Catheter Precision, Inc., a medical device company, has amended the terms of its outstanding short-term promissory notes, as revealed in a recent 8-K filing with the Securities and Exchange Commission. The company announced on Monday that it has extended the maturity date of its notes from August 30, 2024, to January 31, 2026, and increased the interest rate from 8% to 12% after August 31, 2024. Interest accrued up to August 30, 2024, will be payable on that date.
The amendments apply to notes held by various parties, including executive chair and CEO David A. Jenkins, FatBoy Capital, L.P., and the Jenkins Family Charitable Institute, with principal amounts ranging from $100,000 to $500,000.
Notably, Jenkins has significant ties to the company, holding over 10% of the common stock, convertible Series X Preferred shares, stock options, and rights to royalties on sales of the LockeT device. Jenkins' adult daughter, Missiaen Huck, also serves as the non-executive chief operating officer of Catheter Precision.
The decision to amend these financial instruments comes as part of the company's broader financial strategy. The amendments were formalized through a First Amendment to 8% Short Term Promissory Note(s) between Catheter Precision and the respective note holders.
The changes to the promissory notes create a direct financial obligation for the company, which is detailed in the filing under both the Entry into a Material Definitive Agreement and the Creation of a Direct Financial Obligation sections.
In other recent news, Catheter Precision, Inc. has been active in restructuring its stock. The company has finalized the conversion of its Series A Convertible Preferred Stock into common stock, issuing 25,000 shares of common stock in exchange for 400 shares of Series A Preferred. This move could potentially increase the liquidity of its shares and simplify its capital structure.
In a recent development, Catheter Precision announced a reverse stock split of its common stock at a ratio of 1-for-10, reducing the number of outstanding shares from approximately 9.01 million to approximately 901,251. This action is part of a broader recapitalization strategy aimed at increasing the per share trading price of the company's common stock.
Further, the company's shareholders have approved the addition of two million shares to its 2023 Equity Incentive Plan. This strategy aims to incentivize directors, officers, and key employees.
Directors James Caruso and Andrew Arno were re-elected for three-year terms, and a nonbinding vote on executive compensation passed, with future votes to be held every three years.
Lastly, the appointment of WithumSmith+Brown, PC as the company’s independent registered public accounting firm was ratified.
These recent developments indicate a majority participation by the shareholders, as approximately 57.50% of the outstanding shares were represented at the annual meeting.
InvestingPro Insights
Catheter Precision's strategic move to amend the terms of its short-term promissory notes signals a focus on managing its financial obligations and preparing for future growth. This decision aligns with the InvestingPro Tips, which highlight that analysts anticipate sales growth in the current year, pointing towards a potentially brighter future for the company's revenue streams. The company's impressive gross profit margins, which stand at 92.2%, as per the latest InvestingPro Data, further underscore its ability to generate income from its sales, albeit amidst challenges such as quickly burning through cash and short-term obligations exceeding liquid assets.
InvestingPro Data also reveals a significant 140.88% revenue growth over the last twelve months as of Q2 2024, which could be indicative of the company's expanding market presence. However, it's important to note that Catheter Precision is not expected to be profitable this year, and the valuation implies a poor free cash flow yield. Investors should consider these factors alongside the company's recent amendments to its promissory notes to gain a comprehensive understanding of its financial health and outlook.
For those interested in a deeper analysis, there are 11 additional InvestingPro Tips available that provide further insights into Catheter Precision's financial metrics and market performance. These tips, accessible through InvestingPro's platform, can offer valuable context and guidance for investors monitoring the company's progress.
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