Catheter Precision(VTAK) - 2024 Q2 - Quarterly Report

Product Development and Regulatory Approvals - The VIVO System has been utilized in over 1,000 procedures in the U.S. and EU by more than 30 physicians, with no reported device-related complications[154]. - The LockeT product received FDA registration in February 2023, with initial shipments to distributors beginning shortly thereafter[156]. - CE Mark approval for LockeT is expected in the second half of 2024, allowing for initial international shipments to distributors[156]. - The company has initiated clinical studies for LockeT, aimed at demonstrating faster wound closure and lower healthcare costs[157]. - The VIVO System has received regulatory clearance as a pre-procedure planning tool for patients with structurally normal hearts undergoing ablation treatment[154]. - The company aims to establish VIVO as an integral tool for cardiac electrophysiologists, enhancing procedural success and reducing complications[153]. - The company has shifted focus to cardiac electrophysiology products following the merger with Old Catheter[152]. - The company plans to continue developing innovative medical technologies in the field of cardiac electrophysiology[153]. Financial Performance and Cash Flow - Revenues for the three months ended June 30, 2024 decreased by approximately $3 thousand to$93 thousand compared to the same period in 2023, while revenues for the six months ended June 30, 2024 decreased by approximately $6 thousand to$175 thousand[177]. - Cost of revenues increased by approximately $9 thousand for the three months ended June 30, 2024, and by approximately$4 thousand for the six months ended June 30, 2024, primarily due to order fulfillment charges for the LockeT product[178]. - Selling, general and administrative expenses increased by approximately $1.3 million for the three months ended June 30, 2024, but decreased by approximately$6.3 million for the six months ended June 30, 2024, mainly due to reductions in salaries and legal fees[179][180]. - Research and development expenses decreased by approximately $0.1 million for the three months and$0.3 million for the six months ended June 30, 2024, primarily due to reduced regulatory affairs expenditures[181]. - No impairment charges were incurred for the three and six months ended June 30, 2024, following significant impairment charges of $4.8 million and$60.9 million recognized in the same periods of 2023[183][182]. - The change in fair value of royalties payable decreased by $6.1 million for the three months and$6.2 million for the six months ended June 30, 2024, compared to the same periods in the prior year[184]. - As of June 30, 2024, the company had cash and cash equivalents of approximately $16 thousand and an accumulated deficit of approximately$282.6 million[186]. - Net cash used in operating activities for the six months ended June 30, 2024 was approximately $3.6 million, compared to$16.9 million for the same period in 2023[189]. - The company expects operating losses and negative cash flows to continue, raising substantial doubt about its ability to continue as a going concern for the next year[188]. - The company is evaluating potential means of raising cash through future capital transactions and additional bridge loans to fund operations[187]. Stock and Equity Transactions - A reverse stock split was approved on July 3, 2024, reducing authorized common stock to 30 million shares[158]. - The company raised approximately $1.3 million in gross proceeds from a warrant inducement offer, with placement agent fees of about$0.2 million, representing 8.0% of the gross proceeds[161]. - A private placement on March 23, 2023, resulted in an aggregate purchase price of approximately $8.0 million, consisting of 497,908 Class A Units and 4,501,060 Class B Units[162]. - The company approved the issuance of 199,359 shares of common stock upon conversion of Series X Convertible Preferred Stock, with further conversions expected until at least July 9, 2024[166]. - The company has a 2023 Equity Incentive Plan that allows for the grant of options and restricted stock, with 46,000 options outstanding as of June 30, 2024[170]. Royalties and Future Obligations - The company will pay a total royalty of approximately 12$1 million, after which a 2% royalty will apply until total cumulative royalties reach $10 million, contingent on a U.S. patent being granted[198]. Accounting and Compliance - The company is currently reviewing the impact of ASU 2023-07 on its consolidated financial statements, which requires enhanced segment expense disclosures effective for fiscal years beginning after December 15, 2023[200]. - The company is required to adopt ASU 2023-09 for the fiscal year 2025, which mandates improved income tax disclosures, effective for annual periods beginning after December 15, 2024[201]. Product Sales and Market Presence - The company recognized its first sales of the LockeT product during the three months ended June 30, 2024, with revenue recognized upon delivery[174]. - Approximately 35% and 38% of the company's sales for the three and six months ended June 30, 2024, respectively, were derived from customers outside the United States[174]. - The company has shifted its focus to Old Catheter's product lines, primarily in cardiac electrophysiology, following the cessation of the legacy DABRA laser operations[171]. - The VIVO System, one of the company's primary products, offers 3D cardiac mapping and revenue is recognized upon delivery[172]. - The company has not commenced sales of the AMIGO System, which is subject to sales-based royalties upon successful commercialization[199].