On June 6, 2022, Ra Medical Systems, Inc. (the “Company”) initiated a reduction in force (the “Reduction”), in which approximately 65% of the Company’s full-time employees were immediately terminated, effective June 6, 2022, which is the date on which the Company notified such employees of their termination. As part of the Reduction, non-terminated employees have been offered conditional retention arrangements with the Company pursuant to which it is expected that they will continue to provide services during the immediate future for a period of approximately the next 60 days in exchange for a retention payment should the full term of service be completed, during which time the Company and its Board of Directors (the “Board”) will continue to actively evaluate and monitor the Company’s near-term personnel needs based in part on the Company’s financial status and the Board’s review of strategic alternatives. The purpose of the Reduction, which was approved by the Board on June 3, 2022, is to preserve capital with the goal of maximizing the opportunities available to the Company during the Board’s review of strategic alternatives.
The total costs related to the Reduction are estimated to be approximately $1 million in future cash outlays primarily related to severance and retention costs as well as related expenses, which the Company expects to record in the second and third quarters of 2022.
The Company may incur additional expenses not currently contemplated due to events associated with the Reduction. The changes that the Company expects to incur in connection with the Reduction are estimates and subject to a number of assumptions, and actual results may differ materially.
