DEF: Profusa Inc. Seeks Stockholder Approval for Key Proposals

Profusa, Inc. is holding its 2026 Annual Meeting of Stockholders on June 23, 2026, to vote on several critical proposals including a reverse stock split, preferred stock issuance, and equity plan amendment.

Summary

• Profusa, Inc. is convening its 2026 Annual Meeting of Stockholders on June 23, 2026, to be held virtually.
• The meeting agenda includes six proposals requiring stockholder approval.
• Key proposals include electing Lauren Chung as a Class I director, approving a reverse stock split with ratios between 1-for-5 and 1-for-200 to regain Nasdaq compliance, authorizing the issuance of preferred stock for an asset acquisition, approving the conversion of convertible notes potentially exceeding 19.99% of outstanding shares, amending the 2025 Equity and Incentive Plan to increase share availability, and authorizing adjournment if needed.
• The Board of Directors recommends a vote FOR all proposals.
• The record date for determining stockholders entitled to vote is May 12, 2026.
• The company is currently not in compliance with Nasdaq's Minimum Bid Price, Market Value of Listed Securities (MVLS), and Market Value of Publicly Held Shares (MVPHS) requirements.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing as having a neutral to slightly negative sentiment due to the company's non-compliance with Nasdaq listing rules and the dilutive nature of the proposed equity issuances, despite the strategic rationale behind them.

Positives

• Proposal to elect Lauren Chung, a nominee with extensive corporate board and investment analysis experience, to the Board of Directors.
• The reverse stock split proposal aims to regain compliance with Nasdaq's Minimum Bid Price Requirement, potentially enhancing stock liquidity and facilitating future financing.
• The preferred stock issuance proposal is for the acquisition of assets related to the PanOmics Assay, a strategic move to acquire new technology.
• The convertible notes proposal aims to eliminate outstanding indebtedness without using cash by converting the note into equity.
• The equity plan amendment proposal seeks to increase the share pool to incentivize employees and align interests with stockholders, representing 15% of outstanding shares post-reverse split.
• The company has a strong independent board with four out of five directors being independent.

Negatives

• The company is currently not in compliance with Nasdaq's Minimum Bid Price, MVLS, and MVPHS requirements, facing potential delisting.
• A reverse stock split, if not successful, could lead to further stock price depression and potential delisting.
• The reverse stock split may result in fractional shares being cashed out, potentially impacting small shareholders.
• The issuance of preferred stock and conversion of notes will dilute existing stockholders' ownership and economic interests.
• The company has a limited number of employees (11) and outstanding shares (4,660,268 as of May 12, 2026), indicating a small-cap or early-stage company status.

Risks

• Failure to regain compliance with Nasdaq's Minimum Bid Price Requirement by July 6, 2026, could lead to delisting.
• The reverse stock split may not increase the stock price or may lead to decreased liquidity.
• The reverse stock split could result in a lesser number of public shareholders, potentially causing non-compliance with Nasdaq rules.
• The issuance of new shares through preferred stock conversion and convertible note conversion will dilute existing shareholders' equity.
• The company may face challenges in maintaining compliance with other Nasdaq continued listing rules post-reverse split.
• If the reverse stock split is unsuccessful, the company may need to consider less favorable strategic alternatives for liquidity.
• The acquisition of PanOmics Assay assets is contingent on stockholder approval of the preferred stock issuance.

Future Outlook

The company is seeking stockholder approval for several proposals that are critical for its continued listing on Nasdaq and its strategic growth. The reverse stock split is intended to address the minimum bid price requirement, while the preferred stock issuance and convertible note conversion aim to facilitate asset acquisition and debt reduction, respectively. The equity plan amendment is to ensure sufficient shares for future incentives. The company's ability to maintain its Nasdaq listing and execute its business strategy is dependent on the successful approval and implementation of these proposals.

Management Comments

• The Board has determined that the Election of Director Proposal, the Reverse Stock Split Proposal, the Preferred Stock Issuance Proposal, the Convertible Notes Proposal, the Equity Plan Amendment Proposal, and the Adjournment Proposal are advisable and in the best interests of the Company and its stockholders and recommends that you vote or give instruction to vote FOR each proposal.
• We believe that the Range provides us with the most flexibility to achieve the desired results of the Reverse Stock Split.
• The Company believes the Reverse Stock Split Proposal will enable the Company to improve trading liquidity by increasing the price per share of our common stock, which could enable a broader range of institutions to invest.
• After considering the Companys capital structure, the terms of the Note Modification Agreement and the Amendment, and the relative costs and benefits of repaying the Note in cash versus permitting full conversion of the Note into Note Conversion Shares, the Board determined that the issuance of Note Conversion Shares in excess of the Exchange Cap upon conversion of the Note is advisable and in the best interests of the Company and its stockholders.
• Our Board believes that the granting of stock options, SARs, restricted stock awards, restricted stock unit awards, other stock awards and Performance Awards (collectively, awards) under the Plan promotes continuity of management and provides a critical incentive to align the interests of those who are primarily responsible for shaping and carrying out our long -range plans and securing our growth and financial success with the interests of our stockholders.

