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, ~~2023~~2024

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 001-38677

~~Ra Medical Systems,~~Catheter Precision, Inc.

(Exact name of registrant as specified in its charter)

Delaware	38-3661826
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

1670 Highway 160 West, Suite 205 Fort Mill, South Carolina	29708
(Address of principal executive offices)	(Zip Code)

(973) 691-2000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered under Section 12(b) of the Act:

Title of each class:

Trading Symbol(s)

Name of each exchange on

which registered:

Common stock, par value $0.0001 per share

~~RMED~~VTAK

NYSE American

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 ~~days.~~days Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☒☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

As of the close of business on ~~May 30, 2023,~~April 28, 2024, the registrant had ~~5,367,674~~7,573,403 shares of common stock, par value $0.0001 per share, outstanding.

~~RA MEDICAL SYSTEMS,~~CATHETER PRECISION, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page(s)

PART I. FINANCIAL INFORMATION.			3

ITEM 1.	FINANCIAL STATEMENTS.	3
	Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	3
	Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three Months Ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	36

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	4748

ITEM 4.	CONTROLS AND PROCEDURES.	4748

PART II. — OTHER INFORMATION.			48

ITEM 1.	LEGAL PROCEEDINGS.	4851

ITEM 1A .	RISK FACTORS	4951

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	4951

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	4951

ITEM 4.	MINE SAFETY DISCLOSURES.	4951

ITEM 5.	OTHER INFORMATION.	4951

ITEM 6.	EXHIBITS.	5052

	SIGNATURES	55

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

~~RA MEDICAL SYSTEMS,~~CATHETER PRECISION, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share ~~and par value~~ data)

(Unaudited)

							March 31, 2024			December 31, 2023
	March 31, 2023			December 31, 2022			(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	12,218		$	15,859		$	1,491		$	3,565
Accounts receivable, net		80			—
Accounts receivable								73			137
Inventories		70			—			63			44
Prepaid expenses and other current assets		388			977			327			415
Total current assets		12,756			16,836			1,954			4,161
Property and equipment, net		56			—			81			70
Operating lease right-of-use assets		129			—
Lease right-of-use assets								171			179
Intangible assets, net		35,563			—			25,807			26,318
Other non-current assets		5			—			8			8
TOTAL ASSETS	$	48,509		$	16,836		$	28,021		$	30,736

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	580		$	92		$	543		$	464
Accrued expenses		3,822			7,484			1,640			1,733
Notes payable								74			184
Current portion of operating lease liabilities		51			—			93			91
Total current liabilities		4,453			7,576			2,350			2,472
Royalties payable		8,105			—			7,060			6,974
Operating lease liabilities		88			—			87			97
Total liabilities		12,646			7,576			9,497			9,543
Commitments and contingencies (see Note 16)
Commitments and contingencies (see Note 17)
Stockholders' Equity
Series A preferred stock, $0.0001 par value, 10,000,000 shares authorized; 7,203 and 0 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		—			—
Series X preferred stock, $0.0001 par value, 15,404 shares authorized; 14,650 and 12,675 shares issued and outstanding, respectively at March 31, 2023 and 0 shares issued and outstanding at December 31, 2022		—			��
Common stock, $0.0001 par value, 300,000,000 shares authorized; 5,267,092 and 2,160,950 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		—			—
Preferred Stock, $0.0001 par value, 10,000,000 shares authorized
Series A Convertible Preferred Stock, $0.0001 par value, 7,203 shares designated; 3,703 and 4,578 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively								—			—
Series X Convertible Preferred Stock, $0.0001 par value, 15,404 shares designated; 12,656 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively								—			—
Common stock, $0.0001 par value, 300,000,000 shares authorized; 7,573,403 and 7,026,627 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively								1			1
Additional paid-in capital		307,400			214,397			296,907			296,901
Accumulated deficit		(271,537	)		(205,137	)		(278,384	)		(275,709	)
Total stockholders' equity		35,863			9,260			18,524			21,193
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	48,509		$	16,836		$	28,021		$	30,736

See accompanying notes to unaudited condensed consolidated financial ~~statements~~statements.

Table of Contents

~~RA MEDICAL SYSTEMS,~~CATHETER PRECISION, INC.

Condensed Consolidated Statements of Operations

(in thousands, except ~~share and~~ per share data)

(Unaudited)

	For the Three Months Ended March 31,						For the Three Months Ended March 31,
	2023			2022			2024			2023
Revenues
Product sales	$	85		$	9
Revenue							$	82		$	85
Cost of revenues								5			10
Product sales		10			31
Service and other		—			64
Total cost of revenues		10			95
Gross profit (loss)		75			(86	)
Gross profit								77			75
Operating expenses
Loss on impairment of goodwill								—			56,086
Selling, general and administrative		10,233			2,302			2,656			10,233
Research and development		240			3,115			37			240
Loss on impairment of goodwill		56,086			—
Total operating expenses		66,559			5,417			2,693			66,559
Operating loss		(66,484	)		(5,503	)		(2,616	)		(66,484	)
Other income, net
Other income (expense), net
Interest income		69			—			30			69
Other income, net		15			8
Total other income, net		84			8
Loss from operations before income taxes		(66,400	)		(5,495	)
Income taxes		—			—
Other income (expense), net								(3	)		15
Change in fair value of royalties payable								(86	)		—
Total other income (expense), net								(59	)		84
Net loss	$	(66,400	)	$	(5,495	)	$	(2,675	)	$	(66,400	)
Deemed dividends from the warrant inducement offer		(800	)		-
Deemed dividend - warrant inducement offer								—			(800	)
Net loss attributable to common stockholders	$	(67,200	)	$	(5,495)		$	(2,675	)	$	(67,200	)
Net loss per share attributable to common stockholders, basic and diluted	$	(24.65	)	$	(13.71	)	$	(0.36	)	$	(24.65	)
Weighted average common shares used in computing net loss per share, basic and diluted		2,726,442			400,749			7,429,198			2,726,442

See accompanying notes to unaudited condensed consolidated financial ~~statements~~statements.

Table of Contents

~~RA MEDICAL SYSTEMS,~~CATHETER PRECISION, INC.

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except share data)

(Unaudited)

Series A Preferred Stock

Series X Preferred Stock

Common Stock

Additional
Paid-In

Accumulated

Total Stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

Balance at December 31, 2022

—

$ —

—

$ —

2,160,950

$ —

$ 214,397

$ (205,137 )

$ 9,260

Common stock issued upon exercise of options

—

—

—

—

301,746

—

179

—

179

Restricted stock awards cancelled

—

—

—

—

(25 )

—

—

—

—

Stock-based compensation

—

—

—

—

—

—

1,394

—

1,394

Issuance of Series X preferred stock in merger

—

—

14,650

—

—

—

82,925

—

82,925

Conversion of Series X preferred stock

—

—

(1,975 )

—

1,974,905

—

—

—

—

Issuance of instruments in connection with private placement, net

7,203

—

—

—

497,908

—

7,360

—

7,360

Common stock issued upon exercise of warrants, net

—

—

—

—

331,608

—

1,145

—

1,145

Net loss

—

—

—

—

—

—

—

(66,400 )

(66,400 )
Balance at March 31, 2023

7,203

$ —

12,675

$ —

5,267,092

$ —

$ 307,400

$ (271,537 )

$ 35,863

	Series A Convertible Preferred Stock					Series X Convertible Preferred Stock				Common Stock				Additional Paid-In		Accumulated			Total Stockholders'
	Shares			Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance at December 31, 2023		4,578		$	—		12,656	$	—		7,026,627	$	1	$	296,901	$	(275,709	)	$	21,193
Stock-based compensation		—			—		—		—		—		—		6		—			6
Conversion of Series A Convertible Preferred Stock		(875	)		—		—		—		546,776		—		—		—			—
Net loss		—			—		—		—		—		—		—		(2,675	)		(2,675	)
Balance at March 31, 2024		3,703		$	—		12,656	$	—		7,573,403	$	1	$	296,907	$	(278,384	)	$	18,524

Series A Preferred Stock

Series X Preferred Stock

Common Stock

Additional
Paid-In

Accumulated

Total Stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

Balance at December 31, 2021

—

$ —

—

$ —

140,200

$ —

$ 191,945

$ (178,272 )

$ 13,673

Common stock and warrants issued, net

—

—

—

—

504,958

—

9,740

—

9,740

Warrants exercised

—

—

—

—

1,000

—

25

—

25

Vesting of restricted stock units and awards

—

—

—

—

159

—

—

—

—

Restricted stock awards cancelled

—

—

—

—

(289 )

—

—

—

—

Stock-based compensation

—

—

—

—

—

—

165

—

165

Net loss

—

—

—

—

—

—

—

(5,495 )

(5,495 )
Balance at March 31, 2022

—

$ —

—

$ —

646,028

$ —

$ 201,875

$ (183,767 )

$ 18,108

	Series A Convertible Preferred Stock				Series X Convertible Preferred Stock					Common Stock					Additional Paid-In		Accumulated			Total Stockholders'
	Shares		Amount		Shares			Amount		Shares			Amount		Capital		Deficit			Equity
Balance at December 31, 2022		—	$	—		—		$	—		2,161,288		$	—	$	214,397	$	(205,137	)	$	9,260
Common stock issued upon the exercise of options		—		—		—			—		301,746			—		179		—			179
Restricted stock awards cancelled or vested		—		—		—			—		(363	)		—		—		—			—
Stock-based compensation		—		—		—			—		—			—		1,394		—			1,394
Issuance of Series X Convertible Preferred Stock in merger		—		—		14,650			—		—			—		82,925		—			82,925
Conversion of Series X Convertible Preferred Stock		—		—		(1,975	)		—		1,974,905			—		—		—			—
Issuance of Series A Convertible Preferred Stock in connection with private placement, net		7,203		—		—			—		497,908			—		7,360		—			7,360
Warrants exercised (see Note 12)											331,608					1,145					1,145
Deemed dividend - warrant inducement offer		—		—		—			—		—			—		—		—			—
Net loss		—		—		—			—		—			—		—		(66,400	)		(66,400	)
Balance at March 31, 2023		7,203	$	—		12,675		$	—		5,267,092		$	—	$	307,400	$	(271,537	)	$	35,863

See accompanying notes to unaudited condensed consolidated financial ~~statements~~statements.

Table of Contents

~~RA MEDICAL SYSTEMS,~~CATHETER PRECISION, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Three Months Ended March 31,						For the Three Months Ended March 31,
	2023			2022			2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(66,400	)	$	(5,495	)	$	(2,675	)	$	(66,400	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on impairment of goodwill		56,086			—			—			56,086
Depreciation and amortization expense		1,444			186
Depreciation and amortization								522			1,444
Stock-based compensation		1,394			165			6			1,394
Change in fair value of royalties payable								86			—
Accretion of royalties payable		513			—			—			513
Loss on disposals of property and equipment		—			36
Changes in operating assets and liabilities:
Accounts receivable		(9	)		(5	)		64			(9	)
Inventories		(18	)		(73	)		(19	)		(18	)
Prepaid expenses and other assets		612			(240	)		88			612
Right-of-use asset and liability		5			(65	)
Other non-current assets		3			—
Lease right-of-use assets and lease liabilities								—			5
Accounts payable		(434	)		(256	)		79			(434	)
Accrued expenses		(5,051	)		(2,822	)		(93	)		(5,051	)
Accrued interest - related parties		(198	)		—			—			(198	)
Other non-current assets								—			3
Net cash used in operating activities		(12,053	)		(8,569	)		(1,942	)		(12,053	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(37	)		—			(22	)		(37	)
Cash acquired as part of business combination		15			—			—			15
Net cash used in investing activities		(22	)		—			(22	)		(22	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock and warrants		179			12,670			—			179
Payments of offering costs related to the issuance of common stock and warrants		—			(1,519	)
Payments on note payable								(110	)		—
Proceeds from exercise of warrants		1,326			25			—			1,326
Payments of costs related to the exercise of warrants		(181	)		—
Payments of costs related to exercise of warrants								—			(181	)
Payments of convertible promissory notes		(250	)		—			—			(250	)
Proceeds from the private placement of securities		8,000			—			—			8,000
Payments of offering costs related to the private placement of securities		(640	)		—			—			(640	)
Net cash provided by financing activities		8,434			11,176
Net cash (used in) provided by financing activities								(110	)		8,434
NET CHANGE IN CASH AND CASH EQUIVALENTS		(3,641	)		2,607			(2,074	)		(3,641	)
CASH AND CASH EQUIVALENTS, beginning of period		15,859			15,045			3,565			15,859
CASH AND CASH EQUIVALENTS, end of period	$	12,218		$	17,652		$	1,491		$	12,218
SUPPLEMENTAL CASH FLOW INFORMATION
Unpaid offering costs	$	—		$	1,411
Non-cash consideration for Catheter acquisition (Note 3)	$	82,925		$	—
Non-cash consideration for Catheter acquisition							$	—		$	82,925
Cash payments for interest	$	181		$	—		$	3		$	181

See accompanying notes to unaudited condensed consolidated financial ~~statements~~statements.

Table of Contents

Note 1 1.. Organization and Nature of Operations

The Company

~~Ra Medical Systems,~~Catheter Precision, Inc. ("~~Ra Medical"~~Catheter" or the ~~“Company”~~"Company or "Legacy RA Medical") ~~is a medical device company that owns intellectual property related~~, was incorporated in Delaware in July 2018. Catheter was initially formed to andevelop, commercialize and market its advanced excimer laser-based platform for use in the treatment of vascular and dermatological immune-mediated inflammatory diseases. Its excimer laser and single-use catheter system, together referred to as the DABRA Excimer Laser System (“DABRA”), is used as a tool in the treatment of peripheral artery disease. The Company paused all engineering and manufacturing activities during the third quarter of 2022, including the development of a version of the DABRA catheter that is compatible with a standard interventional guidewire. The Company also paused research to prove the feasibility of using a DABRA-derived catheter technology to fracture calcium in arteries in a procedure known as lithotripsy. On July 5, 2022, the Company announced the receipt of FDA 510(k) clearance for the DABRA 2.0 catheter as part of the DABRA Excimer Laser System. The Company suspended sales of DABRA during the year ended December 31, 2022 and currently has no plans to commercialize DABRA 2.0. The Company was formed on September 4, 2002 in the state of California and reincorporated in Delaware on July 14, 2018.

On January 9, 2023, Catheter entered into the ~~Company completed its acquisition~~Amended and Restated Agreement and Plan of Merger, or the "Merger Agreement", with Catheter Precision, Inc., ~~previously~~or “Old Catheter”, a privately-held Delaware ~~corporation (“Catheter”), which is focused on~~corporation. Under the ~~cardiac electrophysiology market and now is~~terms of the Merger Agreement, Old Catheter became a ~~wholly-owned~~wholly owned subsidiary of Catheter, together referred to as the Company, ~~(the~~in a stock-for-stock merger transaction, or the "Merger"). ~~Following~~

After the Merger and looking forward, the legacy Destruction of Arteriosclerotic Blockages by laser Radiation Ablation laser and single-use catheter, together referred to as "DABRA", and related assets were no longer used and Catheter’s legacy lines of business were discontinued, but instead the Company ~~began focusing on~~has shifted the focus of its operations to Old Catheter’s product lines. Accordingly, the Company’s current activities primarily relate to Old Catheter’s historical business which comprises the design, manufacture and sale of new and innovative medical technologies primarily focused in the field of cardiac electrophysiology, ~~see Note 3, Business Combination. Catheter’s~~or EP.

The Company’s primary product is the VIVO System, which is an acronym for View into Ventricular Onset System (“VIVO” or “VIVO System”)~~. VIVO~~, is a ~~non-invasive~~non- invasive imaging system that offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to ~~electrophysiology studies.~~EP procedures. The VIVO ~~system~~System has achieved a CE Mark allowing it to be commercialized in the European Union and has been placed at several hospitals in Europe. ~~FDA~~United States Food and Drug Administration ("FDA") 510(K) clearance in the United States was received and the Company began a limited commercial release of VIVO in 2021.

~~In addition, our LockeT,~~The Company’s newest product, Surgical Vessel Closing Pressure Device ("LockeT"), is a suture retention device ~~is a sterile, Class I product that was registered with the FDA in February 2023, at which time we began initial shipments to distributors. LockeT is~~ indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure and it is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently.

In addition, LockeT is a sterile, Class I product that was registered with the FDA in February 2023, at which time initial shipments began to distributors. Clinical studies for LockeT ~~are planned to begin~~began during the year ended December 31, 2023. These studies are planned to show the product’s effectiveness and benefits, including faster wound closure, earlier ambulation, potentially leading to early hospital discharge, and cost ~~analysis.~~benefits. This ~~data~~information is intended to provide crucial data for marketing and to expand ~~our~~the Company's indications for use with the FDA.

The Company’s product portfolio also includes the Amigo^® Remote Catheter System (the "AMIGO" or "AMIGO System"), a robotic arm that serves as a catheter control device. Prior to 2018, Old Catheter sold the AMIGO remote catheter system (the “AMIGO” or “AMIGO System”) which provides for accurate positioning, manipulation and stable control of catheters for use by electrophysiologists in the diagnosis and treatment of abnormal heart rhythms known as cardiac arrhythmias.marketed Amigo. The Company owns the intellectual property related to ~~the AMIGO System.~~Amigo, and this product is under consideration for future research and development of a generation 2 product.

~~Reverse Stock Split~~Prior to the Merger, Catheter developed an advanced excimer laser-based platform for use in the treatment of vascular immune-mediated inflammatory diseases. DABRA was developed as a tool in the treatment of Peripheral Artery Disease which commonly occurs in the legs. The Company has ceased marketing and operations related to DABRA.

On September 20, 2022, the Company’s board of directors approved a reverse stock split ratio of 1-for-50 (the “Reverse Stock Split”). On October 3, 2022, the effective date of the Reverse Stock Split, the number of the Company’s issued and outstanding shares of common stock decreased from 68.2 million shares to 1.4 million shares. The number of authorized shares and par value per common share remained unchanged. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders who would otherwise have been entitled to receive a fractional share received a cash payment in lieu thereof. The unaudited condensed consolidated financial statements, which includes the accompanying notes to the unaudited condensed consolidated financial statements, have been retrospectively adjusted to reflect the Reverse Stock Split of the Company’s common stock for all periods presented.

Table of Contents

Going Concern

As of March 31, ~~2023,~~2024, the Company had cash and cash equivalents of approximately ~~$12.2~~$1.5 million. For the three months ended March 31, ~~2023,~~2024, the Company used ~~approximately $12.1~~$1.9 million in cash for operating activities. The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception. As of March 31, ~~2023,~~2024, the Company had an accumulated deficit of approximately ~~$271.5~~$278.4 million.

~~Table of Contents~~

Management expects operating losses and negative cash flows to continue for the foreseeable future as the Company invests in its commercial capabilities. ~~Additional~~These negative cash flows and additional costs associated with the Merger paid during the year ended December 31, ~~2022 and during the three months ended March 31,~~ 2023, have substantially depleted the Company’s cash. Following the Merger with Old Catheter, management further reduced staff and other costs while assuming the operating costs of Old Catheter. Of the Company’s cash flows used in operating activities of $12.1 million, much of these cash outflows are related to the Merger and are non-recurring in nature. Specifically, the Company paid approximately $5.0 million in settlement costs that had been accrued as of December 31, 2022. See Note 9, Accrued Expenses. Management will continue to monitor its operating costs and seek to reduce its current liabilities. Such actions may impair its ability to proceed with certain strategic ~~activities, and it may be unsuccessful at negotiating existing liabilities to the Company’s benefit. In January 2023,~~activities. As of March 31, 2024, the Company ~~raised gross proceeds~~had $1.5 million of ~~$1.3 million from a Warrant Repricing~~cash and ~~in March 2023,~~cash equivalents. This amount will not be sufficient to fund the ~~Company completed a Private Placement and raised gross proceeds~~Company's operations through the end of ~~$8.0 million See Note 12, Equity Offerings. If~~May 2025. Because expected revenues are not adequate to fund ~~our~~ planned expenditures ~~or if~~and anticipated operating costs beyond such point, the Company is ~~unsuccessful at~~currently evaluating potential means of raising cash through future capital transactions ~~it may~~and/or bridge loans. If unable to do so, the Company will be required to reduce its spending rate to align with expected revenue levels and cash reserves, although there can be no guarantee that it will be successful in doing so. Accordingly, the Company ~~may~~will likely be required to raise additional cash through debt or equity ~~transactions.~~transactions and/or bridge loans to continue operations. It may not be able to secure financing in a timely manner or on favorable terms, if at all.

~~Management believes its current cash reserves will be sufficient to fund~~As a result of these factors, management has concluded that there is substantial doubt about the Company’s ~~operations for the next twelve months, beginning May 30, 2023. These accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will~~ability to continue as a going concern ~~and~~for a period of one year after the date the condensed consolidated financial statements are issued. The Company’s condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The unaudited condensed consolidated financial statements of the Company include the accounts of ~~Ra Medical~~the Company and Old Catheter. All intercompany transactions have been eliminated in consolidation. ~~The financial results of Catheter are included in the unaudited condensed consolidated financial statements from the date of completion of the Merger, to March 31, 2023.~~

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP"). The Financial Accounting Standards Board (“FASB”) establishes these principles to ensure financial condition, results of operations, and cash flows are consistently reported. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative nongovernmental GAAP as found in the FASB Accounting Standards Codification ("ASC"). Certain footnotes and other financial information normally required by U.S. GAAP have been condensed or omitted in accordance with instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, such statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the ~~Company as of as of March 31, 2023.~~Company. The operating results presented herein are not necessarily an indication of the results that may be expected for the year. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, as filed with the Securities and Exchange Commission (“SEC”) on ~~March 28, 2023.~~April 1, 2024.

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Use of Estimates

~~The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP.~~ The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The Company’s unaudited condensed consolidated financial statements are based upon a number of estimates including, but not limited to, the accounting for the Old Catheter business combination ~~(Note 3)~~(see Note 3, Business Combination), allowance for credit losses, evaluation of impairment of long-lived assets and goodwill, valuation of long-lived assets and their associated estimated useful lives, reserves for warranty costs, fair value of royalties payable, evaluation of probable loss contingencies, fair value of preferred stock and warrants issued, and the fair value of equity awards granted.

Concentrations of Credit Risk

~~Our~~The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash equivalents represent short-term, highly liquid investments with maturities of 90 days or less at the date of purchase. Credit risk related to cash and cash equivalents ~~are~~is based on the creditworthiness of the financial institutions at which these funds are held. The Company has cash balances at financial institutions which throughout the year may exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.

~~The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other hedging arrangements.~~

~~Segment Reporting~~

~~The Company operates in one business segment, which is the marketing, sales and development of medical technologies focused in the field of cardiac electrophysiology.~~

~~Cash~~ ~~and Cash Equivalents~~

The Company considers all short-term, highly liquid investments with original maturities of three months or less to be cash equivalents. Cash equivalents primarily represent funds invested in readily available checking and money market accounts. The Company maintains deposits in financial institutions in excess of federally insured limits of $250,000, in the amount of $11.5 million at March 31, 2023. To reduce its risk associated with the failure of any such financial institution, the Company evaluates the rating of the financial institution in which it holds deposits. Any material loss that the Company may experience in the future could have an adverse effect on its ability to pay its operational expenses or make other payments and may require the Company to move its cash to other high quality financial institutions. Currently, the Company is reviewing its bank relationships in order to mitigate its risk to ensure that its exposure is limited or reduced to the ~~FDIC~~Federal Deposit Insurance Corporation protection limits.

The Company extends credit to customers in the normal course of business. Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the condensed consolidated financial statements. The Company does not require collateral from its customers to secure accounts receivable.

The Company had three customers that represented more than 90% of the Companies consolidated revenue for the three months ended March 31, 2024 and three customers that represented more than 79% of the Company's consolidated revenue for the three months ended March 31, 2023.

The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other hedging arrangements.

~~Foreign Currency Transaction Gain or Loss~~Segment Reporting

The Company ~~measures~~operates in one business segment, which is the ~~foreign currency denominated assets~~marketing, sales and ~~liabilities~~development of medical technologies focused in the field of cardiac electrophysiology.

Cash and Cash Equivalents

Cash equivalents primarily represent funds invested in readily available checking and money market accounts. The Company maintains deposits in financial institutions in excess of federally insured limits of $250,000, in the amount of $1.2 million at the transaction date. Monetary assets and liabilities are then re-measured at exchange rates in effect at the end of each period, and property and non-monetary assets and liabilities are converted at historical rates.March 31, 2024.

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Fair Value Measurements

Fair value represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants and is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to identify inputs used in measuring fair value as follows:

Level 1 - Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;

Level 2 - Inputs other than the quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and

Level 3 - Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

~~Fair Value of Financial Instruments~~

Cash equivalents, prepaid expenses, trade accounts receivable, accounts payable, and accrued expenses are reported on the ~~unaudited~~ condensed consolidated balance sheets at carrying value which approximates fair value due to the short-term maturities of these instruments.

