Vicarious Surgical Inc.

Previous wording

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our unaudited condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto for the year ended December 31, 2023 contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2024, and our other public reports filed with the SEC. This discussion contains forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 and Part II, Item 1A of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, and “the Company” are intended to mean the business and operations of Vicarious Surgical Inc. and its consolidated subsidiaries. The condensed consolidated financial statements for the three and nine-month periods ended September 30, 2024 and 2023, respectively, present the financial position and results of operations of Vicarious Surgical Inc. and its consolidated subsidiaries. In preparing this MD&A, the Company presumes that readers have access to and have read the MD&A in our Annual Report on Form 10-K, pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K.

Current wording

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our unaudited condensed consolidated results of operations and financial condition. The discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto for the year ended December 31, 2024 contained in our Annual Report on Form 10-K filed with the SEC on March 17, 2025, and our other public reports filed with the SEC. This discussion contains forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 and Part II, Item 1A of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references to “we”, “us”, “our”, and “the Company” are intended to mean the business and operations of Vicarious Surgical Inc. and its consolidated subsidiaries. The condensed consolidated financial statements for the three months ended March 31, 2025 and 2024, respectively, present the financial position and results of operations of Vicarious Surgical Inc. and its consolidated subsidiaries. In preparing this MD&A, the Company presumes that readers have access to and have read the MD&A in our Annual Report on Form 10-K, pursuant to Instruction 2 to paragraph (b) of Item 303 of Regulation S-K.

Previous wording

Regained Compliance with NYSE Continued Listing Requirements

Current wording

Compliance with NYSE Continued Listing Requirements

Previous wording

As previously reported, on September 20, 2023, we received notice from the New York Stock Exchange (the “NYSE”) notifying us that, because average closing share price for the Company’s Class A common stock was less than $1.00 over a consecutive 30 trading-day period, the Company no longer met the NYSE’s continued listing criterion relating to minimum share price.

Current wording

As previously reported, on April 10, 2025, we received notice (“the Notice”) from the New York Stock Exchange (the “NYSE”) indicating we were no longer in compliance with the NYSE’s continued listing standards set forth in Section 802.01B of the NYSE’s Listed Company Manual (the “Minimum Market Capitalization Standard”) due to the fact that our average global market capitalization over a consecutive 30 trading-day period was less than $50 million and, at the same time, our stockholders’ equity was less than $50 million, we no longer met the NYSE’s continued listing criterion. In accordance with applicable NYSE procedures, within 45 days from receipt of the Notice, we intend to submit a plan to the NYSE advising it of the definitive action(s) we have taken, are taking, or plan to take that would bring us into conformity with the Minimum Market Capitalization Standard within 18 months of receipt of the Notice (the “Cure Period”). Upon receipt of such plan, the NYSE will have up to 45 days to evaluate the plan and determine whether hawse have made a reasonable demonstration of our ability to come into conformity with the relevant listing standards within the Cure Period. If the NYSE accepts our plan, the NYSE will review us on a quarterly basis to confirm compliance with the plan. If our plan is not accepted, we fail to comply with the plan or do not meet the Minimum Market Capitalization Standard at the end of the Cure Period, we will be subject to NYSE’s prompt initiation of suspension and delisting procedures.

Previous wording

We incurred net losses of $49,927 and $57,960 for the nine months ended September 30, 2024 and September 30, 2023, respectively. These losses include a loss of $415 for the nine months ended September 30, 2024 and a gain of $3,705 for the nine months ended September 30, 2023 related to the change in valuation of our warrant obligations. Our loss from operations prior to the warrant loss and gain and other income and expense items was $51,577 and $65,125 for the nine months ended September 30, 2024 and 2023, respectively, representing a period-over-period gain of 21%, which was primarily due to decreases of $10,071 in personnel-related expenses, $1,684 in supplies and materials, and $1,317 in insurance expenses. The decrease in personnel-related expense was due primarily to a decrease in average headcount of 35%, from an average of 199 people in the nine months ended September 30, 2023 to an average of 130 people for the nine months ended September 30, 2024.

Current wording

We incurred net losses of $15,394 and $17,001 for the three months ended March 31, 2025 and March 31, 2024, respectively. These losses include losses of $93 and $1,867 related to the change in valuation of our warrant obligations for the three months ended March 31, 2025 and March 31, 2024, respectively. Our loss from operations prior to the warrant loss and other income and expense items was $15,747 and $16,109 for the three months ended March 31, 2025 and March 31, 2024, respectively, representing a period-over-period decrease in expenses of 2%, which was primarily due to decreases of $835 in personnel-related expenses and $111 of insurance expense and offset by increases of $300 in professional services and $291 in materials and supplies. The decrease in personnel-related expense was due primarily to a decrease in average headcount of 6%, from an average of 131 people in the three months ended March 31, 2024 to an average of 123 people in the three months ended March 31, 2025.

Previous wording

R&D expenses consist primarily of engineering, product development, regulatory expenses, medical affairs, and other costs associated with product candidates and technologies that are in development. These expenses include employee compensation, including stock-based compensation, supplies, consulting, prototyping, testing, materials, travel expenses, depreciation and an allocation of facility overhead expenses. Additionally, R&D expenses include internal and external costs associated with our regulatory compliance and quality assurance functions and overhead costs. We expect R&D expenses as a percentage of revenue to vary over time depending on the level and timing of our new product development efforts, as well as our clinical development, clinical trial and other related activities.

Current wording

Research and development (“R&D”) expenses consist primarily of engineering, product development, regulatory expenses, medical affairs, and other costs associated with product candidates and technologies that are in development. These expenses include employee compensation, including stock-based compensation, supplies, consulting, prototyping, testing, materials, travel expenses, depreciation and an allocation of facility overhead expenses. Additionally, R&D expenses include internal and external costs associated with our regulatory compliance and quality assurance functions and overhead costs. We expect R&D expenses to vary over time depending on the level and timing of our new product development efforts, as well as our clinical development, clinical trial and other related activities.

Previous wording

The following table sets forth our historical operating results for three months ended September 30, 2024 and 2023:

Current wording

The following table sets forth our historical operating results for the three months ended March 31, 2025 and 2024:

Previous wording

Research and Development Expenses. R&D expenses decreased $2,240, or 17%, to $10,800 during the three months ended September 30, 2024, compared to $13,040 during the three months ended September 30, 2023. This decrease was primarily due to decreases of $2,067 of personnel-related expenses, $242 in software expenses, $185 in materials and supplies and partially offset by an increase of $298 in professional services. The decrease in personnel-related expense was due primarily to a decrease in average headcount of 29%, from an average of 146 people in the three months ended September 30, 2023 to an average of 103 people in the three months ended September 30, 2024.

Current wording

Research and Development Expenses. R&D expenses decreased $553, or 6%, to $9,415 during the three months ended March 31, 2025, compared to $9,968 during the three months ended March 31, 2024. This decrease was primarily due to decreases of $658 of personnel-related expenses and $151 in depreciation expenses and partially offset by an increase of $289 in materials and supplies. The decrease in personnel-related expense was due primarily to a decrease in average headcount of 6%, from an average of 105 people in the three months ended March 31, 2024 to an average of 99 people in the three months ended March 31, 2025.

Previous wording

Sales and Marketing Expenses. S&M expenses decreased $193, or 14%, to $1,208 during the three months ended September 30, 2024, compared to $1,401 during the three months ended September 30, 2023. This decrease was primarily due to a decrease of $170 in personnel-related expenses. The decrease in personnel-related expense was due primarily to a decrease in average headcount of 31%, from an average of 13 people in the three months ended September 30, 2023 to an average of 9 people in the three months ended September 30, 2024.

Current wording

Sales and Marketing Expenses. S&M expenses decreased $100, or 9%, to $1,041 during the three months ended March 31, 2025, compared to $1,141 during the three months ended March 31, 2024. This decrease was primarily due to a decrease of $148 of personnel-related expenses. The decrease in personnel-related expense was due to an average headcount decrease of 20%, from an average of 10 people in the three months ended March 31, 2024 to an average of 8 people for the three months ended March 31, 2025.

Previous wording

Change in Fair Value of Warrant Liabilities. The change in fair value of warrant liabilities during the three months ended September 30, 2024 was a $138 loss. The change in fair value of the warrant liability resulted from the remeasurement of the Public Warrant and Private Placement Warrant liabilities between June 30, 2024 and the end of the reporting period, September 30, 2024.

Current wording

Change in Fair Value of Warrant Liabilities. The change in fair value of warrant liabilities during the three months ended March 31, 2025 was a $93 loss. The change in fair value of warrant liability resulted from the remeasurement of the public and private placement warrant liabilities between December 31, 2024 and the end of the reporting period, March 31, 2025.

Previous wording

Interest and Other Income. Interest and other income decreased by $144 to $802 during the three months ended September 30, 2024, compared to $946 during the three months ended September 30, 2023. The decrease was primarily due to a decrease in interest income from short-term investments.

Current wording

Interest and Other Income. Interest and other income decreased by $529, or 54%, to $446 during the three months ended March 31, 2025, compared to $975 during the three months ended March 31, 2024. The decrease was primarily due to a decrease in interest income from short-term investments.

Previous wording

To date, our primary sources of capital have been private placements of preferred stock prior to the Business Combination, the recapitalization with D8 and the issuance of common stock. Net cash used in our operating activities for the nine months ended September 30, 2024 and the year ended December 31, 2023 was $38,168 and $62,305, respectively. As of September 30, 2024, we held cash and cash equivalents of $7,069, short-term investments of $53,795 and had an accumulated deficit of $182,009.

Current wording

To date, our primary sources of capital have been private placements of preferred stock prior to the Business Combination, public and private sales of securities and the issuance of common stock. Net cash used in our operating activities for the three months ended March 31, 2025 and the year ended December 31, 2024 was $11,768 and $49,956, respectively. As of March 31, 2025, we held cash and cash equivalents of $2,599, short-term investments of $34,763 and had an accumulated deficit of $211,329.

Previous wording

Excluding the non-cash impact of potential changes in the fair value of warrant liabilities, we expect net losses to continue in connection with our ongoing activities, particularly as we continue to invest in commercialization and new product development. We believe our current cash, cash equivalents and short-term investments balance of $60,864 as of September 30, 2024 will be sufficient to support our operations beyond the next twelve months from the date of issuance of these financial statements. Our future capital requirements will depend on many factors, including, but not limited to, any changes in the size, number and scope of clinical trials we may be required to conduct, the timing and conditions of market authorization (if any) for the Vicarious Surgical System, whether we are able to successfully commercialize the Vicarious Surgical System, if approved, additional product candidates we may choose to develop, fluctuations in the cost and timing of our business activities, including manufacturing, hiring and protection of our intellectual property portfolio, and the other risks and uncertainties described in the “Risk Factors” sections in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 4, 2024, in Part II, Item 1A in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed with the SEC on August 13, 2024, and in other filings that we make with the SEC from time to time.

Current wording

Our future capital requirements will depend on many factors, including, but not limited to, any changes in the size, number and scope of clinical trials we may be required to conduct, the timing and conditions of market authorization (if any) for the Vicarious Surgical System, whether we are able to successfully commercialize the Vicarious Surgical System, if approved, additional product candidates we may choose to develop, fluctuations in the cost and timing of our business activities, including manufacturing, hiring and protection of our intellectual property portfolio, and the other risks and uncertainties described in the “Risk Factors” sections in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 17, 2025, and in other filings that we make with the SEC from time to time.

Previous wording

On October 7, 2022, we filed a universal shelf registration statement on Form S-3 (the “Form S-3”), which was declared effective by the SEC on October 27, 2022, on which we registered for sale up to $400 million of any combination of our Class A common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, which includes up to $100 million of Class A common stock that we may issue and sell from time to time, through Cowen and Company, LLC acting as our sales agent, pursuant to the sales agreement that we entered into with Cowen and Company, LLC on October 7, 2022 for our “at-the-market” equity program. In December 2022, we issued 3,048,781 shares of Class A common stock under our sales agreement with Cowen and Company, LLC, resulting in gross proceeds of $10.0 million. We did not issue any Class A common stock under our sales agreement with Cowen and Company, LLC during the nine months ended September 30, 2024.

Current wording

On October 7, 2022, we filed a universal shelf registration statement on Form S-3 (the “Form S-3”), which was declared effective by the SEC on October 27, 2022, on which we registered for sale up to $400 million of any combination of our Class A common stock, preferred stock, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, which includes up to $100 million of Class A common stock that we may issue and sell from time to time, through Cowen and Company, LLC acting as our sales agent, pursuant to the sales agreement that we entered into with Cowen and Company, LLC on October 7, 2022 for our “at-the-market” equity program. In December 2022, we issued 3,048,781 shares of Class A common stock under our sales agreement with Cowen and Company, LLC, resulting in gross proceeds of $10.0 million. We did not sell any shares of our Class A common stock under our sales agreement with Cowen and Company, LLC for the three months ended March 31, 2025 or for the year ended December 31, 2024.

Previous wording

Our cash and cash equivalents and short-term investments balance as of September 30, 2024 was $7,069 and $53,795, respectively. Our future capital requirements may vary from those currently planned and will depend on various factors, including the timing and extent of R&D spending and spending on other strategic business initiatives.

Current wording

Our cash and cash equivalents and short-term investments balance as of March 31, 2025 was $2,599 and $34,763, respectively. Our future capital requirements may vary from those currently planned and will depend on various factors, including the timing and extent of R&D spending and spending on other strategic business initiatives.

Previous wording

Net cash used in operating activities during the nine months ended September 30, 2023 was $50,935, attributable to a net loss of $57,960, a $426 net change in our net operating assets and liabilities and offset by non-cash items of $7,451. Non-cash items consisted of $10,192 in stock-based compensation, a gain of $3,705 due to the change in fair value of our warrant liabilities, $1,329 of depreciation and amortization, $604 for non-cash lease expense and partially offset by a loss of $969 due to the change in accrued interest and net accretion of discounts on marketable securities. The $426 change in our net operating assets and liabilities was due to a $542 decrease in accrued expenses, a $603 decrease in lease liabilities, a $201 decrease in accounts payable, and a $54 increase in other noncurrent assets and was partially offset by a $974 decrease in prepaid and other current assets.

Current wording

Net cash used in operating activities during the three months ended March 31, 2025 was $11,768, attributable to net loss of $15,394 and a net change in our net operating assets and liabilities of $190 and non-cash items of $3,436. Non-cash items consisted of a loss of $93 due to the change in fair value of our warrant liabilities, $2,787 in stock-based compensation, $369 of depreciation and amortization, $239 for non-cash lease expense and partially offset by a $52 change in accrued interest and net accretion of discounts on marketable securities. The $190 change in our net operating assets and liabilities was primarily due to decreases of $311 in prepaid expenses, $145 in accounts payable, $281 in lease liabilities and $18 in other noncurrent assets and partially offset by a $287 increase in accrued expenses.

