8-K: Catheter Precision Subsidiary Cardionomix Eyes Acquisition of Cardionomic Assets in Heart Failure Treatment

Catheter Precision's subsidiary, Cardionomix, is in negotiations to acquire assets related to a late-stage heart failure treatment from Cardionomic, Inc.'s assignee for the benefit of creditors.

Summary

• Catheter Precision, Inc. formed a subsidiary, Cardionomix, in February 2025 to potentially acquire assets from Cardionomic, Inc., which has ceased operations.
• Cardionomix is negotiating an asset purchase agreement to acquire patents and trademarks related to Cardionomic's Cardiac Pulmonary Nerve Simulation (CNPS) System, a late-stage treatment for acute decompensated heart failure.
• The proposed agreement involves Cardionomix acquiring the assets 'AS IS' in exchange for 1,000,000 restricted shares of Catheter Precision's common stock and a $1.5 million promissory note with a 4% annual interest rate, maturing in three years.
• Following the acquisition, Cardionomix would need to raise substantial funds to develop the acquired assets.
• The company has begun discussions with potential investors, but there is no guarantee that sufficient funds can be raised.
• Any financing is likely to involve the issuance of additional securities by Cardionomix, potentially reducing Catheter Precision's ownership interest.
• The company hopes to sign and close the transaction in the first half of the second quarter of 2025, but there is no signed agreement and no guarantee of completion.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the potential acquisition could be positive, it is subject to significant risks and uncertainties, including the need to raise substantial capital and the competitive landscape.

Positives

• The acquisition could provide Catheter Precision with a late-stage treatment for acute decompensated heart failure.
• The promissory note has a three-year maturity, providing Cardionomix with time to develop the assets before repayment is required.

Negatives

• There is no guarantee that the asset acquisition will be completed.
• Cardionomix will need to raise substantial funds to develop the acquired assets, and there is no guarantee that this financing will be secured.
• The acquisition is subject to inherent uncertainties of negotiations.
• The proposed consideration includes the company's listed stock and if the price of the stock drops too low due to market volatility or otherwise, the Seller may be less likely to finalize the acquisition.

Risks

• The acquisition is subject to negotiation uncertainties and may not be completed.
• Raising sufficient funds for Cardionomix's development of the acquired assets is not guaranteed.
• Future financings by Cardionomix could dilute Catheter Precision's ownership and control.
• The acquired assets are being purchased 'AS IS' without recourse, potentially impacting the ability to protect patents and trade names.
• FDA review of the assets is likely to be costly and lengthy, and there is no guarantee that clearance and approval will ever occur or occur on a timetable that is beneficial to the Company.
• The medical device industry is highly competitive, and the Purchased Assets must also compete against potential new drug therapies.
• The company does not have sufficient liquidity to fund its business unless it is able to obtain additional financing or enter into a strategic transaction that would provide additional liquidity during the next three to six months.

Future Outlook

The company expects to acquire assets of Cardionomic, Inc., and anticipates concluding financing for the new subsidiary to fund development of the acquired assets independent of VTAK's balance sheet, but these expectations are subject to risks and uncertainties.

Industry Context

The medical device industry is highly competitive, with numerous companies developing neuromodulation therapies and drug therapies for heart failure. Catheter Precision will need to compete effectively to commercialize the acquired assets successfully.

Comparison to Industry Standards

• It is difficult to compare this announcement to industry standards without specific details on the technology's performance compared to existing heart failure treatments.
• Companies like Medtronic and Abbott are major players in the cardiac device market, and their established presence and resources pose a significant competitive challenge.
• The success of the CNPS System will depend on its efficacy, safety, and cost-effectiveness compared to existing therapies and emerging drug treatments.

Related Party Transactions

• 82% of the common stock of Cardionomix was issued to the Company, 5% to David Jenkins, our Chief Executive Officer and Executive Chairman of the Board, 7% to FatBoy Capital L.P., an entity controlled by Mr. Jenkins, and 6% to certain business associates of Mr. Jenkins.
• These minority interests were issued to compensate these persons for bringing this business opportunity to the Company.

Stakeholder Impact

• Shareholders may be impacted by the potential dilution from the issuance of shares for the acquisition and future financing.
• Employees may be impacted by the potential growth and expansion of the company if the acquisition is successful.
• Customers (patients) may benefit from the development of a new treatment for acute decompensated heart failure.

Next Steps

• Negotiate and finalize the asset purchase agreement with the Seller.
• Secure financing for Cardionomix to develop the acquired assets.
• Obtain FDA clearance and approval for the CNPS System.
• Commercialize the CNPS System.

Key Dates

Keywords

acquisition, Cardionomix, Catheter Precision, heart failure, CNPS System, asset purchase, financing, medical device