Stereotaxis Q1 2025 Earnings Report

Stereotaxis EPS Results

• Actual EPS: N/A
• Consensus EPS: -$0.07
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Stereotaxis Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $6.88 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Stereotaxis Announcement Details

• Quarter: Q1 2025
• Date: 5/12/2025
• Time: After Market Closes
• Conference Call Date: Monday, May 12, 2025
• Conference Call Time: 4:30PM ET

Stereotaxis (NYSEAMERICAN:STXS), Inc. designs, manufactures, and markets robotic systems, instruments, and information systems for the interventional laboratory in the United States and internationally. Its robotic magnetic navigation (RMN) systems include the Genesis RMN and Niobe systems, which enable physicians to complete complex interventional procedures by providing image-guided delivery of catheters and guidewires through the blood vessels and chambers of the heart to treatment sites. The company provides Odyssey, a real-time information solution to manage, control, record, and share procedures across networks; and Stereotaxis Imaging Model S X-ray system, a single-plane, full-power x-ray system, including c-arm, powered table, motorized boom, and monitors for a robotic interventional operating room. In addition, it offers disposables and other accessories, such as QuikCAS automated catheter advancement disposables for the remote advancement of electrophysiology catheters. Further, the company provides Vdrive, a system that offers navigation and stability for the diagnostic and therapeutic devices designed to improve interventional procedures; and V-Loop, V-Sono, and V-CAS disposable components. It markets its products through direct sales force, distributors, and sales agents. The company has a strategic collaboration with MAGiC catheter for cardiac ablation procedures. Stereotaxis, Inc. was incorporated in 1990 and is based in Saint Louis, Missouri.

Stereotaxis Q1 2025 Earnings Call Transcript

Key Takeaways

• 9% revenue growth in Q1 with $7.5 M total revenue and recurring revenue up to $5.5 M, and reaffirmed double-digit growth guidance for 2025.
• MAPIT catheter sales exceeded $1 M in Q1, up 30% sequentially in the US, marking early traction in recurring EP catheter revenue.
• Received CE Mark for MAGIC ablation catheter in Europe, adopted by 20% of hospital customers with an expected ramp to ~$1 M per quarter by year-end and US FDA approval anticipated in H2 2025.
• Completed CE Mark and secured initial purchase order for Genesis X robotic system, with first commercial installation set for this summer and full launch planned post-US approval.
• Structural challenges in the legacy product ecosystem and administrative hurdles—plus China market uncertainty due to tariffs and macro conditions—remain headwinds to near-term growth.

Presentation

[Operator]

Good afternoon. Thank you for joining us for Stereotaxis First Quarter twenty twenty five Earnings Conference Call. Certain statements during the conference call and question and answer period to follow may relate to future events, expectations and as such constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company in the future to be materially different from the statements that the company's executives may make today. These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10 ks or 10 Q.

[Operator]

We assume no duty to update these statements. At this time, all participants have been placed on a listen only mode. The floor will be opened for questions and comments following the presentation. As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to your host, David Fischel, chairman and CEO of Stereotaxis. Please go ahead.

[David Fischel, CEO & Chairman at Stereotaxis]

Thank you, operator, and good afternoon, everyone. Our last call two months ago included a comprehensive overview of Stereotaxis' strategy. We'll keep today's call more brief. I'll focus our prepared remarks on a few key commercial and innovation updates. Our commercial results for the first quarter were solid with 9% year over year growth.

[David Fischel, CEO & Chairman at Stereotaxis]

While the structural challenges of our old product ecosystem remain a significant headwind, we are starting to show commercial progress. There are three areas specifically where we are orienting our focus and seeing results. Growing recurring revenue with our MAPIT portfolio of differentiated EP catheters, starting to commercialize our recently approved MAGIC catheter in Europe and early launch of Genasse X to expand robot adoption. Our recurring revenue growth in the first quarter reflects predominantly the contribution of the Mapit family of differentiated diagnostic EP catheters. Our global commercial team is increasingly driving adoption of these catheters as we approach the anniversary of acquiring APT.

[David Fischel, CEO & Chairman at Stereotaxis]

MAPIT sales in the first quarter were over $1,000,000 Sales in The United States, where entering the acquisition, we identified the most untapped opportunity and commercial synergy have particularly done well, growing 30% sequentially in the first quarter from the fourth quarter. Mapic catheters provide differentiated clinical value in the complex ablation procedures where robotics is most valued and our team most experienced. Treating complex VTs and PVCs along with pediatric and adult congenital patients. The process of getting catheters adopted is gradual. There's the need to generate awareness and interest, the administrative effort to get on contract at hospitals, and the clinical support to turn initial adoption into recurring use.

