Sensus Healthcare Inc

Previous wording

Sensus is a medical device company committed to providing highly effective, non-invasive and cost-effective treatments for both oncological and non-oncological skin conditions.

Current wording

Sensus Healthcare, Inc. (together, with its subsidiaries, Sensus Medical Devices Ltd. and Sensus Healthcare Services, LLC, unless the context otherwise indicates, “Sensus,” “we,” “us,” “our,” or the “Company”) is a medical device company committed to providing highly effective, non-invasive and cost-effective treatments for both oncological and non-oncological skin conditions. The Company uses a proprietary low-energy X-ray technology known as superficial radiation therapy (“SRT”), which is based on over a decade of dedicated research and development, and has successfully incorporated SRT into a portfolio of treatment devices: the SRT-100 TM, SRT-100+TM and SRT-100 Vision TM. To date, SRT technology has been used to effectively and safely treat oncological and non-oncological skin conditions in hundreds of thousands of patients around the world.

Previous wording

**Revenues.**Revenues were $8.8 million for the three months ended September 30, 2024 compared to $3.9 million for the three months ended September 30, 2023, an increase of $4.9 million, or 125.6%. The increase was primarily driven by a higher number of units sold to a large customer in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Current wording

**Revenues.**Revenues were $8.3 million for the three months ended March 31, 2025 compared to $10.7 million for the three months ended March 31, 2024, a decrease of $2.4 million, or 22.4%. The decrease was primarily driven by a lower number of units sold to a large customer in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Previous wording

**Cost of sales.**Cost of sales was $3.6 million for the three months ended September 30, 2024 compared to $1.9 million for the three months ended September 30, 2023, an increase of $1.7 million, or 89.5%. The increase in cost of sales was primarily related to a higher number of units sold and was fairly consistent as a percentage of revenue in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Current wording

**Cost of sales.**Cost of sales was $4.0 million for the three months ended March 31, 2025 and 2024.

Previous wording

**Gross profit.**Gross profit was $5.2 million for the three months ended September 30, 2024 compared to $2.0 million for the three months ended September 30, 2023, an increase of $3.2 million, or 160.0%. Our overall gross profit percentage was 59.1% in the three months ended September 30, 2024 compared to 51.3% in the corresponding period in 2023. The increase in gross profit was primarily driven by a higher number of units sold in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Current wording

**Gross profit.**Gross profit was $4.4 million for the three months ended March 31, 2025 compared to $6.7 million for the three months ended March 31, 2024, a decrease of $2.3 million, or 34.3%. Our overall gross profit percentage was 53.0% in the three months ended March 31, 2025 compared to 62.6% in the corresponding period in 2024. The decrease in gross profit was primarily driven by lower sales and higher costs of service in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Previous wording

**Selling and marketing.**Selling and marketing expense was $3.6 million for the nine months ended September 30, 2024 compared to $5.0 million for the nine months ended September 30, 2023, a decrease of $1.4 million, or 28.0%. The decrease was primarily attributable to the decrease in marketing agency expense, travel expense, and payroll cost due to lower headcount.

Current wording

**Selling and marketing.**Selling and marketing expense was $2.2 million for the three months ended March 31, 2025 compared to $1.3 million for the three months ended March 31, 2024, an increase of $0.9 million, or 69.2%. The increase was primarily driven by an increase in tradeshow costs, costs related to clinical studies, and payroll cost due to increase in headcount.

Previous wording

**General and administrative.**General and administrative expense was $1.6 million for the three months ended September 30, 2024 compared to $1.5 million for the three months ended September 30, 2023, an increase of $0.1 million, or 6.7%. The net increase in general and administrative expense was primarily due to higher compensation and bad debt expense, which were offset by a reduction in bank fees.

Current wording

**General and administrative.**General and administrative expense was $2.2 million for the three months ended March 31, 2025 compared to $1.6 million for the three months ended March 31, 2024, an increase of $0.6 million, or 37.5%. The net increase in general and administrative expense was primarily due to higher professional fees and compensation.

Previous wording

Other income. Other income of $0.3 million for the three months ended September 30, 2024 and 2023 relate primarily to interest income.

Current wording

Other income. Other income of $0.2 million for the three months ended March 31, 2025 and 2024 relates primarily to interest income.

Previous wording

Cash and cash equivalents at September 30, 2024 decreased $0.5 million from December 31, 2023. SeeCash Flowsfor details on the change in cash and cash equivalents during the nine months ended September 30, 2024.

Current wording

Cash and cash equivalents were $19.1 million at March 31, 2025 compared to $22.1 million at December 31, 2024, a decrease of $3.0 million. SeeCash Flowsfor details on the change in cash and cash equivalents during the three months ended March 31, 2025.

Previous wording

Accounts receivable at September 30, 2024 increased $6.4 million from December 31, 2023, primarily due to the increase in sales and concentration of sales to the Company’s primary customer that is subject to extended payment terms.

Current wording

Accounts receivable was $18.0 million at March 31, 2025 compared to $19.7 million at December 31, 2024, a decrease of $1.7 million. The decrease was primarily due to the decrease in sales and concentration of sales to the Company’s primary customer that is subject to extended payment terms.

