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What changed in Catheter Precision, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Catheter Precision, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+414 added−408 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-28)

Top changes in Catheter Precision, Inc.'s 2023 10-K

414 paragraphs added · 408 removed · 304 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

91 edited+3 added−11 removed16 unchanged
Biggest changePhysician Payments Sunshine Act, which requires applicable manufacturers of drugs, devices, biologics and medical s u pplies for which payment is available under Medicare, Medicaid or the Children ’ s Health Insurance Program (with certain exceptions) to re p ort annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), non-physician healthcare professionals (defined to include physician a s sistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certif i ed nurse-midwives) and teaching hospitals, as well as information regarding ownership and investment interests held by the physicians described a b ove and their immediate family members; and • analogous state and non-U.S. laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices, including, but not limited to, research, distribution, sales and marketing arrangements and claims involving health c are items or services reimbursed by non-governmental third-party payors, including private insurers, or by the patients themselves; state l a ws that require pharmaceutical and device companies to comply with the industry ’ s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. government, or otherwise 18 restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require manufacturers to report information related to payments and other tr a nsfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and state and non-U.S. laws go v erning the privacy and security of health information in some circumstances, many of which di f fer from each other in significant ways and often are not preempted by HI P AA, thus complicating compliance e f forts.
Biggest changePhysician Payments Sunshine Act, which requires applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), non-physician healthcare professionals (defined to include physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certified nurse-midwives) and teaching hospitals, as well as information regarding ownership and investment interests held by the physicians described above and their immediate family members; and · analogous state and non-U.S. laws and regulations, such as state anti-kickback and false claims laws, which may apply to our business practices, including, but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or by the patients themselves; state laws that require pharmaceutical and device companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. government, or otherwise report or restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; and state and non-U.S. laws governing the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 19 Table of Contents In particular, activities and arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, waste and other abusive practices.
You may find on our website at www.ramed.com electronic copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, or Exchange Act.
You may find on our website at www.catheterprecision.com electronic copies of our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, or Exchange Act.
A predicate device may be a previously 510(k) cleared device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for submission of PMA applications, or a product previously granted de novo a uthorization.
A predicate device may be a previously 510(k) cleared device or a device that was in commercial distribution before May 28, 1976 for which the FDA has not yet called for submission of PMA applications, or a product previously granted de novo authorization.
The requirements and restrictions apply to “covered entities” (which include health care providers and insurers) as well as to their business associates that receive protected health information from them in order to provide services to or perform certain activities on their behalf.
HIPAA requirements and restrictions apply to “covered entities” (which include health care providers and insurers) as well as to their business associates that receive protected health information from them in order to provide services to or perform certain activities on their behalf.
If we fail to comply or are deemed to have failed to comply with applicable privacy protection laws and regulations such failure could result in government enforcement actions and create liability for us, which could include substantial civil and/or criminal penalties, as well as private litigation and/or adverse publicity that could negatively affect our operating results and business. 20 Environmental Regulation We are subject to federal, state and local regulations governing the storage, use and disposal of waste materials and products.
If we fail to comply or are deemed to have failed to comply with applicable privacy protection laws and regulations such failure could result in government enforcement actions and create liability for us, which could include substantial civil and/or criminal penalties, as well as private litigation and/or adverse publicity that could negatively affect our operating results and business. 21 Table of Contents Environmental Regulation We are subject to federal, state and local regulations governing the storage, use and disposal of waste materials and products.
A number of countries outside of the EEA accept the CE Mark in lieu of marketing submissions as an addendum to that country’s application process. We have a CE Mark for the VIVO System. Beginning July 1, 2023, the United Kingdom will require its own medical device approval (UKCA).
A number of countries outside of the EEA accept the CE Mark in lieu of marketing submissions as an addendum to that country’s application process. We have a CE Mark for the VIVO System. Beginning July 1, 2023, the United Kingdom requires its own medical device approval (UKCA).
T o obtain 510( k ) clearance, a manufacturer must submit a premarket notification demonstrating that the proposed device is substantially equivalent to a legally marketed device, referred to as the predicate device.
To obtain 510(k) clearance, a manufacturer must submit a premarket notification demonstrating that the proposed device is substantially equivalent to a legally marketed device, referred to as the predicate device.
The FDA may order the temporar y , or permanent, discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with the FDA requirements or presents an unacceptable risk to the clinical trial patients.
The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with the FDA requirements or presents an unacceptable risk to the clinical trial patients.
If the government declines to intervene, the whistleblower may proceed on his or her own and, if successful, he or she will receive a percentage of any judgment or settlement amount the company is required to pa y . The government may also initiate an investigation on its own.
If the government declines to intervene, the whistleblower may proceed on his or her own and, if successful, he or she will receive a percentage of any judgment or settlement amount the company is required to pay. The government may also initiate an investigation on its own.
De Novo Classification Devices of a new type that the FDA has not previously classified based on risk are automatically classified into Class III by o peration of section 513(f) (1) of the FDCA, regardless of the level of risk they pose.
De Novo Classification Devices of a new type that the FDA has not previously classified based on risk are automatically classified into Class III by operation of section 513(f) (1) of the FDCA, regardless of the level of risk they pose.
It is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be e f fective in preventing such conduct, mitigating risks, or reducing the chance of governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
It is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective in preventing such conduct, mitigating risks, or reducing the chance of governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
These include: the QSR, labeling regulations, t he medical device reporting regulations (which require that manufacturers report to the FDA if their device may have caused or contributed to a d eath or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur), and reports of corrections and removals regulations (which require manufacturers to report recalls or removals and field corrections to the FDA if initiated to reduce a risk to health posed by the device or to remedy a violation of the FDCA).
These include: the QSR requirements, labeling regulations, the medical device reporting regulations (which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur), and reports of corrections and removals regulations (which require manufacturers to report recalls or removals and field corrections to the FDA if initiated to reduce a risk to health posed by the device or to remedy a violation of the FDCA).
The sponsor also must manufacture the investigational device in conformity with the quality controls described in the IDE application and any conditions of IDE approval that the FDA may impose with respect to manufacturing. Investigational devices may only be distributed for use in an investiga t ion and must bear a label with the statement: “CAUTION-Investigational device.
The sponsor also must manufacture the investigational device in conformity with the quality controls described in the IDE application and any conditions of IDE approval that the FDA may impose with respect to manufacturing. Investigational devices may only be distributed for use in an investigation and must bear a label with the statement: “CAUTION-Investigational device.
Because of the breadth of these laws and the narrow scope of the statutory or regulatory exceptions and safe harbors available, our business activities could be challenged under one or more of these laws. Relationships between medical product manufacturers and health care provi d ers are an area of heightened scrutiny by the government.
Because of the breadth of these laws and the narrow scope of the statutory or regulatory exceptions and safe harbors available, our business activities could be challenged under one or more of these laws. Relationships between medical product manufacturers and health care providers are an area of heightened scrutiny by the government.
If a government entity opens an investigation into possible violations of any of these laws (which may include the issuance of subpoenas), we would have to expend significant resources to defend ourselves against the allegations. Defending against any such actions can be co s tl y , time-consuming and may require significant financial and personnel resources.
If a government entity opens an investigation into possible violations of any of these laws (which may include the issuance of subpoenas), we would have to expend significant resources to defend ourselves against the allegations. Defending against any such actions can be costly, time-consuming and may require significant financial and personnel resources.
If any such actions are instituted against us, those actions could have a significant impact on our business, including t h e imposition of significant fines, and other sanctions that may materially impair our ability to run a profitable business.
If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of significant fines, and other sanctions that may materially impair our ability to run a profitable business.
In addition, the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or f raudulent claim for purposes of the federal civil False Claims Act; • U.S. federal civil and criminal false claims laws and civil monetary penalties laws, including the federal civil False Claims Act, which, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against ind i viduals or entities for knowingly presenting, or causing to be presented, to the U.S. government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudule n t claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. government.
In addition, the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act; · U.S. federal civil and criminal false claims laws and civil monetary penalties laws, including the federal civil False Claims Act, which, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the U.S. government, claims for payment or approval that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the U.S. government.
A number of enforcement actions have been taken against 16 manufacturers that promote products for “o f f-label” uses (i. e ., uses that are not described in the approved or cleared labeling), including actions alleging that claims submitted to government healthcare programs for reimbursement of products that were promoted for “o f f-label” uses are fraudulent in violation of the Federal False Claims Act or other federal a nd state statutes and that the submission of those claims was caused by o f f-label promotion.
A number of enforcement actions have been taken against manufacturers that promote products for “off-label” uses (i.e., uses that are not described in the approved or cleared labeling), including actions alleging that claims submitted to government healthcare programs for reimbursement of products that were promoted for “off-label” uses are fraudulent in violation of the Federal False Claims Act or other federal and state statutes and that the submission of those claims was caused by off-label promotion.
Results from adequate and well-controlled clinical trials are required to establish the safety and e f fectiveness of a Class III PMA device for each indication for which FDA approval is sought.
Results from adequate and well-controlled clinical trials are required to establish the safety and effectiveness of a Class III PMA device for each indication for which FDA approval is sought.
The PMA can include post-approval conditions that the FDA believes necessary to ensure the safety and e f fectiveness of the device including, among other things, restrictions on labeling, promotion, sale and distribution.
The PMA can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device including, among other things, restrictions on labeling, promotion, sale and distribution.
Fai l ure to comply with the conditions of approval can result in material adverse enforcement action, including the loss or withdrawal of the approval and / or placement of restrictions on the sale of the device until the conditions are satisfied.
Failure to comply with the conditions of approval can result in material adverse enforcement action, including the loss or withdrawal of the approval and/or placement of restrictions on the sale of the device until the conditions are satisfied.
Some devices that have been classified as C l ass III are regulated pursuant to the 510(k) requirements because the FDA has not yet called for PMAs for these devices. 510(k) Notification Product marketing in the U.S. for most Class II and limited Class I devices typically follows a 510(k) pathwa y .
Some devices that have been classified as Class III are regulated pursuant to the 510(k) requirements because the FDA has not yet called for PMAs for these devices. 510(k) Notification Product marketing in the U.S. for most Class II and limited Class I devices typically follows a 510(k) pathway.
These laws and regulations may restrict or prohibit a wide range of activities or other arrangements r elated to the development, marketing or promotion of products, including pricing and discounting of products, provision of customer incentives, provision of reimbursement support, other customer support services, provision of sales commissions or other incentives to employees and independent cont r actors and other interactions with healthcare practitioners, other healthcare providers and patients.
These laws and regulations may restrict or prohibit a wide range of activities or other arrangements related to the development, marketing or promotion of products, including pricing and discounting of products, provision of customer incentives, provision of reimbursement support, other customer support services, provision of sales commissions or other incentives to employees and independent contractors and other interactions with healthcare practitioners, other healthcare providers and patients.
Similar to the U.S. federal Anti-Kickback Statute, a p erson or entity does not need to have actual knowledge of the health care fraud statute implemented under HI P AA or specific intent to violate it in order to have committed a violation; • in addition, HI P AA, as amended by the Health Information T echnology for Economic and Clinical Health Act of 2009, or HITECH A ct, and its implementing regulations, imposes obligations, including mandatory contractual terms, with respect to safeguarding the privac y , security and transmission of individually identifiable health information without appropriate authorization by covered entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers as well as their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information; • the U.S.
Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the health care fraud statute implemented under HIPAA or specific intent to violate it in order to have committed a violation; · in addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH Act, and its implementing regulations, imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information without appropriate authorization by covered entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers as well as their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information; · the U.S.
A person or entity does not need to have actual knowledge of the U.S. f e deral Anti-Kickback Statute or specific intent to violate it in order to have committed a violation.
A person or entity does not need to have actual knowledge of the U.S. federal Anti-Kickback Statute or specific intent to violate it in order to have committed a violation.
P r e-Market Authorization and Notification While most Class I and some Class II devices can be marketed without prior FDA authorization, most medical devices can be lega l ly sold within the U.S. only if the FDA has: (i) approved a PMA application prior to marketing, generally applicable to most Class III devices; ( i i) cleared the device in response to a premarket notification, or 510(k) submission, generally applicable to Class I and II devices; or (iii) authorized the device to be marketed through the de novo process, generally applicable for novel Class I or II devices.
Pre-Market Authorization and Notification While most Class I and some Class II devices can be marketed without prior FDA authorization, most medical devices can be legally sold within the U.S. only if the FDA has: (i) approved a PMA application prior to marketing, generally applicable to most Class III devices; (ii) cleared the device in response to a premarket notification, or 510(k) submission, generally applicable to Class I and II devices; or (iii) authorized the device to be marketed through the de novo process, generally applicable for novel Class I or II devices.
In the United S t ates, allegations of such wrongful conduct could also result in a corporate integrity agreement with the U.S. government that imposes significant admini s trative obligations and costs , as has occurred in the past with respect to our legacy products that we no longer market .
In the United States, allegations of such wrongful conduct could also result in a corporate integrity agreement with the U.S. government that imposes significant administrative obligations and costs, as has occurred in the past with respect to our legacy products that we no longer market.
The laws and regulations govern, among other things, the design, manufacture, storage, recordk e eping, approval, labeling, promotion, post-approval monitoring and reporting, distribution and import and export of medical devices.
The laws and regulations govern, among other things, the design, manufacture, storage, recordkeeping, approval, labeling, promotion, post-approval monitoring and reporting, distribution and import and export of medical devices.
Health Insurance Portability and Accountability Act of 1996, or HI P AA, which imposes criminal and civil liability f o r , among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment fo r , healthcare benefits, items or services.
Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
Establishments that manufacture devices are required to register their establishments with the FDA and provide the FDA a list o f the devices that they handle at their facilities. The FDA conducts market surveillance and periodic visits, both announced and unannounced, to inspect or re-inspect equipment, f acilities, laboratories and processes to confirm regulatory compliance.
Establishments that manufacture devices are required to register their establishments with the FDA and provide the FDA a list of the devices that they handle at their facilities. 14 Table of Contents The FDA conducts market surveillance and periodic visits, both announced and unannounced, to inspect or re-inspect equipment, facilities, laboratories and processes to confirm regulatory compliance.
The FDA also can r e quire the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or PMA is obtained. VIVO was cleared by the FDA via a traditional 510(k) with supporting clinical data. This data was collected via a clinical study enrolling 51 subjects and took approximately 12 months to gather.
The FDA also can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or PMA is obtained. 15 Table of Contents VIVO was cleared by the FDA via a traditional 510(k) with supporting clinical data. This data was collected via a clinical study enrolling 51 subjects and took approximately 12 months to gather.
Even after approval of a PMA, a new PMA or PMA supplement may be required in the event of a modification to the device, its la b eling or its manufacturing process.
Even after approval of a PMA, a new PMA or PMA supplement may be required in the event of a modification to the device, its labeling or its manufacturing process.
These laws constrain the bus i ness and financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our products.
These laws constrain the business and financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our products.
If the FDA believes we or any of our contract manufacturers or regulated suppliers are not in compliance with these requirements and patients are b eing subjected to serious risks, the agency can shut down our manufacturing operations, require recalls of our medical device products, refuse to approve new marketing applications, initiate legal proceedings to detain or seize products, enjoin future violations, or assess civil and criminal p e nalties against us or our o f ficers or other employees.