Industry Context

StockSavvy.ai notes that Profusa, Inc.'s proxy statement highlights common challenges faced by small-cap biotechnology companies, particularly regarding Nasdaq listing requirements and the need for capital. The proposed reverse stock split is a typical strategy to meet minimum bid price requirements, while the equity issuances (preferred stock and convertible notes) are common methods for financing acquisitions and operations when traditional debt or equity offerings may be difficult or expensive. The focus on acquiring assets related to the PanOmics Assay suggests a strategic pivot or expansion within the diagnostics or personalized medicine space.

Comparison to Industry Standards

• Many small-cap biotechnology companies face delisting risks due to low stock prices and market capitalization. Reverse stock splits are a common, though not always successful, strategy to maintain exchange listing. For example, companies like Sorrento Therapeutics and Cassava Sciences have undertaken reverse stock splits in recent years to comply with Nasdaq's minimum bid price rule.
• The issuance of convertible preferred stock and convertible notes is a standard practice for early-stage and small-cap companies to secure funding for R&D, acquisitions, or operational needs when access to public markets is limited or costly. These instruments often carry dilution risks for existing shareholders, a factor that is explicitly disclosed by Profusa.
• The increase in authorized shares for equity incentive plans, as proposed by Profusa, is also typical for companies aiming to attract and retain talent in a competitive biotech landscape. The percentage of shares reserved for equity awards (15% post-split) is within the range commonly seen in the industry, though specific benchmarks vary by company stage and funding status.

Management Changes

Corporate Governance

Related Party Transactions

• The company has a modified Promissory Note with NorthView Sponsor I LLC, a related party, with an outstanding principal of $1,869,796. The proposal seeks approval to convert this note into common stock, potentially exceeding 19.99% of outstanding shares.
• The company entered into an Asset Purchase Agreement with Bio Insights LLC for the PanOmics Assay assets, involving the issuance of preferred stock. Bio Insights LLC is a related party in the context of this transaction.
• The company has a loan agreement with Tasly, a shareholder, for up to $1.6 million, with an option for Tasly to convert the outstanding balance and interest into senior unsecured promissory notes or shares of common stock at $144 per share.

Stakeholder Impact

• Shareholders will experience dilution from the potential issuance of shares related to the preferred stock acquisition and convertible note conversion.
• Shareholders' voting and economic interests will be diluted if the reverse stock split is implemented, although their percentage ownership will remain the same (excluding fractional shares).
• The success of the reverse stock split is critical for maintaining the company's Nasdaq listing, which impacts the liquidity and marketability of shares for all stockholders.
• Employees may benefit from the increased share availability under the amended equity plan, aligning their interests with long-term company growth.
• Creditors may be impacted by the conversion of the NorthView Sponsor I LLC note into equity, reducing outstanding debt without cash outflow.

Next Steps

• Stockholders must vote on the six proposals presented at the Annual Meeting.
• If approved, the company will proceed with the reverse stock split, preferred stock issuance, convertible note conversion, and equity plan amendment as outlined.
• The company must regain compliance with Nasdaq's Minimum Bid Price Requirement by July 6, 2026, to maintain its listing on The Nasdaq Capital Market.
• The company will file a Certificate of Amendment to its Certificate of Incorporation to effect the reverse stock split if approved and deemed in the best interest of the company.

Key Dates

Recommendation

The filing presents a critical juncture for Profusa, Inc., with proposals aimed at addressing Nasdaq compliance issues and facilitating strategic growth. While the reverse stock split and equity issuances are necessary steps, they carry significant risks of dilution and potential failure to achieve desired outcomes. The company's current financial health and Nasdaq compliance status warrant caution. Therefore, a 'hold' recommendation is appropriate, advising investors to monitor the outcome of the shareholder vote and the company's subsequent actions regarding Nasdaq compliance and business development.

Keywords

Profusa Inc., Proxy Statement, Annual Meeting, Reverse Stock Split, Nasdaq Compliance, Director Election, Preferred Stock Issuance, Convertible Notes, Equity Plan Amendment, Stockholder Approval