Previous wording

In general terms, liquidity is a measurement of the Company’s ability to meet its cash needs. For the three months ended September 30, 2024, funding was derived primarily from cash generated by the sale of equipment to our customers in the ordinary course of business. The Company believes that proceeds from maturing cash equivalents, as well as the Company’s borrowing capacity under its existing line of credit and access to capital resources are sufficient to meet operating capital and funding requirements for the next 12 months from the date of this quarterly report. Please see Note 3, Debt, to the consolidated financial statements for a discussion regarding the Company’s revolving credit facility with Comerica Bank. The Company’s liquidity position and capital requirements may be impacted by a number of factors, including the following:

Current wording

In general terms, liquidity is a measurement of the Company’s ability to meet its cash needs. For the three months ended March 31, 2025, funding was derived primarily from cash generated by the sale of equipment to our customers in the ordinary course of business. The Company believes that proceeds from maturing cash equivalents, as well as the Company’s borrowing capacity under its existing line of credit and access to capital resources are sufficient to meet operating capital and funding requirements for the next 12 months from the date of this quarterly report. Please see Note 3, Debt, to the condensed consolidated financial statements for a discussion regarding the Company’s revolving credit facility with Comerica Bank. The Company’s liquidity position and capital requirements may be impacted by a number of factors, including the following:

Previous wording

Net cash used in operating activities was $4 thousand for the nine months ended September 30, 2024, consisting of net income of $5.1 million and non-cash charges of $0.6 million, offset by an increase in net operating assets of $5.8 million. Cash flows provided by operating activities primarily include the receipt of revenues offset by the payment of operating expenses incurred in the normal course of business. Non-cash items consisted of credit loss expense, deferred income taxes, stock-based compensation expense, provision for product warranties, amortization of right-of-use asset and depreciation and amortization of property and equipment. Net cash used in operating activities was approximately $4.8 million for the nine months ended September 30, 2023, consisting of net loss of approximately $3.7 million, a decrease in net working capital of approximately $0.6 million, and non-cash charges of approximately $0.5 million. Cash flows provided by operating activities primarily include the receipt of revenues offset by the payment of operating expenses incurred in the normal course of business. Non-cash items consisted of credit loss expense, deferred income taxes, stock-based compensation expense, provision for product warranties, amortization of right-of-use asset, and depreciation and amortization of property and equipment.

Current wording

Net cash used in operating activities was $2.7 million for the three months ended March 31, 2025, consisting of net loss of $2.6 million and an increase in net operating assets of $0.5 million, offset by non-cash charges of $0.4 million. Cash flows provided by operating activities primarily include the receipt of revenues offset by the payment of operating expenses incurred in the normal course of business. Non-cash items consisted of stock-based compensation expense, provision for product warranties, amortization of right-of-use asset and depreciation and amortization of property and equipment. Net cash used in operating activities was approximately $8.2 million for the three months ended March 31, 2024, consisting of net income of approximately $2.3 million and non-cash charges of approximately $1.1 million, offset by an increase in net operating assets of $11.6 million. Cash flows provided by operating activities primarily include the receipt of revenues offset by the payment of operating expenses incurred in the normal course of business. Non-cash items consisted of deferred income taxes, stock-based compensation expense, provision for product warranties, amortization of right-of-use asset and depreciation and amortization of property and equipment.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2024 reflected $0.6 million of purchases of property and equipment. Net cash used in investing activities for the nine months ended September 30, 2023 reflected $0.2 million of purchases of property and equipment.

Current wording

Net cash used in investing activities for the three months ended March 31, 2025 reflected $7 thousand of purchases of property and equipment. Net cash used in investing activities for the three months ended March 31, 2024 reflected $0.2 million of purchases of property and equipment.

Previous wording

During the first three quarters of 2024, we continued to experience some increase in commodity and shipping prices and energy and labor costs which resulted in inflationary pressures across various parts of our business and operations, including on our customers, partners, and suppliers. We continue to monitor the impact of inflation and we are taking actions, such as ordering inventory in advance, to minimize its effects on our product cost and sales.

Current wording

During the first quarter of 2025, we continued to experience some increase in commodity and shipping prices and energy and labor costs which resulted in inflationary pressures across various parts of our business and operations, including on our customers, partners, and suppliers. We continue to monitor the impact of inflation and we are taking actions, such as ordering inventory in advance, to minimize its effects on our product cost and sales.

Previous wording

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. Management has identified certain accounting policies as critical to understanding the financial condition and results of operations. For a detailed discussion on the application of these and other accounting policies, see the Note 1*, Organization and Summary of Significant Accounting Policies* to the consolidated financial statements included in the 2023 Annual Report for further information.

Current wording

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. Management has not applied any critical accounting estimates but has identified certain accounting policies as critical to understanding the financial condition and results of operations. For a detailed discussion on the application of these and other accounting policies, see the Note 1*, Organization and Summary of Significant Accounting Policies* to the consolidated financial statements included in the 2024 Annual Report for further information.