Stereotaxis(STXS) - 2023 Q1 - Quarterly Report

Part I Financial Information Financial Statements The unaudited consolidated financial statements for Q1 2023 show a net loss of $5.3 million, with total assets decreasing to $50.7 million Balance Sheets Total assets decreased to $50.7 million by March 31, 2023, driven by reduced cash, and equity declined to $23.7 million Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2023 (USD) | December 31, 2022 (USD) | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $5,623 | $8,586 | | Short-term investments | $20,041 | $19,844 | | Total current assets | $40,905 | $43,246 | | Total Assets | $50,711 | $53,413 | | Current Liabilities | | | | Total current liabilities | $14,269 | $14,291 | | Total Liabilities | $21,418 | $21,484 | | Total Stockholders' Equity | $23,710 | $26,346 | | Total Liabilities and Stockholders' Equity | $50,711 | $53,413 | Statements of Operations Q1 2023 total revenue decreased 7% to $6.5 million, leading to a $5.6 million operating loss and $5.7 million net loss Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2023 (USD) | Q1 2022 (USD) | | :--- | :--- | :--- | | Total Revenue | $6,548 | $7,037 | | Gross Margin | $3,876 | $4,924 | | Total Operating Expenses | $9,495 | $9,013 | | Operating Loss | $(5,619) | $(4,089) | | Net Loss | $(5,347) | $(4,086) | | Net Loss per Share (Basic & Diluted) | $(0.07) | $(0.06) | Statements of Cash Flows Net cash used in operating activities increased to $2.8 million in Q1 2023, with total cash balances decreasing to $6.8 million Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2023 (USD) | Three Months Ended March 31, 2022 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,802) | $(2,193) | | Net cash used in investing activities | $(349) | $(1,154) | | Net cash provided by financing activities | $56 | $54 | | Net decrease in cash, cash equivalents, and restricted cash | $(3,095) | $(3,293) | Notes to Financial Statements Notes detail business operations, accounting policies, cardiac ablation focus, supply chain risks, and stock-based compensation - The company's primary products are the Genesis RMN System and the Odyssey Solution, focusing on cardiac ablation procedures for arrhythmias, with an aspiration to expand into other endovascular indications[25][27] - The company continues to face risks from supply chain disruptions, inflation, and hospital staffing shortages, which can impact procedure volumes, system installations, and operating costs[37][38][40] - In April 2023, all outstanding shares of Series B Convertible Preferred Stock were converted into common stock on a one-for-one basis[96] - The company has a 10-year CEO Performance Award of up to 13 million shares tied to market capitalization milestones. Stock-based compensation expense for this award was $1.8 million in Q1 2023[98][103] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) MD&A highlights a 7% revenue decrease to $6.5 million in Q1 2023, lower gross margin, and $26.8 million liquidity Results of Operations Q1 2023 revenue decreased 7% to $6.5 million, driven by lower disposables and service revenue, with gross margin at 59% Revenue Comparison (in millions) | Revenue Stream | Q1 2023 (USD) | Q1 2022 (USD) | Change | | :--- | :--- | :--- | :--- | | Systems | $1.8 | $1.6 | +12.5% | | Disposables, service, and accessories | $4.7 | $5.4 | -13.0% | | Total Revenue | $6.5 | $7.0 | -7.0% | - The decrease in disposables, service, and accessories revenue was primarily driven by lower royalties from Biosense Webster[151] - Gross margin decreased to 59% in Q1 2023 from 70% in Q1 2022, driven by changes in system product mix and increased costs under service contracts[152] - Operating expenses increased, with R&D up 12% due to project timing and regulatory expenses, and Sales & Marketing up 7% from higher travel and stock-based compensation[153][154] Liquidity and Capital Resources The company maintains strong liquidity with $6.8 million in cash and $20.0 million in short-term investments, holding no debt Liquidity Position (in millions) | Metric | March 31, 2023 (USD) | December 31, 2022 (USD) | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $6.8 | $9.9 | | Short-term investments | $20.0 | $19.8 | | Working Capital | $26.6 | $29.0 | - Net cash used in operating activities increased to $2.8 million in Q1 2023 from $2.2 million in Q1 2022, driven by a higher operating loss[159] - The company had no debt as of March 31, 2023[162] Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2023, with no material internal control changes - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[165] - No material changes to the company's internal control over financial reporting were identified during the first quarter of 2023[166] Part II Other Information Legal Proceedings The company reported no material legal proceedings during the period - The company reports no material legal proceedings[168] Risk Factors Updated risk factors highlight exposure to uninsured cash balances, with minimal impact from the SVB failure - The company highlights the risk of maintaining cash balances in excess of FDIC-insured limits at financial institutions[169] - Following the failure of Silicon Valley Bank (SVB), the company stated its cash balance at SVB was less than 6% of its total cash and investments and it does not believe it has exposure to loss[169] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported during the period - None reported[170]