Stereotaxis
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S-1/A
STEREOTAXIS, INC. filed this Form S-1/A on 06/17/2004
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from 2003 to 2004 related primarily to increased salary, benefits and travel expenses associated with hiring additional sales personnel and expanded marketing programs.

       Stock-based Compensation Expense. We recorded deferred stock compensation of approximately $184,000 in the three months ended March 31, 2004, an increase of 47% compared to the $125,000 recorded in the three months ended March 31, 2003. The increase in 2004 compared to 2003 was primarily attributable to the increase in the deemed fair value of our common stock and to the issuance of stock options to certain non-employees. An increase in the deemed value of the common stock results in additional stock-based compensation expense for all outstanding non-employee awards which are subject to periodic remeasurement using the Black-Scholes valuation method. As of March 31, 2004, approximately $549,000 of deferred compensation is subject to periodic remeasurement.

       Interest Income. Interest income decreased 7% from $102,000 for the three months ended March 31, 2003 to $95,000 for the three months ended March 31, 2004. The decrease was due primarily to lower interest rates.

       Interest Expense. Interest expense decreased 3% from approximately $114,000 for the three months ended March 31, 2003 to approximately $111,000 for the three months ended March 31, 2004. The decrease was due primarily to lower average balances on outstanding indebtedness.

 
Comparison of the Years ended December 31, 2002 and 2003

       Revenues. We generated $5.0 million in revenue in 2003 compared to $18,900 in 2002. This increase in revenues was attributable to the commencement of commercial sales of our systems following regulatory approval in 2003. We also recognized revenue in 2003 from the sale of one predecessor system for which the cost of production was charged to research and development for previous years. This system is similar to a prototype in that it was placed prior to our receipt of FDA approval and was developed and installed primarily to demonstrate the effectiveness of our new technology. Because of uncertainties regarding whether payment would be ultimately received for this system, the full cost was expensed to research and development during the system’s construction, principally during 2001. In 2003, following acceptance and the commencement of commercial use, the customer paid for the predecessor system. As a result, we recognized revenue in 2003 upon payment for the system.

       The following table shows net revenue by product line in the U.S. and Europe for the 2002 and 2003 fiscal years.

                     
December 31,

2002 2003


(in thousands)
U.S.
               
 
Systems
  $     $ 2,553  
 
Disposables, service and accessories
    19       299  
 
Other
          726  
     
     
 
   
U.S. Total
    19       3,578  
Europe
               
 
Systems
  $     $ 1,255  
 
Disposables, service and accessories
          182  
 
Other
           
     
     
 
   
Europe Total
          1,437  
Total
               
 
Systems
  $     $ 3,808  
 
Disposables, service and accessories
    19       481  
 
Other
          726  
     
     
 
   
Total
  $ 19     $ 5,015  
     
     
 

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