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

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Paragraph-level year-over-year comparison of Stereotaxis, 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.

+375 added−325 removedSource: 10-K (2025-03-14) vs 10-K (2024-03-08)

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

375 paragraphs added · 325 removed · 284 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

117 edited+19 added−15 removed109 unchanged
Biggest changeAs the physician conducts the procedure from the adjacent control room, the Cardiodrive Automated Catheter Advancement System (“Cardiodrive”), in conjunction with the QuikCAS automated catheter advancement system, is used to remotely advance and retract the electrophysiology catheter in the patient’s heart while the robotic magnetic navigation system magnets precisely steer the working tip of the device. 6 Odyssey ® Solution The Odyssey Solution offers a fully integrated, real-time information solution to manage, control, record and share procedures across networks or around the world.
Biggest changeThe robotic magnetic navigation system is used in conjunction with the Cardiodrive Automated Catheter Advancement System (“Cardiodrive”) and the QuikCAS automated catheter advancement single-use disposable device, which together are used to remotely advance and retract a catheter while the robotic magnetic navigation system magnets steer the working tip of the device.
The RMN system allows the operator to navigate disposable interventional devices to the treatment site through complex paths in the blood vessels and chambers of the heart to deliver treatment by using computer controlled, externally applied magnetic fields to directly govern the motion of the working tip of these devices, each of which has a magnetically sensitive tip that predictably responds to magnetic fields generated by our system.
Our RMN system allows the operator to navigate disposable interventional devices to the treatment site through complex paths in the blood vessels and chambers of the heart to deliver treatment by using computer controlled, externally applied magnetic fields to directly govern the motion of the working tip of these devices, each of which has a magnetically sensitive tip that predictably responds to magnetic fields generated by our system.
See “Item 1A—Risk Factors” for a discussion of other competitive risks facing our business. GOVERNMENT REGULATION Our products are medical devices that are subject to extensive regulation in the U.S. and in foreign countries where we do business. The U.S.
See “Item 1A—Risk Factors” for a discussion of other competitive risks facing our business. GOVERNMENT REGULATION Our products are medical devices that are subject to extensive regulation in the U.S. and in foreign countries where we do business.
FDA regulates the development, testing, manufacturing, labeling, storage, recordkeeping, promotion, marketing, distribution and service of medical devices in the U.S. to ensure that medical products distributed domestically are safe and effective for their intended uses.
The FDA regulates the development, testing, manufacturing, labeling, storage, recordkeeping, promotion, marketing, distribution and service of medical devices in the U.S. to ensure that medical products distributed domestically are safe and effective for their intended uses.
These statements relate to, among other things: ● our business, operating, sales and marketing, and regulatory strategies; ● our value proposition; ● our overall liquidity and our ability to fund operations; ● our ability to convert backlog to revenue; ● the ability of physicians to perform certain medical procedures with our products safely, effectively and efficiently; ● the adoption of our products by hospitals and physicians; ● the market opportunity for our products, including expected demand for our products; ● the timing and prospects for regulatory approval of our additional disposable interventional devices; ● the success of our business partnerships and strategic relationships; ● our industry generally, and overall macroeconomic conditions; ● our estimates regarding our capital requirements; ● our plans for hiring additional personnel; and ● any of our other plans, objectives, expectations and intentions contained in this annual report that are not historical facts.
These statements relate to, among other things: ● our business, operating, sales and marketing, and regulatory strategies; ● our value proposition; ● our overall liquidity and our ability to fund operations; ● our ability to convert backlog to revenue; ● the ability of physicians to perform certain medical procedures with our products safely, effectively and efficiently; ● the adoption of our products by hospitals and physicians; ● the market opportunity for our products, including expected demand for our products; ● the timing and prospects for regulatory approval of our additional disposable interventional devices; ● the success of our business partnerships and strategic relationships; ● our industry generally, and overall macroeconomic conditions; ● our estimates regarding our capital requirements; ● our plans for hiring additional personnel; and ● any of our other plans, objectives, expectations and intentions contained in this annual report are not historical facts.
We cannot provide assurance as to the timeline of the ongoing availability of such compatible systems or our ability to obtain equivalent alternatives on competitive terms or at all. RESEARCH AND DEVELOPMENT We have assembled an experienced group of engineers and physicists with recognized expertise in magnetics, software, control algorithms, mechanics, electronics, systems integration and disposable interventional device design.
We cannot provide any assurance as to the timeline of the ongoing availability of such compatible systems or our ability to obtain equivalent alternatives on competitive terms or at all. RESEARCH AND DEVELOPMENT We have assembled an experienced group of engineers and physicists with recognized expertise in magnetics, software, control algorithms, mechanics, electronics, systems integration and disposable interventional device design.
In most foreign countries, private insurance systems may also offer payments for some therapies. Additionally, health maintenance organizations are emerging in certain European countries. In Europe, we believe that substantially all of the procedures, whether commercial or in clinical trials, conducted with the robotic magnetic navigation systems have been reimbursed to date.
In most foreign countries, private insurance systems may also offer payments for some therapies. Additionally, health maintenance organizations are emerging in certain European countries. In Europe, we believe that substantially all of the procedures, whether in commercial settings or clinical trials, conducted with the robotic magnetic navigation systems have been reimbursed to date.
Direct control of the tip of an interventional device, in contrast to all manual hand-held devices that are controlled from their handle, can improve the precision, stability, reach and safety of these devices during procedures. 3 Our primary clinical focus has been electrophysiology, specifically cardiac ablation procedures for the treatment of arrhythmias.
Direct control of the tip of an interventional device, in contrast to all manual hand-held devices that are controlled from their handle, can improve the precision, stability, reach and safety of these devices during procedures. Our primary clinical focus has been electrophysiology, specifically cardiac ablation procedures for the treatment of arrhythmias.
We believe these benefits can be applicable in other endovascular indications where navigation through complex vasculature is often challenging or unsuccessful and generates significant x-ray exposure, and we are investing in research and development in these areas. Our primary products include the Genesis RMN System, the Odyssey Solution, and other related devices.
We believe these benefits can be applicable in other endovascular indications where navigation through complex vasculature is often challenging or unsuccessful and generates significant x-ray exposure, and we are investing in research and development in these areas. Our primary products include the Genesis RMN System, the GenesisX RMN System , the Odyssey Solution, and other related devices.
Our system potentially has broad applicability in other areas, such as structural heart repair, interventional neurosurgery, interventional neuroradiology, peripheral vascular, renal denervation, pulmonology, urology, gynecology and gastrointestinal medicine, and some of our patents may be applicable in these areas as well. Electrophysiology The rhythmic beating of the heart results from the transmission of electrical impulses.
Our system potentially has broad applicability in other areas, such as structural heart repair, interventional neurosurgery, interventional neuroradiology, peripheral vascular, renal denervation, pulmonology, urology, gynecology and gastrointestinal medicine, and some of our patents may be applicable in these areas as well. 8 Electrophysiology The rhythmic beating of the heart results from the transmission of electrical impulses.
The Odyssey Solution improves clinical workflow and information management efficiency by integrating and synchronizing the multiple sources of diagnostic and imaging information found in the interventional labs into a large-screen user interface with single mouse and keyboard control. 5 ● Enhance hospital efficiency by reducing and standardizing procedure times, disposables utilization and staffing needs.
The Odyssey Solution improves clinical workflow and information management efficiency by integrating and synchronizing the multiple sources of diagnostic and imaging information found in the interventional labs into a large-screen user interface with single mouse and keyboard control. ● Enhance hospital efficiency by reducing and standardizing procedure times, disposables utilization and staffing needs.
In addition, the FDA regulates the export of medical devices manufactured in the U.S. to international markets and the importation of medical devices manufactured abroad. 12 In many foreign countries in which we market our products, we are subject to regulations affecting, among other things, product standards, packaging requirements, labeling requirements, import restrictions, tariff regulations, duties and tax requirements.
In addition, the FDA regulates the export of medical devices manufactured in the U.S. to international markets and the importation of medical devices manufactured abroad. In many foreign countries in which we market our products, we are subject to regulations affecting, among other things, product standards, packaging requirements, labeling requirements, import restrictions, tariff regulations, duties and tax requirements.
HIPAA also prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. In addition to federal regulations issued under HIPAA, some states and foreign countries have enacted privacy and security statutes or regulations that, in some cases, are more stringent than those issued under HIPAA.
HIPAA also prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. 15 In addition to federal regulations issued under HIPAA, some states and foreign countries have enacted privacy and security statutes or regulations that, in some cases, are more stringent than those issued under HIPAA.
We are subject to additional regulations in other foreign countries, including, but not limited to Canada, Taiwan, China, Japan, Korea, and Russia, in order to sell our products. We intend that either we or our distributors will receive any necessary approvals or clearance prior to marketing our products in these international markets.
We are subject to additional regulations in other foreign countries, including, but not limited to Canada, Taiwan, China, Japan, Korea, and Russia, to sell our products. We intend that either we or our distributors will receive any necessary approvals or clearance prior to marketing our products in these international markets.
Food and Drug Administration Unless an exemption applies, each medical device we wish to commercially market in the United States will require 510(k) clearance, de novo approval, or pre-market approval from the FDA. The FDA classifies medical devices into one of three classes.
Food and Drug Administration Unless an exemption applies, each medical device we wish to commercially market in the United States will require 510(k) clearance, de novo approval, or pre-market approval (PMA) from the FDA. The FDA classifies medical devices into one of three classes.
We believe our robotic technology can enhance procedure results by improving navigation of disposable interventional devices to treatment sites, and by affecting more precise and safe treatments once these sites are reached. ● Expand the market by enabling minimally invasive endovascular intervention.
We believe our robotic technology can enhance procedure results by improving navigation of disposable interventional devices to treatment sites, and by affecting more precise and safe treatments once these sites are reached. 5 ● Expand the market by enabling minimally invasive endovascular intervention.
We believe that our system can allow these procedures to be performed by a broader range of electrophysiologists and, by automating some of the more complex catheter maneuvers, can standardize and reduce procedure times and significantly improve outcomes. 8 ● General Mapping and Ablations .
We believe that our system can allow these procedures to be performed by a broader range of electrophysiologists and, by automating some of the more complex catheter maneuvers, can standardize and reduce procedure times and significantly improve outcomes. ● General Mapping and Ablations .
Other Recurring Revenue Other recurring revenue includes revenue from product maintenance plans, service-type warranties, other post warranty maintenance, and the implied obligation to provide software enhancements if and when available for a specified period, typically one year following installation of our systems.
Other Recurring Revenue Other recurring revenue includes revenue from product maintenance plans, service-type warranties, other post warranty maintenance, and the implied obligation to provide software enhancements if available for a specified period, typically one year following installation of our systems.
Accordingly, we believe providers in the U.S. will generally not be required to obtain new billing authorizations or codes in order to be compensated for performing medically necessary procedures using our products on insured patients.
Accordingly, we believe providers in the U.S. will generally not be required to obtain new billing authorizations or codes to be compensated for performing medically necessary procedures using our products on insured patients.
We have received regulatory clearances and approvals necessary for us to market the Genesis RMN System in the U.S. and Europe, and we are in the process of obtaining necessary registrations for extending our markets in other countries.
We have received regulatory clearances and approvals necessary for us to market the Genesis RMN System in the U.S., Europe, and China, and we are in the process of obtaining necessary registrations for extending our markets in other countries.
The Odyssey Solution further enables procedures to be observed remotely around the world with high-speed Internet access over a hospital VPN, even wirelessly using a standard laptop or Windows tablet computer. X-ray systems We have arrangements with fluoroscopy system manufacturers to provide such systems in a bundled purchase offer for hospitals establishing robotic interventional operating rooms.
The Odyssey Solution further enables procedures to be observed remotely around the world with high-speed Internet access over a hospital VPN, even wirelessly using a standard laptop or Windows tablet computer. X-ray systems We pursue arrangements with fluoroscopy system manufacturers to provide such systems in a bundled purchase offer for hospitals establishing robotic interventional operating rooms.
Cardiac ablation has become a well-accepted therapy for arrhythmias and a multi-billion-dollar medical device market with expectations for substantial long-term growth. We have shared our aspiration and a product strategy to expand the clinical focus of our technology to several additional endovascular indications including coronary, neuro, and peripheral interventions.
Cardiac ablation has become a well-accepted therapy for arrhythmias and a multi-billion-dollar medical device market with expectations for substantial long-term growth. We have shared our aspirations and a product strategy to expand the clinical focus of our technology to several additional endovascular indications including coronary, neuro, and peripheral interventions.
We have an extensive patent portfolio that we believe protects the fundamental scope of our technology and systems, including our robotic magnetic technology, navigational methods, mapping system and procedural workflows, 3D integration technology, and disposable interventional devices. As of December 31, 2023, we had 44 issued U.S. patents and 2 pending U.S. patent application.
We have an extensive patent portfolio that we believe protects the fundamental scope of our technology and systems, including our robotic magnetic technology, navigational methods, mapping system and procedural workflows, 3D integration technology, and disposable interventional devices. As of December 31, 2024, we had 44 issued U.S. patents and 2 pending U.S. patent application.
Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, or life-supporting, or devices deemed not substantially equivalent to a previously cleared 510(k) device, are placed in Class III, requiring pre-market approval, or PMA. The majority of our current products are Class II devices requiring 510(k) clearances.
Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, or life-supporting, or devices deemed not substantially equivalent to a previously cleared 510(k) device, are placed in Class III, requiring pre-market approval, or PMA. Most of our current products are Class II devices requiring 510(k) clearances.
Because our robotic technology provides precise, computerized control of the working tip of disposable interventional devices, we believe that it will potentially enable difficult diseases to be treated interventionally on a much broader scale than today. ● Enhance patient and physician safety.
Because our robotic technology provides precise, computerized control of the working tip of disposable interventional devices, we believe that it will potentially enable difficult diseases to be treated endovascularly on a much broader scale than today. ● Enhance patient and physician safety.
The FDA may require further information, including clinical trial results or product test data, to make a determination regarding substantial equivalence. The FDA’s 510(k) clearance process usually takes from four to 12 months but can take longer.
The FDA may require further information, including clinical trial results or product test data, to make a determination regarding substantial equivalence. The FDA’s 510(k) clearance process usually takes from (4) four to (12) twelve months but can take longer.
In addition, we offer employees the benefit of equity ownership in the company through stock option grants and/or restricted stock units. Eligible employees have the opportunity to participate in an employee stock purchase plan, which offers the opportunity to purchase our common stock at a discount of 5%.
In addition, we offer employees the benefit of equity ownership in the company through stock option grants and/or restricted stock units. Eligible employees can participate in an employee stock purchase plan, which offers the opportunity to purchase our common stock at a discount of 5%.
Through our arrangements with fluoroscopy system manufacturers and providers of catheters and electrophysiology mapping systems, we provide compatibility between the robotic magnetic navigation system and the visualization and information systems used during electrophysiology and endovascular procedures in order to provide the physician with a comprehensive information and instrument control system.
Through our arrangements with manufacturers and providers of fluoroscopy systems, catheters, and electrophysiology mapping systems, we provide compatibility between the robotic magnetic navigation system and the visualization and information systems used during electrophysiology and endovascular procedures to provide the physician with a comprehensive information and instrument control system.