The royalties payable have unobservable inputs that are not supported by any market data. As ~~of March 31, 2023 and December 31, 2022, respectively,~~such the Company ~~had cash equivalents measured at fair value on~~developed its own assumptions and identified the inputs as Level 3. The revenue adjusted discount rate (“RADR”) was calculated using a ~~recurring basis using Level 1 inputs. As~~weighted average cost of ~~March 31, 2023, cash equivalents of $11.7 million were comprised of $11.4 million in a money market mutual fund, $0.3 million of money market funds,~~capital (“WACC”) approach for the level 3 measurement. The RADR considers the WACC from the Company’s impairment analysis and ~~$20 thousand of certificates of deposit. As of December 31, 2022, cash equivalents of $1.7 million were comprised of $1.4 million of money market funds and $0.3 million of certificates of deposit.~~

~~Accounts Receivable~~

~~Trade accounts receivable are presented net of allowances for credit losses. Prior~~adjusts certain inputs to represent the legacy Ra Medical discontinuation of sales of catheters in June 2022, the Company sold its catheters directly to distributors or physicians and maintained an allowance for credit losses for balances that appeared to have specific collection issues. The collection process was based on the agerisk profile of the ~~invoice and required attempted contacts~~revenue. Under the cost of equity section, the risk-free rate has changed to be commensurate with the ~~customer at specified intervals. Delinquent accounts receivable were charged against~~royalties payable term. Additionally, the ~~allowance for credit losses once the~~Beta and Company determined the amounts were uncollectible. The factors considered in reaching this determination were the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers deteriorated, resulting in an impairment of their ability to make payments, additional allowances mightSpecific Risk Premium have been ~~required.~~

~~As a result~~adjusted to Revenue Beta and Revenue Specific Risk Premium, respectively. This adjustment was calculated by multiplying the respective metric by the quotient of ~~and in connection with the Merger, the Company's~~equity volatility over revenue ~~streams are derived~~volatility. The remaining inputs from the ~~legacy Catheter revenue streams, and as such the accounts receivable policy for the post-Merger entity is described below.~~

The Company records accounts receivable at the invoiced amount less an allowance for any expected uncollectible accounts. In evaluating the Company’s ability to collect outstanding receivable balances, the Company considers many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all reasonable collection effortsImpairment WACC have ~~been made.~~remained unchanged.

The following table ~~shows~~details the ~~activity in~~fair value measurements within the ~~accounts receivable for~~fair value hierarchy of the ~~periods presented (in thousands):~~Company’s financial instruments:

March 31,
2023

December 31,
2022

Accounts receivable, net - balance at beginning of period

$ —

$ 21

Accounts receivable acquired in business combination

80

—

Change in provision for credit losses

—

(21 )
Accounts receivable, net - balance at end of period

$ 80

$ —

	Fair value at March 31, 2024
	Total		Level 1		Level 2		Level 3
Assets:
Cash Equivalents
Mutual Fund	$	1,451	$	1,451	$	—	$	—
Money Market fund		5		5		—		—
Total assets	$	1,456	$	1,456	$	—	$	—

Liabilities
Royalties payable	$	7,060	$	—	$	—	$	7,060
Total liabilities	$	7,060	$	—	$	—	$	7,060

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	Fair value at December 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash Equivalents
Mutual Fund	$	3,397	$	3,397	$	—	$	—
Money Market fund		10		10		—		—
Total assets	$	3,407	$	3,407	$	—	$	—

Liabilities
Royalties payable		6,974		—		—	$	6,974
Total liabilities	$	6,974	$	—	$	—	$	6,974

Financial Instruments — Credit Losses (ASU 2016-13)

Under the Current Expected Credit Loss ("CECL") impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on three portfolio segments: Hospitals – United States, Hospitals – Europe, and Distributors. The ~~following table shows~~determination of portfolio segments is based primarily on the ~~activity~~customers’ industry and geographical location.

Our quantitative allowance for credit loss estimates under CECL was determined using the method that uses an aging schedule. The Company also considers qualitative adjustments that may relate to unique risks, changes in current economic conditions that may not be reflected in quantitatively derived results, or other relevant factors to further inform our estimate of the allowance for credit ~~losses for the periods presented (in thousands):~~losses.

March 31,
2023

December 31,
2022

Balance at beginning of period

$ 152

$ 131

Provision for credit losses

—

21

Balance at end of period

$ 152

$ 152

Accounts Receivable and Allowances for Credit Losses

Trade accounts receivable are recorded at invoiced amounts, net of allowance for credit losses, if applicable, and are unsecured and do not bear interest.

The allowance for credit losses is based on the probability of future collection under the CECL impairment model in which the Company determines its allowance by applying the method based on an aging schedule. The Company also considers reasonable and supportable current information in determining its estimated loss rates, such as external forecasts, macroeconomic trends or other factors including customers’ credit risk and historical loss experience. The adequacy of the allowance is evaluated on a regular basis. Account balances are written off after all means of collection are exhausted and the balance is deemed uncollectible. Subsequent recoveries are credited to the allowance. Changes in the allowance are recorded as adjustments to bad debt expense in the period incurred.

As of March 31, 2024 and December 31, 2023 ~~the entire allowance~~there is no reserve for expected credit losses ~~is related to legacy Ra Medical receivables.~~within accounts receivable.

Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. Cost includes materials, labor and manufacturing overhead related to the purchase and production of inventories. The Company ~~reduced~~reduces the carrying value of inventories for those items that were potentially excess, obsolete or slow-moving based on changes in customer demand, technological developments or other economic factors. ~~There were no inventory obsolescence charges for the three months ended March 31, 2023 and 2022.~~

Effective June 6, 2022, the Company’s board of directors approved a staggered reduction in force (“RIF”). On September 2, 2022, the Company completed the RIF. The purpose of the RIF was to preserve capital with the goal of maximizing the opportunities available to the Company in furtherance of the board of directors’ review of strategic alternatives. As a result of the RIF, the Company paused all engineering and manufacturing activities during the third quarter of 2022.

Prior to the RIF (as defined above), the Company’s catheters were manufactured in-house and each catheter was tested at various stages of the manufacturing process for adherence to quality standards. Catheters that did not meet functionality specification at each test point were destroyed and immediately written off, with the expense recorded in cost of revenues in the unaudited condensed consolidated statements of operations. Once manufactured, completed catheters that passed quality assurance, were sent to a third-party for sterilization and sealed in a sterile container. Upon return from the third-party sterilizer, a sample of catheters from each batch were re-tested. If the sample tests were successful, the batch was accepted into finished goods inventory. If the sample tests were unsuccessful, the entire batch was written off, with the expense recorded in cost of revenues in the unaudited condensed consolidated statements of operations.

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Property and Equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives as follows:

Machinery and equipment		~~2-10~~2-5 years
Computer hardware and software		2-5 years
VIVO DEMO/Clinical Systems		2 years
Furniture and fixtures		5 years

Leasehold improvements are depreciated over the shorter of the useful life of the leasehold improvement or the term of the underlying property’s lease.

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The Company periodically reviews the residual values and estimated useful lives of each class of its property and equipment for ongoing reasonableness, considering long-term views on its intended use of each class of property and equipment and the planned level of improvements to maintain and enhance assets within those classes.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the account balances and any resulting gain or loss is recognized in income for the period. The cost of repairs and maintenance is expensed as incurred, whereas significant betterments are capitalized.

Impairment of Long-Lived Assets

~~The~~In accordance with ASC 360, Impairment and Disposals of Long-lived Assets, the Company periodically reviews its long-lived assets for impairment when certain events or changes in circumstances indicate that the carrying value of the long-lived assets may not be recoverable. Should the sum of the undiscounted expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date. ~~There were no impairment charges for~~

As a result of the sustained decline of the Company's stock price from the date of the Merger, the Company assesses its long-lived assets for impairment. To determine whether the ~~three months ended~~carrying amount of the long-lived asset group is recoverable, the Company determined the estimated future cash flows of the group for a period consistent with that of the primary assets of the group. The sum of the undiscounted cash flows was then compared to the carrying amount of the long-lived assets, as of March 31, ~~2023 and 2022.~~2024. The Company concluded there was no impairment as of March 31, 2024.

Goodwill

In accordance with ASC 350, Intangibles – Goodwill and Other, goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of net assets acquired. Goodwill, which represents the excess of purchase price of Old Catheter over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

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To determine whether goodwill is impaired, annually or more frequently if needed, the Company performs a multi-step impairment test. The Company first has the option to assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. When performing quantitative testing, the Company first estimates the fair values of its reporting units using a combination of an income and market approach. To determine fair values, the Company is required to make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations including the rate of future revenue growth, capital requirements, and income taxes), long-term growth rates for determining terminal value and discount rates. Comparative market multiples are used to corroborate the results of the discounted cash flow test. These assumptions require significant ~~judgement.~~judgment. Pursuant to ~~Accounting Standards Update (''ASU'')~~ASU 2017-04, Simplifying the Test for Goodwill Impairment, the single step is to determine the estimated fair value of the reporting unit and compare it to the carrying value of the reporting unit, including goodwill. To the extent the carrying amount of goodwill exceeds the implied goodwill, the difference is the amount of the goodwill impairment. The Company also completes a reconciliation between the implied equity valuation prepared and the Company’s market capitalization. The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered Level 1 inputs. There were impairment charges of $0 and $56.1 million recognized during the three months ended March 31, 2024 and 2023, see Note 8,3, Business Combination and Note 7, Goodwill, for additional details. As of December 31, 2023, goodwill was fully impaired.

~~Royalty~~ ~~Liability~~Royalties Payable

The Company is obligated to pay royalties under various royalty agreements Old Cather had entered into. On January 9, 2023, prior to the consummation of the Merger, Old Catheter entered in an agreement with its Convertible Promissory Noteholders (“Noteholders”), which substantially consisted of amounts due to David A. Jenkins, previously Old Catheter's Chairman of the Board of Directors prior to the Merger, and, currently, ~~Ra Medical's~~the Company’s Executive Chairman of the Board of Directors and Chief Executive Officer, to forgive all accrued interest and future interest expense in exchange for a future royalty right. The Company will pay to the Noteholders a total royalty equal to approximately 12% of net sales of ~~its Surgical Vessel Closing Pressure Device,~~LockeT, commencing upon the first commercial sale, through December 31, ~~2035.~~2035 (see Note 10, Royalties Payable).

In addition, Old Catheter had entered into an agreement with the inventor of LockeT in exchange for the assignment and all rights to LockeT. Pursuant to the agreement, the Company will pay a 5% royalty on net sales up to $1 million in royalties. After $1 million has been paid, and if, and only if, a U.S. patent is granted by the United States Patent and Trademark Office, then the Company will continue to pay a royalty at a rate of 2% of LockeT net sales, until total cumulative royalties of $10 million have been paid (see Note 10, Royalties Payable).

During 2006 and 2007, Old Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Old Catheter's AMIGO System. The ~~royalty~~agreement calls for the payment to the foundation, upon successful commercialization of the AMIGO System (see Note 10, Royalties Payable).

As of the date of the Merger, the royalties payable ~~has~~had an estimated fair value of approximately ~~$7.9 million as~~$14.2 million. As of March 31, ~~2023. The~~2024 and December 31, 2023 the royalties payable had an estimated fair value ~~was~~of $7.0 million and $7.0 million, respectively. At each reporting period, the fair value is calculated using a discounted cash flow method utilizing a RADR which ~~utilized a discount rate~~was 24.1% as of ~~27%.~~January 9, 2023, 28.0% as of December 31, 2023 and 29.0% as of March 31, 2024.

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Product Warranty

~~Products~~The Company’s current products are warrantied against defects in material and workmanship when properly used for their intended purpose and properly maintained.

Similarly, the DABRA products were warrantied against defects in material and workmanship when properly used for their intended purpose and appropriately maintained. Accordingly, the Company generally replaced catheters that kinked or failed to calibrate. The product warranty liability was determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor. The product warranty liability also includes the estimated costs of a product recall.

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~~The warranty accrual is included in accrued expenses in the accompanying unaudited condensed consolidated balance sheets.~~

Warranty expenses are included in cost of revenues in the accompanying unaudited condensed consolidated statements of operations. Changes in estimates to previously established warranty accruals resulted from current period updates to assumptions regarding repair and product recall costs and are included in current period warranty expense.

~~Derivative Financial Instruments~~

~~The Company does not use derivative instruments to hedge exposures to interest rate, market, or foreign currency risks. The Company evaluates all~~ As of ~~its financial instruments to determine if such instruments contain features that qualify as embedded derivatives.~~

Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives are recognized at fair value, with changes in fair value recognized in the statements of operations for each period.March 31, 2024 and December 31, 2023, there was no accrued warranty balance.

Distinguishing Liabilities from Equity

The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity, to classify certain redeemable and/or convertible instruments. The Company first determines whether a financial instrument should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance ~~sheet (“mezzanine equity”).~~sheet. The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e. at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.

Revenue Recognition

The Company applies the provisions of ~~Financial Accounting Standards Board (“FASB”)~~FASB ASC Topic 606, Revenue from Contracts with Customers (“~~Topic~~ASC 606”), and all related appropriate guidance. The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the ~~company~~Company expects to be entitled in exchange for those goods or services.

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The Company measures revenue based upon the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation. Under ~~Topic~~ASC 606, revenue is recognized when a customer obtains control of promised goods. To achieve this core principal, the Company applies the following five steps:

Step 1: Identify the contract with the customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when the Company satisfies a performance obligation

~~Subsequent to the Merger, the~~The Company’s primary product in 2024 is the VIVO System. The VIVO System offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to electrophysiology studies. In addition to the VIVO System, customers are provided with VIVO Positioning Patch Sets, which are custom patches, that are used in conjunction with the VIVO System to complete the intended output of the VIVO System. The delivery of the VIVO System, including the VIVO Positioning Patch Sets represents the Company’s primary performance obligation. The Company recognizes revenue upon the delivery of the VIVO system. The Company also provides customers with the option to pay for software upgrades in advance at the time of the contract's inception. Software upgrades are stand-ready services, whereby the Company will provide software upgrade services to the customer when and as upgrades are available. Terms of the period covered by the payment of software upgrades in advance can range from one year to multiple years. Customers have the option to renew terms covered by software upgrades at the end of each term. The stand-ready software upgrades represent the Company's second separate performance obligation and revenue is recognized over the term of the period.

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The Company invoices the customers after physical possession and control of the VIVO System is transferred to the customer and recognizes revenue upon delivery. The timing of payment for the corresponding invoices is dependent upon the credit terms identified in each contract. The Company invoices customers who pay for software upgrades in advance in conjunction with the invoice for the delivery of the VIVO System, and subsequent renewals of software upgrades are invoiced at the inception of the term. Revenue for these stand-ready services is recognized evenly over the term of the upgrade period, consistently with similar stand-ready services under ~~Topic~~ASC 606. Similar to the delivery of the VIVO System, the timing of payment for the corresponding invoices is dependent upon the credit terms identified in each contract. The Company has elected the practical expedient to expense costs to obtain a contract, as incurred, as opposed to recognizing the cost as an asset upon occurrence.

~~Legacy Ra Medical~~Disaggregation of Revenue

The ~~Company generated revenue from the~~following table summarizes disaggregated product sales ~~of products and services. Product sales consisted of the sales of catheters for use with the DABRA laser system. The Company paused selling commercial products~~by geographic area ($ in late 2020 and was only selling catheters for use in the atherectomy clinical trial prior to the discontinuation of such sales in June 2022. The Company’s sales agreements generally did not include right-of-return provisions for any form of consideration, including partial refund or credit against amounts owed to the Company. Services and other revenues primarily consisted of billable services, including fees related to DABRA laser commercial usage agreements.thousands):

The Company accounted for a contract with a customer when it had a legally enforceable contract with the customer, the arrangement identified the rights of the parties, the contract had commercial substance, and the Company determined it was probable that it would collect the contract consideration. The Company recognized revenue when control of the promised goods or services transferred to customers, in an amount that reflected the consideration the Company expected to be entitled to in exchange for those goods or services. Taxes collected from customers relating to goods or services and remitted to governmental authorities were excluded from revenue.

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When engaged in commercial sales, the Company entered into a DABRA laser commercial usage agreement or DABRA laser placement acknowledgement with each customer that was supplied a DABRA laser, collectively the “usage agreement”, which provided for specific terms of continued use of the DABRA laser, including a nominal periodic fee. The terms of a usage agreement typically allowed the Company to place a DABRA laser at a customer’s specified location without a specified contract term. Under the usage agreement terms, the Company retained all ownership rights to the DABRA laser and was permitted to request the return of the equipment within 10 business days of notification. While the laser periodic fees were nominal, the usage agreement provided the Company the exclusive rights to supply related single-use catheters to the customer which aggregated the majority of the product sales revenue. There were no specified minimum purchase commitments for the catheters.

~~The~~ Company recognized revenue associated with the usage agreements and catheter supply arrangements in accordance with Topic 606 since (i) the contract primarily included variable payments, (ii) the catheters were priced at their standalone selling price, and (iii) the laser equipment was insignificant in the context of the contract. Revenue was recognized when the performance obligation was satisfied which was generally upon shipment of the catheter.

~~The Company had $85 thousand and $9 thousand in product sales during the three months ended March 31, 2023 and 2022, respectively.~~

	For the Three Months Ended March 31,
	2024		2023
Product Sales
US	$	8	$	58
Europe		74		27
	$	82	$	85

Shipping and Handling Costs

Shipping and handling costs charged to customers are included in net product sales, while all other shipping and handling costs are included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

Advertising and Marketing

Advertising costs are expensed as incurred and included in ~~sales~~selling, general and ~~marketing expense.~~administrative expenses. Advertising costs were ~~$0.2 million~~$49 thousand and ~~$0.1 million~~$18 thousand during the three months ended March 31, ~~2023~~2024 and ~~2022, respectively.~~2023.

Patents

The Company expenses patent costs, including related legal costs, as incurred and records such costs as selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

Research and Development

Major components of research and development costs include ~~personnel expenses, stock-based compensation,~~ consulting, research grants, supplies and clinical trial expenses. Research and development expenses are charged to operations in the period incurred.

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Stock-Based Compensation

The Company records stock-based compensation expense associated with stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) issued to employees, members of the Company’s board of directors and consultants in accordance with the authoritative guidance for stock-based compensation. The Company evaluates whether an award should be classified and accounted for as a liability award or equity award for all stock-based compensation awards granted. The cost of an award of an equity instrument is measured at the grant date, based on the estimated fair value of the award using the Black-Scholes option pricing valuation model (“Black-Scholes model”) which incorporates various assumptions including expected term, volatility and risk-free interest rate, and is recognized as expense on a straight-line basis over the requisite service period of the award, which is generally the vesting period of the respective award. Share-based compensation for an award with a performance condition is recognized when the achievement of such performance condition is determined to be probable. If the outcome of such performance condition is not determined to be probable or is not met, no compensation expense is recognized, and any previously recognized compensation expense is reversed. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur.

As a result of the Merger, all unvested ~~legacy~~Old Catheter stock options were subject to accelerated vesting and therefore became fully vested, as of the closing date of the business combination. ~~Ra Medical~~The Company recognized the fair value of the replacement options as included in consideration transferred to the extent they do not exceed the fair value of the equivalent Old Catheter options. Any incremental fair value was recognized in compensation expense in the post-combination period, with this recognized as a Day 1 expense due to the Old Catheter options becoming fully vested concurrent with the closing of the business combination.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences reverse. Any resulting net deferred tax assets are evaluated for recoverability and, accordingly, a valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax asset will not be realized.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. An uncertain tax position is considered effectively settled on completion of an examination by a taxing authority if certain other conditions are satisfied. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and other expense, respectively.

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Basic and Diluted Net Loss ~~Per~~per Share of Common Stock

The Company calculates basic net loss per share by dividing net loss by the weighted average number of common shares outstanding during the reporting period. A net loss cannot be diluted so when the Company is in a net loss position, basic and diluted loss per common share are the same. If in the future the Company achieves profitability, the denominator of a diluted earnings per common share calculation will include both the weighted average number of shares outstanding and the number of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive. ~~Dilutive~~Anti-dilutive common stock equivalents excluded from the computation of diluted net loss per share include warrants, stock options, ~~and~~ non-vested restricted stock awards, ~~and~~ restricted stock units, ~~using the treasury stock method,~~ Series A Convertible Preferred Stock, and Series X Convertible Preferred ~~Stock, along with the effect, if any, from outstanding convertible securities. See~~(see Note ~~11,~~12, Net loss per ~~share.~~Share).

Net loss attributable to common stockholders consists of net income or loss, as adjusted for actual and deemed dividends declared. The Company recorded a deemed dividend for the modification of existing warrants and issuance of new warrants during the three months ended March 31, 2023 of $0.8 million. The deemed dividend is added to the net loss in determining the net loss available to common ~~stockholders.~~stockholders for the three months ended March 31, 2023.

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Recently Announced Accounting Pronouncements

In ~~June 2022,~~November 2023, the FASB issued ASU ~~No. 2022-03,~~2023-07, ~~Fair Value Measurement~~Segment Reporting (Topic ~~820)~~280): ~~Fair Value Measurement~~Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 require disclosure of ~~Equity Securities Subject~~significant segment expenses that are regularly provided to ~~Contractual Sale Restrictions~~the chief operating decision maker (“~~ASU 2022-03”~~CODM”) ~~which clarifies~~and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM. The amendments in this update also expand the interim segment disclosure requirements. These amendments do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The guidance ~~for fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. ASU 2022-03~~ is effective for fiscal years beginning after December 15, 2023, and ~~for~~ interim periods within ~~those~~ fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. The Company is currently reviewing the impact that the adoption of ASU 2023-07 may have on our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard prospectively in fiscal year 2025 for the annual reporting period ending December 31, 2025. The Company is currently ~~evaluating~~reviewing the impact that the adoption of ASU ~~2022-03~~2023-09 may have on ~~its unaudited condensed~~our consolidated financial ~~statements.~~

As an emerging growth company, the Company may elect to adopt new or revised accounting standards when they become effective for non-public companies, which typically is later than public companies must adopt the standards. The Company has elected to take advantage of the extended transition period afforded by the JOBS Actstatements and ~~as a result, will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-public companies.~~disclosures.

Note 3. Business Combination

On January 9, 2023, the Company completed the acquisition of Old Catheter ~~(the "Merger")~~ for the purpose of acquiring Old Catheter’s existing and developing product lines based on unique electrophysiology technology.

Pursuant to the Merger Agreement, all Old Catheter common stock shares issued and outstanding and convertible promissory notes, representing an aggregate principal of $25.2 million, were converted into a right to receive ~~14,649.591~~14,649.592 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock. Additionally, all outstanding stock options to purchase Old Catheter common stock were assumed and converted into options to purchase approximately 753,699 shares of the Company's common stock.

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The total purchase consideration for the Merger was ~~$82.9~~$72.5 million which represents the sum of the (i) estimated fair value of the ~~14,649.591~~14,649.592 Series X Convertible Preferred Stock issued and (ii) the portion of the estimated fair value of ~~$3.1~~$3.4 million representing the Company stock options issued asin replacement of Old Catheter share-based payment awards as required under FASB Topic ~~805.~~805, Business Combinations ("Topic 805").

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The fair value of the Series X Convertible Preferred Stock includes certain discounts applied to the closing stock price of the Company, on January 9, 2023, of ~~$6.41~~$6.09 per share.

The following table summarizes the ~~preliminary estimated~~ fair value of the consideration associated with the Merger ~~(in thousands, except share data)~~($ in thousands):

Description	Fair Value as of January 9, 2023		Fair Value as of January 9, 2023
Fair value of 14,649.591 Series X convertible preferred stock issued	$	79,840
Fair value of Catheter’s fully vested stock options		3,085
Fair value of 14,649.592 Series X convertible preferred stock issued			$	69,140
Fair value of Old Catheter’s fully vested stock options				3,404
Total Purchase Price	$	82,925	$	72,544

The Merger ~~is being~~was accounted for as a business combination in accordance with Topic ~~805.~~805, and the Company has been determined to be the accounting acquirer. The Company ~~estimated~~allocated the ~~fair values of~~purchase price to the assets acquired and liabilities assumed ~~in the Merger. These values have been prepared based on~~at fair value. The preliminary ~~estimates of the~~purchase price allocation reflects various preliminary fair value ~~of the consideration paid,~~estimates and analyses, including certain tangible assets acquired and liabilities ~~assumed. Differences between these~~assumed, the valuation of intangible assets acquired, liabilities assumed, and goodwill, which were subject to change within the measurement period as preliminary valuations were being finalized (generally one year from the acquisition date). Measurement period adjustments were recorded in the reporting period in which the estimates are finalized, and adjustment amounts were determined. During the three months ended June 30, 2023, the Company recorded measurement period adjustments based on changes to certain estimates and assumptions and their related impact to the ~~final acquisition accounting may occur~~purchase price allocation. Developed technology was revised from $35.1 million to $27.0 million; trademarks were revised from $1.7 million to $1.3 million; customer relationships were revised from $220 thousand to $62 thousand; goodwill was revised from $56.0 million to $60.9 million; and ~~these differences could be material.~~ royalties payable were revised from $7.6 million to $14.2 million.

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The following table summarizes the ~~preliminary~~final purchase price allocations relating to the Merger ~~(in~~($ in thousands):

Description	Fair Value		Fair Value
Assets acquired:
Cash and cash equivalents	$	15	$	15
Accounts receivable		71		71
Inventories		52		52
Prepaid expenses and other current assets		23		23
Property and equipment, net		26		26
Lease right-of-use assets		119		119
Other assets		8		8
Developed technology		35,080		27,014
Customer relationships		220		62
Trademarks		1,700		1,285
Goodwill		56,086		60,934
Total assets acquired	$	93,400	$	89,609

Liabilities assumed:
Accounts payable	$	922	$	922
Accrued expenses		1,389		1,389
Lease liability - current portion		37
Lease liability				124
Interest payable		198		198
Convertible promissory note		250
Lease liability - net of current portion		87
Convertible promissory notes				250
Royalties payable		7,592		14,182
Total liabilities assumed		10,475		17,065
Total purchase price	$	82,925	$	72,544

All intangible assets acquired are subject to amortization and their associated ~~estimated~~ acquisition date fair values and ~~estimated~~ useful lives are as ~~follows (in thousands except for estimated useful life which is in years):~~follows:

Intangible Assets	Estimated Fair Value		Estimated Useful Life		Fair Value		Useful Life
Developed technology- Vivo	$	8,020		8
Developed technology- VIVO					$	8,244		15
Developed technology- LockeT		27,060		6		18,770		14
Customer relationships		220		5		62		6
Trademark- Vivo		1,480		9
Trademark- VIVO						876		9
Trademark- LockeT		220		8		409		9
	$	37,000			$	28,361

Topic 805 requires that an acquirer in a business combination report provisional amounts when measurements are incomplete as of the end of the reporting period covering the business combination. In accordance with Topic 805, the acquirer has a period of time, referred to as the measurement period, to finalize the accounting for a business combination. The measurement period provides companies with a reasonable period of time to determine the value of the identifiable assets acquired, liabilities assumed, and the consideration transferred for the acquiree. In accordance with Topic 805, the measurement period ends as soon as the acquirer receives all necessary information about the facts and circumstances that existed as of the acquisition date for the provisional amounts or has otherwise learned that more information is not obtainable. However, the measurement period cannot exceed one year from the acquisition date. Topic 805 requires that measurement period adjustments be recognized in the reporting period in which the adjustment amount is determined.

In accordance with ASC Topic 805-10-25-15, the acquirer in a business combination has a period of time, referred to as the measurement period, to finalize the accounting for a business combination. The measurement period provides companies with a reasonable period of time to determine the value of identifiable tangible and intangible assets acquired, liabilities assumed, and the consideration transferred for the acquiree. In accordance with ASC Topic 805-10-25-14, the measurement period ends when the acquirer receives all necessary information about the facts and circumstances that existed as of the acquisition date for the provisional amounts (or otherwise learns that more information is not obtainable); however, the measurement period cannot exceed one year from the acquisition date.

As of the date of this Quarterly Report, management is still in the process of evaluating the estimated fair value of the consideration transferred in the Merger. In addition, management is still evaluating the allocation of the acquisition purchase price to the tangible and intangible assets acquired, liabilities assumed, and the resulting goodwill. Management’s analysis of these items has not yet been completed because of the inherent complexities of estimating fair values of (1) the Company’s Series X Preferred Stock, for which no readily determinable fair value exists, issued in the Merger, and (2) assets and technologies developed by Catheter, an early-stage company with limited commercial history. Therefore, the business combination amounts presented in Note 3 were determined by management based on its consideration of all currently available information; however, management has not fully completed its business combination analysis and such amounts must be considered provisional amounts. Notwithstanding the above, as described in Note 8,7, management determined that there were indicators of asset impairment during the ~~quarterly period~~three months ended March 31, 2023, and assessed the carrying values of the Company’s intangible assets and goodwill. As a result, the Company recorded an impairment charge relating to goodwill of $56.1 million during the three months ended March 31, 2023. This amount represented the preliminary purchase price amount ascribed to goodwill.

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Transaction costs incurred in connection with this business combination amounted to approximately $1.7 million during the three months ended March 31, 2023.

Pro Forma Financial Information

The following table represents the revenue, net loss and net loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, ~~2022.~~2023. These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the period presented, nor does the pro forma financial information purport to represent the results of operations for future periods. The following information for the three months ended March 31, 2023 ~~and 2022~~ is presented in thousands except for the per share ~~data:~~data ($ in thousands, except per share data):

	Three Months Ended March 31,						Three Months Ended March 31,
	2023			2022			2023
Revenues	$	88		$	95		$	88
Net loss		(66,570	)		(6,967	)	$	(66,570	)
Net loss attributable to common stockholders		(67,370	)		(6,967	)	$	(67,370	)
Basic and diluted net loss per share – on a pro forma basis (unaudited)	$	(13.56	)		(2.17	)
Basic and diluted net loss per share – on a pro forma basis							$	(13.56	)

Note ~~4. Royalties Payable~~4. Inventories

~~LockeT Royalty~~Inventories consisted of the following ($ in thousands):

	March 31, 2024		December 31, 2023
Raw materials	$	32	$	27
Finished goods		31		17
Inventories	$	63	$	44

~~On January 9, 2023,~~

There were no charges for inventory obsolescence or allowance recorded during the ~~Company entered into an agreement with the Convertible Promissory Noteholders (“Noteholders”) to forgive all accrued interest~~three months ended March 31, 2024 and future interest expense in exchange for a future royalty right. The Company will pay to the Noteholders a total royalty equal to approximately 12% of net sales of its Surgical Vessel Closing Pressure Device ("LockeT"), commencing upon the first commercial sale, through December 31, 2035. The royalty payable has an estimated fair value of approximately $7.4 million. The remaining accrued interest for the notes not converted at closing of the Merger was paid on February 9, 2023.

~~AMIGO System Royalty~~Note 5. Property and Equipment

~~During 2006~~Property and 2007, Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Catheter's AMIGO System receiving a total of $1.6 million from the foundation.

~~The agreement calls for the payment~~equipment, net consisted of the following ~~sales-based royalties, by Catheter, to the foundation, upon successful commercialization of the AMIGO System:~~($ in thousands):

Royalty Percentage

Until Royalty Payment Reaches a Total of

4%

$ 1,589,500

2%

$ 3,179,000

1%

In perpetuity

	March 31,			December 31,
	2024			2023
Machinery and equipment	$	26		$	16
Computer hardware and software		24			17
VIVO DEMO/Clinical Systems		74			69
Property and equipment, gross		124			102
Accumulated depreciation		(43	)		(32	)
Property and equipment, net	$	81		$	70

Depreciation expense was $11 thousand and $7 thousand for the three months ended March 31, 2024 and 2023, respectively.

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There was no royalty expense recorded for the three months ended March 31, 2023 and 2022, respectively in relation to the AMIGO System. No royalties have been paid or are currently payable under the agreements.

~~See table below for roll forward of the royalty payable for the three months ended March 31, 2023:~~

Balance at beginning of period

$ —

AMIGO royalty payable recognized in connection with the Merger

160

LockeT royalty payable recognized in connection with the Merger

7,432

Accretion of LockeT royalty payable

513

Balance at end of period

$ 8,105

~~Note 5. Inventories~~

~~Inventories consisted of the following (in thousands):~~

March 31,
2023

December 31,
2022

Raw materials

$ 38

$ —

Finished goods

32

—

Inventories

$ 70

$ —

Note 6. ~~Property and Equipment~~

~~Property and equipment, net consisted of the following (in thousands):~~

March 31,
2023

December 31,
2022

Machinery and equipment

$ 20

$ —

Computer hardware and software

14

—

VIVO DEMO/Clinical Systems

52

—

Property and equipment, gross

86

—

Accumulated depreciation

(30 )

—

Property and equipment, net

$ 56

$ —

~~Depreciation expense was $7 thousand and $115 thousand for the for the three months ended March 31, 2023 and 2022, respectively.~~

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~~Note 7.~~ Intangible Assets

The following table summarizes the Company’s intangible assets as of March 31, ~~2023:~~2024 ($ in thousands):

Estimated Useful
Life in Years

Gross Carrying
Amount at
January 9,
2023

Accumulated
Amortization

Net Book Value at Net Book Value at March 31,
2023

Developed technology ‐ Vivo

8

$
8,020

$ (251 )

$ 7,769

Developed technology ‐ Locket

6

27,060

(1,127 )

25,933

Customer relationships

5

220

(11 )

209

Trademarks/trade names ‐ Vivo

9

1,480

(41 )

1,439

Trademarks/trade names ‐ Locket

8

220

(7 )

213

$ 37,000

$ (1,437 )

$ 35,563

	Estimated Useful Life in Years		Gross Carrying Amount at January 9, 2023		Accumulated Amortization			Net Book Value at March 31, 2024
Developed technology ‐ VIVO		15	$	8,244	$	(687	)	$	7,557
Developed technology ‐ LockeT		14		18,770		(1,676	)		17,094
Customer relationships		6		62		(13	)		49
Trademarks/trade names ‐ VIVO		9		876		(122	)		754
Trademarks/trade names ‐ LockeT		9		409		(56	)		353
			$	28,361	$	2,554	)	$	25,807

AsThe following table summarizes the Company’s intangible assets as of December 31, ~~2022~~2023 ($ in thousands):

	Estimated Useful Life in Years		Gross Carrying Amount at January 9, 2023		Accumulated Amortization			Net Book Value at December 31, 2023
Developed technology ‐ VIVO		15	$	8,244	$	(550	)	$	7,694
Developed technology ‐ LockeT		14		18,770		(1,341	)		17,429
Customer relationships		6		62		(10	)		52
Trademarks/trade names ‐ VIVO		9		876		(97	)		779
Trademarks/trade names ‐ LockeT		9		409		(45	)		364
			$	28,361	$	(2,043	)	$	26,318

The estimated future amortization expense for the ~~Company did not have any intangible assets.~~next five years and thereafter is as follows ($ in thousands):

Years ending December 31,	Future Amortization Expense
Remainder of 2024	$	1,532
2025		2,043
2026		2,043
2027		2,043
2028		2,043
Thereafter		16,103
Total	$	25,807

The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets. Amortization expense, included within selling, general and administrative expenses, relating to the ~~purchased~~Company's intangible assets was ~~$1.4~~$0.5 million and $0$1.4 million for the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, respectively.

The weighted average remaining amortization period for the Company’s intangible assets as of March 31, 2024, is 12.81 years.

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Note 8.7. Goodwill

In connection with the Merger, the excess of the purchase price over the estimated fair value of the net assets assumed of ~~$56.1~~$60.9 million was recognized as goodwill. The Merger was accounted for as a business combination in accordance with Topic 805, and the Company has been determined to be the accounting acquirer. The Company allocated the purchase price to the assets acquired and liabilities assumed at fair value. During the three months ended June 30, 2023, the Company recorded measurement period adjustments based on changes to certain estimates and assumptions and their related impact to the purchase price allocation. As a result, goodwill was revised from $56.0 million to $60.9 million.

The Company tests Goodwill for impairment at the reporting unit level annually in the fourth quarter or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists. Due to a sustained decrease in the Company’s share price during the ~~three months~~quarter ended March 31, 2023, the Company concluded that, in accordance with ASC 350, a triggering event occurred indicating that potential impairment exists and required the Company to assess if impairment exists as of March 31, ~~2023, and if so, the extend of the impairment.~~2023. In accordance with ASC 350, the Company performed a quantitative goodwill impairment test, which resulted in the carrying amount of the reporting unit exceeding the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired. The Company ~~recorded an impairment charge of $56.1 million related to goodwill for the three months ended March 31, 2023. The Company~~ utilized a combination of an income and market approach to assess the fair value of the reporting ~~unit as of March 31, 2023.~~unit. The income approach considered the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market ~~conditions while the~~conditions. The guideline public company market approach considered marketplace earnings multiples from within a peer public company group. ~~The Company recorded the impairment charge of $56.1 million within loss on impairment of goodwill in the condensed consolidated statement of operations.~~ As of ~~March~~December 31, 2023, cumulative goodwill impairment charges of ~~$56.1~~$60.9 million were incurred related to the Company’s single reporting ~~unit.~~unit and no goodwill remained as of this date.

Note 8. Accrued Expenses

Accrued expenses consisted of the following ($ in thousands):

	March 31, 2024		December 31, 2023
Legal expenses	$	69	$	102
Offering costs		1,356		1,356
Compensation and related benefits		20		43
Other accrued expenses		195		232
Accrued expenses	$	1,640	$	1,733

The product warranty accrual related to the voluntary recall of DABRA catheters, was initiated in September 2019. The recall was closed by the FDA in July 2023 and no claims have been submitted in approximately 2 years. As such, the Company derecognized the warranty liability of $192 thousand as of December 31, 2023. As of March 31, 2024 and December 31, 2023, there is no accrued warranty balance.

Note 9. Notes Payable

The ~~following~~Company purchased director and officer liability insurance coverage on October 16, 2023 for $447 thousand. A down payment of $157 thousand was made and the remaining balance of $291 thousand was financed over 8 months through a short-term financing arrangement with its insurance carrier. The interest rate on the loan is ~~a roll forward of goodwill as of~~8.990%. Interest expense on this loan was $3 thousand and $0 for the three months ended March 31, ~~2023:~~

~~Beginning balance, January 1, 2023~~	$	-
~~Goodwill recognized in connection with the Merger (Note 3)~~		~~56,086~~
~~Impairment charge~~		~~(56,086~~	)
~~Ending balance, March 31, 2023~~	$	-

~~Note 9. Accrued Expenses~~

~~Resignation of CEO~~

~~On April 17,~~2024 and 2023, ~~the Company received the resignation of Will McGuire from his positions as Chief Executive Officer~~respectively. The loan balance was $74 thousand and Secretary, and as a member of the Board of Directors, effective April 28, 2023, for personal reasons, see Note 18, Subsequent Events. The Board of Directors has established a search committee consisting of Susanne Meline and James Caruso to identify a new Chief Executive Officer. Until a new Chief Executive Officer is identified, David Jenkins, Executive Chairman of the Board, will serve as interim Chief Executive Officer and as the Company’s principal executive officer, effective April 28, 2023.

In connection with Mr. McGuire’s resignation, he and the Company entered into a second amendment to his change in control and severance agreement, which among other things, clarified that the amount of Mr. McGuire’s severance payment would be based on his 2022 base salary and bonus opportunity, and provided that he would not receive Cobra coverage following his termination of employment. Mr. McGuire will receive a severance payment of approximately $1.75 million pursuant to his change in control and severance agreement. Because management believed a loss was probable under related agreements,$184 thousand as of March 31, 2024 and December 31, 2023, ~~the Company accrued for $1.75 million in relation to the severance.~~respectively.

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~~Accrued expenses~~Note 10. Royalties Payable

LockeT Royalty

On January 9, 2023 Old Catheter entered into an agreement with the Noteholders to forgive all accrued interest and ~~accrued severance consisted~~future interest expense in exchange for a future royalty right. Under these agreements, the Company is obligated to pay the Noteholders a total royalty equal to approximately 12% of net sales of its LockeT device, commencing upon the first commercial sale, through December 31, 2035.

An additional royalty will be paid to the inventor of the LockeT device. In exchange for the assignment and all rights to LockeT, the Company will pay a 5% royalty on net sales up to $1.0 million in royalties, payable annually in arrears, starting with the year ending December 31, 2022. After $1.0 million has been paid, and if, and only if, a US patent is granted by the United States Patent and Trademark Office, the Company will continue to pay a royalty at a rate of 2% of net sales, until total cumulative royalties of $10.0 million have been paid. The royalty payments will apply to revenues through February 29, 2032, then will terminate regardless of whether the full $10.0 million has been paid.

AMIGO System Royalty

During 2006 and 2007, Old Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Old Catheter's AMIGO System, receiving a total of $1.6 million from the foundation.

The agreement calls for the payment of the following ~~(in thousands):~~sales-based royalties, by Old Catheter, to the foundation, upon successful commercialization of the AMIGO System:

March 31,
2023

December 31,
2022

Legal expenses

$ 177

$ 5,195

Offering costs

1,356

1,356

Compensation and related benefits

63

369

Warranty expenses

192

192

Accrued severance (see Note 18)

1,750

—

Other accrued expenses

284

372

Accrued expenses

$ 3,822

$ 7,484

~~Activity in the product warranty accrual is included in accrued expenses in the unaudited condensed consolidated balance sheets and consisted of the following (in thousands):~~

Three Months Ended
March 31,
2023

Year Ended
December 31,
2022

Balance at beginning of period

$ 192

$ 195

Claims satisfied

—

(3 )
Balance at end of period

$ 192

$ 192

Royalty Percentage	Until Royalty Payment Reaches a Total of
4%	$	1,589,500
2%	$	3,179,000
1%	In perpetuity

The ~~accrued warranty balances at~~Company is not actively marketing and selling the AMIGO System. There was no royalty expense recorded for the three months ended March 31, 2024 and 2023 ~~and December 31, 2022 relate~~in relation to the ~~voluntary recall~~AMIGO System. The AMIGO System royalty has been earned and payment has been deferred to a future date.

The table below represents the change in fair value of ~~catheters, which was initiated~~level 3 royalties payable for the three months ended March 31, 2024 and 2023 ($ in ~~September 2019.~~thousands). See Note 2, Summary of Significant Accounting Policies, for valuation techniques.

	2024		2023
Beginning Balance, January 1,	$	6,974	$	—
AMIGO royalty payable recognized in connection with the Merger		—		160
LockeT royalty payable recognized in connection with the Merger		—		7,432
Accretion of LockeT royalty payable		—		513
Change in fair value of royalties payable		86		—
Ending Balance, March 31,	$	7,060	$	8,105

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Note ~~10.~~11. Leases

For the three months ended March 31, ~~2023~~2024 and ~~2022,~~2023, operating lease expense was $24 thousand and $15 thousand, respectively, and cash paid ~~were $15~~was $24 thousand and ~~$108 thousand, respectively, and~~ $16 ~~thousand and $110~~ thousand, respectively. Variable costs were insignificant for the three months ended March 31, ~~2023~~2024 and ~~2022.~~2023.

The Company's lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies ofwith similar credit ratings and of comparable quality and derived an imputed rate, which was used in a portfolio approach to discount its real estate lease liabilities. Management used an estimated incremental borrowing rate ~~of 11.09%~~as detailed below for ~~all leases that commenced prior to January 1, 2023. For leases entered into during the three months ended March 31, 2023, management used an estimated incremental borrowing rate of 10.00%.~~each lease.

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases, as of March 31, ~~2023:~~2024:

Weighted average remaining lease term (in years) –- operating leases			~~2.51~~1.73
Weighted average discount rate –- operating leases			~~10.91~~8.64	%

~~California Operating Lease~~

The Company had an operating lease for office and manufacturing space which required it to pay base rent and certain utilities. Monthly rent expense was recognized on a straight-line basis over the term of the lease which expires in 2027. At March 31, 2022, the remaining lease term was 5.75 years. The operating lease was included on the condensed balance sheets at the present value of the lease payments at a 7% discount rate which approximates the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment, as the lease did not provide an implicit rate.

~~Table of Contents~~

On October 24, 2022, the Company entered into a lease termination agreement (the “Lease Termination Agreement”) with the landlord, pursuant to which it terminated the lease agreement for its office and manufacturing space in Carlsbad, California, effective October 28, 2022. In accordance with the terms of the Lease Termination Agreement, the Company agreed to (i) release its right to the security deposit of approximately $36 thousand previously paid to the landlord and (ii) pay a $0.3 million lease termination fee to the landlord. As a result of the Lease Termination Agreement, the Company wrote-off its operating lease right-of-use asset, operating lease liability and security deposit, resulting in a non-cash gain of approximately $0.1 million. The lease termination fee of $0.3 million was paid on October 31, 2022.

South Carolina Office Lease Agreement

On September 27, 2022, Old Catheter entered into a lease agreement for office space located in Fort Mill, South Carolina. The space ~~will be~~is used for office and general use. The term of the lease ~~is 38 months which~~ began on October 1, 2022, is 38 months, and ~~which~~ includes two months of free rental from the commencement date of the lease. The lease contains two separate 36 month renewal periods, which require 180 days notice of the Company's intention to exercise. As of the date of these condensed consolidated financial statements, the Company does not intend to exercise either of the two extension options. Total rent is ~~$3,773~~$3,435 per month for the first ten months following the two months of free ~~rental,~~rent, with annual increases on the anniversary of the effective date. The Company has adopted the practical expedient under Topic 842, which permits the Company to account for each separate lease component of a contract and its associated non-lease components as a single lease payment. As a result, beginning at lease inception on October 1, 2022, the Company ~~will recognize~~recognized both the lease payments and associated common area maintenance payments as a single lease payment. The Company estimated an incremental borrowing rate of 11.09% for this lease agreement.

New Jersey Office Lease Agreement

On December 7, 2022, Old Catheter entered into a lease agreement for office space located in Augusta, New Jersey. The space ~~will be~~is used for office and general use. The term of the lease is 24 months ~~which~~and began on January 1, 2023. The lease contains one 24 month renewal period, which requires 9 months’ notice if the Company intends to exercise. In March 2024, the Company notified the landlord of its intent to extend the lease for a 12-month period. In April 2024, a lease extension agreement was entered into extending the lease through December 31, 2025. Total rent is $1,207 per month throughout December 31, 2024 and $1,267 for the remaining term of the extended lease. The Company estimated an incremental borrowing rate of 10% for this lease agreement.

Park City Office Lease Agreement

On March 19, 2023, the Company entered into a lease agreement for office space located in Park City, Utah. The space is used for office and general use. The term of the lease ~~agreement.~~

~~Future~~is for 36 months and began on May 1, 2023. The lease ~~payments for all lease obligations~~contains one 36 month renewal period, which requires 180 days’ notice of the Company's intention to exercise. As of the date of these unaudited condensed consolidated financial statements, the Company does not intend to exercise the extension option. Total rent is $3,200 per month for the ~~following five fiscal years and thereafter are as follows:~~first year with an annual increase of three percent per year on the anniversary of the effective date. The Company estimated an incremental borrowing rate of 6% for this lease agreement.

Period ending December 31:

Operating Lease

Remainder of 2023

$ 62

2024

65

2025

49

Total minimum lease payments

176

Less effects of discounting

(53 )
Present value of future minimum lease payments

$ 123

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~~Right-of-use~~Future lease payments for all lease obligations for the following five fiscal years and thereafter are as follows ($ in thousands):

Years ending December 31:	Operating Lease
Remainder of 2024	$	72
2025		96
2026		14
Total minimum lease payments		182
Less effects of discounting		(2	)
Present value of future minimum lease payments	$	180

Lease right-of-use assets and lease liabilities for ~~our~~the Company's operating leases were recorded in the condensed consolidated balance sheets as ~~follows:~~follows ($ in thousands):

					March 31,		December 31,
	As of March 31, 2023		As of December 31, 2022		2024		2023
Assets
Lease right-of-use assets	$	129	$	—	$	171	$	179
Total lease assets		129		—	$	171	$	179

Liabilities
Current liabilities:
Lease liability - current portion		51		—
Lease liabilities - current portion					$	93	$	91
Non-current liabilities:
Lease liability, net of current portion		88		—
Total lease liability	$	139	$	—
Lease liabilities - net of current portion						87		97
Total lease liabilities					$	180	$	188

Note ~~11.~~12. Net Loss per Share

The Company’s outstanding warrants to purchase common stock have participation rights to any dividends that may be declared in the future and are therefore considered to be participating securities. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods of loss, no loss is allocated to the participating securities since the holders have no contractual obligation to share in the losses of the Company.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at March 31, 2024 consisted of Series A convertible preferred stock of 2,313,956 shares, Series X Convertible Preferred Stock of 12,656,011 shares, warrants of 11,042,137, stock options of 614,593, and no restricted stock awards or restricted stock units.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at March 31, 2023 consisted of Series A convertible preferred stock of ~~7,203~~4,501,060 shares, Series X convertible preferred stock of ~~12,675~~12,656,011 shares, warrants of 11,148,858, stock options of 452,908, restricted stock awards of 556, and restricted stock units of 26.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at March 31, 2022 consisted of warrants of 1,126,599, stock options of 2,128, restricted stock awards of 3,298, restricted stock units of 993 and Employee Stock Purchase Plan shares of 333.

