Business Context and Reporting Period
This Form 8-K Current Report, filed on February 4, 2022, by Ra Medical Systems, Inc. (not Catheter Precision, Inc.), details a material definitive agreement and the closing of a public equity offering. The report covers events occurring between February 4, 2022, and February 8, 2022.
Key Financial Metrics and Capital Structure
- Net Proceeds: Approximately $11.0 million after deducting underwriting discounts, commissions, and estimated offering expenses.
- Securities Issued:
- 9,535,000 shares of common stock.
- 27,602,893 Series A Warrants (exercise price $0.50, 1-year term).
- 27,602,893 Series B Warrants (exercise price $0.50, 7-year term).
- 14,467,893 Pre-Funded Warrants (exercise price $0.0001, 20-year term).
- Outstanding Shares: 26,325,384 shares of common stock issued and outstanding as of the close of business on February 8, 2022. This includes 9,779,456 shares issued immediately upon the exercise of Pre-Funded Warrants.
- Debt and Liquidity: The filing does not provide specific data on existing debt levels, cash flow, or liquidity ratios outside of the new capital raised.
Material Changes and Transaction Details
The primary material change is the significant increase in share count and the introduction of warrant obligations following the public offering. The Company entered into an Underwriting Agreement with Ladenburg Thalmann & Co. Inc. on February 4, 2022. The offering closed on February 8, 2022, following the partial exercise of a 45-day overallotment option by the underwriters to purchase an additional 3,600,000 Series A Warrants and 3,600,000 Series B Warrants.
Guidance, Risks, and Contingencies
- Lock-Up Agreements: The Company and its executive officers and directors are subject to a 90-day lock-up period from the date of the Underwriting Agreement, restricting the sale or transfer of securities without underwriter approval.
- Beneficial Ownership Limitations: Warrant holders are restricted from exercising warrants if doing so would result in beneficial ownership exceeding 4.99% (or 9.99% upon election) of outstanding shares, subject to a 61-day notice period for adjustments.
- Indemnification: The Company agreed to indemnify the underwriters against certain liabilities under the Securities Act of 1933.
- Outlook: The filing does not contain specific forward-looking financial guidance or management commentary regarding future operational performance.
Investor Verification Checklist
- Verify the exact number of shares outstanding post-offering (26,325,384) and the dilution impact of the 55+ million warrants issued.
- Confirm the terms of the Pre-Funded Warrants, specifically the $0.0001 exercise price and the immediate conversion to common stock.
- Review the 90-day lock-up agreement restrictions on insider trading.
- Examine the beneficial ownership limitation clauses (4.99% vs. 9.99%) to understand potential constraints on warrant exercise.
- Check subsequent filings for the actual use of the $11.0 million in net proceeds.