Additionally, we believe that our system allows for more predictable and efficient navigation of these devices to the treatment site and enables catheter contact to be consistently maintained to efficiently apply energy on the wall of the beating heart.
Additionally, we believe that our RMN allows for more predictable and efficient navigation of these devices to the treatment site and enables catheter contact to be consistently maintained to efficiently apply energy on the wall of the beating heart.
These patients may therefore be referred to more invasive or less curative therapies because of the difficulty in precisely and safely controlling the working tip of disposable interventional devices used to treat these complex cases interventionally.
These patients may therefore be referred to more invasive or less curative therapies because of the difficulty in precisely and safely controlling the working tip of disposable interventional devices used to treat these complex cases endovascularly.
We believe that these products provide physicians with the elements required for effective complex electrophysiology procedures: highly accurate information as to the exact location of the catheter in the body and highly precise control over the working tip of the catheter.
We believe that these products provide physicians with the elements required for effective complex electrophysiology procedures: accurate information as to the location of the catheter in the body and precise control over the working tip of the catheter.
Approval processes can be lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied. Not all products have and/or require regulatory clearance in all of the markets we serve.
Approval processes can be lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied. 4 Not all products have and/or require regulatory clearance in all the markets we serve.
We also believe that our system will significantly lower the skill barriers required for physicians to perform complex electrophysiology procedures and, additionally, improve interventional lab efficiency and reduce disposable interventional device utilization.
We also believe that our RMN will significantly lower the skill barriers required for physicians to perform complex electrophysiology procedures and, additionally, improve interventional lab efficiency and reduce disposable interventional device utilization.
We can also utilize security keys, such as embedded smart chips or associated software that could allow our system to recognize specific disposable interventional devices in order to prevent unauthorized use of our system.
We can also utilize security keys, such as embedded smart chips or associated software that could allow our system to recognize specific disposable interventional devices to prevent unauthorized use of our system.
We believe that our system can address the current challenges in electrophysiology by permitting the physician to remotely navigate disposable interventional devices from a control room outside the x-ray field.
We believe that our RMN can address the current challenges in electrophysiology by permitting the physician to remotely navigate disposable interventional devices from a control room outside the x-ray field.
We have also developed substantial expertise in magnet design, magnet physics and magnetic instrument control that was developed in connection with the development of the robotic magnetic navigation system, which we maintain as trade secrets.
We have also developed substantial expertise in magnet design, magnet physics and magnetic instrument control in connection with the development of the robotic magnetic navigation system, which we maintain as trade secrets.
FINANCIAL INFORMATION ABOUT CUSTOMERS No single customer accounted for more than 10% of total revenue for the years ended December 31, 2023 and 2022. No single country, other than the U.S., accounted for more than 10% of total revenue for the years ended December 31, 2023 and 2022.
FINANCIAL INFORMATION ABOUT CUSTOMERS No single customer accounted for more than 10% of total revenue for the years ended December 31, 2024 and 2023. No single country, other than the U.S., accounted for more than 10% of total revenue for the years ended December 31, 2024, and 2023.
Recently, several healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, certain marketing practices, including off-label promotion, may also violate false claims laws.
In the past several years, several healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, certain marketing practices, including off-label promotion, may also violate false claims laws.
Through the use of a single mouse and keyboard, the Odyssey Solution allows the user to command multiple systems in the lab from a single point of control. In addition, the Odyssey Solution acquires a real-time, remote view of the lab, capturing synchronized procedure data for review of important events during cases.
Using a single mouse and keyboard, the Odyssey Solution allows the user to command multiple systems in the lab from a single point of control. In addition, the Odyssey Solution acquires a real-time, remote view of the lab, capturing synchronized procedure data for review of important events during cases.
Biosense Webster’s compatible catheters used with our magnetic navigation system are Class III therapeutic devices and are subject to the PMA process. If U.S. clinical data are needed to support clearance, approval or a marketing application for our devices, generally, an investigational device exemption, or IDE, is assembled and submitted to the FDA.
Biosense Webster’s compatible catheters used with our magnetic navigation system, as well as the MAGiC catheter, are Class III therapeutic devices and are subject to the PMA process. If U.S. clinical data are needed to support clearance, approval or a marketing application for our devices, generally, an investigational device exemption, or IDE, is assembled and submitted to the FDA.
We promote our full suite of products in a typical hospital implementation, subject to regulatory approvals or clearances. This implementation requires a hospital to agree to an upfront capital payment and recurring payments. The upfront capital payment typically includes equipment and installation charges.
We promote our full suite of products necessary for a typical hospital implementation, subject to regulatory approvals or clearances. This implementation requires a hospital to agree to an upfront capital payment and recurring payments. The upfront capital payment typically includes equipment and installation charges.
These include for example: ● The Quality System Regulation, or QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, documentation and other quality assurance procedures during product design and throughout the manufacturing process; ● Labeling requirements and the FDA prohibitions against promoting products for uncleared, unapproved or “off-label” uses; ● Medical device reporting regulations, which require that manufacturers 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 the malfunction were to recur; and ● Reports of Corrections and Removals regulation, which requires manufacturers to report recalls and field actions to the FDA if initiated to reduce a risk to health posed by the device or to remedy a violation of the FD&C Act. 13 The FDA has broad post-market and regulatory enforcement powers.
These include, for example: ● The Quality System Regulation, or QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, documentation and other quality assurance procedures during product design and throughout the manufacturing process; ● Labeling requirements and the FDA prohibitions against promoting products for uncleared, unapproved or “off-label” uses; ● Medical device reporting regulations, which require that manufacturers 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 the malfunction were to recur; and ● Reports of Corrections and Removals regulation, which requires manufacturers to report recalls and field actions to the FDA if initiated to reduce a risk to health posed by the device or to remedy a violation of the FD&C Act.
As a result of any of the foregoing, it may be necessary to modify our operations and procedures to comply with the more stringent state and foreign laws, which may entail significant and costly changes for us.
As a result of any amendment or change to the foregoing, it may be necessary to modify our operations and procedures to comply with the more stringent state and foreign laws, which may entail significant and costly changes for us.
The clinical value of our technology has been demonstrated in over 400 publications and in the real-world experience of more than 100,000 procedures. The clinical literature as well as other available data suggests meaningful reductions in major complications and patient exposure to radiation during procedures utilizing our robotic technology.
The clinical value of our technology has been demonstrated in over 500 publications and in the real-world experience of more than 150,000 procedures. The clinical literature as well as other available data suggests meaningful reductions in major complications and patient exposure to radiation during procedures utilizing our robotic technology.
There is substantial real-world evidence and clinical literature for Robotic Magnetic Navigation in electrophysiology. Hundreds of electrophysiologists at over one hundred hospitals globally have treated over 100,000 arrhythmia patients with our robotic technology. Clinical use of our technology has been documented in over 400 clinical publications.
There is substantial real-world evidence and clinical literature for Robotic Magnetic Navigation in electrophysiology. Hundreds of electrophysiologists at over one hundred hospitals globally have treated over 150,000 arrhythmia patients with our robotic technology. Clinical use of our technology has been documented in over 500 clinical publications.
CUSTOMER SERVICE AND SUPPORT We provide worldwide maintenance and support services to our customers for our compatible products directly or with the assistance of outsourced product and service representatives. By utilizing these relationships, we provide direct, on-site technical support activities, including call center, customer support engineers and service parts logistics and delivery.
CUSTOMER SERVICE AND SUPPORT We provide worldwide maintenance and support services to our customers’ products directly or with the assistance of outsourced product and service representatives. By utilizing these relationships, we provide direct, on-site technical support activities, including call center, customer support engineers and service parts logistics and delivery.
In addition, we had 15 issued foreign patents and 2 pending foreign patent applications. The key patents that protect our technology and systems extend until 2028 and beyond. We also have a number of invention disclosures under consideration and several applications that are being prepared for filing.
In addition, we had 7 issued foreign patents and 5 pending foreign patent applications. The key patents that protect our technology and systems extend until 2028 and beyond. We also have a number of invention disclosures under consideration and several applications that are being prepared for filing.
Our actual results may be materially different from what we expect. We undertake no duty to update these forward-looking statements after the date of this annual report, even though our situation may change in the future. We qualify all of our forward-looking statements by these cautionary statements.
Our actual results may be materially different from what we expect. We undertake no duty to update these forward-looking statements after the date of this annual report, even though our situation may change in the future.
This is designed to improve lab layout and procedure efficiency. The system also features a remote viewing and recording capability called Odyssey Cinema, which is an innovative solution that delivers synchronized content for optimized workflow, advanced care, and improved productivity. This tool includes an archiving capability that allows clinicians to store and replay entire procedures or segments of procedures.
The system also features a remote viewing and recording capability called Odyssey Cinema, which is an innovative solution that delivers synchronized content for optimized workflow, advanced care, and improved productivity. This tool includes an archiving capability that allows clinicians to store and replay entire procedures or segments of procedures.
The Niobe System, our prior generation robotic magnetic navigation system, the Odyssey Solution, Cardiodrive , e-Contact, and various disposable interventional devices have received regulatory clearances and approvals in the U.S., Europe, Canada, China, Japan and various other countries.
The Niobe System, our prior generation robotic magnetic navigation system, the Odyssey Solution, Cardiodrive , e-Contact, and various disposable interventional 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 believe more than 5,000 interventional labs around the world are currently conducting over one million cardiac ablation procedures annually. The market has grown rapidly over the last decade with annualized procedure growth of approximately 10%.
We believe more than 7,000 interventional labs around the world are currently conducting over one and a half million cardiac ablation procedures annually. The market has grown rapidly over the last decade with annualized procedure growth of approximately 10%.
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. As of December 31, 2023, we had approximately $14.7 million of backlog, consisting of outstanding purchase orders and other commitments for these systems.
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. As of December 31, 2024, we had approximately $15.2 million of backlog, consisting of outstanding purchase orders and other commitments for these systems.
Through these strategic relationships we provide compatibility between our robotic magnetic navigation system, x-ray systems, and digital imaging and 3D catheter location sensing technology, as well as disposable interventional devices. The maintenance of these strategic relationships, or the establishment of equivalent alternatives, is critical to our commercialization efforts.
Through these strategic relationships we provide compatibility with our robotic magnetic navigation system, integrated x-ray systems, digital imaging and 3D catheter location sensing technology, and compatible disposable interventional devices. The maintenance of these strategic relationships, or the establishment of equivalent alternatives, is critical to our commercialization efforts.
We maintain quality control for all of our systems by completing final system assembly and inspection in-house. We purchase both custom and off-the-shelf components from a large number of suppliers and subject them to quality specifications and processes.
We maintain quality control for all our systems by completing final system assembly and inspection in-house. We purchase both custom and off-the-shelf components from many suppliers and subject them to quality specifications and processes.
Certificate of Need Laws In a number of states in the U.S., a certificate of need or similar regulatory approval is required prior to the acquisition of high-cost capital items or various types of advanced medical equipment, such as our robotic magnetic navigation system.
Certificate of Need Laws Several states in the U.S., require a certificate of need or similar regulatory approval prior to a hospital’s acquisition of high-cost capital items or various types of advanced medical equipment, such as our robotic magnetic navigation system.
We purchase the majority of our components and major assemblies through purchase orders rather than long-term supply agreements and generally do not maintain large volumes of finished goods. 10 Disposable Interventional Devices Our manufacturing strategy for disposable interventional devices is to outsource their manufacture through subcontracting and to expand partnerships for other interventional devices.
We purchase most of our components and major assemblies through purchase orders rather than long-term supply agreements and generally do not maintain large volumes of finished goods. Disposable Interventional Devices Our historical manufacturing strategy for disposable interventional devices was to outsource their manufacture through subcontracting and to expand partnerships for other interventional devices.
The maintenance of these arrangements, or the establishment of equivalent alternatives, is critical to our commercialization efforts. There are no guarantees that any existing strategic relationships will continue, and efforts are ongoing to ensure the availability of compatible next generation systems and/or equivalent alternatives.
The maintenance of strategic relationships with compatible devices, or the establishment of equivalent alternatives, is critical to our commercialization efforts. There are no guarantees that any existing strategic relationships will continue, and efforts are ongoing to ensure the availability of compatible systems and devices and/or equivalent alternatives.
We value the diversity of each of our employees and the contributions they make in helping us achieve our mission to discover, develop and deliver robotic systems, instruments, and information solutions for the interventional laboratory. We are committed to attracting, developing, and retaining the best talent reflecting a diversity of ideas, backgrounds, and perspectives.
We value the skills of our employees and the contributions they make in helping us achieve our mission to discover, develop and deliver robotic systems, instruments, and information solutions for the interventional laboratory. We are committed to attracting, developing, and retaining the best talent.
STRATEGIC RELATIONSHIPS We have entered into business arrangements with technology leaders in the global interventional market, including manufacturers of fluoroscopy systems, ablation catheters, and electrophysiology mapping systems, that we believe aid us in commercializing our robotic magnetic navigation system.
STRATEGIC RELATIONSHIPS We have arrangements with technology leaders in the global interventional market, including manufacturers of fluoroscopy systems, ablation catheters, and electrophysiology mapping systems, that we believe are critical for us in commercializing our robotic magnetic navigation systems.
OVERVIEW Stereotaxis designs, manufactures and markets robotic systems, instruments and information systems for the interventional laboratory. Our proprietary robotic technology, Robotic Magnetic Navigation, fundamentally transforms endovascular interventions using precise computer-controlled magnetic fields to directly control the tip of flexible interventional catheters or devices.
All of our forward-looking statements are qualified by these cautionary statements. 3 OVERVIEW Stereotaxis designs, manufactures and markets robotic systems, instruments and information systems for the interventional laboratory. Our proprietary robotic technology, Robotic Magnetic Navigation, fundamentally transforms endovascular interventions using precise computer-controlled magnetic fields to directly control the tip of flexible interventional catheters or devices.
Of the December 31, 2023 backlog, we expect approximately 81% to be recognized as revenue over the course of 2024. We had backlog of approximately $14.8 million as of December 31, 2022.
Of the December 31, 2024 backlog, we expect approximately 70% to be recognized as revenue over the course of 2025. We had backlog of approximately $14.7 million as of December 31, 2023.
In addition, we are subject to similar state laws related to the tracking and reporting of certain payments and other transfers of value to healthcare professionals. 14 HIPAA and Other Privacy Laws We are subject to laws and regulations protecting the privacy and integrity of patient medical information, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information, and the applicable Privacy and Security Standards of HITECH, the Health Information Technology for Economic and Clinical Health Act.
HIPAA and Other Privacy Laws We are subject to laws and regulations protecting the privacy and integrity of patient medical information, including the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information, and the applicable Privacy and Security Standards of HITECH, the Health Information Technology for Economic and Clinical Health Act.
Genesis RMN ® , Niobe ® , Navigant ® , Odyssey ® , Odyssey Cinema ™ , Vdrive ® , Vdrive Duo ™ , V-CAS ™ , V-Loop ™ , V-Sono ™ , QuikCAS ™, Cardiodrive ® , and MAGiC ™ are trademarks of Stereotaxis, Inc.
