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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 001-36159

STEREOTAXIS, INC.

(Exact name of the Registrant as Specified in its Charter)

delaware

94-3120386

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification Number)

710 North Tucker Boulevard, Suite 110

St. Louis, MO 63101

(Address of Principal Executive Offices including Zip Code)

(314) 678-6100

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		STXS		NYSE American LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T “See 232.405 of this Chapter” during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated Filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s common stock on July 31, 2025, was 90,653,769.

STEREOTAXIS, INC.

INDEX TO FORM 10-Q

		Page

Part I Financial Information

Item 1.	Consolidated Financial Statements (unaudited)	3-7
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity	5-6
	Consolidated Statements of Cash Flows	7
	Notes to Financial Statements	8-22
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23-29
Item 3.	[Reserved]	29
Item 4.	Controls and Procedures	29

Part II Other Information

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults upon Senior Securities	30
Item 4.	[Reserved]	30
Item 5.	Other Information	30
Item 6.	Exhibits	30

Signatures		31

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

STEREOTAXIS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)	June 30, 2025			December 31, 2024
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	6,967		$	12,217
Restricted cash - current		-			219
Accounts receivable, net of allowance of $582 at 2025 and 2024		4,393			3,824
Inventories, net		9,608			8,331
Prepaid expenses and other current assets		936			1,848
Total current assets		21,904			26,439
Property and equipment, net		3,284			3,573
Goodwill		3,764			3,764
Intangible assets, net		6,899			7,358
Operating lease right-of-use assets		5,204			5,483
Prepaid and other non-current assets		118			107
Total assets	$	41,173		$	46,724

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,730		$	5,668
Accrued liabilities		1,731			2,922
Deferred revenue		5,843			6,804
Current contingent consideration		5,839			5,638
Current portion of operating lease liabilities		605			570
Total current liabilities		20,748			21,602
Long-term deferred revenue		1,057			2,064
Long term contingent consideration		6,384			6,126
Operating lease liabilities		5,122			5,436
Other liabilities		1,110			64
Total liabilities		34,421			35,292

Series A - Convertible preferred stock:
Convertible preferred stock, Series A, par value $0.001; 10,000,000 shares authorized;
21,233 and 21,458 shares outstanding at 2025 and 2024, respectively		5,296			5,352
Convertible preferred stock, Series A, par value $0.001; 10,000,000 shares authorized;21,233 and 21,458 shares outstanding at 2025 and 2024, respectively		5,296			5,352

Stockholders’ equity:
Common stock, par value $0.001; 300,000,000 shares authorized,
86,004,864 and 85,326,557 shares issued at 2025 and 2024, respectively		86			85
Common stock, par value $0.001; 300,000,000 shares authorized,86,004,864 and 85,326,557 shares issued at 2025 and 2024, respectively		86			85
Additional paid in capital		572,950			567,926
Treasury stock, 4,015 shares at 2025 and 2024		(206	)		(206	)
Accumulated deficit		(571,374	)		(561,725	)
Total stockholders’ equity		1,456			6,080
Total liabilities and stockholders’ equity	$	41,173		$	46,724

See accompanying notes.

STEREOTAXIS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

		2025		2024				2025		2024
	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share amounts)	2025			2024			2025			2024
Revenue:
Systems	$	3,038		$	240		$	5,002		$	2,852
Disposables, service and accessories		5,760			4,262			11,268			8,530
Total revenue		8,798			4,502			16,270			11,382

Cost of revenue:
Systems		2,366			187			4,033			2,087
Disposables, service and accessories		1,853			1,002			3,594			2,016
Total cost of revenue		4,219			1,189			7,627			4,103

Gross margin		4,579			3,313			8,643			7,279

Operating expenses:
Research and development		1,777			2,273			4,127			4,516
Sales and marketing		3,269			3,301			6,417			6,304
General and administrative		4,002			3,760			8,497			7,226
Other		(492	)		-			(492	)		-
Total operating expenses		8,556			9,334			18,549			18,046
Operating loss		(3,977	)		(6,021	)		(9,906	)		(10,767	)

Other income (expense)		(1	)		(3	)		(1	)		(3	)
Interest income, net		152			191			258			430
Net loss	$	(3,826	)	$	(5,833	)	$	(9,649	)	$	(10,340	)

Cumulative dividend on convertible preferred stock		(318	)		(325	)		(632	)		(656	)
Net loss attributable to common stockholders	$	(4,144	)	$	(6,158	)	$	(10,281	)	$	(10,996	)

Net loss per share attributable to common stockholders:
Basic	$	(0.05	)	$	(0.07	)	$	(0.12	)	$	(0.13	)
Diluted	$	(0.05	)	$	(0.07	)	$	(0.12	)	$	(0.13	)

Weighted average number of common shares and equivalents:
Basic		87,952,086			84,570,738			87,861,231			84,025,335
Diluted		87,952,086			84,570,738			87,861,231			84,025,335

See accompanying notes.

STEREOTAXIS, INC.

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Unaudited)

Three Months Ended June 30, 2024

	Shares			Amount			Shares		Amount		Amount		Amount			Amount			Amount
(in thousands, except share amounts)	Convertible Preferred Stock Series A (Mezzanine)						Common Stock				Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares			Amount			Shares		Amount		Amount		Amount			Amount			Amount
Balance at March 31, 2024		21,908		$	5,464			82,132,777	$	82	$	556,878	$	(206	)	$	(542,187	)	$	14,567
Stock issued for the exercise of stock options					-			2,213		-		4		-						4
Stock-based compensation					-			342,901		-		2,538		-						2,538
Components of net loss					-					-				-			(5,833	)		(5,833	)
Employee stock purchase plan					-			9,634		-		24		-						24
Preferred stock conversion		(225	)		(56	)		502,634		1		55		-						56
Balance at June 30, 2024		21,683		$	5,408			82,990,159	$	83	$	559,499	$	(206	)	$	(548,020	)	$	11,356

Three Months Ended June 30, 2025

(in thousands, except share amounts)	Convertible Preferred Stock Series A (Mezzanine)				Common Stock				Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Amount		Shares		Amount		Amount		Amount			Amount			Amount

Balance at March 31, 2025		21,233	$	5,296		85,983,677	$	86	$	570,548	$	(206	)	$	(567,548	)	$	2,880
Stock issued for the exercise of stock options				-		1,500		-		2		-						2
Stock-based compensation				-				-		2,367		-						2,367
Components of net loss				-				-				-			(3,826	)		(3,826	)
Employee stock purchase plan				-		19,687		-		33		-						33
Balance at June 30, 2025		21,233	$	5,296		86,004,864	$	86	$	572,950	$	(206	)	$	(571,374	)	$	1,456

See accompanying notes.

STEREOTAXIS, INC.

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Unaudited)

Six Months Ended June 30, 2024

	Shares			Amount			Shares		Amount		Amount		Amount			Amount			Amount
(in thousands, except share amounts)	Convertible Preferred Stock Series A (Mezzanine)						Common Stock				Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares			Amount			Shares		Amount		Amount		Amount			Amount			Amount
Balance at December 31, 2023		22,358		$	5,577			80,949,697	$	81	$	554,148	$	(206	)	$	(537,680	)	$	16,343
Stock issued for the exercise of stock options					-			11,763		-		12		-						12
Stock-based compensation					-			504,375		-		5,127		-						5,127
Components of net loss					-					-				-			(10,340	)		(10,340	)
Employee stock purchase plan					-			23,022		-		46		-						46
Preferred stock conversion		(675	)		(169	)		1,501,302		2		166		-						168
Balance at June 30, 2024		21,683		$	5,408			82,990,159	$	83	$	559,499	$	(206	)	$	(548,020	)	$	11,356

Six Months Ended June 30, 2025

(in thousands, except share amounts)	Convertible Preferred Stock Series A (Mezzanine)						Common Stock				Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares			Amount			Shares		Amount		Amount		Amount			Amount			Amount

Balance at December 31, 2024		21,458			5,352			85,326,557	$	85	$	567,926	$	(206	)	$	(561,725	)	$	6,080
Balance		21,458			5,352			85,326,557	$	85	$	567,926	$	(206	)	$	(561,725	)	$	6,080
Stock issued for the exercise of stock options					-			5,603		-		3		-						3
Stock-based compensation					-			120,908		-		4,902		-						4,902
Components of net loss					-					-				-			(9,649	)		(9,649	)
Employee stock purchase plan					-			33,741		-		63		-						63
Preferred stock conversion		(225	)		(56	)		518,055		1		56		-						57
Balance at June 30, 2025		21,233		$	5,296			86,004,864	$	86	$	572,950	$	(206	)	$	(571,374	)	$	1,456
Balance		21,233		$	5,296			86,004,864	$	86	$	572,950	$	(206	)	$	(571,374	)	$	1,456

See accompanying notes.

STEREOTAXIS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)	2025			2024
	Six Months Ended June 30,
(in thousands)	2025			2024
Cash flows from operating activities
Net loss	$	(9,649	)	$	(10,340	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		312			276
Amortization of intangibles		459			-
Loss on revaluation of contingent consideration		458			-
Non-cash lease expense		1			6
Stock-based compensation		4,902			5,127
Changes in operating assets and liabilities:
Accounts receivable		(569	)		1,040
Inventories		(1,277	)		(858	)
Prepaid expenses and other current assets		913			(166	)
Other assets		(11	)		21
Accounts payable		1,062			946
Accrued liabilities		(145	)		(274	)
Deferred revenue		(1,968	)		(1,223	)
Other liabilities		-			11
Net cash used in operating activities		(5,512	)		(5,434	)
Cash flows from investing activities
Purchase of property and equipment		(23	)		(22	)
Net cash used in investing activities		(23	)		(22	)
Cash flows from financing activities
Proceeds from issuance of stock, net of issuance costs		66			58
Net cash provided by financing activities		66			58
Net decrease in cash, cash equivalents, and restricted cash		(5,469	)		(5,398	)
Cash, cash equivalents, and restricted cash at beginning of period		12,436			20,562
Cash, cash equivalents, and restricted cash at end of period	$	6,967		$	15,164

Supplemental disclosure of cash flow information:
Purchase of property and equipment included in accounts payable	$	-		$	10

Reconciliation of cash, cash equivalents, and restricted cash to consolidated balance sheet as of June 30th:
Cash and cash equivalents	$	6,967		$	14,683
Restricted cash - current		-			481
Total cash, cash equivalents, and restricted cash	$	6,967		$	15,164

See accompanying notes.

STEREOTAXIS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Notes to Consolidated Financial Statements

In this report, “Stereotaxis”, the “Company”, “Registrant”, “we”, “us”, and “our” refer to Stereotaxis, Inc. and its wholly owned subsidiaries. GenesisX RMN, Genesis RMN^®, Niobe^®, Navigant^®, Synchrony, SynX, Odyssey^®, Odyssey Cinema^™, MAGiC ™, EMAGIN, Map-iT™, QuikCAS^™,Cardiodrive^®, Vdrive^®, Vdrive Duo^™, V-CAS^™, V-Loop^™, V-Sono^™, and NuVizion are trademarks of Stereotaxis, Inc. All other trademarks that appear in this report are the property of their respective owners.

1. Description of Business

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. 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. 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.

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. Robotic Magnetic Navigation is designed to enable physicians to complete more complex interventional procedures with greater success and safety by providing image-guided delivery of catheters through the blood vessels and chambers of the heart to treatment sites. This is achieved using externally applied computer-controlled magnetic fields that govern the motion of the working tip of the catheter, resulting in improved navigation. The more flexible atraumatic design of catheters driven using magnetic fields may reduce the risk of patient harm and other adverse events. Performing the procedure from a control cockpit enables physicians to complete procedures in a safe location protected from x-ray exposure, with greater ergonomics, and improved efficiency. We believe these benefits can be applicable in other endovascular indications where navigation through complex vasculature is often 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. 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.

The Genesis RMN System is designed to enable physicians to complete more complex interventional procedures by providing image-guided delivery of catheters through the blood vessels and chambers of the heart to treatment sites. 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 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.

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. 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. 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.

We pursue arrangements with fluoroscopy system manufacturers to provide such systems in a bundled purchase offer for hospitals establishing robotic interventional operating rooms. An integrated x-ray system is critical for customer adoption of RMN systems, and when offered as a bundled purchase with the RMN System, it may reduce the cost of acquisition, the ongoing cost of ownership, and the complexity of installation of a robotic electrophysiology practice.

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. The recurring payments typically include disposable costs for each procedure, equipment service costs beyond the warranty period, and ongoing software updates. In hospitals where our full suite of products has not been implemented, equipment upgrade or expansion can be implemented upon purchasing of the necessary upgrade or expansion.

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 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. 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 regulatory clearances and approvals that allow us to market the SynX collaboration solution in the U.S. and Europe. We have obtained the CE marking for us to market the Stereotaxis MAGiC catheter in Europe and are pursuing regulatory approvals 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.

Not all products have and/or require regulatory clearance in all the markets we serve. Please refer to “Regulatory Approval” in Item 1 for a description of the regulatory clearance, licensing, and/or approvals we currently have or are pursuing.

We have strategic relationships with technology leaders and innovators in the global interventional market. 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. 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.

On July 31, 2024, the Company completed its acquisition of all the shares of capital stock of Access Point Technologies EP, Inc., a Minnesota corporation (“APT”), from APT Holding Company, Inc., a Minnesota corporation. APT, based in Rogers, Minnesota, designs, manufactures, and commercializes a portfolio of differentiated high-quality diagnostic catheters, branded as Map-iT catheters, used during cardiac ablation procedures that are commercially available across key global geographies.

The integration with APT provides in-house catheter development, manufacturing expertise and specialized knowledge that will further Stereotaxis’ innovation efforts in developing a broad family of interventional devices navigated by our robots within electrophysiology and across a range of endovascular procedures.

Stereotaxis has continued to advance development and regulatory approval of its Robotic Magnetic Navigation systems and proprietary interventional devices. In the third quarter of 2024, we attained CE Mark for the GenesisX RMN System and are working towards FDA 510(k) regulatory clearance within the United States. This latest generation of the 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. In November 2024, the Genesis RMN system, our current generation system, received regulatory approval from China’s National Medical Products Administration (NMPA), and our partner MicroPort received the regulatory clearances for their integrated mapping system and novel ablation catheter making available the most current advanced minimally invasive robotic technology to physicians and patients in China.

The Stereotaxis MAGiC catheter, a robotically navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablation procedures, obtained the CE marking in Europe during the first quarter, 2025, and the MAGiC Sweep™ catheter, the first robotically navigated high-density EP mapping catheter, received U.S. Food and Drug Administration (FDA) 510(k) clearance in July 2025. We are in the process of obtaining necessary approvals for both devices in other geographies. We are also currently seeking regulatory clearances for the EMAGIN 5F catheter guide designed to robotically navigate tortuous venous and arterial vasculature.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of Stereotaxis, Inc. have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all the disclosures required by GAAP for complete consolidated financial statements. In the opinion of management, they include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Operating results for the six-month period ended June 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or for future operating periods.

These interim consolidated financial statements and the related notes should be read in conjunction with the annual consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (SEC) on March 14, 2025.

Risks and Uncertainties

Tariff and Trade Regulation Update

The global tariff environment remains fluid and, particularly the potential expiration on November 12, 2025, of the reciprocal U.S.-China tariffs, the proposed increase in the universal baseline tariff, and the outcome of U.S. negotiations with the EU, could materially affect our cost structure, gross margins, and success and timing of product launches.

Other Risks and Uncertainties

Future results of operations and liquidity could be materially adversely impacted by uncertainties in macroeconomic and geopolitical factors in both the U.S. and globally including continuing introduction of new or modification of existing tariffs or trade barriers, supply chain challenges, inflationary pressures, elevated interest rates, and disruptions in commodity markets stemming from conflicts, such as those between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran. 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. We continue to evaluate the macroeconomics business environment, taking action to increase inventory levels where appropriate and engaging in discussions with our vendors on contractual obligations, but we cannot guarantee that our business activities will not be impacted more severely in the future. Our suppliers and contract manufacturers have experienced, and may continue to experience, similar difficulties. If our manufacturing operations or supply chains are materially interrupted, it may not be possible for us to timely manufacture or service our products at required levels, or at all. Changes in economic conditions, tariff escalation, retaliatory measures and new import restrictions could lead to higher inflation than previously experienced or expected, which could, in turn create supply shortages as companies seek alternative sources of supply and adjust their logistics and transportation routes. As a result of these factors, we may be unable to raise the prices of our products sufficiently to keep up with the rate of inflation, especially tariff induced inflation. 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.

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 similar pressures. Hospitals continue to experience challenges with staffing and cost pressures as supply chain constraints and inflation drive up operating costs. Hospitals may also be adversely affected by the liquidity concerns driven by elevated interest rates and the broader macroeconomic environment. These factors could cause delays or cancellations of current purchase orders and other commitments and may exacerbate the long and variable sales and installation cycles for our robotic magnetic navigation systems. 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. Delays in order placement, cancellation of existing orders and reduced demand or availability of our disposable products all would have a material adverse effect on our business, financial condition, and results of operations.

Any disruption to the capital markets could negatively impact our ability to raise capital. 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. Such could result in delayed spending on current projects, a longer sales cycle for new projects where a large capital commitment is required, and decreased demand for our disposable products as well as an increased risk of customer defaults or delays in payments for our system installations, service contracts and disposable products.

In addition to the macroeconomic factors, occurrences similar to the COVID-19 pandemic 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. 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. For instance, in 2022, procedure volumes were challenged by periodic resurgences of COVID-19, ongoing hospital staffing issues and other factors. 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 year. Significant decreases to our capital or recurring revenues could have a material adverse effect on our business, operating results, and financial condition. We continue to anticipate periodic disruptions to our manufacturing operations, supply chains, procedures volumes, service activities, and capital system orders and placements relating to new or ongoing periodic resurgences of pandemic-related issues, any of which could have a material adverse effect on our business, financial condition, results of operations, or cash flows

As a result of the acquisition of APT EP in July, 2024, we are managing APT’s ongoing business of manufacturing, commercializing, development and sales of APT’s catheters and related products and services. The manufacturing process of catheters is complex, highly technical, and our prior experience in this field is dated. The process can be subject to periodic worldwide supply chain disruptions, including labor 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. We may require a higher level of overhead than currently anticipated. Our ability to successfully manage this new aspect of our business will depend, in part, upon management’s ability to design and implement strategic initiatives that address not only the integration of APT into us, but also the increased scope of the combined business with its associated increased costs and complexity. We are still integrating the businesses and implementing safeguards to minimize any negative impacts on our financial position, results of operations and cash flows post-acquisition.

