Stereotaxis, Inc.: Form 10-Q for the period ended Jun 30, 2026

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, 2025. 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,” of this Quarterly Report on Form 10-Q and in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2025, as amended, as well as risks and uncertainties related to our acquisition of Access Point Technologies EP, Inc. (“APT”) and our recently completed acquisition of Robocath. 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 and results of operations; the ongoing impact of the coronavirus (“COVID-19”) pandemic and our response to it or the impact of any similar pandemic; and statements relating to our acquisitions of APT and Robocath, including the anticipated benefits and strategic implications of the acquisitions; our ability to integrate acquired operations; manufacture, develop, commercialize and sell acquired products; retain key personnel; fund Robocath’s operations; and achieve regulatory and commercial milestones that could trigger contingent payments. 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

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 aspiration 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 and the GenesisX RMN Systems, the Synchrony & SynX Solutions, various interventional devices under the Map-iT, MAGiC and EMAGIN brands, 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 diagnostic and therapeutic devices.

The Genesis RMN and the GenesisX RMN Systems are designed to enable physicians to complete 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 enhance the accessibility of Robotic Magnetic Navigation by reducing the lengthy construction cycle necessary to install prior generation RMN systems.

The Synchrony system is designed to digitize and modernize the interventional catheter lab. Synchrony’s ultra-high-definition display consolidates the viewing and control of all disparate systems in the lab, offering an enhanced procedure experience with custom layouts, streamlined workflows, an intuitive user interface, and a decluttered environment. Synchrony digitizes the video streams with full fidelity and ultra-low latency, offering crystal-clear visualization. Its architecture allows obsolescence protection for labs as new technologies are introduced in the future. Synchrony is made available with SynX, a cloud-based HIPAA and GDPR-compliant app that allows for secure remote connectivity, collaboration, recording, and monitoring of the cath lab. These technologies are sold alongside RMN systems and as stand-alone solutions.

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

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.

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. Approval processes can be lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied.

We have strategic relationships with technology leaders and innovators in the global interventional market. Through these strategic relationships we provide compatibility with our robotic magnetic navigation systems, 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.

Corporate Developments

On July 7, 2026, the Company completed its previously announced acquisition of shares and other securities collectively representing 100% of the share capital and voting power of Robocath, a French *société par actions simplifiée (“*Robocath”), pursuant to the Share Sale Agreement dated April 14, 2026, for approximately $20.0 million in cash and common stock.

Robocath, headquartered in Rouen, France, is an innovator of advanced mechanical robotic technology for interventional cardiology and neurointerventions.

At closing, the Company made certain cash payments for the benefit of Robocath’s securityholders and issued (i) 1,469,485 shares of common stock and (ii) pre-funded warrants to purchase 4,575,143 shares of common stock to the securityholders. The Company also issued 225,000 shares of common stock to Robocath’s financial advisor as partial payment of a success fee for acquisition advisory services. The Share Sale Agreement provides for up to $25.0 million of additional earnout consideration, payable in cash, shares of common stock (including shares issuable upon exercise of Purchaser Warrants) or a combination thereof at the Company’s election, upon achievement of one regulatory milestone and two commercial milestones during periods ending December 31, 2033, December 31, 2035 and December 31, 2037, respectively.

Stereotaxis has continued to advance development and regulatory approval of its Robotic Magnetic Navigation systems and proprietary interventional devices.

In the fourth quarter of 2025, we received FDA 510(k) clearance in the United States for the GenesisX RMN System. 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 October 2025, we obtained CE Mark for the Synchrony Solution, and in April 2026, we received FDA 510(k) clearance in the United States.

The Stereotaxis MAGiC catheter, a robotically navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablation procedures, obtained CE marking in Europe during the first quarter of 2025 and FDA 510(k) clearance in January 2026. MAGiC Sweep™, the first robotically navigated high-density EP mapping catheter, received 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, which is designed to robotically navigate tortuous venous and arterial vasculature.

Tariff and Trade Regulation Update

Beginning in 2025, the U.S. implemented a baseline tariff framework on most imports, with higher country- and product-specific rates for certain trading partners, including Mexico, Germany, Japan and China, among others, alongside reciprocal measures announced by other jurisdictions. In February 2026, the U.S. Supreme Court ruled that tariffs levied under the International Emergency Economic Powers Act (“IEEPA”) were unconstitutional. As a result of this ruling, the U.S. Court of International Trade issued an order directing U.S. Customs and Border Protection (“CBP”) to begin formalizing a refund process. On April 20, 2026, CBP launched an online portal for IEEPA tariff refund requests, which are subject to review by CBP. Such refund process was appealed and is subject to ongoing litigation, as well as refund process developments. In response to the Supreme Court’s ruling, a new 10% surcharge on most imports was imposed under Section 122 of the Trade Act of 1974. The surcharge took effect on February 24, 2026, and expired on July 24, 2026. These Section 122 tariffs are currently subject to legal challenge and in May 2026, the CIT issued a ruling that the Section 122 tariffs are unauthorized by the statute, although this ruling is currently stayed pending appeal. Previous exclusions, including for qualifying goods under the United States-Mexico-Canada Agreement (“USMCA”), remained in place. In July 2026, the U.S. presidential administration imposed additional tariffs under Section 301 of the Trade Act of 1974. These Section 301 tariffs are also currently subject to legal challenge.

