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, 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.

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 and six-month periods ended June 30, 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, we presume 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

We are combining advanced miniaturized robotics, computer science, sensing and 3D visualization to build a new category of intelligent and affordable, single-port surgical robot that virtually transports surgeons inside the patient to perform minimally invasive surgery. With our next-generation robotics technology which is being designed with proprietary human-like motion, we are seeking to improve patient outcomes, as well as the cost and efficacy of surgical procedures. Led by a visionary team of engineers from MIT, we intend to deliver the next generation in robotic surgery, designed to solve the shortcomings of both open surgery, as well as current manual and robot-assisted minimally invasive surgery.

Current wording

We are combining advanced miniaturized robotics, computer science, sensing and 3D visualization to build a new category of intelligent and affordable, single-port surgical robot that virtually transports surgeons inside the patient to perform minimally invasive surgery. With our next-generation robotics technology that is being designed with proprietary human-like motion, we are seeking to improve patient outcomes, as well as the cost and efficacy of surgical procedures. Led by a visionary team of engineers from MIT, we intend to deliver the next generation in robotic surgery, designed to solve the shortcomings of both open surgery, as well as current manual and robot-assisted minimally invasive surgery.

Previous 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.

Current wording

As previously reported, on April 10, 2025, we received a 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, so that we no longer met the NYSE’s continued listing criterion. On May 27, 2025, we submitted our 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”). On July 8, 2025, the NYSE notified us that it has accepted our plan to come into conformity with the relevant listing standards within the Cure Period. The NYSE will review us on a quarterly basis during the Cure Period to confirm compliance with the plan.

Previous wording

The Notice has no immediate impact on the listing of our Class A common stock, which will continue to be listed and traded on the NYSE during the Cure Period, subject to the NYSE’s acceptance of our plan, our continued compliance with the plan and NYSE’s other continued listing standards.

Current wording

The Notice and plan have no immediate impact on the listing of our Class A common stock, which will continue to be listed and traded on the NYSE during the Cure Period, subject to our continued compliance with the plan and NYSE’s other continued listing standards.

Previous 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.

Current wording

We incurred net losses of $28,609 and $32,206 for the six months ended June 30, 2025 and June 30, 2024, respectively. These losses include losses of $53 and $277 related to the change in valuation of our warrant obligations for the six months ended June 30, 2025 and June 30, 2024, respectively. Our loss from operations prior to the warrant loss and other income and expense items was $29,266 and $33,822 for the six months ended June 30, 2025 and June 30, 2024, respectively, representing a period-over-period gain of 13%, which was primarily due to decreases of $2,542 in personnel-related expenses and $2,900 in professional services and partially offset by an increase of $1,094 in supplies and materials. The decrease in personnel-related expense was due primarily to a decrease in average headcount of 6%, from an average of 129 people in the six months ended June 30, 2024 to an average of 121 people for the six months ended June 30, 2025.

Previous 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.

Current wording

Research and Development Expenses. R&D expenses decreased $1,874, or 17%, to $9,050 during the three months ended June 30, 2025, compared to $10,924 during the three months ended June 30, 2024. This decrease was primarily due to decreases of $3,038 in professional services and partially offset by increases of $799 in materials and supplies and $342 in personnel-related expenses.

Previous 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.

Current wording

Sales and Marketing Expenses. S&M expenses decreased $848, or 71%, to $349 during the three months ended June 30, 2025, compared to $1,197 during the three months ended June 30, 2024. This decrease was primarily due to a decrease of $834 in personnel-related expenses. The decrease in personnel-related expense was due primarily to a decrease in average headcount of 40%, from an average of 10 people in the three months ended June 30, 2024 to an average of 6 people in the three months ended June 30, 2025.

Previous 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.

Current wording

Change in Fair Value of Warrant Liabilities. The change in fair value of warrant liabilities during the three months ended June 30, 2025 was a $40 gain. The change in fair value of the warrant liability resulted from the remeasurement of the public and private placement warrant liabilities between March 31, 2025 and the end of the reporting period, June 30, 2025.

Previous 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.

Current wording

Interest and Other Income. Interest and other income decreased by $654, or 71%, to $264 during the three months ended June 30, 2025, compared to $918 during the three months ended June 30, 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, 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.

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 six months ended June 30, 2025 and June 30, 2024 was $25,300 and $25,479, respectively. As of June 30, 2025, we held cash and cash equivalents of $3,910, short-term investments of $20,053 and had an accumulated deficit of $224,544.

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. Based on our current planned operations, we do not believe that our current cash, cash equivalents and short-term investments balance of $37,362 as of March 31, 2025 will be sufficient to support our operations beyond the next 12 months from the date of issuance of these financial statements. We currently expect that our cash, cash equivalents and short-term investments will be sufficient to support our operations into the first quarter of 2026. As such, there is substantial doubt about the Company’s ability to continue as a going concern. We may consider raising additional capital to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons.

Current 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. Based on our current planned operations, we do not believe that our current cash, cash equivalents and short-term investments balance of $23,963 as of June 30, 2025 will be sufficient to support our operations beyond the next 12 months from the date of issuance of these financial statements. We currently expect that our cash, cash equivalents and short-term investments will be sufficient to support our operations into the first quarter of 2026. As such, there is substantial doubt about our ability to continue as a going concern. We may consider raising additional capital to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons.

Previous wording

We expect that we will need to obtain substantial additional funding in order to complete our clinical trials, obtain market authorization for the Vicarious Surgical System, and commercialize it, if approved. Until such time, if ever, as we can generate sufficient revenues to support our expenses, we 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. The sale of equity and convertible debt securities may result in dilution to our stockholders. Preferred equity securities or convertible debt could provide for rights, preferences or privileges senior to those of our common stock, including liquidation or other preferences that could adversely affect the rights of our existing stockholders. The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our operations. If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our platform technologies or product candidates or grant licenses on terms that are not favorable to us, or that we would otherwise seek to develop or commercialize ourselves. Additional capital may not be available on reasonable terms, or at all, particularly given the current macroeconomic environment, including diminished liquidity and credit availability, declines in consumer confidence and economic growth, rising interest rates, inflation, uncertainty about economic stability and potential for economic recession. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and more dilutive. If we are unable to raise capital when needed or on attractive terms, we could be forced to significantly delay, scale back or discontinue the development, market authorization or commercialization of the Vicarious Surgical System or future product candidates, or seek collaborators at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available.

Current wording

We expect that we will need to obtain substantial additional funding in order to conduct and complete our clinical trials, obtain market authorization for the Vicarious Surgical System, and commercialize it, if approved. Until such time, if ever, as we can generate sufficient revenues to support our expenses, we 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. The sale of equity and convertible debt securities may result in dilution to our stockholders. Preferred equity securities or convertible debt could provide for rights, preferences or privileges senior to those of our common stock, including liquidation or other preferences that could adversely affect the rights of our existing stockholders. The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our operations. If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights to our platform technologies or product candidates or grant licenses on terms that are not favorable to us, or that we would otherwise seek to develop or commercialize ourselves. Additional capital may not be available on reasonable terms, or at all, particularly given the current macroeconomic environment, including diminished liquidity and credit availability, declines in consumer confidence and economic growth, rising interest rates, inflation, uncertainty about economic stability and potential for economic recession. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and more dilutive. If we are unable to raise capital when needed or on attractive terms, we could be forced to significantly delay, scale back or discontinue the development, market authorization or commercialization of the Vicarious Surgical System or future product candidates, or seek collaborators at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available.

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 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.

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 during the six months ended June 30, 2025 or for the year ended December 31, 2024.

Previous 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.

Current wording

Our cash and cash equivalents and short-term investments balance as of June 30, 2025 was $3,910 and $20,053, 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 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.

Current wording

Net cash used in operating activities during the six months ended June 30, 2025 was $25,300, attributable to a net loss of $28,609 and a net change in our net operating assets and liabilities of $2,814 and partially offset by non-cash items of $6,123. Non-cash items consisted of $4,983 in stock-based compensation, $782 of depreciation and amortization, $485 for non-cash lease expense, a loss of $53 due to the change in fair value of our warrant liabilities, and partially offset by a $180 change in accrued interest and net accretion of discounts on marketable securities. The $2,814 change in our net operating assets and liabilities was due to decreases of $2,215 in accrued expenses, $587 in lease liabilities, $537 in accounts payable, $28 in other noncurrent assets and $497 in prepaid and other current assets.

Previous 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.

Current wording

Net cash used in operating activities during the six months ended June 30, 2024 was $25,479, attributable to a net loss of $32,206 offset by a $631 net change in our net operating assets and liabilities and non-cash items of $7,358. Non-cash items consisted of $6,157 in stock-based compensation, a loss of $277 due to the change in fair value of our warrant liabilities, $1,058 of depreciation and amortization, $438 for non-cash lease expense, a $35 loss on disposal of property and equipment and partially offset by a $607 change in accrued interest and net accretion of discounts on marketable securities. The $631 change in our net operating assets and liabilities was due to a $280 decrease in accrued expenses, a $503 decrease in lease liabilities, and a $18 decrease in other noncurrent assets and was partially offset by a $73 increase in prepaid and other current assets and a $97 increase in accounts payable.

Previous 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.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2025 was $19,432 consisting of $30,451 in proceeds from sales and maturities of available-for-sale investments and partially offset by $11,014 used for purchases of available-for-sale investments and $5 for fixed asset purchases.

Previous 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.

Current wording

Net cash used by investing activities for the six months ended June 30, 2024 was $7,095 consisting of $38,892 used for purchases of available-for-sale investments and $16 for fixed asset purchases, and partially offset by $31,813 in proceeds from sales and maturities of available-for-sale investments.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $17 that was received for stock option exercises.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2025 was $41 that was received for stock option exercises.

Previous wording

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

Current wording

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

Previous wording

We recognize our warrants as liabilities at fair value and adjust the warrant liability to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the statement of operations. The fair value of Public Warrants is determined from their trading value on public markets. The fair value of Private Placement Warrants is calculated using the Black-Scholes option pricing model. The assumptions used in the model are the Company’s stock price, exercise price, expected term, volatility, interest rate, and dividend yield.

Current wording

We recognize our warrants as liabilities at fair value and adjust the warrant liability to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the statement of operations. The fair value of Public Warrants is determined from their trading value on public markets. The fair value of Private Placement Warrants is calculated using the Black-Scholes option pricing model. The assumptions used in the model are our stock price, exercise price, expected term, volatility, interest rate, and dividend yield.

Previous wording

The Company estimates the volatility of its warrants based on implied volatility from the Company’s Public Warrants and from historical volatility of select peer companies’ common stock that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

Current wording

We estimate the volatility of our warrants based on implied volatility from our Public Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which we anticipate remaining at zero.