Sensus Healthcare, Inc.

Previous 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.

Current wording

**Revenues.**Revenues were $7.3 million for the three months ended June 30, 2025 compared to $9.2 million for the three months ended June 30, 2024, a decrease of $1.9 million, or 20.7%. The decrease was primarily driven by a lower number of units sold to a large customer in the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous wording

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

Current wording

**Cost of sales.**Cost of sales was $4.4 million for the three months ended June 30, 2025 compared to $3.8 million for the three months ended June 30, 2024, an increase of $0.6 million, or 15.8%. The increase in cost of sales was primarily related to higher costs of servicing systems and the cost associated with the new placement program in the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous 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.

Current wording

**Gross profit.**Gross profit was $2.9 million for the three months ended June 30, 2025 compared to $5.4 million for the three months ended June 30, 2024, a decrease of $2.5 million, or 46.3%. Our overall gross profit percentage was 39.7% in the three months ended June 30, 2025 compared to 58.7% in the corresponding period in 2024. The decrease in gross profit was primarily driven by lower sales, higher costs of servicing systems, and the cost associated with the new placement program in the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Previous 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.

Current wording

**General and administrative.**General and administrative expense was $2.0 million for the three months ended June 30, 2025 compared to $1.6 million for the three months ended June 30, 2024, an increase of $0.4 million, or 25.0%. The net increase in general and administrative expense was primarily due to higher professional fees (legal and consult) and compensation.

Previous 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.

Current wording

**Selling and marketing.**Selling and marketing expense was $1.4 million for the three months ended June 30, 2025 compared to $1.0 million for the three months ended June 30, 2024, an increase of $0.4 million, or 40.0%. The increase was primarily driven by an increase in tradeshow costs, costs related to clinical studies, and payroll cost due to an increase in headcount.

Previous wording

Research and development. Research and development expense was $2.6 million for the three months ended March 31, 2025 compared to $0.9 million for the three months ended March 31, 2024, an increase of $1.7 million, or 188.9%. The increase was primarily due to significant lobbying costs related to billing code reimbursement, increased headcount and existing product development cost.

Current wording

Research and development. Research and development expense was $4.1 million for the six months ended June 30, 2025 compared to $1.8 million for the six months ended June 30, 2024, an increase of $2.3 million, or 127.8%. The increase was primarily due to significant lobbying costs related to billing code reimbursement, increased headcount, and an increase in product development costs related to next generation systems.

Previous wording

Income taxes. The effective tax rates for the three months ended March 31, 2025 and 2024 were (4.5%) and 26.7%, respectively. The significant decrease in the effective tax rate in the current period primarily reflects an increase in estimated tax credits expected to be generated and utilized during the year. These credits, which include federal incentives for research and development and other qualifying activities, are large in proportion to our income before taxes, resulting in a negative effective tax rate for the quarter. Looking ahead, we anticipate that our effective tax rate for the full year 2025 will continue to differ materially from the U.S. federal statutory rate of 21.0%, driven largely by the favorable impact of these tax credits relative to our pre-tax income.

Current wording

Income taxes. The effective tax rates for the six months ended June 30, 2025 and 2024 were 14.5% and 26.6%, respectively. The decrease in the effective tax rate for the six months ended June 30, 2025 compared to the prior year period was primarily due to an increase in the estimated tax credits that are expected to be generated and utilized.

Previous 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.

Current wording

Cash and cash equivalents were $22.2 million at June 30, 2025 compared to $22.1 million at December 31, 2024, an increase of $0.1 million. SeeCash Flowsfor details on the change in cash and cash equivalents during the six months ended June 30, 2025.

Previous 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.

Current wording

Accounts receivable was $12.6 million at June 30, 2025 compared to $19.7 million at December 31, 2024, a decrease of $7.1 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 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:

Current wording

In general terms, liquidity is a measurement of the Company’s ability to meet its cash needs. For the six months ended June 30, 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 $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.

Current wording

Net cash provided by operating activities was $0.4 million for the six months ended June 30, 2025, consisting of net loss of $3.6 million and non-cash activity of less than $0.1 million, offset by a decrease in net operating assets of $4.1 million, primarily driven by a $7.1 million decrease in accounts receivable and a $3.2 million increase in inventories. 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, deferred income taxes, 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 $4.0 million for the six months ended June 30, 2024, consisting of net income of $3.9 million and non-cash charges of $1.1 million, offset by an increase in net operating assets of $9.0 million, primarily driven by a $7.7 million increase in accounts receivable and a $1.0 million increase in inventories. 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.

Previous 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.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 reflected $34 thousand of purchases of property and equipment. Net cash used in investing activities for the six months ended June 30, 2024 reflected $0.2 million of purchases of property and equipment.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2025 reflected $0.3 million of repurchases of common stock. No cash was provided by or used in financing activities for the three months ended March 31, 2024.

Current wording

Net cash used in financing activities for the six months ended June 30, 2025 reflected $0.3 million of repurchases of common stock. Net cash provided by financing activities for the six months ended June 30, 2024 reflected $17 thousand of exercised stock options.

Previous 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.

Current wording

During the first and second quarters 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 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.

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 revenue recognition 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.