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What changed in Catheter Precision, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Catheter Precision, Inc.'s 2023 and 2024 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 2024 report.

+334 added−293 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in Catheter Precision, Inc.'s 2024 10-K

334 paragraphs added · 293 removed · 147 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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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.
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. 18 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.
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.
Pre-Market Authorization and Notification While some 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 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.
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. 15 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.
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.
The FDA also can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or PMA is obtained. 14 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.
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.
The FDA also regulates industry-sponsored scientific and educational activities that make representations regarding product safety or efficacy in a promotional context. 16 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.
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.
Establishments that manufacture devices are required to register their establishments with the FDA and provide the FDA with a list of the devices that they handle at their facilities. 13 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.
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.
In the context of performance claims for products such as our devices and services, compliance with the FTCA 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.
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.
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.
Federal regulations promulgated by the Occupational Safety and Health Administration impose additional requirements on us, including those protecting employees from exposure to elements such as blood-borne pathogens. We cannot predict the frequency of compliance, monitoring, or enforcement actions to which we may be subject as those regulations are being implemented, which could adversely affect our operations.
Federal regulations promulgated by the Occupational Safety and Health Administration impose additional requirements on us, including those protecting employees from exposure to elements such as blood-borne pathogens. We cannot predict the frequency of compliance, monitoring, or enforcement actions to which we may be subject, which events and actions could adversely affect our operations.
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.
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 concluded enrollment in June 2023.
If we are found to be liable for FCPA or other violations (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), we could suffer from civil and criminal penalties or other sanctions, including contract cancellations or debarment, and loss of reputation, any of which could have a material adverse impact on our business, financial condition, and results of operations.
If we are found to be liable for FCPA or other violations (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), we could suffer from civil and criminal penalties or other sanctions, including contract cancellations or debarment, and loss of reputation, any of which could have a material adverse impact on our business, financial condition, and results of operations. 19 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.
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.
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. We are currently evaluating the regulatory path for any potential PeriKard products.
Employees As of March 12, 2024, we had a total of 14 employees, including 14 full-time employees, which includes finance and administrative, sales and marketing and clinical professionals. We also have retained a total of 5 persons as independent contractors.
Employees As of March 6, 2025, we had a total of 22 employees, including 22 full-time employees, which include finance and administrative, research and development, sales and marketing and clinical professionals. We also have retained a total of 3 people as independent contractors.
This registry concluded enrollment in June 2023 and is anticipated to complete data collection and study activities in September 2024. 18 Table of Contents LockeT is currently undergoing MDR review and approval via the Notified Body. CE Mark is anticipated in August 2024.
The required 12-month follow-up and data collection was completed in late 2024. 17 Table of Contents LockeT is currently undergoing MDR review and approval via the Notified Body. CE Mark is anticipated in the first half of 2025.
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.
We are planning to increase our sales force in support of product launches but currently have no other plans to increase our staff. 20 Table of Contents
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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.
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ITEM 1. BUSINESS 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.
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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.
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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.
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Government expectations and industry best practices for compliance continue to evolve and past activities may not always be consistent with current industry best practices. Further, there is a lack of government guidance as to whether various industry practices comply with these laws, and government interpretations of these laws continue to evolve, all of which creates compliance uncertainties.
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On January 9, 2023, the Company merged with 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.
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Any non-compliance could result in regulatory sanctions, criminal or civil liability and serious harm to our reputation.
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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.
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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.
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Since the Merger, we have shifted the focus of our operations to Old Catheter’s product lines. 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 two primary products include the VIVO System and LockeT.
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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.
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The VIVO System, which is an anacronym for View into Ventricular Onset System(“VIVO” or “VIVO System”) 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.
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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.
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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.
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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.
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On January 24, 2025, we acquired PeriKard, LLC., a development stage company developing a kit of tools to enable physicians to more easily gain access to the pericardial space of the heart. It is intended that the kit will have both a better needle system and a better drainage system than current alternatives.
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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.
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The pericardium is the thin, fluid filled, sac that surrounds the heart. The pericardium is made up of an outer layer of tissue that holds the heart in place within the chest, protects it from inflammation, and acts as a barrier to infection.
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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.
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It also prevents the heart from stretching out and filling with too much blood which could constrict the heart and impede normal heart function in which case, access to the pericardium is needed to drain the excess fluid. Access is also desirable for ablation to treat arrhythmias outside the heart wall. PeriKard is currently in the product development phase.
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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.
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Additional future royalty cash payments may be due to the seller equal to 10% of aggregate future net sales activity of PeiKard’s pericardial access kits, to the extent the product is successfully commercialized, for five years from the acquisition’s closing date.
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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.
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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.
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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.
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We continue to evaluate potential product acquisitions from time to time that might prove complementary to our current portfolio. Electrophysiology Market Overview EP is one of healthcare’s largest sectors and rapidly growing.
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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.
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The EP market includes well known medical devices such as pacemakers, electrocardiogram, or ECG, systems and cardiac catheters, but also laboratory equipment such as intracardiac mapping systems and fluoroscopy systems (similar to x-ray in real time). The EP market includes large medical device companies such as Medtronic, Plc., Abbott Laboratories, Biosense-Webster (J&J) and Boston Scientific Corp.
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The statute and regulations also impose notification obligations on covered entities and their business associates in the event of a breach of the privacy or security of protected health information. We occasionally receive protected health information from our customers in the course of our business.
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Population growth, increasing rates of heart disease and the rising cost of healthcare are driving growth in the EP markets. In September 2024, the Heart Failure Society of America ("HFSA") reported in the Journal of Cardiac Health that approximately 6.7 million Americans over the age of 20 currently live with heart failure, forecast to rise to 8.7 million by 2030.
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As such, we believe that we are business associates and therefore subject to HIPAA’s requirements and restrictions with respect to handling such protected health information and have executed business associate agreements with certain customers. It is possible the data protection laws may be interpreted and applied in a manner that is inconsistent with our practices.
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The proportion of younger patients (aged 35-64) is rising faster than that of older patients driven in part by increasing obesity and hypertension rates amount younger patients, and the overall lifetime risk of heart failure for Americans has risen to 24%. 4 Table of Contents Within the EP market, we focus our products that address the catheter ablation market.
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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.
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The catheter ablation market was $3.5 billion in 2022 and is estimated by Global Market Insights to grow to $14.5 billion in 2032. This market includes medical devices used for atrial and ventricular ablation procedures. Within the last 10 years, ventricular ablation has become a fast-growing treatment option due to updated treatment guidelines, improved technology and raising incidence rates.
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Complying with these various laws and regulations could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business.
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However, the exact number of ventricular ablations performed is not well documented. The ventricular ablation market is estimated by Global Market Insights to grow at a rate of 14.5% CAGR through 2032. Over a ten-year period, one study in Australia demonstrated a growth of 18% for ventricular tachycardia.
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Further, compliance with data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.
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Of note, this surpassed the growth rate of atrial fibrillation (12.7%) which has historically been the largest incidence of cardiac arrhythmias.
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We can provide no assurance that we are or will remain in compliance with diverse privacy and security requirements in all of the jurisdictions in which we do business.
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The Heart Rhythm Society, or HRS, Expert Consensus Statement on Catheter Ablation of Ventricular Arrhythmias, published in May 2019 recommends catheter ablation in preference to anti arrhythmic drugs or in the situation where anti arrhythmic therapy has failed or is not tolerated. The guidelines also recommend ablation for reducing recurrent ventricular tachycardia, or VT, and implantable cardioverter-defibrillator shocks.
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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.
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Existing Treatments and Methods for Catheter Ablations Traditionally, the first line of treatment for cardiac arrhythmias is medication. However, this is often not a permanent fix and many patients eventually need a catheter ablation.
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Segment Information We operate our business as one segment which includes all activities related to the marketing, sales and development of medical technologies focused in the field of cardiac EP. The chief operating decision-maker reviews the operating results on an aggregate basis and manages the operations as a single operating segment.
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In September 2024, the New England Journal of Medicine published clinical trial results which compared the number of adverse events in patients treated with catheter ablation versus patients treated with drug therapy.
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Information contained on, or that can be accessed through, our website is not incorporated by reference into this document, and you should not consider information on our website to be part of this document.
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The trial found that patients treated with catheter ablation had suffered 50% fewer adverse events at the median follow-up period of 4.3 years than patients treated with drug therapy. Catheter Ablation Procedure Overview An electrophysiologist stands next to the patient’s bed near the patient’s groin.
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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.
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A catheter or catheters are inserted into the femoral vein (located at the groin) and navigated into the right side of the heart. Depending on the type of arrhythmia, the catheter is inserted into the atrium or the ventricle.
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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
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Once inserted, a diagnostic catheter is used in conjunction with an invasive (traditional) mapping system to create a map of the patient’s heart. This allows the physician to see the individual patient’s cardiac structures and size.
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Once the map is created, the physician begins to “pace map.” This process requires the physician to move the catheter from spot to spot to determine the electrical conduction at different areas to determine if the tissue in that area is responsible for the arrhythmia.
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Once the area is located, the physician will provide a form of energy (radiofrequency, cryo, etc.) to ablate the tissue in that spot. Treatment Challenges for Ventricular Arrhythmias Treatment of ventricular arrhythmias with cardiac ablations is a relatively new treatment option.
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As a result, we believe that the patient population is underserved, the condition is not as well understood, and the available techniques and technologies are limited when compared to the atrial ablation options. 5 Table of Contents Ablation locations within the ventricle are very difficult to identify.
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Often, patients are highly symptomatic (dizzy, breathing difficulties, etc.) but the arrhythmia is infrequent. When this happens, it is hard to predict when the patient will be having an “active” arrhythmia. Because of this, the physician may not be able to identify the location even when using medication to induce the arrhythmia.
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Without confirmation during invasive mapping, the patient is removed from the electrophysiology lab without the ablation procedure being performed and the patient is required to return at a later date and try again for a successful outcome.
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Even when a patient has frequent ventricular arrhythmias, the process of pace-mapping often takes 4 – 5 hours to identify the location for ablation, which can increase the likelihood of patient complications due to the extended time under anesthesia. Lastly, many patients with untreated ventricular arrhythmias cannot tolerate anesthesia well, thus invasive mapping may not be an option for them.
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Treatment Challenges for Atrial Arrhythmias Catheter ablation for atrial arrhythmias is more standardized and “advanced” than for ventricular ablations, thus less pace mapping is required. Instead, a procedure called Pulmonary Vein Isolation (“ PVI ”) is performed for atrial fibrillation, and a single line is ablated for atrial flutter.
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In pulmonary vein isolation, tiny scars are created in the left upper chamber of the heart in the area where the four lung (pulmonary) veins connect. Despite steady improvement in the tools available to perform effective procedures, there is clear study evidence that catheter based atrial fibrillation treatment technology can become more effective.
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According to a study entitled “ Long Term Outcomes of Catheter Ablation of Atrial Fibrillation: A Systematic Review and Meta- Analysis ” published in the Journal of the American Heart Association on March 18, 2013, which looked at multiple individual studies covering over 6,000 patients, “single procedure freedom from atrial fibrillation at long term follow up was 53.1%.” The same study found “with multiple procedures performed, the long-term success rate was 79.8%.” Ineffective treatment may result in patients undergoing two or more EP procedures to achieve relief from atrial fibrillation at an estimated cost in the range of $20,000 or more per procedure.
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Specific reasons have not been proven for the lower success rate of initial ablation procedures. However, there is growing evidence that better results occur if the treating EP physician is able to make better lesions by maintaining stable contact force of the catheter against the heart wall, thereby reliably delivering the energy required to eliminate the abnormal rhythms.
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Variation in catheter contact force occurs as the physician attempts to manually position and hold the catheter tip in a stable position during cases lasting 2 to 3 hours in order to perform typically over 100 ablations of the cardiac anatomy. Large multi-national medical device companies, such as Medtronic, Inc., Boston Scientific Corp., Abbott Laboratories, St.
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Jude Medical, Inc. and the Biosense Webster division of Johnson & Johnson, among others, continue to invest heavily to develop and introduce new devices and technologies to improve patient outcomes. Included among these are force-sensing catheters, including the Biosense SmartTouch TM catheter, which provide a continuous readout of the contact force between the catheter and the heart wall.
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Our Vivo System is focused on the controlled delivery of these catheter technologies to enhance both the performance of ablation procedures and the ease and safety for the physicians who perform them. 6 Table of Contents Our Products VIVO ™ System Our lead product, VIVO, is an FDA-cleared and CE marked product that utilizes non-invasive inputs to locate the origin of ventricular arrhythmias.
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VIVO has been used in more than 1,000 procedures in leading U.S. and European hospitals. VIVO 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 electrophysiology procedures.
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The VIVO system has achieved a CE Mark allowing it to be sold in the European Union and has been placed at several hospitals in Europe. FDA 510(k) Clearance in the United States was received in June 2019. The VIVO software is provided on an off-the-shelf laptop, and the system includes a 3D camera.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

80 edited+33 added−37 removed337 unchanged
Biggest changeIn the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations.
Biggest changeThis type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations. 46 Table of Contents We are a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to smaller reporting companies will make our common stock less attractive to investors.
As a result, we will require future additional capital infusions including public or private financing, strategic partnerships or other arrangements with organizations that have capabilities and/or products that are complementary to our own capabilities and/or products, in order to execute our strategic vision.
As a result, we will require additional future capital infusions including public or private financing, strategic partnerships or other arrangements with organizations that have capabilities and/or products that are complementary to our own capabilities and/or products, in order to execute our strategic vision.
Pursuant to the agreement, Old Catheter agreed to pay a royalty fee of 5% on net sales up to $1 million. Thereafter, if a patent for the Surgical Vessel Closing Pressure Device is obtained from the U.S.
Pursuant to the agreement, Old Catheter agreed to pay a royalty fee of 5% on net sales of up to $1 million. Thereafter, if a patent for the Surgical Vessel Closing Pressure Device is obtained from the U.S.
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.
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 to use our products for treatments.
Medical devices regulated by the FDA are subject to “general controls” which include: · registration with the FDA; listing commercially distributed products with the FDA; · complying with applicable cGMPs under the Quality System Regulations, or QSR; · filing reports with the FDA of and keeping records relative to certain types of adverse events associated with devices under the medical device reporting regulation; · assuring that device labeling complies with device labeling requirements; · reporting recalls and certain device field removals and corrections to the FDA; and · obtaining premarket notification 510(k) clearance for devices prior to marketing.
Medical devices regulated by the FDA are subject to “general controls” which include: ● registration with the FDA; listing commercially distributed products with the FDA; ● complying with applicable cGMPs under the Quality System Regulations, or QSR; ● filing reports with the FDA and keeping records relative to certain types of adverse events associated with devices under the medical device reporting regulation; ● assuring that device labeling complies with device labeling requirements; ● reporting recalls and certain device field removals and corrections to the FDA; and ● obtaining premarket notification 510(k) clearance for devices prior to marketing.
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.
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; 45 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.
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.
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; 28 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 with respect to China and other countries; ● the impact of public health epidemics on the global economy; and ● business interruptions resulting from geo-political actions, including war and terrorism.
Our goal to achieve profitability is dependent upon establishing VIVO as an integral tool used by cardiac electrophysiologists during ablation treatment of ventricular arrhythmias, as well as upon developing and marketing new products, such as LockeT, the wound closure device, and the successful build out of our U.S. commercial infrastructure and sales force.
Our goal to achieve profitability is dependent upon establishing VIVO as an integral tool used by cardiac electrophysiologists during ablation treatment of ventricular arrhythmias, as well as upon developing and marketing new products, such as LockeT, the wound closure device, and our PeriKard products, and the successful build out of our U.S. commercial infrastructure and sales force.
If a regulatory agency discovers previously unknown problems with our products, such as adverse events of unanticipated severity or frequency, or problems with our facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of our products, such regulatory agency or enforcement authority may impose restrictions on that product or us, including requiring withdrawal of the product from the market.
