Ra Medical Systems, Inc. (NYSE American: RMED) (“Ra Medical” or
the “Company) announces a reduction in the exercise price of all
existing warrants that were issued in the February 2022 public
offering, consisting of Series A Warrants and Series B Warrants,
from $0.50 per share to $0.28 per share, and entry into a
non-binding term sheet to merge with privately held Catheter
Precision Inc. (“Catheter Precision”).
On July 22, 2022, Ra Medical entered into warrant inducement
offer letters with certain investors to immediately exercise up to
an aggregate of 22.2 million of the Series A Warrants held by such
investors at an exercise price of $0.28, with none of the investors
electing to exercise any Series B Warrants. Investors who exercise
their Series A Warrants will receive additional Series C Warrants
to purchase 100% of the shares exercised pursuant to the Series A
Warrants and which will, among other terms, have an exercise price
of $0.28 and a term of five years. Ra Medical expects to receive
aggregate gross proceeds of approximately $6.2 million from the
exercise of the Series A Warrants. The Series A Warrants have been
registered pursuant to a registration statement on Form S-1 and
were issued pursuant to an Underwriting Agreement, dated as of
February 4, 2022. The Series C Warrants and the shares underlying
the Series C Warrants are unregistered and are being issued in a
private placement pursuant to Section 4(a)(2) of the Securities Act
of 1933 (the “Securities Act”).
Non-binding Letter of Intent with Catheter Precision
On June 18, 2022, the Company signed a non-binding summary of
proposed terms (the “Term Sheet”) with Catheter Precision, to
acquire 100% of the outstanding equity interests of Catheter
Precision (the “Merger”). Pursuant to the terms of the Term Sheet,
Catheter Precision securityholders would, after giving effect to
the proposed Merger and excluding any additional offering of the
Company’s securities, own 83.3% of the equity and equity holders of
Ra Medical would own 16.7% of the equity of the combined company on
a fully diluted basis. The contemplated business combination would
give Ra Medical investors exposure to Catheter Precision’s
innovative devices that are designed to improve treatment of
cardiac arrhythmias, while allowing the combined company the
ability to explore funding its strategic initiatives for the
Catheter Precision devices through the public capital markets.
The Company has not entered into a binding agreement with
Catheter Precision with respect to the Merger. Both parties are
currently completing their respective due diligence review of the
other party and are continuing to negotiate the terms of a
definitive merger agreement. Accordingly, the Company cannot
provide any assurance that it will effect the Merger with Catheter
Precision or, even if it is able to consummate such a Merger, that
the terms of any such Merger will be on the terms set forth in the
term sheet or that the intended benefits of the Merger will be
fully realized. The Merger is also subject to specified conditions
precedent that must be satisfied or waived, including certain
conditions precedent that are subject to the approval or consent of
third parties. The Company cannot assure you that all of the
conditions precedent will be satisfied or waived or that it will
receive any of the required third party consents or approvals or
able to satisfy or waive all the conditions precedent to consummate
the Merger. If the conditions precedent are not satisfied or waived
in a timely manner or at all, the Merger may not occur or may be
delayed, and the Company may lose some or all of the intended
benefits of the proposed Merger with Catheter Precision.
Additional information regarding the Ra Medical warrant
repricing and non-binding Term Sheet with Catheter Precision is
available in a Form 8-K filed today with the Securities and
Exchange Commission (the “SEC”).
Ladenburg Thalmann & Co. Inc. acted as the exclusive warrant
inducement agent and is acting as financial advisor to Ra Medical
in connection with the proposed Merger with Catheter Precision.
About Catheter Precision
Catheter Precision is an innovative U.S.-based medical device
company bringing new solutions to market to improve the treatment
of cardiac arrhythmias. It is focused on developing groundbreaking
technology for electrophysiology procedures by collaborating with
physicians and continuously advancing its products. Catheter
Precision has a world-class leadership team led by founder and CEO
David Jenkins, who has extensive experience growing medical device
start-ups. His career includes founding Transneuronix, Inc., which
was acquired by Medtronic for $267 million, and EP Medsystems,
Inc., which was acquired by St. Jude Medical for $95 million.
