Vicarious Surgical Inc.

Good afternoon. Thank you for attending the Vicarious Surgical's 2025 Second Quarter Earnings Call. My name is Cameron, and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad, and I would now like to pass the conference over to your host, Rissa Bytes from the Gilbarn Group. You may proceed.

Good afternoon. Today, after market closed, Icarus Surgical released financial results for the three months ended June 30, 2025. A copy of the press release is available on the company website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including, without limitation, those relating to obtaining approval for the vicarious surgical system and timing for any such approval, the timing of future clinical trials and FDA submissions, cash burn expectations, or operating trends in future financial performance, expense management, market opportunity, and commercialization are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors set forth in our Securities and Exchange Commission filings, including our most recent Form 10-K and Form 10-Q. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 12, 2025. Vicarious Surgical disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. I will now hand the call over to Adam Fax, co-founder and president, to begin prepared remarks. Adam?

Thank you, Marissa. Good afternoon, everybody. It's been an incredible journey leading Vicarious Surgical since its founding. From our earliest days through product development and preclinical testing, I have been continually inspired by the dedication of our team and the strength of our mission. Today, I am proud of the foundation we have built And I'm even more excited about what lies ahead. With that in mind, I am pleased to welcome Stephen Fromm as our new Chief Executive Officer. Stephen brings a strong track record of leadership across the healthcare and medtech industries, and he joins us at a pivotal moment in our company's evolution. His experience and perspective will be invaluable as we continue progressing toward our long-term goals. As I step into the role of president, I look forward to partnering with Stephen and the rest of our leadership team to build on the momentum we have created. Together, we remain focused on developing our technology, advancing our clinical programs, and fulfilling our mission to transform surgical care through groundbreaking robotic innovation. Stephen will share more on this topic. but as we are also using the leadership transition to take a broader look at our development path, including both technical progress and program strategy. With that, I'd like to turn it over to Stephen to introduce himself and share an update on his approach.

Great. Thank you, Adam. So to begin, I'd like to express how excited I am to join the Vicarious Surgical team. We're at an important inflection point in the company's journey, and I believe we have an extraordinary opportunity to redefine what is possible in robotic surgery. I'm grateful for the warm welcome I've received in my first few days, and especially to Adam for his thoughtful support. While still early in my tenure, I've been deeply impressed by the caliber of talent, the clarity of purpose, and the passion that exists throughout this organization. It's clear that a bold and inspiring mission has been built here, and I'm honored to help carry that vision forward. Over the past few days, I've begun to engage with the teams across all areas of business, listening, learning, and gathering candid feedback on our product development, our clinical strategy, operations, and organizational structure. These conversations have only strengthened my confidence in our platform, our people, and the opportunity we have ahead of us. Our technology represents a meaningful advancement in minimally invasive surgeries. The single port robotic market is still in the early stages, and we believe we are in a position to advance the development of our technology with a differentiated platform and a strong technical foundation. We are focused on executing with discipline and aligning around the milestones that will drive the long term value. Before I pass the call to Sarah, I want to provide a brief update on system readiness and anticipated timelines. It is clear that Vicarious Surgical is an excellent, dedicated team, and it has designed a great product with meaningful differentiation. My direction to the team is that the best use of company resources is to focus on completing a fully integrated production equivalent system, enabling design lock, and initiating full system verification and validation. This will be our primary focus until completion with our first clinical patients to follow design law. Through testing conducted during our ongoing build and preparation for our first clinical use trial, it became clear that proceeding now would require using a non-production equivalent system. While such a trial could provide some insights, it would divert our limited resources away from the higher priority goal of finalizing a production equivalent system. This strategic shift means removing the near-term target of an FCU by the end of 2025, and instead concentrating all efforts on completing system design and readiness for full verification on a system that is ready to commercialize. The expected timing of other future clinical trial milestones, including submission of a de novo filing, will in turn depend on FCU timing. So we'll conduct a deep dive into every aspect of our build to secure verification for a production-ready system. This effort is critical, not only for ensuring technical readiness, but also for generating a clear picture of our progress and readiness over the next month. I anticipate this assessment could approximately take about four to six weeks. And at that point, I expect to have greater clarity on our development status, timing to complete system integration, and readiness to initiate full system verification. I will continue to work closely with our technical and strategic teams to refine our timelines, evaluate progress across our development programs, and assess the resources needed to support our next phase. I also plan to continue engaging with our board and our investor base as we evaluate the capital strategy that will best support our objectives. With that, I'll turn it over to Sarah Romano, our CFO, to walk you through the financials.

Thank you, Stephen. Total operating expenses for the second quarter 2025 were $13.5 million, a 24% decrease compared to $17.7 million in the second quarter 2024. Our research and development expenses for the second quarter 2025 were $9.1 million compared to $10.9 million in the second quarter 2024. General and administrative expenses for the second quarter 2025 were $4.1 million compared to $5.6 million in the second quarter 2024. And finally, second quarter 2025 sales and marketing expenses was $300,000 compared to $1.2 million in the second quarter of 2024. Our gap net loss for the second quarter 2025 was $13.2 million or $2.23 per share, just compared to a net loss of $15.2 million, or $2.59 per share, in the second quarter of 2024. Non-GAAP adjusted net loss for the second quarter of 2025 was $13.3 million, or $2.23 per share, as compared to $16.8 million, or $2.86 per share, in the second quarter of 2024. For a reconciliation of all non-GAAP measures to GAAP, please review our earnings press release. We ended the second quarter of this year with approximately $24 million of cash, cash equivalents, and short-term investments on our balance sheet. This represents a second quarter cash burn rate of approximately 13.4 million. We continue to expect full-year 2025 cash burn to be approximately 50 million. and we remain committed to disciplined capital allocation. We look forward to continuing to drive progress on our financial and clinical goals in the coming quarters. And with that, I'll turn the call back over to Steven for closing remarks.

Thank you, Sarah. So I'd like to conclude by reiterating how deeply impressed I am by the strength of the technology, the caliber of the team, and the company's clear commitment to transforming surgical care. While it's still early in my tenure, I look forward to thoroughly reviewing the company's work streams and processes to ensure we're aligned for long-term success. I'd like to express my gratitude to our dedicated team, supportive investors, and valuable partners. And thank you all for your continued support and interest in Vicarious Surgical. Operator, we are now ready to take questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, press star 1. And as a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. And we will pause here briefly as questions are registered. And the first question is from the line of Ryan Zimmerman with BTIG. You may proceed.

Good afternoon. Can you hear me okay? Yes. Thank you. Thanks for taking our questions. So, you know, I appreciate Steven, you know, you get to come in and, you know, kind of prioritize what's important and so forth. Maybe talk to us about kind of, you know, how you guys have gone about that process of deciding, you know, getting a system ready for use and, and needing to push back those timelines around clinical trials, and just how much money has gone into preparing for those clinical trials and maybe either what's lost or what's saved as a result of some of those shifting timelines to extend your cash runway?

Yeah, those are some really good questions there, Ryan, so I appreciate you bringing them to our attention. I'll just be upfront about this. This is my fourth day here. Okay. I just started on Thursday of last week. So I'm really, I've been spending a lot of time with everybody really trying to get a really good grounding of where we are and what we're doing. And so what we've decided to do is put an exercise in place where we really fully understand what's still required to get to a full production equivalent system. And what is it we've completed today? So it's not so much that I understand what you're saying about, changing the timelines. The FCU is extremely important to the company, as we all understand. I think that's obvious. But I want to make sure also that we're doing that FCU on the right system. And that may sound not so obvious, but as we go through the testing of the system that we've integrated, we may come across things that require us to maybe do a little bit of extra work on what we were testing. And so we could continue to rush forward on a system where additional testing or additional development may be required, based on some of the testing that we've done. Or we could step back and say let's just focus on making sure we get all of the right development finished based on the testing that's been done today, so that we have what we take into the clinic is a system that we can move very quickly to commercialization. And I think as a small company with limited resources, I don't believe we have the luxury to have multiple different systems that we're taking into the clinic. And so that leads us in segues into the next part. There hasn't really been any cash or very, it's very minimal. It's immaterial. It's been spent to date on a clinical trial or setting up and getting ready any type of groundwork that's required to start a clinical trial.

is really it's not work that requires spending money it's some resources but the resources are going to be more labor intense so there's no money that's been spent or wasted on that okay well fair enough i guess what was anticipated to be spent on those clinical trials and how does that factor into your cash burn guidance um or the runway you have with the existing cash

Well, look, again, I'm four days into this, so I've got a lot that I've got to get my head around. Maybe let's ask Sarah. Yeah.

