Financial Data and Key Metrics Changes - Net revenue for Q1 2020 was $1.4 million, down from $1.7 million in Q1 2019, with product sales decreasing from $0.9 million to $0.6 million and service revenue remaining stable at $0.8 million [31] - Gross profit margin for Q1 2020 was negative 15%, compared to a negative margin in Q1 2019 [32] - GAAP net loss for Q1 2020 was $7.7 million or $0.56 per share, an improvement from a net loss of $14.7 million or $1.16 per share in the prior year [34] - Cash, cash equivalents, and short-term investments as of March 31, 2020, were $23.4 million, with a cash burn of $7.0 million for Q1 2020 [35] Business Line Data and Key Metrics Changes - Revenue from the vascular segment for Q1 2020 was $0.1 million, down from $0.5 million in the prior year [31] - Revenue from the dermatology segment remained stable at $1.3 million for both Q1 2020 and Q1 2019 [31] Market Data and Key Metrics Changes - The vascular business has seen a reduction in cases starting in March 2020 due to COVID-19, with a focus on severe cases to prevent amputations [20] - The dermatology business has been significantly impacted by COVID-19, leading to a reduction in laser replacements and sales [21] Company Strategy and Development Direction - The company is focusing on extending the shelf life of DABRA catheters and enhancing product features to penetrate the vascular market [42][70] - A comprehensive quality improvement plan has been initiated to address weaknesses in processes and procedures [23] - The company plans to evaluate the dermatology business opportunity and develop a capital-efficient strategy for growth in the U.S. and select markets [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the significant uncertainty due to COVID-19 and its impact on operations and financial results [5] - The company is optimistic about resuming elective surgeries and believes it will help with patient enrollment in clinical studies [63] - Future revenue and gross margin are expected to be negatively impacted in the short term due to reduced sales force and procedural use of products [36] Other Important Information - The company received a $2 million loan under the Paycheck Protection Program, which may be forgiven if used for eligible expenses [37] - Legal fees have increased significantly due to ongoing investigations, impacting overall expenses [26] Q&A Session Summary Question: What is the focus for the company moving forward? - The primary focus is on the vascular side, particularly on extending the shelf life of catheters and supporting the atherectomy study [42][44] Question: What is the timeline for pushing the vascular business? - Engineering work is expected to be completed and FDA clearance obtained in 2021, with enrollment in the atherectomy study anticipated in the first half of 2021 [48] Question: What are the plans for capital and burn rate? - Cash burn has decreased significantly, and the company plans to raise capital, although the exact timing is uncertain [50] Question: Are there any key positions that need to be filled? - Currently, there are no key positions needed, but there is a focus on improving project management processes [52] Question: How is the company addressing the shelf life issue? - The company is approaching the shelf life issue methodically, with a focus on understanding the root causes and implementing solutions [56][57] Question: What is the strategy for the dermatology business? - The company is evaluating both domestic and international opportunities for growth in the dermatology space [60] Question: What is the status of the atherectomy trial? - The company is optimistic about qualifying additional sites for the trial and has received FDA approval to enroll a broader range of patients [62][64]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission file number: 001-38677 Ra Medical Systems, Inc. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or org ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Ra Medical Systems, Inc. (Exact name of Registrant as specified in its charter) Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION item13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission file number: 001-38677 Delaware 38-3661826 (State or other jurisdiction of i ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The financial statements for Q3 2019 show significant declines in cash and equity, widening net loss, and negative operating cash flow [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) The balance sheet as of September 30, 2019, reflects a significant decrease in cash and equity, offset by short-term investments Condensed Balance Sheet Data (in thousands) | Account | September 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $14,512 | $64,315 | | Short-term investments | $25,964 | $0 | | Total current assets | $45,452 | $69,233 | | TOTAL ASSETS | $54,002 | $74,035 | | **Liabilities & Equity** | | | | Total current liabilities | $7,982 | $5,950 | | Total liabilities | $12,261 | $7,330 | | Accumulated deficit | $(107,414) | $(60,221) | | Total stockholders' equity | $41,741 | $66,705 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $54,002 | $74,035 | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) The statements of operations show a significantly widened net loss for Q3 and nine months 2019, driven by surging operating expenses Statement of Operations Highlights (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Total