Since our inception, we have generated significant losses. As of June 30, 2025, we have incurred cumulative net losses of approximately $571.4 million. In 2025, the Company plans to advance adoption of its robotic magnetic navigation systems and its propriety devices in those markets where regulatory clearance has been received and to work with regulatory approval authorities in those geographies where approval is pending, with the goal of furthering clinical adoption and new system placements. We expect to incur additional losses in 2025 as we continue the development and commercialization of our products, conduct our research and development activities, advance new products into clinical development from our existing research programs and fund additional sales and marketing initiatives. During the remainder of 2025, we will continue to monitor the impact of the macroeconomic environment on our project timing, regulatory approvals, customer and supplier operations, and our operating results. Until we can generate significant cash flow from our operations, we expect to continue to fund our operations with cash resources primarily generated from the proceeds of our past and future public offerings, and private sales of our equity securities. We cannot accurately predict the timing and amount of our utilization of capital, which will depend on several factors outside of our control.

While we believe our existing cash and cash equivalents, including the proceeds from our July 2025 equity raise, will be sufficient to fund our operating expenses and capital equipment requirements, in light of the macroeconomic environment, we cannot guarantee that we will not need additional funding in the future. We will continue to explore financing alternatives, and we cannot assure you that additional financing will be available on acceptable terms or that such financing will not be dilutive to our stockholders. If adequate funds are not available to us, we could be required to delay development or commercialization of new products, to license to third parties the rights to commercialize products or technologies that we would otherwise seek to commercialize ourselves, or to reduce the sales, marketing, customer support or other resources devoted to our products, any of which could have a material adverse effect on our business, financial condition, and operational results. In addition, we could be required to cease operations.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market instruments, and other highly liquid investments with original maturities of three months or less from the date of purchase. Accrued interest receivable on money market instruments, included in other current assets, was less than $0.1 million as of June 30, 2025, and December 31, 2024.

Restricted Cash

Restricted cash primarily consists of cash that the Company is obligated to maintain in accordance with contractual obligations. The Company did not have any restricted cash as of June 30, 2025. The company’s restricted cash was $0.2 million at December 31, 2024.

Investments

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. As of June 30, 2025, and December 31, 2024, the Company had no short-term investments.

Amortized cost of U.S. treasury securities and marketable debt securities are based on the Company’s purchase price adjusted for accrual of discount, or amortization of premium, and recognition of impairment charges, if any. The amortized cost of securities the Company purchases at a discount or premium will equal the face or par value at maturity or the call date, if applicable. Stated interest on investments is reported as income when earned and is adjusted for amortization or accretion of any premium or discount.

The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero-loss expectation for U.S. treasury and U.S. government agency securities. The Company regularly reviews the securities using the probability of default method and analyzes the unrealized loss positions and evaluates the current expected credit loss by considering factors such as credit ratings, issuer-specific factors, current economic conditions, and reasonable and supportable forecasts. The Company did not have any material expected credit losses on investments or material expected credit losses on accrued interest related to investments during the six months ended June 30, 2025, or year ended December 31, 2024.

Fair Value Measurements

Financial instruments consist of cash and cash equivalents, restricted cash, investments, accounts receivable, and accounts payable.

The Company measures certain financial assets and liabilities at fair value on a recurring basis. General accounting principles for fair value measurement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (“Level 1”) and the lowest priority to unobservable inputs (“Level 3”). The three levels of the fair value hierarchy are described below:

Level 1:		Values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:		Values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or other model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3:		Values are generated from model-based techniques that use significant assumptions not observable in the market.

As of June 30, 2025, and December 31, 2024, financial assets classified as Level 2 consisted of money market funds. The Company reviews trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data. This approach results in the Level 2 classification of these securities within the fair value hierarchy.

As of June 30, 2025, and December 31, 2024, financial liabilities classified as Level 3 consisted of the contingent consideration due to the APT acquisition. The Company reviews the change in the fair value of contingent consideration, which is performed by a third-party valuation firm. See Note 3 for further information regarding the valuation methods used by the third-party valuation firm. The approach results in the Level 3 classification of the contingent consideration within the fair value hierarchy.

Accounts Receivable, Contract Assets, and Allowance for Credit Losses

Accounts receivable primarily include amounts due from hospitals and distributors for acquisition of magnetic systems, associated disposable device sales and service contracts, net of allowances for expected credit losses. Credit is granted on a limited basis, with balances due generally within 30 days of billing. Contract assets primarily represent the difference between the revenue that was earned but not billed on service contracts and revenue from system contracts that was recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. The Company reports accounts receivable and contract assets net of an allowance for expected credit losses in accordance with Accounting Standards Codification Topic 326, Financial Instruments – Credit Losses (“ASC 326”). The provision for credit loss is based upon management’s assessment of historical and expected net collections considering business and economic conditions and other collection indicators. We assess collectability by reviewing the accounts receivable aging schedule on an aggregated basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectability issues. Amounts deemed uncollectible are recorded as an allowance for expected credit losses.

Revenue and Costs of Revenue

The Company accounts for revenue in accordance with Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers.

We generate revenue from the initial capital sales of systems as well as recurring revenue from the sale of our proprietary disposable devices, from royalties paid to the Company on the sale of various devices as provided by co-development and co-placement arrangements, and from other recurring revenue including ongoing software updates and service contracts.

We account for a contract with a customer when there is a legally enforceable contract between the Company and the customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. We record our revenue based on consideration specified in the contract with each customer, net of any taxes collected from customers that are remitted to government authorities.

For contracts containing multiple products and services, the Company accounts for individual products and services as separate performance obligations if they are distinct, which is if a product or service is separately identifiable from other items in the bundled package, and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company recognizes revenues as the performance obligations are satisfied by transferring control of the product or service to a customer.

For arrangements with multiple performance obligations, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which the Company separately sells the products or services. If a standalone selling price is not directly observable, then the Company estimates the standalone selling price considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services and market conditions. The Company regularly reviews standalone selling prices and updates these estimates if necessary.

Our revenue recognition policy affects the following revenue streams in our business as follows:

Systems:

Contracts related to the sale of systems typically contain separate obligations for the delivery of system(s), installation, service-type warranty, and an implied obligation to provide software enhancements if and when available for one year following installation. Revenue is recognized when the Company transfers control to the customer, which is generally at the point when acceptance occurs that indicates customer acknowledgment of delivery or installation, depending on the terms of the arrangement. Revenue from service-type warranties and the implied obligation to deliver software enhancements if and when available is included in Other Recurring Revenue and is recognized ratably typically over the first year following installation of the system as the customer receives the service-type warranty and right to software updates throughout the period. 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 for the six months ended June 30, 2025, and 2024. Revenue from system delivery and installation represented 31% and 25% of revenue for the six months ended June 30, 2025, and 2024, respectively.

Disposables:

Revenue from sales of disposable products is recognized when control is transferred to the customers, which generally occurs at the time of shipment, but can also occur at the time of delivery depending on the customer arrangement. Disposable products are covered by an assurance type warranty that provides for the return of defective products. Warranty costs were not material for the six months ended June 30, 2025, and 2024. Disposable revenue represented 34% and 28% of revenue for the six months ended June 30, 2025, and 2024, respectively.

Royalty:

The Company receives royalties on the sale of various devices as provided by co-development and co-placement arrangements with various manufacturers. There was no royalty revenue for the six months ended June 30, 2025, and there was less than $0.1 million for the six months ended June 30, 2024.

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. 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. Other recurring revenue represented 35% and 47% of revenue for the six months ended June 30, 2025, and 2024, respectively.

The following table summarizes the Company’s revenue for systems, disposables, and service and accessories for the six months ended June 30, 2025, and 2024 (in thousands):

	2025		2024		2025		2024
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Systems	$	3,038	$	240	$	5,002	$	2,852
Disposables, service and accessories		5,760		4,262		11,268		8,530
Total revenue	$	8,798	$	4,502	$	16,270	$	11,382

Transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to the Company’s systems contracts and obligations that will be recognized as revenue in future periods. These obligations are generally satisfied within two years after contract inception but may occasionally extend longer. Transaction price representing revenue to be earned on remaining performance obligations on system contracts was approximately $12.2 million as of June 30, 2025. Performance obligations arising from contracts for disposables and service are generally expected to be satisfied within one year after entering into the contract.

The following table summarizes the Company’s contract assets and liabilities (in thousands):

	June 30, 2025			December 31, 2024
Contract Assets - unbilled receivables	$	212		$	90
Total unbilled receivables	$	212		$	90

Customer deposits	$	1,368		$	2,687
Product shipped, revenue deferred		1,595			1,708
Deferred service and license fees		3,937			4,473
Total deferred revenue	$	6,900		$	8,868
Less: Long-term deferred revenue		(1,057	)		(2,064	)
Total current deferred revenue	$	5,843		$	6,804

The Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets primarily represent the difference between the revenue that was earned but not billed on service contracts and revenue from system contracts that was recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Customer deposits primarily relate to future system sales but can also include deposits on disposable sales. Deferred revenue is primarily related to service contracts, for which the service fees are billed up-front, generally quarterly or annually, and for amounts billed in advance for system contracts for which some performance obligations remain outstanding. 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. The Company did not have any impairment losses on its contract assets for the periods presented.