[David Fischel, CEO & Chairman at Stereotaxis]

We're still in the very earliest innings of working through these processes. Our first focus was existing US robotic customers, a third of which have by now begun first MAP IT purchases. Our early marketing campaigns are also building awareness with measurable impact in the EP community, where there is essentially no awareness of the catheters. The response to these efforts has been very positive and reinforces our confidence in the clinical value and market opportunity. We're working through many hospital value analysis committee assessments at both robotic accounts and entirely new hospitals to translate that new awareness into first purchases.

[David Fischel, CEO & Chairman at Stereotaxis]

We expect a long runway for continued growth in Mapit catheter revenue as we continue to build awareness and work through hospital approvals. The most significant driver of recurring revenue growth in the coming quarters will be the robotically steered MAGIC ablation catheter. We were delighted in the first quarter to receive European approval for MAGIC. As described on the last call, we began commercial efforts across many of our EU hospital customers. Initial adoption of MAGIC requires administrative submissions at each hospital, and for many hospitals, also additional regional or national administrative efforts.

[David Fischel, CEO & Chairman at Stereotaxis]

We're continuing to work through these processes across EU hospitals, regions, and countries. At approximately 20% of our hospital customers, we've got through these initial administrative efforts and begun commercial sales. Just the initial use of Magic at these initial accounts should conservatively generate a couple hundred thousand dollars of revenue this quarter. We expect this revenue to ramp up significantly in the coming quarters and reiterate the expectation shared on our last call that Magic revenue in Europe will reach approximately $1,000,000 per quarter by the end of this year. Building an attractive razor razorblade business model with portfolios of proprietary catheters is core to our overall strategy.

[David Fischel, CEO & Chairman at Stereotaxis]

That said, a larger installed base of robotic accounts is the critical foundation for robust recurring revenue. We spoke in detail on previous calls about how Genesis X serves as the innovation, making robotics broadly accessible across cath labs. After your receipt of European CE Mark for Genesis X, and then European approval of MAGIC, we were pleased to announce our first Genesis X purchase order in the first quarter and began an initial soft launch. The most impactful aspect of this launch was bringing Genesis X to the two largest electrophysiology conferences in our field, ERA in Vienna in March and HRS in San Diego in April. While Stereotaxis has attended both conferences for twenty years, this was the first time we were able to install a functional robot in our booth.

[David Fischel, CEO & Chairman at Stereotaxis]

Doing so was a dramatic demonstration of how far we've advanced the technology. We were delighted by the reception with busy booths and positive commentary from many physician visitors. Several key opinion leaders in the field from hospitals that adopted, but gave up on robotics in its earliest iterations, or never adopted robotics at all, came by and were impressed and interested. These interactions are reflective of the power of innovation and an increased relevance we and many physician experts expect robotics to play in EP and endovascular surgery. We have been busy preparing for the first commercial installation of Genesis X this summer.

[David Fischel, CEO & Chairman at Stereotaxis]

It will be an important milestone to demonstrate the robot working reliably in the rigorous environment of daily clinical use, and will serve as the pivot from which to enter into a more robust commercial effort. In tandem with working towards that installation, we've been working to enhance compatibility of the robot with various x rays, and preparing our supply chain manufacturing, installation and commercial processes for a full launch. We expect a full launch in Europe and The US shortly after initial commercial use and pending US regulatory approval. While we viewed Genesis X as the significant driver of robotic system growth in the coming years, we continue to have a healthy pipeline of Genesis customers. We were pleased in the first quarter to receive an order for an additional Genesis system from a U.

[David Fischel, CEO & Chairman at Stereotaxis]

S. Customer. We continue to expect a steady flow of Genesis orders in the next few quarters with additional Genesis X orders building on top of that base. We are pleased with the initial commercial impact of MapIt, Magic, and Genesis X. That said, the majority of our focus remains on driving multiple innovations through key development and regulatory milestones.

[David Fischel, CEO & Chairman at Stereotaxis]

Realizing these milestones in our comprehensive innovation strategy set the stage for breakout revenue growth. This will be a milestone rich year, and we're making significant progress on multiple fronts. We discussed the full breadth of innovation efforts on our last call. It's an amazingly busy time. We have six active regulatory reviews ongoing, key products being reviewed by either the US FDA or EU notified body.

[David Fischel, CEO & Chairman at Stereotaxis]

There are an additional five regulatory efforts ongoing for products we expect to submit for regulatory approval in the near term. This is an amazing bolus of innovation and takes a significant amount of effort to shepherd forward. I'll share a few brief regulatory updates on the key technologies. First, MAGIC in The US. We submitted MAGIC to the FDA last year and continue to work collaboratively with FDA on the review of the catheter.

[David Fischel, CEO & Chairman at Stereotaxis]

We've also continued enrolling patients in our ongoing European study, which is supporting this submission and are nearing 100 patients enrolled. Given our interactions with FDA, we continue to expect U. S. Regulatory approval for MAGIC in the second half of this year. Second, Genesis X in The US.

