Combined Company Dedicated to Developing and
Delivering Novel Technologies and Solutions to Improve the Lives of
Patients with Cardiac Arrhythmias
Medtech Veteran David Jenkins to Lead Merged
Company
Ra Medical Systems, Inc. (NYSE American: RMED) (“Ra Medical” or
the “Company”) announces it has entered into an Agreement and Plan
of Merger (the “Definitive Merger Agreement”) with privately held
Catheter Precision, Inc. (“Catheter Precision”), a medical device
and technology company focused in the field of cardiac
electrophysiology. Under the terms of the agreement, Catheter
Precision will become a wholly owned subsidiary of Ra Medical in a
stock for stock reverse merger transaction (the “Merger”). If
completed, the Merger will result in a combined publicly traded
company that will focus on the cardiac electrophysiology market,
one of the most robust and growing areas of medical devices.
Medtech veteran David Jenkins, who has extensive experience growing
medical device start-ups, will act as Chief Executive Officer of
the combined company. Before taking the role as CEO of Catheter
Precision, Mr. Jenkins was instrumental in operating several
medical device start-ups, including Transneuronix, Inc., which was
acquired by Medtronic plc (NYSE:MDT) for $267 million in July 2005,
and EP MedSystems, Inc., which was acquired by St. Jude Medical for
$95.7 million in July 2008.
Catheter Precision has three product areas that it intends to
pursue. Its lead product, named VIVO™ (an acronym for View Into
Ventricular Onset), is an FDA-cleared and CE Mark product that
utilizes non-invasive inputs to locate the origin of ventricular
arrhythmias, and, through its use, the physician can identify
patients for invasive catheter ablation, and with those patients,
reduce the amount of time in the invasive procedure. Ventricular
arrhythmias include ventricular tachyarrhythmias and premature
ventricular arrhythmias, diseases which affect millions of patients
that are not well treated today. While much past growth in the
electrophysiology market has been for atrial fibrillation, Catheter
Precision believes that ventricular arrhythmias represent a large
growth area moving forward. It also intends to pursue a second
generation of Amigo®, a robotic arm previously cleared by both FDA
and CE, which serves as a catheter control device that can be
remotely controlled outside of the procedure room. Catheter
Precision has demonstrated that patient outcomes could potentially
be enhanced by utilization of this device. Catheter Precision is
working toward a third product release in the first half of 2023,
which is a vessel closure device that would assist in the closure
of the insertion site of the percutaneous catheter or other device
used within the body. It is estimated that the worldwide market for
this closure assist device is over one million procedures per
year.
“After undertaking a comprehensive process with external
advisors to explore and evaluate a range of strategic options, our
board and management team believe this transaction with Catheter
Precision is the best strategic alternative for Ra Medical and
represents an opportunity to create substantial value for our
stockholders,” said Will McGuire, Ra Medical CEO. “This business
combination, if completed, will result in Ra Medical investors
having an equity stake in a company that is focused on developing
and commercializing novel technologies and solutions to improve the
lives of patients with cardiac arrhythmias under the leadership of
a world-class team with decades of medical device industry
experience.”
“We look forward to welcoming Ra Medical stockholders to our
combined company following the completion of the proposed merger
transaction,” said Mr. Jenkins, Catheter Precision founder and CEO.
“Catheter Precision is committed to producing cost-effective,
user-friendly and technologically differentiated tools for use in
percutaneous catheter procedures that physicians will embrace. Our
VIVO non-invasive 3D imaging system enables physicians to identify
the origin of arrhythmias pre-procedure, thereby streamlining
workflow and reducing procedure time. We are also considering
development opportunities for the Amigo remote catheter system,
which incorporates the most modern technologies while remaining
easy to learn and use, and we are looking forward to the launch of
our vessel closure device, currently targeted for the first half of
next year. We envision a significant opportunity afforded by this
merger by providing access to the public capital markets.”