net revenue | $1,908 | $2,064 | $5,809 | $4,269 | | Gross (loss) profit | $(517) | $784 | $(1,291) | $1,263 | | Selling, general and administrative | $15,889 | $5,366 | $42,907 | $15,621 | | Research and development | $1,182 | $224 | $3,692 | $1,532 | | Operating loss | $(17,588) | $(4,806) | $(47,890) | $(15,890) | | Net loss | $(17,418) | $(4,807) | $(47,214) | $(15,895) | | Basic and diluted net loss per share | $(1.30) | $(0.59) | $(3.63) | $(1.97) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Cash flow statements indicate a substantial increase in cash used in operations and investing activities for the nine months ended September 30, 2019 Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(23,601) | $(10,109) | | Net cash used in investing activities | $(25,984) | $(424) | | Net cash (used in) provided by financing activities | $(218) | $7,211 | | **NET CHANGE IN CASH AND CASH EQUIVALENTS** | **$(49,803)** | **$(3,322)** | | CASH AND CASH EQUIVALENTS, end of period | $14,512 | $4,915 | [Notes to Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) The notes detail accounting policies, significant commitments, and ongoing legal and governmental investigations, highlighting segment performance - The company believes its cash, cash equivalents, and short-term investments will be sufficient to fund operations for at least the next 12 months[26](index=26&type=chunk) - In September 2019, the company initiated a voluntary recall of its DABRA laser system single-use catheters to change product labeling due to performance issues[53](index=53&type=chunk) - The company is subject to a securities class action lawsuit filed in June 2019, alleging material misstatements in its IPO registration statement[93](index=93&type=chunk) - The company is under investigation by the Department of Justice (DOJ) for potential False Claims Act violations related to marketing clearance, unapproved uses, and improper payments to physicians. It is also under investigation by the SEC and the Criminal Division of the DOJ[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) Segment Net Revenue (in thousands) | Segment | Q3 2019 | Q3 2018 | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Vascular | $226 | $789 | $1,121 | $973 | | Dermatology | $1,682 | $1,275 | $4,688 | $3,296 | | **Total Net Revenue** | **$1,908** | **$2,064** | **$5,809** | **$4,269** | Segment Gross (Loss) Profit (in thousands) | Segment | Q3 2019 | Q3 2018 | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Vascular | $(694) | $210 | $(2,389) | $(77) | | Dermatology | $177 | $574 | $1,098 | $1,340 | | **Total Gross (Loss) Profit** | **$(517)** | **$784** | **$(1,291)** | **$1,263** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights delayed filing due to an Audit Committee investigation, ongoing government probes, product recall, and significant financial losses - The filing was delayed due to an Audit Committee investigation into a former employee's complaint, revealing frequent DABRA catheter failures, potentially confusing sales explanations, and failure to make timely Medical Device Reports (MDRs) to the FDA[113](index=113&type=chunk)[114](index=114&type=chunk) - The company is facing investigations from the SEC's Enforcement Division, a DOJ Civil Investigative Demand regarding the False Claims Act, and a DOJ criminal investigation[118](index=118&type=chunk)[119](index=119&type=chunk) - Due to inconsistent DABRA catheter performance, the company initiated a recall in September 2019 to relabel the product shelf life from 12 months to two months[127](index=127&type=chunk) - The company implemented cost-saving initiatives, including reducing its DABRA sales force from **34 employees** as of June 30, 2019, to **6 employees** as of November 11, 2019[128](index=128&type=chunk) Comparison of Results of Operations (in thousands) | Metric | Q3 2019 | Q3 2018 | Change $ | | :--- | :--- | :--- | :--- | | Total net revenue | $1,908 | $2,064 | $(156) | | Gross (loss) profit | $(517) | $784 | $(1,301) | | Selling, general and administrative | $15,889 | $5,366 | $10,523 | | Operating loss | $(17,588) | $(4,806) | $(12,782) | | Net loss | $(17,418) | $(4,807) | $(12,611) | - The increase in SG&A expenses for Q3 2019 was primarily due to a **$5.2 million** increase in stock-based compensation and a **$3.3 million** increase in legal expenses related to the Audit Committee investigation[155](index=155&type=chunk) - As of September 30, 2019, the company had cash, cash equivalents, and short-term investments of **$40.5 million** and believes this is sufficient to fund operations for at least the next 12 months[164](index=164&type=chunk)[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company assesses its exposure to interest rate, foreign currency, and inflation risks as not material due to its investment policy and operational focus - The company does not believe it has any material exposure to changes in the fair value of its assets from interest rate changes due to the short-term nature of its cash and cash equivalents[179](index=179&type=chunk) - As revenue is denominated in U.S. dollars and expenses are primarily in the United States, the effect of a **10% adverse change** in foreign currency exchange rates would not have been material[180](index=180&type=chunk) - The company does not believe that inflation has had a material effect on its business, results of operations, or financial