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Item 9A. Controls and Procedures

2025-03-31 compared with 2024-04-01 · 1057 added, 848 removed, 806 unchanged (70% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Executive Chairman of the Board and Chief Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of December 31, 2023, including the disclosure controls and procedures of Old Catheter.

Our objective in designing our disclosure controls and procedures is that they provide reasonable assurance of achieving their objectives of ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Our management, with the participation of our Executive Chairman of the Board and Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of December 31, 2024.

Our objective in designing our disclosure controls and procedures is that they provide reasonable assurance of achieving their objectives of ensuring that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based upon this evaluation, due to the existence of the material weaknesses found in our internal controls over financial reporting described below, our Chief Executive Officer and Interim Chief Financial Officer concluded that, as of December 31, 2023, our disclosure controls and procedures were not effective at the reasonable assurance level.

As disclosed in our Form 10-Qs for the quarters ended June 30, 2023 and September 30, 2023, for the reasons set forth therein, our Chief Executive Officer and then-Chief Financial Officer concluded that, as of March 31, 2023, June 30, 2023, and September 30, 2023, our disclosure controls and procedures were not effective at the reasonable assurance level, excluding at that time the disclosure controls and procedures of Old Catheter.

Based upon this evaluation, due to the existence of the material weaknesses found in our internal controls over financial reporting described below, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level.

As disclosed in our Form 10-Qs for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024, for the reasons set forth therein, our Chief Executive Officer and then-Interim Chief Financial Officer concluded that, as of March 31, 2024, June 30, 2024, and September 30, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

In preparation of our financial statements for the period covered by this report, we identified material weaknesses in internal control over financial reporting related to our control environment that existed as of December 31, 2024, as described below.

Specifically, we identified material weaknesses with respect to (1) the lack of segregation of duties, (2) the lack of designed and operating review controls with respect to oversight of the financial reporting process, (3) errors with respect to the review of work performed by service providers, (4) errors in connection with accounting for the royalty obligation acquired in the merger with Old Catheter, (5) use of an incorrect discount rate in calculating the fair value of the royalty obligation, and (6) timing of revenue recognition.

Notwithstanding the identified material weaknesses, management believes that the Financial Statements and related financial information included in this Annual Report for the year ended December 31, 2023 fairly present, in all material respects, our balance sheets, statements of operations, shareholders’ equity and cash flows as of and for the periods presented.

Specifically, we identified material weaknesses with respect to (1) the lack of segregation of duties, (2) the lack of designed and operating review controls with respect to oversight of the financial reporting process, and (3) review of work performed by service providers with regards to (i) management's provision of inputs for valuations to a third-party provider and (ii) the Section 382 calculation in the tax provision in that the Company's provision did not reference the correct dates when determining ownership changes resulting in material changes in the amount of expiring net operating losses available to be utilized.

Notwithstanding the identified material weaknesses, management believes that the Financial Statements and related financial information included in this Annual Report fairly present, in all material respects, our balance sheets, statements of operations, shareholders’ equity and cash flows as of and for the periods presented.

Remediation Plan

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The Company will monitor the effectiveness of its remediation plans and will make changes management determines to be appropriate.

Anticipated remediation measures include continuing assessment of the need to expand the Company’s current accounting and financial reporting teams to include individuals with requisite experience to meet the requirements associated with the increasing operations of a publicly traded company, establishment of policies and procedures to ensure full review and sign offs with respect to the inputs sent to third-party service providers as well as the reports and documentation upon the completion of their work prior to any adjustments being made to the financial statements, establishment of policies and procedures related to the review of all contracts the Company enters into to ensure any terms or conditions are evaluated for any accounting required or accounting treatment or disclosure, and establishment of policies and procedures to review the inputs to royalty liability and other fair value calculations as well as the outputs impacting the balance at each reporting period.

We have taken the following steps associated with material weaknesses related to Old Catheter:

(1) for segregation of duties, we had hired additional employees, including a Chief Financial Officer;

however, we are now seeking a new, permanent Chief Financial Officer, (2) we have begun recording revenue when the product is received by the customer, and (3) as a result of the Merger, Old Catheter no longer has derivative liabilities, so a previously identified material weakness related to this is no longer applicable to our current business.

Anticipated remediation measures include continuing assessment of the need to expand the Company’s current accounting and financial reporting teams to include individuals with requisite experience to meet the requirements associated with the increasing operations of a publicly traded company, establishment of policies and procedures to ensure full review and sign offs with respect to the inputs sent to third-party service providers as well as the reports and documentation upon the completion of their work prior to any adjustments being made to the financial statements, and establishment of policies and procedures to review the inputs to fair value and tax provision calculations as well as the outputs impacting the balance at each reporting period.

In January 2025, we hired a new Chief Financial Officer and are in the process of establishing additional controls intended to eliminate the disclosed material weaknesses.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting other than those related to Old Catheter and the Merger with Old Catheter, which include changes necessitated by the change in the Company’s line of business and the remediation of the material weaknesses with respect to Old Catheter as described above.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2024, which were identified in connection with management's evaluation required by paragraph (d) of Rules 13a-15 and that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management ’ s Annual Report on Internal Control Over Financial Reporting and Attestation Report of the Registered Public Accounting Firm

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Management conducted an assessment of the effectiveness of our internal control over financial reporting, including Old Catheter’s internal control over financial reporting, based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on the assessment, management has concluded that its internal control over financial reporting was not effective as of December 31, 2024 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP, due to the material weaknesses discussed above at “Evaluation of Disclosure Controls and Procedures.” Our independent registered public accounting firm, WithumSmith+Brown, PC ("Withum"), is not required to and has not issued an attestation report as of December 31, 2024 because we are not an “accelerated filer” or a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act.

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DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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Caruso also has extensive operational experience and has led post-acquisition business integration activities on several occasions.

Caruso served as Chief Financial Officer of Catheter Precision from 2010 through 2016.

Caruso served as Chief Financial Officer of Catheter Precision, the private company acquired by us in 2023, from 2010 through 2016.

From 2016 to the present, Mr.

Caruso was retired.

Caruso also served as Chief Financial Officer of EP MedSystems, Inc.

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Caruso is qualified to serve as a director because of his senior level financial experience with public and private companies.

Francis has served as Managing Member of Francis Capital Management, LLC, an investment management firm specializing in small capitalization equities, since 2000.

Francis has more than 20 years of experience in investment management, finance and accounting.

Francis has extensive experience investing in small cap medical device companies.

Francis earned his bachelor's degree in economics from UCLA and MBA from the UCLA Anderson School of Management.

Francis' qualifications to serve as a director include his financial, business and accounting experience.

Francis is a Chartered Financial Analyst and a Certified Public Accountant (inactive).

Andrew Arno Mr.

Arno has 30 years of experience handling a wide range of corporate and financial matters, including work as an investment banker and strategic advisor to emerging growth companies.

Since October 2023, he has served as the Managing Member of Unterberg Legacy Capital, LLC.

He was previously Vice Chairman of Special Equities Group, LLC, a privately held investment banking firm affiliated with Dawson James Securities Inc., and previously with Bradley Woods & Co.

Ltd., and he held that role from June 2019 to March 2023.

Prior to joining Special Equities Group, LLC, Mr.

Arno served as Vice Chairman at Chardan Capital Markets, LLC, from July 2015 to June 2019.

From June 2013 until July 2015, Mr.

Arno served as Managing Director of Emerging Growth Equities, an investment bank, and Vice President of Sabr, Inc., a family investment group.

He was previously President of LOMUSA Limited, an investment banking firm.

From 2009 to 2012, Mr.

Arno served as Vice Chairman and Chief Marketing Officer of Unterberg Capital, LLC, an investment advisory firm that he co-founded.

He was also Vice Chairman and Head of Equity Capital Markets of Merriman Capital LLC, an investment banking firm, and served on the board of the parent company, Merriman Holdings, Inc.

Arno currently serves on the boards of directors of Oncocyte Corporation, Smith Micro Software, Inc.

and XXII Century Group, Inc., a tobacco products company, which are all public companies, and on the boards of Independa Inc., a software company, and Comhear Inc., an audio technology R&D company, both of which are private.

Arno previously served as a director of Asterias Biotherapeutics, Inc.

from August 2014 until it was acquired by Lineage Cell Therapeutics, Inc.

(“Lineage”) in March 2019.

Arno received a BS degree from George Washington University.

We believe Mr.

Arno is qualified to serve on our Board of Directors because of his financial expertise and his experience as a director on other public company boards.

Executive Officers

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His biographical information is set forth above at “Information About the Board of Directors.”

Margrit Thomassen , age 54, became interim Chief Financial Officer and Secretary as of January 2, 2024.

Thomassen has served as Controller of the Company since the merger with Old Catheter on January 9, 2023.

From 2005 until 2023 she worked as Chief Financial Officer of SeaCap Management LLC, an affiliate of Mr.

Jenkins, on various investment opportunities handling accounting, tax, management and human resources tasks.

In 2021, she assumed the role of Controller at Old Catheter.

Philip Anderson , age 58, became Chief Financial Officer on January 6, 2025.

Anderson was retired from November 2022 to December 2024.

Previously, he served as the Chief Financial Officer of Heritage Distilling Corporation, an adult beverage distiller, from August 2021 to November 2022.

From August 2020 to June 2021, he served as Chief Financial Officer of Crown Electrokinetics Corp., a pre-revenue technology/hardware company in the areas of smart windows, fiber optics and water quality solutions.

He served as Chief Financial Officer of Kubient, Inc., a supplier of fraud detection and prevention solutions to the global digital advertising market, from June 2019 to January 2020.

Prior to serving as a CFO Mr.

Anderson was a hedge fund partner for 17 years focused on investing in small and microcap companies.

He received a Bachelor of Arts in Business Management from Ithaca College and an MBA with concentration in Finance from Hofstra University.

Marie-Claude Jacques , age 40, became Chief Commercial Officer on May 1, 2024.

From January 2023 to January 2024, she was the Director of Field Integration for Boston Scientific Corporation, a Fortune 500 manufacturer of medical devices used in rhythm management, endoscopy, neuromodulation, peripheral interventions and neurology/pelvic health.

Jacques was employed with the AF Solutions Group of Boston Scientific’s cardiology division.

From February 2022 to December 2022, she was the Vice President of Sales, Access Solutions for that group.

From August 2022 to December 2022, Ms.

Jacques was Vice President of US sales for Baylis Medical Company Inc., a company that offers advanced transseptal access solutions as well as guidewires, sheaths and dilators used to support catheter-based left-heart procedures.

From June 2014 to August 2022, Ms.

Jacques was Director of US Sales for Baylis Medical Company Inc.

Jacques has been a part of the medical device field for over 15 years.

She began her career with Baylis Medical and was an integral part in growing and scaling the sales' US business.

Jacques led the company to double digit sales growth for consecutive years and participated in market development which led to the acquisition by Boston Scientific in 2022.

She has a bachelor’s degree in microbiology from Université Laval and a Master’s degree in Business Administration from University of Warwick.

Delinquent Section 16(a) Reports

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Such directors, executive officers and 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

Based solely on our review of the copies of such forms, and written representations that we have received from certain reporting persons that they filed all required reports, we believe that all of our officers, directors and greater than 10% stockholders complied with all Section 16(a) filing requirements applicable to them with respect to transactions during 2023, other than one late Form 4 filed by Susanne Meline, who served as a director during 2023, with respect to one transaction.

Based solely on our review of the copies of such forms, and written representations that we have received from certain reporting persons that they filed all required reports, we believe that all of our officers, directors and greater than 10% stockholders complied with all Section 16(a) filing requirements applicable to them with respect to transactions during 2024, other than one late Form 3 filed by Andrew Arno, who began serving as a director in July 2024.

Audit Committee

The members of our Audit Committee are John Francis and James Caruso.

The members of our Audit Committee are Andrew Arno and James Caruso.

Caruso serves as the chairperson of our Audit Committee.

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In addition, the Board has adopted a written code of ethics and conduct that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

A copy of our corporate governance principles and code of ethics and conduct are available on our website, www.catheterprecision.com , under the Investor Relations tab under “Governance”, then “Governance Documents.” If the Board makes any substantive amendments to, or grants any waivers from, the code of ethics and conduct for any officer or director, it will disclose the nature of such amendment or waiver on the Company’s website.

A copy of our corporate governance principles and code of ethics and conduct are available on our website, www.catheterprecision.com , under the Investor tab under “Corporate Governance”, then “Governance Documents.” If the Board makes any substantive amendments to, or grants any waivers from, the code of ethics and conduct for any officer or director, it will disclose the nature of such amendment or waiver on the Company’s website.

Insider Trading Policy

We have adopted an Insider Trading Policy and procedures governing the purchase, sale and/or other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the NYSE American listing standards applicable to us.

A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K for the year ended December 31, 2024.

In addition, with regard to the Company’s trading in its own securities, it is the Company’s policy to comply with the federal securities laws and the applicable exchange listing requirements.

EXECUTIVE COMPENSATION

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With respect to 2024, the compensation committee and the Board did not retain a compensation consultant in connection with determining compensation of non-employee directors.

Following the merger with Old Catheter in January 2023, the Board set 2023 compensation at an annual cash retainer of $50,000.

In January 2024, the compensation committee recommended, and the Board approved, 2024 compensation to all non-employee directors consisting of a cash retainer of $50,000 and an award of non-qualified stock options to purchase 2,500 shares of Company common stock to each non-employee director.

Options were granted on January 8, 2024, have a purchase price of $4.00 per share, a 10-year term, and vest quarterly over three years.

Then in January 2025, the compensation committee recommended, and the Board approved, that annual cash compensation be reduced from $50,000 to $30,000, effective July 1, 2024, with an adjustment made to the final payment to the non-employee directors for 2024.

On January 28, 2025, the compensation committee recommended and granted, and the Board approved, an award of non-qualified stock options to purchase 100,000 shares of Company common stock to each non-employee director.

Options were granted on January 29, 2025, have a purchase price of $0.42 per share, a 10-year term, and vested 33.33% on the grant date, with the remainder vesting 33.33% on the first anniversary of the grant date and 33.34% vesting on the second anniversary of the grant date.

Retainer cash payments will be paid in cash on or about the last day of each fiscal quarter of the Company in arrears to each non-employee director.

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Our non-employee directors remain eligible to receive equity awards and cash or other compensation outside of the compensation described above, as may be provided from time to time at the discretion of our Board of Directors.

No such awards or payments were made in 2023.

2024 Director Compensation Table

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Martin Colombatto (1)

Susanne Meline

No option awards were granted to the directors during the year ended December 31, 2023.

Colombatto held vested options to purchase 73 shares of Company common stock as of December 31, 2023.

James Caruso (2)

John P Francis (3)

Andrew Arno (4)

Colombatto held vested options to purchase 631 shares of Company common stock and unvested options to purchase 1,876 shares of Company common stock as of December 31, 2024.

Caruso held vested options to purchase 624 shares of Company common stock and unvested options to purchase 1,876 shares of Company common stock as of December 31, 2024.

Francis served on the Board from January 2, 2024 to July 3, 2024.

Arno joined the Board on July 3, 2024.

Stock Based Compensation to our Consolidated Financial Statements included in this Annual Report for a discussion of the assumptions we made in the valuation of these option grants.

See Executive Compensation for information about the compensation of Mr.

David Jenkins, a director who is also an executive officer, and Mr.

Will McGuire, a former director who was also an executive officer during a portion of 2023.

David Jenkins, a director who is also an executive officer.

Processes and Procedures for Executive Compensation

The Compensation Committee assists the Board in discharging the Board’s responsibilities relating to oversight of the compensation of the chief executive officer and other executive officers, including reviewing and making recommendations to the Board with respect to the compensation, plans, policies and programs for the chief executive officer and other executive officers and administering the equity compensation plans for executive officers and employees.

The Compensation Committee assists the Board in discharging the Board’s responsibilities relating to oversight of the compensation of the chief executive officer and other executive officers, including reviewing and approving or making recommendations to the Board with respect to the compensation, plans, policies and programs for the chief executive officer and other executive officers and administering the equity compensation plans for executive officers and employees.

The Compensation Committee annually reviews the compensation, plans, policies and programs for the chief executive officer and other executive officers.

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Named Executive Officers

The named executive officers for 2023 (“NEOs”), which consist of our principal executive officer and our former Chief Financial Officer, who were our only executive officers as of December 31, 2023, as well as our former Chief Executive Officer, who would have been one of our next two most highly compensated executive officers but for the fact that he was not serving as an executive officer as of December 31, 2023, were as follows:

Jenkins, Executive Chairman and Interim Chief Executive Officer;

Steve Passey, former Chief Financial Officer;

Jonathan Will McGuire, former Chief Executive Officer and Secretary.

Jenkins was appointed Executive Chairman upon effectiveness of the Merger on January 9, 2023.

McGuire served as Chief Executive Officer until April 28, 2023.

Jenkins was appointed interim Chief Executive Officer beginning April 28, 2023, and Chief Executive Officer beginning January 2, 2024.

Passey served as Chief Financial Officer from April 1, 2023, through December 31, 2023.

The named executive officers for 2024 (“NEOs”), which consist of our principal executive officer, our former Interim Chief Financial Officer, and our Chief Commercial Officer, who were our only executive officers as of December 31, 2024, were as follows:

Jenkins, Executive Chairman and Chief Executive Officer;

Margrit Thomassen, former Interim Chief Financial Officer and Secretary;

Marie-Claude Jacques, Chief Commercial Officer.

Jenkins was appointed Executive Chairman upon effectiveness of the Merger on January 9, 2023 and interim Chief Executive Officer beginning April 28, 2023, and Chief Executive Officer beginning January 2, 2024.

Margrit Thomassen served as Interim Chief Financial Officer from January 1, 2024, through January 6, 2025.

Marie-Claude Jacques was appointed as Chief Commercial Officer beginning May 1, 2024.

Summary Compensation Table

The following table provides information regarding the compensation of the NEOs for 2024 and 2023, as applicable:

Incentive Plan

Name and Principal Position

Non-Equity Incentive Plan

Compensation ($)

Executive Chairman and Interim Chief Executive Officer

Jonathan Will McGuire

1,750,000 (1)

Former Chief Executive Officer and Secretary

Former Chief Financial Officer

represents severance pay that Mr.

McGuire became entitled to upon his resignation, which was effective April 28, 2023, and which was paid in May 2023.

Amounts include Company matching contributions to 401(k) plan;

taxable amounts from vested stock awards;

and amounts paid for a supplemental health insurance plan.

Executive Chairman and Chief Executive Officer

Margrit Thomassen

Former Interim Chief Financial Officer and Secretary

Marie-Claude Jacques

Chief Commercial Officer

Stock-Based Compensation to our Consolidated Financial Statements included in this Annual Report for a discussion of the assumptions we made in the valuation of these option grants.

Executive Employment Agreements and Arrangements

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Jenkins’ employment agreement, he is entitled to annual compensation of $300,000.

Jonathan Will McGuire

The Company entered into an offer letter with Mr.

McGuire dated March 9, 2020 which provided for at-will employment.

The offer letter provided for an initial base salary of $500,000 and eligibility annually for a target cash bonus of 100% of his annual base salary, based on achieving performance objectives established by our board of directors or a committee of our board of directors.

McGuire was also entitled to certain severance benefits and change in control payments, as more fully described in Mr.

McGuire’s Change in Control and Severance Agreement below.

During his employment with the Company, Mr.

Passey received an annual salary of $250,000.

He was also eligible to receive bonuses and equity awards at the discretion of the Compensation Committee.

No such bonuses or awards were awarded.

McGuire’s Change in Control and Severance Agreement

The Company entered into a change in control and severance agreement with Mr.

McGuire on March 30, 2020.

The agreement provided for certain severance benefits, including the change in control payments described below, if the termination was by the Company without cause, or by Mr.

McGuire for good reason, as such terms are defined in the agreement.

If such termination occurred within a certain Change in Control Period, the change in control payments described below became payable.

In January 2023, the agreement was amended to provide that the Change in Control Period would begin three months before a Change in Control, including the Merger, and end 24 months following such event.

Prior to an April 2023 amendment, if the termination described above occurred within the Change in Control Period, Mr.

McGuire’s became entitled to the following:

a lump-sum payment equal to 24 months of the executive officer’s annual base salary as in effect immediately prior to such termination (or if such termination is due to a resignation for good reason based on a material reduction in base salary, then as in effect immediately prior to the reduction) or if greater, at the level in effect immediately prior to the change in control);

a lump-sum payment equal to 150% of the executive officer’s target annual bonus as in effect for the fiscal year in which such termination occurs;

payment of premiums for coverage under COBRA for the executive officer and the named executive officer’s eligible dependents, if any, for up to 24 months, or taxable monthly payments for the equivalent period in the event payment of the COBRA premiums would violate or be subject to an excise tax under applicable law;

100% accelerated vesting and exercisability of all outstanding equity awards and, in the case of an equity award with performance-based vesting, all performance goals and other vesting criteria generally will be deemed achieved at target.

The agreement provided that if any of the amounts provided for above or otherwise payable to Mr.

McGuire would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and could be subject to the related excise tax, he would be entitled to receive either full payment of benefits under the change in control or severance agreement or such lesser amount which would result in no portion of the benefits being subject to the excise tax, whichever resulted in the greater amount of after-tax benefits to the executive officer.

The change in control and severance agreement did not require us to provide any tax gross-up payments.

The agreement was amended in April 2023 to clarify that Mr.

McGuire’s severance payment would be based on his 2022 salary and bonus target, and that he would not be entitled to COBRA benefits.

McGuire resigned for “good reason” as defined in the agreement, effective April 28, 2023.

Upon his resignation, he became entitled to receive a payment of approximately $1.75 million under the agreement, which amount was paid in May 2023.

Marie-Claude Jacques

In April 2024, we entered into an offer letter agreement with Marie-Claude Jacques, Chief Commercial Officer.

In accordance with the terms of the offer letter, she is entitled to guaranteed annual salary compensation for the first two years of employment of $400,000.

After two years her annual salary compensation is reduced to $240,000.

She also received 25,000 non-plan stock options, at an exercise price of $5.321 per share, vesting annually over 5 years, exercisable over ten years per the terms of the offer letter.

Outstanding Equity Awards at 2024 Fiscal Year-End

As of December 31, 2023, none of the NEOs named above held unexercised stock options, unvested stock awards, or any unearned and unvested shares, units or other rights awarded under equity incentive plans.

McGuire’s unvested awards vested upon his resignation in April 2023, and his stock options became no longer exercisable three months following his resignation.

Thomassen held options to purchase Company stock on December 31, 2023, which were received pursuant to the Merger, as described in Item 13 below.

As of December 31, 2024, NEOs held the following equity awards:

Number of Securities Underlying Unexercised Options - Exercisable

Number of Securities Underlying Unexercised Options - Unexercisable

Equity Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options

Option Exercise Price

Option Expiration Date

David Jenkins

Margrit Thomassen

Marie-Claude Jacques

Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Non-Public Information

Option grants to employees, executive officers and non-employee directors are made by the Compensation Committee (the "Committee") under the 2023 Incentive Plan from time to time, as determined by the Committee.

The Committee does take material non-public information into account when determining the timing and terms of stock awards, in that if the Company determines that it is in possession of material non-public information on an anticipated grant date, the Committee expects to defer the grant until a date on which the Company is not in possession of material non-public information.

The Company does not time the release of material non-public information based on equity award grant dates or for the purpose of affecting the value of executive compensation.

For all stock option awards, the exercise price is the closing price of our common stock on the NYSE American on the last trading day preceding the grant date.

The following table presents information regarding stock options issued to our NEOs in fiscal year 2024 during any period beginning four business days before the filing or furnishing of a periodic report or current report disclosing material non-public information and ending one business day after the filings or furnishing of such report with the SEC:

Number of Securities Underlying the Award

Exercise Price of the Award ($/Sh)

Grant Date Fair Value of the Award

Percentage Change in the Closing Market Price of the Securities Underlying the Award Between the Trading Day Ending Immediately Prior to the Disclosure of Material Non-Public Information and the Trading Day Beginning Immediately Following the Disclosure of Material Non-Public Information

Margrit Thomassen

Marie-Claude Jacques

Based on closing prices of the Company's common stock of $3.90 on January 11, 2024 and $3.90 on January 11, 2024.

Based on closing prices of the Company's common stock of $5.50 on May 6, 2024 and $5.60 on May 7, 2024.

Perquisites, Health, Welfare and Retirement Benefits

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Our board of directors may elect to adopt qualified or non-qualified benefit plans in the future if it determines that doing so is in our best interests.

401(k) Savings Plan

Prior to the Merger, the Company maintained a tax-qualified retirement plan that provided eligible employees, including named executive officers, with an opportunity to save for retirement on a tax advantaged basis.