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Net loss attributable to common stockholders for the three months ended March 31, 2023, consists of net loss, as adjusted for deemed dividends. The Company recorded a deemed dividend for the modification of existing warrants and issuance of the Series E warrants (see Note 13, Equity Offerings) of $0.8 million, during the three months ended March 31, 2023.

Note ~~12.~~13. Equity Offerings

~~Public Offering~~

On February 8, 2022, the Company completed the Offering in which it issued and sold (i) 190,700 shares of common stock, (ii) 480,052 warrants to purchase one share of common stock at an exercise price of $25.00 that were immediately exercisable and expire one year from the date of issuance, or Series A warrants, and (iii) 480,052 warrants to purchase one share of common stock at an exercise price of $25.00 that were immediately exercisable and expire seven years from the date of issuance, or Series B warrants, and (iv) 289,352 pre-funded warrants to purchase one share of common stock at an exercise price of $0.005 per share that were immediately exercisable and expire twenty years from the date of issuance. In addition, the Company granted the underwriters of the Offering a 45-day option (the “Overallotment Option”) to purchase up to (i) 72,000 additional shares of common stock, (ii) 72,000 additional Series A warrants and/or (iii) 72,000 additional Series B warrants, solely to cover overallotments.

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~~The Series A warrants and Series B warrants were valued at approximately $11.6 million using the Black-Scholes model based on the following assumptions:~~

Series A

Series B

Risk-free interest rate

0.91 %

1.93 %
Volatility

131.07 %

85.38 %
Expected dividend yield

0.00 %

0.00 %
Expected life (in years)

1.0

7.0

Pursuant to the exercise of the Overallotment Option in February 2022, the Company issued 24,902 shares of common stock, 72,000 Series A warrants and 72,000 Series B warrants, net of underwriting discounts. On various dates in February 2022 and March 2022, the Company issued 289,352 shares of common stock upon the exercise of all of the pre-funded warrants issued in the Offering. In addition, in March 2022, the Company issued 1,000 shares of common stock in connection with the exercise of 500 each of Series A warrants and Series B warrants issued in the Offering. In July 2022, the Company issued 800 shares of common stock in connection with the exercise of 800 Series A warrants issued in the Offering.

Net proceeds received from the Offering were approximately $11.5 million, after deducting underwriter commissions and fees withheld of approximately $1.1 million. In addition, the Company incurred offering expenses paid or payable of $1.8 million.

The Company entered into an agreement with a former placement agent that, subject to satisfaction of the requirements contained therein, called for a cash tail fee payable based on capital raised from certain investors for a definitive time following the expiration of the agreement. The accrued cash tail fee of approximately $0.9 million related to the Offering is included in accrued expenses in the condensed consolidated balance sheet as of December 31, 2022 and March 31, 2023. Additionally, the agreement called for the issuance of a warrant to purchase approximately 33,000 shares of common stock at an exercise price of $31.25 per share. Such warrant would be immediately exercisable and expire five years from the date issued. This warrant was originally valued at approximately $0.4 million on the date of the Offering using the Black-Scholes model based on the following assumptions: expected volatility of 93.25%, risk-free interest rate of 1.81%, expected dividend yield of 0% and an expected term of 5 years. On the date of the Warrant Repricing, this warrant was revalued at approximately $0.4 million using the Black-Scholes model based on the following assumptions: expected volatility of 98.9%, risk-free interest rate of 2.87%, expected dividend yield of 0% and an expected term of 4.6 years. This warrant has not been issued by the Company as of the date of this Quarterly Report.

Warrant Inducement Offer

On January 9, 2023, the Company reduced the exercise price of certain existing warrants (the ~~“Existing Warrants”~~"Existing Warrants"), exercisable for 331,608 shares of the Company’s common stock held by a certain investor (the “Investor”), with exercise prices ranging from $14.00 to $526.50 per share to $4.00 per share (the ~~“Warrant Repricing”~~"2023 Warrant Repricing"). In connection with the 2023 Warrant Repricing, the Company entered into a warrant inducement offer letter (the ~~“Inducement Letter”~~"2023 Inducement Letter"), with the Investor pursuant to which it would exercise up to all of the 331,608 Existing Warrants (the ~~“Inducement Offer”~~"Inducement Offer"). In consideration for exercising the Existing Warrants pursuant to the terms of the 2023 Inducement Letter, the Company received approximately $1.3 million in gross proceeds. The Company paid the placement agent aggregate cash fees of approximately $0.2 million related to the Inducement Offer which represented 8.0% of the gross proceeds received from the Inducement Offer plus other offering costs resulting in net proceeds to the Company of $1.1 million. In consideration for exercising the Existing Warrants pursuant to the terms of the 2023 Inducement Letter, the Company issued the Investor a new Series E common stock purchase warrant, or Series E Warrant (the ~~“Series~~"Series E ~~Warrant”~~Warrant"), to purchase 331,608 shares of common stock at an exercise price of $4.00 per share. The Series E Warrant is exercisable for five years from the date of stockholder approval. Exercise of the Series E Warrant in full was subject to approval of the ~~pre-closing holders of Ra Medical’s~~Company's stockholders other than the Investor, which was obtained at a special meeting of the ~~Stockholders’ Meeting.~~Company's stockholders held on March 21, 2023 (the "Stockholders' Meeting"). The incremental fair value of the repriced warrants amounted to $0.3 million and the fair value of Series E warrant totaled $1.9 million. The relative fair ~~values~~value of such amounts were recorded to additional paid-in capital concurrent with the exercise of the Existing Warrants.

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As a result of the 2023 Warrant Repricing and Inducement Offer, the Company presents a deemed dividend for the modification of Existing Warrants and issuance of the Series E Warrants of $0.8 million during the three months ended March 31, ~~2023 of $0.8 million.~~2023. The deemed ~~divided~~dividend was included in net loss attributable to common stockholders in the calculation of net loss per share in the unaudited consolidated condensed ~~consolidated~~ statements of operations.

AsThe warrants, other than the Series E Warrants which are presented in a separate table below, were valued on the date of ~~March 31,~~the 2023 Warrant Repricing using the ~~Company had 11,148,858 shares~~Black-Scholes model based on the following assumptions:

	5/22/2020 Raise			8/3/20 Raise			Series B			Series C
Risk-free interest rate		4.06	%		4.06	%		3.60	%		3.66	%
Volatility		135.35	%		132.55	%		115.42	%		127.65	%
Expected dividend yield		0.00	%		0.00	%		0.00	%		0.00	%
Expected life (in years)		2.4			2.6			6.5			4.5

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The Series E warrants were also valued on the date of ~~common stock reserved for issuance pursuant to~~ the ~~warrants issued by~~2023 Warrant Repricing at approximately $1.9 million using the ~~Company at a weighted average exercise price of $5.39.~~Black-Scholes model based on the following assumptions:

Risk-free interest rate	3.66	%
Volatility	124.07	%
Expected dividend yield	0.00	%
Expected life (in years)	5.0

Private Placement

On January 9, 2023, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) for a private placement (“Private Placement”), with the Investor. Pursuant to the Securities Purchase Agreement, the Investor agreed to purchase, for an aggregate purchase price of approximately $8.0 million, (a) Class A units at a price that iswas the lower of $3.00 per unit and 90% of the 5 day volume weighted average price of the Company’s common stock immediately prior to obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants (as each are defined below), each consisting of one share of common stock, one Series F common stock purchase warrant, or Series F Warrant, and one Series G common stock purchase warrant, or Series G Warrant, and together with the Series F Warrants (the “PIPE Warrants”) and (b) Class B units at a price of $1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock (the “PIPE Preferred Stock”), par value $0.0001, and one Series F Warrant and one Series G Warrant for each share of the Company’s common stock underlying the PIPE Preferred Stock (each share of which is convertible into a number of shares of the Company’s common stock equal to $1,000 divided by the lower of $3.00 and 90% of the 5 day volume weighted average closing price of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion ~~Rate.~~Rate). The closing under the Securities Purchase Agreement and the sale and issuance of the Class A units and Class B units (and the issuance of any underlying common stock) were approved at the Stockholders’ Meeting. At the closing of the Private Placement, the Company issued 497,908 Class A units for proceeds of approximately $0.9 million and 7,203 Class B units for proceeds of approximately $7.1 million which ~~are~~were convertible into up to 4,501,060 shares of common stock, as well as the issuance of warrants described below.

The PIPE Warrants, including ~~4,999,093~~ Series F warrants and ~~4,999,093~~ Series G warrants, are exercisable at an exercise price of $3.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants. The PIPE Warrants are exercisable at any time on or after the closing date of the Private Placement until the expiration thereof, except that the PIPE Warrants cannot be exercised if, after giving effect thereto, the purchaser would beneficially own more than 4.99%, or the Maximum Percentage, of the outstanding shares of common stock of the Company, which Maximum Percentage may be increased or decreased by the purchaser with written notice to the Company to any other percentage specified not in excess of 9.99%. The Series F Warrants have a term of two years from the date of stockholder approval, and the Series G Warrants have a term of six years from the date of stockholder approval. The Series F Warrants and Series G Warrants were approved at the Stockholders’ Meeting.

The Series F warrants and Series G warrants were valued, in aggregate, at approximately $5.5 million using the Black-Scholes model based on the following assumptions:

	Series F	Series G	Series F			Series G
Risk-free interest rate	3.8 %	3.4 %		3.8	%		3.4	%
Volatility	80.0 %	74.0 %		80.0	%		74.0	%
Expected dividend yield	0.0 %	0.0 %		0.0	%		0.0	%
Expected life (in years)	2.0	6.0		2.0			6.0

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The proceeds from the Securities Purchase Agreement were allocated to the equity instruments issued based on their relative fair values and recorded in additional paid-in capital.

Shares of PIPE Preferred Stock, the conversion of which was approved at the Stockholders’ Meeting, convert into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below. The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

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Subject to limited exceptions, holders of shares of PIPE Preferred Stock will not have the right to convert any portion of their Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or up to 9.99% at the election of the holder) of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of PIPE Preferred Stock will be entitled to receive dividends on shares of PIPE Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock. Except as otherwise required by law, the PIPE Preferred Stock does not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the resale of the shares of common stock, the shares issuable upon exercise of the Warrants and the shares issuable upon the conversion of the PIPE Preferred Stock.

~~Note 13. Preferred Stock~~

~~Series X Convertible Preferred Stock~~

~~As described in Note 3, above, pur~~suant to the Merger Agreement, all Catheter common stock shares issued and outstanding and convertible promissory notes, representing an aggregate principal of $25.2 million, were converted into a right to receive 14,649.591 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock.

Series X Preferred Stock has no voting rights prior to the conversion into Common Stock. While there are no voting rights of the Series X Preferred Stock, there are protective rights regarding the sales of the company, change of control, etc.

On March 21, 2023, the Company held a special meeting of stockholders (the “Stockholders’ Meeting”), at which the stockholders approved, among other things, the issuance of 1,974,905 shares of common stock upon the conversion of 1,974.905 of Series X Preferred Stock which were issued upon the closing of the Merger see Note 3, Business Combination. The remaining 12,674.687 shares of Series X Preferred Stock are expected to remain outstanding until at least July 9, 2024, and will convert thereafter up to 12,674,687 shares of common stock, only if the Company meets the initial listing standards of the NYSE American or another national securities exchange or are delisted from the NYSE American.

Also, through at least July 9, 2024, the ability to convert the Series X Preferred Stock will be subject to a beneficial ownership conversion “blocker” that prevents the holder from acquiring shares of Ra Medical common stock by converting the Series X Preferred Stock to the extent that such shares would result in the holder having, post-conversion, beneficial ownership of common stock above a pre-set threshold (the “Beneficial Ownership Blocker”).

~~Series A Convertible Preferred Stock~~

As described in Note 12, on January 9, 2023, the Company entered into a Securities Purchase Agreement for a Private Placement, with the Investor. Pursuant to the Securities Purchase Agreement, the Investor agreed to purchase, for an aggregate purchase price of approximately $8.0 million, (a) Class A units at a price that is the lower of $3.00 per unit and 90% of the 5 day volume weighted average price of the Company’s common stock immediately prior to obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants, each consisting of one share of common stock, one Series F common stock purchase warrant, or Series F Warrant, and one Series G common stock purchase warrant, or Series G Warrant, and together with the Series F Warrants (the “PIPE Warrants”) and (b) Class B units at a price of $1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock (the “PIPE Preferred Stock”), par value $0.0001, and one Series F Warrant and one Series G Warrant for each share of the Company’s common stock underlying the PIPE Preferred Stock (each share of which is convertible into a number of shares of the Company’s common stock equal to $1,000 divided by the lower of $3.00 and 90% of the 5 day volume weighted average closing price of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion Rate. The closing under the Securities Purchase Agreement and the sale and issuance of the Class A units and Class B units (and the issuance of any underlying common stock) were approved at the Stockholders’ Meeting. At the closing of the Private Placement, the Company issued 497,908 Class A units for proceeds of approximately $0.9 million and 7,203 Class B units for proceeds of approximately $7.1 million which are convertible into up to 4,501,060 shares of common stock, as well as the issuance of certain warrants.

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Placement Fees

In connection with offerings completed by the Company in 2022, (the "2022 Offerings"), the Company entered into an agreement with a placement agent that, subject to satisfaction of the requirements contained therein, called for a placement fee payable based on capital raised from certain investors for a definitive time following the expiration of the agreement. The accrued placement fee of approximately $1.4 million related to the 2022 Offerings is included in accrued expenses in the consolidated balance sheet as of March 31, 2024. Additionally, the agreement called for the issuance of warrants with the following terms:

Number of shares	Exercise Price	Expiration
33,000	$31.25	5 years
31,000	$17.50	5 years

The warrants were valued on the date of the 2022 Offerings using the Black-Scholes model based on the following assumptions:

Value ( $ in

millions)

Expected Volatility

Risk-Free Interest

Rate

Expected Dividend

Yield

Expected Term

(years)

$0.4

93.25%

1.81%

5.0

$0.2

96.70%

2.87%

5.0

The warrants have not been issued by the Company as of March 31, 2024.

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Warrants

The following table presents the number of common stock warrants outstanding:

Warrants outstanding, December 31, 2022	1,150,658
Issued	10,329,794
Exercised	(331,608	)
Expired	(106,707	)
Warrants outstanding, December 31, 2023	11,042,137
Issued	—
Exercised	—
Expired	—
Warrants outstanding, March 31, 2024	11,042,137

The following table presents the number and type of common stock warrants outstanding, their exercise price, and expiration dates as of March 31, 2024:

Warrant Type	Warrants Outstanding		Exercise Price		Expiration Date
May 2020 Warrants		12,743	$	562.50	5/20/2025
May 2020 Placement Agent Warrants		1,244	$	703.13	5/20/2025
August 2020 Warrants		19,407	$	437.50	8/3/2025
August 2020 Placement Agent Warrants		1,918	$	546.88	7/30/2025
August 2021 Pharos Banker Warrants		1,484	$	149.50	8/16/2026
February 2022 Series B Warrants		391,527	$	14.00	2/4/2029
July 2022 Series C Warrants		284,020	$	14.00	7/22/2027
January 2023 Series E Warrants		331,608	$	4.00	3/21/2028
March 2023 Series F Warrants		4,999,093	$	3.00	3/21/2025
March 2023 Series G Warrants		4,999,093	$	3.00	3/21/2029
		11,042,137

As of March 31, 2024, the warrants issued by the Company had a weighted average exercise price of $5.31.

Note 14. Preferred Stock

Series X Convertible Preferred Stock

As described in Note 3,above, pursuant to the Merger Agreement, all Old Catheter common stock shares issued and outstanding and convertible promissory notes, representing an aggregate principal of $25.2 million, were converted into a right to receive 14,649.592 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock.

Series X Convertible Preferred Stock has no voting rights prior to the conversion into common stock. While there are generally no voting rights of the Series X Convertible Preferred Stock, there are protective rights regarding the sales of the company, change of control, etc. No currently outstanding share of Series X Preferred may convert into common stock until on or after July 9, 2024, and then, only if the Company’s common stock has been delisted from the NYSE American or has been approved for initial listing on the NYSE American or another stock exchange, at a rate of 1,000 shares of common stock for each share of Series X Convertible Preferred Stock.

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Upon consummation of the Merger, each holder of Old Catheter convertible promissory notes received, in exchange for discharge of the principal of his or its Notes, a number of shares of the Company's Series X Convertible Preferred Stock representing a potential right to convert into the Company's common stock in an amount equal to one common share for each $3.20 of principal amount.

On March 21, 2023, the Company held the Stockholders' Meeting, at which the stockholders approved, among other things, the issuance of 1,993,581 shares of common stock upon the conversion of 1,993.581 of Series X Convertible Preferred Stock which were issued upon the closing of the Merger, see Note 3, Business Combination. On March 23, 2023, the Company issued 1,974,905 shares of common stock upon the conversion of 1,974.905 of Series X Convertible Preferred Stock. On October 24, 2023, the remaining 18,676 shares of common stock were issued upon the conversion of 18.676 shares of Series X Convertible Preferred Stock. The remaining 12,656.011 shares of Series X Convertible Preferred Stock are expected to remain outstanding until at least July 9, 2024, and will convert thereafter up to 12,656,011 shares of common stock, only if the Company meets the initial listing standards of the NYSE American or another national securities exchange or is delisted from the NYSE American.

Series A Convertible Preferred Stock

As described in Note 13, on January 9, 2023, the Company entered into a Securities Purchase Agreement for a Private Placement with the Investor. Pursuant to the Securities Purchase Agreement, shares of Series A Convertible Preferred Stock were issued, the conversion of which was approved at the Stockholders’ Meeting. The Series A Convertible Preferred Stock converts into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below. The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of Series A Convertible Preferred Stock will not have the right to convert any portion of their Series A Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of Series A Convertible Preferred Stock will be entitled to receive dividends on shares of Series A Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock. Except as otherwise required by law, the Series A Convertible Preferred Stock does not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the shares of common stock, issuable upon the conversion of the Series A Convertible Preferred Stock. The shares have been registered for resale on an effective registration statement on Form S-1.

The following conversions of Series A Convertible Preferred Stock occurred subsequent to the issuance:

Date of Conversion	Series A Shares Converted		Common Shares Issued
July 5, 2023		1,750		1,093,552
July 24, 2023		875		546,776
January 24, 2024		875		546,776

Each share of Series A Convertible Preferred Stock is convertible into approximately 625 shares of common stock. The common stock was issued pursuant to the exemption contained in Section 3(a)(9) of the Securities Act of 1933, as amended (the “Act”), which applies to transactions in which a security is exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange. The shares issued have been registered for resale on an effective registration statement on Form S-1.

Note 15. Stock-Based Compensation

2018 Equity Incentive Plan

In September 2018, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2018 Equity Incentive Plan (the “2018 Plan”) which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, performance-based stock awards and other forms of equity compensation to the Company’s employees, directors and consultants. Stock options granted under the 2018 Plan generally vest one-fourth on the first anniversary of the vesting commencement date with the balance vesting monthly over the remaining three years. Restricted stock units granted under the 2018 Plan generally vest one third on the first anniversary of the vesting commencement date and one sixth every six months thereafter such that the award will be fully vested on the third anniversary of the vesting commencement date. In July 2023, the 2018 Plan was replaced by the 2023 Equity Incentive Plan (the "2023 Plan"), as described below. As of ~~March 31,~~July 2023, ~~and December 31, 2022, 9,041 and 8,552 shares of common stock, respectively, were reserved for future issuance pursuant to the 2018 Plan. The number of shares available for issuance~~no additional awards could be made under the 2018 Plan also includes an annual increase on the first day of each fiscal year equal to the lesser of (1) 1,305 shares; (2) 5% of the outstanding shares of our common stock as of the last day of the immediately preceding fiscal year; or 3) such other amount as the Company’s board of directors may determine.
~~2020 Inducement Equity Incentive Plan~~
~~In March 2020, the Company adopted the 2020 Inducement Equity Incentive Plan (the “2020 Plan”) for the purpose of attracting, retaining~~ and incentivizing employees in furtherance of the Company’s success. The 2020 Plan was adopted without stockholder approval pursuant to Rule 303A.08 of the New York Stock Exchange. The 2020 Plan is used to offer equity awards as material inducements for new employees to join the Company. Upon adoption of the 2020 Plan, 640 shares of common stock were reserved for the granting of inducement stock options, restricted stock awards, restricted stock units and other forms of equity awards. As of March 31, 2023 and December 31, 2022, 181no shares of common stock were reserved for future ~~issuance under the 2020 Plan.~~
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~~Stock Options Assumed in Merger (See Note 3, Business Combination)~~issuance.

At the closing of the Merger, (a) each outstanding share of Catheter common stock and $25,215,000 in Catheter convertible promissory notes were converted into the right to receive 14,649.591 of Ra Medical Series X Convertible Preferred Stock, and b) each outstanding option to purchase Catheter common stock that had not previously been exercised prior to the closing of the Merger was assumed and converted into options to purchase 753,699 shares of Ra Medical Common Stock (“Replacement Options”). Additionally, no Catheter options were amended in connection with the Merger. All the Replacement Options vested in accordance with the original terms of the grants in place at the time of the Merger. As a result, $3,085,000 of purchase price consideration, which represented the estimated fair value of Catheter’s assumed stock options, and $1,374,000 of stock-based compensation expense, which represents the excess of the estimated fair value of the Replacement Options over the assumed Catheter stock options, were recognized upon the closing of the Merger.
~~Stock~~ ~~Options~~
~~The following is a summary of stock option activity for the three months ended March 31, 2023:~~

Stock Options

Weighted Average
Exercise Price

Weighted Average Remaining Life
(in years)

Aggregate
Intrinsic Value
(in thousands)

Outstanding at December 31, 2022

990

$ 11,405

Options assumed in Catheter Merger

753,699

$ 1

—

—

Options exercised

(301,746 )

$ 1

—

—

Canceled/forfeited

(35 )

$ 1,525

—

—

Outstanding at March 31, 2023

452,908

$ 26

3.40

$ —

Vested and expected to vest at March 31, 2023

452,908

$ 26

3.40

$ —

Exercisable at March 31, 2023

452,824

$ 26

3.40

$ —

~~The Company did not grant any stock options during the three months ended March 31, 2023.~~
~~Restricted Stock Units~~
~~The following is a summary of the restricted stock unit activity for the~~ 2018 ~~Plan for the three months ended March 31, 2023:~~

Restricted
Stock Units

Weighted Average
Grant Date Fair Value

Outstanding at December 31, 2022

61

$ 450.46

Vested

(26 )

$ 333.00

Forfeited

(9 )

$ 1,129.10

Outstanding at March 31, 2023

26

$ 1,912.56

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~~Restricted Stock Awards~~
~~A summary of the restricted stock award activity for the three months ended March 31, 2023 is presented below:~~

Restricted
Stock Awards

Weighted Average
Grant Date Fair Value

Outstanding at December 31, 2022

948

$ 248.48

Vested

—

$ —

Forfeited

(392 )

$ 177.90

Outstanding at March 31, 2023

556

$ 298.23

Employee Stock Purchase Plan
In September 2018, the ~~Company’s board of directors~~Company adopted the 2018 Employee Stock Purchase Plan (the “ESPP”) which permitted eligible employees to purchase the Company’s common stock at a discount through payroll deductions during defined offering periods. Eligible employees could elect to withhold up to 15% of their base earnings to purchase shares of the Company’s common stock at a price equal to 85% of the fair market value on the first day of the offering period or the purchase date, whichever was lower. The number of shares of common stock reserved for issuance under the ESPP automatically increased on January 1 of each fiscal year by the lesser of (1) 237 shares, (2) 1.25% of the total number of shares outstanding on December 31 of the preceding fiscal year, or (3) such other amount as the Company’s board of directors may determine.

The Company paused the ESPP in May 2022 and in April 2024, the Company formally terminated the ESPP. For the three months ended March 31, 2024 and 2023, ~~and 2022,~~no cash was received from the exercise of purchase rights under the ~~ESPP was approximately $0 and $0.1 million, respectively. The Company paused the ESPP in May 2022.~~ESPP.

As of March 31, ~~2023,~~2024, the Company had issued 950 shares of common stock since inception of the ESPP, and no26 shares were reserved for future issuance. Upon termination of the ESPP in April 2024, the reserved shares were released back to the authorized pool.

