Business Context and Reporting Period
This Form 8-K is filed by Ra Medical Systems, Inc. (not Catheter Precision, Inc.) on April 2, 2021. The report discloses a change in the registrant's certifying accountant. The company is incorporated in Delaware and trades on the NYSE American under the symbol RMED.
Key Financial Metrics and Liquidity
This filing does not contain specific revenue, profit, or cash flow figures for the current period. However, it references the independent auditor's reports for fiscal years ended December 31, 2020, and 2019, which included a "going concern" explanatory paragraph. The reports noted that the company has experienced:
- Net losses and negative cash flows from operations.
- A significant accumulated deficit.
- Substantial doubt about its ability to continue as a going concern.
Material Changes
The primary material change reported is the dismissal of Deloitte & Touche LLP as the independent registered public accounting firm, effective April 2, 2021. The Audit Committee approved this decision to reduce ongoing costs related to the annual audit. Simultaneously, the company engaged Haskell & White LLP as the new independent registered public accounting firm for the fiscal year ending December 31, 2021.
There were no disagreements with Deloitte regarding accounting principles or auditing scope during the relevant periods. Historical material weaknesses in internal controls (related to tone at the top and communication) were remediated as of December 31, 2019.
Outlook, Risks, and Management Commentary
Management's decision to switch auditors was explicitly driven by cost reduction efforts. The filing reiterates the risk of the company's ability to continue as a going concern, as highlighted in prior audit reports due to recurring losses and negative cash flows. No new guidance or forward-looking financial projections are provided in this document.
Investor Verification Checklist
- Verify the rationale for dismissing a major accounting firm (Deloitte) for a smaller firm (Haskell & White) and assess potential impacts on audit quality or future financing.
- Review the most recent 10-K or 10-Q to confirm the current status of the "going concern" warning and the company's liquidity position.
- Confirm that the remediation of internal control material weaknesses remains effective under the new auditor.
- Check for any subsequent filings regarding the company's ability to secure additional funding given the history of negative cash flows.