Ra Medical Systems, Inc.
- Company Name
- Ra Medical Systems, Inc.
- Stock Symbol
- Class Period
- Purchasers of Ra Medical securities pursuant to the Company’s September 27, 2018 initial public offering
- Motion Deadline
- August 9, 2019
- Southern District of California
The complaint charges Ra Medical, certain of its officers and directors, and the underwriters of its September 27, 2018 initial public offering (“IPO”) with violations of the Securities Act of 1933. Ra Medical designs, develops, and commercializes excimer lasers as tools for the treatment of vascular and dermatological diseases. The Company’s Pharos excimer laser system is used to treat psoriasis, vitiligo, atopic dermatitis, and leukoderma. Its DABRA laser system and disposable DABRA catheter have received approval in the United States for use of ablating a channel in occlusive peripheral vascular disease.
On September 24, 2018, in connection with the IPO, the Company filed the final amendment to its Registration Statement on Form S-1/A with the SEC. The Registration Statement was declared effective on September 26, 2018, and Ra Medical sold approximately 4.5 million shares of its common stock at $17 per share for net proceeds of more than $67 million.
The complaint alleges that the Registration Statement for the IPO was negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading. Specifically, the Registration Statement failed to disclose that the Company’s evaluation of and training program for sales personnel were inadequate, and as such, the Company could not ensure that its newly hired sales personnel were adequately experienced, which, in turn, could reasonably lead to the Company suffering a shortage of qualified sales personnel. In addition, the Registration Statement failed to disclose that the Company’s manufacturing process could not support increased catheter production, which would result in production delays.
On March 14, 2019, the Company announced financial results for the fourth quarter of 2018 that had been negatively impacted by issues related to the hiring and training of qualified sales personnel and certain production limitations. The Company stated that it had “experienced certain issues that had an impact on [its] fourth quarter revenue and into 2019. In particular, the hiring and training of qualified sales personnel was dependent on the onboarding of [its] CCO and [it] also found that [it] needed a more robust training program for [its] newly hired sales personnel . . . . In addition, [the Company] experienced production limitations in [its] manufacturing process as [it] scaled up catheter production.” On this news, the price of the Company’s shares fell $2.14 per share, or nearly 33%, to close at $4.43 per share on March 15, 2019. Since the IPO, Ra Medical’s stock has traded as low as $3.40 per share, or 80% below the price at which the stock was sold in the IPO.