Business Context and Reporting Period
This Form 8-K filing by Ra Medical Systems, Inc. (not Catheter Precision, Inc.) reports a material event occurring on July 30, 2020, with the offering completed on August 3, 2020. The company, incorporated in Delaware and trading on the NYSE under the symbol RMED, is an emerging growth company focused on medical devices, specifically atherectomy technology.
Key Financial Metrics and Capital Structure
The filing details a public offering (the "Offering") consisting of units and pre-funded units. Key financial figures include:
- Gross Proceeds: Approximately $11.4 million (calculated from unit sales: 31,188,100 units at $0.35 and 3,097,614 pre-funded units at $0.3499).
- Net Proceeds: Approximately $10.6 million after deducting placement agent fees and offering expenses.
- Capital Raised Structure:
- 31,188,100 Units (1 Common Stock + 1 Warrant) at $0.35 per unit.
- 3,097,614 Pre-Funded Units (1 Pre-Funded Warrant + 1 Warrant) at $0.3499 per unit.
- Warrant Issuance:
- 34,285,714 Warrants issued to investors (exercise price: $0.35; expiration: 5 years).
- 2,399,999 Placement Agent Warrants issued to H.C. Wainwright & Co., LLC (exercise price: $0.4375; expiration: 5 years).
- Transaction Costs:
- Placement fee: $900,000 (7.5% of gross proceeds).
- Management fee: $120,000 (1.0% of gross proceeds).
- Other expenses: $84,900 (legal, non-accountable, and closing fees).
Note: This filing does not provide revenue, profit, cash flow, or debt metrics for the company's operations. It focuses solely on the capital raise.
Material Changes
The primary material change is the significant increase in authorized and outstanding equity securities resulting from the Offering. The company entered into a Securities Purchase Agreement with institutional investors, altering its capital structure through the issuance of common stock, pre-funded warrants, and standard warrants. No prior comparable period financial data is provided in this specific filing to assess operational changes.
Outlook, Management Commentary, and Risks
Use of Proceeds: Management intends to use the net proceeds for general corporate purposes, specifically highlighting:
- Working capital.
- The Company's atherectomy indication trial.
- Engineering efforts.
Risks and Contingencies:
- Dilution: The Offering significantly increases the number of shares outstanding and potential shares upon warrant exercise.
- Ownership Limitations: Warrants and Pre-Funded Warrants are subject to beneficial ownership limitations (4.99% or 9.99% at holder election), which may restrict immediate exercise.
- Market Risk: The exercise price of warrants is subject to adjustment for stock splits or reverse splits.
Investor Verification Checklist
- Verify the exact number of shares outstanding post-offering to assess dilution impact.
- Confirm the status and timeline of the "atherectomy indication trial" mentioned as a primary use of funds.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) for specific covenants and termination rights.
- Check subsequent filings for the actual exercise of Pre-Funded Warrants, which convert to common stock at a nominal price ($0.0001).
- Monitor the company's cash burn rate relative to the $10.6 million net proceeds to determine runway for clinical trials.