DEF 14A: Profusa Seeks Reverse Stock Split to Maintain Nasdaq Listing

Profusa, Inc. calls a special meeting to vote on a reverse stock split, auditor ratification, and meeting adjournment, primarily to regain Nasdaq listing compliance.

Summary

• A Special Meeting of Stockholders will be held virtually on January 27, 2026, at 10:00 a.m. Eastern Time.
• Stockholders will vote on three proposals: a Reverse Stock Split Proposal, an Auditor Proposal, and an Adjournment Proposal.
• The Reverse Stock Split Proposal seeks approval to amend the Certificate of Incorporation to effect one or more reverse stock splits at a ratio of 1-for-30 to 1-for-200, at the Board's discretion, by January 27, 2028.
• The primary goal of the reverse stock split is to regain compliance with Nasdaq's Minimum Bid Price Requirement and enhance common stock liquidity to facilitate future financing and attract new investors.
• The Auditor Proposal seeks to ratify the appointment of CBIZ CPAs P.C. as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• The Adjournment Proposal authorizes adjourning the meeting if necessary to solicit additional proxies for Proposal One or Two.
• As of the record date, December 23, 2025, 86,414,296 shares of common stock were outstanding and entitled to vote.
• The Board of Directors unanimously recommends voting FOR all three proposals.

Sentiment

Score: 3

Explanation: The filing reveals significant compliance issues with Nasdaq listing requirements, necessitating a reverse stock split to avoid delisting. While the split is a necessary step, it is a reactive measure to address a low stock price and does not inherently signal strong operational performance or positive financial health. The risks associated with the split, including potential further stock price depression and continued non-compliance with other Nasdaq rules, contribute to a negative sentiment. The need for the split indicates underlying challenges in market valuation and investor confidence.

Positives

• The Board believes the proposals are advisable and in the best interests of the Company and its stockholders.
• Maintaining Nasdaq listing offers numerous benefits, including improved access to financing, furtherance of business strategy, and increased investor and business partner interest.
• Successful relisting could enable S-3 shelf eligibility, greatly increasing access to capital markets and other financing opportunities.
• Continued listing would allow the Company to utilize its Equity Line Of Credit (ELOC) program, important for working capital.
• An increased stock price post-split could attract a broader range of institutional investors and potentially improve trading liquidity.

Negatives

• The company is not in compliance with Nasdaq's Minimum Bid Price requirement, with its common stock closing at $0.1048 on December 31, 2025, having traded below $1.00 for over 30 consecutive trading days.
• The company is not in compliance with Nasdaq's Market Value of Listed Securities (MVLS) requirement of $50,000,000, having been below this threshold for 31 consecutive business days from July 29, 2025, to September 10, 2025.
• The company is not in compliance with Nasdaq's Market Value of Publicly Held Shares (MVPHS) requirement of $15,000,000, having been below this threshold for 30 consecutive business days from September 12, 2025, through October 24, 2025.
• The reverse stock split alone will not address the MVLS or MVPHS compliance issues; the company is separately preparing a plan for these deficiencies.
• Failure to obtain approval for the reverse stock split or to regain compliance with Nasdaq requirements could lead to delisting, impeding liquidity and limiting business opportunities.

Risks

• The reverse stock split may incentivize stockholders to sell their holdings, potentially depressing the stock price and leading to delisting from Nasdaq.
• If the stock price dips below $1.00 again within ten trading days following the effectiveness of the reverse stock split, the company will be subject to delisting.
• If the stock price falls below $1.00 for 30 consecutive trading days within one year of the reverse stock split, the company will be immediately subject to delisting without another 180-day compliance period.
• The effect of the reverse stock split on the market price of common stock cannot be predicted with certainty, and the market capitalization may decline.
• Factors unrelated to the number of shares outstanding, such as negative financial results or product development issues, could adversely affect the market price.
• The reverse stock split may result in a lesser number of round lot holders (holders of at least 100 shares), potentially causing non-compliance with Nasdaq's 300 round lot holder rule.
• Delisting would lead to the loss of S-3 shelf eligibility and the inability to utilize the ELOC program, severely impacting capital raising and financing avenues.
• The reverse stock split may not increase the price of common stock over the long term or proportionally to the split ratio.
• The reverse stock split may decrease the liquidity of common stock due to a reduced total number of outstanding shares and potentially fewer market makers.
• Stockholders owning odd lots (less than 100 shares) after the reverse stock split may face incrementally higher trading costs.
• The reverse stock split may lead to a decrease in overall market capitalization if the per-share market price does not increase proportionally.
• The reverse stock split, without a reduction in authorized shares, could lead to greater dilution of existing stockholders' ownership interest if the Board authorizes additional share issuances in the future.

Future Outlook

The company expects the reverse stock split to increase its stock price to regain Nasdaq compliance, facilitate future financing, and attract new investors. It aims to maintain a trading price above $1.00 in the long term. However, the company acknowledges that the split's effect on market price cannot be predicted with certainty and may not achieve these objectives for a meaningful period, or at all.

Management Comments

• "On behalf of the Board of Directors, I cordially invite you to attend the 2026 special meeting of stockholders." Ben C. Hwang, Ph.D., Chairman of the Board
• "We are pleased to utilize the virtual stockholder meeting technology to provide ready access and cost savings for our stockholders and the Company."
• "Our Board believes that the approval of the proposals are advisable and in the best interests of the Company and its stockholders and recommends that you vote FOR each Proposal."
• "The primary goal of the Reverse Stock Split is to enable us to regain compliance with the Minimum Bid Price Requirement for continued listing on Nasdaq, as well as to increase the trading price of our common stock to enhance overall liquidity of the common stock by facilitating future financing and attracting new investors."
• "We believe that the Range provides us with the most flexibility to achieve the desired results of the Reverse Stock Split."
• "The Company is separately preparing a plan to attempt to rectify those deficiencies [MVLS and MVPHS]."
• "Maintaining our Nasdaq listing as a publicly traded listed company has numerous benefits to the Company, including to our ability to procure more financing for ongoing operations, our ability to further our business strategy and our ability to attract more investor and business partner interest, among others."
• "The Board believes that stockholder approval of the Range is in the best interests of our Company and stockholders because it is not possible to predict market conditions at the time the Reverse Stock Split would be implemented."

Industry Context

The filing highlights common challenges faced by small-cap companies in maintaining exchange listings, particularly Nasdaq's minimum bid price, market value of listed securities, and market value of publicly held shares requirements. Reverse stock splits are a common strategy employed by companies to address these issues and avoid delisting, which can severely impact access to capital markets and investor interest. The mention of S-3 shelf eligibility and Equity Line of Credit (ELOC) underscores the importance of maintaining public listing for financing growth in the biotech/med-tech sector.

Comparison to Industry Standards

• The company's closing bid price of $0.1048 on December 31, 2025, is significantly below Nasdaq's $1.00 minimum bid price requirement, indicating underperformance relative to listing standards.
• The company's market value of listed securities (MVLS) and market value of publicly held shares (MVPHS) are below Nasdaq's $50,000,000 and $15,000,000 requirements, respectively, suggesting a market capitalization significantly lower than many Nasdaq-listed peers.
• The proposed reverse stock split ratio of 1-for-30 to 1-for-200 is a wide range, reflecting the significant gap the company needs to bridge to meet the $1.00 minimum bid price and potentially attract institutional investors who often avoid 'penny stocks.'
• The need for a reverse stock split to maintain listing is a common indicator of financial distress or lack of investor confidence, contrasting with companies that maintain compliance through organic growth and strong market performance.

Corporate Governance

Stakeholder Impact

• Shareholders: Will own fewer shares but maintain the same percentage ownership (except for fractional shares paid in cash). Potential for increased stock price and liquidity if the split is successful, but also risks of further price depression and delisting. Odd lot holders may face higher transaction costs.
• Employees/Management: Maintaining Nasdaq listing helps attract and retain talent through equity incentive plans (2025 Plan shares will be adjusted). Delisting could negatively impact morale and compensation value.
• Creditors/Financing Partners: Maintaining Nasdaq listing is crucial for accessing capital markets, S-3 shelf eligibility, and utilizing the Equity Line of Credit, which impacts the company's ability to secure financing and working capital.
• Customers/Suppliers: Indirect impact; a stable, listed company may be perceived as more reliable, potentially aiding business relationships. Delisting could signal instability.

Next Steps

• Stockholders to vote on the Reverse Stock Split Proposal, Auditor Proposal, and Adjournment Proposal at the Special Meeting on January 27, 2026.
• If the Reverse Stock Split Proposal is approved, the Board will determine the exact split ratio (between 1-for-30 and 1-for-200) and the timing (prior to or on January 27, 2028).
• The company is separately preparing a plan to rectify its MVLS and MVPHS deficiencies.
• If the reverse stock split is successful, the company needs to maintain a trading price above $1.00 for at least ten consecutive trading days to regain Minimum Bid Price compliance.
• The Board has the sole authority to abandon the reverse stock split if it determines it is not in the company's best interest between now and January 27, 2028.
• If implemented, the company will file a certificate of amendment to its Certificate of Incorporation with the Secretary of State of Delaware to effect the reverse stock split.

Key Dates

Recommendation

The company is facing severe non-compliance issues with Nasdaq listing requirements (minimum bid price, MVLS, MVPHS), indicating significant underlying financial and market valuation challenges. While a reverse stock split is a necessary measure to avoid immediate delisting, it is a reactive maneuver that often fails to provide long-term price stability and can be viewed negatively by the market. The filing explicitly outlines numerous risks, including potential further stock price depression, decreased liquidity, and the possibility of immediate delisting if the stock falls below $1.00 again within a year. The company's reliance on maintaining its listing for future financing (S-3 shelf eligibility, ELOC) suggests a precarious financial position. Investors should consider the high risk of continued volatility, potential for further value erosion, and the company's struggle to meet basic listing standards.

Keywords

Profusa, Reverse Stock Split, Nasdaq Listing, Delisting Risk, Shareholder Meeting, Corporate Governance, Auditor Ratification, Equity Line of Credit, Capital Markets, Stock Price, MVLS, MVPHS, Minimum Bid Price