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.
Revenue from product maintenance plans and software enhancements, service-type warranties, and the implied obligation to provide software enhancements are deferred and amortized over the service or update period, which is typically one year.
Revenue from product maintenance plans and software enhancements, service-type warranties, and the implied obligation to provide software enhancements are deferred and amortized over the service or update period, which is typically one year. Revenue related to services performed on a time-and-materials basis is recognized when performed.
We also believe that additional cost savings from robotics can result from decreased use of multiple catheters, high-end deflectable sheaths, and contrast media in procedures compared with manual methods further enhancing the rate of return to hospitals. ● Improve physician skill levels in order to improve the efficacy of complex cardiology procedures.
We also believe that additional cost savings from robotics can result from decreased use of multiple catheters, high-end deflectable sheaths, and contrast media in procedures compared with manual methods further enhancing the rate of return to hospitals. ● Expand the population of physicians who can effectively perform complex endovascular procedures.
Our research and development efforts are focused in the following areas: ● development and enhancement of Robotic Magnetic Navigation Systems; ● designing new proprietary disposable interventional devices for use in Electrophysiology and other clinical specialties with our robotic systems; and ● software and other engineering efforts to enhance imaging integrations, user interface, automated navigation, and operating room connectivity.
Our research and development efforts are focused in the following areas: ● development and enhancement of Robotic Magnetic Navigation Systems; ● designing new proprietary disposable interventional devices for use in Electrophysiology and other clinical specialties with our robotic systems; and ● software and other engineering efforts to enhance imaging integrations, user interface, automated navigation, and operating room connectivity. 10 Our research and development team collaborates with strategic third parties to integrate our robotic magnetic navigation system’s open architecture platform with key imaging, location sensing and information systems in the interventional lab.
We also conduct on-site engagement activities that facilitate cross-team networking, collaboration, and innovation. We continue to evolve our programs to respond to the best interest of our changing workforce, as well as the communities in which we operate, in compliance with government regulations. We manage overall safety with guidance based on regional, country, and local regulations and best practices.
We continue to evolve our programs to respond to the best interest of our workforce, as well as the communities in which we operate, in compliance with government regulations. We manage overall safety with guidance based on regional, country, and local regulations and best practices.
Consequently, revenues and/or orders resulting from sales of our robotic magnetic navigation system can vary significantly from one reporting period to the next. 4 We have strategic relationships with technology leaders and innovators in the global interventional market.
In addition, the sales cycle for the robotic magnetic navigation system is lengthy and generally involves construction or renovation activities at customer sites. Consequently, revenues and/or orders resulting from sales of our robotic magnetic navigation system can vary significantly from one reporting period to the next. We have strategic relationships with technology leaders and innovators in the global interventional market.
Due to the clinical benefits of our products, we believe hospitals will realize significant operational benefits when recruiting physicians to work in a safer procedure environment, while attracting patients who desire to have safer procedures that lead to better long-term outcomes.
Due to the clinical benefits of our products, we believe hospitals will realize significant operational benefits when recruiting physicians to work in a safer procedure environment, while attracting patients who desire to have safer procedures that lead to better long-term outcomes. 6 PRODUCTS Robotic Magnetic Navigation Our proprietary robotic magnetic navigation systems (“RMN”) include the GenesisX RMN, Genesis RMN and the prior generation Niobe Systems.
We are subject to unannounced inspections by the FDA to determine our compliance with the QSR and other regulations.
The FDA has broad post-market and regulatory enforcement powers. We are subject to unannounced inspections by the FDA to determine our compliance with the QSR and other regulations.
We were incorporated in Delaware in June, 1990 as Stereotaxis, Inc. Our principal executive offices are located at 710 North Tucker Boulevard, Suite 110, St. Louis, Missouri 63101, and our telephone number is (314) 678-6100.
Our principal executive offices are located at 710 North Tucker Boulevard, Suite 110, St. Louis, Missouri 63101, and our telephone number is (314) 678-6100.
As of December 31, 2023, we had 122 employees, 35 of whom were engaged directly in research and development, 53 in sales and marketing activities, 16 in manufacturing and service, and 18 in general administrative activities including finance, information systems, legal and general management.
As of December 31, 2024, we had 139 employees, 41 of whom were engaged directly in research and development, 51 in sales and marketing activities, 28 in manufacturing and service, and 19 in general administrative activities including finance, information systems, legal and general management.
Revenue related to services performed on a time-and-materials basis is recognized when performed. 7 Regulatory Approval We have received regulatory clearance, licensing and/or approvals necessary for us to market the Genesis System with Cardiodrive, iCONNECT, Navigant, Odyssey and QuikCAS in the U.S. and Europe, and we are in the process of obtaining necessary registrations for extending our markets in other countries.
Regulatory Approval We have received regulatory clearance, licensing and/or approvals necessary for us to market the Genesis System with Cardiodrive, iCONNECT, Navigant, Odyssey and QuikCAS in the U.S., Europe, and China, and we are in the process of pursuing registrations for extending our markets in other countries.
SALES AND MARKETING We market our products in the U.S and internationally through a direct sales force of senior sales specialists, distributors and sales agents, supported by account managers and clinical specialists who provide training, clinical support, and other services to our customers.
The most recent ISO 13485 and MDSAP Certificate of Registration were issued in 2022 and are valid through September 2025. 11 SALES AND MARKETING We market our products in the U.S and internationally through a direct sales force of senior sales specialists, distributors and sales agents, supported by account managers and clinical specialists who provide training, clinical support, and other services to our customers.
PRODUCTS Robotic Magnetic Navigation Our proprietary robotic magnetic navigation systems (“RMN”) include the Genesis RMN and the prior generation Niobe Systems. These systems are designed to enable physicians to complete more complex interventional procedures by providing image-guided delivery of catheters and guidewires through the blood vessels and chambers of the heart to treatment sites.
These systems are designed to enable physicians to complete more complex interventional procedures by providing image-guided delivery of catheters and guidewires through the blood vessels and chambers of the heart to treatment sites.
There can be no assurance that we will recognize such revenue in any particular period or at all because some of our purchase orders and other commitments are subject to contingencies that are outside our control.
There can be no assurance that we will recognize such revenue in any period or at all because some of our purchase orders and other commitments are subject to contingencies that are outside our control. These orders and commitments may be revised, modified or canceled, either by their express terms, because of negotiations or by project changes or delays.
Stereotaxis is the owner of the catheter and we are pursuing regulatory approvals for the MAGiC catheter in various global geographies. Approval processes can be lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied.
We have obtained the CE marking for us to market the MAGiC catheter in Europe and are pursuing regulatory approvals for the MAGiC catheter in the U.S. and various other global geographies. Approval processes can be lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied.
We perform final testing of software products in-house prior to their commercial release. General Our manufacturing facility operates under processes that meet the FDA’s requirements under the Quality System Regulation (QSR). Our ISO registrar and European notified British Standard Institution (BSI) has audited our facility annually since 2001 and found the facility to be in compliance with relevant requirements.
General Our manufacturing facility operates under processes that meet the FDA’s requirements under the Quality System Regulation (QSR). Our ISO registrar and European notified British Standard Institution (BSI) has audited our facility annually since 2001 and found the facility to comply with relevant requirements.
We have received regulatory clearance, licensing and/or approvals necessary for us to market the Niobe System with Cardiodrive, e-Contact, Navigant, Odyssey and QuikCAS in the U.S., Canada, China, Japan, and various other countries. We have received regulatory clearance, licensing and/or approvals necessary for us to market the Vdrive and Vdrive Duo Systems with the V-CAS in the U.S. and Canada.
The GenesisX RMN System, the latest generation of the Genesis RMN System has received regulatory clearance in Europe, and we are in the process of obtaining necessary approvals in the US and other countries, We have received regulatory clearance, licensing and/or approvals necessary for us to market the Niobe System with Cardiodrive, e-Contact, Navigant, Odyssey, QuikCAS in the U.S., Canada, China, Japan, and various other countries.
Disposables and Other Accessories Our robotic magnetic navigation systems are designed to use a toolkit of associated disposable interventional devices.
Disposables and Other Accessories Our robotic magnetic navigation systems are designed to use a toolkit of associated disposable interventional devices. Within this toolkit, we manufacture and distribute the QuikCAS, the iCONNECT, and the V-CAS devices .

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

87 edited+36 added−10 removed216 unchanged
Biggest changeRisks Relating to Regulatory and Legal Matters ● If we or the parties in our strategic collaborations fail to obtain or maintain necessary FDA clearances or approvals for our medical device products, or if such clearances or approvals are delayed, we will be unable to continue to commercially distribute and market our products. ● If our strategic collaborations elect not to or we fail to obtain regulatory approvals in other countries for products under development, we will not be able to commercialize these products in those countries. ● We may fail to comply with continuing regulatory requirements of the FDA and other authorities and become subject to enforcement action, which may include substantial penalties. ● Our suppliers, subcontractors, or we may fail to comply with the FDA quality system regulation or other quality standards. ● If we fail to comply with health care regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. ● Healthcare policy changes, including the potential repeal or amendment of any existing legislation, may have a material adverse effect on us. ● The application of state certificate of need regulations and compliance by our customers with federal and state licensing or other international requirements could substantially limit our ability to sell our products and grow our business. ● Hospitals or physicians may be unable to obtain reimbursement from third-party payors for procedures using our products, or reimbursement for procedures may be insufficient to recoup the costs of purchasing our products. ● Our costs could substantially increase if we receive a significant number of warranty claims or have other significant, uninsured liabilities. 17 Risks Related to Our Common Stock ● Our principal stockholders continue to own a large percentage of our voting stock, and they have the ability to substantially influence matters requiring stockholder approval. ● Future issuances of our securities could dilute current stockholders’ ownership. ● We have never paid dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. ● Our certificate of incorporation and bylaws, Delaware law, and one of our collaboration agreements contain provisions that could discourage a takeover. ● Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty. ● Our future operating results may be below securities analysts’ or investors’ expectations, which could cause our stock price to decline. ● We expect that the price of our common stock could fluctuate substantially, possibly resulting in class action securities litigation. ● If we fail to continue to meet all applicable NYSE American Market requirements and the NYSE American determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock, which would impair the value of your investment and ultimately harm our business by limiting our access to equity markets for capital raising.
Biggest changeRisks Relating to Regulatory and Legal Matters ● If we or the parties in our strategic collaborations fail to obtain or maintain necessary FDA clearances or approvals for our medical device products, or if such clearances or approvals are delayed, we will be unable to continue to commercially distribute and market our products. ● If our strategic collaborations elect not to or we fail to obtain regulatory approvals in other countries for products under development, we will not be able to commercialize these products in those countries. ● We may fail to comply with continuing regulatory requirements of the FDA and other authorities and become subject to enforcement action, which may include substantial penalties. ● Our suppliers, subcontractors, or we may fail to comply with the FDA quality system regulation or other quality standards. 18 ● If we fail to comply with health care regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. ● Healthcare policy changes, including the potential repeal or amendment of any existing legislation, may have a material adverse effect on us. ● The application of state certificate of need regulations and compliance by our customers with federal and state licensing or other international requirements could substantially limit our ability to sell our products and grow our business. ● Hospitals or physicians may be unable to obtain reimbursement from third-party payors for procedures using our products, or reimbursement for procedures may be insufficient to recoup the costs of purchasing our products. ● Our costs could substantially increase if we receive a significant number of warranty claims or have other significant, uninsured liabilities.
The Company’s liquidity needs will be largely determined by the success of clinical adoption within the installed base of our robotic magnetic navigation system as well as by new placements of capital systems.
The Company’s liquidity needs will be largely determined by the success of clinical adoption within the installed base of our robotic magnetic navigation system as well as new placements of capital systems.
The regulations that may affect our ability to operate include: ● the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal health care programs such as the Medicare and Medicaid programs; ● federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent, and which may apply to entities like us if we provide coding and billing advice to customers; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits executing a scheme to defraud any health care benefit program or making false statements relating to health care matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; and the applicable Privacy and Security Standards of HITECH, the Health Information Technology for Economic and Clinical Health Act, which is Title XIII of the American Recovery and Reinvestment Act; ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and state laws governing the privacy of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts, including the California Consumer Privacy Act, or CCPA, which is introduces new and far-reaching law data privacy compliance burdens on many organizations doing business in California who collect personal information about California residents; ● the General Data Protection Regulation, or GDPR, which imposes requirements for controllers and processors of personal data and is in effect across the European Economic Area, or EEA, such as imposing higher standards when obtaining consent from individuals to process their personal data, requiring more robust disclosures to individuals, strengthening individual data rights, shortening timelines for data breach notifications, limiting retention periods and secondary use of information, increasing requirements pertaining to health data as well as pseudonymised data, and imposing additional obligations when we contract third-party processors in connection with the processing of personal data; ● federal self-referral laws, such as the Stark Anti-Referral Law, which prohibits a physician from making a referral to a provider of certain health services with which the physician or the physician’s family member has a financial interest; ● federal and state Sunshine laws, which require manufacturers of certain medical devices to collect and report information on payments or transfers of value to physicians and teaching hospitals, as well as investment interests held by physicians and their immediate family members; and ● regulations pertaining to receipt of CE mark for our products marketed outside of the United States and submission to periodic regulatory audits in order to maintain these regulatory approvals.
The regulations that may affect our ability to operate include: ● the federal healthcare program Anti-Kickback Statute, which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal health care programs such as the Medicare and Medicaid programs; 31 ● federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent, and which may apply to entities like us if we provide coding and billing advice to customers; ● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits executing a scheme to defraud any health care benefit program or making false statements relating to health care matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; and the applicable Privacy and Security Standards of HITECH, the Health Information Technology for Economic and Clinical Health Act, which is Title XIII of the American Recovery and Reinvestment Act; ● state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and state laws governing the privacy of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts, including the California Consumer Privacy Act, or CCPA, which is introduces new and far-reaching law data privacy compliance burdens on many organizations doing business in California who collect personal information about California residents; ● the General Data Protection Regulation, or GDPR, which imposes requirements for controllers and processors of personal data and is in effect across the European Economic Area, or EEA, such as imposing higher standards when obtaining consent from individuals to process their personal data, requiring more robust disclosures to individuals, strengthening individual data rights, shortening timelines for data breach notifications, limiting retention periods and secondary use of information, increasing requirements pertaining to health data as well as pseudonymised data, and imposing additional obligations when we contract third-party processors in connection with the processing of personal data; ● federal self-referral laws, such as the Stark Anti-Referral Law, which prohibits a physician from making a referral to a provider of certain health services with which the physician or the physician’s family member has a financial interest; ● federal and state Sunshine laws, which require manufacturers of certain medical devices to collect and report information on payments or transfers of value to physicians and teaching hospitals, as well as investment interests held by physicians and their immediate family members; and ● regulations pertaining to receipt of CE mark for our products marketed outside of the United States and submission to periodic regulatory audits in order to maintain these regulatory approvals.
