S-1/A: Catheter Precision Seeks $3.6 Million in Public Offering to Fuel Growth

Catheter Precision is undertaking a firm commitment public offering to raise approximately $3.6 million to support operations, clinical trials, and working capital.

Summary

• Catheter Precision, Inc. is offering 7,957,221 shares of common stock in a firm commitment public offering.
• The assumed public offering price is $0.5464 per share, based on the last sale price on NYSE American on June 11, 2024.
• The company is also offering pre-funded warrants to purchase up to 7,957,221 shares for certain investors.
• Entities under the control of CEO David Jenkins have indicated interest in purchasing up to $1,000,000 of common stock in the offering.
• The underwriters will receive an 8% discount on shares, reduced to 5% for sales to certain investors, plus a 1% management fee.
• The company has granted the underwriters a 45-day option to purchase up to 1,193,583 additional shares.
• Net proceeds are estimated at $3.6 million, or $4.2 million if the over-allotment option is exercised in full.
• The company intends to use the proceeds for clinical trials, working capital, and general corporate purposes, including repaying interim financing from the CEO.
• Stockholders will vote on a proposed reverse stock split at the July 3, 2024 annual meeting, with a ratio between 1-for-5 and 1-for-15.
• A reduction in authorized shares will also be voted on, either to 30 million or 100 million shares depending on the reverse stock split outcome.

Sentiment

Score: 5

Explanation: The document is neutral. It describes a public offering to raise capital, which is a common business activity. While the company faces risks and challenges, the offering itself is neither inherently positive nor negative.

Positives

• The offering will provide additional capital to support operations, clinical trials, and working capital.
• Potential investment from entities controlled by the CEO demonstrates confidence in the company.
• The company has the option to expand the offering through the underwriter's over-allotment option.
• The company has a new Category III CPT codes is approved and available starting July 1, 2024.

Negatives

• The offering will result in immediate and substantial dilution for new investors.
• The company has broad discretion in how to use the proceeds, which may not yield a favorable return.
• There is no established public trading market for the pre-funded warrants.
• The company has a history of losses, will incur additional losses, and may never achieve profitability.
• The company identified material weaknesses in its internal control over financial reporting.

Risks

• Investing in the company's securities involves a high degree of risk, as detailed in the Risk Factors section.
• The company may not use the proceeds effectively.
• Future issuances of equity securities may negatively impact the trading price of the common stock.
• The company may not be able to sell Shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing Shares or other securities in the future could have rights superior to existing stockholders.
• The company will be required to raise additional funds to finance its operations and continue as a going concern; We may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us.

Future Outlook

The company aims to establish VIVO and LockeT as integral tools used by cardiac electrophysiologists during and following ablation treatment of ventricular arrhythmias, by reducing procedure time and patient complications and increasing procedural efficiencies and success.

Industry Context

The EP market is estimated to be $15.1 billion by 2028 (CAGR of 13.0%). Population growth, increasing rates of heart disease and the rising cost of healthcare are driving growth in the EP markets. The catheter ablation market was larger than $3.5 billion in 2022 and is estimated to grow to $14.5 billion by 2032 (13.5% CAGR).

Comparison to Industry Standards

• The EP market includes large medical device companies such as Medtronic, Plc., Abbott Laboratories, Biosense-Webster (J&J) and Boston Scientific Corp.
• LockeTs direct competitors include Abbotts Perclose device, Haemonetics VASCADE device and Inari Medicals FlowStasis device.

Related Party Transactions

• Entities under the control of CEO David Jenkins have indicated interest in purchasing up to $1,000,000 of common stock in the offering.
• The company borrowed $500,000 from David Jenkins, our Chairman of the Board and Chief Executive Officer, pursuant to a promissory note dated May 30, 2024 in order to fund our short-term liquidity needs.

Stakeholder Impact

• Shareholders will experience dilution as a result of the public offering.
• Employees may benefit from the company's increased financial stability and growth prospects.
• Customers may benefit from the company's ability to invest in research and development and improve its products.
• The company intends to use the proceeds from this offering, together with other available funds, to support our operations, including for clinical trials, for working capital and for other general corporate purposes, including the payment of accrued liabilities and the repayment of interim financing from our Chairman of the Board and Chief Executive Officer.

Next Steps

• Stockholders will vote on a proposed reverse stock split and reduction in authorized shares at the July 3, 2024 annual meeting.
• The company expects to receive CE Mark approval for LockeT in the second half of 2024.
• Phase II clinical studies for LockeT are anticipated to be completed by the end of the 2024 third quarter.
• Phase III clinical studies for LockeT are anticipated to be completed in early 2025.

Key Dates

Keywords

public offering, common stock, pre-funded warrants, VIVO System, LockeT, catheter precision, electrophysiology, clinical trials, underwriting, dilution