If the FDA believes we or any of our contract manufacturers or regulated suppliers are not in compliance with these requirements and patients are being subjected to serious risks, the agency can shut down our manufacturing operations, require recalls of our medical device products, refuse to approve new marketing applications, initiate legal proceedings to detain or seize products, enjoin future violations, or assess civil and criminal penalties against us or our officers or other employees.
Allegations that we, our o f ficers, or our employees violated any one of these laws can be made by individuals called “whistleb l owers” who may be our employees, customers, competitors or other parties. Government policy is to encourage individuals to become whistleblowers and file a complaint in federal court alleging wrongful conduct.
Allegations that we, our officers, or our employees violated any one of these laws can be made by individuals called “whistleblowers” who may be our employees, customers, competitors or other parties. Government policy is to encourage individuals to become whistleblowers and file a complaint in federal court alleging wrongful conduct.
An IRB may also require the clinical trial it has approved to be halted, either temporarily or permanentl y , for failure to comply with the IRB ’ s requirements, or may impose other conditions or sanctions. Although the QSR does not fully apply to investigational devices, the requirement for controls on design and development does a ppl y .
An IRB may also require the clinical trial it has approved to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose other conditions or sanctions. Although the QSR does not fully apply to investigational devices, the requirement for controls on design and development does apply.
Such laws include, but are not limited to: • the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willful l y soliciting, o f fering, receiving or providing remuneration, directly or indirectl y , in cash or in kind, to induce or reward, or in return f o r , either the referral of an individual fo r , or the purchase, order or recommendation of, any good or service, for which payment may be made under a U.S. healthcare program such as Medicare and Medicaid.
Such laws include, but are not limited to: · the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a U.S. healthcare program such as Medicare and Medicaid.
Supplements to a PMA often require the submission of the same type of information required for an origi n al PMA, except that the supplement is generally limited to that information needed to support the proposed change from the product covered by the o riginal PMA.
Supplements to a PMA often require the submission of the same type of information required for an original PMA, except that the supplement is generally limited to that information needed to support the proposed change from the product covered by the original PMA.
Item 1.A. Risk Factors—Risks Related to Government Regulation. United States Medical Device Regulation In the U.S., medical devices are subject to extensive regulation by the FDA, the Food, Drug and Cosmetic Act, or FDCA, and its implementing regulations, and ce r tain other federal and state statutes and regulations.
Item 1.A. Risk Factors—Risks Related to Government Regulation. United States Medical Device Regulation In the U.S., medical devices are subject to extensive regulation by the Food and Drug Administration (“FDA”), pursuant to the Food, Drug and Cosmetic Act, or FDCA, and its implementing regulations, and certain other federal and state statutes and regulations.
In the conte x t of performance claims for products such as our devices and services, compliance with the FTC Act includes ensuring that there is scientific data to s ubstantiate the claims being made, that the advertising is neither false nor misleading, and that any user testimonials or endorsements we or our agents di s seminate related to the devices or services comply with disclosure and other regulatory requirements.
In the context of performance claims for products such as our devices and services, compliance with the FTC Act includes ensuring that there is scientific data to substantiate the claims being made, that the advertising is neither false nor misleading, and that any user testimonials or endorsements we or our agents disseminate related to the devices or services comply with disclosure and other regulatory requirements.
Such filings are placed on our website as soon as reasonably possible after they are filed with the Securities and Exchange Commission, or SEC. 21
Such filings are placed on our website as soon as reasonably possible after they are filed with the Securities and Exchange Commission, or SEC. 22 Table of Contents
The government is required to investigate all of these complaints and decide whether t o intervene. If the government intervenes and we are required to pay money back to the government as a result of a settlement or judgement, the wh i stleblowe r , as a reward, is awarded a percentage.
The government is required to investigate all of these complaints and decide whether to intervene. If the government intervenes and we are required to pay money back to the government as a result of a settlement or judgement, the whistleblower, as a reward, is awarded a percentage.
Clinical trials, for significant and nons i gnificant risk devices, must be approved by an institutional review board, or IRB—an appropriately constituted group that has been formally designated to r e view and monitor biomedical research involving human subjects and which has the authority to approve, require modifications in, or disapprove r e search to protect the rights, safet y , and welfare of the human research subject.
Clinical trials, for significant and nonsignificant risk devices, must be approved by an institutional review board, or IRB—an appropriately constituted group that has been formally designated to review and monitor biomedical research involving human subjects and which has the authority to approve, require modifications in, or disapprove research to protect the rights, safety, and welfare of the human research subject.
Perso n s and entities can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims b y , for example, providing inaccurate billing or coding information to customers or promoting a product o f f-label; • the U.S.
Persons and entities can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label; · the U.S.
Privacy and Data Protection Laws HIPAA, as amended by the HITECH Act, and the regulations that have been issued under it, impose certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of protected health information.
Privacy and Data Protection Laws HIPAA, as amended by the HITECH Act, and the regulations that have been issued under it, impose certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of protected health information. In the U.S., certain states have additional privacy laws that also work towards the safeguarding of personal information.
If the manufacturer does not adequately respond to a Form 483 or warning lette r , the FDA make take enforcement action against the manufacturer or impose other sanctions or consequences, which may inc l ude: • cease and desist orders; • injunctions, or consent decrees; • civil monetary penalties; • recall, detention or seizure of our products; • operating restrictions, partial or total shutdown of production facilities; • refusal of or delay in granting requests for 510(k) clearance, de novo classification, or premarket approval of new p roducts or modified products; • withdrawing 510(k) clearances, de novo classifications, or premarket approvals that are already granted; • refusal to grant export approval or export certificates or devices; and • criminal prosecution.
If the manufacturer does not adequately respond to a Form 483 or warning letter, the FDA (with assistance from the Justice Department in certain cases) make take enforcement action against the manufacturer or impose other sanctions or consequences, which may include: · injunctions or consent decrees; · civil monetary penalties; · recall, detention or seizure of our products; · operating restrictions, partial or total shutdown of production facilities; · refusal of or delay in granting requests for 510(k) clearance, de novo classification, or premarket approval of new products or modified products; · withdrawing 510(k) clearances, de novo classifications, or premarket approvals that are already granted; · refusal to grant export approval or export certificates or devices; and · criminal prosecution.
After completion of the required clinical testing, a PMA including the results of all preclinical, clinical, and other testing, and information relating to the product ’ s marketing histor y , design, labeling, manufacture, and controls, is prepared and submitted to the FDA.
After completion of the required clinical testing, a PMA including the results of all preclinical, clinical, and other testing, and information relating to the product’s marketing history, design, labeling, manufacture, and controls, is prepared and submitted to the FDA.
In particula r , if our operatio n s are found to be in violation of any of the laws described above or if we agree to settle with the government without admitting to any wrongful conduct or if we are found to be in violation of any other governmental regulations that apply to us, we, our o f ficers and employees may be subject to sanctions, i ncluding civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medi c aid, imprisonment, the curtailment or restructuring of our operations and the imposition of a corporate integrity agreement, any of which could adver s ely a f fect our business, results of operations and financial condition. 19 Foreign Corrupt Practices Act The Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery laws in other jurisdictions, generally prohibit businesses and their representatives from offering to pay, paying, promising to pay or authorizing the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business.
In particular, if our operations are found to be in violation of any of the laws described above or if we agree to settle with the government without admitting to any wrongful conduct or if we are found to be in violation of any other governmental regulations that apply to us, we, our officers and employees may be subject to sanctions, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment, the curtailment or restructuring of our operations and the imposition of a corporate integrity agreement, any of which could adversely affect our business, results of operations and financial condition. 20 Table of Contents Foreign Corrupt Practices Act The Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery laws in other jurisdictions, generally prohibit businesses and their representatives from offering to pay, paying, promising to pay or authorizing the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business.
T o avoid requiring PMA review of low- to moderate-risk devices cla s sified in Class III by operation of la w , Congress enacted section 513(f)(2) of the FDCA. This provision allows the FDA to classify a low- to moderate - risk device not previously classified into Class I or II through the de novo classification pathwa y .
To avoid requiring PMA review of low- to moderate-risk devices classified in Class III by operation of law, Congress enacted section 513(f)(2) of the FDCA. This provision allows the FDA to classify a low- to moderate-risk device not previously classified into Class I or II through the de novo classification pathway.
Though the FDA has a goal to clear a traditional 510(k) within 90 d ays of receipt, the clearance pathway for traditional 510(k)s can take substantially longe r .
Though the FDA has a goal to clear a traditional 510(k) within 90 days of receipt, the clearance pathway for traditional 510(k)s can take substantially longer.
The FDA evaluates the safety and e f fectiv e ness of devices submitted for review under the de novo classification pathway and devices determined to be Class II through this pathway can serve as pr e dicate devices for future 510(k) applicants.
The FDA evaluates the safety and effectiveness of devices submitted for review under the de novo classification pathway and devices determined to be Class II through this pathway can serve as predicate devices for future 510(k) applicants.
These inspections may include the manufacturing facilities of subcontractors. F ollowing an inspection, the FDA may issue a report, known as a Form 483, listing instances where the manufacturer has failed to comply with applicable regulations 13 and/or procedures o r , if observed violations are severe and u r gent, a warning lette r .
These inspections may include the manufacturing facilities of subcontractors. Following an inspection, the FDA may issue a report, known as a Form 483, listing instances where the manufacturer has failed to comply with applicable regulations and/or procedures or, if observed violations are severe and urgent, a warning letter.
The FDCA classifies medical devices into one of three categories based on the risks associated with the device and the level of control necessary to provide reasonable assurance of safety and e f fectiveness. Class I devices are deemed to be low risk and are subject to the few e st regulatory controls.
The FDCA classifies medical devices into one of three categories based on the risks associated with the device and the level of control necessary to provide reasonable assurance of safety and effectiveness. Class I devices are deemed to be low risk and are subject to the fewest regulatory controls. Class II devices provide intermediate levels of risk.
Under the Federal T rade Commission Act, or FTCA, the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practic e s in or a f fecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations relating to the o r ganization, business, practices, and management of entities engaged in commerce.
Under the Federal Trade Commission Act, or FTCA, the FTC is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; and (c) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce.
Limited by Federal law to investigational use.” Post-Market Requi r ements After a device is placed on the market, numerous regulatory requirements appl y .
Limited by Federal law to investigational use.” Post-Market Requirements After a device is placed on the market, numerous regulatory requirements apply.
There are three types of 510(k)s: traditional; special, for certain device modifications; and abbreviated, for devices that co n form to a recognized standard. The special and abbreviated 510(k)s are intended to streamline revie w . The FDA intends to process special 510(k)s wi t hin 30 days of receipt and abbreviated 510(k)s within 90 days of receipt.
There are three types of 510(k)s: traditional; special, for certain device modifications; and abbreviated, for devices that conform to a recognized standard. The special and abbreviated 510(k)s are intended to streamline review. The FDA intends to process special 510(k)s within 30 days of receipt and abbreviated 510(k)s within 90 days of receipt.
MDR requirements now include on-going collection of clinical data to include in annual reports to ensure state of the art technology and safety requirements are met. We are currently collecting data via a multi-center (and country) European Registry. This registry plans to enroll 125 patients with 12-month follow-up.
MDR requirements now include on-going collection of clinical data to include in annual reports to ensure state of the art technology and safety requirements are met. We are currently collecting data via a multi-center (and country) European Registry.
In some cases, one or more smaller IDE studies may precede a pivotal clinical trial intended to demonstrate the safety and e f ficacy of the investigational device. A 30-day waiting period after the submission of each IDE is required prior to the commencement of clinical testing in humans.
A nonsignificant risk device does not require FDA approval of an IDE. In some cases, one or more smaller IDE studies may precede a pivotal clinical trial intended to demonstrate the safety and efficacy of the investigational device. A 30-day waiting period after the submission of each IDE is required prior to the commencement of clinical testing in humans.
Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with good clinical practice, or GC P , an international standard intended to protect the rights and health of patients and to define the roles of clinical trial sponsors, investigato r s, and monitors; and (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safet y , and the e f fectiveness criteria to be evaluated.
Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with good clinical practice, or GCP, an international standard intended to protect the rights and health of patients and to define the roles of clinical trial sponsors, investigators, and monitors; and (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.
For a PMA or Class II 510(k) or de novo devices, the FDA also may require post-marketing testing, surveillance, or other measu r es to monitor the e f fects of an approved or cleared product. The FDA may place conditions on a PMA-approved device that could restrict the distr i bution or use of the product.
For a PMA or Class II 510(k) or de novo devices, the FDA also may require post-marketing testing, surveillance, or other measures to monitor the effects of an approved or cleared product. The FDA may place conditions on a PMA-approved device that could restrict the distribution or use of the product.
The FDA also regulates industry- s ponsored scientific and educational activities that make representations regarding product safety or e f ficacy in a promotional context. Manufacturers of medical devices are permitted to promote products solely for the uses and indications set forth in the approv e d or cleared product labeling.
The FDA also regulates industry-sponsored scientific and educational activities that make representations regarding product safety or efficacy in a promotional context. 17 Table of Contents Manufacturers of medical devices are permitted to promote products solely for the uses and indications set forth in the approved or cleared product labeling.
Therefore, even if we are successful in defending against any such a ctions that may be brought against us, our business may be impaired. If any of the above occu r , it could adversely a f fect our ability to operate o ur business and our results of operations.
Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. If any of the above occur, it could adversely affect our ability to operate our business and our results of operations.
The failure to comply with prohibitions on “o f f-label” promo t ion can result in significant monetary penalties, revocation or suspension of a company ’ s business license, suspension of sales of certain produ c ts, product recalls, civil or criminal sanctions, exclusion from participating in federal healthcare programs, or other enforcement actions.
The failure to comply with prohibitions on “off-label” promotion can result in significant monetary penalties, revocation or suspension of a company’s business license, suspension of sales of certain products, product recalls, civil or criminal sanctions, exclusion from participating in federal healthcare programs, or other enforcement actions.
Advertising, marketing and promotional activities for devices are also subject to FDA oversight and must comply with the statu t ory standards of the FDCA, and the FD A ’ s implementing regulations.
Advertising, marketing and promotional activities for devices are also subject to FDA oversight and must comply with the statutory standards of the FDCA, and the FDA’s implementing regulations.
The manufacturer must show that the proposed device has the same intended use as the predicate device, and it either has the same t echnological characteristics, or it is shown to be equally safe and e f fective and does not raise di f ferent questions of safety and e f fectiv e ness as compared to the predicate device.
The manufacturer must show that the proposed device has the same intended use as the predicate device, and it either has the same technological characteristics, or it is shown to be equally safe and effective and does not raise different questions of safety and effectiveness as compared to the predicate device.
It is expected that future generations of VIVO will require similar data collection and 510(k) submission to receive FDA clearance. 14 Because the LockeT device is a Class 1 product, it did not require clinical data or a formal submission process. After completing validation testing and compiling a Device History File, LockeT was added to our listing of registered devices.
Because the LockeT device is a Class I product, it did not require clinical data or a formal submission process. After completing validation testing and compiling a Device History File, LockeT was added to our listing of registered devices.
Failure to comply wi t h applicable requirements may subject a device and/or its manufacturer to a variety of administrative sanctions, such as FDA refusal to app r ove pending pre-market approval, or PMA, applications, issuance of warning letters or untitled letters, mandatory product recalls, import detentions, civil monetary penalties, and/or judicial sanctions, such as product seizures, injunctions, and criminal prosecution.
