Business Context and Reporting Period
This Form 8-K Current Report was filed by Ra Medical Systems, Inc. (not Catheter Precision, Inc.) on May 20, 2020, with the report date reflecting events occurring through May 22, 2020. The filing details the completion of a public offering of equity securities and the entry into a material definitive agreement with institutional investors.
Key Financial Metrics and Transaction Details
- Offering Structure: The Company sold 20,725,190 Units (one share of Common Stock + one Warrant) at $0.45 per Unit and 1,497,032 Pre-Funded Units (one Pre-Funded Warrant + one Warrant) at $0.4499 per Unit.
- Net Proceeds: Approximately $8.7 million after deducting placement agent fees and estimated offering expenses.
- Warrant Issuance:
- Investor Warrants: 22,222,222 shares exercisable at $0.45 per share, expiring in five years.
- Placement Agent Warrants: 1,555,555 shares issued to H.C. Wainwright & Co., LLC, exercisable at $0.5625 per share (125% of purchase price).
- Transaction Costs:
- Cash placement fee: $750,000 (7.5% of gross proceeds).
- Management fee: $100,000 (1.0% of gross proceeds).
- Non-accountable expenses: $40,000.
- Legal fee reimbursement: $100,000.
- Closing fees: $12,900.
Material Changes and Use of Proceeds
The primary material change is the significant capital raise intended to support the Company's operations. The filing does not provide comparative financial metrics (revenue, profit, or cash flow) for prior periods as this is a transactional report rather than a periodic financial statement. The net proceeds are designated for:
- General corporate purposes and working capital.
- The Company's atherectomy indication trial.
- Engineering efforts.
- Supporting the commercial relaunch strategy.
Outlook, Risks, and Contingencies
Management Commentary: The offering supports the commercial relaunch strategy and clinical trials, indicating a focus on product development and market entry.
Risks and Contingencies:
- Dilution: The issuance of over 22 million warrants and pre-funded units creates potential dilution for existing shareholders.
- Ownership Limitations: Warrants and Pre-Funded Warrants are subject to beneficial ownership limitations (4.99% or 9.99% at holder election), which may restrict exercise rights.
- Pre-Funded Warrants: These are immediately exercisable at a nominal price of $0.0001, effectively converting to common stock immediately upon exercise.
Investor Verification Checklist
- Verify the exact number of shares outstanding post-offering to assess dilution impact.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) for specific covenants and termination rights.
- Confirm the status of the "atherectomy indication trial" and the timeline for the commercial relaunch strategy.
- Check subsequent filings for the actual exercise of Pre-Funded Warrants and Placement Agent Warrants.
- Note that the company name in the filing is Ra Medical Systems, Inc., not Catheter Precision, Inc.