[10-Q] Vicarious Surgical Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

Vicarious Surgical Inc. remains pre-revenue and reported a six-month net loss of $28.6 million and a three-month net loss of $13.2 million. Total assets declined to $40.9 million from $67.7 million, driven by lower cash and short-term investments. Cash and cash equivalents were $3.9 million and short-term investments were $20.1 million, totaling $23.96 million at June 30, 2025.

Management disclosed that these funds are insufficient to support operations for the next 12 months, raising substantial doubt about the company's ability to continue as a going concern and requiring pursuit of additional equity or debt financing. The company reduced operating expenses year-over-year (R&D, G&A and S&M), improving loss from operations by ~13% for the six-month comparison. The NYSE notified the company of non-compliance with market capitalization standards but accepted the company’s cure plan for the specified review period. A CEO appointment was announced as a subsequent event.

Positive

• NYSE accepted the company's cure plan to regain compliance with minimum market capitalization standards, allowing continued listing during the cure period.
• Operating expense reductions led to a ~13% improvement in loss from operations year-over-year for the six-month period.
• Board-level action and new CEO appointment were completed as subsequent events, showing active governance response to challenges.

Negative

• Going concern disclosed: management states $23.96M of cash and short-term investments at June 30, 2025 are insufficient to support operations for the next 12 months, raising substantial doubt.
• Pre-revenue company with significant losses: six-month net loss of $28.6M and accumulated deficit of $224.5M.
• Material decline in liquidity and assets: total assets fell to $40.9M from $67.7M, and short-term investments decreased from $39.4M to $20.1M.
• Reliance on external financing: the company explicitly states it must raise additional equity or debt and there is no assurance financing will be available on acceptable terms.

Insights

Financial Analyst

TL;DR: Material liquidity shortfall and continued cash burn make near-term financing the primary risk to the equity.

The company's six-month net loss of $28.6M, combined with cash and short-term investments of $23.96M, is explicitly stated as insufficient to fund operations for the next 12 months, creating substantial doubt about going concern. Operating expense reductions drove a 13% improvement in loss from operations versus the prior year period, but the business remains pre-revenue and capital-dependent. Short-term investments declined from $39.4M to $20.1M, and total assets fell by $26.8M. Investor focus should be on the company’s ability to execute its financing discussions and the NYSE cure plan that preserves its listing during the remedy period.

Corporate Governance Expert

TL;DR: Governance actions are active: NYSE cure plan accepted and new CEO appointment — important but do not eliminate liquidity risk.

The NYSE accepted Vicarious Surgical’s plan to regain compliance with listing standards, allowing continued trading during the cure period; this is a positive procedural outcome. The Board expanded and appointed a new CEO (employment and option award disclosed as a subsequent event), indicating governance intervention to address operational and strategic needs. However, these governance moves are remedial responses to declining equity and constrained liquidity; they do not, by themselves, resolve the explicit going-concern financing gap described by management.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-39384

VICARIOUS SURGICAL INC.

(Exact name of registrant as specified in its charter)

Delaware		87-2678169
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
78 Fourth Avenue Waltham, Massachusetts		02451
(Address of principal executive offices)		(Zip Code)

617-868-1700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Class A common stock, $0.0001 par value per share		RBOT		The New York Stock Exchange
Warrants: Thirty (30) whole warrants are exercisable to purchase one share of Class A common stock at $345.00 per share		RBOT WS		The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 7, 2025, the registrant had 5,298,253 shares of Class A common stock outstanding and 653,990 shares of Class B common stock outstanding.

TABLE OF CONTENTS

		Page
PART I: FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	1
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024	2
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024	4
	Notes to the Condensed Consolidated Financial Statements	5
Item 2.	Management´s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4.	Controls and Procedures	30
PART II: OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
SIGNATURES		33

In this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” the “Company” and “Vicarious Surgical” mean Vicarious Surgical Inc. (formerly D8 Holdings Corp.) and our subsidiaries. Vicarious Surgical Inc. was incorporated in the Cayman Islands on May 6, 2020. The Company’s legal name became Vicarious Surgical Inc. following a business combination between the Company and Vicarious Surgical Inc. on September 17, 2021 (the “Business Combination”).

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that relate to future events, our future operations or financial performance, or our plans, strategies and prospects. These statements are based on the beliefs and assumptions of our management team. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or performance, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or the negative of these terms, or other comparable terminology intended to identify statements about the future, although not all forward-looking statements contain these identifying words. The forward-looking statements are based on projections prepared by, and are the responsibility of, our management team. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

	●	the ability to maintain the listing of our Class A common stock on the New York Stock Exchange (“NYSE”);
	●	plans and expectations that depend on our ability to continue as a going concern;

● the success, cost and timing of our product and service development activities;

● the approval, commercialization and adoption of our initial product candidates and the success of our single-port surgical robot, called the Vicarious Surgical System, and any of our future product candidates and service offerings;

● the potential attributes and benefits of the Vicarious Surgical System and any of our other product and service offerings once commercialized;

● our ability to obtain and maintain regulatory authorization for the Vicarious Surgical System and our product and service offerings on the timeline we expect, and without unexpected restrictions and limitations of any authorized product or service offering;

● changes in U.S. and foreign laws;

● our ability to identify, in-license or acquire additional technology;

● our ability to maintain our existing license agreements and manufacturing arrangements and scale manufacturing of the Vicarious Surgical System and any future product candidates to commercial quantities;

ii

● our ability to compete with other companies currently marketing or engaged in the development of products and services for use in ventral hernia repair procedures and additional surgical applications, as well as with the use of open surgeries;

● the size and growth potential of the markets for the Vicarious Surgical System and any of our future product and service offerings, and the ability of each to serve those markets once commercialized, either alone or in partnership with others;

● our estimates regarding expenses, future revenue, capital requirements, cash runway and needs for additional financing;

● our ability to raise financing in the future;

	●	our financial performance;
	●	the ongoing effect of the reverse stock split of our Class A common stock on the price or trading of our Class A common stock, including potential continued adverse impacts on the liquidity of our Class A common stock;

● our intellectual property rights and our ability to protect or enforce these rights, and the impact on our business, results and financial condition if we are unsuccessful in doing so; and

● our ability to address economic downturns and political and market conditions beyond our control and their potential to adversely affect our business, financial condition and results of operations, including, but not limited to, increasing our expenses and cost of capital and adversely impacting our supply chain.

These forward-looking statements are based on information available as of the date of this report, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results, performance or achievements to differ materially from those indicated or implied by forward-looking statements such as those described under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K, in Part II, Item 1A of this Quarterly Report on Form 10-Q, elsewhere herein and in other filings that we make from time to time with the U.S. Securities and Exchange Commission (the “SEC”). The risks described in such filings are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

VICARIOUS SURGICAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share data)

		June 30,				December 31,
		2025				2024
Assets
Current assets:
Cash and cash equivalents		$	3,910			$	9,737
Short-term investments			20,053				39,360
Prepaid expenses and other current assets			2,104				2,601
Total current assets			26,067				51,698
Restricted cash			936				936
Property and equipment, net			3,791				4,476
Right-of-use assets			10,075				10,560
Other long-term assets			21				49
Total assets		$	40,890			$	67,719
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	721			$	1,166
Accrued expenses			3,068				5,283
Lease liabilities, current portion			1,309				1,218
Total current liabilities			5,098				7,667
Lease liabilities, net of current portion			11,889				12,567
Warrant liabilities			840				787
Total liabilities			17,827				21,021
Commitments and Contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued or outstanding at June 30, 2025 and December 31, 2024			—				—
Class A Common stock, $0.0001 par value; 300,000,000 shares authorized at June 30, 2025 and December 31, 2024; 5,294,245 and 5,265,089 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively			15				15
Class B Common stock, $0.0001 par value; 22,000,000 shares authorized at June 30, 2025 and December 31, 2024; 653,990 shares issued and outstanding at June 30, 2025 and December 31, 2024			2				2
Additional paid-in capital			247,590				242,566
Accumulated other comprehensive income			—				50
Accumulated deficit			(224,544	)			(195,935	)
Total stockholders’ equity			23,063				46,698
Total liabilities and stockholders’ equity		$	40,890			$	67,719

See accompanying notes to these condensed consolidated financial statements.

1

VICARIOUS SURGICAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share data)

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Operating expenses:
Research and development		$	9,050			$	10,924			$	18,465			$	20,892
Sales and marketing			349				1,197				1,390				2,338
General and administrative			4,120				5,592				9,411				10,592
Total operating expenses			13,519				17,713				29,266				33,822
Loss from operations			(13,519	)			(17,713	)			(29,266	)			(33,822	)
Other income (expense):
Change in fair value of warrant liabilities			40				1,590				(53	)			(277	)
Interest and other income			264				918				710				1,893
Loss before income taxes			(13,215	)			(15,205	)			(28,609	)			(32,206	)
Provision for income taxes			—				—				—				—
Net loss		$	(13,215	)		$	(15,205	)		$	(28,609	)		$	(32,206	)
Net loss per share of Class A and Class B common stock, basic and diluted		$	(2.23	)		$	(2.59	)		$	(4.82	)		$	(5.49	)
Other comprehensive loss:
Net unrealized loss on investments			(18	)			(10	)			(50	)			(61	)
Other comprehensive loss			(18	)			(10	)			(50	)			(61	)
Comprehensive net loss		$	(13,233	)		$	(15,215	)		$	(28,659	)		$	(32,267	)

See accompanying notes to these condensed consolidated financial statements.

2

VICARIOUS SURGICAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands, except share data)

		Three Months Ended June 30, 2025
		Class A & B								Additional								Accumulated Other				Total
		Common Stock								Paid-In				Accumulated				Comprehensive				Stockholders’
		Shares				Amount				Capital				Deficit				Income/(Loss)				Equity
Balance, March 31, 2025			5,931,915			$	17			$	245,370			$	(211,329	)		$	18			$	34,076
Exercise of common stock options			5,900				—				24				—				—				24
Vesting of restricted stock			10,420				—				—				—				—				—
Stock-based compensation			—				—				2,196				—				—				2,196
Net loss			—				—				—				(13,215	)			—				(13,215	)
Other comprehensive loss			—				—				—				—				(18	)			(18	)
Balance, June 30, 2025			5,948,235			$	17			$	247,590			$	(224,544	)		$	—			$	23,063

		Six Months Ended June 30, 2025
		Class A & B								Additional								Accumulated Other				Total
		Common Stock								Paid-In				Accumulated				Comprehensive				Stockholders’
		Shares				Amount				Capital				Deficit				Income/(Loss)				Equity
Balance, January 1, 2025			5,919,079			$	17			$	242,566			$	(195,935	)		$	50			$	46,698
Exercise of common stock options			8,031				—				41				—				—				41
Vesting of restricted stock			21,125				—				—				—				—				—
Stock-based compensation			—				—				4,983				—				—				4,983
Net loss			—				—				—				(28,609	)			—				(28,609	)
Other comprehensive loss			—				—				—				—				(50	)			(50	)
Balance, June 30, 2025			5,948,235			$	17			$	247,590			$	(224,544	)		$	—			$	23,063

		Three Months Ended June 30, 2024
		Class A & B								Additional								Accumulated Other				Total
		Common Stock								Paid-In				Accumulated				Comprehensive				Stockholders’
		Shares				Amount				Capital				Deficit				Income/(Loss)				Equity
Balance, March 31, 2024			5,866,525			$	17			$	233,747			$	(149,713	)		$	(41	)		$	84,010
Vesting of restricted stock			13,934				—				—				—				—				—
Stock-based compensation			—				—				3,066				—				—				3,066
Net loss			—				—				—				(15,205	)			—				(15,205	)
Other comprehensive income/(loss)			—				—				—				—				(10	)			(10	)
Balance, June 30, 2024			5,880,459			$	17			$	236,813			$	(164,918	)		$	(51	)		$	71,861

		Six Months Ended June 30, 2024
		Class A & B								Additional								Accumulated Other				Total
		Common Stock								Paid-In				Accumulated				Comprehensive				Stockholders’
		Shares				Amount				Capital				Deficit				Income/(Loss)				Equity
Balance, January 1, 2024			5,850,158			$	17			$	230,654			$	(132,712	)		$	10			$	97,969
Exercise of common stock options			858				—				2				—				—				2
Vesting of restricted stock			29,443				—				—				—				—				—
Stock-based compensation			—				—				6,157				—				—				6,157
Net loss			—				—				—				(32,206	)			—				(32,206	)
Other comprehensive income/(loss)			—				—				—				—				(61	)			(61	)
Balance, June 30, 2024			5,880,459			$	17			$	236,813			$	(164,918	)		$	(51	)		$	71,861

See accompanying notes to these condensed consolidated financial statements.

3

VICARIOUS SURGICAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

		Six Months Ended June 30,
		2025				2024
Cash flows from operating activities:
Net loss		$	(28,609	)		$	(32,206	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			782				1,058
Loss on disposal of property and equipment			0				35
Stock-based compensation			4,983				6,157
Non-cash lease expense			485				438
Change in fair value of warrant liabilities			53				277
Change in accrued interest and net accretion of discounts on short-term investments			(180	)			(607	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets			497				73
Accounts payable			(537	)			97
Accrued expenses			(2,215	)			(280	)
Lease liabilities			(587	)			(503	)
Other noncurrent assets			28				(18	)
Net cash used in operating activities			(25,300	)			(25,479	)
Cash flows from investing activities:
Purchases of property and equipment			(5	)			(16	)
Purchases of available-for-sale investments			(11,014	)			(38,892	)
Proceeds from sales and maturities of available-for-sale investments			30,451				31,813
Net cash provided by (used in) investing activities			19,432				(7,095	)
Cash flows from financing activities:
Proceeds from exercise of stock options			41				2
Net cash provided by financing activities			41				2
Change in cash, cash equivalents and restricted cash			(5,827	)			(32,572	)
Cash, cash equivalents and restricted cash, beginning of period			10,673				53,758
Cash, cash equivalents and restricted cash, end of period		$	4,846			$	21,186
Reconciliation of restricted cash:
Cash and cash equivalents			3,910				20,250
Restricted cash			936				936
		$	4,846			$	21,186

See accompanying notes to these condensed consolidated financial statements.

4

VICARIOUS SURGICAL INC.

NOTES TO Condensed consolidated FINANCIAL STATEMENTS

(in thousands, except for share and per share data)

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

Vicarious Surgical Inc. (including its subsidiaries, “Vicarious” or the “Company”) (formerly D8 Holdings Corp. (“D8”)) was incorporated in the Cayman Islands on May 6, 2020. The Company’s legal name became Vicarious Surgical Inc. following a business combination between the Company and Vicarious Surgical Inc., a Delaware corporation, on September 17, 2021 (the “Business Combination”). The Company is headquartered in Waltham, Massachusetts.

The Company is currently developing its differentiated surgical robotic system using proprietary de-coupled actuators to virtually transport surgeons inside the patient to perform minimally invasive surgical procedures.

Going Concern

Since inception, the Company has generated negative cash flows from operations and has an accumulated deficit of $224,544. The Company has not yet generated any revenue from operations. Risks to which the Company is exposed include, but are not limited to, uncertainties related to the ability to achieve a revenue-generating product; current and potential competitors with greater financial, technological, production, and marketing resources; dependence on key management personnel; and raising additional capital, as needed. The Company’s ability to continue as a going concern is dependent upon the ability to raise additional debt or equity capital. There can be no assurance that such capital will be available in sufficient amounts or at all, or on terms acceptable to the Company.

