DEF: Profusa Inc. Seeks Stockholder Approval for Reverse Stock Split

Profusa, Inc. is holding a special meeting of stockholders on September 18, 2026, to vote on a proposal to approve an amendment to its Certificate of Incorporation to effect one or more reverse stock splits.

Summary

• Profusa, Inc. is convening a special meeting of stockholders on September 18, 2026, to vote on a Reverse Stock Split Proposal and an Adjournment Proposal.
• The Reverse Stock Split Proposal seeks authorization to amend the company's Certificate of Incorporation to allow the Board of Directors to effect one or more reverse stock splits within the next two years, at a ratio between 1-for-2 and 1-for-12, with an aggregate limit of 1-for-12.
• The primary objective of the reverse stock split is to regain compliance with Nasdaq's Minimum Bid Price Requirement and to increase the stock's trading price to enhance liquidity and facilitate future financing.
• The company has a history of non-compliance with Nasdaq listing rules, including Minimum Bid Price, Market Value of Listed Securities (MVLS), and Market Value of Publicly Held Shares (MVPHS), necessitating multiple previous reverse stock splits.
• The Board of Directors recommends a vote FOR both the Reverse Stock Split Proposal and the Adjournment Proposal.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the company's ongoing struggles with Nasdaq listing requirements and the necessity of a reverse stock split, which often signals underlying financial weakness.

Positives

• The proposed reverse stock split aims to increase the stock price, potentially enhancing liquidity and attracting new investors.
• Maintaining a Nasdaq listing is seen as beneficial for procuring financing, advancing business strategy, and attracting investor and business partner interest.
• The company has recently evidenced compliance with the Publicly Held Shares Rule and has had periods of compliance with the $1.00 bid price requirement.
• The Board believes the proposed reverse stock split is in the best interests of the company and its stockholders.

Negatives

• The company is not currently in compliance with Nasdaq's Minimum Bid Price Requirement and has a history of receiving delisting notices.
• Previous reverse stock splits (February, July, and August 2026) have not permanently resolved the bid price issue.
• There is a risk that the reverse stock split may not be successful in increasing the stock price long-term or may lead to a decrease in market capitalization.
• The company may face challenges in maintaining compliance with other Nasdaq listing rules, such as the number of public shareholders, after the reverse stock split.
• If the reverse stock split proposal is not approved and compliance is not regained, the company's common stock may be delisted, impeding liquidity and business operations.

Risks

• The reverse stock split may incentivize stockholders to sell, potentially depressing the stock price and leading to delisting.
• If the stock price falls below $1.00 again within ten trading days following the reverse stock split, the company may be subject to delisting.
• The reverse stock split may result in a lesser number of public shareholders, potentially causing non-compliance with Nasdaq rules.
• The company may have challenges in maintaining compliance with other Nasdaq continued listing rules.
• The reverse stock split may decrease the liquidity of the common stock and lead to reduced trading volume.
• Stockholders owning odd lots (less than 100 shares) may face higher transaction costs.
• The reverse stock split may lead to a decrease in the company's overall market capitalization.
• If the company falls out of compliance with the Minimum Bid Price Requirement within one year of a reverse stock split, it may not be afforded another compliance period and could be subject to delisting.

Future Outlook

The company aims to regain compliance with Nasdaq's Minimum Bid Price Requirement through the proposed reverse stock split, which is intended to increase the stock price, enhance liquidity, and facilitate future financing. The Board has the discretion to effect the reverse stock split at a ratio between 1-for-2 and 1-for-12, up to an aggregate of 1-for-12, anytime prior to September 18, 2028.

Management Comments

• The Board has fixed the close of business on August 19, 2026, as the date for determining the Company stockholders entitled to receive notice of and vote at the Special Meeting.
• The Board believes that the Reverse Stock Split 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.
• The Board believes that 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 lead to increased interest in our common stock and possibly promote greater liquidity for our stockholders.
• The Board believes that granting our Board (or any of its delegated authorized persons) the authority to set the ratio for the Reverse Stock Split is essential because it allows us to take these factors into consideration and to react to changing market conditions.

Industry Context

StockSavvy.ai notes that reverse stock splits are often employed by companies struggling to maintain exchange listing requirements, particularly the minimum bid price. While intended to improve perception and liquidity, they do not address underlying business performance and can sometimes be viewed negatively by the market.

Stakeholder Impact

• Shareholders may see their number of shares decrease significantly, potentially impacting trading costs for smaller holdings (odd lots).
• Shareholders may experience a decrease in market capitalization if the stock price does not increase proportionally.
• Maintaining a Nasdaq listing benefits all stakeholders by improving the company's ability to secure financing and pursue its business strategy.

Next Steps

• Stockholders to vote on the Reverse Stock Split Proposal and the Adjournment Proposal at the Special Meeting on September 18, 2026.
• If approved, the Board of Directors will determine the specific reverse stock split ratio and timing, up to September 18, 2028.
• The company will file a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware if the reverse stock split is effected.

Key Dates

Recommendation

While the reverse stock split is a necessary step to maintain Nasdaq listing, it does not fundamentally alter the company's financial health or business prospects. The ongoing struggles with compliance suggest continued risk, making a 'hold' recommendation appropriate until there is evidence of sustained operational improvement and stable listing compliance.

Keywords

Reverse Stock Split, Nasdaq Compliance, Stockholder Meeting, Certificate of Incorporation Amendment, Bid Price Requirement, Liquidity, Capital Markets, Proxy Statement