Stereotaxis (STXS) Risk Analysis

Certain of our directors and individuals or entities affiliated with them as well as other principal stockholders beneficially own or control a substantial percentage of the outstanding shares of our common stock. Accordingly, these stockholders will have substantial influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transaction. These stockholders may also delay or prevent a change of control, even if such a change of control would benefit our other stockholders. This significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors' perception that conflicts of interest may exist or arise.

As of December 31, 2024, we had 49.4 million shares of our common stock issuable upon conversion of our Series A Convertible Preferred Stock. Our Series A Convertible Preferred Stock bears dividends at a rate of six percent (6.0%) per annum, which are cumulative and accrue daily from the date of issuance on the $1,000 stated value. Such dividends will not be paid in cash, except in connection with any liquidation, dissolution or winding up of the Company or any redemption of the Series A Convertible Preferred Stock. Instead, the value of the accrued dividends is added to the liquidation preference of the Series A Convertible Preferred Stock and will increase the number of shares of common stock issuable upon conversion, which will dilute the ownership of our common stockholders. In addition, we may be obligated to issue additional shares of our common stock in connection with our 2024 acquisition of APT, which could further dilute our current stockholders' ownership. See "-Risks Related to our 2024 Acquisition of APT-Issuance of the Earnout Consideration will result in dilution to our stockholders and may adversely affect us, including the market price of our securities." In addition, a significant number of shares of our common stock are subject to issuance under our existing stock incentive plans and we may request the ability to issue additional such securities. We may also decide to raise additional funds through public or private debt or equity financing to fund our operations. We filed a universal shelf registration statement on Form S-3 with the SEC in May 2023, which was declared effective by the SEC on June 6, 2023, registering the sale up to $100.0 million of any combination of our 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. While we cannot predict the effect, if any, that future sales of debt, our common stock, other equity securities or securities exercisable for or convertible into our common stock or other equity securities or the availability of any of the foregoing for future sale, will have on the market price of our common stock, it is likely that sales of substantial amounts of our common stock (including shares issued upon the exercise of stock options and stock appreciation rights, the vesting of the CEO Performance Share Unit Award and restricted stock units, the conversion of any convertible securities outstanding now or in the future, including the Series A Convertible Preferred Stock, or under our universal shelf registration statement), will dilute the ownership of our existing stockholders and that the perception that such sales could occur, will adversely affect prevailing market prices for our common stock.

Our certificate of incorporation and bylaws, the Performance Share Unit Agreement with our CEO, and Delaware law contain provisions that might enable our management to resist a takeover. These provisions may: - discourage, delay or prevent a change in the control of our company or a change in our management;   - adversely affect the voting power of holders of common stock; and   - limit the price that investors might be willing to pay in the future for shares of our common stock.

We may be unable to generate significant revenue or grow at the rate expected by securities analysts or investors. In addition, our costs may be higher than we, securities analysts, or investors expect. If we fail to generate sufficient revenue or our costs are higher than we expect, our results of operations will suffer, which in turn could cause our stock price to decline. Our results of operations will depend upon numerous factors, including: - demand for our products;   - the performance of third-party contract manufacturers and component suppliers;   - our ability to develop sales and marketing capabilities;   - the success of our strategic relationships with two multinational fluoroscopy system manufacturers and one provider of catheters and electrophysiology mapping systems;   - our ability to develop, introduce and market integrated next generation systems and/or alternatives to our current strategic relationships with fluoroscopy system manufacturers and the catheter and electrophysiology mapping system provider on a timely basis;   - our ability to develop, introduce and market new or enhanced versions of our products on a timely basis;   - our ability to obtain regulatory clearances or approvals for our new products; and   - our ability to obtain and protect proprietary rights or revenue streams related thereto. Our operating results in any particular period may not be a reliable indication of our future performance. In some future quarters, our operating results may be below the expectations of securities analysts or investors. If this occurs the price of our common stock will likely decline.

While our common stock is traded on the NYSE American Market, trading volume may be limited or sporadic. The market price of our common stock has experienced, and may continue to experience, substantial volatility. During 2024, our common stock traded between $1.66 and $3.29 per share, on trading volume ranging from approximately 67,300 to 6.4 million shares per day. The market price of our common stock will be affected by a number of factors, including: - actual or anticipated variations in our results of operations or those of our competitors;   - the receipt or denial of regulatory approvals;   - announcements of new products, technological innovations or product advancements by us or our competitors;   - developments with respect to patents and other intellectual property rights;   - changes in earnings estimates or recommendations by securities analysts or our failure to achieve analyst earnings estimates;   - developments in our industry; and   - participants in the market for our common stock may take short positions with respect to our common stock. These factors, as well as general economic, credit, political and market conditions, may materially adversely affect the market price of our common stock. As with the stock of many other public companies, the market price of our common stock has been particularly volatile during the recent period of upheaval in the capital markets and world economy. This excessive volatility may continue for an extended period of time following the filing date of this report. Furthermore, the stock prices of many companies in the medical device industry have experienced wide fluctuations that have often been unrelated to the operating performance of these companies. Volatility in the price of our common stock on the NYSE American Market may depress the trading price of our common stock, which could, among other things, allow a potential acquirer of the Company to purchase a significant amount of our common stock at low prices. In addition, the volatility of our stock price could lead to class action securities litigation being filed against us, which could result in substantial costs and a diversion of our management resources, which could significantly harm our business.

Our common stock is currently listed on the NYSE American Market. We currently meet the continued listing standards of NYSE American. However, we cannot guarantee that we will be able to continue to comply with the required standards in order to maintain a listing of our common stock on the NYSE American. If we fail to continue to meet all applicable NYSE American requirements in the future and the NYSE American determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock, which would adversely affect our ability to obtain financing for the continuation of our operations, as a result, harming our business. This delisting could also impair the value of your investment.

If Mr. Fischel achieves all the milestones specified in the CEO Performance Award, by increasing the Company's market capitalization to $5.5 billion for the specified period, he will receive 13,000,000 shares of common stock subject to the vesting requirements in the agreement. If (i) all 13,000,000 shares of common stock subject to the PSU Agreement were to become fully vested, outstanding and held by Mr. Fischel; (ii) all other shares of common stock and stock units held by Mr. Fischel were fully vested and were outstanding; (iii) estimated dilution as a result of potential exercises or conversions from existing grants to employees and non-employee directors and the outstanding convertible preferred stock were to be considered; and (iv) there were no other dilutive events of any kind, Mr. Fischel would beneficially own approximately 10% of the outstanding shares of Stereotaxis common stock after the dilutive events described above and without considering the impact of any other potential future dilutive events or the potential sale of stock required to pay taxes upon the vesting of the restricted stock units.