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DOCUMENTS INCORPORATED BY REFERENCE
Portions of our Proxy Statement for the Annual Meeting of Stockholders to be held on May 29, 2026, are incorporated by reference in Part III.
SENSUS HEALTHCARE, INC.
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
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INTRODUCTORY NOTE
Forward-Looking Statements
This report includes statements that are, or may be deemed, “forward-looking statements.” In some cases, these statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately,” or “potential,” or negative or other variations of those terms or comparable terminology, although not all forward-looking statements contain these words.
Forward-looking statements involve risks and uncertainties because they relate to events, developments, and circumstances relating to Sensus Healthcare, Inc., our industry, and/or general economic or other conditions that may or may not occur in the future or may occur on longer or shorter timelines or to a greater or lesser degree than anticipated. In addition, even if future events, developments and circumstances are consistent with the forward-looking statements contained in this report, they may not be predictive of results or developments in future periods. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward looking statements contained in this report as a result of the following factors, among others: the level and availability of government and/or third party payor reimbursement for clinical procedures using our products, and the willingness of healthcare providers to purchase our products if the level of reimbursement declines; concentration of our customers in the U.S. and China, including the concentration of sales to one particular customer in the U.S.; the development by others of new products, treatments, or technologies that render our technology partially or wholly obsolete; the regulatory requirements applicable to us and our competitors; our ability to efficiently manage our manufacturing processes and costs; the risks arising from doing business in China and other foreign countries, including ongoing geopolitical tensions between the U.S. and China; legislation, regulation, or other governmental action that affects our products, taxes, international trade regulation (including the possibility of tariffs and fluctuations in tariffs on equipment we export or materials we import), or other aspects of our business; the performance of the Company’s information technology systems and its ability to maintain data security; the possibility that inflationary pressures continue to impact our sales; our ability to obtain and maintain the intellectual property needed to adequately protect our products, and our ability to avoid infringing or otherwise violating the intellectual property rights of third parties; and other risks described from time to time in our filings with the Securities and Exchange Commission.
To date, geopolitical uncertainties other than those relating to China have not had any significant impact on our business, but we continue to monitor developments and will address them in future disclosures, if applicable.
Any forward-looking statements that we make in this report speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date this report is filed, except as may be required by applicable law.
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PART I.
Item 1. BUSINESS
Overview
Sensus Healthcare, Inc. (together, with its subsidiaries, Sensus Medical Devices Ltd. and Sensus Healthcare Services, LLC, unless the context otherwise indicates, “Sensus,” “we,” “us,” “our,” or the “Company”) is a medical device company committed to providing highly effective, non-invasive treatments for non-melanoma skin cancer (NMSC) and post-surgical keloid scar prevention. The Company uses a proprietary low-energy X-ray technology known as superficial radiation therapy (“SRT”), which is based on decades of dedicated research and development, and has successfully incorporated SRT into a portfolio of treatment devices: the SRT-100TM, SRT-100+TM and SRT-100 VisionTM. To date, SRT technology has been used to effectively and safely treat oncological and non-oncological skin conditions of close to one-million patients around the world.
Our business was organized in 2010 and the Company, incorporated in Delaware, completed its initial public offering in 2016. The Company operates as one segment from its corporate headquarters located in Boca Raton, Florida. In February 2024, the Company formed Sensus Healthcare Services, LLC, a wholly owned subsidiary that provides operational healthcare offerings to dermatology clinics in the form of equipment, radiation oncology and physicist oversight, and on-site device operation by radiotherapy technologists. The term the Company uses for this service model is the “Fair Deal Agreement.” For further information see Note 1, Organization and Summary of Significant Accounting Policies - Description of the Business, in the notes to the consolidated financial statements in Part II, Item 8.
Our Products and Services
SRT is the Company’s core technology. As of December 31, 2025, the Company had installed 955 units in 21 countries, primarily in the United States.
SRT-100
The SRT-100 is a photon x-ray low energy SRT system that provides patients an alternative to surgery for treating non-melanoma skin cancers, including basal cell and squamous cell skin cancers and other skin conditions such as keloids. The SRT-100 is especially effective in treating primary lesions that would otherwise be difficult to treat or require extensive surgery involving sensitive areas of the head and neck regions, such as the fold in the nose, eyelids, lips, corner of the mouth, and the lining of the ear, that would otherwise lead to a less than desirable cosmetic outcome. SRT treatment procedures do not require the use of anesthetics and eliminate the need for skin grafting. The Company believes that the SRT-100 provides healthcare providers and patients with a safe, virtually painless, and substantially non-scarring treatment option for non-melanoma skin cancer and other skin conditions, such as keloids. It allows dermatologists to retain non-melanoma skin cancer patients, rather than referring them to specialists, while offering radiation oncologists an alternative to costly linear accelerator–based treatments with a process that is less invasive, more time-efficient, and improves practice economics. The SRT-100 provides the following clinical and functional advantages:
| ● | Easy touch automatic set-up procedure, including automatic x-ray tube warm-up procedures; | |
| ● | Specially designed control console for medical physicists and service technicians, providing integrated safety and back-up timer controls, automatic system conditioning procedures, calibration, x-ray output verification and system parameters, including last treatment status information; | |
| ● | Advanced patient record management with integrated enterprise workflow management; |
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| ● | Compact mobile design with a small 30” x 30” footprint and unique scissor x-ray tube arm movements, providing a large range of motion for patient access and treatment; and | |
| ● | High reliability and MTBF (“mean time between failures”) performance that provides availability for patients and practitioners and lowers the total cost of ownership. |
SRT-100 Vision
The SRT-100 Vision provides customers with additional options compared to the SRT-100 base model. These additional options allow for dedicated treatment planning and full treatment progression documentation in a patient’s record. The SRT-100 Vision provides the user with a unique SRT-tailored treatment planning application that integrates an embedded high frequency ultrasound imaging module, volumetric tumor analysis, beam margins planning, and comprehensive dosimetry parameters. This allows the user to precisely and more accurately plan and prescribe the patient-specific treatment course to maximize patient outcomes and workflow efficiency. The SRT-100 Vision also offers a comprehensive control console and workflow management that provides full record and treatment tracing, operator-level access and functional control, audio-visual patient and treated lesion monitoring, and advanced dosimetry setting and tracing.
SRT-100+
The SRT-100+ offers all the same features as the SRT-100, with the addition of:
| ● | An expanded energy range for customized, more precise treatment | |
| ● | Remote diagnostics, including operation tracking | |
| ● | New X-ray tube with extended functionality and performance | |
| ● | Advanced console and enhanced system mobility to optimize clinical practice |
Sentinel service program
The Company offers the Sentinel service program, which provides customers comprehensive protection for their systems. The Sentinel service program covers all parts and labor for the period of the contract and one annual preventive maintenance session that includes cooling system maintenance, high-voltage loop maintenance, filters and system cleaning, and system touch-ups, should these be required during the preventative maintenance session.
Sensus also provides, through the program, turnkey pre-and post-sale services that include the following:
| ● | Providing a pre-install kit for the contractors to prepare the treatment room; | |
| ● | Room retrofit and shielding; | |
| ● | System shipping coordination and installation; | |
| ● | System commissioning by a medical physicist (through a national physics network); | |
| ● | System registration with the state and daily workflow documentation preparation; | |
| ● | Clinical applications training with the customer’s SRT staff; and | |
| ● | Treating the first scheduled patients with our customers (onsite applications training). |
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Fair Deal Agreement
The Company offers the Fair Deal Agreement, a recurring revenue program that provides customers with a revenue-share turn-key solution to gain access to the Company’s image-guided superficial radiotherapy technology to treat non-melanoma skin cancer and keloids. Under this service model, the Company provides the customer with a SRT system, a radiotherapy technologist, radiation oncology and physicist oversight. The Company receives in exchange a contractual percentage of all SRT related reimbursement collected from all payors; an economic value proposition as an alternative to a direct purchase.
Sensus Healthcare Financial Services
In February 2026, the Company launched Sensus Healthcare Financial Services, a financing program through third party banks, to support the acquisition of the Company’s full line of systems through a streamlined process and flexible financing structures, including outright purchase or several leasing alternatives. The Company believes this program will improve conversion of purchase-oriented prospects by reducing administrative and financing barriers. The Company also believes that the program will complement the Company’s broader commercial strategy across independent medical practices and corporate accounts, as well as support a scalable go-to-market strategy as customer demand accelerates under the new reimbursement environment.
Sensus Link
In February 2026, the Company launched Sensus Link, a cloud-based software and connectivity solution intended to expand advanced operating capabilities across the Company’s SRT-100 system installed base. Through the combination of a new point-of-care software solution with cloud-based connectivity features, Sensus Link enables users of SRT-100 systems to access enhanced workflow, treatment documentation and operating intelligence. These capabilities historically were associated solely with more advanced image-guided and workstation platforms. The Company expect this solution to strengthen the commercial offering across both direct purchase and Fair Deal Agreement customers.
Other products
TransDermal Infusion (TDI)
TransDermal Infusion is a biophysical alternative to infuse high weight molecule modalities into the dermis for medical and aesthetic purposes without the use of needles. In 2022, the Company sourced the product from a manufacturer in Italy. The Company started developing its own TDI system in 2023. The Company is not currently offering TDI.
Lasers
Sensus, from time to time, also distributes laser devices, for the aesthetic dermatology market, which includes applications for hair removal, vascular lesions, acne treatment, epidermal pigment removal (including removal of spots, freckles, and tattoos), skin toning, and skin rejuvenation. The Company did not sell any lasers in 2024 or 2025.
Other services
Sensus provides operational healthcare services for dermatology clinics in the form of radiation oncology and physicist oversight and on-site device operation by radiotherapy technologists.
Consumables
The Company sells disposable lead shielding replacements, disposable radiation safety items, such as aprons and eye shields, ultrasound probe film, and disposable applicator tips, which are used to treat various sized lesions and different areas of the body.
Competition
The medical device industry is highly competitive and subject to rapid technological change and is significantly affected by new product introductions and market activities of other participants. Current marketed products, and any future products that the Company commercializes, will compete against healthcare providers who use other methods of treatment for the same disease or condition.
In order to grow its business, Sensus must be able to compete effectively for market acceptance of its products. Key competitive factors include improved outcomes for medical conditions, acceptance by doctors treating non-melanoma skin cancer and keloids, acceptance by the patient community, ease of use and reliability, product price and qualification for reimbursement, technical leadership and superiority, effective marketing and distribution, speed to market, and quality of client service.
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Sales and Marketing
The Company’s focus is mainly on two primary markets, private dermatology practices and radiation oncologists in both private and hospital settings. The Company currently employs a multi-tier sales strategy to optimize geographic coverage and focus on its key markets. This multi-tier sales model uses a direct sales force in the U.S., as well as international dealers and distributors. Sensus plans to continue selling and marketing the Company’s products to both the dermatology and radiation oncology markets concurrently.
Dermatology Market
Private dermatology practices in the U.S. represent the point of entry for most non-melanoma skin cancer patients. The Company believes its SRT products offer dermatologists a competitive advantage by allowing them to retain patients for the treatment of non-melanoma skin cancer, rather than having to refer them to other professionals. In addition to non-melanoma skin cancers, the Company has had a Food and Drug Administration (“FDA”) clearance to treat keloid scars since 2014. The Company’s SRT has been used by over 100 U.S. dermatology practices in the treatment of keloids. It has also been used to treat keloids in China since 2017.
Radiation Oncology Market
For licensed radiation oncologists in the U.S., the Company believes its SRT products offer a simpler, faster method of treatment with a better overall patient experience. SRT offers oncologists the ability to free up more expensive radiation equipment, such as linear accelerators, for more complex procedures while providing patients with effective, non-invasive treatment options for non-melanoma skin cancer.
Other Markets
Sensus believes that the plastic surgery and laser aesthetic markets present growth opportunities. With FDA clearance to treat keloids through SRT, plastic surgeons are recognizing the opportunity to be able to provide an effective treatment solution for this benign tumor.
Manufacturing and Supply
The Company currently uses third parties located in the U.S. to manufacture products. In 2010, the Company entered into a manufacturing agreement with RbM Services, LLC (“RbM”) pursuant to which RbM agreed to manufacture SRT-100 products. Under this agreement, the Company pays a fixed price per unit, subject to annual adjustments due to changes in the cost of materials. The agreement renews for successive one-year periods unless either party notifies the other party in writing, at least 60 days prior to the anniversary date of the agreement, that it will not renew the agreement. The Company or manufacturer may terminate the agreement upon 90 days’ prior written notice.
The Company maintains internal policies, procedures, and supplier management processes designed to ensure that RbM meets applicable quality standards, including FDA and International Organization for Standardization, or ISO, requirements. To date, Sensus has not experienced any difficulty in locating and obtaining the materials necessary to meet the demand for our products, and believes manufacturing capacity is sufficient to meet global market demand for our products for the foreseeable future.
The Company believes this third-party manufacturing relationship allows us to work with a supplier that has well-developed specific competencies while minimizing our capital investment, controlling costs, and shortening cycle times, all of which has allowed us to compete effectively with our competitors. Sensus also works with other third parties that it believes could be relied upon if we needed to change suppliers.
The Company also began contracting with another third-party supplier, Koplak, LLC, in 2025 for special projects and assistance with regard to SRT products. Having multiple supplier relationships is intended to assist the Company in ramping up inventory more quickly in the event of significantly increased demand.
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The Company has a single preferred supplier for the x-ray tubes and other major components used in its products. The Company believes this supplier has superior products; however, products of alternate suppliers would be adequate for Sensus’s products and therefore the Company does not anticipate any material disruptions to the supply of major components if there were a change in suppliers.
Intellectual Property
The Company actively seeks to protect the intellectual property that is important to our business, including seeking and maintaining patents that cover Sensus’s products. The Company also relies on trademarks to enhance, build, and maintain the integrity of the Sensus brand.
The Company possesses eight issued U.S. and Global patents. The patents relate to technology that is pertinent to the Company.
