Regulatory Approvals and Product Development - Catheter Precision, Inc. has received FDA clearance for the VIVO System, which has been utilized in over 1,000 procedures in the U.S. and EU with no reported device-related complications [254]. - The LockeT device was registered with the FDA in February 2023, with initial shipments to distributors beginning thereafter, and CE Mark approval was received in April 2025 [256]. - The company plans to complete pivotal clinical trials for the Cardiac Pulmonary Nerve Stimulation (CPNS) System and obtain necessary regulatory approvals from the FDA [251]. - Catheter Precision, Inc. aims to establish both LockeT and VIVO as integral tools for cardiac electrophysiologists, focusing on reducing procedure time and increasing procedural success [259]. - The VIVO System has received CE Mark designation, allowing marketing in EU member countries, with limited sales commenced through independent distributors [255]. - Clinical studies for LockeT began in 2023, aimed at demonstrating effectiveness in wound healing and potentially reducing healthcare costs [258]. - Cardionomix, a subsidiary, was formed to acquire assets related to the CPNS System, which is in development and has yet to obtain regulatory approval [251]. Acquisitions and Financial Transactions - The company entered into a Membership Interest Purchase Agreement to acquire PeriKard, LLC, issuing 275,000 shares valued at $113 thousand for patented technology [260]. - The acquisition of PeriKard was accounted for as an asset acquisition, recognizing $119 thousand as acquired in-process research and development [261]. - Cardionomix acquired the CPNS System for a total consideration of $1.9 million, which includes $0.3 million in stock and $1.3 million in a promissory note [262]. - The May 2025 PIPE Financing raised gross proceeds of $1.5 million in cash and $864 thousand in QHSLab Notes, with placement agent fees totaling $0.4 million [263]. - As of June 30, 2025, the company sold 4,183,589 shares under the At Market Offering Agreement for gross proceeds of $1.7 million before commissions [272]. Financial Performance and Expenses - Revenues for the three months ended June 30, 2025, increased by approximately $119 thousand compared to the same period in 2024, driven by a $102 thousand increase in LockeT sales [285]. - The cost of revenues decreased by approximately $2 thousand for the three months ended June 30, 2025, primarily due to higher volume-based supplier discounts for LockeT [286]. - Approximately 18% of sales for the three months ended June 30, 2025, were derived from customers outside the United States, a decrease from 35% in the same period of 2024 [278]. - Research and development expenses for the three months ended June 30, 2025, totaled $155 thousand, an increase of $74 thousand compared to the same period in 2024 [281]. - Selling, general and administrative expenses increased by approximately $1.0 million for the six months ended June 30, 2025, primarily due to a $0.9 million increase in salaries and benefits and a $0.2 million increase in stock-based compensation [287]. - Research and development expenses rose by approximately $0.1 million for both the three and six months ended June 30, 2025, mainly due to hiring a full-time employee in January 2025 [288]. - The company recognized $1.848 million as acquired in-process research and development expense related to the acquisition of the CPNS System [283]. - Acquired in-process research and development increased by approximately $1.8 million and $2.0 million for the three and six months ended June 30, 2025, respectively, due to two asset acquisitions completed in 2025 [289]. Cash Flow and Financial Position - As of June 30, 2025, the company had cash and cash equivalents of $0.8 million and an accumulated deficit of $301.5 million [294]. - Net cash used in operating activities was $4.6 million for the six months ended June 30, 2025, primarily related to a net loss of $9.5 million [299]. - The company raised gross proceeds of $1.5 million in cash and acquired $0.9 million in trading debt securities in connection with the May 2025 PIPE Financing [295]. - The company expects operating losses and negative cash flows to continue until sales and gross profit increase sufficiently to cover operating expenses [296]. - Management has concluded that there is substantial doubt about the company's ability to continue as a going concern for a period of one year after the issuance of the financial statements for the quarter ended June 30, 2025 [297]. Valuation and Accounting Policies - The fair value measurement of royalties payable due to related parties is based on significant unobservable inputs, with the present value of estimated future royalty payments being a key component [314]. - The Company applies a revenue adjusted discount rate (RADR) to discount forecasted royalty payments, which is influenced by the weighted average cost of capital (WACC) adjusted for product revenue's risk profile [314]. - The risk-free rate for determining the cost of equity in the RADR is adjusted according to the term of the royalty agreements, reflecting the specific risk associated with the product revenue [314]. - The Beta and Risk Premium used for the cost of equity are also adjusted to account for the volatility of product revenue, ensuring a more accurate valuation [314]. - New accounting pronouncements are detailed in Note 2 of the consolidated financial statements, including expected adoption dates and estimated effects on operations and cash flows [315]. Internal Controls and Reporting - The company has identified material weaknesses in internal control over financial reporting, which could adversely affect its ability to report results accurately [244]. - The change in fair value of royalties payable due to related parties increased by $0.2 million and $1.2 million for the three and six months ended June 30, 2025, respectively, primarily due to additional estimated royalty payments of $0.9 million related to sales of the LockeT device [290]. - The income tax benefit increased by approximately $1.0 million and $1.7 million for the three and six months ended June 30, 2025, due to an increase in net operating losses not subject to limitations [293].
RA MEDICAL SYSTE(RMED) - 2025 Q2 - Quarterly Report