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Why Ra Medical Systems (RMED) Stock is Up Pre-Market Today?

After announcing an acquisition move, Ra Medical Systems Inc. (RMED) jumped 36.08% to $0.1980 in pre-market trading hours Monday. At the end of the last trading session, RMED’s stock gained 1.54% to $0.15 trading in a range of $0.14 to $0.16.

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What is RMED acquiring?

It has been announced that Ra Medical Systems (RMED) has inked an agreement to acquire privately held Catheter Precision, Inc. A reverse merger agreement will result in Catheter Precision becoming a wholly owned subsidiary of Ra Medical. Merger will create a public company that will focus on a growing market for medical devices, cardiac electrophysiology. An experienced medical technology executive, David Jenkins, will lead the combined company as its Chief Executive Officer.

A brief description of the transaction:

RMED will acquire Catheter Precision shares and Catheter Precision options in a reverse merger that will exchange all outstanding convertible promissory notes and equity interests for shares of RMED common stock.

  • On a fully diluted basis calculated using the treasury stock method, Catheter Precision stakeholders are expected to own approximately 80% of the combined company, while RMED shareholders are expected to own approximately 20%.
  • The Merger Agreement provides for certain adjustments, including adjustments based on RMED’s net cash at closing, which is subject to certain adjustments.
  • There has been the approval of the Definitive Merger Agreement by the boards of directors of both companies.
  • It is expected that the merger will close before the end of 2022, provided certain closing conditions are met, including both companies’ shareholders’ approval.
  • Following RMED and Catheter Precision’s signing of a non-binding summary of proposed terms on June 18, 2022, which was disclosed publicly on July 22, 2022, the Definitive Merger Agreement was executed.

How will the new entity be managed?

Following the merger, David Jenkins will serve as Executive Chair and Chief Executive Officer of the combined company. Current CEO Will McGuire and interim CFO Brian Conn have agreed to remain with the Company until the merger closes. When the Merger closes, the combined company’s board of directors will consist of five directors, with David Jenkins joining the board as the Executive Chair, while a current Ra Medical Systems (RMED) director will resign at the closing of the Merger.

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