Revenue Performance - Total net revenue for the three months ended March 31, 2021, was $1.118 million, a decrease of $256,000 from $1.374 million in the same period of 2020[107]. - Product sales decreased to $406,000 in Q1 2021 from $586,000 in Q1 2020, a decline of 30.7%[107]. - Service and other revenue also declined to $712,000 in Q1 2021 from $788,000 in Q1 2020, a decrease of 9.6%[107]. - The vascular segment generated minimal revenue of $4,000 in Q1 2021 compared to $113,000 in Q1 2020, reflecting a decrease of 96.5%[109]. - Dermatology segment revenue was $1.114 million in Q1 2021, down from $1.261 million in Q1 2020, a decrease of approximately 11.7%[111]. Expenses and Losses - Gross loss for Q1 2021 was $255,000, compared to a gross loss of $210,000 in Q1 2020, indicating a worsening of 21.4%[107]. - Total operating expenses decreased to $6.930 million in Q1 2021 from $7.580 million in Q1 2020, a reduction of $650,000[107]. - Research and development expenses increased to $2.816 million in Q1 2021 from $1.295 million in Q1 2020, an increase of 117.5%[107]. - SG&A expenses decreased by $2.2 million to $4.1 million, primarily due to reductions in legal expenses and other cost-saving measures[118]. - Management expects continued operating losses and negative cash flows due to ongoing clinical trials and the impact of the COVID-19 pandemic[128]. Cash Flow and Financial Position - Net cash used in operating activities was $8.1 million for the three months ended March 31, 2021, compared to $7.0 million in 2020[134][135]. - Cash and cash equivalents as of March 31, 2021, were $16.0 million, with an accumulated deficit of $160.4 million[127]. - Adjusted EBITDA was negative $6.1 million for the three months ended March 31, 2021, slightly improved from negative $6.2 million in 2020[126]. - As of March 31, 2021, the company had cash and cash equivalents of $16.0 million, which included net proceeds of $19.1 million from 2020 public offerings and $2.0 million from a Paycheck Protection Program loan[144]. Operational Impact and Future Outlook - The company expects continued negative impacts on revenue due to the COVID-19 pandemic, affecting both patient treatments and clinical trial enrollments[97]. - The company is focusing on obtaining an atherectomy indication for the DABRA catheter, with a pivotal study approved for up to 10 clinical sites and 100 subjects[93]. - Research and development expenses increased by $1.5 million to $2.8 million, driven by personnel, consulting expenses, and clinical study costs related to next-generation catheters[120]. Financial Policies and Risks - The company does not engage in off-balance sheet arrangements and had no material changes to contractual obligations during the reported period[141][142]. - A hypothetical 10% relative change in interest rates would not have had a material impact on the company's financial statements due to the short-term nature of cash and cash equivalents[145]. - Revenue is primarily denominated in U.S. dollars, and a 10% adverse change in foreign exchange rates would not have been material for the periods presented[146]. - The company has not entered into any material foreign currency hedging contracts but may consider doing so in the future as operations grow internationally[146]. - Inflation has not had a material effect on the company's business, but significant inflationary pressures could harm its financial condition[147]. - There have been no significant changes to critical accounting policies or estimates since the last annual report[139]. - The company believes that actual results may differ from estimates and assumptions made in financial reporting, which could be material[140]. - The investment policy focuses on liquidity and capital preservation, avoiding trading or speculative investments[144]. - The company does not have material exposure to changes in the fair value of assets due to interest rate fluctuations[145].

Ra Medical Systems, Inc. (RMED) Q1 2021 Earnings Conference Call May 11, 2021 4:30 PM ET Company Participants Jody Cain - LHA Investor Relations Will McGuire - Chief Executive Officer Andrew Jackson - Chief Financial Officer Conference Call Participants Operator Welcome to the Ra Medical Systems First Quarter 2021 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] At this time, I'd like to turn the conference call over to Jody Cain. Please go ahead. Jo ...

