Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 001-36159

STEREOTAXIS, INC.

(Exact name of the Registrant as Specified in its Charter)

delaware

94-3120386

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification Number)

710 North Tucker Boulevard, Suite 110

St. Louis, MO 63101

(Address of Principal Executive Offices including Zip Code)

(314) 678-6100

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		STXS		NYSE American LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T “See 232.405 of this Chapter” during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated Filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The number of outstanding shares of the registrant’s common stock on October 31, 2024, was 84,729,507.

STEREOTAXIS, INC.

INDEX TO FORM 10-Q

		Page

Part I Financial Information

Item 1.	Financial Statements (unaudited)
	Balance Sheets	3
	Statements of Operations	4
	Statements of Convertible Preferred Stock and Stockholders’ Equity	5-6
	Statements of Cash Flows	7
	Notes to Financial Statements	8-26
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27-35
Item 3.	[Reserved]	35
Item 4.	Controls and Procedures	35-36

Part II Other Information

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36-38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults upon Senior Securities	38
Item 4.	[Reserved]	38
Item 5.	Other Information	38
Item 6.	Exhibits	39

Signatures		40

ITEM 1. FINANCIAL STATEMENTS

STEREOTAXIS, INC.

BALANCE SHEETS

(in thousands, except share amounts)	September 30, 2024			December 31, 2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	10,663		$	19,818
Restricted cash - current		350			525
Accounts receivable, net of allowance of $661 and $672 at 2024 and 2023, respectively		7,921			3,822
Inventories, net		9,009			8,426
Prepaid expenses and other current assets		869			676
Total current assets		28,812			33,267
Property and equipment, net		3,733			3,304
Goodwill		4,494			-
Intangible assets		8,162			-
Restricted cash		-			219
Operating lease right-of-use assets		5,618			4,982
Prepaid and other non-current assets		116			137
Total assets	$	50,935		$	41,909

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,403		$	3,190
Accrued liabilities		3,376			2,972
Deferred revenue		5,092			6,657
Current contingent consideration		5,298			-
Current portion of operating lease liabilities		552			428
Total current liabilities		20,721			13,247
Long-term deferred revenue		2,102			1,637
Long-term contingent consideration		6,251			-
Operating lease liabilities		5,583			5,062
Other liabilities		55			43
Total liabilities		34,712			19,989

Series A - Convertible preferred stock:
Convertible preferred stock, Series A, par value $0.001; 10,000,000 shares authorized; 21,683 and 22,358 shares outstanding at 2024 and 2023, respectively		5,408			5,577

Stockholders’ equity:
Common stock, par value $0.001; 300,000,000 shares authorized, 84,713,400 and 80,949,697 shares issued at 2024 and 2023, respectively		85			81
Additional paid in capital		565,146			554,148
Treasury stock, 4,015 shares at 2024 and 2023		(206	)		(206	)
Accumulated deficit		(554,210	)		(537,680	)
Total stockholders’ equity		10,815			16,343
Total liabilities and stockholders’ equity	$	50,935		$	41,909

See accompanying notes.

STEREOTAXIS, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except share and per share amounts)	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2024			2023			2024			2023
Revenue:
Systems	$	4,391		$	3,539		$	7,243		$	8,673
Disposables, service and accessories		4,805			4,260			13,335			13,533
Total revenue		9,196			7,799			20,578			22,206

Cost of revenue:
Systems		3,673			2,909			5,760			7,309
Disposables, service and accessories		1,424			831			3,440			2,775
Total cost of revenue		5,097			3,740			9,200			10,084

Gross margin		4,099			4,059			11,378			12,122

Operating expenses:
Research and development		2,454			2,668			6,970			8,061
Sales and marketing		3,152			3,097			9,456			9,585
General and administrative		4,838			3,933			12,064			11,011
Total operating expenses		10,444			9,698			28,490			28,657
Operating loss		(6,345	)		(5,639	)		(17,112	)		(16,535	)

Other income		5			-			2			27
Interest income, net		150			270			580			835
Net loss	$	(6,190	)	$	(5,369	)	$	(16,530	)	$	(15,673	)

Cumulative dividend on convertible preferred stock		(328	)		(338	)		(984	)		(1,004	)
Net loss attributable to common stockholders	$	(6,518	)	$	(5,707	)	$	(17,514	)	$	(16,677	)

Net loss per share attributable to common stockholders:
Basic	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)
Diluted	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)

Weighted average number of common shares and equivalents:
Basic		85,824,789			82,468,971			84,629,531			80,028,243
Diluted		85,824,789			82,468,971			84,629,531			80,028,243

See accompanying notes.

STEREOTAXIS, INC.

STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Unaudited)

Three Months Ended September 30, 2023

	Shares		Amount		Shares		Amount		Shares		Amount		Amount		Amount			Amount			Amount
(in thousands, except share amounts)	Convertible Preferred Stock Series A (Mezzanine)				Convertible Preferred Stock Series B				Common Stock				Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Amount		Shares		Amount		Shares		Amount		Amount		Amount			Amount			Amount
Balance at June 30, 2023		22,383	$	5,583		-	$	-		80,682,586	$	81	$	548,782	$	(206	)	$	(527,271	)	$	21,386
Stock issued for the exercise of stock options		-		-		-		-		1,000		-		1		-			-			1
Stock-based compensation		-		-		-		-		172,592				2,672		-			-			2,672
Components of net loss		-				-		-		-									(5,369	)		(5,369	)
Employee stock purchase plan		-				-				17,117		-		25		-						25
Balance at September 30, 2023		22,383	$	5,583		-	$	-		80,873,295	$	81	$	551,480	$	(206	)	$	(532,640	)	$	18,715

Three Months Ended September 30, 2024

	Shares		Amount		Shares		Amount		Shares		Amount		Amount		Amount			Amount			Amount
	Convertible Preferred Stock Series A (Mezzanine)				Convertible Preferred Stock Series B				Common Stock				Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
(in thousands, except share amounts)	Shares		Amount		Shares		Amount		Shares		Amount		Amount		Amount			Amount			Amount

Balance at June 30, 2024		21,683	$	5,408		-	$	-		82,990,159	$	83	$	559,499	$	(206	)	$	(548,020	)	$	11,356
Stock issued for the exercise of stock options		-		-				-		53,203				54		-						54
Stock issued in APT acquisition		-				-				1,486,620		1		2,999					-			3,000
Stock-based compensation				-				-		168,888		1		2,569		-						2,570
Components of net loss																			(6,190	)		(6,190	)
Employee stock purchase plan		-		-				-		14,530				25		-						25
Balance at September 30, 2024		21,683	$	5,408		-	$	-		84,713,400	$	85	$	565,146	$	(206	)	$	(554,210	)	$	10,815

See accompanying notes.

STEREOTAXIS, INC.

STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(Unaudited)

Nine Months Ended September 30, 2023

	Shares		Amount		Shares			Amount			Shares		Amount		Amount			Amount			Amount			Amount
(in thousands, except share amounts)	Convertible Preferred Stock Series A (Mezzanine)				Convertible Preferred Stock Series B						Common Stock				Additional Paid-In Capital			Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares		Amount		Shares			Amount			Shares		Amount		Amount			Amount			Amount			Amount
Balance at December 31, 2022		22,383	$	5,583		5,610,121		$	6			74,874,459	$	75	$	543,438		$	(206	)	$	(516,967	)	$	26,346
Stock issued for the exercise of stock options		-		-		-			-			30,384				(18	)		-						(18	)
Stock-based compensation		-				-						316,646				7,987									7,987
Components of net loss																						(15,673	)		(15,673	)
Employee stock purchase plan		-				-						41,685				73			-			-			73
Preferred stock conversion		-				(5,610,121	)		(6	)		5,610,121		6								-			-
Balance at September 30, 2023		22,383	$	5,583		-		$	-			80,873,295	$	81	$	551,480		$	(206	)	$	(532,640	)	$	18,715

Nine Months Ended September 30, 2024

	Convertible Preferred Stock Series A (Mezzanine)						Convertible Preferred Stock Series B				Common Stock				Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
(in thousands, except share amounts)	Shares			Amount			Shares		Amount		Shares		Amount		Amount		Amount			Amount			Amount

Balance at December 31, 2023		22,358		$	5,577			-	$	-		80,949,697	$	81	$	554,148	$	(206	)	$	(537,680	)	$	16,343
Balance		22,358		$	5,577			-	$	-		80,949,697	$	81	$	554,148	$	(206	)	$	(537,680	)	$	16,343
Stock issued for the exercise of stock options		-						-		-		64,966				66		-			-			66
Stock issued in APT acquisition		-						-				1,486,620		1		2,999		-						3,000
Stock-based compensation												673,263		1		7,695								7,696
Components of net loss		-						-				-						-			(16,530	)		(16,530	)
Employee stock purchase plan		-						-				37,552				72					-			72
Preferred stock conversion		(675	)		(169	)		-				1,501,302		2		166		-						168
Balance at September 30, 2024		21,683		$	5,408			-	$	-		84,713,400	$	85	$	565,146	$	(206	)	$	(554,210	)	$	10,815
Balance		21,683		$	5,408			-	$	-		84,713,400	$	85	$	565,146	$	(206	)	$	(554,210	)	$	10,815

See accompanying notes.

STEREOTAXIS, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)	2024			2023
	Nine Months Ended September 30,
(in thousands)	2024			2023
Cash flows from operating activities
Net loss	$	(16,530	)	$	(15,673	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		428			457
Amortization		178			-
Loss on revaluation of contingent consideration		672			-
Non-cash lease expense		7			23
Stock-based compensation		7,696			7,987
Accretion and short-term investment discount		-			(287	)
Changes in operating assets and liabilities:
Accounts receivable		(3,401	)		(156	)
Inventories		619			1,088
Prepaid expenses and other current assets		(177	)		470
Other assets		21			73
Accounts payable		1,448			270
Accrued liabilities		364			(146	)
Deferred revenue		(1,100	)		(798	)
Other liabilities		12			(8	)
Net cash used in operating activities		(9,763	)		(6,700	)
Cash flows from investing activities
Purchase of property and equipment		(32	)		(366	)
Proceeds from maturity of short-term investments		-			20,131
Cash acquired in business acquisitions		108			-
Net cash provided by investing activities		76			19,765
Cash flows from financing activities
Proceeds from issuance of stock, net of issuance costs		138			55
Net cash provided by financing activities		138			55
Net (decrease) increase in cash, cash equivalents, and restricted cash		(9,549	)		13,120
Cash, cash equivalents, and restricted cash at beginning of period		20,562			9,855
Cash, cash equivalents, and restricted cash at end of period	$	11,013		$	22,975

Reconciliation of cash, cash equivalents, and restricted cash to balance sheet as of September 30th:

Cash and cash equivalents	$	10,663	$	22,100
Restricted cash - current		350		525
Restricted cash		-		350
Total cash, cash equivalents, and restricted cash	$	11,013	$	22,975

See accompanying notes.

STEREOTAXIS, INC.

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Notes to Financial Statements

In this report, “Stereotaxis”, the “Company”, “Registrant”, “we”, “us”, and “our” refer to Stereotaxis, Inc. and its wholly owned subsidiaries. Genesis RMN^®, Niobe^®, Navigant^®, Odyssey^®, Odyssey Cinema™, Vdrive^®, Vdrive Duo™, V-CAS™, V-Loop™, V-Sono™, QuikCAS™, Cardiodrive^®, MAGiC ™, and Map-iT™ catheters are trademarks of Stereotaxis, Inc. All other trademarks that appear in this report are the property of their respective owners.

1. Description of Business

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. Our product strategy is 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 System, the Odyssey Solution, 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 devices.

The Genesis RMN System is designed to enable physicians to complete more 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 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, which is an innovative solution that delivers synchronized content for optimized workflow, advanced care, and improved productivity. This tool includes an archiving capability that allows clinicians to store and replay entire procedures or segments of procedures. This information can be accessed from locations throughout the hospital local area network and over the global Odyssey Network providing physicians with a tool for clinical collaboration, remote consultation, and training.

We have arrangements with fluoroscopy system manufacturers to provide such systems in a bundled purchase offer for hospitals establishing robotic interventional operating rooms. These are single-plane, full-power x-ray systems and include the c-arm and powered table. The combination of RMN Systems with our partnered x-ray systems reduces 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 in 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.

We have received regulatory clearances and approvals necessary for us to market the Genesis RMN System in the U.S. and Europe, and we are in the process of obtaining necessary registrations for extending our markets in other countries. The Niobe System, our prior generation robotic magnetic navigation system, the Odyssey Solution, Cardiodrive, e-Contact, and various disposable interventional devices have received regulatory clearances and approvals in the U.S., Europe, Canada, China, Japan and various other countries. We have regulatory clearances and approvals that allow us to market the Vdrive and Vdrive Duo Systems with the V-CAS device in the U.S., Canada and Europe. We are pursuing regulatory approvals for the Stereotaxis MAGiC catheter, a robotically-navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablation procedures, in various global geographies. 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 between our robotic magnetic navigation system, x-ray systems, and digital imaging and 3D catheter location sensing technology, as well as 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.

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 used during cardiac ablation procedures that are commercially available across key global geographies.

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.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial statements of Stereotaxis, Inc. have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all the disclosures required by GAAP for complete financial statements. In the opinion of management, they include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Operating results for the nine-month period ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or for future operating periods.

These interim financial statements and the related notes should be read in conjunction with the annual financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (SEC) on March 8, 2024.

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, 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 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.

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 of time 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, the COVID-19 pandemic negatively affected, and any resurgence of a variant of COVID-19 or any similar occurrences may in the future 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-coronavirus areas, leading to the performance of fewer procedures in which our disposable products are used. Significant decreases to our capital or recurring revenues could have a material adverse effect on our business, operating results, and financial condition. While we cannot reliably estimate the ultimate duration of the impact or the severity of ongoing periodic resurgences of pandemic-related issues, we continue to anticipate periodic disruptions to our manufacturing operations, supply chains, procedures volumes, service activities, and capital system orders and placements, any of which could have a material adverse effect on our business, financial condition, results of operations, or cash flows. The impact has varied widely over time by individual geography.

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, 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.

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, including Silicon Valley Bank. On March 10, 2023, Silicon Valley Bank (“SVB”), where the Company maintained accounts with a cash balance of less than 6% of the Company’s total cash, cash equivalents and marketable securities, was closed by the California Department of Financial Protection and Innovation and the FDIC was appointed as receiver. On March 12, 2023, the U.S. Department of the Treasury, Federal Reserve Board, and FDIC released a joint statement announcing that the FDIC would complete its resolution of SVB in a manner that fully protected all depositors at SVB and that depositors would have access to all of their money starting March 13, 2023. On March 26, 2023, it was announced that First-Citizens Bank & Trust Company would assume all of SVB’s deposits and loans as of March 27, 2023. During the periods presented, the Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market instruments, and other highly liquid investments with original maturities of three months or less from the date of purchase. Accrued interest receivable on money market instruments, included in other current assets, was less than $0.1 million as of September 30, 2024, and December 31, 2023.

Restricted Cash

Restricted cash primarily consists of cash that the Company is obligated to maintain in accordance with contractual obligations. The Company’s restricted cash was $0.4 million and $0.7 million as of September 30, 2024, and December 31, 2023, respectively.

Investments

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. As of September 30, 2024, and December 31, 2023, the Company had no short-term investments.

Amortized cost of U.S. treasury securities and marketable debt securities are based on the Company’s purchase price adjusted for accrual of discount, or amortization of premium, and recognition of impairment charges, if any. The amortized cost of securities the Company purchases at a discount or premium will equal the face or par value at maturity or the call date, if applicable. Stated interest on investments is reported as income when earned and is adjusted for amortization or accretion of any premium or discount.

The Company segments its portfolio based on the underlying risk profiles of the securities and has a zero-loss expectation for U.S. treasury and U.S. government agency securities. The Company regularly reviews the securities using the probability of default method and analyzes the unrealized loss positions and evaluates the current expected credit loss by considering factors such as credit ratings, issuer-specific factors, current economic conditions, and reasonable and supportable forecasts. The Company did not have any material expected credit losses on investments or material expected credit losses on accrued interest related to investments during the nine months ended September 30, 2024, or year ended December 31, 2023.

Fair Value Measurements

Financial instruments consist of cash and cash equivalents, restricted cash, investments, accounts receivable, and accounts payable.

The Company measures certain financial assets and liabilities at fair value on a recurring basis. General accounting principles for fair value measurement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (“Level 1”) and the lowest priority to unobservable inputs (“Level 3”). The three levels of the fair value hierarchy are described below:

Level 1:		Values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:		Values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or other model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3:		Values are generated from model-based techniques that use significant assumptions not observable in the market.

As of September 30, 2024, and December 31, 2023, financial assets classified as Level 2 consisted of money market funds. The Company reviews trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data. This approach results in the Level 2 classification of these securities within the fair value hierarchy.

As of September 30, 2024, and December 31, 2023, financial liabilities classified as Level 3 consisted of the contingent consideration due to the APT acquisition. The Company reviews the change in the fair value of contingent consideration, which is performed by a third-party valuation firm. See Note 3 for further information regarding the valuation methods used by the third-party valuation firm. The approach results in the Level 3 classification of the contingent consideration within the fair value hierarchy.

Accounts Receivable, Contract Assets, and Allowance for Credit Losses

Accounts receivable primarily include amounts due from hospitals and distributors for acquisition of magnetic systems, associated disposable device sales and service contracts, net of allowances for expected credit losses. Credit is granted on a limited basis, with balances due generally within 30 days of billing. 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. The Company reports accounts receivable and contract assets net of an allowance for expected credit losses in accordance with Accounting Standards Codification Topic 326, Financial Instruments – Credit Losses (“ASC 326”). The provision for credit loss is based upon management’s assessment of historical and expected net collections considering business and economic conditions and other collection indicators. We assess collectability by reviewing the accounts receivable aging schedule on an aggregated basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectability issues. Amounts deemed uncollectible are recorded as an allowance for expected credit losses.

Revenue and Costs of Revenue

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 if 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, service-type warranty, and an implied obligation to provide software enhancements if and when available 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 and the implied obligation to deliver software enhancements if and when available 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 and right to software updates 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 nine months ended September 30, 2024, and approximately $0.1 million for the nine months ended September 30, 2023. Revenue from system delivery and installation represented 35% and 39% of revenue for the nine months ended September 30, 2024, and 2023, respectively.

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 nine months ended September 30, 2024, and 2023. Disposable revenue represented 27% and 21% of revenue for the nine months ended September 30, 2024, and 2023, respectively.

Royalty:

The Company receives royalties on the sale of various devices as provided by co-development and co-placement arrangements with various manufacturers. Royalty revenue represented less than 1% of revenue for the nine months ended September 30, 2024, and 2023.

Other Recurring Revenue:

Other recurring revenue includes revenue from product maintenance plans, service-type warranties, other post warranty maintenance, and the implied obligation to provide software enhancements if and when available for a specified period, typically one year following installation of our systems. Revenue from services and software enhancements, service-type warranties, and the implied obligation to provide software enhancements 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. Other recurring revenue represented 38% and 40% of revenue for the nine months ended September 30, 2024, and 2023, respectively.

The following table summarizes the Company’s revenue for systems, disposables, and service and accessories for the nine months ended September 30, 2024, and 2023 (in thousands):

	2024		2023		2024		2023
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Systems	$	4,391	$	3,539	$	7,243	$	8,673
Disposables, service and accessories		4,805		4,260		13,335		13,533
Total revenue	$	9,196	$	7,799	$	20,578	$	22,206

Transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to the Company’s systems contracts and obligations that will be recognized as revenue in future periods. These obligations are generally satisfied within two years after contract inception but may occasionally extend longer. Transaction price representing revenue to be earned on remaining performance obligations on system contracts was approximately $15.5 million as of September 30, 2024. Performance obligations arising from contracts for disposables and service are generally expected to be satisfied within one year after entering into the contract.

The following table summarizes the Company’s contract assets and liabilities (in thousands):

	September 30, 2024			December 31, 2023
Contract Assets - unbilled receivables	$	940		$	72

Customer deposits	$	1,302		$	2,105
Product shipped, revenue deferred		1,566			1,413
Deferred service and license fees		4,326			4,776
Total deferred revenue	$	7,194		$	8,294
Less: Long-term deferred revenue		(2,102	)		(1,637	)
Total current deferred revenue	$	5,092		$	6,657

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. The Company did not have any impairment losses on its contract assets for the periods presented.

Revenue recognized for the nine months ended September 30, 2024, and 2023, that was included in the deferred revenue balance at the beginning of each reporting period was $5.1 million and $5.7 million, respectively.

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 sheet were $0.1 million as of September 30, 2024, and December 31, 2023. The Company did not incur any impairment losses during any of the periods presented.

Costs of systems revenue include direct product costs, installation labor and other costs including estimated assurance-type warranty costs, and initial training costs, when applicable. These costs are recognized at the time of sale. Costs of disposable revenue include direct product costs and estimated warranty costs and are recognized at the time of sale. Cost of revenue from services and license fees are recognized 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 September 30, 2024.

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 preliminary fair value of the contingent consideration 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 September 30, 2024.

Leasing Arrangements

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company accounts for leases in accordance with Accounting Standards Update No. 2016-02 “Leases” (Topic 842) and all subsequent ASUs that modified Topic 842 (“ASC 842”). The Company determines if an arrangement contains a lease at inception.

The Company leases its facilities under operating leases. In accordance with ASC 842, operating lease agreements are recognized on the balance sheet as a right-of-use (“ROU”) asset and a corresponding lease liability. These leases generally do not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the leases do not contain contingent rent provisions. Many of our leases include both lease (i.e., fixed payments including rent, taxes, and insurance costs) and non-lease components (i.e., common-area or other maintenance costs) which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components for all leases.

The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less) on the balance sheet.

The calculated amounts of the ROU assets and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of the minimum lease payments. ASC 842 requires the use of the discount rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception.

Stock-Based Compensation

The Company accounts for its grants of stock options, non-qualified stock options, stock appreciation rights, restricted shares, restricted stock units and for its employee stock purchase plan in accordance with the provisions of general accounting principles for share-based payments. These accounting principles require the determination of the fair value of the stock-based compensation at the grant date and the recognition of the related expense over the period in which the stock-based compensation vests.

For time-based awards, the Company utilizes the Black-Scholes valuation model to determine the fair value of stock options and stock appreciation rights at the date of grant. The weighted average assumptions and fair value for options granted during the nine months ended September 30, 2024, were 1) expected dividend rate of 0%; 2) expected volatility of 76% based on the Company’s historical volatility; 3) risk-free interest rate based on the Treasury yield on the date of grant; and 4) expected term of 6.25 years. The resulting compensation expense is recognized over the requisite service period, which is generally four years. Restricted shares and units granted to employees and non-employee directors are valued at the fair market value at the date of grant. The Company amortizes the fair market value to expense over the service period, which is generally four years except for grants to directors which are generally earned over a period of six months. If the shares are subject to performance objectives, the resulting compensation expense is amortized over the anticipated vesting period and is subject to adjustment based on the actual achievement of objectives.

For market-based awards, stock-based compensation expense is recognized over the minimum service period regardless of whether or not the market target is probable of being achieved. The fair value of such awards is estimated on the grant date using Monte Carlo simulations.

Shares purchased by employees under the 2022 Employee Stock Purchase Plans are considered to be non-compensatory.

Net Loss per Common Share

Basic earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. In periods where there is net income, we apply the two-class method to calculate basic and diluted net income (loss) per share of common stock, as our convertible preferred stock is a participating security. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. In periods where there is a net loss, the two-class method of computing earnings per share does not apply as our convertible preferred stock does not contractually participate in our losses. We compute diluted net income (loss) per common share using net income (loss) as the “control number” in determining whether potential common shares are dilutive, after giving consideration to all potentially dilutive common shares, including stock options, warrants, unvested restricted stock units outstanding during the period and potential issuance of stock upon the conversion of our convertible preferred stock issued and outstanding during the period, except where the effect of such securities would be antidilutive.

The following table sets forth the computation of basic and diluted EPS (in thousands except for share and per share amounts):

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net loss	$	(6,190	)	$	(5,369	)	$	(16,530	)	$	(15,673	)
Cumulative dividend on convertible preferred stock		(328	)		(338	)		(984	)		(1,004	)
Net loss attributable to common stockholders	$	(6,518	)	$	(5,707	)	$	(17,514	)	$	(16,677	)

Weighted average number of common shares and equivalents:		85,824,789			82,468,971			84,629,531			80,028,243
Basic EPS	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)
Diluted EPS	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)

The Company did not include any portion of unearned restricted shares, outstanding options, stock appreciation rights, warrants or convertible preferred stock in the calculation of diluted loss per common share because all such securities are anti-dilutive for all periods presented. The application of the two-class method of computing earnings per share under general accounting principles for participating securities is not applicable during these periods because those securities do not contractually participate in its losses.

As of September 30, 2024, the Company had 3,957,970 shares of common stock issuable upon the exercise of outstanding options and stock appreciation rights at a weighted average exercise price of $3.80 per share, 49,386,978 shares of our common stock issuable upon conversion of our Series A Convertible Preferred Stock and 1,546,532 shares of unvested restricted share units. The Company had no unearned restricted shares outstanding as of September 30, 2024.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05. The standard modifies the measurement approach for credit losses on financial instruments, including trade receivables, from an incurred loss method to a current expected credit loss method, otherwise known as “CECL.” The standard requires the measurement of expected credit losses to be based on relevant information, including historical experience, current conditions and a forecast that is supportable. The Company adopted the standard in the first quarter of 2023. The impact to the Company’s financial results was immaterial.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires enhanced income tax disclosures, primarily related to the effective tax rate reconciliation and income taxes paid. The Company does not expect a significant impact on its income tax disclosures upon adoption of the ASU which will be effective in the Company’s year ending December 31, 2025.

3. Acquisitions

Acquisition of Access Point Technologies EP, Inc. (“APT”)

On July 31, 2024, the Company acquired all the shares of capital stock of Access Point Technologies EP, Inc. (“APT”), a Minnesota corporation, from APT Holding Company, Inc., a Minnesota corporation. APT designs, manufactures, and commercializes a portfolio of differentiated high-quality diagnostic catheters used during cardiac ablation procedures that are commercially available across key global geographies.

The acquisition of APT was accounted for as a business combination using the acquisition method of accounting. The consideration included an upfront payment and additional contingent payments based upon the achievement of key regulatory and commercial milestones. At closing, the Company issued 1,486,620 shares of its common stock (the “Upfront Stock Consideration”) with a value of $3.0 million. The Share Purchase Agreement obligated us to file a resale registration statement relating to the Upfront Stock Consideration and additional Earnout Shares. The registration statement covered the 1,486,620 Closing Shares and an estimated 4,613,380 additional Earnout Shares. However, the exact number of shares that may be issued under the Share Purchase Agreement for such milestones will be calculated based on the average of the closing per share price of Stereotaxis common stock immediately prior to the dates such revenue performance and/or regulatory milestones are achieved, up to $24.0 million in total value through September 30, 2029, not to exceed 19.9% of the total number of shares of the Company’s common stock issued and outstanding immediately prior to July 31, 2024 (the “Share Cap Limitation”). In addition, the vesting of the right to receive the Earnout Shares would be accelerated in the event of a change of control of Stereotaxis, based on a probability-weighted average estimate of the potential to achieve any remaining milestones, discounted to its net present value taking into account expected time when earnouts related to the milestones would become payable through September 30, 2029. The preliminary estimated fair value of the contingent consideration related to the additional earnout shares at the acquisition date is $10,877. The total contingent consideration including the upfront payment is preliminarily estimated to be $13,877.

The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed for APT as of the acquisition date (in thousands):

(in thousands)	July 31, 2024
	(Unaudited)
Assets acquired:
Current assets
Cash	$	108
Accounts receivable, net of allowance of $19		698
Inventories, net		1,202
Prepaid expenses and other current assets		16
Total current assets		2,024
Property and equipment		825
Goodwill		4,494
Intangible assets		8,340
Total assets acquired	$	15,683
Liabilities assumed:
Current liabilities
Accounts payable	$	1,765
Accrued liabilities		41
Total liabilities assumed	$	1,806
Net assets acquired	$	13,877

The above purchase price allocation is preliminary and subject to revision as additional information about the fair value of individual assets and liabilities becomes available. The preliminary measurement of contingent consideration, accounts receivable, inventory, prepaid expenses and other current assets, property and equipment, intangible assets, goodwill, accounts payable, and accrued liabilities are subject to change. Furthermore, the Company is still evaluating the appropriate useful lives for the acquired property and equipment and intangible assets. A change in the estimated fair value of the net assets acquired will change the amount of the purchase price allocated to goodwill.