[David Fischel, CEO & Chairman at Stereotaxis]

In the first quarter, we responded to FDA's original questions, whittling down a list of approximately 25 outstanding questions to a few final topics. We received additional feedback and questions recently from FDA on these remaining topics. We're working to address these and continue to view regulatory approval of Genasys X in the summer as realistic. Third, our robotically steered high density mapping catheter, MAGIC Sweep. We submitted this catheter for regulatory approval in the first quarter and recently received our first round of questions from FDA.

[David Fischel, CEO & Chairman at Stereotaxis]

We see no significant concerns with these questions and will respond soon. We continue to see both U. S. And EU regulatory approval for MAGIC Sweep in the third quarter. Finally, our vascular guide catheter, Imagine, which allows our robot to begin to expand its use beyond just electrophysiology.

[David Fischel, CEO & Chairman at Stereotaxis]

We also submitted this catheter for regulatory approval in the first quarter and similar to Magic Sweep, continue to expect both US and EU regulatory approval in the third quarter. Beyond these products in active regulatory review, we are finalizing regulatory paperwork for our Synchrony Cath Lab technology with regulatory submissions still this quarter and are making good progress on our robotically steered vascular guidewire, which we believe we will complete by the end of this year. Other R and D activities, like our recently announced AI effort with Navidea and the multiple PSA efforts are also very exciting and are being advanced in parallel, but not expected to lead to regulatory submissions this year. It's an exciting period seeing so much of what we've invested in at the cusp of coming to market. We are heads down focused on advancing all these technologies through the development and regulatory processes and ensuring we are able to manufacture them with high quality and at scale and on commercializing the technologies with creativity.

[David Fischel, CEO & Chairman at Stereotaxis]

This year, we will demonstrate the tangible reality of our overall strategic transformation into a company with an easily adopted robot that can navigate a proprietary set of catheters in EP and broadly across endovascular procedures. These milestones will increasingly contribute to commercial results as we progress through the year and set us up for breakout growth as we look towards 2026. Kim will now provide additional commentary on our financial results, and then I will make a few financial comments as well before opening the call to Q and A. Kim?

[Kimberly Peery, CFO at Stereotaxis]

Thank you, David, and good afternoon, everyone. Revenue for the first quarter of twenty twenty five totaled $7,500,000 growth of 9% from $6,900,000 in the prior year first quarter. System revenue for the first quarter was $2,000,000 and recurring revenue was $5,500,000 compared to $2,600,000 and $4,300,000 in the prior year first quarter. System revenue in the quarter reflects revenue recognition of one Genesis system and partial revenue recognition of other ancillary systems. Recurring revenue growth reflects primarily the contribution from last year's acquisition of ATT Technology.

[Kimberly Peery, CFO at Stereotaxis]

Gross margin for the first quarter was 54% of revenue, recurring revenue gross margin was 68%, and system gross margin was 15%. Recurring revenue gross margins remain impacted by acquisition related accounting that temporarily reduces disposable margins. This is an accounting treatment and not reflective of cash margins or activity. Prior to the acquisition, recurring revenue margins were approximately 75%. Following the acquisition, they dipped down below 60%, and we expect recurring revenue margins to get back to our normal level by this year's third quarter.

[Kimberly Peery, CFO at Stereotaxis]

System gross margins have been fairly consistent in the 15 to 20% range and are impacted significantly by fixed overhead allocated over low production levels. Operating expenses in the October included 3,200,000.0 in noncash charges for stock compensation expense, mark to market adjustment for acquisition related contingent earn out consideration, and amortization of acquired intangible assets. Excluding these noncash charges, adjusted operating expenses were 6,800,000.0 compared to the prior year adjusted operating expenses of 6,100,000.0. The increase in operating expenses reflects the addition of ATT operating expenses following the acquisition. Operating loss and net loss in the first quarter of twenty twenty five were $5,900,000 and $5,800,000 compared with $4,700,000 and $4,500,000 in the previous year.

[Kimberly Peery, CFO at Stereotaxis]

Adjusted operating loss and adjusted net loss for the quarter, excluding noncash charges, were $2,700,000 and $2,600,000 compared with $2,200,000 and $1,900,000 in the previous year. Negative free cash flow for the first quarter was 1,800,000 compared to $2,300,000 in the previous year. At March 31, Stereotaxis had cash and cash equivalents of $10,700,000 and no debt. I will now hand the call back to David.

[David Fischel, CEO & Chairman at Stereotaxis]

Thank you, Kim. As mentioned in our press release, we are reiterating the revenue guidance we provided on the last call. We expect double digit revenue growth for the full year 2025. In any given quarter, we expect system revenue to fluctuate between approximately $2,000,000 to $3,000,000 Recurring revenue will continue to scale throughout the year, an expected $7,000,000 in the fourth quarter. Our revenue expectations assume only modest contributions from Genesis X in Europe this year and no Genesis X revenue from The U.