Failure to comply with applicable requirements may subject a device and/or its manufacturer to a variety of administrative sanctions, such as FDA refusal to approve pending pre-market approval (“PMA”), applications or premarket notification submissions (commonly referred to as “510(k)s),” issuance of warning letters or untitled letters, product recalls, import detentions, civil monetary penalties, and/or judicial sanctions, such as product seizures, injunctions, and criminal prosecution.
In addition, quality-control, manufacture, packaging, and labeling procedures must continue to conform to QSRs and ot h er applicable regulatory requirements after approval and clearance, and manufacturers are subject to periodic inspections by the FDA.
In addition, quality-control, manufacture, packaging, and labeling procedures must continue to conform to QSRs and other applicable regulatory requirements after approval and clearance, and manufacturers are subject to periodic inspections by the FDA. Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality-control to maintain compliance with QSRs.
The PMA process is generally more expensive, rigorous, length y , and uncertain than the 510(k) premarket notification process a n d de novo classification process and requires proof of the safety and e f fectiveness of the device to the FD A ’ s satisfaction.
The PMA process is generally more expensive, rigorous, lengthy, and uncertain than the 510(k) premarket notification process and de novo classification process and requires proof of the safety and effectiveness of the device to the FDA’s satisfaction.
Failure to properly identify reportable eve n ts or to file timely reports, as well as failure to address observations to FD A ’ s satisfaction, can subject us to warning letters, reca l ls, or other sanctions and penalties.
Failure to properly identify reportable events or to file timely reports, as well as failure to address observations to FDA’s satisfaction, can subject us to warning letters, recalls, or other sanctions and penalties.
The FD A ’ s oversight authority review of marketing and promotional activities enc o mpasses, but is not limited to, direct-to-consumer advertising, healthcare provide r -directed advertising and promotion, sales representative commu n ications to healthcare professionals, promotional programming and promotional activities involving electronic media.
The FDA’s oversight authority review of marketing and promotional activities encompasses, but is not limited to, direct-to-consumer advertising, healthcare provider-directed advertising and promotion, sales representative communications to healthcare professionals, promotional programming and promotional activities involving electronic media.
The first patient was enrolled in October 2021 and there are currently 65 patients enrolled. 17 Other Healthca r e Laws Our business operations and current and future arrangements with healthcare professionals, consultants, customers and patients, expose us to broadly applicable state, federal, and foreign fraud and abuse and other healthcare laws and regulations.
Other Healthcare Laws Our business operations and current and future arrangements with healthcare professionals, consultants, customers and patients, expose us to broadly applicable state, federal, and foreign fraud and abuse and other healthcare laws and regulations.
The IDE application must also include a description of product manufact u ring and controls, and a proposed clinical trial protocol. The FDA typically grants IDE approval for a specified number of patients to be treated at sp e cified study centers.
The IDE application must also include a description of product manufacturing and controls, and a proposed clinical trial protocol. The FDA typically grants IDE approval for a specified number of patients to be treated at specified study centers. During the study, the sponsor must comply with the FDA’s IDE requirements for investigator selection, trial monitoring, reporting, and record keeping.
Corporate Information Our principal executive offices are located at 1670 Highway 160 West, Suite 205, Fort Mill, South Carolina 29708. Our telephone number is (973) 691-2000. Our corporate website address is www.ramed.com.
We are planning to increase our sales force in support of product launches but currently have no other plans to increase our staff. Corporate Information Our principal executive offices are located at 1670 Highway 160 West, Suite 205, Fort Mill, South Carolina 29708. Our telephone number is (973) 691-2000. Our corporate website address is www.catheterprecision.com.
The FDA requires each manufacturer to make this determination in the first instance, but the FDA can review any such decision. If the FDA disagrees with a manufacture r ’ s decision not to seek a new 510(k) clearance for the modified device, the agency may retroactively require the manufacturer to seek 510(k) clearance or PMA.
If the FDA disagrees with a manufacturer’s decision not to seek a new 510(k) clearance for the modified device, the agency may retroactively require the manufacturer to seek 510(k) clearance or PMA.
In addition, these privacy regulations may differ from country to country and state to state and may vary based on whether testing is performed in the U.S. or in the local country.
If so, this could result in government-imposed fines or orders requiring that we change our practices, which could adversely affect our business. In addition, these privacy regulations may differ from country to country and state to state and may vary based on whether testing is performed in the U.S. or in the local country.
After a device receives 510(k) clearance, any modification that could significantly a f fect its safety or e f fectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require a PMA.
After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or could require a PMA. The FDA requires each manufacturer to make this determination in the first instance, but the FDA can review any such decision.
Class III devices must typically be approved by the FDA before they are marketed. LockeT is a sterile, Class I product and was registered with the FDA in February of 2023. VIVO is an FDA-cleared Class II product.
LockeT is a sterile, Class I product and was registered with the FDA in February of 2023. It does not require FDA marketing authorization. VIVO is an FDA-cleared Class II product.
The Federal T rade Commission, or FTC, also oversees the advertising and promotion of our products (other than labeling) pursua n t to its broad authority to police deceptive advertising for goods or services within the U.S.
The Federal Trade Commission, or FTC, also oversees the advertising and promotion of our products (other than labeling) pursuant to its broad authority to police deceptive advertising for goods or services within the U.S. The FDA and FTC work together to regulate different aspects of activities by medical product manufacturers, consistent with the inter-agency Memorandum of Understanding.
If the FDA disapproves the IDE within this 30-day period, the clinical trial proposed in the IDE may not begin. 15 An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe t o test the device in humans and that the testing protocol is scientifically sound.
In addition, even if the 30-day waiting period expires without objection by the FDA, the FDA can impose a clinical hold if safety issues arise. 16 Table of Contents An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud. • Our revenues may depend on our customers’ receipt of adequate reimbursement from private insurers and government sponsored healthcare programs. • We may be unable to compete successfully with companies in our highly competitive industry, many of whom have substantially greater resources than we do. • Our future operating results depend upon our ability to obtain components in sufficient quantities on commercially reasonable terms or according to schedules, prices, quality and volumes that are acceptable to us, and suppliers may fail to deliver components, or we may be unable to manage these components effectively or obtain these components on such terms. • If hospitals, physicians and patients do not accept our current and future products or if the market for indications for which any product candidate is approved is smaller than expected, we may be unable to generate significant revenue, if any. 22 • The recent coronavirus outbreak (“COVID-19”) adversely affected our financial condition and results of operations and we cannot provide any certainty as to whether there will be future impacts from COVID-19 or another pandemic.
Biggest changeRisks Related to Our Business and Products · We will not be able to reach profitability unless we are able to achieve our product expansion and growth goals; our VIVO launch plans require significant investment in infrastructure and sales representatives. · Our research and development and commercialization efforts may depend on entering into agreements with corporate collaborators. · We have entered into joint marketing agreements with respect to our products, and may enter into additional join marketing agreements, that will reduce our revenues from product sales. · Royalty agreements with respect to LockeT, the surgical vessel closing pressure device, will reduce any future profits from this product. · If we experience significant disruptions in our information technology systems, our business may be adversely affected. · Litigation and other legal proceedings may adversely affect our business. · If we make acquisitions or divestitures, we could encounter difficulties that harm our business. · Failure to attract and retain sufficient qualified personnel could also impede our growth. · Our revenues may depend on our customers’ receipt of adequate reimbursement from private insurers and government sponsored healthcare programs. · We may be unable to compete successfully with companies in our highly competitive industry, many of whom have substantially greater resources than we do. · Our future operating results depend upon our ability to obtain components in sufficient quantities on commercially reasonable terms or according to schedules, prices, quality and volumes that are acceptable to us, and suppliers may fail to deliver components, or we may be unable to manage these components effectively or obtain these components on such terms. · If hospitals, physicians and patients do not accept our current and future products or if the market for indications for which any product candidate is approved is smaller than expected, we may be unable to generate significant revenue, if any. · The recent coronavirus outbreak (“COVID-19”) adversely affected our financial condition and results of operations and we cannot provide any certainty as to whether there will be future impacts from COVID-19 or another pandemic. · A variety of risks associated with marketing our products internationally could materially adversely affect our business. 23 Table of Contents · The impact of the military conflicts in Ukraine and Israel, and the actions that have been and could be taken by other countries, including new and stricter sanctions and actions taken in response to such sanctions, have affected, and may continue to affect, our business and results of operations, including our supply chain. · If the third parties on which we rely for the conduct of our clinical trials and results do not perform our clinical trial activities in accordance with good clinical practices and related regulatory requirements, we may be unable to obtain regulatory approval for or commercialize our product candidates. · We may be adversely affected by product liability claims, unfavorable court decisions or legal settlements. · Our ability to use our net operating loss carryforwards may be limited. · We may have to make milestone payments under the Settlement Agreement we entered into with the Department of Justice (“DOJ”).
The medical device industry is now experiencing greater scrutiny and regulation by federal, state and foreign governmental authorities. Companies in our industry are subject to more frequent and more intensive reviews and investigations, often involving the marketing, business practices, and product quality management.
The medical device industry is now experiencing greater scrutiny and regulation by federal, state and foreign governmental authorities. Companies in our industry are subject to more frequent and more intensive reviews and investigations, often involving marketing, business practices, and product quality management.
The FDA and other agencies, including the DOJ, closely regulate and monitor the post-clearance or approval marketing and promotion of products to ensure that they are marketed and distributed only for the cleared or approved indications and in accordance with the provisions of the cleared or approved labeling.
The FDA and other agencies, including the DOJ, closely regulate and monitor the post-clearance or post-approval marketing and promotion of products to ensure that they are marketed and distributed only for the cleared or approved indications and in accordance with the provisions of the cleared or approved labeling.
Depending on the corrective action we take to address a product’s deficiencies or defects, the FDA may require, or we may voluntarily decide, that we will need to seek and obtain new approvals or clearances for the device before we may market or distribute the corrected device.
Depending on the corrective action we take to address a product’s deficiencies or defects, the FDA may require, or we may voluntarily decide, that we will need to seek and obtain new approvals or clearances for a device before we may market or distribute the corrected device.
After a May 2018 inspection, the FDA issued to us a Form 483 that included observations for failure to properly evaluate whether certain complaints related to our previously marketed DABRA product that we received rose to a level required to be reported to the FDA.
After a May 2018 inspection related to our previously marketed DABRA product, the FDA issued to us a Form 483 that included observations for failure to properly evaluate whether certain complaints related to our previously marketed DABRA product that we received rose to a level required to be reported to the FDA.
The FDA’s and other comparable non-U.S. regulatory agencies’ statutes, regulations, or policies may change, and additional government regulation or statutes may be enacted, which could increase post-approval regulatory requirements, or delay, suspend, prevent marketing of any cleared or approved products or necessitate the recall of distributed products.
The FDA’s and other comparable non-U.S. regulatory agencies’ statutes, regulations, or policies may change, and additional government regulation or statutes may be enacted, which could increase post-approval regulatory requirements, or delay, suspend, or prevent marketing of any cleared or approved products or necessitate the recall of distributed products.
In addition, pursuant to the changes of the PPACA, a claim that includes items or services resulting from a violation of the Anti-Kickback Statute is a false claim for purposes of the False Claims Act.
In addition, pursuant to the changes to the PPACA, a claim that includes items or services resulting from a violation of the Anti-Kickback Statute is a false claim for purposes of the False Claims Act.
If our or our suppliers’ operations result in the contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and fines, and any liability could significantly exceed our insurance coverage and have a material adverse effect on our on our business, financial condition, and results of operations.
If our or our suppliers’ operations result in the contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and fines, and any liability could significantly exceed our insurance coverage and have a material adverse effect on our business, financial condition, and results of operations.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the U.S.
Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection but where enforcement is not as strong as that in the U.S.
Some of these provisions include: • our board of directors is divided into three classes serving staggered three-year terms, such that not all members of the board is elected at one time, which could delay the ability of stockholders to change the membership of a majority of our board of directors; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; 50 • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at an annual or special meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the chairperson of the board of directors, the chief executive officer or president (in the absence of a chief executive officer) or a majority vote of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our certificate of incorporation relating to the issuance of preferred stock and management of our business or our bylaws, which may inhibit the ability of an acquirer to affect such amendments to facilitate an unsolicited takeover attempt; • the ability of our board of directors, by majority vote, to amend our bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Some of these provisions include: · that our board of directors is divided into three classes serving staggered three-year terms, such that not all members of the board is elected at one time, which could delay the ability of stockholders to change the membership of a majority of our board of directors; · the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; · the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; · a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at an annual or special meeting of our stockholders; · a requirement that special meetings of stockholders be called only by the chairperson of the board of directors, the chief executive officer or president (in the absence of a chief executive officer) or a majority vote of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; · the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our certificate of incorporation relating to the issuance of preferred stock and management of our business or our bylaws, which may inhibit the ability of an acquirer to affect such amendments to facilitate an unsolicited takeover attempt; · the ability of our board of directors, by majority vote, to amend our bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our bylaws to facilitate an unsolicited takeover attempt; and · advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Moreover, if we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.
Moreover, if we are not able to comply with the requirements of Section 404 to us in a timely manner, or if we or our independent registered public accounting firm identifies additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.
We and our suppliers are required to comply with the FDA’s QSR, which delineates, among other things, the design controls, document controls, purchasing controls, identification and traceability, production and process 36 controls, acceptance activities, nonconforming product requirements, corrective and preventive action requirements, labeling and packaging controls, handling, storage, distribution and installation requirements, complaint handling, records requirements, servicing requirements, and statistical techniques potentially applicable to the production of our medical devices.
We and our suppliers are required to comply with the FDA’s QSR, which delineates, among other things, the design controls, document controls, purchasing controls, identification and traceability, production and process controls, acceptance activities, nonconforming product requirements, corrective and preventive action requirements, labeling and packaging controls, handling, storage, distribution and installation requirements, complaint handling, records requirements, servicing requirements, and statistical techniques potentially applicable to the production of our medical devices.
Furthermore, trade secret protection does not prevent competitors from independently developing substantially equivalent. 45 We may not be able to protect our intellectual property and proprietary rights throughout the world. Third parties may attempt to commercialize competitive products or services in foreign countries where we do not have any patents or patent applications where legal recourse may be limited.
Furthermore, trade secret protection does not prevent competitors from independently developing substantially equivalent products. We may not be able to protect our intellectual property and proprietary rights throughout the world. Third parties may attempt to commercialize competitive products or services in foreign countries where we do not have any patents or patent applications where legal recourse may be limited.
As a Class II, 510(k)-cleared device, our VIVO product is subject to both general and special controls. Instead of obtaining 510(k) clearance, most Class III devices are subject to premarket approval, or PMA. 32 We do not believe any of our current products are Class III devices, but future products could be, which would subject them to the PMA process.
As a Class II, 510(k)-cleared device, our VIVO product is subject to both general and special controls. Instead of obtaining 510(k) clearance, most Class III devices are subject to premarket approval, or PMA. We do not believe any of our current products are Class III devices, but future products could be, which would subject them to the PMA process.
Alternatively, if a court were to find either 51 exclusive forum provision in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on our business, financial condition, and results of operations.
Alternatively, if a court were to find either exclusive forum provision in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on our business, financial condition, and results of operations.
