Good afternoon. Thank you for joining us for Stereotaxis Third Quarter 2024 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 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-K or 10-Q. 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 open for question 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.

Thank you, operator, and good afternoon, everyone. I'm pleased with our performance this quarter. We demonstrated solid commercial execution, successfully closed and integrated the APT acquisition, and are advancing in parallel a broad range of innovation and regulatory efforts that are strategically transformational. On our last call, I provided significant commentary on our innovation strategy and APT. I'll keep today's remarks relatively brief with just a focus on the key updates. Kim will then share our financial results and we'll open the call to Q&A. Our revenue growth in the third quarter was predominantly driven by partial revenue recognition of three Genesis systems that were delivered to customers late in the quarter. All three were delivered to European hospitals, two of which are upgrading their existing robotic labs to Genesis, and one of which is establishing an entirely new robotic program. As has been our custom, we will announce Genesis launches in coordination with each hospital as they treat their first patients. Our pipeline of Genesis customers remains robust, and we received orders for two additional Genesis systems in the third quarter. The combination of these incremental orders and system revenue left us with a capital backlog of $15.5 million at the end of the third quarter. We continue to see an active pipeline of interested customers in Genesis and expect to continue to receive orders in this and coming quarters. The recent CE mark for Genesis X has allowed us to start to build a pipeline of Genesis X customers that incrementally adds to our robotic opportunity. This Genesis X pipeline will ultimately dwarf our Genesis pipeline. While we have not yet received CE Mark approval for the MAGiC catheter, which is key to the launch of Genesis X, we expect it in the near term. At around a similar time as that milestone, we expect to receive our first Genesis X system order. We are very excited to start to see the impact Genesis X will have on patients, physicians, hospitals, and on our overall growth trajectory. Our capital results have been predominantly driven by Europe, where we have the most advanced product ecosystem coming into fruition. With regulatory approvals in the United States and China slightly behind Europe, we look forward to those geographies increasingly contributing to our capital orders and revenue. Our robotic system orders have also historically remained fully driven by the electrophysiology specialty. In the coming year, as we introduced the first vascular catheters and guide wires, we look forward to starting to receive orders driven by a broader array of specialties. Recurring revenue in the third quarter benefited from the partial quarter contribution of catheter revenue from the acquisition of APT. This contribution was approximately $0.5 million in the third quarter and will be larger in the fourth quarter. We are excited by the positive reception to APT's catheters from our customers in the community of robotic electrophysiologists. We expect meaningful sequential revenue growth from these catheters in the fourth and subsequent quarters. I described on our last call the clinical and commercial synergy, as well as the commercial strategy with these differentiated catheters. I'm pleased that the early months following the acquisition continue to validate synergy and strategy. While the addition of APT is supporting a return to growth in recurring revenue, our largest recurring revenue opportunity remains ahead of us with regulatory approvals and commercial launches of robotically navigated ablation and mapping catheters and vascular guidance catheters and wires. That segues well into updates on our innovation strategy. We are aggressively driving broad-based progress across the late stages of a comprehensive innovation strategy. The MAGiC catheter, our proprietary robotically navigated cardiac ablation catheter, is close to receiving European CE Mark approval. During the third quarter, following our earnings call, we received questions on the last outstanding area of review, microbiology. We responded to those questions, received a second round of brief clarification questions, and are awaiting final confirmation that our microbiology review has been completed. We should receive CE Mark for MAGiC shortly afterwards. We are very much looking forward to approval and expect significant commercial adoption of MAGiC given our clinical experience in the ongoing European study and the positive feedback we received from our community of robotic customers. In the U.S., the FDA is continuing its review of the MAGiC PMA submission and we continue to have collaborative and thoughtful dialogue. We have aligned on an expected indication for MAGiC and the data that should support that indication. The ongoing dialogue supports our expectation of achieving an initial regulatory approval leveraging the data being generated in the ongoing European MAGiC study with a clear plan for subsequent post-approval studies in the U.S. We appreciate the collaborative nature of these discussions and believe they are reflective of a shared appreciation for the importance of ensuring MAGiC becomes available for patients and physicians who depend on it. Beyond MAGiC, we made significant progress with what will be the first-ever robotic high-density mapping catheter and vascular guidance catheter. Both of these catheters were being advanced with APT over the last couple of years and completed development around the time of acquisition. During the third quarter, we manufactured hundreds of catheters needed for formal regulatory testing and expect to complete all testing within a couple of months, setting us up for regulatory submissions next quarter in early 2025. Both catheters provide significant value clinically, commercially, and strategically. Some very recent anecdotal insights on the interest in these two catheters may be helpful. I had the opportunity to meet with dozens of our customers at the Society for Cardiac Robotic Navigation's annual conference two weeks ago in Portugal. Immediately after that, I visited physicians at one of the most prestigious and globally well-respected EP centers in France. At both the conference and at this prestigious hospital, there was significant focus on the importance of mapping and how our robotic mapping catheter addresses a primary barrier to physician interest and use of robotics. The French hospital viewed our emerging comprehensive product ecosystem and the mapping catheter in particular as highlights, warranting reassessing the impact robotics can have on the field. Following my meeting in France, I visited London where I had the opportunity to meet among other activities with non-electrophysiologists to explore initial uses of our robotic guide catheter and guide wire. We identified several new indications with unmet medical need where our overall approach and the guide catheter specifically can improve care and add value. We're excited by how the mapping and guide catheter can boost adoption of robotics in EP and initiate adoption in the broader endovascular field. I want to highlight the contributions of our new teammates from APT, who work diligently and efficiently on the development and manufacturing of these catheters. The unique expertise of APT is highly complementary and additive to Stereotaxis’ strategy as we increasingly focus on a broad family of robotically-steered endovascular devices. Beyond catheters, we have several other significant regulatory and development efforts ongoing. The primary milestone in the last quarter was attaining CE Mark for Genesis X in Europe and submitting Genesis X to the FDA for U.S. 510(k) clearance. The FDA reviewed our submission and sent us a first round of questions in October. We've begun preparing our answers and expect to respond in the coming weeks. In China, we have been working with our partner, MicroPort, to gain regulatory approval for the Genesis robot, mapping integration, and a novel ablation catheter. The Chinese NMPA regulatory body recently completed an on-site audit of our quality system and the Genesis system in St. Louis. The success of that audit, with very positive feedback shared by the reviewers, is a testament to our team and the high-quality operations they established. The successful audit portends well for near-term approvals in China. There is much more going on, but we are keeping today's call focused on the primary milestones and will provide a more comprehensive review on our next call. Our broad-based progress on a new foundational product ecosystem across three key geographies is transformational. We are in a particularly exciting period. I'll hand the call over to Kim to discuss our financial results, and then I'll make a few financial comments as well before we open the line to Q&A.

Thank you, David, and good afternoon, everyone. Revenue for the third quarter of 2024 totaled $9.2 million, an 18% year-over-year increase, compared to $7.8 million in the prior year third quarter. System revenue for the third quarter was $4.4 million driven by partial revenue recognition on the delivery of three Genesis systems. This compares to system revenue of $3.5 million in the prior year third quarter. Recurring revenue of $4.8 million compares to $4.3 million in the prior year third quarter and reflects the two-month contribution of our previously announced acquisition of APT. We received two orders in the quarter and we maintained system backlog of $15.5 million as of the end of the third quarter. Gross margin for the third quarter of 2024 was 45% of revenue. Recurring revenue gross margin was 70% and system gross margin was 16%. Recurring revenue gross margin was impacted by accounting related to the acquisition of APT. As part of GAAP acquisition accounting, we are required to value finished goods inventory at market, giving us minimal accounting gross margin on the subsequent sales of that inventory. This is a temporary margin reduction with no economic impact. Once this inventory is sold in the next few months, we expect recurring revenue gross margin, including the APT products, to return to historical levels. System gross margin continues to reflect the allocation of significant overhead expenses on low production volume. Operating expenses in the quarter of $10.4 million included $2.5 million in non-cash stock compensation expense and a $0.7 million non-cash mark-to-market adjustment for acquisition-related contingent earn-out considerations. Excluding these non-cash charges, adjusted operating expenses were $7.2 million, comparable to prior year adjusted operating expenses of $7.1 million. Operating expenses in the current year third quarter include two months of APT operating expenses following the closing of the acquisition. Operating loss and net loss in the third quarter were $6.3 million and $6.2 million, compared with $5.6 million and $5.4 million in the prior year third quarter. Adjusted operating loss and adjusted net loss for the quarter, excluding non-cash stock compensation expense and the mark-to-market adjustment, were $3.1 million and $3 million, compared with $3 million and $2.8 million in the previous year. Negative free cash flow for the third quarter was $4.2 million. At September 30th, Stereotaxis had cash and cash equivalents, including restricted cash of $11 million and no debt. Significant cash receipts in October increased Stereotaxis balance of cash and cash equivalents, including restricted cash to $13.3 million at the end of October. I will now hand the call back to Dave.