The following patents were issued between August 2007 and September 2008:
| ● | U.S. Patent No. 7,372,940: Radiation therapy system featuring rotatable filter assembly (expired September 30, 2025) |
| ● | U.S. Patent No. 7,263,170: Radiation therapy system featuring rotatable filter assembly (expired September 30, 2025) |
The following patents were issued to us in 2017:
| ● | Russia Patent No. 2633322: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires January 12, 2033) | |
| ● | China Patent No. ZL201380013491.7: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires January 12, 2033) |
The following patents were issued to Sensus in 2020:
| ● | U.S. Patent No. 10,596,392: Dermatology Radiotherapy System with hybrid Imager (expires July 28, 2038) | |
| ● | China Patent No. ZL201710929838.2 Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires August 14, 2038) |
The following patent was issued to Sensus in 2021:
| ● | U.S. Patent No. 11,027,149: Hybrid Ultrasound-Guided Superficial Radiotherapy System and Method (expires July 7, 2034) |
The following patent was issued to Sensus in 2024:
| ● | U.S. Patent No. 11,894,123: Radiotherapy Mobile and Wireless Device Workflow Management System (expires June 20, 2039) |
The Company also owns eight U.S. trademark registrations (expiring from 2025 through 2031).
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The Company also relies on trade secrets and other unpatented proprietary rights to develop and maintain a competitive position. The Company seeks to protect unpatented proprietary rights through a variety of methods, including confidentiality agreements with employees, consultants and others who may have access to this proprietary information. The Company requires all employees to execute invention assignment agreements with respect to inventions arising from their employment.
The Company can provide no assurance that any patents or trademarks will be issued or registered as a result of our pending or future applications for such intellectual property. Even if any such patents or trademarks are ultimately issued or registered, they, or any of the Company’s other intellectual property, may not provide any meaningful protection or competitive advantage. Intellectual property could be challenged, invalidated, circumvented, infringed upon, or misappropriated. In addition, third parties have claimed, and in the future may claim, that the Company or customers, licensees, or other parties indemnified by the Company are infringing upon their intellectual property rights.
Government Regulation
Sensus’s business is subject to extensive federal, state, local, and foreign laws and regulations, including those relating to the protection of the environment, health, and safety. Some of the pertinent laws and regulations have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations. In addition, these laws and regulations and their interpretations are subject to change, and new laws may be enacted. Both federal and state governmental agencies continue to subject the healthcare industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts. The Company believes that its business operations and relationships with customers and suppliers are structured to comply with all applicable legal requirements. However, it is possible that governmental entities or other third parties could interpret these laws and regulations differently and assert otherwise. Discussed below are statutes and regulations that are most relevant to the Company’s business. For the year ended December 31, 2025, we incurred $3.4 million in expenses related to regulatory compliance and quality standards.
FDA Regulation of Medical Devices
The Federal Food, Drug and Cosmetic Act (“FDCA”) and FDA regulations establish a comprehensive system for the regulation of medical devices intended for human use. Sensus’s medical device products are subject to these regulations, as well as other federal, state, and local laws and regulations. The FDA is also responsible for the overall enforcement of quality, regulatory, and statutory requirements governing medical devices.
FDA classifies medical devices into one of three classes — Class I, Class II, or Class III — depending on their level of risk and the types of controls that are necessary to assure device safety and effectiveness. The class assignment determines the type of premarketing submission or application, if any, that will be required before marketing in the U.S. The Company’s medical devices are Class II devices under the FDA’s classification system. Class II devices are deemed to present a moderate risk and are devices for which general controls alone are not sufficient to provide a reasonable assurance of safety and effectiveness. Medical devices in Class II are subject to both general controls and “special controls” — e.g., special labeling, compliance with industry standards, and post market surveillance. Unless exempted, Class II devices typically require FDA clearance before marketing, through the premarket notification (“510(k)”) process, in accordance with 21 CFR, Part 807 requirements.
Unless it is exempt from premarket review requirements, a medical device must receive marketing authorization from the FDA prior to being commercially distributed in the U.S. For Class II devices, 510(k) is the most common pathway to obtain market authorization in the US.
510(k) pathway
We have previously received FDA 510(k) clearances for our SRT-100, SRT-100 Vision, and SRT-100+ (Class II) products through the 510(k) pathway due to the requirement for special controls. To date, other available US regulatory pathways (i.e., Self-certification (Class I), Pre-market Authorization Class III, or de novo) have not been appropriate for our developed products and may involve extended review periods.
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Ongoing FDA regulation
After a device is entered into commerce in the U.S., regardless of its classification or premarket pathway, numerous additional FDA requirements generally apply. These include:
| ● | Establishment registration and device listing requirements, in accordance with 21 CFR, Part 807; | |
| ● | Quality System Regulation requirements, which govern the methods used in, and the facilities and controls used for, the design, manufacture, packaging, labeling, storage, installation, and servicing of finished devices, in accordance with 21 CFR, Part 820; | |
| ● | Labeling requirements, which mandate the inclusion of certain content in device labels and labeling, and which also prohibit the promotion of products for uncleared or unapproved (i.e., “off-label”) uses; | |
| ● | Medical Device Reporting regulation, which requires that manufacturers and importers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur, in accordance with 21 CFR, Part 803; and | |
| ● | Reports of Corrections and Removals regulation, which requires that manufacturers and importers (a) report to the FDA recalls (i.e., corrections or removals) if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health, and (b) keep records of recalls that they determine to be not reportable, all in accordance with 21 CFR, Part 806. |
The FDA enforces these requirements by inspection and market surveillance. Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include, but is not limited to, the following sanctions:
| ● | Issuance of Form 483 observations (also known as “minor non-conformances”) during a facilities inspection; | |
| ● | Untitled letters or warning letters; | |
| ● | Fines, injunctions, and civil penalties; | |
| ● | Consent Decrees, which forces improvements in the quality management system through the use of the federal courts; | |
| ● | Recall or seizure of products; | |
| ● | Operating restrictions, partial suspension or total shutdown of production; | |
| ● | Refusing 510(k) clearance or premarket approval of new products; | |
| ● | Withdrawing 510(k) clearance or premarket approvals that are already granted; and | |
| ● | Criminal prosecution. |
The Company is subject to unannounced establishment inspections by the FDA, as well as other regulatory agencies overseeing the implementation of and compliance with applicable state public health regulations. These inspections may include our suppliers’ facilities.
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Centers for Medicare and Medicaid Services (CMS) CPT Codes and Local Coverage Determinations (LCDs)
CMS is the federal agency within the U.S. Department of Health and Human Services responsible for administering the Medicare program, Medicaid, the Children’s Health Insurance Program, and the Health Insurance Marketplace. CMS sets health and safety standards for facilities, manages beneficiary enrollment, and pays claims. Sensus relies on its SRT technology and SRT is reimbursed through CPT codes that CMS establishes and sets the value for. CMS released brand new CPT codes for SRT beginning on January 1, 2026, however, the announcement of the new CPT codes, which were proposed in July, significantly impacted 2025 sales numbers for the Company, as customers anticipated use of the new codes in 2026.
In addition, an LCD is a regional policy created by Medicare Administrative Contractors that determines whether a specific medical item or service is considered reasonable, necessary, and covered under Medicare Part A or Part B within a particular geographic area. LCD’s define covered diagnosis codes, service frequency, and documentation requirements, and are stored in the Medicare Coverage Database.
International Regulations
International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country. In order to market our products in other countries, the Company must obtain regulatory approvals and comply with safety and quality regulations. The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA clearance or approval, and the requirements may differ. The European Union/European Economic Area, or EU/EEA, requires a CE conformity mark in order to market medical devices. The UK, due to Brexit, also requires a separate clearance. Many other countries, such as Australia, India, New Zealand, Pakistan, and Sri Lanka, accept CE or FDA clearance or approval, although others, such as China, Brazil, Canada and Japan, require separate regulatory filings.
In the EU/EEA, existing Sensus devices are required to comply with the essential requirements of the EU Medical Devices Directive (93/42/EEC), while any new products placed in the EU/EEA must comply with the EU Medical Device Regulation (2017/745). Compliance with these requirements entitles the Company to affix the CE marking of conformity to our medical devices, without which they cannot be commercialized in the EU/EEA. To demonstrate compliance with the essential requirements and obtain the right to affix the CE marking of conformity, the Company must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification. Except for low-risk medical devices (Class I), where the manufacturer can issue an EC Declaration of Conformity based on a self-assessment of the conformity of its products with the essential requirements of the Medical Devices Directive (existing products) or Medical Device Regulation (new products), a conformity assessment procedure requires the intervention of a Notified Body, which is an organization accredited by a Member State of the EU/EEA to conduct conformity assessments. The Notified Body typically audits and examines the quality system for the manufacture, design, and final inspection of devices before issuing a certification demonstrating compliance with the essential requirements. Based on this certification, we can draw up an EU Declaration of Conformity which allows us to affix the CE mark to our products.
Further, the advertising and promotion of Sensus’s products in the EU/EEA is subject to the laws of individual EEA Member States implementing the EU Medical Devices Directive, Directive 2006/114/EC concerning misleading and comparative advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other EU/EEA Member State laws governing the advertising and promotion of medical devices. These laws may limit or restrict the advertising and promotion of our products to the general public and may impose limitations on our promotional activities with healthcare professionals.
The Company has obtained approval to sell our products in Australia, Canada, China, Hong Kong, European Union, United Kingdom, Israel, Mexico, Russia, South Africa, South Korea, Vietnam, Taiwan, and Guatemala, and is currently seeking approval in several other countries. The Company has also received its Medical Device Single Audit Program (MDSAP) certification which allows medical device manufactures to satisfy certain regulatory requirements in USA, Canada, Japan, Australia, and Brazil through a single audit, reducing costs, minimizing operational disruptions, expediting market access, and providing more consistent and transparent regulatory oversight.
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Sales and Marketing Commercial Compliance
Federal anti-kickback laws and regulations prohibit, among other things, persons from knowingly and willfully soliciting, receiving, offering, or paying remuneration, directly or indirectly, in exchange for, or to induce either the referral of an individual, or the purchase, order, or recommendation of, any good or service paid for under federal healthcare programs such as the Medicare and Medicaid programs. Possible sanctions for violation of these anti-kickback laws include monetary fines, civil and criminal penalties, exclusion from Medicare and Medicaid programs, and forfeiture of amounts collected in violation of such prohibitions.
In addition, federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to get a false claim paid. Off-label promotion has been pursued as a violation of the federal false claims laws. Pursuant to FDA regulations, we can only market our products for cleared or approved uses. Although surgeons are permitted to use medical devices for indications other than those cleared or approved by the FDA based on their medical judgment, we are prohibited from promoting products for such off-label uses. Additionally, the majority of states in which we market our products have similar anti-kickback, false claims, anti-fee splitting, and self-referral laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers. Violations of these laws may result in substantial civil and criminal penalties.
To enforce compliance with the federal laws, the U.S. Department of Justice, or DOJ, has increased its scrutiny of interactions between healthcare companies and healthcare providers, which has led to an unprecedented level of investigations, prosecutions, convictions and settlements in the healthcare industry. Dealing with investigations can be time- and resource-consuming. Additionally, if a healthcare company settles an investigation with the DOJ or other law enforcement agencies, the company may be required to agree to additional compliance and reporting requirements as part of a consent decree or corporate integrity agreement.
U.S. and foreign government regulators have increased regulation, enforcement, inspections, and governmental investigations of the medical device industry, including increased U.S. government oversight and enforcement of the Foreign Corrupt Practices Act. Whenever a governmental authority concludes that a company is not in compliance with applicable laws or regulations, that authority can impose fines, delay or suspend regulatory clearances, institute proceedings to detain or seize the company’s products, issue a recall, impose operating restrictions, enjoin future violations, assess civil penalties against the company, or its officers or employees, and recommend criminal prosecution. Moreover, governmental authorities can ban or request the recall, repair, replacement, or refund of the cost of devices the company distributes.
Additionally, the commercial compliance environment is continually evolving in the healthcare industry as some states, including California, Massachusetts and Vermont, mandate implementation of corporate compliance programs, along with the tracking and reporting of gifts, compensation, and other remuneration to physicians. The Affordable Care Act also imposes reporting and disclosure requirements on device manufacturers for any “transfer of value” made or distributed to prescribers and other healthcare providers. Device manufacturers are also required to report and disclose any investment interests held by physicians and their family members during the preceding calendar year. Failure to submit required information may result in civil monetary penalties of up to an aggregate of $150,000 per year (and up to an aggregate of $1 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests not reported in an annual submission. The shifting compliance environment and the need to build and maintain robust and expandable systems to comply in multiple jurisdictions with different compliance or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements. The Company has implemented policies and procedures related to commercial compliance including with respect to compliance in connection with sales and marketing.
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Healthcare Fraud and Abuse
Healthcare fraud and abuse laws apply to Sensus’s business when a customer submits a claim for an item or service that is reimbursed under Medicare, Medicaid, or most other federally funded healthcare programs. The federal anti-kickback statute (the “Anti-Kickback Statute”) prohibits unlawful inducements for the referral of business reimbursable under federally funded healthcare programs, such as remuneration provided to physicians to induce them to use certain tissue products or medical devices reimbursable by Medicare or Medicaid. The Anti-Kickback Statute is subject to evolving interpretations. For example, the government has enforced the Anti-Kickback Statute to reach large settlements with healthcare companies based on sham consultant arrangements with physicians. The majority of states also have anti-kickback laws which establish similar prohibitions that may apply to items or services reimbursed by any third-party payor, including commercial insurers. Further, recently enacted amendments to the Affordable Care Act, among other things, amend the intent requirement of the Anti-Kickback Statute and criminal healthcare fraud statute. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the Affordable Care Act provides that the government may assert that a claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of false claims statutes. If a governmental authority were to conclude that we are not in compliance with applicable laws and regulations, we and our officers and employees could be subject to severe criminal and civil penalties including, for example, exclusion from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid. In addition to the Anti-Kickback Statute, the federal physician self-referral statute, commonly known as the Stark Law, prohibits physicians who have a financial relationship with an entity, including an investment, ownership, or compensation relationship, from referring Medicare patients for designated health services, which include clinical pathology services, unless an exception applies. Similarly, entities may not bill Medicare or any other party for services furnished pursuant to a prohibited referral. Many states have their own self-referral laws as well, which in some cases apply to all third-party payors, not just Medicare and Medicaid. If a governmental authority were to conclude that we are not in compliance with the Stark Law or state self-referral laws and regulations, our business could be subject to severe financial consequences, including the obligation to refund amounts billed to third-party payors in violation of such laws, civil penalties, and potentially exclusion from participation in government healthcare programs like Medicare and Medicaid. The Stark Law often is enforced through lawsuits brought under the Federal False Claims Act, violations of which trigger significant monetary penalties and treble damages.
Additionally, the civil False Claims Act prohibits knowingly presenting or causing the presentation of a false, fictitious, or fraudulent claim for payment to the U.S. government. Actions under the False Claims Act may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government. Violations of the False Claims Act can result in very significant monetary penalties and treble damages. The federal government is using the False Claims Act, and the accompanying threat of significant liability, in its investigations of healthcare providers and suppliers throughout the country for a wide variety of Medicare billing practices, obtaining multi-million and multi-billion dollar settlements in addition to individual criminal convictions. Given the significant size of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigating healthcare providers’ and suppliers’ compliance with the healthcare reimbursement rules and fraud and abuse laws. The Company has implemented policies and procedures related to compliance with applicable regulations design to prevent healthcare fraud and abuse.
Health Information Privacy
The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform services for them that involve individually identifiable health information. The HIPAA privacy and security regulations, including the expanded requirements under HITECH, establish comprehensive federal standards with respect to the use and disclosure of protected health information by covered entities and their business associates, in addition to setting standards to protect the confidentiality, integrity, and security of protected health information.
The Company has implemented policies and procedures related to compliance with the HIPAA privacy and security regulations, as required by law. The privacy and security regulations establish a “floor” and do not supersede state laws that are more stringent. Therefore, we are required to comply with both federal privacy and security regulations and varying state privacy and security laws. In addition, for healthcare data transfers from other countries relating to citizens of those countries, the Company must comply with the laws of those other countries. The federal privacy regulations restrict the ability to use or disclose patient identifiable laboratory data, without patient authorization, for purposes other than payment, treatment, or healthcare operations (as defined by HIPAA), except for disclosures for various public policy purposes and other permitted purposes outlined in the privacy regulations. HIPAA, as amended by HITECH, provides for significant fines and other penalties for wrongful use or disclosure of protected health information in violation of the privacy and security regulations, including potential civil and criminal fines and penalties. If the Company does not comply with existing or new laws and regulations related to protecting the privacy and security of health information, it could be subject to monetary fines, civil penalties, or criminal sanctions. In addition, other federal and state laws that protect the privacy and security of patient information may be subject to enforcement and interpretations by various governmental authorities and courts resulting in complex compliance issues. The Company could incur damages under state laws pursuant to an action brought by a private party for the wrongful use or disclosure of confidential health information or other private personal information. If the Company were to experience a breach of protected health information, it could be subject to significant adverse publicity in addition to possible enforcement sanctions and civil damages lawsuits. Finally, the Company may be required to incur additional costs related to ongoing HIPAA compliance as may be necessary to address evolving interpretations and enforcement of HIPAA and other health information privacy and security laws, the enactment of new laws or regulations, emerging cybersecurity threats, and other factors.
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Research and Development
Research and development costs related to development and quality and regulatory costs are expensed as incurred. For the years ended December 31, 2025 and 2024, the Company incurred research and development expenses of $7.8 million and $4.2 million, respectively. The Company expects research and development expenses incurred in 2026 to be substantially lower than those incurred in 2025.
Employees and Human Capital
At December 31, 2025, the Company had 60 employees. None of the Company’s employees are represented by a labor union or covered by a collective bargaining agreement.
The Company believes that its success depends on the ability to attract, develop, and retain key personnel. It also believes that the skills, experience, and industry knowledge of its key employees significantly benefits its operations and performance. The Company believes that it offers competitive compensation and other means of attracting and retaining key personnel.
Employee levels are managed to align with the pace of business and management believes it has sufficient human capital to operate its business successfully.
Available Information
Sensus files annual, quarterly, and current reports, proxy statements, and all amendments to these reports and other information with the SEC. Sensus makes available free-of-charge, on or through its website at http://www.sensushealthcare.com, Sensus’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and all amendments to those filings, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Our corporate governance guidelines, code of business conduct and ethics, board committee charters, and certain other corporate governance policies are also posted on the Investor Relations section of our website. The information on Sensus’s website is not incorporated by reference in this Annual Report on Form 10-K. Reports, proxy statements, and other information regarding issuers that file electronically with the SEC, including Sensus’s filings, are also available to the public from the SEC’s website at http://www.sec.gov.
Item 1A. RISK FACTORS
An investment in Sensus’s common stock contains a high degree of risk. Investors should carefully consider the following risks and uncertainties before making an investment decision with respect to our common stock. These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. Our business, including our operating results and financial conditions, could be harmed if any of these risks, as well as other risks not currently known to us or that we currently deem immaterial, were to materialize. The trading price of Sensus’s common stock could decline due to the occurrence of any of these risks. In assessing these risks, investors should also refer to the other information included in our filings with the SEC, including our financial statements and the related notes. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
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Risks Related to our Business
If third-party payors do not provide coverage and adequate reimbursement for the use of our products, it is unlikely that our products will be widely used, and our revenue will be negatively impacted.
In the U.S., the commercial success of Sensus’s existing products and any future products will depend, in part, on the extent to which governmental payors at the federal and state levels, including Medicare and Medicaid, private health insurers, and other third-party payors provide coverage for and establish adequate reimbursement levels for procedures using these products. Neither hospitals nor physicians are likely to use Sensus’s products if they do not receive adequate reimbursement payments for the procedures using these products.
Some private payors in the U.S. may base their reimbursement policies on the coverage decisions determined by CMS. Others may adopt different coverage or reimbursement policies for procedures performed using Sensus’s products, while some governmental programs, such as Medicaid, have reimbursement policies that vary from state to state, some of which may not pay an amount that supports the selling price of Sensus’s products, if at all. A Medicare national or local coverage decision denying coverage for any of the procedures performed using the Company’s products could result in private and other third-party payors also denying coverage. Medicare (Part B) and a number of private insurers in the U.S. currently cover and pay for both non-melanoma skin cancer and keloid treatments using the SRT-100. A withdrawal, or even contemplation of a withdrawal, by CMS, Medicaid or private payors of reimbursements, or any other unfavorable coverage or reimbursement decisions by government programs or private payors, could have a material adverse effect on the Company’s revenues and business.
Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis. In many international markets, a product must be approved for reimbursement before it can be cleared for sale in that country. Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. In most markets there are private insurance systems as well as government-managed systems. Sensus’s products may not be considered cost-effective by international third-party payors or governments managing healthcare systems. Furthermore, reimbursement may not be available or, if available, third-party payors’ reimbursement policies may adversely affect the Company’s ability to sell products profitably. If sufficient coverage and reimbursement are not available for Sensus’s products, in either the U.S. or internationally, the demand for these products and, consequently, the Company’s revenues and business, will be adversely affected.
Substantially all of the Company’s revenue is generated from the sale of the SRT-100 and related products, and any decline in the sales of these products will negatively impact the Company’s business, financial condition, and results of operations.
The Company is focused heavily on the development and commercialization of a limited number of products for the treatment of non-melanoma skin cancer and other skin conditions with SRT. From the Company’s inception in 2010 through December 31, 2025, revenue has primarily been derived from sales of the SRT-100 product line and related services and ancillary products. Although the Company has introduced new products, the Company expects most of revenue in the near to medium term to be derived from or related to sales of the SRT-100 product line. Because of this, any decline in the sales of these products will negatively impact the Company’s business, financial condition, and results of operations.
The Company’s technology could be superseded by new products, treatments, or technologies that gain wider acceptance among doctors and patients, which could adversely affect the Company.
The medical device industry is highly competitive and subject to rapid technological change, and is significantly affected by the introduction of new products and treatment options. The Company’s products, some of which use technologies that have been available for many years, compete for market acceptance against those of healthcare providers who use other methods of treatment for similar diseases and conditions. Our success depends on our ability to keep pace with rapid technological changes affecting the development of our products and our operations. Emerging technological trends such as artificial intelligence, machine learning, and automation are impacting many industries and business operations, including ours. If we do not adequately invest in new technology, appropriately implement new technologies, or evolve our business at sufficient speed and scale in response to such developments, or if we do not make the right strategic investments to respond to these developments, our products, results of operations, and ability to develop and maintain our business could be negatively affected. Such investments could require substantial expenditures to the extent we were to modify or adapt our existing products and services to keep pace with such new technologies. If new products, treatments, and/or technologies are developed by our competitors or other third parties more quickly or more successfully than us that gain wide acceptance among doctors and patients, including products or treatments developed by our significant customers, it could take market share away from the Company, which could adversely affect the Company’s render the Company’s products obsolete, which could impair our ability to compete effectively and adversely affect our results of operations.
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The Company’s customers, including one U.S. customer accounting for a significant portion of our sales, are concentrated in the U.S., and economic difficulties or changes in the purchasing policies or patterns of the Company’s customers in the U.S. has had and could have in the future a significant impact on our business and operating results.
Most of the Company’s sales have been made to customers located in the U.S. (92% and 96% in the years ended December 31, 2025 and 2024, respectively). Additionally, a single customer in the U.S. accounted for 52% and 73% of revenues for the years ended December 31, 2025, and December 31, 2024, respectively. Because of these concentrations, changes in economic conditions, competitive products (including any developed by our significant customers), or the loss of, reduction of business with, or less favorable terms with, our significant customer or other U.S. customers, has caused, and may cause in the future, significant fluctuations in our revenue. A reduction or delay in orders for the Company’s products for these or other reasons has in the past, and could in the future, materially harm our business and results of operations.
The Company has a single preferred supplier for the x-ray tubes and other major components used in the Company’s products and the loss of this preferred supplier could adversely affect the Company.
The Company has a single preferred supplier for the x-ray tubes and other major components used in the Company’s products. Although other suppliers exist in the market, the Company believes that our preferred supplier’s products are of a superior quality. The loss of the preferred supplier, or its inability to supply the Company with an adequate supply of these components, could hinder the Company’s ability to effectively produce the Company’s products to meet existing demand levels, especially if the Company were unable to timely procure them from other suppliers in the market, which could adversely affect the Company’s ability to commercialize products and to maintain or increase revenues.
The Company’s operations may be impaired if our information technology systems fail to perform adequately or are the subject of a data breach or cyberattack.
The Company’s information technology systems are critically important to operating business efficiently. The Company relies on information technology systems to manage business data, communications, employee information, and other business processes. The Company outsources certain business process functions to third-party providers and similarly relies on these third parties to maintain and store confidential information on their systems. The failure of these information technology systems to perform as the Company anticipates could disrupt business and could result in transaction errors, processing inefficiencies, and the loss of sales and customers, causing business and results of operations to suffer.
The Company has experienced, and expects to continue to experience, cyber security threats and incidents, none of which have been material to the Company to date. Although the Company protects its information technology systems, the Company has experienced varying degrees of cyber security threats incidents in the normal conduct of business, which include the use of computer malware, ransomware, computer hacking, viruses, worms, phishing, and other malicious activities that could result in unauthorized access, theft, misuse, loss, release, or destruction of data, account takeovers, unavailability of services, or other events. These types of threats may derive from human error, fraud, or malice on the part of external or internal parties or may result from accidental technological failure. Further, these types of threats may be exacerbated by recent developments in artificial intelligence and its increased use to produce sophisticated malware, phishing schemes, and other fraudulent activities. The development and maintenance of measures to mitigate against cyber security risks is costly and time-consuming, requiring continuous monitoring as technologies change and efforts to overcome security measures evolve.
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Although there have been no serious consequences to date, cyber security incidents or other significant disruption of our information systems or those of our customers or third-party vendors could occur, and, if they do, they could (i) disrupt the proper functioning of our networks and systems and therefore our operations; (ii) result in the unauthorized access to, and destruction, loss, theft, misappropriation, or release of confidential, sensitive, or otherwise valuable information of ours; (iii) result in a violation of applicable privacy, data protection, and other laws, subjecting us to additional regulatory scrutiny and exposing us to civil litigation, enforcement actions, governmental fines, and possible financial liability; (iv) require significant management attention and resources to remedy the damages that result; or (v) harm our reputation. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, in the event of a cyber-related incident, we may be delayed in identifying or responding to the incident, which could increase the negative impact of the incident on our business, financial condition, and results of operations.
The Company carries insurance against cyber-related incidents risks, performs penetration tests from time to time, and designs business processes to attempt to mitigate the risk of such incidents. While our cyber insurance coverage would apply in the event of certain cyber-related incidents, the amount of coverage may not be adequate depending on the magnitude of the incident. Furthermore, because cyber-related incidents are inherently difficult to predict and can take many forms, some incidents may not be covered under our cyber insurance coverage.
Sensus may be required to obtain additional funds in the future, and these funds may not be available on acceptable terms or at all.
Sensus’s operations have consumed substantial amounts of cash since its inception. Sensus may need to seek additional capital, as our existing financial resources including our revolving line of credit (which restricts the ability to incur certain indebtedness or permit certain encumbrances on assets without the prior written consent of the lender), may not allow us to conduct all of the activities that would be beneficial for future growth. If Sensus is unable to raise funds on favorable terms, or at all, it may not be able to support commercialization efforts, increase research and development activities, compete effectively, or meet debt and other contractual obligations, and the growth of our business may be negatively impacted.
The Company’s cash requirements in the future may be significantly different from current estimates and depend on many factors, including:
| ● | the results of commercialization efforts for products; | |
| ● | the need for additional capital to fund development programs; | |
| ● | the costs involved in obtaining and enforcing patents or any litigation by third parties regarding intellectual property; | |
| ● | the establishment of high-volume manufacturing and increased sales, marketing, and distribution capabilities; and | |
| ● | success in entering into collaborative relationships with other parties. |
To the extent that Sensus raises additional capital through the sale of equity or convertible debt securities, the ownership interests of the existing stockholders will be diluted. Moreover, the terms of newly issued securities may include liquidation or other preferences that adversely affect common stockholders’ rights. Debt financing, if available, may involve covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures, or declaring distributions or dividends. If Sensus raises additional funds through collaboration and licensing arrangements with third parties, the Company may have to relinquish valuable rights to technologies or products or to grant licenses on terms that are not favorable. Any of these events could adversely affect Sensus’s ability to declare dividends on its common stock and to achieve future product development and commercialization goals and could have a material adverse effect on our business, financial condition, and results of operations.
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Consolidation in the healthcare industry could adversely affect the Company’s future revenues and operating income.
The medical technology industry has experienced a significant amount of consolidation, resulting in companies with greater market presence. Health care systems and other health care companies are also consolidating, resulting in greater purchasing power for the combined companies. The disruption in the healthcare industry caused by consolidation may lead to further competition among medical device suppliers to provide goods and services, which could adversely affect the Company’s future revenues and operating income.
Pandemics, natural disasters, global climate change, acts of terrorism and global conflicts may have a negative impact on our business and operations.
Pandemics (such as the COVID-19 pandemic), natural disasters, global climate change, acts of terrorism, global conflicts or other similar events have in the past, and may in the future have, a negative impact on our business and operations. These events impact us negatively to the extent that they result in disruptions in the global and national economies and certain industries and geographies in which we operate. In addition, these or similar events may impact economic growth negatively, which could have an adverse effect on our business and operations and may have other adverse effects on us in ways that we are unable to predict.
Risks Related to our Regulatory Environment
Sensus is subject to various federal, state, and foreign healthcare laws and regulations, and a finding of failure to comply with these laws and regulations could have a material adverse effect on its business.
Sensus’s operations are, and will continue to be, directly and indirectly affected by various federal, state, and foreign healthcare laws, including, but not limited to, those described below.
| ● | The Anti-Kickback Statute, which prohibits any person or entity from knowingly and willfully offering, paying, soliciting, or receiving any remuneration, directly or indirectly, in cash or in kind, in return for or to induce the referring, ordering, leasing, purchasing, or arranging for or recommending the referring, ordering, purchasing, or leasing of any good, facility, item, or service, for which payment may be made, in whole or in part, under federal healthcare programs, such as the Medicare and Medicaid programs. | |
| ● | The Federal “Sunshine” law, which requires us to track and report annually to CMS information related to certain payments and other “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors) and teaching hospitals and to report annually to CMS ownership and investment interests held by physicians and their immediate family members. We are also subject to similar foreign “sunshine” laws or codes of conduct, which vary country by country. | |
| ● | Federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, persons or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim to, or the knowing use of false records or statements to obtain payment from, or approval by, the federal government. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals, commonly known as “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. When an entity is determined to have violated the False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim. Many of the physicians that use our products will file for reimbursement from governmental programs such as Medicare and Medicaid. As a result, we may be subject to the False Claims Act if we knowingly cause the filing of false claims. |
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| ● | HIPAA, which, among other things, created federal criminal laws that prohibit knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of or payment for healthcare benefits, items or services. |
Additionally, HIPAA, as amended by HITECH, and applicable implementing regulations, impose certain requirements relating to the privacy, security, and transmission of individually identifiable health information without appropriate authorization on entities subject to the law, such as health plans, clearinghouses, and healthcare providers and their business associates. Internationally, substantially every jurisdiction in which we operate has established its own data security and privacy legal framework with which we must comply, including the Data Protection Directive 95/46/EC and national implementation of the Directive in the member states of the European Union.
Many states have also adopted laws similar to each of the above federal laws, such as anti-kickback and false claims laws, which may be broader in scope and apply to items or services reimbursed by any third-party payor, including commercial insurers, as well as laws that restrict our marketing activities with healthcare professionals and entities, and require the Company to track and report payments and other transfers of value, including consulting fees, provided to healthcare professionals and entities. Some states mandate implementation of compliance programs to ensure compliance with these laws. Additionally, certain states require a certificate of need prior to the installation of a radiation device, such as the SRT-100. The Company is also subject to foreign fraud and abuse laws, which vary by country.
If the Company’s operations are found to be in violation of any of the laws or regulations described above or any other governmental laws or regulations that apply now or in the future, it may be subject to penalties, including administrative, civil, and criminal penalties; damages; fines; disgorgement; individual imprisonment; contractual damages; reputational harm; exclusion from governmental healthcare programs; and the curtailment or restructuring of its operations. Any of the foregoing could adversely affect the Company’s ability to operate its business and financial results.
Sensus is required to comply with medical device reporting requirements and must report certain malfunctions, deaths, and serious injuries associated with its products, which can result in voluntary corrective actions or agency enforcement actions.
Under the FDA’s medical device reporting regulations (21 CFR 803), medical device manufacturers are required to submit information to the U.S. Food and Drug Administration when they receive a report or become aware that a device has or may have caused or contributed to a death or serious injury or has or may have a malfunction that would likely cause or contribute to death or serious injury if the malfunction were to recur. All manufacturers placing medical devices on the market in the European Economic Area are legally bound to report any serious or potentially serious incidents involving devices they produce or sell (MEDDEV 2.12-1) to the competent authority in whose jurisdiction the incident occurred through the “European Vigilance” process.
If an event subject to medical device reporting requirements occurs, Sensus will need to comply with the reporting requirements, which would adversely affect its reputation and subject Sensus to actions by regulatory authorities, such as ordering recalls, imposing fines, or seizing the affected products. Furthermore, any corrective action, whether voluntary or involuntary, will require the dedication of time and capital and will distract management from business operations. Any of the foregoing would negatively impact Sensus’s reputation, business, and financial results.
Healthcare policy changes may have a material adverse effect on Sensus’s business.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, included, among other things, comparative effectiveness research, an independent payment advisory board, payment system reforms (including shared savings pilots), and other provisions, one or more of which may significantly affect the payment for, and the availability of, healthcare services and may result in fundamental changes to federal healthcare reimbursement programs, any of which may materially affect numerous aspects of our business.
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Other healthcare reform measures may result in more rigorous coverage criteria and in additional downward pressure on the reimbursement received for procedures utilizing our products. In addition, other legislative changes have been proposed and adopted since the law discussed above was enacted that may adversely affect Sensus’s revenues. Changes to existing laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on Sensus’s business and financial operations. Any reduction in reimbursement from Medicare or other government programs may result in a reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent Sensus from being able to increase revenue, attain profitability, or commercialize its devices. In addition, other legislative changes may be enacted or existing regulations, guidance, or interpretations may be changed, each of which may adversely affect our operations.
Risks Related to our Intellectual Property
If Sensus’s patents and other intellectual property rights do not adequately protect its products, it may lose market share to competitors and be unable to operate business profitably.
Sensus’s success significantly depends on its ability to protect proprietary rights to the technologies used in its products. Sensus relies on three U.S. patents and two foreign patents, as well as a combination of copyright, trade secret, and trademark laws, and nondisclosure, confidentiality, and other contractual restrictions, to protect its proprietary technology. Sensus also has patent applications currently pending and in the process of being submitted. However, these legal means afford only limited protection and may not adequately protect its rights or permit Sensus to gain or keep any competitive advantage. For example, some or all of the pending patent applications or any future pending applications may be unsuccessful. The U.S. Patent and Trademark Office may deny or require significant narrowing of claims in the pending patent applications or future patent applications, and patents issued as a result of these patent applications, if any, may not provide Sensus with significant commercial protection or be issued in a form that is advantageous. Sensus could also incur substantial costs in proceedings before the U.S. Patent and Trademark Office. These proceedings could result in adverse decisions as to the priority of its inventions and the narrowing or invalidation of claims in its issued patents. Third parties may successfully challenge issued patents and those that may be issued in the future, which would render these patents invalid or unenforceable, which in turn could limit Sensus’s ability to stop competitors from marketing and selling related products. In addition, pending patent applications include claims to aspects of Sensus’s products and procedures that are not currently protected by issued patents, and third parties may successfully patent those aspects before us or otherwise challenge our rights to these aspects.
Both the patent application process and the process of managing patent disputes can be time consuming and expensive. Competitors may be able to design around Sensus’s patents or develop products that provide outcomes that are comparable to Sensus’s products. Although Sensus has entered into confidentiality agreements and intellectual property assignment agreements with certain of its employees, consultants, and advisors in order to protect our intellectual property and other proprietary technology, these agreements may not be enforceable or may not provide meaningful protection for trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements. In addition, Sensus has not sought patent protection in all countries where it sells products. If Sensus fails to timely file a patent application in any such country or major market, Sensus may be precluded from doing so at a later date. Competitors may use Sensus’s technologies in jurisdictions where Sensus has not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories in which Sensus has patent protection that may not be sufficient to terminate infringing activities. Furthermore, the laws of some foreign countries may not protect intellectual property rights to the same extent as the laws of the U.S., if at all.
In the event a competitor infringes upon one of Sensus’s patents or other intellectual property rights, enforcing those patents and rights may be difficult and time consuming. Even if successful, litigation to defend these patents against challenges or to enforce Sensus’s intellectual property rights could be expensive and time consuming and could divert management’s attention. Moreover, Sensus may not have sufficient resources to defend patents against challenges or to enforce intellectual property rights, any of which would adversely affect its ability to compete. Any of the foregoing would negatively impact Sensus’s business, operations, and financial results.
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If Sensus’s trademarks or trade names are not adequately protected, then Sensus may be unable to build name recognition in markets of interest and its business may be adversely affected.
Sensus’s registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, declared generic, or determined to infringe other marks. Sensus may be unable to protect the rights to these trademarks and trade names, which it needs to build name recognition by potential partners or customers in markets of interest. If these trademarks are challenged, infringed upon, circumvented, or declared generic or infringing, or if Sensus is unable to establish name recognition based on these trademarks and trade names, then it may be unable to compete effectively and Sensus’s business may be adversely affected.
The medical device industry is characterized by extensive patent litigation, and if Sensus becomes subject to litigation, it could be costly, result in the diversion of management’s attention, require us to pay significant damages or royalty payments, or prevent us from marketing and selling existing or future products.
The medical device industry is characterized by extensive litigation and administrative proceedings over patent and other intellectual property rights. Determining whether a product infringes a patent involves complex legal and factual issues. As the number of participants in the market for skin cancer and general oncology devices and treatments increases, the possibility of patent infringement claims against Sensus increases. Any infringement claims, litigation or other proceedings would place a significant strain on Sensus’s financial resources, divert the attention of management from the core business and harm Sensus’s reputation. Any of the foregoing could negatively impact Sensus’s business, operations, and financial results.
Adverse outcomes in litigation or similar proceedings could adversely impact business.
Sensus may in the future be named as a party to litigation or other similar legal proceedings. Adverse outcomes in any or all of these proceedings could result in monetary damages or injunctive relief that could adversely affect its ability to continue conducting business. If an unfavorable final outcome in any such matter becomes probable and reasonably estimable, the Company’s financial condition could be materially and adversely affected.
Risks Related to the Ownership of Sensus’s Securities
We have a history of net losses prior to 2021 and we reported a net loss in 2025. If we do not return to and maintain profitability, our financial condition and the value of our common stock could suffer.
The Company has a history of net losses. The historical losses from inception through December 31, 2021 totaled $17.8 million. While the Company achieved profitability in 2021 and maintained profitability on an annual basis through 2024, the Company reported a net loss of $7.7 million during the year ended December 31, 2025. The accumulated net loss prior to 2021 was mainly related to the research and development expenses in the early stage of the Company. The Company expects to continue to incur significant expenses as it seeks to grow its business, including costs related to research and development, sales and marketing, and general and administrative functions. The Company is continuously managing expenses and pursuing strategies to improve operational efficiency and increase revenues. However, there can be no assurances that these and other actions will result in the Company returning to profitability or, if profitability is achieved, that the Company will be able to sustain profitability. The Company’s failure to achieve and maintain profitability could negatively impact our financial condition and the value of our common stock.
Limited trading activity for shares of Sensus’s common stock may contribute to price volatility.
While Sensus’s common stock is listed and traded on the Nasdaq Capital Market, there has been limited trading activity in the Company’s shares. Due to the limited trading activity of Sensus’s common stock, relativity small trades may have a significant impact on the price of our common stock.
The Company does not anticipate paying dividends for the foreseeable future. As a result, investors must rely on price appreciation of the Company’s common stock for a return on its investment in the foreseeable future.
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The Company expects to retain any funds and future earnings to support the operation, growth, and development of its business and does not anticipate paying any cash dividends on its common stock in the foreseeable future. As a result, a return on an investor’s investment in the near future will occur only if the Company’s share price appreciates. The Company’s common stock price may not appreciate in value or maintain the price at which an investor purchased these securities, and in either case, may not realize a return on investment or could lose all or part of an investment in the Company’s securities.
Any future determination to declare cash dividends will be made at the discretion of the Company’s Board of Directors (the “Board of Directors”) and will be subject to compliance with applicable laws and covenants under any credit facilities, which may restrict or limit the Company’s ability to pay dividends. For example, the Company’s current revolving line of credit restricts the ability to pay dividends or make any distributions or payments or redeem, retire, or purchase any capital stock without the prior written consent of the lender (with limited exceptions). Also, the form, frequency, and amount of dividends will depend upon the Company’s future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions, and other factors that the Board of Directors may deem relevant. Sensus may not pay dividends as a result of any of the foregoing, and in these cases, an investor would need to rely on price appreciation of the Company’s common stock for a return on investment.
Sensus’s executive officers and directors may exert control over the Company and may exercise influence over matters subject to stockholder approval.
Sensus’s executive officers and directors, together with their respective affiliates, beneficially owned approximately 9.0% of our outstanding common stock as of February 12, 2026. Accordingly, these stockholders, if they act together, may exercise substantial influence over matters requiring stockholder approval, including the election of directors and approval of corporate transactions, such as a merger. This concentration of ownership could have the effect of delaying or preventing a change in control or otherwise discourage a potential acquirer from attempting to obtain control over Sensus, which in turn could have a material adverse effect on the market value of Sensus’s common stock.
If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about Sensus, the price of Sensus’s securities and trading volume could decline.
The trading market for Sensus’s securities depends, in part, on the research and reports that securities or industry analysts publish about us. Sensus may be unable to attract or sustain coverage by well-regarded securities and industry analysts. If either none or only a limited number of securities or industry analysts cover Sensus, or if these securities or industry analysts are not widely respected within the general investment community, the trading price for Sensus’s securities would be materially and negatively impacted. In the event Sensus obtains securities or industry analyst coverage, if one or more of the analysts who cover Sensus downgrades the securities or publishes inaccurate or unfavorable research about the Company, the price of Sensus’s securities would likely decline. If one or more of these analysts cease coverage of Sensus, or fail to publish reports on Sensus regularly, demand for the Sensus’s securities could decrease, which might cause the price of its securities and trading volume to decline.
The Company’s certificate of incorporation and bylaws, and Delaware law contain provisions that could discourage another company from acquiring the Company and may prevent attempts by the Company’s stockholders to replace or remove the current directors and management.
Provisions of the Delaware General Corporation Law (“DGCL”) and the Company’s certificate of incorporation and bylaws may discourage, delay, or prevent a merger or acquisition that stockholders may consider favorable, including transactions in which an investor might otherwise receive a premium for its stock. In addition, these provisions may frustrate or prevent any attempts by the Company’s stockholders to replace or remove the current management by making it more difficult for stockholders to replace or remove directors from the Board of Directors. These provisions include:
| ● | authorizing the issuance of “blank check” preferred stock without any need for action by stockholders; |
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| ● | requiring supermajority stockholder voting to effect any merger or sale of all or substantially all of the Company’s stock and assets; | |
| ● | eliminating the ability of stockholders to call and bring business before special meetings of stockholders; | |
| ● | prohibiting stockholder action by written consent; | |
| ● | establishing advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings; | |
| ● | dividing the Board of Directors into three classes so that only one third of the directors will be up for election in any given year; and | |
| ● | providing that the Company’s directors may be removed only by the affirmative vote of at least 75% of the Company’s then-outstanding common stock and only for cause. |
In addition, the Company is subject to Section 203 of the DGCL, which may have an anti-takeover effect with respect to transactions not approved in advance by the Board of Directors, including discouraging takeover attempts that could result in a premium over the market price for shares of the Company’s common stock. These provisions will apply even if a takeover offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that the Board of Directors determines is not in the best interests of the Company and its stockholders and could also affect the price that some investors are willing to pay for the Company’s common stock.
The Company’s certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between the Company and its stockholders, which could limit a stockholder’s ability to obtain a favorable judicial forum for disputes with the Company or its directors, officers, or employees.
The Company’s certificate of incorporation provides that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the exclusive forum for: any derivative action or proceeding brought on behalf of the Company; any action asserting a breach of fiduciary duty; any action asserting a claim against the Company arising pursuant to the DGCL, the Company’s certificate of incorporation, or bylaws; or any action asserting a claim against the Company that is governed by the internal affairs doctrine. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers, or other employees, which may discourage these lawsuits against the Company and its directors, officers, and other employees. If a court were to find the choice of forum provision contained in the Company’s certificate of incorporation to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving the action in other jurisdictions, which could harm business and financial condition.
If the Company fails to maintain proper and effective internal controls, the Company’s ability to produce accurate and timely financial statements could be impaired and investors’ views of the Company or its business could be harmed, resulting in a decrease in value of the Company’s common stock.
As a public company, the Company is required to maintain internal control over financial reporting and to report any material weaknesses in the Company’s internal controls. In addition, the Company is required to furnish a report by management on the effectiveness of the internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. In addition, the Company’s independent registered public accounting firm will be required to attest to the effectiveness of the internal control over financial reporting beginning with the Company’s annual report on Form 10-K following the date on which the Company no longer qualifies as a smaller reporting company. Compliance with Section 404 of the Sarbanes-Oxley Act will require the Company to incur substantial accounting expense and expend significant management efforts. If the Company is unable to comply with the requirements of Section 404 in a timely manner, or the Company and the independent registered public accounting firm identify deficiencies in the internal control over financial reporting that are deemed to be material weaknesses, the market price of the Company’s common stock could decline and the Company could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities, which would require additional financial and management resources.
20
In connection with the preparation of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We have since enhanced our internal control environment and remediated this material weakness. However, we cannot guarantee that we will not identify different material weaknesses in the future.
Item 1B. UNRESOLVED STAFF COMMENTS
The Company has no unresolved comments from the SEC staff relating to the Company’s periodic or current reports filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Item 1C. CYBERSECURITY
Cybersecurity Risk Management and Processes
Our cybersecurity risk management program is being designed based on various cybersecurity frameworks, including National Institute of Standards and Technology and the Center for Internet Security, as well as information security standards issued by the International Organization for Standardization, including ISO 27001 and ISO 27002. The Company uses these frameworks and information security standards as a guide to identify, assess, and management cybersecurity risks relevant to the business.
In addition, the Company has a strategic plan, which encompasses the following key elements:
| ● | Establishment of a dedicated cybersecurity governance committee; | |
| ● | Standardization of cybersecurity incident response procedures and formats; | |
| ● | Conducting penetration tests on a quarterly basis; | |
| ● | Enhancement of segregation of duties to mitigate the risk of self-review of transactions within the system; |
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The Company has not identified any risks from known cybersecurity threats and did not have any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company. For a discussion of whether and how any risks from cybersecurity threats are reasonably likely to materially affect us, refer to Item 1A. Risk Factors – “The Company’s operations may be impaired if our information technology systems fail to perform adequately or are the subject of a data breach or cyberattack,” which is incorporated by reference into this Item 1C.
Cybersecurity Governance
third-party consultants to design and implement controls for the prevention, detection, mitigation, and remediation of cybersecurity risks. The CTO maintains regular communication with the Board on matters related to cybersecurity and provides updates to management on a quarterly basis. In the event of a cybersecurity incident, the Board is to be promptly notified.
Item 2. PROPERTIES
The Company’s corporate headquarters is located in Boca Raton, Florida and occupies a total of 10,356 square feet of space under a lease and a sublease that both expire in September 2027. The Company believes that the current facilities are suitable and adequate to meet the Company’s current needs and that suitable additional space will be available as and when needed. The Company’s main manufacturing function is physically located at our third-party manufacturer’s facility in Oak Ridge, Tennessee. Additional disclosures have been included within Note 6, Commitments and Contingencies, of the consolidated financial statements.
Item 3. LEGAL PROCEEDINGS
From time to time, Sensus is party to certain legal proceedings in the ordinary course of business. Management, after consultation with legal counsel, currently does not anticipate that the aggregate liability arising out of these legal proceedings will have a material effect on Sensus’s results of operations, financial position, or cash flows and have assessed that there is no need to record a liability for these legal proceedings and related contingencies. Additional disclosures have been included within Note 6, Commitments and Contingencies, of the consolidated financial statements.
Item 4. MINE SAFETY DISCLOSURE
Not applicable.
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PART II.
Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
The Company’s Class A common stock is publicly traded on the NASDAQ Capital Market under the symbol “SRTS.”
Holders
At the close of business on February 26, 2026, there were 16 common stockholders of record. This does not include “street name” or beneficial owners, whose shares are held of record by banks, brokers, and other financial institutions.
Dividends
The Company has never declared or paid any dividends on its common stock and anticipates that for the foreseeable future all earnings will be retained for use rather than paid out as dividends. Any future payment of cash dividends will be dependent upon the Company’s financial condition, results of operations, current and anticipated cash requirements, and plans for expansion, as well as other factors that the Board of Directors deems relevant. Additionally, certain contractual agreements and provisions of Delaware law impose restrictions on our ability to pay dividends. For example, the Company’s current revolving line of credit restricts the ability to pay dividends or make any distributions or payments or redeem, retire, or purchase any capital stock without the prior written consent of the lender (with limited exceptions). Additionally, Section 170(a) of the DGCL only permits dividends to be paid out of two legally available sources: (1) out of surplus, or (2) if there is no surplus, out of net profits for the year in which the dividend is declared or the preceding year (so-called “nimble dividends”). However, dividends may not be declared or paid out of net profits if “the capital of the corporation, computed in accordance with sections 154 and 244 of the DGCL, shall have been diminished by depreciation in the value of its property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets.” Contractual obligations and applicable law will restrict the ability to declare and pay dividends in the future.
Unregistered Sales of Securities
There were no unregistered sales of securities during the year ended December 31, 2025.
Purchases of Equity Securities by the Registrant and Affiliated Purchasers
In August 2023, the Company announced that its Board of Directors had authorized a program to purchase up to $3,000,000 of shares of its common stock. Purchases may be made in a variety of methods, including open market, from time to time, depending upon market conditions, including the market price of the common stock, and other factors. The program has no time limit and may be modified, suspended, or discontinued at any time. No purchases were made during the fourth quarter of 2025 by or on behalf of the Company.
Item 6. RESERVED
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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following management’s discussion and analysis (“MD&A”) in conjunction with the information set forth within the financial statements and related notes included in this Annual Report on Form 10-K.
Overview
As discussed elsewhere in this Report, Sensus achieved profitability for the first time in 2021, and maintained profitability through 2024. The Company incurred a net loss in 2025, mostly related to lobbying costs to secure reimbursement codes and lower demand particularly from our historically largest customer. Sensus continues to seek to return to profitability in 2026 by, among other things, increasing sales and managing operational expenses where necessary in order to continue to invest in marketing initiatives to promote the Company’s products. SRT reimbursement was just revalued and increased by CMS, effective as of January 1, 2026. Management expects that the new reimbursement codes will increase the demand for the SRT product. However, Sensus faces a number of uncertainties in 2026 that could impact our ability to achieve this goal. These include further decreased demand from its historically largest customer, increased cost due to hiring more sales representatives, continued inflation, and decreased demand for its higher priced SRT device.
Components of our results of operations
Sensus manages its business globally within one reportable segment, which is consistent with how management views the business, prioritizes investment and resource allocation decisions, and assesses operating performance.
Results of Operation
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| For the Years Ended | ||||||||
| December 31, | ||||||||
| (in thousands, except shares and per share data) | 2025 | 2024 | ||||||
| Revenues | $ | 27,482 | $ | 41,807 | ||||
| Cost of sales | 15,615 | 17,376 | ||||||
| Gross profit | 11,867 | 24,431 | ||||||
| Operating expenses | ||||||||
| General and administrative | 7,873 | 7,147 | ||||||
| Selling and marketing | 6,523 | 4,978 | ||||||
| Research and development | 7,778 | 4,216 | ||||||
| Total operating expenses | 22,174 | 16,341 | ||||||
| (Loss) income from operations | (10,307 | ) | 8,090 | |||||
| Other income: | ||||||||
| Interest income, net | 683 | 932 | ||||||
| Other income, net | 683 | 932 | ||||||
| (Loss) income before income tax | (9,624 | ) | 9,022 | |||||
| (Benefit from) provision for income taxes | (1,905 | ) | 2,375 | |||||
| Net (loss) income | $ | (7,719 | ) | $ | 6,647 | |||
| Net income per share – basic | $ | (0.47 | ) | $ | 0.41 | |||
| diluted | $ | (0.47 | ) | $ | 0.41 | |||
| Weighted average number of shares used in | ||||||||
| computing net income per share – basic | 16,326,937 | 16,312,351 | ||||||
| diluted | 16,326,937 | 16,359,616 | ||||||
2025 Compared with 2024
Revenues of $27.5 million in 2025 decreased by $14.3 million, or 34%, from $41.8 million in 2024. The decrease in revenue was primarily driven by a lower number of units sold (70 in the year ended December 31, 2025, compared to 115 in the year ended December 31, 2024), reflecting reduced sales to our largest customer, slightly offset by revenue recognized from new placements under the Fair Deal Agreement (the “Program”).
Cost of sales of $15.6 million in 2025 decreased by $1.8 million, or 10%, from $17.4 million in 2024. The decrease in cost of sales was primarily related to a lower number of units sold offset by significantly higher costs of servicing systems and the cost associated with new placements under the Program, which generates costs related to installation and training in advance of related revenues.
Gross profit of $11.9 million, or 43.3% of revenue, in 2025 decreased by $12.5 million, or 51%, from $24.4 million, or 58.4% of revenue, in 2024. The decrease in gross profit was primarily driven by lower sales, higher cost of servicing systems and the costs associated with new placements under the Program.
General and administrative expenses of $7.9 million in 2025 increased by $0.8 million, or 11%, from $7.1 million in 2024. The net increase in general and administrative expense was primarily due to higher professional fees and insurance costs and compensation costs.
Selling and marketing expenses of $6.5 million in 2025 increased by $1.5 million, or 30%, from $5.0 million in 2024. The increase was primarily driven by increases in tradeshow costs and payroll cost due to increase in headcount.
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Research and development expenses of $7.8 million in 2025 increased by $3.6 million, or 86%, from $4.2 million in 2024. The increase was primarily due to significant lobbying costs related to billing code reimbursement, increased headcount, and an increase in product development costs related to next generation systems. The Company expects research and development expenses incurred in 2026 to be substantially lower than those incurred in 2025.
Other income, net of $0.7 million and $0.9 million in the years ended December 31, 2025 and 2024, respectively, relates primarily to interest income.
Cash and cash equivalents of $22.1 million at December 31, 2025 was unchanged as compared to December 31, 2024. See Cash flows for details on the change in cash and cash equivalents during the year ended December 31, 2025.
Accounts receivable, net of $6.0 million at December 31, 2025 decreased by $13.7 million, or 70%, from $19.7 million at December 31, 2024. The decrease was primarily due to the decrease in sales and concentration of sales to the Company’s largest customer that are subject to extended payment terms.
Inventories of $14.6 million at December 31, 2025 increased by $4.5 million, or 44%, from $10.1 million at December 31, 2024. The increase was primarily due to the anticipation of increasing future sales.
Liabilities
There were no borrowings under our revolving lines of credit at December 31, 2025 or December 31, 2024. See Note 3, Debt, to the consolidated financial statements for further discussion.
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Liquidity and Capital Resources
In general terms, liquidity is a measurement of the Company’s ability to meet its cash needs. For the year ended December 31, 2025, funding was derived primarily from cash generated by the sale of equipment to our customers in the ordinary course of business. The Company believes that proceeds from maturing cash equivalents, as well as the Company’s borrowing capacity under its existing line of credit provide the Company with access to capital resources sufficient to meet operating capital and funding requirements for the next 12 months from the date of this annual report. Please see Note 3, Debt , to the consolidated financial statements for a discussion regarding the Company’s revolving credit facility with Comerica Bank. The Company’s liquidity position and capital requirements may be impacted by a number of factors, including the following:
| ● | ability to generate and increase revenue; | |
| ● | fluctuations in gross margins, operating expenses and net results; and | |
| ● | financial market instability or disruptions to the banking system due to bank failures |
The Company’s primary short-term capital needs, which are subject to change, include expenditures related to:
| ● | expansion of sales and marketing activities; and | |
| ● | continued research and development activities. |
The Company claimed Employee Retention Credits (“ERC”) as provided in the Coronavirus Aid, Relief, and Economic Security Act of 2020 and subsequent amendments. The ERC is a fully refundable payroll tax credit to provide financial incentives to eligible businesses to retain their workforce through the period of financial hardship resulting from the COVID-19 pandemic. The Company received $0.3 million in the second quarter of 2025 and $0.2 million in the fourth quarter of 2024. These amounts were recorded against the payroll expenses in the consolidated statements of (loss) income. Further claims outstanding will be recorded in the period in which payment is received.
Sensus’s management regularly evaluates cash requirements for current operations, commitments, capital requirements and business development transactions, and may seek to raise additional funds for these purposes in the future. However, there can be no assurance that it will be able to raise such funds or the terms on which such funds may be raised, if at all.
Cash flows
The following table provides a summary of the Company’s cash flows for the periods indicated:
| For the Years Ended | ||||||||
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | 528 | $ | (831 | ) | |||
| Investing activities | (196 | ) | (276 | ) | ||||
| Financing activities | (305 | ) | 15 | |||||
| Total | $ | 27 | $ | (1,092 | ) | |||
Cash flows from operating activities
Net cash provided by operating activities was $0.5 million for the year ended December 31, 2025, consisting of net loss of $7.7 million and non-cash activities of $0.4 million, offset by an increase in net operating assets of $8.6 million. Cash flows provided by operating activities primarily include the receipt of revenues offset by the payment of operating expenses incurred in the normal course of business. Non-cash items consisted of credit loss expense, deferred income taxes, stock-based compensation expense, provision for product warranties, amortization of right-of-use asset and depreciation of property and equipment. Net cash used in operating activities was $0.8 million for the year ended December 31, 2024, consisting of net income of $6.6 million and non-cash charges of $1.1 million, offset by an increase in net operating assets of $8.5 million. Cash flows provided by operating activities primarily include the receipt of revenues offset by the payment of operating expenses incurred in the normal course of business. Non-cash items consisted of credit loss expense, deferred income taxes, stock-based compensation expense, provision for product warranties, amortization of right-of-use asset and depreciation and amortization of property and equipment.
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Cash flows from investing activities
Net cash used in investing activities during the year ended December 31, 2025 reflected $0.2 million of purchases of property and equipment. Net cash used in investing activities during the year ended December 31, 2024 mainly reflected $0.3 million of purchases of property and equipment.
Cash flows from financing activities
Net cash used in financing activities during the year ended December 31, 2025 reflected $0.3 million of stock repurchase and $5 thousand of withholding taxes on stock-based compensation. Net cash provided by financing activities during the year ended December 31, 2024 reflected $67 thousand of exercised stock options, offset by $52 thousand of withholding taxes on stock-based compensation.
Inflation
During 2025, increased commodity and shipping prices and energy and labor costs resulted in minor inflationary pressures across various parts of our business and operations, including on our customers, partners, and suppliers. We continue to monitor the impact of inflation and we are taking actions, such as ordering inventory in advance, to minimize its effects on our product cost and sales.
Indebtedness
Please see Note 3, Debt, to the consolidated financial statements.
Contractual Obligations and Commitments
Please see Note 6, Commitments and Contingencies, to the consolidated financial statements.
Critical Accounting Policies and Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. Management has not applied any critical accounting estimates but has identified certain accounting policies as critical to understanding the financial condition and results of operations. For a detailed discussion on the application of these and other accounting policies, see the notes to the consolidated financial statements included in this Annual Report on Form 10-K.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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FINANCIAL STATEMENTS OF SENSUS HEALTHCARE, INC.
CONTENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Sensus Healthcare, Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Sensus Healthcare, Inc. and Subsidiaries (the “Company”) as of December 31, 2025, and the related consolidated statement of (loss) income, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
As described in Notes 1 and 10, the Company adopted Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” as of January 1, 2025, which is retrospectively applied to January 1, 2024. Except for the effects of the retrospective presentation for the adoption of Topic 740, we were not engaged to audit, review, or apply any procedures to the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended. Other than as stated above, we do not express an opinion or any other form of assurance about whether such financial position and the results of its operations and its cash flows as of and for the year ended December 31, 2024, have been fairly stated. Those balances were audited by the predecessor auditor.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ Carr, Riggs & Ingram, L.L.C.
We have served as the Company’s auditor since 2026.
Palm Beach Gardens, FL
March 4, 2026
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Sensus Healthcare, Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Sensus Healthcare, Inc. and Subsidiaries (the “Company”) as of December 31, 2024, and the related consolidated statement of income, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
As described in Notes 1 and 12, the Company adopted Accounting Standards Update No. 2023-07, “Segment Reporting (“Topic 280”): Improvements to Reportable Segment Disclosures,” as of January 1, 2024, which is retrospectively applied to January 1, 2023. Except for the effects of the retrospective presentation for the adoption of Topic 280, we were not engaged to audit, review, or apply any procedures to the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, other than as stated above and, accordingly, we do not express an opinion or any other form of assurance about whether such financial position has been fairly stated as of December 31, 2023 and for the year then ended. Those balances were audited by the predecessor auditor.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
MIAMI | FT. LAUDERDALE | BOCA RATON | WEST PALM BEACH | NEW YORK CITY
F-3
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/
We have served as the Company’s auditor since 2024.
March 5, 2025
F-4
SENSUS HEALTHCARE, INC.
CONSOLIDATED BALANCE SHEETS
| As of | As of | |||||||
| December 31, | December 31, | |||||||
| (in thousands, except shares and per share data) | 2025 | 2024 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid inventory | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Deferred tax assets, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Other noncurrent assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Product warranties | ||||||||
| Operating lease liabilities, current portion | ||||||||
| Deferred revenue, current portion | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities | ||||||||
| Deferred revenue, net of current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, shares authorized and issued and outstanding | ||||||||
| Common stock, $ par value – authorized; issued and outstanding at December 31, 2025; issued and outstanding at December 31, 2024 | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, and shares at cost, at December 31, 2025 and December 31, 2024, respectively | ( | ) | ( | ) | ||||
| Retained earnings | ||||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
F-5
SENSUS HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME
| For the Years Ended | ||||||||
| December 31, | ||||||||
| (in thousands, except shares and per share data) | 2025 | 2024 | ||||||
| Revenues | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| General and administrative | ||||||||
| Selling and marketing | ||||||||
| Research and development | ||||||||
| Total operating expenses | ||||||||
| (Loss) income from operations | ( | ) | ||||||
| Other income: | ||||||||
| Interest income, net | ||||||||
| Other income, net | ||||||||
| (Loss) income before income taxes | ( | ) | ||||||
| (Benefit from) provision for income taxes | ( | ) | ||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Net (loss) income per share – basic | $ | ( | ) | $ | ||||
| diluted | $ | ( | ) | $ | ||||
| Weighted average number of shares used in computing net (loss) income per share – basic | ||||||||
| diluted | ||||||||
See accompanying notes to the consolidated financial statements.
F-6
SENSUS HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| Common Stock | Additional Paid-In | Treasury Stock | Retained | |||||||||||||||||||||||||
| (in thousands, except shares) | Shares | Amount | Capital | Shares | Amount | Earnings | Total | |||||||||||||||||||||
| December 31, 2023 | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||
Exercise of stock options | — | |||||||||||||||||||||||||||
Forfeiture of restricted stock units | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||||
| Surrender of shares for tax withholding on stock-based compensation | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||
| December 31, 2024 | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||||||
| Exercise of stock options | — | — | ||||||||||||||||||||||||||
| Forfeiture of restricted stock units | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||||
| Surrender of shares for tax withholding on stock-based compensation | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Stock repurchase | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||
| December 31, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||
See accompanying notes to the consolidated financial statements.
F-7
SENSUS HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Years Ended | ||||||||
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Cash flows from operating activities | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash and cash equivalents provided by (used in) operating activities: | ||||||||
| Credit loss expense | ||||||||
| Depreciation | ||||||||
| Amortization of right-of-use asset | ||||||||
| Provision for product warranties | ||||||||
| Stock-based compensation | ||||||||
| Deferred income taxes | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepaid inventory | ( | ) | ||||||
| Other current assets | ( | ) | ( | ) | ||||
| Other noncurrent assets | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| Product warranties | ( | ) | ( | ) | ||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| Cash flows from investing activities | ||||||||
| Acquisition of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Repurchase of common stock | ( | ) | ||||||
| Withholding taxes on stock-based compensation | ( | ) | ( | ) | ||||
| Exercise of stock options | ||||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents – beginning of period | ||||||||
| Cash and cash equivalents – end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income tax paid | $ | $ | ||||||
| Income tax refunds received | $ | $ | ||||||
| Supplemental schedule of noncash investing and financing transactions: | ||||||||
| Net transfers from inventory to fixed assets | $ | $ | ||||||
| Lease liability arising from obtaining right-of-use-assets | $ | $ | ||||||
See accompanying notes to the consolidated financial statements.
F-8
SENSUS HEALTHCARE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Organization and Summary of Significant Accounting Policies
Description of the Business
Sensus Healthcare, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “Sensus” or the “Company”) is a manufacturer of radiation therapy devices and sells the devices to healthcare providers globally through its distribution and marketing network. The Company operates from its corporate headquarters located in Boca Raton, Florida.
In 2024, the Company formed Sensus Healthcare Services, LLC, a wholly-owned subsidiary that provides operational healthcare services to dermatology clinics in the form of equipment, radiation oncology oversight and physicist oversight, and on-site device operation by radiotherapy technologists where the Company receives a contractual percentage of all SRT reimbursement to the practice.
Basis of Presentation and Principles of Consolidation
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its subsidiaries. Accounts and transactions between consolidated entities have been eliminated.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates.
Revenue Recognition
The Company’s revenue is derived from sales of the Company’s devices and services related to operating, maintaining and repairing the devices as part of a contract or on an ad-hoc basis without a service contract.
The Company provides warranties, generally for one year, in conjunction with the sale of its products. These warranties entitle the customer to repair, replacement, or modification of the defective product, subject to the terms of the relevant warranty. The Company has determined that these warranties do not represent separate performance obligations, as the customer does not have the option to purchase the warranty separately and the warranty does not provide the customer with a service in addition to the assurance that the product complies with agreed-upon specifications. The Company records an estimate of future warranty claims at the time it recognizes revenue from the sale of the device based upon management’s estimate of the future claims rate.
Revenue is recognized upon transfer of control of promised goods or services to customers when the product is shipped or the service is rendered, based on the amount the Company expects to receive in exchange for those goods or services. The Company enters into contracts that can include multiple services, which are accounted for separately if they are determined to be distinct.
To determine the transaction price for contracts in which a customer promises consideration in a form other than cash, the Company measures the estimated fair value of the noncash consideration at contract inception. If the Company cannot reasonably estimate the fair value of the noncash consideration, the Company measures the consideration indirectly by reference to the stand-alone selling price of the products promised to the customer or class of customer in exchange for the consideration.
Our service contracts include maintenance or repair service for device purchases and personnel service contracts to assist in the use and operation of leased-out equipment under lease agreements where the Company is the lessor.
F-9
The revenues from maintenance or repair service contracts are recognized over the service contract period on a straight-line basis. In the event that a customer does not sign a service contract, but requests maintenance or repair services after the warranty expires, the Company recognizes revenue when the service is rendered. There is no termination provision in the service contract or any penalties in practice for cancellation of the service contract.
The revenues from personnel service contracts are recognized in the period that the work is performed, as the Company has elected the practical expedient under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, to recognize revenue in the amount to which the entity has a right to invoice. The service contracts can be terminated by mutual written agreement.
The Company has determined that in practice no significant discount is given on service contracts when offered with the device purchase or equipment lease as compared to when sold on a stand-alone basis. The service level provided is identical whether the service contract is purchased on a stand-alone basis or together with the device purchase or equipment lease. The Company may also incur preparation cost to ensure the customer’s space meets the requirements and specifications for the operation of the equipment. The preparation cost is expensed as incurred.
The Company also generates revenue from leases in which the Company is the lessor. The Company identifies the lease and non-lease components and allocates the contract consideration on a relative stand-alone selling price basis at lease inception. The Company has elected the practical expedient to combine lease and non-lease components when the components qualify to be combined, and such combined components are accounted for as a lease under ASC 842, Leases. Revenues from non-lease components that are not qualified to be combined are recognized under ASC 606, Revenue from Contracts with Customers, when the related services are rendered.
The components of disaggregated revenue for the years ended December 31, 2025 and 2024 were as follows:
| For the Years Ended | ||||||||
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Product Revenue - recognized at a point in time | $ | $ | ||||||
| Product Revenue - recognized over time | ||||||||
| Service Revenue - recognized at a point in time | ||||||||
| Service Revenue - recognized over time | ||||||||
| Total Revenue | $ | $ | ||||||
The Company operates in a highly regulated environment, primarily in the U.S. dermatology market, in which state regulatory approval is sometimes required prior to the customer being able to use the product. In cases where such regulatory approval is pending, revenue is deferred until such time as regulatory approval is obtained.
Deferred revenue activity for 2025 and 2024 was as follows:
| (in thousands) | Product | Service | Total | |||||||||
| December 31, 2023 | $ | $ | $ | |||||||||
| Revenue recognized | ( | ) | ( | ) | ( | ) | ||||||
| Amounts invoiced | ||||||||||||
| December 31, 2024 | $ | $ | $ | |||||||||
| Revenue recognized | ( | ) | ( | ) | ||||||||
| Amounts invoiced | ||||||||||||
| December 31, 2025 | $ | $ | $ | |||||||||
F-10
Remaining performance obligations related to deposits for products have original expected durations of one year or less. Estimated service revenue to be recognized in the future related to the performance obligations that are unsatisfied (or partially unsatisfied) as of December 31, 2025 is as follows:
| Year | Service Revenue | |||
| 2026 | ||||
| 2027 | ||||
| Total | $ | |||
For the years ended December 31, 2025 and 2024, the Company paid commissions for certain equipment sales. Because the recovery of commissions is expected to occur from product revenue within one year, the Company charges commissions to expense as incurred.
In addition, the Company incurs commissions associated with equipment lease agreements, which are accounted for as initial direct costs and recorded in other noncurrent assets in the consolidated balance sheets. The commission is capitalized at the commencement of the lease and recognized as an expense in selling and marketing expenses over the lease term.
Shipping and handling costs are expensed as incurred and are included in cost of sales.
Concentration
Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable.
The Company maintains cash balances at financial institutions in excess of federally insured limits. The Company has not experienced any losses related to these balances. The Federal Deposit Insurance Corporation insures eligible accounts up to $250,000 per depositor at each financial institution. The Company holds cash at well-known banks and does not believe that it is exposed to any significant credit risks on its cash.
One customer in the United States accounted
for
Geographical Information
The following table illustrates total revenue for the years ended December 31, 2025 and 2024 by geographic region.
| For the Years Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||||
| United States | $ | % | $ | % | ||||||||||||
| China | % | % | ||||||||||||||
| Other | % | % | ||||||||||||||
| Total Revenue | $ | % | $ | % | ||||||||||||
Fair Value of Financial Instruments
Carrying amounts of cash equivalents, accounts receivable, accounts payable and the revolving credit facility approximate fair value due to their relative short maturities.
F-11
Fair Value Measurements
The Company uses a fair value hierarchy that prioritizes inputs to valuation approaches used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories:
Level 1 Inputs:
Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date.
| ● | Level 1 assets may include listed mutual funds, ETFs and listed equities |
Level 2 Inputs:
Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; quotes from pricing services or brokers for which the Company can determine that orderly transactions took place at the quoted price or that the inputs used to arrive at the price are observable; and inputs other than quoted prices that are observable, such as models or other valuation methodologies.
| ● | Level 2 assets may include debt securities and foreign currency exchange contracts that have inputs to the valuations that generally can be corroborated by observable market data. |
Level 3 Inputs:
Unobservable inputs for the valuation of the asset or liability, which may include nonbinding broker quotes.
| ● | Level 3 assets include investments for which there is little, if any, market activity. These inputs require significant management judgment or estimation. |
Significance of Inputs: The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.
Foreign Currency
The Company’s foreign operation functional currency is the U.S. dollar. The Company considers its Israel subsidiary an extension of the parent company operations in the United States. The cash flow in the foreign operation depends primarily on the funding by the parent company.
Cash and Cash Equivalents
Cash and cash equivalents primarily consists of cash, money market funds and short-term, highly liquid investments with original maturities of three months or less.
Accounts Receivable
On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss model for recognition of credit losses with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. This update did not have a significant impact on the Company’s consolidated financial statements.
On October 1, 2025, the Company adopted ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this ASU provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. This update did not have a significant impact on the Company’s consolidated financial statements.
F-12
The Company does business and extends credit
based on an evaluation of each customer’s financial condition, generally without requiring collateral. Exposure to losses
on receivables is expected to vary by customer due to the financial condition of each customer. The Company estimates future credit
losses based on the age of customer receivable balances, collection history and forecasted economic trends. Future collections
can be significantly different from historical collection trends or current estimates. The Company monitors exposure to credit
losses and maintains allowances for anticipated losses considered necessary under the circumstances. The allowance for expected
credit losses was $
Inventories
Inventories consist of finished product and components and are stated at the lower of cost or net realizable value, determined using the first-in-first-out method.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation on property and equipment is calculated on the straight-line basis over the estimated useful life of each asset. Maintenance and repairs are expensed as incurred; expenditures that enhance the value of property or extend their useful lives are capitalized. When assets are sold or returned, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in other income in the consolidated statements of (loss) income.
Inventory units designated for customer
demonstrations, as part of the sales process, are reclassified to property and equipment and the depreciation is recorded in selling
and marketing expense. Property and equipment that were reclassified to or from inventory were $
Research and Development
Research and development costs related to products under development by the Company and quality and regulatory costs and are expensed as incurred.
Basic net (loss) income per share is calculated by dividing the net (loss) income by the weighted-average number of common shares outstanding for the period using the treasury stock method for options, restricted stocks and warrants. Diluted net (loss) income per share is computed by giving effect to all potential dilutive common share equivalents outstanding for the period.
F-13
| For the Years Ended | ||||||||
| December 31, | ||||||||
| (in thousands, except share and per share amounts) | 2025 | 2024 | ||||||
| Basic | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Weighted average number of shares used in computing net (loss) income per share – basic | ||||||||
| Net (loss) income per share - basic | $ | ( | ) | $ | ||||
| Diluted | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Weighted average number of shares used in computing net (loss) income per share – basic | ||||||||
| Dilutive effects of: | ||||||||
| Stock options | ||||||||
| Restricted stock awards | ||||||||
| Weighted average number of shares used in computing net (loss) income per share – diluted | ||||||||
| Net (loss) income per share - diluted | $ | ( | ) | $ | ||||
| The shares in full amount listed below were not included in the computation of diluted net (loss) income per share because to do so would have been antidilutive for the periods presented: | ||||||||
| Restricted stock awards | ||||||||
| Stock options | ||||||||
Diluted net loss per share for the year ended December 31, 2025 excludes the dilutive effect of any stock options or shares issued under restricted stock awards, as the inclusion would be antidilutive due to the Company’s net loss during the period. Diluted net income per share for the year ended December 31, 2024 includes the dilutive effect of stock options and restricted stock awards that were issued in December 2022, January 2024, and December 2024 to directors, officers, and employees.
Pursuant to relevant accounting guidance related to accounting for equity-based compensation, the Company is required to recognize all share-based payments to non-employees and employees in the financial statements based on grant-date fair values. The Company has accounted for issuances of shares and options in accordance with the guidance, which requires the recognition of expense, based on grant-date fair values, over the service period, which is generally the period over which the shares and options vest.
Advertising Costs
Advertising and promotion costs are
charged to expense as incurred. Advertising and promotion costs included in selling and marketing expense in the accompanying
consolidated statements of (loss) income amounted to $
Leases
The Company evaluates arrangements at inception to determine if an arrangement is or contains a lease. Operating lease assets represent the Company’s right to control an underlying asset for the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and obtains substantially all of the economic benefits from using the underlying asset. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company uses an incremental borrowing rate that the Company would expect to incur for a fully collateralized loan over a similar term under similar economic conditions to determine the present value of the lease payments. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets.
F-14
The lease payments used to determine the Company’s operating lease assets may include lease incentives, and stated rent increases are recognized in the Company’s operating lease assets in the Company’s consolidated balance sheets. Operating lease assets are amortized to rent expense over the lease term and included in operating expenses in the consolidated statements of (loss) income.
For leases in which the Company is the lessor, the Company identifies the lease and non-lease components and allocates the contract consideration to the different components on a relative stand-alone selling price basis at lease inception. The Company uses a residual approach for the components when the stand-alone selling price is not directly observable or those for which the Company has not established a price.
The Company has elected the practical expedient
to combine lease and non-lease components when the components qualify to be combined. Continuous supporting services are the primary
non-lease components and are not predominant. As a result, the combined components are accounted for as a lease under ASC 842,
Leases. The revenues from non-lease components that are not qualified to be combined are recognized when the services are rendered
under ASC 606, Revenue from Contracts with Customers. The revenues from non-lease components were $
For operating leases where the Company is the lessor, the Company recognizes the underlying assets and depreciates them over the estimated useful life which is based upon an estimate of the residual value expected at the end of the lease term. Lease income is recognized on a straight-line basis over the lease term when the lease payment is determined. Lease income is not recognized when collection of all contractual rents over the term of the agreement is not probable. When collection is not probable, the Company limits the lease income to the lesser of the revenue recognized on a straight-line basis or cash basis. The lease income is included in revenues in the consolidated statements of (loss) income.
Variable lease payments associated with the leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are presented within revenues in the consolidated statements of (loss) income.
Income Taxes
The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
In July 2025, the One Big Beautiful Bill Act (the “Tax Act”) was enacted, introducing a series of corporate tax changes in the U.S., including 100% bonus depreciation on qualified property and full expensing for research and development expenditures. The impacts of the Tax Act are reflected in our results for the year ended December 31, 2025, and there was no material impact to our income tax expense or effective tax rate. We expect that certain provisions will make the timing of cash tax payments in future periods less frequent.
Uncertain tax positions are recognized in the consolidated financial statements only if a position is more likely than not to be sustained upon examination by taxing authorities, based on the technical merits of the position. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense.
F-15
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance transparency of income tax disclosures. The amendments require annual disclosure of certain information relating to the rate reconciliation, income taxes paid by jurisdiction, income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign jurisdictions, income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign jurisdictions. The amendments also eliminate certain requirements relating to unrecognized tax benefits and certain deferred tax disclosure relating to subsidiaries and corporate joint ventures. The ASU is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. The adoption of ASU No. 2023-09 did not have a significant impact on the Company’s consolidated financial statements.
In March 2024, the FASB issued ASU No. 2024-01, Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, to clarify how an entity determines whether a profits interest or similar award is within the scope of Topic 718 or is not a share-based payment arrangement and therefore within the scope of other guidance. ASU No. 2024-01 provides an illustrative example with multiple fact patterns and also amends certain language in the “Scope” and “Scope Exceptions” sections of Topic 718 to improve its clarity and operability without changing the guidance. The ASU is effective for fiscal years beginning after December 15, 2024, and interim periods within those annual periods. The adoption of ASU No. 2024-01 did not have a significant impact on the Company’s consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires entities to (i) disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, (ii) include certain amounts that are already required to be disclosed under current U.S. GAAP in the same disclosures as other disaggregation requirements, (iii) disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and (iv) disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense. ASU No. 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating ASU No. 2024-03 to determine the impact it may have on its consolidated financial statements.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under ASU No. 2025-05, an entity is required to disclose whether it has elected to use the practical expedient. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collection are evaluated. ASU No. 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this standard early on October 1, 2025. The adoption of ASU No. 2025-05 did not have a significant impact on the Company’s consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270), which is intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU No. 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU No. 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating ASU No. 2025-11 to determine the impact it may have on its consolidated financial statements.
F-16
Note 2 — Property and Equipment
Property and equipment consists of the following:
| As of | As of | |||||||||
| December 31, | December 31, | Estimated | ||||||||
| (in thousands) | 2025 | 2024 | Useful Lives | |||||||
| Operations equipment | $ | $ | ||||||||
| Equipment leased to customers | ||||||||||
| Tradeshow and demo equipment | ||||||||||
| Computer equipment | ||||||||||
| Research and development equipment | ||||||||||
| Subtotal | ||||||||||
| Construction in progress | ||||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||||
| Property and Equipment, Net | $ | $ | ||||||||
Depreciation expense was $
Note 3 — DEBT
In September 2023, the Company entered
into a revolving credit facility (the “Credit Facility”) with Comerica Bank (“Comerica”) that originally
provided for maximum borrowings of $
At December 31, 2025, the Company was in default under the Credit Facility for failing to maintain the required minimum profitability covenant. The Company was in compliance with its financial covenants under the Credit Facility as of December 31, 2024. There were no borrowings outstanding under the facility at December 31, 2025 and December 31, 2024.
In February 2026, Comerica was acquired by Fifth Third and the Company is currently evaluating any impact this may have on the facility.
F-17
Note 4 — Product Warranties
Changes in product warranty liability were as follows for the years ended December 31, 2025 and 2024:
| (in thousands) | Amount | |||
| Balance, December 31, 2023 | $ | |||
| Warranties accrued during the period | ||||
| Payments on warranty claims | ( | ) | ||
| Balance, December 31, 2024 | $ | |||
| Warranties accrued during the period | ||||
| Payments on warranty claims | ( | ) | ||
| Balance, December 31, 2025 | $ | |||
Note 5 — Leases
Operating Lease Agreements
The
Company leases its headquarters office from an unrelated third party under a lease expiring in September 2027. The amortization
expense of the right of use lease asset was $
The following table presents information about the amount, timing and uncertainty of future cash flows arising from the Company’s operating leases as of December 31, 2025.
| Maturity of Operating Lease Liability | Amount | |||
| 2026 | ||||
| 2027 | ||||
| Total undiscounted operating leases payments | $ | |||
| Less: Imputed interest | ( | ) | ||
| Present Value of Operating Lease Liability | $ | |||
| Operating lease liability, current portion | $ | |||
| Operating lease liability, net of current portion | $ | |||
| Other Information | ||||
| Weighted-average remaining lease term | | |||
| Weighted-average discount rate | % | |||
Cash
paid for amounts included in the measurement of operating lease liabilities was $
Operating
lease cost recognized as expense was $
Lessor Accounting
The Company, through its subsidiary, Sensus Healthcare Services, LLC, leases superficial radiotherapy equipment to dermatology clinics. These leases generally have an initial term of 60 months and automatically renew for a one-year period upon the expiration of the initial lease term. Payments due under the leases may be fixed or variable payments.
F-18
The components of lease income for the years ended December 31, 2025 and 2024 are as follows:
| For the Years Ended December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Lease income - operating leases - fixed payments | $ | $ | ||||||
| Lease income - operating leases - variable payments | ||||||||
| Total | $ | $ | ||||||
The future minimum fixed lease payments to be received under the lease agreements as of December 31, 2025 are as follows:
| (in thousands) | Amount | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
Note 6 — Commitments and Contingencies
Manufacturing Agreement
The Company has a contract manufacturing agreement with an unrelated third party, RbM, for the production and manufacture of the SRT-100 (and subsequently the SRT-100 Vision and the SRT-100+), in accordance with the Company’s product specifications. The agreement renews for successive one-year periods unless either party notifies the other party in writing, at least 60 days prior to the anniversary date of the agreement, that it will not renew the agreement. The Company or RbM may terminate the agreement upon 90 days’ prior written notice.
The Company pays RbM for finished goods
in advance of the inventory being received. The Company paid RbM $
Legal contingencies
The Company is party to certain legal proceedings in the ordinary course of business. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and related contingencies.
In August 2019, the Company received a Civil Investigative Demand from the Department of Justice (the “Department”) seeking documents and written responses in connection with an investigation of the billing to Medicare by a physician who had treated patients with the Company’s SRT-100. The Department subsequently advised the Company that it was considering expanding the investigation to determine whether the Company had any involvement in the physician’s use of certain reimbursements codes. The Company has fully cooperated with the Department. The Company disputes that it has engaged in any wrongdoing with respect to such reimbursement claims; among other considerations, the Company does not submit claims for reimbursement or provide coding or billing advice to physicians. To the Company’s knowledge, the Department has made no determination as to whether the Company engaged in any wrongdoing, or whether to pursue any legal action against the Company. Should the Department decide to pursue legal action, the Company believes it has strong and meritorious defenses and will vigorously defend itself. As of December 31, 2025, the Company was unable to estimate the cost, if any, associated with this matter.
F-19
Note 7 — Employee Benefit Plans
The Company sponsors a 401(k) defined contribution
retirement plan that allows eligible employees to contribute a portion of their compensation, as defined by the plan and subject
to Internal Revenue Code (“IRC”) limitations. The Company makes contributions to the plan which include matching a percentage of the employees’
contributions up to certain limits. Expenses related to this plan were $
Note 8 — Stockholders’ Equity
Preferred Stock
The Company has authorized million shares of preferred stock. No shares of preferred stock were issued or outstanding at December 31, 2025 or December 31, 2024.
Treasury Stock
Treasury stock includes shares surrendered by employees for tax withholding on the vesting of restricted stock awards and shares repurchased in open market transactions. and shares were surrendered by employees for tax withholding for the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, the Company repurchased and shares, respectively, in open market transactions.
2016 and 2017 Equity Incentive Plans
The Company’s 2016 Equity Incentive Plan and the 2017 Incentive Plan, as amended in June 2023 and August 2025 (collectively, the “Plans”), provide for the issuance of up to shares and shares, respectively. In August 2025, the Company amended the 2017 Incentive Plan to increase the number of shares of common stock authorized for issuance thereunder by shares. In addition, unless the Compensation Committee specifically determines otherwise, the maximum number of shares available under the Plans and the awards granted under the Plans will be subject to appropriate adjustment in the case of any stock dividends, stock splits, recapitalizations, reorganizations, mergers, consolidations, exchanges or other changes in capitalization affecting the Company’s common stock. The awards may be made in the form of restricted stock awards or stock options, among other things. As of December 31, 2025 and 2024, and shares were available to be granted in the Plans, respectively.
On December 19, 2022, a total of
shares of restricted common stock were issued to employees. The restricted shares vest
On January 11, 2024, shares of restricted common stock with a fair value of $ per share, the stock price on the grant date, were issued to an employee. of the shares vested and the expense related to these shares was recognized on the grant date. The remaining shares vested in January 2025. The grant date fair value of $ per share is being recognized as expense on a straight-line basis over the vesting period. As of December 31, 2025, the shares issued on January 11, 2024 were fully vested.
On December 17, 2024, shares of
restricted common stock with a fair value of $ per share, the stock price on the grant date, were issued to employees and directors.
of the shares issued to one individual vested and the expense related to these shares was recognized on the grant date.
The remaining shares issued to the same individual vest over a three-year period. The remaining 60,000 shares issued to
other individuals vest
F-20
On December 12, 2025, shares of restricted common stock with a fair value of $per share, the stock price on the grant date, were issued to an employee. The grant date fair value of $ per share is being recognized as expense on a straight-line basis over the vesting period of four years. As of December 31, 2025, none of the shares issued on December 12, 2025 were vested or forfeited.
Restricted Stock
| Weighted- | ||||||||
| Average | ||||||||
| Grant | ||||||||
| Restricted | Date Fair | |||||||
| Outstanding at | Stock | Value | ||||||
| December 31, 2023 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ( | ) | $ | |||||
| December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ( | ) | ||||||
| December 31, 2025 | $ | |||||||
The Company recognizes forfeitures as they occur. The reduction of stock compensation expense related to the forfeitures was $ thousand and $ thousand for the years ended December 31, 2025 and 2024, respectively.
Stock compensation expense related to restricted stock, excluding the recognition of forfeitures, was $ million for the years ended December 31, 2025 and 2024.
Unrecognized stock compensation expense was $ million as of December 31, 2025, which will be recognized over a weighted-average period of years.
Stock Options
Stock options expire years after the grant date. Options that have been granted are exercisable and vest based on the terms of the related agreements.
F-21
| Weighted- | ||||||||||||
| Average | ||||||||||||
| Weighted- | Remaining | |||||||||||
| Average | Contractual | |||||||||||
| Number of | Exercise | Term | ||||||||||
| Options | Price | (In Years) | ||||||||||
| Outstanding - December 31, 2023 | $ | |||||||||||
| Granted | — | |||||||||||
| Exercised | ( | ) | — | |||||||||
| Expired | — | |||||||||||
| Outstanding - December 31, 2024 | $ | |||||||||||
| Granted | — | |||||||||||
| Exercised | — | |||||||||||
| Expired | — | |||||||||||
| Outstanding - December 31, 2025 | $ | |||||||||||
| Exercisable – December 31, 2024 | $ | |||||||||||
| Exercisable - December 31, 2025 | $ | |||||||||||
As of December 31, 2025, the stock options have been fully vested. The stock options outstanding had an intrinsic value of $ and $ million as of December 31, 2025 and 2024, respectively.
Note 10 — Income Taxes
The provision (benefit) for income taxes consisted of the following:
| For The Years Ended | ||||||||
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Current - Federal | $ | ( | ) | $ | ||||
| Current - State | ||||||||
| Deferred - Federal | ( | ) | ( | ) | ||||
| Deferred - State | ( | ) | ||||||
| Income tax provision (benefit) | $ | ( | ) | $ | ||||
F-22
For the years ended December 31, 2025 and 2024, the expected tax expense (benefit) based on the statutory rate is reconciled with the actual tax expense (benefit) as follows:
| For The Years Ended | ||||||||||||||||
| December 31, | ||||||||||||||||
| 2025 | 2024 | |||||||||||||||
| (in thousands) | In USD | Percent of Pre-Tax Income | In USD | Percent of Pre-Tax Income | ||||||||||||
| US federal statutory tax rate | $ | ( | ) | % | $ | % | ||||||||||
| State and local income taxes, net of federal income tax effect (a) | ( | ) | % | % | ||||||||||||
| Foreign tax effects | — | |||||||||||||||
| Israel | ( | ) | % | % | ||||||||||||
| Effect of changes in tax laws or rates enacted in the current period | ( | %) | ( | ) | ( | %) | ||||||||||
| Effect of cross-border tax laws | — | |||||||||||||||
| FDII | % | ( | ) | ( | %) | |||||||||||
| Tax credits | — | |||||||||||||||
| Research and development tax credits | ( | ) | % | ( | ) | ( | %) | |||||||||
| Changes in valuation allowances | % | % | ||||||||||||||
| Nontaxable or nondeductible items | ( | %) | ( | ) | ||||||||||||
| Changes in unrecognized tax benefits | % | ( | %) | |||||||||||||
| Other adjustments | ( | %) | % | |||||||||||||
| Total income tax expense (benefit) | $ | ( | ) | % | $ | % | ||||||||||
| (a) |
As of December 31, 2025 and December 31, 2024, the Company’s net deferred tax asset consisted of the tax effects of temporary differences attributable to the following:
| As of December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Deferred tax assets: | ||||||||
| Net operating losses | $ | $ | ||||||
| Stock-based compensation | ||||||||
| Depreciation and amortization | ||||||||
| Accrued expenses and reserves | ||||||||
| Inventory capitalization | ||||||||
| Customer deposits | ||||||||
| Tax credits | ||||||||
| Charitable contributions | ||||||||
| Lease accounting, net | ||||||||
| Other, net | ||||||||
| Gross deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets | ||||||||
| Deferred tax liabilities | ||||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Depreciation and amortization | ||||||||
| Total deferred tax liabilities | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
As of December 31,
2025, the Company has federal net operating loss (“NOL”) carryforwards of approximately $
F-23
In assessing the realization of deferred
tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will be realized.
The ultimate realization of deferred tax assets is dependent upon the future generation of taxable income during the periods in
which those temporary differences become deductible. In making this assessment, management considers, by tax jurisdiction, the
future reversal of existing taxable temporary differences, projected future taxable income exclusive of reversing temporary differences
and carryforwards, taxable income in prior carryback periods where carryback is permitted, and available tax planning strategies.
Based on this evaluation, management has continued to maintain a full valuation allowance against the Company’s net deferred
tax assets in Israel and recorded a valuation allowance during the current year against California research and development credit
carryforwards, as it is more likely than not that these deferred tax assets will not be realized as of the balance sheet date.
The valuation allowance related to the California research and development tax credit increased by $
Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements as of December 31, 2025 and 2024. The Company does not expect any significant changes in its unrecognized tax benefits within 12 months of the reporting date. The Company has U.S. federal and certain state tax returns subject to examination by tax authorities beginning with those filed for the year ended December 31, 2018. The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses.
Cash paid and received for income taxes by jurisdiction pursuant to the disclosure requirements of ASU No. 2023-09 for the years ended December 31, 2025 and 2024 is as follows:
| For The Years Ended | ||||||||
| December 31, | |||||||
| (in thousands) | 2025 | 2024 | ||||||
| Cash (paid) received for income taxes: | ||||||||
| Federal income taxes paid | $ | ( | ) | $ | ( | ) | ||
| State income taxes paid | ||||||||
| Florida | ( | ) | ( | ) | ||||
| Illinois | ( | ) | ( | ) | ||||
| Other | ( | ) | ( | ) | ||||
| Foreign income taxes paid | ||||||||
| Total income taxes paid | $ | ( | ) | $ | ( | ) | ||
| Cash received for income taxes: | ||||||||
| Federal income taxes received | $ | $ | ||||||
| State income taxes received | ||||||||
| Florida | ||||||||
| Illinois | ||||||||
| Other | ||||||||
| Foreign income taxes received | ||||||||
| Total income taxes received | $ | $ | ||||||
F-24
Note 11 — Segment Reporting
The Company has a single reportable segment focused around sale of similar products and related services. This reportable segment derives revenues from customers by selling medical devices which are used to treat oncological and non-oncological skin conditions with SRT technology and providing services related to operating, maintaining, and repairing these devices.
The Company’s chief operating decision-maker (the “CODM”), who is the chief executive officer, assesses performance for the reportable segment and decides how to allocate resources using net income as the primary measure of profitability. The CODM is not regularly provided with specific segment expenses, but focuses on revenue, gross profit, and net income. Expense information, including cost of sales can be easily computed from the provided information. These segment (and consolidated) measures of profitability are shown in the consolidated statements of (loss) income. The measure of segment assets is reported on the consolidated balance sheets as total assets.
Note 12 — Subsequent Events
The Company has evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued for potential recognition or disclosure. The Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements.
F-25
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no disagreements on accounting and financial disclosure matters.
Item 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Control and Procedures
As of December 31, 2025, the end of the year covered by this Annual Report on Form 10-K, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer each concluded that as of December 31, 2025, the end of the year covered by this Annual Report on Form 10-K, we did maintain effective disclosure controls and procedures.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our internal control over financial reporting. Our management used the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission to perform this evaluation. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our internal control over financial reporting was effective as of December 31, 2025.
As a smaller reporting company, our independent registered accounting firm is not required to issue an attestation report on our internal control over financial reporting.
29
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. OTHER INFORMATION
The Company is furnishing
Item 9C. DISCLOSURES REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS
Not applicable.
30
PART III.
Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The information required by this item will be set forth in the Proxy Statement for our 2026 Annual Meeting and is incorporated into this report by reference.
Item 11. EXECUTIVE COMPENSATION
The information required by this item will be set forth in the Proxy Statement for our 2026 Annual Meeting and is incorporated into this report by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item will be set forth in the Proxy Statement for our 2026 Annual Meeting and is incorporated into this report by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item will be set forth in the Proxy Statement for our 2026 Annual Meeting and is incorporated into this report by reference.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item will be set forth in the Proxy Statement for our 2026 Annual Meeting and is incorporated into this report by reference.
31
PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed as a part of this report:
| 1. | Financial Statements |
The Company’s consolidated financial statements included beginning on page F-1.
| 2. | Financial Statement Schedules |
Financial statement schedules have been omitted because they are not applicable, not required or the information required is included in the Company’s consolidated financial statements or note thereto.
| 3. | Exhibits Required to be Filed by Item 601 of Regulation S-K |
The Exhibit Index beginning on page 29 of this Annual Report on Form 10-K is incorporated by reference to this Item 15.
Item 16. FORM 10-K SUMMARY
None.
32
EXHIBIT INDEX
33
34
35
| 101.INS* | Inline XBRL Instance Document. | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 104.* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| + | Indicates a management contract or compensatory plan. |
| # | Portions of exhibit have been omitted. |
| * | Filed electronically herewith. |
| Instruments defining the rights of holders of unregistered long-term debt of the issuer and its subsidiaries have been omitted from this exhibit index because the amount of debt authorized under any such instrument does not exceed 10% of the total assets of the issuer and its consolidated subsidiaries. The issuer agrees to furnish a copy of any such instrument to the Commission upon request. |
36
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SENSUS HEALTHCARE, INC. | |
| Date: March 4, 2026 | /s/ Joseph C. Sardano |
| Joseph C. Sardano | |
| Chief Executive Officer | |
| (Principal Executive Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Name | Title | Date | ||
| /s/ Joseph C. Sardano | Chief Executive Officer and Chairman | March 4, 2026 | ||
| Joseph C. Sardano | (Principal Executive Officer) | |||
| /s/ Javier Rampolla | Chief Financial Officer | March 4, 2026 | ||
| Javier Rampolla | (Principal Financial and Accounting Officer) | |||
| /s/ Larry Biscotti | Director | March 4, 2026 | ||
| Larry Biscotti | ||||
| /s/ Megan Cornish | Director | March 4, 2026 | ||
| Megan Cornish | ||||
| /s/ Anthony B. Petrelli | Director | March 4, 2026 | ||
| Anthony B. Petrelli | ||||
| /s/ Eric Sachetta | Director | March 4, 2026 | ||
Eric Sachetta
|
||||
| /s/ Michael C. Sardano | Director | March 4, 2026 | ||
| Michael C. Sardano |
37