Financial Data and Key Metrics Changes - Revenue for Q1 2019 was $1.7 million, an increase from $1 million in Q1 2018, with product sales of $894,000 and service revenue of $854,000 [24] - GAAP net loss attributable to common stockholders for Q1 2019 was $14.7 million or $1.16 per share, compared to a net loss of $2.7 million or $0.34 per share in Q1 2018 [28] - Adjusted EBITDA for Q1 2019 was negative $6.8 million, worsening from negative $2.1 million in the prior year [28] - Cash and cash equivalents were $55.1 million as of March 31, 2019, with $8.9 million used for operating activities in Q1 2019 [29] Business Line Data and Key Metrics Changes - Revenue from the vascular segment was $0.5 million in Q1 2019, up from $0.1 million in the prior year [25] - Revenue from the dermatology segment was $1.3 million in Q1 2019, an increase from $0.9 million in the prior year [25] - Total cost of revenues for Q1 2019 was $1.9 million, compared to $0.7 million in the prior year [26] Market Data and Key Metrics Changes - The addressable market for peripheral artery disease (PAD) in the U.S. is over $1 billion, with only 20% to 30% of patients currently being treated [15] - PAD affects approximately 17.5 million Americans, with 200,000 amputations performed annually due to untreated cases [15] Company Strategy and Development Direction - The company has shifted its commercial strategy to focus on long-term customer relationships and the DABRA excimer laser system for vascular disease treatments [12] - A total of 16 new usage agreements were signed in Q1 2019, bringing the total to 69 agreements as of March 31, 2019 [13] - The company is conducting a two-year registry to measure long-term results using DABRA and has submitted an IDE to the FDA for label expansion [18][19] Management's Comments on Operating Environment and Future Outlook - Management anticipates a greater impact on revenues in the second half of the year due to the transition in commercial strategy [12] - The company expects to see positive impacts from the new commercial strategy reflected in revenue starting in the second half of 2019 [23] - Management is optimistic about the DABRA system's potential to change vascular treatment paradigms and is focused on building shareholder value [34][35] Other Important Information - The company completed validation of its upgraded manufacturing process in March 2019, which had previously limited catheter production [14] - The DABRA system has shown promising clinical results, with success rates of 94% and 98% reported in recent studies [31] Q&A Session Summary Question: Progress on sales and new agreements - Management noted excitement about restarting evaluation accounts and the positive response from customers regarding the DABRA system [39][41] Question: Cash burn for the year - The company reported a cash burn of $8.9 million in Q1 2019 but did not provide guidance for future cash burn [51] Question: Customer response to the product - There has been no pushback on the product, and clinical data is helping to validate its effectiveness [54][55] Question: Sales force expansion - The company plans to increase the number of sales reps from 20 to approximately 30 by the end of 2019 [63] Question: Coronary study timing and size - A pilot study for coronary applications is expected to start within the next three quarters, with commercialization potentially in 2021 [70][75]

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)

Financial Data and Key Metrics Changes - Revenue for Q4 2018 was $2.0 million, compared to $1.9 million in Q4 2017, with product sales of $1.2 million and service revenue of $0.8 million [27] - Gross profit margin for Q4 2018 improved to 40% from 14% in Q4 2017 [28] - GAAP net loss for Q4 2018 was $14.9 million or $1.18 per share, compared to a loss of $3.1 million or $0.40 per share in Q4 2017 [30] - For the full year 2018, revenue was $6.3 million, a 7% increase from $5.9 million in 2017 [31] - GAAP net loss for 2018 was $30.8 million or $3.34 per share, compared to a loss of $17.8 million or $2.35 per share in 2017 [33] Business Line Data and Key Metrics Changes - Revenue from the vascular segment in Q4 2018 was $0.6 million, up from $0.2 million in the prior year [28] - Revenue from the dermatology segment was $1.4 million in Q4 2018, down from $1.7 million in the prior year [28] - For the full year 2018, vascular segment revenue was $1.6 million, an increase of $0.3 million from 2017, while dermatology segment revenue was $4.7 million, down from $5.6 million in 2017 [31] Market Data and Key Metrics Changes - The total addressable market for Peripheral Artery Disease (PAD) in the U.S. is estimated to be over $1 billion, with only 20% to 30% of patients actively treated [11] - Approximately 180,000 amputations are performed annually in the U.S. due to PAD [12] Company Strategy and Development Direction - The company is transitioning to a new integrated commercial strategy aimed at building long-term relationships with customers [16] - The new strategy focuses on establishing a commercial ecosystem that integrates sales, clinical specialists, marketing, and technical support [24] - The company is pursuing FDA clearance for atherectomy indications and plans to expand product offerings in the endovascular space [43][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the DABRA system's potential and the positive impact of the new commercial strategy beginning in Q2 2019 [22][36] - The company aims to build a body of compelling study evidence to support physician adoption of the DABRA system [38] - Management noted that manufacturing issues have been resolved and full production has resumed [20][21] Other Important Information - Cash and cash equivalents as of December 31, 2018, were $64.3 million, following an IPO that generated net proceeds of $67.3 million [34] - The company does not plan to provide quarterly revenue guidance but expects Q1 2019 revenue to be between $1.0 million and $1.4 million [35][36] Q&A Session Summary Question: Factors leading to light numbers in the vascular segment - Management acknowledged manufacturing issues but confirmed that they have been resolved and full production has resumed [50] Question: Details on the strategy change - The new strategy focuses on establishing longer-term relationships rather than initial evaluation sales, with a strong emphasis on customer adoption [52][54] Question: Revenue expectations for the year - Management refrained from providing specific revenue guidance but indicated that qualified reps could generate $1 million annually with four accounts [61] Question: Hiring pace for sales reps - The company plans to add sales reps at a measured pace, focusing on quality over quantity [68] Question: Manufacturing issues in Q4 2018 - The issues were related to a specific piece of equipment during the scale-up process, which has now been upgraded [76]

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 ...