If a regulatory agency discovers previously unknown problems with our products, such as adverse events of unanticipated severity or frequency, or problems with our facility where the product is manufactured, or disagrees with the promotion, marketing or labeling of our products, such regulatory agencies or enforcement authority may impose restrictions on that product or us, including requiring withdrawal of the product from the market.
Physician Payment Sunshine Act, now known as Open Payments, requires us to report to the Centers for Medicare & Medicaid Services, or CMS, payments and other transfers of value to all U.S. physicians and U.S. teaching hospitals, with the reported information made publicly available on a searchable website.
For example, the U.S. Physician Payment Sunshine Act, now known as Open Payments, requires us to report to the Centers for Medicare & Medicaid Services, or CMS, payments and other transfers of value to all U.S. physicians and U.S. teaching hospitals, with the reported information made publicly available on a searchable website.
Our business strategy also includes expanding uses for our products which will require us to seek additional regulatory clearances in the United States, and we also must continue to expand our patents in order to obtain meaningful patent protection for and establish freedom to commercialize our product candidates.
Our business strategy also includes expanding uses for our products which will require us to seek additional regulatory clearances in the United States and abroad, and we also must continue to expand our patents in order to obtain meaningful patent protection for and establish freedom to commercialize our product candidates.
We and our suppliers are also subject to the regulations of foreign jurisdictions regarding the manufacturing process if we market products overseas. The FDA enforces the QSR through periodic and announced or unannounced inspections of manufacturing facilities. We anticipate that we and certain of our third-party component suppliers will be subject to future inspections.
We and our suppliers are also subject to the regulations of foreign jurisdictions regarding the manufacturing process if we market products overseas. The FDA enforces the QSR through periodic and announced or unannounced inspections of manufacturing facilities. We anticipate that we and certain of our third-party suppliers will be subject to future inspections.
The FDA or state or foreign regulatory authorities may find that certain claims, design features or performance characteristics, in order to be made or included in the products, are required to be supported by further clinical studies and marketing clearances or approvals, which could be lengthy, costly and possibly unobtainable. 39 Table of Contents If any of our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be required to report under applicable medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.
The FDA or state or foreign regulatory authorities may find that certain claims, design features or performance characteristics, in order to be made or included in the products, are required to be supported by further clinical studies and marketing clearances or approvals, which could be lengthy, costly and possibly unobtainable. 35 Table of Contents If any of our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be required to report under applicable medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.
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 .
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. 22 Table of Contents Compliance with Section 404 of the Sarbanes-Oxley Act could have a material adverse impact on our business.
Further, if we encounter delays in our development efforts, the period of time during which we could market our products and services under patent protection would be reduced. 47 Table of Contents In addition to the protection afforded by patents, we also rely on trade secret protection to protect proprietary know-how that may not be patentable or that we elect not to patent, processes for which patents may be difficult to obtain or enforce, and any other elements of our products and services that involve proprietary know-how, information or technology that is not covered by patents.
Further, if we encounter delays in our development efforts, the period of time during which we could market our products and services under patent protection would be reduced. 43 Table of Contents In addition to the protection afforded by patents, we also rely on trade secret protection to protect proprietary know-how that may not be patentable or that we elect not to patent, processes for which patents may be difficult to obtain or enforce, and any other elements of our products and services that involve proprietary know-how, information or technology that is not covered by patents.
Additionally, we cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors or other third parties. 46 Table of Contents The patent prosecution process is expensive, time-consuming, and complex, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent applications at a reasonable cost or in a timely manner.
Additionally, we cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors or other third parties. 42 Table of Contents The patent prosecution process is expensive, time-consuming, and complex, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent applications at a reasonable cost or in a timely manner.
We also received similar letters related to our late Form 10-Q filings during 2023, but we have since filed all late Forms and have remedied those deficiencies. 53 Table of Contents If the NYSE American delists our shares of common stock from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our common stock would qualify to be quoted on an over-the-counter market.
We also received similar letters related to our late Form 10-Q filings during 2023, but we have since filed all late Forms and have remedied those deficiencies. 49 Table of Contents If the NYSE American delists our shares of common stock from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our common stock would qualify to be quoted on an over-the-counter market.
A failure or delay in obtaining necessary regulatory clearances or approvals would materially adversely affect our business, financial condition, and results of operations. 36 Table of Contents Although we have obtained regulatory clearance for our VIVO and LockeT products in the U.S. and certain non-U.S. jurisdictions, our business plans include expanding uses for our products, which will require additional clearances; and even after clearance is obtained, our products will remain subject to extensive regulatory scrutiny.
A failure or delay in obtaining necessary regulatory clearances or approvals would materially adversely affect our business, financial condition, and results of operations. 32 Table of Contents Although we have obtained regulatory clearance for our VIVO and LockeT products in the U.S. and certain non-U.S. jurisdictions, our business plans include expanding uses for our products, which will require additional clearances; and even after clearance is obtained, our products will remain subject to extensive regulatory scrutiny.
If these additional shares of common stock are issued and sold, or if it is perceived that they will be sold, in the public market, this could result in additional dilution and the trading price of our common stock could decline. 51 Table of Contents Further, additional capital may be needed in the future to continue our planned operations, including commercialization efforts, expanded research and development activities and costs associated with operating a public company.
If these additional shares of common stock are issued and sold, or if it is perceived that they will be sold, in the public market, this could result in additional dilution and the trading price of our common stock could decline. 47 Table of Contents Further, additional capital may be needed in the future to continue our planned operations, including commercialization efforts, expanded research and development activities and costs associated with operating a public company.
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.
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. 38 Table of Contents We are regulated by the federal Stark Law.
Therefore, we cannot be certain that we were the first to make the inventions claimed in any of our pending patent applications, or that we were the first to file for patent protection of such inventions.
Therefore, we cannot be certain whether we were the first to make the inventions claimed in any of our pending patent applications, or that we were the first to file for patent protection of such inventions.
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.
The EP market includes large medical device companies such as Medtronic, Plc., Abbott Laboratories, Biosense-Webster (J&J) and Boston Scientific Corp. 26 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.
Further, CPT codes may change over time, undermining our customer’s ability to continue to use those codes, and reimbursement may be interrupted. Furthermore, some payors may not accept these new or revised codes for payment. 41 Table of Contents Reimbursement rates are unpredictable, and we cannot project how our business may be affected by future legislative and regulatory developments.
Further, CPT codes may change over time, undermining our customer’s ability to continue to use those codes, and reimbursement may be interrupted. Furthermore, some payors may not accept these new or revised codes for payment. 37 Table of Contents Reimbursement rates are unpredictable, and we cannot project how our business may be affected by future legislative and regulatory developments.
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 previously 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.
Any of these occurrences may harm our business, prospects, financial condition and operating results. 31 Table of Contents 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.
Any of these occurrences may harm our business, prospects, financial condition and operating results. 27 Table of Contents 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.
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.
Our insurance coverage may not be adequate to cover the potentially significant losses that may result from security breaches. 40 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. 33 Table of Contents 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. 29 Table of Contents 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. As of December 31, 2023, we had net operating loss carryforwards, or NOLs, available of approximately $147 million for federal income tax purposes and $111.7 million for state income tax purposes. Utilization of these NOLs depends on many factors, including our future income, which cannot be assured.
Our ability to use our net operating loss carryforwards may be limited. As of December 31, 2024, we had net operating loss carryforwards, or NOLs, available of approximately $147 million for federal income tax purposes and $111.7 million for state income tax purposes. Utilization of these NOLs depends on many factors, including our future income, which cannot be assured.
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.
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. 24 Table of Contents If we experience significant disruptions in our information technology systems, our business may be adversely affected.
We no longer market DABRA. 38 Table of Contents The failure by us to properly identify reportable events or to file timely reports with the FDA can subject us to sanctions and penalties, including warning letters and recalls. Physicians, hospitals and other healthcare providers may make similar reports to regulatory authorities.
We no longer market DABRA. 34 Table of Contents The failure by us to properly identify reportable events or to file timely reports with the FDA can subject us to sanctions and penalties, including warning letters and recalls. Physicians, hospitals and other healthcare providers may make similar reports to regulatory authorities.
We cannot assure you that our arrangements or business practices will not be subject to government scrutiny or be found to violate applicable fraud and abuse laws. 45 Table of Contents Governmental export or import controls could limit our ability to compete in foreign markets and subject us to liability if we violate them.
We cannot assure you that our arrangements or business practices will not be subject to government scrutiny or be found to violate applicable fraud and abuse laws. 41 Table of Contents Governmental export or import controls could limit our ability to compete in foreign markets and subject us to liability if we violate them.
Controls and Procedures” included in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, we have concluded that our disclosure controls were not effective as of March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023 because material weaknesses existed in our internal control over financial reporting.
Controls and Procedures” included in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, we have concluded that our disclosure controls were not effective as of March 31, 2024, June 30, 2024, September 30, 2024, and December 31, 2024 because material weaknesses existed in our internal control over financial reporting.
The FDA issued to us a Form 483 that included observations, related to our previously marketed DABRA product, that schedules for the adjustment, cleaning, and other maintenance of equipment have not been adequately established, a device master record index was not current, and document control procedures have not been fully established.
The FDA issued us a Form 483 that included observations related to our previously marketed DABRA product, that schedules for the adjustment, cleaning, and other maintenance of equipment had not been adequately established, a device master record index was not current, and document control procedures had not been fully established.
As a result of these material weaknesses, our management has concluded that our disclosure controls were not effective as of March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023. For a discussion of management’s consideration of the material weaknesses described above, see below “Part II, Item 9A.
As a result of these material weaknesses, our management has concluded that our disclosure controls were not effective as of March 31, 2024, June 30, 2024, September 30, 2024, and December 31, 2024. For a discussion of management’s consideration of the material weaknesses described above, see below “Part II, Item 9A.
If any of the risks actually occur, our business, financial condition, operating results, cash flows and prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
If any of the risks actually occur, our business, financial condition, operating results, cash flow and prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
Governmental approval of health care products does not guarantee that these third-party payers will pay for the products. Even if third-party payers do accept our products and services, the amounts they pay may not be adequate to enable us to realize a profit.
Governmental approval of health care products does not guarantee that these third-party payers will pay for the products. Even if third-party payers do accept our products and services, the amounts they pay may not be adequate to enable us to make a profit.
We are no longer marketing DABRA devices. 37 Table of Contents Any government adverse finding, regulatory sanction or investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity.
We are no longer marketing DABRA devices. 33 Table of Contents Any government adverse finding, regulatory sanction or investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity.
We expect increased federal and state privacy and security enforcement efforts. 43 Table of Contents If a breach of our measures protecting personal data covered by HIPAA, as amended by the HITECH Act, occurs, we may incur significant liabilities.
We expect increased federal and state privacy and security enforcement efforts. 39 Table of Contents If a breach of our measures protecting personal data covered by HIPAA, as amended by the HITECH Act, occurs, we may incur significant liabilities.
We face intense competition for executive-level talent from a variety of sources, including from current and potential competitors in the medical device and healthcare industries, and there is no guarantee that we can locate suitable replacements when they are needed. Our revenues may depend on our customers’ receipt of adequate reimbursement from private insurers and government sponsored healthcare programs.
We face intense competition for executive-level talent from a variety of sources, including from current and potential competitors in the medical device and healthcare industries, and there is no guarantee that we can locate suitable replacements when they are needed. Our revenues may depend on our customers ’ receipt of adequate reimbursement from private insurers and government sponsored healthcare programs.
Controls and Procedures: of this Annual Report on Form 10-K, and “Part I, Item 4. Controls and Procedures” included in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. As described below at “Part II, Item 9A. Controls and Procedures” of this Annual Report on Form 10-K and “Part I, Item 4.
Controls and Procedures: of this Annual Report on Form 10-K, and “Part I, Item 4. Controls and Procedures” included in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. As described below at “Part II, Item 9A. Controls and Procedures” of this Annual Report on Form 10-K and “Part I, Item 4.
The unavailability of any component or supplier could result in production delays, idle manufacturing facilities, product design changes and loss of access to important technology and tools for producing and supporting our products, as well as impact our capacity production.
The unavailability of any component or supplier could result in production delays, idle manufacturing facilities, product design changes and loss of access to important technology and tools for producing and supporting our products, as well as impacting our production capacity.
Our current business primarily derives revenues from the View into Ventricular Onset System or VIVO™ System (“VIVO” or “VIVO System”). VIVO is FDA cleared and CE marked, having received FDA 510(k) clearance in June 2019.
Our current business primarily derives revenues from the View into Ventricular Onset System or VIVO™ System (“VIVO” or “VIVO System”) and our LockeT product. VIVO is FDA cleared, and CE marked, having received FDA 510(k) clearance in June 2019.
We are required to report certain adverse events and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing product safety issues could result in increased costs to assure compliance.
We are required to report certain adverse events and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing product safety issues could result in increased costs to ensure compliance.
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.
We responded to the FDA with the corrective measures we were 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 delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline. 52 Table of Contents Our certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the U.S. are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline. 48 Table of Contents Our certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the U.S. are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
For example, as discussed above, on December 28, 2020, we entered into a Settlement Agreement with the DOJ to resolve a civil False Claims Act investigation and related civil action, and in connection with the Settlement Agreement, we also have reached agreements that resolve previously disclosed related investigations conducted by certain state attorneys general.
For example, on December 28, 2020, we entered into a Settlement Agreement with the DOJ to resolve a civil False Claims Act investigation and related civil action, and in connection with the Settlement Agreement, we also have reached agreements that resolve previously disclosed related investigations conducted by certain state attorneys general.
It is unclear how future litigation and healthcare measures promulgated by the Biden administration or future administrations will impact the implementation of the PPACA and our business, financial condition and results of operations.
It is unclear how future litigation and healthcare measures promulgated by the Trump administration or future administrations will impact the implementation of the PPACA and our business, financial condition and results of operations.
We are subject to the continued listing requirements of the NYSE American. If we are unable to comply with such requirements, our common stock would be delisted from the NYSE American, which would limit investors’ ability to effect transactions in our common stock and subject us to additional trading restrictions.
We are subject to the continued listing requirements of the NYSE American. If we are unable to comply with such requirements, our common stock would be delisted from the NYSE American, which would limit investors ’ ability to effect transactions in our common stock and subject us to additional trading restrictions.
Complying with any new legislation or reversing changes implemented under the PPACA could be time-intensive and expensive, resulting in a material adverse effect on our business. 40 Table of Contents Other healthcare reform legislative changes have also been proposed and adopted in the U.S. since the PPACA was enacted.
Complying with any new legislation or reversing changes implemented under the PPACA could be time-consuming and expensive, resulting in a material adverse effect on our business. 36 Table of Contents Other healthcare reform legislative changes have also been proposed and adopted in the U.S. since the PPACA was enacted.
In addition, we must make a significant investment building our U.S. commercial infrastructure and sales force, a lengthy process requiring ongoing investment and a certain amount of lead time to produce the growth rate we desire.
We must also make a significant investment building our U.S. commercial infrastructure and sales force, a lengthy process requiring ongoing investment and a certain amount of lead time to produce the growth rate we desire.
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.
The remaining 12,656 shares of Series X Preferred Stock may be convertible into 1,265,601 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.
Moreover, the laws of other countries in which we now, or may in the future, conduct operations or contract for services may afford little or no effective protection of our intellectual property. The failure to adequately protect our intellectual property and other proprietary rights could materially harm our business.
Moreover, the laws of other countries in which we now, or may in the future, conduct operations or contracts for services may afford little or no effective protection of our intellectual property. The failure to adequately protect our intellectual property and other proprietary rights could materially damage our business.
During fiscal 2023, over 70% of our revenues were derived from four customers, two of whom represented over half of our revenues.
During fiscal 2024, over 70% of our revenues were derived from four customers, two of whom represented over half of our revenues.
If we or our suppliers fail to comply with the FDA’s Quality System Regulation, or QSR, or any applicable state equivalent, our operations could be interrupted, and our potential product sales and operating results could suffer.
If we or our suppliers fail to comply with the FDA ’ s Quality System Regulation, or QSR, or any applicable state equivalent, our operations could be interrupted, and our potential product sales and operating results could suffer.
While we do generate revenue, we are currently operating at a loss, and there is no guarantee that we will be able to grow revenues enough to offset our costs and realize profitability. To date, we have not been profitable, and our accumulated deficit was approximately $275.7 million at December 31, 2023.
While we do generate revenue, we are currently operating at a loss, and there is no guarantee that we will be able to grow revenues enough to offset our costs and achieve profitability. To date, we have not been profitable, and our accumulated deficit was approximately $292 million at December 31, 2024.
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.
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. Further, legislative and regulatory changes under the PPACA remain possible.
We are in the process of formulating a plan to remediate the material weaknesses described therein; however, if we are unable to remediate our material weaknesses in a timely manner or we identify additional material weaknesses, we may be unable to provide required financial information in a timely or reliable manner and we may incorrectly report financial information.
We have formulated and are implementing a plan to remediate the material weaknesses described therein; however, if we are unable to remediate our material weaknesses in a timely manner or we identify additional material weaknesses, we may be unable to provide required financial information in a timely or reliable manner and we may incorrectly report financial information.
Our information systems require an ongoing commitment of significant resources to maintain, protect and enhance our existing systems. Failure to maintain or protect our information systems and data integrity effectively could have a material adverse effect on our business, financial condition, and results of operations. Litigation and other legal proceedings may adversely affect our business.
Our information systems require an ongoing commitment of significant resources to maintain, protect and enhance our existing systems. Failure to maintain or protect our information systems and data integrity effectively could have a material adverse effect on our business, financial condition, and results of operations.
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.
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.
Historically, aside from Merger costs, our losses have resulted principally from costs incurred in research and development, and from general and administrative costs associated with our operations. During the first quarter 2023 we raised approximately $9.3 million in proceeds from securities transactions, but Merger costs and other negative cash flows have substantially depleted our cash.
Historically, aside from Merger costs, our losses have resulted principally from costs incurred in research and development, and from general and administrative costs associated with our operations. During the 2024 we raised approximately $7.2 million in net proceeds from securities transactions, but operating costs and negative cash flows have substantially depleted our cash.
The process takes five to seven years to complete. To date, we have met with reimbursement specialists and are working to determine the best strategy. 27 Table of Contents In addition, our sales and marketing strategy for VIVO requires us to hire additional clinical support and sales representatives who are experienced in the EP field.
To date, we have met with reimbursement specialists and are working to determine the best strategy. ● Develop new products, including potentially our PeriKard products. 23 Table of Contents In addition, our sales and marketing strategy for VIVO requires us to hire additional clinical support and sales representatives who are experienced in the EP field.
As of March 7, 2024, we have approximately $1.86 million in cash and cash equivalents, which, together with our anticipated cash from operations, is not adequate to meet our working capital needs through May of 2024, and our business is currently not profitable.
As of March 14, 2025, we have approximately $787 thousand in cash and cash equivalents, which, together with our anticipated cash from operations, is not adequate to meet our working capital needs through the remainder of 2025, and our business is currently not profitable.
We urge investors to review the detailed descriptions of risk factors that follow.) Risks Related to Our Financial Position and Need for Additional Capital · We will be required to raise additional funds to finance our operations and continue as a going concern; We may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us. · Our business has a history of losses, will incur additional losses, and may never achieve profitability.
Risks Related to Our Financial Position and Need for Additional Capital We will be required to raise additional funds to finance our operations and continue as a going concern; We may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us.
Mr. Jenkins is critical to our current business development, and we would not be able to easily replace him. Our success also depends on our ability to retain our other current key employees and continue to attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel.
Our success also depends on our ability to retain our other current key employees and continue to attract, retain and motivate highly skilled junior, mid-level and senior managers as well as junior, mid-level and senior scientific and medical personnel.
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.
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.
During the first quarter of 2023 we raised approximately $9.3 million in proceeds from securities transactions, but Merger costs and other negative cash flows have substantially depleted our cash.
During 2024 we raised approximately $7.2 million in net proceeds from securities transactions, but operating costs and other negative cash flows have substantially depleted our cash.
In addition, the stock market in general, and medical device companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.
In addition, the stock market in general, and medical device companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies, including recent fluctuations following proposed and enacted tariffs by the US government.
If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected. 48 Table of Contents Risks Related to Ownership of Our Common Stock The price of our stock has been and may continue to be volatile, which could result in substantial losses for investors.
If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.
If our stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline. As of March 12, 2024, we had 7,573,403 outstanding shares of our common stock and outstanding options to purchase up to 614,593 shares of our common stock.
If our stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.
We expect that these activities, together with future general and administrative activities, will result in significant expenses for the foreseeable future. We may never achieve profitability. 25 Table of Contents Risks Related to Our Internal Controls We have identified material weaknesses in our internal control over financial reporting.
We expect that these activities, together with future general and administrative activities, will result in significant expenses for the foreseeable future. We may never achieve profitability.
In July 2023, we adopted the 2023 Equity Incentive Plan, or the 2023 Plan. As of March 12, 2024, 146,545 shares were available for issuance under the 2023 Plan, and options to purchase 410,000 shares were outstanding.
In July 2023, we adopted the 2023 Equity Incentive Plan, or the 2023 Plan. As of March 6, 2025, 796,615 shares were available for issuance as new awards under the 2023 Plan, options to purchase 1,681,000 shares were outstanding, and 66,667 shares of restricted stock awards had been authorized for future issuance.
Accordingly, utilization of our NOLs is subject to an annual limitation for federal tax purposes under IRC Section 382. Due to the changes in control, we estimated that $51.9 million of the $147 million federal NOLs are effectively eliminated, according to IRC Section 382. In addition, $40.8 million of our $111.7 million in state NOLs were also eliminated.
Due to the changes in control, we estimated that $46.2 million of the $104.3 million federal NOLs are effectively eliminated, according to IRC Section 382. In addition, $61.2 million of our $63.8 million in state NOLs were also eliminated.
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 completed an IRC Section 382 analysis regarding the limitation of net operating losses through December 31, 2024, and determined that ownership changes occurred in during 2023 and 2024. Accordingly, utilization of our NOLs is subject to an annual limitation for federal tax purposes under IRC Section 382.
We also were required to make a payment of $5.0 million as a result of the January 2023 merger with Old Catheter in January 2023, which we made in February 2023.
We also were required to make a payment of $5.0 million as a result of the January 2023 merger with Old Catheter in January 2023, which we made in February 2023. 31 Table of Contents Additionally, federal, state and foreign governments and entities have enacted laws and issued regulations and other standards requiring increased visibility and transparency of our interactions with healthcare providers.
Our current Interim Chief Financial Officer, Margrit Thomassen, is currently only working for us on an interim basis. As a result, we will need to hire a new, full-time Chief Financial Officer soon. We do not maintain “key man” insurance policies on the lives of any of our employees, including our Executive Chairman and Chief Executive Officer, David A. Jenkins.
We do not maintain “key man” insurance policies on the lives of any of our employees, including our Executive Chairman and Chief Executive Officer, David A. Jenkins. Mr. Jenkins is critical to our current business development, and we would not be able to easily replace him.
As described elsewhere in this Form 10-K and in our Quarterly Reports on Form 10-Q filed during 2023, we have identified material weaknesses in our internal control over financial reporting related to (1) the lack of segregation of duties, (2) the lack of designed and operating review controls with respect to oversight of the financial reporting process, (3) errors with respect to the review of work performed by service providers, (4) errors in connection with accounting for the royalty obligation acquired in the merger with Old Catheter, (5) use of an incorrect discount rate in calculating the fair value of the royalty obligation and (6) timing of revenue recognition.
As described elsewhere in this Form 10-K and in our Quarterly Reports on Form 10-Q filed during 2024, we have identified material weaknesses in our internal control over financial reporting related to (1) the lack of segregation of duties, (2) the lack of designed and operating review controls with respect to oversight of the financial reporting process, and (3) review of work performed by service providers with regards to (i) management's provision of inputs for valuations to a third-party service provider and (ii) the Section 382 calculation in the tax provision in that the Company's provision did not reference the correct dates when determining ownership changes resulting in material changes in the amount of expiring net operating losses available to be utilized.
We assumed options to purchase 753,699 shares in connection with the merger with Old Catheter, and as of March 12, 2024, 204,520 of these options remained outstanding. In addition, in the first quarter of 2024, we issued employee and director stock options to purchase an aggregate of 410,000 shares.
We assumed options to purchase 75,367 shares in connection with the merger with Old Catheter, and as of March 6, 2025, 16,427 of these options remained outstanding. We issued to officers of the Company non-plan options to purchase 525,000 shares, which were outstanding as of March 6, 2025.
Risks Related to Government Regulation and our Industry · We are subject to pervasive and continuing regulation by the FDA and other regulatory agencies.
As a result of these eliminations, our ability to utilize the federal and state NOLs were reduced to $58.2 million and $2.6 million, respectively. 30 Table of Contents Risks Related to Governmental Regulation and our Industry We are subject to pervasive and continuing regulation by the FDA and other regulatory agencies.
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 have previously entered into joint marketing agreements that materially reduced the revenues that we received from VIVO products, and although all such agreements have been terminated, we may enter into similar agreements in the future with respect to any or all of our products, and any similar agreements entered into in the future may also materially reduce our per unit product revenues.
We are a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to smaller reporting companies will make our common stock less attractive to investors. We are a smaller reporting company, as defined by SEC rules.
We are a smaller reporting company, as defined by SEC rules.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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ITEM 1C. CYBERSECURITY The Company approaches cybersecurity as an enterprise-wide risk and uses external resources to assess risk and manage its IT and 24x7 cybersecurity operations, including managed service providers who assist in the support of key business systems.
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Item 1C. Cybersecurity 50 Item 2. Properties 51 Item 3. Legal Proceedings 51 Item 4. Mine Safety Disclosures 51 Part II Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 52
Removed
The Company may also periodically engage external consultants to assist with cybersecurity incident management, particularly where advanced or specialized expertise may be required. If a material cybersecurity breach occurs, the incident will be reviewed by management to determine whether further escalation is appropriate.
Removed
The Executive Chairman of the Board and Chief Executive Officer and the Interim Chief Financial Officer have primary responsibility for this review and assessment. Any incident assessed as potentially being or becoming material will immediately be escalated for further assessment and reported to designated members of our executive team, and if deemed necessary or appropriate, the Board of Directors.
Removed
The Board Audit Committee is responsible for reviewing and discussing the adequacy and effectiveness of the Company’s information security policies and the procedures and controls regarding information systems.
Removed
In addition, we plan to consult with outside counsel as appropriate, including on materiality analyses and disclosure matters, and to assist in making the final materiality determination regarding disclosure and other compliance decisions. We also plan to keep our independent public accounting firm informed of such incidents as appropriate.
Removed
The Company maintains a cyber liability insurance policy that is designed to cover certain expenses, business losses, business interruption, and fines and penalties associated with a data breach or other similar incident. Cyber liability insurance also provides coverage in the event of a ransomware attack.
Removed
To date, the Company has not had a cybersecurity event that materially impacted or is reasonably likely to materially affect its business strategy, results of operations, financial condition, or the security of its proprietary data. 54 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 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.
Biggest changeITEM 2. PROPERTIES Our manufacturing, inventory and order fulfillment activities for VIVO 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 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny 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.
Biggest changeAny 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. ITEM 6. [Reserved] 52 Table of Contents
ITEM 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”.
ITEM 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”.
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.
On March 17, 2025, the last reported sales price of our common stock was $0.41 and, according to our transfer agent, as of March 17, 2025, there were 79 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, 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.
Biggest changeResults of operations for the years ended December 31, 2024 and 2023 The following table sets forth the results of the Company's operations for the periods presented (in thousands): For the Year Ended December 31, 2024 2023 Change Revenue $ 420 $ 442 $ (22 ) Cost of revenues 42 30 12 Selling, general and administrative expenses 11,349 17,122 (5,773 ) Research and development expenses 272 475 (203 ) Loss on impairment of goodwill — 60,934 (60,934 ) Change in fair value of royalties payable (2,239 ) 7,208 (9,447 ) Other income (expense), net (1) (20 ) 339 (359 ) Income tax provision 3,141 — 3,141 (1) Constitutes the operating activities within other income (expense), net in the consolidated statements of operations, except for the change in fair value of royalties payable that is presented separately in the table above. 56 Table of Contents Revenues The decrease in revenues of approximately $22 thousand for the year ended December 31, 2024 as compared to the prior year was due to lower product sales of the VIVO System that was partially offset by our first sales of LockeT in 2024.
The income approach considered the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions while the guideline public company market approach considered marketplace earnings multiples from within a peer public company group.
The income approach considered the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions while the guideline public company market-based approach considered marketplace earnings multiples from within a peer public company group.
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.
Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material. 60 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.
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.
Components of our results of operations for the years ended December 31, 2024 and 2023 Revenues Prior to the Merger, product revenues consisted of sales of catheters for use with the DABRA laser in our atherectomy clinical trials.
The Company’s Critical Accounting Estimates The information set forth below relates to the Company’s critical accounting policies and estimates. The discussion and analysis of our financial position and results of operations is based on our audited consolidated financial statements included elsewhere in this Annual Report, which have been prepared in accordance with U.S. GAAP.
The Company ’ s Critical Accounting Estimates The information set forth below relates to the Company’s critical accounting policies and estimates. The discussion and analysis of our financial position and results of operations is based on our consolidated financial statements included elsewhere in this Annual Report, which have been prepared in accordance with U.S. GAAP.
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.
We have received FDA clearance to market and promote the VIVO System in the U.S. 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.
Jenkins, previously Old Catheter's Chairman of the Board of Directors prior to the Merger, and, currently, the Company’s Executive Chairman of the Board of Directors and Chief Executive Officer, to forgive all accrued interest and future interest expense in exchange for a future royalty right.
Jenkins, previously Old Catheter's Chairman of the Board of Directors prior to the Merger, and, currently, the Company’s Executive Chairman of the Board of Directors and Chief Executive Officer, and certain of his affiliates, to forgive all accrued interest and future interest expense in exchange for a future royalty right.
In accordance with ASC 350 we performed a quantitative goodwill impairment test, which resulted in the carrying amount of the reporting unit exceeding its fair value, indicating that the goodwill of the reporting unit was impaired.
In accordance with ASC 350, Intangibles - Goodwill and Other , we performed a quantitative goodwill impairment test, which resulted in the carrying amount of the reporting unit exceeding its fair value, indicating that the goodwill of the reporting unit was impaired.
After the Merger, our legacy DABRA laser is no longer in use and we have shifted the focus of our operations to Old Catheter’s product lines. 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.
After the Merger, we shifted the focus of our operations to Old Catheter’s product lines, such that our legacy DABRA laser is no longer in use. 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.
Off-Balance Sheet Arrangements We do not engage in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, as a part of our ongoing business. Accordingly, we did not have any off-balance sheet arrangements during any of the periods presented.
Off-balance sheet arrangements Subsequent to the Merger, we have not engaged in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, as a part of our ongoing business. Accordingly, we did not have any off-balance sheet arrangements during any of the periods presented.
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 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. These clinical studies are intended to provide crucial data for marketing and to expand our indications for use with the FDA.
Change in fair value of royalties payable As of the date of the Merger, the royalties payable was calculated using a discounted cash flow method utilizing a discount rate of 24.1%. At each reporting period, the fair value of the royalties payable is calculated using the discounted cash flow method. At December 31, 2023, the discount rate was 28.0%.
Change in fair value of royalties payable As of the date of the Merger, the royalties payable was calculated using a discounted cash flow method utilizing a discount rate of 24.1%. At each reporting period, the fair value of the royalties payable is calculated using the discounted cash flow method.
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.
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 (EP).
Net Cash Provided by Financing Activities During the year ended December 31, 2023, net cash provided by financing activities of $8.4 million- primarily consisted of net cash proceeds from the private placement of $8.0 million, proceeds from the exercise of warrants of $1.3 million, and proceeds from issuance of common stock and warrants of $0.2 million, partially offset by the payment of offering costs of $0.6 million, payments of convertible promissory notes and accrued interest of $0.3 million, payments of costs related to the warrant repricing of $0.2 million, and payments on note payable of $0.1 million.
During the year ended December 31, 2023, net cash provided by financing activities of $8.4 million primarily consisted of net cash proceeds from the private placement of securities of $8.0 million and proceeds from the exercise of warrants of $1.3 million, partially offset by the payment of offering costs of $0.6 million and payment of convertible promissory notes and accrued interest of $0.3 million.
We utilized a combination of an income and market approach to assess the fair value of the reporting unit as of March 31, 2023 and June 30, 2023.
We utilized a combination of an income and market-based approach to assess the fair value of the reporting unit during 2023.
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.
Research and development expenses Research and development ("R&D") expenses are expensed as incurred and include the following: research grants paid to other parties; product development; 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.
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.
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 warranties liabilities, royalties payable due to related parties, share based compensation, evaluation of impairment of long-lived assets and goodwill, valuation of long-lived assets and their associated estimated useful lives, and revenues.
As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date the consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date the consolidated financial statements for the year ended December 31, 2024 are issued.
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.
Our newest product, LockeT® (“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.
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.
LockeT is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently. 53 Table of Contents Our business strategy is to become a leading medical device 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 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 believe certain of our accounting policies are critical to understanding our financial position and results of operations. 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.
Our revenues post-Merger primarily consist of VIVO, 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.
One of our two primary products is the View into Ventricular Onset (“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.
Because expected revenues are not adequate to fund our planned expenditures and anticipated operating costs beyond such point, we are currently evaluating potential means of raising cash through future capital transactions.
We expect the need to complete an additional financing sometime in the next three to six months. Because expected revenues are not adequate to fund our planned expenditures and anticipated operating costs and liabilities beyond such point, we are currently evaluating potential means of raising cash through future capital transactions and additional bridge loans.
CE Mark approval is expected in the second half of 2024, at which time initial international shipments to distributors will begin.
In May 2023, Catheter submitted LockeT for CE Mark approval. CE Mark approval is expected in first half of 2026, at which time initial international shipments to distributors will begin.
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.
During the year ended December 31, 2023, net cash used in investing activities of $61 thousand consisted of purchases of property and equipment of $76 thousand, offset by proceeds from cash acquired as part of the Merger of $15 thousand.
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.
Selling, general and administrative expenses Selling, general and administrative ("SG&A") expenses consist of employee-related costs, including salaries, benefits and stock-based compensation expenses. Other SG&A expenses include amortization of intangible assets, professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses and facility-related expenses.
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.
Other income, net The decrease in other income (expense), net of approximately $0.4 million for the year ended December 31, 2024, respectively, as compared to the prior year was primarily due to a decrease in investment income. Income Tax Provision. We recorded an income tax provision of $3.1 million in 2024, as compared to zero in 2023.
Cash Flows for the Years Ended December 31, 2023 and 2022 ($ 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.
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 change in fair value of royalties payable of $7.2 million, and a decrease in operating assets and liabilities of $7.1 million, partially offset by non-cash adjustments related to loss on impairment of goodwill of $60.9 million, stock-based compensation of $1.2 million, and depreciation and amortization of $2.1 million. 59 Table of Contents Net cash used in investing activities During the year ended December 31, 2024, net cash used in investing activities of $67 thousand consisted of purchases of property and equipment.
Due to a sustained decrease in our share price during the quarters ended March 31, 2023 and June 30, 2023, we concluded that in accordance with ASC 350 a triggering event occurred indicating that potential impairment exists that required us to assess if impairment existed as of March 31, 2023 and June 30, 2023.
As a result of the Merger with Old Catheter, the Company recognized $60.9 million of goodwill. Due to a sustained decrease in our share price during 2023, we concluded that a triggering event occurred indicating that potential impairment existed that required us to assess if goodwill was impaired during 2023.
Accounting for Long-Lived Assets-Useful Lives Intangible assets acquired from business combinations are initially measured at their estimated fair values and are then amortized on a straight-line basis over their estimated useful lives. Management evaluates whether events or circumstances have occurred that indicate the remaining useful life or carrying value of the amortizing intangible should be revised and adjusted, if necessary.
Accounting for long-lived assets - estimated useful lives Intangible assets acquired from business combinations are initially measured at their estimated fair values and are then amortized on a straight-line basis over their estimated useful lives.
We will pay to the Noteholders a total royalty equal to approximately 12% of net sales of LockeT, commencing upon the first commercial sale, through December 31, 2035. In addition, Old Catheter had entered into an agreement with the inventor of LockeT in exchange for the assignment and all rights to LockeT.
We will pay to the noteholders a total royalty equal to approximately 12% of net sales of LockeT, which commenced upon the first commercial sale in 2024, through December 31, 2035.
We recorded the impairment charge of $60.9 million within loss on impairment of goodwill in the consolidated statement of operations. As of December 31, 2023, cumulative goodwill impairment charges of $60.9 million were incurred related to our single reporting unit.
We recorded the impairment charge of $60.9 million for the year ended December 31, 2023 within loss on impairment of goodwill in the consolidated statement of operations. There was no remaining goodwill balance as of December 31, 2023.
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.
Accordingly, we will likely be required to raise additional cash through debt or equity transactions and bridge loans to continue our operations and pay our debts as they come due, and if we are unable to do so, we will be required to suspend a portion or all of our operations and/or potentially seek relief from our creditors.
During 2006 and 2007, Old Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Old Catheter's AMIGO System. The agreement calls for the payment of sales-based royalties to the foundation, upon successful commercialization of the AMIGO System. We are not currently selling the AMIGO System.
No royalty payments will be due under this Royalty Agreement after December 31, 2033. During 2006 and 2007, Old Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Old Catheter's AMIGO System.
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.
If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the assets carrying value over its fair value is recorded in the Company’s consolidated statements of operations at that date. 61 Table of Contents Stock-based compensation We calculate the cost of awards of equity instruments based on the grant date fair value of the option awards issued to employees, members of our board of directors and nonemployee consultants using the Black-Scholes option pricing valuation model ("Black-Scholes model"), which incorporates various assumptions including volatility, expected term and risk-free interest rate.
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.
Net cash provided by financing activities During the year ended December 31, 2024, net cash provided by financing activities of $8.6 million primarily consisted of net cash proceeds from the issuance of common stock and warrants of $7.3 million, the issuance of notes payable to related parties of $1.5 million, and the exercise of warrants of $1.2 million, partially offset by the payment of offering costs of $1.4 million.
The decrease was partially offset by an increase in suture retention device development of $0.2 million. 63 Table of Contents Restructuring and Impairment Charges We test for goodwill impairment at the reporting level annually in the fourth quarter or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.
The net decreases were primarily the result of the discontinuation of the historical products of the Company that were previously under developme nt. 57 Table of Contents Loss on impairment of goodwill We test for goodwill impairment at the reporting level annually in the fourth quarter or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.
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.
Research and development expenses The decrease in research and development expenses of approximately $0.2 million for the year ended December 31, 2024 as compared to the prior year was primarily due to a decrease in product development costs of $0.1 million, and a decrease in regulatory affairs related expenditures of $0.1 million.
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.
Such actions may impair our ability to proceed with certain strategic activities. We expect operating losses and negative cash flows to continue for the foreseeable future as we invest in our commercial capabilities.
Pursuant to the agreement, we will pay a 5% royalty on net sales up to $1 million in royalties.
In addition, the Company finalized an Invention Assignment and Royalty Agreement (the "Royalty Agreement") that had previously been entered into by Old Catheter with the inventor of LockeT in exchange for the assignment and all rights to LockeT. Pursuant to the agreement, we will pay a 5% royalty on net sales up to $1 million in royalties.
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.
LockeT is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently. LockeT 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 2024, we recognized our first sale of LockeT.
Should the sum of the undiscounted expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date. Goodwill Goodwill, which represents the excess of purchase price of Old Catheter over the fair value of net assets acquired, is carried at cost.
Management evaluates whether events or circumstances have occurred that indicate the remaining useful life or carrying value of the amortizing intangible should be revised and adjusted, if necessary. Should the sum of the undiscounted expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date.
Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents of approximately $3.6 million and an accumulated deficit of approximately $275.7 million. For the year ended December 31, 2023, net cash used from operating activities was approximately $20.6 million.
For the year ended December 31, 2024, net cash used from operating activities was approximately $9.3 million. We have incurred recurring net losses from operations and negative cash flows from operating activities since inception.
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.
(“Old Catheter”), a privately held Delaware corporation (the “Merger”), which became a wholly owned subsidiary of the Company. Following the Merger, we discontinued the Company’s legacy lines of business and the use of any of its DABRA-related assets. We shifted the focus of our operations to Old Catheter’s product lines.
Selling, General and Administrative Expenses The increase in SG&A of approximately $0.9 million for the year ended December 31, 2023 as compared to the corresponding period in the prior year was due primarily to the increase in depreciation and amortization of approximately $2.0 million that resulted from intangible assets acquired in the Merger, an increase in salaries and benefits of $2.0 million related to the Company's former Chief Executive Officer, an increase in stock based compensation of approximately $0.8 million, which was related to the one time stock compensation for Old Catheter stock options assumed in the Merger, an increase in consulting expenses of $0.7 million and an increase in other selling, general and administrative expenses of $0.4 million.
Furthermore, the decrease in selling, general and administrative expenses was impacted by a decrease in stock-based compensation expense of $1.2 million, which primarily related to the one-time, stock compensation expense incurred for Old Catheter stock options that were assumed in connection with the Merger in 2023.
The change in fair value of the royalties payable from the date of the Merger to December 31, 2023, was a decrease of $7.2 million. There were no royalties payable for the year ended December 31, 2022 and therefore no fair value measurement.
The change in fair value of the royalties payable for the year ended December 31, 2024 as compared to the prior year was a decrease of $9.4 million, which is primarily driven by the change in forecasted royalty payments and discount rates used to estimate the fair value of royalties payable.
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.
Cash flows for the years ended December 31, 2024 and 2023 (in thousands) For the Year Ended December 31, 2024 2023 Net cash provided by (used in): Operating activities $ (9,271 ) $ (20,619 ) Investing activities (67 ) (61 ) Financing activities 8,646 8,386 Net change in cash and cash equivalents $ (692 ) $ (12,294 ) Net cash used in operating activities During the year ended December 31, 2024, net cash used in operating activities of $9.3 million primarily consisted of a net loss of $16.6 million, partially offset by non-cash adjustments related to depreciation and amortization of $2.1 million, an increase in deferred income tax provision of $3.1 million, and change in fair value of royalties payable of $2.2 million.
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.
Catheter’s international distributors are supported by two EU-based full-time consultants. In addition, our newest product is LockeT, 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.
Removed
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Investing in our common stock involves a high degree of risk.
Added
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K for the period ended December 31, 2024 (this "Annual Report").
Removed
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, including the Risk Factors contained in Item 1A, before making an investment decision. The risks and uncertainties described in this Annual Report on Form 10-K may not be the only ones we face.
Added
The following discussion and analysis of our financial condition and results of operations contain forward-looking statements that involve a number of risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations.
Removed
If any of the risks actually occur, our business, financial condition, operating results, cash flows and prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
Added
Important factors that could cause actual results to differ materially from those stated or implied by our forward-looking statements include, but are not limited to, those set forth in Item 1A. Risk Factors of this Annual Report, many of which are outside of our control.
Removed
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.
Added
All forward-looking statements included in this Annual Report are based on information available to us as of the time we file and, except as required by law, we undertake no obligation to update publicly or revise any forward-looking statements. Overview On January 9, 2023, the Company merged with the former Catheter Precision, Inc.
Removed
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.
Added
In September 2024, we received notification of the issuance of our first LockeT patent in the country of China and we also completed a Middle East distribution agreement for LockeT. 54 Table of Contents Clinical studies for LockeT began during the year ended December 31, 2023.
Removed
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.
Added
For more information about our clinical studies, refer to Item 1, Business. Recent Developments October 2024 Warrant Inducement Offer On October 25, 2024, the Company executed the Warrant Inducement Offer Letters with certain holders of the Company’s existing warrants.
Removed
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.
Added
Pursuant to the terms and conditions of the Warrant Inducement Offer Letters, the holders immediately exercised an aggregate of (i) 33,160.8 Series E Warrants, (ii) 499,909.34 Series F Warrants, (iii) 499,909.34 Series G Warrants, (iv) 1,990,000 Series H Warrants, and (v) 2,325,000 Series I Warrants (collectively, the “2024 Existing Warrants”) to purchase 5,347,981 shares of the Company’s common stock at a reduced exercise price of $0.70 per share of common stock.
Removed
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.
Added
In consideration for the immediate exercise of the 2024 Existing Warrants for cash, the Company agreed to issue unregistered new Series K Common Stock Purchase Warrants (“Series K Warrants”) to purchase up to 10,695,962 shares of common stock.
Removed
Since the Merger, we have shifted the focus of our operations to Old Catheter’s product lines.
Added
The Series K Warrants have an exercise price of $0.70 per share of common stock, are not exercisable until stockholders' approval is obtained (“Stockholder Approval”), and have a term of 5.5 years following Stockholder Approval. In addition to the Series K Warrants, the Company also issued 320,879 Placement Agent Warrants to the Placement Agent as part of their compensation.
Removed
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.
Added
The Placement Agent Warrants have the same terms as the Series K Warrants, except that the exercise price is $1.085 per share and the warrants are exercisable six months after the date of issuance.
Removed
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.
Added
Pursuant to the terms of the Warrant Inducement Offer Letters, in the event that the exercise of the 2024 Existing Warrants would cause a holder to exceed the beneficial ownership limitations included therein, the Company issued the number of shares of common stock that would not cause a holder to exceed such beneficial ownership limitations and held the remaining balance of shares of common stock in abeyance.
Removed
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.
Added
Accordingly, the Company held an aggregate of 3,096,000 shares of common stock in abeyance (the “Abeyance Shares”) as of December 31, 2024.
Removed
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.
Added
The Abeyance Shares are evidenced through the holder’s existing warrants and will be held by the Company until the holder sends notice that the remaining balance of shares of common stock may be issued without surpassing the beneficial ownership limitations. Until such time, the Abeyance Shares are evidenced through the holder’s existing warrants and deemed to be prepaid.
Removed
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.
Added
The Company received aggregate gross proceeds of $3.7 million in cash, prior to deducting placement agent fees and offering expenses of $0.4 million, resulting in net proceeds of $3.3 million. The Company further recorded a deemed dividend of $5.2 million in connection with the modification of the 2024 Existing Warrants as well as the issuance of the Series K Warrants.
Removed
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.
Added
September 2024 Public Offering On August 30, 2024, the Company entered into an underwriting agreement to issue and sell in a public offering (i) 347,277 Common Stock Units, priced at a public offering price of $1.00 per unit, with each unit consisting of (a) one share of Common Stock, (b) one warrant to purchase one share of Common Stock at an exercise price of $1.00 per share that expires on the six month anniversary of the date of issuance (a “Series H Warrant”), (c) one warrant to purchase one share of Common Stock at an exercise price of $1.00 per share that expires on the eighteenth month anniversary of the date of issuance (a “Series I Warrant”), and (d) one warrant to purchase one share of Common Stock at an exercise price of $1.00 per share that expires on the five year anniversary of the date of issuance (a “Series J Warrant”), and (ii) 2,773,000 Pre-Funded Warrant Units, priced at a public offering price of $0.9999 per unit, with each unit consisting of (a) one pre-funded warrant to purchase one share of Common Stock at an exercise price of $0.0001 per share that has no expiration date (a “Pre-Funded Warrant”), (b) one Series H Warrant, (c) one Series I Warrant, and (d) one Series J Warrant.
Removed
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.
Added
In addition to the securities described above, the Company granted the underwriter a 45-day Overallotment Option to purchase up to (i) 468,041 additional shares of Common Stock, (ii) 468,041 additional Series H Warrants, (iii) 468,041 additional Series I Warrants, and/or (iv) 468,041 additional Series J Warrants, solely to cover over-allotments.

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