Merger and Financial Requirements - Ra Medical Systems, Inc. is undergoing a merger with Catheter Precision, Inc., which is expected to close by early 2023, pending shareholder approval and other conditions[97][98]. - The company anticipates needing to raise between $2.0 million and $3.0 million to meet the $8.0 million "Net Cash" closing requirement for the merger[99]. - The company has substantial doubt regarding its ability to continue as a going concern for the next twelve months, particularly if the merger does not close[114]. Stock and Shareholder Actions - A reverse stock split of 1-for-50 was approved, reducing the number of outstanding shares from 68.2 million to 1.4 million[100]. - The company received a deficiency letter from NYSE American due to a low average share price of less than $0.20, but believes the reverse stock split has cured this deficiency[102]. - The company entered into an At-The-Market Sales Agreement with an aggregate offering price of up to $7.6 million, completing the sale of 1.1 million shares for net proceeds of $7.4 million[101]. Operational Changes and Workforce - A reduction in force resulted in approximately 65% of full-time employees being terminated, with additional layoffs affecting 20% of employees, totaling severance payments of approximately $0.9 million[107]. - Engineering activities have been paused, including the development of a new DABRA catheter, pending the merger's completion[108]. - Enrollment in the atherectomy clinical study was stopped at 108 subjects, with plans to complete six-month follow-ups by early 2023[106]. Financial Performance - Net revenue for the three months ended September 30, 2022, was $0, a decrease of $5,000 compared to the same period in 2021, while net revenue for the nine months ended September 30, 2022, was $14,000, down $3,000 from the prior year[121]. - Cost of revenue decreased by $246,000 and $1,052,000 for the three and nine months ended September 30, 2022, respectively, primarily due to the discontinuation of manufacturing activities in June 2022[123]. - Selling, general and administrative (SG&A) expenses for the three months ended September 30, 2022, were $3.5 million, a decrease of $697,000 compared to the same period in 2021, while SG&A expenses for the nine months ended September 30, 2022, were $8.3 million, down $2.993 million year-over-year[124][125]. - Research and development (R&D) expenses for the three months ended September 30, 2022, were $727,000, a decrease of $2.215 million compared to the same period in 2021, and for the nine months ended September 30, 2022, R&D expenses were $6.238 million, down $2.283 million year-over-year[126][127]. - Restructuring and impairment charges were $542,000 for the three months and $4.069 million for the nine months ended September 30, 2022, due to severance expenses and inventory obsolescence[128]. - Adjusted EBITDA for the three months ended September 30, 2022, was $(4.091) million, a decrease of $2.9 million compared to the same period in 2021, while for the nine months ended September 30, 2022, it was $(13.873) million, down $4.7 million year-over-year[134]. Cash Flow and Liquidity - As of September 30, 2022, the company had cash and cash equivalents of $13.7 million, with a need to raise additional financing between $2.0 million and $3.0 million to meet merger requirements[136][138]. - Net cash used in operating activities for the nine months ended September 30, 2022, was $(19.543) million, compared to $(21.914) million for the same period in 2021[140]. - The company improved liquidity resources during 2022 with total net proceeds of $23.5 million from private placements and warrant exercises[138]. - Net cash provided by financing activities for the nine months ended September 30, 2022, was $18.2 million, primarily from net proceeds of $13.6 million from public offerings and $5.7 million from Series A warrants[144]. - Cash and cash equivalents as of September 30, 2022, were $13.7 million, with no material exposure to interest rate changes due to the short-term nature of these assets[149]. - The company experienced changes in operating assets and liabilities of $4.5 million for the nine months ended September 30, 2022[141]. - The company paid $1.1 million in offering costs related to financing activities for the nine months ended September 30, 2022[144]. Accounting and Economic Conditions - There were no significant changes to critical accounting policies and estimates, except for a change in the estimated useful life of lasers to eight years effective January 1, 2022[146]. - The company does not believe inflation has had a material effect on its business or financial condition, but acknowledges potential risks if costs become subject to significant inflationary pressures[150].
Catheter Precision(VTAK) - 2022 Q3 - Quarterly Report