# Stereotaxis, Inc. (STXS)

Informational only - not investment advice.

CIK: 0001289340
SIC: 3845 Electromedical & Electrotherapeutic Apparatus
SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 38](/major-group/38/) > [SIC 3845 Electromedical & Electrotherapeutic Apparatus](/industry/3845/)
Latest 10-K filed: 2026-03-12
SEC page: https://www.sec.gov/edgar/browse/?CIK=1289340
Filing source: https://www.sec.gov/Archives/edgar/data/1289340/000149315226009881/form10-k.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 32377000 | USD | 2025 | 2026-03-12 |
| Net income | -21643000 | USD | 2025 | 2026-03-12 |
| Assets | 52251000 | USD | 2025 | 2026-03-12 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001289340.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  |  | 29,346,617 | 28,902,550 | 26,630,035 | 35,021,000 | 28,147,000 | 26,771,000 | 26,918,000 | 32,377,000 |
| Net income |  | -5,286,720 | -5,887,410 | 116,756 | -4,591,284 | -6,646,459 | -10,716,000 | -18,292,000 | -20,713,000 | -24,045,000 | -21,643,000 |
| Operating income |  | -6,426,357 | -5,919,597 | -2,457,039 | -4,826,859 | -6,713,815 | -12,888,000 | -18,776,000 | -21,839,000 | -24,739,000 | -22,112,000 |
| Gross profit |  | 24,634,783 | 20,389,861 | 23,629,438 | 22,766,091 | 18,965,789 | 23,232,000 | 18,470,000 | 14,860,000 | 14,594,000 | 17,071,000 |
| Diluted EPS |  | -0.54 | -0.32 | -0.03 | -0.10 | -0.11 | -0.16 | -0.26 | -0.27 | -0.30 | -0.25 |
| Operating cash flow | -12,117,658 |  | -4,674,567 | -2,546,582 | -4,616,680 | -3,511,772 | -2,946,000 | -8,415,000 | -9,139,000 | -8,497,000 | -13,685,000 |
| Capital expenditures |  | 410,184 | 81,577 | 265,482 | 29,486 | 70,896 | 1,397,000 | 2,378,000 | 366,000 | 34,000 | 93,000 |
| Dividends paid |  | 0.00 | 0.00 |  |  | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Assets |  | 20,965,803 | 10,667,203 | 18,514,607 | 43,584,754 | 55,455,825 | 60,985,000 | 53,413,000 | 41,909,000 | 46,724,000 | 52,251,000 |
| Liabilities |  | 36,495,255 | 31,274,326 | 11,242,989 | 15,060,157 | 15,226,584 | 21,560,000 | 21,484,000 | 19,989,000 | 35,292,000 | 33,530,000 |
| Stockholders' equity |  | -21,489,927 | -26,567,598 | 1,311,143 | 22,766,407 | 34,625,000 | 33,841,000 | 26,346,000 | 16,343,000 | 6,080,000 | 13,481,000 |
| Cash and cash equivalents |  | 8,501,392 | 3,686,302 | 10,796,072 | 30,182,115 | 43,939,512 | 38,739,000 | 8,586,000 | 19,818,000 | 12,217,000 | 13,421,000 |
| Free cash flow |  |  | -4,756,144 | -2,812,064 | -4,646,166 | -3,582,668 | -4,343,000 | -10,793,000 | -9,505,000 | -8,531,000 | -13,778,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  |  | 0.40% | -15.89% | -24.96% | -30.60% | -64.99% | -77.37% | -89.33% | -66.85% |
| Operating margin |  |  |  | -8.37% | -16.70% | -25.21% | -36.80% | -66.71% | -81.58% | -91.91% | -68.30% |
| Return on equity |  |  |  | 8.90% | -20.17% | -19.20% | -31.67% | -69.43% | -126.74% | -395.48% | -160.54% |
| Return on assets |  | -25.22% | -55.19% | 0.63% | -10.53% | -11.99% | -17.57% | -34.25% | -49.42% | -51.46% | -41.42% |
| Liabilities / equity |  |  |  | 8.57 | 0.66 | 0.44 | 0.64 | 0.82 | 1.22 | 5.80 | 2.49 |
| Current ratio |  | 0.54 | 0.33 | 1.76 | 3.19 | 3.88 | 3.87 | 3.03 | 2.51 | 1.22 | 1.51 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001289340.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | -0.07 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | -0.07 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -0.07 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 7,859,000 | -4,957,000 | -0.07 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 7,799,000 | -5,369,000 | -0.07 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 4,565,000 | -5,040,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 6,880,000 | -4,507,000 | -0.06 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 4,502,000 | -5,833,000 | -0.07 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 9,196,000 | -6,190,000 | -0.08 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 6,340,000 | -7,515,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 7,472,000 | -5,823,000 | -0.07 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 8,798,000 | -3,826,000 | -0.05 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 7,464,000 | -6,463,000 | -0.07 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 8,642,000 | -5,531,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 6,291,000 | -5,861,000 | -0.06 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1289340/000149315226022697/form10-q.htm

Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization.
Confidence: high
Filing date: 2026-05-13
Report date: 2026-03-31

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, 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” 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 31,2025, as well as various
impacts related to our previously announced acquisition of Access Point Technologies EP, Inc. (“APT”) and our recently announced
acquisitions 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, 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

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.

21

We
pursue arrangements with fluoroscopy system manufacturers to provide RMN 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 offer with the RMN System, may reduce the cost of acquisition, the ongoing cost of ownership, and
the complexity of installation of a robotic electrophysiology practice.

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
April 14, 2026, the Company entered into a share sale agreement to acquire shares and other securities collectively representing 100%
of the share capital and voting power of Robocath, a French société par actions simplifiée, for $20.0 million
in the form of cash, a number of shares of Stereotaxis common stock based on a value of $2.00 per share, or a combination of cash and
shares at closing and, in addition, consideration contingently delivered after closing upon achieving certain key regulatory and commercial
milestones. The acquisition is expected to close by the end of the third quarter of 2026 subject to customary closing conditions. Robocath
is a venture-backed innovator of advanced mechanical robotic technology for interventional cardiology and neurointerventions headquartered
in Rouen, France.

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) regulatory clearance within 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 attained CE Mark for the Synchrony
Solution and in the first quarter of 2026 we received FDA 510(k) regulatory clearance within the United States.

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 U.S. Food and Drug Administration (FDA) 510(k)
clearance in January 2026. MAGiC Sweep™, 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.

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 c

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization.
Confidence: high

ITEM 7.

MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto included
in this report on Form 10-K. Operating results are not necessarily indicative of results that may occur in future periods.

This
report includes various forward-looking statements that are subject to risks and uncertainties, many of which are beyond our control.
Our actual results could differ materially from those anticipated in these forward- looking statements as a result of various factors,
including those set forth in Item 1A. “Risk Factors,” 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 impact
of, and our response to the coronavirus (“COVID-19”) pandemic, pandemics similar to the coronavirus (“COVID-19”)
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 “believes,” “expects,” “anticipates,” “intends,”
“estimates,” “projects,” “can,” “could,” “may,” “will,” “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 were made. They give our expectations regarding the future but are not guarantees. We undertake no obligation
to update publicly or revise forward-looking statements, whether because of new information, future events or otherwise, unless required
by law.

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.

39

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 Odyssey and 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
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. The Odyssey Solution and Odyssey Cinema are being replaced
by next generation innovative solutions branded Synchrony and SynX. Synchrony digitizes and modernizes the interventional
cath lab with a 4K high-definition display that consolidates the viewing and control of disparate systems in the lab, offering enhanced
procedure experience with custom layouts, streamlined workflows, an intuitive user interface, and a decluttered environment. Synchrony
is made available with SynX a cloud-based HIPAA and GDPR-compliant browser and mobile-based app that allows for secure remote
connectivity, collaboration, recording, and monitoring of the cath lab. As these technologies gain regulatory approvals they are being
commercialized alongside RMN systems and as stand-alone solutions.

We
pursue arrangements with fluoroscopy system manufacturers to provide RMN 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 offer with the RMN System, may reduce the cost of acquisition, the ongoing cost of ownership, and
the complexity of installation of a robotic electrophysiology practice.

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.

As
of December 31, 2025, we had approximately $9.1 million of system backlog, consisting of outstanding purchase orders and other commitments
for these systems. Of the December 31, 2025 system backlog, we expect approximately 78% to be recognized as revenue over the course of
2026. We had system backlog of approximately $14.4 million as of December 31, 2024. There can be no assurance that we will recognize
such revenue in any period or at all because some of our purchase orders and other commitments are subject to contingencies that are
outside our control. These orders and commitments may be revised, modified or canceled, either by their express terms, because of negotiations
or by project changes or delays. In addition, the sales cycle for the robotic magnetic navigation system is lengthy and generally involves
construction or renovation activities at customer sites. Consequently, revenues and/or orders resulting from sales of our robotic magnetic
navigation systems can vary significantly from one reporting period to the next.

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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 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
transaction was concluded pursuant to that certain Share Purchase Agreement, dated May 11, 2024. The transaction consideration included
an upfront payment of 1,486,620 shares of Company common stock issued at closing, as well as additional contingent payments of Company
common stock based upon the achievement of specified product revenue and regulatory approval milestones through September 30, 2029. All
consideration is payable in Stereotaxis common stock.

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 in the fourth quarter of 2025 we received 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. In October, 2025, we attained CE Mark for the Synchrony Solution and are working towards FDA 510(k) regulatory
clearance within the United States.

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 U.S. Food and Drug Administration (FDA) 510(k)
clearance in January, 2026. MAGiC Sweep™, 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.

Risks
and Uncertainties

Future
results of operations could be materially adversely impacted by macroeconomic and geopolitical factors. The Company continues to experience
difficulties with periodic worldwide supply chain disruptions, including shortages and inflationary pressures, tariffs or other trade
restrictions, and logistics delays which make it difficult for us to source parts and ship our products. We have generally been able
to conduct normal business activities albeit in a more deliberate manner than prior to the COVID-19 pandemic, including taking action
to increase inventory levels and engaging in discussions with our vendors on contractual obligations, but we cannot guarantee that they
will not be impacted more severely in the future. 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 and supply chain constraints could
lead to higher inflation than previously experienced or expected, which could, in turn, lead to an increase in costs. We may be unable
to raise the prices of our products sufficiently to keep up with the rate of 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.

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Many
of our hospital customers, for whom the purchase of our system involves a significant capital purchase which may be part of a larger
construction project at the customer site (typically the construction of a new building), may themselves be under economic pressures.
Hospitals continue to experience challenges with staffing and cost pressures as supply chain constraints and inflation drive up operating
costs. This may 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.

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 aforementioned 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 current 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, we will be 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.

We
have arrangements with technology leaders in the global interventional market, including manufacturers of fluoroscopy systems, ablation
catheters, and electrophysiology mapping systems, that we believe are critical for us in commercializing our robotic magnetic navigation
systems. These arrangements are important to us as they provide for the integration of our system with digital imaging and 3D catheter
location sensing technology, as well as catheters compatible with our system.

Prior
to regulatory clearance of a replacement device, our propriety MAGiC ablation catheter, in Europe in 2025 and regulatory approval
in the U.S. in early 2026, the robotically enabled ablation catheters predominantly used with our RMN Systems were co-developed with
Biosense Webster, a wholly owned subsidiary of Johnson and Johnson (the “J&J catheters”). The J&J catheters were
solely manufactured and distributed by them and their obligation to supply those catheters ended on December 31, 2025. We do not know
their plans for the continuation of the J&J catheters, and we have no guarantees that supply of those catheters will continue into
2026. Although we are ramping up production of the MAGiC ablation catheter as a replacement device, continued supply of the J&J
catheters into 2026 remains of significant importance for many customers of our technology.

Concentration
of Credit Risk

Financial
instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents and marketable securities.
Our investments may include, at any time, a diversified portfolio of cash equivalents and short-term and long-term investments in a variety
of high-quality securities, including money market funds, U.S. treasury and U.S. government agency securities, corporate notes and bonds,
commercial paper, non-U.S. government agency securities, and municipal notes. The Company’s exposure to any individual corporate
entity is limited by policy. Deposits may exceed federally insured limits, and the Company is exposed to credit risk on deposits in the
event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance
Corporation (FDIC). The Company closely monitors events involving limited liquidity, defaults, non-performance or other adverse developments
that affect financial institutions or other companies in the financial services industry or the financial services industry generally.

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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, revenue and expenses
and related disclosures. We review our estimates and judgments on an ongoing basis. We base our estimates and judgments on historical
experience and on various other assumptions that we believe to be reasonable under the circumstances. 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.

Revenue
Recognition

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 as 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, 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 years ended December
31, 2025 and 2024.

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 periods presented.

43

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 balance sheets
were approximately $0.1 million as of December 31, 2025 and 2024, 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, estimated warranty costs, initial training costs
and product maintenance costs. These costs are recorded at the time of sale. Costs of disposable revenue include direct product costs
and estimated warranty costs and are recorded at the time of sale. Cost of revenue from services and license fees are recorded 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 December 31, 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 both at the acquisition
date and subsequent reporting periods 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 December 31,
2025 and 2024.

44

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 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 or if performance targets are not achieved.

Valuation
of Inventory

We
value our inventory at the lower of: (1) the actual cost of our inventory, determined using the first-in, first-out (FIFO) method, or
(2) its net realizable value. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and
reserve accordingly. Our reserve estimate for excess and obsolete is based on expected future use. Excess manufacturing overhead costs
attributable to idle facility expenses or abnormally low production volumes are excluded from inventory and recorded as an expense in
the period incurred.

Income
Taxes

Deferred
tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities
using the enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances
are established when necessary to reduce deferred tax assets to the amounts expected to be realized. We have established a valuation
allowance against the entire amount of our deferred tax assets net of liabilities because we are not able to conclude, due to our history
of operating losses, that it is more likely than not that we will be able to realize any portion of the deferred tax assets.

In
assessing whether and to what extent deferred tax assets are realizable, we consider whether it is more likely than not that some portion
or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which those temporary differences become deductible. We consider projected future taxable
income and tax planning strategies in making this assessment. Based upon the level of historical taxable losses, limitations imposed
by Section 382 of the Internal Revenue Code and projections for future losses over periods which the deferred tax assets are deductible,
we determined that a 100% valuation allowance of deferred tax assets net of liabilities was appropriate.

Results
of Operations

Comparison
of the Years ended December 31, 2025 and 2024

Revenue.
Revenue increased from $26.9 million for the year ended December 31, 2024, to $32.4 million for the year ended December 31, 2025, an
increase of 20%. Revenue from sales of systems increased from $8.6 million for the year ended December 31, 2024, to $10.2 million
for the year ended December 31, 2025, an increase of approximately 18%, driven by increased system sales volumes in the current year
period. Revenue from sales of disposable interventional devices, service and accessories increased to $22.2 million for the year
ended December 31, 2025, from $18.3 million for the year ended December 31, 2024, an increase of approximately 21%. The increase was
primarily driven by the full year contribution from our 2024 acquisition of APT and increased service revenue in the current year
period.

Cost
of Revenue. Cost of revenue increased from $12.3 million for the year ended December 31, 2024, to $15.3 million for the year ended
December 31, 2025, an increase of approximately 24%. As a percentage of our total revenue, overall gross margin was 53% and 54% for the
years ended December 31, 2025, and December 31, 2024, respectively. The decrease was primarily due to changes in product mix. Cost of
revenue for systems sold increased from $6.9 million for the year ended December 31, 2024, to $8.0 million for the year ended December
31, 2025, primarily due to increased system sales volume in the current year period. Gross margin for systems increased from $1.8 million
for the year ended December 31, 2024, to $2.2 million for the year ended December 31, 2025. Cost of revenue for disposables, service,
and accessories increased from $5.4 million for the year ended December 31, 2024, to $7.3 million for the year ended December 31, 2025.
Gross margin for disposables, service and accessories was 67% for the current year period compared to 70% for the year ended December
31, 2024, primarily driven by product mix.

45

Research
and Development Expense. Research and development expenses decreased from $9.8 million for the year ended December 31, 2024, to $9.4
million for the year ended December 31, 2025, a decrease of approximately 4%. This decrease was primarily driven by the attainment of technological feasibility and regulatory approval of the
GenesisX in 2025 offset by acquired headcount expense from our acquisition.

Sales
and Marketing Expense. Sales and marketing expenses remained consistent at $12.4 million for the years ended December 31, 2025 and
2024.

General
and Administrative Expense. General and administrative expenses include finance, information systems, legal, and general management
expenses, amortization of acquisition related intangible assets, and the gain or loss associated with the remeasurement of the acquisition
related contingent consideration. General and administrative expenses increased from $17.2 million for the year ended December 31, 2024,
to $17.8 million for the year ended December 31, 2025, an increase of approximately 4%. This increase was primarily driven by the change
in contingent consideration expense and amortization of acquisition related intangible assets offset by lower administrative expenses
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. Net interest income was $0.5 million for the year ended December 31, 2025, and $0.7 million for the year ended December 31,
2024. The decrease was driven by lower invested balances and declining interest rates in the current year period.

Income
Taxes

In
assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or
all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers
projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable
losses, and projections for future periods over which the deferred tax assets are deductible, the Company determined that a 100%
valuation allowance of net deferred tax assets was appropriate.

As
of December 31, 2025, we had gross federal net operating loss carryforwards arising from our operations of approximately $159.1 million.
The federal net operating loss carryforwards reflect accumulated book losses reduced for the 2013 IRC Section 382 ownership change limitation
of $144.4 million, book/tax differences and expiration of carryforwards. The federal net operating loss carryforwards generated prior
to the 2018 tax year of approximately $98.8 million will expire between 2030 and 2037. The federal net operating losses generated in
2018 and thereafter will be carried forward indefinitely as a result of changes in the tax law following the Tax Cuts and Jobs Act (“TCJA”).
As of December 31, 2025, we had gross state net operating loss carryforward of approximately $50.2 million which will expire at various
dates between 2026 and 2043 if not utilized.

In
addition to the net operating loss carryovers related to our operations, in connection with our 2024 acquisition of APT as discussed
in Note 3, we acquired federal and state net operating loss and tax credit carryovers of APT. Our ability to utilize those carryovers
and credits will be limited under IRC Section 382. The Section 382 limited net operating loss carryovers total approximately $9.2 million,
of which $0.6 million was incurred prior to the 2018 effective date of the TCJA and will expire between 2035 and 2037 with the remainder
available for indefinite carryforward. The applicable state net operating loss carryforwards related to APT are approximately $9.6 million
with $9.2 million expiring at various dates between 2030 - 2038 with the remaining carried forward indefinitely. The acquired tax credit
carryforwards total $0.3 million for federal income tax purposes, which expire between 2036 and 2043, and state credit carryovers of
$0.3 million, which expire between 2031 and 2038. Consistent with our conclusion with respect to the need for valuation allowances associated
with our other deferred tax assets, the net deferred tax assets related to APT of $1.6 million at the acquisition date as well as those
at December 31, 2025 were fully included in our valuation allowance.