RISK FACTORS SUMMARY Risks Related to Our Business and Business Operations ● We may not generate cash from operations or be able to raise the necessary capital to continue operations. ● Macroeconomic and geopolitical factors, as well as pandemics, epidemics or outbreaks of infectious disease could have an adverse effect our supply chain, our hospital customer buying patterns, and our ability to raise capital and could otherwise disrupt our normal business operations. 16 ● We may not be able to fund our business operations in the same manner as we have done historically if we do not improve the operating performance of the Company or raise additional capital. ● Hospital decision-makers may not purchase our robotic magnetic navigation systems or related products or may think that such systems and products are too expensive. ● If we are unable to fulfill our current purchase orders and other commitments on a timely basis or at all, we may not be able to achieve future sales growth. ● We will likely experience long and variable sales and installation cycles, which could result in substantial fluctuations in our quarterly results of operations. ● Physicians may not use our products if they do not believe they are safe, efficient and effective. ● Our collaborations with fluoroscopy system manufacturers and providers of catheters and electrophysiology mapping systems or other parties may fail, or we may not be able to enter into additional collaborations in the future. ● The complexity associated with selling, marketing, and distributing products could impair our ability to increase revenue. ● Our marketing strategy is dependent on collaboration with physician “thought leaders.” ● Physicians may not commit enough time to sufficiently learn our system. ● Customers may choose to purchase competing products and not ours. ● If the magnetic fields generated by our system are not compatible with, or interfere with, other widely used equipment in the interventional labs, sales of our products would be negatively affected. ● The use of our products could result in product liability claims that could be expensive, divert management’s attention, and harm our reputation and business. ● We have incurred substantial losses in the past and may not be profitable in the future. ● Our reliance on contract manufacturers and on suppliers, and in some cases, a single supplier, could harm our ability to meet demand for our products in a timely manner or within budget. ● Risks associated with international manufacturing and trade could negatively impact the availability and cost of our products because materials used to manufacture our magnets, one of our key system components, are sourced from overseas. ● We may encounter problems at our manufacturing facilities or those of our subcontractors or otherwise experience manufacturing delays that could result in lost revenue. ● Our growth may place a significant strain on our resources, and if we fail to manage our growth, our ability to develop, market, and sell our products will be harmed.
RISK FACTORS SUMMARY Risks Related to Our Business and Business Operations ● We may not generate cash from operations or be able to raise the necessary capital to continue operations. ● Macroeconomic and geopolitical factors, as well as pandemics, epidemics or outbreaks of infectious disease could have an adverse effect our supply chain, our hospital customer buying patterns, and our ability to raise capital and could otherwise disrupt our normal business operations. ● We may not be able to fund our business operations in the same manner as we have done historically if we do not improve the operating performance of the Company or raise additional capital. ● Hospital decision-makers may not purchase our robotic magnetic navigation systems or related products or may think that such systems and products are too expensive. ● If we are unable to fulfill our current purchase orders and other commitments on a timely basis or at all, we may not be able to achieve future sales growth. 17 ● We will likely experience long and variable sales and installation cycles, which could result in substantial fluctuations in our quarterly results of operations. ● Physicians may not use our products if they do not believe they are safe, efficient and effective. ● Our collaborations with fluoroscopy system manufacturers and providers of catheters and electrophysiology mapping systems or other parties may fail, or we may not be able to enter additional collaborations in the future. ● The complexity associated with selling, marketing, and distributing products could impair our ability to increase revenue. ● Our marketing strategy is dependent on collaboration with physician “thought leaders.” ● Physicians may not commit enough time to sufficiently learn our system. ● Customers may choose to purchase competing products and not ours. ● If the magnetic fields generated by our system are not compatible with, or interfere with, other widely used equipment in the interventional labs, sales of our products would be negatively affected. ● The use of our products could result in product liability claims that could be expensive, divert management’s attention, and harm our reputation and business. ● We have incurred substantial losses in the past and may not be profitable in the future. ● Our reliance on contract manufacturers and on suppliers, and in some cases, a single supplier, could harm our ability to meet demand for our products in a timely manner or within budget. ● Risks associated with international manufacturing and trade could negatively impact the availability and cost of our products because materials used to manufacture our magnets, one of our key system components, are sourced from overseas. ● We may encounter problems at our manufacturing facilities or those of our subcontractors or otherwise experience manufacturing delays that could result in lost revenue. ● Our growth may place a significant strain on our resources, and if we fail to manage our growth, our ability to develop, market, and sell our products will be harmed.
An inability to use technologies essential to our products would have a material adverse effect on our financial condition, results of operations and cash flow and could undermine our ability to continue our current business operations. Expensive intellectual property litigation is frequent in the medical device industry and may cause to incur substantial expenses to defend.
An inability to use technologies essential to our products would have a material adverse effect on our financial condition, results of operations and cash flow and could undermine our ability to continue our current business operations. 28 Expensive intellectual property litigation is frequent in the medical device industry and may cause to incur substantial expenses to defend.
In addition, if we fail to comply with new or changed laws, regulations and standards, regulatory authorities may initiate legal proceedings against us and our business and reputation may be harmed. Our future operating results may be below securities analysts’ or investors’ expectations, which could cause our stock price to decline.
In addition, if we fail to comply with new or changed laws, regulations and standards, regulatory authorities may initiate legal proceedings against us and our business and reputation may be harmed. 34 Our future operating results may be below securities analysts’ or investors’ expectations, which could cause our stock price to decline.
If magnetic interference becomes a significant issue at targeted institutions, it would increase our installation costs at those institutions and could limit the number of hospitals that would be willing to purchase and install our systems, either of which would adversely affect our financial condition, results of operations and cash flow.
If magnetic interference becomes a significant issue at targeted institutions, it will increase our installation costs at those institutions and could limit the number of hospitals that would be willing to purchase and install our systems, either of which would adversely affect our financial condition, results of operations and cash flow.
At this time, we are not able to determine the full consequences to us, including the total cost of compliance, of these various federal and state laws. 28 Healthcare policy changes, including the potential repeal or amendment of any existing legislation, may have a material adverse effect on us.
At this time, we are not able to determine the full consequences to us, including the total cost of compliance, of these various federal and state laws. Healthcare policy changes, including the potential repeal or amendment of any existing legislation, may have a material adverse effect on us.
Fischel to serve as CEO for the long term, there is no assurance that Mr. Fischel will continue as CEO. 32 General Risk Factors General economic conditions could materially adversely impact us. Our operating performance is dependent upon economic conditions in the United States and in other countries in which we operate.
Fischel to serve as CEO for the long term, there is no assurance that Mr. Fischel will continue as CEO. General Risk Factors General economic conditions could materially adversely impact us. Our operating performance is dependent upon economic conditions in the United States and in other countries in which we operate.
An adverse outcome under any such investigation or audit could subject us to fines or other penalties, which could adversely affect our business and financial results. 27 Our suppliers, subcontractors, or we may fail to comply with the FDA quality system regulation or other quality standards.
An adverse outcome under any such investigation or audit could subject us to fines or other penalties, which could adversely affect our business and financial results. Our suppliers, subcontractors, or we may fail to comply with the FDA quality system regulation or other quality standards.
Risks Related to the February 2021 CEO Performance Stock Unit Grant ● We will incur significant additional stock-based compensation expense over the term of the CEO Performance Award regardless of whether or not any of the milestones are achieved . ● Our stockholders may experience substantial dilution upon payout of shares under the CEO Performance Award. ● Certain provisions in the PSU Agreement may discourage a change in control of the Company even if such a transaction would otherwise be beneficial to our stockholders. ● We are highly dependent on the services of Mr.
Risks Related to the February 2021 CEO Performance Stock Unit Grant ● We will incur significant additional stock-based compensation expense over the term of the CEO Performance Award regardless of whether any of the milestones are achieved . ● Our stockholders may experience substantial dilution upon payout of shares under the CEO Performance Award. ● Certain provisions in the PSU Agreement may discourage a change in control of the Company even if such a transaction would otherwise be beneficial to our stockholders. ● We are highly dependent on the services of Mr.
As described in Note 9 of the accompanying notes to the consolidated financial statements in Part II, Item 8 of this Form 10-K, on February 23, 2021, the Company`s Board of Directors, upon recommendation of the Compensation Committee, approved the grant of the Performance Share Unit Award (“CEO Performance Award”) pursuant to the CEO Performance Share Unit Award Agreement (the “PSU Agreement”), to David L.
As described in Note 11 of the accompanying notes to the consolidated financial statements in Part II, Item 8 of this Form 10-K, on February 23, 2021, the Company`s Board of Directors, upon recommendation of the Compensation Committee, approved the grant of the Performance Share Unit Award (“CEO Performance Award”) pursuant to the CEO Performance Share Unit Award Agreement (the “PSU Agreement”), to David L.
Our product commercialization plans could be disrupted, leading to lower than expected revenue and a material and adverse impact on our results of operations and cash flow, if: 20 ● we fail to or are unable to maintain adequate compatibility of our products with the most prevalent imaging products or disposable interventional devices expected by our customers for their clinical practice; ● any of our collaboration partners delays or fails in the integration of its technology or new products with our robotic magnetic navigation system; ● any of our collaboration partners fails to develop, commercialize or support compatible products in a timely manner; ● any of our collaboration partners fails to maintain required regulatory approvals for their own products and such failure impacts our ability to deliver compatible systems in a timely manner or at all; or ● we become involved in disputes with one or more of our collaboration partners regarding our collaborations or contractual rights and obligations related thereto.
Our product commercialization plans could be disrupted, leading to lower than expected revenue and a material and adverse impact on our results of operations and cash flow, if: ● we fail to or are unable to maintain adequate compatibility of our products with the most prevalent imaging products or disposable interventional devices expected by our customers for their clinical practice; ● any of our collaboration partners delays or fails in the integration of its technology or new products with our robotic magnetic navigation system; ● any of our collaboration partners fails to develop, commercialize or support compatible products in a timely manner; ● any of our collaboration partners fails to maintain required regulatory approvals for their own products and such failure impacts our ability to deliver compatible systems in a timely manner or at all; or ● we become involved in, or cannot efficiently resolve, disputes with one or more of our collaboration partners regarding our collaborations or contractual rights and obligations related thereto.
We have programs in place to detect, contain, and respond to data security incidents, and we continually make improvements to our networks and systems in order to minimize or eliminate vulnerabilities.
We have programs in place to detect, contain, and respond to data security incidents, and we continually make improvements to our networks and systems to minimize or eliminate vulnerabilities.
While we have experienced, and expect to continue to experience, these types of threats to our information technology networks and infrastructure, to date none of these threats has had a material impact on our business or operations. 24 We may be unable to protect our technology from use by third parties, which may allow them to compete with us and harm our business.
While we have experienced, and expect to continue to experience, these types of threats to our information technology networks and infrastructure, to date none of these threats has had a material impact on our business or operations. 27 We may be unable to protect our technology from use by third parties, which may allow them to compete with us and harm our business.
Macroeconomic and geopolitical factors, as well as pandemics, epidemics or outbreaks of infectious disease could have an adverse effect our supply chain, our hospital customer buying patterns, and our ability to raise capital and could otherwise disrupt our normal business operations. Future results of operations could be materially adversely impacted by macroeconomic and geopolitical factors.
Macroeconomic and geopolitical factors, as well as pandemics, epidemics or outbreaks of infectious disease could have an adverse effect our supply chain, our hospital customers buying patterns, and our ability to raise capital and could otherwise disrupt our normal business operations. Future results of operations could be materially adversely impacted by macroeconomic and geopolitical factors.
In order to market our products outside of the U.S., we and our strategic collaborations or distributors must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Approval procedures vary among countries and can involve additional product testing and additional administrative review periods.
To market our products outside of the U.S., we and our strategic collaborations or distributors must establish and comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy. Approval procedures vary among countries and can involve additional product testing and additional administrative review periods.
In addition, historically the majority of our products have been delivered less than one year after the receipt of a purchase order from a hospital, with the timing being dependent on the construction cycle for the new or replacement interventional suite in which the equipment will be installed.
In addition, historically most of our products have been delivered less than one year after receipt of a purchase order from a hospital, with the timing being dependent on the construction cycle for the new or replacement interventional suite in which the equipment will be installed.
Physicians may not commit enough time to sufficiently learn our system. In order for physicians to learn to use the robotic magnetic navigation system, they must attend structured training sessions in order to familiarize themselves with a sophisticated user interface and they must be committed to learning the technology.
Physicians may not commit enough time to sufficiently learn our system. For physicians to learn to use the robotic magnetic navigation system, they must attend structured training sessions to familiarize themselves with a sophisticated user interface and they must be committed to learning the technology.
Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expense and divert our management’s attention from the operation of our business.
Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.
Future issuances of our securities could dilute current stockholders’ ownership. As of December 31, 2023, we had 49.4 million shares of our common stock issuable upon conversion of our Series A Convertible Preferred Stock.
Future issuances of our securities could dilute current stockholders’ ownership. As of December 31, 2024, we had 49.4 million shares of our common stock issuable upon conversion of our Series A Convertible Preferred Stock.
This delisting could also impair the value of your investment. Risks Related to the February 2021 CEO Performance Stock Unit Grant We will incur significant additional stock-based compensation expense over the term of the CEO Performance Award regardless of whether or not any of the milestones are achieved.
This delisting could also impair the value of your investment. 35 Risks Related to the February 2021 CEO Performance Stock Unit Grant We will incur significant additional stock-based compensation expense over the term of the CEO Performance Award regardless of whether any of the milestones are achieved.
We also experienced reductions in demand for our disposable products as our healthcare customers (physicians and hospitals) re-prioritized the treatment of patients and diverted resources away from non-coronavirus areas, leading to the performance of fewer procedures in which our disposable products are used.
We also experienced reductions in demand for our disposable products as our healthcare customers (physicians and hospitals) re-prioritized the treatment of patients and diverted resources away from non-pandemic related areas, leading to the performance of fewer procedures in which our disposable products are used.
If we have to abandon a product, our ability to develop and grow our business in new directions and markets would be adversely affected. 25 Our products and related technologies can be applied in different medical applications, and we may fail to focus on the most profitable areas.
If we must abandon a product, our ability to develop and grow our business in new directions and markets would be adversely affected. Our products and related technologies can be applied in different medical applications, and we may fail to focus on the most profitable areas.
However, we have limited financial and managerial resources and, therefore, may be required to focus on products in selected industries and sites and to forego efforts with regard to other products and industries. Our decisions may not produce viable commercial products and may divert our resources from more profitable market opportunities.
However, we have limited financial and managerial resources and, therefore, may be required to focus on products in selected industries and sites and to forego efforts regarding to other products and industries. Our decisions may not produce viable commercial products and may divert our resources from more profitable market opportunities.
In the event that dividends or other distributions of assets are made or paid by the Company to the holders of the common stock, the holders of Series A Convertible Preferred Stock are entitled to participate in such dividend or distribution on an as-converted basis.
If dividends or other distributions of assets are made or paid by the Company to the holders of the common stock, the holders of Series A Convertible Preferred Stock are entitled to participate in such dividend or distribution on an as-converted basis.
We have incurred substantial net losses since inception, including incurring an accumulated deficit of 537.7 million as of December 31, 2023, and we expect to incur losses into the future as we continue the commercialization of our products. Moreover, the extent of our future losses and the timing of profitability are highly uncertain.