For purposes of the above allocation, we based our preliminary estimate of the fair values for contingent consideration, intangible assets, and property and equipment on valuation studies performed by third-party valuation firms. We used various valuation methods, including discounted cash flows, distributor method, excess earnings, and relief from royalty method to estimate the preliminary fair value of the identified intangible assets. The preliminary fair value of the contingent consideration was determined using a Monte Carlo simulation and probability based approaches. The Cost approach was utilized to determine the preliminary fair value of property and equipment. Goodwill and other intangible assets reflected above were determined to meet the criteria for recognition apart from tangible assets acquired and liabilities assumed. The goodwill is primarily attributable to APT’s in-house research and development team versus using third party developers and the expansion of manufacturing capacity. The tax basis in the acquired goodwill is zero.

The Company’s consolidated statement of earnings for the three and nine months ended September 30, 2024, includes APT post-acquisition revenue of $643 and net loss of $1,195. Net loss for the three and nine months ended September 30, 2024, includes $672 of expense due to the revaluation of the contingent consideration as of the reporting date. This expense is recognized within General and Administrative expenses for the three and nine months ended September 30, 2024.

(in thousands)	(Unaudited)
Revenue	$	643
Net income (loss)	$	(1,195	)

The following represents the pro forma consolidated revenue as if APT had been included in the consolidated results of the Company. Revenue was $9,686 and $23,519 for the three and nine months ended September 30, 2024, and $9,349 and $27,404 for the three and nine months for the period ended September 30, 2023.

The Company incurred acquisition costs of $235 and $368 that were recognized within General and Administrative expenses for the three and nine months ended September 30, 2024.

The intangible assets related to the acquisition consisted of the following:

Unaudited	Fair Value (in thousands)		Amortization Period (in years)
Intangible assets subject to amortization:
Developed Technology		7,610		8.0
Customer Relationships		310		10.0
Trademark		420		5.0
Total intangible assets subject to amortization		8,340
Intangible assets not subject to amortization
Goodwill		4,494		N/A
Total intangible assets not subject to amortization		4,494
Total intangible assets		12,834
Weighted average amortization period				7.9

4. Financial Instruments

The following tables summarize the Company’s cash and fair value by significant category reported as cash and cash equivalents and restricted cash as of September 30, 2024, and December 31, 2023:

	September 30, 2024
	Valuation								Reported as:
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Restricted Cash- current		Short-term Investments		Restricted Cash
Cash	$	1,656	$	-	$	-	$	1,656	$	1,656	$	-	$	-	$	-
Level 2
Money market funds		9,357		-		-		9,357		9,007		350		-		-
Subtotal		9,357		-		-		9,357		9,007		350		-		-
Total assets measured at fair value	$	11,013	$	-	$	-	$	11,013	$	10,663	$	350	$	-	$	-

	December 31, 2023
	Valuation								Reported as:
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Restricted Cash- current		Short-term Investments		Restricted Cash
Cash	$	2,122	$	-	$	-	$	2,122	$	2,122	$	-	$	-	$	-
Level 2
Money market funds		18,440		-		-		18,440		17,696		525		-		219
Subtotal		18,440		-		-		18,440		17,696		525		-		219
Total assets measured at fair value	$	20,562	$	-	$	-	$	20,562	$	19,818	$	525	$	-	$	219

Interest income was approximately $0.6 million and $1.1 million during the nine months ended September 30, 2024, and the year ended December 31, 2023, respectively.

As of September 30, 2024, and December 31, 2023, the Company did not have any financial assets classified as Level 1 or Level 3. The contingent consideration is carried at fair value and is a Level 3 financial liability. See further discussion of the contingent consideration in Note 3.

5. Inventories

Inventories consist of the following (in thousands):

Schedule of Inventories

	September 30, 2024			December 31, 2023
Raw materials	$	5,974		$	5,918
Work in process		893			1,034
Finished goods		4,950			3,413
Reserve for excess and obsolescence		(2,808	)		(1,939	)
Total inventory	$	9,009		$	8,426

At the closing of the acquisition, GAAP accounting required us to record all acquired inventory at its market value.

The Company had approximately $2.8 million in reserve for excess and obsolescence. The reserve includes the fair value of slow moving acquired inventory and the value of Niobe Systems and related raw materials and spare parts.

6. Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following (in thousands):

	September 30, 2024			December 31, 2023
Prepaid expenses	$	332		$	181
Prepaid commissions		83			110
Deposits		495			424
Other assets		75			98
Total prepaid expenses and other assets		985			813
Less: Noncurrent prepaid expenses and other assets		(116	)		(137	)
Total current prepaid expenses and other assets	$	869		$	676

7. Property and Equipment

Property and Equipment consist of the following (in thousands):

Schedule of Property and Equipment

	September 30, 2024			December 31, 2023
Equipment	$	5,108		$	4,269
Leasehold improvements		2,917			2,911
Gross property and equipment		8,025			7,180
Less: Accumulated depreciation		(4,292	)		(3,876	)
Net property and equipment	$	3,733		$	3,304

8. Intangible Assets

Intangible Assets consist of the following (in thousands):

Schedule of Intangible Assets

	September 30, 2024			December 31, 2023
Developed technology	$	7,610		$	-
Customer relationships		310			-
Trademark		420			-
Total intangibles		8,340			-
Less: Accumulated amortization		(178	)		-
Net intangibles	$	8,162		$	-

9. Leases

On March 1, 2021, the Company entered into an office lease agreement (the “Globe Lease”) with Globe Building Company, under which the Company leases executive office space and manufacturing facilities of approximately 43,100 square feet of rentable space located at 710 N. Tucker Boulevard, St. Louis, Missouri that serves as the Company’s principal executive and administrative offices and manufacturing facility. Lease payments commenced on January 1, 2022, and the lease has a term of ten years, with two renewal options of five years each. The minimum annual rent under the terms of the Globe Lease ranges from approximately $0.8 million in 2022 to $1.0 million in 2031.

On July 31, 2024, the Company entered into a lease agreement (the “Talulla Lease”) with Talulla Group LLC, under which the Company will lease office space and manufacturing facilities of approximately 11,300 square feet of rentable space located at 12560 Fletcher Lane, Rogers, Minnesota that will continue to serve as the APT’s office and manufacturing facility. Lease payments commenced on August 1, 2024, and the lease has a term of four years, with two renewal options of four years each. The minimum annual rent under the terms of the Talulla Lease is approximately $0.2 million per year. In accordance with ASC 842, the Company recorded a ROU asset and lease liability in third quarter of 2024. The initial recognition of the ROU asset and lease liability was $1.0 million.

As of September 30, 2024, the weighted average discount rate for operating leases was 9.00% and the weighted average remaining lease term for operating lease term is 7.34 years.

The following table represents lease costs and other lease information (in thousands):

	2024		2023		2024		2023
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease cost	$	256	$	227	$	710	$	681
Short-term lease cost		1		4		9		13
Total net lease cost	$	257	$	231	$	719	$	694

Cash paid within operating cash flows	$	286	$	255	$	797	$	741

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities and equipment which are paid based on actual costs incurred.

Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2024, were as follows (in thousands):

	September 30, 2024
2024	$	265
2025		1,079
2026		1,097
2027		1,122
2028		1,147
2029 and thereafter		3,705
Total lease payments		8,415
Less: Interest		(2,280	)
Present value of lease liabilities	$	6,135

10. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

Schedule of Accrued Liabilities

	September 30, 2024			December 31, 2023
Accrued salaries, bonus, and benefits	$	1,636		$	1,222
Accrued licenses and maintenance fees		-			484
Accrued warranties		65			107
Accrued professional services		462			138
Accrued investigational sites		138			-
Deferred contract obligation		1,045			1,045
Other		85			19
Total accrued liabilities		3,431			3,015
Less: Long-term accrued liabilities		(55	)		(43	)
Total current accrued liabilities	$	3,376		$	2,972

11. Convertible Preferred Stock and Stockholders’ Equity

The holders of common stock are entitled to one vote for each share held and to receive dividends when and as declared by the Board of Directors out of funds legally available for dividends, subject to the prior rights or preferences applicable to any preferred stock as may then be outstanding. No dividends have been declared or paid as of September 30, 2024, and the Company does not presently intend to pay any cash dividends in the foreseeable future.

Series A Convertible Preferred Stock and Warrants

In September 2016, the Company issued (i) 24,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”), par value $0.001 per share, with a stated value of $1,000 per share, which are convertible into shares of the Company’s common stock at an initial conversion rate of $0.65 per share, subject to adjustment for events such as stock splits, combinations and the like as provided in the certificate of designations covering such Series A Preferred Stock, and (ii) (the SPA Warrants) to purchase an aggregate of 36,923,078 shares of common stock. The shares of Series A Preferred Stock are entitled to vote on an as-converted basis with the common stock, subject to specified beneficial ownership issuance limitations. The Series A Preferred Stock bear dividends at a rate of six percent (6%) per annum, which are cumulative and accrue daily from the date of issuance on the $1,000 stated value. Such dividends will not be paid in cash except in connection with any liquidation, dissolution or winding up of the Company or any redemption of the Series A Preferred Stock. Each holder of convertible preferred shares has the right to require us to redeem such holder’s shares of Series A Preferred Stock upon the occurrence of specified events, which include certain business combinations, the sale of all or substantially all of the Company’s assets, or the sale of more than 50% of the outstanding shares of the Company’s common stock. In addition, the Company has the right to redeem the Series A Preferred Stock in the event of a defined change of control. The Series A Preferred Stock ranks senior to our common stock as to distributions and payments upon the liquidation, dissolution, and winding up of the Company. Since the Series A Preferred Stock are subject to conditions for redemption that are outside the Company’s control, the Series A Preferred Stock are presently reported in the mezzanine section of the balance sheet.

2021 CEO Performance Award Unit Grant

On February 23, 2021, the Company`s Board of Directors, upon recommendation of the Compensation Committee, approved the grant of the CEO Performance Award to the Company’s Chief Executive Officer. The CEO Performance award is a 10-year performance award of up to 13,000,000 shares, tied to the achievement of market capitalization milestones and subject to minimum service requirements.

As detailed in the table below, the CEO Performance Award consists of ten vesting tranches. The first market capitalization milestone is $1.0 billion, and each of the remaining nine market capitalization milestones are in additional $500 million increments, up to $5.5 billion.

Tranche #	No. of Shares Subject to PSU		Market Capitalization Milestones⁽¹⁾
1		1,000,000	$	1,000,000,000
2		1,500,000	$	1,500,000,000
3		1,500,000	$	2,000,000,000
4		2,000,000	$	2,500,000,000
5		1,000,000	$	3,000,000,000
6		1,000,000	$	3,500,000,000
7		1,000,000	$	4,000,000,000
8		2,000,000	$	4,500,000,000
9		1,000,000	$	5,000,000,000
10		1,000,000	$	5,500,000,000
Total:		13,000,000

Each tranche represents a portion of the PSUs covering the number of shares outlined in the table above. Each tranche vests upon (i) satisfaction of the market capitalization milestones and (ii) continued employment as CEO of the Company from the grant date through December 31, 2030. Absent an earlier termination, the PSUs will expire on December 31, 2030. If our CEO ceases employment as CEO of the Company for any reason including death, disability, termination for cause or without cause (as defined in the award agreement), or if he voluntary terminates after service as CEO for at least five years, the remaining service period will be waived and he will retain any PSUs that have vested through the date of termination.

The Company received Shareholder approval at its annual meeting on May 20, 2021, for shares to be issued under the award.

The market capitalization requirement is considered a market condition under FASB Accounting Standards Codification Topic 718 “Compensation – Stock Compensation” and is estimated on the grant date using Monte Carlo simulations. Recognition of stock-based compensation expense of all the tranches commenced on February 23, 2021, the date of grant, as the probability of meeting the ten market capitalization milestones is not considered in determining the timing of expense recognition. The expense will be recognized on an accelerated basis through 2030. Key assumptions for estimating the performance-based awards fair value at the date of grant included share price on grant date, volatility of the Company’s common stock price, risk free interest rate, and grant term.

Total stock-based compensation recorded as operating expense for the CEO Performance Award was $5.4 million and $5.3 million for the nine months ended September 30, 2024, and 2023. As of September 30, 2024, and 2023, the Company had approximately $31.6 million and $38.8 million, respectively, of total unrecognized stock-based compensation expense remaining under the CEO Performance Award assuming the grantee’s continued employment as CEO of the Company, or in a similar capacity, through 2030. As of September 30, 2024, none of the performance milestones established by the 2021 CEO Incentive Program have been achieved, and no awards have been earned.

Stock Award Plans

In February 2022, the Compensation Committee of the Board of Directors adopted the 2022 Stock Incentive Plan (the “Plan”) which was subsequently approved by the Company’s shareholders. This plan replaced the 2012 Stock Incentive Plan which expired on May 19, 2022. The 2022 Stock Incentive Plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares and restricted share units to employees, non-employee directors, and third-party consultants.

At September 30, 2024, the Company had 5,370,040 remaining shares of the Company’s common stock to provide for current and future grants under its various equity plans.

At September 30, 2024, the total compensation cost related to options and non-vested stock granted to employees and non-employees under the Company’s stock award plans but not yet recognized was approximately $3.3 million, excluding compensation not yet recognized related to the CEO Performance Award discussed above. This cost will be amortized over a period of up to four years over the underlying estimated service periods and will be adjusted for subsequent changes in actual forfeitures and anticipated vesting periods.

A summary of the option and stock appreciation rights activity for the nine-month period ended September 30, 2024, is as follows:

	Number of Options/SARs			Range of Exercise Price		Weighted Average Exercise Price per Share
Outstanding, December 31, 2023		3,650,115			$0.74 - $9.87	$	3.93
Granted		728,500			$1.99 - $3.01	$	2.98
Exercised		(64,966	)		$0.74 - $2.57	$	1.02
Forfeited		(355,679	)		$0.74 - $9.87	$	3.98
Outstanding, September 30, 2024		3,957,970			$0.74 - $9.87	$	3.80

A summary of the restricted stock unit activity for the nine-month period ended September 30, 2024, is as follows:

	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value per Unit
Outstanding, December 31, 2023		1,502,131		$	3.94
Granted		696,945		$	1.69
Vested		(652,544	)	$	2.91
Outstanding, September 30, 2024		1,546,532		$	3.36

12. Product Warranty Provisions

The Company’s standard policy is to warrant all capital systems against defects in material or workmanship for one year following installation with an assurance or a service-type warranty. The Company’s estimate of costs to service the warranty obligations is based on historical experience and current product performance trends. A regular review of warranty obligations is performed to determine the adequacy of the reserve and adjustments are made to the estimated warranty liability as appropriate.