Thank you, Kim. We're maintaining the revenue guidance provided on our last call and are glad that our third quarter performance exceeded expectations. This year's revenue is expected to be approximately equal to 2023 without incorporating potential revenue from the launch of Genesis X and MAGiC. We expect year-over-year growth in both system revenue and recurring revenue in the upcoming quarters. We are cognizant of the importance of protecting our balance sheet, protecting shareholders from unnecessary dilution, and managing Stereotaxis in a financially prudent fashion. Maintenance of operating expenses at essentially a flat level as last year, despite the acquisition and inclusion of APT, is reflective of our focus on prudent financial management. This posture is balanced with continued investment in the technologies, team, and infrastructure that supports growth and success, with investments still being made from which we will only reap the fruits of in several years. We expect to end this year with approximately $12 million cash and no debt. We view our existing balance sheet as allowing us to reach key milestones, commercialize our new innovations, and profitably grow our business. We have no intention of diluting shareholders at current valuation levels and will be thoughtful in how we manage our financial position and protect shareholder value. Operator, can you please open the line to Q&A?

We will now begin the question-and-answer session. Your first question comes from Frank Takkinen with Lake Street Capital Markets. Frank, please go ahead.

Great, congrats on all the progress, David. Maybe just starting with some clarifying questions on MAGiC just to make sure I understand. So it feels like MAGiC in Q4 still before year-end and CE Mark still seems pretty reasonable given where you're at with that process. One, can you confirm that? And two, the U.S. timeline, how does the interaction influence that timeline? Is it feeling like it's a first-half 2025 event or is it maybe a little bit too early to call?

Sure. Hi, Frank. Thanks for the good questions. So in Europe, as we kind of described in the prepared remarks, we're at the last stages of the review. It is tough sometimes sitting patiently as even very minor things get turned around on the other side of the Atlantic. Overall, we feel very good with how our responses to the original microbiology questions and then, as I mentioned, a couple clarification questions that came after that. Those were very benign, and so I think that we are in an overall very good fundamental place and we are sitting patiently on our hands awaiting a certificate. So, yes, I think that is in the very short-term, but again, there's no statutory requirement for the regulator. So we will sit here patiently until we receive it. When it comes to the U.S., I think it's still a little bit early to know. The FDA is definitely reviewing the spectrum of the submission, the various components of it, the various aspects of it. There are some activities like a manufacturing facility audit, which will probably be part of the review process, and that has not taken place yet. So I think there's still several things there, but I would think that over the next couple quarters or so, that would be a reasonable timeframe. But again, that is something that we're working very collaboratively with the FDA. We appreciate the way that they've been working with us and kind of we'll see how that review goes in terms of the exact timeline. I think what has been kind of very nice is how we've reached alignment on an indication, the type of data that should be supportive of that indication and how also we can expand our indications after the original approval and kind of with post-approval studies in the U.S.

Got it. Okay, that's helpful. Thank you. I would like to understand how the U.S. market is currently performing in terms of system sales. It seems like Europe is doing well, but I'm not sure if this is just a temporary trend in the current quarter or if there are deeper insights to be gained about the differences between Europe and the U.S. Additionally, is there any anticipation in the U.S. for the mobile robot and the MAGiC catheter, or is the focus still primarily on Genesis, albeit in a somewhat softer macro environment?

Yes, sure, it's a great question. I think kind of I've spoken obviously for many, many, not just quarters, but even a few years, about this whole concept of product ecosystems and how you can't really think about a specific product on its own. You have to think about the ecosystem that it works within. And that's why we've been advancing this comprehensive innovation strategy, which really addresses the ecosystem and creates an attractive ecosystem that can scale significantly. In Europe, we have the most advanced ecosystem. When you think about the robot, the associated disposables that are either on market or very near market, and the integrations with X-ray, with mapping systems. It is just the most attractive and advanced of the ecosystems given the regulatory approvals that have been reached. And I think you can start to see then, once we start to have a good ecosystem in place, the commercial impact that we start to see in the marketplace. And this is obviously without yet MAGiC on the market, without the vascular devices on the market, and without actually Genesis X truly on the market, because we can't really launch Genesis X without MAGiC being approved in a full sense. But just having Genesis with an attractive X-ray integrated with MAGiC being viewed in the marketplace as very near-term, and with kind of the mapping integration of Abbott, kind of the way that, that starts to create a positive dynamic for our sales team kind of with our customers. And so I think that's what you're seeing in Europe. In the U.S. and in China, we're a little bit kind of further behind in terms of bringing that ecosystem together. And so it's just kind of been more challenging. I kind of spoke in a call about kind of how in China, I think we're very close also to a couple regulatory approvals that will be very helpful for that ecosystem. In the U.S. also, we're working towards bringing that ecosystem together. And then I think kind of that's also something over the next couple of quarters or a few quarters that we're looking at. But I think kind of the results in Europe are really a reflection of how the ecosystem effect ultimately drives commercialization and why having a good ecosystem is so valuable.

Got it. Okay, that's helpful. I'll stop there. Thank you.

Thank you.

Your next question comes from the line of Josh Jennings with TD Cowen. Josh, please go ahead.

Hi, good afternoon. Thanks for the questions and great to see all the progress here. David, I was hoping to just follow-up on Frank's question on the MAGiC catheter and just the trial design? Can you help us understand how it has evolved after kind of hammering out negotiations with the FDA and can you divulge what the initial indication is that's been agreed upon and what the requirements are to have the FDA look positively around the trial design and ultimately the results and make an approval decision?

Hi, Josh. Good afternoon. Let me address your question. Regarding regulatory matters, it's typically best not to be too specific. This approach aligns with both norms and regulatory expectations. The study in Europe has included a diverse group of arrhythmia patients, and we are actively enrolling more patients with very positive results and satisfied physicians. We can use the comprehensive data from this study to evaluate overall safety and performance of the catheter. There are specific patient groups with significant unmet medical needs that manual catheters do not adequately serve. This is where we aim to first secure an indication in the U.S., as there is a clear clinical need for the benefits that MAGiC offers. Our primary focus will be here initially, with plans to broaden indications in the future. However, our main priority remains ensuring that MAGiC is accessible to the patients and physicians who benefit most from it.

I wanted to ask about the APT catheter portfolio. Can you provide an update on the pulse reception and your expectations for significant sequential revenue growth? I would like to hear about the cases in which APT catheters are being used and which specific catheters are involved. Also, how do you see the ramp-up process? Is it mainly about getting the catheter into more accounts both in the United States and internationally to achieve that revenue growth? Additionally, could you help us understand the factors that contribute to what significant growth entails?

Certainly. APT has developed and brought to market a range of specialized diagnostic EP catheters used in cardiac ablation procedures. These catheters enhance the quality of electrogram data for physicians, enabling them to pinpoint the areas to ablate for effective patient treatment. Our sales force regularly supports cardiac ablation cases, making these catheters a natural fit for our offerings. They are particularly beneficial in more complex ventricular tachycardia procedures, especially for pediatric and congenital patients, where accurate diagnostic information is crucial. This aligns with our messaging and values, emphasizing the importance of robotics in treating complex arrhythmias. We have been educating our entire commercial team about APT's product line and informing our physician customers, a vast majority of whom were previously unaware of APT and its catheters. In the U.S., we have concentrated on getting these catheters on contract with various hospitals, which involves navigating value assessment committees to obtain approval for physicians to order them. We are beginning to receive orders from hospitals that had not previously utilized these catheters. Our current focus is on raising awareness, managing logistics, and ensuring positive initial experiences with the catheters, which will lead to reorders. We observed some benefits in the third quarter, and as we progress through this process with more hospitals, we anticipate continued growth in the fourth quarter and beyond. These catheters could generate considerable revenue in the high-single-digit or double-digit million range, though our goal is not to build a 100 million-plus portfolio. We see the potential for substantial business growth from slightly differentiated catheters that provide added value, as demonstrated by companies like Baylis. This initiative will support our overall strategy to increase robotic adoption, expand our physician connections in electrophysiology, and enhance our sales team's effectiveness. As we prepare to launch Genesis X with MAGiC pending regulatory approvals in the U.S., we expect to establish stronger relationships with physicians who have not previously utilized robotics, along with a more capable sales team to facilitate that launch.

