Item 2.05. Costs Associated with Exit or Disposal Activities.

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.

This Item 2.05 contains forward-looking statements that are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995, as amended. Forward looking statements are statements that are not historical facts. Words such as “expects,” “believes,” “will,” “may,” “anticipates,” “intends,” “plans,” “estimates,” “seek,” “predict,” “project,” “potential” or the negatives of these terms or variations of them or similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding the anticipated benefits of the Reduction, the anticipated timing and details of the reduction in workforce and expected charges and costs associated with the reduction in workforce that we expect to incur. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management, and are subject to a number of risks and uncertainties. Factors that could cause actual results to differ materially from current expectations include possible changes in the expected costs and charges associated with the Reduction, and risks associated with our ability to achieve the expected benefits of the Reduction and realignment of our resources. Additionally, these forward-looking statements should be considered in conjunction with the cautionary statements and risk factors described in our Annual Report on Form 10-K for the period ended December 31, 2021, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 and our other filings filed from time to time with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking statement, except as required by law.