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What changed in Sensus Healthcare, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Sensus Healthcare, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+125 added−110 removedSource: 10-K (2025-03-05) vs 10-K (2024-03-15)

Top changes in Sensus Healthcare, Inc.'s 2024 10-K

125 paragraphs added · 110 removed · 97 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

34 edited+6 added−3 removed73 unchanged
Biggest changeFDA Regulation of Medical Devices The Federal Food, Drug and Cosmetic Act (“FDCA”) and FDA regulations establish a comprehensive system for the regulation of medical devices intended for human use. Sensus’s medical device products are subject to these regulations, as well as other federal, state, and local laws and regulations.
Biggest changeSensus’s medical device products are subject to these regulations, as well as other federal, state, and local laws and regulations. The FDA is also responsible for the overall enforcement of quality, regulatory, and statutory requirements governing medical devices.
The information on Sensus’s website is not incorporated by reference in this Annual Report on Form 10-K. Reports, proxy statements, and other information regarding issuers that file electronically with the SEC, including Sensus’s filings, are also available to the public from the SEC’s website at http://www.sec.gov.
The information on Sensus’s website is not incorporated by reference in this Annual Report on Form 10-K. Reports, proxy statements, and other information regarding issuers that file electronically with the SEC, including Sensus’s filings, are also available to the public from the SEC’s website at http://www.sec.gov. 10
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include, but is not limited to, the following sanctions: ● Issuance of Form 483 observations (also known as “minor non-conformances”) during a facilities inspection; ● Untitled letters or warning letters; 6 ● Fines, injunctions, and civil penalties; ● Consent Decrees, which forces improvements in the quality management system through the use of the federal courts; ● Recall or seizure of products; ● Operating restrictions, partial suspension or total shutdown of production; ● Refusing 510(k) clearance or premarket approval of new products; ● Withdrawing 510(k) clearance or premarket approvals that are already granted; and ● Criminal prosecution.
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include, but is not limited to, the following sanctions: ● Issuance of Form 483 observations (also known as “minor non-conformances”) during a facilities inspection; ● Untitled letters or warning letters; ● Fines, injunctions, and civil penalties; ● Consent Decrees, which forces improvements in the quality management system through the use of the federal courts; ● Recall or seizure of products; ● Operating restrictions, partial suspension or total shutdown of production; ● Refusing 510(k) clearance or premarket approval of new products; ● Withdrawing 510(k) clearance or premarket approvals that are already granted; and ● Criminal prosecution.
The Company has implemented policies and procedures related to commercial compliance including with respect to compliance in connection with sales and marketing. Healthcare Fraud and Abuse Healthcare fraud and abuse laws apply to Sensus’s business when a customer submits a claim for an item or service that is reimbursed under Medicare, Medicaid, or most other federally funded healthcare programs.
The Company has implemented policies and procedures related to commercial compliance including with respect to compliance in connection with sales and marketing. 8 Healthcare Fraud and Abuse Healthcare fraud and abuse laws apply to Sensus’s business when a customer submits a claim for an item or service that is reimbursed under Medicare, Medicaid, or most other federally funded healthcare programs.
The Stark Law often is enforced through lawsuits brought under the Federal False Claims Act, violations of which trigger significant monetary penalties and treble damages. 8 Additionally, the civil False Claims Act prohibits knowingly presenting or causing the presentation of a false, fictitious, or fraudulent claim for payment to the U.S. government.
The Stark Law often is enforced through lawsuits brought under the Federal False Claims Act, violations of which trigger significant monetary penalties and treble damages. Additionally, the civil False Claims Act prohibits knowingly presenting or causing the presentation of a false, fictitious, or fraudulent claim for payment to the U.S. government.
The patents relate to technology that is pertinent to the Company. The following patents were issued between August 2007 and September 2008: ● U.S. Patent No. 7,372,940: Radiation therapy system featuring rotatable filter assembly (expires September 30, 2025) ● U.S.
The patents relate to technology that is pertinent to the Company. The following patents were issued between August 2007 and September 2008: ● U.S. Patent No. 7,372,940: Radiation therapy system featuring rotatable filter assembly (expires September 30, 2025) 4 ● U.S.
These include: ● Establishment registration and device listing requirements, in accordance with 21 CFR, Part 807; ● Quality System Regulation requirements, which govern the methods used in, and the facilities and controls used for, the design, manufacture, packaging, labeling, storage, installation, and servicing of finished devices, in accordance with 21 CFR, Part 820; ● Labeling requirements, which mandate the inclusion of certain content in device labels and labeling, and which also prohibit the promotion of products for uncleared or unapproved (i.e., “off-label”) uses; ● Medical Device Reporting regulation, which requires that manufacturers and importers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur, in accordance with 21 CFR, Part 803; and ● Reports of Corrections and Removals regulation, which requires that manufacturers and importers (a) report to the FDA recalls (i.e., corrections or removals) if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health, and (b) keep records of recalls that they determine to be not reportable, all in accordance with 21 CFR, Part 806.
These include: ● Establishment registration and device listing requirements, in accordance with 21 CFR, Part 807; ● Quality System Regulation requirements, which govern the methods used in, and the facilities and controls used for, the design, manufacture, packaging, labeling, storage, installation, and servicing of finished devices, in accordance with 21 CFR, Part 820; ● Labeling requirements, which mandate the inclusion of certain content in device labels and labeling, and which also prohibit the promotion of products for uncleared or unapproved (i.e., “off-label”) uses; ● Medical Device Reporting regulation, which requires that manufacturers and importers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur, in accordance with 21 CFR, Part 803; and ● Reports of Corrections and Removals regulation, which requires that manufacturers and importers (a) report to the FDA recalls (i.e., corrections or removals) if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health, and (b) keep records of recalls that they determine to be not reportable, all in accordance with 21 CFR, Part 806. 6 The FDA enforces these requirements by inspection and market surveillance.
The SRT-100 provides the following clinical and functional advantages: ● Easy touch automatic set-up procedure, including automatic x-ray tube warm-up procedures; ● Specially designed control console for medical physicists and service technicians, providing integrated safety and back-up timer controls, automatic system conditioning procedures, calibration, x-ray output verification and system parameters, including last treatment status information; ● Advanced patient record management with integrated enterprise workflow management; ● Compact mobile design with a small 30” x 30” footprint and unique scissor x-ray tube arm movements, providing a large range of motion for patient access and treatment; and ● High reliability and MTBF (“mean time between failures”) performance that provides availability for patients and practitioners and lowers the total cost of ownership. 1 SRT-100 Vision The SRT-100 Vision provides customers with additional options compared to the SRT-100 base model.
The SRT-100 provides the following clinical and functional advantages: ● Easy touch automatic set-up procedure, including automatic x-ray tube warm-up procedures; ● Specially designed control console for medical physicists and service technicians, providing integrated safety and back-up timer controls, automatic system conditioning procedures, calibration, x-ray output verification and system parameters, including last treatment status information; ● Advanced patient record management with integrated enterprise workflow management; ● Compact mobile design with a small 30” x 30” footprint and unique scissor x-ray tube arm movements, providing a large range of motion for patient access and treatment; and 1 ● High reliability and MTBF (“mean time between failures”) performance that provides availability for patients and practitioners and lowers the total cost of ownership.
Finally, the Company may be required to incur additional costs related to ongoing HIPAA compliance as may be necessary to address evolving interpretations and enforcement of HIPAA and other health information privacy and security laws, the enactment of new laws or regulations, emerging cybersecurity threats, and other factors. 9 Research and Development Research and development costs related to development and quality and regulatory costs are expensed as incurred.
Finally, the Company may be required to incur additional costs related to ongoing HIPAA compliance as may be necessary to address evolving interpretations and enforcement of HIPAA and other health information privacy and security laws, the enactment of new laws or regulations, emerging cybersecurity threats, and other factors.