About the Transaction
The Merger is structured as a stock for stock reverse merger
whereby all of Catheter Precision’s outstanding convertible
promissory notes and equity interests are to be exchanged for
shares of Ra Medical common stock and Catheter Precision options
assumed by the Company. Catheter Precision stakeholders are
expected to own approximately 80% of the combined company, and
pre-merger Ra Medical equity holders are expected to own
approximately 20% of the combined company, on a fully diluted basis
calculated using the treasury stock method, subject to certain
adjustments provided for in the Merger Agreement and further
described in our Form 8-K filed today, including adjustment based
on the amount of Ra Medical’s net cash at closing.
The boards of directors of both companies have approved the
Definitive Merger Agreement. The merger is expected to close before
the end of 2022, subject to satisfying certain closing conditions,
including the receipt of shareholder approval by both companies.
The Definitive Merger Agreement follows the signing by Ra Medical
and Catheter Precision of a non-binding summary of proposed terms
on June 18, 2022, which was publicly disclosed on July 22, 2022.
Investors in Ra Medical are encouraged to review the Definitive
Merger Agreement, which contains the definitive terms of the
Merger.
The descriptions of the Merger, the Ra Medical Special Meeting
of Stockholders, Catheter Precision, and the other transactions and
matters contemplated thereby or referenced herein do not purport to
be complete and are qualified in their entirety by reference to the
Company’s Current Report on Form 8-K filed on the date hereof, the
Company’s Quarterly Report on Form 10-Q for the period ended June
30, 2022, and any prior or subsequent reports on Form 10-K, Form
10-Q or Form 8-K filed with the Securities and Exchange Commission
(the “SEC”) from time to time and available on the SEC website. The
Company also intends to file a proxy statement with the SEC.
Ladenburg Thalmann & Co. Inc. is acting as the exclusive
financial advisor to Ra Medical in connection with the proposed
Merger with Catheter Precision.
Management and Organization
The combined company will be led by David Jenkins as Executive
Chair and Chief Executive Officer following the Merger. Will
McGuire, the current CEO, and Brian Conn, the current interim CFO,
have agreed to remain with the Company through the closing of the
Merger.
Immediately following the closing of the Merger, the combined
company’s board of directors will consist of five directors, with
David Jenkins joining the board of directors as the Executive Chair
and a to-be-determined current director of Ra Medical resigning at
the closing of the Merger.
Conditions of the Merger Agreement
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 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 including, among others, (a) Catheter Precision shall
have delivered the PPM/Joint Information Statement (as defined in
the Definitive Merger Agreement) to Catheter Precision
securityholders, (b) no law or order prevents the closing of the
Merger and the related transactions, (c) conditions relating to the
HHS Confirmation (as defined in the Definitive Merger Agreement)
and other litigation matters shall be satisfied or waived, (d) the
Company furnishing Net Cash greater than $8,000,000, (e) the entry
into the Executive Chairman Agreement (as defined in the Definitive
Merger Agreement) pursuant to which David Jenkins shall be
appointed to the board of directors of the Company and shall be
paid an annual salary of $300,000, (f) the last closing sale price
of the Company’s Common Stock prior to 4:00 p.m. (New York City
time) on the last Trading Day (as defined in the Definitive Merger
Agreement) prior to the Closing is equal to or greater than $0.09,
and the average of the last closing sale price of the Company’s
Common Stock prior to 4:00 p.m. (New York City time) on each of the
five (5) consecutive full Trading Days prior to the Closing is
equal to or greater than $0.09, in each case as adjusted for the
Reverse Stock Split (as defined in the Definitive Merger
Agreement), (g) other than the letter dated August 31, 2022 from
the NYSE American LLC, the Company shall not have received
correspondence from the NYSE American or the staff thereof relating
to the delisting, or maintenance of listing, of the Company’s
Common Stock on the NYSE American, and Catheter Precision shall
have received assurance in form and substance satisfactory to
Catheter Precision that the transactions contemplated by the
Definitive Merger Agreement will not cause the Company to be
delisted from the NYSE American, (h) Catheter Precision shall have
entered into a Debt Settlement Agreement with each of the holders