About Ra Medical Systems
Ra Medical Systems manufactures the DABRA excimer laser and
catheters for the treatment of certain vascular diseases. DABRA has
been cleared by the FDA for crossing chronic total occlusions in
patients with symptomatic infrainguinal lower extremity vascular
disease and has an intended use for ablating a channel in occlusive
peripheral vascular disease. In addition, DABRA has been granted CE
mark clearance for the endovascular treatment of infrainguinal
arteries via atherectomy and for crossing total occlusions.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements generally relate to future events
or Ra Medical’s future financial or operating performance. In some
cases, you can identify forward-looking statements because they
contain words such as “may,” “will,” “should,” “expects,” “plans,”
“anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential” or
“continue” or the negative of these words or other similar terms or
expressions that concern Ra Medical’s future expectations,
strategy, plans or intentions. Forward-looking statements in this
press release include, but are not limited to, statements
concerning the proposed Merger with Catheter Precision, Ra
Medical’s future financial performance and Ra Medical’s ability to
conserve capital and maximize any strategic opportunity. Ra
Medical’s expectations and beliefs regarding these matters may not
materialize, and actual results in future periods are subject to
risks and uncertainties that could cause actual results to differ
materially from those projected or implied by such forward-looking
statements. Factors that may cause actual results to differ
materially from current expectations include, but are not limited
to: (i) the risk that the proposed Merger may not be completed in a
timely manner or at all, which may adversely affect the price of
the Company’s securities; (ii) the outcome of any legal proceedings
that may be instituted against the Company, Catheter Precision, the
combined company following the Merger, if consummated, or others
following an announcement of the merger agreement, if entered into,
relating to the proposed Merger, any ancillary agreements
contemplated thereby and the transactions contemplated thereby;
(iii) the inability to issue the shares of common stock issuable
upon conversion of the Merger preferred stock due to the failure to
obtain stockholder approval; (iv) the Company’s inability to
satisfy or have waived the conditions precedent to the closing of
the Merger, which may also be subject to the consent or approval of
third parties, including: confirmation from NYSE American that the
Merger will not violate or otherwise be subject to sections of the
NYSE American Listed Company’s Guide relating to treatment of the
Merger as a reverse merger transaction or requiring shareholder
approval to approve the Merger or to issue shares of the Company’s
common stock and/or preferred stock to the securityholders of
Catheter Precision; the Company’s obligation to deliver a minimum
of $5.0 million in “net cash” at the closing of the Merger; the
Company not being designated as a “shell company” by the SEC or the
NYSE American; satisfactory resolution, in the sole discretion of
Catheter Precision, of the outstanding putative securities class
action complaint and shareholder derivative complaint that the
Company previously disclosed; the review and completion of due
diligence by Catheter Precision of the Settlement Agreement and
Corporate Integrity Agreement, each dated as of December 28, 2020,
associated with the Company’s settlements with the United States
Department of Justice, the Office of the Inspector General of the
Department of Health and Human Services and the participating
states (collectively, the “Settlement Agreement”), and Catheter
Precision’s decision, in its sole discretion, to proceed with the
Merger in light of the terms of the Settlement Agreement, as may be
subsequently modified, amended or terminated; (v) changes to the
structure of the proposed Merger that may be required or
appropriate as a result of applicable laws or regulations or as a
condition to obtaining regulatory approval of the proposed Merger;
(vi) the ability to meet stock exchange listing standards following
the consummation of the proposed Merger, if effected; (vii) the
risk that the proposed Merger disrupts current plans and operations
of the Company or diverts management’s attention from the Company’s
ongoing business operations and potential difficulties in the
Company’s operations as a result of the announcement and
consummation of the proposed Merger; (viii) the ability to
recognize the anticipated benefits of the proposed Merger, if
consummated; (ix) costs related to the proposed Merger, if
consummated; (x) changes in applicable laws or regulations; (xi)
the possibility that the Company or the combined company following
the Merger, if consummated, may be adversely affected by other
economic, business, regulatory, and/or competitive factors; (xii)
the combined company’s estimates of expenses and profitability
following the Merger, if consummated; (xiii) the evolution of the
markets in which the combined company will compete following the
Merger, if consummated; (xiv) the ability of the Company or the
combined company following the Merger, if consummated, to implement
its strategic initiatives and continue to innovate its existing
products; (xv) the ability of the combined company following the
Merger, if consummated, to defend its intellectual property and
satisfy regulatory requirements; (xvi) the ability of the Company
or the combined company following the Merger, if consummated, to
issue equity or equity-linked securities in connection with the
proposed Merger or in the future; (xvi) the impact of the COVID-19
pandemic on the Company’s or the combined company’s business
following the Merger, if consummated; and (xvii) other risks and
uncertainties set forth in the section entitled “Risk Factors” and
“Cautionary Note Regarding Forward-Looking Statements” in the
Company’s prospectus dated February 4, 2022 and prospectus
supplement dated July 22, 2022 relating to its public offering of
units and other documents filed and to be filed by the Company with
the SEC. These filings identify and address other important risks
and uncertainties that could cause actual events and results to
differ materially from those contained in the forward-looking
statements.
Readers are cautioned not to put undue reliance on
forward-looking statements, and the Company and Catheter Precision
assume no obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise. Neither the Company nor Catheter
Precision gives any assurance that either the Company or Catheter
Precision will achieve its expectations. The inclusion of any
statement in this communication does not constitute an admission by
the Company or Catheter Precision or any other person that the
events or circumstances described in such statement are
material.
Disclaimer
This press release relates to a proposed business combination
between the Company and Catheter Precision. This document does not
constitute an offer to sell or exchange, or the solicitation of an
offer to buy or exchange, any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction.
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version on businesswire.com: https://www.businesswire.com/news/home/20220722005106/en/
Investor Relations Contact: LHA Investor Relations Jody Cain
310-691-7100 jcain@lhai.com
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