We source certain subassemblies from Mexico, all of which qualify under USMCA; therefore, these items were not subject to the increased tariff, and the effect on our cost of revenue for the six months ended June 30, 2026, was immaterial. We currently expect our Mexican subassemblies to continue to qualify under USMCA and therefore do not expect a material impact from future changes relating to these items.

Some of our suppliers have also incurred incremental tariffs and have passed or may pass those additional costs on to us. These pass-through tariffs and other specific tariff actions against steel and aluminum have resulted in an effective rate of up to 60% (“tariff stacking”) on certain specialty alloys that we source from Europe and Japan. These measures have not had a material direct impact on our operations to date, but the long-term effects of these and other existing or future trade measures are difficult to predict.

We also import certain raw materials and finished goods from outside of the U.S. that are subject to tariffs, including our proprietary MAGiC catheter, which is manufactured in Germany and currently distributed principally in Europe. This device received FDA 510(k) clearance in the U.S. in January 2026, and we are currently ramping up production as a replacement for catheters previously supplied to users by J&J. Tariffs could render the U.S. product launch of the MAGiC catheter uneconomical, which could slow adoption of our Robotic Magnetic Navigation (“RMN”) platform.

In addition, we import limited quantities of R&D consumables and manufacturing inputs from China and, through our partner MicroPort Scientific Corporation, sell U.S.-manufactured RMN systems into China. Both inbound materials and outbound finished products are now subject to tariffs, which we expect to continue to have an adverse impact on sales of RMN systems in China. If tariffs increase, the impact could be material, particularly to sales of RMN systems in China. We continue to pursue mitigation strategies.

During the six months ended June 30, 2026, tariffs and other trade measures recognized in total cost of revenue were not material. Future changes to tariff rates, the availability of tariff refunds and the imposition of new tariffs by the U.S. and/or other countries could result in a material impact to our results of operations. There remains substantial uncertainty regarding the duration of various existing and newly announced or intended tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, suspended, or invalidated, and the ultimate impact of changes to tariffs and trade barriers will depend on various factors, including the timing, amount, scope, and nature of any tariffs or trade barriers that are implemented and the availability of refunds, all of which could have a material adverse effect on our business, financial condition, or results of operations. We continue to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations.

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 macroeconomic 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, government shutdowns, 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. 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 our acquisition of APT EP, Inc. July 2024 and of Robocath in July 2026, we are managing the ongoing businesses of both APT and Robocath, which include the manufacturing, commercializing, developing and selling catheters, interventional products and other related products and services. The manufacturing process for catheters is complex and highly technical, and our experience in this field is prior to the APT acquisition was 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 that 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 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 and Robocath into our business, but also the increased scope of the combined business and its associated costs and complexity. We are integrating both APT’s and Robocath’s respective businesses into our own, and implementing safeguards to minimize any negative impacts on our financial position, results of operations and cash flows. In addition, Robocath is located in, and organized under the law of, France, and that may present additional accounting, cultural, regulatory and other issues. Please refer to Part II, Item 1A, Risk Factors, for a description of the risks associated with the Robocath acquisition.

Since our inception, we have generated significant losses. As of June 30, 2026, we have incurred cumulative net losses of approximately $593.7 million. In 2026, the Company plans to advance adoption of its robotic magnetic navigation systems and its proprietary 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 2026 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, fund additional sales and marketing initiatives, and fund Robocath’s ongoing operations and development of its next-generation R-Two products. Robocath has sustained historical operating losses, and we expect that it will continue to incur operating losses and negative cash flows in the coming years. We may be required to fund Robocath’s ongoing operations for the foreseeable future. During the remainder of 2026, 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.

Based on our current plans and assumptions, we believe our existing cash and cash equivalents, including the proceeds from our at-the-market offering program and July 2025 equity raise, will be sufficient to fund our operating expenses and capital equipment requirements, including currently anticipated funding requirements for Robocath’s operations and development activities. In light of the macroeconomic environment and the uncertainties associated with integrating and funding Robocath, however, we cannot guarantee that we will not need additional funding in the future. We will continue to explore financing alternatives, and we cannot guarantee 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, license to third parties rights to commercialize products or technologies that we would otherwise seek to commercialize ourselves, or 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 results of operations. In addition, we could be required to cease operations.

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, 2025.