We have incurred substantial net losses since inception, including incurring an accumulated deficit of $561.7 million as of December 31, 2024, and we expect to incur losses into the future as we continue the commercialization of our products. Moreover, the extent of our future losses and the timing of profitability are highly uncertain.
Accordingly, these stockholders acting as a group, will have substantial influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transaction.
Accordingly, these stockholders will have substantial influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transaction.
For example, supply chain disruptions have led to vendor discussions regarding contractual performance which we intend to resolve through continued negotiations but may require us to assert performance issues under our vendor agreements; in such event, we may not be successful in our claims, and even if we are successful, we may experience supply disruptions.
For example, supply chain disruptions have led to vendor discussions regarding contractual performance which we intend to resolve through continued negotiations but have required us to assert performance issues under our vendor agreements. We may not be successful in our claims, and even if we are successful, we may continue to experience supply disruptions.
An inability to train a sufficient number of physicians to generate adequate demand for our products could have a material adverse impact on our financial condition and cash flow. 21 Customers may choose to purchase competing products and not ours. Our products must compete with traditional interventional methods.
An inability to train enough physicians to generate adequate demand for our products could have a material adverse impact on our financial condition and cash flow. Customers may choose to purchase competing products and not ours. Our products must compete with traditional interventional methods.
If we experience any failures or delays in completing the installation of these systems, our reputation would suffer and we may not be able to sell additional systems. We have experienced situations in which our purchase orders and other commitments did not result in recognizing revenue from placement of a system with a customer.
If we experience any failures or delays in completing the installation of these systems, our reputation would suffer and we may not be able to sell additional systems. We have experienced situations in which our purchase orders and other commitments did not result in recognizing revenue.
As a result, in future quarters our operating results could fall below the expectations of securities analysts or investors, in which event our stock price would likely decrease. Physicians may not use our products if they do not believe they are safe, efficient and effective.
This may contribute to substantial fluctuations in our quarterly operating results. As a result, in future quarters our operating results could fall below the expectations of securities analysts or investors, in which event our stock price would likely decrease. 21 Physicians may not use our products if they do not believe they are safe, efficient and effective.
The expense will be recognized on an accelerated basis through 2030. Total stock-based compensation recorded as operating expense for the CEO Performance Award was $7.1 million for the year ended December 31, 2023. As of December 31, 2023, the Company had approximately $37.0 million of total unrecognized stock-based compensation expense remaining under the CEO Performance Award if Mr.
The expense will be recognized on an accelerated basis through 2030. Total stock-based compensation recorded as operating expense for the CEO Performance Award was $7.2 million for the year ended December 31, 2024. As of December 31, 2024, the Company had approximately $29.8 million of total unrecognized stock-based compensation expense remaining under the CEO Performance Award if Mr.
Our stockholders may experience substantial dilution upon payout of shares under the CEO Performance Award. If Mr. Fischel achieves all the milestones specified in the CEO Performance Award, by increasing the Company’s market capitalization to $5.5 billion for the specified period, he will receive 13,000,000 shares of common stock subject to the vesting requirements in the agreement.
If Mr. Fischel achieves all the milestones specified in the CEO Performance Award, by increasing the Company’s market capitalization to $5.5 billion for the specified period, he will receive 13,000,000 shares of common stock subject to the vesting requirements in the agreement.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including SEC regulations such as the Dodd-Frank Wall Street Reform and Consumer Protection Act have in the past created uncertainty for public companies.
Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty. Changing laws, regulations and standards relating to corporate governance and public disclosure, including SEC regulations such as the Dodd-Frank Wall Street Reform and Consumer Protection Act, have in the past created uncertainty for public companies.
Since assuming the role of CEO in February 2017, Mr. Fischel has revitalized the Company’s commercial capabilities, strengthened its financial position, and led the development of a robust innovation strategy, and stockholders have benefited substantially, with Stereotaxis’ stock appreciating substantially. However, between February 2017 and December 2020, Mr.
Since assuming the role of CEO in February 2017, Mr. Fischel has revitalized the Company’s commercial capabilities, strengthened its financial position, and led the development of a robust innovation strategy. However, between February 2017 and December 2020, Mr.
If the United States and global economy becomes sluggish or deteriorates for a longer period than we anticipate, we may experience a material negative decrease on the demand for our products which may, in turn, have a material adverse effect on our revenue, profitability, financial condition, ability to raise additional capital and the market price of our stock.
If the United States and global economy becomes sluggish or deteriorates for a longer period than we anticipate, we may experience a material negative decrease on the demand for our products which may, in turn, have a material adverse effect on our revenue, profitability, financial condition, ability to raise additional capital and the market price of our stock. 36 We maintain our cash at financial institutions, often in balances that exceed federally insured limits.
We continue to evaluate and monitor developments with respect to new and proposed rules and cannot predict or estimate the amount of the additional compliance costs we may incur or the timing of such costs.
We continue to evaluate and monitor developments with respect to new and proposed rules, including potential recission of certain rules or proposed rules under the current administration, and cannot predict or estimate the amount of the additional compliance costs we may incur or the timing of such costs.
For example, previous administrations implemented, or considered the imposition of, tariffs on certain foreign goods, and we cannot predict the ongoing status of tariffs or any further potential legislation or actions taken by the U.S. federal government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures taken by governments in Europe, Asia, and other countries, could adversely impact our ability to sell products and services, which could increase the cost of our products and the components and raw materials that go into making them.
For example, the Trump administrations has implemented, or is considering the imposition of, tariffs on certain foreign goods, including on our products that emanate from China as described above and we cannot predict the implementation or effects of any such tariffs or proposed tariffs, or any potential legislation or actions taken by the U.S. federal government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures taken by governments in Europe, Asia, and other countries, could adversely impact our ability to sell products and services, which could increase the cost of our products and the components and raw materials that go into making them.
We subcontract all or part of the manufacture and assembly of components of our products and devices. The products we design may not satisfy all the performance requirements of our customers and we may need to improve or modify the design or ask our subcontractors to modify their production process in order to do so.
The products we design may not satisfy all the performance requirements of our customers and we may need to improve or modify the design or ask our subcontractors to modify their production process to do so.
The majority of our cash is held in accounts at U.S. banking institutions that we believe are of high quality. Cash held in depository accounts may exceed the $250,000 Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations.
Cash held in depository accounts may exceed the $250,000 Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations.
Fischel continues to serve as CEO, or in a similar capacity, through 2030. This additional stock-based compensation expense, incurred regardless of whether or not any milestones are achieved, increases the difficulty for the Company to achieve a profitable position as measured by generally accepted accounting principles.
Fischel continues to serve as CEO, or in a similar capacity, through 2030. This additional stock-based compensation expense, incurred regardless of whether any milestones are achieved, increases the difficulty for the Company to achieve a profitable position as measured by generally accepted accounting principles. Our stockholders may experience substantial dilution upon payout of shares under the CEO Performance Award.
The Company continues to experience difficulties with periodic worldwide supply chain disruptions, including shortages and inflationary pressures, and logistics delays which make it difficult for us to source parts and ship our products.
The Company continues to experience difficulties with periodic worldwide supply chain disruptions, including shortages and inflationary pressures, tariffs and other trade regulations that are or may be imposed, and logistics delays which make it difficult for us to source parts and ship our products.
In addition, we, or our subcontractors, may experience quality problems, substantial costs and unexpected delays related to efforts to upgrade and expand manufacturing, assembly and testing capabilities. If we incur delays due to quality problems or other unexpected events, our revenue may be impacted.
In addition, we, or our subcontractors, may experience quality problems, substantial costs and unexpected delays related to efforts to upgrade and expand manufacturing, assembly and testing capabilities.
These provisions may: ● discourage, delay or prevent a change in the control of our company or a change in our management; ● adversely affect the voting power of holders of common stock; and ● limit the price that investors might be willing to pay in the future for shares of our common stock. 30 Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty.
These provisions may: ● discourage, delay or prevent a change in the control of our company or a change in our management; ● adversely affect the voting power of holders of common stock; and ● limit the price that investors might be willing to pay in the future for shares of our common stock.
While we cannot reliably estimate the ultimate duration of the impact or the severity of ongoing periodic resurgences of pandemic-related issues, we continue to anticipate periodic disruptions to our manufacturing operations, supply chains, procedures volumes, service activities, and capital system orders and placements, any of which could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
While we cannot reliably anticipate whether there will be new or periodic resurgences of pandemic-related issues, or the impact or the severity of any such pandemics or resurgences, we believe that any such instances could cause periodic disruptions to our manufacturing operations, supply chains, procedures volumes, service activities, and capital system orders and placements, any of which could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
The revenue and income potential of our products and our business model are unproven, and we may be unable to generate significant revenue or grow at the rate expected by securities analysts or investors. In addition, our costs may be higher than we, securities analysts, or investors expect.
We may be unable to generate significant revenue or grow at the rate expected by securities analysts or investors. In addition, our costs may be higher than we, securities analysts, or investors expect.
If we are unable to improve the operating performance of the Company or if we are unable to obtain sufficient additional capital, it may impair our ability to obtain new customers or hire and retain employees, any of which could force us to substantially revise our business plan or cease operations, which may reduce or negate the value of your investment.
If we are unable to improve the operating performance of the Company or if we are unable to obtain sufficient additional capital, it may impair our ability to obtain new customers or hire and retain employees, any of which could force us to substantially revise our business plan or cease operations, which may reduce or negate the value of your investment. 20 Hospital decision-makers may not purchase our robotic magnetic navigation systems or related products or may think that such systems and products are too expensive.
Our growth may place a significant strain on our resources, and if we fail to manage our growth, our ability to develop, market, and sell our products will be harmed. Our business plan contemplates a period of substantial growth and business activity.
If we incur delays due to quality problems or other unexpected events, our revenue may be impacted. 25 Our growth may place a significant strain on our resources, and if we fail to manage our growth, our ability to develop, market, and sell our products will be harmed. Our business plan contemplates a period of substantial growth and business activity.
In addition, if these manufacturers or suppliers stop providing us with the components or services necessary for the operation of our business, we may not be able to identify alternate sources in a timely fashion.
If orders do not match forecasts, we, as well as our contract manufacturers, may have excess or inadequate inventory of materials and components. 24 In addition, if these manufacturers or suppliers stop providing us with the components or services necessary for the operation of our business, we may not be able to identify alternate sources in a timely fashion.
Because we retain some portion of our insurable risks and, in some cases, we are entirely self-insured, unforeseen or catastrophic losses in excess of insurance coverage could require us to pay substantial amounts, which may have a material adverse impact on our business, financial condition, results of operations, or cash flows. 29 Risks Related to Our Common Stock Our principal stockholders continue to own a large percentage of our voting stock, and they have the ability to substantially influence matters requiring stockholder approval.
Because we retain some portion of our insurable risks and, in some cases, we are entirely self-insured, unforeseen or catastrophic losses in excess of insurance coverage could require us to pay substantial amounts, which may have a material adverse impact on our business, financial condition, results of operations, or cash flows.
Our backlog includes those outstanding purchase orders and other commitments that management believes will result in recognition of revenue upon delivery or installation of our systems. We cannot assure you that we will recognize revenue in any particular period or at all because some of our purchase orders and other commitments are subject to contingencies that are outside our control.
We cannot assure you that we will recognize revenue in any period or at all because some of our purchase orders and other commitments are subject to contingencies that are outside our control.
If these clearances or approvals are not received or are substantially delayed or if we are not able to offer either a sufficient array of approved disposable interventional devices or a fully integrated robotic magnetic navigation system, we may not be able to successfully market our system to as many institutions as we currently expect, which could have a material adverse impact on our financial condition, results of operations and cash flow. 26 Furthermore, obtaining 510(k) clearances, de novo approvals, PMAs or PMA supplement approvals, from the FDA could result in unexpected and significant costs for us and consume management’s time and other resources.
If these clearances or approvals are not received or are substantially delayed or if we are not able to offer either a sufficient array of approved disposable interventional devices or a fully integrated robotic magnetic navigation system, we may not be able to successfully market our system to as many institutions as we currently expect, which could have a material adverse impact on our financial condition, results of operations and cash flow.
The Company expects to continue to incur operating losses and negative cash flows until revenues reach a level sufficient to support ongoing operations or expense reductions are in place.
The Company has sustained operating losses throughout its corporate history and expects that its 2024 operating expenses will exceed its 2024 gross margin. The Company expects to continue to incur operating losses and negative cash flows until revenues reach a level sufficient to support ongoing operations or expense reductions are in place.
In addition, as the markets for medical devices develop, additional competitors could enter the market. We cannot assure you that we will be able to compete successfully against existing or new competitors. Our revenue would be reduced or eliminated if our competitors develop and market products that are more effective and less expensive than our products.
In addition, as the markets for medical devices develop, additional competitors could enter the market. We cannot assure you that we will be able to compete successfully against existing or new competitors.
Certain of our directors and individuals or entities affiliated with them as well as other principal stockholders beneficially own or control a substantial percentage of the outstanding shares of our common stock.
Risks Related to Our Common Stock Our principal stockholders continue to own a large percentage of our voting stock, and they could substantially influence matters requiring stockholder approval. Certain of our directors and individuals or entities affiliated with them as well as other principal stockholders beneficially own or control a substantial percentage of the outstanding shares of our common stock.
In addition, the volatility of our stock price could lead to class action securities litigation being filed against us, which could result in substantial costs and a diversion of our management resources, which could significantly harm our business. 31 If we fail to continue to meet all applicable NYSE American Market requirements and the NYSE American determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock, which would impair the value of your investment and ultimately harm our business by limiting our access to equity markets for capital raising.
If we fail to continue to meet all applicable NYSE American Market requirements and the NYSE American determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock, which would impair the value of your investment and ultimately harm our business by limiting our access to equity markets for capital raising.
If we cannot raise capital on acceptable terms, we will not be able to, among other things: ● maintain customer and vendor relationships; ● hire, train and retain employees; ● maintain or expand our operations; ● enhance our existing products or develop new ones; or ● respond to competitive pressures.
If we cannot raise capital on acceptable terms, we will not be able to, among other things: ● maintain customer and vendor relationships; ● hire, train and retain employees; ● maintain or expand our operations; ● enhance our existing products or develop new ones; or ● respond to competitive pressures. 19 Our failure to do any of these things could result in lower revenue and adversely affect our financial condition and results of operations, and we may have to curtail or cease operations.
Factors that may inhibit our sales and marketing efforts include: ● our inability to recruit and retain adequate numbers of qualified sales and marketing personnel; ● our inability to accurately forecast future product sales and utilize resources accordingly; ● the inability of sales personnel to obtain access to or persuade adequate numbers of hospitals and physicians to purchase and use our products; and ● unforeseen costs associated with maintaining and expanding an independent sales and marketing organization.
Factors that may inhibit our sales and marketing efforts include: ● our inability to recruit and retain adequate numbers of qualified sales and marketing personnel; ● our inability to accurately forecast future product sales and utilize resources accordingly; ● the inability of sales personnel to obtain access to or persuade adequate numbers of hospitals and physicians to purchase and use our products; and ● unforeseen costs associated with maintaining and expanding a sales and marketing organization. 22 In addition, if we fail to effectively use distributors or contract sales agents for distribution of our products where appropriate, our revenue and profitability would be adversely affected.