The HIPAA privacy and security regulations, including the expanded requirements under HITECH, establish comprehensive federal standards with respect to the use and disclosure of protected health information by covered entities and their business associates, in addition to setting standards to protect the confidentiality, integrity, and security of protected health information.
The HIPAA privacy and security regulations, including the expanded requirements under HITECH, establish comprehensive federal standards with respect to the use and disclosure of protected health information by covered entities and their business associates, in addition to setting standards to protect the confidentiality, integrity, and security of protected health information. 9 The Company has implemented policies and procedures related to compliance with the HIPAA privacy and security regulations, as required by law.
In February 2024, the Company formed Sensus Healthcare Services, LLC, a wholly-owned subsidiary that provides operational healthcare services to dermatology clinics. For further information see Note 1, Description of the Business , in the notes to the consolidated financial statements in Part II, Item 8. Our Products and Services SRT is the Company’s core technology.
In February 2024, the Company formed Sensus Healthcare Services, LLC, a wholly-owned subsidiary that provides operational healthcare services to dermatology clinics. For further information see Note 1, Organization and Summary of Significant Accounting Policies - Description of the Business , in the notes to the consolidated financial statements in Part II, Item 8.
Patent No. 7,263,170: Radiation therapy system featuring rotatable filter assembly (expires September 30, 2025) The following patents were issued to us in 2017: ● Russia Patent No. 26333322: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method ● China Patent No. ZL201380013491.7: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method 4 The following patents were issued to Sensus in 2020: ● U.S.
Patent No. 7,263,170: Radiation therapy system featuring rotatable filter assembly (expires September 30, 2025) The following patents were issued to us in 2017: ● Russia Patent No. 2633322: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires January 12, 2033) ● China Patent No.
The Company has implemented policies and procedures related to compliance with the HIPAA privacy and security regulations, as required by law. The privacy and security regulations establish a “floor” and do not supersede state laws that are more stringent. Therefore, we are required to comply with both federal privacy and security regulations and varying state privacy and security laws.
The privacy and security regulations establish a “floor” and do not supersede state laws that are more stringent. Therefore, we are required to comply with both federal privacy and security regulations and varying state privacy and security laws.
This allows the user to precisely and more accurately plan and prescribe the patient-specific treatment course to maximize patient outcomes and workflow efficiency. The SRT-100 Vision also offers a comprehensive control console and workflow management that provides full record and treatment tracing, operator-level access and functional control, audio-visual patient and treated lesion monitoring, and advanced dosimetry setting and tracing.
The SRT-100 Vision also offers a comprehensive control console and workflow management that provides full record and treatment tracing, operator-level access and functional control, audio-visual patient and treated lesion monitoring, and advanced dosimetry setting and tracing.
As of December 31, 2023, the Company had installed 752 units in 21 countries, primarily in the United States. SRT-100 The SRT-100 is a photon x-ray low energy SRT system that provides patients an alternative to surgery for treating non-melanoma skin cancers, including basal cell and squamous cell skin cancers and other skin conditions such as keloids.
SRT-100 The SRT-100 is a photon x-ray low energy SRT system that provides patients an alternative to surgery for treating non-melanoma skin cancers, including basal cell and squamous cell skin cancers and other skin conditions such as keloids.
Further, the advertising and promotion of Sensus’s products in the EU/EEA is subject to the laws of individual EEA Member States implementing the EU Medical Devices Directive, Directive 2006/114/EC concerning misleading and comparative advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other EU/EEA Member State laws governing the advertising and promotion of medical devices.
Based on this certification, we can draw up an EU Declaration of Conformity which allows us to affix the CE mark to our products. 7 Further, the advertising and promotion of Sensus’s products in the EU/EEA is subject to the laws of individual EEA Member States implementing the EU Medical Devices Directive, Directive 2006/114/EC concerning misleading and comparative advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other EU/EEA Member State laws governing the advertising and promotion of medical devices.
Patent No. 10,596,392: Dermatology Radiotherapy System with hybrid Imager (expires July 28, 2038) ● China Patent No. ZL201710929838.2 Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires August 14, 2038) The following patent was issued to Sensus in 2021: ● U.S.
ZL201380013491.7: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires January 12, 2033) The following patents were issued to Sensus in 2020: ● U.S. Patent No. 10,596,392: Dermatology Radiotherapy System with hybrid Imager (expires July 28, 2038) ● China Patent No.
These laws may limit or restrict the advertising and promotion of our products to the general public and may impose limitations on our promotional activities with healthcare professionals. 7 The Company has obtained approval to sell our products in Australia, Canada, China, Hong Kong, European Union, United Kingdom, Israel, Mexico, Russia, South Africa, South Korea, Vietnam, Taiwan, and Guatemala, and is currently seeking approval in several other countries.
The Company has obtained approval to sell our products in Australia, Canada, China, Hong Kong, European Union, United Kingdom, Israel, Mexico, Russia, South Africa, South Korea, Vietnam, Taiwan, and Guatemala, and is currently seeking approval in several other countries.
None of the Company’s employees are represented by a labor union or covered by a collective bargaining agreement. The Company believes that its success depends on the ability to attract, develop, and retain key personnel. It also believes that the skills, experience, and industry knowledge of its key employees significantly benefits its operations and performance.
Employees and Human Capital At December 31, 2024, the Company had 54 employees. None of the Company’s employees are represented by a labor union or covered by a collective bargaining agreement. The Company believes that its success depends on the ability to attract, develop, and retain key personnel.
For the years ended December 31, 2023 and 2022, the Company incurred research and development expenses of approximately $3.7 million and $3.5 million, respectively. The Company expects research and development expenses in 2024 to be generally consistent with 2023. Employees and Human Capital At December 31, 2023, the Company had 35 employees.
Research and Development Research and development costs related to development and quality and regulatory costs are expensed as incurred. For the years ended December 31, 2024 and 2023, the Company incurred research and development expenses of $4.2 million and $3.7 million, respectively. The Company expects research and development expenses in 2025 to be generally consistent with 2024.
The Company also relies on trade secrets and other unpatented proprietary rights to develop and maintain a competitive position. The Company seeks to protect unpatented proprietary rights through a variety of methods, including confidentiality agreements with employees, consultants and others who may have access to this proprietary information.
The Company seeks to protect unpatented proprietary rights through a variety of methods, including confidentiality agreements with employees, consultants and others who may have access to this proprietary information. The Company requires all employees to execute invention assignment agreements with respect to inventions arising from their employment.
Unless exempted, Class II devices typically require FDA clearance before marketing, through the premarket notification (“510(k)”) process, in accordance with 21 CFR, Part 807 requirements. Unless it is exempt from premarket review requirements, a medical device must receive marketing authorization from the FDA prior to being commercially distributed in the U.S.
Unless it is exempt from premarket review requirements, a medical device must receive marketing authorization from the FDA prior to being commercially distributed in the U.S.
The Notified Body typically audits and examines the quality system for the manufacture, design, and final inspection of devices before issuing a certification demonstrating compliance with the essential requirements. Based on this certification, we can draw up an EU Declaration of Conformity which allows us to affix the CE mark to our products.
The Notified Body typically audits and examines the quality system for the manufacture, design, and final inspection of devices before issuing a certification demonstrating compliance with the essential requirements.
Even if any such patents or trademarks are ultimately issued or registered, they, or any of the Company’s other intellectual property, may not provide any meaningful protection or competitive advantage. Intellectual property could be challenged, invalidated, circumvented, infringed upon, or misappropriated.
The Company can provide no assurance that any patents or trademarks will be issued or registered as a result of our pending or future applications for such intellectual property. Even if any such patents or trademarks are ultimately issued or registered, they, or any of the Company’s other intellectual property, may not provide any meaningful protection or competitive advantage.
