Catheter Precision, Inc. — SEC Filing Summary
Business Context and Reporting Period
This filing is Ra Medical Systems, Inc.’s Form 10-K for the fiscal year ended December 31, 2022, filed March 28, 2023. The filing predates the company’s January 9, 2023 merger with Catheter Precision, Inc.; therefore, the reported 2022 financial statements primarily reflect Ra Medical’s legacy DABRA operations rather than Catheter Precision’s historical results.
- Following the merger, the company shifted its focus to cardiac electrophysiology technologies, principally the VIVO cardiac mapping system and the LockeT suture retention device.
- Ra Medical ceased marketing DABRA and discontinued related manufacturing, engineering activities, and atherectomy clinical-trial enrollment during 2022.
- Catheter Precision’s historical financial results are not included in the 2022 operating results; the filing directs investors to a subsequent Form 8-K for those results.
Key Financial Metrics
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Net revenues | $14 thousand | $22 thousand | Down $8 thousand |
| Gross loss | $147 thousand | $1.538 million | Improved $1.391 million |
| Operating loss | $26.961 million | $29.266 million | Improved $2.305 million |
| Net loss | $26.865 million | $25.070 million | Increased $1.795 million |
| Net loss per share | $25.98 | $248.22 | Improved, primarily reflecting share-count changes and the 2022 reverse split |
| Cash used in operating activities | $22.568 million | $27.625 million | Improved $5.057 million |
| Cash provided by financing activities | $23.361 million | $14.962 million | Increased $8.399 million |
| Cash and cash equivalents at year-end | $15.859 million | $15.045 million | Increased $0.814 million |
| Accumulated deficit | $205.137 million | $178.272 million | Increased $26.865 million |
Revenue was immaterial relative to the company’s cost base, and the filing does not present a meaningful positive operating or gross margin. The company had no inventory, property and equipment, or operating lease assets on the December 31, 2022 balance sheet after disposing of or writing down legacy assets.
Total liabilities were $7.576 million, consisting primarily of $7.484 million in accrued expenses and $92 thousand in accounts payable. The filing does not report outstanding conventional debt at year-end; the prior $2.0 million PPP loan was forgiven in 2021. Accrued expenses included approximately $5.0 million related to the DOJ and participating-state settlement triggered by the merger.
Material Changes Versus the Prior Comparable Period
- Net revenue declined 36% to $14 thousand as catheter sales ceased in June 2022.
- Research and development expense declined $5.861 million to $6.392 million following the reduction in force and pause of engineering activities.
- SG&A increased $0.775 million to $16.250 million, primarily because of legal expenses related to the DOJ settlement and merger.
- The company recorded $4.172 million of restructuring and impairment costs, including $1.548 million of property and equipment impairment, $1.000 million of inventory obsolescence, $0.910 million of severance, $0.395 million of prepaid research and development write-offs, and $0.319 million of contract termination fees.
- Approximately 85% of full-time employees were terminated through the 2022 reduction in force.
- The dermatology business sale generated $2.191 million of income from discontinued operations in 2021; no comparable discontinued-operations income was recorded in 2022.
- A 1-for-50 reverse stock split became effective October 3, 2022.
Guidance, Outlook, Risks, Contingencies, and Unusual Items
- Management expects continuing operating losses and negative operating cash flow as it invests in commercialization of VIVO and other electrophysiology products. No formal revenue or earnings guidance was provided.
- Management stated that cash reserves, together with subsequent financing, are expected to fund operations for the next twelve months, but also indicated that additional capital may be required. Future equity financing could materially dilute existing stockholders.
- In January 2023, the company raised approximately $1.3 million gross from a warrant inducement transaction. In March 2023, it completed an approximately $8.0 million private placement involving common stock, convertible preferred stock, and warrants.
- The merger created substantial potential dilution. At the March 2023 stockholder meeting, holders approved conversion of 1,993,627 Series X preferred shares into common stock; additional Series X preferred shares may become convertible in the future subject to listing-related conditions.
- The merger triggered $5.0 million of payments under the DOJ and participating-state settlement agreements, paid in February 2023. Additional payments may be required if revenue targets are met, including $1.0 million for 2023 and $1.25 million for 2024 if annual revenue exceeds $10 million.
- VIVO had FDA 510(k) clearance and CE Mark authorization, but the filing states that VIVO had no separate reimbursement code. Market adoption, reimbursement, regulatory compliance, clinical evidence, and competition from substantially larger medical-device companies remain significant risks.
- Stereotaxis receives 45% of revenue generated from VIVO sales at robotic hospitals under the joint marketing agreement.
- LockeT was registered with the FDA as a Class I device in February 2023. The filing describes planned clinical studies and future commercialization efforts, but does not provide a revenue forecast.
- The company has royalty obligations related to LockeT, including approximately 12% of net sales payable to certain Catheter noteholders through December 31, 2035, plus a separate 5% royalty on net sales up to $1 million and potentially 2% thereafter if patent conditions are met.
- Management reported effective disclosure controls and internal control over financial reporting as of December 31, 2022. The independent auditor was not required to provide an internal-control attestation because of the company’s emerging-growth-company status.
Most Important Facts for Investors to Verify
- Review Catheter Precision’s historical financial statements and the post-merger pro forma information, because the 2022 Form 10-K results largely represent the discontinued or substantially reduced Ra Medical business.
- Reconcile the company’s post-merger cash balance, operating cash burn, accrued liabilities, and expected liquidity runway after the January and March 2023 financings.
- Assess the fully diluted share count, including Series X and Series A preferred stock, outstanding warrants, options, and potential future conversions.
- Confirm the final accounting for the merger, including the preliminary $82.9 million purchase consideration, $37.0 million of acquired intangible assets, and $66.0 million of preliminary goodwill.
- Evaluate VIVO commercial adoption, recurring patch revenue, reimbursement prospects, clinical evidence, regulatory status, and the economic impact of the Stereotaxis revenue-sharing arrangement.
- Verify the status and potential amount of DOJ settlement milestone payments and other legal, royalty, and contingency obligations.
- Review whether the company can achieve sufficient revenue growth to offset recurring losses and avoid additional dilutive financing.