to minimum service requirements.
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Asdetailed in the table below, the CEO Performance Award consists of ten vesting tranches. The first market capitalization milestone is$ billion, and each of the remaining nine market capitalization milestones are in additional $ million increments, up to $ billion.
| Tranche # | No. of Shares Subject to PSU | Market Capitalization Milestones(1) | ||||||
| 1 | $ | |||||||
| 2 | $ | |||||||
| 3 | $ | |||||||
| 4 | $ | |||||||
| 5 | $ | |||||||
| 6 | $ | |||||||
| 7 | $ | |||||||
| 8 | $ | |||||||
| 9 | $ | |||||||
| 10 | $ | |||||||
| Total: | ||||||||
TheCompany received Shareholder approval at its annual meeting on May 20, 2021, for shares to be issued under the award.
Themarket capitalization requirement is considered a market condition under FASB Accounting Standards Codification Topic 718 “Compensation– Stock Compensation” and is estimated on the grant date using Monte Carlo simulations. Recognition of stock-based compensationexpense of all the tranches commenced on February 23, 2021, the date of grant, as the probability of meeting the ten market capitalizationmilestones is not considered in determining the timing of expense recognition. The expense will be recognized on an accelerated basisthrough 2030. Key assumptions for estimating the performance-based awards fair value at the date of grant included share price on grantdate, volatility of the Company’s common stock price, risk free interest rate, and grant term.
Totalstock-based compensation recorded as operating expense for the CEO Performance Award was $ million and $ million for the six monthsended June 30, 2025, and 2024. As of June 30, 2025, and 2024, the Company had approximately $ million and $ million, respectively,of total unrecognized stock-based compensation expense remaining under the CEO Performance Award assuming the grantee’s continuedemployment as CEO of the Company, or in a similar capacity, through 2030. As of June 30, 2025, none of the performance milestones establishedby the 2021 CEO Incentive Program have been achieved, and no awards have been earned.
StockAward Plans
InFebruary 2022, the Compensation Committee of the Board of Directors adopted the 2022 Stock Incentive Plan (the “Plan”) whichwas subsequently approved by the Company’s shareholders. This plan replaced the 2012 Stock Incentive Plan which expired on . The 2022 Stock Incentive Plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciationrights, restricted shares and restricted share units to employees, non-employee directors, and third-party consultants.
Asof June 30, 2025, the Company had remaining shares of the Company’s common stock to provide for current and future grantsunder its various equity plans.
Asof June 30, 2025, the total compensation cost related to options, stock appreciation rights, and non-vested stock granted to employeesand non-employees under the Company’s stock award plans but not yet recognized was approximately $ million, excluding compensationnot yet recognized related to the CEO Performance Award discussed above. This cost will be amortized over a period of up to over the underlying estimated service periods and will be adjusted for subsequent changes in actual forfeitures and anticipated vestingperiods.
| Number of Options/SARs | Range of Exercise Price | Weighted Average Exercise Price per Share | ||||||||||
| Outstanding, December 31, 2024 | $ - $ | $ | ||||||||||
| Granted | $- $ | $ | ||||||||||
| Exercised | ( | ) | $ - $ | $ | ||||||||
| Forfeited | ( | ) | $- $ | $ | ||||||||
| Outstanding, June 30, 2025 | $ - $ | $ | ||||||||||
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| Number of Restricted Stock Units | Weighted Average Grant Date Fair Value per Unit | |||||||
| Outstanding, December 31, 2024 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Outstanding, June 30, 2025 | $ | |||||||
12.Product Warranty Provisions
TheCompany’s standard policy is to warrant all capital systems against defects in material or workmanship for one year following installationwith an assurance or a service-type warranty. The Company’s estimate of costs to service the warranty obligations is based on historicalexperience and current product performance trends. A regular review of warranty obligations is performed to determine the adequacy ofthe reserve and adjustments are made to the estimated warranty liability as appropriate.
Accruedassurance-type warranty, which is included in other accrued liabilities, consists of the following (in thousands):
| June 30, 2025 | December 31, 2024 | |||||||
| Warranty accrual, beginning of the fiscal period | $ | $ | ||||||
| Accrual adjustment for product warranty | ||||||||
| Payments made | ( | ) | ( | ) | ||||
| Warranty accrual, end of the fiscal period | $ | $ | ||||||
13.Commitments and Contingencies
TheCompany at times becomes a party to claims in the ordinary course of business. Management believes that the ultimate resolution of pendingor threatened proceedings will not have a material effect on the financial position, results of operations or liquidity of the Company.In February 2024, a vendor filed financing statements under the Uniform Commercial Code (“UCC”) on underlying inventory forapproximately $
InApril 2021, the Company entered into a letter of credit pursuant to the Lease agreement totaling approximately $
14.Subsequent Events
OnJuly 17, 2025, Stereotaxis, Inc. (the “Company”) entered into a placement agency agreement (the “Placement Agency Agreement”)with Lake Street Capital Markets, LLC (“Placement Agent”) and a securities purchase agreement (the “Purchase Agreement”)with certain investors (the “Investors”) pursuant to which the Company agreed to sell, in a registered direct offering (the“Offering”), $
OnAugust 7, 2025, Stereotaxis, Inc, in accordance with Section 2.5(b) of the May 11, 2024, Share Purchase Agreement among Stereotaxis,Inc, Access Point Technologies EP, Inc. and APT Holding Company, Inc., issued shares of common stock, par value $ per shareas partial settlement of the earnout consideration to APT Holding, Inc.