These additional options allow for dedicated treatment planning and full treatment progression documentation in a patient’s record. The SRT-100 Vision provides the user with a unique SRT-tailored treatment planning application that integrates an embedded high frequency ultrasound imaging module, volumetric tumor analysis, beam margins planning, and comprehensive dosimetry parameters.
The SRT-100 Vision provides the user with a unique SRT-tailored treatment planning application that integrates an embedded high frequency ultrasound imaging module, volumetric tumor analysis, beam margins planning, and comprehensive dosimetry parameters. This allows the user to precisely and more accurately plan and prescribe the patient-specific treatment course to maximize patient outcomes and workflow efficiency.
Class II devices are deemed to present a moderate risk and are devices for which general controls alone are not sufficient to provide a reasonable assurance of safety and effectiveness. Medical devices in Class II are subject to both general controls and “special controls” — e.g., special labeling, compliance with industry standards, and post market surveillance.
The Company’s medical devices are Class II devices under the FDA’s classification system. Class II devices are deemed to present a moderate risk and are devices for which general controls alone are not sufficient to provide a reasonable assurance of safety and effectiveness.
The FDA is also responsible for the overall enforcement of quality, regulatory, and statutory requirements governing medical devices. 5 FDA classifies medical devices into one of three classes — Class I, Class II, or Class III — depending on their level of risk and the types of controls that are necessary to assure device safety and effectiveness.
FDA classifies medical devices into one of three classes — Class I, Class II, or Class III — depending on their level of risk and the types of controls that are necessary to assure device safety and effectiveness. The class assignment determines the type of premarketing submission or application, if any, that will be required before marketing in the U.S.
Patent No. 11,027,149: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires July 7, 2034) The following patent was issued to Sensus in 2024: ● U.S. Patent No. 11,894,123: Radiotherapy Mobile and Wireless Device Workflow Management System (expires June 20, 2039) The Company also owns eight U.S. trademark registrations (expiring from 2025 through 2031).
Patent No. 11,894,123: Radiotherapy Mobile and Wireless Device Workflow Management System (expires June 20, 2039) The Company also owns eight U.S. trademark registrations (expiring from 2025 through 2031). The Company also relies on trade secrets and other unpatented proprietary rights to develop and maintain a competitive position.
Some of the pertinent laws and regulations have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations. In addition, these laws and regulations and their interpretations are subject to change, and new laws may be enacted.
Government Regulation Sensus’s business is subject to extensive federal, state, local, and foreign laws and regulations, including those relating to the protection of the environment, health, and safety. Some of the pertinent laws and regulations have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations.
Available Information Sensus files annual, quarterly, and current reports, proxy statements, and all amendments to these reports and other information with the SEC.
Employee levels are managed to align with the pace of business and management believes it has sufficient human capital to operate its business successfully. Available Information Sensus files annual, quarterly, and current reports, proxy statements, and all amendments to these reports and other information with the SEC.
However, it is possible that governmental entities or other third parties could interpret these laws and regulations differently and assert otherwise. Discussed below are statutes and regulations that are most relevant to the Company’s business. For the year ended December 31, 2023, we incurred approximately $1.4 million in expenses related to regulatory compliance and quality standards.
The Company believes that its business operations and relationships with customers and suppliers are structured to comply with all applicable legal requirements. However, it is possible that governmental entities or other third parties could interpret these laws and regulations differently and assert otherwise. Discussed below are statutes and regulations that are most relevant to the Company’s business.
In addition, third parties have claimed, and in the future may claim, that the Company or customers, licensees, or other parties indemnified by the Company are infringing upon their intellectual property rights. Government Regulation Sensus’s business is subject to extensive federal, state, local, and foreign laws and regulations, including those relating to the protection of the environment, health, and safety.
Intellectual property could be challenged, invalidated, circumvented, infringed upon, or misappropriated. In addition, third parties have claimed, and in the future may claim, that the Company or customers, licensees, or other parties indemnified by the Company are infringing upon their intellectual property rights.
Both federal and state governmental agencies continue to subject the healthcare industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts. The Company believes that its business operations and relationships with customers and suppliers are structured to comply with all applicable legal requirements.
In addition, these laws and regulations and their interpretations are subject to change, and new laws may be enacted. Both federal and state governmental agencies continue to subject the healthcare industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts.
The Company believes that it offers competitive compensation and other means of attracting and retaining key personnel. Employee levels are managed to align with the pace of business and management believes it has sufficient human capital to operate its business successfully.
It also believes that the skills, experience, and industry knowledge of its key employees significantly benefits its operations and performance. The Company believes that it offers competitive compensation and other means of attracting and retaining key personnel.
Removed
The Company requires all employees to execute invention assignment agreements with respect to inventions arising from their employment. The Company can provide no assurance that any patents or trademarks will be issued or registered as a result of our pending or future applications for such intellectual property.
Added
Our Products and Services SRT is the Company’s core technology. As of December 31, 2024, the Company had installed 867 units in 21 countries, primarily in the United States.
Removed
The class assignment determines the type of premarketing submission or application, if any, that will be required before marketing in the U.S. The Company’s medical devices are Class II devices under the FDA’s classification system.
Added
SRT-100 Vision The SRT-100 Vision provides customers with additional options compared to the SRT-100 base model. These additional options allow for dedicated treatment planning and full treatment progression documentation in a patient’s record.
Removed
The FDA enforces these requirements by inspection and market surveillance.
Added
ZL201710929838.2 Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires August 14, 2038) The following patent was issued to Sensus in 2021: ● U.S. Patent No. 11,027,149: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires July 7, 2034) The following patent was issued to Sensus in 2024: ● U.S.
Added
For the year ended December 31, 2024, we incurred $0.9 million in expenses related to regulatory compliance and quality standards. 5 FDA Regulation of Medical Devices The Federal Food, Drug and Cosmetic Act (“FDCA”) and FDA regulations establish a comprehensive system for the regulation of medical devices intended for human use.
Added
Medical devices in Class II are subject to both general controls and “special controls” — e.g., special labeling, compliance with industry standards, and post market surveillance. Unless exempted, Class II devices typically require FDA clearance before marketing, through the premarket notification (“510(k)”) process, in accordance with 21 CFR, Part 807 requirements.
Added
These laws may limit or restrict the advertising and promotion of our products to the general public and may impose limitations on our promotional activities with healthcare professionals.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

32 edited+16 added−6 removed81 unchanged
Biggest changeThe Company has experienced, and expects to continue to experience, cyber security threats and incidents, none of which has been material to the Company to date. Although the Company protects our information technology systems, the Company has experienced varying degrees of cyber-incidents in the normal conduct of business, including viruses, worms, phishing, and other malicious activities.
Biggest changeAlthough the Company protects its information technology systems, the Company has experienced varying degrees of cyber security threats incidents in the normal conduct of business, which include the use of computer malware, ransomware, computer hacking, viruses, worms, phishing, and other malicious activities that could result in unauthorized access, theft, misuse, loss, release, or destruction of data, account takeovers, unavailability of services, or other events.
These provisions include: ● authorizing the issuance of “blank check” preferred stock without any need for action by stockholders; ● requiring supermajority stockholder voting to effect any merger or sale of all or substantially all of the Company’s stock and assets; ● eliminating the ability of stockholders to call and bring business before special meetings of stockholders; 17 ● prohibiting stockholder action by written consent; ● establishing advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings; ● dividing the Board of Directors into three classes so that only one third of the directors will be up for election in any given year; and ● providing that the Company’s directors may be removed only by the affirmative vote of at least 75% of the Company’s then-outstanding common stock and only for cause.
These provisions include: ● authorizing the issuance of “blank check” preferred stock without any need for action by stockholders; ● requiring supermajority stockholder voting to effect any merger or sale of all or substantially all of the Company’s stock and assets; ● eliminating the ability of stockholders to call and bring business before special meetings of stockholders; 19 ● prohibiting stockholder action by written consent; ● establishing advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings; ● dividing the Board of Directors into three classes so that only one third of the directors will be up for election in any given year; and ● providing that the Company’s directors may be removed only by the affirmative vote of at least 75% of the Company’s then-outstanding common stock and only for cause.