Previous wording

Net cash used in operating activities during the nine months ended September 30, 2024 was $38,168, attributable to a net loss of $49,297, offset by a $113 net change in our net operating assets and liabilities and non-cash items of $11,016. Non-cash items consisted of $9,094 in stock-based compensation, $1,565 of depreciation and amortization, a loss of $415 due to the change in fair value of our warrant liabilities, $665 for non-cash lease expense and partially offset by a loss of $725 due to the change in accrued interest and net accretion of discounts on marketable securities. The $113 change in our net operating assets and liabilities was due to a $684 decrease in prepaid and other current assets, a $137 decrease in accounts payable, a $25 decrease in other noncurrent assets, a $39 increase in accrued expenses and was partially offset by a $772 decrease in lease liabilities.

Current wording

Net cash used in operating activities during the three months ended March 31, 2024 was $14,458, attributable to net loss of $17,001 and a net change in our net operating assets and liabilities of $2,686 and non-cash items of $5,229. Non-cash items consisted of a loss of $1,867 due to the change in fair value of our warrant liabilities, $3,091 in stock-based compensation, $521 of depreciation and amortization, $216 for non-cash lease expense and partially offset by a $466 change in accrued interest and net accretion of discounts on marketable securities. The $2,686 change in our net operating assets and liabilities was primarily due to decreases of $2,259 in accrued expenses, $241 in lease liabilities, $14 in accounts payable, $9 in other noncurrent assets, and partially offset by a $209 increase in prepaid expenses.

Previous wording

Cash flows used in Investing Activities

Current wording

Cash flows provided by (used in) Investing Activities

Previous wording

Net cash used by investing activities for the nine months ended September 30, 2023 was $50,828 consisting of $62,731 used for purchases of available-for-sale investments and $632 for fixed asset purchases, and partially offset by proceeds of $12,535 from sales and maturities of available-for-sale investments.

Current wording

Net cash provided by investing activities for the three months ended March 31, 2025 was $4,613 consisting of $13,550 in proceeds from sales and maturities of available-for-sale investments and partially offset by $8,932 used for purchases of available-for-sale investments and $5 used for fixed asset purchases.

Previous wording

Net cash used by investing activities for the nine months ended September 30, 2024 was $7,587 consisting of $52,784 used for purchases of available-for-sale investments, and partially offset by proceeds of $45,182 from sales and maturities of available-for-sale investments and $15 for fixed asset sales.

Current wording

Net cash used by investing activities for the three months ended March 31, 2024 was $144 consisting of $19,493 for purchases of available-for-sale investments, $10 for fixed asset purchases consisting mainly of leasehold improvements and partially offset by $19,359 in proceeds from sales and maturities of available-for-sale investments.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was $2 that was received for stock option exercises.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2024 was $2 that was received for stock option exercises.

Previous wording

Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the consolidated balance sheet date, as well as the reported expenses incurred during the reporting periods. Our management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to our condensed consolidated financial statements.

Current wording

Our condensed consolidated financial statements have been prepared in accordance with US GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the consolidated balance sheet date, as well as the reported expenses incurred during the reporting periods. Our management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to our condensed consolidated financial statements.

Previous wording

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 “Summary of Significant Accounting Policies – Recently Issued Accounting Pronouncements” in our unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Current wording

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 “Summary of Significant Accounting Policies – Recently Issued Accounting Pronouncements” in our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Previous wording

Following the Business Combination, we became an “emerging growth company,” as defined in the JOBS Act. Pursuant to the JOBS Act, an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by FASB or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. We currently take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. Accordingly, the information contained herein may be different than the information you receive from other public companies.

Current wording

We are an “emerging growth company,” as defined in the JOBS Act. Pursuant to the JOBS Act, an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by FASB or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. We intend to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. Accordingly, the information contained herein may be different than the information you receive from other public companies.

Previous wording

We take advantage of some of the reduced regulatory and reporting requirements of emerging growth companies pursuant to the JOBS Act, and we intend to continue to do so as long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments.

Current wording

We also intend to take advantage of some of the reduced regulatory and reporting requirements of emerging growth companies pursuant to the JOBS Act so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments.