It's not every day that an investor stumbles across a hidden gem biotech company before anyone else seemingly discovers it. We recently discovered what we believe is truly a hidden gem in a new public company called Catheter Precision (NYSE: VTAK), which could and should be worth many multiples of its current valuation. Catheter Precision is hidden from the public eye because it merged months ago into a medtech company called Ra Medical. Since then Ra Medical’s old operations have been terminated. Because of this, Catheter Precision looks like a very good investment but much of the company’s new direction and strategy, as well as potential revenues and forecasted cash requirements, require some digging to uncover. Additionally, the company’s 10-Q is overdue, so presumably this is why there is currently a valuation disparity, along with a weak overall biotech market. It looks like the company isn’t operating well due to the overdue SEC filings, and it looks like they will run out of cash given Ra Medical’s obsolete burn rate. But this couldn’t be further from the truth. It’s just not obvious when looking at current SEC filings or company presentations that this company is ready to rock and roll instead of withering up and dying, which is what you’d suppose if you checked the historical data. In reality the company just completed a merger with an industry veteran and successful investor taking the helm at VTAK; there is not yet an updated presentation available nor do the financials reflect the current state of the company. The company is truly a hidden gem, but how long will that last when it becomes apparent that the company is metamorphosing into an entirely new entity? At some point, when the company’s SEC filings become current, the improved state of affairs could create a landslide of buying as investors digest the prospects and financials of the new company.From an unknowing investor’s point of view, they will take one look at the stock chart over the past 5 years (-99.99% return) along with the company’s past 4 years of financial (see the cash burn (~$25 million annual cash burn—see various 10-Q and 10-Ks) versus the current cash on hand which is estimated to be around $12 million as of January per the merger press release). This is enough to send any investor running for the hills, never to set eyes on the ticker again. So no unknowing investor will have looked into the company.Because of this, VTAK is currently completely overlooked. The simple fact is that all these major red flags have changed within the past few months and none of this (Ra Medical’s old cash burn) reflects the current management or financial state of the new company. The company has dropped Ra Medical’s old products in the vascular space, including an almost-completed 125-person clinical trial, and will be focusing on Catheter’s electrophysiology products moving forward. To investors, it is a new company—Catheter Precision plus Ra Medical’s net cash. In this article, I will discuss the new company and its potential value with its two medical device/technology solutions which are currently being launched.
Old History and New Management
The company has right-sided operations since the merger, ceasing questionable actions and reducing cash burn via a reduction in headcount. Under prior management, Ra Medical was selling its products off-label, avoiding recall-related safety issues, and other sketchy practices, which ultimately resulted in a multi-million dollar settlement with the DOJ. Using these unethical sales practices, the company had been bringing in millions in revenue but blowing through even more money with a bloated overhead. No wonder the stock performed poorly in the past. Now, everything is different.Concurrent with the merger, the company brought on medtech veteran and Catheter Precision CEO David Jenkins as its executive chairman. Jenkins is a very successful venture investor who has invested ~$30 million of his own money into Catheter Precision, aligning his interests with shareholders’ interests, rather than taking a fat salary and shirking the responsibility of driving shareholder returns. In fact, if all of Jenkins’ preferred stock is converted to common stock, it's possible that he will own more than half the company. This is an equity play for him and personal enrichment by salary compensation will likely be negligible. This alone could be enough to ensure newcomers to the stock that things will be different moving forward.In contrast to the new Catheter Precision, some investors familiar with microcap medtech and biotech may know of a company called enVVeno (NASDAQ: NVNO). I would argue that this is a similar investment opportunity without the management risk that faces NVNO. enVVeno is working on vascular implants to solve diseases like chronic venous insufficiency (CVI) and their products work extremely well and address large unmet medical needs. However, NVNO’s CEO has been a very poor steward of shareholder capital despite any other positives he may bring to the company. He uses the company as a lifestyle vehicle and the longer he takes to make the company a success, the more stock options he gets paid—not that this executive behavior is entirely uncommon in the biotech space. However, in contrast, David Jenkins is a cash-concerned serial entrepreneur with skin-in-the-game and a long track record including many successes in the medtech space including two notable successful exits: EP MedSystems, Inc. to St. Jude Medical (now owned by Abbott (NYSE: ABT)) in 2008 and Transneuronix to Medtronic (NYSE: MDT) in 2005, for $91 million and $260 million respectively. These are companies where Jenkins was instrumental in operating, rather than just passively investing.Once again, this company appears to be undiscovered. Once investors check under the hood I think they'll like what they see, if they’re comfortable with medtech.
Following Jenkins Into Another Investment
According to available information, Jenkins’ performance as an operator/investor has been fairly consistent and it’s safe to say that he’s a very successful businessman, especially in the electrophysiology market. First was the aforementioned EP Medsystems, which if they had the company today in this more developed EP market might be a billion-dollar company. The company returned investors about 4x in 10 years ($20 million to $100 million with some dilution) which averages out to a 15% CAGR. Transneuronix was a bigger winner for the investors as Jenkins managed a 10x return in about 7 years, or a 39% CAGR. The difference with Ra Medical/Catheter Precision is the entire career of experience he has brought to the table and the fact that the company is sporting a microcap valuation while already having innovative products on the market. His other companies were developmental at the beginning. Investors buying the Catheter Precision merger are introduced to a company ready to ramp up commercially while the stock is misunderstood and in a very poor capital market. This makes the valuation depressed even though the markets are not as much of a concern since the company might not need another capital raise to accelerate its products’ hard launches.Additionally Jenkins has invested $30 million of his own money into the company and is therefore aligned with shareholders as he and his family own about half of the company. He himself is also well capitalized. This is not the first time he has done so as he invested his own funds in EP Medsystems to “push it over the hump” to success prior to its acquisition. The EP market is growing at a strong pace—on J&J’s recent earnings call, they said again that EP divisions are experiencing double digits growth. This market is also more mature than it used to be so the investment thesis for VTAK versus Jenkins’ prior projects looks even more attractive.
Background and Summary of Catheter Precision
Catheter Precision is a small medtech company bringing novel solutions to market in the electrophysiology space, specifically for cardiac arrhythmias. Founded in 2006, the company has been developing three devices for the EP market, namely 1) a non-invasive 3D imaging system called VIVO that enables physicians to identify the origin of arrhythmias pre-procedure, 2) an advanced suture (stitches) retention device called LockeT, which is intended to improve the wound healing, ease of stitching, and reduced scarring or deformation in wounds (applicable to a wider market than just EP), and 3) a developmental stage remote catheter system called AMIGO, which will take a bit more time and capital to bring to market, so will not be the first priority.Jenkins tried to merge Catheter Precision years ago but the opportunity finally appeared for the company to merge and become publicly traded.Jenkins, who is also the company’s founder, has worked as an entrepreneur in the medical device industry his whole career. According to Jenkins, this is his last company (the third company in cardiac electrophysiology), he has personally invested $30 million in the company, and all of his focus is on the company. I question that all his focus is on this one company since he was just added to the board of Crdentia Staffing. But it should be a primary focus. Jenkins has developed a deep understanding of the competitive field and industry, as well as the field’s key opinion leaders and leading physicians. He knows the competitive and clinical field as well as the key doctors in the electrophysiology field.The company has recently hired sales reps in Europe and the U.S. to spearhead the full launch of the VIVO system and the LockeT device. We’ll get to the significance of these attractive products and how they’ll drive profits later. To simplify things, the company’s comparables might lie in the $300 to $900 million dollar range, without revenues. The company has approved products (VIVO, LockeT) and is ready to launch.
The VIVO System
The VIVO (View into Ventricular Onset) system is an FDA-approved (as of June 2019) “non-invasive 3D imaging system that enables physicians to identify the origin of ventricular arrhythmias pre-procedure, streamlining workflow and reducing overall procedure time.” This allows physicians to more accurately pinpoint the desired efficacious location for ablation, which should decrease the risk of ineffective ablation, decrease the procedure time, and decrease the risks of procedural complications.
Ventricular Arrhythmias
For those who aren’t familiar with the heart or arrhythmias, they are basically malfunctioning contractions of the heart due to improper electrical impulses sent to the muscles of the heart that cause it to pump in a well-timed fashion. Arrhythmias can range from benign to life-threatening depending on a range of variables, similar to how piston misfiring in an engine can be damaging to an engine. Atrial fibrillation is an irregular beating of the heart localized in the left or right atrium, and this condition can commonly be treated with an ablative procedure where the part of the atria responsible for the aberrant electrical signaling is electrically isolated or destroyed. Ventricular arrhythmias are improper signals/contractions in the right or left ventricles, and the most common are premature ventricular contractions (PVC) and ventricular tachycardia (VT). When a ventricle contracts before it's completely filled with blood, this impairs blood flow and puts stress on the heart. Three or more PVCs in a row are typically characterized as VT. PVC is common and usually benign but can lead to ventricular fibrillation which is a quivering of the ventricles instead of pumping, often leading to cardiac arrest and death. The problem with PVC and VT is that the ablation procedures targeting the ventricles, particularly the left ventricle, can be more difficult than atrial ablation due to the difficulty in finding the origin site of the arrhythmia (e.g. papillary muscles, ventricular septum). This has stymied the increase in ventricular ablation procedures being completed despite their effectiveness in correcting ventricular arrhythmias.
