10-K: Vicarious Surgical Outlines Capital Stock Details in 10-K Filing

Sentiment:

Annual Results 17 March 2025 5:00 PM

Vicarious Surgical's 10-K filing details the structure of its capital stock, including Class A and Class B common stock, preferred stock authorization, and warrant information.

Capital raiseThe company may consider raising additional capital to expand its business, pursue strategic investments, take advantage of financing opportunities, or for other reasons.The company may seek to sell additional common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing.

Worse than expectedThe company has a history of losses and negative cash flows from operations, has an accumulated deficit, and has concluded that the Companys cash, cash equivalents and investments will not be sufficient to sustain operations for at least twelve months from the date the financials are available to be issued.

Summary

Vicarious Surgical's 10-K filing provides a detailed overview of the company's capital stock structure.
The company is authorized to issue 323,000,000 shares, consisting of 300,000,000 shares of Class A common stock, 22,000,000 shares of Class B common stock, and 1,000,000 shares of preferred stock, all with a par value of $0.0001 per share.
Class A common stock grants one vote per share, with dividend and liquidation rights subject to any outstanding preferred stock.
Class B common stock provides twenty votes per share and shares dividend rights with Class A common stock, convertible to Class A on a one-to-one basis under certain conditions.
As of December 31, 2024, there were 17,248,601 public warrants outstanding, exercisable for 574,953 shares of Class A common stock, and 10,400,000 private placement warrants outstanding, exercisable for 346,666 shares of Class A common stock.
The exercise price for the warrants is $345.00 per full share, with potential adjustments and redemption options available to the company.
The filing also discusses registration rights for PIPE Investors and existing stockholders, as well as anti-takeover provisions embedded in the company's charter and bylaws.
The company has identified a material weakness in its internal control over financial reporting.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While it details the company's capital structure and governance, it also highlights significant financial challenges, including substantial doubt about its ability to continue as a going concern and a material weakness in internal controls. The potential for future capital raises adds uncertainty.

Positives

The board of directors has the flexibility to issue preferred stock, which can be used for acquisitions, future financings, and other corporate purposes.
Registration rights are in place for PIPE investors and existing stockholders, providing liquidity options.
The company is taking steps to remediate the material weakness in its internal control over financial reporting.

Negatives

The high exercise price of $345.00 for the warrants may make them less likely to be exercised unless the share price significantly increases.
Anti-takeover provisions could deter potential acquisitions, limiting stockholder value.
The material weakness in internal control over financial reporting could lead to inaccurate financial reporting and decreased investor confidence.
The company has identified a material weakness in its internal control over financial reporting.

Risks

The high warrant exercise price may result in the warrants expiring unexercised.
Anti-takeover provisions could deter potential acquisitions, limiting stockholder value.
The material weakness in internal control over financial reporting could lead to inaccurate financial reporting and decreased investor confidence.
The company's reliance on third parties for manufacturing and supply of components could be disrupted.

Future Outlook

The company expects to continue to incur significant losses for at least the next several years as it commercializes the Vicarious Surgical System and seeks to develop new surgical applications. The company estimates that its cash resources will be sufficient to fund operations and meet its obligations into the first quarter of 2026.

Management Comments

Management is evaluating and pursuing different strategies to obtain the required funding for our operations.
Management does not believe that the Companys cash, cash equivalents and short-term investments balance at December 31, 2024 of $49,097 will be sufficient to support our operations beyond the next twelve months from the date of issuance of these financial statements, and accordingly, this raises substantial doubt about our ability to continue as a going concern.

Industry Context

The medical device industry is highly regulated, and the company's success depends on obtaining and maintaining regulatory approvals, as well as competing with larger, well-established companies.

Comparison to Industry Standards

The company faces competition from larger and well-established companies such as Intuitive Surgical, Johnson & Johnson, and Medtronic.
These competitors have greater financial and marketing resources, which could impact Vicarious Surgical's ability to compete effectively.
The company's success depends on continued clinical and technical innovation, quality and reliability, as well as educating hospitals, surgeons, and patients on the results associated with robotic-assisted surgery using the Vicarious Surgical System and our value proposition relative to other techniques.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chief Financial Officer	William Kelly	Randy Clark	January 18, 2024	William Kelly transitioned to a consulting role.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Clawback Policy	The Board of Directors adopted a policy providing for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements.	July 18, 2023	Aims to reinforce the company's pay-for-performance compensation philosophy and emphasize integrity and accountability.

Related Party Transactions

On January 17, 2025, the Company entered into a three-year consulting agreement with William Kelly, Vicarious Surgicals former Chief Financial Officer.

Stakeholder Impact

Shareholders face potential dilution from future equity offerings.
Employees may experience uncertainty due to the company's financial challenges and potential restructuring.
Customers and suppliers may be concerned about the company's long-term viability.

Next Steps

The company must continue to actively pursue additional equity or debt financing.
The company is focused on designing and implementing effective internal controls measures to improve its evaluation of disclosure controls and procedures, including internal control over financial reporting, and remediate the material weaknesses.

Key Dates

Date	Description
May 6, 2020	Vicarious Surgical Inc. (formerly D8 Holdings Corp.) was incorporated in the Cayman Islands.
July 14, 2020	Date of the Warrant Agreement between Vicarious Surgical Inc. (formerly D8 Holdings Corp.) and Continental Stock Transfer & Trust Company.
July 17, 2020	D8's initial public offering date.
April 15, 2021	Date of the Agreement and Plan of Merger among Vicarious Surgical Inc. (formerly D8 Holdings Corp.), Snowball Merger Sub, Inc., and Vicarious Surgical Operating Co. (formerly Vicarious Surgical Inc.).
September 17, 2021	Date of the Business Combination between Vicarious Surgical Inc. and Vicarious Surgical Operating Co.
September 17, 2021	Date of the Amended and Restated Registration Rights Agreement.
September 23, 2021	Date of the Amended and Restated Bylaws of Vicarious Surgical Inc.
October 14, 2021	Date of the Amendment to Lease between Vicarious Surgical US Inc. and Fourth Avenue LLC.
October 22, 2021	Effective date of the registration statement covering the shares of Class A common stock issuable upon exercise of the warrants.
June 1, 2022	Date of the amendment to the 2021 Plan, which provides for the granting of up to 219,667 additional shares of Class A common stock under the 2021 Plan as determined by the Board of Directors.
October 7, 2022	Date of the Sales Agreement between the Registrant and Cowen and Company, LLC.
October 27, 2022	Effective date of the universal shelf registration statement on Form S-3.
December 2022	Date of the issuance of 3,048,781 shares of Class A common stock under the sales agreement with Cowen and Company, LLC.
June 1, 2023	Date of the amendment to the 2021 Plan, which provides for the granting of up to 232,361 additional shares of Class A common stock under the 2021 Plan as determined by the Board of Directors.
July 18, 2023	Date of the adoption of the Clawback Policy.
August 2, 2023	Date of the underwriting agreement related to the public offering of 45,000,000 shares of Class A common stock.
August 7, 2023	Closing date of the public offering of 45,000,000 shares of Class A common stock.
August 29, 2023	Closing date of the exercise of the underwriters' option to purchase additional shares.
June 10, 2024	Date of the Companys annual shareholder meeting where the shareholders granted the Companys board of directors the discretion to effect a reverse stock split.
June 12, 2024	Date the Company effected a 1-for-30 reverse stock split of its issued and outstanding shares of Class A and Class B common stock.
January 2, 2025	Commencement date of the Consulting Agreement with William Kelly.
January 8, 2025	Date of the revision of the Vicarious Surgical Inc. Insider Trading Policy.
January 17, 2025	Date of the Consulting Agreement between Vicarious Surgical Inc. and William Kelly.
December 31, 2028	Termination date of the Consulting Agreement with William Kelly.

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