Stereotaxis’ second quarter operating expenses were approximately $15.5 million compared to $14.6 million in the prior year quarter. During the first six months of 2006, the Company incurred operating expenses of $30.6 million versus $24.7 million during the six months ended June 30, 2005. The 2005 operating expenses included a charge of $2.9 million for the royalty settlement relating to an in-licensed patent. The increase in quarterly and year to date spending relates primarily to additional research and development expenses devoted to system-associated enhancements, incremental sales and marketing headcount and related costs, and to the impact of additional stock compensation expense required under the newly implemented accounting standard.

Net loss for the second quarter ended June 30, 2006 was approximately $13.6 million compared to $11.3 million reported in the prior year quarter. Net loss for the 2005 quarter included the $2.9 million impact of the royalty claim settlement. Net loss per diluted share for the current quarter was $(0.41) compared to $(0.42) for the prior year quarter. Diluted earnings per share were calculated based on weighted average shares of 33.2 million and 27.3 million, respectively, for the two quarters.

For the six months ended June 30, 2006, net loss was approximately $28.2 million compared to approximately $18.7 million during the corresponding period of the prior year. The increase in net loss compared to the prior year relates to the $3.5 million reduction in gross profit related to the reduced number of system sales, as well as the increase in operating expenses between the two periods. The prior period year to date expenses included the $2.9 million impact of the royalty claim settlement. For the six months ended June 30, 2006, net loss per diluted share was $(0.88) compared to $(0.69) for the prior year period. Net loss per share was calculated based on 32.2 million and 27.2 million shares outstanding, respectively. The change in weighted average shares outstanding both for the three and six month periods relates primarily to the issuance of 5.5 million shares in the Company’s follow-on offering completed in February 2006.

After adjustment for two orders where installation dates were significantly delayed by construction and other issues and for second quarter systems revenue, at June 30, 2006, Stereotaxis had purchase orders and other commitments for its Niobe system of approximately $40 million. The Company does not include orders for disposables, service or other accessories in its backlog data. These purchase orders are subject to contingencies that are outside our control and may be revised, modified or cancelled.

“Our U.S. sales ramp and recovery from prior catheter approval delays is approaching the turning point that we had anticipated would occur in the second half of this year. Based on our solid order rate in the second quarter and to date and on our strong backlog of approximately $40M, we believe we have sufficient orders in hand to reiterate our revenue guidance for the year.,” said Bevil Hogg, President and Chief Executive Officer. “Importantly, our late stage pipeline activity in the U.S. and international markets continues to be robust and we believe we are already well-positioned for success in 2007.”

Stereotaxis ended the quarter with cash and investments of approximately $44.7 million compared to $10.7 million at year-end 2005. Total debt at June 30, 2006 amounted to $2.5 million, with approximately $9 million of funds available under a $10 million working capital line of credit.

The Company continues to expect total revenue for the year ended December 31, 2006 to be between $26 million and $30 million. To reiterate, Stereotaxis’ sales cycle, similar to other