of Catheter Precision Notes, (i) lock-up agreements have been
entered into by and among the Company, Catheter Precision, and
certain persons who are directors, officers and/or significant
stockholders of either Parent or the Company, (j) the Company shall
have sublet or terminated the lease with respect to its corporate
headquarters and manufacturing facility, (k) Catheter Precision and
the Company shall have received the approval from their respective
stockholders necessary to approve the Merger and the transactions
contemplated by the Definitive Merger Agreement, (l) that the
Company has entered into release agreements with certain of its
officers and employees relating to existing change of control and
severance agreements, and (m) each of the representations and
warranties of the Company and Catheter Precision set forth in the
Definitive Merger Agreement shall have been true as of the date of
the Definitive Merger Agreement and as of the Closing Date as
though made on and as of the Closing Date (except to the extent
such representations and warranties are specifically made as of a
particular date, in which case such representations and warranties
shall be true and correct as of such date), in each case, except
where the failure to be true and correct, individually or in the
aggregate, has not had, and is not reasonably likely to have a
Parent Material Adverse Effect (as defined in the Definitive Merger
Agreement) with respect to Parent, or a Material Adverse Effect (as
defined in the Definitive Merger Agreement) with respect to
Catheter Precision. The Company cannot assure that all conditions
precedent will be satisfied or waived, that it will receive any of
the required third-party consents or approvals or that it will be
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. In
addition, the parties have the right to waive or modify certain key
closing conditions of the Merger Agreement, including the minimum
stock price condition, and these conditions should not be
interpreted as representations or covenants by either or both of
the parties.
The Definitive Merger Agreement also contains certain customary
termination rights, including, (a) the right of the parties to
terminate the Definitive Merger Agreement by mutual written
consent, (b) the right of either party to terminate the Definitive
Merger Agreement if the Merger has not occurred by December 31,
2022, (c) the right of either party to terminate the Definitive
Merger Agreement due to a material breach by the other party of any
of its representations, warranties or covenants which would result
in the closing conditions not being satisfied, subject to certain
conditions, (d) the right of Catheter Precision to terminate the
Definitive Merger Agreement if any of the closing conditions are
not capable of being satisfied, and (e) the right of either party
to terminate the Definitive Merger Agreement if a court of
competent jurisdiction or other governmental body issues a final
and non-appealable order, decree or ruling, or has taken any other
action, having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger and related transactions.
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.
About Ra Medical Systems
Ra Medical Systems, Inc. is a medical device company that owns
intellectual property related to an advanced excimer laser-based
platform for use in the treatment of vascular immune-mediated
inflammatory diseases. Its excimer laser and single-use catheter
system, together referred to as the DABRA Excimer Laser System, is
used as a tool in the treatment of peripheral artery disease.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to buy or sell or the solicitation of an offer to buy or
sell any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made, except by
means of a prospectus meeting the requirements of Section 10 of the
U.S. Securities Act of 1933, as amended.
Additional Information and Where to Find It
The shares of Common Stock being issued in the Merger (the
“Securities”) are being offered and sold in transactions exempt
from registration under the Securities Act, in reliance on Section
4(a)(2) thereof. Catheter Precision and Ra Medical intend to
distribute a Private Placement Memorandum/Joint Information
Statement (the “PPM/Joint Information Statement”) to the
stockholders of Catheter Precision, and Catheter Precision
stockholders are encouraged to carefully read the PPM/Joint
Information Statement, together with Ra Medical’s concurrent SEC
filings, which will contain important information concerning the
transaction.
The Securities have not been registered under the Securities Act
and such Securities may not be offered or sold in the United States
absent registration or an exemption from registration under the
Securities Act and any applicable state securities laws.