Revenue recognized for the six months ended June 30, 2025, and 2024, that was included in the deferred revenue balance at the beginning of each reporting period was $4.9 million and $4.3 million, respectively.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company has determined that sales incentive programs for the Company’s sales team meet the requirements to be capitalized as the Company expects to generate future economic benefits from the related revenue generating contracts after the initial capital sales transaction. The costs capitalized as contract acquisition costs included in prepaid expenses and other assets, in the Company’s consolidated balance sheet were approximately $0.1 million as of June 30, 2025, and December 31, 2024. The Company did not incur any impairment losses during any of the periods presented.

Cost of Contracts

Costs of systems revenue include direct product costs, installation labor and other costs including estimated assurance-type warranty costs, and initial training costs, when applicable. These costs are recognized at the time of sale. Costs of disposable revenue include direct product costs and estimated warranty costs and are recognized at the time of sale. Cost of revenue from services and license fees are recognized when incurred.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in business combinations and is allocated to the appropriate reporting unit when acquired. Other acquired intangible assets are stated at the fair value acquired. Goodwill is not amortized; rather, it is evaluated for impairment annually and whenever events or changes in circumstances indicate that the value of the asset may be impaired. Definite-lived intangible assets are considered long-lived assets and are amortized on a straight-line basis over the periods that expected economic benefits will be provided. See Note 3, Acquisitions for further discussion of the goodwill and intangible assets recorded as of the acquisition date and as of June 30, 2025.

Contingent Liabilities- Earnout Consideration

The Company has determined that the contingent consideration due under the terms of its July 31, 2024, acquisition agreement with APT Holding Company, Inc. represents a contingent liability in accordance with the provisions of Accounting Standard 805, Business Combinations. The Company has established short-term and long-term contingent liabilities for the net present fair value of contingent payments which are both probable of occurrence and reasonably estimable. The initial fair value of the contingent consideration was determined by a third-party valuation firm using both a Monte Carlo simulation and probability-based approaches. The contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved. Changes in fair value are recognized in the Company’s earnings as a charge to General and Administrative expenses. See Note 3, Acquisitions for further discussion of the contingent consideration recorded as of the acquisition date and as of June 30, 2025.

Leasing Arrangements

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company accounts for leases in accordance with Accounting Standards Update No. 2016-02 “Leases” (Topic 842) and all subsequent ASUs that modified Topic 842 (“ASC 842”). The Company determines if an arrangement contains a lease at inception.

The Company leases its facilities under operating leases. In accordance with ASC 842, operating lease agreements are recognized on the consolidated balance sheet as a right-of-use (“ROU”) asset and a corresponding lease liability. These leases generally do not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the leases do not contain contingent rent provisions. Many of our leases include both lease (i.e., fixed payments including rent, taxes, and insurance costs) and non-lease components (i.e., common-area or other maintenance costs) which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components for all leases.

The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less) on the consolidated balance sheet.

The calculated amounts of the ROU assets and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. ASC 842 requires the use of the discount rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception.

Stock-Based Compensation

The Company accounts for its grants of stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units and for its employee stock purchase plan in accordance with the provisions of general accounting principles for share-based payments. These accounting principles require the determination of the fair value of the stock-based compensation at the grant date and the recognition of the related expense over the period in which the stock-based compensation vests.

For time-based awards, the Company utilizes the Black-Scholes valuation model to determine the fair value of stock options and stock appreciation rights at the date of grant. The weighted average assumptions and fair value for options granted during the six months ended June 30, 2025, were 1) expected dividend rate of 0%; 2) expected volatility of 75% based on the Company’s historical volatility; 3) risk-free interest rate based on the Treasury yield on the date of grant; and 4) expected term of 6.25 years. The resulting compensation expense is recognized over the requisite service period, which is generally four years, net of actual forfeitures. Restricted shares and units granted to employees and non-employee directors are valued at the fair market value at the date of grant. The Company amortizes the fair market value to expense over the service period, which is generally four years except for grants to directors which are generally earned over a period of six months. If the shares are subject to performance objectives, the resulting compensation expense is amortized over the anticipated vesting period and is subject to adjustment based on the actual achievement of objectives.

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.

Shares purchased by employees under the 2022 Employee Stock Purchase Plans are considered to be non-compensatory.

Net Loss per Common Share

Basic earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. In periods where there is net income, we apply the two-class method to calculate basic and diluted net income (loss) per share of common stock, as our convertible preferred stock is a participating security. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply as our convertible preferred stock does not contractually participate in our losses. We compute diluted net income (loss) per common share using net income (loss) as the “control number” in determining whether potential common shares are dilutive, after giving consideration to all potentially dilutive common shares, including stock options, warrants, unvested restricted stock units outstanding during the period and potential issuance of stock upon the conversion of our convertible preferred stock issued and outstanding during the period, except where the effect of such securities would be antidilutive.

The following table sets forth the computation of basic and diluted EPS (in thousands except for share and per share amounts):

	2025			2024			2025			2024
	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Net loss	$	(3,826	)	$	(5,833	)	$	(9,649	)	$	(10,340	)
Cumulative dividend on convertible preferred stock		(318	)		(325	)		(632	)		(656	)
Net loss attributable to common stockholders	$	(4,144	)	$	(6,158	)	$	(10,281	)	$	(10,996	)

Weighted average number of common shares and equivalents:		87,952,086			84,570,738			87,861,231			84,025,335
Basic EPS	$	(0.05	)	$	(0.07	)	$	(0.12	)	$	(0.13	)
Diluted EPS	$	(0.05	)	$	(0.07	)	$	(0.12	)	$	(0.13	)

The Company did not include any portion of unearned restricted shares, outstanding options, stock appreciation rights, warrants or convertible preferred stock in the calculation of diluted loss per common share because all such securities are anti-dilutive for all periods presented. The application of the two-class method of computing earnings per share under general accounting principles for participating securities is not applicable during these periods because those securities do not contractually participate in its losses.

As of June 30, 2025, the Company had 4,371,340 shares of common stock issuable upon the exercise of outstanding options and stock appreciation rights at a weighted average exercise price of $3.49 per share under its 2012 and 2022 Stock Purchase Plans, 49,825,183 shares of our common stock issuable upon conversion of our Series A Convertible Preferred Stock, 2,380,625 shares of unvested restricted share units awarded under the 2022 Stock Purchase Plan, and 13,000,000 unvested share units relating to the 2021 CEO Performance Award Unit Grant. The Company had no unearned restricted shares outstanding as of June 30, 2025.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires enhanced income tax disclosures, primarily related to the effective tax rate reconciliation and income taxes paid. The Company does not expect a significant impact on its income tax disclosures upon adoption of the ASU which will be effective at the Company’s year end December 31, 2025.

In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”). This ASU provides illustrative examples to clarify how entities should determine whether profits interest and similar awards are within the scope of Topic 718 or other compensation guidance, such as Topic 710. Amendments in ASU 2024-01 are effective for public business entities for annual periods beginning after December 15, 2024, and for all other entities for annual periods beginning after December 15, 2025. The Company does not expect the adoption to have a material impact on its consolidated financial statements and related disclosures.

3. Acquisitions

Acquisition of Access Point Technologies EP, Inc. (“APT”)

On July 31, 2024, the Company acquired all the shares of capital stock of Access Point Technologies EP, Inc. (“APT”), a Minnesota corporation, from APT Holding Company, Inc., a Minnesota corporation. APT designs, manufactures, and commercializes a portfolio of differentiated high-quality diagnostic catheters used during cardiac ablation procedures that are commercially available across key global geographies.

The acquisition of APT was accounted for as a business combination using the acquisition method of accounting. The consideration included an upfront payment and additional contingent payments based upon the achievement of key regulatory and commercial milestones. At closing, the Company issued 1,486,620 shares of its common stock (the “Upfront Stock Consideration”) with a value of $3.0 million. The Share Purchase Agreement obligated us to file a resale registration statement relating to the Upfront Stock Consideration and additional Earnout Shares. The registration statement covered the 1,486,620 Closing Shares and an estimated 4,613,380 additional Earnout Shares. However, the exact number of shares that may be issued under the Share Purchase Agreement for such milestones will be calculated based on the average of the closing per share price of Stereotaxis common stock immediately prior to the dates such revenue performance and/or regulatory milestones are achieved, up to $24.0 million in total value through September 30, 2029, not to exceed 19.9% of the total number of shares of the Company’s common stock issued and outstanding immediately prior to July 31, 2024 (the “Share Cap Limitation”). In addition, the vesting of the right to receive the Earnout Shares would be accelerated in the event of a change of control of Stereotaxis, based on a probability-weighted average estimate of the potential to achieve any remaining milestones, discounted to its net present value taking into account expected time when earnouts related to the milestones would become payable through September 30, 2029. The estimated fair value of the contingent consideration related to the additional earnout shares at the acquisition date was $9,966. The total contingent consideration, including the upfront, payment is estimated to be $12,966.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed for APT as of the acquisition date (in thousands):

(in thousands)	July 31, 2024

Assets acquired:
Current assets
Cash	$	108
Accounts receivable, net of allowance of $19		693
Inventories, net		1,607
Prepaid expenses and other current assets		1
Total current assets		2,409
Property and equipment		825
Goodwill		3,764
Intangible assets		7,740
Total assets acquired	$	14,738
Liabilities assumed:
Current liabilities
Accounts payable	$	1,723
Accrued liabilities		49
Total liabilities assumed	$	1,772
Net assets acquired	$	12,966

The above purchase price allocation is final as of June 30, 2025. No measurement period adjustments were recognized during the six months ended June 30, 2025.

For purposes of the above allocation, we based our estimate of the fair values for contingent consideration, intangible assets, and property and equipment on valuation studies performed by third-party valuation firms. We used various valuation methods, including discounted cash flows, distributor method, excess earnings, and relief from royalty method to estimate the fair value of the identified intangible assets. The fair value of the contingent consideration was determined using a Monte Carlo simulation and probability based approaches. The Cost approach was utilized to determine the fair value of property and equipment. Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to APT’s in-house research and development team versus using third party developers and the expansion of manufacturing capacity. The tax basis in the acquired goodwill is zero.

The Company’s consolidated statement of earnings for the six months ended June 30, 2025, includes APT post-acquisition revenue of $2,562. Net loss for the six months ended June 30, 2025, was $1,395. Net loss for the six months ended June 30, 2025, includes $458 of expense due to the revaluation of the contingent consideration as of the reporting date. This expense is recognized within General and Administrative expenses for the six months ended June 30, 2025.

	2025
	Six Months Ended June 30,
	2025
(in thousands)	(Unaudited)
Revenue	$	2,562
Net loss	$	(1,395	)

The following represents the pro forma consolidated revenue as if APT had been included in the consolidated results of the Company. Revenue was $13,833 for the six months ended June 30, 2024.

The intangible assets related to the acquisition consisted of the following:

	Fair Value		Amortization Period
	(in thousands)		(in years)
Intangible assets subject to amortization:
Developed technology	$	6,250		7.0 - 8.0
Customer relationships		310		10.0
Trademark		410		5.0
Total intangible assets subject to amortization	$	6,970
Intangible assets not subject to amortization
In process research and development		770		N/A
Goodwill	$	3,764		N/A
Total intangible assets not subject to amortization		4,534
Total intangible assets	$	11,504
Weighted average amortization period				7.7

4. Financial Instruments

The following table summarizes the Company’s cash and cash equivalents, amortized cost, gross unrealized gains, gross unrealized losses, and fair value by significant category reported as cash and cash equivalents and restricted cash as of June 30, 2025, and December 31, 2024:

	June 30, 2025
	Reported as:
(in thousands)	Cash and Cash Equivalents		Restricted Cash- current
Cash	$	1,656	$	-
Level 2
Money market funds		5,311		-.
Subtotal		5,311		-
Total assets measured at fair value	$	6,967	$	-

	December 31, 2024
	Reported as:
(in thousands)	Cash and Cash Equivalents		Restricted Cash- current
Cash	$	969	$	-
Level 2
Money market funds		11,248		219
Subtotal		11,248		219
Total assets measured at fair value	$	12,217	$	219

Interest income recorded for these cash and investments was $0.3 million and $0.7 million during the six months ended June 30, 2025, and the year ended December 31, 2024, respectively.

As of June 30, 2025, and December 31, 2024, the Company did not have any financial assets classified as Level 1 or Level 3. The contingent consideration is carried at fair value and is a Level 3 financial liability. See further discussion of the contingent consideration in Note 3.

5. Inventories

Inventories consist of the following (in thousands):

Schedule of Inventories

	June 30, 2025			December 31, 2024
Raw materials	$	6,494		$	5,223
Work in process		1,508			1,103
Finished goods		4,263			4,382
Reserve for excess and obsolescence		(2,657	)		(2,377	)
Total inventory	$	9,608		$	8,331

At the closing of the acquisition, GAAP accounting required us to record all acquired inventory at its market value.

The Company had approximately $2.7 million in reserve for excess and obsolescence. The reserve includes the fair value of slow moving acquired inventory and the value of Niobe Systems and related raw materials and spare parts.

6. Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following (in thousands):

	June 30, 2025			December 31, 2024
Prepaid expenses	$	336		$	405
Prepaid commissions		88			78
Deposits		611			411
Deferred cost of revenue		-			1,025
Other assets		19			36
Total prepaid expenses and other assets		1,054			1,955
Less: Noncurrent prepaid expenses and other assets		(118	)		(107	)
Total current prepaid expenses and other assets	$	936		$	1,848

Deferred cost of revenue represents the cost of systems for which the system has been delivered to the customer but for which revenue has not been recognized.

7. Property and Equipment

Property and Equipment consist of the following (in thousands):

Schedule of Property and Equipment

	June 30, 2025			December 31, 2024
Equipment	$	5,121		$	5,098
Leasehold improvements		2,916			2,916
Gross property and equipment		8,037			8,014
Less: Accumulated depreciation		(4,753	)		(4,441	)
Net property and equipment	$	3,284		$	3,573

8. Goodwill and Intangible Assets

Goodwill and Intangible Assets consist of the following (in thousands):

	June 30, 2025			December 31, 2024
Goodwill	$	3,764		$	3,764

Developed technology		6,250			6,250
In process research and development		770			770
Customer relationships		310			310
Trademark		410			410
Total intangibles		7,740			7,740

Less: Accumulated amortization		(841	)		(382	)
Net intangibles	$	6,899		$	7,358

9. Leases

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 that serves as the Company’s principal executive and administrative offices and manufacturing facility. Lease payments commenced on January 1, 2022, and the lease has a term of ten years, with two renewal options of five years each. The minimum annual rent under the terms of the Globe Lease ranges from approximately $0.8 million in 2022 to $1.0 million in 2031.

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. Lease payments commenced on August 1, 2024, and the lease has a term of four years, with two renewal options of four years each. The minimum annual rent under the terms of the Talulla Lease is approximately $0.2 million per year. In accordance with ASC 842, the Company recorded a ROU asset and lease liability in third quarter of 2024. The initial recognition of the ROU asset and lease liability was $1.0 million.

As of June 30, 2025, the weighted average discount rate for operating leases was 9% and the weighted average remaining lease term for operating lease term is 6.59 years.

The following table represents lease costs and other lease information (in thousands):

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities and equipment which are paid based on actual costs incurred.

	2025		2024		2025		2024
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Operating lease cost	$	269	$	227	$	538	$	454
Short-term lease cost		1		5		2		8
Total net lease cost	$	270	$	232	$	540	$	462

Cash paid within operating cash flows	$	292	$	253	$	587	$	510

Future minimum payments for operating leases with initial or remaining terms of one year or more as of June 30, 2025, were as follows (in thousands):

	June 30, 2025
2025	$	539
2026		1,097
2027		1,122
2028		1,147
2029		1,173
2030 and thereafter		2,533
Total lease payments		7,611
Less: Interest		(1,884	)
Present value of lease liabilities	$	5,727

10. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

Schedule of Accrued Liabilities

	June 30, 2025			December 31, 2024
Accrued salaries, bonus, and benefits	$	1,362		$	1,569
Accrued warranties		50			50
Accrued professional services		211			170
Accrued investigational sites		73			45
Deferred contract obligation		-			1,045
Other		1,145			107
Total accrued liabilities		2,841			2,986
Less: Long term accrued liabilities		(1,110	)		(64	)
Total current accrued liabilities	$	1,731		$	2,922

11. Convertible Preferred Stock and Stockholders’ Equity

The holders of common stock are entitled to one vote for each share held and to receive dividends when and as declared by the Board of Directors out of funds legally available for dividends, subject to the prior rights or preferences applicable to any preferred stock as may then be outstanding. No dividends have been declared or paid as of June 30, 2025, and the Company does not presently intend to pay any cash dividends in the foreseeable future.

Series A Convertible Preferred Stock and Warrants

In September 2016, the Company issued (i) 24,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”), par value $0.001 per share, with a stated value of $1,000 per share, which are convertible into shares of the Company’s common stock at an initial conversion rate of $0.65 per share, subject to adjustment for events such as stock splits, combinations and the like as provided in the certificate of designations covering such Series A Preferred Stock, and (ii) (the SPA Warrants) to purchase an aggregate of 36,923,078 shares of common stock. The shares of Series A Preferred Stock are entitled to vote on an as-converted basis with the common stock, subject to specified beneficial ownership issuance limitations. The Series A Preferred Stock bear dividends at a rate of six percent (6%) per annum, which are cumulative and accrue daily from the date of issuance on the $1,000 stated value. Such dividends will not be paid in cash except in connection with any liquidation, dissolution or winding up of the Company or any redemption of the Series A Preferred Stock. Each holder of convertible preferred shares has the right to require us to redeem such holder’s shares of Series A Preferred Stock upon the occurrence of specified events, which include certain business combinations, the sale of all or substantially all of the Company’s assets, or the sale of more than 50% of the outstanding shares of the Company’s common stock. In addition, the Company has the right to redeem the Series A Preferred Stock in the event of a defined change of control. The Series A Preferred Stock ranks senior to our common stock as to distributions and payments upon the liquidation, dissolution, and winding up of the Company. Since the Series A Preferred Stock are subject to conditions for redemption that are outside the Company’s control, the Series A Preferred Stock are presently reported in the mezzanine section of the consolidated balance sheet.

2021 CEO Performance Award Unit Grant

On February 23, 2021, the Company`s Board of Directors, upon recommendation of the Compensation Committee, approved the grant of the CEO Performance Award to the Company’s Chief Executive Officer. The CEO Performance award is a 10-year performance award of up to 13,000,000 shares, tied to the achievement of market capitalization milestones and subject to minimum service requirements.

As detailed in the table below, the CEO Performance Award consists of ten vesting tranches. The first market capitalization milestone is $1.0 billion, and each of the remaining nine market capitalization milestones are in additional $500 million increments, up to $5.5 billion.