Yeah, so budgeted costs around clinical trials, it's actually not overly material to our budget, believe it or not. So a lot of the cost for this FCU, you know, it's not going to make a major change in our overall 2025 budget. I think going forward, that may change as we continue to evaluate, but currently in this year, it won't be materially different.

Our next question comes from the line of Josh Jennings with TD Cohen. And Tim, we do ask that during the Q&A session, you keep your questions to one question and one follow-up. Josh, your line is now open.

Great. Thank you. This is Eric on for Josh. Thank you for allowing me to ask the question here. Appreciate the update on the strategy and new development targets. And I understand it might take some time to work with the team before you have a better idea of exact timing. But in terms of milestones that investors should expect for this year, are you able to share which of the development and system milestones you think you could have achieved, say, by the end of this year?

I think it's early days right now, and it's hard to put an actual date on the calendar for anything other than the first action. This first exercise is it is really fundamentally important for what we're trying to accomplish here. And I need full visibility on that. And it's going to take a little bit of time to get there. What we're going to complete by the end of this year, I think, will become more apparent once I've been able to get through this exercise. And I hate to mislead anybody. And that's what I don't. I want to just say up front, I'm not trying to punt anything to the future. What I'm trying to say is I don't want to provide you with misleading guidance. I want to make sure that I have clarity and that when I give you something and verbally telling you and giving you guidance, that you can rely on that. Okay. And we're not putting anything on hold for us to do this exercise. Most of this information already exists. It's a matter of me gathering it and getting the right questions answered. All right, so that we can do this. And I think this is going to be really helpful for all the investors that I've been talking to, you know, over the last few weeks and so forth. It's very important for them to have guidance that they can rely on. And so give me the grace of finding all the detail out so that I can provide you with that type of guidance.

Sure. Understood. That makes sense. And then maybe just on the balance sheet with the cash investments that you have on hand now, I was hoping you could talk about how you feel about your ability to continue funding development and some of the other work that is ahead of the company.

It's a good question. And obviously, there's a lot of variables at play here. We're a micro-cap company. It's a difficult environment. But there's a fundamental reason why I joined this company. There is a system here that we're building where there's a real need. This is something that nobody has ever even attempted to build before. There is a need here for this. The fact that there's a need here, I'm coming in actually in a luxury position because we can see the goal line. Once we hit that goal line of actually having the fully integrated, the production equivalent system ready for full verification and validation, everything becomes much easier after that, believe it or not, because of the system we are building. And I'm coming in where a lot of the heavy lifting has already been done. A lot of these major problems have already been solved. Okay. So I have that luxury. And so I'm seeing where we are and I see what we have. I see an industry here, which is dominated by one player. And I see a lot of others that are trying to copy what they're doing. And I saw this team wasn't, this team was actually approaching a problem that needed solving. They weren't trying to copycat somebody that was already successful. And so that's what brought me on board to this company. And what I've learned over the last four days is the actual people here are amazing. They have the right people here. They are people that can solve problems and get this system built. So what I need now is to be able to be in a position to provide guidance to the investors as to when all that's going to happen. And yeah, I could throw dates out, but they're not going to mean anything. So I need to get the work done so that I can give you dates that actually have meaning behind them. But when we get this system built, It's going to be a system that's going to be able to obviously get market share because of what we're going to be providing. Okay. And look, the markets are hard, but I'm going out there telling people that this is a project and this is a system and a company that is worth investing in for the long term. Because this is a system that isn't just a copycat. This is a system that deserves market share because it's solving a real problem that exists today that nobody else is going after. Okay, so first of all, we need to make sure that we have something that people want. If people want that, that provides us with this market opportunity, which I can share with investors. Now the investors need to get confidence that we can actually deliver on that. And that's what I need time to do, is to give them the confidence on what time it's going to take to deliver on that. But we're not talking that it's going to take forever. Like I tell you, we can already see that goal line. It's just a matter of what's left to do to get there.

Our last question comes from the line of Adam Mader with Piper Sandler. You may proceed.

Hi, good afternoon. Thank you for taking the questions. Just a couple from me, and I kind of wanted to pull a little bit on the same thread as, as Ryan was, was asking about. And I, I guess, you know, the, the first question that I have is, um, you know, it's, it's clear based on the prepared remarks, you don't feel that the system is ready to kind of push forward to first in human at this point. Um, but I just wanted to, I guess, kind of better understand what led you to that conclusion. Is it something on the hardware? Is it instruments? Is it software? Just, you know, general bugs that you're seeing in the system that need to be worked out. Just help us understand kind of what you're looking to troubleshoot going forward. And then I had a follow up. Thanks.