How Do Papillary Muscles Work - Rectangle Circle (rectanglecirclee.blogspot.com)
Ventricular fibrillation is considered more immediately life-threatening than atrial fibrillation. VT usually occurs when the heart muscle has been damaged and this causes abnormal electrical pathways in the ventricles. Below is a diagram showing the correct pathway of electrical impulses from the sinus node (natural pacemaker) to the ventricles. Various deviations in signaling which encourage a contraction at the improper time may cause arrhythmia. Normally, the atria need to contract before the ventricles to fill the ventricles with blood; after this, the ventricles contract to pump the blood.
Premature ventricular contractions (PVCs) - Symptoms and causes - Mayo Clinic
As opposed to ventricular fibrillation, atrial fibrillation is not directly fatal, but it is associated with a high risk of clotting and other complications. For instance, patients with AFib have a 3-5x increased stroke risk, and untreated AFib can weaken the heart and eventually cause heart failure. This underscores the importance of a properly pumping heart.Individuals who only have infrequent PVCs with no structural heart disease usually have normal lives. However, those with at least 10,000 PVCs per day or greater than 10% PVC burden are at risk of dilated cardiomyopathy and significant clinical symptoms. However, recent European Society of Cardiology (ESC) guidelines recommend catheter ablation for patients experiencing >10 PVCs/hr (burden rate of 0.27%) or where PVC-induced cardiomyopathy is suspected. Supposedly this is recommended to prevent further complications and reduce symptoms.
VIVO’s Accuracy: Detecting PVC and VT Origin
After a series of fairly successful studies for locating VAs to guide treatment, and then subsequent VIVO system optimization, VIVO was shown to be 100% accurate in identifying a PVC (100% site of origin, 99.5% paced location) or VT foci in the right, left, or septal region of the heart in clinical trials. Catheter Precision conducted two self-funded trials that have proven VIVO’s utility for treatment on the ventricular side of the heart. It also demonstrated a reduction in mapping time of 30% with a reduction in overall procedure time of 38 minutes.The system, an ECG imaging system, works by combining a myocardial model from CT or MRI, a 12-lead ECG for ventricular arrhythmia localization, and a 3D photo for electrode positioning into computer algorithms to pinpoint the required site for ablation, guiding more successful procedures.
The system can also aid in identifying sites of pleomorphic PVC (multiple sites) which have lower success rates and more repeat procedures. This also benefits the patient as they are able to be counseled more accurately to assess risk by identifying the site (LV summit, epicardium, etc) which affects the procedural risk profile, making VIVO valuable to patients with questionable PVC burdens or otherwise only contemplating ablation.
Current Solutions for Ventricular Arrhythmias
In some cases, VAs like PVC can be managed with lifestyle changes or pharmacological solutions. Antiarrhythmic medications like beta blockers, calcium channel blockers, and ACE inhibitors have been available for nearly a century and are a key therapeutic solution, with the intent to reduce the frequency and duration of arrhythmic episodes, along with potentially reducing hospitalizations due to atrial fibrillation. However, drug use is often limited due to proarrhythmic and noncardiovascular toxicities and limited effectiveness. Regardless of the drawbacks, the medications are widely prescribed and new antiarrhythmic drugs are under development.
The LockeT Device
This device is a lot simpler to wrap one’s head around and there’s also not as much public discussion on it. In February 2023, the company announced the launch of LockeT, its suture (stitches) retention device. The way it works is by distributing suture tension over a larger area on the patient, in conjunction with the suture closures. This helps with healing but also to smooth out the way the skin heals back together, to reduce the ugliness of scarring.
https://www.catheterprecision.com/wp-content/uploads/2023/03/LockeT-Information-Sheet-_1_.pdf
LockeT is applicable to percutaneous wound sites; for instance, it can be used with an EP procedure where a catheter has been placed through the skin and into a blood vessel. In this case, the physician would suture the site and the vessel, and the LockeT device would hold the sutures in place, being either a complement or an alternative to other closure devices such as Perclose, sold by Abbott (NYSE: ABT), Vascade, sold by Cardiva, a unit of Haemonetics (NYSE: HAE), and Angioseal, sold by Terumo (OCTMKTS: TRUMY). Other markets besides cardiac electrophysiology include structural heart and other vascular surgeries; millions of applicable procedures according to the company. The selling point is that it is user and patient friendly as well as low-cost, simplifying closure. The company claims market uptake will be rapid. Lastly, Catheter Precision expects to receive a CE Mark for LockeT in Q3.