Revenue Recognition

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.

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.

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 as necessary.

Systems:

Contracts related to the sale of systems typically contain separate obligations for the delivery of system(s), installation, and a service-type warranty 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 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 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, 2026, and 2025.

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, 2026, and 2025.

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:

Other recurring revenue includes revenue from product maintenance plans, service-type warranties, and other post warranty maintenance. Revenue from services and software enhancements, including service-type warranties, 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.

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. See Note 2 to the consolidated financial statements for additional details 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 $0.2 million and $0.1 million as of June 30, 2026, and December 31, 2025, respectively. 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, stock option, non-qualified stock options, stock appreciation rights, and restricted share grants made to employees, directors, and third-party consultants at the fair value of the grants. 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 stock and 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 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 awards 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, or if we change our achievement expectations for performance based grants. The amount of expense to be recorded in future periods may decrease if the requisite service periods are not completed or if achievement expectations for performance based grants become improbable.

Results of Operations

Comparison of the Three Months Ended June 30, 2026, and 2025

Revenue. Revenue decreased from $8.8 million for the three months ended June 30, 2025, to $7.7 million for the three months ended June 30, 2026, a decrease of 13%. Revenue from the sales of systems decreased to $1.5 million for the three months ended June 30, 2026, from $3.0 million for the three months ended June 30, 2025, driven by decreased sales volume in the current year period. Revenue from sales of disposable interventional devices, service, and accessories increased to approximately $6.2 million for the three months ended June 30, 2026, from $5.8 million for the three months ended June 30, 2025, an increase of approximately 7%. The increase in the current period was primarily driven by higher current period disposable sales of Stereotaxis supplied catheters which include our proprietary MAGiC ablation catheter partially offset by continuing pressure from the Johnson & Johnson transition.

Cost of Revenue. Cost of revenue decreased from $4.2 million for the three months ended June 30, 2025, to $3.2 million for the three months ended June 30, 2026, a decrease of approximately 25%. As a percentage of our total revenue, overall gross margin increased to 58% for the three months ended June 30, 2026, from 52% for the three months ended June 30, 2025, primarily due to changes in product mix. Cost of revenue for systems sold decreased from $2.4 million for the three months ended June 30, 2025, to $1.1 million for the three months ended June 30, 2026, driven by decreased system sales volume in the current year period. Gross margin for systems was $0.7 million for the three months ended June 30, 2025, compared to $0.4 million for the three months ended June 30, 2026. Cost of revenue for disposables, service, and accessories increased from $1.9 million for the three months ended June 30, 2025, to $2.1 million for the three months ended June 30, 2026, driven by increased disposable sales volumes. Gross margin for disposables, service, and accessories decreased to 66% for the three months ended June 30, 2026, from 68% for the three months ended June 30, 2025 due to changes in product mix in the current period.

Research and Development Expenses. Research and development expenses increased from $1.8 million for the three months ended June 30, 2025, to $2.4 million for the three months ended June 30, 2026, an increase of approximately 34%. This increase was primarily driven by the capitalization of GenesisX into inventory in the prior year period and partially offset by lower headcount-related costs in the current year period.

Sales and Marketing Expenses. Sales and marketing expenses decreased from $3.3 million for the three months ended June 30, 2025, to $2.6 million for the three months ended June 30, 2026, a decrease of approximately 21%. This decrease was primarily due to lower headcount-related costs and trade-show 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 $4.0 million for the three months ended June 30, 2025, to $4.1 million for the three months ended June 30, 2026, an increase of approximately 2%.

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

Interest Income. Net interest income remained consistent at $0.1 million for the three months ended June 30, 2025, and 2026.

Comparison of the Six Months Ended June 30, 2026, and 2025

Revenue. Revenue decreased from $16.3 million for the six months ended June 30, 2025, to $14.0 million for the six months ended June 30, 2026, a decrease of approximately 14%. Revenue from sales of systems decreased to $2.8 million for the six months ended June 30, 2026, from $5.0 million for the six months ended June 30, 2025, driven by decreased sales volume in the current-year period. Revenue from sales of disposable interventional devices, service, and accessories decreased to approximately $11.2 million for the six months ended June 30, 2026, from $11.3 million for the six months ended June 30, 2025, a decrease of approximately 1%. The decrease in the current period was primarily driven by the transition from catheters provided by Johnson & Johnson to Stereotaxis-supplied catheters including sales of our proprietary MAGiC ablation catheter.

Cost of Revenue. Cost of revenue decreased from $7.6 million for the six months ended June 30, 2025, to $5.7 million for the six months ended June 30, 2026, a decrease of approximately 26%. As a percentage of our total revenue, overall gross margin increased to 59% for the six months ended June 30, 2026, from 53% for the six months ended June 30, 2025, primarily due to changes in product mix. Cost of revenue for systems sold decreased from $4.0 million for the six months ended June 30, 2025, to $1.9 million for the six months ended June 30, 2026, driven by decreased system sales volume in the current year period. Gross margin for systems was $1.0 million for the six months ended June 30, 2025, compared to $0.9 million for the six months ended June 30, 2026. Cost of revenue for disposables, service, and accessories increased from $3.6 million for the six months ended June 30, 2025, to $3.8 million for the six months ended June 30, 2026, driven by increased disposable sales volumes. Gross margin for disposables, service, and accessories decreased to 66% for the six months ended June 30, 2026, from 68% for the six months ended June 30, 2025 due to changes in product mix in the current period.

Research and Development Expenses. Research and development expenses increased from $4.1 million for the six months ended June 30, 2025, to $4.8 million for the six months ended June 30, 2026, an increase of approximately 16%. This increase was primarily driven by the capitalization of GenesisX into inventory in the prior year period and partially offset by lower headcount-related costs in the current year period.

Sales and Marketing Expenses. Sales and marketing expenses decreased from $6.4 million for the six months ended June 30, 2025, to $5.2 million for the six months ended June 30, 2026, a decrease of approximately 19%. This decrease was primarily due to lower headcount-related costs and trade-show 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 $8.5 million for the six months ended June 30, 2025, to $8.8 million for the six months ended June 30, 2026, an increase of approximately 4%.

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

Interest Income. Net interest income remained consistent at approximately $0.2 million for the six months ended June 30, 2025, and 2026.

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, 2026, we had $10.5 million of cash and cash equivalents. We had working capital of $11.2 million as of June 30, 2026, compared to $11.5 million as of December 31, 2025.

In July 2025, we closed a registered direct offering of our common stock for $8.5 million in gross proceeds before deducting offering expenses. In November 2025, we completed the additional closing from the July registered direct offering for $4.0 million in gross proceeds before deducting offering expenses.

On March 13, 2026, we filed a new shelf registration statement on Form S-3 (File No. 333-294288) to register (i) $100.0 million of debt securities, common stock, preferred stock, warrants, rights or units consisting of any two or more of such securities (the “2026 Shelf”) and (ii) $50.0 million of common stock that may be issued under the at-the-market offering program with Roth Capital described below. The 2026 Shelf was declared effective by the SEC on March 20, 2026.

As noted above, in August 2025, we entered into a sales agreement with Roth Capital Markets (“Roth”), as sales agent and/or principal, under which we may issue and sell up to $50.0 million of our common stock. On March 13, 2026, we entered into a first amendment to the sales agreement, which modified the original sales agreement to, among other things, reflect our filing of a new Registration Statement on Form S-3 with the SEC on March 13, 2026 and set the maximum amount of shares of our common stock that we may offer and sell through or to Roth at $50 million from the date of the amendment to the sales agreement, subject to certain limitations set forth in the amendment. During the six months ended June 30, 2026, we sold an aggregate of 2,361,579 shares of common stock under the sales agreement, at an average price of approximately $2.34 per share for gross proceeds of $5.5 million and net proceeds of $5.3 million, after deducting Roth’s commission and other expenses. As of June 30, 2026, $49.3 million of common stock remained available to be sold under this facility, subject to certain conditions as specified in the sales agreement.

For additional information on our “at-the-market” facility, refer to Note 10, Convertible Preferred Stock and Stockholders’ Equity of the notes to the consolidated financial statements, under the subheading At-the-Market Offering Program, included within this report.

The following table summarizes our cash flow by operating, investing and financing activities for the six months ended June 30, 2026, and 2025 (in thousands):

Net cash used in operating activities. We used approximately $7.1 million and $5.5 million of cash for operating activities during the six months ended June 30, 2026 and 2025, respectively. The increase in cash used in operating activities was driven by the higher operating loss in the current-year period and changes in working capital.

Net cash used in investing activities. We used approximately $1.2 million of cash for investing activities during the six months ended June 30, 2026, for interim financing provided to Robocath and the purchase of equipment. We used less than $0.1 million of cash for investing activities during the six months ended June 30, 2025, for the purchase of equipment.

Net cash provided by financing activities. We generated approximately $5.4 million of cash from financing activities during the six months ended June 30, 2026, and approximately $0.1 million during the six months ended June 30, 2025. The cash generated in 2026 was primarily driven by proceeds from the at-the-market offering. The cash generated in 2025 was driven by proceeds from the issuance of stock upon the exercise of options, net of issuance costs, and from our employee stock purchase program.

Capital Resources

As of June 30, 2026, 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.

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.

Except as set forth in the supplemental risk factors relating to the Robocath acquisition included as Exhibit 99.1 to our Current Report on Form 8-K dated July 15, 2026, and filed with the SEC on July 16, 2026, which are incorporated herein by reference, there have been no material changes to the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as amended.