Vicarious Surgical (US:RBOT)2022-03-30 16:00Financial Performance and Losses - The company has incurred net losses of $35.2 million and $12.9 million for the years ended December 31, 2021, and 2020, respectively, with an accumulated deficit of $66.8 million as of December 31, 2021[132]. - The company has not generated any revenue from the sale of the Vicarious System to date and anticipates continuing to incur significant losses for at least the next several years[128][129]. - The company expects to expend substantial additional amounts to commercialize the Vicarious System and develop new surgical applications[134]. - As of December 31, 2021, the company had federal net operating loss carry forwards (NOLs) of approximately $67.3 million, with $2.8 million set to expire between 2034 and 2037 if not utilized[205]. - NOLs generated in taxable years beginning after December 31, 2017, may offset no more than 80% of the taxable income for that year, and cannot be carried back to prior years[206]. Product Development and Market Strategy - The company plans to use funds from the Business Combination to scale operations, develop the Vicarious System for ventral hernia repair, and expand into new surgical applications[134]. - The company aims to launch the Vicarious System for ventral hernia repair and later expand to other abdominal surgical applications, with FDA clearance expected in 2023[139]. - The success of the Vicarious System depends on market acceptance and the ability to demonstrate its value compared to competing products[141][146]. - The market for robotic-assisted surgical technology is rapidly evolving, making it difficult to forecast demand for the Vicarious System[140]. - The success of the Vicarious System depends on training sufficient numbers of surgeons and hospital staff, which poses a significant challenge[154]. Competition and Market Risks - The company faces competition from established companies in robotic-assisted surgery, which may impact its ability to generate future revenue[145]. - The company may face significant competition from established manufacturers like Intuitive Surgical and Johnson & Johnson, which have greater financial and marketing resources[157]. - Future revenue growth is expected to come increasingly from international markets, which involves various risks including compliance with foreign regulations and political instability[168]. - The introduction of new products by competitors could make the company's future offerings obsolete, adversely affecting its business and financial condition[191]. Regulatory and Compliance Challenges - The company is subject to extensive government regulation, including pre-market and post-market regulation by the FDA, which could restrict the development and marketing of its products[212]. - The FDA's review process for 510(k) clearance typically takes 90 to 180 days, while the PMA process can take from 180 days to over a year[215][216]. - Regulatory changes could result in higher costs or lower sales than anticipated, impacting the company's operations[213]. - The company must comply with varying international regulations for marketing authorization, including CE mark in the EU, which could delay revenue generation[231]. Operational and Manufacturing Risks - The company relies on limited suppliers for key components of the Vicarious System, which could disrupt operations if those suppliers fail to meet requirements[173]. - Manufacturing problems or delays could limit revenue growth or increase losses, particularly if production does not meet regulatory standards[171]. - Quality issues could lead to recalls or safety alerts, adversely impacting the company's business, financial condition, and cash flows[184]. - A recall of the Vicarious System could significantly impact the company's financial condition and operational results[236]. Intellectual Property and Legal Risks - The company faces risks related to the protection of its intellectual property, which may not adequately shield against competition[257]. - Patent applications may not result in granted patents, and existing patents may not provide sufficient protection against competitors[258]. - The company may face costly litigation if competitors infringe on its patents, which could result in significant financial liabilities and resource diversion[279]. - The company may be subject to claims regarding the wrongful use of trade secrets by employees or contractors, leading to costly litigation[284]. Internal Controls and Financial Reporting - The company has identified material weaknesses in its internal control over financial reporting for the years ended December 31, 2021, and 2020, which could lead to misstatements in financial statements[199]. - The company expects to incur additional costs to remediate control deficiencies, with no assurance that these efforts will be successful[203]. - A material weakness in internal controls over financial reporting was identified, leading to a restatement of previously issued financial statements for the period ended December 31, 2021[314]. Market and Stock Performance - The company has 17,249,991 outstanding public warrants and 8,900,000 private placement warrants, all exercisable at $11.50 per share, which could lead to dilution for existing shareholders[310]. - The trading market for D8's securities is influenced by analyst coverage; a lack of coverage or adverse opinions could lead to declines in stock price and trading volume[321]. - Anti-takeover provisions in Delaware law and D8's organizational documents may limit stockholder actions and discourage beneficial takeover attempts, potentially affecting stock price[325].