15. Commitments and Contingencies

The Company at times becomes a party to various claims, disputes, and administrative and legal matters in the ordinary course of our past and current business activities. As a result, contingencies can arise resulting from an existing condition, situation, or set of circumstances involving an uncertainty as to the realization of a possible loss.

We have in place insurance coverage for litigation defense and claim settlement costs incurred in connection with these claims. We estimate the value of probable payments under these claims and probable insurance recoveries associated with existing claims based on management’s interpretations and estimates surrounding the claims and available or applicable insurance coverage. At December 31, 2025, Stereotaxis had $4.3 million of insurance receivables recorded in other current assets and $4.3 million of legal contingencies recorded in other current liabilities both related to ongoing litigation. We believe we have substantial defenses to these claims; however, the ultimate outcome of legal proceedings is inherently uncertain, and we will continue to evaluate developments and adjust our assessments as necessary.

In February 2024, a vendor filed financing statements under the Uniform Commercial Code (“UCC”) on underlying inventory for approximately $0.6 million. We believe the financing statements were filed without merit, and we are fully contesting the propriety of such actions.

In April 2021, the Company entered into a letter of credit pursuant to the Lease agreement totaling approximately $1.8 million to be delivered in four equal instalments of which the first was delivered in April 2021, the second was delivered in July 2021, the third was delivered in October 2021, and the fourth was delivered in January 2022. The amount available under this letter of credit automatically reduces by one fortieth at the end of each month during the lease term and was completed in May 2025.

Estimated loss contingencies are accrued only if the loss is probable and the amount of the loss can be reasonably estimated. With respect to a particular loss contingency, it may be probable that a loss has occurred but the estimate of the loss is a wide range. If we deem an amount within the range to be a better estimate than any other amount within the range, that amount will be accrued. However, if no amount within the range is a better estimate than any other amount, the minimum amount of the range is accrued. While we believe that none of these claims, disputes, or administrative and legal matters will have a material adverse effect on our financial position, these matters are uncertain and we cannot at this time determine whether the financial impact, if any, of these matters will be material to our results of operations in the period in which such matters are resolved or a better estimate becomes available.