Furthermore, the laws of some foreign countries may not protect intellectual property rights to the same extent as the laws of the U.S., if at all. In the event a competitor infringes upon one of Sensus’s patents or other intellectual property rights, enforcing those patents and rights may be difficult and time consuming.
Furthermore, the laws of some foreign countries may not protect intellectual property rights to the same extent as the laws of the U.S., if at all. 16 In the event a competitor infringes upon one of Sensus’s patents or other intellectual property rights, enforcing those patents and rights may be difficult and time consuming.
The Company’s cash requirements in the future may be significantly different from current estimates and depend on many factors, including: ● the results of commercialization efforts for products; ● the need for additional capital to fund development programs; ● the costs involved in obtaining and enforcing patents or any litigation by third parties regarding intellectual property; ● the establishment of high-volume manufacturing and increased sales, marketing, and distribution capabilities; and ● success in entering into collaborative relationships with other parties. 12 To the extent that Sensus raises additional capital through the sale of equity or convertible debt securities, the ownership interests of the existing stockholders will be diluted.
The Company’s cash requirements in the future may be significantly different from current estimates and depend on many factors, including: ● the results of commercialization efforts for products; ● the need for additional capital to fund development programs; ● the costs involved in obtaining and enforcing patents or any litigation by third parties regarding intellectual property; ● the establishment of high-volume manufacturing and increased sales, marketing, and distribution capabilities; and ● success in entering into collaborative relationships with other parties. 13 To the extent that Sensus raises additional capital through the sale of equity or convertible debt securities, the ownership interests of the existing stockholders will be diluted.
Furthermore, any corrective action, whether voluntary or involuntary, will require the dedication of time and capital and will distract management from business operations. Any of the foregoing would negatively impact Sensus’s reputation, business, and financial results. Healthcare policy changes may have a material adverse effect on Sensus’s business.
Furthermore, any corrective action, whether voluntary or involuntary, will require the dedication of time and capital and will distract management from business operations. Any of the foregoing would negatively impact Sensus’s reputation, business, and financial results. 15 Healthcare policy changes may have a material adverse effect on Sensus’s business.
As a result, we may be subject to the False Claims Act if we knowingly cause the filing of false claims. 13 ● HIPAA, which, among other things, created federal criminal laws that prohibit knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of or payment for healthcare benefits, items or services.
As a result, we may be subject to the False Claims Act if we knowingly cause the filing of false claims. 14 ● HIPAA, which, among other things, created federal criminal laws that prohibit knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of or payment for healthcare benefits, items or services.
The Company is focused heavily on the development and commercialization of a limited number of products for the treatment of non-melanoma skin cancer and other skin conditions with SRT. From the Company’s inception in 2010 through December 31, 2023, revenue has primarily been derived from sales of the SRT-100 product line and related services and ancillary products.
The Company is focused heavily on the development and commercialization of a limited number of products for the treatment of non-melanoma skin cancer and other skin conditions with SRT. From the Company’s inception in 2010 through December 31, 2024, revenue has primarily been derived from sales of the SRT-100 product line and related services and ancillary products.
Most of the Company’s sales have been made to customers located in the U.S. (91% and 94% in the years ended December 31, 2023 and 2022, respectively). Additionally, a single customer in the U.S. accounted for approximately 61% and 73% of revenues for the years ended December 31, 2023, and December 31, 2022, respectively.
Most of the Company’s sales have been made to customers located in the U.S. (96% and 91% in the years ended December 31, 2024 and 2023, respectively). Additionally, a single customer in the U.S. accounted for 73% and 61% of revenues for the years ended December 31, 2024, and December 31, 2023, respectively.
Sensus also has patent applications currently pending and in the process of being submitted. However, these legal means afford only limited protection and may not adequately protect its rights or permit Sensus to gain or keep any competitive advantage. For example, some or all of the pending patent applications or any future pending applications may be unsuccessful. The U.S.
However, these legal means afford only limited protection and may not adequately protect its rights or permit Sensus to gain or keep any competitive advantage. For example, some or all of the pending patent applications or any future pending applications may be unsuccessful. The U.S.
The Company has a history of net losses. The historical losses from inception through December 31, 2021 totaled approximately $17.8 million. The Company reported net income of $0.5 million and $24.2 million, respectively, during the years ended December 31, 2023 and 2022.
The Company has a history of net losses. The historical losses from inception through December 31, 2021 totaled $17.8 million. The Company reported net income of $6.6 million and $0.5 million, respectively, during the years ended December 31, 2024 and 2023.
Sensus’s executive officers and directors may exert control over the Company and may exercise influence over matters subject to stockholder approval. Sensus’s executive officers and directors, together with their respective affiliates, beneficially owned approximately 11% of our outstanding common stock as of February 21, 2024.
Sensus’s executive officers and directors may exert control over the Company and may exercise influence over matters subject to stockholder approval. Sensus’s executive officers and directors, together with their respective affiliates, beneficially owned approximately 8.5% of our outstanding common stock as of February 12, 2025.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, included, among other things, comparative effectiveness research, an independent payment advisory board, payment system reforms (including shared savings pilots), and other provisions, one or more of which may significantly affect the payment for, and the availability of, healthcare services and may result in fundamental changes to federal healthcare reimbursement programs, any of which may materially affect numerous aspects of our business. 14 Other healthcare reform measures may result in more rigorous coverage criteria and in additional downward pressure on the reimbursement received for procedures utilizing our products.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, included, among other things, comparative effectiveness research, an independent payment advisory board, payment system reforms (including shared savings pilots), and other provisions, one or more of which may significantly affect the payment for, and the availability of, healthcare services and may result in fundamental changes to federal healthcare reimbursement programs, any of which may materially affect numerous aspects of our business.
If the Company is unable to comply with the requirements of Section 404 in a timely manner, or the Company and the independent registered public accounting firm identify deficiencies in the internal control over financial reporting that are deemed to be material weaknesses, the market price of the Company’s common stock could decline and the Company could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities, which would require additional financial and management resources. 18
If the Company is unable to comply with the requirements of Section 404 in a timely manner, or the Company and the independent registered public accounting firm identify deficiencies in the internal control over financial reporting that are deemed to be material weaknesses, the market price of the Company’s common stock could decline and the Company could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities, which would require additional financial and management resources. 20 In connection with the preparation of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, we identified a material weakness in our internal control over financial reporting.
The loss of the preferred supplier, or its inability to supply the Company with an adequate supply of these components, could hinder the Company’s ability to effectively produce the Company’s products to meet existing demand levels, especially if the Company were unable to timely procure them from other suppliers in the market, which could adversely affect the Company’s ability to commercialize products and to maintain or increase revenues. 11 The Company’s operations may be impaired if our information technology systems fail to perform adequately or are the subject of a data breach or cyberattack.
The loss of the preferred supplier, or its inability to supply the Company with an adequate supply of these components, could hinder the Company’s ability to effectively produce the Company’s products to meet existing demand levels, especially if the Company were unable to timely procure them from other suppliers in the market, which could adversely affect the Company’s ability to commercialize products and to maintain or increase revenues.
If sufficient coverage and reimbursement are not available for Sensus’s products, in either the U.S. or internationally, the demand for these products and, consequently, the Company’s revenues and business, will be adversely affected.
Furthermore, reimbursement may not be available or, if available, third-party payors’ reimbursement policies may adversely affect the Company’s ability to sell products profitably. If sufficient coverage and reimbursement are not available for Sensus’s products, in either the U.S. or internationally, the demand for these products and, consequently, the Company’s revenues and business, will be adversely affected.
The Company’s products, some of which use technologies that have been available for many years, compete for market acceptance against those of healthcare providers who use other methods of treatment for similar diseases and conditions.
The Company’s products, some of which use technologies that have been available for many years, compete for market acceptance against those of healthcare providers who use other methods of treatment for similar diseases and conditions. Our success depends on our ability to keep pace with rapid technological changes affecting the development of our products and our operations.
Sensus may not pay dividends as a result of any of the foregoing, and in these cases, an investor would need to rely on price appreciation of the Company’s common stock for a return on investment. 16 Sensus is a “smaller reporting company,” and the reduced reporting requirements applicable to smaller reporting companies may make Sensus’s common stock less attractive to investors.
Sensus may not pay dividends as a result of any of the foregoing, and in these cases, an investor would need to rely on price appreciation of the Company’s common stock for a return on investment.
If new products, treatments, and/or technologies were developed that gain wide acceptance among doctors and patients, including products or treatments developed by our significant customers, it could take market share away from the Company, which could adversely affect the Company’s ability to maintain or increase revenue and/or render the Company’s products obsolete.
If new products, treatments, and/or technologies are developed by our competitors or other third parties more quickly or more successfully than us that gain wide acceptance among doctors and patients, including products or treatments developed by our significant customers, it could take market share away from the Company, which could adversely affect the Company’s render the Company’s products obsolete, which could impair our ability to compete effectively and adversely affect our results of operations.
A withdrawal, or even contemplation of a withdrawal, by CMS, Medicaid or private payors of reimbursements, or any other unfavorable coverage or reimbursement decisions by government programs or private payors, could have a material adverse effect on the Company’s revenues and business. 10 Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis.
A withdrawal, or even contemplation of a withdrawal, by CMS, Medicaid or private payors of reimbursements, or any other unfavorable coverage or reimbursement decisions by government programs or private payors, could have a material adverse effect on the Company’s revenues and business.
The failure of these information technology systems to perform as the Company anticipates could disrupt business and could result in transaction errors, processing inefficiencies, and the loss of sales and customers, causing business and results of operations to suffer.
The failure of these information technology systems to perform as the Company anticipates could disrupt business and could result in transaction errors, processing inefficiencies, and the loss of sales and customers, causing business and results of operations to suffer. 12 The Company has experienced, and expects to continue to experience, cyber security threats and incidents, none of which have been material to the Company to date.
Sensus’s success significantly depends on its ability to protect proprietary rights to the technologies used in its products. Sensus relies on three U.S. patents and two foreign patents, as well as a combination of copyright, trade secret, and trademark laws, and nondisclosure, confidentiality, and other contractual restrictions, to protect its proprietary technology.
Sensus relies on three U.S. patents and two foreign patents, as well as a combination of copyright, trade secret, and trademark laws, and nondisclosure, confidentiality, and other contractual restrictions, to protect its proprietary technology. Sensus also has patent applications currently pending and in the process of being submitted.
The Company’s information technology systems are critically important to operating business efficiently. The Company relies on information technology systems to manage business data, communications, employee information, and other business processes. The Company outsources certain business process functions to third-party providers and similarly relies on these third parties to maintain and store confidential information on their systems.
The Company outsources certain business process functions to third-party providers and similarly relies on these third parties to maintain and store confidential information on their systems.
Although the Company has introduced new products, the Company expects most of revenue in the near to medium term to be derived from or related to sales of the SRT-100 product line. Because of this, any decline in the sales of these products will negatively impact the Company’s business, financial condition, and results of operations.
Although the Company has introduced new products, the Company expects most of revenue in the near to medium term to be derived from or related to sales of the SRT-100 product line.
If these trademarks are challenged, infringed upon, circumvented, or declared generic or infringing, or if Sensus is unable to establish name recognition based on these trademarks and trade names, then it may be unable to compete effectively and Sensus’s business may be adversely affected. 15 The medical device industry is characterized by extensive patent litigation, and if Sensus becomes subject to litigation, it could be costly, result in the diversion of management’s attention, require us to pay significant damages or royalty payments, or prevent us from marketing and selling existing or future products.
The medical device industry is characterized by extensive patent litigation, and if Sensus becomes subject to litigation, it could be costly, result in the diversion of management’s attention, require us to pay significant damages or royalty payments, or prevent us from marketing and selling existing or future products.
Any future determination to declare cash dividends will be made at the discretion of the Company’s Board of Directors (the “Board of Directors”) and will be subject to compliance with applicable laws and covenants under any credit facilities, which may restrict or limit the Company’s ability to pay dividends.
The Company’s common stock price may not appreciate in value or maintain the price at which an investor purchased these securities, and in either case, may not realize a return on investment or could lose all or part of an investment in the Company’s securities. 17 Any future determination to declare cash dividends will be made at the discretion of the Company’s Board of Directors (the “Board of Directors”) and will be subject to compliance with applicable laws and covenants under any credit facilities, which may restrict or limit the Company’s ability to pay dividends.
If one or more of these analysts cease coverage of Sensus, or fail to publish reports on Sensus regularly, demand for the Sensus’s securities could decrease, which might cause the price of its securities and trading volume to decline.
If one or more of these analysts cease coverage of Sensus, or fail to publish reports on Sensus regularly, demand for the Sensus’s securities could decrease, which might cause the price of its securities and trading volume to decline. 18 The Company’s certificate of incorporation and bylaws, and Delaware law contain provisions that could discourage another company from acquiring the Company and may prevent attempts by the Company’s stockholders to replace or remove the current directors and management.
In addition, other legislative changes may be enacted or existing regulations, guidance, or interpretations may be changed, each of which may adversely affect our operations. Risks Related to our Intellectual Property If Sensus’s patents and other intellectual property rights do not adequately protect its products, it may lose market share to competitors and be unable to operate business profitably.
Risks Related to our Intellectual Property If Sensus’s patents and other intellectual property rights do not adequately protect its products, it may lose market share to competitors and be unable to operate business profitably. Sensus’s success significantly depends on its ability to protect proprietary rights to the technologies used in its products.
The Company’s technology could be superseded by new products, treatments, or technologies that gain wider acceptance among doctors and patients, which could adversely affect the Company. The medical device industry is highly competitive and subject to rapid technological change, and is significantly affected by the introduction of new products and treatment options.
The medical device industry is highly competitive and subject to rapid technological change, and is significantly affected by the introduction of new products and treatment options.
In many international markets, a product must be approved for reimbursement before it can be cleared for sale in that country. Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. In most markets there are private insurance systems as well as government-managed systems.
Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. In most markets there are private insurance systems as well as government-managed systems. Sensus’s products may not be considered cost-effective by international third-party payors or governments managing healthcare systems.
However, the Company’s efforts to mitigate these risks may be unsuccessful, and security breaches may occur. Moreover, the development and maintenance of these measures requires continuous monitoring as technologies change and efforts to overcome security measures evolve.
The development and maintenance of measures to mitigate against cyber security risks is costly and time-consuming, requiring continuous monitoring as technologies change and efforts to overcome security measures evolve.
In addition, other legislative changes have been proposed and adopted since the law discussed above was enacted that may adversely affect Sensus’s revenues. Changes to existing laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on Sensus’s business and financial operations.
Changes to existing laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on Sensus’s business and financial operations. Any reduction in reimbursement from Medicare or other government programs may result in a reduction in payments from private payors.
Any reduction in reimbursement from Medicare or other government programs may result in a reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent Sensus from being able to increase revenue, attain profitability, or commercialize its devices.
The implementation of cost containment measures or other healthcare reforms may prevent Sensus from being able to increase revenue, attain profitability, or commercialize its devices. In addition, other legislative changes may be enacted or existing regulations, guidance, or interpretations may be changed, each of which may adversely affect our operations.
Removed
Sensus’s products may not be considered cost-effective by international third-party payors or governments managing healthcare systems. Furthermore, reimbursement may not be available or, if available, third-party payors’ reimbursement policies may adversely affect the Company’s ability to sell products profitably.
Added
Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis. In many international markets, a product must be approved for reimbursement before it can be cleared for sale in that country.
Removed
Although there have been no serious consequences to date, such breaches could result in unauthorized access to information, including customer, supplier, employee, or other company confidential data. The Company carries insurance against these risks, performs penetration tests from time to time, and designs business processes to attempt to mitigate the risk of such breaches.
Added
Because of this, any decline in the sales of these products will negatively impact the Company’s business, financial condition, and results of operations. 11 The Company’s technology could be superseded by new products, treatments, or technologies that gain wider acceptance among doctors and patients, which could adversely affect the Company.
Removed
However, a successful breach or attack could have a material negative impact on operations and subject the Company to consequences such as direct costs associated with incident response. Sensus may be required to obtain additional funds in the future, and these funds may not be available on acceptable terms or at all.
Added
Emerging technological trends such as artificial intelligence, machine learning, and automation are impacting many industries and business operations, including ours.
Removed
Sensus’s operations have consumed substantial amounts of cash since its inception.
Added
If we do not adequately invest in new technology, appropriately implement new technologies, or evolve our business at sufficient speed and scale in response to such developments, or if we do not make the right strategic investments to respond to these developments, our products, results of operations, and ability to develop and maintain our business could be negatively affected.
Removed
The Company’s common stock price may not appreciate in value or maintain the price at which an investor purchased these securities, and in either case, may not realize a return on investment or could lose all or part of an investment in the Company’s securities.
Added
Such investments could require substantial expenditures to the extent we were to modify or adapt our existing products and services to keep pace with such new technologies.
Removed
The Company’s certificate of incorporation and bylaws, and Delaware law contain provisions that could discourage another company from acquiring the Company and may prevent attempts by the Company’s stockholders to replace or remove the current directors and management.
Added
The Company’s operations may be impaired if our information technology systems fail to perform adequately or are the subject of a data breach or cyberattack. The Company’s information technology systems are critically important to operating business efficiently. The Company relies on information technology systems to manage business data, communications, employee information, and other business processes.
Added
These types of threats may derive from human error, fraud, or malice on the part of external or internal parties or may result from accidental technological failure. Further, these types of threats may be exacerbated by recent developments in artificial intelligence and its increased use to produce sophisticated malware, phishing schemes, and other fraudulent activities.
Added
Although there have been no serious consequences to date, cyber security incidents or other significant disruption of our information systems or those of our customers or third-party vendors could occur, and, if they do, they could (i) disrupt the proper functioning of our networks and systems and therefore our operations; (ii) result in the unauthorized access to, and destruction, loss, theft, misappropriation, or release of confidential, sensitive, or otherwise valuable information of ours; (iii) result in a violation of applicable privacy, data protection, and other laws, subjecting us to additional regulatory scrutiny and exposing us to civil litigation, enforcement actions, governmental fines, and possible financial liability; (iv) require significant management attention and resources to remedy the damages that result; or (v) harm our reputation.
Added
The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, in the event of a cyber-related incident, we may be delayed in identifying or responding to the incident, which could increase the negative impact of the incident on our business, financial condition, and results of operations.
Added
The Company carries insurance against cyber-related incidents risks, performs penetration tests from time to time, and designs business processes to attempt to mitigate the risk of such incidents. While our cyber insurance coverage would apply in the event of certain cyber-related incidents, the amount of coverage may not be adequate depending on the magnitude of the incident.
Added
Furthermore, because cyber-related incidents are inherently difficult to predict and can take many forms, some incidents may not be covered under our cyber insurance coverage. Sensus may be required to obtain additional funds in the future, and these funds may not be available on acceptable terms or at all. Sensus’s operations have consumed substantial amounts of cash since its inception.
Added
Other healthcare reform measures may result in more rigorous coverage criteria and in additional downward pressure on the reimbursement received for procedures utilizing our products. In addition, other legislative changes have been proposed and adopted since the law discussed above was enacted that may adversely affect Sensus’s revenues.
Added
If these trademarks are challenged, infringed upon, circumvented, or declared generic or infringing, or if Sensus is unable to establish name recognition based on these trademarks and trade names, then it may be unable to compete effectively and Sensus’s business may be adversely affected.
Added
Sensus is a “smaller reporting company,” and the reduced reporting requirements applicable to smaller reporting companies may make Sensus’s common stock less attractive to investors.
Added
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We have since enhanced our internal control environment and remediated this material weakness.
Added
However, we cannot guarantee that we will not identify different material weaknesses in the future.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Governance The Board of Directors actively collaborates with management to supervise cybersecurity risks. The Chief Technology Officer (“CTO”), with over 10 years’ experience in cybersecurity, leads the Company’s overall cybersecurity function and monitors cybersecurity risks.
Biggest changeThe Chief Technology Officer (“CTO”), with over 10 years’ experience in cybersecurity, leads the Company’s overall cybersecurity function and monitors cybersecurity risks. The CTO works with internal personnel and third-party consultants to design and implement the controls on the prevention, detection, mitigation, and remediation of cybersecurity risks.
For a discussion of whether and how any risks from cybersecurity threats are reasonably likely to materially affect us, refer to Item 1A. Risk Factors – “The Company’s operations may be impaired if our information technology systems fail to perform adequately or are the subject of a data breach or cyberattack,” which is incorporated by reference into this Item 1C.
Risk Factors – “The Company’s operations may be impaired if our information technology systems fail to perform adequately or are the subject of a data breach or cyberattack,” which is incorporated by reference into this Item 1C. 21 Cybersecurity Governance The Board of Directors actively collaborates with management to supervise cybersecurity risks.
In the event of a cybersecurity incident, the Board is to be promptly notified. Management considers cybersecurity risk as part of its risk oversight function and is in the process of establishing a cybersecurity governance committee. The cybersecurity governance committee will oversee the management’s implementation of the cybersecurity risk management program. 19
The CTO maintains regular communication with the Board on matters related to cybersecurity and provides updates to management on a quarterly basis. In the event of a cybersecurity incident, the Board is to be promptly notified. Management considers cybersecurity risk as part of its risk oversight function and is in the process of establishing a cybersecurity governance committee.
Removed
The CTO works with internal personnel and third-party consultants to design and implement the controls on the prevention, detection, mitigation, and remediation of cybersecurity risks. The CTO maintains regular communication with the Board on matters related to cybersecurity and provides updates to management on a quarterly basis.
Added
For a discussion of whether and how any risks from cybersecurity threats are reasonably likely to materially affect us, refer to Item 1A.
Added
The cybersecurity governance committee will oversee the management’s implementation of the cybersecurity risk management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES The Company’s corporate headquarters is located in Boca Raton, Florida and occupies approximately 8,926 square feet of space under a lease that currently expires in September 2027. The Company believes that the current facilities are suitable and adequate to meet the Company’s current needs and that suitable additional space will be available as and when needed.
Biggest changeItem 2. PROPERTIES The Company’s corporate headquarters is located in Boca Raton, Florida and occupies a total of 10,356 square feet of space under a lease and a sublease that both expire in September 2027.
The Company’s main manufacturing function is physically located at our third-party manufacturer’s facility in Oak Ridge, Tennessee. Additional disclosures have been included within Note 7, Commitments and Contingencies , of the consolidated financial statements.
Additional disclosures have been included within Note 6, Commitments and Contingencies , of the consolidated financial statements.
Added
The Company believes that the current facilities are suitable and adequate to meet the Company’s current needs and that suitable additional space will be available as and when needed. The Company’s main manufacturing function is physically located at our third-party manufacturer’s facility in Oak Ridge, Tennessee.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAdditional disclosures have been included within Note 7, Commitments and Contingencies of the consolidated financial statements. Item 4. MINE SAFETY DISCLOSURE Not applicable. 20 PART II.
Biggest changeAdditional disclosures have been included within Note 6, Commitments and Contingencies, of the consolidated financial statements. Item 4. MINE SAFETY DISCLOSURE Not applicable. 22 PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s Class A common stock is publicly traded on the NASDAQ Capital Market under the symbol “SRTS.” Holders At the close of business on March 7, 2024, there were 20 common stockholders of record.
Biggest changeItem 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s Class A common stock is publicly traded on the NASDAQ Capital Market under the symbol “SRTS.” Holders At the close of business on February 13, 2025, there were 17 common stockholders of record.
Unregistered Sales of Securities There were no unregistered sales of securities during the year ended December 31, 2023. Purchases of Equity Securities by the Registrant and Affiliated Purchasers In August 2023, the Company announced that its Board of Directors had authorized a program to purchase up to $3,000,000 of shares of its common stock.
Unregistered Sales of Securities There were no unregistered sales of securities during the year ended December 31, 2024. Purchases of Equity Securities by the Registrant and Affiliated Purchasers In August 2023, the Company announced that its Board of Directors had authorized a program to purchase up to $3,000,000 of shares of its common stock.
Added
No purchases were made during the fourth quarter of 2024 by or on behalf of the Company. Item 6. RESERVED 23

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

23 edited+2 added−3 removed5 unchanged
Biggest changeNet cash provided by investing activities was $14.8 million during the year ended December 31, 2022, primarily due to proceeds from sale of assets, particularly the sale of the Sculptura assets for $15 million in cash, partially offset by the cash used in acquisition of property and equipment of $0.2 million. 24 Cash flows from financing activities Net cash used in financing activities was $40 thousand during the year ended December 31, 2023, primarily due to repurchases of common stock and withholding taxes on stock-based compensation, partially offset by proceeds from exercises of stock options.
Biggest changeNet cash used in investing activities during the year ended December 31, 2023 mainly reflected $0.2 million of purchases of property and equipment. Cash flows from financing activities Net cash provided by financing activities during the year ended December 31, 2024 reflected $67 thousand of exercised stock options, offset by $52 thousand of withholding taxes on stock-based compensation.
Components of our results of operations Sensus manages our business globally within one reportable segment, which is consistent with how management views the business, prioritizes investment and resource allocation decisions, and assesses operating performance.
Components of our results of operations Sensus manages its business globally within one reportable segment, which is consistent with how management views the business, prioritizes investment and resource allocation decisions, and assesses operating performance.
Overview As discussed elsewhere in this Report, Sensus achieved profitability for the first time in 2021, maintained profitability in 2022 and 2023, and seeks to maintain and increase profitability in 2024 by, among other things, increasing sales and managing operational expenses where necessary in order to continue to invest in research and development of new products and marketing initiatives to promote the Company’s products.
Overview As discussed elsewhere in this Report, Sensus achieved profitability for the first time in 2021, maintained profitability in 2023 and 2024, and seeks to maintain and increase profitability in 2025 by, among other things, increasing sales and managing operational expenses where necessary in order to continue to invest in research and development of new products and marketing initiatives to promote the Company’s products.
Please see Note 4, Debt , to the consolidated financial statements for a discussion regarding the Company’s revolving credit facility with Comerica Bank. The Company’s liquidity position and capital requirements may be impacted by a number of factors, including the following: ● ability to generate and increase revenue; and ● fluctuations in gross margins, operating expenses, and net results.
Please see Note 3, Debt , to the consolidated financial statements for a discussion regarding the Company’s revolving credit facility with Comerica Bank. The Company’s liquidity position and capital requirements may be impacted by a number of factors, including the following: ● ability to generate and increase revenue; and ● fluctuations in gross margins, operating expenses, and net results.
However, Sensus faces a number of uncertainties in 2024 that could impact our ability to achieve this goal. These include inflation and international trade issues. Either of these matters could adversely affect the Company’s ability to do business in a number of countries and geographic regions, including China.
However, Sensus faces a number of uncertainties in 2025 that could impact our ability to achieve this goal. These include inflation and international trade issues. Either of these matters could adversely affect the Company’s ability to do business in a number of countries and geographic regions, including China.
Inflation During 2023, increased commodity and shipping prices and energy and labor costs resulted in inflationary pressures across various parts of our business and operations, including on our customers, partners, and suppliers.
Inflation During 2024, increased commodity and shipping prices and energy and labor costs resulted in inflationary pressures across various parts of our business and operations, including on our customers, partners, and suppliers.
For the year ended December 31, 2023, funding was derived primarily from cash generated by the sale of equipment to our customers in the ordinary course of business.
For the year ended December 31, 2024, funding was derived primarily from cash generated by the sale of equipment to our customers in the ordinary course of business.
We continue to monitor the impact of inflation and we are taking actions, such as ordering inventory in advance, to minimize its effects on our product cost and sales. Indebtedness Please see Note 4, Debt , to the consolidated financial statements. Contractual Obligations and Commitments Please see Note 7, Commitments and Contingencies , to the consolidated financial statements.
We continue to monitor the impact of inflation and we are taking actions, such as ordering inventory in advance, to minimize its effects on our product cost and sales. Indebtedness Please see Note 3, Debt , to the consolidated financial statements. Contractual Obligations and Commitments Please see Note 6, Commitments and Contingencies , to the consolidated financial statements.
Management has identified certain accounting policies as critical to understanding the financial condition and results of operations. For a detailed discussion on the application of these and other accounting policies, see the notes to the consolidated financial statements included in this Annual Report on Form 10-K.
Management has not applied any critical accounting estimates but has identified certain accounting policies as critical to understanding the financial condition and results of operations. For a detailed discussion on the application of these and other accounting policies, see the notes to the consolidated financial statements included in this Annual Report on Form 10-K.
See Note 4, Debt , to the consolidated financial statements for further discussion. 23 Liquidity and Capital Resources Overview In general terms, liquidity is a measurement of the Company’s ability to meet its cash needs.
See Note 3, Debt , to the consolidated financial statements for further discussion. 25 Liquidity and Capital Resources Overview In general terms, liquidity is a measurement of the Company’s ability to meet its cash needs.
Cash and cash equivalents at December 31, 2023 decreased $2.4 million from December 31, 2022. See Cash flows for details on the change in cash and cash equivalents during the year ended December 31, 2023.
Cash and cash equivalents of $22.1 million at December 31, 2024 decreased by $1.0 million, or 4%, from $23.1 million at December 31, 2023. See Cash flows for details on the change in cash and cash equivalents during the year ended December 31, 2024.
Cash flows The following table provides a summary of the Company’s cash flows for the periods indicated: For the Years Ended December 31 (in thousands) 2023 2022 Net cash provided by (used in): Operating activities $ (2,145 ) $ (1,412 ) Investing activities (187 ) 14,841 Financing activities (40 ) (2,428 ) Total $ (2,372 ) $ 11,001 Cash flows from operating activities Net cash used in operating activities was $2.1 million for the year ended December 31, 2023, consisting of net income of $485 thousand partially offset by a decrease in net operating liabilities of $2.7 million and non-cash charges of $0.1 million.
Cash flows The following table provides a summary of the Company’s cash flows for the periods indicated: For the Years Ended December 31 (in thousands) 2024 2023 Net cash provided by (used in): Operating activities $ (831 ) $ (2,145 ) Investing activities (276 ) (187 ) Financing activities 15 (40 ) Total $ (1,092 ) $ (2,372 ) Cash flows from operating activities Net cash used in operating activities was $0.8 million for the year ended December 31, 2024, consisting of net income of $6.6 million and non-cash charges of $1.1 million, offset by an increase in net operating assets of $8.5 million.