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, 2020 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 Ra Medical Systems, Inc. (Exact name of Registrant as specified in its charter) Delaware 38-3661826 (State or other jurisdiction of i ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's Q3 2020 financial statements reflect significant revenue decline, continued net losses, and increased cash from financing, with substantial doubt about its going concern status [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) As of September 30, 2020, cash significantly increased to **$33.6 million** due to financing, while total assets slightly decreased and accumulated deficit grew to **$142.8 million** Condensed Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $33,646 | $14,584 | | Total current assets | $37,179 | $36,000 | | TOTAL ASSETS | $43,454 | $44,081 | | **Liabilities & Equity** | | | | Total current liabilities | $8,039 | $6,814 | | Total liabilities | $12,916 | $10,931 | | Accumulated deficit | ($142,758) | ($117,157) | | Total stockholders' equity | $30,538 | $33,150 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $43,454 | $44,081 | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) Q3 2020 net revenue decreased **52%** to **$0.9 million** due to lower product sales, resulting in a **$7.8 million** net loss despite reduced operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Total net revenue | $914 | $1,908 | $3,188 | $5,809 | | Gross loss | ($504) | ($517) | ($981) | ($1,291) | | Selling, general and administrative | $4,933 | $15,889 | $19,114 | $42,907 | | Research and development | $2,332 | $1,182 | $5,580 | $3,692 | | Operating loss | ($7,769) | ($17,588) | ($25,675) | ($47,890) | | Net loss | ($7,779) | ($17,418) | ($25,601) | ($47,214) | | Basic and diluted net loss per share | ($0.13) | ($1.30) | ($0.79) | ($3.63) | [Condensed Statements of Cash Flows](index=6&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2020, net cash used in operations improved, while **$22.0 million** from financing activities led to a **$19.1 million** net increase in cash Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | ($18,890) | ($23,601) | | Net cash provided by (used in) investing activities | $15,928 | ($25,984) | | Net cash provided by (used in) financing activities | $22,024 | ($218) | | **Net change in cash and cash equivalents** | **$19,062** | **($49,803)** | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes highlight substantial doubt about going concern, COVID-19 impact, **$19.1 million** raised from public offerings, and ongoing SEC/DOJ investigations with a **$2.7 million** accrual - The company's ability to continue as a going concern is in **substantial doubt** due to recurring net losses, negative cash flows, and ongoing COVID-19 uncertainty[25](index=25&type=chunk)[29](index=29&type=chunk) - The COVID-19 pandemic is expected to continue adversely impacting revenue and delaying enrollment in the company's atherectomy clinical trial[23](index=23&type=chunk)[27](index=27&type=chunk) - The company is subject to active investigations by the **SEC** and **DOJ** regarding potential violations, with a **$2.7 million** accrual for the DOJ False Claims Act investigation[84](index=84&type=chunk)[85](index=85&type=chunk) - In May and August 2020, the company completed public offerings, raising aggregate net proceeds of approximately **$19.1 million**[69](index=69&type=chunk)[72](index=72&type=chunk) - In May 2020, the company received a **$2.0 million** loan under the Paycheck Protection Program (PPP), potentially forgivable if used for eligible purposes[59](index=59&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses DABRA catheter improvements, COVID-19 clinical trial delays, Q3 2020 revenue decline, reduced operating expenses, bolstered liquidity, and ongoing going concern doubts [Overview and Recent Developments](index=20&type=section&id=Overview%20and%20Recent%20Developments) Ra Medical focuses on improving DABRA catheter and advancing its atherectomy clinical trial, which faces COVID-19 delays, while commercial shipments are paused until Q1 2021 - The company's vascular strategy focuses on engineering efforts to improve the **DABRA catheter's shelf life, robustness, and guidewire compatibility**[106](index=106&type=chunk)[112](index=112&type=chunk) - The company is conducting a pivotal IDE clinical study for an atherectomy indication, but enrollment is substantially delayed by the **COVID-19 pandemic**[107](index=107&type=chunk)[108](index=108&type=chunk) - Commercial shipments of DABRA catheters are paused due to shelf-life stability issues, with resolution and FDA approval expected in **Q1 