In January 2013, the 38 American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
If we fail to report events required to be reported to the FDA within the required timeframes, or at all, the FDA could take enforcement action against us. Any such adverse event involving our products also could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection or 37 enforcement action.
If we fail to report events required to be reported to the FDA within the required timeframes, or at all, the FDA could take enforcement action against us. Any such adverse event involving our products also could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection or enforcement action.
In addition to the factors discussed in this Risk Factors section and elsewhere in this Annual Report, these factors include: • our failure to increase the sales of our products; 46 • the failure by our customers to obtain adequate reimbursements or reimbursement levels that would be sufficient to support product sales to our customers and pricing of our products to support revenue projections; • unanticipated serious safety concerns related to the use of our products; • changes in our organization; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our future growth; • the size and growth of our target markets; • actual or anticipated variations in quarterly operating results; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including shareholder litigation, government actions or litigation related to intellectual property; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • any delay in any regulatory filings for our future products and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such products; • adverse regulatory decisions, including failure to receive regulatory approval of our future products, failure to maintain regulatory approval for our existing products or failure to obtain regulatory approval for additional indications for our existing products; • changes in laws or regulations applicable to our products; • adverse developments concerning our suppliers or distributors; • our inability to obtain adequate supplies and components for our products or inability to do so at acceptable prices; • our inability to establish and maintain collaborations if needed; • changes in the market valuations of similar companies; • overall performance of the equity markets; • sales of large blocks of our common stock including sales by our executive officers and directors; • trading volume of our common stock; • limited “public float” in the hands of a small number of persons whose sales or lack of sales of our common stock could result in positive or negative pricing pressure on the market price for our common stock; • additions or departures of key scientific or management personnel; • changes in accounting practices; 47 • ineffectiveness of our internal controls; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
In addition to the factors discussed in this Risk Factors section and elsewhere in this Annual Report, these factors include: · our failure to increase the sales of our products; · the failure by our customers to obtain adequate reimbursements or reimbursement levels that would be sufficient to support product sales to our customers and pricing of our products to support revenue projections; · unanticipated serious safety concerns related to the use of our products; · changes in our organization; · introduction of new products or services offered by us or our competitors; · announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; · our ability to effectively manage our future growth; · the size and growth of our target markets; · actual or anticipated variations in quarterly operating results; · disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; · significant lawsuits, including shareholder litigation, government actions or litigation related to intellectual property; · our cash position; · our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; · publication of research reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage, by securities analysts; · any delay in any regulatory filings for our future products and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such products; · adverse regulatory decisions, including failure to receive regulatory approval of our future products, failure to maintain regulatory approval for our existing products or failure to obtain regulatory approval for additional indications for our existing products; · changes in laws or regulations applicable to our products; · adverse developments concerning our suppliers or distributors; · our inability to obtain adequate supplies and components for our products or inability to do so at acceptable prices; · our inability to establish and maintain collaborations if needed; · changes in the market valuations of similar companies; · overall performance of the equity markets; · sales of large blocks of our common stock including sales by our executive officers and directors; · trading volume of our common stock; 49 Table of Contents · limited “public float” in the hands of a small number of persons whose sales or lack of sales of our common stock could result in positive or negative pricing pressure on the market price for our common stock; · additions or departures of key scientific or management personnel; · changes in accounting practices; · ineffectiveness of our internal controls; · general political and economic conditions; and · other events or factors, many of which are beyond our control.
Catheter entered into a Joint Marketing Agreement with Stereotaxis, Inc. in January 2021, as subsequently amended in January 2022 and May 2022, pursuant to which Stereotaxis agrees to promote our VIVO System to customers who may benefit from the use of VIVO in robotic or non-robotic electrophysiology procedures.
Old Catheter entered into a Joint Marketing Agreement with Stereotaxis, Inc. in January 2021, as subsequently amended in January 2022 and May 2022, pursuant to which Stereotaxis agrees to promote our VIVO System to customers who may benefit from the use of VIVO in robotic or non-robotic electrophysiology procedures.
However, we may incur material liabilities relating to 31 product liability claims in the future, including product liability claims arising out of the usage and delivery of our products. Should we incur product-related liabilities exceeding our insurance coverage, we would be required to use available cash or raise additional cash to cover such liabilities.
However, we may incur material liabilities relating to product liability claims in the future, including product liability claims arising out of the usage and delivery of our products. Should we incur product-related liabilities exceeding our insurance coverage, we would be required to use available cash or raise additional cash to cover such liabilities.
Our information technology systems may be subject to computer viruses, ransomware or other malware, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, 25 telecommunication failures and user errors, among other malfunctions.
Our information technology systems may be subject to computer viruses, ransomware or other malware, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures and user errors, among other malfunctions.
In the event of an accident, we could be held liable for any damages that result and any liability could exceed the limits or fall outside the coverage of our insurance coverage, 42 which we may not be able to maintain on acceptable terms, or at all.
In the event of an accident, we could be held liable for any damages that result and any liability could exceed the limits or fall outside the coverage of our insurance coverage, which we may not be able to maintain on acceptable terms, or at all.
We no longer market DABRA, but any government-mandated recall or additional voluntary recall by us of VIVO or another product we market in the future could occur as a result of component failures, manufacturing errors, design or labeling defects or other issues.
We no longer market DABRA, but any government-mandated recall or additional voluntary recall by us of VIVO, LockeT or another product we market in the future could occur as a result of component failures, manufacturing errors, design or labeling defects or other issues.
Moreover, any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or in the countries, persons, or technologies targeted by such 43 regulations, could result in decreased use of our products by, or in our decreased ability to export our products to existing or potential customers with international operations.
Moreover, any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or in the countries, persons, or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export our products to existing or potential customers with international operations.
Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we 44 license from or license to third parties and are therefore reliant on our licensors or licensees.
Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents, covering technology that we license from or license to third parties and are therefore reliant on our licensors or licensees.
Shares of our common stock are currently listed on the NYSE American. In order to maintain our listing, we must maintain certain share prices, financial and share distribution targets, including maintaining a minimum amount of stockholders’ equity and a minimum number of public stockholders.
Shares of our common stock are currently listed on the NYSE American. In order to maintain our listing, we must maintain certain share prices, financial and share distribution targets, including maintaining a minimum amount of stockholders’ equity, minimum public float, and a minimum number of public stockholders.
We completed an IRC Section 382 analysis regarding the limitation of net operating losses through December 31, 2020 and determined that ownership changes occurred in May 2020. Management believes further ownership changes occurred during each of the years ended December 31, 2022 and 2021.
We completed an IRC Section 382 analysis regarding the limitation of net operating losses through December 31, 2020 and determined that ownership changes occurred in May 2020. Management believes further ownership changes occurred during each of the years ended December 31, 2023, 2022 and 2021.
We may need seek out additional collaborations in order to commercialize Catheter’s products. We will continue to seek research collaborations, co-development and marketing agreements, and licensing deals for Catheter’s products in development; however, there is no guarantee that we will be successful in our efforts.
We may need to seek out additional collaborations in order to commercialize our products. We will continue to seek research collaborations, co-development and marketing agreements, and licensing deals for our products in development; however, there is no guarantee that we will be successful in our efforts.
Prior to our listing on the New York Stock Exchange in September 2018, there was no public market for shares of our common stock. Although our common stock is listed on the NYSE American, the market for our shares has demonstrated varying levels of trading activity.
Prior to our listing on the New York Stock Exchange in September 2018, there was no public market for shares of our common stock. Although our common stock is now listed on the NYSE American, the market for our shares has demonstrated varying levels of trading activity.
In addition, because we are now incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporate Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporate Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock.
We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend. 52 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as a dividend. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
These competitors may have more experience than we have in research 28 and development, marketing, manufacturing, preclinical testing, conducting clinical trials, obtaining FDA and non-U.S. regulatory clearances or approvals and marketing cleared or approved products.
These competitors may have more experience than we have in research and development, marketing, manufacturing, preclinical testing, conducting clinical trials, obtaining FDA and non-U.S. regulatory clearances or approvals and marketing cleared or approved products.
Any failure to obtain or maintain patent protection with respect to VIVO or any new devices that we market could have a material adverse effect on our business, financial condition, and results of operations.
Any failure to obtain or maintain patent protection with respect to VIVO, LockeT or any new devices that we market could have a material adverse effect on our business, financial condition, and results of operations.
We responded to the FDA with the corrective measures we are taking and to address the issued identified in the Form 483 and based on this information, the FDA issued to us an Establishment Inspection Report, or EIR, closing out the inspection.
We responded to the FDA with the corrective measures we are taking and to address the issues identified in the Form 483 and based on this information, the FDA issued to us an Establishment Inspection Report, or EIR, closing out the inspection.
Any collaborator with whom we may enter into such collaboration agreements may not support fully our research and commercial interests since our program may compete for time, attention and resources with such collaborator’s internal programs.
Any collaborator with whom we may enter into such collaboration agreements may not support fully our research and commercial interests since our programs may compete for time, attention and resources with such collaborator’s internal programs.
Under the NYSE American rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain NYSE American corporate governance requirements, including: • the requirement that a majority of the Company’s board of directors consists of independent directors; • the requirement that the Company’s directors must be nominated by a Nominating Committee composed by a majority of independent directors; and • the requirement that executive compensation must be determined or recommended to the Company’s board of directors for determination, by a Compensation Committee comprised of independent directors or by a majority of the independent directors on the Company’s board. 48 Accordingly, if we qualify as a controlled company, we will likely elect to be treated as such and our stockholders will not be afforded the same protections generally as stockholders of other NYSE American-listed companies.
Under the NYSE American rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain NYSE American corporate governance requirements, including: · the requirement that a majority of the Company’s board of directors consists of independent directors; · the requirement that the Company’s directors must be nominated by a Nominating Committee composed by a majority of independent directors; and · the requirement that executive compensation must be determined or recommended to the Company’s board of directors for determination, by a Compensation Committee comprised of independent directors or by a majority of the independent directors on the Company’s board. 50 Table of Contents Accordingly, if we qualify as a controlled company, we will likely elect to be treated as such and our stockholders will not be afforded the same protections generally as stockholders of other NYSE American-listed companies.
Failure to comply with these legal and regulatory requirements could impact our business, and we have had and will continue to spend substantial time and financial resources to develop and implement enhanced structures, policies, systems and processes to comply with these legal and regulatory requirements, which may also impact our business and which could have a material adverse effect on our business, financial condition, and results of operations for years after any resolution of these investigations and any resulting claims are resolved.
Failure to comply with these legal and regulatory requirements could impact our business, and we have spent and will continue to spend substantial time and financial resources to develop and implement enhanced structures, policies, systems and processes to comply with these legal and regulatory requirements, which may also impact our business and which could have a material adverse effect on our business, financial condition, and results of operations for years after any resolution of these investigations and any resulting claims are resolved.
ITEM 1A. RI SK FACTORS Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, before making an investment decision. The risks and uncertainties described below may not be the only ones we face.
ITEM 1A. RISK FACTORS Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, before making an investment decision. The risks and uncertainties described below may not be the only ones we face.
From time to time we are involved in and may become involved in legal proceedings relating to patent and other intellectual property matters, product liability claims, employee claims, tort or contract claims, federal regulatory investigations, securities class action, and other legal proceedings or investigations, which could have an adverse impact on our reputation, business and financial condition and divert the attention of our management from the operation of our business.
From time to time we are involved in and may become involved in legal proceedings relating to patent and other intellectual property matters, product liability claims, employee claims, tort or contract claims, federal regulatory investigations, securities class actions, and other legal proceedings or investigations, which could have an adverse impact on our reputation, business and financial condition and divert the attention of our management from the operation of our business.
We have entered into joint marketing agreements with respect to our products, and may enter into additional join marketing agreements, that will reduce our revenues from product sales.
We have entered into joint marketing agreements with respect to our products, and may enter into additional joint marketing agreements, that will reduce our revenues from product sales.
We have entered into a Settlement Agreement with the Department of Justice, or DOJ, and agreements with the participating states, resolving a DOJ civil investigation concerning certain Covered Conduct (as defined in the Settlement Agreement), and the Office of Inspector General, or OIG, has agreed, conditioned upon our full payment of amounts owed in the Settlement Agreement, and in consideration of our obligations under a Corporate Integrity Agreement, to release our permissive exclusion rights and refrain from instituting any administrative action seeking to exclude us from participating in Medicare, Medicaid, or other federal health care programs as a result of the Covered Conduct.
We have entered into a Settlement Agreement with the Department of Justice, or DOJ, and agreements with the participating states, resolving a DOJ civil investigation concerning certain Covered Conduct (as defined in the Settlement Agreement), and the Office of Inspector General, or OIG, has agreed, in consideration of our full payment of amounts owed in the Settlement Agreement and our obligations under a Corporate Integrity Agreement, to release our permissive exclusion rights and refrain from instituting any administrative action seeking to exclude us from participating in Medicare, Medicaid, or other federal health care programs as a result of specified covered conduct.
Although we believe that this agreement is in the best interest of our business and our stockholders, it will material reduce the revenues that we receive from VIVO products that are sold by Stereotaxis, and any similar agreements entered into in the future may have the same impact.
Although we believe that this agreement is in the best interest of our business and our stockholders, it will materially reduce the revenues that we receive from VIVO products that are sold by Stereotaxis, and any similar agreements entered into in the future may have the same impact.
We cannot predict these periodic revisions with certainty, and such revisions may result in stricter standards for reimbursement of hospital charges for certain specified products, potentially adversely impacting our business, results of operations, and financial conditions when we start receiving reimbursement from third party payers.
We cannot predict these periodic revisions with certainty, and such revisions may result in stricter standards for reimbursement of hospital charges for certain specified products, potentially adversely impacting our business, results of operations, and financial condition when we start receiving reimbursement from third party payers.
The agreement has a term that runs through December 31, 2023, provided however, that the agreement will automatically extend for successive two-year terms unless either party provides the other written notice of termination at least one year prior to the next-scheduled termination date.
The agreement has a term that runs through December 31, 2025, provided however, that the agreement will automatically extend for successive two-year terms unless either party provides the other written notice of termination at least one year prior to the next-scheduled termination date.
Even with reimbursement approval and coverage by government and private payors, providers submitting reimbursement claims for new products or existing products with new approved or cleared indications may face delay in payment if there is confusion by providers or payors regarding the appropriate codes to use in seeking reimbursement.
Even after reimbursement approval and coverage by government and private payors is obtained, providers submitting reimbursement claims for new products or existing products with new approved or cleared indications may face delay in payment if there is confusion by providers or payors regarding the appropriate codes to use in seeking reimbursement.
Furthermore, in some cases, we may not be able to obtain issued claims covering VIVO, as well as other technologies that are important to our business, which are sufficient to prevent third parties, such as our competitors, from utilizing our technology.
Furthermore, in some cases, we may not be able to obtain issued claims covering VIVO or LockeT, as well as other technologies that are important to our business, which are sufficient to prevent third parties, such as our competitors, from utilizing our technology.
An adverse determination could subject us to different liabilities, including criminal penalties, civil monetary penalties and exclusion from participation in Medicare, Medicaid or other health care programs, any of which could have a material adverse effect on our business, financial condition or results of operations. We are regulated by the federal Stark Law.