The Company intends to file a proxy statement (the “Proxy”) to
call, give notice of and hold a meeting of its stockholders to vote
to approve, among other matters, (a) the Merger, and (b) the
issuance of the shares of the Ra Medical Common Stock to be issued
pursuant to the terms of the Merger Agreement. Catheter Precision
also intends to furnish an information statement to its
stockholders in connection with the proposed Merger as part of the
PPM/Joint Information Statement. The only matters that the Company
is seeking approval for at the Special Meeting of Stockholders are
the matters that will be set forth in the Proxy.
The Proxy and PPM/Joint Information Statement will contain
important information about Catheter Precision, the proposed Merger
and related matters. In addition, the Company is filing on the date
hereof a Current Report on Form 8-K that includes certain audited
financial statements of Catheter Precision for the two-year period
ended December 31, 2021 (the “Catheter Audited Financial
Statements”), the unaudited financial statements of Catheter
Precision for the periods ended June 30, 2022 and June 30, 2021
(the “Catheter Precision Unaudited Financial Statements and
together with the Catheter Precision Audited Financial Statements,
the “Catheter Precision Financial Statements”), and the unaudited
pro forma combined financial information of the combined company as
of June 30, 2022 and for the year ended December 31, 2021 and the
six months ended June 30, 2022 (the “Pro Forma Financial
Information,” and collectively with the Catheter Precision
Financial Statements, the “Financial Information”).
Ra Medical intends to mail the Proxy to Ra Medical stockholders,
and Catheter Precision intends to electronically disseminate the
PPM/Joint Information Statement. INVESTORS AND SECURITYHOLDERS OF
RA MEDICAL AND CATHETER PRECISION ARE URGED TO READ THESE MATERIALS
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT RA MEDICAL, CATHETER PRECISION AND THE PROPOSED
MERGER. THIS COMMUNICATION IS NOT A SUBSTITUTE FOR THE PPM/JOINT
INFORMATION STATEMENT, THE PROXY, THE CURRENT REPORT ON FORM 8-K
BEING FILED ON THE DATE HEREOF, THE COMPANY’S QUARTERLY REPORT FOR
THE PERIOD ENDED JUNE 30, 2022, OR ANY OTHER DOCUMENTS THAT RA
MEDICAL AND/OR CATHETER PRECISION MAY FILE WITH THE SEC OR SEND TO
THEIR RESPECTIVE SECURITYHOLDERS IN CONNECTION WITH THE PROPOSED
TRANSACTIONS. INVESTORS AND SECURITYHOLDERS MAY OBTAIN FREE COPIES
OF RA MEDICAL’S DOCUMENTS FILED WITH THE SEC, ONCE AVAILABLE, ON
THE RA MEDICAL WEBSITE OR ON THE SEC’S WEBSITE.
The unaudited pro forma combined financial information does not
purport to represent the actual results of operations that the
Company and Catheter Precision would have achieved had the
companies been combined during the periods presented in the
unaudited pro forma combined financial statements and is not
intended to project the future results of operations that the
combined company may achieve after the Merger. The unaudited pro
forma combined financial information does not reflect any potential
cost savings that may be realized as a result of the Merger and
also does not reflect any restructuring or integration-related
costs to achieve those potential cost savings.
Participants in the Solicitation
Ra Medical, Catheter Precision and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of Ra Medical in
connection with the proposed transaction. Information about Ra
Medical’s directors and executive officers is set forth in Ra
Medical’s Annual Report on Form 10-K for the year ended December
31, 2021, which was filed with the SEC on March 17, 2022, as
amended, and in subsequent filings made by Ra Medical with the SEC.
Other information regarding the interests of such individuals, as
well as information regarding Catheter Precision’s directors and
executive officers and other persons who may be deemed participants
in the proposed transaction, will be set forth in the proxy
statement and other relevant materials to be filed with the SEC
when they become available. You may obtain free copies of these
documents as described in the preceding paragraph.