~~Stock-based~~2020 Inducement Equity Incentive Plan
In March 2020, the Company adopted the 2020 Inducement Equity Incentive Plan (the “2020 Plan”) for the purpose of attracting, retaining and incentivizing employees in furtherance of the Company’s success. The 2020 Plan was adopted without stockholder approval pursuant to Rule 303A.08 of the New York Stock Exchange. The 2020 Plan is used to offer equity awards as material inducements for new employees to join the Company. Upon adoption of the 2020 Plan, 640 shares of common stock were reserved for the granting of inducement stock options, restricted stock awards, restricted stock units and other forms of equity awards. As of March 31, 2024 and December 31, 2023, 540 shares of common stock were reserved for future issuance under the 2020 Plan. In April 2024, the Company terminated the 2020 Plan at which time the reserved shares were released back to the authorized pool.
Stock Options Assumed in Merger(See Note 3, Business Combination)
At the closing of the Merger, each outstanding option to purchase Old Catheter common stock that had not previously been exercised prior to the closing of the Merger was assumed and converted into options to purchase 753,699 shares of the Company’s common stock (“Replacement Options”). Additionally, no Old Catheter options were amended in connection with the Merger. All the Replacement Options vested in accordance with the original terms of the grants in place at the time of the Merger. As a result, $3.4 million of purchase price consideration, which represented the estimated fair value of Old Catheter’s assumed stock options, and $1.1 million of stock-based compensation expense, ~~recorded in operating expenses was as follows (in thousands):~~which represents the excess of the estimated fair value of the Replacement Options over the assumed Old Catheter stock options, were recognized upon the closing of the Merger.

Three Months Ended March 31,

2023

2022

Selling, general and administrative

$ 1,394

$ 113

Research and development

—

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Stock-based compensation in operating expenses

$ 1,394

$ 162

2023 Equity Incentive Plan

~~Stock-based~~In July 2023, the Company’s stockholders approved, the 2023 Plan, as defined above, which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, performance-based stock awards and other forms of equity compensation to the Company’s employees, directors and consultants. Stock options granted under the 2023 Plan to employees and consultants generally will vest annually over a five-year period or as determined by the Board’s Compensation Committee, while grants to non-employee directors generally vest quarterly over a three-year period. As of March 31, 2024 and December 31, 2023, 146,546 and 501,868 shares of common stock were reserved for future issuance pursuant to the 2023 Plan. The number of shares available for issuance under the 2023 Plan also includes a quarterly increase commencing on September 1, 2023 by an amount equal to the lesser of (i) 10% of the number equal to the number of shares of common stock outstanding on the applicable adjustment date less the number of shares of common stock outstanding at the beginning of the fiscal quarter immediately preceding the adjustment date, but if such number is a negative number, then the increase will be zero; or (ii) such lesser number of shares as may be determined by the Board.
On January 8, 2024, the Board approved the issuance of a total of 285,000 non-qualified stock options under the 2023 Plan. 75,000 of these non-qualified options were issued to non-employee directors that vest at 8 1/3% per quarter for 3 years with an exercise price of $0.40 and expiration date of January 8, 2034. The remaining 210,000 non-qualified options were issued to employees and consultants and vest at 20% per year for 5 years with an exercise price of $0.40 and expiration date of January 8, 2034.
On February 26, 2024, the Board approved the issuance of a total of 150,000 incentive stock options under the 2023 Plan. All options were issued to employees and vest at 20% per year for 5 years with an exercise price of $0.43 and expiration date of February 26, 2034.
The options issued during the quarter ended March 31, 2024 were valued at approximately $0$170 thousand using the Black-Scholes model based on the following assumptions on the date of issue:

Non-Employee Director Options Issued January 8, 2024

Employee Options Issued January 8, 2024

Employee Options Issued February 26, 2024

Risk-free interest rate

4.01 %

4.01 %

4.28 %
Volatility

175.36 %

175.36 %

178.14 %
Expected dividend yield

0 %

0 %

0 %
Expected life (in years)

6.5

6.5

6.5

See Note 20, Subsequent Events, for additional options issued under the 2023 Plan in April 2024 and ~~$3 thousand was capitalized to property and equipment and inventory during~~non-Plan options issued in May 2024.
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The following is a summary of stock option activity for the three months ended March 31, 2024:

Stock Options

Weighted Average Exercise Price

Weighted Average Remaining Life (in years)

Aggregate Intrinsic Value (in thousands)

Outstanding at December 31, 2023

214,652

$ 6.47

6.38

Options exercised

—

$ —

—

—

Options granted

435,000

$ 0.41

—

—

Canceled/forfeited

(35,059 )

$ 0.45

—

—

Outstanding at March 31, 2024

614,593

$ 2.52

8.59

$ 32,260

Vested and expected to vest at March 31, 2024

614,593

$ 2.52

8.59

$ 32,260

Exercisable at March 31, 2024

204,593

$ 6.76

6.09

$ —

Restricted Stock Units
All restricted stock units have been forfeited or vested as of December 31, 2023.
Restricted Stock Awards
All restricted stock awards have been forfeited or vested as of December 31, 2023.
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Stock-based compensation expense for the three months ended March 31, 2024 and 2023 was $6 thousand and ~~2022, respectively.~~$1,394 thousand, which was recorded in selling, general and administrative expense in the Company's condensed consolidated statements of operations.

Total unrecognized estimated stock-based compensation expense by award type and the remaining weighted average recognition period over which such expense is expected to be recognized at March 31, ~~2023~~2024 was as follows:

Unrecognized
Expense
(in thousands)

Remaining Weighted Average
Recognition Period
(in years)

Stock options

$ 62

—

Restricted stock awards

$ 96

0.6

Restricted stock units

$ 7

0.8

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Unrecognized Expense (in thousands)

Remaining Weighted Average Recognition Period (in years)

Stock options

$ 154

4.5

Restricted stock awards

$ —

—

Restricted stock units

$ —

—

Note ~~15.~~16. Income Taxes

The ~~following table summarizes the Company’s effective tax rate~~Company recorded no provision or benefit for ~~the periods indicated:~~

Three Months Ended March 31,

Year Ended December 31,

2023

2022

Reported income tax expense rate

0 %

(0.1
%)
~~The Company did not record an~~ income tax ~~provision~~expense for the three months ended March 31, 2024 and 2023, ~~and 2022. The Company recorded an income tax expense for the twelve months ended December 31, 2022, primarily due to minimum state taxes.~~respectively.

At December 31, 2022, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $54.5 million and $47.8 million, respectively. The state NOL carryforwards begin expiring in 2030. Use of these NOL carryforwards may be significantly limited under the tax rules regarding the use of losses 27 following an ownership change under Internal Revenue Code (“IRC”) Section 382. Management performed a Section 382 analysis regarding the limitation of net operating losses through December 31, 2020 and determined that ownership changes occurred in May 2020. The Company believes further ownership changes occurred during each of the years ended December 31, 2022 and 2021. Accordingly, utilization of the Company’s NOLs is subject to an annual limitation for federal tax purposes under IRC Section 382. Due to the changes in control, the Company estimated that all of its $54.5 million federal NOL carryforwards are effectively eliminated, in accordance with IRC Section 382. In addition, $40.8 million of its $47.8 million in state NOL carryforwards is also eliminated. As a result of these eliminations, the Company’s federal and state NOLs were reduced to zero and $6.9 million, respectively, before taking into consideration the valuation allowance.
~~In addition, for~~For all periods presented, the pretax losses incurred by the Company received no corresponding tax benefit because the Company concluded that it is ~~not~~ more likely than not that ~~its net~~the Company will be unable to realize the value of any resulting deferred tax ~~assets will not be realized.~~assets. The Company will continue to assess its position in future periods to determine if it is appropriate to reduce a portion of its valuation ~~allowance.~~allowance in the future.

The ~~acquisition~~Company has no open tax audits with any taxing authority as of Catheter Precision Inc was treated as a stock purchase for U.S. tax purposes in the first quarter of 2023. As such, the Company recorded deferred tax assets and liabilities on its U.S. tax attributes. The Company continues to use its deferred tax liabilities as a source of income against a portion of its deferred tax assets. A valuation allowance was recordedMarch 31, 2024, except for the ~~portion~~California Department of Tax and Fee Administration sales and use tax audit. The period covered by the ~~deferred tax assets that are not more-likely-than-not to be realized.~~
~~As part of the Tax Cuts and Jobs Act of 2017 (TCJA), beginning with the Company's 2022 tax year, the Company~~audit is required to capitalize research and development expenses, as defined under Internal Revenue Code section 174. For expenses that are incurred for research and development in the U.S., the amounts will be amortized over 5 years, and expenses that are incurred for research and experimentation outside the U.S. will be amortized over 15 years. This provision has not had a significant impact to the consolidated financial statements.October 1, 2020 through March 31, 2023.
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Note ~~16.~~17. Commitments and Contingencies
~~Securities Class Action~~
~~On June 7, 2019, a putative securities class action complaint captioned~~ ~~Derr v. Ra Medical Systems, Inc., et al,~~ (Civil Action no. 19CV1079 LAB NLS) was filed in the U.S. District Court for the Southern District of California against the Company, certain current and former officers and directors, and certain underwriters of the Company’s initial public offering. Following the appointment of a lead plaintiff and the filing of a subsequent amended complaint, the lawsuit alleges that the defendants made material misstatements or omissions in the Company’s registration statement in violation of Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”) and between September 27, 2018 and November 27, 2019, inclusive, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). On March 11, 2020, lead plaintiffs voluntarily dismissed the underwriter defendants without prejudice. On March 13, 2020, defendants filed a motion to dismiss the amended complaint. On March 24, 2021, the court issued an order granting defendants’ motion to dismiss claims under the Securities Act in full and certain claims under the Exchange Act and denying defendants’ motion to dismiss certain Exchange Act claims. Plaintiffs filed their second amended complaint on April 19, 2021, realleging the Securities Act claims and certain of the previously dismissed Exchange Act claims. On June 10, 2021, defendants moved to dismiss the second amended complaint. On November 12, 2021, following a private settlement mediation with the lead plaintiffs, the parties executed a stipulation of settlement that resolved the claims asserted in the securities class action. The settlement provides for a payment to the plaintiff class of $10.0 million. On March 18, 2022, the Company paid approximately $0.6 million towards the settlement to satisfy its self-insured retention/deductible. The Company’s insurers paid the remainder of the settlement. The proposed settlement required both preliminary and final approval by the court. On February 11, 2022, the court granted preliminary approval of the settlement, scheduled a hearing on final approval of the settlement and denied the pending motion to dismiss without prejudice. On May 2, 2022, plaintiffs filed a motion for final approval of the settlement and plan of allocation, and lead counsel filed a motion for an award of attorneys’ fees and reimbursement of litigation expenses. On September 23, 2022, the court granted final approval of the settlement, certified the settlement class, granted in part lead counsel’s motion for an award of attorneys’ fees and reimbursement of litigation expenses, dismissed plaintiffs’ claims with prejudice, and entered final judgment.
~~Shareholder Derivative Litigation~~
~~On October 1, 2019, a shareholder derivative complaint captioned~~ ~~Noel Borg v. Dean Irwin, et al~~ (Civil Action no. 1:99-cm-09999) was filed in the U.S. District Court for the District of Delaware against certain current and former officers and directors, purportedly on behalf of the Company, which is named as a nominal defendant in the action. The complaint alleges breaches of fiduciary duty, unjust enrichment, waste, and violations of Section 14(a) of the Exchange Act. On October 21, 2019, pursuant to the parties’ stipulation, the court stayed the derivative lawsuit until the related class action is resolved. On November 10, 2022, the plaintiff filed a notice voluntarily dismissing the case without prejudice.
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~~Settlement Agreements with the Department of Justice and Participating States~~
As previously announced on December 28, 2020, the Company entered into a settlement agreement with the U.S., acting through the Department of Justice (“DOJ”) and on behalf of the Office of Inspector General, and other settlement agreements with certain state attorneys general, collectively the “Settlement Agreements”, to resolve investigations and a related civil action concerning its marketing of the DABRA laser system and DABRA-related remuneration to certain physicians.
Pursuant to the terms of the Settlement Agreements, (a) if the Company’s revenue exceeds $10 million in any of fiscal years 2021-2024, the Company is also required to pay for the corresponding year: $500,000 for 2021, $750,000 for 2022, $1 million for 2023, and $1.25 million for 2024; (b) if the Company is acquired or is otherwise involved in a change in control transaction (as defined in the Settlement Agreement) before the end of 2024, the Company was required to pay an additional settlement amount of $5 million, plus 4% of the value attributed to the Company in the transaction, so long as the attributed value is in excess of $100 million, with the total change in control payment never to exceed $28 million; and (c) if the Company’s obligations under the Settlement Agreements are avoided by bankruptcy, the U.S. may rescind the releases and bring an action against the Company in which the Company agrees is not subject to an automatic stay, is not subject to any statute of limitations, estoppel or laches defense, and is a valid claim in the amount of $56 million, minus any prior change in control payments. As a result of the Merger, the Company recorded $5.0 million related to the Settlement Agreements as of December 31, 2022, which is included in accrued expenses in the accompanying balance sheet as of December 31, 2022.
~~In February 2023, the Company made payments of $4.7 million and $0.3 million to the DOJ and the participating states, respectively, pursuant to the terms of the Settlement Agreements.~~
~~Filing of Complaint~~
~~On September 29, 2022, a purported stockholder of the Company filed a complaint captioned~~ ~~David Nguyen v. Ra Medical Systems, Inc. et al.~~ (Civil Action no. 3:22-cv-01470-BEN-MSB) in the U.S. District Court for the Southern District of California against us and our current directors. The complaint alleges violations of Sections 14(a) and 20(a) of the Exchange Act based on alleged deficiencies in our preliminary proxy, filed with the SEC on September 23, 2022. On February 7, 2023, plaintiff filed a notice voluntarily dismissing the case without prejudice.
~~Other Litigation~~

In the normal course of business, the Company is at times subject to pending and threatened legal actions. In management’s opinion, any potential loss resulting from the resolution of these matters will not have a material effect on the results of operations, financial position or cash flows of the Company.

As of March 31, 2024, the Company had no outstanding litigation.
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Note ~~17.~~18. Employee Benefit Plan

In January 2019, the Company established a defined contribution plan under Section 401(k) of the Internal Revenue Code (“401(k) Plan”). Under the terms of the 401(k) Plan, all full-time employees were eligible to make voluntary contributions as a percentage or defined amount of compensation. The Company made matching contributions based on 100% of each employee’s contribution up to 3% and 50% of contributions between 3% and 5%, with the match-eligible contribution limited to 4% of the employee’s eligible compensation. The Company cancelled the 401(k) Plan effective March 10, ~~2023.~~2023 and distributed all assets held by the 401(k) Plan to the participants. The ~~Company’s expense~~Company had no expenses related to the matching contributions ~~was approximately $0 and $0.2 million~~ for the three months ended March 31, ~~2023~~2024 and ~~2022, respectively.~~2023.

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Note 1819. Related Parties
Prior to the Merger, David A. Jenkins, the Company’s current Executive Chairman of the Board and Chief Executive Officer, and Old Catheter’s then Chairman of the Board of Directors, and his affiliates held approximately $25.1 million of Old Catheter’s Convertible Promissory Notes, or the Notes, that were converted in the Old Catheter merger into 7,856,251 shares of Series X Convertible Preferred Stock (see Note 3, Business Combination, and Note 14, Preferred Stock). In consideration for forgiving the interest accrued but remaining unpaid under the Notes in an aggregate amount of approximately $13.9 million, Mr. Jenkins and his affiliates also received royalty rights equal to approximately 12% of the net sales, if any, of LockeT, commencing upon the first commercial sale and through December 31, 2035 (see Note 10, Royalties Payable).
In addition to the shares described above that were issued in connection with the Notes, Mr. Jenkins and his affiliates received 1,325.838 shares of Series X Convertible Preferred Stock in the merger, and Mr. Jenkins’ adult children received 1,284.344 shares of Series X Convertible Preferred Stock in the merger, all in exchange for their equity interests in Old Catheter in accordance with the merger exchange ratio.
In connection with the Merger (see Note 3, Business Combination), the Company assumed $1.4 million of accrued expenses and advances, of which $1.1 million was due to Mr. Jenkins and was paid on January 10, 2023.
Mr. Jenkins’ daughter, the Company’s non-executive Chief Operating Officer, received options to purchase 144,169 shares of the Company’s common stock upon the closing of the merger in exchange for her options to purchase shares of Old Catheter common stock, converted based on the exchange ratio in the merger. Of the total options to purchase 144,169 shares of the Company’s common stock, 140,816 options have an exercise price of $0.59 per share, and the remaining 3,353 options have an exercise price of $2.02 per share.
Margrit Thomassen, the Company's Interim Chief Financial Officer, received options to purchase 16,764 shares of the Company's common stock upon the closing of the merger in exchange for her options to purchase shares of Old Catheter common stock, converted based on the exchange ratio in the merger. The options have an exercise price of $0.59 per share. In January 2024, she received an option to purchase 25,000 shares of the Company's common stock under the 2023 Plan. The options have an exercise price of $0.40 per share, vest at 20% per year for 5 years and expire in January 2034.
Following stockholder approval on March 21, 2023, the Company issued 991,828 shares of common stock to Mr. Jenkins and affiliates upon conversion of 991.828 shares of Series X Convertible Preferred Stock, and 235,320 shares of common stock to his adult children upon conversion of 235.320 shares of Series X Convertible Preferred Stock.
.Note 20. Subsequent Events

~~Resignation of CEO~~Options Issued Under the 2023 Equity Incentive Plan

On April ~~17, 2023, the Company received the resignation of Will McGuire from his positions as Chief Executive Officer and Secretary, and as a member of~~24, 2024, the Board approved the issuance of ~~Directors, effective~~a total of 125,000 incentive stock options under the 2023 Equity Incentive Plan. All options were issued to employees and vest at 20% per year for 5 years with an exercise price of $0.46 and expiration date of April 28, 2023, for personal reasons. The Board of Directors has established a search committee consisting of Susanne Meline and James Caruso to identify a new Chief Executive Officer. Until a new Chief Executive Officer is identified, David Jenkins, Executive Chairman of the Board, will serve as interim Chief Executive Officer and as the Company’s principal executive officer, effective April 28, 2023.
In connection with Mr. McGuire’s resignation, he and the Company entered into a second amendment to his change in control and severance agreement, which among other things, clarified that the amount of Mr. McGuire’s severance payment would be based on his 2022 base salary and bonus opportunity, and provided that he would not receive Cobra coverage following his termination of employment. Mr. McGuire will receive a severance payment of approximately $1.75 million pursuant to his change in control and severance agreement. As of March 31, 2023, the Company determined that it was probable that the change in control would occur. Because management believed a loss was probable under related agreements, as of March 31, 2023 the Company accrued for $1.75 million in relation to the severance. ~~The Company paid the severance in full on May 12, 2023.~~24, 2034.

~~Entry into Lease Agreement~~Non-Plan Options Issued

On ~~March 19, 2023,~~April 24, 2024, the ~~Company entered into~~Board approved the issuance of a ~~36 month lease agreement in Park City, Utah effective May 1, 2023.~~total of 250,000 Non-Plan Options as an employment incentive for the position of Chief Commercial Officer. The ~~rent expense under~~options will be issued as of the ~~agreement is $3,203~~first day of employment and vest at 20% per ~~month.~~year for 5 years with an exercise price to be the closing market price of the Company’s common stock on the day immediately preceding the issuance date of the options. The options will expire 10 years from the issuance date.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available. This section should be read in conjunction with our unaudited condensed financial statements and related notes included in Part I, Item 1 of this report. The statements contained in this Quarterly Report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Forward-looking statements can be identified by words such as “believe,” “anticipate,” “may,” “might,” “can,” “could,” “continue,” “depends,” “expect,” “expand,” “forecast,” “intend,” “predict,” “plan,” “rely,” “should,” “will,” “may,” “seek,” or the negative of these terms or and other similar expressions, although not all forward-looking statements contain these words. These statements include, but are not limited to, our expectations regarding CE Mark approval for LockeT. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements.

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including, but not limited to, those described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~ 2023. These risks include, but are not limited to, that: we will be required to raise additional funds to finance our operations and continue as a going concern , and we may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us, our business has a history of losses, will incur additional losses, and may never achieve profitability, we have identified material weaknesses in our internal control over financial reporting and these material weaknesses could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner, compliance with Sarbanes-Oxley Act Section 404 could have a material adverse impact on our business, we will not be able to reach profitability unless we are able to achieve our product expansion and growth goals; our VIVO launch plans require significant investment in infrastructure and sales representatives, our research and development and commercialization efforts may depend on entering into agreements with corporate collaborators, we have entered into joint marketing agreements with respect to our products, and may enter into additional join marketing agreements, that will reduce our revenues from product sales, royalty agreements with respect to LockeT, the surgical vessel closing pressure device, will reduce any future profits from this product, if we experience significant disruptions in our information technology systems, our business may be adversely affected, litigation and other legal proceedings may adversely affect our business, if we make acquisitions or divestitures, we could encounter difficulties that harm our business, failure to attract and retain sufficient qualified personnel could also impede our growth, our revenues may depend on our customers’ receipt of adequate reimbursement from private insurers and government sponsored healthcare programs, we may be unable to compete successfully with companies in our highly competitive industry, many of whom have substantially greater resources than we do, our future operating results depend upon our ability to obtain components in sufficient quantities on commercially reasonable terms or according to schedules, prices, quality and volumes that are acceptable to us, and suppliers may fail to deliver components, or we may be unable to manage these components effectively or obtain these components on such terms, if hospitals, physicians and patients do not accept our current and future products or if the market for indications for which any product candidate is approved is smaller than expected, we may be unable to generate significant revenue, if any, the recent coronavirus outbreak (“COVID-19”) adversely affected our financial condition and results of operations and we cannot provide any certainty as to whether there will be future impacts from COVID-19 or another pandemic, a variety of risks associated with marketing our products internationally could materially adversely affect our business, the impact of the military conflicts in Ukraine and Israel, and the actions that have been and could be taken by other countries, including new and stricter sanctions and actions taken in response to such sanctions, have affected, and may continue to affect, our business and results of operations, including our supply chain, if the third parties on which we rely for the conduct of our clinical trials and results do not perform our clinical trial activities in accordance with good clinical practices and related regulatory requirements, we may be unable to obtain regulatory approval for or commercialize our product candidates, we may be adversely affected by product liability claims, unfavorable court decisions or legal settlements, our ability to use our net operating loss carryforwards may be limited, we may have to make milestone payments under the Settlement Agreement we entered into with the Department of Justice (“DOJ”), we are subject to pervasive and continuing regulation by the FDA and other regulatory agencies. Our products may be subject to additional recalls, revocations or suspensions after receiving FDA or foreign approval or clearance, which could divert managerial and financial resources, harm our reputation, and adversely affect our business, changes in trade policies among the U.S. and other countries, in particular the imposition of new or higher tariffs, could place pressure on our average selling prices as our customers seek to offset the impact of increased tariffs on their own products, increased tariffs or the imposition of other barriers to international trade could have a material adverse effect on our revenues and operating results, product clearances and approvals can often be denied or significantly delayed, although we have obtained regulatory clearance for our VIVO and LockeT products in the U.S. and certain non-U.S. jurisdictions, our business plans include expanding uses for our products, which will require additional clearances; and even after clearance is obtained, our products remain subject to extensive regulatory scrutiny, if we or our suppliers fail to comply with the FDA’s Quality System Regulation, or QSR, or any applicable state equivalent, our operations could be interrupted, and our potential product sales and operating results could suffer, our products may be subject to additional recalls, revocations or suspensions after receiving FDA or foreign approval or clearance, which could divert managerial and financial resources, harm our reputation, and adversely affect our business, if any of our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be required to report under applicable medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions, healthcare reform initiatives and other administrative and legislative proposals may adversely affect our business, financial condition, results of operations and cash flows in our key markets, and if we are unable to obtain and maintain patent protection for our products, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our existing products and any products we may develop, and our technology may be adversely affected.
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These forward-looking statements reflect our beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Quarterly Report and are subject to risks and uncertainties. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. We qualify all of the forward-looking statements in this Quarterly Report by these cautionary statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events or otherwise.

This Quarterly Report also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources.

References to “we”, “us”, “our” and “the Company” refer to ~~Ra Medical Systems,~~Catheter Precision, Inc.

Overview

RaThe registrant (together with our consolidated operating subsidiary, the “Company” or “Catheter”) was incorporated under the name “Ra Medical Systems, Inc.~~, or Ra Medical,~~” as a Delaware corporation in July 2018. A predecessor had been incorporated in California in September of 2002, but was reincorporated in ~~Delaware~~2018 in ~~July 2018. Ra Medical~~connection with our initial public offering. The Company was initially formed to develop, commercialize and market ~~its advanced~~an excimer laser-based platform for use in the treatment of vascular and dermatological immune-mediated inflammatory ~~diseases.~~diseases, including the DABRA product line.

On January 9, 2023, ~~Ra Medical completed its acquisition of~~the Company merged with the former Catheter Precision, Inc., (“or “Old Catheter”), a ~~privately held~~privately-held Delaware corporation ~~pursuant to an Amended~~(the “Merger”), and ~~Restated Agreement and Plan~~the business of ~~Merger, or the Merger Agreement. Under the terms of the Merger Agreement,~~Old Catheter ~~merged into~~became a wholly owned subsidiary of ~~Ra Medical, in a stock-for-stock and notes payable merger transaction, or~~the Company, which today is our only operating subsidiary. Following the Merger, ~~(we refer to~~we discontinued the ~~post-merger combined company as~~Company’s legacy lines of business and the ~~“Company”). The total estimated purchase consideration~~use of any of its DABRA-related assets. For further information about these historical lines of business, see “Item 1. Business” of the Company’s Form 10-K for the fiscal year ended December 31, 2021. Since the Merger, ~~was $82.9 million which represents~~we have shifted the ~~sum~~focus of the (i) estimated fair value of the 14,649.591 Series X Convertible Preferred Stock issued and (ii) portion of the estimated fair value of the $3.1 million representing the Company stock options issued as replacement of Cather share-based payment awards.
~~The Company’s primary business focus now relates~~our operations to Old Catheter’s product lines. Accordingly, our current activities primarily relate to Old Catheter’s historical business which comprises the design, manufacture and ~~products. Catheter’s~~sale of new and innovative medical technologies focused in the field of cardiac electrophysiology, or “EP.”
Our primary product is the View into Ventricular Onset System or VIVO^TM, System (“VIVO” or “VIVO System”)~~. VIVO~~ which is a non-invasive imaging system that offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to ~~electrophysiology studies. The VIVO system has achieved~~EP procedures.
Our newest product, LockeT, is a ~~CE Mark allowing it to be commercialized~~suture retention device indicated for wound healing by distributing suture tension over a larger area in the ~~European Union~~patient in conjunction with a figure of eight suture closure. LockeT is intended to temporarily secure sutures and ~~has been placed at several hospitals~~aid clinicians in ~~Europe. FDA 510(K) clearance in the United States was received,~~locating and ~~the Company began a limited commercial release of VIVO in 2021.~~removing sutures efficiently.

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Our product portfolio also includes the Amigo^® Remote Catheter System, or Amigo, a robotic arm that serves as a catheter control device. Prior to 2018, Old Catheter marketed Amigo. We own the intellectual property related to Amigo, and this product is under consideration for future research and development of a generation 2 product.
~~Table of Contents~~

Pre-Merger Operations

~~Ra Medical~~The Company owns intellectual property related to an advanced excimer laser-based platform for use in the treatment of vascular immune-mediated inflammatory diseases. The Destruction of Arteriosclerotic Blockages by laser Radiation Ablation, ~~or DABRA,~~ laser and single-use catheter, together referred to as the DABRA Excimer Laser System or DABRA, was developed as a tool in the treatment of Peripheral Artery Disease which commonly occurs in the legs. ~~Ra Medical~~The Company also previously marketed the Pharos laser which was used to treat proliferative skin conditions. ~~Ra Medical~~The Company completed the sale of its Pharos laser business, or Dermatology Business, to STRATA Skin Sciences, Inc. on August 16, 2021.

~~As previously reported, the~~The board of directors approved a reduction in force ~~or RIF,~~("RIF") effective June 6, 2022, under which approximately 65% of Ra ~~Medical’s~~Medical's full-time employees were immediately terminated and provided one-time severance payments totaling approximately $0.6 million. In August and September 2022, an additional 20% of Legacy Ra ~~Medical’s~~Medical's employees were terminated and provided one-time severance payments totaling approximately $0.3 million. The purpose of the RIF was to preserve capital with the goal of maximizing the opportunities available to Legacy Ra Medical during the board of directors’ review of strategic alternatives.
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As a result of the RIF and the board of directors’ review of strategic alternatives, ~~Ra Medical~~the Company paused all engineering activities in June 2022. On July 5, 2022, Ra Medical announced the receipt of FDA 510(k) clearance for the DABRA 2.0 catheter as part of the DABRA Excimer Laser System. This catheter includes a braided over jacket to make the catheter more robust and more kink-resistant when navigating tortuous anatomy. This catheter also has a six-month shelf life as a result of multiple design and manufacturing remediations implemented to address prior limitations. Ra MedicalThe Company has ceased marketing the DABRA Excimer Laser System and does not currently intend to commercialize the DABRA 2.0 catheter.

As previously reported, Ra Medical’s strategy was to pursue an atherectomy indication for use, which the FDA defines to include a prespecified improvement in luminal patency. Ra Medical received an Investigational Device Exemption, or IDE, approval in January 2020, and the study was approved for up to 10 clinical sites and 100 subjects. In February 2022, the FDA approved a protocol amendment, raising the enrollment limit from a maximum of 100 subjects to 125 subjects.
On June 6, 2022, Ra Medical ceased enrollment in the atherectomy clinical study at 108 subjects, with the intent to satisfy the FDA’s data requirements to support an atherectomy indication by completing the six-month follow-up by the end of 2022 or early 2023. However, due to the Merger, Ra Medical closed all clinical sites subsequent to the Merger in January 2023, and it has no plans to pursue the atherectomy indication with the FDA.
Post-Merger Operations

Looking forward, we do not expect to use our legacy DABRA-related assets or continue ~~Ra Medical’s~~the Company's legacy lines of business, but instead ~~expect to shift~~have shifted the focus of our operations to Old Catheter’s product lines. Accordingly, our current activities primarily relate to Old Catheter’s historical business, which comprises the design, manufacture and sale of new and innovative medical technologies focused in the field of cardiac electrophysiology, or EP.

Our primary product is the ~~VIVO™~~VIVO System. We are focused on the design, market development and usage adoption of our VIVO System by cardiac electrophysiologists to enhance their ability to diagnose and treat cardiac arrhythmias. We have completed development, received regulatory clearance, and initiated sales of the VIVO System in the U.S. and Europe.

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Our business strategy is to become ~~the~~a leading medical imaging company in the field of cardiac electrophysiology, and we are dedicated to developing and delivering electrophysiology products to provide patients, hospitals, and physicians with novel technologies and solutions to improve the lives of patients with cardiac arrhythmias. We aim to establish VIVO as an integral tool used by cardiac electrophysiologists during ablation treatment of ventricular arrhythmias by reducing procedure time and patient complications and increasing procedural success.

We have received ~~United States Food and Drug Administration, or~~ FDA clearance to market and promote the VIVO System in the United States as a pre-procedure planning tool for patients with structurally normal hearts undergoing ablation treatment for idiopathic ventricular arrhythmias. VIVO allows for the acquisition, analysis, display and storage of cardiac electrophysiological data and maps for analysis by a physician. We began a limited commercial launch of VIVO in 2021 and to date, VIVO has been utilized in more than ~~850~~1,000 procedures in the U.S. and EU by over 30 physicians, with no reported device-related complications.

We have been cleared to label the VIVO System with the CE Mark in the EU and certain other countries. The CE Mark designation, which affirms the product’s conformity with European health, safety, and environmental protection standards, allows us to market that product in countries that are members of the EU and the European Free Trade Association. Catheter has commenced limited sales of the VIVO System in Europe and the UK through independent distributors. Catheter’s international distributors are supported by two EU based full time ~~and one part time employee.~~consultants.

In addition, ~~our~~ LockeT, a suture retention device, is a sterile, Class I product that was registered with the FDA in February 2023, at which time we began initial shipments to distributors. In May 2023, Catheter submitted LockeT for CE Mark approval. CE Mark approval is expected in the second half of 2024, at which time initial international shipments to distributors will begin. LockeT is indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure, and it is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently.

Clinical studies for LockeT ~~are planned to begin~~began during the year ended December 31, 2023. ~~These~~The three phases of the current studies are planned to show the product’s effectiveness and benefits, including faster wound closure, earlier ambulation, potentially leading to early hospital discharge, and ~~cost analysis.~~lower costs for the healthcare provider and/or insurance payor. This data is intended to provide crucial data for marketing and to expand our indications for use with the FDA.

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Prior to 2018, Catheter marketed the AMIGO® Remote Catheter System, or the AMIGO or AMIGO System, which provides for accurate positioning, manipulation, and stable control of catheters for use by electrophysiologists in the diagnosis and treatment of abnormal heart rhythms known as cardiac arrhythmias. Amigo was designed for use during the ablation procedure, to allow the physician to remotely navigate standard commercially available catheters, with stability and precision, and maintains catheter locations within the heart while decreasing radiation exposure and avoiding long periods standing bedside in heavy protective lead aprons. AMIGO has been used in over 2,000 procedures in the U.S. and Europe and has been well received by leading experts in the field of EP. We own the intellectual property related to AMIGO, and this product is under consideration for future research and development of a generation 2 product.
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Recent Developments
Expansion of Sales Force
Beginning in the first quarter of 2024, we began to rejuvenate our sales force with plans to engage a new Chief Commercial Officer ("CCO"). As of May 1, 2024, nine sales people and one clinical support staff have been hired, along with the new COO.

Settlement Agreements with the Department of Justice and Participating States

On December 28, 2020, ~~Ra Medical~~the Company entered into a settlement agreement with the U.S., acting through the ~~DOJ~~Department of Justice ("DOJ") and on behalf of the ~~OIG,~~Office of Inspector General, and other settlement agreements with certain state attorneys general ~~collectively~~(collectively the ~~Settlement Agreements,~~"Settlement Agreements"), to resolve investigations and a related civil action concerning its marketing of the DABRA laser system and DABRA-related remuneration to certain physicians. Pursuant to the terms of the Settlement Agreements, if ~~Ra Medical~~the Company was acquired or was otherwise involved in a change in control transaction (as defined in the Settlement Agreements) before the end of 2024, ~~Ra Medical~~the Company was required to pay a settlement amount of $5.0 million. As a result of the Merger, ~~Ra Medical~~the Company made payments of $4.7 million and $0.3 million to the DOJ and participating states, respectively, in February 2023. ~~Such amounts were included in accrued expenses in the balance sheet at December 31, 2022.~~
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Warrant Inducement Offer

On January 9, 2023, we reduced the exercise price of certain existing warrants, or the Existing Warrants, exercisable for 331,608 shares of ~~Ra Medical~~the Company's common stock held by a certain investor (the “Investor”), with exercise prices ranging from $14.00 to $526.50 per share to $4.00 per share, or the Warrant Repricing. In connection with the Warrant Repricing, we entered into a warrant inducement offer letter, or the Inducement Letter, with the Investor pursuant to which it would exercise up to all of the 331,608 Existing Warrants, or the Inducement Offer. In consideration for exercising the Existing Warrants pursuant to the terms of the Inducement Letter, we received approximately $1.3 million in gross proceeds. We paid the placement agent aggregate cash fees of approximately $0.2 million related to the Inducement Offer which represented 8.0% of the gross proceeds received from the Inducement Offer plus other offering costs. In consideration for exercising the Existing Warrants pursuant to the terms of the Inducement Letter, we issued the Investor a new Series E common stock purchase warrant, or Series E Warrant, to purchase 331,608 shares of common stock at an exercise price of $4.00 per share. The Series E Warrant is exercisable for five years from the date of stockholder approval. Exercise of the Series E Warrant in full was approved by ~~Ra Medical’s~~the Company's stockholders at the special Stockholders’ Meeting held on March 21, 2023. The incremental fair value of the repriced warrants amounted to $0.3 million and the fair value of Series E warrant totaled $1.9 million. The relative fair values of such amounts were recorded to additional paid-in capital concurrent with the exercise of the Existing Warrants. The Company registered the shares of common stock underlying the Series E Warrant for resale in February 2023.

Securities Purchase Agreement

On January 9, 2023, we entered into a Securities Purchase Agreement ~~or the Securities~~(the "Securities Purchase ~~Agreement,~~Agreement"), for a private placement ~~or the Private Placement,~~(the "Private Placement"), with the Investor. Pursuant to the Securities Purchase Agreement, on March 23, 2023, the Investor ~~agreed to purchase,~~purchased, for an aggregate purchase price of approximately $8.0 million, (a) 497,908 Class A Units at a price ~~that was the lower~~ of ~~$3.00~~$1.60029 per unit and 90% of the 5 day volume weighted average price of our common stock immediately prior to obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants (as each are defined below),Class A Unit, each consisting of one share of common stock, one Series F Common Stock Purchase Warrant, or Series F Warrant, and one Series G Common Stock Purchase Warrant, or Series G Warrant, and together with the Series F Warrant, the PIPE Warrants, and (b) 4,501,060 Class B Units at a price of $1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock, par value $0.0001, or the PIPE Preferred Stock, and one Series F Warrant and one Series G Warrant for each share of the Company’s common stock underlying the PIPE Preferred Stock, each share of which is convertible into ~~a number of~~approximately 625 shares of the Company’s common stock, equal to $1,000 divided by the lower of $3.00 and 90% of the 5 day volume weighted average closing price of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion Rate. The closing under the Securities Purchase Agreement and the sale and issuance of the Class A Units and Class B Units (and the issuance of any underlying common stock) was approved at the special Stockholders’ Meeting held March 21, 2023. ~~At the closing of the Private Placement, we issued 497,908 Class A Units for proceeds of approximately $0.9 million and 4,501,060 Class B Units for proceeds of approximately $7.1 million.~~

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The PIPE Warrants are exercisable at an exercise price of $3.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants. The PIPE Warrants are exercisable at any time ~~on or after the closing date of the Private Placement~~ until the expiration thereof, except that the PIPE Warrants cannot be exercised if, after giving effect thereto, the purchaser would beneficially own more than 4.99%, or the Maximum Percentage, of the outstanding shares of common stock of the Company, which Maximum Percentage may be increased or decreased by the purchaser with written notice to the Company to any other percentage specified not in excess of 9.99%. The Series F Warrants have a term of two years from the date of stockholder approval, and the Series G Warrants have a term of six years from the date of stockholder approval. Stockholder approval of the Series F Warrants and Series G Warrants was obtained at the special Stockholders’ Meeting held on March 21, 2023.

Shares of PIPE Preferred Stock, the conversion of which was approved at the special Stockholders’ Meeting held on March 21, 2023, convert into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below. The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of PIPE Preferred Stock ~~will~~do not have the right to convert any portion of their Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of PIPE Preferred Stock ~~will be~~are entitled to receive dividends on shares of PIPE Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock. Except as otherwise required by law, the PIPE Preferred Stock does not have voting rights. However, as long as any shares of PIPE Preferred Stock are outstanding, the Company will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the PIPE Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the PIPE Preferred Stock, (b) alter or amend the Certificate of Designation for the PIPE Preferred Stock, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of PIPE Preferred Stock, (d) increase the number of authorized shares of PIPE Preferred Stock, or (e) enter into any agreement with respect to any of the foregoing. The PIPE Preferred Stock does not have a preference upon any liquidation, dissolution or winding-up of the Company. The holders of PIPE Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of the Company’s common stock would receive if the PIPE Preferred Stock were fully converted (disregarding for such purposes any conversion limitations) to the Company’s common stock, which amounts will be paid pari passu with all holders of the Company’s common stock.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the resale of the shares of its common stock, the shares issuable upon exercise of the PIPE Warrants and the shares issuable upon the conversion of the PIPE Preferred Stock. ~~This~~These registration ~~statement was~~statements were declared effective in April 2023.

~~We intend to use the~~The net proceeds from the Private Placement and the Warrant Repricing have been used to advance the development and commercialization of our novel electrophysiology technologies and solutions and to support general corporate purposes.

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Conversion of Series X Convertible Preferred Stock

On March 21, 2023, wethe Company held a special meeting of stockholders ~~or Stockholders’ Meeting,~~(the “Stockholders’ Meeting”), at which the stockholders approved, among other things, the issuance of ~~1,974,905~~1,993,581 shares of ~~our~~ common stock upon ~~the~~ conversion of ~~1,974.905~~1,993.581 shares of ~~our~~ Series X Convertible Preferred Stock which were issued upon the closing of the ~~Merger. The remaining 12,674.687~~Merger (see Note 3, Business Combination of our accompanying unaudited consolidated financial statements). On March 23, 2023, the Company issued 1,974,905 shares of common stock upon the conversion of 1,974.905 shares of Series X Convertible Preferred Stock. On October 24, 2023, the remaining 18,676 shares of common stock were issued upon the conversion of 18.676 shares of Series X Convertible Preferred Stock. The remaining 12,656.011 shares of Series X Convertible Preferred Stock are expected to remain outstanding until at least July 9, 2024, and will convert thereafter ~~into~~ up to ~~12,674,687~~12,656,011 shares of common stock, only if ~~we meet~~the Company meets the initial listing standards of the NYSE American or another national securities exchange or ~~are~~is delisted from the NYSE American.
Issuance of Securities upon Conversion of Series A Preferred
On July 5, 2023, the Company issued 1,093,552 shares of its common stock in connection with the conversion of 1,750 shares of its outstanding Series A Convertible Preferred Stock. The shares were issued in connection with two separate conversions of 875 shares of Series A Convertible Preferred Stock into 546,776 shares of common stock that occurred on July 3, 2023. Each share of Series A Convertible Preferred Stock is convertible into approximately 625 shares of common stock.
On July 24, 2023, the Company issued 546,776 shares of its common stock in connection with the conversion of 875 shares of its outstanding Series A Convertible Preferred Stock.
On January 24, 2024, the Company issued 546,776 shares of its common stock in connection with the conversion of 875 shares of its outstanding Series A Convertible Preferred Stock.
Adoption of 2023 Equity Incentive Plan
On July 11, 2023, we held an Annual Meeting where our stockholders approved the 2023 Equity Incentive Plan (“2023 Plan”) that authorizes us to grant options, restricted stock and other equity-based awards. No issuance of options were granted under the 2023 Plan during the year ended December 31, 2023. As of March 31, 2024, options to purchase an aggregate of 410,000 shares were outstanding and 146,546 shares remain available for grant under the 2023 Plan, subject to adjustment as provided therein. See Note 20, Subsequent Events, of our accompanying unaudited consolidated financial statements for a discussion of option grants made subsequent to March 31, 2024.

Components of our Results of Operations for the Three Months Ended March 31, ~~2023~~2024 and ~~2022~~2023

~~Net~~ Revenues

Product sales revenues prior to the Merger consisted of sales of catheters for use with the DABRA laser in our atherectomy clinical trials.

After the Merger, our legacy DABRA laser is no longer in use and we have shifted the focus of our operations to Old Catheter’s product lines. Accordingly, our current activities primarily relate to Old Catheter’s historical business which comprises the design, manufacture and sale of new and innovative medical technologies focused in the field of cardiac electrophysiology, or EP.

Our ~~revenues post-Merger primarily consist of~~primary product in 2024 is the VIVO ~~which is a non-invasive imaging system that~~System. The VIVO System offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to ~~EP procedures.~~electrophysiology studies. In addition to the VIVO System, customers are provided with VIVO Positioning Patch Sets, which are custom patches, that are used in conjunction with the VIVO System to complete the intended output of the VIVO System. The delivery of the VIVO System, including the VIVO Positioning Patch Sets represents ~~the Company’s~~our primary performance obligation. ~~The Company recognizes~~We recognize revenue upon the delivery of the VIVO system. ~~The Company~~We also ~~provides~~provide customers with the option to pay for software upgrades in advance at the time of the contract's inception. Software upgrades are stand-ready services, whereby ~~the Company~~we will provide software upgrade services to the customer when and as upgrades are available. Terms of the period covered by the payment of software upgrades in advance can range from one year to multiple years. Customers have the option to renew terms covered by software upgrades at the end of each term. The stand-ready software upgrades represent ~~the Company's~~our second separate performance obligation and revenue is recognized over the term of the period.
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We invoice the customers after physical possession and control of the VIVO System is transferred to the customer and recognize revenue upon delivery. The timing of payment for the corresponding invoices is dependent upon the credit terms identified in each contract. We invoice customers who pay for software upgrades in advance in conjunction with the invoice for the delivery of the VIVO System, and subsequent renewals of software upgrades are invoiced at the inception of the term. Revenue for these stand-ready services is recognized evenly over the term of the upgrade period, consistently with similar stand-ready services under ASC 606. Similar to the delivery of the VIVO System, the timing of payment for the corresponding invoices is dependent upon the credit terms identified in each contract. We have elected the practical expedient to expense costs to obtain a contract, as incurred, as opposed to recognizing the cost as an asset upon occurrence.
We are a business that has operations within multiple countries. During the three months ended March 31, 2024, approximately 90% of our sales were derived from customers outside the United States. This shift of revenue to predominantly international customers is a result of timing of orders placed and not expected to continue.

Cost of Revenues

Cost of revenues for product sales consisted primarily of costs of components for use in our products, the labor used to produce our products, and the manufacturing overhead that supports production.

Selling, General and Administrative Expenses

Selling, general and administrative or ("SG~~&A,~~&A"), expenses consist of employee-related costs, including salaries, benefits and stock-based compensation expenses. Other SG&A expenses include amortization of intangible assets and accretion of royalties payable acquired in the Merger (for the three months ended March 31, 2023), professional services fees, including legal, audit and tax fees, insurance costs, general corporate expenses and facility-related expenses.

Research and Development Expenses

Research and development or ("R~~&D,~~&D"), expenses are expensed as incurred and include the following: research grants; product ~~development, certain employee-related expenses, including salaries, benefits and an allocated portion of stock-based compensation expense;~~development; cost of clinical studies to support new products and product enhancements, including expanded indications; supplies used for internal R&D and clinical activities; and cost of outside consultants who assist with technology development and clinical affairs.

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Results of Operations for the Three Months Ended March 31, ~~2023~~2024 and ~~2022~~2023

The following table sets forth the results of ~~Ra Medical’s~~the Company's operations for the periods presented ~~(in~~($ in thousands):

Three Months Ended March 31,

For the Three Months
Ended March 31,

2023

2022

Change

2024

2023

Change

Net revenues

$ 85

$ 9

$ 76

Revenues

$ 82

$ 85

$ (3 )
Cost of revenues

10

95

(85 )

5

10

(5 )
Selling, general and administrative expenses

10,233

2,302

7,931

2,656

10,233

(7,577 )
Research and development expenses

240

3,115

(2,874 )

37

240

(203 )
Loss on impairment of goodwill

56,086

-

56,086

Other income (expense), net

84

8

76

Impairment charges

—

56,086

(56,086 )
Change in fair value of royalties payable

(86 )

—

(86 )
Other income, net

27

84

(57 )

~~Net~~ Revenues

The ~~increase~~decrease in ~~net~~ revenues of approximately ~~$76~~$3 thousand for the three months ended March 31, ~~2023~~2024 as compared to the corresponding period in the prior year was due to lower product sales of the VIVO System ~~as a result of the Merger that took place in January 2023.~~products.

Cost of Revenues

The decrease in cost of revenues of approximately ~~$85~~$5 thousand for the three months ended March 31, ~~2023~~2024 as compared to the corresponding period in the prior year was due to the lower cost of ~~sales~~revenues of the VIVO ~~System, as a result~~Positioning Patches. During 2024, changes to the manufacturing process of the ~~Business Combination that took place~~Vivo Positioning Patches led to a reduction in ~~January 2023.~~the manufacturing cost of approximately 40%.

Selling, General and Administrative Expenses

The ~~increase~~decrease in ~~SG&A~~selling, general and administrative expenses of approximately ~~$7.9~~$7.6 million for the three months ended March 31, ~~2023~~2024 as compared to the corresponding period in the prior year was due primarily to a decrease in salaries and benefits of $2.0 million relating to the ~~increase~~Company's former Chief Executive Officer, a decrease in ~~professional~~legal fees of ~~approximately $2.5~~$2.0 million ~~of which, $1.7 million was~~that were primarily incurred in connection with the Merger, ~~an increase~~a decrease in ~~severance related charges~~depreciation and amortization of ~~$2.1~~approximately $1.4 million that resulted from intangible assets acquired in the Merger, of which the useful lives and fair value of those intangible assets were finalized during the three months ended June 30, 2023. Further, a decrease in stock based compensation of approximately $1.4 million, of which, ~~$1.75 million related to Ra Medical’s former Chief Executive Officer, an increase in stock compensation of approximately~~ $1.3 ~~million, of which $1.4~~ million was related to the one time stock compensation for Old Catheter stock options assumed in the Merger, ~~offset by~~ a ~~partial~~ decrease ~~in stock compensation expenses due to the reduction in force in fiscal year 2022. Additionally, SG&A increased as a result~~ of ~~an increase in depreciation and amortization~~accounting/audit fees of approximately ~~$1.9~~$0.5 million, ~~that resulted from intangible assets acquired in the Merger,~~a decrease of investor relations and ~~increase~~SEC fees of approximately $0.1 million, a decrease in other selling, general and administrative expenses of ~~$0.6~~$0.1 million, and ~~was partially offset by~~ a decrease ~~in salaries and benefits~~of other fees of approximately ~~$0.5~~$0.1 million.

Research and Development Expenses

The decrease in ~~R&D~~research and development expenses of approximately ~~$2.9~~$0.1 million for the three months ended March 31, ~~2023~~2024 as compared to the corresponding period in the prior year was due primarily ~~due~~ to a decrease in R&D salaries and benefits expenses of approximately $0.9 million, a decrease in R&D facilities allocation expenses of $0.9 million, a decrease in R&D professional fees of $0.3 million, a decrease in R&D supplies and materials of $0.4 million and a decrease in clinical study costs of ~~$0.2~~$0.1 million. This decrease was primarily the result of the discontinuation of the historical products of Ra Medical that were under development.

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~~Loss on~~ Impairment ~~of Goodwill~~Charges

We test for goodwill impairment at the reporting level annually in the fourth quarter or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists. As a result of the Merger with Old Catheter the Company recognized $56.1 million of goodwill for the three months ended March 31, 2023. Due to a sustained decrease in our share price during the ~~three months~~quarters ended March 31, 2023 and June 30, 2023, we concluded that in accordance with ASC 350 a triggering event occurred indicating that potential impairment exists that required us to assess if impairment existed as of March 31, 2023 and June 30, 2023. In accordance with ASC 350 we performed a quantitative goodwill impairment test, which resulted in the carrying amount of the reporting unit exceeding ~~the~~its fair value, ~~of the reporting unit,~~ indicating that the goodwill of the reporting unit was impaired. ~~We recorded an impairment charge of $56.1 million related to goodwill for the three months ended March 31, 2023.~~ We utilized a combination of an income and market approach to assess the fair value of the reporting unit as of March 31, 2023 and June 30, 2023. The income approach considered the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions while the guideline public company market approach considered marketplace earnings multiples from within a peer public company group. We recorded the impairment charge of ~~$56.1~~$60.9 million within ~~Loss~~loss on impairment of goodwill in the ~~condensed~~ consolidated statement of operations. As of ~~March~~December 31, 2023, cumulative goodwill impairment charges of ~~$56.1~~$60.9 million were incurred related to our single reporting unit. The remaining balance of goodwill was reduced to zero as of December 31, 2023.

~~In accordance with ASC Topic 805-10-25-15,~~For the ~~acquirer~~three months ended March 31, 2024, no impairment charges were incurred.
Change in a business combination has a period of time, referred to as the measurement period, to finalize the accounting for a business combination. The measurement period provides companies with a reasonable period of time to determine thefair value of identifiable tangible and intangible assets acquired, liabilities assumed, and the consideration transferred for the acquiree. In accordance with ASC Topic 805-10-25-14, the measurement period ends when the acquirer receives all necessary information about the facts and circumstances that existed as of the acquisition date for the provisional amounts (or otherwise learns that more information is not obtainable); however, the measurement period cannot exceed one year from the acquisition date.royalties payable

As of the date of ~~this Quarterly Report, management~~the Merger, the royalties payable was calculated using a discounted cash flow method utilizing a discount rate of 24.1%. From the Merger date through March 31, 2023, the Company's accounting policy was to accrete the royalties payable, which was included in selling, general, and administrative expenses on the unaudited condensed consolidated statement of operations. Subsequent to March 31, 2023, the Company changed its accounting policy to remeasure the royalties payable and record it at fair value, which is ~~still in~~presented within other income on the ~~process~~unaudited condensed consolidated statement of ~~evaluating~~operations. At each reporting period, the ~~estimated~~ fair value of the ~~consideration transferred~~royalties payable is calculated using the discounted cash flow method. At March 31, 2024, the discount rate was 29%, The change in ~~the Merger. In addition, management is still evaluating the allocation~~fair value of the ~~acquisition purchase price to~~royalties payable for the tangible and intangible assets acquired, liabilities assumed, and the resulting goodwill. Management’s analysis of these items has not yet been completed because of the inherent complexities of estimating fair values of (1) the Company’s Series X Preferred Stock, for which no readily determinable fair value exists, issued in the Merger, and (2) assets and technologies developed by Catheter, an early-stage company with limited commercial history. Therefore, the business combination amounts presented in Note 3 were determined by management based on its consideration all currently available information; however, management has not fully completed its business combination analysis and such amounts must be considered provisional amounts. Notwithstanding the above, as described more fully in Note 8, management determined that there were indicators of asset impairment during the quarterly periodthree months ended March 31, 2024 as compared to the corresponding periods in the prior year was a decrease of $0.1 million. The change between three months ended March 31, 2024 and 2023 ~~and assessed~~is driven by both the ~~carrying values~~change in fair value of the ~~Company’s intangible assets and goodwill.~~royalties payable as well the change in accounting policy.

Other~~Income~~~~(Expense),~~ income, Net

The ~~increase~~decrease in other income (expense), net of approximately $0.1 million for the three months ended March 31, ~~2023~~2024 as compared to the corresponding ~~period~~periods in the prior year was primarily due to ~~an increase~~a decrease in ~~interest income of approximately $69 thousand and an increase in dividend income of approximately $15 thousand.~~investment income.

Liquidity and Capital Resources

As of March 31, ~~2023,~~2024, we had cash and cash equivalents of approximately ~~$12.2~~$1.5 million and an accumulated deficit of approximately ~~$271.5~~$278.4 million. For the three months ended March 31, ~~2023,~~2024, net cash used from operating activities was approximately ~~$12.1~~$1.9 million. ~~The Company has~~We have incurred recurring net losses from operations and negative cash flows from operating activities since inception.
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Table of Contents

We expect operating losses and negative cash flows to continue for the foreseeable future as we invest in our commercial capabilities. ~~Additional~~These negative cash flows and additional costs associated with the Merger paid during the year ended December 31, ~~2022 and during the three months ended March 31,~~ 2023 have substantially depleted our cash. Following the Merger with Old Catheter, we further reduced staff and other costs while assuming the operating costs of Old Catheter. Of the Company’s cash flows used in operating activities of $12.1 million, much of these cash outflows are related to the Merger and are non-recurring in nature. Specifically, we paid approximately $5.0 million in settlement costs that had been accrued as of December 31, 2022. See Note 9, Accrued Expenses. We will continue to monitor our operating costs and seek to reduce our current liabilities. Such actions may impair our ability to proceed with certain strategic ~~activities,~~activities. As of March 31, 2024, we had $1.5 million of cash and ~~we may~~cash equivalents. We believe that this amount will not be ~~unsuccessful at negotiating existing liabilities~~sufficient to fund our operations through the ~~Company’s benefit. In January 2023, we raised gross proceeds~~end of $1.3 million from a Warrant Repricing and, in March 2023, we completed a Private Placement and raised gross proceeds of $8.0 million. See Note 12, Equity Offerings, of our accompanying condensed consolidated financial statements. IfMay 2025. Because expected revenues are not adequate to fund our planned expenditures orand anticipated operating costs beyond such point, we are ~~unsuccessful at~~currently evaluating potential means of raising cash through future capital transactions and/or bridge loans. If we ~~may~~are unable to do so, we will be required to reduce our spending rate to align with expected revenue levels and cash reserves, although there can be no guarantee that we will be successful in doing so. Accordingly, we ~~may~~will likely be required to raise additional cash through debt or equity ~~transactions.~~transactions and/or bridge loans to continue our operations, and if we are unable to do so, we will be required to suspend a portion or all of our operations. We may not be able to secure financing in a timely manner or on favorable terms, if at all.

~~We believe our current cash reserves will be sufficient~~As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to ~~fund our operations~~continue as a going concern for a period of one year after the ~~next twelve months, beginning May 30, 2023. The~~date the unaudited condensed consolidated financial statements ~~have been prepared assuming that we will continue as a going concern and~~for the quarter ended March 31, 2024 are issued. The Company’s unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Cash Flows for the Three Months Ended March 31, 2024 and 2023 ~~and 2022~~($ in thousands)

~~The following information reflects Ra Medical’s cash flows for operations for the periods presented (in thousands):~~

Three Months Ended March 31,

2023

2022

Net cash provided by (used in):

Operating activities

$ (12,053 )

$ (8,569 )
Investing activities

$ (22 )

$ —

Financing activities

$ 8,434

$ 11,176

Net change in cash and cash equivalents

$ (3,641 )

$ 2,607

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For the Three Months
Ended March 31,

2024

2023

Net cash provided by (used in):

Operating activities

$ (1,942 )

$ (12,053 )
Investing activities

(22 )

(22 )
Financing activities

(110 )

8,434

Net change in cash and cash equivalents

$ (2,074 )

$ (3,641 )

Net Cash Used in Operating Activities
During the three months ended March 31, 2024, net cash used in operating activities of $1.9 million consisted of a net loss of $2.6 million, partially offset by an increase in operating assets and liabilities of $0.1 million and non-cash expenses of $0.6 million, consisting primarily of depreciation and amortization of $0.5 million and a change in fair value of royalties payable of $0.1 million.

During the three months ended March 31, 2023, net cash used in operating activities of $12.1 million consisted of a net loss of $66.4 million, a decrease in operating assets and liabilities of $5.1 million, partially offset by non-cash expenses of $59.4 million, consisting primarily of a loss on impairment of goodwill of $56.1 million, non-cash stock-based compensation of $1.4 million, depreciation and amortization of $1.4 million and accretion of royalties payable of $0.5 million.

Net Cash Used in Investing Activities
During the three months ended March 31, ~~2022,~~2024, net cash used in ~~operating~~investing activities of ~~$8.6 million~~$22 thousand consisted of ~~a net loss~~purchases of ~~$5.5 million, a decrease in net operating assets~~property and ~~liabilities of $3.5 million and non-cash adjustments to net loss of $0.4 million, consisting primarily of stock-based compensation and depreciation and amortization of $0.2 million each.~~equipment.

45
~~Net Cash Used in Investing Activities~~
Table of Contents

During the three months ended March 31, 2023, net cash used in investing activities of ~~$22.0~~$22 thousand consisted of purchases of property and equipment of approximately ~~$37.0~~$37 thousand, offset by proceeds from cash acquired as part of business combination of approximately ~~$15.0~~$15 thousand.

Net Cash (Used in)/Provided by Financing Activities
During the three months ended March 31, 2024, net cash used in financing activities of $0.1 million primarily consisting of payments on notes payable.

During the three months ended March 31, 2023, net cash provided by financing activities of $8.4 million, ~~primarily~~ consisted of cash proceeds from the private placement of $8.0 million, proceeds from issuance of common stock and warrants of $0.2 million and proceeds from the exercise of warrants of $1.3 million, offset by the payment of offering costs of $0.6 ~~million.~~
~~During~~million, the ~~three months ended March 31, 2022, net cash provided by financing activities~~payment of ~~$11.2~~costs related to exercise of warrants $0.2 million ~~primarily consisted~~and the payment of ~~net cash proceeds from the February 2022 public offering.~~convertible promissory notes of $0.3 million.

Off-Balance Sheet Arrangements

We do not engage in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, as a part of our ongoing business. Accordingly, we did not have any off-balance sheet arrangements during any of the periods presented.

~~Ra Medical~~’sThe Company’s Critical Accounting ~~Policies and~~ Estimates

The information set forth below relates to ~~Ra Medical’s~~the Company’s critical accounting policies and estimates. The discussion and analysis of our financial position and results of operations is based on our interim unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report, which have been prepared in accordance with U.S. GAAP. We believe certain of our accounting policies are critical to understanding our financial position and results of operations.

Management’s discussion and analysis of ~~Ra Medical’s~~the Company's financial condition and results of operations is based on our ~~condensed~~unaudited consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these ~~condensed~~unaudited consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We regularly evaluate estimates and assumptions related to business combinations, including the determination of the purchase price and related allocations to the fair value of assets acquired and liabilities assumed, provisions for legal contingencies, income taxes, deferred income tax, asset valuation allowances, valuation of warrant liabilities, share based compensation and revenues. Our estimates are based on current facts, historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

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~~Table of Contents~~
We believe the following discussion addresses our most critical accounting policies, which are those that are most important to our financial condition and results of operations and require our most difficult, subjective and complex judgments.
~~Business Combinations~~
We account for business combinations under the provisions of Accounting Standards Codification (“ASC”) Topic 805-10, Business Combinations (“ASC 805-10”), which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. These values have currently been prepared based on preliminary estimates of the fair value of the consideration paid, assets acquired and liabilities assumed. Differences between these preliminary estimates and the final acquisition accounting may occur and these differences could be material. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred.

Accounting for Long-Lived Assets-Useful Lives

Intangible assets acquired from business combinations are initially measured at their estimated fair values and are then amortized on a straight-line basis over their estimated useful lives. Management evaluates whether events or circumstances have occurred that indicate the remaining useful life or carrying value of the amortizing intangible should be revised and adjusted, if necessary. Should the sum of the undiscounted expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date.

~~Goodwill~~
Goodwill, which represents the excess of purchase price of Catheter over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. We review goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.
To determine whether goodwill is impaired, annually or more frequently if needed, the Company performs a multi-step impairment test. The Company first has the option to assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. When performing quantitative testing, the Company first estimates the fair values of its reporting units using a combination of an income and market approach. To determine fair values, the Company is required to make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations including the rate of future revenue growth, capital requirements, and income taxes), long-term growth rates for determining terminal value and discount rates. Comparative market multiples are used to corroborate the results of the discounted cash flow test. These assumptions require significant judgement. Pursuant to ASU 2017-04, Simplifying the Test for Goodwill Impairment, the single step is to determine the estimated fair value of the reporting unit and compare it to the carrying value of the reporting unit, including goodwill. To the extent the carrying amount of goodwill exceeds the implied goodwill, the difference is the amount of the goodwill impairment. The Company also completes a reconciliation between the implied equity valuation prepared and the Company’s market capitalization. The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs. The inputs for the market capitalization calculation are considered Level 1 inputs.

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~~Research and Development Expenses~~
We make estimates of our accrued expenses as of each balance sheet date in our condensed consolidated financial statements based on facts and circumstances known to us at that time. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual accordingly. Services related to research and development projects are expensed as research and development costs at the time such costs are incurred.
~~Clinical Trial Costs and Accruals~~
We accrue clinical trial costs based on work performed. In determining the amount to accrue, we rely on estimates of total costs incurred based on enrollment, the completion of clinical trials and other events. We follow this method because we believe reasonable dependable estimates of the costs applicable to various stages of a clinical trial can be made. However, the actual costs and timing of clinical trials are highly uncertain, subject to risks and may change depending on a number of factors. Differences between the actual clinical trial costs and the estimated clinical trial costs that we have accrued in any prior period are recognized in the subsequent period in which the actual costs become known. Historically, our estimated accrued expenses have approximated actual expenses incurred; however, material differences could occur in the future.

Stock-Based Compensation

We calculate the cost of awards of equity instruments based on the grant date fair value of the awards issued to employees, members of our board of directors and nonemployee consultants using the Black-Scholes option pricing valuation model, or Black-Scholes model, which incorporates various assumptions including volatility, expected term and risk-free interest rate. The expected term of the options is the estimated period of time until exercise and was determined using the SEC’s safe harbor rules, using an average of vesting and contractual terms, as we did not have sufficient historical experience of similar awards. Expected stock price volatility is based on historical volatilities of certain “guideline” companies, as the Company does not have sufficient historical stock price data. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent term. The estimated fair value of stock-based compensation awards is amortized on a straight-line basis over the relevant vesting period, adjusted for actual forfeitures at the time they occur.

Royalties Payable
We are obligated to pay royalties under various royalty agreements Old Cather had entered into. On January 9, 2023, prior to the consummation of the Merger, Old Catheter entered in an agreement with its Convertible Promissory Noteholders, which substantially consisted of amounts due to David A. Jenkins, previously Old Catheter's Chairman of the Board of Directors prior to the Merger, and, currently, the Company’s Executive Chairman of the Board of Directors and Chief Executive Officer, to forgive all accrued interest and future interest expense in exchange for a future royalty right. We will pay to the Noteholders a total royalty equal to approximately 12% of net sales of LockeT, commencing upon the first commercial sale, through December 31, 2035.
In addition, Old Catheter had entered into an agreement with the inventor of LockeT in exchange for the assignment and all rights to LockeT. Pursuant to the agreement, we will pay a 5% royalty on net sales up to $1 million in royalties. After $1 million has been paid, and if, and only if, a U.S. patent is granted by the United States Patent and Trademark Office, then we will continue to pay a royalty at a rate of 2% of LockeT net sales, until total cumulative royalties of $10 million have been paid.
During 2006 and 2007, Old Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Old Catheter's AMIGO System. The agreement calls for the payment of sales-based royalties to the foundation, upon successful commercialization of the AMIGO System. We are not currently selling the AMIGO System.
~~Jobs Act~~New Accounting ~~Election~~Pronouncements

~~An emerging growth company can take advantage~~In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an ~~extended transition period~~amount and description of its composition for ~~complying with new~~other segment items to reconcile to segment profit or ~~revised accounting standards. Thus, an emerging growth company can delay~~loss, and the title and position of the entity’s CODM. The amendments in this update also expand the interim segment disclosure requirements. These amendments do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. The Company is currently reviewing the impact that the adoption of ~~certain accounting standards until those standards would otherwise apply to private companies. We~~ASU 2023-07 may have ~~elected to avail ourselves of this exemption~~on our consolidated financial statements and ~~therefore, we are not subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.~~disclosures.

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In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard prospectively in fiscal year 2025 for the annual reporting period ending December 31, 2025. The accounting pronouncement is not expected to have a material impact on the Company's related disclosures.
Effective January 1, 2023, repurchases are subject to a nondeductible excise tax under the Inflation Reduction Act of 2022 equal to 1.0% of the fair market value of the shares repurchased, subject to certain limitations. There was no impact to our financial condition or results of operations in 2023 or for the three months ended March 31, 2024 as a result of the excise tax.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Executive Chairman of the Board and ~~interim~~ Chief Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of March 31, ~~2023.~~2024. Our objective in designing our disclosure controls and procedures ~~are designed to~~is that they provide reasonable assurance of achieving their objectives of ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our ~~interim~~ Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
~~During the quarter ended March 31, 2023, we completed the Merger with Catheter. Subsequent~~ Based upon this evaluation, due to the ~~Catheter Merger, we have initiated integration activities and an assessment of Catheter’s internal controls. See “Note 3. Business Combination”~~existence of the ~~Notes to Unaudited Condensed Consolidated Financial Statements for additional information. In accordance with the SEC's published guidance, we have currently excluded Catheter’s~~material weaknesses found in our internal ~~control~~controls over financial reporting ~~from~~described below, our evaluation of disclosure controls because we acquired these operations during the current fiscal year. SEC rules require that we complete our assessment of the internal control over financial reporting of Catheter within one year after the date of the acquisition. Following the Merger, the Company is primarily focused on Catheter’s business, and Catheter’s results of operations represented approximately one hundred percent of the operations of the Company for the quarter ended March 31, 2023.
As of December 31, 2022, legacy Catheter’s management determined that material weaknesses existed with regard to Catheter’s internal control over financial reporting. These material weaknesses were specifically identified in relation to (1) segregation of duties, (2) controls surrounding the timing of recognition of revenues, and (3) controls surrounding the determination of the fair value of derivative liabilities.
The Company has expanded its accounting department through new hires in April 2023, as well as engaging a third-party accounting firm to assist the Company in certain accounting matters, including the determination of the fair values of any identified derivative liabilities. These remediation activities are ongoing, and management cannot yet assert that these material weaknesses have been remediated as of March 31, 2023.
~~Based upon our evaluation, and excluding the legacy Catheter material weaknesses discussed above, our interim~~ Chief Executive Officer and Interim Chief Financial Officer concluded that, as of March 31, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level. As disclosed in our Form 10-K for the year ended December 31, 2023, for the reasons set forth therein, our Chief Executive Officer and Interim Chief Financial Officer had previously concluded that, as of March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023 our disclosure controls and procedures were not effective at the reasonable assurance level.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis. In preparation of our financial statements for the period covered by this report, we identified material weaknesses in internal control over financial reporting related to our control environment that existed as of March 31, 2024, as described below.
Specifically, we identified material weaknesses with respect to (1) the lack of segregation of duties, (2) the lack of designed and operating review controls with respect to oversight of the financial reporting process, (3) errors with respect to the review of work performed by service providers, (4) errors in connection with accounting for the royalty obligation acquired in the merger with Old Catheter, (5) use of an incorrect discount rate in calculating the fair value of the royalty obligation, and (6) timing of revenue recognition.
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Notwithstanding the identified material weaknesses, management believes that the Financial Statements and related financial information included in this Quarterly Report and in its Quarterly and Annual Reports filed during and with respect to the year ended December 31, 2023 fairly present, in all material respects, our balance sheets, statements of operations, shareholders’ equity and cash flows as of and for the periods presented.
Remediation Plan
Management is in the process of developing a remediation plan and believes significant progress has been made, including the following remediation items:
1. Segregation of duties –All payroll items are now reviewed by our Interim Chief Financial Officer prior to processing the payroll. Invoices are entered by one clerk and checks cut by another, after approval from the Interim CFO authorizing which invoices to pay. Checks are signed by the Chief Executive Officer. Wires are entered by one clerk and approval is required by the Interim Chief Financial Officer. Addition of a permanent Chief Financial Officer would strength the reviews/controls already in place and a search is currently in process.
2. Lack of designed and operating review controls with respect to oversight of the financial reporting process – A third party contractor prepares the financial reports and they are reviewed and approved by management prior to inclusion in any filings. Addition of a permanent Chief Financial Officer will create an additional layer of review.
3. Errors with respect to the review of work performed by service providers – work performed by service providers is reviewed and any errors identified are sent back to service provider for resolution before being incorporated into the company’s financial reports.
4. Errors in connection with accounting for the royalty obligations acquired in the merger with Old Catheter – the first royalty calculations did not include the royalty for LockeT inventor. Any new contracts are now reviewed by the Interim Chief Financial Officer for any assets or liabilities that would need to be recorded.
5. Use of an incorrect discount rate in calculating the fair value of the royalty obligation – Calculations are reviewed by management to ensure inputs are reasonable prior to incorporating the calculations into the Company’s financial reports.
6. Timing of revenue recognition – Revenue is recognized when product is delivered to the customer. We have implemented a tracking spreadsheet for all shipments which contains delivery date, and invoicing/recognition of revenue is then dated to match the delivery date. This is reviewed at month end by the Interim Chief Financial Officer to ensure revenue is recognized in the proper period.
The material weaknesses will not be considered remediated until management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. The Company will monitor the effectiveness of its remediation plans and will make changes management determines to be appropriate. Additional anticipated remediation measures include continuing assessment of the need to expand the Company’s current accounting and financial reporting teams to include individuals with requisite experience to meet the requirements associated with the increasing operations of a publicly traded company, establishment of policies and procedures to ensure full review and sign offs with respect to the inputs sent to third-party service providers as well as the reports and documentation upon the completion of their work prior to any adjustments being made to the financial statements, establishment of policies and procedures related to the review of all contracts the Company enters into to ensure any terms or conditions are evaluated for any accounting required or accounting treatment or disclosure, and establishment of policies and procedures to review the inputs to royalties payable and other fair value calculations as well as the outputs impacting the balance at each reporting period.
49
Table of Contents

Changes in Internal Control over Financial Reporting

~~There~~Except as noted above, there have been no changes in the Company’s internal control over financial reporting during the quarter ended March 31, ~~2023,~~2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting other than those related to the Merger with Catheter, which include changes necessitated by the change in the Company’s line of business. Subsequent to March 31, 2023, the Company hired a new Chief Financial Officer, and as disclosed above, the Company has added to its accounting department and is in the process of remediating certain material weaknesses.reporting.

Inherent Limitations on Effectiveness of Controls

Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

4750
Table of Contents

PART II. — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Reference is made to the information disclosed under Item 3 — "~~Securities Class Action~~Legal Proceedings
~~On June 7, 2019, a putative securities class action complaint captioned~~ ~~Derr v. Ra Medical Systems, Inc., et al,~~ ~~(Civil Action no. 19CV1079 LAB NLS) was filed~~" in the U.S. District Court for the Southern District of California against the Company, certain current and former officers and directors, and certain underwriters of the Company’s initial public offering. Following the appointment of a lead plaintiff and the filing of a subsequent amended complaint, the lawsuit alleges that the defendants made material misstatements or omissions in the Company’s registration statement in violation of Sections 11 and 15 of the Securities Act of 1933, or the Securities Act, and between September 27, 2018 and November 27, 2019, inclusive, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, or the Exchange Act. On March 11, 2020, lead plaintiffs voluntarily dismissed the underwriter defendants without prejudice. On March 13, 2020, defendants filed a motion to dismiss the amended complaint. On March 24, 2021, the court issued an order granting defendants’ motion to dismiss claims under the Securities Act in full and certain claims under the Exchange Act and denying defendants’ motion to dismiss certain Exchange Act claims. Plaintiffs filed their second amended complaint on April 19, 2021, realleging the Securities Act claims and certain of the previously dismissed Exchange Act claims. On June 10, 2021, defendants moved to dismiss the second amended complaint. On November 12, 2021, following a private settlement mediation with the lead plaintiffs, the parties executed a stipulation of settlement that resolved the claims asserted in the securities class action. The settlement provides for a payment to the plaintiff class of $10.0 million. On March 18, 2022, the Company paid approximately $0.6 million towards the settlement to satisfy its self-insured retention/deductible. The Company’s insurers paid the remainder of the settlement. The proposed settlement required both preliminary and final approval by the court. On February 11, 2022, the court granted preliminary approval of the settlement, scheduled a hearing on final approval of the settlement and denied the pending motion to dismiss without prejudice. On May 2, 2022, plaintiffs filed a motion for final approval of the settlement and plan of allocation, and lead counsel filed a motion for an award of attorneys’ fees and reimbursement of litigation expenses. On September 23, 2022, the court granted final approval of the settlement, certified the settlement class, granted in part lead counsel’s motion for an award of attorneys’ fees and reimbursement of litigation expenses, dismissed plaintiffs’ claims with prejudice, and entered final judgment.
~~Shareholder Derivative Litigation~~
~~On October 1, 2019, a shareholder derivative complaint captioned~~ ~~Noel Borg v. Dean Irwin, et al~~ (Civil Action no. 1:99-cm-09999) was filed in the U.S. District Court for the District of Delaware against certain current and former officers and directors, purportedly on behalf of the Company, which is named as a nominal defendant in the action. The complaint alleges breaches of fiduciary duty, unjust enrichment, waste, and violations of Section 14(a) of the Exchange Act. On October 21, 2019, pursuant to the parties’ stipulation, the court stayed the derivative lawsuit until the related class action is resolved. On November 10, 2022, the plaintiff filed a notice voluntarily dismissing the case without prejudice.
~~Settlement Agreements with the Department of Justice and Participating States~~
On December 28, 2020, the Company entered into a settlement agreement with the U.S., acting through the DOJ and on behalf of the OIG, and other settlement agreements with certain state attorneys general, collectively the Settlement Agreements, to resolve investigations and a related civil action concerning its marketing of the DABRA laser system and DABRA-related remuneration to certain physicians. Pursuant to the terms of the Settlement Agreements, (a) if the Company’s revenue exceeds $10 million in any of fiscal years 2021-2024, the Company also is required to pay for the corresponding year: $0.5 million for 2021, $0.75 million for 2022, $1 million forFiscal 2023 and $1.25 million for 2024; (b) if the Company is acquired or is otherwise involved in a change in control transaction before the end of 2024, the Company was required to pay an additional settlement amount of $5 million, plus 4% of the value attributed to the Company in the transaction, so long as the attributed value is in excess of $100 million, with the total change in control payment never to exceed $28 million; and (c) if the Company’s obligations under the Settlement Agreement are avoided by bankruptcy, the U.S. may rescind the releases and bring an action against the Company in which the Company agrees is not subject to an automatic stay, is not subject to any statute of limitations, estoppel or laches defense, and is a valid claim in the amount of $56 million, minus any prior change in control payments. As a result of the merger with Catheter Precision, Inc., the Company made payments of $4.7 million and $0.3 million to the DOJ and participating states, respectively, in February 2023.
48
~~Table of Contents~~
~~Filing of Complaint~~
~~On September 29, 2022, a purported stockholder of the Company filed a complaint captioned~~ ~~David Nguyen v. Ra Medical Systems, Inc. et al.~~ (Civil Action no. 3:22-cv-01470-BEN-MSB) in the U.S. District Court for the Southern District of California against us and our current directors. The complaint alleges violations of Sections 14(a) and 20(a) of the Exchange Act based on alleged deficiencies in our preliminary proxy, filed with the SEC on September 23, 2022. On February 7, 2023, plaintiff filed a notice voluntarily dismissing the case without prejudice.
~~Other Litigation~~
In the normal course of business, we are at times subject to pending and threatened legal actions. In management’s opinion, any potential loss resulting from the resolution of these matters will not have a material effect on our results of operations, financial position or cash flows.10-K.

ITEM 1A. RISK FACTORS

~~The~~There have been no material changes from the risk factors previously disclosed in the Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the Company’sAnnual Report on Form 10-K for the year ended December 31, 2022, under the heading “Risk Factors.” When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations, financial condition and stock price can be materially and adversely affected. Except as noted below, there have been no material changes to the Company’s risk factors since the 2022 Form 10-K.
~~We recently identified material weaknesses in Catheter Precision’s internal controls over financial reporting.~~
As of December 31, 2022, legacy Catheter’s management determined that material weaknesses existed with regard to Catheter’s internal control over financial reporting. These material weaknesses were specifically identified in relation to (1) segregation of duties, (2) controls surrounding the timing of recognition of revenues, and (3) controls surrounding the determination of the fair value of derivative liabilities. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis.
The Company has expanded its accounting department through new hires in April 2023, as well as engaging a third-party accounting firm to assist the Company in certain accounting matters, including the determination of the fair values of any identified derivative liabilities. These remediation activities are ongoing, and management cannot yet assert that these material weaknesses have been fully remediated. If our remedial measures are insufficient, or if additional material weaknesses or significant deficiencies in our internal control over financial reporting or in our disclosure controls occur in the future, our future consolidated financial statements or other information filed with the SEC may contain material misstatements and could require a restatement of our consolidated financial statements, cause us to fail to meet our reporting obligations or cause investors to lose confidence in our reported financial information, leading to a decline in the market value of our securities.2023.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Previously ~~reported on the registrant’s Current Report on Form 8-K/A filed on March 31, 2023.~~reported.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

4951
Table of Contents

ITEM 6. EXHIBITS

Exhibit

Incorporated by Reference

Incorporated by Reference
Number
Description
Form

File No.

Exhibit

Filing Date
Description
Form

File No.

Exhibit

Filing Date

2.2

Amended and Restated Agreement and Plan of Merger, dated January 9, 2023, by and among the Registrant, certain subsidiaries, and Catheter Precision, Inc.

8-K

001-38677

2.1

1/13/2023

3.1.1

Amended and Restated Certificate of Incorporation of the Registrant.

8-K

001-38677

3.1

10/1/2018

Amended and Restated Certificate of Incorporation of the Registrant.

8-K

001-38677

3.1

10/1/2018

3.1.2

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant.
(effective 11/16/20)

8-K

001-38677

3.1

11/17/2020

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant. (effective 11/16/20)

8-K

001-38677

3.1

11/17/2020

3.1.3

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant.
(effective 09/30/22)

8-K

001-38677

3.1

9/20/2022

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant. (effective 09/30/22)

8-K

001-38677

3.1

9/20/2022

3.1.4

Certificate of Designation of Series X Convertible Preferred Stock.

8-K

001-38677

3.1

1/13/2023

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant. (filed 08/01/23, effective 08/17/23)

8-K

001-38677

3.1

8/4/2023

3.1.5

Certificate of Designation of Series A Preferred Stock.

8-K

001-38677

3.2

1/13/2023
5

Certificate of Designation of Series X Convertible Preferred Stock.

8-K

001-38677

3.1

1/13/2023

6

Certificate of Designation of Series A Preferred Stock.

8-K

001-38677

3.2

1/13/2023

3.2.1

Amended and Restated Bylaws of the Registrant.

8-K

001-38677

3.2

10/1/2018

Amended and Restated Bylaws of the Registrant.

8-K

001-38677

3.2

10/1/2018

3.2.2

Amendment to Amended and Restated Bylaws of the Registrant.

8-K

001-38677

3.1

8/17/2022

Amendment to Amended and Restated Bylaws of the Registrant.

8-K

001-38677

3.1

8/17/2022

4.1

Specimen common stock certificate of the Registrant.

S-1

333-226191

4.1

7/16/2018

Specimen common stock certificate of the Registrant.

S-1

333-226191

4.1

7/16/2018

4.2

Description of Capital Stock.

10-K

001-38677

4.2

3/28/2023

[omitted.]

4.3

Form of warrant issued in May 2020.

8-K

001-38677

4.1

5/22/2020

Form of warrant issued in May 2020.

8-K

001-38677

4.1

5/22/2020

4.4

Form of pre-funded warrant issued in May 2020.

8-K

001-38677

4.2

5/22/2020

Form of pre-funded warrant issued in May 2020.

8-K

001-38677

4.2

5/22/2020

4.5

Form of placement agent warrant issued in May 2020.

8-K

001-38677

4.3

5/22/2020

Form of placement agent warrant issued in May 2020.

8-K

001-38677

4.3

5/22/2020

5052
Table of Contents

Exhibit

Incorporated by Reference
Number

Description

Form

File No.

Exhibit

Filing Date

Description

Form

File No.

Exhibit

Filing Date

4.6

Form of warrant offered in July 2020.

S-1

333-239887

4.3

7/16/2020

Form of warrant offered in July 2020.

S-1

333-239887

4.3

7/16/2020

4.7

Form of pre-funded warrant issued in July 2020.

S-1

333-239887

4.4

7/16/2020

Form of pre-funded warrant issued in July 2020.

S-1

333-239887

4.4

7/16/2020

4.8

Form of placement agent warrant offered in July 2020.

S-1

333-239887

4.5

7/16/2020

Form of placement agent warrant offered in July 2020.

S-1

333-239887

4.5

7/16/2020

4.9

[omitted.]

[omitted.]

4.10

Form of Series B Warrant offered in February 2022.

S-1/A

333-262195

4.9

2/3/2022

Form of Series B Warrant offered in February 2022.

S-1/A

333-262195

4.9

2/3/2022

4.11

[omitted.]

S-1/A

333-262195

4.10

2/3/2022

[omitted.]

S-1/A

333-262195

4.10

2/3/2022

4.12

Warrant Agency Agreement, dated February 8, 2022, by and between the Registrant and American Stock & Trust Company LLC.

8-K

001-38677

4.4

2/9/2022

Warrant Agency Agreement, dated February 8, 2022, by and between the Registrant and American Stock & Trust Company LLC.

8-K

001-38677

4.4

2/9/2022

4.12.1

Amendment No. 1, dated July 22, 2022, to February 8, 2022 Warrant Agency Agreement by and between the Company and American Stock Transfer & Trust Company, LLC.

10-Q

001-38677

4.7

8/15/2022

Amendment No. 1, dated July 22, 2022, to February 8, 2022 Warrant Agency Agreement by and between the Company and American Stock Transfer & Trust Company, LLC.

10-Q

001-38677

4.7

8/15/2022

4.13

Form of Series E Warrant offered in January 2023.

8-K

001-38677

4.1

1/13/2023

Form of Series E Warrant offered in January 2023.

8-K

001-38677

4.1

1/13/2023

4.14

Form of Series F Warrant issued in March 2023.

8-K

001-38677

4.2

1/13/2023

Form of Series F Warrant issued in March 2023.

8-K

001-38677

4.2

1/13/2023

4.15

Form of Series G Warrant issued in March 2023.

8-K

001-38677

4.3

1/13/2023

Form of Series G Warrant issued in March 2023.

8-K

001-38677

4.3

1/13/2023

10.1

[omitted.]

10.10.1

Amendment to Change in Control and Severance Agreement, dated as of January 9, 2023, by and between Ra Medical Systems, Inc. and Jonathan Will McGuire.

8-K

001-38677

10.6

1/13/2023

10.16.1

Notice of Suspension of Corporate Integrity Agreement, dated January 11, 2023.

10-K

001-38677

10.16.1

3/28/2023

5153
Table of Contents

Exhibit

Incorporated by Reference
Number

Description

Form

File No.

Exhibit

Filing Date

10.20

Form of Amended and Restated Support Agreement, dated January 9, 2023, by and among the Company, Catheter Precision, Inc. and directors, officers and certain shareholders of the Company.

8-K

001-38677

10.1

1/13/2023

10.21

Form of Lock-Up Agreement, dated January 9, 2023, by and among the Company; Catheter Precision, Inc.; directors, officers, and certain stockholders of the Company; and certain stockholders of Catheter.

8-K

001-38677

10.2

1/13/2023

10.24

Securities Purchase Agreement, dated January 9, 2023, by and among the Company and Armistice Master Fund Ltd. (“January 2023 SPA”).

8-K

001-38677

10.4

1/13/2023
-
~~Ex. A to January 2023 SPA (form of Certificate of Designation of Series A Convertible Preferred Stock).~~Exhibit

~~8-K~~

~~001-38677~~Incorporated by Reference
Number

~~3.2~~Description

~~1/13/2023~~Form
File No.
Exhibit
Filing Date

-
~~Ex. B to January 2023 SPA (form of Registration Rights Agreement).~~31.1*

~~8-K~~Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~001-38677~~

~~10.5~~

~~1/13/2023~~

-
~~Ex. C to January 2023 SPA (form of Series F Warrant).~~31.2*

~~8-K~~Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~001-38677~~

~~4.2~~

~~1/13/2023~~

-
~~Ex. D to January 2023 SPA (form of Series G Warrant).~~32.1**

~~8-K~~Certifications of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~001-38677~~

~~4.3~~

~~1/13/2023~~
32.2**
Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

10.25

Registration Rights Agreement, dated January 9, 2023.

8-K

001-38677

10.5

1/13/2023

10.26

Warrant Inducement Offer Letter, dated January 9, 2023.

8-K

001-38677

10.3

1/13/2023

10.27.1

Debt Settlement Agreement and Release including certain royalty rights with David A. Jenkins, dated January 9, 2023.

10-K

001-38677

10.27.1

3/28/23
52
~~Table of Contents~~
Exhibit

Incorporated by Reference
Number

Description

Form

File No.

Exhibit

Filing Date

10.27.2

Debt Settlement Agreement and Release including certain royalty rights with Daniel C. Stanzione, Sr. Irrevocable Trust Dated December 31, 2007, dated January 9, 2023.

10-K

001-38677

10.27.2

3/28/23

10.27.3

Debt Settlement Agreement and Release including certain royalty rights with Fatboy Capital, L.P., dated January 9, 2023.

10-K

001-38677

10.27.3

3/28/23

31.1*

Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certifications of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~101.INS~~101.INS*

Inline XBRL Instance Document

~~101.SCH~~101.SCH*

Inline XBRL Taxonomy Extension Schema Document

~~101.CAL~~101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

~~101.DEF~~101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

~~101.LAB~~101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document

~~101.PRE~~101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

~~104~~104*

Cover Page Interactive Data File (embedded within the Inline XBRL document).

*
Filed herewith.

**
The information in this exhibit is furnished and deemed not filed with the Securities and Exchange Commission for purposes of section 18 of the Exchange Act of 1934, as amended (Exchange Act), and is not to be incorporated by reference into any filing of ~~Ra Medical Systems,~~Catheter Precision, Inc. under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

5354
Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~RA MEDICAL SYSTEMS,~~CATHETER PRECISION, INC.

(Registrant)

Date: ~~June 2, 2023~~May 6, 2024
By;
/s/ David A. Jenkins

David A. Jenkins
Executive Chairman of the Board and
~~Interim~~ Chief Executive Officer
(Principal Executive Officer)
~~Date: June 2, 2023~~
~~By:~~
~~/s/ Steve K. Passey~~
~~Steve K. Passey~~

Date: May 6, 2024
By:
/s/ Margrit Thomassen
Margrit Thomassen
Interim Chief Financial Officer

(Principal Financial and Accounting Officer)

5455

	Series A Preferred Stock				Series X Preferred Stock					Common Stock					Additional Paid-In		Accumulated			Total Stockholders'
	Shares		Amount		Shares			Amount		Shares			Amount		Capital		Deficit			Equity
Balance at December 31, 2022		—	$	—		—		$	—		2,160,950		$	—	$	214,397	$	(205,137	)	$	9,260
Common stock issued upon exercise of options		—		—		—			—		301,746			—		179		—			179
Restricted stock awards cancelled		—		—		—			—		(25	)		—		—		—			—
Stock-based compensation		—		—		—			—		—			—		1,394		—			1,394
Issuance of Series X preferred stock in merger		—		—		14,650			—		—			—		82,925		—			82,925
Conversion of Series X preferred stock		—		—		(1,975	)		—		1,974,905			—		—		—			—
Issuance of instruments in connection with private placement, net		7,203		—		—			—		497,908			—		7,360		—			7,360
Common stock issued upon exercise of warrants, net		—		—		—			—		331,608			—		1,145		—			1,145
Net loss		—		—		—			—		—			—		—		(66,400	)		(66,400	)
Balance at March 31, 2023		7,203	$	—		12,675		$	—		5,267,092		$	—	$	307,400	$	(271,537	)	$	35,863

	March 31, 2023		December 31, 2022
Accounts receivable, net - balance at beginning of period	$	—	$	21
Accounts receivable acquired in business combination		80		—
Change in provision for credit losses		—		(21	)
Accounts receivable, net - balance at end of period	$	80	$	—

	March 31, 2023		December 31, 2022
Balance at beginning of period	$	152	$	131
Provision for credit losses		—		21
Balance at end of period	$	152	$	152

	Estimated Useful Life in Years		Gross Carrying Amount at January 9, 2023		Accumulated Amortization			Net Book Value at Net Book Value at March 31, 2023
Developed technology ‐ Vivo		8	$	8,020	$	(251	)	$	7,769
Developed technology ‐ Locket		6		27,060		(1,127	)		25,933
Customer relationships		5		220		(11	)		209
Trademarks/trade names ‐ Vivo		9		1,480		(41	)		1,439
Trademarks/trade names ‐ Locket		8		220		(7	)		213
			$	37,000	$	(1,437	)	$	35,563

	Three Months Ended March 31, 2023		Year Ended December 31, 2022
Balance at beginning of period	$	192	$	195
Claims satisfied		—		(3	)
Balance at end of period	$	192	$	192

Period ending December 31:	Operating Lease
Remainder of 2023	$	62
2024		65
2025		49
Total minimum lease payments		176
Less effects of discounting		(53	)
Present value of future minimum lease payments	$	123

	Series A			Series B
Risk-free interest rate		0.91	%		1.93	%
Volatility		131.07	%		85.38	%
Expected dividend yield		0.00	%		0.00	%
Expected life (in years)		1.0			7.0

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2022		990		$	11,405
Options assumed in Catheter Merger		753,699		$	1		—		—
Options exercised		(301,746	)	$	1		—		—
Canceled/forfeited		(35	)	$	1,525		—		—
Outstanding at March 31, 2023		452,908		$	26		3.40	$	—
Vested and expected to vest at March 31, 2023		452,908		$	26		3.40	$	—
Exercisable at March 31, 2023		452,824		$	26		3.40	$	—

	Restricted Stock Units			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2022		61		$	450.46
Vested		(26	)	$	333.00
Forfeited		(9	)	$	1,129.10
Outstanding at March 31, 2023		26		$	1,912.56

	Restricted Stock Awards			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2022		948		$	248.48
Vested		—		$	—
Forfeited		(392	)	$	177.90
Outstanding at March 31, 2023		556		$	298.23

	Non-Employee Director Options Issued January 8, 2024			Employee Options Issued January 8, 2024			Employee Options Issued February 26, 2024
Risk-free interest rate		4.01	%		4.01	%		4.28	%
Volatility		175.36	%		175.36	%		178.14	%
Expected dividend yield		0	%		0	%		0	%
Expected life (in years)		6.5			6.5			6.5

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2023		214,652		$	6.47		6.38
Options exercised		—		$	—		—		—
Options granted		435,000		$	0.41		—		—
Canceled/forfeited		(35,059	)	$	0.45		—		—
Outstanding at March 31, 2024		614,593		$	2.52		8.59	$	32,260
Vested and expected to vest at March 31, 2024		614,593		$	2.52		8.59	$	32,260
Exercisable at March 31, 2024		204,593		$	6.76		6.09	$	—

	Unrecognized Expense (in thousands)		Remaining Weighted Average Recognition Period (in years)
Stock options	$	62		—
Restricted stock awards	$	96		0.6
Restricted stock units	$	7		0.8

	Unrecognized Expense (in thousands)		Remaining Weighted Average Recognition Period (in years)
Stock options	$	154		4.5
Restricted stock awards	$	—		—
Restricted stock units	$	—		—

	Three Months Ended March 31,			Year Ended December 31,
	2023			2022

Reported income tax expense rate		0	%	(0.1	%)

Exhibit		Incorporated by Reference					Incorporated by Reference
Number	Description	Form	File No.	Exhibit	Filing Date	Description	Form	File No.	Exhibit	Filing Date

2.2	Amended and Restated Agreement and Plan of Merger, dated January 9, 2023, by and among the Registrant, certain subsidiaries, and Catheter Precision, Inc.	8-K	001-38677	2.1	1/13/2023

3.1.1	Amended and Restated Certificate of Incorporation of the Registrant.	8-K	001-38677	3.1	10/1/2018	Amended and Restated Certificate of Incorporation of the Registrant.	8-K	001-38677	3.1	10/1/2018

3.1.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant. (effective 11/16/20)	8-K	001-38677	3.1	11/17/2020	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant. (effective 11/16/20)	8-K	001-38677	3.1	11/17/2020

3.1.3	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant. (effective 09/30/22)	8-K	001-38677	3.1	9/20/2022	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant. (effective 09/30/22)	8-K	001-38677	3.1	9/20/2022

3.1.4	Certificate of Designation of Series X Convertible Preferred Stock.	8-K	001-38677	3.1	1/13/2023	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant. (filed 08/01/23, effective 08/17/23)	8-K	001-38677	3.1	8/4/2023

3.1.5	Certificate of Designation of Series A Preferred Stock.	8-K	001-38677	3.2	1/13/2023
5						Certificate of Designation of Series X Convertible Preferred Stock.	8-K	001-38677	3.1	1/13/2023

6						Certificate of Designation of Series A Preferred Stock.	8-K	001-38677	3.2	1/13/2023

3.2.1	Amended and Restated Bylaws of the Registrant.	8-K	001-38677	3.2	10/1/2018	Amended and Restated Bylaws of the Registrant.	8-K	001-38677	3.2	10/1/2018

3.2.2	Amendment to Amended and Restated Bylaws of the Registrant.	8-K	001-38677	3.1	8/17/2022	Amendment to Amended and Restated Bylaws of the Registrant.	8-K	001-38677	3.1	8/17/2022

4.1	Specimen common stock certificate of the Registrant.	S-1	333-226191	4.1	7/16/2018	Specimen common stock certificate of the Registrant.	S-1	333-226191	4.1	7/16/2018

4.2	Description of Capital Stock.	10-K	001-38677	4.2	3/28/2023	[omitted.]

4.3	Form of warrant issued in May 2020.	8-K	001-38677	4.1	5/22/2020	Form of warrant issued in May 2020.	8-K	001-38677	4.1	5/22/2020

4.4	Form of pre-funded warrant issued in May 2020.	8-K	001-38677	4.2	5/22/2020	Form of pre-funded warrant issued in May 2020.	8-K	001-38677	4.2	5/22/2020

4.5	Form of placement agent warrant issued in May 2020.	8-K	001-38677	4.3	5/22/2020	Form of placement agent warrant issued in May 2020.	8-K	001-38677	4.3	5/22/2020

10.25	Registration Rights Agreement, dated January 9, 2023.	8-K	001-38677	10.5	1/13/2023

10.26	Warrant Inducement Offer Letter, dated January 9, 2023.	8-K	001-38677	10.3	1/13/2023

10.27.1	Debt Settlement Agreement and Release including certain royalty rights with David A. Jenkins, dated January 9, 2023.	10-K	001-38677	10.27.1	3/28/23

~~101.INS~~101.INS*		Inline XBRL Instance Document

~~101.SCH~~101.SCH*		Inline XBRL Taxonomy Extension Schema Document

~~101.CAL~~101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

~~101.DEF~~101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

~~101.LAB~~101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

~~101.PRE~~101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

~~104~~104*		Cover Page Interactive Data File (embedded within the Inline XBRL document).

*	Filed herewith.

**	The information in this exhibit is furnished and deemed not filed with the Securities and Exchange Commission for purposes of section 18 of the Exchange Act of 1934, as amended (Exchange Act), and is not to be incorporated by reference into any filing of ~~Ra Medical Systems,~~Catheter Precision, Inc. under the Securities Act of 1933, as amended (Securities Act), or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

	~~RA MEDICAL SYSTEMS,~~CATHETER PRECISION, INC. (Registrant)

Date: ~~June 2, 2023~~May 6, 2024	By;	/s/ David A. Jenkins
		David A. Jenkins Executive Chairman of the Board and ~~Interim~~ Chief Executive Officer (Principal Executive Officer)
~~Date: June 2, 2023~~	~~By:~~	~~/s/ Steve K. Passey~~
		~~Steve K. Passey~~

Date: May 6, 2024	By:	/s/ Margrit Thomassen
		Margrit Thomassen
		Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)