Sounds exciting. And maybe just lastly on the robotic HD mapping catheter, just, I mean, did I hear that you could get approval potentially as early as the beginning of 2025? And we'd love to just, I know you've done this before, the end of the recurring revenue per case will be exponentially higher as you build out this ecosystem of catheters. But maybe just help us remind us current competitors, HD mapping catheters, what their ASPs are, maybe the guide catheters or sheaths are running? And just remind us of the current recurring revenue per case that Stereotaxis is writing in the registration today versus once the full portfolio is built out and how big that can be per case? Thanks a lot.

Sure. So I mentioned that in early 2025, in the first quarter, we'd expect to do the regulatory submissions for the high-density mapping catheter, the robotic high-density mapping catheter, and the robotic vascular guidance catheter. So those would be the regulatory submissions. And in terms of these are obviously more 510(k), these are 510(k) devices. So these aren't PMAs. The overall regulatory timeline should be much simpler than what we've experienced, obviously, with MAGiC. And APT has good experience gaining regulatory approval for its diagnostic catheters around the world. So I think they overall come with a lot of expertise in that. And when it comes to the overall revenue impact, I think kind of on the last call, I provided some more color on that, where generally if you think about our disposable revenue per procedure that we currently get for every robotic procedure, an ablation catheter would you know again it depends a lot on the geography and but generally should let's say triple the revenue the introduction of the ablation catheter could probably triple our disposable revenue per procedure. Adding a high-density mapping catheter on top of that probably again doubles again the revenue there. So you're talking about something in the five times or so what our current disposable revenue per procedure is as you introduced these two. And probably in the beginning in the non-EP space as we start to enter into the vascular field, I'd expect generally the revenue per procedure to be lower, but there's also a multi-year strategy there for how that can increase over time, but I wouldn't expect in the beginning that we're pursuing the same level of disposable revenue per procedure. Our goal really in the beginning is to demonstrate the value of the robot across multiple clinical specialties, and then we'll build out the vascular portfolio over a few years after that.

Excellent. Thanks for clarifying that timeline and for all those details. Appreciate it.

Thank you, Josh.

And your next question comes from the line of Adam Maeder with Piper Sandler. Adam, please go ahead.

Hi, David. Thank you for taking the questions and congrats on the progress in the next quarter. Maybe to start from me, wanted to ask about your MAGiC catheter. It sounds like CE Mark approval is approaching pretty quickly here. Just remind us kind of how you're feeling about the ability to supply the market from an inventory standpoint? And then also just give us a refresher on the sales force. How many folks are in the European commercial organization? How many folks are in the U.S., as well and then I had a follow-up. Thanks.

Sure. Hi, Adam. Good afternoon. Thank you. Regarding MAGiC in Europe, we believe that MAGiC is an effective catheter that will benefit our physician customers and enhance their clinical experience. Based on our extensive experience from the clinical trial over the past year, we are confident it is a reliable clinical solution. We are closely collaborating with Osypka to ensure a smooth manufacturing ramp-up, and they are putting considerable effort into building inventory and improving efficiency in the manufacturing process. Overall, we have been actively engaged to ensure we are well-prepared for a successful launch without significant obstacles. From a sales perspective, we currently have approximately 30 to 35 hospital customers in Europe and a sales force that includes trainers and the full team, totaling around a dozen sales team members in the region. This team effectively collaborates with our customers across Europe. Although we do not require a representative to be present for every procedure, we have plans to hire dedicated representatives focused on specific hospitals as we introduce the MAGiC catheter and foster adoption at individual accounts. This strategy will enable us to expand our sales team sustainably in the upcoming quarters as we launch MAGiC while providing an enhanced level of service to each hospital.

That's helpful, color. Thanks for that, David. And for the follow-up, I just wanted to ask briefly about the PFA program. I think you gave an update on last quarter earnings call. It sounds like you have a couple PFA initiatives and development, but I just wanted to ask for the latest and greatest there, and thanks again for taking the questions.

Sure, thanks a lot. So we have had quite a lot of preclinical animal studies with both actually of the robotic PFA programs that we mentioned on the last call. We had one actually this past weekend, so we kind of had quite a lot. I think that there is, like I mentioned on the last call, I think that with one of those programs, with both of those programs, we probably can be in first in-human studies next year, with one of those even probably having regulatory clearance in the European geography next year. And so that's kind of, those I'd say are the two main things that we're advancing. There are other PFA companies that we are collaborating with that are not as advanced as those two primary robotic efforts. But those are kind of, those two we've been had quite a busy few months with preclinical studies, including high-quality survival studies where you kind of assess performance over a longer time period post the procedure.

Thanks for the color.

Thank you.

And your next question comes from okay, so there's no further questions at this time. I will now turn the call back over to Mr. Fischel for closing remarks.

I see one more, Mark, if you want to open it up to the last question seems like?

Oh sure, no problem. So our next question comes from the line of Guy. Guy, please go ahead.

Hey David. How are you?

Hi, good afternoon.

Good. Thanks, I wanted to see if you could just touch, I guess, a little bit of a color on the guidewire, on Synchrony and Sync, and particularly the last two I've seen on the website, but I've seen no product announcements?

Sure. So the guidewire and the guide catheter have been our two initial products that would allow us to expand the value of our robotic system beyond electrophysiology into the broader vascular navigation field. And so those are kind of two products that we've worked on for some time. The guidewire with a contract manufacturer that we've had a relationship with, and the guide catheter was with APT even prior to that position. And the guide catheter has now advanced very smoothly, very nicely. And so that's where we plan to do a submission in the first quarter. And that would allow us not too long after that to actually commercialize and start to use our robot in non-EP procedures and kind of start to expand the use case and the value proposition. On the guidewire side, the ramp-up of manufacturing has been fairly slow with all sorts of starts and stops, we are making progress there. I still don't know what the right timeline for that is, given all the starts and stops that we've had historically. And so I haven't commented because I'd rather kind of comment when I know with confidence that we are going to meet a timeline. So I think there is a decent chance that we get that also in a good place in the coming months, but that is not certain. So again, right now I'm most focused on the guide catheter given the high level of confidence we have there with that coming out. And again, when we visit customers like the ones that I mentioned in London, not customers, but potential customers who are not electrophysiologists, like in London, there are definitely also a range of applications with the guide catheter by itself can be very beneficial. And if I shift over to Synchrony and Sync, again, there wasn't kind of any reason not to talk about that other than the desire to focus more on the things where there have been significant milestones near term. Sync has been available on the App Store. We are using it internally with physicians whenever we do preclinical studies. We've kind of used it in this kind of limited release setting. Synchrony is entering formal regulatory verification validation testing very, very shortly. And that's a Class 1 device that will be a relatively benign regulatory process to it. And so overall kind of we feel good about how that's coming together. When we have physicians and hospital administrators visit, it is very nice to see how excited they are by that technology, given that it is really ancillary to what we've been our core robotic offering. But we get very good feedback on it. So I think that there is going to be a good opportunity with those products outside of just improving the robotic ecosystem. And when we start to launch the product, I think it will be great to do kind of a real tech demo for interested physicians and the investor community.

Perfect, thanks David.

Thank you.

All right, so there's no further questions at this time, and I will now turn the call back over to Mr. David for closing remarks.

Okay, thank you very much. Thank you all for all your questions. We look forward to working hard on your behalf to close out the year strong and I look forward to speaking again next year.

And that concludes today's call. Thank you all for joining. You may now disconnect.