condition[181](index=181&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting, with remediation underway - Management concluded that as of September 30, 2019, the company's disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[183](index=183&type=chunk) - A material weakness was identified in the control environment, stemming from an inappropriate "tone at the top" set by certain former senior management, leading to behavior inconsistent with the Code of Ethics, failure to make timely FDA reports, and undocumented product recalls[185](index=185&type=chunk)[191](index=191&type=chunk) - A material weakness was also identified in information and communication, as complaints implicating executive officers were not brought to the attention of the board or Audit Committee[187](index=187&type=chunk) - Remediation activities have commenced, including separation from certain former executives, hiring a new VP of Quality, implementing enhanced policies and training, and strengthening regulatory systems[188](index=188&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in significant legal and regulatory matters, including securities class actions, shareholder derivative suits, and multiple governmental investigations by the DOJ and SEC - A securities class action lawsuit was filed in June 2019 against the company, certain officers, and IPO underwriters, alleging material misstatements or omissions in the registration statement[193](index=193&type=chunk) - A shareholder derivative complaint was filed in October 2019 against certain officers and directors for breaches of fiduciary duty and other violations[194](index=194&type=chunk) - The company is under a DOJ Civil Investigative Demand regarding a False Claims Act investigation and is also aware of an open criminal investigation by the DOJ's Fraud Section[196](index=196&type=chunk)[198](index=198&type=chunk) - The SEC notified the company on November 13, 2019, that it is conducting an investigation[198](index=198&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) The company faces high risks from unresolved product performance issues, ongoing government investigations, a history of losses, internal control weaknesses, and intense competition - The company may be unable to successfully remedy the performance and calibration issues with its DABRA catheters, which has led to a product recall and could prevent market acceptance and revenue growth[203](index=203&type=chunk)[204](index=204&type=chunk) - The business is exposed to significant risk from matters arising from the Audit Committee investigation, including regulatory proceedings and government enforcement actions by the SEC and DOJ, which may adversely affect business and results[225](index=225&type=chunk) - The company has a history of net losses (**$47.2 million** for the nine months ended Sep 30, 2019) and may be unable to achieve profitability. It may require additional capital, which may not be available on acceptable terms[224](index=224&type=chunk)[219](index=219&type=chunk) - Material weaknesses have been identified in internal control over financial reporting, which could prevent accurate financial reporting and cause investors to lose confidence[273](index=273&type=chunk) - The company faces substantial competition from larger, better-resourced companies in the medical device industry, such as Medtronic, Boston Scientific, and Abbott Laboratories[236](index=236&type=chunk)[241](index=241&type=chunk) - The company is subject to numerous healthcare laws, including anti-kickback and false claims statutes, and is currently under a DOJ investigation for potential violations[259](index=259&type=chunk)[261](index=261&type=chunk) - The company received a deficiency notice from the NYSE for failure to timely file its Form 10-Q and must maintain compliance with listing standards, including minimum market capitalization, to avoid delisting[397](index=397&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered equity sales and is re-prioritizing IPO proceeds to address DABRA catheter performance issues - The company raised approximately **$67.3 million** in net proceeds from its IPO, which closed on October 1, 2018[431](index=431&type=chunk) - The company is re-prioritizing the use of its IPO proceeds to focus on remedying the inconsistencies in its DABRA catheter performance, in addition to supporting clinical studies and general corporate purposes[432](index=432&type=chunk) [Defaults Upon Senior Securities](index=79&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - None[433](index=433&type=chunk) [Mine Safety Disclosures](index=79&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[434](index=434&type=chunk) [Other Information](index=79&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[435](index=435&type=chunk) [Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and certifications - Exhibits include corporate governance documents, CEO/CFO certifications (Sections 302 and 906 of Sarbanes-Oxley), and XBRL financial data[436](index=436&type=chunk)

PART I. FINANCIAL INFORMATION [Explanatory Note](index=3&type=section&id=Explanatory%20Note) The company states the filing of its Form 10-Q was delayed due to internal and external investigations - The delay in filing the Form 10-Q was caused by an internal Audit Committee investigation and an external Department of Justice investigation[9](index=9&type=chunk) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited statements show a significant cash decrease, revenue growth, and a substantially increased net loss driven by higher operating expenses [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Total assets decreased due to a significant reduction in cash, while total liabilities increased mainly from operating lease liabilities Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $11,787 | $64,315 | | Short-term investments | $36,601 | $0 | | Total current assets | $53,488 | $69,233 | | Total Assets | $62,474 | $74,035 | | **Liabilities & Equity** | | | | Total current liabilities | $6,295 | $5,950 | | Total liabilities | $10,579 | $7,330 | | Total stockholders' equity | $51,895 | $66,705 | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) Net revenue increased year-over-year, but net losses widened significantly due to a substantial rise in SG&A expenses Statement of Operations Summary (in thousands) | Metric | Q2 2019 | Q2 2018 | H1 2019 | H1 2018 | | :--- | :--- | :--- | :--- | :--- | | Total net revenue | $2,153 | $1,236 | $3,901 | $2,205 | | Gross (loss) profit | $(580) | $246 | $(774) | $479 | | Selling, general and administrative | $13,789 | $7,615 | $27,018 | $10,254 | | Operating loss | $(15,348) | $(8,391) | $(30,302) | $(11,083) | | Net loss | $(15,122) | $(8,395) | $(29,796) | $(11,088) | | Basic and diluted net loss per share | $(1.16) | $(1.03) | $(2.32) | $(1.38) | [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operations and investing activities increased significantly, leading to a $52.5 million decrease in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(15,747) | $(5,966) | | Net cash used in investing activities | $(36,657) | $(251) | | Net cash (used in) provided by financing activities | $(124) | $7,749 | | **Net Change in Cash and Cash Equivalents** | **$(52,528)** | **$1,532** | [Notes to Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail the adoption of new accounting standards and outline significant legal challenges, including DOJ and SEC investigations - The company adopted new accounting standards for Revenue (ASC 606) and Leases (ASC 842) on January 1, 2019[37](index=37&type=chunk)[50](index=50&type=chunk)[62](index=62&type=chunk) - The company is facing multiple legal and regulatory challenges, including a securities class action lawsuit, a shareholder derivative complaint, and investigations by the SEC and DOJ concerning potential violations of the **False Claims Act** and **Anti-Kickback Statute**[89](index=89&type=chunk)[90](index=90&type=chunk)[93](index=93&type=chunk) Segment Net Revenue and Gross (Loss) Profit (in thousands) | Segment | H1 2019 Net Revenue | H1 2018 Net Revenue | H1 2019 Gross (Loss) Profit | H1 2018 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Vascular | $895 | $184 | $(1,695) | $(287) | | Dermatology | $3,006 | $2,021 | $921 | $766 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the filing delay, investigation findings, operational results showing revenue growth but a larger net loss, and cash sufficiency - An internal Audit Committee investigation found significant issues, including inconsistent DABRA catheter performance, misleading sales explanations, failure to file Medical Device Reports (MDRs), undocumented product recalls, and questionable payments to physicians[108](index=108&type=chunk) - The company is under investigation by the SEC and the Department of Justice (both civil and criminal divisions) regarding potential violations of the **False Claims Act** and **Anti-Kickback Statute**, among other issues[112](index=112&type=chunk)[113](index=113&type=chunk) - In response to operational challenges and to conserve cash, the company initiated cost-saving measures, including reducing its DABRA sales force from **34 employees** as of June 30, 2019, to **6 as of November 11, 2019**[122](index=122&type=chunk)[162](index=162&type=chunk) Results of Operations Comparison - Six Months Ended June 30 (in thousands) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Total net revenue | $3,901 | $2,205 | | Gross (loss) profit | $(774) | $479 | | Selling, general and administrative | $27,018 | $10,254 | | Operating loss | $(30,302) | $(11,083) | | Net loss | $(29,796) | $(11,088) | [Quantitative and Qualitative Disclosures about Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate sensitivity and foreign currency exchange, both currently considered not material - The company's primary market risks are **interest rate sensitivity** on its cash and investments and **foreign currency exchange risk**[176](index=176&type=chunk) - Management believes there is **no material exposure** to interest rate changes due to the short-term nature of its cash and investments[177](index=177&type=chunk) - Foreign currency risk is currently minimal as most transactions are in U.S. dollars, but this could change with international growth[178](index=178&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective due to material weaknesses in the control environment and communication channels - Management concluded that **disclosure controls and procedures were not effective** as of June 30, 2019[181](index=181&type=chunk) - A material weakness was identified in the control environment, stemming from an inappropriate **"tone at the top"** set by certain former senior management, leading to behavior inconsistent with the Code of Ethics, misleading sales explanations, and failure to properly document recalls and payments[184](index=184&type=chunk)[188](index=188&type=chunk) - A material weakness was also identified in information and communication, as complaints implicating executive officers were not brought to the attention of the board or Audit Committee[186](index=186&type=chunk) - Remediation efforts are underway, including the separation of certain former executives, hiring of new qualified personnel, and implementing enhanced policies and controls[187](index=187&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a securities class action lawsuit and multiple governmental investigations by the DOJ and SEC - A securities class action lawsuit was filed against the company, certain officers, and IPO underwriters, alleging **material misstatements** in the registration statement[191](index=191&type=chunk) - The company is under investigation by the Department of Justice (DOJ) for potential **False Claims Act violations** related to marketing clearance, unapproved uses of its DABRA device, and improper payments to physicians[194](index=194&type=chunk) - The company has been notified of investigations by both the **SEC's Division of Enforcement** and the **Criminal Division of the DOJ**[195](index=195&type=chunk)[196](index=196&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its products, ongoing government investigations, regulatory compliance, and stock ownership [Risks Related to Business and Products](index=37&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Products) Success is highly dependent on fixing DABRA catheter issues, managing net losses, and navigating outcomes of investigations and litigation - A primary risk is the inability to successfully remedy performance and calibration issues with DABRA catheters, which has led to customer dissatisfaction and a voluntary recall to relabel the shelf life from **12 to two months**[201](index=201&type=chunk)[204](index=204&type=chunk)[209](index=209&type=chunk) - The company has a history of net losses, incurring **$29.8 million in the first six months of 2019**, and may be unable to achieve profitability[219](index=219&type=chunk) - The company faces significant risks from its recently completed Audit Committee investigation, ongoing regulatory investigations (DOJ, SEC), and related securities litigation, which could result in penalties, fines, and business disruption[220](index=220&type=chunk)[221](index=221&type=chunk)[223](index=223&type=chunk) [Risks Related to Regulatory Approval and Industry](index=53&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20our%20Industry) The company faces extensive FDA oversight, risks from off-label promotion allegations, and potential impacts from healthcare reform - The company's operations are subject to pervasive **FDA regulatory requirements**, and failure to comply can result in sanctions, recalls, or production suspension[281](index=281&type=chunk)[283](index=283&type=chunk) - The company faces risks of enforcement action for **off-label promotion**, particularly concerning the marketing of DABRA for atherectomy, which is a subject of a DOJ investigation[247](index=247&type=chunk)[249](index=249&type=chunk) - The business is subject to healthcare fraud and abuse laws, such as the **Anti-Kickback Statute**, and the DOJ is investigating improper remuneration to physicians[253](index=253&type=chunk)[254](index=254&type=chunk) [Risks Related to Intellectual Property](index=62&type=section&id=Risks%20Related%20to%20our%20Intellectual%20Property) Competitive position depends on the uncertain process of obtaining and defending patents and protecting critical trade secrets - The company's ability to compete depends on successfully obtaining and maintaining **patent protection** for its products, which is an uncertain and complex process[334](index=334&type=chunk)[335](index=335&type=chunk) - The company may become involved in expensive and time-consuming **intellectual property litigation** to defend against infringement claims or to enforce its own patents[361](index=361&type=chunk)[372](index=372&type=chunk) - In addition to patents, the company relies on **trade secrets**, which are difficult to protect and could be lost through misappropriation or independent development by competitors[356](index=356&type=chunk) [Risks Related to Ownership of Common Stock](index=72&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Stock ownership risks include high price volatility, potential NYSE delisting, and significant control by principal stockholders - The company received a deficiency notice from the NYSE for failing to timely file its Form 10-Q and faces the **risk of delisting** if it does not maintain compliance with all listing requirements[386](index=386&type=chunk) - The stock price is likely to be **highly volatile** due to factors such as operating results, regulatory developments, and market conditions[388](index=388&type=chunk)[389](index=389&type=chunk) - As of June 30, 2019, executive officers, directors, and 10% stockholders owned approximately **38% of the outstanding common stock**, giving them significant influence over corporate matters[401](index=401&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales and has updated the use of its IPO proceeds to prioritize fixing DABRA catheter issues - The company's IPO in October 2018 raised approximately **$67.3 million in net proceeds**[420](index=420&type=chunk) - The intended use of IPO proceeds has been updated to prioritize remedying the inconsistencies in **DABRA catheter performance**, alongside clinical studies and general corporate purposes[421](index=421&type=chunk) [Defaults Upon Senior Securities](index=78&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[422](index=422&type=chunk) [Mine Safety Disclosures](index=78&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[423](index=423&type=chunk) [Other Information](index=78&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[424](index=424&type=chunk) [Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including corporate governance documents and required Sarbanes-Oxley certifications - Key exhibits include corporate governance documents and required **CEO/CFO certifications** under Sarbanes-Oxley[425](index=425&type=chunk)

Ra Medical Systems, Inc. (RMED) Q1 2019 Earnings Conference Call May 13, 2019 4:30 PM ET Company Participants Kevin McCabe – LHA Investor Relations Dean Irwin – Chief Executive Officer Tom Fogarty – Chief Commercial Officer Andrew Jackson – Chief Financial Officer Conference Call Participants Matthew O’Brien – Piper Jaffray Bruce Nudell – SunTrust Craig Bijou – Cantor Fitzgerald Anthony Vendetti – Maxim Group Operator Ladies and gentlemen, thank you for standing by. Welcome to the Ra Medical Systems First Q ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed financial statements for the quarter ended March 31, 2019, show a net loss of **$14.7 million**, a significant increase from the **$2.7 million** loss in the prior-year period. Total assets decreased to **$69.3 million** from **$74.0 million** at year-end 2018, primarily due to a decrease in cash and cash equivalents. The company adopted new accounting standards for revenue (ASC 606) and leases (ASC 842) during the period [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) Condensed Balance Sheet Data (in thousands) | Account | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $55,129 | $64,315 | | Total current assets | $60,453 | $69,233 | | TOTAL ASSETS | $69,280 | $74,035 | | **Liabilities & Equity** | | | | Total current liabilities | $5,085 | $5,950 | | Total liabilities | $9,483 | $7,330 | | Total stockholders' equity | $59,797 | $66,705 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $69,280 | $74,035 | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) Condensed Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2019 | Three Months Ended Mar 31, 2018 | | :--- | :--- | :--- | | Total net revenue | $1,748 | $969 | | Gross (loss) profit | $(194) | $233 | | Total operating expenses | $14,760 | $2,925 | | Operating loss | $(14,954) | $(2,692) | | Net loss | $(14,674) | $(2,693) | | Basic and diluted net loss per share | $(1.16) | $(0.34) | [Condensed Statements of Cash Flows](index=5&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Condensed Statement of Cash Flows (in thousands) | Activity | Three Months Ended Mar 31, 2019 | Three Months Ended Mar 31, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,944) | $(2,425) | | Net cash used in investing activities | $(165) | $(120) | | Net cash (used in) provided by financing activities | $(77) | $1,391 | | **NET CHANGE IN CASH AND CASH EQUIVALENTS** | **$(9,186)** | **$(1,154)** | [Notes to Condensed Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Key notes detail the company's reincorporation and IPO in 2018, and the adoption of new accounting standards for revenue (ASC 606) and leases (ASC 842) in Q1 2019. Stock-based compensation expense was significant at **$7.7 million** for the quarter, largely due to the modification of replacement awards. The company operates in two segments: Vascular, which saw revenue growth to **$0.5 million** but incurred a gross loss, and Dermatology, with revenue of **$1.3 million** and a gross profit of **$0.5 million** - The company adopted ASC Topic 606 (Revenue from Contracts with Customers) on January 1, 2019, using the modified retrospective method. The adoption did not have a material effect on the results of operations for the three-month period[28](index=28&type=chunk) - The company adopted ASC Topic 842 (Leases) on January 1, 2019, recognizing right-of-use assets and lease liabilities of **$3.2 million**. The new standard did not change the accounting for leases where the company is the lessor[47](index=47&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended Mar 31, 2019 | Three Months Ended Mar 31, 2018 | | :--- | :--- | :--- | | Selling, general and administrative | $6,319 | $370 | | Research and development | $910 | $78 | | **Total in operating expenses** | **$7,229** | **$448** | Segment Performance (in thousands) | Segment | Net Revenue (Q1 2019) | Gross (Loss) Profit (Q1 2019) | Net Revenue (Q1 2018) | Gross Profit (Q1 2018) | | :--- | :--- | :--- | :--- | :--- | | Vascular | $461 | $(706) | $90 | $(161) | | Dermatology | $1,287 | $512 | $879 | $394 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's commercial-stage status, focusing on its DABRA and Pharos excimer laser systems. The significant increase in net loss to **$14.7 million** in Q1 2019 from **$2.7 million** in Q1 2018 was driven by a **$10.6 million** rise in SG&A expenses and a **$1.2 million** increase in R&D, primarily due to higher stock-based compensation and costs associated with being a public company. While total net revenue grew **80%** to **$1.7 million**, gross profit turned into a loss of **$0.2 million**. The company believes its cash of **$55.1 million** is sufficient to fund operations for at least the next 12 months [Overview](index=17&type=section&id=Overview) - Ra Medical is a commercial-stage medical device company with two main products: DABRA for vascular diseases (PAD) and Pharos for dermatological conditions[81](index=81&type=chunk) - The company is pursuing an expanded FDA indication for DABRA to include atherectomy, with a clinical trial expected to start in Q3 2019 and have final results in Q1 2020[81](index=81&type=chunk)[82](index=82&type=chunk) - Recent challenges included production limitations in catheter manufacturing (remediated in March 2019) and the need for a more robust training program for new sales personnel, which impacted Q4 2018 and Q1 2019 revenue[89](index=89&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Comparison of Results for Three Months Ended March 31 (in thousands) | Item | 2019 | 2018 | Change $ | | :--- | :--- | :--- | :--- | | Total net revenue | $1,748 | $969 | $779 | | Gross (loss) profit | $(194) | $233 | $(427) | | Selling, general and administrative | $13,229 | $2,639 | $10,590 | | Research and development | $1,531 | $286 | $1,245 | | Net loss | $(14,674) | $(2,693) | $(11,981) | - Vascular segment revenue increased by **$0.4 million** year-over-year due to higher catheter sales following the commercial launch[103](index=103&type=chunk) - SG&A expenses increased by **$10.6 million**, primarily due to a **$5.9 million** increase in stock-based compensation, **$2.5 million** in personnel costs for sales and public company functions, and **$0.8 million** in outside services[111](index=111&type=chunk) - R&D expenses increased by **$1.2 million**, mainly from a **$0.8 million** rise in stock-based compensation and a **$0.4 million** increase in supplies[112](index=112&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2019, the company had cash and cash equivalents of **$55.1 million** and an accumulated deficit of **$74.9 million**[120](index=120&type=chunk) - Management believes that existing cash will be sufficient to fund operations for at least the next 12 months[121](index=121&type=chunk) - Net cash used in operating activities was **$8.9 million** for the three months ended March 31, 2019, a significant increase from **$2.4 million** in the prior-year period, driven by a higher net loss[123](index=123&type=chunk)[124](index=124&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are related to interest rate sensitivity, foreign currency exchange, and inflation. Management believes that exposure to these risks is not material. Cash and cash equivalents of **$55.1 million** are held in short-term instruments, minimizing interest rate risk. As international operations expand, foreign currency risk may increase, but its current effect is not material. Inflation is not believed to have had a material effect on the business - The company does not believe it has material exposure to changes in interest rates due to the short-term nature of its cash and cash equivalents[133](index=133&type=chunk) - As international operations expand, results may become subject to fluctuations in foreign currency exchange rates, but the current risk is not material[134](index=134&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2019. They concluded that these controls were effective at a reasonable assurance level. There were no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2019, the company's disclosure controls and procedures were effective at the reasonable assurance level[138](index=138&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[139](index=139&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a legal action with Strata Skin Sciences, Inc. and its director, Uri Geiger, filed in August 2018. Strata is seeking declaratory relief regarding non-liability for statements made about Ra Medical. Ra Medical believes the action lacks merit and plans to vigorously oppose it. Management does not believe any current legal proceedings are likely to have a material adverse effect on the business - The company is in a legal dispute with Strata Skin Sciences, Inc. regarding statements made by a Strata director. The company believes Strata's action lacks merit and is vigorously opposing it[143](index=143&type=chunk) - Management opines that no current legal proceedings are likely to have a material adverse effect on the company's business, financial condition, or results of operations[144](index=144&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company outlines extensive risks across its business, regulatory environment, intellectual property, and stock ownership. Key business risks include dependence on the successful commercialization of the DABRA system, potential manufacturing issues, competition from larger players, and the need for market acceptance. Regulatory risks involve the complex and costly FDA compliance and approval process for new indications. Intellectual property risks center on the ability to obtain and defend patents. Financial risks include a history of losses, the potential need for additional capital, and stock price volatility [Risks Related to Business and Products](index=27&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Products) - The company's success is highly dependent on the successful marketing and sale of its DABRA product[147](index=147&type=chunk) - The company has experienced manufacturing problems, such as production limitations in catheter production in Q4 2018 and Q1 2019, which could limit revenue growth[156](index=156&type=chunk) - The company has a history of net losses, incurring **$14.7 million** in Q1 2019, and may not achieve profitability in the future[162](index=162&type=chunk) - The company faces substantial competition from larger, more established medical device companies with greater financial and marketing resources[167](index=167&type=chunk)[174](index=174&type=chunk) [Risks Related to Regulatory Approval and Industry](index=40&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20and%20our%20Industry) - The company's products are subject to extensive and ongoing regulation by the FDA and other agencies, and failure to comply can lead to significant enforcement actions[214](index=214&type=chunk)[215](index=215&type=chunk) - Obtaining regulatory clearance or approval for new products or new indications for existing products is a costly, lengthy, and uncertain process[221](index=221&type=chunk)[222](index=222&type=chunk) - Healthcare reform, cost-containment pressures, and changes in reimbursement practices by third-party payors could decrease demand for the company's products[242](index=242&type=chunk)[249](index=249&type=chunk) [Risks Related to Intellectual Property](index=48&type=section&id=Risks%20Related%20to%20our%20Intellectual%20Property) - The company's ability to compete depends on its success in obtaining, maintaining, and enforcing patent protection for its products, which is an expensive and uncertain process[265](index=265&type=chunk)[267](index=267&type=chunk) - The company may become involved in costly intellectual property litigation, either by asserting its own rights or defending against claims of infringement from others[290](index=290&type=chunk)[295](index=295&type=chunk) - The company relies on trade secrets and confidentiality agreements to protect proprietary information, but these measures can be breached and may not provide adequate protection[286](index=286&type=chunk) [Risks Related to Reliance on Third Parties](index=56&type=section&id=Risks%20Related%20to%20Our%20Reliance%20on%20Third%20Parties) - The company depends on a limited number of third-party suppliers for key components and sub-assemblies, and the loss of these suppliers could harm the business[311](index=311&type=chunk)[312](index=312&type=chunk) - Failure by the company or its component suppliers to meet regulatory quality standards (like FDA's QSR) could lead to manufacturing disruptions and enforcement actions[314](index=314&type=chunk) [Risks Related to Ownership of Common Stock](index=57&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) - The company's stock price may be volatile, and an active, liquid trading market may not be sustained[319](index=319&type=chunk) - Principal stockholders and management own a significant percentage of the company's stock (approx. **37%** as of March 31, 2019), allowing them to exert significant control over matters subject to stockholder approval[332](index=332&type=chunk) - As an "emerging growth company," the company can take advantage of reduced reporting requirements, which may make its common stock less attractive to some investors[333](index=333&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the period. It provides details on its Initial Public Offering (IPO), which closed on October 1, 2018. The IPO generated aggregate net proceeds of approximately **$67.3 million** after deducting underwriting discounts and offering expenses. There has been no material change in the intended use of these proceeds - The company's IPO, which closed on October 1, 2018, raised approximately **$67.3 million** in net proceeds[354](index=354&type=chunk) - There has been no material change in the expected use of the net proceeds from the IPO as described in the final prospectus[355](index=355&type=chunk) [Item 3. Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[356](index=356&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[357](index=357&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[357](index=357&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's certificate of incorporation, bylaws, an offer letter with an executive, and certifications from the CEO and CFO as required by the Sarbanes-Oxley Act - The exhibits filed include corporate governance documents, a management contract, and required CEO/CFO certifications[359](index=359&type=chunk)

Ra Medical Systems, Inc. (RMED) Q4 2018 Earnings Conference Call March 14, 2019 4:30 PM ET Company Participants Kevin McCabe - LHA Investor Relations Dean Irwin - Chief Executive Officer, Chief Technology Officer and Chairman of the Board of Directors Thomas Fogarty - Chief Commercial Officer Andrew Jackson - Chief Financial Officer Conference Call Participants Andrew Stafford - Piper Jaffray Bruce Nudell - SunTrust Robinson Humphrey, Inc. Anthony Vendetti - Maxim Group, LLC Operator Ladies and gentlemen, t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission file number: 001-38677 Ra Medical Systems, Inc. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or organiza ...

Ra Medical Systems, Inc. NYSE: RMED Corporate Presentation January 2019 Disclaimer 2 Certain statements in this presentation and the accompanying oral commentary are forward-looking statements. These statements relate to future events or the future financial performance of Ra Medical Systems, Inc. (the "Company") and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be material ...