Tranche #	No. of Shares Subject to PSU		Market Capitalization Milestones⁽¹⁾
1		1,000,000	$	1,000,000,000
2		1,500,000	$	1,500,000,000
3		1,500,000	$	2,000,000,000
4		2,000,000	$	2,500,000,000
5		1,000,000	$	3,000,000,000
6		1,000,000	$	3,500,000,000
7		1,000,000	$	4,000,000,000
8		2,000,000	$	4,500,000,000
9		1,000,000	$	5,000,000,000
10		1,000,000	$	5,500,000,000
Total:		13,000,000

Each tranche represents a portion of the PSUs covering the number of shares outlined in the table above. Each tranche vests upon (i) satisfaction of the market capitalization milestones and (ii) continued employment as CEO of the Company from the grant date through December 31, 2030. Absent an earlier termination, the PSUs will expire on December 31, 2030. If our CEO ceases employment as CEO of the Company for any reason including death, disability, termination for cause or without cause (as defined in the award agreement), or if he voluntary terminates after service as CEO for at least five years, the remaining service period will be waived and he will retain any PSUs that have vested through the date of termination.

The Company received Shareholder approval at its annual meeting on May 20, 2021, for shares to be issued under the award.

The market capitalization requirement is considered a market condition under FASB Accounting Standards Codification Topic 718 “Compensation – Stock Compensation” and is estimated on the grant date using Monte Carlo simulations. Recognition of stock-based compensation expense of all the tranches commenced on February 23, 2021, the date of grant, as the probability of meeting the ten market capitalization milestones is not considered in determining the timing of expense recognition. The expense will be recognized on an accelerated basis through 2030. Key assumptions for estimating the performance-based awards fair value at the date of grant included share price on grant date, volatility of the Company’s common stock price, risk free interest rate, and grant term.

Total stock-based compensation recorded as operating expense for the CEO Performance Award was $3.5 million and $3.6 million for the six months ended June 30, 2025, and 2024. As of June 30, 2025, and 2024, the Company had approximately $26.3 million and $33.4 million, respectively, of total unrecognized stock-based compensation expense remaining under the CEO Performance Award assuming the grantee’s continued employment as CEO of the Company, or in a similar capacity, through 2030. As of June 30, 2025, none of the performance milestones established by the 2021 CEO Incentive Program have been achieved, and no awards have been earned.

Stock Award Plans

In February 2022, the Compensation Committee of the Board of Directors adopted the 2022 Stock Incentive Plan (the “Plan”) which was subsequently approved by the Company’s shareholders. This plan replaced the 2012 Stock Incentive Plan which expired on May 19, 2022. The 2022 Stock Incentive Plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares and restricted share units to employees, non-employee directors, and third-party consultants.

As of June 30, 2025, the Company had 3,794,350 remaining shares of the Company’s common stock to provide for current and future grants under its various equity plans.

As of June 30, 2025, the total compensation cost related to options, stock appreciation rights, and non-vested stock granted to employees and non-employees under the Company’s stock award plans but not yet recognized was approximately $2.4 million, excluding compensation not yet recognized related to the CEO Performance Award discussed above. This cost will be amortized over a period of up to four years over the underlying estimated service periods and will be adjusted for subsequent changes in actual forfeitures and anticipated vesting periods.

A summary of the option and stock appreciation rights activity for the six-month period ended June 30, 2025, is as follows:

	Number of Options/SARs			Range of Exercise Price		Weighted Average Exercise Price per Share
Outstanding, December 31, 2024		3,858,360			$0.74 - $9.20	$	3.79
Granted		673,000			$1.60 - $2.27	$	1.62
Exercised		(24,300	)		$0.74 - $2.15	$	1.96
Forfeited		(135,720	)		$1.53 - $6.96	$	3.06
Outstanding, June 30, 2025		4,371,340			$0.74 - $9.20	$	3.49

A summary of the restricted stock unit activity for the six-month period ended June 30, 2025, is as follows:

	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value per Unit
Outstanding, December 31, 2024		1,546,532		$	3.36
Granted		954,093		$	1.67
Vested		(120,000	)	$	5.24
Outstanding, June 30, 2025		2,380,625		$	2.59

12. Product Warranty Provisions

The Company’s standard policy is to warrant all capital systems against defects in material or workmanship for one year following installation with an assurance or a service-type warranty. The Company’s estimate of costs to service the warranty obligations is based on historical experience and current product performance trends. A regular review of warranty obligations is performed to determine the adequacy of the reserve and adjustments are made to the estimated warranty liability as appropriate.

Accrued assurance-type warranty, which is included in other accrued liabilities, consists of the following (in thousands):

Schedule of Accrued Warranty

	June 30, 2025			December 31, 2024
Warranty accrual, beginning of the fiscal period	$	50		$	107
Accrual adjustment for product warranty		1			6
Payments made		(1	)		(63	)
Warranty accrual, end of the fiscal period	$	50		$	50

13. Commitments and Contingencies

The Company at times becomes a party to claims in the ordinary course of business. Management believes that the ultimate resolution of pending or threatened proceedings will not have a material effect on the financial position, results of operations or liquidity of the Company. In February 2024, a vendor filed financing statements under the Uniform Commercial Code (“UCC”) on underlying inventory for approximately $0.6 million. We believe the financing statements were filed without merit, and we are fully contesting the propriety of such actions.

In April 2021, the Company entered into a letter of credit pursuant to the Lease agreement totaling approximately $1.8 million to be delivered in four equal instalments of which the first was delivered in April 2021, the second was delivered in July 2021, the third was delivered in October 2021, and the fourth was delivered in January 2022. The amount available under this letter of credit automatically reduces by one fortieth at the end of each month during the lease term and was completed in May 2025.

14. Subsequent Events

On July 17, 2025, Stereotaxis, Inc. (the “Company”) entered into a placement agency agreement (the “Placement Agency Agreement”) with Lake Street Capital Markets, LLC (“Placement Agent”) and a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Investors”) pursuant to which the Company agreed to sell, in a registered direct offering (the “Offering”), $12.5 million shares of common stock, par value $0.001 per share (the “Common Stock”) for a public offering price of $2.00 for each share of Common Stock in the Offering. At the initial closing (the “Initial Closing”) under the Purchase Agreement on July 18, 2025, the Company issued an aggregate of 4,250,000 shares of its Common Stock (the “Initial Shares”) to the Investors and received aggregate gross proceeds of $8.5 million with respect to such Initial Shares, before deducting the Placement Agent’s fees and expenses and other Offering expenses payable by the Company. In addition, the Company has agreed to issue, and one of the Investors has agreed to purchase, 2,000,000 additional Shares (the “Additional Shares”) on November 25, 2025 (or such earlier date as the Company and such Investor agrees) (the “Additional Closing”). At the Additional Closing, the Company expects to receive gross proceeds of $4.0 million for such Additional Shares, before deducting Offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for working capital, to accelerate product commercialization, research and development, and other general corporate purposes.

On August 7, 2025, Stereotaxis, Inc, in accordance with Section 2.5(b) of the May 11, 2024, Share Purchase Agreement among Stereotaxis, Inc, Access Point Technologies EP, Inc. and APT Holding Company, Inc., issued 417,710 shares of common stock, par value $0.001 per share as partial settlement of the earnout consideration to APT Holding, Inc.

ITEM 2. 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 Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024. Operating results are not necessarily indicative of results that may occur in future periods.

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 “Part II - Item 1A. Risk Factors” included in this Quarterly Report on Form 10-Q and in Part I, Item 1A, “Risk Factors,” included in our Annual Report on Form 10-K for the year ended December 31,2024, 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. Forward-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 on-going impact of the coronavirus (“COVID -19”) pandemic and our response to it or any impact of a similar pandemic, 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. Such statements include, but are not limited to, statements preceded by, followed by, or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “can”, “could”, “may”, “would”, or similar expressions. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You should not unduly rely on these forward-looking statements, which speak only as of the date on which they are 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.

Overview

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 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. 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 regulatory clearances and approvals that allow us to market the SynX networking solution in the U.S. and Europe. We have obtained the CE marking for us to market the Stereotaxis MAGiC catheter in Europe and are pursuing regulatory approvals 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.

Corporate Developments

On July 31, 2024, the Company completed its acquisition of all the shares of capital stock of Access Point Technologies EP, Inc., a Minnesota corporation (“APT”), from APT Holding Company, Inc., a Minnesota corporation. APT, based in Rogers, Minnesota, designs, manufactures, and commercializes a portfolio of differentiated high-quality diagnostic catheters used during cardiac ablation procedures that are commercially available across key global geographies.

The Stereotaxis MAGiC catheter, a robotically navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablation procedures, obtained the CE marking in Europe during the first quarter, 2025, and the MAGiC Sweep™ catheter, the first robotically navigated high-density EP mapping catheter, received U.S. Food and Drug Administration (FDA) 510(k) clearance in July 2025. We are in the process of obtaining necessary approvals in other geographies. We are also currently seeking regulatory clearances for the EMAGIN 5F catheter guide designed to robotically navigate tortuous venous and arterial vasculature.

Tariff and Trade Regulation Update

The global tariff environment remains fluid and could materially affect our cost structure, gross margins, and timing of product launches.