Yeah, so I'll take that one, Adam. And I appreciate the question. So the way to think about, you know, kind of our previous plan and strategy that I laid out is that the goal was to take the system that we have, you know, integrate it. and then bring it through this sort of preliminary V&V testing in order to bring it into our first clinical use. And, you know, we kind of understood and communicated that, you know, a handful of things can go wrong and can be, you know, but could, as long as they don't affect safety or efficacy and can be mitigated in a controlled clinical trial setting, we could still bring it into the clinic safely. And we could still do that, but And Stephen's direction, especially communicating and working with the team over the past couple of weeks leading up to start and the last week here, is that the amount of effort to do that is to some degree wasted effort. I don't really want to say wasted, but with a company with such limited resources, we would be taking the things that didn't work and testing them thoroughly to make sure they're safe. and then justifying them for use in the clinic. And that's a huge amount of work. So I'll give a specific example here. And we took our surgeon console to TUV to do the 60601 testing, and it passed everything except for EMC testing. There were excessive emissions actually coming from the ergonomic stages that make the system comfortable for the surgeon. That's not a big deal. We can fix that. It'll take a couple of months. But in order to then go into an FCU by the end of the year, what we need to do is turn off those ergonomic stages, set them up for the surgeon doing it, turn them off in order to make sure that it's safe and not overly emitting in the clinical setting, and then do additional testing to ensure that while they're turned off, that it's still safe and that there's no real risk that the surgeon would need to adjust the ergonomic stages during the procedure. And, you know, coming in and seeing a handful of these issues, you know, none of which are individually deal-breaking, but each of which will take effort and time away from getting into our pivotal study and getting to that milestone of actually being able to do system verification on the full production equivalent system. Stephen's direction has been really clear that, you know, we need to focus on that and focus on getting to the end point rather than getting into the clinic as soon as possible.

Okay, I got it. That's really helpful color, Adam. Appreciate all that. And I guess for the follow-up, I realize you're not giving specific dates in terms of clinical milestones, first in human, et cetera. But I guess I'm just trying to understand the messaging around how we should think about a potential shift in the timelines. So you have the four to six weeks of kind of review assessment, you know, in the best case scenario, do you get moving pretty quickly after that review period and potentially still get into first in human later this year? Or should we assume that it's going to be a little bit more of kind of like a heavy lift potential, you know, parts of the system have to be redesigned and a more significant push out. I just, trying to understand if this is something that's going to slide by, you know, a couple of months or if it's going to be, you know, more dramatic than that. Thanks for taking the questions.

Yeah, no, appreciate it. Back to me. It's Stephen here. And look, it's exactly the question I'm asking myself right now. So I wish I could tell you and I wish I could get, I would love to just throw out and say, I don't, I can't even tell you, I can't give you any guidance right now just because I can't answer that question faithfully. But I'm telling you, we can see the goalposts. So it's not like we're saying that this is, in fact, I don't even want to say that. I don't know. Let me have this assessment. Give me that luxury of having this assessment. And then we can tell you exactly where we are. Like, does this ship this out a month? Does it ship this out three months? I don't know what it does. I have no idea. That's why I'm here. I'm wanting to take a snapshot photo of where we are and what's left to do. And that'll give us a really good idea and indication of a timeline.

That was our final question. I would now like to pass the conference back to management for any closing remarks.

Yeah, I think, look, those were all great questions, and I think they're spot on. And the funny thing is, the questions I'm asking myself, the questions the board's asking, they're the reason I'm here. And so I wish I could give you the answer my fourth day in, but I can't. And so I need a little bit of time here to get this over, to get this exercise over. But I am so excited. I'm telling you, I thought I was excited doing my due diligence before I joined. But as I've been through, they've been heavy four days, and I've been through a lot of meetings and discussions. I'm actually really excited about seeing that the goal line is becoming more visible to me as I learn more and more about where we are with the system. That's it for me. So thank you, everyone.

Yeah, thank you, everybody, for joining. That concludes the call.

All right. That concludes today's call. Thank you for your participation and enjoy the rest of your day.