All participants’ interests in their deferrals were 100% vested when contributed.

Pre-tax and after-tax contributions were allocated to each participant’s individual account and were then invested in selected investment alternatives according to the participant’s directions.

The Company, in its sole discretion, could make certain contributions to the plan.

The 401(k) plan was intended to qualify under Sections 401(a) and 501(a) of the Internal Revenue Code.

As a tax-qualified retirement plan, contributions to the 401(k) plan and earnings on those contributions were not taxable to the employees until distributed from the 401(k) plan, and all contributions, if any, were deductible by the Company when made.

As a result of the Merger, the Company terminated the 401(k) Savings Plan and liquidated all assets in March 2023.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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In addition, the rules include shares of common stock issuable pursuant to:

(i) the exercise of stock options that are either immediately exercisable or exercisable on or before May 11,2024, which is 60 days after March 12, 2024 and (ii) outstanding warrants to purchase common stock held by that person that are either immediately exercisable or exercisable on or before May 11, 2024, which is 60 days after March 12, 2024.

(i) the exercise of stock options that are either immediately exercisable or exercisable on or before May 16,2025, which is 60 days after March 17, 2025 and (ii) outstanding warrants to purchase common stock held by that person that are either immediately exercisable or exercisable on or before May 16, 2025.

These shares are deemed to be outstanding and beneficially owned by the person holding those options and warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

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Number of Shares

of Common Stock

Percentage of

of Common Stock

5% Stockholders:

Armistice Capital Master Fund Ltd.

Armistice Capital LLC (1)

Jenkins Family Charitable Institute (2)

Casey Jenkins (3)

Directors and Named Executive Officers:

Jonathan Will McGuire (2)

Martin Colombatto (6)

Andrew Arno (7)

Margrit Thomassen (8)

Marie-Claude Jacques (9)

All directors and executive officers as a group (6 persons) (4)(5)(6)(7)(9)(10)

The number of shares presented as beneficially owned by shareholder was obtained from Schedule 13G filed by the shareholder on February 14, 2024 and represents shares issuable upon conversion of Series A Preferred Stock.

The precise number of shares beneficially owned by the shareholder depends upon the operation of certain beneficial ownership blockers and the number of shares outstanding, and therefore may be greater or less than the number presented from time to time.

The table does not include other derivative securities that are not currently exercisable due to beneficial ownership blockers.

These securities are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (the "Master Fund") and may be deemed to be beneficially owned by:

(i) Armistice Capital, LLC ("Armistice Capital"), as the investment manager of the Master Fund;

and (ii) Steven Boyd, as the Managing Member of Armistice Capital.

Certain information was obtained from a Schedule 13G/A filed by the shareholder on February 14, 2025.

The precise number of shares beneficially owned by the shareholder depends upon the operation of certain beneficial ownership blockers contained in warrants held by the shareholder and the number of shares outstanding, and therefore may be greater or less than the number presented from time to time.

The table does not include those warrants held by the shareholder that are not currently exercisable due to beneficial ownership blockers.

The shareholder currently owns Prepaid Series H warrants to receive 657,000 shares of common stock, Prepaid Series I warrants to receive 1,500,000 shares of common stock, Series J warrants to purchase 1,500,000 shares of common stock and Series K warrants to purchase 8,065,962 shares of common stock.

Address of stockholder is 510 Madison Avenue, 7th Floor, New York, NY 10022.

McGuire resigned as an officer, director and employee of the Company effective April 28, 2023.

Includes (i) 2,264 shares held by a family charitable trust of which Mr.

Jenkins is the trustee;

(ii) 2,264 shares held by a charitable remainder unitrust of which Mr.

Jenkins, the daughter of Mr.

Jenkins, is the trustee of Jenkins Family Charitable Institute.

Includes 466,756 shares subject to currently exercisable Series I Warrants held by the Jenkins Family Charitable Institute.

Does not include Series I and Series J Warrants held by the Jenkins Family Charitable Institute to purchase an aggregate of 583,244 shares of common stock and Series J Warrants held by Ms.

Jenkins to purchase 150,000 shares of common stock which are not currently exercisable due to beneficial ownership blockers.

Does not include 18.691 shares of Series X Preferred Stock held by the Jenkins Family Charitable Institute which are convertible into approximately 18,690 shares of common stock upon satisfaction of certain conditions that have not currently been met.

Includes 466,756 shares subject to currently exercisable Series I Warrants held by the Jenkins Family Charitable Institute.

Does not include Series I and Series J Warrants held by the Jenkins Family Charitable Institute to purchase an aggregate of 733,244 shares of common stock and 150,000 shares subject to Series J Warranted held by Ms.

Jenkins which are currently not exercisable due to beneficial ownership blockers.

Does not include 18.691 shares of Series X Preferred Stock held by the Jenkins Family Charitable Institute and 262.256 shares of Series X Preferred Stock held by Ms.

Jenkins which are convertible into approximately 28,094 shares of common stock upon satisfaction of certain conditions that have not currently been met.

Also does not include 5,583 shares held by Ms.

Includes (i) 226 shares held by a charitable remainder unitrust of which Mr.

Jenkins’ wife is the trustee;

and (iii) 709,703 shares held by a partnership of which Mr.

and (ii) 70,970 shares held by a partnership of which Mr.

Jenkins is the manager member of the managing partner.

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Does not include unvested options to purchase 68,130 shares of common stock.

Includes (i) 73 shares of common stock subject to options exercisable within 60 days of March 12, 2024, and (ii) 30 shares held of record by M.

Colombatto Trust, of which Mr.

Colombatto serves as trustee, and (iii) exercisable options to purchase 2,083 shares of common stock.

Includes (i) 7 shares of common stock subject to options exercisable within 60 days of March 17, 2025, and (ii) exercisable options to purchase 34,370 shares of common stock.

Does not include unvested options to purchase 68,130 shares of common stock.

Includes (i) 1,548 shares of common stock subject to warrants exercisable within 60 days of March 12, 2024 held of record by Catalysis Partners (CP), (ii) exercisable options to purchase 2,083 shares of common stock, and (iii) 36 shares held by his spouse.

Includes exercisable options to purchase 33,330 shares of common stock.

Does not include unvested options to purchase 66,670 shares of common stock.

Francis has an investment interest in CP and, together with his spouse, owns a controlling interest in Francis Capital Management LLC, which also has an investment interest in CP and serves as both its Managing Member and Investment Manager.

Francis disclaims beneficial interest of these securities except to the extent of his pecuniary interest therein.

Does not include 11.481 shares of Series X Preferred Stock held by a retirement fund for the benefit of Mr.

Francis which are convertible into 11,481 shares of common stock but which are subject to certain beneficial ownership blockers and which may not be converted, at the earliest, until July 9, 2024.

Includes 16,764 shares of common stock underlying vested stock options held by Margrit Thomassen, the Company’s interim Chief Financial Officer and Secretary;

excludes unvested options to purchase 25,000 shares of common stock held by Ms.

Includes (i) 1,676 shares of common stock underlying vested stock options held by Margrit Thomassen, the Company’s Secretary;

and (ii) exercisable options to purchase 10,500 shares of common stock.

Does not include unvested options to purchase 42,000 shares of common stock.

Includes exercisable options to purchase 30,000 shares of common stock.

Does not include unvested options to purchase 213,750 shares of common stock.

Includes exercisable options to purchase 55,556 shares of common stock held by Philip Anderson, the Company's Chief Financial Officer.

Does not include unvested options to purchase 444,444 shares of common stock held by Mr.

EQUITY COMPENSATION PLAN INFORMATION

Information as of December 31, 2024, regarding the Company’s equity compensation plans is summarized in the following table:

Number of Securities to be

Issued Upon Exercise of

Outstanding Options and

Restricted Stock Units

Weighted-Average

Exercise Price of

Outstanding Options (1)

Number of Securities

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Future Issuance Under

Number of Securities to be

Equity Compensation

Issued Upon Exercise of

Weighted-Average

Plans (Excluding

Securities Reflected in

Outstanding Options and

Exercise Price of

Securities Reflected

Restricted Stock Units

Outstanding Options (1)

in Column (a))

Plan Category

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The weighted average exercise price is based solely on outstanding options.

Outstanding options were issued under the Company’s 2018 Equity Incentive Plan (as amended, the “2018 Plan”).

The number of securities remaining available includes both the 2018 Plan and the 2023 Equity Incentive Plan (the “2023 Plan”).

Excludes 54,678 shares which become available on March 1, 2024, and additional shares which will become available in future quarters, pursuant to an adjustment feature under the 2023 Plan.

Outstanding options were issued under the Company’s 2018 Equity Incentive Plan (as amended, the “2018 Plan”) and the Company's 2023 Equity Incentive Plan (the "2023 Plan").

The 2018 Plan was terminated in 2024 and no shares remain available for future issuance.

The number of securities remaining available represents shares under the 2023 Plan, and excludes 1.5 million shares authorized by the Company's stockholders in January 2025, and 124,733 shares which become available on March 1, 2025, and additional shares which will become available in future quarters, pursuant to an adjustment feature under the 2023 Plan.

Under the adjustment features, the number of shares available for issuance under the 2023 Plan increases on the first day of each fiscal quarter (each, an “Adjustment Date”) by an amount equal to the lesser of:

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or (ii) such lesser number of Shares as may be determined by the Board.

(3) Represents Old Catheter options assumed in connection with the January 9, 2023 acquisition of Old Catheter.

Represents Old Catheter options assumed in connection with the January 9, 2023 acquisition of Old Catheter and non plan options issued to officers of the Company.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Person Transactions

Pursuant to SEC rules, a “transaction” with a related party includes any transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company was or is a participant and the related person had or will have a direct or indirect material interest where the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years.

Accordingly, the applicable threshold for us is $120,000.

Since January 1, 2022, we have engaged in the following transactions in which our executive officers, directors, promoters or beneficial owners of more than 5% of our common stock had or will have a direct or indirect material interest, other than compensation arrangements which are described under “ Executive Compensation .” We believe that all of these transactions were on terms as favorable as could have been obtained from unrelated third parties.

Employment and Related Agreements

We currently do not have written employment agreements with our executive officers.

For information about our employment agreements with our Named Executive Officers, who are former employees, refer to “ Executive Compensation—Executive Employment Agreements and Arrangements .”

In January 2023, we entered into an oral employment agreement with Missiaen Huck, Mr.

David Jenkins’ adult daughter.

Huck serves as the non-executive chief operating officer of Catheter and receives annual compensation of $165,000.

In January 2024, Ms.

Huck received a grant of options to purchase 25,000 shares of Company common stock which have an exercise price of $0.40 per share, vest ratably over five years and have a term of 10 years.

As noted below, Ms.

Huck also holds options to purchase an additional 144,169 shares of Company common stock which were originally issued by Old Catheter and assumed in the Merger.

Margrit Thomassen became interim Chief Financial Officer and Secretary in January 2024.

She joined the Company as controller in January 2023, in connection with the Merger with Old Catheter.

Thomassen’s annual salary for both 2023 and 2024 is $144,000.

In January 2024, Ms.

Thomassen received a grant of options to purchase 25,000 shares of Company common stock which have an exercise price of $0.40 per share, vest ratably over five years and have a term of 10 years.

As noted below, Ms.

Thomassen also holds options to purchase an additional 16,764 shares of Company common stock which were originally issued by Old Catheter and assumed in the Merger.

Merger-Related Transactions

Jenkins and his affiliates held approximately $25.1 million of Old Catheter’s Convertible Promissory Notes, or the Notes, that were converted in the Old Catheter merger into 7,856.251 shares of Series X Preferred Stock.

Upon consummation of the merger, each such Noteholder received, in exchange for discharge of the principal of his or its Notes, a number of shares of our Series X Preferred Stock representing a potential right to convert into our common stock in an amount equal to one common share for each $3.20 of principal amount.

In consideration for forgiving the interest accrued but remaining unpaid under the Notes in an aggregate amount of approximately $13.9 million, Mr.

Jenkins and his affiliates also received royalties equal to 11.77% of the net sales, if any, of the LockeT device, commencing upon the first commercial sale and through December 31, 2035.

In addition to the shares described above that were issued in connection with the Notes, Mr.

Jenkins and his affiliates received 1,325.838 shares of Series X Preferred Stock in the merger, and Mr.

Jenkins’ adult children received 1,284.344 shares of Series X Preferred Stock in the merger, all in exchange for their equity interests in Old Catheter in accordance with the merger exchange ratio.

Additional, noninterest-bearing demand loans totaling $1,075,000 from David Jenkins to Old Catheter were repaid by the Company at or shortly after the closing of the merger.

Jenkins’ daughter, Missiaen Huck, received options to purchase 144,169 shares of the Company’s common stock upon the closing of the Merger in exchange for her options to purchase shares of Catheter common stock, converted based on the exchange ratio in the merger.

Of the total options to purchase 144,169 shares of the Company’s common stock, 140,816 options have an exercise price of $0.59 per share, and the remaining 3,353 options have an exercise price of $2.02 per share.

Thomassen received options to purchase 16,764 shares of the Company’s common stock upon the closing of the Merger in exchange for her options to purchase shares of Catheter common stock, converted based on the exchange ratio in the Merger.

The options have an exercise price of $0.59 per share.

Following stockholder approval on March 21, 2023, we issued 991,828 shares of common stock to Mr.

Jenkins and affiliates upon conversion of 991.828 shares of Series X Preferred Stock, and 235,320 shares of common stock to his adult children upon conversion of 235.320 shares of Series X Preferred Stock.

Warrant Inducement Offer

(“Armistice”) with exercise prices ranging from $14.00 to $526.50 per share to $4.00 per share (the "2023 Warrant Repricing").

In connection with the 2023 Warrant Repricing, the Company entered into a warrant inducement offer letter (the "2023 Inducement Letter") with Armistice pursuant to which it would exercise up to all of the 331,608 Existing Warrants (the "Inducement Offer").

In consideration for exercising the Existing Warrants pursuant to the terms of the 2023 Inducement Letter, the Company received approximately $1.3 million in gross proceeds.

The Company paid the placement agent aggregate cash fees of approximately $0.2 million related to the Inducement Offer which represented 8.0% of the gross proceeds received from the Inducement Offer plus other offering costs resulting in net proceeds to the Company of $1.1 million.

In consideration for exercising the Existing Warrants pursuant to the terms of the 2023 Inducement Letter, the Company issued Armistice a new Series E common stock purchase warrant, or Series E Warrant (the "Series E Warrant"), to purchase 331,608 shares of common stock at an exercise price of $4.00 per share.

The Series E Warrant is exercisable for five years from the date of stockholder approval.

Exercise of the Series E Warrant in full was subject to approval of the Company's stockholders other than Armistice which was obtained at the stockholders’ meeting held on March 21, 2023 (the ”Stockholders’ Meeting”).

Private Placement

On January 9, 2023, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) for a private placement (“Private Placement”), with Armistice.

Pursuant to the Securities Purchase Agreement, Armistice agreed to purchase, for an aggregate purchase price of approximately $8.0 million, (a) Class A units at a price that was the lower of $3.00 per unit and 90% of the 5 day volume weighted average price of the Company’s common stock immediately prior to obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants (as each are defined below), each consisting of one share of common stock, one Series F common stock purchase warrant, or Series F Warrant, and one Series G common stock purchase warrant, or Series G Warrant, and together with the Series F Warrants (the “PIPE Warrants”) and (b) Class B units at a price of $1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock (the “PIPE Preferred Stock”), par value $0.0001, and one Series F Warrant and one Series G Warrant for each share of the Company’s common stock underlying the PIPE Preferred Stock (each share of which is convertible into a number of shares of the Company’s common stock equal to $1,000 divided by the lower of $3.00 and 90% of the 5 day volume weighted average closing price of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion Rate).

The closing under the Securities Purchase Agreement and the sale and issuance of the Class A units and Class B units (and the issuance of any underlying common stock) were approved at the Stockholders’ Meeting.

At the closing of the Private Placement, the Company issued 497,908 Class A units for proceeds of approximately $0.9 million and 7,203 Class B units for proceeds of approximately $7.1 million, the preferred stock underlying which is convertible into up to 4,501,060 shares of common stock, as well as the issuance of warrants described below.

The PIPE Warrants, including Series F warrants and Series G warrants, are exercisable at an exercise price of $3.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants.

The PIPE Warrants are exercisable at any time on or after the closing date of the Private Placement until the expiration thereof, except that the PIPE Warrants cannot be exercised if, after giving effect thereto, the purchaser would beneficially own more than 4.99%, or the Maximum Percentage, of the outstanding shares of common stock of the Company, which Maximum Percentage may be increased or decreased by the purchaser with written notice to the Company to any other percentage specified not in excess of 9.99%.

The Series F Warrants have a term of two years from the date of stockholder approval, and the Series G Warrants have a term of six years from the date of stockholder approval.

The Series F Warrants and Series G Warrants were approved at the Stockholders’ Meeting.

Issuance of Securities upon Conversion of Series A Preferred

On July 5, 2023 the Company issued 1,093,552 shares of its common stock in connection with the conversion of 1,750 shares of its outstanding Series A Convertible Preferred Stock held by Armistice Capital Master Fund Ltd.

(“Armistice”).

The shares were issued in connection with two separate conversions of 875 shares of Series A Convertible Preferred Stock into 546,776 shares of common stock that occurred on July 3, 2023.

Each share of Series A Convertible Preferred Stock is convertible into approximately 625 shares of common stock.

On July 24, 2023, the Company issued 546,776 shares of its common stock in connection with the conversion of 875 shares of its outstanding Series A Convertible Preferred Stock held by Armistice.

On January 24, 2024, the Company issued 546,776 shares of its common stock in connection with the conversion of 875 shares of its outstanding Series A Convertible Preferred Stock held by Armistice.

Indemnification of Officers and Directors

We have historically entered into indemnification agreements with directors and executive officers, in addition to the indemnification provided for in our amended and restated certificate of incorporation and amended and restated bylaws, and we may also do so in the future.

The indemnification agreements and our amended and restated certificate of incorporation and amended and restated bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.

The information required by the Item will be included in the 2025 Proxy Statement, and is incorporated herein by reference, or will be included in an amendment to this report if the 2025 Proxy Statement is not filed on or before April 30, 2025.

PRINCIPAL ACCOUNTING FEES AND SERVICES

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100 ) since June 21, 2023.

Withum was also the independent registered public accounting firm that audited the financial statements of Old Catheter for the fiscal year ended December 31, 2022.

Fees Paid to the Independent Registered Public Accounting Firms

The following table represents aggregate fees for services provided to us in the fiscal year ended December 31, 2024 by Withum.

It does not include fees billed to us for services rendered by our previous auditor, Haskell & White LLP, during 2023, or fees billed to us by Withum for pre-Merger services rendered to Old Catheter.:

It does not include fees billed to us for services rendered by our previous auditor, Haskell & White LLP, during 2024:

Audit Fees (1)

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“Audit-Related Fees” generally include fees incurred for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements but are not otherwise included as Audit Fees.

For fiscal 2023, the fees presented consist of fees billed for professional services rendered in connection with the purchase price allocation and valuation of the business combination with regards to the Merger.

“Tax Fees” consist of permissible tax compliance and tax advisory service fees.

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Financial Statements .

Reports of Independent Registered Public Accounting Firms

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

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(effective 09/30/22)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant (filed 7/11/2024, effective 7/15/2024)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Registrant (effective 1/13/2025)

Certificate of Designation of Series X Convertible Preferred Stock.

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Form of placement agent warrant offered in July 2020.

Form of placement agent warrant offered in October 2024

Form of Series B Warrant offered in February 2022.

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Form of Series G Warrant issued in March 2023.

Form of Series H Warrant offered in September 2024

Form of Series I Warrant offered in September 2024

Form of Series J Warrant offered in September 2024

Form of Series K Warrant offered in October 2024

Form of Pre-Funded Warrant offered in September 2024

Form of Underwriters' Warrant offered in September 2024

Form of Warrant Agency Agreement dated as of September 3, 2024 entered into by and between the Registrant and Equiniti Trust Company, LLC

2018 Form of Indemnification Agreement between the Registrant and directors and executive officers.

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2018 Equity Incentive Plan and Forms of Award Agreement thereunder, as amended.

Change in Control and Severance Agreement, by and between the Registrant and Jonathan Will McGuire, dated as of March 30, 2020.

Amendment to Change in Control and Severance Agreement, dated as of January 9, 2023, by and between Ra Medical Systems, Inc.

and Jonathan Will McGuire.

Amendment to Change in Control and Severance Agreement, dated as of April 17, 2023, by and between Ra Medical Systems, Inc.

and Jonathan Will McGuire.

Employment letter by and between the Registrant and Jonathan Will McGuire, dated as of March 9, 2020.

Settlement Agreement, among the Company, among the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General of the Department of Health and Human Services and the Defense Health Agency, acting on behalf of the TRICARE Program, and Robert Gruber, dated December 28, 2020.

Corporate Integrity Agreement, between the Company and the Office of Inspector General of the Department of Health and Human Services, dated December 28, 2020.

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Warrant Inducement Offer Letter dated July 22, 2022.

Securities Purchase Agreement, dated January 9, 2023, by and among the Company and Armistice Master Fund Ltd.

(“January 2023 SPA”).

A to January 2023 SPA (form of Certificate of Designation of Series A Convertible Preferred Stock).

Exhibit Number

Incorporated by Reference

B to January 2023 SPA (form of Registration Rights Agreement).

C to January 2023 SPA (form of Series F Warrant).

D to January 2023 SPA (form of Series G Warrant).

Registration Rights Agreement, dated January 9, 2023.

Warrant Inducement Offer Letter, dated January 9, 2023.

Debt Settlement Agreement and Release including certain royalty rights with David A.

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LockeT Royalty Agreement with Auston Locke.

Joint Marketing Agreement dated January 19, 2021 with Stereotaxis, Inc.

(the “Stereotaxis Marketing Agreement”).

Extension Agreement dated January 11, 2022 to the Stereotaxis Marketing Agreement.

Addendum One dated May 27, 2022 to the Stereotaxis Marketing Agreement.

Assignment and Agreement from Auston Locke in relation to LockeT dated July 15, 2022

Assignment and Agreement from David A.

Jenkins in relation to LockeT dated January 24, 2023

Invention Assignment and Royalty Agreement with Auston Locke in relation to LockeT dated May 28, 2024

Lease with respect to Fort Mill facility.

Consulting Agreement dated February 1, 2018, with Patricia Kennedy.

Catheter Precision, Inc.

Notice of Nonplan Stock Option Award to Patricia Kennedy dated March 30, 2018.

2023 Equity Incentive Plan

2023 Form of Nonstatutory Stock Option Agreement for Non-Employee Directors Under 2023 Equity Incentive Plan

2023 Form of Nonstatutory Stock Option Agreement Under 2023 Equity Incentive Plan

2023 Form of Nonstatutory Stock Option Agreement for Employees Under 2023 Equity Incentive Plan

2023 form of Incentive Stock Option Agreement Under 2023 Equity Incentive Plan

Notice of Stock Option Award granted March 13, 2021 to Margrit Thomassen under Old Catheter's 2009 Equity Incentive Plan

Non-plan Stock Option Award granted May 1, 2024 to Marie-Claude Jacques

Non-plan Stock Option Award granted January 6, 2025 to Philip Anderson

Offer Letter to Philip Anderson dated January 3, 2025

Offer Letter to Marie-Claude Jacques dated April 24, 2024

Software and Technology License Agreement dated May 1, 2016, with Peacs BV.

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Incorporated by Reference

Warrant Inducement Letter Dated October 24, 2024

Waiver Agreement Dated October 29, 2024

Promissory Note dated May 30, 2024

Promissory Note dated June 25, 2024

Promissory Note dated July 1, 2024

Promissory Note dated July 18, 2024

Promissory Note dated July 25, 2024

Quality Agreement with Zien Medical Technologies, Inc.

related to LockeT Manufacture, dated March 20, 2023

First Amendment to Promissory Note dated May 30, 2024

First Amendment to Promissory Notes dated June 25, 2024, July 1, 2024 and July 18, 2024

First Amendment to Promissory Note dated July 25, 2024

Letter re change in certifying accountant

Insider Trading Policy dated March 21, 2025

Subsidiaries of the Registrant

Consent of WithumSmith+Brown, PC, Independent Registered Public Accounting Firm.

Consent of Haskell & White LLP, Independent Registered Public Accounting Firm.

Power of Attorney (contained on signature page).

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Inline XBRL Taxonomy Extension Presentation Linkbase Document.

Cover Page Interactive Data File (formatted as Inline XBRL)

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Filed herewith.

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KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David A.

Jenkins and Margrit Thomassen, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, to sign any and all amendments (including post-effective amendments) to this Annual Report on Form 10-K and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-facts and agents, or his substitute or substitutes, or any of them, shall do or cause to be done by virtue hereof.

Jenkins and Philip Anderson, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, to sign any and all amendments (including post-effective amendments) to this Annual Report on Form 10-K and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-facts and agents, or his substitute or substitutes, or any of them, shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

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(Principal Executive Officer)

/s/ Margrit Thomassen

Interim Chief Financial Officer

/s/ Philip Anderson

Chief Financial Officer

March 28, 2025

Margrit Thomassen

Philip Anderson

(Principal Financial and Accounting Officer)

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Martin Colombatto

/s/ Andrew Arno

March 28, 2025

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Catheter Precision, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Catheter Precision, Inc., (the “Company”) as of December 31, 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows, for the year ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Catheter Precision, Inc., (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023 and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt Regarding Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the entity has incurred recurring losses from operations and expects to continue to incur operating losses that raise substantial doubt about its ability to continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring losses from operations and negative cash flows from operations and expects to continue to incur operating losses that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our opinion is not modified with respect to this matter.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to Catheter Precision, Inc.

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Catheter Precision, Inc.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Business Combination

Description of the Matter

On January 9, 2023, the Company completed the acquisition of Catheter Precision Inc.

a privately held Delaware Corporation (“Old Catheter”) (the “Merger”).

As further described in Note 3 to the consolidated financial statements, the Company accounted for the purchase consideration and related valuation and allocation in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations (ASC 805) .

Management evaluated all criteria in ASC 805 including the makeup of management and governance before and after the transaction as well as the percentage of voting interests in the Company.

Based on the evaluation, the Company concluded that they were the accounting acquirer.

Total consideration for the Merger was $72.5 million which represents the sum of the (i) estimated fair value of $69.1 million for the 14,649.592 shares of newly designated Series X Convertible Preferred Stock issued and (ii) the estimated fair value of $3.4 million associated with stock options issued as replacements of Old Catheter share-based payment awards.

The Company engaged valuation specialists to fair value the Series X Convertible Preferred Stock that was issued as well as assist in the allocation of purchase price for the acquired assets and liabilities assumed.

We identified the evaluation of the Company’s determination of the accounting acquirer and the determination of the purchase price associated with the Merger to be a critical audit matter.

The business combination was deemed to be a critical audit matter due to the complexity and subjectivity involved in (1) the evaluation of identifying the accounting acquirer and (2) the determination of the purchase consideration and related valuation and allocation of such consideration.

A high degree of auditor judgment was required in evaluating the relative importance of the indicative factors, individually and in the aggregate, including the post combination voting rights, composition of the board of directors and management, the terms of the newly created Series X Convertible Preferred Stock issued in the Merger, and the entity initiating the business combination.

The determination of the purchase price and the related allocation of the purchase price to the underlying assets acquired and liabilities assumed is a complex process that requires involvement from valuation specialists and significant professional judgment regarding the various inputs into an array of valuations to support the consideration given in the transaction and the underlying allocations.

A different conclusion would result in a material difference in the accounting for the Merger.

How the Critical Audit Matter was Addressed in the Audit

The following are the primary procedures we performed to address this critical audit matter.

We tested the Company’s conclusions that the Company was the accounting acquirer by:

reviewing management’s evaluation process which involved documenting an understanding of the terms in the Amended and Restated Agreement and Plan of Merger and related exhibits as follows:

evaluated management’s assessment of the post combination voting rights,

reviewed the composition of the board of directors and management,

reviewed the public filings associated with and leading up to and subsequent to the Merger,

reviewed the terms of the newly created Series X Convertible Preferred Stock,

examined the documents associated with the Merger including the Merger Agreement, corporate documents including the articles of incorporation and bylaws of the Company, investor presentations, and board minutes of both the Company and Old Catheter pre- and post-merger,

corroborated our understanding the structure and form of the Merger with external legal counsel.

We evaluated management’s valuations including obtaining audit evidence that supports management’s inputs in generating the forecasts used by the valuation specialists as follows:

audited projections and other significant inputs to each of the calculations to assess reasonableness of the final purchase price allocation,

assessed the professional competence, experience, and objectivity of the Company's external valuation specialist.

utilized our internal valuation specialists to assess the fair value of the Series X Convertible Preferred Stock.

utilized our internal valuation specialist to evaluate the reasonableness of the methodology and valuations of acquired intangible assets.

Fair Value of Royalties Payable

Description of the Matter

As described in Note 10 to the consolidated financial statements, the Company had $6.97 million of royalties payable as of December 31, 2023, based on the fair value of the royalties payable related to the Amigo and LockeT royalty agreements acquired in connection with the Merger.

We identified the fair value of royalties payable as a critical audit matter due to its highly sensitive inputs.

The Company had $9.2 million of royalties payable as of December 31, 2024, based on the fair value of the royalties payable related to the LockeT royalty agreements acquired in connection with the prior year merger.

We identified the fair value of royalties payable as a critical audit matter.

In determining the fair value, management must generate revenue projections through the expiration of the royalty agreements.

They also must calculate a revenue-adjusted discount rate which is then applied to calculate the present value of the royalties payable.

There is significant uncertainty associated with the projections due to the fact that management must forecast sales for a new product which, while there is interest in the market place and it is being evaluated for use in the hospital environment, it has had no sales as of the date of the valuation.

They must also calculate a revenue-adjusted discount rate which is then applied to calculate the present value of the royalties payable.

There is significant uncertainty associated with the projections due to limited sales history available as the related product only began sales in the current year.

In addition, the calculation of the discount rate requires the involvement of management's valuation specialists.

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To determine the reasonableness of the fair value of the royalties payable, we:

audited the projections through detailed review of management’s memo and forecast schedules along with review of supporting evidence including:

industry standards,

external data sources,

regulatory factors,

Company press releases and related SEC filings,

copies of presentations given by the Company,

considered any potentially contradicting information,

reviewed the present value calculation of the royalties payable,

Assessed the reasonableness of the forecasts of future revenue by (i) comparing to historical revenue growth of the Company and (ii) assessing forecasts of future revenues against industry metrics and guideline companies.

Utilized personnel with specialized knowledge and skill in valuation to assist in assessing the reasonableness of discount rates incorporated into the valuation models used by management.

Recalculated the mathematical accuracy of the Company’s net present value calculation.

Assessed the professional competence, experience, and objectivity of the Company’s external valuation specialist.

utilized our internal valuation specialist to evaluate the reasonableness of the methodology of the calculation of the revenue-adjusted discount rate.

Assessment of ASC 350 and ASC 360 impairment analysis

Assessment of ASC 360 Impairment Analysis

Description of the Matter

As described in Note 2 to the consolidated financial statements, in accordance with ASC 350, Intangibles – Goodwill and Other (ASC 350) and ASC 360, Impairment and Disposal of Long-Lived Assets (ASC 360) , the Company, at least annually or more frequently if certain events or changes in circumstances indicate the carrying value may not be recoverable, management performs an impairment analysis.

As a result of the sustained decline of the Company’s stock price from the date of the Merger to the date of each reporting period, the Company assessed their goodwill, intangible assets, and long-lived assets for impairment.

The Company performed a quantitative goodwill impairment test, which resulted in the carrying amount of the reporting unit exceeding the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired.

The Company utilized a combination of an income and market approach to assess the fair value of the reporting unit.

The income approach considered the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions.

The guideline public company market approach considered marketplace earnings multiples from within a peer public company group.

As of December 31, 2023, cumulative goodwill impairment charges of $60.9 million were incurred related to the Company’s single reporting unit.

With respect to its long-lived assets, to determine whether the carrying amount of the long-lived asset group is recoverable, the Company determined the estimated future cash flows of the group for a period consistent with that of the primary assets of the group.

The sum of the undiscounted cash flows was then compared to the carry amount of the long-lived assets, as of December 31, 2023, to conclude whether the asset group carrying value is recoverable.

We identified the assessment of ASC 350 and ASC 360 impairment analysis as a critical audit matter due to the estimation and subjectivity needed to identify impairment triggers and perform an impairment test.

The inputs to test are subjective as they are based on management’s forecasts.

In accordance with ASC 360, Impairment and Disposal of Long-Lived Assets ("ASC 360"), the Company, at least annually or more frequently if certain events or changes in circumstances indicate the carrying value may not be recoverable, performs an impairment analysis.

As a result of the sustained negative cash flows from operations and continued losses from operations, the Company assessed their intangible assets and long-lived assets for impairment.

To determine whether the carrying amount of the long-lived asset group is recoverable, the Company determined the estimated future cash flows of the group for a period consistent with that of the primary assets of the group.

The sum of the undiscounted cash flows was then compared to the carrying amount of the long-lived assets as of December 31, 2024 to conclude whether the asset group carrying value is recoverable.

We identified the ASC 360 impairment analysis as a critical audit matter due to the estimation and subjectivity needed to identify impairment triggers and perform an impairment test.

The inputs to the test are subjective as they are based on management's forecasts.

Additionally, there is complexity that requires the Company to involve valuation specialists in performing the quantitative test.

How the Critical Matter was Addressed in the Audit

To determine the reasonableness of the goodwill impairment and conclusion the long-lived assets were not impaired we:

reviewed the impairment analyses performed as of each interim reporting period as well as at year-end,

audited the projections utilized by the valuation specialist in the impairment assessment through detailed review of management’s memo and forecast schedules along with review of supporting evidence including:

industry standards,

external data sources,

regulatory factors,

Company press releases and related SEC filings,

copies of presentations given by the Company,

To determine the reasonableness of the conclusion the long-lived assets were not impaired we:

Evaluated the reasonableness of management’s assumptions in the calculation of fair value of reporting unit, including the revenue growth rate in the projected future cash flows by comparing projections to historical results, actual results through year-end, relevant peer companies, and industry data.

Utilized personnel with specialized knowledge and skill in valuation to assist in evaluating the appropriateness of the methodologies and valuation models utilized by management to determine the fair value of the reporting units.

Assessed the professional competence, experience, and objectivity of the Company's external valuation specialist.

utilized our internal valuation specialists to review the methodologies for each quarter’s quantitative impairment analysis.

Equity Offerings - Private Placement

Accounting For Warrants Associated with September 2024 Public Offering

Description of the Matter

As discussed in Note 13, Private Placement , on January 9, 2023, the Company entered into a Securities Purchase Agreement for a private placement for which the Company would issue (a) Class A units consisting of one share of common stock, one Series F common stock purchase warrant, and one Series G common stock purchase warrant and (b) Class B units consisting of one share of newly designated Series A Convertible Preferred Stock, one Series F common stock purchase warrant and one Series G common stock purchase warrant.

The Company engaged valuation specialists to fair value the underlying instruments and allocate proceeds accordingly.

Management evaluated all criteria under ASC 480 , Distinguishing Liabilities from Equity, to determine the proper accounting treatment for each instrument issued.

We identified accounting for this equity-based transaction as a critical audit matter due to the complexity of the offering consisting of preferred stock, common stock and warrants in addition to the related valuation and classification of the instruments.

The Company issued warrants in connection with the September 2024 Public Offering.

The accounting for the issuance of these warrants involves evaluation of complex accounting guidance to be performed by management as it relates to determining the accounting classification of the warrants.

This matter was identified as a critical audit matter due to the complexity in accounting for the warrants and the significant impact of these conclusions on the Company's consolidated financial statements.

How the Critical Matter was Addressed in the Audit

The following are the primary procedures we performed to address this critical audit matter:

reviewed the underlying agreements with the investor,

reviewed management’s accounting treatment analysis memorandum,

due to the complexity of the underlying instrument, we evaluated whether the various instruments issued were free-standing, could be classified as debt or equity, and whether they contained any derivatives,

vouched the proceeds that were raised,

audited management’s allocation of proceeds analysis by

footing/cross footing the schedule for mathematical accuracy,

agreeing amounts to the Company’s accounting treatment analysis memorandum,

agreeing the fair value to the valuation reports prepared by the Company’s valuation specialist,

confirming the price of the Company’s common stock,

agreed share issuances to the Company’s transfer agent report.

utilized our internal valuation specialists to evaluate volatility inputs of the Black-Scholes models that were utilized in allocating the value of each instrument based on the net proceeds raised.

Our principal audit procedures performed to address this critical audit matter included the following:

Reviewed the executed offering under the registration statement and associated agreements.

Reviewed management’s technical accounting memo evaluating the terms and conditions of the executed agreements to determine the appropriate classification of the instruments.

Utilized personnel with specialized knowledge and skills in technical accounting to assist in:

(i) evaluating the terms of the offering documents in relation to the relevant accounting literature, and (ii) assessing the appropriateness of conclusions reached by the Company.

Accounting For Warrants and Modification of Warrants Associated with October 2024 Warrant Inducement

Description of the Matter

The Company modified the exercise price of existing warrants in connection with the October 2024 Warrant Inducement.

In consideration for the exercise, warrant holders were issued new warrants.

The accounting for the modification and issuance of these warrants involves complex and subjective judgment by management as it relates to determining the accounting classification of the warrants and determining the fair value of the warrants at issuance and modification dates.

How the Critical Matter was Addressed in the Audit

Our principal audit procedures performed to address this critical audit matter included the following:

Reviewed the Warrant Inducement Offer to common stock purchase warrants.

Reviewed management's technical accounting memo in conjunction with the terms and conditions of the executed warrant agreements to determine the appropriate classification of the instruments.

Evaluated management's methodology and assumptions used in the valuation of the warrants.

Utilized our internal valuation specialists to assess the reasonableness of the volatility inputs into the Company's Black-Scholes model.

Assessed the professional competence, experience, and objectivity of the Company's external valuation specialist.

Recalculated the mathematical accuracy of the Company's fair valuation of the warrants.

/s/ WithumSmith+Brown, PC

We have served as the Company’s auditor since 2023.

We have served as Catheter Precision, Inc.’s auditor since 2023.

East Brunswick, New Jersey

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PCAOB ID Number 100

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Catheter Precision, Inc.

(formerly, Ra Medical Systems, Inc.)

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Catheter Precision, Inc.

(formerly, Ra Medical Systems, Inc.) (the “Company”) as of December 31, 2022, the related statements of operations, stockholders' equity, and cash flows for the year ended December 31, 2022 and the related notes (collectively referred to as the “financial statements“).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ HASKELL & WHITE LLP

HASKELL & WHITE LLP

We have served as the Company's auditor from 2021 to 2023.

Irvine, California

March 28, 2023

CATHETER PRECISION, INC.

(formerly known as RA MEDICAL SYSTEMS, INC.)

Consolidated Balance Sheets

4 unchanged sentences

Cash and cash equivalents

$ 2,873 $ 3,565

Accounts receivable, net

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Property and equipment, net

Lease right-of-use assets

Operating lease right-of-use assets, net

Intangible assets, net

24,274 26,318

Other non-current assets

$ 27,770 $ 30,736

LIABILITIES AND STOCKHOLDERS' EQUITY

3 unchanged sentences

Notes payable

Current portion of royalties payable due to related parties

Current portion of operating lease liabilities

Total current liabilities

Royalties payable

Royalties payable due to related parties

Deferred tax liability

Notes payable due to related parties

Interest payable due to related parties

Operating lease liabilities

6 unchanged sentences

Series X Convertible Preferred Stock, $ 0.0001 par value, 15,404 shares designated;

12,656 and 0 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

12,656 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

Common stock, $ 0.0001 par value, 30,000,000 shares authorized;

7,026,627 and 2,161,288 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

8,004,633 and 702,662 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

304,109 296,902

Accumulated deficit

( 292,352 ) ( 275,709 )

Total stockholders' equity

11,757 21,193

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 27,770 $ 30,736

See accompanying notes to consolidated financial statements.

CATHETER PRECISION, INC.

(formerly known as RA MEDICAL SYSTEMS, INC.)

Consolidated Statements of Operations

1 unchanged sentence

Year Ended December 31,

Product sales

Cost of revenues

Product sales

Service and other

Total cost of revenues

Gross profit (loss)

Operating expenses

1 unchanged sentence

Selling, general and administrative

11,349 17,122

Research and development

Restructuring costs

Total operating expenses

11,621 78,531

Operating loss

Other income, net

Interest income

( 11,243 ) ( 78,119 )

Other income (expense), net

Change in fair value of royalties payable

Total other income, net

Interest income

Interest expense

Other expense, net

Change in fair value of royalties payable due to related parties

( 2,239 ) 7,208

Total other income (expense), net

( 2,259 ) 7,547

Loss from operations before income taxes

Deemed dividend - warrant inducement offer

( 13,502 ) ( 70,572 )

Income tax provision

$ ( 16,643 ) $ ( 70,572 )

Deemed dividend on warrant inducement offer

( 5,158 ) ( 800 )

Net loss attributable to common stockholders

$ ( 21,801 ) $ ( 71,372 )

Net loss per share attributable to common stockholders, basic and diluted

$ ( 6.68 ) $ ( 129.88 )

Weighted-average common shares used in computing net loss per share, basic and diluted

3,263,586 549,507

See accompanying notes to consolidated financial statements.

CATHETER PRECISION, INC.

(formerly known as RA MEDICAL SYSTEMS, INC.)

Consolidated Statements of Stockholders' Equity

1 unchanged sentence

Series A Convertible

Preferred Stock

Series X Convertible

Preferred Stock

Total Stockholders'

Paid-In Capital

Balance at December 31, 2021

$ ( 178,272 )

Common stock issued, net

Warrants issued, net

Warrants exercised

Restricted stock awards cancelled or vested

Common stock issued pursuant to the vesting of restricted stock units and purchases under employee stock purchase plan

Stock-based compensation

Preferred Stock

Stockholders'

Balance at December 31, 2022

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Common stock issued upon exercise of options

— — — — 40,233 — 238 — 238

Restricted stock awards cancelled or vested

— — — — ( 42 ) — — — —

Stock-based compensation

— — — — — — 1,217 — 1,217

Issuance of Series X Convertible Preferred Stock in merger

— — 14,650 — — — 72,544 — 72,544

Conversion of Series X Convertible Preferred Stock

— — ( 1,994 ) — 199,359 — — — —

Issuance of Series A Convertible Preferred Stock in connection with private placement, net

Warrants exercised net

7,203 — — — 49,791 — 7,360 — 7,360

Warrants exercised (see Note 13)

— — — — 33,161 — 1,145 — 1,145

Conversion of Series A Convertible Preferred Stock

Deemed dividend - warrant inducement offer

( 2,625 ) — — — 164,033 — 1 — 1

— — — — — — — ( 70,572 ) ( 70,572 )

Balance at December 31, 2023

4,578 $ — 12,656 $ — 702,662 $ — $ 296,902 $ ( 275,709 ) $ 21,193

Stock-based compensation

— — — — — — 54 — 54

Issuance of common stock upon exercise of Pre-Funded Warrants (see Note 13)

— — — — 2,773,000 — — — —

Issuance of common stock and other equity-classified contracts from September 2024 Public Offering, net of issuance costs

— — — — 805,900 — 2,612 — 2,612

Issuance of common stock through October 2024 Warrant Inducement Offer, net of issuance costs

— — — — 2,251,981 — 3,356 — 3,356

Issuance of common stock upon exercise of Series Warrants (see Note 13)

— — — — 1,185,000 — 1,185 — 1,185

Conversion of Series A Convertible Preferred Stock

( 4,578 ) — — — 286,090 — — — —

— — — — — — — ( 16,643 ) ( 16,643 )

Balance at December 31, 2024

— $ — 12,656 $ — 8,004,633 $ — $ 304,109 $ ( 292,352 ) $ 11,757

See accompanying notes to consolidated financial statements.

CATHETER PRECISION, INC.

(formerly known as RA MEDICAL SYSTEMS, INC.)

Consolidated Statements of Cash Flows

(in thousands, except share data)

(in thousands)

For the Years Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 16,643 ) $ ( 70,572 )

Adjustments to reconcile net loss to net cash used in operating activities:

Restructuring charges

Loss on impairment of goodwill

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Stock-based compensation

Change in fair value of royalties payable

Gain on write-off of right-of-use asset and liability

Loss on sales and disposals of property and equipment

Provision for credit losses

Change in fair value of royalties payable due to related parties

2,239 ( 7,208 )

Deferred income tax provision

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other assets

Lease right-of-use assets and lease liabilities

Prepaid expenses and other current assets

Operating lease right-of-use assets and lease liabilities

Current portion of royalties payable due to related parties

Accounts payable

( 234 ) ( 550 )

Accrued expenses

Accrued interest - related parties

Other liabilities

( 185 ) ( 7,139 )

Interest payable due to related parties

Net cash used in operating activities

( 9,271 ) ( 20,619 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

Proceeds from sales of property and equipment

( 67 ) ( 76 )

Cash acquired as part of business combination

Net cash (used in) provided by investing activities

Net cash used in investing activities

( 67 ) ( 61 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of common stock and warrants

Payments of offering costs related to the issuance of common stock and warrants

Payments on note payable

Proceeds from issuance of common stock and other equity-classified contracts from the September 2024 Public Offering, net of issuance costs

Proceeds from issuance of common stock from the October 2024 Warrant Inducement Offer, net of issuance costs

Proceeds from notes payable due to related parties

Payment on notes payable

( 256 ) ( 107 )

Proceeds from notes payable

Proceeds from exercise of warrants

Proceeds from issuance of common stock in connection with the employee stock purchase plan

Payments of costs related to exercise of warrants

Payments of convertible promissory notes

Payment of costs related to the warrant repricing

Payment of convertible promissory notes and accrued interest

Proceeds from the private placement of securities

2 unchanged sentences

NET CHANGE IN CASH AND CASH EQUIVALENTS

( 692 ) ( 12,294 )

CASH AND CASH EQUIVALENTS, beginning of year

CASH AND CASH EQUIVALENTS, end of year

SUPPLEMENTAL CASH FLOW INFORMATION

Unpaid offering costs

Cash payments for income taxes

Non-cash consideration for Catheter acquisition

$ 2,873 $ 3,565

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for interest

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES

Property and equipment reclassified from inventories

Conversion of Series A Convertible Preferred Stock for common stock

Cash payments for interest

Non-cash consideration for Catheter acquisition

Deemed dividend on warrant inducement offer

$ ( 5,158 ) $ ( 800 )

See accompanying notes to consolidated financial statements.

CATHETER PRECISION, INC.

(formerly known as RA MEDICAL SYSTEMS, INC.)

Notes to Consolidated Financial Statements

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Catheter Precision, Inc.

(formerly known as Ra Medical Systems, Inc.) ("Catheter" or the "Company or "Legacy RA Medical"), was incorporated in Delaware in July 2018.

("Catheter" or the "Company”) was incorporated in California on September 4, 2002, and reincorporated in Delaware in July 2018.

Catheter was initially formed to develop, commercialize and market its advanced excimer laser-based platform for use in the treatment of vascular and dermatological immune-mediated inflammatory diseases.

On January 9, 2023, Catheter entered into the Amended and Restated Agreement and Plan of Merger, or the "Merger Agreement", with Catheter Precision, Inc., or “Old Catheter”, a privately-held Delaware corporation.

Under the terms of the Merger Agreement, Old Catheter became a wholly owned subsidiary of Catheter, together referred to as the Company, in a stock-for-stock merger transaction, or the "Merger".

After the Merger and looking forward, the legacy Destruction of Arteriosclerotic Blockages by laser Radiation Ablation laser and single-use catheter, together referred to as "DABRA," related assets were no longer used and Catheter’s legacy lines of business were discontinued, but instead the Company has shifted the focus of its operations to Old Catheter’s product lines.

Accordingly, the Company’s current activities primarily relate to Old Catheter’s historical business which comprises the design, manufacture and sale of new and innovative medical technologies primarily focused in the field of cardiac electrophysiology, or EP.

The Company’s primary product is the View into Ventricular Onset System (“VIVO” or “VIVO System”) which is a non-invasive imaging system that offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to EP procedures.

The VIVO system has achieved a CE Mark allowing it to be commercialized in the European Union and has been placed at several hospitals in Europe.

United States Food and Drug Administration ("FDA") 510(K) clearance in the United States was received and the Company began a limited commercial release of VIVO in 2021.

The Company’s newest product, Surgical Vessel Closing Pressure Device ("LockeT"), is a suture retention device indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure and is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently.

On January 9, 2023, Catheter entered into the Amended and Restated Agreement and Plan of Merger (the "Merger Agreement") with Catheter Precision, Inc.

(“Old Catheter”), a privately held Delaware corporation.

Under the terms of the Merger Agreement, Old Catheter became a wholly owned subsidiary of Catheter, together referred to as the Company, in a stock-for-stock merger transaction (the "Merger").

Prior to the Merger, Catheter developed the advanced excimer laser-based platform, which was developed as a tool in the treatment of Peripheral Artery Disease, which commonly occurs in the legs.

After the Merger, and looking forward, this legacy Destruction of Arteriosclerotic Blockages by laser Radiation Ablation, laser and single-use catheter (together referred to as "DABRA") and related assets were no longer used.

The Company ceased operations and marketing with respect to DABRA, and Catheter’s legacy lines of business were discontinued.

The Company shifted the focus of its operations to Old Catheter’s product lines.

Accordingly, the Company’s current activities primarily relate to Old Catheter’s historical business, which comprises the design, manufacture and sale of new and innovative medical technologies in the field of cardiac electrophysiology (“EP”).

One of the Company’s two primary products is the VIVO System, which is an acronym for View into Ventricular Onset (“VIVO” or “VIVO System”).

VIVO is a non-invasive imaging system that offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to EP procedures.

The VIVO System is commercially available in the European Union and has been placed at several hospitals in Europe.

United States Food and Drug Administration ("FDA") 510 (k) clearance was received, and the Company began a limited commercial release of VIVO in 2021 in the United States.

The Company’s newest product, LockeT® (“LockeT”), is a suture retention device indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure and is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently.

In addition, LockeT is a sterile, Class I product that was registered with the FDA in February 2023, at which time initial shipments began to distributors.

Clinical studies for LockeT began during the quarter ended September 30, 2023.

These studies are planned to show the product’s effectiveness and benefits, including faster wound closure, earlier ambulation, potentially leading to early hospital discharge, and cost benefits.

This information is intended to provide crucial data for marketing and to expand the Company's indications for use with the FDA.

Clinical studies for LockeT began during the year ended December 31, 2023.

These studies are planned to show the product’s effectiveness and benefits, including faster wound closure and earlier ambulation, potentially leading to early hospital discharge and cost benefits.

This information is intended to provide crucial data for marketing.

The Company recorded its first commercial sale of LockeT to distributors in May 2024.

The Company’s product portfolio also includes the Amigo® Remote Catheter System (the "AMIGO" or "AMIGO System"), a robotic arm that serves as a catheter control device.

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The Company owns the intellectual property related to AMIGO, and this product is under consideration for future research and development of a generation 2 product.

Prior to the Merger, Catheter developed an advanced excimer laser-based platform for use in the treatment of vascular immune-mediated inflammatory diseases.

DABRA was developed as a tool in the treatment of Peripheral Artery Disease which commonly occurs in the legs.

The Company has ceased marketing DABRA.

Effective June 6, 2022, the Company’s board of directors approved a staggered reduction in force (“RIF”).

On September 2, 2022, the Company completed the RIF.

The purpose of the RIF was to preserve capital with the goal of maximizing the opportunities available to the Company in furtherance of the board of directors’ review of strategic alternatives.

As a result of the RIF, the Company paused all engineering and manufacturing activities during the third quarter of 2022 for its legacy DABRA Products.

Reverse stock split

July 3, 2024, at the annual meeting of stockholders of the Company, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation of the Company (the “Amendment”), which included a decrease in the authorized common stock and authorization for the Board, in its discretion, to effect a reverse stock split within specified parameters.

The Amendment was effective

July 15, 2024, reducing the authorized common stock to

30 million shares and effecting a reverse stock split in which each

10 ) shares of the Company’s common stock, par value

$ 0.0001 per share, issued and outstanding immediately prior to the effective time, automatically combined into

1 ) validly issued, fully paid and non-assessable share of the Company’s common stock, par value

$ 0.0001 per share.

No fractional shares were issued as a result of the reverse stock split.

Stockholders who would otherwise have been entitled to receive a fractional share were entitled to receive their pro rata portion of the net proceeds obtained from the aggregation and sale by the exchange agent of the fractional shares resulting from the reverse stock split (reduced by any customary brokerage fees, commissions and other expenses).

All references to share and per share amounts for all periods presented in the consolidated financial statements have been retrospectively restated to reflect this reverse stock split.

All rights to receive shares of common stock under outstanding securities, including but not limited to, warrants and options, were adjusted to give effect to the reverse stock split.

Furthermore, proportionate adjustments were made to the per share exercise price and the number of shares of Common Stock that may be purchased upon exercise of outstanding warrants and stock options granted by the Company, and the number of shares of Common Stock reserved for future issuance under the Company’s Equity Incentive Plan.

Going concern

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty.

The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception.

As of December 31, 2024 , the Company had cash and cash equivalents of approximately $ 2.9 million.

For the year ended December 31, 2024 , the Company used $ 9.3 million in cash for operating activities.

The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception.

As of December 31, 2024 , the Company had an accumulated deficit of approximately $ 292.4 million.

Management expects operating losses and negative cash flows to continue for the foreseeable future as the Company invests in its commercial capabilities.

Additional costs associated with the Merger paid during the years ended December 31, 2023 and 2022, respectively, have substantially depleted the Company’s cash.

Following the Merger with Old Catheter, management further reduced staff and other costs while assuming the operating costs of Old Catheter.

Of the Company’s cash flows used in operating activities of $ 20.6 million, a portion of them are cash outflows related to the Merger and are non-recurring in nature.

Specifically, the Company paid approximately $ 5 .0 million in settlement costs that had been accrued as of December 31, 2022.

These negative cash flows have substantially depleted the Company’s cash.

Following the Merger with Old Catheter, Management further reduced costs while assuming the operating costs of Old Catheter.

Management will continue to monitor its operating costs and seek to reduce its current liabilities.

Such actions may impair its ability to proceed with certain strategic activities.

In January 2023, the Company raised gross proceeds of $ 1.3 million from a 2023 Warrant Repricing (as defined in Note 13, Equity Offerings) and, in March 2023, the Company completed a Private Placement and raised gross proceeds of $ 8 .0 million (see Note 13, Equity Offerings).

If expected revenues are not adequate to fund planned expenditures, or if the Company is unsuccessful at raising cash through future capital transactions, it may be required to reduce its spending rate to align with expected revenue levels and cash reserves, although there can be no guarantee that it will be successful in doing so.

Accordingly, the Company may be required to raise additional cash through debt or equity transactions.

It may not be able to secure financing in a timely manner or on favorable terms, if at all.

As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date the consolidated financial statements are issued.

The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Between May 30, 2024 and July 25, 2024, the Company issued five short-term promissory notes with related parties totaling $ 1.5 million with an 8 % interest rate and a maturity date of August 30, 2024 ( the “Related Party Notes”).

On August 23, 2024, the Company amended the Related Party Notes to extend the maturity date to January 31, 2026.

As part of the amendment, all interest accrued as of the amendment date was repaid to the noteholders and the contractual interest rate increased to 12 % per annum as of the amendment date.

See Note 9, Notes Payable for additional information.

On August 30, 2024, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Ladenburg Thalmann & Co.

as representative (the “Representative”) of the underwriters named in the Underwriting Agreement (the “Underwriters”).

Pursuant to the Underwriting Agreement, the Company completed a public offering of its securities on September 3, 2024 ( the “September 2024 Public Offering”) and sold an aggregate of (i) 805,900 Common Stock Units and (ii) 2,773,000 Pre-Funded Units.

The Company collected gross proceeds of approximately $ 3.6 million before deducting underwriting discounts, commissions, and offering expenses payable by the Company of $ 1.0 million.

See Note 13, Equity Offerings for additional information.

On October 25, 2024, the Company executed the Warrant Inducement Offer Letters (the “2024 Warrant Inducement Offer”) with certain holders of the Company’s existing warrants.

Following the close of the 2024 Warrant Inducement Offer, such warrant holders immediately exercised an aggregate of (i) 33,160.8 Series E Warrants, (ii) 499,909.34 Series F Warrants, (iii) 499,909.34 Series G Warrants, (iv) 1,990,000 Series H Warrants, and (v) 2,325,000 Series I Warrants (collectively the “2024 Existing Warrants”) to purchase 5,347,981 shares of the Company’s common stock at a reduced exercise price of $ 0.70 per share of common stock.

In consideration for the immediate exercise of the 2024 Existing Warrants for cash, the Company agreed to issue unregistered new Series K Common Stock Purchase Warrants (“Series K Warrants”) to purchase up to 10,695,962 shares of common stock.

The Company received aggregate gross proceeds of $ 3.7 million in cash, prior to deducting placement agent fees and offering expense of $ 0.4 million.

See Note 13, Equity Offerings for additional information.

Based on the Company’s liquidity resources, there is substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date of issuance of the consolidated financial statements.

The accompanying consolidated financial statements have been prepared on the basis of the Company continuing to operate in the normal course of business and do not reflect any adjustments to the assets and liabilities related to the substantial doubt of its ability to continue as a going concern.

Management’s ability to continue as a going concern is dependent upon its ability to raise additional funding.

Management plans to raise additional capital through public or private equity or debt financings to fulfill its operating and capital requirements for at least 12 months from the date of the issuance of the consolidated financial statements.

However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all.

Furthermore, if the Company issues equity securities to raise additional funds, its existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders.

Summary of Significant Accounting Policies

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All intercompany transactions have been eliminated in consolidation.

The financial results of Old Catheter are included in the consolidated financial statements from the date of completion of the Merger to December 31, 2023.

Basis of presentation

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Actual results could differ from those estimates.

The Company’s consolidated financial statements are based upon a number of estimates including, but not limited to, the accounting for the Old Catheter business combination (see Note 3, Business Combination), allowance for credit losses, evaluation of impairment of long-lived assets and goodwill, valuation of long-lived assets and their associated estimated useful lives, reserves for warranty costs, fair value of royalties payable, evaluation of probable loss contingencies, fair value of preferred stock and warrants issued, and the fair value of equity awards granted.

Reclassifications

Certain reclassifications have been made to the financial statements for the nine months ended September 30, 2023 to conform to the current period financial statement presentation.

Certain regulatory costs of $ 0.1 million for the nine months ended September 30, 2023, that were previously classified in research and development expenses were reclassified to selling, general and administrative expenses in the consolidated statements of operations.

The Company’s consolidated financial statements are based upon a number of estimates including, but not limited to, the accounting for the Old Catheter business combination (see Note 3, Business Combination), allowance for credit losses, evaluation of impairment of long-lived assets and goodwill, valuation of long-lived assets and their associated estimated useful lives, reserves for warranty costs, fair value of royalties payable due to related parties, evaluation of probable loss contingencies, fair value of preferred stock and warrants issued, including valuation of the deemed dividend, and fair value of equity awards granted.

Concentrations of credit risk

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

Cash equivalents represent highly liquid investments with maturities of 90 days or less at the date of purchase.

Credit risk related to cash and cash equivalents is based on the creditworthiness of the financial institutions at which these funds are held.

The Company has cash balances at financial institutions which throughout the year may exceed the federally insured limit of $250,000.

Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.

To reduce its risk associated with the failure of any such financial institution, the Company evaluates the rating of the financial institution in which it holds deposits.

Any material loss that the Company may experience in the future could have an adverse effect on its ability to pay its operational expenses or make other payments and may require the Company to move its cash to other high quality financial institutions.

Currently, the Company is reviewing its bank relationships in order to mitigate its risk to ensure that its exposure is limited or reduced to the Federal Deposit Insurance Corporation protection limits.

The Company generally maintains cash and cash equivalent balances in various operating accounts at financial institutions with high quality credit in amounts in excess of federally insured limits of $250,000.

As of December 31, 2024 , the Company had deposits in financial institutions in excess of federally insured limits of $ 2.6 million .

The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company has no significant off-balance sheet risk, such as foreign exchange contracts, option contracts, or other hedging arrangements.

The Company extends credit to customers in the normal course of business.

Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the consolidated financial statements.

Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the consolidated balance sheets.

The Company does not require collateral from its customers to secure accounts receivable.

The Company had three customers that represented more than 10% of the Company’s consolidated revenue as of December 31, 2023.

The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other hedging arrangements.

The Company had 3 customers that represented 62 % and 67 % of the Company's consolidated revenues for the years ended December 31, 2024 and 2023 , respectively.

Reclassifications

Certain prior year financial statement amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

In the current year, the Company separately discloses interest income and interest expense in the consolidated statement of operations.

For comparative purposes, amounts in the prior years have been reclassified to conform to current year presentations.

Segment reporting

The Company operates in one business segment, which is the marketing, sales and development of medical technologies focused in the field of cardiac electrophysiology.

The Company operates in one reportable segment, which includes all activities related to the marketing, sales, and development of medical technologies in the cardiac electrophysiology field.

While the commercial efforts that coordinate the marketing, sales, and distribution of these products are organized by geographic region and product, all of these activities are supported by a single corporate team and distribution channels.

The determination of a single reportable segment is consistent with the consolidated financial information available and regularly reviewed by the Company’s chief operating decision maker (“CODM”).

The CODM is the Company’s chief executive officer, who reviews and evaluates consolidated net loss reported on the consolidated statements of operations for purposes of assessing performance, making operating decisions, allocating resources and planning and forecasting for future periods.

As the Company’s operations are managed at the consolidated level, there are no differences between the measurement of the reportable segments’ profit or losses and the Company’s consolidated statements of operations.

Segment asset measures are not used as a basis for the CODM to evaluate the performance of or to allocate resources to the segment.

The following table summarizes segment revenues and significant segment expenses included in the measure of segment profit or loss (consolidated net loss) reviewed by the CODM:

For the Year Ended

Cost of revenues

Loss on impairment of goodwill

Depreciation and amortization expense

Stock-based compensation expense

Salaries and benefits expense

Professional fees

Research and development expenses

Interest income

( 81 ) ( 347 )

Interest expense

Change in fair value of royalties payable due to related parties

2,239 ( 7,208 )

Income tax expense

Other segment items (1)

Segment net loss

( 16,643 ) ( 70,572 )

Reconciliation of net loss

Adjustments and reconciling items

Consolidated net loss

( 16,643 ) ( 70,572 )

( 1 ) Other segment items include other expenses, net of $ 10 thousand, consulting fees of $ 505 thousand, investor relations and SEC fees of $ 459 thousand, insurance fees of $ 533 thousand, and other selling, general, and administrative expenses of $ 1,462 thousand for the year ended December 31, 2024.

Other segment items include other expenses, net of $ 8 thousand, consulting fees of $ 730 thousand, investor relations and SEC fees of $ 691 thousand, insurance fees of $ 704 thousand, and other selling, general, and administrative expenses of $ 1,422 thousand for the year ended December 31, 2023.

Other selling, general, and administrative expenses primarily consist of travel expenses, computer and information technology expenses, and rent expenses.

Cash and cash equivalents

The Company considers all short-term, highly liquid investments with original maturities of 90 days or less to be cash equivalents.

Cash equivalents primarily represent funds invested in readily available checking and money market accounts.

The Company maintains deposits in financial institutions in excess of federally insured limits of $250,000, in the amount of $ 3.1 million at December 31, 2023.

The Company considers all highly liquid investments purchased with an original maturity date of ninety days or less at the date of purchase to be cash equivalents.

Cash and cash equivalents primarily represent funds invested in readily available checking and money market accounts.

Fair value measurements

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Level 3 - Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

Cash equivalents, prepaid expenses, trade accounts receivable, accounts payable, and accrued expenses are reported on the consolidated balance sheets at carrying value which approximates fair value due to the short-term maturities of these instruments.

Cash equivalents, prepaid expenses, accounts receivable, accounts payable, and accrued expenses are reported on the consolidated balance sheets at carrying value which approximates fair value due to the short-term maturities of these instruments.

The carrying value of our notes payable and notes payable due to related parties approximates the instruments' fair value due to the short-term maturities of these debt instruments.

The following table details the fair value measurements within the fair value hierarchy of the Company’s financial instruments:

Fair value at December 31, 2023

December 31, 2024

Cash Equivalents

$ 2,803 $ 2,803 $ — $ —

Money market fund

Royalties payable

$ 2,815 $ 2,815 $ — $ —

Royalties payable due to related parties

$ 9,213 $ — $ — $ 9,213

Total liabilities

The royalties payable have unobservable inputs that are not supported by any market data.

As such the Company developed its own assumptions and identified the inputs as level 3.

The revenue adjusted discount rate (“RADR”) was calculated using a weighted average cost of capital (“WACC”) approach for the level 3 measurement.

The RADR considers the WACC from the Company’s impairment analysis and adjusts certain inputs to represent the risk profile of the revenue.

Under the cost of equity section, the risk-free rate has changed to be commensurate with the royalties payable term.

Additionally, the Beta and Company Specific Risk Premium have been adjusted to Revenue Beta and Revenue Specific Risk Premium, respectively.

This adjustment was calculated by multiplying the respective metric by the quotient of equity volatility over revenue volatility.

The remaining inputs from the Impairment WACC have remained unchanged.

Fair value at December 31, 2022

$ 9,213 $ — $ — $ 9,213

December 31, 2023

Cash Equivalents

Certificate of Deposit

$ 3,397 $ 3,397 $ — $ —

Money market fund

Financial Instruments — Credit Losses (ASU 2016-13)

In June 2016, the FASB issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (“CECL”).

The amendments in this update introduce a new accounting model to measure credit losses for financial assets measured at amortized cost.

The FASB has also issued additional ASUs to clarify the scope and provide additional guidance for ASU 2016-13.

Credit losses for financial assets measured at amortized cost should be determined based on the total current expected credit losses over the life of the financial asset or group of financial assets.

In effect, the financial asset or group of financial assets should be presented at the net amount expected to be collected.

Credit losses will no longer be recorded under the current incurred loss model for financial assets measured at amortized cost.

The amendments also modify the accounting for available-for-sale debt securities whereby credit losses will be recorded through an allowance for credit losses rather than a write-down to the security’s cost basis, which allows for reversals of credit losses when estimated credit losses decline.

Credit losses for available-for-sale debt securities should be measured in a manner similar to current GAAP.

There was no impact of applying the CECL methodology upon adoption effective on January 1, 2020.

Under the CECL impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on three portfolio segments:

Hospitals – United States, Hospitals – Europe, and Distributors.

The determination of portfolio segments is based primarily on the customers’ industry and geographical location.

Our quantitative allowance for credit loss estimates under CECL was determined using the method that uses an aging schedule.

The Company also considers qualitative adjustments that may relate to unique risks, changes in current economic conditions that may not be reflected in quantitatively derived results, or other relevant factors to further inform our estimate of the allowance for credit losses.

Accounts Receivable and Allowances for Doubtful Accounts

Trade accounts receivable are recorded at invoiced amounts, net of allowance for credit losses, if applicable, and are unsecured and do not bear interest.

The allowance for doubtful accounts is based on the probability of future collection under the current expected credited loss impairment model under CECL, which was adopted by the Company on January 1, 2020.

Under the CECL impairment model, the Company determines its allowance by applying the method based on an aging schedule.

The Company also considers reasonable and supportable current information in determining its estimated loss rates, such as external forecasts, macroeconomic trends or other factors including customers’ credit risk and historical loss experience.

The adequacy of the allowance is evaluated on a regular basis.

Account balances are written off after all means of collection are exhausted and the balance is deemed uncollectible.

Subsequent recoveries are credited to the allowance.

Changes in the allowance are recorded as adjustments to bad debt expense in the period incurred.

Accounts receivable consists of the following:

$ 3,407 $ 3,407 $ — $ —

Royalties payable due to related parties

$ 6,974 $ — $ — $ 6,974

Total liabilities

$ 6,974 $ — $ — $ 6,974

The fair value measurement of royalties payable due to related parties includes unobservable inputs that are not supported by any market data.

Royalties payable due to related parties equals the present value of estimated future royalty payments, wherein the Company applies an internally developed, revenue adjusted discount rate (“RADR”) to discount back the forecasted royalty payments.

The RADR is based on the Company’s weighted average cost of capital (“WACC”) adjusted for the product revenue’s risk profile.

The risk-free rate used to determine the cost of equity for the RADR is adjusted to be commensurate with the term of the royalty agreements.

Furthermore, the Beta and Risk Premium used to determine the cost of equity are also adjusted to reflect the product revenue's volatility.

All other inputs for the RADR and the Company’s WACC are the same.

The following tables summarize the significant unobservable inputs used in the fair value measurement of Level 3 instruments:

December 31, 2024

Valuation Technique

Unobservable Input

Royalties payable due to related parties

Discounted future cash flows

Revenue adjusted discount rate

December 31, 2023

Trade accounts receivable

Reserve for expected credit losses

Accounts receivable, net - balance at end of period

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value.

Valuation Technique

Unobservable Input

Royalties payable due to related parties

Discounted future cash flows

Revenue adjusted discount rate

Increases or decreases in the fair value of royalties payable due to related parties can result from updates to assumptions, such as changes in discount rates, projected cash flows, among other assumptions.

Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period.

Changes or updates to assumptions could have a material impact on the reported fair value, the change in fair value, and the results of operations in any given period.

The table below summarizes the change in fair value of royalties payable to related parties for the years ended December 31, 2024 and 2023 (in thousands):

Beginning Balance at January 1,

AMIGO royalty payable recognized in connection with the Merger

LockeT royalty payable recognized in connection with the Merger

Change in fair value of royalties payable due to related parties

2,239 ( 7,208 )

Ending Balance at December 31,

$ 9,213 $ 6,974

Accounts receivable and allowances for credit losses

Accounts receivable consists of trade receivables recorded at invoiced amounts.

Accounts receivable is presented net of any discounts and allowance for credit losses, is unsecured and does not bear interest.

Accounts receivable are evaluated for collectability based on historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts, including the probability of future collection and estimated loss rates based on aging schedules.

Accounts receivable are assessed for collectability based on three portfolio segments:

Hospitals - United States, Hospitals - Europe, and Distributors.

The determination of portfolio segments is based on the customers’ industry and geographical location.

Changes in the estimated collectability of accounts receivable are recorded in the results of operations in the period in which the estimate is revised.

Accounts receivable are written off as uncollectible after all means of collection are exhausted.

Any subsequent recoveries are credited to the allowance for credit losses.

As of December 31, 2024 and 2023, the allowance for credit losses related to accounts receivable was immaterial.

Inventories are stated at the lower of cost (determined by the first -in, first -out method) or net realizable value.

Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories.

The Company reduced the carrying value of inventories for those items that were potentially excess, obsolete or slow-moving based on changes in customer demand, technological developments or other economic factors.

The Company reduces the carrying value of inventories for those items that are potentially in excess, obsolete or slow-moving based on changes in customer demand, technological developments or other economic factors.

Property and equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives as follows:

Property and equipment are recorded at cost, less accumulated depreciation.

Property and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Machinery and equipment

Computer hardware and software

LockeT animation video

VIVO DEMO/Clinical Systems

Furniture and fixtures

Leasehold improvements are depreciated over the shorter of the useful life of the leasehold improvement or the term of the underlying property’s lease.

The Company periodically reviews the residual values and estimated useful lives of each class of its property and equipment for ongoing reasonableness, considering long-term views on its intended use of each class of property and equipment and the planned level of improvements to maintain and enhance assets within those classes.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the account balances and any resulting gain or loss is recognized in income for the period.

The cost of repairs and maintenance is expensed as incurred, whereas significant betterments are capitalized.

The Company periodically reviews the residual values and estimated useful lives of each class of its property and equipment for ongoing reasonableness, considering the long-term views of their intended use and the level of planned improvements to maintain and enhance those assets.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective account balances and any resulting gain or loss is recognized in the Company’s consolidated statements of operations.

The cost of repairs and maintenance are expensed as incurred, whereas significant renewals and betterments are capitalized.

Impairment of long-lived assets

In accordance with ASC 360, Impairment and Disposals of Long-lived Assets, the Company periodically reviews its long-lived assets for impairment when certain events or changes in circumstances indicate that the carrying value of the long-lived assets may not be recoverable.

Should the sum of the undiscounted expected future net cash flows be less than the carrying value, the Company would recognize an impairment loss at that date.

As a result of the sustained decline of the Company's stock price from the date of the Merger, the Company assesses its long-lived assets for impairment.

In accordance with ASC 360, Impairment and Disposals of Long-lived Assets , the Company periodically reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value of the long-lived assets may not be recoverable.

If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the assets carrying value over its fair value is recorded in the Company’s consolidated statements of operations at that date.

As a result of the sustained decline of the Company's stock, the Company assessed its long-lived assets for impairment.

To evaluate whether the carrying amount of the long-lived asset group is recoverable, the Company determined the estimated future cash flows of the group for a period consistent with that of the primary assets of the group.

The sum of the undiscounted cash flows was then compared to the carrying amount of the long-lived assets as of December 31, 2024.

The Company concluded there was no impairment as of December 31, 2024 .

Due to the Company’s RIF and the decision to discontinue enrollment of patients in its DABRA related clinical trial, the Company ceased manufacturing activities of DABRA .

The Company’s property and equipment was determined to be impaired as of June 30, 2022, resulting in an impairment charge of $ 1.5 million which was based on the actual cash proceeds received upon the disposal of the property and equipment in July 2022.

The impairment charge of $ 1.5 million is included in restructuring costs in the consolidated statements of operations for the year ended December 31, 2022.

In accordance with ASC 350, Intangibles – Goodwill and Other , goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of net assets acquired.

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The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing.

When performing quantitative testing, the Company first estimates the fair values of its reporting units using a combination of an income and market approach.

When performing quantitative testing, the Company first estimates the fair values of its reporting units using a combination of an income and market-based approach.

To determine fair values, the Company is required to make assumptions about a wide variety of internal and external factors.

4 unchanged sentences

To the extent the carrying amount of goodwill exceeds the implied goodwill, the difference is the amount of the goodwill impairment.

The Company also completes a reconciliation between the implied equity valuation prepared and the Company’s market capitalization.

The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs.

1 unchanged sentence

There were impairment charges of $ 60.9 million recognized during the year ended December 31, 2023 ( see Note 3, Business Combination and Note 7, Goodwill for additional details).

Royalties Payable

The Company is obligated to pay royalties under various royalty agreements Old Cather had entered into.

On January 9, 2023, prior to the consummation of the Merger, Old Catheter entered in an agreement with its Convertible Promissory Noteholders (“Noteholders”), which substantially consisted of amounts due to David A.

Jenkins, previously Old Catheter's Chairman of the Board of Directors prior to the Merger, and, currently, the Company’s Executive Chairman of the Board of Directors and Chief Executive Officer, to forgive all accrued interest and future interest expense in exchange for a future royalty right.

The Company will pay to the Noteholders a total royalty equal to approximately 12% of net sales of LockeT, commencing upon the first commercial sale, through December 31, 2035 .

In addition, Old Catheter had entered into an agreement with the inventor of LockeT in exchange for the assignment and all rights to LockeT, Pursuant to the agreement, the Company will pay a 5% royalty on net sales up to $1 million in royalties.

After $1 million has been paid, and if, and only if, a U.S.

patent is granted by the United States Patent and Trademark Office, then the Company will continue to pay a royalty at a rate of 2% of LockeT net sales, until total cumulative royalties of $10 million have been paid (see Note 10, Royalties Payable).

During 2006 and 2007, Old Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Old Catheter's AMIGO System.

The agreement calls for the payment to the foundation, upon successful commercialization of the AMIGO System (see Note 10, Royalties Payable).

As of the date of the Merger, the royalties payable had an estimated fair value of approximately $ 14.2 million.

As of December 31, 2023, the royalties payable had an estimated fair value of $ 7.0 million.

At each reporting period, the fair value is calculated using a discounted cash flow method utilizing a RADR which was 24.1 % as of January 9, 2023 and 28.0 % as of December 31, 2023.

As of December 31, 2023, goodwill was fully impaired.

Royalties payable due to related parties

The Company is obligated to pay royalties related to sales of LockeT and AMIGO System under various royalty agreements executed by Old Catheter.

The Company recognizes a liability for royalty fees incurred and payable based on actual sales of products under current portion of royalties payable due to related parties in the consolidated balance sheets.

The Company recognizes a liability for future, estimated royalty payments at fair value under the royalties payable due to related parties in the consolidated balance sheets.

The royalties payable due to related parties is remeasured at each reporting period.

Changes in fair value of royalties payable due to related parties are recorded on the consolidated statements of operations in the period in which they occur.

See Note 10, Royalties Payable for additional information.

Product warranty

The Company’s current products are warrantied against defects in material and workmanship when properly used for their intended purpose and properly maintained.

Similarly, the DABRA products were warrantied against defects in material and workmanship when properly used for their intended purpose and appropriately maintained.

Accordingly, the Company generally replaced catheters that kinked or failed to calibrate.

The product warranty liability was determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor.

The product warranty liability also includes the estimated costs of a product recall.

The warranty accrual is included in accrued expenses in the accompanying consolidated balance sheets.

The Company offers product warranties against defects in material and workmanship when the products are used for their intended purpose and properly maintained.

Warranty expenses are included in cost of revenues in the accompanying consolidated statements of operations.

Changes in estimates to previously established warranty accruals resulted from current period updates to assumptions regarding repair and product recall costs and are included in current period warranty expense.

Changes in estimates to previously established warranty accruals result from current period updates to assumptions regarding repair and product recall costs and are included in current period warranty expense.

As of December 31, 2024 and December 31, 2023 , there was no accrued product warranty balance.

Distinguishing liabilities from equity

The Company relies on the guidance provided by ASC Topic 480, Distinguishing Liabilities from Equity , to classify certain redeemable and/or convertible instruments.

The Company first determines whether a financial instrument should be classified as a liability.

The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.

Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet.

The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e.

at the option of the holder).

Otherwise, the Company accounts for the financial instrument as permanent equity.

The Company evaluates equity or liability classification for freestanding financial instruments, including convertible preferred stock, warrants, and options, pursuant to the guidance under ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480” ).

The Company classifies as liabilities all freestanding financial instruments that are (i) mandatorily redeemable, (ii) represent an obligation to repurchase the Company’s equity shares by transferring assets, or (iii) represent an unconditional obligation (or conditional obligation if the financial instrument is not an outstanding share) to issue a variable number of shares predominantly based on a fixed monetary amount, variations in something other than the fair value of the Company’s equity shares, or variations inversely related to changes in fair value of the Company’s equity shares.

If a freestanding financial instrument does not represent an outstanding equity share and does not meet liability classification under ASC 480, the Company then assesses whether the freestanding financial instrument is indexed to its own stock and meets equity classification pursuant to ASC 815 - 40, Derivatives and Hedging (“ASC 815” ).

The Company further assesses whether the freestanding financial instruments should be classified as temporary equity.

Freestanding financial instruments that are redeemable for cash or other assets at a fixed or determinable date, at the option of the holder, or upon the occurrence of an event are classified in temporary equity in accordance with ASC 480.

Otherwise, the freestanding financial instruments are classified in permanent equity.

Revenue recognition

The Company applies the provisions of FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), and all related appropriate guidance.

The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

The Company measures revenue based upon the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client arrangement are satisfied.

A performance obligation is a promise in a contract to transfer a distinct service to the customer.

The transaction price of a contract is allocated to each distinct performance obligation.

Under ASC 606, revenue is recognized when a customer obtains control of promised goods.

To achieve this core principal, the Company applies the following five steps:

In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606” ), the Company accounts for contracts with customers when there is a legally enforceable contract, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable.

Revenue is measured as the amount of consideration expected to be received in exchange for transferring promised goods or services.

The amount of consideration to be received and revenue recognized may vary due to discounts.

A performance obligation is a promise in a contract to transfer a distinct good or service.

If there are multiple performance obligations in the customer contract, the Company allocates the transaction price in the contract to each performance obligation based on the relative standalone selling price.

The Company does not adjust revenue for the effects of a significant financing component for contracts if the period between the transfer of control and corresponding payment is expected to be one year or less.

Revenue is recognized when performance obligations in the customer contract are satisfied.

This generally occurs when the customer obtains control of a promised good at a point in time or when a customer receives a promised service over time.

Pursuant to ASC 606, the Company applies the following five steps to each customer contract:

Identify the contract with the customer

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Recognize revenue when the Company satisfies a performance obligation

The Company’s primary product in 2023 was the VIVO System.

The VIVO System offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to electrophysiology studies.

In addition to the VIVO System, customers are provided with VIVO Positioning Patch Sets, which are custom patches, that are used in conjunction with the VIVO System to complete the intended output of the VIVO System.

The delivery of the VIVO System, including the VIVO Positioning Patch Sets represents the Company’s primary performance obligation.

The Company recognizes revenue upon the delivery of the VIVO system.

The Company also provides customers with the option to pay for software upgrades in advance at the time of the contract's inception.

Software upgrades are stand-ready services, whereby the Company will provide software upgrade services to the customer when and as upgrades are available.

Terms of the period covered by the payment of software upgrades in advance can range from one year to multiple years.

Customers have the option to renew terms covered by software upgrades at the end of each term.

The stand-ready software upgrades represent the Company's second separate performance obligation and revenue is recognized over the term of the period.

The Company invoices the customers after physical possession and control of the VIVO System is transferred to the customer and recognizes revenue upon delivery.

The timing of payment for the corresponding invoices is dependent upon the credit terms identified in each contract.

The Company invoices customers who pay for software upgrades in advance in conjunction with the invoice for the delivery of the VIVO System, and subsequent renewals of software upgrades are invoiced at the inception of the term.

Revenue for these stand-ready services is recognized evenly over the term of the upgrade period, consistently with similar stand-ready services under ASC 606.

Similar to the delivery of the VIVO System, the timing of payment for the corresponding invoices is dependent upon the credit terms identified in each contract.

The Company has elected the practical expedient to expense costs to obtain a contract, as incurred, as opposed to recognizing the cost as an asset upon occurrence.

The VIVO System offers 3D cardiac mapping to help localize the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to electrophysiology studies.

Customers are provided with VIVO Positioning Patch Sets, which are custom patches, that are used in conjunction with the VIVO System.

The VIVO Positioning Patch Sets are integral to the functionality of the VIVO System.

The VIVO System, including the VIVO Positioning Patch Sets, represents the Company’s primary performance obligation.

The Company recognizes revenue when physical possession and control of the VIVO System is transferred to the customer upon delivery.

The Company also offers customers software upgrades for the VIVO System, which may be purchased and paid in advance at contract inception.

Software upgrades represent stand-ready services, whereby the Company promises to provide software upgrades to the customer when and as upgrades are available.

Software upgrade services may be offered for initial contract terms of one to multiple years.

Customers have the option to renew software upgrades services at the end of each term.

The software upgrade services represent the Company's second performance obligation, which is recognized evenly over time over the contract term.

There were no software upgrade services revenues during the years ended December 31, 2024 and 2023.

The Company invoices the customer for the VIVO System and related software upgrades after physical possession and control of the VIVO System has been transferred to the customer.

Subsequent renewals for software upgrades are invoiced at inception of the renewed term.

The timing of payment for the corresponding invoices depends on the credit terms identified in each customer contract.

LockeT was launched by the Company in February 2023 and is a suture retention device indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure.

LockeT is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently.

The LockeT device represents a performance obligation in the customer contract.

The Company recognizes revenue when it transfers control of the LockeT device to the customer, which happens when the Company delivers the product to the customer.

The Company has elected as a practical expedient to expense as incurred any costs incurred to obtain a contract as the related amortization period would be one year or less.

Disaggregation of revenue

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Advertising costs are expensed as incurred and included in selling, general and administrative expenses.

Advertising costs were $ 95 thousand during the year ended December 31, 2023.

Advertising costs were immaterial during the year ended December 31, 2022.

Advertising costs were $ 170 t housand and $ 95 thousand during the years ended December 31, 2024 and 2023, respectively.

The Company expenses patent costs, including related legal costs, as incurred and records such costs as selling, general and administrative expenses in the accompanying consolidated statements of operations.

Research and development

Major components of research and development costs include personnel expenses, consulting, supplies and clinical trial expenses.

Major components of research and development costs include consulting, research grants, supplies and clinical trial expenses.

Research and development expenses are charged to operations in the period incurred.

Stock-based compensation

The Company records stock-based compensation expense associated with stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) issued to employees, members of the Company’s board of directors and consultants in accordance with the authoritative guidance for stock-based compensation.

The Company evaluates whether an award should be classified and accounted for as a liability award or equity award for all stock-based compensation awards granted.

The cost of an award of an equity instrument is measured at the grant date, based on the estimated fair value of the award using the Black-Scholes option pricing valuation model (“Black-Scholes model”) which incorporates various assumptions including expected term, volatility and risk-free interest rate, and is recognized as expense on a straight-line basis over the requisite service period of the award, which is generally the vesting period of the respective award.

Share-based compensation for an award with a performance condition is recognized when the achievement of such performance condition is determined to be probable.

If the outcome of such performance condition is not determined to be probable or is not met, no compensation expense is recognized, and any previously recognized compensation expense is reversed.

The Company recognizes stock-based compensation expense associated with stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) issued to employees, members of the Company’s board of directors and consultants in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718” ).

The Company evaluates whether stock-based awards should be classified and accounted for as liability or equity awards on the date of grant.

Furthermore, the Company measures all stock-based awards granted based on the fair value of the award on the date of grant.

Stock options are measured at fair value using the Black-Scholes option pricing valuation model (the “Black-Scholes model”), which incorporates various assumptions, including expected term, volatility and risk-free interest rate.

Stock-based compensation expense for all stock-based awards is recognized over the requisite service period, which is generally the vesting period of the respective stock award.

Stock-based compensation expense for stock-based awards with a performance condition is recognized when the achievement of such performance condition is determined to be probable.

If the outcome of such performance condition is not probable or is not met, no stock-based compensation expense is recognized, and any previously recognized compensation expense is reversed.

Forfeitures are recognized as a reduction of stock-based compensation expense as they occur.

As a result of the Merger, all unvested Old Catheter stock options were subject to accelerated vesting and therefore became fully vested, as of the closing date of the business combination.

As a result of the Merger, all unvested Old Catheter stock options were subject to accelerated vesting and became fully vested as of the closing date of the business combination.

The Company recognized the fair value of the replacement options as included in consideration transferred to the extent they do not exceed the fair value of the equivalent Old Catheter options.

Any incremental fair value was recognized in compensation expense in the post-combination period, with this recognized as a Day 1 expense due to the Old Catheter options becoming fully vested concurrent with the closing of the business combination.

Any incremental fair value was recognized in stock-based compensation expense in the post-combination period, with this recognized as a Day 1 expense due to the Old Catheter options becoming fully vested concurrent with the closing of the business combination.

The Company accounts for income taxes using the asset and liability method.

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The Company accounts for uncertainty in income taxes using a two -step approach to recognizing and measuring uncertain tax positions.

The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any.

The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on an audit, including resolution of related appeals or litigation processes, if any.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

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Basic and diluted net loss per share of common stock

The Company calculates basic net loss per share by dividing net loss by the weighted average number of common shares outstanding during the reporting period.

A net loss cannot be diluted so when the Company is in a net loss position, basic and diluted loss per common share are the same.

If in the future the Company achieves profitability, the denominator of a diluted earnings per common share calculation will include both the weighted average number of shares outstanding and the number of common stock equivalents, if the inclusion of such common stock equivalents would be dilutive.

Anti-dilutive common stock equivalents excluded from the computation of diluted net loss per share include warrants, stock options, non-vested restricted stock awards, restricted stock units, Series A Convertible Preferred Stock, and Series X Convertible Preferred (see Note 12, Net loss per Share).

Earnings per share attributable to common stockholders is calculated using the two -class method, which is an earnings allocation formula that determines earnings per share for the holders of the Company’s common shares and participating securities.

The Company’s Series A Convertible Preferred Stock, Series X Convertible Preferred Stock, and outstanding warrants are participating securities as they contain participating rights in distributions made to common stockholders.

Since the participating securities do not include a contractual obligation to share in the losses of the Company, they are not included in the calculation of net loss per share in the periods that have a net loss.

In addition, common stock equivalent shares (whether or not participating) are excluded from the computation of diluted earnings per share in periods in which they have an anti-dilutive effect on net loss per common share.

Diluted net loss per share is computed using the more dilutive of (a) the two -class method or (b) the if-converted method and treasury stock method, as applicable.

In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Diluted net loss per share is equivalent to basic net loss per share for the periods presented herein because common stock equivalent shares from warrants, stock options, non-vested restricted stock awards, restricted stock units, Series A Convertible Preferred Stock, and Series X Convertible Preferred Stock were anti-dilutive (see Note 12, Net Loss per Share).

Net loss attributable to common stockholders consists of net income or loss, as adjusted for actual and deemed dividends declared.

The Company recorded a deemed dividend for the modification of existing warrants and issuance of new warrants during the year ended December 31, 2023 of $ 0.8 million.

The deemed dividend is added to the net loss in determining the net loss available to common stockholders.

Recently Announced Accounting Pronouncements

In June 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”) which clarifies guidance for fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities.

ASU 2022-03 is effective for fiscal years beginning after December 15, 2023 and for interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2022-03 on its consolidated financial statements.

The Company recorded a deemed dividend for the modification of existing warrants and issuance of new warrants of $ 5.2 million and $ 0.8 million for the years ended December 31, 2024 and 2023 , respectively.

The deemed dividend is added to net loss in determining the net loss available to common stockholders for the years ended December 31, 2024 and 2023 .

Recently adopted accounting pronouncements

In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures ("ASU 2023 - 07" ).

The amendments in ASU 2023 - 07 require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM.

The amendments in this update also expand the interim segment disclosure requirements.

These amendments do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

The company adopted the amended guidance for the fiscal year-ended December 31, 2024.

The adoption of ASU 2023 - 07 expanded certain disclosures but did not have a material impact on our consolidated financial statements.

Refer to Note 2, Summary of Significant Accounting Policies, for more information about our segment reporting.

Recently issued accounting pronouncements

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

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The Company is required to adopt this standard prospectively in fiscal year 2025 for the annual reporting period ending December 31, 2025.

The accounting pronouncement is not expected to have a material impact on the Company's related disclosures.

The Company does not believe the impact of the new guidance and related codification improvements will have a material impact to its financial position, results of operations and cash flows.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses ("ASU 2024 - 03" ).

ASU 2024 - 03 requires the disaggregation of certain costs and expenses in the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement.

ASU 2024 - 03 is effective for the Company’s Annual Report on Form 10 -K for the fiscal year ending December 31, 2027 and for interim periods beginning in 2028.

The guidance may be applied on a prospective or retrospective basis and early adoption is permitted.

The Company is currently evaluating the impact of adopting ASU 2024 - 03 on its consolidated financial statements.

Business Combination

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The following table summarizes the fair value of the consideration associated with the Merger (in thousands):

Fair Value as of January 9, 2023

Fair Value as of

January 9, 2023

Fair value of 14,649.592 Series X convertible preferred stock issued

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Total Purchase Price

The Merger is being accounted for as a business combination in accordance with Topic 805 and the Company has been determined to be the accounting acquirer.

The Merger was accounted for as a business combination in accordance with Topic 805, and the Company has been determined to be the accounting acquirer.

The Company allocated the purchase price to the assets acquired and liabilities assumed at fair value.

The preliminary purchase price allocation reflects various preliminary fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, liabilities assumed, and goodwill, which were subject to change within the measurement period as preliminary valuations were being finalized (generally one year from the acquisition date).

The purchase price allocation reflects various fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, liabilities assumed, and goodwill, which were subject to change within the measurement period as valuations were being finalized (generally one year from the acquisition date).

Measurement period adjustments were recorded in the reporting period in which the estimates are finalized, and adjustment amounts were determined.

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goodwill was revised from $ 56.0 million to $ 60.9 million;

and royalties payable were revised from $ 7.6 million to $ 14.2 million.

and royalties payable due to related parties were revised from $ 7.6 million to $ 14.2 million.

The following table summarizes the final purchase price allocations relating to the Merger (in thousands):

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Convertible promissory notes

Royalties payable

Royalties payable due to related parties

Total liabilities assumed

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As a result, the Company recorded an impairment charge relating to goodwill of $ 60.9 million during the year ended December 31, 2023.

This amount represented the purchase price amount ascribed to goodwill.

Transaction costs incurred in connection with this business combination amounted to approximately $ 1.7 million during the year ended December 31, 2023.

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These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the period presented, nor does the pro forma financial information purport to represent the results of operations for future periods.

The following information for the years ended December 31, 2023 and 2022 is presented in thousands except for the per share data ($ in thousands, except per share data):

For the Years Ended December 31,

The following information for the year ended December 31, 2023 and is presented in thousands except for the per share data (in thousands, except per share data):

For the Year Ended December 31,

Net loss attributable to common stockholders

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Finished goods

There were no inventory obsolescence charges for the year ended December 31, 2023.

Due to the Company's RIF and decision to discontinue enrollment of patients in its DABRA clinical trial, the Company suspended manufacturing activities of DABRA products in June 2022 and disposed of substantially all DABRA related inventories in July 2022, resulting in a write-down of $1.0 million in its inventories to net realizable value.

Such expense is included in restructuring and impairment charges in the consolidated statements of operations for the year ended December 31, 2022.

There were no charges for inventory obsolescence or allowance recorded for the years ended December 31, 2024 and 2023 .

Property and Equipment

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Computer hardware and software

LockeT animation video

VIVO DEMO/Clinical Systems

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Accumulated depreciation

( 97 ) ( 32 )

Property and equipment, net

Depreciation expense was $ 65 thousand and $ 32 thousand for the years ended December 31, 2024 and 2023 , respectively.

Due to the Company’s decision to discontinue enrollment of patients in its DABRA clinical trial and the RIF, the Company suspended manufacturing activities of DABRA products in June 2022.

The impairment charge of $ 1.5 million is included in restructuring and impairment charges in the consolidated statements of operations for the year ended December 31, 2022.

Intangible Assets

The following table summarizes the Company’s intangible assets as of December 31, 2024 (in thousands):

Useful Life in

Gross Carrying

January 9, 2023

Net Book Value at

December 31, 2023

Developed technology ‐ VIVO

15 $ 8,244 $ ( 1,099 ) $ 7,145

Developed technology ‐ LockeT

14 18,770 ( 2,681 ) 16,089

Customer relationships

6 62 ( 21 ) 41

Trademarks/trade names ‐ VIVO

9 876 ( 195 ) 681

Trademarks/trade names ‐ LockeT

As of December 31, 2022 the Company did not have any intangible assets.

9 409 ( 91 ) 318

$ 28,361 $ ( 4,087 ) $ 24,274

The following table summarizes the Company’s intangible assets as of December 31, 2023 ( in thousands):

Gross Carrying

Developed technology ‐ VIVO

15 $ 8,244 $ ( 550 ) $ 7,694

Developed technology ‐ LockeT

14 18,770 ( 1,341 ) 17,429

Customer relationships

6 62 ( 10 ) 52

Trademarks/trade names ‐ VIVO

9 876 ( 97 ) 779

Trademarks/trade names ‐ LockeT

9 409 ( 45 ) 364

$ 28,361 $ ( 2,043 ) $ 26,318

The estimated future amortization expense for the next five years and thereafter is as follows (in thousands):

Years ending December 31,

Future Amortization Expense

The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets.

Amortization expense, included within selling, general and administrative expenses, relating to the purchased intangible assets was $ 2.0 million and $ 0 for the years ended December 31, 2023 and 2022, respectively.

The weighted average remaining amortization period for the Company’s intangible assets as of December 31, 2023, is 13.06 years.

The Company uses the straight-line method to determine amortization expense for its definite lived intangible assets.

Amortization expense, included within selling, general and administrative expenses, related to the Company's intangible assets was $ 2.0 million and $ 2.0 million for the years ended December 31, 2024 and 2023 , respectively.

In connection with the Merger, the excess of the purchase price over the estimated fair value of the net assets assumed of $ 60.9 million was recognized as goodwill.

The Merger was accounted for as a business combination in accordance with Topic 805, and the Company has been determined to be the accounting acquirer.

The Company allocated the purchase price to the assets acquired and liabilities assumed at fair value.

During the three months ended June 30, 2023, the Company recorded measurement period adjustments based on changes to certain estimates and assumptions and their related impact to the purchase price allocation.

As a result, goodwill was revised from $ 56.0 million to $ 60.9 million.

The Company tests Goodwill for impairment at the reporting unit level annually in the fourth quarter or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.

Due to a sustained decrease in the Company’s share price during the quarters ended March 31, 2023 and June 30, 2023, the Company concluded that, in accordance with ASC 350, a triggering event occurred indicating that potential impairment exists and required the Company to assess if impairment exists as of March 31, 2023 and June 30, 2023.

Due to a sustained decrease in the Company’s share price during the quarter ended March 31, 2023, the Company concluded that, in accordance with ASC 350, a triggering event occurred indicating that potential impairment exists and required the Company to assess if impairment exists as of March 31, 2023.

In accordance with ASC 350, the Company performed a quantitative goodwill impairment test, which resulted in the carrying amount of the reporting unit exceeding the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired.

The Company utilized a combination of an income and market approach to assess the fair value of the reporting unit.

The Company utilized a combination of an income and market-based approach to assess the fair value of the reporting unit.

The guideline public company market approach considered marketplace earnings multiples from within a peer public company group.

As of December 31, 2023, cumulative goodwill impairment charges of $ 60.9 million were incurred related to the Company’s single reporting unit.

The following is a roll forward of goodwill as of December 31, 2023 ($ in thousands):

Balance at beginning of year

Goodwill recognized in connection with the Merger (Note 3)

Impairment charge

Balance at end of year

As of December 31, 2023, cumulative goodwill impairment charges of $ 60.9 million were incurred related to the Company’s single reporting unit and no goodwill remains as of this date.

Accrued Expenses

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Legal expenses

DOJ settlement

Offering costs

Compensation and related benefits

Warranty expenses

Other accrued expenses

Accrued expenses

Activity in the product warranty accrual is included in accrued expenses in the consolidated balance sheets and consisted of the following ($ in thousands):

Year Ended December 31,

Balance at beginning of year

Claims satisfied

Removal of accrued warranty

Balance at end of year

The warranty relates to the voluntary recall of DABRA catheters, which was initiated in September 2019.

$ 1,548 $ 1,733

The product warranty accrual related to the voluntary recall of DABRA catheters was initiated in September 2019.

The recall was closed by the FDA in July 2023 and no claims have been submitted in approximately 2 years.

As such, the Company derecognized the warranty liability as of December 31, 2023.

As such, the Company derecognized the warranty liability of $ 192 thousand as of December 31, 2023.

The accrued warranty balance was $ 0 as of December 31, 2024 and 2023 .

Notes Payable

Note Payable - Director & Officer Liability Insurance

The Company purchased director and officer liability insurance coverage on October 16, 2023 for $ 447 thousand.

A down payment of $ 157 thousand was made and the remaining balance of $ 290 thousand was financed over 8 months through a short-term financing arrangement with its insurance carrier.

The interest rate on the loan was 8.99 %.

Interest expense on this loan was $ 4 thousand and $ 6 thousand for the years ended December 31, 2024 and 2023 , respectively.

The loan balance was $ 184 thousand as of December 31, 2023.

The loan balance was paid off in May 2024, such that there is no remaining balance as of December 31, 2024 .

The Company purchased director and officer liability insurance coverage on September 26, 2024 for $ 293 thousand.

A down payment of $ 44 thousand was made and the remaining balance of $ 249 thousand was financed over 10 months through a short-term financing arrangement with its insurance carrier.

The interest rate on the loan is 9.99 %.

Interest expense on this loan for the year ended December 31, 2023 was $ 6 thousand.

The loan balance as of December 31, 2023 was $ 184 thousand.

Royalties Payabl e

Interest expense on this loan was $ 6 thousand for the year ended December 31, 2024 .

The loan balance was $ 177 thousand as of December 31, 2024 .

Promissory Notes (collectively, the “Related Party Notes”)

On May 30, 2024, David A.

Jenkins loaned $ 500,000 to the Company in exchange for a short-term promissory note.

On June 25, 2024, an entity controlled by Mr.

Jenkins loaned $ 150,000 to the Company in exchange for a short-term promissory note.

On July 1, 2024 and July 18, 2024, the Company entered into two short-term promissory notes with an affiliate of Mr.

Jenkins, wherein the affiliate loaned $ 250,000 and $ 100,000 , respectively, to the Company in exchange for the short-term promissory notes.

On July 25, 2024, the Company entered into a short-term promissory note with a Trust, of which Mr.

Jenkins’ adult daughter is the trustee, wherein the Trust loaned $ 500,000 to the Company in exchange for the short-term promissory note.

All of these short-term promissory notes (the “Related Party Notes”) had a maturity date of August 30, 2024 and interest at 8 % per annum.

On August 23, 2024, the Company entered in the first amendment of the Related Party Notes, which extended the maturity date to January 31, 2026 and increased the interest rate to 12 % per annum after August 31, 2024.

All other terms and conditions remained substantially unchanged.

As part of the amendment, the Company paid down all accrued interest to date of $ 21 thousand.

The amendment was accounted for as a debt modification in accordance with ASC 470 - 50, Debt Modifications and Extinguishment (“ASC 470 - 50” ).

Since the modified terms and conditions were not substantially different from the prior terms and conditions, the Company accounted for the debt modification as a continuation of the original debt instrument.

The Company further concluded that the debt modification did not result in any adjustments to the carrying value of the Related Party Notes.

The Related Party Notes, including all principal and interest, accelerate and become immediately due and payable upon the occurrence of certain customary events of default, including failure to pay amounts owed when due, material breach of the Company’s representations or warranties (unless waived by the holders of the Related Party Notes or cured within 10 days following notice), certain events involving the discontinuation of the Company’s business and/or certain types of proceedings involving insolvency, bankruptcy, receivership and the like.

Interest expense on the Related Party Notes was $ 81 thousand for the year ended December 31, 2024 .

The Related Party Notes and related accrued interest totaled $ 1.6 million as of December 31, 2024 , $ 61 thousand of which related to accrued interest and was recorded under interest payable due to related parties on the consolidated balance sheets.

The principal balance of $ 1.5 million of the Related Party Notes is recorded under notes payable due to related parties on the consolidated balance sheets.

See Note 19, Related Parties for additional details.

Royalties Payable

LockeT Royalty

On January 9, 2023, Old Catheter entered into an agreement with the Noteholders to forgive all accrued interest and future interest expense in exchange for a future royalty right.

Under these agreements, the Company is obligated to pay the Noteholders a total royalty equal to approximately 12 % of net sales of its LockeT device, commencing upon the first commercial sale, through December 31, 2035.

The remaining accrued interest for the note not converted at closing of the Merger was paid on February 9, 2023.

An additional royalty will be paid to the inventor of the LockeT device.

Under these agreements, the Company is obligated to pay the Noteholders a total royalty equal to 11.82 % of net sales of its LockeT device on a quarterly basis, commencing upon the first commercial sale, which occurred in April 2024, through December 31, 2035.

As of December 31, 2024, the fair value of the royalty payable related to the agreement with the Noteholders was $ 9.2 million.

The Company recorded a loss on the change in the fair value of $ 2.2 million for the year ended December 31, 2024.

An additional royalty will be paid to the inventor of the LockeT device as detailed in the Royalty Agreement.

In exchange for the assignment and all rights to LockeT, the Company will pay a 5 % royalty on net sales up to $ 1.0 million in royalties, payable annually in arrears, starting with the year ending December 31, 2022.

After $ 1.0 million has been paid, and if, and only if, a US patent is granted by the United States Patent and Trademark Office, the Company will continue to pay a royalty at a rate of 2 % of net sales, until total cumulative royalties of $ 10.0 million have been paid.

The royalty payments will apply to revenues through February 29, 2032 , then will terminate regardless of whether the full $ 10.0 million has been paid.

The royalty payments will apply to revenues through December 31, 2033, then will terminate regardless of whether the full $ 10.0 million has been paid.

The Company recorded its first sales of LockeT devices during the year ended December 31, 2024, such that the Company owes $ 32 thousand in connection with the royalty agreements as of December 31, 2024.

The Company did not owe any royalty payments as of December 31, 2023.

AMIGO System Royalty

During 2006 and 2007, Old Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Old Catheter's AMIGO System, receiving a total of $ 1.6 million from the foundation.

The agreement calls for the payment of the following sales-based royalties, by Old Catheter, to the foundation, upon successful commercialization of the AMIGO System:

The agreement calls for the payment of the following sales-based royalties by Old Catheter to the foundation upon successful commercialization of the AMIGO System (in thousands, except for percentages):

Until Royalty Payment

Royalty Percentage

Until Royalty Payment Reaches a Total of

Reaches a Total of

1% In perpetuity

The Company is not actively marketing and selling the AMIGO System.

There was no royalty expense recorded for the years ended December 31, 2023 and 2022 in relation to the AMIGO System.

The Company is not actively marketing and selling the AMIGO System, such that there was no royalty expense recorded for the years ended December 31, 2024 and 2023 in relation to the AMIGO System.

The AMIGO System royalty has been earned and payment has been deferred to a future date.

The table below represents the change in fair value of level 3 royalties payable for the year ended December 31, 2023.

See Note 2, Summary of Significant Accounting Policies, for valuation techniques.

Balance at beginning of year

AMIGO royalty payable recognized in connection with the Merger

LockeT royalty payable recognized in connection with the Merger

Change in fair value of royalties payable

Balance at end of year

For the years ended December 31, 2023 and 2022, operating lease expense was $ 94 thousand and $ 365 thousand, respectively, and cash paid was $ 95 thousand and $ 360 thousand, respectively.

Variable costs were insignificant for the years ended December 31, 2023 and 2022.

The Company's lease agreements generally do not provide an implicit borrowing rate.

Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate.

The Company benchmarked itself against other companies with similar credit ratings and of comparable quality and derived an imputed rate, which was used in a portfolio approach to discount its real estate lease liabilities.

Management used an estimated incremental borrowing rate as detailed below for each lease.

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases, as of December 31, 2023:

Weighted average remaining lease term (in years) - operating leases

Weighted average discount rate - operating leases

California Operating Lease

The Company had an operating lease for office and manufacturing space which required it to pay base rent and certain utilities.

Monthly rent expense was recognized on a straight-line basis over the term of the lease which was set to expire in 2027 .

The operating lease was included on the consolidated balance sheets at the present value of the lease payments at a 7% discount rate which approximates the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment, as the lease did not provide an implicit rate.

On October 24, 2022, the Company entered into a lease termination agreement (the “Lease Termination Agreement”) with the landlord, pursuant to which it terminated the lease agreement for its office and manufacturing space in Carlsbad, California, effective October 28, 2022.

In accordance with the terms of the Lease Termination Agreement, the Company agreed to (i) release its right to the security deposit of approximately $ 36 thousand previously paid to the landlord and (ii) pay a $ 0.3 million lease termination fee to the landlord.

As a result of the Lease Termination Agreement, the Company wrote off its operating lease right-of-use asset, operating lease liability and security deposit, resulting in a non-cash gain of approximately $ 0.1 million.

The lease termination fee of $ 0.3 million was paid on October 31, 2022.

The AMIGO System royalty payable is recorded under royalties payable due to related parties in the consolidated balance sheets.

The Company determines if an arrangement contains a lease at contract inception based on its ability to control a physically distinct asset in exchange for consideration.

If the arrangement contains a lease, the Company then determines the classification of the lease as either operating or finance.

For the years ended December 31, 2024 and 2023 , the Company only had operating leases.

For operating leases, right-of-use (“ROU”) assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

The present values of future lease payments are discounted using the interest rate implicit in the lease if it is readily determinable.

As most leases do not provide an implicit rate, the Company applies an incremental borrowing rate based on the information available at commencement date to determine the present value of future lease payments over the lease term.

The Company benchmarked itself against other companies with similar credit ratings and of comparable quality to derive an incremental borrowing rate.

Lease expense is recognized on a straight-line basis over the lease term in the consolidated statements of operations.

The Company elected to utilize the short-term lease exemption to exclude recognition of ROU assets and lease liabilities from the balance sheet for leases with an initial term of 12 months or less, with payments instead being expensed on a straight-line basis over the lease term.

If a lease includes options to extend the lease term, the Company does not assume the option will be exercised in its initial lease term assessment unless there is reasonable certainty that the Company will renew based on an assessment of economic factors present as of the lease commencement date.

The Company monitors its plans to renew its material lease each reporting period.

The Company enters into contracts that contain both lease and non-lease components.

Non-lease components include costs that do not provide a right-to-use a leased asset but instead provide a service such as maintenance costs.

The Company has elected to account for the lease and non-lease components together as a single component for all classes of underlying assets.

Variable costs associated with the lease, such as maintenance and utilities, are not included in the measurement of ROU assets and liabilities.

Variable costs are expensed when the events determining the amount of variable consideration to be paid have occurred.

South Carolina Office Lease Agreement

1 unchanged sentence

The space is used for office and general use.

The term of the lease began on October 1, 2022, is 38 months, and includes two months of free rental from the commencement date of the lease.

The lease contains two separate 36 month renewal periods, which require 180 days notice of the Company's intention to exercise.

As of the date of these consolidated financial statements, the Company does not intend to exercise either of the two extension options.

The lease term began on October 1, 2022, is 38 months, and includes two months of free rent from the commencement date of the lease.

The lease contains two distinct 36 -month renewal periods, which require 180 days’ notice of the Company's intention to exercise.

As of December 31, 2024, the Company does not intend to exercise either of the two extension options.

Total rent is $ 3,435 per month for the first ten months following the two months of free rent, with annual increases on the anniversary of the effective date.

The Company has adopted the practical expedient under Topic 842, which permits the Company to account for each separate lease component of a contract and its associated non-lease components as a single lease payment.

As a result, beginning at lease inception on October 1, 2022, the Company will recognize both the lease payments and associated common area maintenance payments as a single lease payment.

The Company estimated an incremental borrowing rate of 11.09 % for this lease agreement.

New Jersey Office Lease Agreement

1 unchanged sentence

The space is used for office and general use.

The term of the lease is 24 months and began on January 1, 2023.

The lease contains one 24 month renewal period, which requires 9 months’ notice if the Company intends to exercise.

As of the date of the consolidated financial statements, the Company does not intend to exercise the extension option.

Total rent is $ 1,207 per month throughout the term of the lease agreement.

The Company estimated an incremental borrowing rate of 10 % for this lease agreement.

The lease term began on January 1, 2023 and is 24 months.

The lease contains one 24 -month renewal period, which requires 9 months’ notice of the Company’s intent to exercise.

In March 2024, the Company notified the landlord of its intent to extend the lease for a 12 -month period.

In April 2024, a lease extension agreement was entered into extending the lease through December 31, 2025.

Total rent is $ 1,207 per month through December 31, 2024, and $ 1,267 for the remaining term of the extended lease.

Park City Office Lease Agreement

1 unchanged sentence

The space is used for office and general use.

The term of the lease is for 36 months and began on May 1, 2023.

The lease term began on May 1, 2023 and is 36 months.

The lease contains one 36 -month renewal period, which requires 180 days’ notice of the Company's intention to exercise.

As of the date of these consolidated financial statements, the Company does not intend to exercise the extension option.

As of December 31, 2024, the Company does not intend to exercise the extension option.

Total rent is $ 3,200 per month for the first year with an annual increase of three percent per year on the anniversary of the effective date.

The Company estimated an incremental borrowing rate of 6 % for this lease agreement.

Future lease payments for all lease obligations for the following five fiscal years and thereafter are as follows ($ in thousands):

The following tables present supplemental balance sheet information related to operating leases for the years ended December 31, 2024 and 2023 :

For the Year Ended

Operating lease expense

Cash paid for leases

For the Year Ended

Weighted average remaining lease term (in years) - operating leases

Weighted average discount rate - operating leases

Future minimum lease payments for all lease obligations for the following five fiscal years and thereafter are as follows (in thousands):

Years ending December 31:

Operating Lease

Operating Leases

Total minimum lease payments

1 unchanged sentence

Present value of future minimum lease payments

Lease right-of-use lease assets and lease liabilities for the Company's operating leases were recorded in the consolidated balance sheets as follows ($ in thousands):

Lease right-of-use assets

Total lease assets

Current liabilities:

Lease liabilities - current portion

Non-current liabilities:

Lease liabilities - net of current portion

Operating lease right-of-use assets and lease liabilities were recorded in the consolidated balance sheets as follows:

Operating lease right-of-use assets, net

Current portion of operating lease liabilities

Operating lease liabilities

Total lease liabilities

Net Loss per Share

The Company’s outstanding warrants to purchase common stock have participation rights to any dividends that may be declared in the future and are therefore considered to be participating securities.

The Company’s Series A Convertible Preferred Stock, of which no shares were outstanding as of December 31, 2024, and outstanding warrants to purchase common stock have participation rights to any dividends that may be declared in the future, such that they are participating securities.

Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income.

During periods of loss, no loss is allocated to the participating securities since the holders have no contractual obligation to share in the losses of the Company.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at December 31, 2023 consisted of Series A convertible preferred stock of 4,578 shares, Series X Convertible Preferred Stock of 12,656 shares, warrants of 11,042,137 , stock options of 214,652 , and no restricted stock awards or restricted stock units.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at December 31, 2022 consisted of warrants of 1,150,658 , stock options of 990 , restricted stock awards of 948 , restricted stock units of 61 and no shares under the Employee Stock Purchase Plan.

Net loss attributable to common stockholders consists of net loss, as adjusted for deemed dividends.

The Company recorded a deemed dividend for the modification of existing warrants and issuance of the Series E warrants (see Note 13, Equity Offerings) of $ 0.8 million, during the year ended December 31, 2023.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at December 31, 2024 , consisted of 1,265,601 shares of common stock issuable upon conversion of Series X Convertible Preferred Stock, 16,539,513 shares of common stock issuable upon exercise of outstanding warrants, and 95,605 shares of common stock issuable upon exercise of vested stock options.

The weighted-average number of common shares outstanding as of December 31, 2024 includes the shares held in abeyance upon the exercise of certain existing warrants (see Note 13, Equity Offerings).

In connection with the 2024 Warrant Inducement Offer, the Company agreed to issue the number of shares of common stock that would not cause a holder to exceed their beneficial ownership limitation and to hold the remaining balance of shares of common stock in abeyance.

Accordingly, the Company held 3,096,00 shares of common stock in abeyance as of December 31, 2024 (the “Abeyance Shares”).

The Abeyance Shares are evidenced through the holders’ existing warrants, which are now deemed to be fully prepaid.

Since the Abeyance Shares are issuable for no consideration and do not contain any other conditions that must be satisfied by the holder to ultimately receive such shares of common stock, the Abeyance Shares were included in the weighted-average number of common shares and excluded from the anti-dilutive number of warrants included above as of December 31, 2024 .

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at December 31, 2023 , consisted of 286,125 shares of Series A Convertible Preferred Stock, 1,265,601 shares of Series X Convertible Preferred Stock, 1,104,214 warrants, and 21,465 stock options.

Net loss attributable to common stockholders consists of net loss adjusted for deemed dividends.

The Company recorded a deemed dividend for the modification of existing warrants and issuance of new warrants (see Note 13, Equity Offerings) of $ 5.2 million and $ 0.8 million for the years ended December 31, 2024 and 2023 , respectively.

Equity Offerings

Public Offering

On February 8, 2022, the Company completed an offering (the "2022 Offering") in which it issued and sold (i) 190,700 shares of common stock, (ii) 480,052 warrants to purchase one share of common stock at an exercise price of $ 25.00 that were immediately exercisable and expired one year from the date of issuance, or Series A warrants, and (iii) 480,052 warrants to purchase one share of common stock at an exercise price of $ 25.00 that were immediately exercisable and expire seven years from the date of issuance, or Series B warrants, and (iv) 289,352 pre-funded warrants to purchase one share of common stock at an exercise price of $ 0.005 per share that were immediately exercisable and expire twenty years from the date of issuance.

In addition, the Company granted the underwriters of the 2022 Offering a 45 -day option (the “Overallotment Option”) to purchase up to (i) 72,000 additional shares of common stock, (ii) 72,000 additional Series A warrants and/or (iii) 72,000 additional Series B warrants, solely to cover overallotments.

The Series A warrants and Series B warrants were valued at approximately $4.2 million and $7.4 million, respectively, for a total of $ 11.6 million using the Black-Scholes model based on the following assumptions:

Risk-free interest rate

Expected dividend yield

Expected life (in years)

Pursuant to the exercise of the Overallotment Option in February 2022, the Company issued 24,902 shares of common stock, 72,000 Series A warrants and 72,000 Series B warrants, net of underwriting discounts.

On various dates in February 2022 and March 2022, the Company issued 289,352 shares of common stock upon the exercise of all of the pre-funded warrants issued in the 2022 Offering.

In addition, in March 2022, the Company issued 1,000 shares of common stock in connection with the exercise of 500 each of Series A warrants and Series B warrants issued in the 2022 Offering.

In July 2022, the Company issued 800 shares of common stock in connection with the exercise of 800 Series A warrants issued in the 2022 Offering.

Net proceeds received from the 2022 Offering were approximately $ 11.5 million, after deducting underwriter commissions and fees withheld of approximately $ 1.1 million.

In addition, the Company incurred offering expenses paid or payable of $ 1.8 million.

The Company entered into an agreement with a former placement agent that, subject to satisfaction of the requirements contained therein, called for a cash tail fee payable based on capital raised from certain investors for a definitive time following the expiration of the agreement.

The accrued cash tail fee of approximately $ 0.9 million related to the 2022 Offering is included in accrued expenses in the consolidated balance sheet as of December 31, 2022.

Additionally, the agreement called for the issuance of a warrant to purchase approximately 33,000 shares of common stock at an exercise price of $31.25 per share.

Such warrant would be immediately exercisable and expire five years from the date issued.

This warrant was originally valued at approximately $ 0.4 million on the date of the 2022 Offering using the Black-Scholes model based on the following assumptions:

expected volatility of 93.25 %, risk-free interest rate of 1.81 %, expected dividend yield of 0 % and an expected term of 5 years.

On the date of the 2022 Warrant Repricing (as defined below), this warrant was revalued at approximately $ 0.4 million using the Black-Scholes model based on the following assumptions:

expected volatility of 98.9 %, risk-free interest rate of 2.87 %, expected dividend yield of 0 % and an expected term of 4.6 years.

This warrant has not been issued by the Company as of the date of this Annual Report.

2022 Warrant Repricing

On July 22, 2022, the Company reduced the exercise price of all outstanding warrants, consisting of Series A warrants and Series B warrants, that were issued in the public offering on February 8, 2022 (the "2022 Offering") from $25.00 per share to $ 14.00 per share (the “2022 Warrant Repricing”).

Following the 2022 Warrant Repricing, the Company entered into warrant inducement offer letters (the “2022 Inducement Letters”) with certain investors.

In response to the 2022 Inducement Letters, investors exercised approximately 0.4 million Series A warrants and no Series B warrants.

Investors who exercised their Series A warrants received Series C warrants to purchase 100 % of the shares exercised pursuant to the Series A warrants.

The Series C warrants have an exercise price of $ 14.00 , are immediately exercisable and expire in five years .

The Company received net proceeds of approximately $ 4.9 million from the exercises of the Series A warrants, after deducting underwriter commissions and fees withheld of $ 0.6 million and other offering expenses paid or payable of $0.7 million.

The 2022 Warrant Repricing resulted in an immediate and incremental increase of approximately $ 2.3 million in the estimated fair value of the Series A warrants and Series B warrants issued in the 2022 Offering.

The Series A warrants and Series B warrants were valued on the date of the 2022 Warrant Repricing using the Black-Scholes model based on the following assumptions:

Risk-free interest rate

Expected dividend yield

Expected life (in years)

The Series C warrants were valued on the date of the 2022 Warrant Repricing at approximately $ 2.3 million using the Black-Scholes model based on the following assumptions:

Risk-free interest rate

Expected dividend yield

Expected life (in years)

The accrued cash tail fee of approximately $ 0.5 million related to the 2022 Warrant Repricing is included in accrued expenses in the consolidated balance sheet as of December 31, 2022.

Additionally, the agreement called for the issuance of a warrant to purchase approximately 31,000 shares of common stock with an exercise price of $ 17.50 per share, expiring five years from the date issued.

This warrant was valued at approximately $ 0.2 million on the 2022 Warrant Repricing date using the Black-Scholes model based on the following assumptions:

expected volatility of 96.7 %, risk-free interest rate of 2.87 %, expected dividend yield of 0% and an expected term of 5 .0 years.

This warrant has not been issued by the Company as of the date of this Annual Report.

At-The-Market Sales Agreement

On September 2, 2022, the Company entered into the At-The-Market Sales Agreement (the “ATM Agreement”) under which the Company could sell its common stock from time to time having an aggregate offering price of up to $ 7.6 million.

The Company completed the sale of 1,071,240 shares of common stock under the ATM Agreement on October 7, 2022, at a weighted average price of $ 7.09 per share, resulting in net proceeds of approximately $ 7.4 million, after offering fees withheld of approximately $ 0.2 million.

2023 Warrant Inducement Offer

On January 9, 2023, the Company reduced the exercise price of certain existing warrants (the "Existing Warrants"), exercisable for 331,608 shares of the Company’s common stock held by a certain investor (the “Investor”), with exercise prices ranging from $ 14.00 to $ 526.50 per share to $ 4.00 per share (the "2023 Warrant Repricing").

In connection with the 2023 Warrant Repricing, the Company entered into a warrant inducement offer letter (the "2023 Inducement Letter") with the Investor pursuant to which it would exercise up to all of the 331,608 Existing Warrants (the "Inducement Offer").

In consideration for exercising the Existing Warrants pursuant to the terms of the 2023 Inducement Letter, the Company received approximately $ 1.3 million in gross proceeds.

In consideration for exercising the Existing Warrants pursuant to the terms of the 2023 Inducement Letter, the Company issued the Investor a new Series E common stock purchase warrant, or Series E Warrant (the "Series E Warrant"), to purchase 331,608 shares of common stock at an exercise price of $ 4.00 per share.

On January 9, 2023, the Company reduced the exercise price of certain existing warrants (the “2023 Existing Warrants) held by an investor (the “Investor”) with exercise prices ranging from $ 140.00 to $ 5,265 per share of common stock to $ 40.00 per share of common stock (the “2023 Warrant Repricing”).

The 2023 Existing Warrants were exercisable for 33,161 shares of the Company’s common stock.

In connection with the 2023 Warrant Repricing, the Company entered into a Warrant Inducement Offer Letter with the Investor pursuant to which the Investor agreed to exercise the 2023 Existing Warrants at the reduced exercise price of $ 40.00 per share of common stock (the "2023 Warrant Inducement Offer").

The Company received approximately $ 1.3 million in gross proceeds.

The Company paid placement agent aggregate cash fees plus other offering costs of approximately $ 0.2 million, resulting in net proceeds of $ 1.1 million.

In consideration for exercising the 2023 Existing Warrants, the Company issued the Investor a new Series E common stock purchase warrant (the "Series E Warrant") to purchase 33,161 shares of common stock at an exercise price of $ 40.00 per share.

The Series E Warrant is exercisable for five years from the date of stockholder approval.

Exercise of the Series E Warrant in full was subject to approval of the Company's stockholders other than the Investor, which was obtained at a special meeting of the Company's stockholders held on March 21, 2023 ( the "Stockholders' Meeting").

The incremental fair value of the repriced warrants amounted to $0.3 million and the fair value of Series E warrant totaled $ 1.9 million.

The relative fair value of such amounts were recorded to additional paid-in capital concurrent with the exercise of the Existing Warrants.

As a result of the 2023 Warrant Repricing and Inducement Offer, the Company presents a deemed dividend for the modification of Existing Warrants and issuance of the Series E Warrants of $ 0.8 million during the year ended December 31, 2023.

The incremental fair value of the repriced warrants amounted to $ 0.3 million and the fair value of Series E Warrants totaled $ 1.9 million.

The relative fair value of such amounts was recorded to additional paid-in capital concurrent with the exercise of the 2023 Existing Warrants.

As a result of the 2023 Warrant Inducement Offer, the Company presents a deemed dividend for the modification of the 2023 Existing Warrants and issuance of the Series E Warrants of $ 0.8 million for the year ended December 31, 2023.

The deemed dividend was included in net loss attributable to common stockholders in the calculation of net loss per share in the consolidated statements of operations.

The warrants, other than the Series E Warrants which are presented in a separate table below, were valued on the date of the 2023 Warrant Repricing using the Black-Scholes model based on the following assumptions:

The 2023 Existing Warrants were valued on the date of the 2023 Warrant Repricing using the Black-Scholes model based on the following assumptions:

5/22/2020 Raise

8/3/2020 Raise

Risk-free interest rate

4.06 % 4.06 % 3.60 % 3.66 %

135.35 % 132.55 % 115.42 % 127.65 %

Expected dividend yield

0.00 % 0.00 % 0.00 % 0.00 %

Expected life (in years)

2.4 2.6 6.5 4.5

The Series E Warrants were also valued on the date of the 2023 Warrant Repricing at approximately $ 1.9 million using the Black-Scholes model based on the following assumptions:

4 unchanged sentences

On January 9, 2023, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) for a private placement (“Private Placement”) with the Investor.

Pursuant to the Securities Purchase Agreement, the Investor agreed to purchase, for an aggregate purchase price of approximately $8.0 million, (a) Class A units at a price that was the lower of $ 3.00 per unit and 90% of the 5 day volume weighted average price of the Company’s common stock immediately prior to obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants (as each are defined below), each consisting of one share of common stock, one Series F common stock purchase warrant, or Series F Warrant, and one Series G common stock purchase warrant, or Series G Warrant, and together with the Series F Warrants (the “PIPE Warrants”) and (b) Class B units at a price of $ 1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock (the “PIPE Preferred Stock”), par value $ 0.0001 , and one Series F Warrant and one Series G Warrant for each share of the Company’s common stock underlying the PIPE Preferred Stock (each share of which is convertible into a number of shares of the Company’s common stock equal to $ 1,000 divided by the lower of $ 3.00 and 90% of the 5 day volume weighted average closing price of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion Rate).

Pursuant to the Securities Purchase Agreement, the Investor agreed to purchase, for an aggregate purchase price of approximately $ 8.0 million, (a) Class A Units at a price that was the lower of $ 3.00 per unit and 90 % of the 5 day volume weighted average price of the Company’s common stock immediately prior to obtainment of the approval of the Company’s stockholders to convert the PIPE Preferred Stock and PIPE Warrants (as each are defined below), without adjusting such price for the reverse stock split, each consisting of one tenth of one share of common stock, one tenth of one Series F common stock purchase warrant (“Series F Warrant”) and one tenth of one Series G common stock purchase warrant (“Series G Warrant”, and together with the Series F Warrants, the “PIPE Warrants”) and (b) Class B Units at a price of $ 1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock (the “PIPE Preferred Stock”), par value $ 0.0001 , and one tenth of one Series F Warrant and one tenth of one Series G Warrant for each one - tenth of one share of the Company’s common stock underlying the PIPE Preferred Stock (each share of which is convertible into a number of shares of the Company’s common stock equal to $ 1,000 divided by the lower of $ 30.00 and 90 % of the 5 day volume weighted average closing price, multiplied by ten in order to reflect the impact of the reverse stock split of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of the conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion Rate).

The closing under the Securities Purchase Agreement and the sale and issuance of the Class A Units and Class B Units (and the issuance of any underlying common stock) were approved at the Stockholders’ Meeting.

At the closing of the Private Placement, the Company issued 497,908 Class A units for proceeds of approximately $ 0.9 million and 7,203 Class B units for proceeds of approximately $ 7.1 million which were convertible into up to 4,501,060 shares of common stock, as well as the issuance of warrants described below.

The PIPE Warrants, including Series F warrants and Series G warrants, are exercisable at an exercise price of $3.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants.

The Series F Warrants have a term of two years from the date of stockholder approval, and the Series G Warrants have a term of six years from the date of stockholder approval.

At the closing of the Private Placement, the Company issued 497,908 Class A Units for proceeds of approximately $ 0.9 million and 7,203 Class B Units for proceeds of approximately $ 7.1 million, which contained preferred shares that were convertible into up to 450,123 shares of common stock, as well as the issuance of warrants described below.

The PIPE Warrants, including Series F Warrants and Series G Warrants, were exercisable at an exercise price of $ 30.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants.

The PIPE Warrants were exercisable at any time on or after the closing date of the Private Placement until the expiration thereof, except that the PIPE Warrants could not be exercised if, after giving effect thereto, the purchaser would beneficially own more than 4.99 %, or the Maximum Percentage, of the outstanding shares of common stock of the Company, which Maximum Percentage could be increased or decreased by the purchaser with written notice to the Company to any other percentage specified not in excess of 9.99 %.

The Series F Warrants had a term of two years from the date of stockholder approval, and the Series G Warrants had a term of six years from the date of stockholder approval.

The Series F Warrants and Series G Warrants were approved at the Stockholders’ Meeting.

1 unchanged sentence

Risk-free interest rate

80.0 % 74.0 %

Expected dividend yield

1 unchanged sentence

The proceeds from the Securities Purchase Agreement were allocated to the equity instruments issued based on their relative fair values and recorded in additional paid-in capital.

Shares of PIPE Preferred Stock, the conversion of which was approved at the Stockholders’ Meeting, convert into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below.

The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of PIPE Preferred Stock will not have the right to convert any portion of their Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of PIPE Preferred Stock will be entitled to receive dividends on shares of PIPE Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock.

Except as otherwise required by law, the PIPE Preferred Stock does not have voting rights.

Shares of PIPE Preferred Stock, the conversion of which was approved at the Stockholders’ Meeting, were convertible into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below.

The conversion price was subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of PIPE Preferred Stock did not have the right to convert any portion of their Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 4.99 % (or up to 9.99 % at the election of the holder) of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of PIPE Preferred Stock were entitled to receive dividends on shares of PIPE Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock.

Except as otherwise required by law, the PIPE Preferred Stock did not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the resale of the shares of common stock, the shares issuable upon exercise of the Warrants and the shares issuable upon the conversion of the PIPE Preferred Stock.

Conversion of Preferred Stock Issued in Private Placement

On July 5, 2023 the Company issued 1,093,552 shares of its common stock in connection with the conversion of 1,750 shares of its outstanding Series A Convertible Preferred Stock.

The shares were issued in connection with two separate conversions of 875 shares of Series A Convertible Preferred Stock into 546,776 shares of common stock that occurred on July 3, 2023.

Each share of Series A Convertible Preferred Stock is convertible into approximately 625 shares of common stock.

The common stock was issued pursuant to the exemption contained in Section 3(a)(9) of the Securities Act of 1933, as amended (the “Act”), which applies to transactions in which a security is exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.

The shares issued have been registered for resale on an effective registration statement on Form S-1.

On July 24, 2023, the Company issued 546,776 shares of its common stock in connection with the conversion of 875 shares of its outstanding Series A Convertible Preferred Stock.

The common stock was issued pursuant to the exemption contained in Section 3(a)(9) of the Act, which applies to transactions in which a security is exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.

The shares issued have been registered for resale on an effective registration statement on Form S-1.

See Note 20, Subsequent Events, for additional conversion.

Placement fees

In connection with offerings completed by the Company in 2022, (the "2022 Offerings"), the Company entered into an agreement with a placement agent that, subject to satisfaction of the requirements contained therein, called for a placement fee payable based on capital raised from certain investors for a definitive time following the expiration of the agreement.

The accrued placement fee of approximat ely $ 1.4 million r elated t o the 2022 Offerings is included in accrued expenses in the consolidated balance sheets as of December 31, 2024 and 2023.

Additionally, the agreement called for the issuance of warrants with the following terms:

Number of shares

Exercise Price

3,300 $ 312.50 5 years

3,100 $ 175.00 5 years

The warrants were valued on the date of the 2022 Offerings using the Black-Scholes model based on the following assumptions:

Value ($ in millions)

Expected Volatility

Risk-Free Interest Rate

Expected Dividend Yield

Expected Term (years)

$ 0.4 93.25 % 1.81 % 0 % 5.0

$ 0.2 96.70 % 2.87 % 0 % 5.0

September 2024 Public Offering

On September 3, 2024, in connection with the September Public Offering (see Note 1 ), the Company sold an aggregate of 805,900 Common Stock Units and 2,773,000 Pre-Funded Warrant Units at a public offering price of $ 1.00 per Common Stock Unit and $ 0.9999 per Pre-Funded Warrant Unit.

The Company received gross proceeds of approximately $ 3.6 million less underwriting discounts and commissions of $ 1.0 million, resulting in net proceeds of $ 2.6 million.

Each Common Stock Unit consists of:

(i) one share of the Company's Common Stock, (ii) a Series H Warrant to purchase one share of Common Stock at an exercise price of $ 1.00 per share that expires six months from the date of issuance, (iii) a Series I Warrant to purchase one share of Common Stock at an exercise price of $ 1.00 per share that expires eighteen months from the date of issuance, and (iv) a Series J Warrant to purchase one share of Common Stock at an exercise price of $ 1.00 per share that expires five years from the date of issuance.

Each Pre-Funded Warrant Unit consists of:

(i) one Pre-Funded Warrant to purchase one share of Common Stock at an exercise price of $ 0.0001 per share with no expiration date, (ii) one Series H Warrant, (iii) one Series I Warrant (iv) and one Series J Warrant.

Pursuant to the Underwriting Agreement, the Company granted the Representative a 45 -day Overallotment Option to purchase up to (i) 468,041 additional shares of Common Stock, (ii) 468,041 additional Series H Warrants, (iii) 468,041 additional Series I Warrants, and/or (iv) 468,041 additional Series J Warrants, solely to cover over-allotments.

On August 30, 2024, the Underwriters partially exercised the Overallotment Option to purchase an additional 458,623 shares of Common Stock, 458,623 Series H Warrants, 458,623 Series I Warrants, and 458,623 Series J Warrants, or 458,623 Common Stock Units.

The Common Stock Units issued through the exercise of the Overallotment Option are included in the 805,900 Common Stock Units noted abo ve.

The Overallotment Option expired on October 14, 2024.

Furthermore, at the closing date, the Company agreed to deliver to the Representative warrants to purchase an aggregate number of shares of Common Stock equal to 6 % of the shares of Common Stock (i) issued in connection with the September 2024 Public Offering and (ii) issuable upon the exercise of the Pre-Funded Warrants.

Therefore, the Company issued 214,734 warrants to the Representative and its designees (the “Representative Warrants”).

The Representative Warrants are part of the underwriter costs and commissions incurred in connection with the September 2024 Public Offering.

The Representative Warrants may be exercised to purchase one share of Common Stock at an exercise price of $ 1.55 per share and expire five years from the date of issuance.

Each Series H Warrant, Series I Warrant, Series J Warrant (collectively, the “Series Warrants”), and Pre-Funded Warrant is immediately exercisable.

The exercise price of the Series Warrants and Pre-Funded Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s Common Stock.

Subject to limited exceptions, a holder of the Series Warrants will not have the right to exercise any portion of its Series Warrants if the holder (together with such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99 %, or in the case of certain holders 9.99 %, of the shares of Common Stock then outstanding (the “Beneficial Ownership Limitation”).

Similarly, a holder of the Pre-Funded Warrants has a Beneficial Ownership Limitation of 9.99 %.

At the holder’s option, the holder of the Series Warrants may increase the beneficial ownership limitation to 19.99 % of the shares of Common Stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.

The Representative Warrants are exercisable six months after the effective date of the Registration Statement filed by the Company on August 29, 2024.

The Representative Warrants further have a Beneficial Ownership Limitation of 4.99 %, which may be increased to 9.99 % of the shares of Common Stock then outstanding at the option of the Representative.

Any increase in the Beneficial Ownership Limitation will become effective upon 61 days’ prior notice to the Company.

The Company assessed the Series Warrants, Pre-Funded Warrants, and Representative Warrants issued in connection with the September 2024 Public Offering (collectively, the “September 2024 Warrants”) and determined that they do not require liability classification pursuant to ASC 480.

Furthermore, the September 2024 Warrants do not have any net cash settlement provisions that would preclude equity classification under ASC 815 - 40.

Accordingly, the September 2024 Warrants were recorded to additional paid-in capital in the consolidated balance sheets.

2024 Warrant Inducement Offer

On October 25, 2024, the Company executed the 2024 Warrant Inducement Offer (see Note 1 ) with certain holders of the Company’s existing warrants (Series E, Series F, Series G, Series H and Series I Warrants, collectively the “2024 Existing Warrants”).

Pursuant to the terms of the 2024 Warrant Inducement Offer, the Company agreed to lower the exercise price per share of common stock for all holders of the 2024 Existing Warrants, including those that did not participate in the 2024 Warrant Inducement Offer.

The 2024 Existing Warrants had exercise prices ranging from $ 1.00 to $ 40.00 per share of Common Stock.

Following the closing of the 2024 Warrant Inducement Offer, the Holders immediately exercised an aggregate of (i) 33,160.8 Series E Warrants, (ii) 499,909.34 Series F Warrants, (iii) 499,909.34 Series G Warrants, (iv) 1,990,000 Series H Warrants, and (v) 2,325,000 Series I Warrants to purchase 5,347,981 shares of common stock at a reduced exercise price of $ 0.70 per share.

The Company received aggregate gross proceeds of $ 3.7 million in cash, prior to deducting placement agent fees and offering expense of $ 0.4 million.

In consideration for the immediate exercise of the 2024 Existing Warrants for cash, the Company issued unregistered new Series K common stock purchase warrants (“Series K Warrants”) to purchase up to 10,695,962 shares of common stock.

The Series K Warrants have an exercise price of $ 0.70 per share of common stock, were not exercisable until stockholders approval was obtained (“Stockholder Approval”), and have a term of 5.5 years following Stockholder Approval.

Stockholder Approval was obtained on January 13, 2025.

In connection with the closing, the Company issued Placement Agent Warrants to the Placement Agent to purchase up to 320,879 shares of common stock on the same terms as the Series K Warrants, except that the exercise price is $ 1.085 per share and the warrants are exercisable six months after the date of issuance.

As a result of the 2024 Warrant Inducement Offer, the Company recorded a deemed dividend for the modification of the 2024 Existing Warrants and issuance of the Series K Warrants of $ 5.2 million for the year ended December 31, 2024 .

The deemed dividend was included in net loss attributable to common stockholders in the calculation of net loss per share in the consolidated statements of operations.

Pursuant to the terms of the 2024 Warrant Inducement Offer, in the event that the exercise of the 2024 Existing Warrants would cause a holder to exceed the beneficial ownership limitations included therein, the Company would issue the number of shares of common stock that would not cause a holder to exceed such beneficial ownership limitations and hold the remaining balance of shares of common stock in abeyance.

Accordingly, as of December 31, 2024, the Company held an aggregate of 3,096,000 shares of common stock in abeyance (the “Abeyance Shares”).

The Abeyance Shares are evidenced through the holder’s existing warrants, which are deemed to be prepaid.

The Abeyance Shares will be held by the Company until the holder sends notice that the remaining balance of shares of common stock may be issued without surpassing the beneficial ownership limitations.

Until such time, the Abeyance Shares are evidenced through the holder’s existing warrants ( September 2024 Prepaid Series H Warrants and September 2024 Prepaid Series I Warrants) and are included in the Company’s table of outstanding warrants below.

The following table presents the number of common stock warrants outstanding:

Warrants outstanding, December 31, 2023

Warrants outstanding, December 31, 2022

( 6,209,979 )

Warrants outstanding, December 31, 2024

The following table presents the number and type of common stock warrants outstanding, their exercise price, and expiration dates as of December 31, 2023:

Warrants Outstanding

As of December 31, 2024 and December 31, 2023 , all warrants outstanding are recorded in additional paid-in capital in the consolidated balance sheets.

The following table presents the number and type of common stock purchase warrants outstanding, their exercise price, and expiration dates as of December 31, 2024 :

Exercise Price

1 unchanged sentence

May 2020 Warrants

1,275 $ 5,625.00 5/20/2025

May 2020 Placement Agent Warrants

124 $ 7,031.25 5/20/2025

August 2020 Warrants

1,943 $ 4,375.00 8/3/2025

August 2020 Placement Agent Warrants

192 $ 5,468.75 7/30/2025

August 2021 Pharos Banker Warrants

148 $ 1,495.00 8/16/2026

February 2022 Series B Warrants

39,153 $ 140.00 2/4/2029

July 2022 Series C Warrants

January 2023 Series E Warrants

March 2023 Series F Warrants

March 2023 Series G Warrants

28,402 $ 140.00 7/22/2027

September 2024 Series H Warrants

578,900 $ 0.70 3/3/2025

September 2024 Prepaid Series H Warrants (1)

1,366,000 $ — None

September 2024 Series I Warrants

1,078,900 $ 0.70 3/3/2026

September 2024 Prepaid Series I Warrants (1)

1,730,000 $ — None

September 2024 Series J Warrants

3,578,901 $ 1.00 9/3/2029

September 2024 Representative Warrants

214,734 $ 1.55 8/29/2029

October 2024 Series K Warrants

10,695,962 $ 0.70 7/13/2030

October 2024 Placement Agent Warrants

320,879 $ 1.09 4/25/2030

As of December 31, 2024 , the warrants issued by the Company had a weighted average exercise price of $ 2.05 .

( 1 ) In calculating net loss per share, the Abeyance Shares were included in the weighted-average number of common shares and excluded from the anti-dilutive number of warrants excluded from the net loss per share calculation (see Note 12, Net Loss Per Share).

Preferred Stock

Series X Convertible Preferred Stock

As described in Note 3, above, pursuant to the Merger Agreement, all Old Catheter common stock shares issued and outstanding and convertible promissory notes, representing an aggregate principal of $ 25.2 million, were converted into a right to receive 14,649.592 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock .

As described in Note 3, above, pursuant to the Merger Agreement, all Old Catheter common stock shares issued and outstanding and convertible promissory notes, representing an aggregate principal balance of $ 25.2 million, were converted into a right to receive 14,649.592 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock.

Series X Convertible Preferred Stock has no voting rights prior to the conversion into common stock.

While there are generally no voting rights of the Series X Convertible Preferred Stock, there are protective rights regarding the sales of the company, change of control, etc.

No currently outstanding share of Series X Preferred may convert into common stock until on or after July 9, 2024, and then, only if the Company’s common stock has been delisted from the NYSE American or has been approved for initial listing on the NYSE American or another stock exchange, at a rate of 1,000 shares of common stock for each share of Series X Convertible Preferred Stock.

Upon consummation of the merger, each holder of Old Catheter convertible promissory notes received, in exchange for discharge of the principal of his or its Notes, a number of shares of the Company's Series X Convertible Preferred Stock representing a potential right to convert into the Company's common stock in an amount equal to one common share for each $3.20 of principal amount .

Series X Preferred Stock may convert into common stock only if the Company’s common stock has been delisted from the NYSE American or has been approved for initial listing on the NYSE American or another stock exchange, at a rate of 100 shares of common stock for each share of Series X Convertible Preferred Stock.

Other than dividends payable in shares of Common Stock, Holders of Series X Convertible Preferred Stock will be entitled to receive dividends on shares of Series X Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of Common Stock.

Upon consummation of the Merger, each holder of Old Catheter convertible promissory notes received, in exchange for discharge of the principal of their Notes, a number of shares of the Company's Series X Convertible Preferred Stock representing a potential right to convert into the Company's common stock in an amount equal to one common share for each $ 32.00 of principal amount.

On March 21, 2023, the Company held the Stockholders' Meeting, at which the stockholders approved, among other things, the issuance of 199,359 shares of common stock upon the conversion of 1,993.581 of Series X Convertible Preferred Stock which were issued upon the closing of the Merger (see Note 3, Business Combination).

1 unchanged sentence

On October 24, 2023, the remaining 1,868 shares of common stock were issued upon the conversion of 18.676 shares of Series X Convertible Preferred Stock.

The remaining 12,656.011 shares of Series X Convertible Preferred Stock are expected to remain outstanding until at least July 9, 2024, and will convert thereafter up to 12,656,011 shares of common stock , only if the Company meets the initial listing standards of the NYSE American or another national securities exchange or is delisted from the NYSE American.

The remaining 12,656 shares of Series X Convertible Preferred Stock are expected to remain outstanding until the Company meets the initial listing standards of the NYSE American or another national securities exchange or is delisted from the NYSE American, at which time they will convert into common stock.

Series A Convertible Preferred Stock

1 unchanged sentence

Pursuant to the Securities Purchase Agreement, shares of Series A Convertible Preferred Stock were issued, the conversion of which was approved at the Stockholders’ Meeting.

The Series A Convertible Preferred Stock converts into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below.

The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of Series A Convertible Preferred Stock will not have the right to convert any portion of their Series A Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion .

Holders of Series A Convertible Preferred Stock will be entitled to receive dividends on shares of Series A Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock.

Except as otherwise required by law, the Series A Convertible Preferred Stock does not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the shares of common stock, issuable upon the conversion of the Series A Convertible Preferred Stock.

The shares have been registered for resale on an effective registration statement on Form S-1.

After the final conversion on July 23, 2024, the Company had no shares of Series A Convertible Preferred Stock outstanding.

The Series A Convertible Preferred Stock converted into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below.

The conversion price was subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of Series A Convertible Preferred Stock did not have the right to convert any portion of their Series A Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of Series A Convertible Preferred Stock were entitled to receive dividends on shares of Series A Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock.

Except as otherwise required by law, the Series A Convertible Preferred Stock did not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register for resale the shares of common stock issuable upon the conversion of the Series A Convertible Preferred Stock.

Those shares of common stock were registered for resale on an effective registration statement on Form S- 1.

The following conversions of Series A Convertible Preferred Stock occurred subsequent to the issuance and prior to December 31, 2024 :

Date of Conversion

Series A Shares Converted

Common Shares Issued

July 24, 2023

January 24, 2024

July 11, 2024

July 22, 2024

July 23, 2024

Each share of Series A Convertible Preferred Stock was convertible into approximately 62.5 shares of common stock.

The common stock was issued pursuant to the exemption contained in Section 3 (a)( 9 ) of the Securities Act of 1933, as amended (the “Act”), which applies to transactions in which a security is exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.

The shares issued have been registered for resale on an effective registration statement on Form S- 1.

As of December 31, 2024 , the Company had no shares of Series A Convertible Preferred Stock outstanding.

Stock-Based Compensation

1 unchanged sentence

In September 2018, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2018 Equity Incentive Plan (the “2018 Plan”), which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, performance-based stock awards and other forms of equity compensation to the Company’s employees, directors and consultants.

Stock options granted under the 2018 Plan generally vest one-fourth on the first anniversary of the vesting commencement date with the balance vesting monthly over the remaining three years.

Restricted stock units granted under the 2018 Plan generally vest one third on the first anniversary of the vesting commencement date and one sixth every six months thereafter such that the award will be fully vested on the third anniversary of the vesting commencement date.

As of December 31, 2023 and December 31, 2022, 0 and 8,552 shares of common stock, respectively, were reserved for future issuance pursuant to the 2018 Plan.

In July 2023, the 2018 Plan was replaced by the 2023 Plan, as defined below.

As of July 2023, no additional awards could be made under the 2018 Plan.

In July 2023, the 2018 Plan was replaced by the 2023 Equity Incentive Plan (the "2023 Plan"), as described below.

As of July 2023, no additional awards could be made under the 2018 Plan and no shares of common stock were reserved for future issuance.

As of December 31, 2024 , there are 7 non-statutory stock options outstanding under the 2018 Plan.

Three expire in June 2028 and four expire in January 2030.

2018 Employee Stock Purchase Plan

In September 2018, the Company's board of directors adopted the 2018 Employee Stock Purchase Plan (the “ESPP”), which permitted eligible employees to purchase the Company’s common stock at a discount through payroll deductions during defined offering periods.

Eligible employees could elect to withhold up to 15 % of their base earnings to purchase shares of the Company’s common stock at a price equal to 85 % of the fair market value on the first day of the offering period or the purchase date, whichever was lower.

The number of shares of common stock reserved for issuance under the ESPP automatically increased on January 1 of each fiscal year by the lesser of ( 1 ) 23 shares, ( 2 ) 1.25 % of the total number of shares outstanding on December 31 of the preceding fiscal year, or ( 3 ) such other amount as the Company’s board of directors may determine.

In April 2024, the Company formally terminated the ESPP.

For the years ended December 31, 2024 and December 31, 2023 , no cash was received from the exercise of purchase rights under the ESPP in each respective period.

As of December 31, 2024 , the Company had issued 95 shares of common stock since inception of the ESPP, and no shares were reserved for future issuance.

As of December 31, 2023 , the Company had issued 95 shares of common stock since inception of the ESPP, and 2 shares were reserved for future issuance.

Upon termination of the ESPP in April 2024, the reserved shares were released back to the authorized pool.

2020 Inducement Equity Incentive Plan

3 unchanged sentences

Upon adoption of the 2020 Plan, 64 shares of common stock were reserved for the granting of inducement stock options, restricted stock awards, restricted stock units and other forms of equity awards.

As of December 31, 2023 and December 31, 2022, 540 shares of common stock and 181 shares of common stock, respectively, were reserved for future issuance under the 2020 Plan.

2023 Equity Incentive Plan

In July 2023, the Company’s stockholders approved, the 2023 Equity Incentive Plan (the “2023 Plan”) which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, performance-based stock awards and other forms of equity compensation to the Company’s employees, directors and consultants.

Stock options granted under the 2023 Plan to employees and consultants generally will vest annually over a five-year period or as determined by the Board’s Compensation Committee, while grants to non-employee directors generally vest quarterly over a three-year period.

As of December 31, 2023, 501,868 shares of common stock were reserved for future issuance pursuant to the 2023 Plan.

The number of shares available for issuance under the 2023 Plan also includes a quarterly increase commencing on September 1, 2023 by an amount equal to the lesser of (i) 10 % of the number equal to the number of shares of common stock outstanding on the applicable adjustment date less the number of shares of common stock outstanding at the beginning of the fiscal quarter immediately preceding the adjustment date, but if such number is a negative number, then the increase will be zero;

or (ii) such lesser number of shares as may be determined by the Board.

As of December 31, 2023, no grants had been made under the 2023 Plan (see Note 20, Subsequent Events).

As of December 31, 2024 and December 31, 2023 , 0 and 54 shares of common stock were reserved for future issuance under the 2020 Plan.

In April 2024, the Company terminated the 2020 Plan at which time the reserved shares were released back to the authorized pool.

Stock options assumed in Merger (See Note 3, Business Combination)

2 unchanged sentences

All the Replacement Options vested in accordance with the original terms of the grants in place at the time of the Merger.

As a result, $ 3.4 million of purchase price consideration, which represented the estimated fair value of Old Catheter’s assumed stock options, and $ 1.1 million of stock-based compensation expense, which represents the excess of the estimated fair value of the Replacement Options over the assumed Old Catheter stock options, were recognized upon the closing of the Merger.

The following is a summary of stock option activity for the year ended December 31, 2023:

As a result, $ 3.4 million of the purchase price consideration, which represented the estimated fair value of Old Catheter’s assumed stock options, and $ 1.1 million of stock-based compensation expense, which represents the excess of the estimated fair value of the Replacement Options over the assumed Old Catheter stock options, were recognized upon the closing of the Merger.

2023 Equity Incentive Plan

In July 2023, the Company’s stockholders approved the 2023 Plan as defined above, which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, performance-based stock awards and other forms of equity compensation to the Company’s employees, directors and consultants.

Stock options granted under the 2023 Plan to employees and consultants generally will vest annually over a five -year period or as determined by the Board’s Compensation Committee, while grants to non-employee directors generally vest quarterly over a three -year period.

As of December 31, 2024 and December 31, 2023, 926,882 and 50,186 shares of common stock were reserved for issuance pursuant to future awards under the 2023 Plan.

or (ii) such lesser number of shares as may be determined by the Board.

On January 8, 2024, the Compensation Committee (the "Committee") of the Board approved the issuance of a total of 28,500 non-qualified stock options under the 2023 Plan.

During 2024, 7,500 of these non-qualified options were issued to non-employee directors that vest at 8 1/3% per quarter for 3 years with an exercise price of $ 4.00 and expiration date of January 8, 2034.

The remaining 21,000 non-qualified options were issued to employees and consultants and vest at 20 % per year for 5 years with an exercise price of $ 4.00 and expiration date of January 8, 2034.

On February 26, 2024, the Committee approved the issuance of a total of 15,000 incentive stock options under the 2023 Plan.

All options were issued to employees and vest at 20 % per year for 5 years with an exercise price of $ 4.20 and expiration date of February 26, 2034.

On April 24, 2024, the Committee approved the issuance of a total of 12,500 incentive stock options under the 2023 Plan.

All options were issued to employees and vest at 20 % per year for 5 years with an exercise price of $ 4.60 and expiration date of April 24, 2034.

On July 9, 2024, the Committee approved the issuance of a total of 10,000 incentive stock options under the 2023 Plan.

All options were issued to employees and vest at 20 % per year for 5 years with an exercise price of $ 3.50 and expiration date of July 9, 2034.

The options issued for the

for the year ended December 31, 2024 were valued at approximately

$ 262 thousand using the Black-Scholes model based on the following assumptions on the date of issue:

Non-Employee Director Options Issued January 8, 2024

Employee Options Issued January 8, 2024

Employee Options Issued February 26, 2024

Employee Options Issued April 24, 2024

Employee Options Issued July 9, 2024

Risk-free interest rate

4.01 % 4.01 % 4.28 % 4.65 % 4.30 %

175.36 % 175.36 % 178.14 % 211.61 % 214.61 %

Expected dividend yield

0.00 % 0.00 % 0.00 % 0.00 % 0.00 %

Expected life (in years)

6.5 6.5 6.5 6.5 6.5

The following is a summary of stock option activity for the options for the year ended December 31, 2024 (in thousands, except for weighted average price and remaining life):

Stock Options

Weighted Average Exercise Price

Weighted Average Remaining Life (in years)

Aggregate Intrinsic Value (in thousands)

Outstanding at December 31, 2023

Options assumed in Old Catheter Merger

21,465 $ 64.71 6.38 $ —

Options exercised

Canceled/forfeited

Options granted

66,000 4.08 — —

Cancelled/forfeited

( 16,860 ) 4.49 — —

Outstanding at December 31, 2024

70,605 $ 20.88 8.38 $ —

Vested and expected to vest at December 31, 2024

70,605 $ 20.88 8.38 $ —

Exercisable at December 31, 2024

The Company did not grant any stock options during the year ended December 31, 2023.

Restricted Stock Units

The following is a summary of the restricted stock unit activity for the 2018 Plan for the year ended December 31, 2023:

Weighted Average Grant Date Fair Value

18,352 $ 68.64 5.96 $ —

Non-Plan Options Issued

On April 24, 2024, the Board approved the issuance of a total of 25,000 Non-Plan Options as an employment incentive for the position of Chief Commercial Officer.

The options were issued on May 1, 2024, the first day of employment and vest at 20 % per year for 5 years with an exercise price of $ 5.321 and an expiration date of May 1, 2034.

The Non-Plan Options issued were valued at approximately $ 131 thousand using the Black-Scholes model based on the following assumptions on the date of issue:

Non-Plan Options Issued May 1, 2024

Risk-free interest rate

Expected dividend yield

Expected life (in years)

The following is a summary of stock option activity for the Non-Plan options for the year ended December 31, 2024 (in thousands, except for weighted average price and remaining life):

Stock Options

Outstanding at December 31, 2023

Options exercised

Options granted

25,000 5.32 — —

Cancelled/forfeited

Outstanding at December 31, 2024

25,000 $ 5.32 9.33 $ —

Vested and expected to vest at December 31, 2024

25,000 $ 5.32 9.33 $ —

Exercisable at December 31, 2024

Restricted Stock Units

All restricted stock units have been forfeited or vested as of December 31, 2023.

Restricted Stock Awards

A summary of the restricted stock award activity for the year ended December 31, 2023 is presented below:

Weighted Average Grant Date Fair Value

Outstanding at December 31, 2022

Outstanding at December 31, 2023

Employee Stock Purchase Plan

In September 2018, the Company’s board of directors adopted the 2018 Employee Stock Purchase Plan (the “ESPP”) which permitted eligible employees to purchase the Company’s common stock at a discount through payroll deductions during defined offering periods.

The number of shares of common stock reserved for issuance under the ESPP automatically increased on January 1 of each fiscal year by the lesser of (1) 237 shares, (2) 1.25 % of the total number of shares outstanding on December 31 of the preceding fiscal year, or (3) such other amount as the Company’s board of directors may determine.

The Company paused the ESPP in May 2022.

For the year ended December 31, 2022, cash received from the exercise of purchase rights under the ESPP was approximately $ 5 thousand.

As of December 31, 2023, the Company had issued 950 shares of common stock since inception of the ESPP, and 26 shares were reserved for future issuance.

Stock-based compensation expense recorded in operating expenses was as follows ($ in thousands):

For the Year Ended December 31,

Selling, general and administrative

Research and development

Stock-based compensation in operating expenses

Stock-based compensation of approximately $ 0 and $ 5 thousand was capitalized to property and equipment and inventory during the years ended December 31, 2023 and 2022, respectively.

There was no unrecognized estimated stock-based compensation expense for stock options, restricted stock awards or restricted stock units at December 31, 2023.

All restricted stock awards have been forfeited or vested as of December 31, 2023.

Stock-based compensation expense for the years ended December 31, 2024 and 2023 was $ 54 thousand and $ 1.2 million , respectively, in selling, general and administrative expenses in the consolidated statements of operations.

Total unrecognized estimated stock-based compensation expense by award type and the remaining weighted average recognition period over which such expense is expected to be recognized at December 31, 2024 was as follows:

Unrecognized Expense (in thousands)

Remaining Weighted Average Recognition Period (in years)

Stock options (Non-Plan Options)

Stock options (2023 Plan Options)

Restricted stock awards

Restricted stock units

A reconciliation of the differences between the U.S.

1 unchanged sentence

For the Year Ended December 31,

Tax computed at the federal statutory rate

federal statutory rate

( 21.0 )% ( 21.0 )%

Section 382 NOL limitation

2 unchanged sentences

Stock-based compensation

Royalty mark to market

3.5 % ( 2.1 )%

Change in valuation allowance

( 70.7 )% 16.7 %

Purchase accounting

Goodwill impairment

Royalty mark to market

Effective tax rate

The federal and state income tax provision is summarized as follows (in thousands):

5 unchanged sentences

Net operating loss carryforwards

$ 12,358 $ 24,829

Stock-based compensation

1 unchanged sentence

Intangible assets

Accrued legal settlement

Operating lease liabilities

1 unchanged sentence

Other accruals

Fixed asset basis

Total gross deferred tax assets

13,346 26,767

Deferred tax liabilities:

1 unchanged sentence

Operating lease right-of-use assets

( 24 ) ( 42 )

Intangible assets

( 5,506 ) ( 6,216 )

Total gross deferred tax liabilities

( 5,530 ) ( 6,259 )

Valuation allowance

Total deferred taxes

At December 31, 2023, and December 31, 2022 the Company had available Federal Net Operating Loss (NOL) carryforwards of $ 147 million and $ 54.5 million, respectively.

For State purposes, such NOL carryforwards were $ 111.7 million and $ 47.8 million, respectively.

( 10,957 ) ( 20,508 )

Net deferred tax liabilities

$ ( 3,141 ) $ —

At December 31, 2024 , and December 31, 2023 the Company had available Federal Net Operating Loss (NOL) carryforwards of $ 104.3 million.

For State purposes, such NOL carryforwards were $ 63.8 million.

The net operating losses begin expiring in 2027.

1 unchanged sentence

The Company experienced a change in control during 2023 and 2024.

Accordingly, utilization of its respective consolidated and/or separately computed NOL's is subject to an annual limitation for federal tax purposes under Internal Revenue Code ("IRC") Section 382.

Accordingly, utilization of its respective consolidated and/or separately computed NOL's is subject to an annual limitation for federal tax purposes under IRC Section 382.

Due to this change in control, the Company estimates that $ 46.2 million of $ 104.3 million federal NOL carryforward is effectively eliminated under IRC Section 382.

8 unchanged sentences

The amount of deferred tax asset considered realizable, however, could change in the near term if estimates which require significant judgment of future taxable income during the carryforward period are increased or decreased.

The valuation allowance decreased by $ 9.5 million from $ 20.5 million as of December 31, 2023 to $ 11.0 million as of December 31, 2024.

The Company recognizes interest and penalties relating to uncertain tax positions in income tax expense .

1 unchanged sentence

Effective January 1, 2023, repurchases of Company stock are subject to a nondeductible excise tax under the Inflation Reduction Act of 2022 equal to 1.0% of the fair market value of the shares repurchased, subject to certain limitations.

There was no impact to the Company’s financial condition or results of operations in 2023 as a result of the excise tax.

There was no impact to the Company’s financial condition or results of operations in 2023 and 2024 as a result of the excise tax.

The Company files income tax returns as prescribed by tax laws of the jurisdictions in which it operates.

13 unchanged sentences

The Company cancelled the 401 (k) Plan effective March 10, 2023 and distributed all assets held by the 401 (k) Plan to the participants.

The Company had no expenses related to the matching contribution for the year ended December 31, 2023 and approximately $ 0.2 million for the year ended December 31, 2022.

The Compan y had no expenses related to the matching contributions for the years ended December 31, 2024 and 2023 .

Related Parties

Prior to the Merger, David A.

Jenkins, the Company’s current Executive Chairman of the Board and Chief Executive Officer, and Old Catheter’s then Chairman of the Board of Directors, and his affiliates held approximately $ 25.1 million of Old Catheter’s Convertible Promissory Notes, or the Notes, that were converted in the Old Catheter merger into 7,856,251 shares of Series X Convertible Preferred Stock (see Note 3, Business Combination, and Note 14, Preferred Stock).

Jenkins, the Company’s current Executive Chairman of the Board and Chief Executive Officer, and Old Catheter’s Chairman of the Board of Directors, and his affiliates held approximately $ 25.1 million of Old Catheter’s Convertible Promissory Notes, or the Notes, that were converted into 7,856.251 shares of Series X Convertible Preferred Stock in connection with the Merger (see Note 3, Business Combination, and Note 14, Preferred Stock).

In consideration for forgiving the interest accrued but remaining unpaid under the Notes in an aggregate amount of approximately $ 13.9 million, Mr.

Jenkins and his affiliates also received royalty rights equal to approximately 12% of the net sales, if any, of LockeT, commencing upon the first commercial sale and through December 31, 2035 (see Note 10, Royalties Payable).

Jenkins and his affiliates also received royalty rights equal to approximately 12 % of the net sales, if any, of LockeT, commencing upon the first commercial sale and through December 31, 2035.

The Company entered into an additional royalty agreement for the LockeT device with Auston Locke, who is the son of Robert Locke, VP of Product Development.

Under this agreement, the Company will pay a 5 % royalty rate on net sales up to $ 1 million in cumulative royalties.

If a patent is obtained, the royalty rate will be 2 % of net sales until the Company has paid a total of $ 10 million in cumulative royalties.

Refer to Note 2, Summary of Significant Accounting Policies and Note 10, Royalties Payable for additional information over the royalties payable due to these related parties.

In addition to the shares described above that were issued in connection with the Notes, Mr.

7 unchanged sentences

Jenkins and affiliates upon conversion of 991.828 shares of Series X Convertible Preferred Stock, and 23,532 shares of common stock to his adult children upon conversion of 235.320 shares of Series X Convertible Preferred Stock.

On May 1, 2024, Marie-Claude Jacques, the Company’s Chief Commercial Officer, received a non-plan option to purchase 25,000 shares of the Company’s common stock.

The options have an exercise price of $ 5.321 per share, vest at 20 % per year for 5 years and expire in May 2034.

During the year ended December 31, 2024, the Company entered into various short-term promissory notes with various related parties (the “Related Party Notes”).

These Related Party Notes had a maturity date of August 30, 2024 and interest rates of 8 % per annum.

On August 23, 2024, the Notes were amended to extend the maturity date to January 31, 2026 and increase the interest rate to 12 % per annum effective August 31, 2024.

See Note 9, Notes Payable for further information.

The related parties and the amounts owed to each related party are summarized in the following table (in thousands):

Related Party

Issuance Date

Principal Amount

Interest Paid

Interest Accrued

David Jenkins

$ 500 $ 10 $ 20

FatBoy Capital

$ 150 $ 2 $ 6

FatBoy Capital

$ 250 $ 4 $ 10

FatBoy Capital

$ 100 $ 1 $ 4

Jenkins Family Charitable Institute

$ 500 $ 4 $ 21

On September 3, 2024, the Jenkins Family Charitable Institute also invested approximately $ 500,000 in the Company’s public offering and received 265,000 shares of common stock;

235,000 pre funded warrants with an exercise price of $ 0.0001 and no expiration date;

500,000 Series H Warrants with an exercise price of $ 1.00 per share that expire on March 3, 2025;

500,000 Series I Warrants with an exercise price of $ 1.00 per share that expire on March 3, 2026;

and 500,000 Series J Warrants with an exercise price of $ 1.00 per share that expire on September 3, 2029.

On October 28, 2024, the Jenkins Family Charitable Institute exercised all 235,000 pre funded warrants and received 235,000 shares of common stock of the Company.

On December 31, 2024, the Jenkins Family Charitable Institute distributed 450,000 Series J warrants to its trustee and two advisors, who are daughters of Mr.

Subsequent Events

Issuance of Securities in Private Placement

On January 24, 2024, Catheter Precision, Inc.

issued 546,776 shares of its common stock in connection with the conversion of 875 shares of its outstanding Series A Convertible Preferred Stock.

The conversion occurred on January 23, 2024.

Each share of Series A Convertible Preferred Stock is convertible into approximately 625 shares of common stock.

The common stock was issued pursuant to the exemption contained in Section 3(a)(9) of the Securities Act of 1933, as amended (the "Act"), which applies to transactions in which a security is exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.

The shares issued have been registered for resale on an effective registration statement on Form S-1.

Options Issued Under 2023 Equity Incentive Plan

On January 8, 2024, the Board approved the issuance of a total of 285,000 non-qualified stock options under the 2023 Equity Incentive Plan.

75,000 of these non-qualified options were issued to non-employee directors that vest at 8 1/3% per quarter for 3 years with an exercise price of $0.40 and expiration date of January 8, 2034 .

The remaining 210,000 non-qualified options were issued to employees and consultants and vest at 20% per year for 5 years with an exercise price of $0.40 and expiration date of January 8, 2034 .

On February 26, 2024, the Board approved the issuance of a total of 150,000 incentive stock options under the 2023 Equity Incentive Plan.

All options were issued to employees and vest at 20% per year for 5 years with an exercise price of $0.43 and expiration date of February 26, 2034 .

Issuance of Common Stock

In connection with the October 2024 Warrant Inducement Offer, shares were held in abeyance in the event that the exercise of the 2024 Existing Warrants would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the 2024 Existing Warrant.

These Abeyance Shares are held as Pre-Funded Warrants until notice is received from the holder that the balance, or portion thereof, may be issued in compliance with the beneficial ownership limitations.

On January 3, 2025, the Company released and issued 939,000 Abeyance Shares.

Amendment to the Amended and Restated Certificate of Incorporation

On January 13, 2025, at the Special Meeting of Stockholders of the Company, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation of the Company (the “Amendment”) which included an increase in the authorized capital stock to 70 million shares, consisting of 60 million shares of common stock and 10 million shares of preferred stock.

Series K Warrants

On January 13, 2025, at the Special Meeting of Stockholders of the Company, the stockholders approved the issuance of up to 10,695,962 shares of the Company’s common outstanding stock, upon the exercise of the Series K Warrants.

See Note 13, Equity Offerings for additional information over the Series K Warrants issued in connection with the October 2024 Warrant Inducement Offer.

2023 Equity Incentive Plan

On January 13, 2025, at the Special Meeting of Stockholders of the Company, the stockholders of the Company approved an additional 1.5 million shares of common stock for issuance pursuant to the Company’s 2023 Equity Incentive Plan.

On January 29, 2025, the Board approved the issuance of options to purchase a total of 1,627,500 shares of common stock to employees, consultants and non-employee directors with various vesting provisions, an exercise price of $ 0.42 per share and expiration date of January 29, 2035.

Included in the option issuance was a grant of 450,000 shares to Mr.

Jenkins, the Company’s Executive Chairman and Chief Executive Officer, a grant of 50,000 shares to Mr.

Jenkins’ daughter, the Company’s non-executive Chief Operating Officer, and a grant of 250,000 options to Marie-Claude Jacques, Chief Commercial Officer.

On January 31, 2025, the Board approved a restricted stock grant to a consultant of the Company pursuant to the Company’s 2023 Equity Incentive Plan.

The grant calls for the issuance of 100,000 shares of common stock of the Company through June 16, 2025.

Non-Plan Options

On January 3, 2025, the Board approved, as an inducement grant, the issuance of 500,000 non-plan options to the Chief Financial Officer of the Company to vest monthly over 3 years with an exercise price of $ 0.53 per share and expiration date of January 6, 2035.

PeriKard Acquisition

On January 14, 2025, the Company entered into a Membership Interest Purchase Agreement (“the Agreement”) with Cardiofront, LLC (“Seller”) to purchase the issued and outstanding membership interests of PeriKard, LLC, a wholly-owned subsidiary of Seller.

The primary purpose was to purchase patented technology for commercialization within the broader cardiac treatment/electrophysiology industry.

Pursuant to the Agreement, the Company issued 275,000 shares of its common stock to the Seller in exchange for 100 % of the membership interests of PeriKard, LLC (“Acquisition”).

Additional future royalty cash payments may be due to the Seller equal to 10 % of aggregate future net sales activity of PeriKard’s pericardial access kits, to the extent the product is successfully commercialized, for five years from the acquisition’s closing date.

This transaction closed on January 24, 2025.

The accounting for the Acquisition is incomplete due to the proximity of the closing date of the Acquisition to the date of this filing.

As a result, the Company is unable to disclose certain information including the major classes of assets acquired and liabilities assumed, nor provisional fair value estimates of the identifiable net assets acquired.

Due to its insignificant size relative to the Company, the Company does not expect to provide supplemental pro forma financial information of the combined entity for the current and prior reporting periods.

The Company will recognize and provide additional disclosures regarding the Acquisition within its first quarter 2025 Quarterly Report on Form 10 -Q.

Formation of New Subsidiary

On February 17, 2025, the Company incorporated Cardionomix, Inc.

Cardionomix, Inc.

currently holds no assets and is inactive.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures