Vicarious Surgical (RBOT) - 2024 Q4 - Annual Report

Financial Performance and Position - The company has incurred an accumulated deficit of $195.9 million as of December 31, 2024, with net losses of$63.2 million and $71.1 million for the years ended December 31, 2024 and 2023, respectively[128][129]. - As of December 31, 2024, the company held cash and cash equivalents of$9.7 million and short-term investments of $39.4 million, which are expected to fund operations only into the first quarter of 2026[128][132]. - The company has not generated any revenue from the sales of the Vicarious Surgical System to date and anticipates continuing to incur significant losses for several years as it develops and commercializes the system[129][131]. - Future revenue generation is heavily dependent on the successful commercialization of the Vicarious Surgical System and the establishment of a sales and distribution network[131][139]. - The company recorded a full valuation allowance related to its NOLs and other deferred tax assets due to uncertainty regarding the realization of future benefits[187]. - As of December 31, 2024, the company had federal net operating loss carry forwards (NOLs) of approximately$165.1 million, with about $2.8 million set to expire between 2034 and 2037 if not utilized[187]. Market and Competitive Landscape - The company faces substantial competition from established companies in the robotic-assisted surgical market, including Intuitive Surgical, Johnson & Johnson, and Medtronic, which may impact its ability to generate future revenue[138][137]. - The company aims to commercialize the Vicarious Surgical System initially for ventral hernia repair procedures, with plans to expand into gynecological, urological, and other general surgical applications[135][139]. - Competition in the medical device industry is intense, with major competitors like Intuitive Surgical and Johnson & Johnson having greater resources, which could impact the company's market position[148]. - The introduction of new products by competitors could render the company's offerings obsolete, affecting future revenue and market acceptance[176]. Regulatory and Compliance Challenges - The company must navigate regulatory challenges and maintain compliance to successfully launch the Vicarious Surgical System in the market[140][135]. - The company is subject to extensive government regulation, which could restrict the development and marketing of its product candidates, potentially leading to significant costs[193]. - The FDA's review process for premarket notifications typically takes 90 to 180 days, while De Novo classification applications can take 120 to 280 days, with potential for longer delays[196]. - There is no guarantee that the FDA will grant marketing authorization for the Vicarious Surgical System or any future product candidates, which could hinder business growth[204]. - Compliance with regulatory requirements includes post-market surveillance and inspections, which may involve significant operational disruptions[200]. Operational Risks - The company faces challenges in establishing relationships with key surgeons, hospitals, and ASCs due to existing ties with larger medical device companies, which may hinder effective marketing of the Vicarious Surgical System[142]. - Manufacturing delays or problems could limit revenue growth and increase losses, impacting the company's operational results[160]. - The company relies on limited suppliers for key components, and losing these suppliers could necessitate redesigns and significantly affect business operations[163]. - The company faces challenges in developing and optimizing sales and distribution channels, which could negatively impact operating results and customer experience[167]. Intellectual Property and Legal Risks - The company relies on patent protection to maintain a competitive advantage, but uncertainties exist regarding the validity and enforceability of its patents[246]. - Litigation over intellectual property rights could be costly and time-consuming, with unfavorable outcomes potentially impacting the company's business[263]. - The company may face significant expenses and resource consumption when challenging third-party patents through USPTO or EPO proceedings[266]. - Adverse outcomes in intellectual property litigation could lead to diminished perceived value of the company's product candidates and negatively impact stock prices[267]. Management and Personnel - The company is highly dependent on the contributions of its co-founders and key personnel, and losing them could adversely affect business operations[150]. - The company must continue to recruit and retain effective sales and marketing personnel to achieve market awareness and sales success for the Vicarious Surgical System[170]. Financial and Market Risks - Economic downturns could weaken demand for the company's products and hinder capital raising efforts[177]. - Decreasing prices for the Vicarious Surgical System due to market pressures could adversely affect the company's financial condition if expenses are not reduced accordingly[159]. - The company anticipates incurring additional costs to remediate identified control deficiencies, which may not guarantee success[186]. Corporate Governance and Structure - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of certain exemptions from disclosure requirements, which may affect the attractiveness of its securities to investors[300][302]. - Approximately 71.7% of the voting power is held by Adam Sachs, Sammy Khalifa, and Barry Greene, which may lead the company to become a "controlled company" under NYSE standards[313]. - The board of directors can issue preferred stock without stockholder approval, which could significantly dilute the ownership of a hostile acquirer[306].