Product Economics
We expect these products to carry excellent gross margins. The LockeT device disposables reportedly cost $8 to produce and sell for $150 each. The estimated market for this is 4-5 million annual procedures with not a lot of competition. VIVO is supposed to cost about $45,000 upfront, with disposables selling for around $1,500 and costing $125 to manufacture. Catheter Precision should approach gross margins of 90% or greater as disposables for both VIVO and LockeT overshadow VIVO system sales.
Commercial Launch
We expect the company’s commercial uptake to be relatively strong. Jenkins has good connections with some of the best KOLs in the electrophysiology field. The company had been slow rolling its launch for the past year or so, and now it is finally ramping up sales efforts, so we expect an 18-24 month ramp to a run rate of $25 million in annual revenue, with about $2-3 million in revenue for this year, and about 60% of the revenue coming from VIVO, and 40% from LockeT.Data on the incidence or prevalence of PVC, VT, or other ventricular electrophysiological maladies that may benefit from VIVO is difficult to find as there is simply not a lot of data on the subject. PVC is extremely common but its burden widely varies as does its symptomology. There are also conflicting opinions on the usefulness and risk-reward ratio of ablation for PVC; however, when looking at the totality of literature being published, the electrophysiology field is generally moving in the direction of pro-ablation, especially with severe or moderate PVC burden, with the true risks of PVC not being a totally benign condition being elucidated as well as the benefit of ablation for LVEF, exercise tolerance, and other symptoms being further studied.Atrial ablation has a large failure rate, with many patients coming in a second or third time for repeat ablations. Currently, the growth in this procedure is from the atrial ablation side, particularly with repeat patients with recurrence, with recurrence rates estimated to be between 20% and 40%. Industry growth is not on the ventricular side, which basically includes ventricular tachycardia (VT) or premature ventricular contractions (PVC). The reason for the lack of ventricular ablations is that it takes a long time to figure out where the arrhythmias originate. Catheter precision focuses primarily on the ventricular side of the heart, helping physicians pinpoint exactly where the pathological ventricular cardiac activation is, with high accuracy. This sharpshooting of ventricular arrhythmias with accurate pre-mapping reduces the time patients are under anesthesia on the operating table and also reduces complications. The cost savings are estimated to be about $15,000 per procedure while also enabling more procedures per day (another $30,000-$45,000 per day in revenue for the electrophysiology practices). There are an estimated 3,000 EP labs around the world. Incidence rates for idiopathic symptomatic ventricular arrhythmias including PVC (with reduced ejection fraction) were found to be 62 per 100,000 person-years versus 90-123 per 100,000 person-years for Afib. Therefore I assume the total number of ventricular ablations will increase over time to match the total number of ablations for atrial fibrillation, which is estimated to be 75,000 procedures per year with an estimated 400,000 current candidates for ventricular ablation in the U.S. Also, VFib is considered much more dangerous than Afib, and PVC is becoming more understood as a serious condition that can also give way to Vfib. Therefore this, in the long-term, in my opinion, is not a poor assumption; however, the confidence in this estimation of future ventricular arrhythmia ablations is comparatively low. Given the vast market of 400,000 patients who may currently benefit from ventricular ablation, the 75,000 (mostly atrial) ablations that are currently done annually, and $1,500 in revenue per procedure, it isn’t unreasonable to think that VIVO could generate $15 million annually in disposables - 10,000 procedures per year, or 13% of the number of atrial ablations done per year. This is also only 2.5% of the readily available addressable market of 400,000 patients and 3,000 EP labs.To aid in the full launch, Catheter Precision has hired a few additional sales personnel and some clinical representatives to support the launch and gather information on patients entering their European observational registry; before, there had been no fully designated sales employees in any prior quarter. The goal is to have more clinical validation and market acceptance for VIVO, with 40-50 systems in use in U.S. hospitals by the end of 2024.
Financials
The company’s financials are currently difficult to navigate based on past financial statements, with the last 3 quarters showing a $5 million per quarter cash burn (aside from a $5m legacy settlement). Catheter’s press release states an anticipated $12.5 million in cash after the raise/merger is completed, leaving them with two years of operating capital. Thus it is implied that the company’s cash burn will decrease and perhaps some launch revenues will increasingly offset its expenses over this period. We expect the company will be using $550,000/month excluding contributions from COGS—gross margins are high so we expect this contribution to be minimal.The company recently announced Q1 results where they had $85,000 in sales and $10,223,000 in SG&A. The next quarter should be substantially different based on the company having been cleaned up from its bloated overhead costs in the meantime. So essentially, the launch as measured in clean quarterly results is starting in Q2. Any financial results before April 1st, 2023 are not indicative of Catheter Precision’s performance; investors will have to wait until next quarter to make judgments on its operations and launch.In the following chart, I model out a parabolically increasing revenue model to the target $25 million annual run rate by Q1 2025 to test if their cash balance might be enough. The revenues are parabolic as it's a conservative assumption from a cash perspective and the recurring revenues from disposables will take time to build. I model COGS as 80% of revenues in Q1 and dropping to 10% of revenues in Q1 2025. I simply use Q2 cash as the May 30th balance of $8.6 million as explained in the Q1 results release. This is actually a balance from more than halfway through Q2 but it's another conservative assumption just for the purposes of testing their cash balance through a launch, to see if they might need to raise money.As one can see, if the company can lower its expenses as it intends, and ramp revenues in a timely manner, a cash raise may not be necessary. David Jenkins has been known to support his companies in the past, participating in small financings to get the companies “over the hump.”
Valuation
One can value the company based on EV/EBITDA on forecasted revenues but it’s probably easiest to value the company based on comps. Should the company reach a $25 million run rate in two years, using a 20x EV/EBITDA multiplier (a bit high to account for some continued growth based on being still early in the launch process in a growing subsector), the company would be valued at $306 million, assuming 90% gross margins and $7.2 million in SG&A. This is in line with recent comps.Based on the company’s most recent 10Q, the fully diluted share count is 28.56 million based on 5,267,092 shares of common stock outstanding, 12,674,687 shares of common stock if Series X preferred stock is converted, 646,028 warrants and options, etc., and 4,999,093 Series F warrants and 4,999,093 Series G warrants, which are exercisable at $3.00 or 90% of the 5-day VWAP. This also represents another source of funding for the company, where it is assumed these warrants will be exercised regardless based on our bullish thesis.Based on 28.56 million shares, a $306 million value would be $10.70/share. We believe it's reasonable that if sales traction shows that the company will not need to dilute significantly, the shares could approach $2-4 in the next 12 months.
Comps and Competition
The best comp for Ra Medical/Catheter Precision is a company called CardioInsight, which Medtronic (MDT) bought for $100 million ($93 million net of cash) in 2015. The company developed its ECVUE system which was designed to “non-invasively generate images of the electrical activity of the heart by combining body surface electrical data with 3-dimensional (3-D) anatomical data. The system then reconstructs and displays 3-D maps and other useful measures of cardiac electrical activity.” The CardioInsight vest uses 252 electrodes. While this sounds similar to VIVO, the key difference is that VIVO uses MRI/CT and has been developed to model the heart in 3D but not just a surface model. ECVUE/CardioInsight“is limited by only being able to map the epicardium [surface] as well as its cumbersome nature and high radiation exposure. View Into Ventricular Onset™ (VIVO) is a novel non-invasive mapping tool that has been previously shown to accurately localise the site of origin of ventricular arrhythmias by using the 12‑lead ECG to create a 3-dimensional (3D) model of ventricular activation – an ‘electrical roadmap’" Since VIVO localizes the VA origin, it is much more useful to the physician and fits into their workflow. Since it enables VA ablations, it provides an opportunity in a blue ocean market on the ventricular side for electrophysiology. That wasn’t really the case for CardioInsight’s product.Notably, at the time of acquisition, CardioInsight’s ECVUE system had been used with more than 1,400 patients and featured in more than 120 peer-reviewed journals and presentations. While VIVO hasn’t been featured in nearly as many journals, it has already been used in procedures 800 times. ECVUE (CardioInsight Workstation) is also much more expensive than VIVO (almost 10x), and seems to be mostly used for AFib.A comp for the LockeT device, which is initially targeted for EP procedures but applicable to a wider range of indications, is Cardiva which Haemonetics bought for $510 million in 2021. It's important to note that Cardiva Medical was expected to add $70 million in revenues for Haemonetics in the first fiscal year and the company’s collagen-based vascular closure products were shown to allow patients to be discharged after AFib ablation the same day as well as reduce the