We maintain our cash at financial institutions, often in balances that exceed federally insured limits. Adverse developments that affect financial institutions, transactional counterparties, or other third parties, or concerns or rumors about these events, have in the past and may in the future lead to market-wide liquidity problems.
Adverse developments that affect financial institutions, transactional counterparties, or other third parties, or concerns or rumors about these events, have in the past and may in the future lead to market-wide liquidity problems. Most of our cash is held in accounts at U.S. banking institutions that we believe are of high quality.
Other companies in the medical device industry continue to develop new devices and technologies for traditional interventional methods. If these or other new products or technologies emerge that provide the same or superior benefits as our products at equal or lesser cost, it could render our products obsolete or unmarketable.
If these or other new products or technologies emerge that provide the same or superior benefits as our products at equal or lesser cost, it could render our products obsolete or unmarketable.
The application of state certificate of need regulations and compliance by our customers with federal and state licensing or other international requirements could substantially limit our ability to sell our products and grow our business.
However, we cannot currently predict the content, timing or impact that any such future legislation will have on our business. 32 The application of state certificate of need regulations and compliance by our customers with federal and state licensing or other international requirements could substantially limit our ability to sell our products and grow our business.
Further, the Series A Convertible Preferred Stock rank senior to our common stock as to distributions and payments upon the liquidation, dissolution and winding up of the Company.
As a result, capital appreciation, if any, of our common stock will be an investor’s sole source of gain for the foreseeable future. Further, the Series A Convertible Preferred Stock rank senior to our common stock as to distributions and payments upon the liquidation, dissolution and winding up of the Company.
Our certificate of incorporation and bylaws, Delaware law, and one of our collaboration agreements contain provisions that could discourage a takeover. Our certificate of incorporation and bylaws and Delaware law contain provisions that might enable our management to resist a takeover.
Our certificate of incorporation and bylaws, the Performance Share Unit Agreement with our CEO, and Delaware law contain provisions that might enable our management to resist a takeover.
Even if the PPACA is not amended or repealed, the administration could propose changes impacting implementation of the PPACA, which could materially and adversely affect our financial position or operations. However, we cannot currently predict the content, timing or impact that any such future legislation will have on our business.
Even if the PPACA is not amended or repealed, the administration could propose changes impacting implementation of the PPACA, which could materially and adversely affect our financial position or operations.
Outside of electrophysiology, there are at least two companies that have commercialized robotic systems for guidewire manipulation and can be viewed as potential competitors as we look to address additional clinical applications. We are pursuing regulatory approvals for the Stereotaxis MAGiC catheter, a robotically-navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablation procedures, in various global geographies.
Outside of electrophysiology, there are at least two companies that have commercialized robotic systems for guidewire manipulation and can be viewed as potential competitors as we look to address additional clinical applications.
If we experience software errors or performance problems, we would likely also experience: ● loss of revenue; ● delay in market acceptance of our products; ● damage to our reputation; ● additional regulatory filings; ● product recalls; ● increased service or warranty costs; and/or ● product liability claims relating to the software defects.
If we experience software errors or performance problems, we would likely also experience: ● loss of revenue; ● delay in market acceptance of our products; ● damage to our reputation; ● additional regulatory filings; ● product recalls; ● increased service or warranty costs; and/or ● product liability claims relating to the software defects. 29 Risks Related to Regulatory and Legal Matters If we or the parties in our strategic collaborations fail to obtain or maintain necessary FDA clearances or approvals for our medical device products, or if such clearances or approvals are delayed, we will be unable to continue to commercially distribute and market our products.
Furthermore, even if we achieve significant revenue, we may choose to pursue a strategy of increasing market penetration and presence or expand or accelerate new product development or clinical research activities at the expense of profitability. 22 Our reliance on contract manufacturers and on suppliers, and in some cases, a single supplier, could harm our ability to meet demand for our products in a timely manner or within budget.
Furthermore, even if we achieve significant revenue, we may choose to pursue a strategy of increasing market penetration and presence or expand or accelerate new product development or clinical research activities at the expense of profitability.
Additionally, any modification to an FDA 510(k) cleared or de novo-approved device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance.
Congress could amend the FD&C Act, and the FDA could modify its regulations promulgated under this law or its policies in a way to make ongoing regulatory compliance more burdensome and difficult. 30 Additionally, any modification to an FDA 510(k) cleared or de novo-approved device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance.
If the capital markets are disrupted for an extended period of time and we need to raise additional capital, such capital may not be available on acceptable terms, or at all.
If the capital markets are disrupted for an extended period and we need to raise additional capital, such capital may not be available on acceptable terms, or at all. Disruptions to the capital markets and other financing sources could also negatively impact our hospital customers’ ability to raise capital or otherwise obtain financing to fund their operations and capital projects.
We have paid no cash dividends on any of our classes of common stock to date and we currently intend to retain our future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of our common stock will be an investor’s sole source of gain for the foreseeable future.
We have never paid dividends on our common stock, and we do not anticipate paying any cash dividends in the foreseeable future. We have paid no cash dividends on any of our classes of common stock to date and we currently intend to retain our future earnings to fund the development and growth of our business.
A material reduction or interruption in any of our manufacturing processes or a substantial increase in costs would have a material adverse effect on our business, operating results, and financial condition. 18 Many of our hospital customers, for whom the purchase of our system involves a significant capital purchase which may be part of a larger construction project at the customer site (typically the construction of a new building), may themselves be under economic pressures.
Many of our hospital customers, for whom the purchase of our system involves a significant capital purchase which may be part of a larger construction project at the customer site (typically the construction of a new building), may themselves be under economic pressures.
We may not be able to fund our business operations in the same manner as we have done historically if we do not improve the operating performance of the Company or raise additional capital. The Company has sustained operating losses throughout its corporate history and expects that its 2024 operating expenses will exceed its 2024 gross margin.
The impact has varied widely over time by individual geography. We may not be able to fund our business operations in the same manner as we have done historically if we do not improve the operating performance of the Company or raise additional capital.
During 2023, our common stock traded between $1.33 and $2.75 per share, on trading volume ranging from approximately 44,500 to 5.0 million shares per day.
During 2024, our common stock traded between $1.66 and $3.29 per share, on trading volume ranging from approximately 67,300 to 6.4 million shares per day.
If the magnetic fields generated by our system are not compatible with, or interfere with, other widely used equipment in the interventional labs, sales of our products would be negatively affected. Our robotic magnetic navigation system generates magnetic fields that directly govern the motion of the internal, or working, tip of disposable interventional devices.
Our revenue would be reduced or eliminated if our competitors develop and market products that are more effective and less expensive than our products. 23 If the magnetic fields generated by our system are not compatible with, or interfere with, other widely used equipment in the interventional labs, sales of our products would be negatively affected.
The robotic magnetic navigation system is a novel device, and hospitals and physicians are traditionally slow to adopt new products and treatment practices. In addition, hospitals may delay their purchase or installation decision for the robotic magnetic navigation system based on the disposable interventional devices that have received regulatory clearance or approval.
In addition, hospitals may delay their purchase or installation decision for the robotic magnetic navigation system based on the disposable interventional devices that have received regulatory clearance or approval. Moreover, the robotic magnetic navigation system is an expensive piece of capital equipment, representing a significant portion of the cost of a new or replacement interventional lab.
We, and our contract manufacturers, acquire materials, complete standard subassemblies and assemble fully configured systems based on sales forecasts. If orders do not match forecasts, we, as well as our contract manufacturers, may have excess or inadequate inventory of materials and components.
We, and our contract manufacturers, acquire materials, complete standard subassemblies and assemble fully configured systems based on sales forecasts.
During the COVID-19 pandemic, we experienced business disruptions, including travel restrictions on us and our third-party distributors, which negatively affected our complex sales, marketing, installation, distribution and service network relating to our products and services, and that may occur again in the future.
All of this negatively affected our complex sales, marketing, installation, distribution and service network relating to our products and services, and that may occur again in the future if we experience another pandemic or a significant resurgence of COVID-19.
In addition, decreases in the value of the U.S. dollar against foreign currencies, or significant price increase from these suppliers, could increase the cost of products we purchase from overseas vendors. 23 We may encounter problems at our manufacturing facilities or those of our subcontractors or otherwise experience manufacturing delays that could result in lost revenue.
Countries may also adopt other protectionist measures that could limit our ability to offer our products and services. In addition, decreases in the value of the U.S. dollar against foreign currencies, or significant price increase from these suppliers, could increase the cost of products we purchase from overseas vendors.
Any failure to sell as many systems as our business plan requires could also have a seriously detrimental impact on our results of operations, financial condition, liquidity position, and cash flow. 19 If we are unable to fulfill our current purchase orders and other commitments on a timely basis or at all, we may not be able to achieve future sales growth.
If hospitals do not widely adopt our systems or partnered products or if they decide that our systems are too expensive, we may never become profitable. Any failure to sell as many systems as our business plan requires could also have a seriously detrimental impact on our results of operations, financial condition, liquidity position, and cash flow.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. 33 Our cybersecurity risk management program includes: ● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise information technology (“IT”) environment; ● a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; ● the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security controls; ● cybersecurity awareness training for our employees, incident response personnel, and senior management; and ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.
Biggest changeOur cybersecurity risk management program includes: ● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise information technology (“IT”) environment; ● a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; ● the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security controls; ● cybersecurity awareness training for our employees, incident response personnel, and senior management; and ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.
We also maintain third party security procedures to identify, prioritize, assess, mitigate and remediate third party risks; however, we rely on the third parties we use to implement security programs commensurate with their risk, and we cannot ensure in all circumstances that their efforts will be successful.
We use these cybersecurity frameworks and information security standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. 37 We also maintain third party security procedures to identify, prioritize, assess, mitigate and remediate third party risks; however, we rely on the third parties we use to implement security programs commensurate with their risk, and we cannot ensure in all circumstances that their efforts will be successful.
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We use these cybersecurity frameworks and information security standards as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
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Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Company leased approximately 2,200 square feet of office space in Maple Grove, Minnesota, under a lease agreement that ended August 31, 2022. The Company also has leased office space in Amsterdam, The Netherlands through June 30, 2024. In addition, we lease an office space in Beijing, China under a lease agreement through November 29, 2026.
Biggest changeLease payments commenced on August 1, 2024, and the lease has a term of four years, with two renewal options of four years each. The Company also has leased office space in Amsterdam, The Netherlands through June 30, 2025. In addition, we lease an office space in Beijing, China under a lease agreement through November 29, 2026. 38
ITEM 2. PROPERTIES On March 1, 2021, the Company entered into an office lease agreement (the “Lease”) with Globe Building Company (the “Landlord”), under which the Company leases executive office space and manufacturing facilities of approximately 43,100 square feet of rentable space located at 710 N. Tucker Boulevard, St.
ITEM 2. PROPERTIES On March 1, 2021, the Company entered into an office lease agreement (the “Globe Lease”) with Globe Building Company, under which the Company leases executive office space and manufacturing facilities of approximately 43,100 square feet of rentable space located at 710 N. Tucker Boulevard, St.
Louis, Missouri (the “Premises”) that serves as the Company’s new principal executive and administrative offices and manufacturing facility. Lease payments commenced January 1, 2022 and the lease has a term of ten years, with two renewal options of five years each.
Louis, Missouri that serves as the Company’s new principal executive and administrative offices and manufacturing facility. Lease payments commenced January 1, 2022 and the lease has a term of ten years, with two renewal options of five years each. The new lease space includes approximately 23,000 square feet of office space and 20,100 square feet of demonstration and assembly space.
The new lease space includes approximately 23,000 square feet of office space and 20,100 square feet of demonstration and assembly space. The Company gained access to the Premises in the third quarter 2021 to begin constructing leasehold improvements. In the fourth quarter of 2021, the Company received an occupancy permit and relocated its operations to the new leased space.
The Company gained access to the Premises in the third quarter 2021 to begin constructing leasehold improvements. In the fourth quarter of 2021, the Company received an occupancy permit and relocated its operations to the new leased space.
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On July 31, 2024, the Company entered into a lease agreement (the “Talulla Lease”) with Talulla Group LLC, under which the Company will lease office space and manufacturing facilities of approximately 11,300 square feet of rentable space located at 12560 Fletcher Lane, Rogers, Minnesota that will continue to serve as the APT’s office and manufacturing facility.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeChanges in and Disagreements With Accountants on Accounting and Financial Disclosure 63 Item 9A. Controls and Procedures 63 Item 9B. Other Information 64 PART III Item 10. Directors and Executive Officers of the Registrant 64 Item 11. Executive Compensation 64 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 64 Item 13.
Biggest changeChanges in and Disagreements With Accountants on Accounting and Financial Disclosure 74 Item 9A. Controls and Procedures 74 Item 9B. Other Information 75 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 75 PART III Item 10. Directors and Executive Officers of the Registrant 75 Item 11. Executive Compensation 76 Item 12.
Item 4. Mine Safety Disclosures 34 Part II Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 34 Item 6. Selected Financial Data 35 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 8. Financial Statements and Supplementary Data 41 Item 9.
Item 4. Mine Safety Disclosures 39 Part II Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 39 Item 6. [Reserved] 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 Item 8. Financial Statements and Supplementary Data 48 Item 9.
Certain Relationships and Related Person Transactions and Director Independence 65 Item 14. Principal Accounting Fees and Services 65 PART IV Item 15. Exhibits and Financial Statement Schedules 65 2 PART I
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 76 Item 13. Certain Relationships and Related Person Transactions and Director Independence 76 Item 14. Principal Accounting Fees and Services 76 PART IV Item 15. Exhibits and Consolidated Financial Statement Schedules 76 2 PART I

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of February 29, 2024, there were approximately 419 stockholders of record of our common stock, although we believe that there is a significantly larger number of beneficial owners of our common stock. 34
Biggest changeAs of February 28, 2025, there were approximately 395 stockholders of record of our common stock, although we believe that there is a significantly larger number of beneficial owners of our common stock.

Item 7. Management's Discussion & Analysis

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

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Biggest changeForward-looking statements include, but are not limited to, discussions regarding our operating strategy, sales and marketing strategy, regulatory strategy, our industry generally, overall economic conditions, our financial condition, liquidity and capital resources, our results of operations, and the impact of the ongoing coronavirus (“COVID-19”) pandemic and our responses to it.
Biggest changeForward-looking statements include, but are not limited to, discussions regarding our operating strategy, sales and marketing strategy, regulatory strategy, industry, economic conditions, financial condition, liquidity, capital resources, results of operations, the impact of, and our response to the coronavirus (“COVID-19”) pandemic pandemics similar to the coronavirus (“COVID-19”) pandemic (or COVID-19 resurgences), and statements relating to our recent acquisition of APT including any benefits expected from the acquisition, potential strategic implications as a result of the acquisition, and the potential for achievement of the regulatory and commercial milestones that would trigger contingent payments in the transaction.
Our investments may include, at any time, a diversified portfolio of cash equivalents and short- and long-term investments in a variety of 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. The Company’s exposure to any individual corporate entity is limited by policy.
