Sensus Healthcare(SRTS) - 2025 Q1 - Quarterly Report

PART I – Financial Information Condensed Consolidated Financial Statements (unaudited) Q1 2025 unaudited financials report a $2.6 million net loss, decreased assets, negative operating cash flow, noting a DOJ investigation and revenue concentration Condensed Consolidated Balance Sheets Total assets decreased to $60.2 million by March 31, 2025, primarily from reduced cash, with liabilities increasing and equity falling to $53.0 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $19,072 | $22,056 | | Accounts receivable, net | $18,018 | $19,731 | | Inventories | $9,923 | $10,097 | | Total current assets | $54,196 | $56,738 | | Total assets | $60,210 | $62,165 | | Liabilities & Equity | | | | Total current liabilities | $6,725 | $5,885 | | Total liabilities | $7,176 | $6,338 | | Total stockholders' equity | $53,034 | $55,827 | | Total liabilities and stockholders' equity | $60,210 | $62,165 | Condensed Consolidated Statements of Income (Loss) Q1 2025 reported a $2.57 million net loss, a shift from prior year's income, due to 21.7% lower revenues and a 188.9% increase in R&D expenses Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $8,344 | $10,663 | | Gross Profit | $4,354 | $6,662 | | Total Operating Expenses | $7,000 | $3,775 | | Research and Development | $2,606 | $926 | | Income (loss) from operations | ($2,646) | $2,887 | | Net income (loss) | ($2,572) | $2,274 | | Net income (loss) per share – diluted | ($0.16) | $0.14 | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity decreased to $53.0 million by March 31, 2025, primarily due to a $2.57 million net loss and $0.3 million in stock repurchases - Key changes in stockholders' equity for Q1 2025 include a net loss of $2.572 million and the repurchase of stock for $0.3 million[18] Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $2.7 million in Q1 2025, leading to a $3.0 million net decrease in cash, ending the quarter with $19.1 million Summary of Cash Flows (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,677) | ($8,187) | | Net cash used in investing activities | ($7) | ($233) | | Net cash used in financing activities | ($300) | $0 | | Net decrease in cash and cash equivalents | ($2,984) | ($8,420) | | Cash and cash equivalents – end of period | $19,072 | $14,728 | Notes to the Condensed Consolidated Financial Statements (unaudited) Notes detail accounting policies, Q1 2025 revenue of $6.7 million with 69% from one customer, a $15 million credit facility, and an ongoing DOJ investigation - In 2024, the company formed Sensus Healthcare Services, LLC, a wholly owned subsidiary to provide operational healthcare services, including leased equipment and radiotherapy technologists[23] - A single customer in the U.S. accounted for 69% of revenue for Q1 2025 and 87% of accounts receivable as of March 31, 2025[41] - The company has a $15 million revolving credit facility with Comerica Bank, with no borrowings outstanding as of March 31, 2025. The facility is secured by all company assets and has several covenants[66][67] - The company is cooperating with a Department of Justice (DOJ) investigation into the billing practices of a physician who used the company's SRT-100. The company disputes any wrongdoing and is unable to estimate the potential cost[79] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes Q1 2025's 22.4% revenue decrease to lower unit sales, with gross profit margin falling to 53.0% and operating expenses, notably R&D, significantly increasing Q1 2025 vs Q1 2024 Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $8,344 | $10,663 | -22.4% | | Gross Profit | $4,354 | $6,662 | -34.3% | | Selling and marketing | $2,186 | $1,270 | +69.2% | | Research and development | $2,606 | $926 | +188.9% | | Net Income (Loss) | ($2,572) | $2,274 | -226.3% | - The decrease in revenue was primarily driven by a lower number of units sold to a large customer[106] - The increase in R&D expense was primarily due to significant lobbying costs related to billing code reimbursement, increased headcount, and product development[111] - Cash and cash equivalents decreased by $3.0 million during the quarter, from $22.1 million to $19.1 million[115] Quantitative and Qualitative Disclosures about Market Risk This section is not applicable for the reporting period - The company has indicated that this item is not applicable[129] Controls and Procedures As of March 31, 2025, management concluded that disclosure controls and procedures were effective, with no significant changes to internal control over financial reporting - Management, including the CEO and CFO, evaluated disclosure controls and procedures and concluded they were effective as of March 31, 2025[130] - No significant changes were made to internal control over financial reporting during the most recently completed fiscal quarter[131] PART II – Other Information Legal Proceedings The company is involved in ordinary course legal proceedings, with details on a Department of Justice investigation referenced in Note 6 - The company is involved in ordinary course legal proceedings and refers to Note 6, which details an ongoing DOJ investigation[134] Risk Factors Investors are directed to the 2024 Annual Report for risk factors, as no new or amended risks are presented in this filing - For a discussion of risk factors, the report refers to Part I, Item 1A of the company's 2024 Annual Report[135] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales occurred in Q1 2025; the company repurchased 50,360 shares for $0.3 million under its $3 million stock repurchase program - There were no unregistered sales of securities during the three months ended March 31, 2025[136] Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Repurchased | Average Price Paid per Share | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | Jan 2025 | 0 | $— | $2,972,812 | | Feb 2025 | 50,360 | $5.90 | $2,672,816 | | Mar 2025 | 0 | $— | $2,672,816 | | Total | 50,360 | $5.90 | | Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None[141] Mine Safety Disclosure This section is not applicable to the company - Not applicable[142] Other Information No directors or officers adopted or terminated any Rule 10b5-1 trading plans during Q1 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the quarter[143] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed include CEO and CFO certifications pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350, as well as Inline XBRL files[145]