Liquidity
and Capital Resources

Liquidity
refers to the liquid financial assets available to fund our business operations and pay for near-term obligations. These liquid financial
assets consist of cash, cash equivalents, and investments.

As
of December 31, 2025, our accumulated deficit was $583.4 million with cash and cash equivalents of $13.4 million. Since inception, we
have financed our operations primarily through cash generated by operations and proceeds from our debt and stock offerings.

46

Capital
Resources

As
of December 31, 2025 and 2024, the Company did not have any debt.

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 direct registering offering for $4.0 million in gross proceeds deducting
offering expenses.

In
addition, 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 up to $50.0 million of our common stock (the “ATM Program”). During the twelve months ended December
31, 2025, the Company sold an aggregate of 963,723 shares of common stock under the Sales Agreement, at an average price of approximately
$3.17 per share for gross proceeds of $3.1 million and net proceeds of $2.9 million, after deducting Roth’s commission and other
expenses. As of December 31, 2025, $46.9 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 the 2025 registered direct offering and our “at-the-market” facility, refer to Note 11, Convertible
Preferred Stock and Stockholders’ Equity of the notes to the consolidated financial statements, under the subheadings Controlled
Equity Offering and 2025 Equity Financing, included within this report.

Liquidity

The
following table summarizes our cash flow by operating, investing and financing activities for years ended December 31, 2025 and 2024
(in thousands):

Year Ended December 31,

2025

2024

Cash flow used in operating activities

$

(13,685

)

$

(8,497

)

Cash flow (used in) provided by investing activities

(93

)

74

Cash flow provided by financing activities

14,763

297

Net
cash used in operating activities. We used approximately $13.7 million and $8.5 million of cash in operating activities during the
years ended December 31, 2025 and 2024, respectively. The increase in cash used in operating activities was primarily driven by changes
in working capital.

Net
cash used in/provided by investing activities. We used less than $0.1 million of cash for investing activities during the year ended
December 31, 2025 for the purchase of equipment. We generated approximately $0.1 million for investing activities during the year ended
December 2024 from the acquisition of Access Point Technologies EP, Inc.

Net
cash provided by financing activities. We generated approximately $14.8 million and $0.3 million of cash from financing activities
for the years ended December 31, 2025 and 2024, respectively. The cash generated in 2025 was primarily driven by the proceeds from the
registered direct offering and the controlled equity offering during the third and fourth quarters. The cash generated in 2024 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.

At
December 31, 2025, we had working capital of approximately $11.5 million, compared to working capital of approximately $4.8 million at
December 31, 2024. The increase in working capital was primarily driven by the proceeds from our equity offerings in 2025.

Our
principal source of liquidity is cash provided by operations and by the issuance of common stock through the exercise of stock options
and our employee stock purchase program as well as cash received from past equity raises. In addition, the Company filed a universal
shelf registration statement on Form S-3 with the SEC in May 2023, which was declared effective by the SEC on June 6, 2023, registering
for sale up to $100.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights and/or units
from time to time and at prices and on terms that we may determine. The net proceeds of any securities we sell under our shelf registration
statement may be used for general corporate purposes, including among other possible uses, the acquisition of companies or businesses,
repayment and refinancing of debt, working capital and capital expenditures.

The
Company believes the cash, and cash equivalents on hand as of December 31, 2025, will be sufficient to meet its obligations as they become
due in the ordinary course of business for at least 12 months following the date of the consolidated financial statements included in
this Annual Report on Form 10-K, as well as for periods beyond that 12-month period. Our cash requirements depend on numerous factors,
including success of clinical adoption within the installed base of robotic magnetic systems, new placements of capital systems, the
resources we devote to developing and supporting our products, and other factors. We expect to continue to fund our operations with cash
resources primarily generated from the proceeds of our past equity raises and from our working capital. In the future, we may finance
cash needs through the sale of other equity securities or non-core assets, strategic collaboration agreements, debt financings or through
distribution rights.

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.

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