2021**[109](index=109&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q3 2020 net revenue decreased **52%** to **$0.9 million** across both segments, while SG&A expenses significantly declined, and R&D expenses increased, leading to improved Adjusted EBITDA Net Revenue by Segment (in thousands) | Segment | Q3 2020 | Q3 2019 | Change $ | | :--- | :--- | :--- | :--- | | Vascular | $68 | $226 | ($158) | | Dermatology | $846 | $1,682 | ($836) | | **Total net revenue** | **$914** | **$1,908** | **($994)** | - SG&A expenses for Q3 2020 decreased by **$11.0 million** year-over-year, primarily due to lower stock-based compensation, legal expenses, and personnel costs[139](index=139&type=chunk) - R&D expenses for Q3 2020 increased by **$1.1 million** year-over-year, driven by higher personnel, consulting, and supply costs for catheter improvement initiatives[141](index=141&type=chunk) Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q3 2020 | Q3 2019 | | :--- | :--- | :--- | | Net loss | ($7,779) | ($17,418) | | Depreciation and amortization | 631 | 460 | | Interest income | (4) | (245) | | Interest expense | 14 | 72 | | Income tax expense | — | 3 | | Stock-based compensation | 964 | 7,277 | | **Adjusted EBITDA** | **($6,174)** | **($9,851)** | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2020, the company had **$33.6 million** in cash, bolstered by **$19.1 million** from offerings and a **$2.0 million** PPP loan, but substantial doubt about going concern persists - As of September 30, 2020, the company had cash and cash equivalents of **$33.6 million** and an accumulated deficit of **$142.8 million**[150](index=150&type=chunk) - The company raised net proceeds of **$19.1 million** from public offerings in 2020 and received a **$2.0 million** PPP loan[150](index=150&type=chunk)[151](index=151&type=chunk) - Cost-saving initiatives included reducing the DABRA sales force from **34 employees** to **five clinical specialists**[152](index=152&type=chunk) - Management concluded that **substantial doubt** exists about the company's ability to continue as a going concern within 12 months from the financial statements' issuance[155](index=155&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports minimal material exposure to market risks, including interest rate and foreign currency exchange risks, due to its short-term cash and U.S. dollar denominated revenues - The company believes it has no material exposure to changes in fair value from interest rate changes due to the **short-term nature of its cash and cash equivalents**[170](index=170&type=chunk) - Foreign currency exchange risk is not considered material as revenues are denominated in **U.S. dollars** and international operations are limited[171](index=171&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2020, with no material changes in internal control over financial reporting - Management concluded that as of September 30, 2020, the company's disclosure controls and procedures were **effective** at the reasonable assurance level[175](index=175&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended September 30, 2020[176](index=176&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company faces significant legal challenges, including a securities class action lawsuit and multiple ongoing government investigations by the SEC and DOJ, with a **$2.7 million** accrual - The company is defending against a **securities class action lawsuit** alleging material misstatements in its IPO registration statement and disclosures[179](index=179&type=chunk) - The company is subject to an **SEC investigation** and separate **civil and criminal investigations by the DOJ**[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - The DOJ's civil investigation concerns potential **False Claims Act violations**, with a **$2.7 million** accrual for this matter[184](index=184&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) The company faces high risks including substantial doubt about going concern, DABRA product issues, intense competition, regulatory compliance, ongoing government investigations, and potential NYSE delisting - There is **substantial doubt** about the company's ability to continue as a going concern, requiring additional financing[196](index=196&type=chunk) - The company's success is highly dependent on the **DABRA catheter**, which faces unresolved performance, shelf life, and calibration issues leading to paused commercial sales[198](index=198&type=chunk)[199](index=199&type=chunk) - The company is subject to active and ongoing **government investigations (DOJ, SEC)** and litigation that may adversely affect its business[219](index=219&type=chunk)[220](index=220&type=chunk) - The company must comply with **NYSE's continued listing requirements**, including minimum share price and market capitalization, to avoid delisting[407](index=407&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred; remaining IPO proceeds will fund the atherectomy clinical trial, DABRA catheter improvements, and general corporate purposes - There were **no unregistered sales of equity securities** in the reported period[440](index=440&type=chunk) - The company intends to use remaining IPO proceeds for its **atherectomy clinical trial**, DABRA catheter improvements, and general corporate purposes[443](index=443&type=chunk) [Item 5. Other Information](index=83&type=section&id=Item%205.%20Other%20Information) Jeffrey Kraws, the company's President, provided notice of his resignation effective January 15, 2021 - Jeffrey Kraws, the Company's President, announced his resignation effective **January 15, 2021**[447](index=447&type=chunk)

Financial Data and Key Metrics Changes - Net revenue for Q3 2020 was $0.9 million, down from $1.9 million in Q3 2019, with product sales decreasing from $1.1 million to $0.2 million and service revenue slightly decreasing from $0.8 million to $0.7 million [22] - Gross loss decreased to $504,000 in Q3 2020 from $517,000 in Q3 2019 [23] - GAAP net loss for Q3 2020 was $7.8 million or $0.13 per share, compared to a net loss of $17.4 million or $1.30 per share in the prior year [25] - Adjusted EBITDA improved to negative $6.2 million in Q3 2020 from negative $9.9 million in Q3 2019 [26] Business Line Data and Key Metrics Changes - Revenue from the vascular segment was $0.1 million in Q3 2020, down from $0.2 million in the prior year [22] - Dermatology segment revenue was $0.8 million in Q3 2020, down from $1.7 million in the prior year, but showed a 20% growth in product revenue compared to Q2 2020 [20][23] Market Data and Key Metrics Changes - The dermatology business has seen a recovery with many offices reopening, achieving 70% to 90% of pre-COVID procedure volumes [48] - The company has experienced increased activity in clinical sites, enrolling an additional 12 subjects for a total of 13 subjects in the atherectomy indication clinical trial [18] Company Strategy and Development Direction - The company is focused on quality improvements and has completed 115 out of 116 items in its quality improvement plan [9] - Engineering efforts are aimed at extending the shelf life of future catheters and developing next-generation products, including a guidewire-compatible catheter [12][15] - The company is navigating the challenges posed by COVID-19 while continuing to invest in strategic initiatives and reducing spending where necessary [21][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress made in engineering and clinical trials despite the challenges posed by the COVID-19 pandemic [29] - The company is committed to its mission of saving lives and limbs while operating in large and growing markets [29] Other Important Information - The company has reduced its DABRA sales force significantly from 34 employees to 5 due to the pandemic's impact [21] - The manufacturing facility has remained operational throughout the pandemic, with minor delays in receiving parts but no material impact on key engineering efforts [27] Q&A Session Summary Question: Shelf life issue with the catheter - Management is focused on two identified issues affecting shelf life and believes they have made significant progress in addressing them [32] Question: Next-generation catheter technology - No additional clinical data is needed for the braided over jacket catheter, and regulatory filings will be made without it [35] Question: Timeline for IDE trial and enrollment - The company is hopeful to activate two additional sites within the next 90 days, pending IRB approvals [46] Question: Dermatology business recovery - The dermatology offices are reopening, and the company has seen a 20% increase in product revenue from Q2 to Q3, predominantly in the U.S. [49] Question: Reverse split approval - The board is expected to approve the range for the reverse split shortly [50]