On February 1, 2025, the United States announced a 25 percent tariff on most imports from Mexico and Canada. Goods meeting the rules of origin under the United States-Mexico-Canada Agreement (“USMCA”) are expressly exempt. All sub-assemblies we source from Mexico qualify under USMCA; therefore, these items were not subject to the tariff, and the effect on our cost of revenues for the six months ended June 30, 2025, was immaterial. An Executive Order dated July 31, 2025, raised the general tariff rate on non-USMCA Canadian imports from 25 % to 35 %. Because our Canadian and Mexican sub-assemblies continue to qualify under USMCA, we do not expect a material impact.

On April 2, 2025, the United States imposed a 10 percent universal ‘baseline” tariff on all imports that do not qualify under USMCA and announced additional country-specific tariffs. Higher “reciprocal” country-specific rates, which were initially suspended for 90 days, became effective as of August 7, 2025, under the July 31, 2025, Executive Order. We procure certain specialty metals and other raw materials from suppliers in Japan and several European countries that remain subject to the 10 percent baseline tariff. We expect some vendors to pass the incremental duty through price increases, which could elevate our cost of revenues and research and development (“R&D”) expenses in the second half of 2025.

On July 27, 2025, the United States and the European Union agreed to suspend a previously threatened 30 percent tariff and to negotiate a permanent 15 percent ceiling on most EU goods. Implementation details, including the treatment of medical devices, remain under discussion.

Our proprietary Magic Catheter is manufactured in Germany and currently distributed only in Europe. If tariffs comparable to those described above are extended to European medical devices entering the United States, our planned U.S. product launch could be delayed or rendered uneconomical, which would, in turn, slow adoption of our RMN platform.

On April 7, 2025, the United States increased tariffs on imports from the People’s Republic of China (“China”) to rates of up to 145 percent, and China imposed a 125 percent retaliatory tariff on U.S.-origin goods. On May 12, 2025, following negotiations in Geneva, the United States and China issued a Joint Statement suspending most of the reciprocal tariff increases while talks continued. The initial 90-day period expired on August 12, 2025, and then renewed to November 10, 2025. Under the agreement, (i) U.S. duties on Chinese goods have been reduced to a base rate of approximately 30 percent, down from the prior 145 percent ceiling, and (ii) China has lowered its duty on U.S. goods to approximately 10 percent, down from 125 percent. All other non-tariff counter-measures announced since April 2025 have been suspended until August 12, 2025. We import limited quantities of R&D consumables and manufacturing inputs from China and, through our partner MicroPort Scientific Corporation, sell U.S.-manufactured Robotic Magnetic Navigation (“RMN”) systems into China. Both inbound materials and outbound finished products are now subject to these reciprocal tariffs. If the reduced rates remain in place, we anticipate a less than one percent increase in expenses for the second half of 2025. If the higher tariffs are reinstated, the impact could be more material, particularly to sales of RMN systems in China. We are actively pursuing mitigation strategies.

Effective June 4, 2025, Proclamation 11 043 increased Section 232 tariffs on steel and aluminum from 25 % to 50 %. These duties apply in addition to the 10 % baseline tariff, resulting in an effective rate of up to 60 % (“tariff stacking”) on certain specialty alloys that we source from Europe and Japan. This did not result in a material direct impact on our operations in the first half of 2025, but the long-term effects of these and other existing and future tariff actions are difficult to predict.

The ultimate effect of any tariff or trade barrier will depend on factors outside our control, including, potential extensions, escalations, or reciprocal tariff responses, as well as the reactions of our suppliers and customers.

Other Risks and Uncertainties

Future results of operations and liquidity could be materially adversely impacted by uncertainties in macroeconomic and geopolitical factors. The Company continued to experience difficulties with periodic worldwide supply chain disruptions, including shortages and inflationary pressures, tariffs and other trade regulations that are or may be imposed, market disruptions stemming from conflicts, such as in the Middle East, including Israel and Iran, and logistics delays which make it difficult for us to source parts and ship our products. We continue to evaluate the macroeconomics business environment, taking action to increase inventory levels where appropriate and engaging in discussions with our vendors on contractual obligations, but we cannot guarantee that our business activities will not be impacted more severely in the future. Our suppliers and contract manufacturers have experienced, and may continue to experience, similar difficulties. If our manufacturing operations or supply chains are materially interrupted, it may not be possible for us to timely manufacture or service our products at required levels, or at all. Changes in economic conditions, tariff escalation, retaliatory measures and new import restrictions could lead to higher inflation than previously experienced or expected, which could, in turn create supply shortages as companies seek alternative sources of supply and adjust their logistics and transportation routes. As a result of these factors, we may be unable to raise the prices of our products sufficiently to keep up with the rate of inflation, especially tariff induced inflation. 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.

In addition to the macroeconomic factors, occurrences similar to the COVID-19 pandemic or 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. 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. For instance, in 2022, procedure volumes were challenged by periodic resurgences of COVID-19, ongoing hospital staffing issues and other factors. 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 year. Significant decreases to our capital or recurring revenues could have a material adverse effect on our business, operating results, and financial condition. We continue to anticipate periodic disruptions to our manufacturing operations, supply chains, procedures volumes, service activities, and capital system orders and placements relating to new or ongoing periodic resurgences of pandemic-related issues, any of which could have a material adverse effect on our business, financial condition, results of operations, or cash flows

As a result of the July 2024 acquisition of APT EP, Inc., we are managing APT’s ongoing business of manufacturing, commercializing, development and sales of APT’s catheters and related products and services. The manufacturing process of catheters is complex, highly technical, and our prior experience in this field is dated. The process can be subject to periodic worldwide supply chain disruptions, including labor 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. We may require a higher level of overhead than currently anticipated. Our ability to successfully manage this new aspect of our business will depend, in part, upon management’s ability to design and implement strategic initiatives that address not only the integration of APT into us, but also the increased scope of the combined business with its associated increased costs and complexity. We are still integrating the businesses and implementing safeguards to minimize any negative impacts on our financial position, results of operations and cash flows post-acquisition.

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 preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. We review our estimates and judgments on an on-going basis. We base our estimates and judgments on 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. For a complete listing of our critical accounting policies, please refer to our Annual Report on Form 10-K for the year ended December 31, 2024.

Revenue Recognition

In accordance with Accounting Standards Codification Topic 606 (“ASC 606”), “Revenue from Contracts with Customers,” we account for a contract with a customer when there is a legally enforceable contract between the Company and the customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. We record our revenue based on consideration specified in the contract with each customer, net of any taxes collected from customers that are remitted to government authorities.

For contracts containing multiple products and services the Company accounts for individual products and services as separate performance obligations if they are distinct, which is if a product or service is separately identifiable from other items in the bundled package, and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company recognizes revenues as the performance obligations are satisfied by transferring control of the product or service to a customer.

Systems:

Contracts related to the sale of systems typically contain separate obligations for the delivery of system(s), installation, service-type warranty, and an implied obligation to provide software enhancements if and when available for one year following installation. Revenue is recognized when the Company transfers control to the customer, which is generally at the point when acceptance occurs that indicates customer acknowledgment of delivery or installation, depending on the terms of the arrangement. Revenue from service-type warranties and the implied obligation to deliver software enhancements if and when available is included in Other Recurring Revenue and is recognized ratably typically over the first year following installation of the system as the customer receives the service-type warranty and right to software updates throughout the period. 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 six months ended June 30, 2025, and 2024.

Disposables:

Royalty:

The Company receives royalties on the sale of various devices as provided by co-development and co-placement arrangements with various manufacturers.

Other Recurring Revenue:

The Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets primarily represent the difference between the revenue that was recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Customer deposits primarily relate to future system sales but can also include deposits on disposable sales. Deferred revenue is primarily related to service contracts, for which the service fees are billed up-front, generally quarterly or annually, and for amounts billed in advance for system contracts for which some performance obligations remain outstanding. 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 for additional detail on deferred revenue. The Company did not have any impairment losses on its contract assets for the periods presented.

Assets Recognized from the Costs to Obtain a Contract with a Customer

The Company has determined that sales incentive programs for the Company’s sales team meet the requirements to be capitalized as the Company expects to generate future economic benefits from the related revenue generating contracts after the initial capital sales transaction. The costs capitalized as contract acquisition costs included in prepaid expenses and other assets in the Company’s consolidated balance sheets were approximately $0.1 million as of June 30, 2025, and December 31, 2024. The Company did not incur any impairment losses during any of the periods presented.

Cost of Contracts

Costs of systems revenue include direct product costs, installation labor and other costs including estimated assurance-type warranty costs and initial training costs, when applicable. These costs are recognized at the time of sale. Costs of disposable revenue include direct product costs and estimated warranty costs and are recognized at the time of sale. Cost of revenue from services and license fees are recognized 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, non-employee directors, and third-party consultants at the fair value of the grants. For time-based awards, the fair value of options and stock appreciation rights granted was determined using the Black-Scholes valuation method which gives consideration to the estimated value of the underlying stock at the date of grant, the exercise price of the option, the expected dividend yield and volatility of the underlying stock, the expected life of the option and the corresponding risk-free interest rate. The fair value of the grants of restricted shares and units was determined based on the closing price of our stock on the date of grant. Stock compensation expense for options, stock appreciation rights and for time-based restricted share grants and units is amortized on a straight-line basis over the vesting period of the underlying issue, generally over four years except for grants to non-employee directors which are generally earned over a period of six months. Stock compensation expense for performance-based restricted shares, if any, is amortized on a straight-line basis over the anticipated vesting period and is subject to adjustment based on the actual achievement of objectives. Compensation expense is recognized only for those options expected to vest, net of actual forfeitures. Estimates of the expected life of options have been based on the average of the vesting and expiration periods, which is the simplified method under general accounting principles for share-based payments. Estimates of volatility utilized in calculating stock-based compensation have been prepared based on historical data. Actual experience to date has been consistent with these estimates.