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ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Thefollowing discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto includedin this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024. Operating results arenot necessarily indicative of results that may occur in future periods.
Thisreport includes various forward-looking statements that are subject to risks and uncertainties, many of which are beyond our control.Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors,including those set forth in “Part II - Item 1A. Risk Factors” included in this Quarterly Report on Form 10-Q and in PartI, Item 1A, “Risk Factors,” included in our Annual Report on Form 10-K for the year ended December 31,2024, as well as variousimpacts related to our previously announced acquisition of Access Point Technologies EP, Inc. (“APT”). Forward-looking statementsdiscuss matters that are not historical facts. Forward-looking statements include, but are not limited to, discussions regarding ouroperating strategy, sales and marketing strategy, regulatory strategy, industry, economic conditions, financial condition, liquidity,capital resources, results of operations, the on-going impact of the coronavirus (“COVID -19”) pandemic and our responseto it or any impact of a similar pandemic, and statements relating to our recent acquisition of APT including any benefits expected fromthe acquisition, potential strategic implications as a result of the acquisition, and the potential for achievement of the regulatoryand commercial milestones that would trigger contingent payments in the transaction. Such statements include, but are not limited to,statements preceded by, followed by, or that otherwise include the words “believe”, “expects”, “anticipates”,“intends”, “estimates”, “projects”, “can”, “could”, “may”, “would”,or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained inthe Private Securities Litigation Reform Act of 1995. You should not unduly rely on these forward-looking statements, which speak onlyas of the date on which they are made. They give our expectations regarding the future but are not guarantees. We undertake no obligationto update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unlessrequired by law.
Overview
Stereotaxisdesigns, manufactures and markets robotic systems, instruments and information systems for the interventional laboratory. Our proprietaryrobotic technology, Robotic Magnetic Navigation, fundamentally transforms endovascular interventions using precise computer-controlledmagnetic fields to directly control the tip of flexible interventional catheters or devices. Direct control of the tip of an interventionaldevice, in contrast to all manual hand-held devices that are controlled from their handle, can improve the precision, stability, reachand safety of these devices during procedures.
Ourprimary clinical focus has been electrophysiology, specifically cardiac ablation procedures for the treatment of arrhythmias. Cardiacablation has become a well-accepted therapy for arrhythmias and a multi-billion-dollar medical device market with expectations for substantiallong-term growth. We have shared our aspirations and a product strategy to expand the clinical focus of our technology to several additionalendovascular indications including coronary, neuro, and peripheral interventions.
Thereis substantial real-world evidence and clinical literature for Robotic Magnetic Navigation in electrophysiology. Hundreds of electrophysiologistsat over one hundred hospitals globally have treated over 150,000 arrhythmia patients with our robotic technology. Clinical use of ourtechnology has been documented in over 500 clinical publications. Robotic Magnetic Navigation is designed to enable physicians to completemore complex interventional procedures with greater success and safety by providing image-guided delivery of catheters through the bloodvessels and chambers of the heart to treatment sites. This is achieved using externally applied computer-controlled magnetic fields thatgovern the motion of the working tip of the catheter, resulting in improved navigation. The more flexible atraumatic design of cathetersdriven using magnetic fields may reduce the risk of patient harm and other adverse events. Performing the procedure from a control cockpitenables physicians to complete procedures in a safe location protected from x-ray exposure, with greater ergonomics, and improved efficiency.We believe these benefits can be applicable in other endovascular indications where navigation through complex vasculature is often challengingor unsuccessful and generates significant x-ray exposure, and we are investing in research and development in these areas.
Ourprimary products include the Genesis RMN System, the GenesisX RMN System, the Odyssey Solution, and other relateddevices. Through our strategic relationships with fluoroscopy system manufacturers, providers of catheters and electrophysiology mappingsystems, and other parties, we offer our customers x-ray systems and other accessory devices.
TheGenesis RMN System is designed to enable physicians to complete more complex interventional procedures by providing image-guideddelivery of catheters through the blood vessels and chambers of the heart to treatment sites. This is achieved using externally appliedmagnetic fields that govern the motion of the working tip of the catheter, resulting in improved navigation, efficient procedures, andreduced x-ray exposure. The GenesisX RMN System, the latest generation of the Genesis RMN System, is designed to significantlyenhance the accessibility of Robotic Magnetic Navigation by eliminating the lengthy construction cycle necessary to install prior generationRMN systems.
TheOdyssey Solution consolidates lab information onto one large integrated display, enabling physicians to view and control all thekey information in the operating room. This is designed to improve lab layout and procedure efficiency. The system also features a remoteviewing and recording capability called Odyssey Cinema, which is an innovative solution that delivers synchronized content foroptimized workflow, advanced care, and improved productivity. This tool includes an archiving capability that allows clinicians to storeand replay entire procedures or segments of procedures. This information can be accessed from locations throughout the hospital localarea network and over the global Odyssey Network providing physicians with a tool for clinical collaboration, remote consultation, andtraining. We are actively developing the next generation imaging and collaboration solutions with Synchrony and SynX.
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Wepursue arrangements with fluoroscopy system manufacturers to provide such systems in a bundled purchase offer for hospitals establishingrobotic interventional operating rooms. An integrated x-ray system is critical for customer adoption of RMN systems, and when offeredas a bundled purchase with the RMN System, it may reduce the cost of acquisition, the ongoing cost of ownership, and the complexity ofinstallation of a robotic electrophysiology practice.