Management does not believe that the Company’s cash, cash equivalents and short-term investments balance at June 30, 2025 of $23,963 will be sufficient to support the Company’s operations for the next 12 months from the date of issuance of these financial statements, and accordingly, this raises substantial doubt about the Company’s ability to continue as a going concern. To address the Company’s capital needs, the Company must continue to actively pursue additional equity or debt financing. The Company has been in ongoing discussions with potential investors and banks with respect to such financing. Adequate financing opportunities might not be available to the Company, when and if needed, on acceptable terms or at all. If the Company is unable to obtain additional financing in sufficient amounts or on acceptable terms under such circumstances, the Company’s operating results and prospects will be adversely affected. The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the condensed consolidated financial statements prepared in accordance with US GAAP may have been condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes for the years ended December 31, 2024 and 2023. The condensed consolidated balance sheet as of December 31, 2024, included herein, was derived from the audited consolidated financial statements of the Company.

The condensed consolidated financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of June 30, 2025, the Company’s results of operations, and stockholders’ equity for the three and six-month periods ended June 30, 2025 and 2024, and the Company’s cash flows for the six-month periods ended June 30, 2025 and 2024. The operating results for the three and six-month periods ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any interim period or for any other future year.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

5

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.

Reverse Stock Split

On June 12, 2024, the Company effected a 1-for-30 reverse stock split (“Reverse Split”) of its issued and outstanding shares of Class A and Class B common stock. The Reverse Split did not change the number of authorized shares of Class A and Class B common stock. All references in these unaudited condensed financial statements to shares, share prices, exercise prices, and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the Reverse Split (see Note 10 – Stockholders’ Equity and Stock-Based Compensation – Reverse Stock Split).

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods presented. Estimates are used for, but are not limited to, the Company’s ability to continue as a going concern, fair value of financial instruments, and contingencies. Actual results may differ from those estimates.

Fair Value of Financial Instruments

US GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. The framework provides a fair value hierarchy that prioritizes the inputs for the valuation techniques. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements) and minimizes the use of unobservable inputs. The most observable inputs are used, when available. The three levels of the fair value hierarchy are described as follows:

Level 1—Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived from, or corroborated by, observable market data by correlation or other means.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Cash and Cash Equivalents

Cash and cash equivalents consist of checking accounts, money market funds, U.S. treasury securities and U.S. government agency securities. The Company considers all highly liquid investments with an original maturity of 90 days or less at the date of purchase to be cash equivalents.

6

Restricted Cash

The Company has an agreement to maintain a cash balance of $936 at June 30, 2025 and December 31, 2024 as collateral for a letter of credit related to the Company’s lease. The balance is classified as long-term on the Company’s balance sheets as the lease period ends in March 2032.

Short-Term Investments

All of the Company’s investments, which consist of U.S. treasury securities and U.S. government agency securities, are classified as available-for-sale and are carried at fair value. There were unrealized losses of $18 and $50 for the three and six-month periods ended June 30, 2025, respectively. There were unrealized losses of $10 and $61 for the three and six-month periods ended June 30, 2024, respectively.

Concentrations of Credit Risk and Off-Balance-Sheet Risk

The Company has no significant off-balance-sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high-credit standing. Periodically, there may be times when the deposits exceed the FDIC insurance limits.

Warrant Liabilities

The Company does not use derivative instruments to hedge its exposures to cash flow, market or foreign currency risks. Management evaluates all of the Company’s financial instruments, including issued warrants to purchase its Class A common stock, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

As part of the Business Combination, the Company assumed 17,249,991 public warrants issued in connection with D8’s initial public offering on July 17, 2020 (“Public Warrants”) and 10,400,000 warrants sold in a private placement to D8’s sponsor in connection with the closing of D8’s initial public offering and in connection with the conversion of D8 working capital loans (the “Private Placement Warrants”), each exercisable to purchase shares of Class A common stock. All of the Company’s outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrants as liabilities at fair value and adjusts 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 was determined from their trading value on public markets. The fair value of Private Placement Warrants was calculated using the Black-Scholes option pricing model.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts, and any resulting gain or loss is included in the determination of net loss. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets.

Impairment of Long-Lived Assets 

The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through June 30, 2025, that would indicate its long-lived assets are impaired.

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Guarantees and Indemnifications

As permitted under Delaware law, the Company indemnifies its officers, directors, consultants and employees for certain events or occurrences that happen by reason of the relationship with, or position held at, the Company. Through June 30, 2025, the Company had not experienced any losses related to these indemnification obligations, and no claims were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related liabilities have been established.

Research and Development 

Research and development costs are expensed in the period incurred. Research and development costs include payroll and personnel expenses, consulting costs, software and web services, legal, raw materials and allocated overhead such as depreciation and amortization, rent and utilities. Advance payments for goods and services to be used in future research and development activities are recorded as prepaid expenses and are expensed over the service period as the services are provided or when the goods are consumed.

Stock-Based Compensation

The Company accounts for all stock-based compensation, including stock options, performance-based stock options (“PSOs”), restricted stock units (“RSUs”), performance-based RSUs (“PSUs”), warrants and other forms of equity issued as compensation for services, at fair value and recognizes stock-based compensation expense for those equity awards, net of actual forfeitures, over the requisite service period, which is generally the vesting period of the respective award.

The fair value of the Company’s stock options and PSOs on the date of grant is determined by a Black-Scholes option pricing model utilizing key assumptions such as stock price, expected volatility and expected term. The Company’s estimates of these assumptions are primarily based on the fair value of the Company’s stock, historical data, and judgment regarding future trends. The Company uses its publicly traded stock price as the fair value of its common stock.

The fair value of RSUs and PSUs are based on the closing stock price on the grant date.

Income Taxes

The Company accounts for income taxes under the asset and liability method pursuant to ASC 740, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that management believes that these assets are more likely than not to be realized in the future. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense.

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Net Loss Per Share

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common stock. For the purpose of this calculation, outstanding stock options, PSOs, RSUs, PSUs and stock warrants are considered potential dilutive common stock and are excluded from the computation of net loss per share as their effect is anti-dilutive.

Accordingly, in periods in which the Company reports a net loss, such losses are not allocated to such participating securities. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to be outstanding when their effect is anti-dilutive.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (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 Financial Accounting Standards Board (“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. The Company currently takes advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies and intends to continue to do so as long as the Company qualifies as an emerging growth company. Accordingly, the information contained herein may be different than the information disclosed by other public companies. The Company’s emerging growth company status will expire on December 31, 2025.

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of the ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to improve disclosures about a public business entity’s expenses, primarily through additional disaggregation of income statement expenses. The requirements of the ASU are effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.

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3. SHORT-TERM INVESTMENTS

Short-term investments consist of U.S. treasury and U.S. government agency securities and are classified as available-for-sale. 

Available-for-sale investments are reported at fair value, with unrealized gains or losses reported in accumulated other comprehensive income. The fair values of the Company’s available-for-sale cash and cash equivalents securities are Level 1 measurements, based on quoted prices from active markets for identical assets. The fair values of our available-for-sale short-term investments securities are Level 2 measurements, based on quoted prices from inactive markets for identical assets.

The amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of the Company’s marketable securities by type of security as of June 30, 2025 and December 31, 2024 were as follows:

		June 30, 2025
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Assets:
U.S. treasury and U.S. government securities			20,053				2				(2	)			20,053
Total assets		$	20,053			$	2			$	(2	)		$	20,053

		December 31, 2024
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Assets:
U.S. treasury and U.S. government securities			39,310				59				(9	)			39,360
Total assets		$	39,310			$	59			$	(9	)		$	39,360

The aggregate fair value of available-for-sale debt securities in an unrealized loss position as of June 30, 2025 was $9,751. The Company did not have any investments in a continuous unrealized loss position for more than twelve months as of June 30, 2025. As of June 30, 2025, the Company believes that the cost basis of its available-for-sale debt securities is recoverable. No allowance for credit losses was recorded as of June 30, 2025.