Cautionary Note Regarding Forward-Looking Statements
This communication contains forward-looking statements which
include, but are not limited to, statements regarding expected
timing, completion and effects of the proposed Merger, future
access to capital markets, and the plans and expectations of the
combined company regarding Catheter Precision’s products, including
its plans, strategies, projected timelines and estimated markets,
for and/or related to VIVO and the Amigo and vessel closure devices
described above. These forward-looking statements are subject to
the safe harbor provisions under the Private Securities Litigation
Reform Act of 1995. The Company’s expectations and beliefs
regarding these matters may not materialize. Actual outcomes and
results may differ materially from those contemplated by these
forward-looking statements as a result of uncertainties, risks and
changes in circumstances, including but not limited to risks and
uncertainties related to: the ability of the parties to consummate
the proposed Merger, satisfaction of closing conditions precedent
to the consummation of the proposed Merger, potential delays in
consummating the Merger and the ability of the Company to timely
and successfully achieve the anticipated benefits of the Merger,
including the ability of the combined company to access the capital
markets at such times and in such amounts, and on such terms, as
needed to meet the Net Cash requirements of the Merger Agreement,
execute its future business strategies and maintain its listing on
the NYSE American or other national stock exchange, potential
application of SEC and/or exchange “shall company” rules, and the
ability of the combined company to successfully pursue its product
lines in the manner and in the timeframe described here. The Merger
Agreement contains certain closing conditions, including a minimum
prevailing stock price for Ra Medical and Net Cash amount at
closing, which do not constitute representations or covenants of
either party, and are subject to waiver by the parties. If Ra
Medical’s stock price drops below certain levels, the amount of
merger consideration, if any, received by Catheter stockholders
will be adversely impacted. The parties have reserved the right to
waive conditions to the closing of the Merger and revise the Merger
Agreement. Additional risks and uncertainties that could cause
actual outcomes and results to differ materially from those
contemplated by the forward-looking statements are included under
the caption “Risk Factors” and elsewhere in the Company’s most
recent filings with the SEC, including the Company’s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2022, the
Current Report on Form 8-K being filed on the date hereof and any
prior or subsequent reports on Form 10-K, Form 10-Q or Form 8-K
filed with the SEC from time to time and available at www.sec.gov.
Important business and financial information about Catheter
Precision’s business and the related discussion and analysis of
financial condition and results of operations of Catheter Precision
is set forth in the Current Report on Form 8-K being filed on the
date hereof and the exhibits thereto and should be read in
conjunction with the Catheter Precision Financial Statements and
the pro forma financial statements for the combined company that
are attached as exhibits thereto. Risks and uncertainties related
to the Merger, Catheter Precision, and the projections and
estimates described above that may cause actual results to differ
materially from those expressed or implied in any forward-looking
statement are included “Risk Factors – Risk Related to the Merger
with Catheter Precision and – Risks Related to Our Evaluation of
Strategic Alternatives for our Legacy Assets,” and “Risk Factors –
Risks Related to the Business of Catheter Precision,” which are
filed as the exhibits to the Current Report on Form 8-K being filed
on the date hereof. These documents can be accessed on the
Company’s Investor Relations page at https://ir.ramed.com/ by
clicking on the link titled “SEC Filings.” The risks and
uncertainties may be amplified by the COVID-19 pandemic, which has
caused significant economic uncertainty, and ongoing volatility in
the stock markets and the U.S. economy in general. The extent to
which the COVID-19 pandemic impacts the Company’s and Catheter
Precision’s businesses, operations, and financial results,
including the duration and magnitude of such effects, will depend
on numerous factors, which are unpredictable, including, but not
limited to, the duration and spread of the outbreak, its severity,
the actions to contain the virus or treat its impact, and how
quickly and to what extent normal economic and operating conditions
can resume.
The forward-looking statements included in this communication
are made only as of the date hereof. The Company and Catheter
Precision assume no obligation and do not intend to update these
forward-looking statements, except as required by law.
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/20220912005366/en/
Ra Medical Systems Contact: LHA Investor Relations Jody Cain
310-691-7100 jcain@lhai.com
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