Vicarious Surgical Inc. Q4 FY2023 earnings call

• 2023 was a meaningful year with efforts to transform Beta 2 surgical system into V1.0 product, collaborating with surgeon and hospital system partners to shape design, focusing on subsystem build-out and integration. - Encountered external headwinds and integration hurdles, leading to team downsizing and expenditure reduction. - Achievements in 2023 include expanding foundational partnerships with hospital systems, raising $47 million through equity follow-on offering, and receiving regulatory clarity from FDA pre-submission meetings. - In 2024, made strides in subsystems integration, will conduct cadaver testing in spring and complete integration of V1.0 System in fall. - David Styka retired as Chairman of the Board, and Randy Clark was appointed as President with over 20 years of medical device industry experience.

In 2023, total operating expenses were $80.7 million, essentially flat compared to the prior year. R&D expenditures for the full year 2023 were $47.6 million, compared to $43.9 million in 2022. General and administrative expenses for the full year were $26.9 million, down from $29.7 million in 2022. Full year 2023 sales and marketing expenses of $6.2 million were comparable to the prior year. Adjusted net loss for the full year was $76.3 million, equating to an adjusted net loss of $0.52 per share, compared to an adjusted net loss of $78.8 million or $0.65 per share in the prior year. GAAP net loss for the full year was $71.1 million, equating to a net loss of $0.49 per share. As of the end of 2023, there was approximately $98 million of cash, cash equivalents and short-term investments on the balance sheet. The cash burn rate for 2023 was $63.4 million, in line with full year and updated Q3 guidance. For 2024, the expected cash burn is approximately $50 million, in line with the initially provided 2024 cash burn guidance of $40 million to $55 million.

• Expect cash burn of approximately $50 million for the full year 2024, in line with the initially provided 2024 cash burn guidance of $40 million to $55 million. - Will conduct cadaver testing in spring to evaluate the system ahead of final software and hardware refinement. - Aim to complete the integration of the V1.0 System in fall.

• Macro-economic conditions created an opaque market outlook with increased capital costs. - Encountered integration hurdles and certain software and hardware components required additional development efforts. - Uncertainty regarding regulatory approval timing and process.

Q: Maybe just to start on the milestones, Adam and Bill. What do you expect to get out of the cadaver lab in the spring? How much can you use for your regulatory submission? And just kind of the expectations there. And then once you get the V1.0 established, again, kind of what's the process from A to B in terms of using that to then get to the next step towards regulatory submission?

A: So thanks so much for the questions, Ryan. First of all, we're really pleased with the progress we've made so far in the V1.0 System. The spring cadaver lab is really about testing that fully integrated V1.0 System. Overall, the purpose of the V1.0 System and the cadaver lab is to prove out that all of that functionality that surgeons and hospitals really loved that was in the Beta 2 prototype is now in our V1.0 product works as effectively, and all of it is being conducted and documented appropriately to be part of our process for the regulatory submission. Then the next step after that, I think was your second question. And that really is about taking any of the challenges that we unearth during this cadaveric process, as well as any bugs resolving those over the rest of the spring, the summer and the fall, into our final V1.0 System.

Q: Okay. Got it. Thank you. And well, I guess, just to follow up on that. So just to be clear then, the V1.0 -- is the V1.0 what you're going to the agency with or do you expect to have a V2.0? I just want to make sure I'm clear about kind of that pathway to clearance.

A: It's a fair question. So the V1.0 system is what we intend to take to the agency. But I do want to set expectations that there's a reason that it's not finalized this spring. I do expect to have some things that are going to be tweaked or adjusted overall over the course of the summer and the fall, and we are on track for the fall milestone.