Overview

Vicarious Surgical is a company that is combining advanced miniaturized robotics, computer science, sensing, and 3D visualization to build a new category of intelligent and affordable, single-port surgical robot. Their goal is to improve patient outcomes, as well as the cost and efficacy of surgical procedures, by delivering the next generation in robotic surgery.

The company estimates there are over 45 million soft tissue surgical procedures, including an estimated 3.9 million ventral hernia procedures, that are addressable annually worldwide by their technology. However, the company has not generated any revenue to date, as they are still in the development and regulatory approval stages.

Financial Highlights

Vicarious Surgical incurred net losses of $63,223 and $71,071 for the years ended December 31, 2024 and 2023, respectively. The 2024 net loss included a gain of $43 related to the change in valuation of their warrant obligations, while the 2023 net loss included a gain of $5,191 related to the change in valuation of their warrant obligations.

The company’s loss from operations prior to the warrant gain and other income and expense items was $66,555 and $80,666 for the years ended December 31, 2024 and 2023, respectively, representing a period-over-period decrease in expenses of 17%. This was primarily due to decreases in personnel-related expenses, insurance expense, materials and supplies, and software expense.

The decrease in personnel-related expenses was due to a 28% decrease in average headcount, from 177 people in 2023 to 127 people in 2024.

Factors Affecting Results of Operations

The key factors affecting Vicarious Surgical’s results of operations and financial condition include:

Revenue: The company has not generated any revenue to date and does not expect to generate revenue unless and until they receive FDA authorization for their product candidate.

Research and Development (R&D) Expenses: R&D expenses consist primarily of engineering, product development, regulatory expenses, medical affairs, and other costs associated with product candidates and technologies that are in development. The company expects R&D expenses to vary over time depending on the level and timing of their new product development efforts.

General and Administrative (G&A) Expenses: G&A expenses consist primarily of compensation for personnel, professional services fees, insurance costs, and other general corporate expenses. The company expects G&A expenses to continue to increase as they expand their infrastructure to support anticipated growth.

Sales and Marketing (S&M) Expenses: S&M expenses consist primarily of compensation for personnel related to selling and marketing functions and physician education programs. The company expects S&M expenses to continue to increase as they increase potential customers’ awareness of their presence and prepare for product launch.

Change in Fair Value of Warrant Liabilities: The change in fair value of warrant liability represents the mark-to-market fair value adjustments to the outstanding Public Warrants and Private Placement Warrants.

Interest Income and Expense: Interest income consists primarily of interest earned on cash and investments, while interest expense consists primarily of interest incurred on equipment loans that were paid off in April 2023.

Results of Operations

The table below summarizes Vicarious Surgical’s historical operating results for the years ended December 31, 2024 and 2023:

The key highlights from the results of operations include:

• R&D expenses decreased by 16% primarily due to decreases in personnel-related expenses, materials and supplies, software, and facilities.
• S&M expenses decreased by 27% primarily due to decreases in personnel-related expenses, professional services, and travel.
• G&A expenses decreased by 19% primarily due to decreases in personnel-related expenses, insurance, professional services, software, travel, and other operating costs.
• The change in fair value of warrant liabilities resulted in a $43 gain in 2024 compared to a $5,191 gain in 2023.
• Interest and other income decreased by 26% primarily due to a decrease in interest income from short-term investments.
• Interest expense decreased by 100% due to the equipment loans being paid off in April 2023.

Liquidity and Capital Resources

As of December 31, 2024, Vicarious Surgical held cash and cash equivalents of $9,737, short-term investments of $39,360, and had an accumulated deficit of $195,935. The company expects net losses to continue as they invest in commercialization and new product development.

Based on their current planned operations, the company does not believe their current cash, cash equivalents, and short-term investments balance of $49,097 as of December 31, 2024 will be sufficient to support their operations beyond the next twelve months. As such, there is substantial doubt about the company’s ability to continue as a going concern.

The company may need to raise additional capital through the sale of common or preferred equity, convertible debt securities, or by entering into a credit facility or other debt financing. However, the ability to raise additional capital on reasonable terms, or at all, may be difficult given the current macroeconomic environment.

Cash Flows Summary

The key highlights from the cash flow statement include:

• Net cash used in operating activities decreased from $62,305 in 2023 to $49,956 in 2024, primarily due to the decrease in net loss.
• Net cash provided by investing activities in 2024 was $6,863, consisting of $65,192 in proceeds from sales and maturities of investments, partially offset by $58,149 used for purchases of investments.
• Net cash provided by financing activities in 2024 was $8 from stock option exercises, compared to $44,702 in 2023 which included $44,222 of proceeds from the issuance of common stock.

Critical Accounting Policies and Estimates

The company’s critical accounting policy relates to the recognition and measurement of warrant liabilities. Vicarious Surgical recognizes the warrants as liabilities at fair value and adjusts the warrant liability to fair value at each reporting period, with any changes in fair value recognized in the statement of operations.

The fair value of the Public Warrants is determined from their trading value on public markets, while the fair value of the Private Placement Warrants is calculated using the Black-Scholes option pricing model, which requires the company to make assumptions about the stock price, exercise price, expected term, volatility, interest rate, and dividend yield.

Emerging Growth Company

Vicarious Surgical qualifies as an “emerging growth company” under the JOBS Act and takes advantage of certain reduced reporting and other requirements afforded to such companies, including the option to adopt new or revised accounting standards within the same time periods as private companies.