Accrued assurance-type warranty, which is included in other accrued liabilities, consists of the following (in thousands):

Schedule of Accrued Warranty

	September 30, 2024			December 31, 2023
Warranty accrual, beginning of the fiscal period	$	107		$	163
Accrual adjustment for product warranty		(2	)		547
Payments made		(40	)		(603	)
Warranty accrual, end of the fiscal period	$	65		$	107

13. Commitments and Contingencies

The Company at times becomes a party to claims in the ordinary course of business. Management believes that the ultimate resolution of pending or threatened proceedings will not have a material effect on the financial position, results of operations or liquidity of the Company. In February 2024, a vendor filed financing statements under the Uniform Commercial Code (“UCC”) on underlying inventory for approximately $0.6 million. We believe the financing statements were filed without merit, and we are fully contesting the propriety of such actions.

In April 2021, the Company entered into a letter of credit pursuant to the Lease agreement totaling approximately $1.8 million to be delivered in four equal instalments of which the first was delivered in April 2021, the second was delivered in July 2021, the third was delivered in October 2021, and the fourth was delivered in January 2022. The amount available under this letter of credit automatically reduces by one fortieth at the end of each month during the lease term.

14. Subsequent Events

None.

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 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, 2023. 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 31,2023, 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 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

We have received regulatory clearances and approvals necessary for us to market the Genesis RMN System in the U.S. and Europe, and we are in the process of obtaining necessary registrations for extending our markets in other countries. The Niobe System, our prior generation robotic magnetic navigation system, the Odyssey Solution, Cardiodrive, e-Contact, and various disposable interventional devices have received regulatory clearances and approvals in the U.S., Europe, Canada, China, Japan and various other countries. We have regulatory clearances and approvals that allow us to market the Vdrive and Vdrive Duo Systems with the V-CAS device in the U.S., Canada and Europe. We are pursuing regulatory approvals for the Stereotaxis MAGiC catheter, a robotically-navigated magnetic ablation catheter designed to perform minimally invasive cardiac ablation procedures, in various global geographies. Approval processes can be lengthy and uncertain, submissions may require revised or additional non-clinical and clinical data, and regulatory applications could be denied.

Corporate Developments

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.

Risks and Uncertainties

Concentration of Credit Risk

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. We review our estimates and judgments on an on-going 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 financial statements. For a complete listing of our critical accounting policies, please refer to our Annual Report on Form 10-K for the year ended December 31, 2023.

Revenue Recognition

In accordance with Accounting Standards Codification Topic 606 (“ASC 606”), “Revenue from Contracts with Customers,” 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.

Systems:

Disposables:

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:

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 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 for additional detail 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 $0.1 million as of September 30, 2024, and December 31, 2023. 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 including estimated assurance-type warranty costs and initial training costs, when applicable. These costs are recognized at the time of sale. Costs of disposable revenue include direct product costs and estimated warranty costs and are recognized at the time of sale. Cost of revenue from services and license fees are recognized when incurred.

Stock-Based Compensation

Stock compensation expense, which is a non-cash charge, results from stock option, non-qualified stock options, stock appreciation rights, and restricted share grants made to employees, non-employee 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 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 non-employee 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 options 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.

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.

Results of Operations

Comparison of the Three Months Ended September 30, 2024, and 2023

Revenue. Revenue increased from $7.8 million for the three months ended September 30, 2023, to $9.2 million for the three months ended September 30, 2024, an increase of 18%. Revenue from the sales of systems increased to $4.4 million for the three months ended September 30, 2024, from $3.5 million for the three months ended September 30, 2023, driven by increased system sales volumes in the current year period. Revenue from sales of disposable interventional devices, service, and accessories increased to approximately $4.8 million for the three months ended September 30, 2024, from $4.3 million for the three months ended September 30, 2023, an increase of approximately 13%. The increase was primarily driven by an increase in sales of magnetically enabled devices and the two month impact of post-acquisition non-magnetic disposable device sales recorded in the current year period.

Cost of Revenue. Cost of revenue increased from $3.7 million for the three months ended September 30, 2023, to $5.1 million for the three months ended September 30, 2024, an increase of approximately 36%. As a percentage of our total revenue, overall gross margin decreased to 45% for the three months ended September 30, 2024, from 52% for the three months ended September 30, 2023, primarily due to changes in product mix. Cost of revenue for systems sold increased from $2.9 million for the three months ended September 30, 2023, to $3.7 million for the three months ended September 30, 2024, driven by increased system sales volumes in the current year period. Gross margin for systems was $0.6 million for the three months ended September 30, 2023, compared to $0.7 million for the three months ended September 30, 2024. Cost of revenue for disposables, service, and accessories increased from $0.8 million for the three months ended September 30, 2023, to $1.4 million for the three months ended September 30, 2024. Gross margin for disposables, service, and accessories was 71% for the three months ended September 30, 2024, compared to 80% for the three months ended September 30, 2023. Gross margin for disposables, service, and accessories was depressed by acquisition related accounting which required the valuation of acquired finished good inventory to fair value and by higher expenses incurred under service contracts in the current period.

Research and Development Expenses. Research and development expenses decreased from $2.7 million for the three months ended September 30, 2023, to $2.5 million for the three months ended September 30, 2024, a decrease of approximately 8%. This decrease was primarily driven by project timing in the current year period.

Sales and Marketing Expenses. Sales and marketing expenses slightly increased from $3.1 million for the three months ended September 30, 2023, to $3.2 million for the three months ended September 30, 2024, an increase of approximately 2%. The increase was primarily driven by third party commissions generated from new acquisition related sales channels.

General and Administrative Expenses. General and administrative expenses include finance, information systems, legal, general management, and the quarterly gain or loss associated with the remeasurement of the acquisition related contingent consideration. General and administrative expenses increased from $3.9 million for the three months ended September 30, 2023, to $4.8 million for the three months ended September 30, 2024, an increase of approximately 23%. The increase was primarily driven by the remeasurement of the contingent consideration.

Interest Income (Expense). Net interest income was approximately $0.3 million for the three months ended September 30, 2023, compared to $0.2 million for the three months ended September 30, 2024. The decrease was driven by lower invested balances and lower interest rates in the current year period.

Comparison of the Nine Months Ended September 30, 2024, and 2023

Revenue. Revenue decreased from $22.2 million for the nine months ended September 30, 2023, to $20.6 million for the nine months ended September 30, 2024, a decrease of approximately 7%. Revenue from the sales of systems decreased from $8.7 million for the nine months ended September 30, 2023, to $7.2 million for the nine months ended September 30, 2024, driven by decreased system sales volumes in the current year period. Revenue from sales of disposable interventional devices, service and accessories decreased to $13.3 million for the nine months ended September 30, 2024, from $13.5 million for the nine months ended September 30, 2023, a decrease of approximately 1%. The decrease was primarily driven by decreased service revenue in the current year period partially offset by higher sales of magnetically enabled disposables devices and the two months impact of post-acquisition non-magnetic disposable device sales recorded in the current year period.

Cost of Revenue. Cost of revenue decreased from $10.1 million for the nine months ended September 30, 2023, to $9.2 million for the nine months ended September 30, 2024, a decrease of approximately 9%. As a percentage of our total revenue, overall gross margin remained consistent at 55% for the nine months ended September 30, 2024, and 2023. Cost of revenue for systems sold decreased from $7.3 million for the nine months ended September 30, 2023, to $5.8 million for the nine months ended September 30, 2024, driven by decreased system sales volumes in the current year period. Gross margin for systems was $1.4 million for the nine months ended September 30, 2023, compared to $1.5 million for the nine months ended September 30, 2024. Cost of revenue for disposables, service, and accessories increased from $2.8 million for the nine months ended September 30, 2023, to $3.4 million for the nine months ended September 30, 2024, driven by acquisition related accounting which required the valuation of acquired finished good inventory to fair value and higher expenses incurred under service contracts in the current period. Gross margin for disposables, service and accessories was 79% for the nine months ended September 30, 2023, compared to 74% for the nine months ended September 30, 2024. The decrease was driven primarily by decreased service revenue in the current year period and acquisition related accounting requiring the valuation of acquired finished inventory at fair value.

Research and Development Expenses. Research and development expenses decreased from $8.1 million for the nine months ended September 30, 2023, compared to $7.0 million for the nine months ended September 30, 2024, a decrease of 14%. This decrease was primarily driven by the reversal of an accrued regulatory license fee, decreased headcount and project timing in the current year period.

Sales and Marketing Expenses. Sales and marketing expenses decreased from $9.6 million for the nine months ended September 30, 2023, to $9.5 million for the nine months ended September 30, 2024, a decrease of approximately 1%. This decrease was primarily due to lower headcount expenses partially offset by third party commissions generated from new acquisition related sales channels in the current year period.

General and Administrative Expenses. General and administrative expenses include finance, information systems, legal, general management, and the quarterly gain or loss associated with the remeasurement of the acquisition related contingent consideration. General and administrative expenses increased from $11.0 million for the nine months ended September 30, 2023, to $12.1 million for the nine months ended September 30, 2024, an increase of approximately 10%. This increase was primarily driven by the remeasurement of the contingent consideration, and to a lesser extent by higher administrative expenses and professional service fees in the current period.

Interest Income (Expense). Net interest income was approximately $0.8 million for the nine months ended September 30, 2023, compared to $0.6 million for the nine months ended September 30, 2024. The decrease was driven by lower invested balances and declining interest rates in the current year period.

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 September 30, 2024, we had $11.0 million of cash and cash equivalents, inclusive of restricted cash. We had working capital of $8.1 million as of September 30, 2024, compared to $20.0 million as of December 31, 2023.

The following table summarizes our cash flow by operating, investing and financing activities for the nine months ended September 30, 2024, and 2023 (in thousands):

	Nine Months Ended September 30,
	2024			2023
Cash flow used in operating activities	$	(9,763	)	$	(6,700	)
Cash flow provided by investing activities		76			19,765
Cash flow provided by financing activities		138			55

Net cash used in operating activities. We used approximately $9.7 million and $6.7 million of cash for operating activities during the nine months ended September 30, 2024, and 2023, respectively. The increase in cash used in operating activities was driven by changes in working capital.

Net cash provided by investing activities. We generated approximately $0.1 million and $19.8 million of cash during the nine months ended September 30, 2024, and 2023, respectively. The cash generated during the nine months ended September 30, 2024, was from the acquisition of Access Point Technologies EP, Inc. and during the nine months ended September 30, 2023, was from proceeds received from the maturity of short-term investments.

Net cash provided by financing activities. We generated approximately $0.1 million of cash from financing activities during the nine months ended September 30, 2024, and 2023. The cash generated in both periods 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.

Capital Resources

As of September 30, 2024, the Company did not have any debt.

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.

ITEM 3. [RESERVED]

None.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures: The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

Changes In Internal Control Over Financial Reporting: The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of the Company’s internal control over financial reporting to determine whether any changes occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. Based on that evaluation, there has been no such change during the period covered by this report.

During the period ended September 30, 2024, the Company completed the acquisition of Access Point Technologies EP, Inc. As a result of the acquisition, the Company is in the process of reviewing the internal control structure of this business and, if necessary, will make appropriate changes as the Company incorporates its controls and procedures into the acquired business.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Risks Related to our Recently Completed Acquisition of APT

We may be unable to successfully integrate APT into our business and may fail to realize any or all of the anticipated benefits of the acquisition, or those benefits may take longer to realize than expected.

Prior to the completion of our acquisition of APT, both companies previously operated independently and manufactured different products. The success of the acquisition will depend, in part, on our ability to (i) successfully integrate APT’s businesses into Stereotaxis, (ii) successfully manufacture, commercialize, develop and sell APT’s catheters and related products, and (iii) realize the anticipated benefits, including synergies, cost savings, innovation opportunities and operational efficiencies, from the acquisition, all in a manner that does not materially disrupt existing customer, supplier and employee relations. If we are unable to achieve these objectives within the anticipated time frame, or at all, the anticipated benefits may not be realized fully or at all, or may take longer to realize than expected, and the value of our common stock may decline.

The integration of APT into our business may result in material challenges, including, without limitation:

	●	the diversion of management’s attention from ongoing business concerns;
	●	developing and managing internal financial and disclosure processes at APT, which has been a private company not subject to SEC reporting obligations;
	●	managing a more complex combined business;
	●	expanding operations to manufacture APT’s catheter products and overcoming our lack of manufacturing experience related to such products;
	●	maintaining employee morale, retaining key APT employees and the possibility that the integration process and organizational changes may adversely impact the ability to maintain employee relationships;
	●	transitioning and maintaining business and operational relationships of APT, including suppliers, collaboration partners, employees and other counterparties;
	●	risks related to APT’s existing customer contracts and disputes with customers;
	●	the integration process not proceeding as expected, including due to a possibility of faulty assumptions or expectations regarding the integration process or APT’s operations;

	●	risks related to litigation, disputes, investigations or other events that could increase our expenses, result in liability or require that we take other action;
	●	consolidating corporate, administrative and compliance infrastructures and eliminating duplicative operations;
	●	coordinating geographically separate locations;
	●	unanticipated issues in integrating information technology, communications and other systems; and
	●	unforeseen expenses, costs, liabilities or delays associated with the acquisition or the integration.

Many of these factors are outside of our control, and any one of them could result in delays, increased costs, decreases in the amount of expected cost savings or synergies and diversion of management’s time and energy, which could materially affect our financial position, results of operations and cash flows.

Our future results may be adversely impacted if we do not effectively manage APT’s catheter manufacturing business following the completion of the acquisition.

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, 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. There can be no assurances that we will be successful in manufacturing catheter products or that we will realize the expected operating efficiencies, cost savings and other benefits anticipated from the acquisition.

The issuance of the Earnout Consideration will result in dilution to our stockholders and may adversely affect us, including the market price of our securities.

At the closing of the acquisition of APT on July 31, 2024, we issued 1,486,620 Closing Shares to the Selling Stockholder pursuant to the Share Purchase Agreement. In addition, the Share Purchase Agreement requires us to issue additional Earnout Shares to the Selling Stockholder upon achievement of certain global and US revenue targets for APT products as well as US and Europe regulatory approvals of certain robotically-navigated catheters that APT will develop.

The Share Purchase Agreement obligated us to file a resale registration statement relating to the Upfront Stock Consideration and additional Earnout Shares. This prospectus is a part of that resale registration statement and covers the 1,486,620 Closing Shares and an estimated 4,613,380 additional Earnout Shares. However, the exact number of shares that may be issued under the Share Purchase Agreement for such milestones will be calculated based on the average of the closing per share price of Stereotaxis common stock immediately prior to the dates such revenue performance and/or regulatory milestones are achieved, up to $24 million in total value through September 30, 2029, not to exceed 19.9% of the total number of shares of the Company’s common stock issued and outstanding immediately prior to July 31, 2024 (the “Share Cap Limitation”). In addition, the vesting of the right to receive the Earnout Shares would be accelerated in the event of a change of control of Stereotaxis, based on a probability-weighted average estimate of the potential to achieve any remaining milestones, discounted to its net present value taking into account expected time when earnouts related to the milestones would become payable through September 30, 2029.

As a result, the actual number of additional Earnout Shares we may be required to issue could be materially greater or less than our estimate, depending whether and to what extent the future revenue milestones are met and/or regulatory approvals are obtained, as well as the actual average closing price of our common stock calculated pursuant to a formula near the time such milestones are achieved and/or whether a change of control occurs. If we are required to issue Earnout Shares under the Share Purchase Agreement, there could be significant additional dilution to the Company’s stockholders. Moreover, even if we are not required to issue any Earnout Shares, the potential for the issuance of such shares may negatively affect the trading price of our common stock in anticipation of such potential dilution. Sales of a substantial number of shares comprising the Closing Shares or any Earnout Shares in the public market, or the perception that such sales may occur, could adversely affect the market price of our securities.

Under certain circumstances, we may take certain actions to achieve the milestones under the Purchase Agreement that we would not have undertaken if we had not completed the acquisition, which may have an adverse effect on the historical business of Stereotaxis.

During the revenue earnout periods under our Purchase Agreement, which end on September 30, 2029, we agreed to operate APT and its business in a commercially reasonable manner as conducted prior to the closing, taken as a whole, including maintaining relationships with customers, suppliers, independent contractors, governmental entities, and others having business dealings with it consistent with APT’s practice prior to the closing. We agreed not to take any action during the revenue earnout periods which has as its intended purpose the diminution of the earnout consideration.

While we retain the sole authority to operate and control APT’s business and its operations, including without limitation, any and all decisions relating various aspects of their and our combined business, we may nevertheless take certain actions related to the milestones that we would not have undertaken if we had not completed the acquisition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [RESERVED]

None.

ITEM 5. OTHER INFORMATION

On September 1, 2024, Ms. Kimberly Peery, the Chief Financial Officer of the Company, adopted a trading arrangement for the sale of securities of the Company’s common stock (a “Rule 10b5-1 Trading Plan”) that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c). Ms. Peery’s Rule 10b5-1 Trading Plan, which has a term of one year, provides for the exercise and sale of up to 165,750 incentive stock options pursuant to the limit orders specified in the plan. The plan will be effective for 12 months following the 90-day cooling off period. The adopted plan replaced Ms. Peery’s prior plan which had a one year term and was adopted on September 1, 2023.

ITEM 6. EXHIBITS

Number		Description

2.1†#		Share Purchase Agreement, dated as of May 11, 2024, by and among the Company, Access Point Technologies EP, Inc. and APT Holding Company, Inc., as seller. incorporated by reference to Exhibit 2.1 of the Registrant’s 10-Q (File No. 001-36159) for the fiscal quarter ended June 30, 2024.

2.2		Amendment No. 1 to Share Purchase Agreement, dated as of July 31, 2024, by and among the Company, Access Point Technologies EP, Inc. and APT Holding Company, Inc., as seller, incorporated by reference to Exhibit 2.2 of the Registrant’s 10-Q (File No. 001-36159) for the fiscal quarter ended June 30, 2024.

2.3#		Form of Voting and Support Agreement (included as Exhibit B to the Securities Share Purchase Agreement filed as Exhibit 2.1), incorporated by reference to Exhibit 2.3 of the Registrant’s 10-Q (File No. 001-36159) for the fiscal quarter ended June 30, 2024.

3.1		Restated Articles of Incorporation of the Registrant, incorporated by reference to Exhibit 3.1 of the Registrant’s Form 10-Q (File No. 000-50884) for the fiscal quarter ended September 30, 2004.

3.2		Certificate of Amendment to Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K (File No. 000-50884) filed on July 10, 2012.

3.3		Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock, incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K (File No. 001-36159) filed on September 30, 2016.

3.4		Restated Bylaws of the Registrant, incorporated by reference to Exhibit 3.2 of the Registrant’s Form 10-Q (File No. 000-50884) for the fiscal quarter ended September 30, 2004.

31.1		Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by Chief Executive Officer).

31.2		Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by Chief Financial Officer).

32.1		Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Chief Executive Officer).

32.2		Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Chief Financial Officer).

101.INS		Inline XBRL Instance Document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

# This filing excludes certain schedules and exhibits pursuant to Item 601(a)(5) of Regulation S-K, which the registrant agrees to furnish supplementally to the Securities and Exchange Commission upon request; provided, however, that the registrant may request confidential treatment for any schedules or exhibits so furnished.

†As permitted by Regulation S-K, Item 601(b)(2)(ii) of the Securities Exchange Act of 1934, as amended, certain confidential portions of this exhibit have been redacted from the publicly filed document.

STEREOTAXIS, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	STEREOTAXIS, INC. (Registrant)

Date: November 14, 2024	By:	/s/ David L. Fischel
		David L. Fischel
		Chief Executive Officer

Date: November 14, 2024	By:	/s/ Kimberly R. Peery
		Kimberly R. Peery
		Chief Financial Officer

Exhibit 31.1

Certification of Principal Executive Officer

I, David L. Fischel, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Stereotaxis, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2024	/s/ David L. Fischel
	David L. Fischel
	Chief Executive Officer
	Stereotaxis, Inc.
	(Principal Executive Officer)

Exhibit 31.2

Certification of Principal Financial Officer

I, Kimberly R. Peery, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Stereotaxis, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2024	/s/ Kimberly R. Peery
	Kimberly R. Peery
	Chief Financial Officer
	Stereotaxis, Inc.
	(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Stereotaxis, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David L. Fischel, Chief Executive Officer of the Company, certify, pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2024	/s/ David L. Fischel
	David L. Fischel
	Chief Executive Officer
	Stereotaxis, Inc.

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Stereotaxis, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kimberly R. Peery, Chief Financial Officer of the Company, certify, pursuant to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2024	/s/ Kimberly R. Peery
	Kimberly R. Peery
	Chief Financial Officer
	Stereotaxis, Inc.

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Oct. 31, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-36159
Entity Registrant Name	STEREOTAXIS, INC.
Entity Central Index Key	0001289340
Entity Tax Identification Number	94-3120386
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	710 North Tucker Boulevard
Entity Address, Address Line Two	Suite 110
Entity Address, City or Town	St. Louis
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63101
City Area Code	(314)
Local Phone Number	678-6100
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	STXS
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		84,729,507

Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 10,663	$ 19,818
Restricted cash - current	350	525
Accounts receivable, net of allowance of $661 and $672 at 2024 and 2023, respectively	7,921	3,822
Inventories, net	9,009	8,426
Prepaid expenses and other current assets	869	676
Total current assets	28,812	33,267
Property and equipment, net	3,733	3,304
Goodwill	4,494
Intangible assets	8,162
Restricted cash		219
Operating lease right-of-use assets	5,618	4,982
Prepaid and other non-current assets	116	137
Total assets	50,935	41,909
Current liabilities:
Accounts payable	6,403	3,190
Accrued liabilities	3,376	2,972
Deferred revenue	5,092	6,657
Current contingent consideration	5,298
Current portion of operating lease liabilities	552	428
Total current liabilities	20,721	13,247
Long-term deferred revenue	2,102	1,637
Long-term contingent consideration	6,251
Operating lease liabilities	5,583	5,062
Other liabilities	55	43
Total liabilities	34,712	19,989
Series A - Convertible preferred stock:
Convertible preferred stock, Series A, par value $0.001; 10,000,000 shares authorized; 21,683 and 22,358 shares outstanding at 2024 and 2023, respectively	5,408	5,577
Stockholders’ equity:
Common stock, par value $0.001; 300,000,000 shares authorized, 84,713,400 and 80,949,697 shares issued at 2024 and 2023, respectively	85	81
Additional paid in capital	565,146	554,148
Treasury stock, 4,015 shares at 2024 and 2023	(206)	(206)
Accumulated deficit	(554,210)	(537,680)
Total stockholders’ equity	10,815	16,343
Total liabilities and stockholders’ equity	$ 50,935	$ 41,909

Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Accounts receivable, allowance	$ 661	$ 672
Series A convertible preferred stock, par value	$ 0.001	$ 0.001
Series A convertible preferred stock, shares authorized	10,000,000	10,000,000
Series A convertible preferred stock, shares outstanding	21,683	22,358
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	84,713,400	80,949,697
Treasury stock, shares	4,015	4,015

Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue:
Total revenue	$ 9,196	$ 7,799	$ 20,578	$ 22,206
Cost of revenue:
Total cost of revenue	5,097	3,740	9,200	10,084
Gross margin	4,099	4,059	11,378	12,122
Operating expenses:
Research and development	2,454	2,668	6,970	8,061
Sales and marketing	3,152	3,097	9,456	9,585
General and administrative	4,838	3,933	12,064	11,011
Total operating expenses	10,444	9,698	28,490	28,657
Operating loss	(6,345)	(5,639)	(17,112)	(16,535)
Other income	5		2	27
Interest income, net	150	270	580	835
Net loss	(6,190)	(5,369)	(16,530)	(15,673)
Cumulative dividend on convertible preferred stock	(328)	(338)	(984)	(1,004)
Net loss attributable to common stockholders	$ (6,518)	$ (5,707)	$ (17,514)	$ (16,677)
Net loss per share attributable to common stockholders:
Basic	$ (0.08)	$ (0.07)	$ (0.21)	$ (0.21)
Diluted	$ (0.08)	$ (0.07)	$ (0.21)	$ (0.21)
Weighted average number of common shares and equivalents:
Basic	85,824,789	82,468,971	84,629,531	80,028,243
Diluted	85,824,789	82,468,971	84,629,531	80,028,243
Systems [Member]
Revenue:
Total revenue	$ 4,391	$ 3,539	$ 7,243	$ 8,673
Cost of revenue:
Total cost of revenue	3,673	2,909	5,760	7,309
Disposables Service and Accessories [Member]
Revenue:
Total revenue	4,805	4,260	13,335	13,533
Cost of revenue:
Total cost of revenue	$ 1,424	$ 831	$ 3,440	$ 2,775

Statements of Convertible Preferred Stock and Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Convertible Preferred Stock Series A [Member]	Convertible Preferred Stock Series B [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022	$ 5,583	$ 6	$ 75	$ 543,438	$ (206)	$ (516,967)	$ 26,346
Balance, shares at Dec. 31, 2022	22,383	5,610,121	74,874,459
Stock issued for the exercise of stock options				(18)			(18)
Stock issued for the exercise of stock options, shares			30,384
Stock-based compensation				7,987			7,987
Stock-based compensation, shares			316,646
Components of net loss						(15,673)	(15,673)
Employee stock purchase plan				73			73
Employee stock purchase plan, shares			41,685
Preferred stock conversion		$ (6)	$ 6
Preferred stock conversion, shares		(5,610,121)	5,610,121
Balance at Sep. 30, 2023	$ 5,583		$ 81	551,480	(206)	(532,640)	18,715
Balance, shares at Sep. 30, 2023	22,383		80,873,295
Balance at Jun. 30, 2023	$ 5,583		$ 81	548,782	(206)	(527,271)	21,386
Balance, shares at Jun. 30, 2023	22,383		80,682,586
Stock issued for the exercise of stock options				1			1
Stock issued for the exercise of stock options, shares			1,000
Stock-based compensation				2,672			2,672
Stock-based compensation, shares			172,592
Components of net loss						(5,369)	(5,369)
Employee stock purchase plan				25			25
Employee stock purchase plan, shares			17,117
Balance at Sep. 30, 2023	$ 5,583		$ 81	551,480	(206)	(532,640)	18,715
Balance, shares at Sep. 30, 2023	22,383		80,873,295
Balance at Dec. 31, 2023	$ 5,577		$ 81	554,148	(206)	(537,680)	16,343
Balance, shares at Dec. 31, 2023	22,358		80,949,697
Stock issued for the exercise of stock options				66			66
Stock issued for the exercise of stock options, shares			64,966
Stock-based compensation			$ 1	7,695			7,696
Stock-based compensation, shares			673,263
Components of net loss						(16,530)	(16,530)
Employee stock purchase plan				72			72
Employee stock purchase plan, shares			37,552
Stock issued in APT acquisition			$ 1	2,999			3,000
Stock issued in APT acquisition, shares			1,486,620
Preferred stock conversion	$ (169)		$ 2	166			168
Preferred stock conversion, shares	(675)		1,501,302
Balance at Sep. 30, 2024	$ 5,408		$ 85	565,146	(206)	(554,210)	10,815
Balance, shares at Sep. 30, 2024	21,683		84,713,400
Balance at Jun. 30, 2024	$ 5,408		$ 83	559,499	(206)	(548,020)	11,356
Balance, shares at Jun. 30, 2024	21,683		82,990,159
Stock issued for the exercise of stock options				54			54
Stock issued for the exercise of stock options, shares			53,203
Stock-based compensation			$ 1	2,569			2,570
Stock-based compensation, shares			168,888
Components of net loss						(6,190)	(6,190)
Employee stock purchase plan				25			25
Employee stock purchase plan, shares			14,530
Stock issued in APT acquisition			$ 1	2,999			3,000
Stock issued in APT acquisition, shares			1,486,620
Balance at Sep. 30, 2024	$ 5,408		$ 85	$ 565,146	$ (206)	$ (554,210)	$ 10,815
Balance, shares at Sep. 30, 2024	21,683		84,713,400

Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities
Net loss	$ (6,190)	$ (16,530)	$ (15,673)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		428	457
Amortization		178
Loss on revaluation of contingent consideration	672	672
Non-cash lease expense		7	23
Stock-based compensation		7,696	7,987
Accretion and short-term investment discount			(287)
Changes in operating assets and liabilities:
Accounts receivable		(3,401)	(156)
Inventories		619	1,088
Prepaid expenses and other current assets		(177)	470
Other assets		21	73
Accounts payable		1,448	270
Accrued liabilities		364	(146)
Deferred revenue		(1,100)	(798)
Other liabilities		12	(8)
Net cash used in operating activities		(9,763)	(6,700)
Cash flows from investing activities
Purchase of property and equipment		(32)	(366)
Proceeds from maturity of short-term investments			20,131
Cash acquired in business acquisitions		108
Net cash provided by investing activities		76	19,765
Cash flows from financing activities
Proceeds from issuance of stock, net of issuance costs		138	55
Net cash provided by financing activities		138	55
Net (decrease) increase in cash, cash equivalents, and restricted cash		(9,549)	13,120
Cash, cash equivalents, and restricted cash at beginning of period		20,562	9,855
Cash, cash equivalents, and restricted cash at end of period	11,013	11,013	22,975
Cash and cash equivalents	10,663	10,663	22,100
Restricted cash - current	350	350	525
Restricted cash			350
Total cash, cash equivalents, and restricted cash	$ 11,013	$ 11,013	$ 22,975

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (6,190)	$ (5,369)	$ (16,530)	$ (15,673)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024 shares
Insider Trading Arrangements [Line Items]
Name	Ms. Kimberly Peery
Title	Chief Financial Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	September 1, 2024
Trading Arrangement, Securities Aggregate Available Amount	165,750

Description of Business

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

1. Description of Business

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

Risks and Uncertainties

Concentration of Credit Risk

Cash and Cash Equivalents

Restricted Cash

Investments

Fair Value Measurements

Financial instruments consist of cash and cash equivalents, restricted cash, investments, accounts receivable, and accounts payable.

Level 1:		Values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:		Values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or other model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3:		Values are generated from model-based techniques that use significant assumptions not observable in the market.

Accounts Receivable, Contract Assets, and Allowance for Credit Losses

Revenue and Costs of Revenue

The Company accounts for revenue in accordance with Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers.

Our revenue recognition policy affects the following revenue streams in our business as follows:

Systems:

Disposables:

Royalty:

Other Recurring Revenue:

The following table summarizes the Company’s revenue for systems, disposables, and service and accessories for the nine months ended September 30, 2024, and 2023 (in thousands):

	2024		2023		2024		2023
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Systems	$	4,391	$	3,539	$	7,243	$	8,673
Disposables, service and accessories		4,805		4,260		13,335		13,533
Total revenue	$	9,196	$	7,799	$	20,578	$	22,206

The following table summarizes the Company’s contract assets and liabilities (in thousands):

	September 30, 2024			December 31, 2023
Contract Assets - unbilled receivables	$	940		$	72

Customer deposits	$	1,302		$	2,105
Product shipped, revenue deferred		1,566			1,413
Deferred service and license fees		4,326			4,776
Total deferred revenue	$	7,194		$	8,294
Less: Long-term deferred revenue		(2,102	)		(1,637	)
Total current deferred revenue	$	5,092		$	6,657

Assets Recognized from the Costs to Obtain a Contract with a Customer

Goodwill and Intangible Assets

Contingent Liabilities- Earnout Consideration

Leasing Arrangements

Stock-Based Compensation

Shares purchased by employees under the 2022 Employee Stock Purchase Plans are considered to be non-compensatory.

Net Loss per Common Share

The following table sets forth the computation of basic and diluted EPS (in thousands except for share and per share amounts):

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net loss	$	(6,190	)	$	(5,369	)	$	(16,530	)	$	(15,673	)
Cumulative dividend on convertible preferred stock		(328	)		(338	)		(984	)		(1,004	)
Net loss attributable to common stockholders	$	(6,518	)	$	(5,707	)	$	(17,514	)	$	(16,677	)

Weighted average number of common shares and equivalents:		85,824,789			82,468,971			84,629,531			80,028,243
Basic EPS	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)
Diluted EPS	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)

Recently Issued Accounting Pronouncements

Acquisitions

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Acquisitions

3. Acquisitions

Acquisition of Access Point Technologies EP, Inc. (“APT”)

The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed for APT as of the acquisition date (in thousands):

(in thousands)	July 31, 2024
	(Unaudited)
Assets acquired:
Current assets
Cash	$	108
Accounts receivable, net of allowance of $19		698
Inventories, net		1,202
Prepaid expenses and other current assets		16
Total current assets		2,024
Property and equipment		825
Goodwill		4,494
Intangible assets		8,340
Total assets acquired	$	15,683
Liabilities assumed:
Current liabilities
Accounts payable	$	1,765
Accrued liabilities		41
Total liabilities assumed	$	1,806
Net assets acquired	$	13,877

(in thousands)	(Unaudited)
Revenue	$	643
Net income (loss)	$	(1,195	)

The Company incurred acquisition costs of $235 and $368 that were recognized within General and Administrative expenses for the three and nine months ended September 30, 2024.

The intangible assets related to the acquisition consisted of the following:

Unaudited	Fair Value (in thousands)		Amortization Period (in years)
Intangible assets subject to amortization:
Developed Technology		7,610		8.0
Customer Relationships		310		10.0
Trademark		420		5.0
Total intangible assets subject to amortization		8,340
Intangible assets not subject to amortization
Goodwill		4,494		N/A
Total intangible assets not subject to amortization		4,494
Total intangible assets		12,834
Weighted average amortization period				7.9

Financial Instruments

9 Months Ended

Sep. 30, 2024

Investments, All Other Investments [Abstract]

Financial Instruments

4. Financial Instruments

The following tables summarize the Company’s cash and fair value by significant category reported as cash and cash equivalents and restricted cash as of September 30, 2024, and December 31, 2023:

	September 30, 2024
	Valuation								Reported as:
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Restricted Cash- current		Short-term Investments		Restricted Cash
Cash	$	1,656	$	-	$	-	$	1,656	$	1,656	$	-	$	-	$	-
Level 2
Money market funds		9,357		-		-		9,357		9,007		350		-		-
Subtotal		9,357		-		-		9,357		9,007		350		-		-
Total assets measured at fair value	$	11,013	$	-	$	-	$	11,013	$	10,663	$	350	$	-	$	-

	December 31, 2023
	Valuation								Reported as:
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Restricted Cash- current		Short-term Investments		Restricted Cash
Cash	$	2,122	$	-	$	-	$	2,122	$	2,122	$	-	$	-	$	-
Level 2
Money market funds		18,440		-		-		18,440		17,696		525		-		219
Subtotal		18,440		-		-		18,440		17,696		525		-		219
Total assets measured at fair value	$	20,562	$	-	$	-	$	20,562	$	19,818	$	525	$	-	$	219

Interest income was approximately $0.6 million and $1.1 million during the nine months ended September 30, 2024, and the year ended December 31, 2023, respectively.

Inventories

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Inventories

5. Inventories

Inventories consist of the following (in thousands):

Schedule of Inventories

	September 30, 2024			December 31, 2023
Raw materials	$	5,974		$	5,918
Work in process		893			1,034
Finished goods		4,950			3,413
Reserve for excess and obsolescence		(2,808	)		(1,939	)
Total inventory	$	9,009		$	8,426

At the closing of the acquisition, GAAP accounting required us to record all acquired inventory at its market value.

Prepaid Expenses and Other Assets

9 Months Ended

Sep. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Assets

6. Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following (in thousands):

	September 30, 2024			December 31, 2023
Prepaid expenses	$	332		$	181
Prepaid commissions		83			110
Deposits		495			424
Other assets		75			98
Total prepaid expenses and other assets		985			813
Less: Noncurrent prepaid expenses and other assets		(116	)		(137	)
Total current prepaid expenses and other assets	$	869		$	676

Property and Equipment

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment

7. Property and Equipment

Property and Equipment consist of the following (in thousands):

Schedule of Property and Equipment

	September 30, 2024			December 31, 2023
Equipment	$	5,108		$	4,269
Leasehold improvements		2,917			2,911
Gross property and equipment		8,025			7,180
Less: Accumulated depreciation		(4,292	)		(3,876	)
Net property and equipment	$	3,733		$	3,304

Intangible Assets

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

8. Intangible Assets

Intangible Assets consist of the following (in thousands):

Schedule of Intangible Assets

	September 30, 2024			December 31, 2023
Developed technology	$	7,610		$	-
Customer relationships		310			-
Trademark		420			-
Total intangibles		8,340			-
Less: Accumulated amortization		(178	)		-
Net intangibles	$	8,162		$	-

Leases

9 Months Ended

Sep. 30, 2024

Leases

Leases

9. Leases

As of September 30, 2024, the weighted average discount rate for operating leases was 9.00% and the weighted average remaining lease term for operating lease term is 7.34 years.

The following table represents lease costs and other lease information (in thousands):

	2024		2023		2024		2023
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease cost	$	256	$	227	$	710	$	681
Short-term lease cost		1		4		9		13
Total net lease cost	$	257	$	231	$	719	$	694

Cash paid within operating cash flows	$	286	$	255	$	797	$	741

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased facilities and equipment which are paid based on actual costs incurred.

Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2024, were as follows (in thousands):

	September 30, 2024
2024	$	265
2025		1,079
2026		1,097
2027		1,122
2028		1,147
2029 and thereafter		3,705
Total lease payments		8,415
Less: Interest		(2,280	)
Present value of lease liabilities	$	6,135

Accrued Liabilities

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Accrued Liabilities

10. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

Schedule of Accrued Liabilities

	September 30, 2024			December 31, 2023
Accrued salaries, bonus, and benefits	$	1,636		$	1,222
Accrued licenses and maintenance fees		-			484
Accrued warranties		65			107
Accrued professional services		462			138
Accrued investigational sites		138			-
Deferred contract obligation		1,045			1,045
Other		85			19
Total accrued liabilities		3,431			3,015
Less: Long-term accrued liabilities		(55	)		(43	)
Total current accrued liabilities	$	3,376		$	2,972

Convertible Preferred Stock and Stockholders’ Equity

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Convertible Preferred Stock and Stockholders’ Equity

11. Convertible Preferred Stock and Stockholders’ Equity

Series A Convertible Preferred Stock and Warrants

2021 CEO Performance Award Unit Grant

Tranche #	No. of Shares Subject to PSU		Market Capitalization Milestones⁽¹⁾
1		1,000,000	$	1,000,000,000
2		1,500,000	$	1,500,000,000
3		1,500,000	$	2,000,000,000
4		2,000,000	$	2,500,000,000
5		1,000,000	$	3,000,000,000
6		1,000,000	$	3,500,000,000
7		1,000,000	$	4,000,000,000
8		2,000,000	$	4,500,000,000
9		1,000,000	$	5,000,000,000
10		1,000,000	$	5,500,000,000
Total:		13,000,000

The Company received Shareholder approval at its annual meeting on May 20, 2021, for shares to be issued under the award.

Stock Award Plans

At September 30, 2024, the Company had 5,370,040 remaining shares of the Company’s common stock to provide for current and future grants under its various equity plans.

A summary of the option and stock appreciation rights activity for the nine-month period ended September 30, 2024, is as follows:

	Number of Options/SARs			Range of Exercise Price		Weighted Average Exercise Price per Share
Outstanding, December 31, 2023		3,650,115			$0.74 - $9.87	$	3.93
Granted		728,500			$1.99 - $3.01	$	2.98
Exercised		(64,966	)		$0.74 - $2.57	$	1.02
Forfeited		(355,679	)		$0.74 - $9.87	$	3.98
Outstanding, September 30, 2024		3,957,970			$0.74 - $9.87	$	3.80

A summary of the restricted stock unit activity for the nine-month period ended September 30, 2024, is as follows:

	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value per Unit
Outstanding, December 31, 2023		1,502,131		$	3.94
Granted		696,945		$	1.69
Vested		(652,544	)	$	2.91
Outstanding, September 30, 2024		1,546,532		$	3.36

Product Warranty Provisions

9 Months Ended

Sep. 30, 2024

Guarantees and Product Warranties [Abstract]

Product Warranty Provisions

12. Product Warranty Provisions

Accrued assurance-type warranty, which is included in other accrued liabilities, consists of the following (in thousands):

Schedule of Accrued Warranty

	September 30, 2024			December 31, 2023
Warranty accrual, beginning of the fiscal period	$	107		$	163
Accrual adjustment for product warranty		(2	)		547
Payments made		(40	)		(603	)
Warranty accrual, end of the fiscal period	$	65		$	107

Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Subsequent Events

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

None.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Risks and Uncertainties

Risks and Uncertainties

Concentration of Credit Risk

Concentration of Credit Risk

Cash and Cash Equivalents

Cash and Cash Equivalents

Restricted Cash

Restricted Cash

Investments

Investments

Fair Value Measurements

Fair Value Measurements

Financial instruments consist of cash and cash equivalents, restricted cash, investments, accounts receivable, and accounts payable.

Level 1:		Values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:		Values are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or other model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3:		Values are generated from model-based techniques that use significant assumptions not observable in the market.

Accounts Receivable, Contract Assets, and Allowance for Credit Losses

Accounts Receivable, Contract Assets, and Allowance for Credit Losses

Revenue and Costs of Revenue

Revenue and Costs of Revenue

The Company accounts for revenue in accordance with Accounting Standards Codification Topic 606 (“ASC 606”), Revenue from Contracts with Customers.

Our revenue recognition policy affects the following revenue streams in our business as follows:

Systems:

Disposables:

Royalty:

Other Recurring Revenue:

The following table summarizes the Company’s revenue for systems, disposables, and service and accessories for the nine months ended September 30, 2024, and 2023 (in thousands):

	2024		2023		2024		2023
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Systems	$	4,391	$	3,539	$	7,243	$	8,673
Disposables, service and accessories		4,805		4,260		13,335		13,533
Total revenue	$	9,196	$	7,799	$	20,578	$	22,206

The following table summarizes the Company’s contract assets and liabilities (in thousands):

	September 30, 2024			December 31, 2023
Contract Assets - unbilled receivables	$	940		$	72

Customer deposits	$	1,302		$	2,105
Product shipped, revenue deferred		1,566			1,413
Deferred service and license fees		4,326			4,776
Total deferred revenue	$	7,194		$	8,294
Less: Long-term deferred revenue		(2,102	)		(1,637	)
Total current deferred revenue	$	5,092		$	6,657

Assets Recognized from the Costs to Obtain a Contract with a Customer

Assets Recognized from the Costs to Obtain a Contract with a Customer

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Contingent Liabilities- Earnout Consideration

Contingent Liabilities- Earnout Consideration

Leasing Arrangements

Leasing Arrangements

Stock-Based Compensation

Stock-Based Compensation

Shares purchased by employees under the 2022 Employee Stock Purchase Plans are considered to be non-compensatory.

Net Loss per Common Share

Net Loss per Common Share

The following table sets forth the computation of basic and diluted EPS (in thousands except for share and per share amounts):

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net loss	$	(6,190	)	$	(5,369	)	$	(16,530	)	$	(15,673	)
Cumulative dividend on convertible preferred stock		(328	)		(338	)		(984	)		(1,004	)
Net loss attributable to common stockholders	$	(6,518	)	$	(5,707	)	$	(17,514	)	$	(16,677	)

Weighted average number of common shares and equivalents:		85,824,789			82,468,971			84,629,531			80,028,243
Basic EPS	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)
Diluted EPS	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of Revenue Disaggregated by Type

The following table summarizes the Company’s revenue for systems, disposables, and service and accessories for the nine months ended September 30, 2024, and 2023 (in thousands):

	2024		2023		2024		2023
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Systems	$	4,391	$	3,539	$	7,243	$	8,673
Disposables, service and accessories		4,805		4,260		13,335		13,533
Total revenue	$	9,196	$	7,799	$	20,578	$	22,206

Summary of Contract Assets and Liabilities

The following table summarizes the Company’s contract assets and liabilities (in thousands):

	September 30, 2024			December 31, 2023
Contract Assets - unbilled receivables	$	940		$	72

Customer deposits	$	1,302		$	2,105
Product shipped, revenue deferred		1,566			1,413
Deferred service and license fees		4,326			4,776
Total deferred revenue	$	7,194		$	8,294
Less: Long-term deferred revenue		(2,102	)		(1,637	)
Total current deferred revenue	$	5,092		$	6,657

Schedule of Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted EPS (in thousands except for share and per share amounts):

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net loss	$	(6,190	)	$	(5,369	)	$	(16,530	)	$	(15,673	)
Cumulative dividend on convertible preferred stock		(328	)		(338	)		(984	)		(1,004	)
Net loss attributable to common stockholders	$	(6,518	)	$	(5,707	)	$	(17,514	)	$	(16,677	)

Weighted average number of common shares and equivalents:		85,824,789			82,468,971			84,629,531			80,028,243
Basic EPS	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)
Diluted EPS	$	(0.08	)	$	(0.07	)	$	(0.21	)	$	(0.21	)

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Estimated Fair Value of Assets Acquires and Liabilities Assumed

(in thousands)	July 31, 2024
	(Unaudited)
Assets acquired:
Current assets
Cash	$	108
Accounts receivable, net of allowance of $19		698
Inventories, net		1,202
Prepaid expenses and other current assets		16
Total current assets		2,024
Property and equipment		825
Goodwill		4,494
Intangible assets		8,340
Total assets acquired	$	15,683
Liabilities assumed:
Current liabilities
Accounts payable	$	1,765
Accrued liabilities		41
Total liabilities assumed	$	1,806
Net assets acquired	$	13,877

Schedule of Consolidated Statement of Earning

(in thousands)	(Unaudited)
Revenue	$	643
Net income (loss)	$	(1,195	)

Schedule of Intangible Assets Related to Acquisition

The intangible assets related to the acquisition consisted of the following:

Unaudited	Fair Value (in thousands)		Amortization Period (in years)
Intangible assets subject to amortization:
Developed Technology		7,610		8.0
Customer Relationships		310		10.0
Trademark		420		5.0
Total intangible assets subject to amortization		8,340
Intangible assets not subject to amortization
Goodwill		4,494		N/A
Total intangible assets not subject to amortization		4,494
Total intangible assets		12,834
Weighted average amortization period				7.9

Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2024

Investments, All Other Investments [Abstract]

Schedule of Cash and Cash Equivalents, Restricted Cash and Investments

The following tables summarize the Company’s cash and fair value by significant category reported as cash and cash equivalents and restricted cash as of September 30, 2024, and December 31, 2023:

	September 30, 2024
	Valuation								Reported as:
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Restricted Cash- current		Short-term Investments		Restricted Cash
Cash	$	1,656	$	-	$	-	$	1,656	$	1,656	$	-	$	-	$	-
Level 2
Money market funds		9,357		-		-		9,357		9,007		350		-		-
Subtotal		9,357		-		-		9,357		9,007		350		-		-
Total assets measured at fair value	$	11,013	$	-	$	-	$	11,013	$	10,663	$	350	$	-	$	-

	December 31, 2023
	Valuation								Reported as:
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash and Cash Equivalents		Restricted Cash- current		Short-term Investments		Restricted Cash
Cash	$	2,122	$	-	$	-	$	2,122	$	2,122	$	-	$	-	$	-
Level 2
Money market funds		18,440		-		-		18,440		17,696		525		-		219
Subtotal		18,440		-		-		18,440		17,696		525		-		219
Total assets measured at fair value	$	20,562	$	-	$	-	$	20,562	$	19,818	$	525	$	-	$	219

Inventories (Tables)

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of the following (in thousands):

Schedule of Inventories

	September 30, 2024			December 31, 2023
Raw materials	$	5,974		$	5,918
Work in process		893			1,034
Finished goods		4,950			3,413
Reserve for excess and obsolescence		(2,808	)		(1,939	)
Total inventory	$	9,009		$	8,426

Prepaid Expenses and Other Assets (Tables)

9 Months Ended

Sep. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following (in thousands):

	September 30, 2024			December 31, 2023
Prepaid expenses	$	332		$	181
Prepaid commissions		83			110
Deposits		495			424
Other assets		75			98
Total prepaid expenses and other assets		985			813
Less: Noncurrent prepaid expenses and other assets		(116	)		(137	)
Total current prepaid expenses and other assets	$	869		$	676

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and Equipment consist of the following (in thousands):

Schedule of Property and Equipment

	September 30, 2024			December 31, 2023
Equipment	$	5,108		$	4,269
Leasehold improvements		2,917			2,911
Gross property and equipment		8,025			7,180
Less: Accumulated depreciation		(4,292	)		(3,876	)
Net property and equipment	$	3,733		$	3,304

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

	September 30, 2024			December 31, 2023
Developed technology	$	7,610		$	-
Customer relationships		310			-
Trademark		420			-
Total intangibles		8,340			-
Less: Accumulated amortization		(178	)		-
Net intangibles	$	8,162		$	-

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases

Schedule of Lease Costs and Other Lease Information

The following table represents lease costs and other lease information (in thousands):

	2024		2023		2024		2023
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease cost	$	256	$	227	$	710	$	681
Short-term lease cost		1		4		9		13
Total net lease cost	$	257	$	231	$	719	$	694

Cash paid within operating cash flows	$	286	$	255	$	797	$	741

Schedule of Future Minimum Operating Lease Payments

Future minimum payments for operating leases with initial or remaining terms of one year or more as of September 30, 2024, were as follows (in thousands):

	September 30, 2024
2024	$	265
2025		1,079
2026		1,097
2027		1,122
2028		1,147
2029 and thereafter		3,705
Total lease payments		8,415
Less: Interest		(2,280	)
Present value of lease liabilities	$	6,135

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

Schedule of Accrued Liabilities

	September 30, 2024			December 31, 2023
Accrued salaries, bonus, and benefits	$	1,636		$	1,222
Accrued licenses and maintenance fees		-			484
Accrued warranties		65			107
Accrued professional services		462			138
Accrued investigational sites		138			-
Deferred contract obligation		1,045			1,045
Other		85			19
Total accrued liabilities		3,431			3,015
Less: Long-term accrued liabilities		(55	)		(43	)
Total current accrued liabilities	$	3,376		$	2,972

Convertible Preferred Stock and Stockholders’ Equity (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Summary of Performance Award And Market Capitalization Milestones

Tranche #	No. of Shares Subject to PSU		Market Capitalization Milestones⁽¹⁾
1		1,000,000	$	1,000,000,000
2		1,500,000	$	1,500,000,000
3		1,500,000	$	2,000,000,000
4		2,000,000	$	2,500,000,000
5		1,000,000	$	3,000,000,000
6		1,000,000	$	3,500,000,000
7		1,000,000	$	4,000,000,000
8		2,000,000	$	4,500,000,000
9		1,000,000	$	5,000,000,000
10		1,000,000	$	5,500,000,000
Total:		13,000,000

Summary of Option and Stock Appreciation Rights Activity

A summary of the option and stock appreciation rights activity for the nine-month period ended September 30, 2024, is as follows:

	Number of Options/SARs			Range of Exercise Price		Weighted Average Exercise Price per Share
Outstanding, December 31, 2023		3,650,115			$0.74 - $9.87	$	3.93
Granted		728,500			$1.99 - $3.01	$	2.98
Exercised		(64,966	)		$0.74 - $2.57	$	1.02
Forfeited		(355,679	)		$0.74 - $9.87	$	3.98
Outstanding, September 30, 2024		3,957,970			$0.74 - $9.87	$	3.80

Schedule of Restricted Stock Unit Activity

A summary of the restricted stock unit activity for the nine-month period ended September 30, 2024, is as follows:

	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value per Unit
Outstanding, December 31, 2023		1,502,131		$	3.94
Granted		696,945		$	1.69
Vested		(652,544	)	$	2.91
Outstanding, September 30, 2024		1,546,532		$	3.36

Product Warranty Provisions (Tables)

9 Months Ended

Sep. 30, 2024

Guarantees and Product Warranties [Abstract]

Schedule of Accrued Warranty

Accrued assurance-type warranty, which is included in other accrued liabilities, consists of the following (in thousands):

Schedule of Accrued Warranty

	September 30, 2024			December 31, 2023
Warranty accrual, beginning of the fiscal period	$	107		$	163
Accrual adjustment for product warranty		(2	)		547
Payments made		(40	)		(603	)
Warranty accrual, end of the fiscal period	$	65		$	107

Schedule of Revenue Disaggregated by Type (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Product Information [Line Items]
Total revenue	$ 9,196	$ 7,799	$ 20,578	$ 22,206
Systems [Member]
Product Information [Line Items]
Total revenue	4,391	3,539	7,243	8,673
Disposables Service and Accessories [Member]
Product Information [Line Items]
Total revenue	$ 4,805	$ 4,260	$ 13,335	$ 13,533

Summary of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Product Information [Line Items]
Contract Assets - unbilled receivables	$ 940	$ 72
Total deferred revenue	7,194	8,294
Less: Long-term deferred revenue	(2,102)	(1,637)
Total current deferred revenue	5,092	6,657
Customer Deposits [Member]
Product Information [Line Items]
Total deferred revenue	1,302	2,105
Product Shipped Revenue Deferred [Member]
Product Information [Line Items]
Total deferred revenue	1,566	1,413
Deferred Service And License Fees [Member]
Product Information [Line Items]
Total deferred revenue	$ 4,326	$ 4,776

Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Accounting Policies [Abstract]
Net loss	$ (6,190)	$ (5,369)	$ (16,530)	$ (15,673)
Cumulative dividend on convertible preferred stock	(328)	(338)	(984)	(1,004)
Net loss attributable to common stockholders	$ (6,518)	$ (5,707)	$ (17,514)	$ (16,677)
Weighted average number of common shares and equivalents, basic	85,824,789	82,468,971	84,629,531	80,028,243
Weighted average number of common shares and equivalents, diluted	85,824,789	82,468,971	84,629,531	80,028,243
Basic EPS	$ (0.08)	$ (0.07)	$ (0.21)	$ (0.21)
Diluted EPS	$ (0.08)	$ (0.07)	$ (0.21)	$ (0.21)

Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Product Information [Line Items]
Restricted cash	$ 0.4		$ 0.7
Short-term investments
Expected credit loss on investments or accrued interest, description	The Company did not have any material expected credit losses on investments or material expected credit losses on accrued interest related to investments during the nine months ended September 30, 2024, or year ended December 31, 2023.		The Company did not have any material expected credit losses on investments or material expected credit losses on accrued interest related to investments during the nine months ended September 30, 2024, or year ended December 31, 2023.
Remaining performance obligations	$ 15.5
Contract with customer liability revenue recognized	5.1	$ 5.7
Capitalized contract cost	$ 0.1		$ 0.1
Expected dividend rate	0.00%
Expected volatility	76.00%
Expected term	6 years 3 months
Series A Convertible Preferred Stock [Member]
Product Information [Line Items]
Potential common shares excluded from diluted earnings per share	49,386,978
Stock Options and Stock Appreciation Rights [Member]
Product Information [Line Items]
Potential common shares excluded from diluted earnings per share	3,957,970
Weighted average exercise price	$ 3.80
Restricted Stock [Member]
Product Information [Line Items]
Potential common shares excluded from diluted earnings per share	1,546,532
Unearned Restricted Shares [Member]
Product Information [Line Items]
Potential common shares excluded from diluted earnings per share	0
Revenue From System Delivery and Installation [Member] \| Product Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage	35.00%	39.00%
Disposable Revenue [Member] \| Product Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage	27.00%	21.00%
Royalty Revenue [Member] \| Product Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage	1.00%	1.00%
Other Recurring Revenue [Member] \| Product Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage	38.00%	40.00%
Systems [Member]
Product Information [Line Items]
Warranty costs	$ 0.1	$ 0.1
Other Current Assets [Member] \| Maximum [Member]
Product Information [Line Items]
Accrued interest receivable	$ 0.1		$ 0.1

Schedule of Estimated Fair Value of Assets Acquires and Liabilities Assumed (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Jul. 31, 2024	Dec. 31, 2023
Current assets
Net of allowance	$ 661	$ 19	$ 672
Goodwill	4,494
Access Point Technologies EP Inc [Member]
Current assets
Cash		108
Accounts receivable, net of allowance of $19		698
Inventories, net		1,202
Prepaid expenses and other current assets		16
Total current assets		2,024
Property and equipment		825
Goodwill	$ 4,494	4,494
Intangible assets		8,340
Total assets acquired		15,683
Current liabilities
Accounts payable		1,765
Accrued liabilities		41
Total liabilities assumed		1,806
Net assets acquired		$ 13,877

Schedule of Consolidated Statement of Earning (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Business Acquisition [Line Items]
Net income (loss)	$ 6,190	$ 5,369	$ 16,530	$ 15,673
Access Point Technologies EP Inc [Member]
Business Acquisition [Line Items]
Revenue	643		643
Net income (loss)	$ (1,195)		$ (1,195)

Schedule of Intangible Assets Related to Acquisition (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Jul. 31, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Total intangible assets subject to amortization	$ 8,340
Goodwill	4,494
Developed Technology Rights [Member]
Business Acquisition [Line Items]
Total intangible assets subject to amortization	7,610
Customer Relationships [Member]
Business Acquisition [Line Items]
Total intangible assets subject to amortization	310
Trademarks [Member]
Business Acquisition [Line Items]
Total intangible assets subject to amortization	420
Access Point Technologies EP Inc [Member]
Business Acquisition [Line Items]
Total intangible assets subject to amortization	8,340
Goodwill	4,494	$ 4,494
Total intangible assets not subject to amortization	4,494
Total intangible assets	$ 12,834
Weighted average amortization period - Amortization Period in Years	7 years 10 months 24 days
Access Point Technologies EP Inc [Member] \| Developed Technology Rights [Member]
Business Acquisition [Line Items]
Total intangible assets subject to amortization	$ 7,610
Weighted average amortization period - Amortization Period in Years	8 years
Access Point Technologies EP Inc [Member] \| Customer Relationships [Member]
Business Acquisition [Line Items]
Total intangible assets subject to amortization	$ 310
Weighted average amortization period - Amortization Period in Years	10 years
Access Point Technologies EP Inc [Member] \| Trademarks [Member]
Business Acquisition [Line Items]
Total intangible assets subject to amortization	$ 420
Weighted average amortization period - Amortization Period in Years	5 years

Acquisitions (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
Acquisitions (Details Narrative) - USD ($)	Jul. 31, 2024	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Business Acquisition [Line Items]
Stock consideration acquisitions, value		$ 3,000,000		$ 3,000,000
Total contingent consideration including upfront payment	$ 13,877
Components of net loss		(6,190,000)	$ (5,369,000)	(16,530,000)	$ (15,673,000)
Revaluation of contingent consideration		672,000		672,000
Business acquisition, pro forma revenue		9,686	$ 9,349	23,519	$ 27,404
Business combination, incurred acquisition costs		$ 235		$ 368
Common Stock [Member]
Business Acquisition [Line Items]
Stock consideration acquisitions, shares		1,486,620		1,486,620
Stock consideration acquisitions, value		$ 1,000		$ 1,000
Access Point Technologies EP Inc [Member]
Business Acquisition [Line Items]
Business acquisition, number of closing shares	1,486,620
Business acquisition, additional earnout shares	4,613,380
Estimated fair value of contingent consideration related to additional earnout shares	$ 10,877
Revenue		643,000		643,000
Components of net loss		$ 1,195,000		$ 1,195,000
Access Point Technologies EP Inc [Member] \| Share Purchase Agreement [Member]
Business Acquisition [Line Items]
Business combination performance obligation regulatory milestones payable amount	$ 24,000,000.0
Business combination percentage of maximum voting rights to issue common shares	19.90%
Access Point Technologies EP Inc [Member] \| Common Stock [Member]
Business Acquisition [Line Items]
Stock consideration acquisitions, shares	1,486,620
Stock consideration acquisitions, value	$ 3,000,000.0

Schedule of Cash and Cash Equivalents, Restricted Cash and Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Cash and Cash Equivalents	$ 10,663	$ 19,818	$ 22,100
Restricted Cash- current	350	525	525
Short-term Investments
Restricted Cash		219	$ 350
Total assets measured at fair value, Amortized Cost	11,013	20,562
Total assets measured at fair value, Gross Unrealized Gains
Total assets measured at fair value, Gross Unrealized Losses
Total assets measured at fair value, Fair value	11,013	20,562
Fair Value, Inputs, Level 2 [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Cash and Cash Equivalents	9,007	17,696
Restricted Cash- current	350	525
Short-term Investments
Restricted Cash		219
Cash and Held to maturity securities, Amortized Cost	9,357	18,440
Cash and Held to maturity securities, Gross Unrealized Gains
Cash and Held to maturity securities, Gross Unrealized Losses
Cash and Held to maturity securities, Fair Value	9,357	18,440
Cash [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Cash, Amortized Cost	1,656	2,122
Cash, Gross Unrealized Gains
Cash, Gross Unrealized Losses
Cash, Fair Value	1,656	2,122
Cash and Cash Equivalents	1,656	2,122
Restricted Cash- current
Short-term Investments
Restricted Cash
Money Market Funds [Member] \| Fair Value, Inputs, Level 2 [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Cash, Amortized Cost	9,357	18,440
Cash, Gross Unrealized Gains
Cash, Gross Unrealized Losses
Cash, Fair Value	9,357	18,440
Cash and Cash Equivalents	9,007	17,696
Restricted Cash- current	350	525
Short-term Investments
Restricted Cash		$ 219

Financial Instruments (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Investments, All Other Investments [Abstract]
Interest income	$ 150	$ 270	$ 580	$ 835	$ 1,100

Schedule of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 5,974	$ 5,918
Work in process	893	1,034
Finished goods	4,950	3,413
Reserve for excess and obsolescence	(2,808)	(1,939)
Total inventory	$ 9,009	$ 8,426

Inventories (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Reserve for excess and obsolescence	$ 2,808	$ 1,939

Schedule of Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 332	$ 181
Prepaid commissions	83	110
Deposits	495	424
Other assets	75	98
Total prepaid expenses and other assets	985	813
Less: Noncurrent prepaid expenses and other assets	(116)	(137)
Total current prepaid expenses and other assets	$ 869	$ 676

Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 8,025	$ 7,180
Less: Accumulated depreciation	(4,292)	(3,876)
Net property and equipment	3,733	3,304
Equipment [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	5,108	4,269
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 2,917	$ 2,911

Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Total intangibles	$ 8,340
Less: Accumulated amortization	(178)
Net intangibles	8,162
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Total intangibles	7,610
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Total intangibles	310
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Total intangibles	$ 420

Schedule of Lease Costs and Other Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Leases
Operating lease cost	$ 256	$ 227	$ 710	$ 681
Short-term lease cost	1	4	9	13
Total net lease cost	257	231	719	694
Cash paid within operating cash flows	$ 286	$ 255	$ 797	$ 741

Schedule of Future Minimum Operating Lease Payments (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Leases
2024	$ 265
2025	1,079
2026	1,097
2027	1,122
2028	1,147
2029 and thereafter	3,705
Total lease payments	8,415
Less: Interest	(2,280)
Present value of lease liabilities	$ 6,135

Leases (Details Narrative) $ in Millions	Jul. 31, 2024 USD ($) ft²	Mar. 01, 2021 USD ($) ft²	Sep. 30, 2024
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
ROU asset and lease liability	$ 1.0
Weighted average discount rate, operating lease			9.00%
Weighted average remaining lease term, operating lease			7 years 4 months 2 days
Office Lease Agreement [Member] \| Globe Building Company [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Area of land \| ft²		43,100
Operating lease, term		10 years
Operating lease, option to extend		two
Operating lease, renewal term		5 years
Office Lease Agreement [Member] \| Globe Building Company [Member] \| 2022 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payments for rent		$ 0.8
Office Lease Agreement [Member] \| Globe Building Company [Member] \| 2031 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payments for rent		$ 1.0
Lease Agreement [Member] \| Tallula Group LLC [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Area of land \| ft²	11,300
Operating lease, term	4 years
Operating lease, option to extend	two
Operating lease, renewal term	4 years
Payments for rent	$ 0.2

Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued salaries, bonus, and benefits	$ 1,636	$ 1,222
Accrued licenses and maintenance fees		484
Accrued warranties	65	107	$ 163
Accrued professional services	462	138
Accrued investigational sites	138
Deferred contract obligation	1,045	1,045
Other	85	19
Total accrued liabilities	3,431	3,015
Less: Long-term accrued liabilities	(55)	(43)
Total current accrued liabilities	$ 3,376	$ 2,972

Summary of Performance Award And Market Capitalization Milestones (Details) - PSU Agreement [Member] - Mr. Fischel [Member]	Feb. 23, 2021 USD ($) shares
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	13,000,000
Market capitalization milestone, amount \| $	$ 1,000,000,000.0
Share-Based Payment Arrangement, Tranche One [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	1,000,000
Market capitalization milestone, amount \| $	$ 1,000,000,000
Share-Based Payment Arrangement, Tranche Two [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	1,500,000
Market capitalization milestone, amount \| $	$ 1,500,000,000
Share-Based Payment Arrangement, Tranche Three [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	1,500,000
Market capitalization milestone, amount \| $	$ 2,000,000,000
ShareBased Compensation Award Tranche Four [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	2,000,000
Market capitalization milestone, amount \| $	$ 2,500,000,000
ShareBased Compensation Award Tranche Five [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	1,000,000
Market capitalization milestone, amount \| $	$ 3,000,000,000
ShareBased Compensation Award Tranche Six [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	1,000,000
Market capitalization milestone, amount \| $	$ 3,500,000,000
ShareBased Compensation Award Tranche Seven [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	1,000,000
Market capitalization milestone, amount \| $	$ 4,000,000,000
ShareBased Compensation Award Tranche Eight [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	2,000,000
Market capitalization milestone, amount \| $	$ 4,500,000,000
ShareBased Compensation Award Tranche Nine [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	1,000,000
Market capitalization milestone, amount \| $	$ 5,000,000,000
ShareBased Compensation Award Tranche Ten [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares subject to PSU \| shares	1,000,000
Market capitalization milestone, amount \| $	$ 5,500,000,000

Summary of Option and Stock Appreciation Rights Activity (Details) - Equity Option [Member] - Stock Appreciation Rights (SARs) [Member]	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Number of Options/SARs, Outstanding, Beginning \| shares	3,650,115
Weighted Average Exercise Price per Share, Outstanding, Beginning	$ 3.93
Number of Options/SARs, Granted \| shares	728,500
Weighted Average Exercise Price per Share, Granted	$ 2.98
Number of Options/SARs, Exercised \| shares	(64,966)
Weighted Average Exercise Price per Share, Exercised	$ 1.02
Number of Options/SARs, Forfeited \| shares	(355,679)
Weighted Average Exercise Price per Share, Forfeited	$ 3.98
Number of Options/SARs, Outstanding, Ending \| shares	3,957,970
Weighted Average Exercise Price per Share, Outstanding, Ending	$ 3.80
Minimum [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Range of Exercise Price, Outstanding	0.74
Range of Exercise Price, Granted	1.99
Range of Exercise Price, Exercised	0.74
Range of Exercise Price, Forfeited	0.74
Range of Exercise Price, Outstanding, Ending	0.74
Maximum [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Range of Exercise Price, Outstanding	9.87
Range of Exercise Price, Granted	3.01
Range of Exercise Price, Exercised	2.57
Range of Exercise Price, Forfeited	9.87
Range of Exercise Price, Outstanding, Ending	$ 9.87

Schedule of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) [Member]	9 Months Ended
	Sep. 30, 2024 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of Restricted Stock Units, Outstanding, Beginning \| shares	1,502,131
Weighted Average Grant Date Fair Value per Unit, Outstanding, Beginning \| $ / shares	$ 3.94
Number of Restricted Stock Units, Outstanding, Granted \| shares	696,945
Weighted Average Grant Date Fair Value per Unit, Granted \| $ / shares	$ 1.69
Number of Restricted Stock Units, Outstanding, Vested \| shares	(652,544)
Weighted Average Grant Date Fair Value per Unit, Vested \| $ / shares	$ 2.91
Number of Restricted Stock Units, Outstanding, Ending \| shares	1,546,532
Weighted Average Grant Date Fair Value per Unit, Outstanding, Ending \| $ / shares	$ 3.36

Convertible Preferred Stock and Stockholders’ Equity (Details Narrative) - USD ($)		1 Months Ended	9 Months Ended
	Feb. 23, 2021	Sep. 30, 2016	Sep. 30, 2024	Sep. 30, 2023
Class of Stock [Line Items]
Common stock, voting rights			The holders of common stock are entitled to one vote for each share held
Payments of dividends common stock			$ 0
Stock-based compensation expense			7,696,000	$ 7,987,000
Unrecognized stock-based compensation expense			$ 3,300,000
Share based payment arrangement, cost not yet recognized, period			4 years
2012 Stock Incentive Plan [Member]
Class of Stock [Line Items]
Stock plan expiration date			May 19, 2022
Stock Award Plans [Member]
Class of Stock [Line Items]
Common stock, shares reserved for future grants			5,370,040
PSU Agreement [Member] \| Mr. Fischel [Member]
Class of Stock [Line Items]
Performance award term	10 years
Number of shares granted	13,000,000
Maximum market capitalization milestone, amount	$ 1,000,000,000.0
Increase in market capitalization milestone, amount	$ 500,000,000
Award vesting rights, description	Each tranche represents a portion of the PSUs covering the number of shares outlined in the table above. Each tranche vests upon (i) satisfaction of the market capitalization milestones and (ii) continued employment as CEO of the Company from the grant date through December 31, 2030. Absent an earlier termination, the PSUs will expire on December 31, 2030. If our CEO ceases employment as CEO of the Company for any reason including death, disability, termination for cause or without cause (as defined in the award agreement), or if he voluntary terminates after service as CEO for at least five years, the remaining service period will be waived and he will retain any PSUs that have vested through the date of termination
Stock-based compensation expense			$ 5,400,000	5,300,000
Unrecognized stock-based compensation expense			$ 31,600,000	$ 38,800,000
PSU Agreement [Member] \| Mr. Fischel [Member] \| Maximum [Member]
Class of Stock [Line Items]
Maximum market capitalization milestone, amount	$ 5,500,000,000
Series A Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Sale of stock, number of shares sold		24,000
Preferred stock, par value		$ 0.001
Preferred stock, stated value		1,000
Redemption price per share		$ 0.65
Common stock issuable from warrants		36,923,078
Preferred stock dividend rate		6.00%
Preferred stock redemption, triggering event, percent of common stock sold threshold		50.00%

Schedule of Accrued Warranty (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Guarantees and Product Warranties [Abstract]
Warranty accrual, beginning of the fiscal period	$ 107	$ 163
Accrual adjustment for product warranty	(2)	547
Payments made	(40)	(603)
Warranty accrual, end of the fiscal period	$ 65	$ 107

Commitments and Contingencies (Details Narrative) - USD ($) $ in Millions	1 Months Ended
	Feb. 29, 2024	Apr. 30, 2021
Line of Credit Facility [Line Items]
Vendor proceedings on Inventory	$ 0.6
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Long-term line of credit		$ 1.8