[David Fischel, CEO & Chairman at Stereotaxis]

S. We believe this is conservative, but warranted pending regulatory clearances. These revenue expectations also assume no system revenue from China. While we viewed the recent approval of Genesis in China as a potentially significant tailwind this year, the ongoing macro situation creates substantial uncertainty onto the extent Chinese hospitals will be able to purchase Genesis Systems. We and our partner, MicroPort, are continuing to work on a meaningful pipeline of Chinese customers, but believe it is prudent to view this as an upside given the uncertainty.

[David Fischel, CEO & Chairman at Stereotaxis]

Growing recurring revenue and stable operating expenses support our expectation for reduced cash use in 2025 compared to 2024. I'm pleased with our relatively modest cash use in the first quarter, and our cash level is approximately flat with our cash bonds at the end of last year's third quarter. Tariffs, assuming current rates persist, are anticipated to cause less than a 1% increase to our expenses. Review our existing balance sheet as allowing us to reach key milestones, commercialize our innovation and profitably grow. We'll now take your questions.

[David Fischel, CEO & Chairman at Stereotaxis]

Operator, can you please open the line to Q and A?

[Operator]

We also ask that you please limit your questions to one and one follow-up so that everyone can have the opportunity to engage with our speakers for today. Please say your first question comes from the line of Adam Mader with Piper Sandler. Please go ahead.

[Adam Maeder, Managing Director & Senior Research Analyst at Piper Sandler Companies]

Hi. Good afternoon, David and Kim. Thank you for taking the questions and congrats on all the progress.

[David Fischel, CEO & Chairman at Stereotaxis]

Thanks. Good afternoon, Yes.

[Adam Maeder, Managing Director & Senior Research Analyst at Piper Sandler Companies]

Good to hear from you, David. Maybe just one from me to start on the capital side. Multipart question, but just wanted to dig into the backlog a little bit more and just kind of get a better sense for kind of how that's shaping up, I guess, both on the Genesis side as well as the Genesis X Mobile system, both in The U. S. And in Europe.

[Adam Maeder, Managing Director & Senior Research Analyst at Piper Sandler Companies]

And one of the questions I have is, is the capital equipment environment still relatively healthy and resilient? And in The U. S. Particularly, just wondering if folks are deferring purchases waiting for the Genesis X to become available and if that's kind of impacting you guys a little bit. And then I had a follow-up and sorry for the long winded question.

[David Fischel, CEO & Chairman at Stereotaxis]

Sure, sure. No, it's a great question. And I think when you look at the capital environment overall, you do really have to look at the three key geographies each independently because there is very much its own dynamic in each of the three. And just in terms of our product ecosystem and kind of what we're working within, I'd say that our experience is probably not necessarily reflective of broader macroeconomics. I don't know, we're still such a small fish that it's very hard to say that what we experience is reflective of the broader capital equipment environment, because again, we're kind of a small fish in a huge ocean.

[David Fischel, CEO & Chairman at Stereotaxis]

And I think that irrespective of how the macro goes, we're going to be mainly driven by our own swimming capabilities. That said, if we look at kind of the three regions in The US, we have still the least advanced of an ecosystem in that we have don't yet have magic approved. We don't have the catheter approved. And so it's kind of a it's a tougher capital environment for us. We do have various interested customers on the Genesis side as kind of we announced we had one gen sorter from a US customer in the first quarter.

[David Fischel, CEO & Chairman at Stereotaxis]

So obviously there continues to be a pipeline there. There continues to be activity, but I'd say that's probably one of our most challenged markets until we get Genesis X on the market and have kind of some of the catheters that are critical for Genesis X also approved. And we do have hospitals that are very much and kind of you probably saw some of them at HRS. There are hospitals that are very much interested and engaging with us in understanding how Genesex X could fit into their labs. They like the fact that they don't have to necessarily think about a major construction project for it.

[David Fischel, CEO & Chairman at Stereotaxis]

And so there is kind of a group of interested hospitals there, but obviously kind of we're waiting towards that later in the year when we have approval both of Genesis X and MAGIC to view that as being really actionable. In Europe, we have a more kind of robust pipeline in that we have both on the genesis side and on the gen sex side. I'd say that the Genesis side is still in some ways a larger pipeline than Genesis X just because there are physicians and hospitals that have interacted with us for the last couple years and have advanced that interest in that over the years. And if they're already planning to do construction or they're building out new wings of hospitals, their baseline assumption is to use Genesis just because that's what's been in their mind all along. We are starting now to also build a separate pipeline of physicians that would be most interested in Genesis X.

[David Fischel, CEO & Chairman at Stereotaxis]

I recognize that the investment community already counts it as a given that Genesis X works I give it as a given and obviously we added at the conference, we were able to show it. That is very helpful. But there is something with physicians and hospitals. There's I think a natural conservatism which wants to see things actually working in the real world treating patients before they are fully on board and fully confident to jump. So there is more of that market confidence in Genesis given that people have seen it working now at many hospitals consistently treating thousands of patients than there is still on Genesis X.