Product & Technology - DABRA is an excimer laser system with disposable catheters for treating peripheral artery disease (PAD) by crossing total chronic occlusions (CTOs) and ablating a channel[7] - DABRA utilizes photoablation to disintegrate plaque in the artery and is designed to track the patient's true lumen[8,19] - PHAROS, using the same laser platform as DABRA, has US FDA 510(k) clearance and Europe CE Mark for treating psoriasis, vitiligo, atopic dermatitis, and leukoderma[8] Clinical & Market - In a pivotal study, DABRA demonstrated 94% effectiveness in successful crossing of target lesions based on angiographic analysis[26] - The company targets a $1.1 billion global annual total addressable market (TAM) with over 17 million PAD sufferers in the US[9,28] - Only 20% to 30% of peripheral artery disease patients are actively being treated[12,28] Financials - For the six months ended June 30, 2020, total net revenue was $2.274 million, including $191 thousand from vascular and $2.083 million from dermatology[53] - For the year ended December 31, 2019, total net revenue was $7.199 million, including $1.275 million from vascular and $5.924 million from dermatology[53] - As of June 30, 2020, the company had $29.380 million in cash and cash equivalents and short-term investments[55]

Financial Data and Key Metrics Changes - Net revenue for Q2 2020 was $0.9 million, down from $2.2 million in Q2 2019, with product sales decreasing from $1.3 million to $0.2 million and service revenue from $0.9 million to $0.7 million [20] - Gross profit margin for Q2 2020 was negative 30%, compared to negative 27% in Q2 2019 [21] - GAAP net loss for Q2 2020 was $10.1 million or $0.43 per share, an improvement from a net loss of $15.1 million or $1.16 per share in the prior year [24] - Adjusted EBITDA for Q2 2020 was negative $8.4 million, compared to negative $7.8 million in the prior year [24] Business Line Data and Key Metrics Changes - Revenue from the vascular segment in Q2 2020 was $0.1 million, down from $0.4 million in the prior year [21] - Revenue from the dermatology segment was $0.8 million in Q2 2020, compared to $1.8 million in the prior year [21] - SG&A expenses for Q2 2020 were $7.9 million, down from $13.8 million in the prior year, including an increase of $2.0 million in accrued costs related to government investigations [22] Market Data and Key Metrics Changes - The COVID-19 pandemic has significantly impacted the ability to activate new clinical trial sites and enroll subjects, with many sites operating at reduced capacity [14][15] - The dermatology business has seen delays in capital equipment purchases, but recurring revenue from service and lease agreements has mitigated some impacts [17] Company Strategy and Development Direction - The company is focused on engineering improvements for the DABRA catheter to enhance its market penetration in the atherectomy market, including extending shelf life and increasing robustness [10][11] - The company is exploring the development of larger diameter catheters for atherectomy procedures in larger vessels [13] - A strategy for the dermatology business is under evaluation, with potential for revenue growth both domestically and internationally [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate the challenges posed by COVID-19 and highlighted successful capital raises during the pandemic [9] - The company is optimistic about the return of procedural volumes in clinical settings and is actively working to support trial sites for the atherectomy study [42] Other Important Information - The company secured a $2 million loan under the Paycheck Protection Program, which may be forgiven if used for specified purposes [19] - Cash and cash equivalents as of June 30, 2020, were reported at $29.4 million, with an additional $10.6 million raised from a public offering shortly thereafter [19] Q&A Session Summary Question: Can you provide more detail on the progress regarding the catheter shelf life issue? - Management identified issues related to the catheter's fluid core and coating, expressing confidence in resolving these by year-end [28][29] Question: What are the components of the increased SG&A expenses? - SG&A expenses included litigation costs and increased spending in quality and R&D, with a cash burn of $12.8 million for the first half of 2020 [30][31] Question: How is the company addressing the atherectomy trial enrollment process during COVID-19? - The company is actively adding sites and has amended the protocol to include more severe patients, while also supporting trial sites with clinical specialists [41][42] Question: What is the timeline for completing enrollment in the atherectomy trial? - Management could not provide a definitive timeline due to the unpredictable impact of COVID-19 but indicated that updates would be available in future calls [45] Question: What is the strategy for the dermatology business as offices reopen? - The company sees opportunities for growth in the dermatology business and is evaluating strategies to capitalize on the rebound in procedures [46][47]

Ra Medical Systems, Inc. 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 June 30, 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 (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or orga ...

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]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%2E%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Ra Medical Systems reported a reduced net loss of **$7.7 million** in Q1 2020, but faces going concern doubts and legal challenges [Condensed Balance Sheets](index=3&type=section&id=Condensed%20Balance%20Sheets) Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $18,437 | $14,584 | | Short-term investments | $5,003 | $15,993 | | Total current assets | $28,689 | $36,000 | | **Total Assets** | **$36,300** | **$44,081** | | **Liabilities & Equity** | | | | Total current liabilities | $6,022 | $6,814 | | **Total Liabilities** | **$9,826** | **$10,931** | | Accumulated deficit | $(124,858) | $(117,157) | | **Total Stockholders' Equity** | **$26,474** | **$33,150** | [Condensed Statements of Operations](index=4&type=section&id=Condensed%20Statements%20of%20Operations) Condensed Statement of Operations (in thousands, except per share data) | Account | Three Months Ended Mar 31, 2020 | Three Months Ended Mar 31, 2019 | | :--- | :--- | :--- | | Total net revenue | $1,374 | $1,748 | | Gross loss | $(210) | $(194) | | Selling, general and administrative | $6,285 | $13,229 | | Research and development | $1,295 | $1,531 | | **Operating loss** | **$(7,790)** | **$(14,954)** | | **Net loss** | **$(7,701)** | **$(14,674)** | | Basic and diluted net loss per share | $(0.56) | $(1.16) | [Condensed Statements of Cash Flows](index=6&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Condensed Statement of Cash Flows (in thousands) | Activity | Three Months Ended Mar 31, 2020 | Three Months Ended Mar 31, 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,043) | $(8,944) | | Net cash provided by (used in) investing activities | $10,972 | $(165) | | Net cash used in financing activities | $(76) | $(77) | | **Net change in cash and cash equivalents** | **$3,853** | **$(9,186)** | | **Cash and cash equivalents, end of period** | **$18,437** | **$55,129** | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) - The company expects COVID-19 to adversely impact revenue and delay its atherectomy clinical trial enrollment as patients postpone voluntary treatments[27](index=27&type=chunk) - Management has substantial doubt about the company's ability to continue as a going concern for the next 12 months due to recurring net losses, negative cash flows, and a significant accumulated deficit of **$124.9 million** as of March 31, 2020 The company's continuation is dependent on raising additional funding[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company is subject to a securities class action lawsuit, a shareholder derivative complaint, and investigations by the SEC and the Department of Justice (DOJ) The DOJ investigation includes a Civil Investigative Demand related to the False Claims Act and a separate criminal investigation[71](index=71&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) Segment Performance (in thousands) | Segment | Net Revenue Q1 2020 | Net Revenue Q1 2019 | Gross (Loss)/Profit Q1 2020 | Gross (Loss)/Profit Q1 2019 | | :--- | :--- | :--- | :--- | :--- | | Vascular | $113 | $461 | $(548) | $(706) | | Dermatology | $1,261 | $1,287 | $338 | $512 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **21%** revenue decrease to vascular product issues and reduced operating expenses, while addressing going concern doubts and COVID-19 impacts [Overview and Recent Developments](index=18&type=section&id=Overview%20and%20Recent%20Developments) - The company's vascular business strategy is focused on servicing core U.S. accounts while working on key initiatives to relaunch its DABRA product These initiatives include achieving a longer shelf life, developing a braided overjacket to reduce kinking, creating a rapid exchange version, and obtaining an atherectomy indication[91](index=91&type=chunk)[99](index=99&type=chunk) - The COVID-19 pandemic is expected to adversely impact revenue and slow enrollment in the atherectomy clinical trial To mitigate financial pressures, the company entered into a **$2.0 million** Paycheck Protection Program (PPP) loan in May 2020[96](index=96&type=chunk)[97](index=97&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Results of Operations Comparison (in thousands) | Account | Q1 2020 | Q1 2019 | Change $ | | :--- | :--- | :--- | :--- | | Total net revenue | $1,374 | $1,748 | $(374) | | Gross loss | $(210) | $(194) | $(16) | | Selling, general and administrative | $6,285 | $13,229 | $(6,944) | | Research and development | $1,295 | $1,531 | $(236) | | **Operating loss** | **$(7,790)** | **$(14,954)** | **$7,164** | - Vascular net revenue decreased by **$0.4 million** year-over-year due to lower catheter unit sales, a result of the company's reduced sales force and focus on fixing catheter performance issues[109](index=109&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **$6.9 million**, primarily due to a **$5.5 million** reduction in stock-based compensation and a **$1.8 million** decrease in personnel-related costs from sales force reductions This was partially offset by a **$1.4 million** increase in legal expenses[119](index=119&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2020, the company had **$23.4 million** in cash, cash equivalents, and short-term investments, with an accumulated deficit of **$124.9 million**[127](index=127&type=chunk) - Management expects operating losses and negative cash flows to continue due to its reduced commercial footprint, costs for its atherectomy clinical trial, product development efforts, and ongoing litigation[129](index=129&type=chunk) - Management has concluded there is substantial doubt about the company's ability to continue as a going concern and plans to raise additional capital through equity or debt financings to fund operations for at least the next 12 months[132](index=132&type=chunk)[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material exposure to market risks from interest rate changes, foreign currency fluctuations, or inflation due to its short-term investments - The company believes it does not have material exposure to changes in fair value from interest rate fluctuations due to the short-term nature of its cash and cash equivalents[146](index=146&type=chunk) - As revenue is denominated in U.S. dollars and expenses are primarily in the U.S., the effect of a **10%** adverse change in foreign currency exchange rates would not have been material for the periods presented[147](index=147&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2020, with no material changes to internal control over financial reporting - Management, including the CEO and CFO, concluded that as of March 31, 2020, the company's disclosure controls and procedures were effective at the reasonable assurance level[150](index=150&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[151](index=151&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company faces significant legal challenges, including a securities class action and ongoing SEC and DOJ investigations into marketing practices and 510(k) clearance - A putative securities class action lawsuit alleges material misstatements in the company's IPO registration statement and subsequent public statements A motion to dismiss was filed by the defendants in March 2020[153](index=153&type=chunk) - The company is cooperating with an active SEC investigation that began in November 2019 following the company's voluntary disclosure of an internal Audit Committee investigation[156](index=156&type=chunk) - The Department of Justice (DOJ) is conducting a False Claims Act investigation and a separate criminal investigation The civil probe concerns whether the company fraudulently obtained 510(k) clearance, promoted its DABRA device for unapproved uses, and made improper payments to physicians[158](index=158&type=chunk)[159](index=159&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) The company faces critical risks including going concern doubts, DABRA product performance issues, significant legal and regulatory investigations, and potential NYSE delisting [Financial and Operational Risks](index=30&type=section&id=Financial%20and%20Operational%20Risks) - The company has determined there is substantial doubt about its ability to continue as a going concern and is dependent on raising additional external financing to fund operations[166](index=166&type=chunk)[167](index=167&type=chunk) - The company's future success depends substantially on its DABRA product It may be unable to successfully remedy performance, shelf life, and calibration issues, which have previously led to customer dissatisfaction and a voluntary recall[169](index=169&type=chunk)[170](index=170&type=chunk) - The company has a history of significant net losses, with an accumulated deficit of **$124.9 million** as of March 31, 2020, and may be unable to achieve profitability in the future[188](index=188&type=chunk) [Legal and Regulatory Risks](index=36&type=section&id=Legal%20and%20Regulatory%20Risks) - The company faces significant risk from active and ongoing government investigations (SEC, DOJ) and litigation related to findings from its Audit Committee investigation, which could result in civil or criminal penalties, fines, and exclusion from governmental healthcare programs[189](index=189&type=chunk)[190](index=190&type=chunk) - The company is subject to enforcement actions if it is found to have engaged in off-label promotion of its products The DOJ is investigating whether the company marketed its DABRA device for unapproved uses[216](index=216&type=chunk)[218](index=218&type=chunk) - The company is subject to numerous healthcare fraud and abuse laws, such as the Anti-Kickback Statute The DOJ is investigating whether the company paid improper remuneration to physicians[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) [Stock and Corporate Risks](index=70&type=section&id=Stock%20and%20Corporate%20Risks) - The company is not in compliance with NYSE continued listing requirements for minimum market capitalization and faces the risk of delisting, which could negatively impact stock liquidity and price[375](index=375&type=chunk)[376](index=376&type=chunk) - The company's stock price may be highly volatile due to factors such as operating results, regulatory developments, and limited trading volume[378](index=378&type=chunk) - As of March 31, 2020, executive officers, directors, and **10%** stockholders owned approximately **38%** of the company's common stock, allowing them to exert significant control over matters subject to stockholder approval[389](index=389&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=77&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales and shifted IPO proceeds from sales force expansion to remedying DABRA issues and general corporate purposes - The company received net proceeds of approximately **$67.3 million** from its IPO in October 2018[411](index=411&type=chunk) - The intended use of IPO proceeds has shifted from sales force expansion to focusing on remedying DABRA catheter performance issues and other general corporate purposes, including clinical studies[413](index=413&type=chunk) [Other Items (Defaults, Mine Safety, Other Info, Exhibits)](index=78&type=section&id=Other%20Items) The company reports no defaults on senior securities, no mine safety disclosures, and no other material information for the period - The company reports no defaults on senior securities, no mine safety disclosures, and no other material information for the period[414](index=414&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk)