Business Context and Reporting Period
This Form 8-K Current Report was filed by Ra Medical Systems, Inc. (not Catheter Precision, Inc.) on August 16, 2021. The filing discloses the entry into a Material Definitive Agreement regarding the divestiture of a specific business unit.
Key Financial Metrics and Transaction Details
The filing details an Asset Purchase Agreement to sell the Pharos laser business to Strata Skin Sciences, Inc. (STRATA). The filing does not provide standard periodic financial metrics such as revenue, profit, cash flow, or debt levels for the company as a whole.
- Base Purchase Price: $5,000,000
- Adjustments:
- Less: Estimated cost of remaining warranty and service obligations ($1,500,000).
- Plus: Value of Business Inventory acquired ($250,000).
- Less: $50,000 plus the assumption of Assumed Liabilities by STRATA.
- Assets Transferred: Contracts, inventory, intellectual property, books, records, and claims related to the Pharos laser business.
Material Changes
The primary material change is the divestiture of the Pharos laser business. Ra Medical will cease ownership of this segment's assets and liabilities (except for those specifically retained or indemnified) upon closing. A concurrent Services Agreement was executed, under which Ra Medical will provide support services and spare parts to STRATA for several months post-closing.
Outlook, Risks, and Contingencies
Closing Conditions: The transaction is subject to customary closing conditions.
Indemnification: Ra Medical has agreed to indemnify STRATA against specified liabilities and expenses resulting from breaches of representations and warranties.
Investor Caution: The filing explicitly states that representations and warranties in the agreement are for risk allocation between the parties and should not be relied upon as characterizations of the actual state of facts. Information may change after the agreement date.
Key Facts for Investor Verification
- Verify the final closing date and whether all customary conditions were met.
- Confirm the final net purchase price after the calculation of warranty obligations, inventory value, and assumed liabilities.
- Review the specific terms of the Services Agreement to understand the duration and scope of ongoing revenue from STRATA.
- Assess the impact of removing the Pharos laser business on Ra Medical's future revenue streams and product portfolio.