Results of Operations For the Years Ended December 31, (in thousands, except shares and per share data) 2023 2022 Revenues $ 24,405 $ 44,532 Cost of sales 10,345 14,904 Gross profit 14,060 29,628 Operating expenses Selling and marketing 5,608 6,329 General and administrative 5,156 5,008 Research and development 3,678 3,460 Total operating expenses 14,442 14,797 Income (loss) from operations (382 ) 14,831 Other income: Gain on sale of assets 42 12,779 Interest income 992 380 Other income, net 1,034 13,159 Income before income tax 652 27,990 Provision for income taxes 167 3,746 Net income $ 485 $ 24,244 Net income per share – basic $ 0.03 $ 1.47 diluted $ 0.03 $ 1.46 Weighted average number of shares used in computing net income per share – basic 16,259,254 16,480,991 diluted 16,266,139 16,618,214 22 2023 Compared with 2022 Revenues of $24.4 million in 2023 decreased by $20.1 million, or 45%, from $44.5 million in 2022.
Results of Operations For the Years Ended December 31, (in thousands, except shares and per share data) 2024 2023 Revenues $ 41,807 $ 24,405 Cost of sales 17,376 10,345 Gross profit 24,431 14,060 Operating expenses General and administrative 7,147 5,156 Selling and marketing 4,978 5,608 Research and development 4,216 3,678 Total operating expenses 16,341 14,442 Income (loss) from operations 8,090 (382 ) Other income: Gain on sale of assets — 42 Interest income 932 992 Other income, net 932 1,034 Income before income tax 9,022 652 Provision for income taxes 2,375 167 Net income $ 6,647 $ 485 Net income per share – basic $ 0.41 $ 0.03 diluted $ 0.41 $ 0.03 Weighted average number of shares used in computing net income per share – basic 16,312,351 16,259,254 diluted 16,359,616 16,266,139 24 2024 Compared with 2023 Revenues of $41.8 million in 2024 increased by $17.4 million, or 71%, from $24.4 million in 2023.
Prepaid inventory at December 31, 2023 decreased $3.3 million from December 31, 2022, primarily due to the completion of finished goods from inventory deposits paid to a manufacturer during the year ended December 31, 2023. Liabilities There were no borrowings under our revolving lines of credit at December 31, 2023 or December 31, 2022.
Inventories of $10.1 million at December 31, 2024 decreased by $1.8 million, or 15%, from $11.9 million at December 31, 2023, primarily due to a shipments of units sold during the year ended December 31, 2024. Liabilities There were no borrowings under our revolving lines of credit at December 31, 2024 or December 31, 2023.
Non-cash charges consisted of depreciation and amortization, stock-based compensation and product warranty charges. Cash flows from investing activities Net cash used in investing activities was $0.2 million during the year ended December 31, 2023, primarily consisting of cash used in the acquisition of property and equipment of $0.2 million.
Non-cash charges consisted of credit loss expense, deferred income taxes, stock-based compensation expense, provision for product warranties, amortization of right-of-use asset, depreciation and amortization of property and equipment and gain on sale of assets. 26 Cash flows from investing activities Net cash used in investing activities during the year ended December 31, 2024 reflected $0.3 million of purchases of property and equipment.
Net cash used in operating activities was $1.4 million for the year ended December 31, 2022, consisting of net income of $24.2 million partially offset by an increase in net operating assets of $12.9 million, gain on sale of assets of $12.8 million, deferred income taxes of $1.7 million, and non-cash charges of $1.8 million.
Net cash used in operating activities was $2.1 million for the year ended December 31, 2023, consisting of net income of $0.5 million and non-cash charges of $1.0 million, offset by a decrease in net operating liabilities of $3.6 million.
General and administrative expenses of $5.2 million in 2023 increased by $0.2 million, or 4%, from $5.0 million in 2022, due primarily to an increase in professional fees and offset by a decrease in compensation expenses. Research and development expenses of $3.7 million in 2023 increased by $0.2 million, or 6%, from $3.5 million in 2022.
The decrease was primarily attributable to the decrease in marketing agency expense, travel expense, and payroll cost due to lower headcount. Research and development expenses of $4.2 million in 2024 increased by $0.5 million, or 14%, from $3.7 million in 2023.
The decrease in gross profit was primarily driven by the lower number of units sold and higher costs charged by vendors in 2023. Selling and marketing expenses of $5.6 million in 2023 decreased by $0.7 million, or 11%, from $6.3 million in 2022. The decrease was primarily attributable to lower compensation expense offset by an increase in tradeshow expenses.
The net increase in general and administrative expense was primarily due to higher compensation, professional fees and bad debt expense, which were offset by a reduction in bank fees and insurance expense. Selling and marketing expenses of $5.0 million in 2024 decreased by $0.6 million, or 11%, from $5.6 million in 2023.
The decrease in cost of sales was primarily related to the decrease in sales in 2023. Gross profit of $14.1 million, or 57.6% of revenue, in 2023 decreased by $15.5 million, or 52%, from $29.6 million, or 66.5% of revenue, in 2022.
The increase in cost of sales was primarily related to a higher number of units sold in the year ended December 31, 2024 compared to the year ended December 31, 2023. Gross profit of $24.4 million, or 58.4% of revenue, in 2024 increased by $10.3 million, or 73%, from $14.1 million, or 57.8% of revenue, in 2023.
Net cash used in financing activities was $2.4 million during the year ended December 31, 2022, primarily due to purchases of common stock and principal payments on our PPP loan, partially offset by proceeds from exercises of stock options.
Net cash used in financing activities during the year ended December 31, 2023 reflected $27 thousand of repurchases of common stock and $59 thousand of withholding taxes on stock-based compensation, offset by $46 thousand of exercised stock options.
Accounts receivable , net at December 31, 2023 decreased $6.7 million from December 31, 2022, primarily due to collections of receivables and the decrease in sales during the year ended December 31, 2023.
Accounts receivable , net of $19.7 million at December 31, 2024 increased by $9.1 million, or 86%, from $10.6 million at December 31, 2023, primarily due to the increase in sales to the Company’s primary customer that is subject to extended payment terms.
The increase was primarily due to expenses related to a project to develop a drug delivery system for an aesthetic project during 2023.
The increase was primarily due to higher compensation expenses and existing product development cost offset by a decrease in expenses related to a project to develop a drug delivery system for aesthetic use during 2024. Other income, net of $0.9 million and $1.0 million in the years ended December 31, 2024 and 2023, respectively, relate primarily to interest income.
Inventories at December 31, 2023 increased $8.4 million from December 31, 2022, primarily due to an increase in completion of finished goods offset by shipments of units sold during the year ended December 31, 2023.
The increase was primarily driven by a higher number of units sold, with 115 units sold in the year ended December 31, 2024 compared to 67 units sold in the year ended December 31, 2023. Cost of sales of $17.4 million in 2024 increased by $7.1 million, or 69%, from $10.3 million in 2023.
Removed
The decrease was primarily driven by the lower number of SRT units sold, as our customers continued to defer purchases of our product due to the inflationary pressures impacting the healthcare market. Cost of sales of $10.3 million in 2023 decreased by $4.6 million, or 31%, from $14.9 million in 2022.
Added
The increase in gross profit was primarily driven by a higher number of units sold in the year ended December 31, 2024 compared to the year ended December 31, 2023. General and administrative expenses of $7.1 million in 2024 increased by $1.9 million, or 37%, from $5.2 million in 2023.
Removed
Other income, net of $1.0 million in 2023 decreased by $12.2 million from $13.2 million in 2022 and is primarily attributable to the gain on sale of assets of $12.8 million in 2022 (See Note 2, Disposition , to the consolidated financial statements) and offset by an increase in interest income of $0.6 million in 2023.
Added
Cash flows provided by operating activities primarily include the receipt of revenues offset by the payment of operating expenses incurred in the normal course of business. Non-cash items consisted of credit loss expense, deferred income taxes, stock-based compensation expense, provision for product warranties, amortization of right-of-use asset and depreciation and amortization of property and equipment.
Removed
Non-cash charges consisted of depreciation and amortization, stock-based compensation, and product warranty charges.

Other SRTS 10-K year-over-year comparisons