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.

The amount of compensation expense to be recorded in future periods may increase if we make additional grants of options, stock appreciation rights or restricted shares. The amount of expense to be recorded in future periods may decrease if the requisite service periods are not completed.

Results of Operations

Comparison of the Three Months Ended June 30, 2025, and 2024

Revenue. Revenue increased from $4.5 million for the three months ended June 30, 2024, to $8.8 million for the three months ended June 30, 2025, an increase of 95%. Revenue from the sales of systems increased to $3.0 million for the three months ended June 30, 2025, from $0.2 million for the three months ended June 30, 2024, driven by increased sales volume in the current year period. Revenue from sales of disposable interventional devices, service, and accessories increased to approximately $5.8 million for the three months ended June 30, 2025, from $4.3 million for the three months ended June 30, 2024, an increase of approximately 35%. The increase was primarily driven by the impact of post-acquisition non-magnetic disposable device sales recorded in the current year period.

Cost of Revenue. Cost of revenue increased from $1.2 million for the three months ended June 30, 2024, to $4.2 million for the three months ended June 30, 2025, an increase of approximately 255%. As a percentage of our total revenue, overall gross margin decreased to 52% for the three months ended June 30, 2025, from 74% for the three months ended June 30, 2024, primarily due to changes in product mix. Cost of revenue for systems sold increased from $0.2 million for the three months ended June 30, 2024, to $2.4 million for the three months ended June 30, 2025, driven by increased system sales volume in the current year period. Gross margin for systems was less than $0.1 million for the three months ended June 30, 2024, compared to $0.7 million for the three months ended June 30, 2025. Cost of revenue for disposables, service, and accessories increased from $1.0 million for the three months ended June 30, 2024, to $1.9 million for the three months ended June 30, 2025. Gross margin for disposables, service, and accessories was 68% for the three months ended June 30, 2025, compared to 76% for the three months ended June 30, 2024. Gross margin for disposables, service, and accessories continues to be depressed by acquisition related accounting which required the valuation of acquired finished good inventory to fair value and by changes in product mix in the current period.

Research and Development Expenses. Research and development expenses decreased from $2.3 million for the three months ended June 30, 2024, to $1.8 million for the three months ended June 30, 2025, a decrease of approximately 22%. This decrease was primarily driven by the capitalization of GenesisX into inventory

Sales and Marketing Expenses. Sales and marketing expenses remained consistent at $3.3 million for the three months ended June 30, 2024, and 2025.

General and Administrative Expenses. 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. General and administrative expenses increased from $3.8 million for the three months ended June 30, 2024, to $4.0 million for the three months ended June 30, 2025, an increase of approximately 6%. This increase was primarily driven by the amortization of the acquisition related intangible assets offset by lower professional service fees in the current year period.

Other Operating Expense. The Company received approximately $0.5 million in an employee retention tax credit in the second quarter of 2025.

Interest Income (Expense). Net interest income was approximately $0.2 million for the three months ended June 30, 2024 and 2025.

Comparison of the Six Months Ended June 30, 2025 and 2024

Revenue. Revenue increased from $11.4 million for the six months ended June 30, 2024, to $16.3 million for the six months ended June 30, 2025, an increase of approximately 43%. Revenue from the sales of systems increased from $2.9 million for the six months ended June 30, 2024, to $5.0 million for the six months ended June 30, 2025, driven by increased system sales volumes in the current year period. Revenue from sales of disposable interventional devices, service and accessories increased to $11.3 million for the six months ended June 30, 2025, from $8.5 million for the six months ended June 30, 2024, an increase of approximately 32%. The increase was primarily driven by the impact of post-acquisition non-magnetic disposable device sales recorded in the current year period.

Cost of Revenue. Cost of revenue increased from $4.1 million for the six months ended June 30, 2024, to $7.6 million for the six months ended June 30, 2025, an increase of approximately 86%. As a percentage of our total revenue, overall gross margin decreased to 53% for the six months ended June 30, 2025, from 64% for the six months ended June 30, 2024, primarily due to changes in product mix. Cost of revenue for systems sold increased from $2.1 million for the six months ended June 30, 2024, to $4.0 million for the six months ended June 30, 2025, driven by increased system sales volume in the current year period. Gross margin for systems was $0.8 million for the six months ended June 30, 2024, compared to $1.0 million for the six months ended June 30, 2025. Cost of revenue for disposables, service, and accessories increased from $2.0 million for the six months ended June 30, 2024, to $3.6 million for the six months ended June 30, 2025, driven by increased disposables sales volume in the current period. Gross margin for disposables, service and accessories was 76% for the six months ended June 30, 2024, compared to 68% for the six months ended June 30, 2025. Gross margin for disposables, service, and accessories was impacted by acquisition related accounting which required the valuation of acquired finished good inventory to fair value and by changes in product mix in the current period.

Research and Development Expenses. Research and development expenses decreased from $4.5 million for the six months ended June 30, 2024, to $4.1 million for the six months ended June 30, 2025, a decrease of 9%. This decrease was primarily driven by the capitalization of GenesisX into inventory offset by acquired headcount expense from our acquisition.

Sales and Marketing Expenses. Sales and marketing expenses increased from $6.3 million for the six months ended June 30, 2024, to $6.4 million for the six months ended June 30, 2025, an increase of approximately 2%. This increase was primarily driven by tradeshow expenses in the current year period.

General and Administrative Expenses. 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. General and administrative expenses increased from $7.2 million for the six months ended June 30, 2024, to $8.5 million for the six months ended June 30, 2025, an increase of approximately 18%. This increase was primarily driven by the acquisition related contingent consideration, amortization of the acquisition related intangible assets, and higher professional service fees in the current year period.

Other Operating Expense. The Company received approximately $0.5 million in an employee retention tax credit in the second quarter of 2025.

Interest Income (Expense). Net interest income was approximately $0.4 million for the six months ended June 30, 2024, compared to $0.2 million for the six months ended June 30, 2025. The decrease was driven by lower invested balances and interest rates in the current year period partially offset by interest received with payment of the employee retention tax credit in the current year period.

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 June 30, 2025, we had $7.0 million of cash and cash equivalents. We had working capital of $1.2 million as of June 30, 2025, compared to $4.8 million as of December 31, 2024.

The following table summarizes our cash flow by operating, investing and financing activities for the six months ended June 30, 2025, and 2024 (in thousands):

	Six Months Ended June 30,
	2025			2024
Cash flow used in operating activities	$	(5,512	)	$	(5,434	)
Cash flow used in investing activities		(23	)		(22	)
Cash flow provided by financing activities		66			58

Net cash used in operating activities. We used approximately $5.5 million and $5.4 million of cash for operating activities during the six months ended June 30, 2025, and 2024, respectively. The increase in cash used in operating activities was driven by changes in working capital partially offset by a lower net loss.

Net cash used in investing activities. We used less than $0.1 million of cash for investing activities during the six months ended June 30, 2025, and 2024. The cash used for both periods was for the purchase of equipment.

Net cash provided by financing activities. We generated less than $0.1 million of cash from financing activities during the six months ended June 30, 2025, and 2024. The cash generated in both periods was driven by the proceeds from issuance of stock from the exercise of options, net of issuance costs, and from our employee stock purchase program.

Capital Resources

As of June 30, 2025, the Company did not have any debt.

Off-Balance Sheet Arrangements

We do not currently have, nor have we ever had, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. 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.

ITEM 3. [RESERVED]

None.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures: The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

Changes In Internal Control Over Financial Reporting: The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of the Company’s internal control over financial reporting to determine whether any changes occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Based on that evaluation, there has been no such change during the period covered by this report.

During the period ended December 31, 2024, the Company completed the acquisition of Access Point Technologies EP, Inc. As a result of the acquisition, the Company is in the process of reviewing the internal control structure of this business and, if necessary, will make appropriate changes as the Company incorporates its controls and procedures into the acquired business.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [RESERVED]

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Number		Description

3.1		Restated Articles of Incorporation of the Registrant, incorporated by reference to Exhibit 3.1 of the Registrant’s Form 10-Q (File No. 000-50884) for the fiscal quarter ended September 30, 2004.

3.2		Certificate of Amendment to Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K (File No. 000-50884) filed on July 10, 2012.

3.3		Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock, incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-36159) filed on September 30, 2016.

3.4		Restated Bylaws of the Registrant, incorporated by reference to Exhibit 3.2 of the Registrant’s Form 10-Q (File No. 000-50884) for the fiscal quarter ended September 30, 2004.

31.1		Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by Chief Executive Officer).

31.2		Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by Chief Financial Officer).

32.1		Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Chief Executive Officer).

32.2		Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Chief Financial Officer).

101.INS		Inline XBRL Instance Document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

STEREOTAXIS, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STEREOTAXIS, INC. (Registrant)

Date: August 13, 2025	By:	/s/ David L. Fischel
		David L. Fischel
		Chief Executive Officer

Date: August 13, 2025	By:	/s/ Kimberly R. Peery
		Kimberly R. Peery
		Chief Financial Officer

Stereotaxis, Inc. 10-Q