Wepromote our full suite of products necessary for a typical hospital implementation, subject to regulatory approvals or clearances. Thisimplementation requires a hospital to agree to an upfront capital payment and recurring payments. The upfront capital payment typicallyincludes equipment and installation charges. The recurring payments typically include disposable costs for each procedure, equipmentservice costs beyond the warranty period, and ongoing software updates. In hospitals where our full suite of products has not been implemented,equipment upgrade or expansion can be implemented upon purchasing of the necessary upgrade or expansion.
Wehave received regulatory clearances and approvals necessary for us to market the Genesis RMN System in the U.S., Europe, andChina, and we are in the process of obtaining necessary registrations for extending our markets in other countries. The GenesisXRMN System, the latest generation of the Genesis RMN System, has received regulatory clearances and approvals in Europe, and weare in the process of obtaining necessary registrations in the US and other countries. The Niobe System, our prior generationrobotic magnetic navigation system, the Odyssey Solution, Cardiodrive, e-Contact, and various disposableinterventional devices, including the Map-iT family of devices, have received regulatory clearances and approvals in the U.S.,Europe, Canada, China, Japan and various other countries. We have regulatory clearances and approvals that allow us to market the Vdriveand Vdrive Duo Systems with the V-CAS device in the U.S., Canada, and Europe. We have regulatory clearances and approvals that allow us to marketthe SynX networking solution in the U.S. and Europe. We have obtained the CE marking for us to market the Stereotaxis MAGiCcatheter in Europe and are pursuing regulatory approvals in the U.S. and various other global geographies. Approval processes can be lengthyand uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied.
Notall products have and/or require regulatory clearance in all the markets we serve. Please refer to “Regulatory Approval”in Item 1 for a description of the regulatory clearance, licensing, and/or approvals we currently have or are pursuing.
Wehave strategic relationships with technology leaders and innovators in the global interventional market. Through these strategic relationshipswe provide compatibility with our robotic magnetic navigation system, integrated x-ray systems, digital imaging and 3D catheter locationsensing technology, and compatible disposable interventional devices. The maintenance of these strategic relationships, or the establishmentof equivalent alternatives, is critical to our commercialization efforts. There are no guarantees that any existing strategic relationshipswill continue, and efforts are ongoing to ensure the availability of compatible systems and devices and/or equivalent alternatives. Wecannot provide assurance as to the timeline of the ongoing availability of such compatible systems or our ability to obtain equivalentalternatives on competitive terms or at all.
CorporateDevelopments
OnJuly 31, 2024, the Company completed its acquisition of all the shares of capital stock of Access Point Technologies EP, Inc., a Minnesotacorporation (“APT”), from APT Holding Company, Inc., a Minnesota corporation. APT, based in Rogers, Minnesota, designs, manufactures,and commercializes a portfolio of differentiated high-quality diagnostic catheters used during cardiac ablation procedures that are commerciallyavailable across key global geographies.
Theintegration with APT provides in-house catheter development, manufacturing expertise and specialized knowledge that will further Stereotaxis’innovation efforts in developing a broad family of interventional devices navigated by our robots within electrophysiology and acrossa range of endovascular procedures.
Stereotaxishas continued to advance development and regulatory approval of its Robotic Magnetic Navigation systems and proprietary interventionaldevices. In the third quarter of 2024, we attained CE Mark for the GenesisX RMN System and are working towards FDA 510(k) regulatoryclearance within the United States. This latest generation of the RMN System is designed to significantly enhance the accessibility ofRobotic Magnetic Navigation by eliminating the lengthy construction cycle necessary to install prior generation RMN systems. In November2024, the Genesis RMN system, our current generation system, received regulatory approval from China’s National MedicalProducts Administration (NMPA), and our partner MicroPort received the regulatory clearances for their integrated mapping system andnovel ablation catheter making available the most current advanced minimally invasive robotic technology to physicians and patients inChina.
TheStereotaxis MAGiC catheter, a robotically navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablationprocedures, obtained the CE marking in Europe during the first quarter, 2025, and the MAGiC Sweep™ catheter, the first roboticallynavigated high-density EP mapping catheter, received U.S. Food and Drug Administration (FDA) 510(k) clearance in July 2025. We are inthe process of obtaining necessary approvals in other geographies. We are also currently seeking regulatory clearances for the EMAGIN5F catheter guide designed to robotically navigate tortuous venous and arterial vasculature.
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Tariffand Trade Regulation Update
Theglobal tariff environment remains fluid and could materially affect our cost structure, gross margins, and timing of product launches.
OnFebruary 1, 2025, the United States announced a 25 percent tariff on most imports from Mexico and Canada. Goods meeting the rules oforigin under the United States-Mexico-Canada Agreement (“USMCA”) are expressly exempt. All sub-assemblies we source fromMexico qualify under USMCA; therefore, these items were not subject to the tariff, and the effect on our cost of revenues for the sixmonths ended June 30, 2025, was immaterial. An Executive Order dated July 31, 2025, raised the general tariff rate on non-USMCA Canadianimports from 25 % to 35 %. Because our Canadian and Mexican sub-assemblies continue to qualify under USMCA, we do not expect a materialimpact.
OnApril 2, 2025, the United States imposed a 10 percent universal ‘baseline” tariff on all imports that do not qualifyunder USMCA and announced additional country-specific tariffs. Higher “reciprocal” country-specific rates, which were initially suspended for 90 days, became effective asof August 7, 2025, under the July 31, 2025, Executive Order. We procure certain specialty metals and other raw materials from suppliersin Japan and several European countries that remain subject to the 10 percent baseline tariff. We expect some vendors to pass the incrementalduty through price increases, which could elevate our cost of revenues and research and development (“R&D”) expenses inthe second half of 2025.
OnJuly 27, 2025, the United States and the European Union agreed to suspend a previously threatened 30 percent tariff and to negotiatea permanent 15 percent ceiling on most EU goods. Implementation details, including the treatment of medical devices, remain under discussion.
Ourproprietary Magic Catheter is manufactured in Germany and currently distributed only in Europe. If tariffs comparable to those describedabove are extended to European medical devices entering the United States, our planned U.S. product launch could be delayed or rendereduneconomical, which would, in turn, slow adoption of our RMN platform.
OnApril 7, 2025, the United States increased tariffs on imports from the People’s Republic of China (“China”) torates of up to 145 percent, and China imposed a 125 percent retaliatory tariff on U.S.-origin goods. On May 12, 2025, followingnegotiations in Geneva, the United States and China issued a Joint Statement suspending most of the reciprocal tariff increaseswhile talks continued. The initial 90-day period expired on August 12, 2025, and then renewed to November 10, 2025. Under the agreement, (i) U.S. duties on Chinese goods have been reduced to a base rate of approximately 30 percent, downfrom the prior 145 percent ceiling, and (ii) China has lowered its duty on U.S. goods to approximately 10 percent, down from 125percent. All other non-tariff counter-measures announced since April 2025 have been suspended until August 12, 2025. We importlimited quantities of R&D consumables and manufacturing inputs from China and, through our partner MicroPort ScientificCorporation, sell U.S.-manufactured Robotic Magnetic Navigation (“RMN”) systems into China. Both inbound materials andoutbound finished products are now subject to these reciprocal tariffs. If the reduced rates remain in place, we anticipate a lessthan one percent increase in expenses for the second half of 2025. If the higher tariffs are reinstated, the impact could be morematerial, particularly to sales of RMN systems in China. We are actively pursuing mitigation strategies.
EffectiveJune 4, 2025, Proclamation 11 043 increased Section 232 tariffs on steel and aluminum from 25 % to 50 %. These duties apply in additionto the 10 % baseline tariff, resulting in an effective rate of up to 60 % (“tariff stacking”) on certain specialty alloysthat we source from Europe and Japan. This did not result in a material direct impact on our operations in the first half of 2025, butthe long-term effects of these and other existing and future tariff actions are difficult to predict.
Theultimate effect of any tariff or trade barrier will depend on factors outside our control, including, potential extensions, escalations,or reciprocal tariff responses, as well as the reactions of our suppliers and customers.
OtherRisks and Uncertainties
Futureresults of operations and liquidity could be materially adversely impacted by uncertainties in macroeconomic and geopolitical factors.The Company continued to experience difficulties with periodic worldwide supply chain disruptions, including shortages and inflationarypressures, tariffs and other trade regulations that are or may be imposed, market disruptions stemming from conflicts, such as in theMiddle East, including Israel and Iran, and logistics delays which make it difficult for us to source parts and ship our products. Wecontinue to evaluate the macroeconomics business environment, taking action to increase inventory levels where appropriate and engagingin discussions with our vendors on contractual obligations, but we cannot guarantee that our business activities will not be impactedmore severely in the future. Our suppliers and contract manufacturers have experienced, and may continue to experience, similar difficulties.If our manufacturing operations or supply chains are materially interrupted, it may not be possible for us to timely manufacture or serviceour products at required levels, or at all. Changes in economic conditions, tariff escalation, retaliatory measures and new import restrictionscould lead to higher inflation than previously experienced or expected, which could, in turn create supply shortages as companies seekalternative sources of supply and adjust their logistics and transportation routes. As a result of these factors, we may be unable toraise the prices of our products sufficiently to keep up with the rate of inflation, especially tariff induced inflation. A materialreduction or interruption in any of our manufacturing processes or a substantial increase in costs would have a material adverse effecton our business, operating results, and financial condition.
Manyof our hospital customers, for whom the purchase of our system involves a significant capital purchase which may be part of a largerconstruction project at the customer site (typically the construction of a new building), may themselves be under similar pressures.Hospitals continue to experience challenges with staffing and cost pressures as supply chain constraints and inflation drive up operatingcosts. Hospitals may also be adversely affected by the liquidity concerns driven by elevated interest rates and the broader macroeconomicenvironment. These factors could cause delays or cancellations of current purchase orders and other commitments and may exacerbate thelong and variable sales and installation cycles for our robotic magnetic navigation systems. Our hospital customers have also experiencedchallenges in sourcing supplies, such as catheters, needed to perform procedures. Such shortages have, and may continue to, put pressureon procedures and our disposable revenue. Delays in order placement, cancellation of existing orders and reduced demand or availabilityof our disposable products all would have a material adverse effect on our business, financial condition, and results of operations.
Anydisruption to the capital markets could negatively impact our ability to raise capital. If the capital markets are disrupted for an extendedperiod and we need to raise additional capital, such capital may not be available on acceptable terms, or at all. Disruptions to thecapital markets and other financing sources could also negatively impact our hospital customers’ ability to raise capital or otherwiseobtain financing to fund their operations and capital projects. Such could result in delayed spending on current projects, a longer salescycle for new projects where a large capital commitment is required, and decreased demand for our disposable products as well as an increasedrisk of customer defaults or delays in payments for our system installations, service contracts and disposable products.
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Inaddition to the macroeconomic factors, occurrences similar to the COVID-19 pandemic or may negatively affect demand for both our systemsand our disposable products. In the past, we have experienced business disruptions, including travel restrictions on us and our third-partydistributors, which negatively affected our complex sales, marketing, installation, distribution and service network relating to ourproducts and services. We also experienced reductions in demand for our disposable products as our healthcare customers (physicians andhospitals) re-prioritized the treatment of patients and diverted resources away from non-pandemic areas, leading to the performance offewer procedures in which our disposable products are used. The impact varied widely over time by individual geography. For instance,in 2022, procedure volumes were challenged by periodic resurgences of COVID-19, ongoing hospital staffing issues and other factors. Inthe first quarter of 2023, COVID-19 resurgences in China continued to negatively impact our procedure volumes in that region, but asinfections and hospitalization decreased, we saw a recovery of procedure volumes with no further impacts in the year. Significant decreasesto our capital or recurring revenues could have a material adverse effect on our business, operating results, and financial condition.We continue to anticipate periodic disruptions to our manufacturing operations, supply chains, procedures volumes, service activities,and capital system orders and placements relating to new or ongoing periodic resurgences of pandemic-related issues, any of which couldhave a material adverse effect on our business, financial condition, results of operations, or cash flows
Asa result of the July 2024 acquisition of APT EP, Inc., we are managing APT’s ongoing business of manufacturing, commercializing,development and sales of APT’s catheters and related products and services. The manufacturing process of catheters is complex,highly technical, and our prior experience in this field is dated. The process can be subject to periodic worldwide supply chaindisruptions, including labor shortages and inflationary pressures, tariffs or other trade restrictions, and logistics delays whichmake it difficult for us to source parts and ship our products. We may require a higher level of overhead than currentlyanticipated. Our ability to successfully manage this new aspect of our business will depend, in part, upon management’sability to design and implement strategic initiatives that address not only the integration of APT into us, but also the increasedscope of the combined business with its associated increased costs and complexity. We are still integrating the businesses andimplementing safeguards to minimize any negative impacts on our financial position, results of operations and cash flowspost-acquisition.
Sinceour inception, we have generated significant losses. As of June 30, 2025, we have incurred cumulative net losses of approximately $571.4million. In 2025, the Company plans to advance adoption of its robotic magnetic navigation systems and its propriety devices in thosemarkets where regulatory clearance has been received and to work with regulatory approval authorities in those geographies where approvalis pending, with the goal of furthering clinical adoption and new system placements. We expect to incur additional losses in 2025 aswe continue the development and commercialization of our products, conduct our research and development activities, advance new productsinto clinical development from our existing research programs and fund additional sales and marketing initiatives. During the remainderof 2025, we will continue to monitor the impact of the macroeconomic environment on our project timing, regulatory approvals, customerand supplier operations, and our operating results. Until we can generate significant cash flow from our operations, we expect to continueto fund our operations with cash resources primarily generated from the proceeds of our past and future public offerings, and privatesales of our equity securities. We cannot accurately predict the timing and amount of our utilization of capital, which will depend onseveral factors outside of our control.
Whilewe believe our existing cash and cash equivalents, including the proceeds from our July 2025 equity raise, will be sufficient to fundour operating expenses and capital equipment requirements, in light of the macroeconomic environment, we cannot guarantee that we willnot need additional funding in the future. We will continue to explore financing alternatives, and we cannot assure you that additionalfinancing will be available on acceptable terms or that such financing will not be dilutive to our stockholders. If adequate funds arenot available to us, we could be required to delay development or commercialization of new products, to license to third parties therights to commercialize products or technologies that we would otherwise seek to commercialize ourselves, or to reduce the sales, marketing,customer support or other resources devoted to our products, any of which could have a material adverse effect on our business, financialcondition, and operational results. In addition, we could be required to cease operations.
CriticalAccounting Policies and Estimates
Ourdiscussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, whichhave been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financialstatements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses,and related disclosures. We review our estimates and judgments on an on-going basis. We base our estimates and judgments on historicalexperience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ fromthese estimates. We believe the following accounting policies are critical to the judgments and estimates we use in preparing our consolidatedfinancial statements. For a complete listing of our critical accounting policies, please refer to our Annual Report on Form 10-K forthe year ended December 31, 2024.
RevenueRecognition
Wegenerate revenue from the initial capital sales of systems as well as recurring revenue from the sale of our proprietary disposable devices,from royalties paid to the Company on the sale of various devices as provided by co-development and co-placement arrangements, and fromother recurring revenue including ongoing software updates and service contracts.
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Inaccordance with Accounting Standards Codification Topic 606 (“ASC 606”), “Revenue from Contracts with Customers,”we account for a contract with a customer when there is a legally enforceable contract between the Company and the customer, the rightsof the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. Werecord our revenue based on consideration specified in the contract with each customer, net of any taxes collected from customers thatare remitted to government authorities.
Forcontracts containing multiple products and services the Company accounts for individual products and services as separate performanceobligations if they are distinct, which is if a product or service is separately identifiable from other items in the bundled package,and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company recognizesrevenues as the performance obligations are satisfied by transferring control of the product or service to a customer.
Forarrangements with multiple performance obligations, revenue is allocated to each performance obligation based on its relative standaloneselling price. Standalone selling prices are based on observable prices at which the Company separately sells the products or services.If a standalone selling price is not directly observable, then the Company estimates the standalone selling price considering marketconditions and entity-specific factors including, but not limited to, features and functionality of the products and services and marketconditions. The Company regularly reviews standalone selling prices and updates these estimates as necessary.
Systems:
Contractsrelated to the sale of systems typically contain separate obligations for the delivery of system(s), installation, service-type warranty,and an implied obligation to provide software enhancements if and when available for one year following installation. Revenue is recognizedwhen the Company transfers control to the customer, which is generally at the point when acceptance occurs that indicates customer acknowledgmentof delivery or installation, depending on the terms of the arrangement. Revenue from service-type warranties and the implied obligationto deliver software enhancements if and when available is included in Other Recurring Revenue and is recognized ratably typically overthe first year following installation of the system as the customer receives the service-type warranty and right to software updatesthroughout the period. The Company’s system contracts generally do not provide a right of return. Systems may be covered by a one-yearassurance-type warranty in lieu of a service-type warranty. Assurance-type warranty costs were less than $0.1 million for the six monthsended June 30, 2025, and 2024.
Disposables:
Revenuefrom sales of disposable products is recognized when control is transferred to the customers, which generally occurs at the time of shipment,but can also occur at the time of delivery depending on the customer arrangement. Disposable products are covered by an assurance typewarranty that provides for the return of defective products. Warranty costs were not material for the six months ended June 30, 2025,and 2024.
Royalty:
TheCompany receives royalties on the sale of various devices as provided by co-development and co-placement arrangements with various manufacturers.
OtherRecurring Revenue:
Otherrecurring revenue includes revenue from product maintenance plans, service-type warranties, other post warranty maintenance, and theimplied obligation to provide software enhancements if and when available for a specified period, typically one year following installationof our systems. Revenue from services and software enhancements, service-type warranties, and the implied obligation to provide softwareenhancements are deferred and amortized over the service or update period, which is typically one year. Revenue related to services performedon a time-and-materials basis is recognized when performed.
TheCompany invoices its customers based on the billing schedules in its sales arrangements. Contract assets primarily represent the differencebetween the revenue that was recognized based on the relative selling price of the related performance obligations and the contractualbilling terms in the arrangements. Customer deposits primarily relate to future system sales but can also include deposits on disposablesales. Deferred revenue is primarily related to service contracts, for which the service fees are billed up-front, generally quarterlyor annually, and for amounts billed in advance for system contracts for which some performance obligations remain outstanding. For servicecontracts, the associated deferred revenue is generally recognized ratably over the service period. For system contracts, the associateddeferred revenue is recognized when the remaining performance obligations are satisfied. See Note 2 for additional detail on deferredrevenue. The Company did not have any impairment losses on its contract assets for the periods presented.
AssetsRecognized from the Costs to Obtain a Contract with a Customer
TheCompany has determined that sales incentive programs for the Company’s sales team meet the requirements to be capitalized as theCompany expects to generate future economic benefits from the related revenue generating contracts after the initial capital sales transaction.The costs capitalized as contract acquisition costs included in prepaid expenses and other assets in the Company’s consolidatedbalance sheets were approximately $0.1 million as of June 30, 2025, and December 31, 2024. The Company did not incur any impairment lossesduring any of the periods presented.
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Costof Contracts
Costsof systems revenue include direct product costs, installation labor and other costs including estimated assurance-type warranty costsand initial training costs, when applicable. These costs are recognized at the time of sale. Costs of disposable revenue include directproduct costs and estimated warranty costs and are recognized at the time of sale. Cost of revenue from services and license fees arerecognized when incurred.
Stock-BasedCompensation
Stockcompensation expense, which is a non-cash charge, results from stock option, non-qualified stock options, stock appreciation rights,and restricted share grants made to employees, non-employee directors, and third-party consultants at the fair value of the grants. Fortime-based awards, the fair value of options and stock appreciation rights granted was determined using the Black-Scholes valuation methodwhich gives consideration to the estimated value of the underlying stock at the date of grant, the exercise price of the option, theexpected dividend yield and volatility of the underlying stock, the expected life of the option and the corresponding risk-free interestrate. The fair value of the grants of restricted shares and units was determined based on the closing price of our stock on the dateof grant. Stock compensation expense for options, stock appreciation rights and for time-based restricted share grants and units is amortizedon a straight-line basis over the vesting period of the underlying issue, generally over four years except for grants to non-employeedirectors which are generally earned over a period of six months. Stock compensation expense for performance-based restricted shares,if any, is amortized on a straight-line basis over the anticipated vesting period and is subject to adjustment based on the actual achievementof objectives. Compensation expense is recognized only for those options expected to vest, net of actual forfeitures. Estimates of theexpected life of options have been based on the average of the vesting and expiration periods, which is the simplified method under generalaccounting principles for share-based payments. Estimates of volatility utilized in calculating stock-based compensation have been preparedbased on historical data. Actual experience to date has been consistent with these estimates.
Formarket-based awards, stock-based compensation expense is recognized over the minimum service period regardless of whether or not themarket target is probable of being achieved. The fair value of such awards is estimated on the grant date using Monte Carlo simulations.
Theamount of compensation expense to be recorded in future periods may increase if we make additional grants of options, stock appreciationrights or restricted shares. The amount of expense to be recorded in future periods may decrease if the requisite service periods arenot completed.
Resultsof Operations
Comparisonof the Three Months Ended June 30, 2025, and 2024
Revenue.Revenue increased from $4.5 million for the three months ended June 30, 2024, to $8.8 million for the three months ended June 30, 2025,an increase of 95%. Revenue from the sales of systems increased to $3.0 million for the three months ended June 30, 2025, from $0.2 millionfor the three months ended June 30, 2024, driven by increased sales volume in the current year period. Revenue from sales of disposableinterventional devices, service, and accessories increased to approximately $5.8 million for the three months ended June 30, 2025, from$4.3 million for the three months ended June 30, 2024, an increase of approximately 35%. The increase was primarily driven by the impactof post-acquisition non-magnetic disposable device sales recorded in the current year period.