risk of complications; the company and its sales were more mature at this point in time compared with Catheter Precision. So this value comparison is definitely a current overestimation.Another pseudo competitor to Catheter Precision is BioSig (BSGM). The company has a market cap of almost $90 million. The company has developed and is launching, to explain in simple terms, a more accurate ECG device, intended to aid electrophysiologists in reading various signals. This product, PURE EP, we don’t consider as “necessary” as VIVO in identifying and treating VAs, though would be a nice complementary product for an electrophysiologist. The company does have a collaboration with the Mayo Clinic, but the best this device can currently do is just provide another signal for the physician to help diagnose. They are currently running a study to see if signals from PURE EP result in different ablation targets and improve procedural efficiency for AFib. In our opinion, Catheter Precision has a more valuable product.CEO/COB Jenkins has experience with investment exits as mentioned before. Therefore it is not unrealistic to think about larger suitors who might purchase the company outright and compare the values of the aforementioned comps to the potential value for VTAK. For instance, J&J (NYSE: JNJ) mentioned on their Q1 conference call that their electrophysiology sales continue to grow at a double-digit pace: “As we continue to increase our reporting transparency, beginning this quarter, we are providing visibility to Electrophysiology sales. Electrophysiology continued to deliver double-digit sales growth in all regions with the exception of Asia Pacific, which reflects impacts related to volume-based procurement in China.” Other suitors whose strategies Catheter Precision’s business might fall into include Medtronic, and Boston Scientific (NYSE: BSX). VIVO would be additive to their product lines, not cannibalistic.
Risks
There’s a high amount of risk in investing in cash-flow-negative companies launching new products. It’s fairly clear how valuable VIVO is. However, success will boil down to operations and execution. There are regulatory risks such as not obtaining CE Mark for LockeT, and unexpectedly poor outcomes in post-marketing surveying (European observational registry) which the company is pursuing. I mention this as a risk because VIVO has performed very well to date so there is much more room for error on the downside when measuring VIVO’s effectiveness in the clinic, even though poor performance isn’t expected. Funding and dilution is always a risk. Lack of market uptake and competition are significant risks. While there is no direct competition, BioSig and others may have products that provide alternative solutions, in a way.Most notably, considering 75% of the company’s fully diluted shares are not outstanding yet (in the form of warrants, etc), the company has about a $5-6 million market cap. If there were all ~20 million shares outstanding, its market cap would still be about $20 million. This is extremely low and while exciting to think about returns from such a low valuation, the risks tend to be very high with many companies failing. While we like Jenkins and Cather’s products, this is otherwise a very risky investment and that statement should be taken very seriously. Oftentimes companies with depressed valuations have difficulty raising money to support operations or product launches and enter into a death spiral of dilution.
Conclusion
About a month ago there was a European Heart Rhythm Association (EHRA) conference in Spain. One well-respected doctor stood up and said he would never do a particular ablation case without VIVO. I suspect this was a pleomorphic PVC case. At the Heart Rhythm Association meeting in New Orleans a month later there was a live left ventricular procedure done in front of ~150-200 doctors, and the LockeT device was demonstrated in front of everyone during the live procedure. So anecdotally, there has been some positive feedback from the initial product launch from the EP physicians.The company is currently at a very low valuation, launching its two EP products, but completely invisible based on past financial statements. We expect the company to drastically reduce its cash burn rate and have mildly successful launches with a few million dollars in revenue for this year, following a larger ramp next year. Shall the company fail to reign in its expenses, massive dilution could occur. However, under the leadership of David Jenkins, who has a significant ownership stake and who has a successful track record, the chances of commercial and financial success we believe are better. It is again important to note the high risk involved in an investment in VTAK shares where massive dilution potentially could almost entirely wipe out existing shareholders, but given commercial success under seasoned leadership who own a large portion of the company, the upside is potentially $10. Shareholders considering going long VTAK should consider an appropriately weighted position given the company’s small size and the prior company’s shares performing extremely poorly (under prior leadership), as well as current financial filings (as of June 31, 2023) not providing any glimpse into how the new company will utilize its financial resources. VTAK shares are likely to rise strongly if the company updates its financials with any significant revenue.
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Disclosure: Insider Financial and its owners do not have a position in the stocks posted and have posted this article for free without editorial input. A guest contributor wrote this article and solely reflects his opinions.
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