Our investments may include, at any time, a diversified portfolio of cash equivalents and short-term and long-term investments in a variety of 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. The Company’s exposure to any individual corporate entity is limited by policy.
We believe these benefits can be applicable in other endovascular indications where navigation through complex vasculature is often challenging or unsuccessful and generates significant x-ray exposure, and we are investing in research and development in these areas. Our primary products include the Genesis RMN System, the Odyssey Solution, and other related devices.
We believe these benefits can be applicable in other endovascular indications where navigation through complex vasculature is often challenging or unsuccessful and generates significant x-ray exposure, and we are investing in research and development in these areas. Our primary products include the Genesis RMN System, the GenesisX RMN System , the Odyssey Solution, and other related devices.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with our financial statements and notes thereto included in this report on Form 10-K. Operating results are not necessarily indicative of results that may occur in future periods.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto included in this report on Form 10-K. Operating results are not necessarily indicative of results that may occur in future periods.
Our hospital customers have also experienced challenges in sourcing supplies, such as catheters, needed to perform procedures. Such shortages have, and may continue to, put pressure on procedures and our disposable revenue. 36 Any disruption to the capital markets could negatively impact our ability to raise capital.
Our hospital customers have also experienced challenges in sourcing supplies, such as catheters, needed to perform procedures. Such shortages have, and may continue to, put pressure on procedures and our disposable revenue. Any disruption to the capital markets could negatively impact our ability to raise capital.
Consequently, revenues and/or orders resulting from sales of our robotic magnetic navigation system can vary significantly from one reporting period to the next. We have strategic relationships with technology leaders and innovators in the global interventional market.
Consequently, revenues and/or orders resulting from sales of our robotic magnetic navigation system can vary significantly from one reporting period to the next. 40 We have strategic relationships with technology leaders and innovators in the global interventional market.
We have received regulatory clearances and approvals necessary for us to market the Genesis RMN System in the U.S. and Europe, and we are in the process of obtaining necessary registrations for extending our markets in other countries.
We have received regulatory clearances and approvals necessary for us to market the Genesis RMN System in the U.S., Europe, and China, and we are in the process of obtaining necessary registrations for extending our markets in other countries.
Approval processes can be lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied. Not all products have and/or require regulatory clearance in all of the markets we serve.
Approval processes can be lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied. Not all products have and/or require regulatory clearance in all the markets we serve.
We have generally been able to conduct normal business activities albeit in a more deliberate manner than prior to the pandemic, including taking action to increase inventory levels and engaging in discussions with our vendors on contractual obligations, but we cannot guarantee that they will not be impacted more severely in the future.
We have generally been able to conduct normal business activities albeit in a more deliberate manner than prior to the COVID-19 pandemic, including taking action to increase inventory levels and engaging in discussions with our vendors on contractual obligations, but we cannot guarantee that they will not be impacted more severely in the future.
Revenue from services and software enhancements, service-type warranties, and the implied obligation to provide software enhancements are deferred and amortized over the service or update period, which is typically one year. Revenue related to services performed on a time-and-materials basis is recognized when performed. 38 The Company invoices its customers based on the billing schedules in its sales arrangements.
Revenue from services and software enhancements, service-type warranties, and the implied obligation to provide software enhancements are deferred and amortized over the service or update period, which is typically one year. Revenue related to services performed on a time-and-materials basis is recognized when performed. 43 The Company invoices its customers based on the billing schedules in its sales arrangements.
In addition, we do not engage in trading activities involving non-exchange traded contracts. As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could have arisen if we had engaged in these relationships. 40
In addition, we do not engage in trading activities involving non-exchange traded contracts. As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could have arisen if we had engaged in these relationships. 47
For market-based awards, stock-based compensation expense is recognized over the minimum service period regardless of whether or not the market target is probable of being achieved. The fair value of such awards is estimated on the grant date using Monte Carlo simulations.
For market-based awards, stock-based compensation expense is recognized over the minimum service period regardless of whether the market target is probable of being achieved. The fair value of such awards is estimated on the grant date using Monte Carlo simulations.
The Company believes the cash, and cash equivalents on hand as of December 31, 2023, will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date of the financial statements included in this Annual Report on Form 10-K, as well as for periods beyond that 12-month period.
The Company believes the cash, and cash equivalents on hand as of December 31, 2024, will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date of the consolidated financial statements included in this Annual Report on Form 10-K, as well as for periods beyond that 12-month period.
Through our strategic relationships with fluoroscopy system manufacturers, providers of catheters and electrophysiology mapping systems, and other parties, we offer our customers magnetically compatible x-ray systems and other accessory devices.
Through our strategic relationships with fluoroscopy system manufacturers, providers of catheters and electrophysiology mapping systems, and other parties, we offer our customers x-ray systems and other accessory devices.
You should not unduly rely on these forward-looking statements, which speak only as of the date on which they were made. They give our expectations regarding the future but are not guarantees. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.
You should not unduly rely on these forward-looking statements, which speak only as of the date on which they were made. They give our expectations regarding the future but are not guarantees. We undertake no obligation to update publicly or revise forward-looking statements, whether because of new information, future events or otherwise, unless required by law.
We promote our full suite of products in a typical hospital implementation, subject to regulatory approvals or clearances. This implementation requires a hospital to agree to an upfront capital payment and recurring payments. The upfront capital payment typically includes equipment and installation charges.
We promote our full suite of products necessary for a typical hospital implementation, subject to regulatory approvals or clearances. This implementation requires a hospital to agree to an upfront capital payment and recurring payments. The upfront capital payment typically includes equipment and installation charges.
Valuation of Inventory We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out (FIFO) method, or its current net realizable value. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete is based on expected future use.
Valuation of Inventory We value our inventory at the lower of: (1) the actual cost of our inventory, determined using the first-in, first-out (FIFO) method, or (2) its net realizable value. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete is based on expected future use.
The costs capitalized as contract acquisition costs included in prepaid expenses and other assets in the Company’s balance sheets were $0.1 million and $0.2 million as of December 31, 2023 and 2022, respectively. The Company did not incur any impairment losses during any of the periods presented.
The costs capitalized as contract acquisition costs included in prepaid expenses and other assets in the Company’s balance sheets were approximately $0.1 million as of December 31, 2024 and 2023. respectively. The Company did not incur any impairment losses during any of the periods presented.
This is designed to improve lab layout and procedure efficiency. The system also features a remote viewing and recording capability called Odyssey Cinema, which is an innovative solution that delivers synchronized content for optimized workflow, advanced care, and improved productivity. This tool includes an archiving capability that allows clinicians to store and replay entire procedures or segments of procedures.
The system also features a remote viewing and recording capability called Odyssey Cinema, which is an innovative solution that delivers synchronized content for optimized workflow, advanced care, and improved productivity. This tool includes an archiving capability that allows clinicians to store and replay entire procedures or segments of procedures.
Cash provided by investing activities for the year ended December 31, 2023, consisted of $19.8 million. The cash generated during the year ended December 31, 2023, was from proceeds received from the maturity of short-term investments of $20.1 million, partially offset by $0.4 million of cash paid for equipment, construction and design costs associated with our new facility .
The cash generated during the year ended December 31, 2023, was from proceeds received from the maturity of short-term investments of $20.1 million, partially offset by $0.4 million of cash paid for equipment, construction and design costs associated with our new facility. Net cash provided by financing activities .
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. As of December 31, 2023, we had approximately $14.7 million of backlog, consisting of outstanding purchase orders and other commitments for these systems.
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. As of December 31, 2024, we had approximately $15.2 million of backlog, consisting of outstanding purchase orders and other commitments for these systems.
Through these strategic relationships we provide compatibility between our robotic magnetic navigation system, x-ray systems, and digital imaging and 3D catheter location sensing technology, as well as disposable interventional devices. The maintenance of these strategic relationships, or the establishment of equivalent alternatives, is critical to our commercialization efforts.
Through these strategic relationships we provide compatibility with our robotic magnetic navigation system, integrated x-ray systems, digital imaging and 3D catheter location sensing technology, and compatible disposable interventional devices. The maintenance of these strategic relationships, or the establishment of equivalent alternatives, is critical to our commercialization efforts.
This report 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 Item 1A. “Risk Factors.” Forward-looking statements discuss matters that are not historical facts.
This report 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 Item 1A.
The net proceeds of any securities we sell under our shelf registration statement may be used for general corporate purposes, including among other possible uses, the acquisition of companies or businesses, repayment and refinancing of debt, working capital and capital expenditures. At this time, we have no plans to sell any such securities under our shelf registration statement.
The net proceeds of any securities we sell under our shelf registration statement may be used for general corporate purposes, including among other possible uses, the acquisition of companies or businesses, repayment and refinancing of debt, working capital and capital expenditures.
We generated approximately $0.1 million and $0.2 million of cash for the years ended December 31, 2023 and 2022, respectively. The cash generated in both periods was driven by the exercise of stock options and our employee stock purchase program.
We generated approximately $0.3 million and $0.1 million of cash for the years ended December 31, 2024 and 2023, respectively. The cash generated in both periods was driven by the exercise of stock options, net of issuance costs, and our employee stock purchase program.
While we cannot reliably estimate the ultimate duration of the impact or the severity of ongoing periodic resurgences of pandemic-related issues, we continue to anticipate periodic disruptions to our manufacturing operations, supply chains, procedures volumes, service activities, and capital system orders and placements, any of which could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
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 could have a material adverse effect on our business, financial condition, results of operations, or cash flows.
At December 31, 2023, we had working capital of approximately $20.0 million, compared to a working capital of approximately $29.0 million at December 31, 2022. The decrease in working capital was primarily driven by the net loss incurred during the year ended December 31, 2023.
At December 31, 2024, we had working capital of approximately $4.8 million, compared to a working capital of approximately $20.0 million at December 31, 2023. The decrease in working capital was primarily driven by the net loss incurred and acquisition of APT during the year ended December 31, 2024.
We also experienced reductions in demand for our disposable products as our healthcare customers (physicians and hospitals) re-prioritized the treatment of patients and diverted resources away from non-coronavirus areas, leading to the performance of fewer procedures in which our disposable products are used.
We also experienced reductions in demand for our disposable products as our healthcare customers (physicians and hospitals) re-prioritized the treatment of patients and diverted resources away from non-pandemic areas, leading to the performance of fewer procedures in which our disposable products are used. The impact varied widely over time by individual geography.
Liquidity The following table summarizes our cash flow by operating, investing and financing activities for years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Cash flow used in operating activities $ (9,139 ) $ (8,415 ) Cash flow provided by (used in) investing activities 19,765 (22,094 ) Cash flow provided by financing activities 81 220 Net cash used in operating activities .
Liquidity The following table summarizes our cash flow by operating, investing and financing activities for years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Cash flow used in operating activities $ (8,497 ) $ (9,139 ) Cash flow provided by investing activities 74 19,765 Cash flow provided by financing activities 297 81 Net cash used in operating activities .
Of the December 31, 2023 backlog, we expect approximately 81% to be recognized as revenue over the course of 2024. We had backlog of approximately $14.8 million as of December 31, 2022.
Of the December 31, 2024 backlog, we expect approximately 70% to be recognized as revenue over the course of 2025. We had backlog of approximately $14.7 million as of December 31, 2023.
We used approximately $9.1 million and $8.4 million of cash in operating activities during the years ended December 31, 2023 and 2022, respectively. The increase in cash used in operating activities was driven by the increased operating loss offset by changes in working capital in the current year period. Net cash provided by (used in) investing activities .
We used approximately $8.5 million and $9.1 million of cash in operating activities during the years ended December 31, 2024 and 2023, respectively. The decrease in cash used in operating activities was driven by the increased operating loss partially offset by changes in working capital. 46 Net cash provided by investing activities .
The Company’s system contracts generally do not provide a right of return. Systems are generally covered by a one-year service-type warranty or a one-year assurance-type warranty. Warranty costs for assurance-type warranty arrangements were approximately $0.5 million and $0.1 million for the years ended December 31, 2023 and 2022, respectively.
The Company’s system contracts generally do not provide a right of return. Systems may be covered by a one-year assurance-type warranty in lieu of a service-type warranty. Assurance-type warranty costs were less than $0.1 million for the year ended December 31, 2024 and approximately $0.5 million for the year ended December 31, 2023, respectively.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures. We review our estimates and judgments on an ongoing basis. We base our estimates and judgments on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures. We review our estimates and judgments on an ongoing basis.
Revenue from sales of systems increased from $6.8 million for the year ended December 31, 2022, to $8.7 million for the year ended December 31, 2023, an increase of approximately 28%, driven by increased system sales volumes in the current year period.
Revenue from sales of systems decreased from $8.7 million for the year ended December 31, 2023, to $8.6 million for the year ended December 31, 2024, a decrease of approximately 1%, driven by decreased system sales volumes in the current year period.
The decrease was primarily due to changes in product mix. Cost of revenue for systems sold increased from $5.8 million for the year ended December 31, 2022, to $8.1 million for the year ended December 31, 2023, primarily due to increased system sales volumes and period costs in the current year period.
Cost of revenue for systems sold decreased from $8.1 million for the year ended December 31, 2023, to $6.9 million for the year ended December 31, 2024, primarily due to decreased system sales volume and changes in product mix in the current year period.
Gross margin for systems decreased from $1.0 million for the year ended December 31, 2022, to $0.7 million for the year ended December 31, 2023. Cost of revenue for disposables, service, and accessories remained consistent at $3.9 million for years ended December 31, 2022, and 2023.
Gross margin for systems increased from $0.7 million for the year ended December 31, 2023, to $1.8 million for the year ended December 31, 2024. Cost of revenue for disposables, service, and accessories increased from $3.9 million for the year ended December 31, 2023, to $5.4 million for the year ended December 31, 2024.
For service contracts, the associated deferred revenue is generally recognized ratably over the service period. For system contracts, the associated deferred revenue is recognized when the remaining performance obligations are satisfied. See Note 2 to the financial statements for additional details on deferred revenue. The Company did not have any impairment losses on its contract assets for the periods presented.
For service contracts, the associated deferred revenue is generally recognized ratably over the service period. For system contracts, the associated deferred revenue is recognized when the remaining performance obligations are satisfied. See Note 2 to the consolidated financial statements for additional details on deferred revenue.
There can be no assurance that we will recognize such revenue in any particular period or at all because some of our purchase orders and other commitments are subject to contingencies that are outside our control.
There can be no assurance that we will recognize such revenue in any period or at all because some of our purchase orders and other commitments are subject to contingencies that are outside our control. These orders and commitments may be revised, modified or canceled, either by their express terms, because of negotiations or by project changes or delays.
Revenue from sales of disposable interventional devices, service and accessories decreased to $18.0 million for the year ended December 31, 2023, from $21.3 million for the year ended December 31, 2022, a decrease of approximately 15%.
Revenue from sales of disposable interventional devices, service and accessories increased to $18.3 million for the year ended December 31, 2024, from $18.0 million for the year ended December 31, 2023, an increase of approximately 1%.
The Niobe System, our prior generation robotic magnetic navigation system, the Odyssey Solution, Cardiodrive , e-Contact, and various disposable interventional devices have received regulatory clearances and approvals in the U.S., Europe, Canada, China, Japan and various other countries.
The GenesisX RMN System, the latest generation of the Genesis RMN System has received regulatory clearances and approvals in Europe, and we are in the process of obtaining necessary registrations in the US and other countries, The Niobe System, our prior generation robotic magnetic navigation system, the Odyssey Solution, Cardiodrive , e-Contact, and various disposable interventional 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.
In the past, we have experienced business disruptions, including travel restrictions on us and our third-party distributors, which negatively affected our complex sales, marketing, installation, distribution and service network relating to our products and services.
In addition to the aforementioned macroeconomic factors, the COVID-19 pandemic or similar occurrences may negatively affect demand for both our systems and our disposable products. In the past, we have experienced business disruptions, including travel restrictions on us and our third-party distributors, which negatively affected our complex sales, marketing, installation, distribution and service network relating to our products and services.
The federal net operating loss carryforwards generated prior to the 2018 tax year of approximately $98.8 million will expire between 2030 and 2037. The federal net operating losses generated in 2018 and thereafter will be carried forward indefinitely as a result to changes in the tax law following the Tax Cuts and Jobs Act.
The federal net operating losses generated in 2018 and thereafter will be carried forward indefinitely as a result of changes in the tax law following the Tax Cuts and Jobs Act (“TCJA”).
Actual results may differ from these estimates. We believe the following accounting policies are critical to the judgments and estimates we use in preparing our financial statements.
We base our estimates and judgments on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. We believe the following accounting policies are critical to the judgments and estimates we use in preparing our consolidated financial statements.
We have received the regulatory clearances and approvals that allow us to market the Vdrive and Vdrive Duo Systems with the V-CAS device in the U.S. and Canada. We are pursuing regulatory approvals for the Stereotaxis MAGiC catheter, a robotically-navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablation procedures, in various global geographies.
We have regulatory clearances and approvals that allow us to market the Vdrive and Vdrive Duo Systems with the V-CAS device in the U.S., Canada, and Europe. We have obtained the CE marking for us to market the Stereotaxis MAGiC catheter in Europe and are pursuing regulatory approval in the U.S. and various other global geographies.
The impact has varied widely over time by individual geography. In 2022, procedure volumes were challenged by periodic resurgences of COVID-19, ongoing hospital staffing issues and other factors.
For instance, in 2022, procedure volumes were challenged by periodic resurgences of COVID-19, ongoing hospital staffing issues and other factors.
There is substantial real-world evidence and clinical literature for Robotic Magnetic Navigation in electrophysiology. Hundreds of electrophysiologists at over one hundred hospitals globally have treated over 100,000 arrhythmia patients with our robotic technology. Clinical use of our technology has been documented in over 400 clinical publications.
Hundreds of electrophysiologists at over one hundred hospitals globally have treated over 150,000 arrhythmia patients with our robotic technology. Clinical use of our technology has been documented in over 500 clinical publications.
On March 26, 2023, it was announced that First-Citizens Bank & Trust Company would assume all of SVB’s deposits and loans as of March 27, 2023. During the periods presented, the Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities.
On March 26, 2023, it was announced that First-Citizens Bank & Trust Company would assume all of SVB’s deposits and loans as of March 27, 2023.
Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
During the periods presented, the Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities. 42 Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles.
The Company continues to experience difficulties with periodic worldwide supply chain disruptions, including shortages and inflationary pressures, and logistics delays which make it difficult for us to source parts and ship our products.
Risks and Uncertainties Future results of operations could be materially adversely impacted by macroeconomic and geopolitical factors. The Company continues to experience difficulties with periodic worldwide supply chain disruptions, including shortages and inflationary pressures, tariffs or other trade restrictions, and logistics delays which make it difficult for us to source parts and ship our products.
Results of Operations Comparison of the Years ended December 31, 2023 and 2022 Revenue . Revenue decreased from $28.1 million for the year ended December 31, 2022, to $26.8 million for the year ended December 31, 2023, a decrease of approximately 5%.
Results of Operations Comparison of the Years ended December 31, 2024 and 2023 Revenue . Revenue increased from $26.8 million for the year ended December 31, 2023, to $26.9 million for the year ended December 31, 2024, an increase of less than 1%.
This is achieved using externally applied magnetic fields that govern the motion of the working tip of the catheter, resulting in improved navigation, efficient procedures, and reduced x-ray exposure. The Odyssey Solution consolidates lab information onto one large integrated display, enabling physicians to view and control all the key information in the operating room.
This is achieved using externally applied magnetic fields that govern the motion of the working tip of the catheter, resulting in improved navigation, efficient procedures, and reduced x-ray exposure.
Cost of revenue from services and license fees are recorded when incurred. Stock-based Compensation Stock compensation 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, directors, and third-party consultants at the fair value of the grants.
See Note 3, Acquisitions for further discussion of the contingent consideration recorded as of the acquisition date and as of December 31, 2024. 44 Stock-based Compensation Stock compensation 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, directors, and third-party consultants at the fair value of the grants.
In the first quarter of 2023, the most recent COVID-19 resurgences in China continued to negatively impact our procedure volumes in that region, but as infections and hospitalization decreased, we saw a recovery of procedure volumes. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents and marketable securities.
In the first quarter of 2023, COVID-19 resurgences in China continued to negatively impact our procedure volumes in that region, but as infections and hospitalization decreased, we saw a recovery of procedure volumes with no further impacts in the current year.
If the capital markets are disrupted for an extended period of time and we need to raise additional capital, such capital may not be available on acceptable terms, or at all.
If the capital markets are disrupted for an extended period and we need to raise additional capital, such capital may not be available on acceptable terms, or at all. Disruptions to the capital markets and other financing sources could also negatively impact our hospital customers’ ability to raise capital or otherwise obtain financing to fund their operations and capital projects.
Research and development expenses decreased from $10.6 million for the year ended December 31, 2022, to $10.3 million for the year ended December 31, 2023, a decrease of approximately 3%. This decrease was primarily due to project timing in the current year period. Sales and Marketing Expense.
Research and development expenses decreased from $10.3 million for the year ended December 31, 2023, to $9.8 million for the year ended December 31, 2024, a decrease of approximately 5%. This decrease was primarily driven by the reversal of an accrued regulatory license fee. Sales and Marketing Expense.
Many of our hospital customers, for whom the purchase of our system involves a significant capital purchase which may be part of a larger construction project at the customer site (typically the construction of a new building), may themselves be under economic pressures.
A material reduction or interruption in any of our manufacturing processes or a substantial increase in costs would have a material adverse effect on our business, operating results, and financial condition. 41 Many of our hospital customers, for whom the purchase of our system involves a significant capital purchase which may be part of a larger construction project at the customer site (typically the construction of a new building), may themselves be under economic pressures.
These orders and commitments may be revised, modified or canceled, either by their express terms, as a result of negotiations or by project changes or delays. In addition, the sales cycle for the robotic magnetic navigation system is lengthy and generally involves construction or renovation activities at customer sites.
In addition, the sales cycle for the robotic magnetic navigation system is lengthy and generally involves construction or renovation activities at customer sites.
Cardiac ablation has become a well-accepted therapy for arrhythmias and a multi-billion-dollar medical device market with expectations for substantial long-term growth. We have shared our aspiration and a product strategy to expand the clinical focus of our technology to several additional endovascular indications including coronary, neuro, and peripheral interventions.
Cardiac ablation has become a well-accepted therapy for arrhythmias and a multi-billion-dollar medical device market with expectations for substantial long-term growth.
This information can be accessed from locations throughout the hospital local area network and over the global Odyssey Network providing physicians with a tool for clinical collaboration, remote consultation, and training. 35 We have arrangements with fluoroscopy system manufacturers to provide such systems in a bundled purchase offer for hospitals establishing robotic interventional operating rooms.
This information can be accessed from locations throughout the hospital local area network and over the global Odyssey Network providing physicians with a tool for clinical collaboration, remote consultation, and training. We are actively developing the next generation imaging and collaboration solutions with Synchrony and SynX .
Sales and marketing expenses remained consistent with $12.4 million for the year ended December 31, 2023, as compared to $12.3 million for the year ended December 31, 2022, an increase of less than 1%. General and Administrative Expense . General and administrative expenses include finance, information systems, legal, and general management expenses.
Sales and marketing expenses remained consistent at $12.4 million for the years ended December 31, 2024 and 2023. General and Administrative Expense . General and administrative expenses include finance, information systems, legal, and general management expenses, amortization of acquisition related intangible assets, and the gain or loss associated with the remeasurement of the acquisition related contingent consideration.
As of December 31, 2023, we had gross federal net operating loss carryforwards of approximately $127.4 million. The federal net operating loss carryforwards reflect accumulated book losses reduced for the 2013 IRC Section 382 ownership change limitation of $213.7 million, book/tax differences and expiration of unused carryforwards.
The federal net operating loss carryforwards reflect accumulated book losses reduced for the 2013 IRC Section 382 ownership change limitation of $188.0 million, book/tax differences and expiration of carryforwards. The federal net operating loss carryforwards generated prior to the 2018 tax year of approximately $98.8 million will expire between 2030 and 2037.
As of December 31, 2023, we had gross state net operating loss carryforward of approximately $40.2 million which will expire at various dates between 2024 and 2042 if not utilized. Liquidity and Capital Resources Liquidity refers to the liquid financial assets available to fund our business operations and pay for near-term obligations.
As of December 31, 2024, we had gross state net operating loss carryforward of approximately $38.1 million which will expire at various dates between 2025 and 2043 if not utilized.
Cost of revenue increased from $9.7 million for the year ended December 31, 2022, to $11.9 million for the year ended December 31, 2023, an increase of approximately 23%. As a percentage of our total revenue, overall gross margin was 56% and 66% for the years ended December 31, 2023, and December 31, 2022, respectively.
As a percentage of our total revenue, overall gross margin was 54% and 56% for the years ended December 31, 2024, and December 31, 2023, respectively. The decrease was primarily due to changes in product mix.
General and administrative expenses decreased from $14.4 million for the year ended December 31, 2022, to $14.1 million for the year ended December 31, 2023, a decrease of approximately 2%. This decrease was primarily driven by lower administrative expenses, professional service fees and reduced currency loss in the current year period. Interest Income.
This increase was primarily driven by the remeasurement of the contingent consideration, higher administrative expenses and professional service fees in the current year period, and amortization of the acquisition related intangible assets. Interest Income. Net interest income was $0.7 million for the year ended December 31, 2024, and $1.1 million for the year ended December 31, 2023.
Capital Resources As of December 31, 2023 and 2022, the Company did not have any debt.
Since inception, we have financed our operations primarily through cash generated by operations and proceeds from our debt and stock offerings. Capital Resources As of December 31, 2024 and 2023, the Company did not have any debt.
Gross margin for disposables, service and accessories was 79% for the current year period compared to 82% for the year ended December 31, 2022, driven by changes in product mix and higher costs under service contracts in the current year period. Research and Development Expense .
Gross margin for disposables, service and accessories was 70% for the current year period compared to 79% for the year ended December 31, 2023, primarily driven by acquisition related accounting which required the valuation of acquired finished good inventory to fair value. 45 Research and Development Expense .
There are no guarantees that any existing strategic relationships will continue, and efforts are ongoing to ensure the availability of compatible systems and devices and/or equivalent alternatives. For example, prior to the expiration of our agreement Biosense Webster on December 31. 2022, we received quarterly royalty payments based on net revenues from sales of co-developed catheters with Biosense Webster.
There are no guarantees that any existing strategic relationships will continue, and efforts are ongoing to ensure the availability of compatible systems and devices and/or equivalent alternatives. We cannot provide assurance as to the timeline of the ongoing availability of such compatible systems or our ability to obtain equivalent alternatives on competitive terms or at all.
Income Taxes Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. Accordingly, net deferred tax assets have been fully offset by valuation allowances as of December 31, 2023, and December 31, 2022, to reflect these uncertainties.
Accordingly, net deferred tax assets have been fully offset by valuation allowances as of December 31, 2024, and December 31, 2023, to reflect these uncertainties. As of December 31, 2024, we had gross federal net operating loss carryforwards arising from our operations of approximately $134.9 million.
These liquid financial assets consist of cash, cash equivalents, and investments. 39 As of December 31, 2023, our accumulated deficit was $537.7 million with cash and cash equivalents of $20.6 million, inclusive of restricted cash. Since inception, we have financed our operations primarily through cash generated by operations and proceeds from our debt and stock offerings.
Liquidity and Capital Resources Liquidity refers to the liquid financial assets available to fund our business operations and pay for near-term obligations. These liquid financial assets consist of cash, cash equivalents, and investments. As of December 31, 2024, our accumulated deficit was $561.7 million with cash and cash equivalents of $12.4 million, inclusive of restricted cash.
These are single-plane, full-power x-ray systems and include the c-arm and powered table. The combination of RMN Systems with our partnered x-ray systems reduces the cost of acquisition, the ongoing cost of ownership, and the complexity of installation of a robotic electrophysiology practice.
An integrated x-ray system is critical for customer adoption of RMN systems, and when offered as a bundled purchase offer with the RMN System, may reduce the cost of acquisition, the ongoing cost of ownership, and the complexity of installation of a robotic electrophysiology practice.
Removed
Such royalty payments represented 7% of revenue for the year ended December 31, 2022. We cannot provide assurance as to the timeline of the ongoing availability of such compatible systems or our ability to obtain equivalent alternatives on competitive terms or at all. Risks and Uncertainties Future results of operations could be materially adversely impacted by macroeconomic and geopolitical factors.
Added
“Risk Factors,” as well as various impacts related to our previously announced acquisition of Access Point Technologies EP, Inc. (“APT”). Forward-looking statements discuss matters that are not historical facts.
Removed
A material reduction or interruption in any of our manufacturing processes or a substantial increase in costs would have a material adverse effect on our business, operating results, and financial condition.
Added
We have shared our aspiration and a product strategy to expand the clinical focus of our technology to several additional endovascular indications including coronary, neuro, and peripheral interventions. 39 There is substantial real-world evidence and clinical literature for Robotic Magnetic Navigation in electrophysiology.
Removed
Disruptions to the capital markets and other financing sources could also negatively impact our hospital customers’ ability to raise capital or otherwise obtain financing to fund their operations and capital projects.
Added
The GenesisX RMN System, the latest generation of the Genesis RMN System, is designed to significantly enhance the accessibility of Robotic Magnetic Navigation by eliminating the lengthy construction cycle necessary to install prior generation RMN systems.
Removed
In addition to the aforementioned macroeconomic factors, the COVID-19 pandemic or similar occurrences may continue to negatively affect demand for both our systems and our disposable products.
Added
The Odyssey Solution consolidates lab information onto one large integrated display, enabling physicians to view and control all the key information in the operating room. This is designed to improve lab layout and procedure efficiency.
Removed
Investments Valuation Our investments may include, at any time, a diversified portfolio of cash equivalents and short- and long-term investments in a variety of 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.
Added
We pursue arrangements with fluoroscopy system manufacturers to provide such systems in a bundled purchase offer for hospitals establishing robotic interventional operating rooms.

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