Costof Revenue. Cost of revenue increased from $1.2 million for the three months ended June 30, 2024, to $4.2 million for the three monthsended June 30, 2025, an increase of approximately 255%. As a percentage of our total revenue, overall gross margin decreased to 52% forthe three months ended June 30, 2025, from 74% for the three months ended June 30, 2024, primarily due to changes in product mix. Costof revenue for systems sold increased from $0.2 million for the three months ended June 30, 2024, to $2.4 million for the three monthsended June 30, 2025, driven by increased system sales volume in the current year period. Gross margin for systems was less than $0.1million for the three months ended June 30, 2024, compared to $0.7 million for the three months ended June 30, 2025. Cost of revenuefor disposables, service, and accessories increased from $1.0 million for the three months ended June 30, 2024, to $1.9 million for thethree months ended June 30, 2025. Gross margin for disposables, service, and accessories was 68% for the three months ended June 30,2025, compared to 76% for the three months ended June 30, 2024. Gross margin for disposables, service, and accessories continues to bedepressed by acquisition related accounting which required the valuation of acquired finished good inventory to fair value and by changesin product mix in the current period.
Researchand Development Expenses. Research and development expenses decreased from $2.3 million for the three months ended June 30, 2024,to $1.8 million for the three months ended June 30, 2025, a decrease of approximately 22%. This decrease was primarily driven by thecapitalization of GenesisX into inventory
Salesand Marketing Expenses. Sales and marketing expenses remained consistent at $3.3 million for the three months ended June 30, 2024,and 2025.
Generaland Administrative Expenses. General and administrative expenses include finance, information systems, legal, and general managementexpenses, amortization of acquisition related intangible assets, and the gain or loss associated with the remeasurement of the acquisitionrelated contingent consideration. General and administrative expenses increased from $3.8 million for the three months ended June 30,2024, to $4.0 million for the three months ended June 30, 2025, an increase of approximately 6%. This increase was primarily driven bythe amortization of the acquisition related intangible assets offset by lower professional service fees in the current year period.
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OtherOperating Expense. The Company received approximately $0.5 million in an employee retention tax credit in the second quarter of 2025.
InterestIncome (Expense). Net interest income was approximately $0.2 million for the three months ended June 30, 2024 and2025.
Comparisonof the Six Months Ended June 30, 2025 and 2024
Revenue.Revenue increased from $11.4 million for the six months ended June 30, 2024, to $16.3 million for the six months ended June 30, 2025,an increase of approximately 43%. Revenue from the sales of systems increased from $2.9 million for the six months ended June 30, 2024,to $5.0 million for the six months ended June 30, 2025, driven by increased system sales volumes in the current year period. Revenuefrom sales of disposable interventional devices, service and accessories increased to $11.3 million for the six months ended June 30,2025, from $8.5 million for the six months ended June 30, 2024, an increase of approximately 32%. The increase was primarily driven bythe impact of post-acquisition non-magnetic disposable device sales recorded in the current year period.
Costof Revenue. Cost of revenue increased from $4.1 million for the six months ended June 30, 2024, to $7.6 million for the six monthsended June 30, 2025, an increase of approximately 86%. As a percentage of our total revenue, overall gross margin decreased to 53% forthe six months ended June 30, 2025, from 64% for the six months ended June 30, 2024, primarily due to changes in product mix. Cost ofrevenue for systems sold increased from $2.1 million for the six months ended June 30, 2024, to $4.0 million for the six months endedJune 30, 2025, driven by increased system sales volume in the current year period. Gross margin for systems was $0.8 million for thesix months ended June 30, 2024, compared to $1.0 million for the six months ended June 30, 2025. Cost of revenue for disposables, service,and accessories increased from $2.0 million for the six months ended June 30, 2024, to $3.6 million for the six months ended June 30,2025, driven by increased disposables sales volume in the current period. Gross margin for disposables, service and accessories was 76%for the six months ended June 30, 2024, compared to 68% for the six months ended June 30, 2025. Gross margin for disposables, service,and accessories was impacted by acquisition related accounting which required the valuation of acquired finished good inventory to fairvalue and by changes in product mix in the current period.
Researchand Development Expenses. Research and development expenses decreased from $4.5 million for the six months ended June 30, 2024, to$4.1 million for the six months ended June 30, 2025, a decrease of 9%. This decrease was primarily driven by the capitalization of GenesisXinto inventory offset by acquired headcount expense from our acquisition.
Salesand Marketing Expenses. Sales and marketing expenses increased from $6.3 million for the six months ended June 30, 2024, to $6.4million for the six months ended June 30, 2025, an increase of approximately 2%. This increase was primarily driven by tradeshow expensesin the current year period.
Generaland Administrative Expenses. General and administrative expenses include finance, information systems, legal, and general managementexpenses, amortization of acquisition related intangible assets, and the gain or loss associated with the remeasurement of the acquisitionrelated contingent consideration. General and administrative expenses increased from $7.2 million for the six months ended June 30, 2024,to $8.5 million for the six months ended June 30, 2025, an increase of approximately 18%. This increase was primarily driven by the acquisitionrelated contingent consideration, amortization of the acquisition related intangible assets, and higher professional service fees inthe current year period.
OtherOperating Expense. The Company received approximately $0.5 million in an employee retention tax credit in the second quarter of 2025.
InterestIncome (Expense). Net interest income was approximately $0.4 million for the six months ended June 30, 2024, compared to $0.2 millionfor the six months ended June 30, 2025. The decrease was driven by lower invested balances and interest rates in the current year periodpartially offset by interest received with payment of the employee retention tax credit in the current year period.
Liquidityand Capital Resources
Liquidityrefers to the liquid financial assets available to fund our business operations and pay for near-term obligations. These liquid financialassets consist of cash, cash equivalents, and investments.
Asof June 30, 2025, we had $7.0 million of cash and cash equivalents. We had working capital of $1.2 million as of June 30, 2025, comparedto $4.8 million as of December 31, 2024.
Thefollowing table summarizes our cash flow by operating, investing and financing activities for the six months ended June 30, 2025, and2024 (in thousands):
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flow used in operating activities | $ | (5,512 | ) | $ | (5,434 | ) | ||
| Cash flow used in investing activities | (23 | ) | (22 | ) | ||||
| Cash flow provided by financing activities | 66 | 58 | ||||||
Netcash used in operating activities. We used approximately $5.5 million and $5.4 million of cash for operating activities during thesix months ended June 30, 2025, and 2024, respectively. The increase in cash used in operating activities was driven by changes in workingcapital partially offset by a lower net loss.
Netcash used in investing activities. We used less than $0.1 million of cash for investing activities during the six months ended June30, 2025, and 2024. The cash used for both periods was for the purchase of equipment.
Netcash provided by financing activities. We generated less than $0.1 million of cash from financing activities during the six monthsended June 30, 2025, and 2024. The cash generated in both periods was driven by the proceeds from issuance of stock from the exerciseof options, net of issuance costs, and from our employee stock purchase program.
CapitalResources
Asof June 30, 2025, the Company did not have any debt.
Off-BalanceSheet Arrangements
Wedo not currently have, nor have we ever had, any relationships with unconsolidated entities or financial partnerships, such as entitiesoften referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitatingoff-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activitiesinvolving non-exchange traded contracts. As a result, we are not materially exposed to any financing, liquidity, market, or credit riskthat could have arisen if we had engaged in these relationships.
ITEM3. [RESERVED]
None.
ITEM4. CONTROLS AND PROCEDURES
DisclosureControls and Procedures: The Company’s management, with the participation of the Company’s Chief Executive Officer andChief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is definedin Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the endof the period covered by this report. Any controls and procedures, no matter how well designed and operated, can provide only reasonableassurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefitrelationship of possible controls and procedures. Based on such evaluation, the Company’s Chief Executive Officer and Chief FinancialOfficer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.
ChangesIn Internal Control Over Financial Reporting: The Company’s management, with the participation of the Company’s ChiefExecutive Officer and Chief Financial Officer, also conducted an evaluation of the Company’s internal control over financial reportingto determine whether any changes occurred during the period covered by this report that have materially affected, or are reasonably likelyto materially affect, the Company’s internal control over financial reporting. Based on that evaluation, there has been no suchchange during the period covered by this report.
Duringthe period ended December 31, 2024, the Company completed the acquisition of Access Point Technologies EP, Inc. As a result of the acquisition,the Company is in the process of reviewing the internal control structure of this business and, if necessary, will make appropriate changesas the Company incorporates its controls and procedures into the acquired business.
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PARTII – OTHER INFORMATION
ITEM1. LEGAL PROCEEDINGS
None.
ITEM1A. RISK FACTORS
None.
ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM4. [RESERVED]
None.
ITEM5. OTHER INFORMATION
None.
ITEM6. EXHIBITS
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STEREOTAXIS,INC.
SIGNATURES
Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf bythe undersigned thereunto duly authorized.
| STEREOTAXIS, INC. (Registrant) | ||
| Date: August 13, 2025 | By: | /s/ David L. Fischel |
| David L. Fischel | ||
| Chief Executive Officer | ||
| Date: August 13, 2025 | By: | /s/ Kimberly R. Peery |
| Kimberly R. Peery | ||
| Chief Financial Officer | ||
| 31 |
Exhibit31.1
Certificationof Principal Executive Officer
I,David L. Fischel, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Stereotaxis, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have: |
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidatedfinancial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internalcontrol over financial reporting; and
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.
| Date: August 13, 2025 | /s/ David L. Fischel |
| David L. Fischel | |
| Chief Executive Officer | |
| Stereotaxis, Inc. | |
| (Principal Executive Officer) |
Exhibit31.2
Certificationof Principal Financial Officer
I,Kimberly R. Peery, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Stereotaxis, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have: |
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidatedfinancial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internalcontrol over financial reporting; and
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.
| Date: August 13, 2025 | /s/ Kimberly R. Peery |
| Kimberly R. Peery | |
| Chief Financial Officer | |
| Stereotaxis, Inc. | |
| (Principal Financial Officer) |
Exhibit32.1
CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350,
ASADOPTED PURSUANT TO
SECTION906 OF THE SARBANES-OXLEY ACT OF 2002
Inconnection with the quarterly report of Stereotaxis, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2025as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David L. Fischel, Chief ExecutiveOfficer of the Company, certify, pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operationsof the Company.
| Date: August 13, 2025 | /s/ David L. Fischel |
| David L. Fischel | |
| Chief Executive Officer | |
| Stereotaxis, Inc. |
Exhibit32.2
CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350,
ASADOPTED PURSUANT TO
SECTION906 OF THE SARBANES-OXLEY ACT OF 2002
Inconnection with the quarterly report of Stereotaxis, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2025as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kimberly R. Peery, Chief FinancialOfficer of the Company, certify, pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operationsof the Company.
| Date: August 13, 2025 | /s/ Kimberly R. Peery |
| Kimberly R. Peery | |
| Chief Financial Officer | |
| Stereotaxis, Inc. |