Ra Medical Systems Provides First Corporate Update Since Merger, Q1 Results To Be Announced On May 22, 2023

Author: Happy Mohamed | May 16, 2023 08:06am

 Ra Medical Systems, Inc. (NYSE:RMED) announced the first corporate update since the merger of the private company Catheter Precision, Inc. into the public company Ra Medical Systems. Catheter Precision continues to operate as a wholly owned subsidiary of RMED, which operates as the parent. The RMED board of directors, as part of its governance commitment, last month established a committee for examining a transition at the CEO level. Mr. David Jenkins, the Company's Executive Chairman of the Board, is serving as Interim Chief Executive Officer until a full-time replacement is named.

David Jenkins said, "Since the time of the merger in January, we have analyzed our opportunities and resources and have affirmed our decision to focus on Catheter Precision's cardiac electrophysiology technologies and markets. As such, we have decided to close the laser catheter business of Ra Medical. Although Ra Medical had a 510(K) FDA approval, an ongoing clinical trial nearing its endpoint, and an intellectual property portfolio, we believe that the target market required a broader product offering which entailed further research and development before bringing its products to market. Therefore, our decision was made to allocate our limited resources to the cardiac electrophysiology field, with a team and products in place. We believe these changes and others are in strong alignment with cash management and the overall shareholder interest."

As part of the transition, and to appropriately match expenditures to the size of the company, several notable changes have been made.

• The facility in Carlsbad, California was closed, and the leases were terminated.
• All employees associated with the manufacture of the laser catheter were terminated.
• Legal representation has been changed from a costly international firm to a smaller regional firm.
• Better cash management on excess funds has been instituted.
• Will McGuire, RMED's previous CEO, resigned as of the end of April.
• The part-time Acting CFO has been replaced with a full-time permanent CFO.
• The board of directors has been reduced from five to four directors, and director pay has been reduced. The salary and bonus of the acting CEO is limited to $300,000 annually.
• The company has brought in $8 million in new funding, so that as of May 1, 2023, Ra Medical had approximately $11 million on hand, which is prior to payment of Mr. McGuire's severance payment in May. Management believes these cash resources will last into 2024.

In addition to these above changes, Ra Medical has made additional investments into the electrophysiology business, with several highlights to share:

• Five new area sales representatives and three additional clinical support specialists were hired, onboarded, and fully trained as of April 1, 2023. This has resulted in over 70 new target accounts for our VIVO product on May 1, 2023, and over 20 target accounts for our recently launched LockeT product, all in the US.
• Catheter Precision launched LockeT, a brand-new closure device, which is a Class I device labeled for suture retention. This product is not only applicable to electrophysiology procedures, but also structural heart procedures, percutaneous pacemaker implants, and vascular surgery procedures.
• The VIVO European registry has almost completed enrollment, now having enrolled 125 patients. New clinical studies for both VIVO and LockeT will begin later this year.
• Catheter Precision will attend the Heart Rhythm Society annual scientific sessions, to be held May 19-21, where our products will be on display in the exhibit hall, including VIVO and the new LockeT closure device.

The company plans to file a Form 12b-25 Notification of Late Filing on May 16, 2023, and to file the 10-Q for the first quarter ending March 31, 2023, by May 22, 2023, and will release first quarter financial information at that time. The acquisition of Catheter Precision requires an allocation of the purchase price amongst the acquired assets, including an evaluation of goodwill and other intangibles. This time-consuming evaluation, with the assistance of outside consultants, has been a necessary endeavor to bring about meaningful numbers for the first quarter, and to provide our auditors with the information to complete their review.

Posted In: RMED