[David Fischel, CEO & Chairman at Stereotaxis]

And it's up to us over this coming year as we install the first system, maybe a second system that we kind of demonstrate Genesis X working well and that will kind of increase the contents and allow us to grow there. But again, I expect them relatively consistency and we should have almost every quarter at least one or two Genesis orders coming out of Europe. And then China is its own dynamic. We obviously just got regulatory approval. MicroPort is a great partner with us in China.

[David Fischel, CEO & Chairman at Stereotaxis]

There and they are pushing aggressively despite the macro noise to start to build and to start to convert the pipeline that we have in actual orders and the whole tariff situation and what that would mean in terms of the price of Genesis for a Chinese hospital customer is obviously a little bit challenging and there's uncertainty there. The news today is probably somewhat more helpful in that, but that uncertainty does kind of raise questions and that's why we're viewing that all as upside. That's not part of our guidance, but definitely kind of there should be upside there, particularly if the macro situation is improved versus what it was last week. I hope that helps. And if there's any follow-up can obviously talk a bit more about it.

[Adam Maeder, Managing Director & Senior Research Analyst at Piper Sandler Companies]

No, that's great color, David. Thanks so much for all of that. And for the follow-up, pivoting over to the catheter side, your MAGIC RF ablation catheter. I guess just wanted to kind of get a better understanding of the feedback from your European customers that have adopted that catheter. How is the catheter performing?

[Adam Maeder, Managing Director & Senior Research Analyst at Piper Sandler Companies]

Is it being used predominantly in SVT and VT? Or is it really across a garden variety of cases? And as you think about that 20%, I think you said of customers that are now using Magic, and kind of through the VAC process, just kind of how should we think about that scaling over the course of the next couple of quarters? And thanks again for taking the questions.

[David Fischel, CEO & Chairman at Stereotaxis]

Sure. So overall, reception to it is very positive. It isn't very surprising for us because we did have obviously the clinical study before. And so we got multiple physicians who had experience with MAGIC even before the launch. And it's in many ways, A very, it's just improvement in various ways that make the experience with the catheter nicer and the performance nicer.

[David Fischel, CEO & Chairman at Stereotaxis]

What we experienced in the clinical study is now playing out also in these initial adoptions that commercially and it has been used like in the clinical study across the full spectrum of procedures. So, SVTs, AF procedures, VTs, PVCs, congenital patients, really across the spectrum of patients. And though, like our overall volume, there is more of a propensity of using it in VTs and PVCs, the complex cases where we add the most value and that just matches our overall procedural volume. And we are continuing to ramp hospital by hospital, physician by physician, the number of sites that will start using and then kind of switch over fully to MAGIC. We've given the guidance of MAGIC in Europe scaling to about a million dollar run rate at the end of this year.

[David Fischel, CEO & Chairman at Stereotaxis]

And equals about a $4,000,000 annual revenue from MAGIC that will be a fairly good penetration. That's probably about half of the penetration or a little bit less than half of the penetration that we'd kind of expect overall from our European customers. And so I think kind of in the past, I've talked about that generally, you should expect a two year process to fully convert the market over. And so I think kind of we're very much on track on that.

[Adam Maeder, Managing Director & Senior Research Analyst at Piper Sandler Companies]

Great color. Thanks again.

[David Fischel, CEO & Chairman at Stereotaxis]

Thank you.

[Operator]

Your next question comes from the line of Frank Takinen with Lake Street Capital Markets. Please go ahead.

[Frank Takkinen, Senior Research Analyst at Lake Street Capital Markets, LLC]

Thanks for taking the questions. Congrats on all the progress. I was going to start with one on MAGIC, just to continue that conversation a little bit. How have ordering patterns look for the 20% that are now active? Have they essentially started to use it and maybe they're testing a few units before they fully implement it and use MAGIC exclusively?

[Frank Takkinen, Senior Research Analyst at Lake Street Capital Markets, LLC]

Or are they getting confidence kind of right up front to switch over all of their RF magnetically driven catheters to MAGIC?

[David Fischel, CEO & Chairman at Stereotaxis]

Sure. Hi, Frank. Good afternoon. It's a great question. Generally, when we see the first order, we see an order for five or 10 catheters kind of in a box of five or 10, and then they'll work through those.

[David Fischel, CEO & Chairman at Stereotaxis]

We make sure our trainers are on-site. We make sure that kind of there's real discussions. It's not that they just pull it out and use it one day without any discussion. We want to make sure their experience is good. There are differences.

[David Fischel, CEO & Chairman at Stereotaxis]

You're given an analogy that kind of all of us can remember. You have a car that you've driven for fifteen, twenty years, and suddenly you have a new car. Even if it's a better handling car, there are differences in the experience and so it's useful kind of to both discuss those before they do the first drive and then to kind of be with them on the first drive and make sure it's going well and they're enjoying it. We've gotten very positive feedback. We've had some now kind of second orders after that first order, this even I think third order from a couple.

[David Fischel, CEO & Chairman at Stereotaxis]

So, we're starting now to get into some repeat orders from some of the hospitals and otherwise are working through those initial batches. Sometimes also in some hospitals, there are multiple physicians and so you'll see kind of one who will take the flag and say, I wanna be the one to do the first few and then they'll talk about it with their colleagues and then the other colleagues want to do it. So it's every hospital has its own little dynamic, but overall kind of that's the way it's playing out. We have kind of multiple hospitals obviously where we're in certain aspects of either the hospital review or the national review to get it in. And so, it's kind of it's a grind just working through these processes, but overall, we're very happy with kind of the position reception.

[Frank Takkinen, Senior Research Analyst at Lake Street Capital Markets, LLC]

Got it. That's helpful. And then maybe just MAGIC in US, I heard the updated comments that you're working collaboratively with the FDA. What's kind of left on the docket as you look at that submission process? Is there anything specific that they're waiting to see?

[Frank Takkinen, Senior Research Analyst at Lake Street Capital Markets, LLC]

Or is it more just in their court and related to timing of when they can get to the file?

[David Fischel, CEO & Chairman at Stereotaxis]

So overall, I'd say that actually, despite all of the news articles and things like this that we're painting a dour picture of things, FDA seems to be working very hard, is very, still doing very detailed reviews, is responsive and there. So I kind of say that's overall been a pleasure kind of seeing that in practice, it doesn't seem like stuff on the news are having an impact, at least from our vantage point. And when you look at kind of our FDA review of MAGIC, we have received very, very detailed questions, comments on various parts of the submission. And so those kind of we've either addressed or sometimes you do some secondary biocompatibility or sterility test to supplement the test that you had before and the vast majority of that I think is done. Think there might be a couple tests that we are now running at third party labs kind of to supplement the submission but largely that is all done.

[David Fischel, CEO & Chairman at Stereotaxis]

As we are continuing to enroll patients in Europe, particularly we've kind of we're not trying to enroll a specific number of patients now, we're really enrolling complex congenital complex anatomy patients, and that kind of seem to be the most suited for FDA to review at this point. And so as we're doing that, we're compiling all the data, sharing it with FDA, they're getting that and being able to review it. So I'd say kind of it's the mix of working through the questions and some of the remaining topics, ensuring that the clinical data that has been generated out of the European study is reviewed thoroughly and kind of that FDA feels comfortable with that. Those are probably the largest items. There is the potential for an on-site audit of the manufacturing facility, but that may not be required. That's still a question mark.

[Frank Takkinen, Senior Research Analyst at Lake Street Capital Markets, LLC]

Got it. That's helpful. I'll stop there. Thank you.

[David Fischel, CEO & Chairman at Stereotaxis]

Maybe one other comment just kind of similar to your first question but more fitting with the second one. The US is obviously The US doesn't have as many administrative complexities as Europe. And so generally I would expect US adoption of MAGIC post approval to be quicker. You obviously don't have any of the national or regional registrations. You still have to work through VAC committees in The US but we've had now quite a lot of experience with back committees with the Mabic catheters in The US and sometimes that goes slowly but when a physician is vocal about it that can move overall very quickly and so that's then I think kind of we have good experience now with that and that will help us with the MAGIC program in the future.

[Operator]

Your next question comes from the line of Jason Witzes with ROTH Capital. Please go ahead.

[Jason Wittes, Managing Director & Senior Research Analyst at Roth Capital Partners, LLC]

Hi. Thanks for taking the questions. First off, I assume the if MAGIC gets approved in The U. S, that would potentially be some upside in the numbers if we got it, say, early in the second half? Or is that not the right way to think about it?

[David Fischel, CEO & Chairman at Stereotaxis]

Hi, Jason. Yes, we didn't include MAGIC in The U. S. In our guidance for $7,000,000 of recurring revenue in the fourth quarter. That doesn't include MAGIC revenue in The U. S.

[Jason Wittes, Managing Director & Senior Research Analyst at Roth Capital Partners, LLC]

And in terms of just penetration in Europe and I think you sort of spoke to it in The U. S, what's your kind of timeline that you think before we can be sort of fully converted or fully set maybe not saturated, fully converted to MAGIC in The US and Europe?

[David Fischel, CEO & Chairman at Stereotaxis]

So the general statement I've made is that I'd expect a full conversion to play out over a period of approximately two years. So that would say in Europe, you should expect you know, at some point in the course of 2026, that really, you know, substantially all of the usage has converted to magic. And then US would probably The US is at a quicker timeline than that, it's obviously starting later.

[Jason Wittes, Managing Director & Senior Research Analyst at Roth Capital Partners, LLC]

I got it. And then for GenesisX, it sounds like you're already having conversations in the field. Are these I appreciate that they don't have to do a major construction, But have they looked at alternative ways of financing? I know you've talked about in the past that you could potentially lease these systems or even place these systems. Is that been part of the discussions? Or is that something that you're saving for later?

[David Fischel, CEO & Chairman at Stereotaxis]

It's a good question. So obviously in Europe we're having those open discussions on commercializing Genesis X and kind of building a pipeline. In The U. S. It's not yet approved.

[David Fischel, CEO & Chairman at Stereotaxis]

So we're kind of sharing it as a part of our innovation strategy, but we're obviously not commercializing it or quoting it or doing anything of that sort in The US. And when you look at the different financial models, we are still at the point where we are ramping up manufacturing and supply chain and everything of that sort. There is a demand that is open to acquiring systems. And so we're not trying to push. I think that at some point in the coming few quarters, we will start to present hospitals three models, a purchase model, a leasing model, and a placement with a disposable revenue disposable catheter commitment model.

[David Fischel, CEO & Chairman at Stereotaxis]

And we'll place the three of them to some extent on the desk of a hospital, and we'll be agnostic to the three, and we'll we'll just kind of, you know, streamline the the speed of adoption by sharing these three models all at the same time up front. At this stage, we are still predominantly talking about the sales model, other than in a few scenarios where, you know, with with particular KOLs where we we would really like to, you know, switch them on to robotics and and the leasing model would be kind of, would be attractive to us to get them to try it at least and to start to, kind of share their experience with it, because it would be kind of impactful for overall awareness of the robot in the field. And so I'd say we're mainly still focusing on the sales model, but as we ramp up manufacturing and supply chain as we go into a full commercial launch, you'll see us be much more agnostic between those three models with the goal again of I think I had a comment in our prepared remarks where ultimately the real driver of growth is going from having 100 robot installed base to having 1,000 robot installed base.

[David Fischel, CEO & Chairman at Stereotaxis]

And so how do you kind of accelerate that as much as possible? And luckily with good portfolio of catheters, you can do that in a leasing model or a placement with disposable commitment model, and it still ends up being financially kind of prudent and attractive to do so.

[Jason Wittes, Managing Director & Senior Research Analyst at Roth Capital Partners, LLC]

Great, David. Appreciate all the color. I'll jump back in queue.

[David Fischel, CEO & Chairman at Stereotaxis]

Thank you.

[Operator]

Your next question comes from the line of Josh Jennings with C. D. Cowen. Please go ahead.

[Joshua Jennings, Managing Director at TD Cowen]

Hi, good afternoon. Thanks, David and Kim. Wanted to ask David, just as you're building out your catheter portfolio, meaning we think about the commercial era where you have the MAGIC RMN ablation catheter, MAGIC Sweep high density mapping catheter and the MAPIT portfolio. I mean, do you envision the case mix for robotic magnetic navigation cardiac ablation procedures evolving? I mean should you think the percentages of ventricular versus atrial?

[Joshua Jennings, Managing Director at TD Cowen]

And I think you guys you described some of the cases that MAGICAT is being used in terms of your case mix. Would you expect that to change? Do you expect the platform to be utilized in more atrial ablations as well?

[David Fischel, CEO & Chairman at Stereotaxis]

Hey, Josh, thanks for the question. That's a good one. And maybe kind of just to start the you saw it obviously at HRS, portion of our booth where we displayed all the catheters, and we have it obviously also on our investor slide and an image of that. And so this transition from a year ago selling zero catheters to having, I think was 10 catheters displayed and eight out of the 10 of them are going to be commercial this year and already, I think the majority of them are commercial at least in one of the key geographies. That is really kind of a major strategic transformation for Stereotaxis.

[David Fischel, CEO & Chairman at Stereotaxis]

Again, we've had twenty years of commercial experience and never selling our own catheter. So that is a big, big one for us. And when you look at the case mix specifically, and we are working on all sides that kind of each of those portfolios, MAPit, MAGIC and Imagine end up being much kind of big significant portfolios of catheter revenue. And when you look at the case mix specifically in EP, where the majority of our procedures currently are VTs, PVCs, congenital patients, I think that that will probably persist also in as we get our own portfolio of catheters. Mechanism of action, whether you apply that mechanism of action, robotic magnetic mechanism of action to an ablation catheter or to a mapping catheter.

[David Fischel, CEO & Chairman at Stereotaxis]

R really provides its most value in challenging cases where manual catheters have difficulty being navigated well or being stable or being safe. And so I think kind of that said, that's obviously where we shine. And so I kind of say that's our best foot in the door with any individual physician. Once you have your foot in the door and they like to use you, you see adoption of us also in SVTs, also in some AF cases. And so I kind of I think that we're, at least for now, we can be in order of magnitude larger, even more than, I mean, 30 fold larger, just in the VT PBC congenital space.

[David Fischel, CEO & Chairman at Stereotaxis]

And so, that is a good niche, a good large niche for us to focus on at this time. Again, as you get your foot in the door, there's always the opportunity to expand your usage into other procedure types. And so that's kind of how I would do things now. I think kind of sidestepping the slug fest that is taking on in the AF space right now is probably also a healthy thing from just a commercial team focus perspective. We can have a much bigger impact with that much lower hanging fruit in the complex ablations.

[Joshua Jennings, Managing Director at TD Cowen]

Makes sense, thanks. And one of the follow-up on imagine, I know you've been interacting with neurovascular physician experts over the years and are understanding that there's some buzz that you've generated. I was hoping you could walk us through, know this may be a review, but walk us through five ten approval of Imagine, five ten approval of Genesis X, maybe how do you see the neurovascular community engaging and potentially adopting robotic magnetic navigation using the Imagine guide catheter, guidewire for some of the neurovascular cases over the next twelve to twenty four months? Thanks a lot.

[David Fischel, CEO & Chairman at Stereotaxis]

Sure, thanks. That's a great question too. So our Imagine portfolio will initially have the Imagine 5F guide catheter. It's a five French guide catheter. And then we hope to submit by the end of this year, also the 14 guidewire, which is a much, much smaller kind of almost like the diameter of piece of hair and little wire.

[David Fischel, CEO & Chairman at Stereotaxis]

And so those are kind of the two key families and each one of them will have kind of a family of devices that are relatively similar but slightly different. And the guide catheter has already been submitted so that kind of as we gain approval, there are certain procedures that are better suited for catheter and others that are better suited for a wire. So let's say in the neuro field, one of the areas where we expect the guide catheter to provide a lot of value is just navigating up the carotid. I think I might have mentioned on some previous calls, some of the feedback we were receiving from neurointerventionalists, we're navigating from the aorta into the carotid and up the carotid in a subset of patients, whether it's fifteen percent or twenty percent of patients can be very, very difficult and they'll spend twenty, thirty, forty, fifty, sixty minutes trying to do so and sometimes they'll fail completely. And during that whole time they're on X-ray and obviously, if it's a stroke case, that amount of time is critical for the outcome of the patient.

[David Fischel, CEO & Chairman at Stereotaxis]

And so there is kind of similarly, there's other cases that would be useful for the Guidewire that are just kind of different or other parts of a case where a Guidewire could be helpful. As we get the Guide catheter approved, I would say that the guide catheter can work obviously with Genesis X, but can also work with Niobe and Genesis. And so the quickest easiest adoption of the guide catheter will be in existing labs where they already have a robot and an interventional cardiologist or radiologist wants to step into the lab and kind of try it in some complex cases. Essentially, every EP department is part of the interventional cardiology department. So even if you have a room that is a dedicated EP room, usually the cardiologists are literally right next door and able to use those labs.

[David Fischel, CEO & Chairman at Stereotaxis]

It's probably more difficult for neuro interventionalists to use an EP lab just because the other tools that they have in a neuro lab are different. And so that would probably only take place in an existing niobria genesis lab, you know, if it was really part of a series of cases that were, particularly difficult that they wanted to move into the EP rooms for that process. And so I'd see a slower, but kind of good interest adoption in the neuro field. And probably that's gonna be predicated also on having Genesis X available. And also on some of our efforts that I kind of touched upon in some of the prepared remarks on making Genesis X compatible with various other x rays in the field.

[David Fischel, CEO & Chairman at Stereotaxis]

And so kind of we're working on that in tandem. There are physicians in The US from various hospitals who are very interested in the clinical value that imagine can provide. And so as we get that on the market as Genesis X is on the market, I expect we're going to be able to establish Genesis X at a couple hospitals at least and start to demonstrate the clinical value in the neuro field. And then probably you're going to see more value being shown in interventional cardiology and interventional radiology just from existing installed base.

[Joshua Jennings, Managing Director at TD Cowen]

Understood. Appreciate that. Thanks David.

[Operator]

Thank you, everyone. And that concludes our Q and A session for today. I will now turn the call back over to David Fischel for the closing remarks.

[David Fischel, CEO & Chairman at Stereotaxis]

Okay. Thank you very much for all your questions and for the continued support. We look forward to working hard on your behalf over the coming quarter and speaking again soon. Thank you.

[Operator]

Ladies and gentlemen, that concludes today's call. You may now all disconnect. Thank you for joining. Have a nice day ahead.

Participants

Executives

• David Fischel, CEO & Chairman
• Kimberly Peery, CFO

Analysts

• Adam Maeder, Managing Director & Senior Research Analyst at Piper Sandler Companies
• Frank Takkinen, Senior Research Analyst at Lake Street Capital Markets, LLC
• Jason Wittes, Managing Director & Senior Research Analyst at Roth Capital Partners, LLC
• Joshua Jennings, Managing Director at TD Cowen