An adverse determination could subject us to different liabilities, including criminal penalties, civil monetary penalties and exclusion from participation in Medicare, Medicaid or other health care programs, any of which could have a material adverse effect on our business, financial condition or results of operations. 42 Table of Contents We are regulated by the federal Stark Law.
HIPAA, as amended by the HITECH Act, and the regulations that have been issued under it, impose certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of protected health information.
HIPAA, as amended by the HITECH Act, and the regulations that have been issued under it, imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of protected health information.
The EP market includes large medical device companies such as Medtronic, Plc., Abbott Laboratories, Biosense-Webster (J&J) and Boston Scientific Corp. Many of our competitors have substantially greater financial, manufacturing, commercial, and technical resources than we do. There has been consolidation in the industry, and we expect that to continue.
The EP market includes large medical device companies such as Medtronic, Plc., Abbott Laboratories, Biosense-Webster (J&J) and Boston Scientific Corp. 30 Table of Contents Many of our competitors have substantially greater financial, manufacturing, commercial, and technical resources than we do. There has been consolidation in the industry, and we expect that to continue.
Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the U.S., or from selling or importing products made using our inventions in and into the U.S. or other jurisdictions.
Consequently, we may not be able to prevent third parties from utilizing our inventions in all countries outside the U.S., or from selling or importing products made using our inventions in and into the U.S. or other jurisdictions.
A cyber security incident could cause a violation of HIPAA, breach of customer and patient privacy, or other negative impacts. We rely extensively on our information technology (or IT) systems to manage scheduling and financial data, communicate with hospitals and their patients, vendors, and other third parties, and summarize and analyze operating results.
A cyber security incident could cause a violation of HIPAA and/or state consumer privacy laws, breach of customer and patient privacy, or other negative impacts. We rely extensively on our information technology (or IT) systems to manage scheduling and financial data, communicate with hospitals and their patients, vendors, and other third parties, and summarize and analyze operating results.
Our insurance coverage may not be adequate to cover the potentially significant losses that may result from security breaches. We must comply with environmental and Occupational Safety and Health Administration Regulations. We are subject to federal, state and local regulations governing the storage, use and disposal of waste materials and products.
Our insurance coverage may not be adequate to cover the potentially significant losses that may result from security breaches. 44 Table of Contents We must comply with environmental and Occupational Safety and Health Administration Regulations. We are subject to federal, state and local regulations governing the storage, use and disposal of waste materials and products.
The failure of these third parties to carry out their obligations could delay or prevent the development, approval, and commercialization of our product candidates or result in enforcement actions against us. We may be adversely affected by product liability claims, unfavorable court decisions or legal settlements.
The failure of these third parties to carry out their obligations could delay or prevent the development, approval, and commercialization of our product candidates or result in enforcement actions against us. 33 Table of Contents We may be adversely affected by product liability claims, unfavorable court decisions or legal settlements.
Our certificate of incorporation further provides that the federal district courts of the U.S. is the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Our certificate of incorporation further provides that the federal district courts of the U.S. are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
As a result, even if the Surgical Vessel Closing Pressure Device is successfully developed and marketed, our revenues from this device will be reduced by the amount of these royalties. If we experience significant disruptions in our information technology systems, our business may be adversely affected.
As a result, even if the Surgical Vessel Closing Pressure Device is successfully developed and marketed, our revenues from this device will be reduced by the amount of these royalties. 28 Table of Contents If we experience significant disruptions in our information technology systems, our business may be adversely affected.
We are subject to additional risks related to operating in foreign countries, including: • differing regulatory requirements in foreign countries; • differing reimbursement regimes in foreign countries, including price controls and lower payment; • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the U.S.; • potential liability under the FCPA or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the U.S.; 30 • product shortages resulting from any events affecting raw material or finished good supply or distribution or manufacturing capabilities abroad; • the impact of the current situation relating to trade with China and tariffs and other trade barriers that may be implemented by governmental authorities; • the impact of public health epidemics on the global economy, such as the new coronavirus currently impacting the U.S., Europe, China and elsewhere; and • business interruptions resulting from geo-political actions, including war and terrorism.
We are subject to additional risks related to operating in foreign countries, including: · differing regulatory requirements in foreign countries; · differing reimbursement regimes in foreign countries, including price controls and lower payment; · unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; · economic weakness, including inflation, or political instability in particular foreign economies and markets; · compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; · foreign taxes, including withholding of payroll taxes; · foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; · difficulties staffing and managing foreign operations; 32 Table of Contents · workforce uncertainty in countries where labor unrest is more common than in the U.S.; · potential liability under the FCPA or comparable foreign regulations; · challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the U.S.; · product shortages resulting from any events affecting raw material or finished good supply or distribution or manufacturing capabilities abroad; · the impact of the current situation relating to trade with China and tariffs and other trade barriers that may be implemented by governmental authorities; · the impact of public health epidemics on the global economy; and · business interruptions resulting from geo-political actions, including war and terrorism.
In June 2021, the U.S. Supreme Court held that Texas and other challengers had no legal standing to challenge the PPACA, dismissing the case on procedural grounds without specifically ruling on the constitutionality of the PPACA. Thus, the PPACA will remain in effect in its current form.
In June 2021, the U.S. Supreme Court held that Texas and other challengers had no legal standing to challenge the PPACA, dismissing the case on procedural grounds without specifically ruling on the constitutionality of the PPACA. Thus, the PPACA remains in effect in its current form.
Moreover, we have acquired Catheter, and in the future we may engage in additional business transactions, such as acquisitions, reorganizations or implementation of new information systems, any of which could negatively affect our internal control over financial reporting and result in material weaknesses.
Moreover, in the future we may engage in additional business transactions, such as acquisitions, reorganizations or implementation of new information systems, any of which could negatively affect our internal control over financial reporting and result in material weaknesses.
At our special meeting of stockholders held on March 21, 2023, our stockholders approved the conversion of 1,993.627 shares of our Series X Preferred Stock into 1,993,627 shares of our common stock.
At our special meeting of stockholders held on March 21, 2023, our stockholders approved the conversion of 1,993.581 shares of our Series X Preferred Stock into 1,993,581 shares of our common stock.
We may have difficulty gaining market acceptance for the products we sell if third-party payers do not provide adequate coverage and reimbursement to hospitals. Major third-party payers of hospitals, such as private healthcare insurers, periodically revise their payment methodologies based, in part, upon changes in government sponsored healthcare programs.
We may have difficulty gaining market acceptance for the products we sell if third-party payers do not provide adequate coverage and reimbursement to hospitals and/or other relevant healthcare providers. Major third-party payers of hospitals, such as private healthcare insurers, periodically revise their payment methodologies based, in part, upon changes in government sponsored healthcare programs.
All actions are complete, and the final Form 483 report was sent to the FDA on September 25, 2020. We are no longer operating this facility, but the FDA could conduct inspections of our current facilities.
All actions were completed, and the final Form 483 report was sent to the FDA on September 25, 2020. We are no longer operating this facility, but the FDA could conduct inspections of our current facilities.
To accomplish this, we will need to: • Develop initial users that demonstrate clinical and economic benefits and support studies which provide evidence of tangible benefits to prospective customers, such as procedural success, patient complications and reduced procedure times. • Collaborate with clinical thought leaders to establish clinical techniques, evolve our product features and demonstrate enhanced capabilities to broaden the appeal of VIVO. • Expand our FDA clearance to market our products for additional procedure types.
To accomplish this, we will need to: · Develop initial users that demonstrate clinical and economic benefits and support studies which provide evidence of tangible benefits to prospective customers, such as procedural success, no or minimal patient complications and reduced procedure times. · Collaborate with clinical thought leaders to establish clinical techniques, evolve our product features and demonstrate enhanced capabilities to broaden the appeal of VIVO and LockeT. · Acquire data and expand our FDA clearance to market our products for additional procedure types.
The remaining 12,655.965 shares of Series X Preferred Stock may be convertible into 12,655,965 shares of our common stock on or after July 9, 2024, in the event that we meet the initial listing standards of the NYSE American or another securities exchange or have been delisted from the NYSE American.
The remaining 12,656.011 shares of Series X Preferred Stock may be convertible into 12,656,011 shares of our common stock on or after July 9, 2024, in the event that we meet the initial listing standards of the NYSE American or another securities exchange or have been delisted from the NYSE American.
If we use cash to acquire companies, products or technologies, it may divert resources otherwise available for other purposes. If we use our common stock to acquire companies, products or technologies, our stockholders may experience substantial dilution. Failure to attract and retain sufficient qualified personnel could also impede our growth.
If we use cash to acquire companies, products or technologies, it may divert resources otherwise available for other purposes. If we use our common stock to acquire companies, products or technologies, our stockholders may experience substantial dilution. 29 Table of Contents Failure to attract and retain sufficient qualified personnel could also impede our growth.
We may also be subject to significant regulatory fines or penalties. The FDA may not approve future PMA applications or supplements or clear our 510(k) applications on a timely basis or at all. For example, the COVID-19 outbreak could affect the FDA’s ability to review applications or supplements.
We may also be subject to significant regulatory fines or penalties. The FDA may not approve future PMA applications or supplements or clear our 510(k) applications on a timely basis or at all. For example, the a new pandemic outbreak could affect the FDA’s ability to review applications or supplements.
Physicians may decide not to recommend our treatments for a variety of reasons including: • timing of market introduction of competitive products; • demonstration of clinical safety and efficacy compared to other products; • cost-effectiveness; • limited or no coverage by third-party payers; • convenience and ease of administration; 29 • prevalence and severity of adverse side effects; • restrictions in the label of the drug; • other potential advantages of alternative treatment methods; and • ineffective marketing and distribution support of our products.
Physicians may decide not to use our products for a variety of reasons including: · timing of market introduction of competitive products; · demonstration of clinical safety and efficacy compared to other products; · cost-effectiveness; · limited or no coverage by third-party payers; · convenience and ease of administration; · prevalence and severity of adverse side effects; · restrictions in the label of the device; · other potential advantages of alternative treatment methods; and · ineffective marketing and distribution support of our products.
See “—We have entered into joint marketing agreements with respect to our products, and may enter into additional join marketing agreements, that will reduce our revenues from product sales,” and “—Royalty agreements with respect to our surgical vessel closing pressure device in development will reduce any future revenues from this product.” 23 Our business has a history of losses and will incur additional losses, and we may never achieve profitability.
See “—We have entered into joint marketing agreements with respect to our products, and may enter into additional join marketing agreements, that will reduce our revenues from product sales,” and “—Royalty agreements with respect to LockeT, the surgical vessel closing pressure device, will reduce any future revenues from this product.” Our business has a history of losses and will incur additional losses, and we may never achieve profitability.
As disclosed previously, we settled a DOJ civil False Claims Act investigation concerning, among other things, whether we marketed and promoted our DABRA devices for unapproved uses that were not covered by federal healthcare programs. We are no longer marketing DABRA devices.
As disclosed previously, we settled a DOJ civil False Claims Act investigation concerning, among other things, whether we marketed and promoted our DABRA devices for unapproved uses that were not covered by federal healthcare programs.
Technological interruptions would impact our business operations would disrupt our operations, including our ability to timely ship and track product orders, project inventory requirements, manage our supply chain and otherwise adequately service our customers or disrupt our customers’ ability use our products for treatments.
Technological interruptions could disrupt our operations, including our ability to timely ship and track product orders, project inventory requirements, manage our supply chain and otherwise adequately service our customers, or could disrupt our customers’ ability use our products for treatments.
For example, we have previously been a party to securities class action and shareholder derivative litigation and other litigation as set forth in Legal Proceedings. Litigation is inherently unpredictable and can result in excessive or unanticipated verdicts and/or injunctive relief that affect how we operate our business.
For example, we have previously been a party to securities class action and shareholder derivative litigation and other litigation. Litigation is inherently unpredictable and can result in excessive or unanticipated verdicts and/or injunctive relief that affect how we operate our business.
Therefore, these future collaborators may not commit sufficient resources to our program to move it forward effectively, or the program may not advance as rapidly as it might if we had retained complete control of all research, development, regulatory and commercialization decisions.
Therefore, these future collaborators may not commit sufficient resources to our programs to move them forward effectively, or the programs may not advance as rapidly as they might if we had retained complete control of all research, development, regulatory and commercialization decisions.
During the first quarter of 2020 , we adopted the 2020 Inducement Equity Incentive Plan , or the 2020 Plan, for the purpose of attracting, retaining and incentivizing employees in furtherance of our success. As of December 31, 2022, 18 1 shares were available for issuance under the 2020 Plan .
During the first quarter of 2020, we adopted the 2020 Inducement Equity Incentive Plan, or the 2020 Plan, for the purpose of attracting, retaining and incentivizing employees in furtherance of our success. As of December 31, 2023, 540 shares were available for issuance under the 2020 Plan.
In addition, at the time of our merger with Catheter, additional royalty rights with respect to the Surgical Vessel Closing Pressure Device were granted to certain holders (the “Noteholders”) of Catheter’s outstanding convertible promissory notes in exchange for forgiveness of the interest that had accrued under those notes but remained unpaid, pursuant to the terms of certain Debt Settlement Agreements.
In addition, at the time of our merger with Old Catheter, additional royalty rights with respect to LockeT were granted to certain holders (the “Noteholders”) of Old Catheter’s outstanding convertible promissory notes in exchange for forgiveness of the interest that had accrued under those notes but remained unpaid, pursuant to the terms of certain Debt Settlement Agreements.
The Corporate Integrity Agreement has a five-year term and imposes monitoring, reporting, certification, documentation, oversight, screening, and training obligations on us, including the hiring of a compliance officer and independent review organization; however, the OIG has agreed that we are not subject to the terms of the Corporate Integrity Agreement for so long as we do not carry on the legacy Ra Medical business or use the related business assets post our merger with Catheter.
The Corporate Integrity Agreement has a five-year term expiring in December 2025 and imposes monitoring, reporting, certification, documentation, oversight, screening, and training obligations on us, including the hiring of a compliance officer and independent review organization; however, the OIG has agreed that we are not subject to the terms of the Corporate Integrity Agreement for so long as we do not carry on the legacy Ra Medical business or use the related business assets.
Jenkins, our Executive Chairman of the Board, and his affiliates and family members, beneficially own or control, in the aggregate, approximately 24.6% of our outstanding shares of common stock.
Jenkins, our Executive Chairman of the Board, and his affiliates and family members, beneficially own or control, in the aggregate, approximately 16.9% of our outstanding shares of common stock.
The impact of the military action in Ukraine, and the actions that have been and could be taken by other countries, including new and stricter sanctions and actions taken in response to such sanctions, have affected, and may continue to affect, our business and results of operations, including our supply chain.
The impact of the ongoing Russia-Ukraine and Israel-Gaza military conflicts, and other actions that have been and could be taken by other countries, including new and stricter sanctions and actions taken in response to such sanctions, have affected, and may continue to affect, our business and results of operations, including our supply chain.
Pursuant to a private 49 placement in January 2023, as approved by the stockholders at our March 21, 2023 special meeting of stockholders , we also issued warrants to purchase up to 9,998,186 shares of common stock at a purchase price of $3.00 per share. We had an aggregate of 11,148,855 warrants outstanding as of March 2 3 , 2023.
Pursuant to a private placement in January 2023, as approved by the stockholders at our March 21, 2023 special meeting of stockholders, we also issued warrants to purchase up to 9,998,186 shares of common stock at a purchase price of $3.00 per share. We had an aggregate of 11,042,137 warrants outstanding as of March 12, 2024.
These voluntary recalls and any future recalls of our products could divert managerial and financial resources, harm our reputation and adversely affect our business. In addition, the FDA conducted an unannounced facility inspection in December 2019.
These voluntary recalls and any future recalls of our products could divert managerial and financial resources, harm our reputation and adversely affect our business. In addition, the FDA conducted an unannounced facility inspection in December 2019 in connection with our previously marketed DABRA product.
On February 24, 2022, Russian forces launched significant military action against Ukraine, and sustained conflict and disruption in the region is possible.
On February 24, 2022, Russian forces launched significant military action against Ukraine, and sustained conflict and disruption in the region has occurred.
As a result of any internal control failures, we could also become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation or divert financial and management resources from our core business, and which would have a material adverse effect on our business, financial condition and results of operations.
As a result of any internal control failures, we could also become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation or divert financial and management resources from our core business, and which would have a material adverse effect on our business, financial condition and results of operations. 26 Table of Contents Compliance with Section 404 of the Sarbanes-Oxley Act could have a material adverse impact on our business .

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our existing facilities are sufficient to meet our current needs and that suitable additional space will be available as and when needed.
Biggest changeAdministrative activities are also conducted in an approximate 1,200 square foot facility in Park City, Utah under a lease that expires in April 2026. We believe that our existing facilities are sufficient to meet our current needs and that suitable additional space will be available as and when needed.
ITEM 2. PROPERTIES Our manufacturing, inventory and order fulfillment activities are performed in our approximate 2,000 square foot headquarters facility in Fort Mill, South Carolina under a lease that expires in January 2026. We conduct administrative and accounting activities in an approximate 1,100 square foot facility in Budd Lake, New Jersey under a lease that expires in December 2024.
ITEM 2. PROPERTIES Our manufacturing, inventory and order fulfillment activities are performed in our approximate 2,000 square foot headquarters facility in Fort Mill, South Carolina under a lease that expires in November 2025. We conduct administrative and accounting activities in an approximate 1,100 square foot facility in Augusta, New Jersey under a lease that expires in December 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn management’s opinion, any potential loss resulting from the resolution of these matters will not have a material effect on our results of operations, financial position or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 54 PART II — FINANCIAL INFORMATION
Biggest changeITEM 3. LEGAL PROCEEDINGS In the normal course of business, we are at times subject to pending and threatened legal actions. In management’s opinion, any potential loss resulting from the resolution of these matters will not have a material effect on our results of operations, financial position or cash flows.
Removed
ITEM 3. LEGAL PROCEEDINGS Securities Class Action On June 7, 2019, a putative securities class action complaint captioned Derr v. Ra Medical Systems, Inc., et al, (Civil Action no. 19CV1079 LAB NLS) was filed in the U.S.
Removed
District Court for the Southern District of California against the Company, certain current and former officers and directors, and certain underwriters of the Company’s initial public offering.
Removed
Following the appointment of a lead plaintiff and the filing of a subsequent amended complaint, the lawsuit alleges that the defendants made material misstatements or omissions in the Company’s registration statement in violation of Sections 11 and 15 of the Securities Act of 1933, or the Securities Act, and between September 27, 2018 and November 27, 2019, inclusive, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, or the Exchange Act.
Removed
On March 11, 2020, lead plaintiffs voluntarily dismissed the underwriter defendants without prejudice. On March 13, 2020, defendants filed a motion to dismiss the amended complaint.
Removed
On March 24, 2021, the court issued an order granting defendants’ motion to dismiss claims under the Securities Act in full and certain claims under the Exchange Act and denying defendants’ motion to dismiss certain Exchange Act claims.
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Plaintiffs filed their second amended complaint on April 19, 2021, realleging the Securities Act claims and certain of the previously dismissed Exchange Act claims. On June 10, 2021, defendants moved to dismiss the second amended complaint.
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On November 12, 2021, following a private settlement mediation with the lead plaintiffs, the parties executed a stipulation of settlement that resolved the claims asserted in the securities class action. The settlement provides for a payment to the plaintiff class of $10.0 million.
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On March 18, 2022, the Company paid approximately $0.6 million towards the settlement to satisfy its self-insured retention/deductible. The Company’s insurers paid the remainder of the settlement. The proposed settlement required both preliminary and final approval by the court.
Removed
On February 11, 2022, the court granted preliminary approval of the settlement, scheduled a hearing on final approval of the settlement and denied the pending motion to dismiss without prejudice.
Removed
On May 2, 2022, plaintiffs filed a motion for final approval of the settlement and plan of allocation, and lead counsel filed a motion for an award of attorneys’ fees and reimbursement of litigation expenses.
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On September 23, 2022, the court granted final approval of the settlement, certified the settlement class, granted in part lead counsel’s motion for an award of attorneys’ fees and reimbursement of litigation expenses, dismissed plaintiffs’ claims with prejudice, and entered final judgment. Shareholder Derivative Litigation On October 1, 2019, a shareholder derivative complaint captioned Noel Borg v.
Removed
Dean Irwin, et al (Civil Action no. 1:99-cm-09999) was filed in the U.S. District Court for the District of Delaware against certain current and former officers and directors, purportedly on behalf of the Company, which is named as a nominal defendant in the action.
Removed
The complaint alleges breaches of fiduciary duty, unjust enrichment, waste, and violations of Section 14(a) of the Exchange Act. On October 21, 2019, pursuant to the parties’ stipulation, the court stayed the derivative lawsuit until the related class action is resolved.
Removed
On November 10, 2022, the plaintiff filed a notice voluntarily dismissing the case without prejudice. 53 Settlement Agreements with the Department of Justice and Participating States On December 28, 2020, the Company entered into a settlement agreement with the U.S., acting through the DOJ and on behalf of the OIG, and other settlement agreements with certain state attorneys general, collectively the Settlement Agreements, to resolve investigations and a related civil action concerning its marketing of the DABRA laser system and DABRA-related remuneration to certain physicians.
Removed
Pursuant to the terms of the Settlement Agreements, (a) if the Company’s revenue exceeds $10 million in any of fiscal years 2021-2024, the Company also is required to pay for the corresponding year: $500,000 for 2021, $750,000 for 2022, $1 million for 2023, and $1.25 million for 2024; (b) if the Company is acquired or is otherwise involved in a change in control transaction before the end of 2024, the Company was required to pay an additional settlement amount of $5 million, plus 4% of the value attributed to the Company in the transaction, so long as the attributed value is in excess of $100 million, with the total change in control payment never to exceed $28 million; and (c) if the Company’s obligations under the Settlement Agreement are avoided by bankruptcy, the U.S. may rescind the releases and bring an action against the Company in which the Company agrees is not subject to an automatic stay, is not subject to any statute of limitations, estoppel or laches defense, and is a valid claim in the amount of $56 million, minus any prior change in control payments.
Removed
As a result of the merger with Catheter Precision, Inc., the Company made payments of $4.7 million and $0.3 million to the DOJ and participating states, respectively, in February 2023. Filing of Complaint On September 29, 2022, a purported stockholder of the Company filed a complaint captioned David Nguyen v. Ra Medical Systems, Inc. et al.
Removed
(Civil Action no. 3:22-cv-01470-BEN-MSB) in the U.S. District Court for the Southern District of California against us and our current directors. The complaint alleges violations of Sections 14(a) and 20(a) of the Exchange Act based on alleged deficiencies in our preliminary proxy, filed with the SEC on September 23, 2022.
Removed
On February 7, 2023, plaintiff filed a notice voluntarily dismissing the case without prejudice. Other Litigation In the normal course of business, we are at times subject to pending and threatened legal actions.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is traded on the NYSE American under the symbol “RMED.” On March 23, 2023, the last reported sales price of our common stock was $1.42 and, according to our transfer agent, as of March 23, 2023, there were 57 record holders of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is traded on the NYSE American under the symbol “VTAK”. Prior to August 17, 2023 the Company’s common stock was traded on the NYSE American under the symbol “RMED”.
Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on, among other factors, our financial condition, operating results, capital requirements, general business conditions, the terms of any future credit agreements and other factors that our board of directors may deem relevant. Recent Sales of Unregistered Securities None.
Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on, among other factors, our financial condition, operating results, capital requirements, general business conditions, the terms of any future credit agreements and other factors that our board of directors may deem relevant.
Removed
Use of Proceeds None. Recent Repurchases of Equity Securities None. ITEM 6. [Reserved] 55
Added
On March 12, 2024, the last reported sales price of our common stock was $0.58 and, according to our transfer agent, as of March 12, 2024, there were 112 record holders of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations for the Years Ended December 31, 2022 and 2021 The following table sets forth the results of Ra Medical’s continuing and discontinued operations for the periods presented (in thousands): Year Ended December 31, 2022 2021 Change Net revenues $ 14 $ 22 $ (8 ) Cost of revenues 161 1,560 (1,399 ) Selling, general and administrative expenses 16,250 15,475 775 Research and development expenses 6,392 12,253 (5,861 ) Restructuring costs 4,172 — 4,172 Other income (expense), net 99 2,009 (1,910 ) Net Revenues The decrease of approximately $8,000 in net revenues for the year ended December 31, 2022 as compared to the prior year was due to decreased catheter unit sales as a result of the discontinuation of all manufacturing activities in June 2022 while we explored strategic options.
Biggest changeResults of Operations for the Years Ended December 31, 2023 and 2022 The following table sets forth the results of the Company's operations for the periods presented ($ in thousands): For the Year Ended December 31, 2023 2022 Change Revenue $ 442 $ 14 $ 428 Cost of revenues 30 161 (131 ) Selling, general and administrative expenses 17,122 16,250 872 Research and development expenses 475 6,392 (5,917 ) Restructuring/impairment charges 60,934 4,172 56,762 Change in fair value of royalties payable 7,208 — 7,208 Other income, net 339 99 240 Revenues The increase in revenues of approximately $428 thousand for the year ended December 31, 2023 as compared to the corresponding period in the prior year was due to product sales of the VIVO system, as a result of the merger that took place in January 2023. 62 Table of Contents Cost of Revenues The decrease in cost of revenues of approximately $131 thousand for the year ended December 31, 2023 as compared to the corresponding period in the prior year was due to the cost of sales of the VIVO System, as a result of the Merger that took place in January 2023, which were substantially lower than the cost of revenues for the Ra Medical legacy products during the comparable prior year periods, which legacy products have been discontinued.
In August and September 2022, an additional 20% of Ra Medical’s employees were terminated and provided one-time severance payments totaling approximately $0.3 million. The purpose of the RIF was to preserve capital with the goal of maximizing the opportunities available to Ra Medical during the board of directors’ review of strategic alternatives.
In August and September 2022, an additional 20% of Legacy Ra Medical’s employees were terminated and provided one-time severance payments totaling approximately $0.3 million. The purpose of the RIF was to preserve capital with the goal of maximizing the opportunities available to Legacy Ra Medical during the board of directors’ review of strategic alternatives.
Our business strategy is to become the leading medical imaging company in the field of cardiac electrophysiology, and we are dedicated to developing and delivering electrophysiology products to provide patients, hospitals, and physicians with novel technologies and solutions to improve the lives of patients with cardiac arrhythmias.
Our business strategy is to become a leading medical imaging company in the field of cardiac electrophysiology, and we are dedicated to developing and delivering electrophysiology products to provide patients, hospitals, and physicians with novel technologies and solutions to improve the lives of patients with cardiac arrhythmias.
The Destruction of Arteriosclerotic Blockages by laser Radiation Ablation, or DABRA, laser and single-use catheter, together referred to as the DABRA Excimer Laser System or DABRA, was developed as a tool in the treatment of Peripheral Artery Disease which commonly occurs in the legs. Ra Medical also previously marketed the Pharos laser which was used to treat proliferative skin conditions.
The Destruction of Arteriosclerotic Blockages by laser Radiation Ablation, laser and single-use catheter, together referred to as the DABRA Excimer Laser System or DABRA, was developed as a tool in the treatment of Peripheral Artery Disease which commonly occurs in the legs. The Company also previously marketed the Pharos laser which was used to treat proliferative skin conditions.
Net Cash Provided by Investing Activities During the year ended December 31, 2022, net cash provided by investing activities of $21,000 consisted of proceeds from sales of property and equipment of approximately $38,000, partially offset by purchases of property and equipment of approximately $17,000.
During the year ended December 31, 2022, net cash provided by investing activities of $21 thousand consisted of proceeds from sales of property and equipment of approximately $38 thousand, partially offset by purchases of property and equipment of approximately $17 thousand.
Holders of PIPE Preferred Stock will be entitled to receive dividends on shares of PIPE Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock. Except as otherwise required by law, the PIPE Preferred Stock does not have voting rights.
Holders of PIPE Preferred Stock are entitled to receive dividends on shares of PIPE Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock. Except as otherwise required by law, the PIPE Preferred Stock does not have voting rights.
As a result of the Merger, Ra Medical made payments of $4.7 million and $0.3 million to the DOJ and participating states, respectively, in February 2023. Such amounts were included in accrued expenses in the balance sheet at December 31, 2022.
As a result of the Merger, the Company made payments of $4.7 million and $0.3 million to the DOJ and participating states, respectively, in February 2023. Such amounts were included in accrued expenses in the balance sheet at December 31, 2022.
The PIPE Warrants are exercisable at any time on or after the closing date of the Private Placement until the expiration thereof, except that the PIPE Warrants cannot be exercised if, after giving effect thereto, the purchaser would beneficially own more than 4.99%, or the Maximum Percentage, of the outstanding shares of common stock of the Company, which Maximum Percentage may be increased or decreased by the purchaser with written notice to the Company to any other percentage specified not in excess of 9.99%.
The PIPE Warrants are exercisable at any time until the expiration thereof, except that the PIPE Warrants cannot be exercised if, after giving effect thereto, the purchaser would beneficially own more than 4.99%, or the Maximum Percentage, of the outstanding shares of common stock of the Company, which Maximum Percentage may be increased or decreased by the purchaser with written notice to the Company to any other percentage specified not in excess of 9.99%.
Warrant Inducement Offer On January 9, 2023, we reduced the exercise price of certain existing warrants, or the Existing Warrants, exercisable for 331,608 shares of Ra Medical common stock held by a certain investor, or the Investor, with exercise prices ranging from $14.00 to $526.50 per share to $4.00 per share, or the Warrant Repricing.
Warrant Inducement Offer On January 9, 2023, we reduced the exercise price of certain existing warrants, or the Existing Warrants, exercisable for 331,608 shares of the Company's common stock held by a certain investor (the “Investor”), with exercise prices ranging from $14.00 to $526.50 per share to $4.00 per share, or the Warrant Repricing.
Subject to limited exceptions, holders of shares of PIPE Preferred Stock will not have the right to convert any portion of their Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or up to 9.99% at the election of the holder) of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.
Subject to limited exceptions, holders of shares of PIPE Preferred Stock do not have the right to convert any portion of their Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.
Research and Development Expenses Research and development, or R&D, expenses were expensed as incurred and included the following: • certain employee-related expenses, including salaries, benefits and stock-based compensation expense; • cost of clinical studies to support new products and product enhancements, including expanded indications; • supplies used for internal R&D and clinical activities; and • cost of outside consultants who assist with technology development and clinical affairs.
Research and Development Expenses Research and development ("R&D"), expenses are expensed as incurred and include the following: product development, certain employee-related expenses, including salaries, benefits and an allocated portion of stock-based compensation expense; cost of clinical studies to support new products and product enhancements, including expanded indications; supplies used for internal R&D and clinical activities; and cost of outside consultants who assist with technology development and clinical affairs.
Settlement Agreements with the Department of Justice and Participating States On December 28, 2020, Ra Medical entered into a settlement agreement with the U.S., acting through the DOJ and on behalf of the OIG, and other settlement agreements with certain state attorneys general, collectively the Settlement Agreements, to resolve investigations and a related civil action concerning its marketing of the DABRA laser system and DABRA-related remuneration to certain physicians.
Recent Developments Settlement Agreements with the Department of Justice and Participating States On December 28, 2020, the Company entered into a settlement agreement with the U.S., acting through the Department of Justice ("DOJ") and on behalf of the Office of Inspector General, and other settlement agreements with certain state attorneys general (collectively the "Settlement Agreements"), to resolve investigations and a related civil action concerning its marketing of the DABRA laser system and DABRA-related remuneration to certain physicians.
Pursuant to the terms of the Settlement Agreements, if Ra Medical was acquired or was otherwise involved in a change in control transaction before the end of 2024, Ra Medical was required to pay a settlement amount of $5.0 million.
Pursuant to the terms of the Settlement Agreements, if the Company was acquired or was otherwise involved in a change in control transaction (as defined in the Settlement Agreements) before the end of 2024, the Company was required to pay a settlement amount of $5.0 million.
Accordingly, our current activities primarily relate to Catheter’s historical business, which comprises the design, manufacture and sale of new and innovative medical technologies focused in the field of cardiac electrophysiology, or EP. Our primary product is the View into Ventricular Onset System or VIVO™ System (“VIVO” or “VIVO System”).
Accordingly, our current activities primarily relate to Old Catheter’s historical business, which comprises the design, manufacture and sale of new and innovative medical technologies focused in the field of cardiac electrophysiology, or EP. Our primary product is the VIVO System.
Post-Merger Operations Looking forward, we do not expect to use our legacy DABRA-related assets or continue Ra Medical’s legacy lines of business, but instead expect to shift the focus of our operations to Catheter’s product lines.
Post-Merger Operations Looking forward, we do not expect to use our legacy DABRA-related assets or continue the Company's legacy lines of business, but instead have shifted the focus of our operations to Old Catheter’s product lines.
Stock-Based Compensation We calculate the cost of awards of equity instruments based on the grant date fair value of the awards issued to employees, members of our board of directors and nonemployee consultants using the Black-Scholes option pricing valuation model, or Black-Scholes model, which incorporates various assumptions including volatility, expected term and risk-free interest rate.
The inputs for the market capitalization calculation are considered Level 1 inputs. 67 Table of Contents Stock-Based Compensation We calculate the cost of awards of equity instruments based on the grant date fair value of the awards issued to employees, members of our board of directors and nonemployee consultants using the Black-Scholes option pricing valuation model, or Black-Scholes model, which incorporates various assumptions including volatility, expected term and risk-free interest rate.
The remaining 12,655.965 shares of Series X Preferred Stock are expected to remain outstanding until at least July 9, 2024, and will convert thereafter into up to 12,655,965 shares of common stock, only if we meet the initial listing standards of the NYSE American or another national securities exchange or are delisted from the NYSE American.
The remaining 12,656.011 shares of Series X Convertible Preferred Stock are expected to remain outstanding until at least July 9, 2024, and will convert thereafter up to 12,656,011 shares of common stock, only if the Company meets the initial listing standards of the NYSE American or another national securities exchange or is delisted from the NYSE American.
LockeT is indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure, and it is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently. Clinical studies for LockeT are planned to begin during 2023.
LockeT is indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure, and it is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently. 58 Table of Contents Clinical studies for LockeT began during the year ended December 31, 2023.
The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the resale of the shares of its common stock, the shares issuable upon exercise of the PIPE Warrants and the shares issuable upon the conversion of the PIPE Preferred Stock.
The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the resale of the shares of its common stock, the shares issuable upon exercise of the PIPE Warrants and the shares issuable upon the conversion of the PIPE Preferred Stock. These registration statements were declared effective in April 2023.
Restructuring Costs Restructuring costs of $4.2 million were incurred during the year ended December 31, 2022 due to the RIF and the board of directors’ decisions to discontinue manufacturing activities and enrollment in the clinical trial. No such expenses were incurred in the prior year. See Note 14.
Restructuring costs of $4.2 million were incurred during the year ended December 31, 2022, due to the RIF and the board of directors’ decisions to discontinue manufacturing activities and enrollment in the clinical trial of the legacy DABRA products. There were no restructuring costs incurred during the year ended December 31, 2023.
The Series E Warrant is exercisable for five years from the date of stockholder approval. Exercise of the Series E Warrant in full was approved by Ra Medical’s stockholders at the Stockholders’ Meeting.
The Series E Warrant is exercisable for five years from the date of stockholder approval. Exercise of the Series E Warrant in full was approved by the Company's stockholders at the special Stockholders’ Meeting held on March 21, 2023.
Refer to the Current Report on Form 8-K filed on March 28, 2023 for management’s discussion and analysis of financial condition and results of operations for Catheter Precision, Inc.’s historical financial results. Overview Ra Medical Systems, Inc., or Ra Medical, was incorporated in Delaware in July 2018.
Refer to the Current Report on Form 8-K filed on March 28, 2023 for management’s discussion and analysis of financial condition and results of operations for Catheter Precision, Inc.’s historical financial results.
We paid the placement agent aggregate cash fees of approximately $0.2 million related to the Inducement Offer which represented 8.0% of the gross proceeds received from the Inducement Offer plus other offering costs.
In consideration for exercising the Existing Warrants pursuant to the terms of the Inducement Letter, we received approximately $1.3 million in gross proceeds. We paid the placement agent aggregate cash fees of approximately $0.2 million related to the Inducement Offer which represented 8.0% of the gross proceeds received from the Inducement Offer plus other offering costs.
These studies are planned to show the product’s effectiveness and benefits, including faster wound closure, earlier ambulation, potentially leading to early hospital discharge, and cost analysis. This data is intended to provide crucial data for marketing and to expand our indications for use with the FDA.
The three phases of the current studies are planned to show the product’s effectiveness and benefits, including faster wound closure, earlier ambulation, potentially leading to early hospital discharge, and lower costs for the healthcare provider and/or insurance payor. This data is intended to provide crucial data for marketing and to expand our indications for use with the FDA.
The Series F Warrants have a term of two years from the date of stockholder approval, and the Series G Warrants have a 58 term of six years from the date of stockholder approval. Stockholder approval of the Series F Warrants and Series G Warrants was obtained at the Stockholde rs’ Meeting .
The Series F Warrants have a term of two years from the date of stockholder approval, and the Series G Warrants have a term of six years from the date of stockholder approval. Stockholder approval of the Series F Warrants and Series G Warrants was obtained at the special Stockholders’ Meeting held on March 21, 2023.
Cash Flows for the Years Ended December 31, 2022 and 2021 The following information reflects Ra Medical’s cash flows for continuing operations and discontinued operations for the periods presented (in thousands): Year Ended December 31, 2022 2021 Net cash provided by (used in): Operating activities $ (22,568 ) $ (27,625 ) Investing activities 21 3,802 Financing activities 23,361 14,962 Net change in cash and cash equivalents $ 814 $ (8,861 ) Net Cash Used in Operating Activities During the year ended December 31, 2022, net cash used in operating activities of $22.6 million consisted of a net loss of $26.9 million, partially offset by non-cash expenses of $3.8 million, consisting primarily of non-cash restructuring costs of $2.9 million and stock-based compensation and depreciation and amortization each of $0.4 million, partially offset by a non-cash gain of $0.1 million related to the write-off of our right-of-use asset and liability due to the termination of the lease for our manufacturing and office space.
During the year ended December 31, 2022, net cash used in operating activities of $22.6 million consisted of a net loss of $26.9 million, partially offset by non-cash expenses of $3.8 million, consisting primarily of non-cash restructuring costs of $2.9 million and stock-based compensation and depreciation and amortization each of $0.4 million, partially offset by a non-cash gain of $0.1 million related to the write-off of our right-of-use asset and liability due to the termination of the lease for our manufacturing and office space.
We aim to establish VIVO as an integral tool used by cardiac electrophysiologists during ablation treatment of ventricular arrhythmias by reducing procedure time and patient complications and increasing procedural success. We have been cleared to label the VIVO System with the CE Mark in the EU and certain other countries.
We aim to establish VIVO as an integral tool used by cardiac electrophysiologists during ablation treatment of ventricular arrhythmias by reducing procedure time and patient complications and increasing procedural success.
We regularly evaluate estimates and assumptions related to provisions for legal contingencies, income taxes, deferred income tax, asset valuation allowances, valuation of warrant liabilities, share based compensation and revenues.
We regularly evaluate estimates and assumptions related to business combinations, including the determination of the purchase price and related allocations to the fair value of assets acquired and liabilities assumed, provisions for legal contingencies, income taxes, deferred income tax, asset valuation allowances, valuation of warrant liabilities, share based compensation and revenues.
Management expects operating losses and negative cash flows to continue for the foreseeable future as we invest in our commercial capabilities. Accrued expenses of $7.5 million at December 31, 2022 are primarily related to the Merger with Catheter. Additional costs associated with the Merger paid during the year ended December 31, 2022 have substantially depleted our cash.
Despite the additional financing, we expect operating losses and negative cash flows to continue for the foreseeable future as we invest in our commercial capabilities. These negative cash flows and additional costs associated with the Merger paid during the year ended December 31, 2022 and during the year ended December 31, 2023 have substantially depleted our cash.
If expected revenues are not adequate to fund our planned expenditures, or if we are unsuccessful at raising cash through future capital transactions, we may be required to reduce our spending rate to align with revenue levels and cash reserves, although there can be no guarantee that we will be successful in doing so.
If we are unable to do so, we will be required to reduce our spending rate to align with expected revenue levels and cash reserves, although there can be no guarantee that we will be successful in doing so.
Net Cash Provided by Financing Activities During the year ended December 31, 2022, net cash provided by financing activities of $23.4 million c onsisted primarily of net proceeds of $11.5 million from the issuance of common stock and warrants in the February 2022 offering, $7.4 million under our ATM offerings and $5.7 million from the exercises of warrants, 62 partially offset by the payment of $1.2 million in offering cost s du ring the year ended December 31, 202 1 , net cash provided by financing activities of $ 1 5 . 0 million consisted pri marily of net proceeds of $15.2 million from our ATM offerings, partially offset by payments of $0.3 million on our financed equipment.
During the year ended December 31, 2022, net cash provided by financing activities of $23.4 million consisted primarily of net proceeds of $11.5 million from the issuance of common stock and warrants in the February 2022 offering, $7.4 million under our ATM offerings and $5.7 million from the exercises of warrants.
In connection with the Warrant Repricing, we entered into a warrant inducement offer letter, or the Inducement Letter, with the Investor pursuant to which it exercised all of the 331,608 Existing Warrants, or the Inducement Offer. In consideration for exercising the Existing Warrants pursuant to the terms of the Inducement Letter, we received approximately $1.3 million in gross proceeds.
In connection with the Warrant Repricing, we entered into a warrant inducement offer letter, or the Inducement Letter, with the Investor pursuant to which it would exercise up to all of the 331,608 Existing Warrants, or the Inducement Offer.
LockeT, a suture retention device, is a sterile, Class I product that was registered with the FDA in February 2023, at which time we began initial shipments to distributors.
Catheter’s international distributors are supported by two EU based full time consultants. In addition, LockeT, a suture retention device, is a sterile, Class I product that was registered with the FDA in February 2023, at which time we began initial shipments to distributors. In May 2023, Catheter submitted LockeT for CE Mark approval.
Pursuant to the Securities Purchase Agreement, the Investor agreed to purchase, for an aggregate purchase price of approximately $8.0 million, (a) Class A Units at a price that is the lower of $3.00 per unit and 90% of the 5 day volume weighted average price of our common stock immediately prior to obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants (as each are defined below), each consisting of one share of common stock, one Series F Common Stock Purchase Warrant, or Series F Warrant, and one Series G Common Stock Purchase Warrant, or Series G Warrant, and together with the Series F Warrants the PIPE Warrants, and (b) Class B Units at a price of $1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock, par value $0.0001, or the PIPE Preferred Stock, and one Series F Warrant and one Series G Warrant for each share of the Company’s common stock underlying the PIPE Preferred Stock, each share of which is convertible into a number of shares of the Company’s common stock equal to $1,000 divided by the lower of $3.00 and 90% of the 5 day volume weighted average closing price of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion Rate.
Pursuant to the Securities Purchase Agreement, on March 23, 2023, the Investor purchased, for an aggregate purchase price of approximately $8.0 million, (a) 497,908 Class A Units at a price of $1.60029 per Class A Unit, each consisting of one share of common stock, one Series F Common Stock Purchase Warrant, or Series F Warrant, and one Series G Common Stock Purchase Warrant, or Series G Warrant, and together with the Series F Warrant, the PIPE Warrants, and (b) 4,501,060 Class B Units at a price of $1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock, par value $0.0001, or the PIPE Preferred Stock, and one Series F Warrant and one Series G Warrant for each share of the Company’s common stock underlying the PIPE Preferred Stock, each share of which is convertible into approximately 625 shares of the Company’s common stock, or the Preferred Conversion Rate.
As previously reported, the board of directors approved a reduction in force, or RIF, effective June 6, 2022, under which approximately 65% of Ra Medical’s full-time employees were immediately terminated and provided one-time severance payments totaling approximately $0.6 million.
The Company completed the sale of its Pharos laser business, or Dermatology Business, to STRATA Skin Sciences, Inc. on August 16, 2021. 57 Table of Contents The board of directors approved a reduction in force ("RIF") effective June 6, 2022, under which approximately 65% of Ra Medical's full-time employees were immediately terminated and provided one-time severance payments totaling approximately $0.6 million.
Shares of PIPE Preferred Stock, the conversion of which was approved at the Stockholders’ Meeting, convert into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below. The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.
Shares of PIPE Preferred Stock, the conversion of which was approved at the special Stockholders’ Meeting held on March 21, 2023, convert into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below.
VIVO allows for the acquisition, analysis, display and storage of cardiac electrophysiological data and maps for analysis by a physician. We began a limited commercial launch of VIVO in 2021 and to date, VIVO has been utilized in more than 850 procedures in the U.S. and EU by over 30 physicians, with no reported device-related complications.
We began a limited commercial launch of VIVO in 2021 and to date, VIVO has been utilized in more than 1,000 procedures in the U.S. and EU by over 30 physicians, with no reported device-related complications. We have been cleared to label the VIVO System with the CE Mark in the EU and certain other countries.
Under the terms of the Merger Agreement, Catheter became a wholly owned subsidiary of Ra Medical, together referred to as the Company, in a stock-for-stock merger transaction, or the Merger. Pre-Merger Operations Prior to the Merger, Ra Medical owned intellectual property related to an advanced excimer laser-based platform for use in the treatment of vascular immune-mediated inflammatory diseases.
Pre-Merger Operations The Company owns intellectual property related to an advanced excimer laser-based platform for use in the treatment of vascular immune-mediated inflammatory diseases.
Components of our Results of Operations for the Years Ended December 31, 2022 and 2021 Net Revenues Product sales revenues consisted of sales of catheters for use with the DABRA laser in our atherectomy clinical trials. 59 Cost of R evenue s Cost of revenues for product sales consisted primarily of costs of components for use in our products, the labor used to produce our products, and the manufacturing overhead that supports production.
Components of our Results of Operations for the Years Ended December 31, 2023 and 2022 Revenues Product sales revenues prior to the Merger consisted of sales of catheters for use with the DABRA laser in our atherectomy clinical trials.
Catheter’s international distributors are supported by two EU based full time and one part time employee. We have received United States Food and Drug Administration, or FDA, clearance to market and promote the VIVO System in the United States as a pre-procedure planning tool for patients with structurally normal hearts undergoing ablation treatment for idiopathic ventricular arrhythmias.
We have received FDA clearance to market and promote the VIVO System in the United States as a pre-procedure planning tool for patients with structurally normal hearts undergoing ablation treatment for idiopathic ventricular arrhythmias. VIVO allows for the acquisition, analysis, display and storage of cardiac electrophysiological data and maps for analysis by a physician.
Securities Purchase Agreement On January 9, 2023, we entered into a Securities Purchase Agreement, or the Securities Purchase Agreement, for a private placement, or the Private Placement, with the Investor.
The Company registered the shares of common stock underlying the Series E Warrant for resale in February 2023. Securities Purchase Agreement On January 9, 2023, we entered into a Securities Purchase Agreement (the "Securities Purchase Agreement"), for a private placement (the "Private Placement"), with the Investor.
As a result of the RIF and the board of directors’ review of strategic alternatives, Ra Medical paused all engineering activities in June 2022. On July 5, 2022, Ra Medical announced the receipt of FDA 510(k) clearance for the DABRA 2.0 catheter as part of the DABRA Excimer Laser System.
As a result of the RIF and the board of directors’ review of strategic alternatives, the Company paused all engineering activities in June 2022. The Company has ceased marketing the DABRA Excimer Laser System and does not currently intend to commercialize the DABRA 2.0 catheter.
Selling, General and Administrative Expenses Selling, general and administrative, or SG&A, expenses consisted of employee-related expenses, including salaries, benefits and stock-based compensation expense. Other SG&A expenses include professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses and facility-related expenses.
Other SG&A expenses include amortization of intangible assets and accretion of royalties payable acquired in the Merger, professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses and facility-related expenses.
The closing under the Securities Purchase Agreement and the sale and issuance of the Class A Units and Class B Units (and the issuance of any underlying common stock) was approved at the Stockholders’ Meeting.
The closing under the Securities Purchase Agreement and the sale and issuance of the Class A Units and Class B Units (and the issuance of any underlying common stock) was approved at the special Stockholders’ Meeting held March 21, 2023. 59 Table of Contents The PIPE Warrants are exercisable at an exercise price of $3.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants.
Other Income (Expense), Net The decrease of approximately $1.9 million in other income (expense), net for the year ended December 31, 2022 as compared to the prior year was primarily due to the $2.0 million gain on the forgiveness of the Paycheck Protection Program promissory note under the Coronavirus Aid, Relief and Economic Security Act during the year ended December 31, 2021.
Other income, Net The increase in other income (expense), net of approximately $0.2 million for the year ended December 31, 2023 as compared to the corresponding periods in the prior year was primarily due to an increase in interest income.
The estimated fair value of stock-based compensation awards is amortized on a straight-line basis over the relevant vesting period, adjusted for actual forfeitures at the time they occur. Jobs Act Accounting Election An emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.
The estimated fair value of stock-based compensation awards is amortized on a straight-line basis over the relevant vesting period, adjusted for actual forfeitures at the time they occur. Royalties Payable We are obligated to pay royalties under various royalty agreements Old Cather had entered into.
During the year ended December 31, 2021, net cash used in operating activities of $27.6 million consisted of a net loss of $25.1 million, non-cash gains of $6.0 million consisting of the gains on the sale of the Dermatology Business of $3.5 million, the extinguishment of the PPP promissory note of $2.0 million and the sale of fixed assets of $0.5 million, partially offset by non-cash expenses of $3.8 million consisting primarily of stock-based compensation and depreciation and amortization of $2.2 million and $1.6 million, respectively, and a net change in operating assets and liabilities of $0.3 million.
Cash Flows for the Years Ended December 31, 2023 and 2022 ($ in thousands) For the Year Ended December 31, 2023 2022 Net cash provided by (used in): Operating activities $ (20,619 ) $ (22,568 ) Investing activities (61 ) 21 Financing activities 8,386 23,361 Net change in cash and cash equivalents $ (12,294 ) $ 814 Net Cash Used in Operating Activities During the year ended December 31, 2023, net cash used in operating activities of $20.6 million consisted of a net loss of $70.6 million, a decrease in operating assets and liabilities of $7.1 million, partially offset by non-cash expenses of $57.0 million, consisting primarily of a loss on impairment of goodwill of $60.9 million, non-cash stock-based compensation of $1.2 million, depreciation and amortization of $2.1 million, and a change in fair value of royalties payable of $7.2 million.
Management’s discussion and analysis of Ra Medical’s financial condition and results of operations is based on their financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.
The preparation of these consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.
We may not be able to secure financing in a timely manner or on favorable terms, if at all. Furthermore, if we issue equity securities to raise additional funds, our existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of our existing stockholders.
Accordingly, we will likely be required to raise additional cash through debt or equity transactions to continue our operations, and if we are unable to do so, we will be required to suspend a portion or all of our operations. We may not be able to secure financing in a timely manner or on favorable terms, if at all.
During the year ended December 31, 2021, net cash provided by investing activities of $3.8 million consisted primarily of the net proceeds of $3.5 million from the sale of the Dermatology Business and $0.6 million in proceeds from the sales of equipment, partially offset by purchases of equipment of $0.3 million.
In addition, there was a net change in operating assets and liabilities of $0.5 million. 65 Table of Contents Net Cash (Used in)/Provided by Investing Activities During the year ended December 31, 2023, net cash used in investing activities of $61 thousand consisted of purchases of property and equipment of approximately $76 thousand, offset by proceeds from cash acquired as part of business combination of approximately $15 thousand.
While our significant accounting policies are more fully described in the notes to our financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following discussion addresses our most critical accounting policies, which are those that are most important to our financial condition and results of operations and require our most difficult, subjective and complex judgments.
Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. 66 Table of Contents We believe the following discussion addresses our most critical accounting policies, which are those that are most important to our financial condition and results of operations and require our most difficult, subjective and complex judgments.
Ra Medical was initially formed to develop, commercialize and market its advanced excimer laser-based platform for use in the treatment of vascular and dermatological immune-mediated inflammatory diseases. On January 9, 2023, Ra Medical entered into the Amended and Restated Agreement and Plan of Merger, or the Merger Agreement, with Catheter Precision, Inc., or Catheter, a privately held Delaware corporation.
The Company was initially formed to develop, commercialize and market an excimer laser-based platform for use in the treatment of vascular and dermatological immune-mediated inflammatory diseases, including the DABRA product line.
Research and Development Expenses The decrease of approximately $5.9 million in R&D expenses for the year ended December 31, 2022 as compared to the prior year was primarily due to the RIF and the board of directors’ decisions to pause all engineering activities, discontinue manufacturing activities and cease enrollment in the clinical trial, resulting in decreases of $4.0 million in personnel and consulting expenses, $1.5 million in R&D supplies expense , $0.2 million in stock-based compensation and $0.2 million in other costs, primarily facility costs .
Research and Development Expenses The decrease in R&D expenses of approximately $5.9 million for the year ended December 31, 2023 as compared to the corresponding period in the prior year was due primarily to a decrease in R&D salaries and benefits expenses of $3.5 million, a decrease of parts and materials of $0.7 million, a decrease in clinical study costs of $0.6 million, a decrease in R&D professional fees of $0.6 million, a decrease in R&D facilities allocation expenses of $0.3 million, and a decrease in other expenses of $0.4 million.
In January 2023, we raised gross proceeds of $1.3 million from the Warrant Repricing and signed the Securities Purchase Agreement for the Private Placement for $8.0 million. In March 2023, we completed the Private Placement and raised gross proceeds of $8.0 million.
We have incurred recurring net losses from operations and negative cash flows from operating activities since inception. 64 Table of Contents In January 2023, we raised gross proceeds of $1.3 million from a Warrant Repricing and, in March 2023, we completed a Private Placement and raised gross proceeds of $8.0 million (see Note 13, Equity Offerings, of our accompanying audited consolidated financial statements).
We own the intellectual property related to Amigo, and this product is under consideration for future research and development of a generation 2 product. 57 Recent Developments Conversion of Series X Preferred Stock On March 21, 2023, we held a special meeting of stockholders, or Stockholders’ Meeting, at which the stockholders approved, among other things, the issuance of 1,993,627 shares of our common stock upon the conversion of 1,993.627 of our Series X Preferred Stock which were issued upon the closing of the Merger.
The net proceeds from the Private Placement and the Warrant Repricing have been used to advance the development and commercialization of our novel electrophysiology technologies and solutions and to support general corporate purposes. 60 Table of Contents Conversion of Series X Convertible Preferred Stock On March 21, 2023, the Company held a special meeting of stockholders (the “Stockholders’ Meeting”), at which the stockholders approved, among other things, the issuance of 1,993,581 shares of common stock upon conversion of 1,993.581 of Series X Convertible Preferred Stock which were issued upon the closing of the Merger (see Note 3, Business Combination of our accompanying audited consolidated financial statements).
We will continue to monitor our operating costs and seek to reduce our current liabilities. Such actions may impair our ability to proceed with certain strategic activities, and we may be unsuccessful at negotiating existing liabilities to our benefit. We believe our current cash reserves will be sufficient to fund the Company’s operations for the next twelve months.
Such actions may impair our ability to proceed with certain strategic activities. As of March 7, 2024 we had $1.86 million of cash and cash equivalents. We believe that this amount will not be sufficient to fund our operations through May 2024.
Removed
Ra Medical completed the sale of its Pharos laser business, or Dermatology Business, to STRATA Skin Sciences, Inc. on August 16, 2021. Accordingly, the financial information and results of operations of the Dermatology Business have been presented as discontinued operations for the year ended December 31, 2021.
Added
Overview The registrant (together with our consolidated operating subsidiary, the “Company” or “Catheter”) was incorporated under the name “Ra Medical Systems, Inc.” as a Delaware corporation in July 2018. A predecessor had been incorporated in California in September of 2002, but was reincorporated in 2018 in connection with our initial public offering.
Removed
This catheter includes a braided over jacket to make the catheter more robust and more kink-resistant when navigating tortuous anatomy. This catheter also has a six-month shelf life as a result of multiple design and manufacturing remediations implemented to address prior limitations.
Added
On January 9, 2023, the Company merged with the former Catheter Precision, Inc., or “Old Catheter”, a privately-held Delaware corporation (the “Merger”), and the business of Old Catheter became a wholly owned subsidiary of the Company, which today is our only operating subsidiary.
Removed
Ra Medical has ceased marketing the DABRA Excimer Laser System and does not intend to commercialize the DABRA 2.0 catheter. As previously reported, Ra Medical’s strategy was to pursue an atherectomy indication for use, which the FDA defines to include a prespecified improvement in luminal patency.
Added
Following the Merger, we discontinued the Company’s legacy lines of business and the use of any of its DABRA-related assets. For further information about these historical lines of business, see “Item 1. Business” of the Company’s Form 10-K for the fiscal year ended December 31, 2021.
Removed
Ra Medical received an Investigational Device Exemption, or IDE, approval in January 2020, and the study was approved for up to 10 clinical sites and 100 subjects.
Added
Since the Merger, we have shifted the focus of our operations to Old Catheter’s product lines.
Removed
In February 2022, the FDA approved a protocol amendment, raising the enrollment limit from a maximum of 100 subjects to 125 subjects. 56 On June 6, 2022, Ra Medical ceased enrollment in the atherectomy clinical study at 108 subjects , with the intent to satisfy the FDA’s data requirements to support an atherectomy indication by completing the six-month follow-up by the end of 2022 or early 2023 .
Added
Accordingly, our current activities primarily relate to Old Catheter’s historical business which comprises the design, manufacture and sale of new and innovative medical technologies focused in the field of cardiac electrophysiology, or “EP.” Our primary product is the View into Ventricular Onset System or VIVO System (“VIVO” or “VIVO System”) which is a non-invasive imaging system that offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to EP procedures.
Removed
However, due to the Merger, Ra Medical closed all clinical sites subsequent to the Merger in January 2023 , and it has no plans to pursue the atherectomy indication with the FDA.
Added
Our newest product, LockeT, is a suture retention device indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure. LockeT is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently.
Removed
Prior to 2018, Catheter marketed the Amigo® Remote Catheter System, or the Amigo or Amigo System, which provides for accurate positioning, manipulation, and stable control of catheters for use by electrophysiologists in the diagnosis and treatment of abnormal heart rhythms known as cardiac arrhythmias.
Added
Our product portfolio also includes the Amigo ® Remote Catheter System, or Amigo, a robotic arm that serves as a catheter control device. Prior to 2018, Old Catheter marketed Amigo. We own the intellectual property related to Amigo, and this product is under consideration for future research and development of a generation 2 product.
Removed
Amigo was designed for use during the ablation procedure, to allow the physician to remotely navigate standard commercially available catheters, with stability and precision, and maintains catheter locations within the heart while decreasing radiation exposure and avoiding long periods standing bedside in heavy protective lead aprons.
Added
CE Mark approval is expected in the second half of 2024, at which time initial international shipments to distributors will begin.
Removed
Amigo was used in over 2,000 procedures in the U.S. and Europe and was well received by leading experts in the field of EP.
Added
The incremental fair value of the repriced warrants amounted to $0.3 million and the fair value of Series E warrant totaled $1.9 million. The relative fair values of such amounts were recorded to additional paid-in capital concurrent with the exercise of the Existing Warrants.
Removed
At the closing of the Private Placement, we issued 497,908 Class A Units for proceeds of approximately $0.8 million and 4,501,060 Class B Units for proceeds of approximately $7.2 million. The PIPE Warrants are exercisable at an exercise price of $3.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants.
Added
The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.
Removed
We intend to use the net proceeds from the Private Placement to advance the development and commercialization of our novel electrophysiology technologies and solutions and to support general corporate purposes.
Added
On March 23, 2023, the Company issued 1,974,905 shares of common stock upon the conversion of 1,974.905 shares of Series X Convertible Preferred Stock. On October 24, 2023, the remaining 18,676 shares of common stock were issued upon the conversion of 18.676 shares of Series X Convertible Preferred Stock.
Removed
Restructuring Costs Restructuring costs consisted of all costs related to the RIF and the board of directors’ decisions to stop enrollment in the clinical trial and cease manufacturing activities, including severance, impairment of long-term assets, inventory obsolescence, write-off of prepaid R&D supplies, and the termination of our operating lease agreement and a service contract.
Added
Issuance of Securities upon Conversion of Series A Preferred On July 5, 2023 the Company issued 1,093,552 shares of its common stock in connection with the conversion of 1,750 shares of its outstanding Series A Convertible Preferred Stock.

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