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following:

		Estimated		June 30,				December 31,
		Useful Lives		2025				2024
Machinery and equipment		3 to 5 years		$	3,160			$	3,155
Furniture and fixtures		3 to 7 years			915				1,031
Computer hardware and software		3 years			1,468				1,351
Leasehold improvements		Lesser of lease term or asset life			4,507				4,416
Total property and equipment					10,050				9,953
Less accumulated depreciation					(6,259	)			(5,477	)
Property and equipment, net				$	3,791			$	4,476

Depreciation expense for the three and six-month periods ended June 30, 2025 was $413 and $782, respectively. Depreciation expense for the three and six-month periods ended June 30, 2024 was $524 and $1,058, respectively. 

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5. FAIR VALUE MEASUREMENTS

The following fair value hierarchy table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value:

		June 30, 2025
		Quoted Prices
		in Active Markets for Identical Items				Significant Other Observable Inputs				Significant Unobservable Inputs
		(Level 1)				(Level 2)				(Level 3)				Total
Assets:
Money market funds		$	641			$	—			$	—			$	641
U.S. treasury securities			—				20,053								20,053
Total assets		$	641			$	20,053			$	—			$	20,694
Liabilities:
Warrant liabilities - public warrants		$	502			$	—			$	—			$	502
Warrant liabilities - private warrants			—				—				338				338
Total liabilities		$	502			$	—			$	338			$	840

		December 31, 2024
		Quoted Prices
		in Active Markets for Identical Items				Significant Other Observable Inputs				Significant Unobservable Inputs
		(Level 1)				(Level 2)				(Level 3)				Total
Assets:
Money market funds		$	709			$	—			$	—			$	709
U.S. treasury securities			—				39,360								39,360
Total assets		$	709			$	39,360			$	—			$	40,069
Liabilities:
Warrant liabilities - public warrants		$	423			$	—			$	—			$	423
Warrant liabilities - private warrants			—				—				364				364
Total liabilities		$	423			$	—			$	364			$	787

Money market funds are classified as cash and cash equivalents. U.S. treasury securities are classified as cash equivalents when the date from initial purchase to maturity is less than 90 days. The remaining investments are classified as short-term investments.

The carrying values of prepaid expenses, right of use assets, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of the instruments. The fair values of the Company’s short-term investments are Level 2 measurements as the US government securities are not the most recent offerings and are therefore not traded in an active market.

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The fair value of the Public Warrants was determined from their trading value on public markets. The fair value of the Private Placement Warrants was calculated using the Black-Scholes option pricing model. The assumptions used in the model were the Company’s stock price, exercise price, expected term, volatility, interest rate, and dividend yield.

For the three months ended June 30, 2025, the Company recognized a gain to the statement of operations resulting from a decrease in the fair value of liabilities of $40 presented as a change in fair value of warrant liabilities on the accompanying statement of operations. For the six months ended June 30, 2025, the Company recognized a loss to the statement of operations resulting from an increase in the fair value of liabilities of $53 presented as a change in fair value of warrant liabilities on the accompanying statement of operations.

For the three months ended June 30, 2024, the Company recognized a gain to the statement of operations resulting from a decrease in the fair value of liabilities of $1,590 presented as a change in fair value of warrant liabilities on the accompanying statement of operations. For the six months ended June 30, 2024, the Company recognized a loss to the statement of operations resulting from an increase in the fair value of liabilities of $277 presented as a change in fair value of warrant liabilities on the accompanying statement of operations.

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.

The following table provides quantitative information regarding the inputs used in determining the fair value of the Company’s Level 3 liabilities:

Private Placement Warrants		As of June 30, 2025				As of December 31, 2024
Volatility			190.0	%			130.0	%
Stock price		$	7.50			$	13.16
Expected life of warrants			1.2 years				1.7 years
Risk-free rate			3.9	%			4.2	%
Dividend yield			0.00	%			0.00	%

The following table shows the change in number and value of the warrants since December 31, 2024:

		Public								Private								Total
		Shares				Value				Shares				Value				Shares				Value
December 31, 2024			17,248,601			$	423				10,400,000			$	364				27,648,601			$	787
Change in value			—			$	119				—			$	(26	)			—			$	93
March 31, 2025			17,248,601			$	542				10,400,000			$	338				27,648,601			$	880
Change in value			—			$	(40	)			—			$	—				—			$	(40	)
June 30, 2025			17,248,601			$	502				10,400,000			$	338				27,648,601			$	840

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6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

The following table summarizes the Company’s components of accrued expenses and other current liabilities:

		As of
		June 30, 2025				December 31, 2024
Compensation and benefits related		$	2,805			$	3,970
Professional services and other			263				1,313
Accrued expenses		$	3,068			$	5,283

7. COMMITMENTS AND CONTINGENCIES

From time to time, the Company may face legal claims or actions in the normal course of business. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to its legal proceedings.

8. LEASES

The Company leases its office facility under a noncancelable operating lease agreement that expires in March 2032. Lease expense for the three and six-month periods ended June 30, 2025 was $534 and $1,069, respectively. Lease expense for the three and six-month periods ended June 30, 2024 was $534 and $1,069, respectively.

A summary of the components of lease costs for the Company under ASC 842 for the six months ended June 30, 2025 and June 30, 2024, respectively, is as follows:

		June 30,
Lease costs		2025				2024
Operating lease costs		$	1,069			$	1,069
Variable lease costs			240				246
Total lease costs		$	1,309			$	1,315

Supplemental disclosure of cash flow information related to leases for the six months ended June 30, 2025 and June 30, 2024, respectively, is as follows:

		June 30,
		2025				2024
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows)		$	1,170			$	1,134

The weighted-average remaining lease term and discount rate were as follows:

		June 30,
		2025				2024
Weighted-average remaining lease term (in years)			6.8				8
Weighted-average discount rate			8.74	%			8.74	%

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The following table presents the maturity of the Company’s operating lease liabilities as of June 30, 2025:

Years Ended December 31,
2025, excluding the six months ended June 30, 2025		$	1,188
2026			2,430
2027			2,502
2028			2,574
2029			2,646
Thereafter			6,210
Total future minimum lease payments		$	17,550
Less imputed interest			(4,352	)
Carrying value of lease liabilities		$	13,198

9. INCOME TAXES

For the three and six-month periods ended June 30, 2025 and for the year ended December 31, 2024, the Company did not record a tax provision as the Company did not earn any taxable income in either period and maintains a full valuation allowance against its net deferred tax assets.

On July 4, 2025, the U.S. government enacted The One Beautiful Bill Act of 2025, (known as the "One Big Beautiful Bill Act or "OBBBA") which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. The Company is currently evaluating the impact of the new legislation but does not expect it to have a material impact on the results of operations.

10. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Reverse Stock Split

At the Company’s annual shareholder meeting held on June 10, 2024, the Company’s shareholders granted the Company’s board of directors (the “Board of Directors”) the discretion to effect a reverse stock split of the Company’s issued and outstanding Class A and Class B common stock through an amendment (the “Certificate of Amendment”) to the Company’s Certificate of Incorporation at a ratio of not less than 1-for-5 and not greater than 1-for-30. The Board of Directors approved effecting a 1-for-30 reverse stock split and authorized the filing of the Certificate of Amendment for the Reverse Split with the Secretary of State of the State of Delaware. The Reverse Split became effective in accordance with the terms of the Certificate of Amendment on June 12, 2024. The Certificate of Amendment did not change the number of authorized shares of common stock or the par value. All references in these unaudited condensed financial statements to shares, share prices, exercise prices, and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the Reverse Split.

Authorized Shares 

At June 30, 2025, the Company’s authorized shares consisted of 300,000,000 shares of Class A common stock, $0.0001 par value; and 22,000,000 shares of Class B common stock, $0.0001 par value; and 1,000,000 shares of preferred stock, par value of $0.0001 per share.

Preferred Stock

Preferred stock shares authorized may be issued from time to time in one or more series, with each series terms, voting, dividend, conversion, redemption, liquidation and other rights to be determined by the Board of Directors at the time of issuance. As of June 30, 2025, there were no shares of preferred stock issued and outstanding.

Warrants

The Company’s outstanding warrants include Public Warrants, which were issued as one-half of a redeemable Public Warrant per unit issued in D8’s initial public offering on July 17, 2020, and Private Placement Warrants sold in a private placement to D8’s sponsor (the “Sponsor”) in connection with the closing of the initial public offering and in connection with the conversion of D8 working capital loans.

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As of June 30, 2025, the Company had 17,248,601 Public Warrants exercisable for 574,953 shares of Class A common stock and 10,400,000 Private Placement Warrants exercisable for 346,666 shares of Class A common stock outstanding.

Thirty (30) whole warrants are exercisable for one share of Class A common stock at an exercise price of $345.00 per share. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The Company filed a registration statement with the SEC that was declared effective as of October 22, 2021 covering the shares of Class A common stock issuable upon exercise of the warrants and is maintaining a current prospectus relating to those shares of Class A common stock until the warrants expire, are exercised or redeemed, as specified in the warrant agreement. 

The warrants will expire on September 17, 2026 or earlier upon redemption or liquidation.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $540.00. The Company may call the Public Warrants for redemption:

● in whole and not in part;

● at a price of $0.30 per warrant;

● upon a minimum of 30 days’ prior written notice of redemption; and

● if, and only if, the last reported sale price of Class A common stock equals or exceeds $540.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $300.00. The Company may call the Public Warrants for redemption:

● in whole and not in part;

● at a price of $3.00 per warrant;

● upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the “fair market value” of the Company’s Class A common stock; and

● if, and only if, the last reported sale price of Class A common stock shares equals or exceeds $300.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.

The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) are not redeemable by the Company, (ii) may be exercised by the holders on a cashless basis and (iii) are entitled to registration rights. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. 

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Common Stock

Classes of Common Stock

Class A common stock receives one vote per share. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available for such purposes. In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of our debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the Class A common stock, then outstanding, if any.

Class B common stock receives 20 votes per share and converts into Class A common stock at a one-to-one conversion rate per share. Holders of Class B common stock will share ratably together with each holder of Class A common stock, if and when any dividend is declared by the Board of Directors. Holders of Class B common stock have the right to convert shares of their Class B common stock into fully paid and non-assessable shares of Class A common stock, on a one-to-one basis, at the option of the holder at any time. Upon the occurrence of certain events, holders of Class B common stock automatically convert into Class A common stock, on a one-to-one basis. In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class B common stock are entitled to share ratably in all assets remaining after payment of our debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the Class B common stock, then outstanding, if any.

Stock Based Compensation

2021 Plan — In connection with the closing of the Business Combination, the Company’s stockholders approved the Vicarious Surgical Inc. 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which 219,667 shares of Class A common stock were reserved for future equity grants under the 2021 Plan and 393,136 shares of Class A common stock were reserved for issuance under the 2021 Plan upon exercise of outstanding option awards assumed by the Company in connection with the Business Combination. On June 1, 2022, the Company’s stockholders approved an amendment to the 2021 Plan, which provides for the granting of up to 219,667 additional shares of Class A common stock under the 2021 Plan as determined by the Board of Directors. On June 1, 2023, the Company’s stockholders approved an amendment to the 2021 Plan, which provides for the granting of up to 232,361 additional shares of Class A common stock under the 2021 Plan as determined by the Board of Directors. On June 10, 2024, the Company’s stockholders approved an amendment to the 2021 Plan, which provides for the granting of up to 166,667 additional shares of Class A common stock under the 2021 Plan as determined by the Board of Directors. On June 27, 2025, the Company’s stockholders approved an amendment to the 2021 Plan, which provides for the granting of up to 311,046 additional shares of Class A common stock under the 2021 Plan as determined by the Board of Directors.

The 2021 Plan provides for the granting of incentive and nonqualified stock options, restricted stock, and other stock-based awards to employees, officers, directors, consultants, and advisors of the Company. Under the 2021 Plan, incentive and nonqualified stock options may be granted at not less than 100% of the fair market value of the Company’s common stock on the date of grant. If an incentive stock option is granted to an individual who owns more than 10% of the combined voting power of all classes of the Company’s capital stock, the exercise price may not be less than 110% of the fair market value of the Company’s common stock on the date of grant and the term of the option may not be longer than five years. PSOs include threshold, target, and maximum achievement levels based on the achievement of specific performance measures. PSOs are subject to forfeiture if applicable performance measures are not attained. The expense is recognized over the vesting period, based on the best available estimate of the number of share units expected to vest. Estimates are subsequently revised if there is any indication that the number of share units expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. In June 2024, 123,510 PSOs were granted and represent the maximum achievement levels based on the achievement of specific performance measures.

The 2021 Plan authorizes the Company to issue up to 1,542,544 shares of Class A common stock pursuant to awards granted under the 2021 Plan. The Board of Directors administers the 2021 Plan and determines the specific terms of the awards. The contractual term of options granted under the 2021 Plan is not more than 10 years. The 2021 Plan will expire on April 13, 2031 or an earlier date approved by a vote of the Company’s stockholders or Board of Directors.

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The Company issues RSUs to be settled upon vesting in shares of Class A common stock to certain employees and members of the Board of Directors. The RSUs vest over a four-year period. PSUs are issued in the form of performance share units. PSUs include threshold, target, and maximum achievement levels based on the achievement of specific performance measures. PSUs are subject to forfeiture if applicable performance measures are not attained. The expense is recognized over the vesting period, based on the best available estimate of the number of share units expected to vest. Estimates are subsequently revised if there is any indication that the number of share units expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. In July 2023, 83,680 PSUs were granted and an additional 83,680 PSUs could have been earned if certain performance measures had been overachieved. As of December 31, 2024, there are no outstanding PSUs from the July 2023 grant. The activity for common stock subject to vesting is as follows:

		Shares Subject to Vesting				Weighted Average Grant Date Fair Value
Balance of unvested shares - January 1, 2025			73,922			$	97.32
Granted			—			$	—
Vested			(10,705	)		$	119.54
Forfeited			—			$	—
Balance of unvested shares - March 31, 2025			63,217			$	93.55
Granted			—			$	—
Vested			(10,420	)		$	138.68
Forfeited			(13,740	)		$	80.56
Balance of unvested shares - June 30, 2025			39,057			$	86.08

The total stock-based compensation related to RSUs during the three and six-month periods ended June 30, 2025 was $1,264 and $2,570, respectively. As of June 30, 2025, the total unrecognized stock-based compensation expense related to unvested RSUs aggregated $3,059 and is expected to be recognized over a weighted average period of 1.22 years. The aggregate intrinsic value of RSUs granted and vested during the six months ended June 30, 2025 was $0 and $220, respectively. The aggregate intrinsic value of RSUs outstanding at June 30, 2025 was $293.

The Company grants stock options to employees at exercise prices deemed by the Board of Directors to be equal to the fair value of the Class A common stock at the time of grant. For options with a service condition, the fair value of the Company’s stock options on the date of grant is determined by a Black-Scholes pricing model utilizing key assumptions such as common stock price, risk-free interest rate, dividend yield, expected volatility and expected life. The Company’s estimates of these assumptions are primarily based on the fair value of the Company’s stock, historical data and judgement regarding future trends. The Company uses its publicly traded stock price as the fair value of its common stock.

During the six months ended June 30, 2025 and June 30, 2024, the Company granted options to purchase 433,983 and 348,810 shares, respectively, of Class A common stock, to employees and consultants with a fair value of $2,577 and $2,085 respectively, calculated using the Black-Scholes option-pricing model with the following assumptions:

			Six Months Ended June 30,
			2025				2024
Risk-free interest rate			3.84% - 4.32	%			4.24% - 4.46	%
Expected term, in years			5.50 - 6.08				5.81 - 6.31
Dividend yield			—	%			—	%
Expected volatility			102.44% - 102.53	%			92.78% - 99.51	%

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The risk-free interest rate assumption is based upon observed interest rates appropriate for the term of the related stock options. The expected life of employee and non-employee stock options was calculated using the average of the contractual term of the option and the weighted-average vesting period of the option, as the Company does not have sufficient history to use an alternative method to calculate an expected life for employees. The Company does not pay a dividend and is not expected to pay a dividend in the foreseeable future.

As of June 30, 2025, there was $6,294 of total gross unrecognized stock-based compensation expense related to unvested stock options. The costs remaining as of June 30, 2025 are expected to be recognized over a weighted-average period of 2.51 years.

Total stock-based compensation expense related to all of the Company’s stock-based awards granted is reported in the statements of operations as follows:

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Research and development		$	765			$	577			$	1,311			$	1,214
Sales and marketing			(55	)			343				274				686
General and administrative			1,486				2,146				3,398				4,257
Total		$	2,196			$	3,066			$	4,983			$	6,157

The Company plans to generally issue previously unissued shares of Class A common stock for the exercise of stock options.

There were 162,315 shares of Class A common stock available for future equity grants under the 2021 Plan at June 30, 2025.

The option activity of the 2021 Plan for the six months ended June 30, 2025, is as follows:

		Options				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (in Years)
Outstanding at January 1, 2025			709,939			$	54.49				8.13
Granted			433,983				7.30
Exercised			(8,031	)			5.18
Forfeited, expired, or cancelled			(119,926	)			61.72
Options outstanding at June 30, 2025			1,015,965			$	33.87				8.45
Options exercisable at June 30, 2025			302,612			$	82.83				6.13
Options vested and expected to vest at June 30, 2025			965,548			$	35.28				8.42

The weighted average grant date fair value of options granted during the six months ended June 30, 2025 and June 30, 2024 was $5.94 and $5.98, respectively. The aggregate intrinsic value of options exercised during the six months ended June 30, 2025 and June 30, 2024 was $30 and $9, respectively. The aggregate intrinsic value of options outstanding at June 30, 2025 was $305.

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Common Stock Reserved for Future Issuance

As of June 30, 2025 and December 31, 2024, the Company has reserved the following shares of Class A common stock for future issuance (in thousands):

		As of
		June 30,				December 31,
		2025				2024
Common stock options outstanding			1,016				710
Restricted stock units outstanding			39				74
Shares available for issuance under the 2021 Plan			162				152
Public Warrants			575				575
Private Placement Warrants			347				347
Total shares of authorized common stock reserved for future issuance			2,139				1,858

11. EMPLOYEE RETIREMENT PLAN

The Company maintains the Vicarious Surgical Inc. 401(k) plan, under Section 401(k) of the Internal Revenue Code of 1986, as amended, covering all eligible employees. Employees of the Company may participate in the 401(k) plan after one month of service and must be 18 years of age or older. The Company offers company-funded matching contributions which totaled $216 and $384 for the three and six-month periods ended June 30, 2025, respectively. For the three and six-month periods ended June 30, 2024, the company-funded matching contributions were $165 and $395, respectively.

12. Net Loss Per Share

The Company computes basic loss per share using net loss attributable to Company common stockholders and the weighted-average number of common shares outstanding during each period. Diluted loss per share includes shares issuable upon exercise of outstanding stock options and stock-based awards where the conversion of such instruments would be dilutive.

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2025				2024				2025				2024
Numerator for basic and diluted net loss per share:
Net loss		$	(13,215	)		$	(15,205	)		$	(28,609	)		$	(32,206	)
Denominator for basic and diluted net loss per share:
Weighted average shares			5,938,282				5,873,019				5,931,378				5,865,003
Net loss per share of Class A and Class B common stock – basic and diluted		$	(2.23	)		$	(2.59	)		$	(4.82	)		$	(5.49	)

For the six months ended June 30, 2025, 1,976,642 shares of the Company’s common stock were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options and warrants were greater than or equal to the average price of the common shares and were therefore anti-dilutive. As the Company had a net loss for the six months ended June 30, 2025, 1,976,642 shares were excluded from weighted average shares outstanding. For the six months ended June 30, 2024, 1,794,053 shares of the Company’s common stock were excluded from the calculation of diluted earnings per share because the exercise prices of the stock options and warrants were greater than or equal to the average price of the common shares and were therefore anti-dilutive.

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13. SEGMENT REPORTING

The Company operates as one operating segment, and therefore one reportable segment. The Company manages business activities on a consolidated basis through the development of the surgical robotic system. The Company’s determination that it operates as a single operating segment is consistent with the financial information regularly reviewed by the chief operating decision maker (“CODM”) for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting for future periods. The Company’s CODM is its Chief Executive Officer.

For the Company’s segment, the CODM uses net loss, that is reported on the consolidated statements of operations as consolidated net loss, to allocate resources (including employees, property, and financial resources), predominantly during the annual budget and forecasting process. The CODM also uses consolidated net loss, along with non-financial inputs and qualitative information, to evaluate the Company’s performance, establish compensation, monitor budget versus actual results, and decide the level of investment in the Company’s various operating activities and other capital allocation activities. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. The accounting policies for our single operating segment are the same as those described in the summary of significant accounting policies.

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Research and development		$	9,050			$	10,924			$	18,465			$	20,892
Sales and marketing			349				1,197				1,390				2,338
General and administrative			4,120				5,592				9,411				10,592
Other segment items			(304	)			(2,508	)			(657	)			(1,616	)
Loss before income taxes		$	13,215			$	15,205			$	28,609			$	32,206

14. SUBSEQUENT EVENTS

On July 30, 2025, the Board of Directors (the “Board”) of the Company appointed Stephen From as Chief Executive Officer of the Company, effective as of August 7, 2025 (the “Effective Date”). The Board also approved an increase to the size of the Board and the appointment of Mr. From to the Board to fill the resulting vacancy, in each case effective as of the Effective Date and subject to the commencement of Mr. From’s employment on that date.

In connection with Mr. From’s appointment as Chief Executive Officer, on July 30, 2025, the Company entered into an Executive Employment Agreement (the “Employment Agreement”) with Mr. From. The Employment Agreement provides that, subject to the approval of the Board and the Compensation Committee of the Board, the Company will grant to Mr. From a non-qualified stock option (the “Option”) exercisable for up to 297,600 shares of the Company’s Class A common stock. The Option will be granted as a material inducement to Mr. From entering into employment with the Company pursuant to Section 303A.08 of the New York Stock Exchange Listed Company Manual. Consequently, the Option will be made outside of the Company’s 2021 Equity Incentive Plan, as amended (the “Plan”), but will be subject to terms and conditions generally consistent with those in the Plan.

Also on July 30, 2025, the Board appointed Adam Sachs, the Company’s Chief Executive Officer through the Effective Date, as President of the Company, effective as of the Effective Date.

******

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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.

Overview

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.

We estimate there are over 45 million soft tissue surgical procedures (including an estimated 3.9 million ventral hernia procedures), addressable annually worldwide by our technology. Of these procedures, it is estimated that more than 50% are performed using open surgery, and less than 5% are performed by current robot-assisted minimally invasive surgery.

We believe this slow adoption of robot-assisted surgery has occurred because of several factors, including the following:

● Significant Capital Investment. Legacy robotic systems require high upfront acquisition costs and burdensome annual service contracts that are often prohibitively expensive, especially in outpatient settings. Based on discussion with industry sources, we estimate these capital costs to be up to $2.0 million or more per system upfront, plus an additional 10% to 20% annually for maintenance and service contracts.

● Low Utilization. In addition to the significant acquisition costs, existing robotic systems create inefficiencies and increase costs to medical facilities considering adoption. Due to their large size and limited portability, existing robotic systems require the construction of a dedicated operating room, occupying valuable real estate within the hospital. Once in place, these robotic systems require extensive set-up and operating room turnover times, which limits the number of procedures that can be performed with the robotic system.

● Limited Capabilities. Existing robotic systems have limited capabilities and are ill-suited for many outpatient procedures. Due to their limited degrees of freedom inside the abdomen, they depend on significant, complicated, robotic motion outside the body, and they have limited ability to operate in multiple quadrants, difficulty operating on the “ceiling” of the abdomen, create collisions inside and outside of the patient’s abdomen, and restrict overall access of the operating team to the patient.

● Difficult to Use. Existing robotic systems require the surgeon to develop an extensive procedure plan in advance to determine appropriate incision sites and angles for each procedure, in order to avoid collisions inside and outside of the patient’s abdomen. Surgeons must develop this plan with fewer degrees of freedom than they would employ using open surgery, restricting their natural movements. Becoming proficient at manipulating these legacy robotic systems to perform the procedures they otherwise were trained to perform via open surgery requires extensive training and several dozen procedures on live patients. As these systems are maintained in dedicated, expensive, operating rooms, obtaining access to train on the system becomes a significant impediment to adoption, resulting in more open surgeries.

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The single-port Vicarious Surgical System with advanced, miniaturized robotics and exceptional visualization is designed to address the significant limitations of open surgery and existing single- and multi-port robotic surgical approaches to improve patient outcomes and enhance adoption by hospitals and other medical facilities. The Vicarious Surgical System is designed with a fundamentally different architecture, and proprietary “de-coupled actuators,” to overcome many of the limitations of open surgery or existing robot-assisted surgical procedures with a minimally invasive and more capable robotic system. This architecture enables unprecedented dexterity inside the abdomen through an ultra-thin support tube, providing significant improvement over existing legacy robotic systems and minimizing the complications and trauma associated with open surgery. The Vicarious Surgical System has not yet been authorized by the Food and Drug Administration (the “FDA”). We have had pre-submission meetings with the FDA to align on our regulatory strategy and plan to file a de novo application with the FDA for use in ventral hernia procedures as our first indication.

The dollar amounts set forth in this section are presented in thousands, except for per share amounts.

Recent Developments

Compliance with NYSE Continued Listing Requirements

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.

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.

Financial Highlights

We are pre-revenue generating as of June 30, 2025.

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.

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Factors Affecting Results of Operations

The following factors have been important to our business and we expect them to impact our results of operations and financial condition in future periods:

Revenue

To date, we have not generated any revenue. We do not expect to generate revenue unless and until we receive FDA authorization of our product candidate. The amount of revenue, if any, from initial sales of a new product is difficult to predict and, even if we successfully commercialize our product candidate upon approval and begin generating revenue, such revenues will initially only modestly reduce our continued net losses resulting from our research and development and marketing activities which we expect to continue to increase even after market authorization is received.

Research and Development Expenses

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.

General and Administrative Expenses

General and administrative (“G&A”) expenses consist primarily of compensation for personnel, including stock-based compensation, related to executive, finance and accounting, information technology and human resource functions. Other G&A expenses include travel expenses, professional services fees (including legal, audit and tax fees), insurance costs, general corporate expenses and allocated facilities-related expenses. We expect G&A expenses to continue to increase in absolute dollars as we expand our infrastructure to both drive and support the anticipated growth due to additional legal, accounting, insurance and other expenses associated with being a public company.

Sales and Marketing Expenses

Sales and marketing (“S&M”) expenses consist primarily of compensation for personnel, including stock-based compensation, related to selling and marketing functions and physician education programs. Other S&M expenses include training, travel expenses, promotional activities, marketing initiatives, market research and analysis, conferences and trade shows, professional services fees and allocated facilities-related expenses. We expect S&M expenses to continue to increase in absolute dollars as we increase potential customers’ awareness of our presence and prepare our sales and marketing function for our product launch at a future, yet undetermined date.

Change in Fair Value of Warrant Liabilities

The change in fair value of warrant liability represents the mark-to-market fair value adjustments to the outstanding Public Warrants and Private Placement Warrants assumed as part of the consummation of the Business Combination on September 17, 2021. The change in fair value of our Private Placement Warrants is primarily the result of the change in the underlying stock price of our stock used in the Black-Scholes option pricing model while the Public Warrants are marked-to-market based on their price on the NYSE. The warrant liability was measured at fair value initially on September 17, 2021 and is remeasured at exercise, and for warrants that remain outstanding at the end of each subsequent reporting period.

Interest Income

Interest income consists primarily of interest income earned on our cash and cash equivalents and short-term investments.

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Results of Operations

The following table sets forth our historical operating results for the three months ended June 30, 2025 and 2024:

		Three months ended June 30,
(in thousands, except for per share amounts)		2025				2024				Change				%  Change
Operating expenses:
Research and development		$	9,050			$	10,924			$	(1,874	)			(17	)%
Sales and marketing			349				1,197				(848	)			(71	)%
General and administrative			4,120				5,592				(1,472	)			(26	)%
Total operating expenses			13,519				17,713				(4,194	)			(24	)%
Loss from operations			(13,519	)			(17,713	)			4,194				(24	)%
Other income (expense):
Change in fair value of warrant liabilities			40				1,590				(1,550	)			(97	)%
Interest and other income			264				918				(654	)			(71	)%
Loss before income taxes			(13,215	)			(15,205	)			1,990				(13	)%
Provision for income taxes			—				—				—				N/M
Net loss		$	(13,215	)		$	(15,205	)		$	1,990				(13	)%
Net loss per common share, basic and diluted		$	(2.23	)		$	(2.59	)		$	0.36				(14	)%
Other comprehensive gain (loss):
Net unrealized gain (loss) on investments			(18	)			(10	)			(9	)			90	%
Other comprehensive gain (loss)			(18	)			(10	)			(9	)			90	%
Comprehensive gain (loss)		$	(13,233	)		$	(15,215	)		$	1,981				(13	)%

Comparison of the Three Months ended June 30, 2025 and 2024

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.

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.

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General and Administrative Expenses. G&A expenses decreased $1,472, or 26%, to $4,120 during the three months ended June 30, 2025, compared to $5,592 during the three months ended June 30, 2024. This decrease was primarily due to decreases of $1,215 in personnel-related expenses, $155 in professional services and $112 of insurance expense. The decrease in personnel-related expense was due primarily to a decrease in average headcount of 6%, from an average of 16 people in the three months ended June 30, 2024 to an average of 15 people in the three months ended June 30, 2025.

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.

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.

Income Taxes. Our income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law. Due to historical cumulative losses and expected future losses, we maintain a full valuation allowance against our U.S. and state deferred tax assets.

The following table sets forth our historical operating results for the six months ended June 30, 2025 and 2024:

		Six months ended June 30,
(in thousands, except for per share amounts)		2025				2024				Change				%  Change
Operating expenses:
Research and development		$	18,465			$	20,892			$	(2,427	)			(12	)%
Sales and marketing			1,390				2,338				(948	)			(41	)%
General and administrative			9,411				10,592				(1,181	)			(11	)%
Total operating expenses			29,266				33,822				(4,556	)			(13	)%
Loss from operations			(29,266	)			(33,822	)			4,556				(13	)%
Other income (expense):
Change in fair value of warrant liabilities			(53	)			(277	)			224				(81	)%
Interest and other income			710				1,893				(1,183	)			(62	)%
Loss before income taxes			(28,609	)			(32,206	)			3,597				(11	)%
Provision for income taxes			—				—				—				N/M
Net loss		$	(28,609	)		$	(32,206	)		$	3,597				(11	)%
Net loss per common share, basic and diluted		$	(4.82	)		$	(5.49	)		$	0.67				(12	)%
Other comprehensive gain (loss):
Net unrealized gain (loss) on investments			(50	)			(61	)			10				(16	)%
Other comprehensive gain (loss)			(50	)			(61	)			10				(16	)%
Comprehensive gain (loss)		$	(28,659	)		$	(32,267	)		$	3,607				(11	)%

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Comparison of the Six Months ended June 30, 2025 and 2024

Research and Development Expenses. R&D expenses decreased $2,427, or 12%, to $18,465 during the six months ended June 30, 2025, compared to $20,892 during the six months ended June 30, 2024. This decrease was primarily due to a decrease of $3,108 in professional services and partially offset by an increase of $1,088 in materials and supplies.

Sales and Marketing Expenses. S&M expenses decreased $948, or 41%, to $1,390 during the six months ended June 30, 2025, compared to $2,338 during the six months ended June 30, 2024. This decrease was primarily due to a decrease of $982 in personnel-related expenses. The decrease in personnel-related expense was due primarily to an average headcount decrease of 40%, from an average of 10 people in the six months ended June 30, 2024 to an average of 6 people for the six months ended June 30, 2025.

General and Administrative Expenses. G&A expenses decreased $1,181, or 11%, to $9,411 during the six months ended June 30, 2025, compared to $10,592 during the six months ended June 30, 2024. This decrease was primarily due to a decrease of $1,244 in personnel-related expenses. The decrease in personnel-related expense was due primarily to an average headcount decrease of 6%, from an average of 16 people in the six months ended June 30, 2024 to an average of 15 people for the six months ended June 30, 2025.

Change in Fair Value of Warrant Liabilities. The change in fair value of warrant liabilities during the six months ended June 30, 2025 was a $53 loss. The change in fair value of the 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, June 30, 2025.

Interest and Other Income. Interest and other income decreased by $1,183 to $710 during the six months ended June 30, 2025, compared to $1,893 during the six months ended June 30, 2024. The decrease was primarily due to a decrease in interest income from short-term investments.

Income Taxes. Our income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law. Due to historical cumulative losses and expected future losses, we maintain a full valuation allowance against our U.S. and state deferred tax assets.

Liquidity and Capital Resources

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.

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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.

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.

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.

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.

27

Cash

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.

Cash Flows Summary

Comparison of the six months ended June 30, 2025 and June 30, 2024

		Six months ended June 30,
(in thousands)		2025				2024
Net cash used in operating activities		$	(25,300	)		$	(25,479	)
Net cash provided by (used in) investing activities		$	19,432			$	(7,095	)
Net cash provided by financing activities		$	41			$	2

Cash flows used in Operating Activities

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.

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. 

Cash flows provided by (used in) Investing Activities

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.

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.

Cash flows provided by Financing Activities

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

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

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Off-Balance Sheet Arrangements

During the periods presented, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

Critical Accounting Policies and Estimates

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.

While our significant accounting policies are described in the notes to our historical condensed consolidated financial statements (see Note 2 of the accompanying unaudited condensed consolidated financial statements), we believe the following critical accounting policy requires significant judgment and estimates in the preparation of our condensed consolidated financial statements:

Warrant Liabilities

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.

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. 

Recently Adopted Accounting Pronouncements

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.

Emerging Growth Company

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.

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.

29

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4. Controls and Procedures.

Background and Remediation of Material Weaknesses

In connection with our evaluation of disclosure controls and procedures covering our consolidated financial statements as of December 31, 2024, we identified material weaknesses in our internal control over financial reporting. We have concluded that material weaknesses exist in our disclosure controls and procedures, including internal control over financial reporting, as we do not have the necessary business processes, personnel and related internal controls to operate in a manner to satisfy the accounting and financial reporting requirements of a public company. These material weaknesses manifested themselves in ways that included the improper segregation of duties relating to review of the recording of journal entries and the reconciliation of key accounts and safeguarding of assets, as well as the analysis of accounting for certain transactions and accounts, improper controls related to information technology, ineffective risk assessment process and documentation and monitoring of control processes, accounting policies and procedures.

We are focused on designing and implementing effective internal controls measures to improve our evaluation of disclosure controls and procedures, including internal control over financial reporting, and remediate the material weaknesses. In order to remediate these material weaknesses, we have taken and plan to take the following actions:

● the hiring and continued hiring of additional accounting, finance and legal resources with public company experience; and

● implementation of additional review controls and processes requiring timely account reconciliation and analyses of certain transactions and accounts.

These actions and planned actions are subject to ongoing evaluation by management and will require testing and validation of design and operating effectiveness of internal control over financial reporting over future periods. We are committed to the continuous improvement of our internal control over financial reporting and will continue to review the internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective as of June 30, 2025 to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Securities and Exchange Act is recorded, processed, summarized and reported as and when required.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation of such internal control required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

As of the date of this Quarterly Report on Form 10-Q, to our knowledge, we are not party to and our property is not subject to any material pending legal proceedings. However, from time to time, we may become involved in legal proceedings or subject to claims that arise in the ordinary course of our business activities. Regardless of the outcome, such legal proceedings or claims could have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

Our business, results of operations, financial condition and cash flows are subject to various risks and uncertainties, including the risk factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 17, 2025, and the risk factor described below. We may disclose changes to risk factors or additional risk factors from time to time in our future filings with the SEC.

There can be no assurance that we will be able to continue to satisfy the continued listing standards of the NYSE.

On April 10, 2025, we received a notice (“the Notice”) from 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, and we therefore no longer met the NYSE’s continued listing criterion. As described in the Notice, as of April 9, 2025, our 30 trading-day average market capitalization was approximately $47.4 million and our last reported stockholders’ equity as of December 31, 2024, was approximately $46.7 million.

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 NYSE’s Minimum Market Capitalization Standard within the 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 18 months to confirm compliance with the plan.

If the NYSE delists our Class A common stock from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we and our stockholders could face significant material adverse consequences including:

● A limited availability of market quotations for our Class A common stock;

● Reduced liquidity for our Class A common stock;

● A limited amount of news and analyst coverage; and

● A decreased ability to obtain additional financing in the future.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

Not applicable.

Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the three months ended June 30, 2025.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

No director or officer adopted or terminated any Rule 10b5-1 plan or any non Rule 10b5-1 trading arrangement during the three months ended June 30, 2025.

31

Item 6. Exhibits.

Exhibit Number		Exhibit Description		Incorporated by Reference herein from Form or Schedule		Filing Date		SEC File / Registration Number
10.1+		Vicarious Surgical Inc. 2021 Equity Incentive Plan, as amended, and forms of agreement thereunder.		Form 8-K (Exhibit 10.1)		6/30/2025		001-39384
10.2+		Amended and Restated Non-Employee Director Compensation Policy		Form 8-K (Exhibit 10.2)		6/30/2025		001-39384
10.3+		Executive Employment Agreement, dated as of July 30, 2025, between Vicarious Surgical Inc. and Stephen From		Form 8-K (Exhibit 10.1)		7/31/2025		001-39384
31.1*		Certification of Principal Executive Officer Pursuant to Rules 12a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer and Principal Accounting Officer Pursuant to Rules 12a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*†		Certifications of Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith.
†	The certifications furnished in Exhibit 32 hereto are deemed to accompany this Quarterly Report and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.
+	Management contract or compensatory plan or arrangement.

32

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	VICARIOUS SURGICAL INC.
August 12, 2025	By:	/s/ Stephen From
		Stephen From
		Chief Executive Officer
		(Principal Executive Officer)
August 12, 2025	By:	/s/ Sarah Romano
		Sarah Romano
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

33

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FAQ

What was Vicarious Surgical (RBOT)’s net loss for the six months ended June 30, 2025?

The company reported a $28.6 million net loss for the six months ended June 30, 2025.

Does the RBOT 10-Q state the company can operate for the next 12 months without additional financing?

No. Management explicitly states the $23.96 million of cash and short-term investments at June 30, 2025 are insufficient to support operations for the next 12 months, raising substantial doubt about going concern.

What liquidity and asset changes did RBOT report in this 10-Q?

Total assets declined to $40.9M from $67.7M; cash and cash equivalents were $3.9M and short-term investments were $20.1M at June 30, 2025.

Is RBOT currently generating revenue according to the filing?

No. The filing states the company is pre-revenue and has not generated revenue from operations as of June 30, 2025.

What action did the NYSE take regarding RBOT's listing status?

The NYSE notified the company of non-compliance with minimum market capitalization standards, and subsequently accepted the company’s plan to address the deficiency within the cure period, allowing continued listing during review.

Were there any leadership changes disclosed in the 10-Q?

Yes. As a subsequent event, the Board appointed Stephen From as Chief Executive Officer effective August 7, 2025, and approved an employment agreement including an option award.