Filing summary
Entity and period: The supplied filing is MedTech Acquisition Corporation’s unaudited Form 10-Q for the quarter ended June 30, 2022, signed August 10, 2022. This does not appear to be a TriSalus Life Sciences, Inc. filing. MedTech was a blank-check company, not an operating healthcare business, and had not begun operations or generated operating revenue.
Financial results and position
| Metric | Three months ended June 30, 2022 | Six months ended June 30, 2022 |
|---|---|---|
| Operating revenue | None | None |
| General and administrative expense | $288,273 | $958,080 |
| Net income | $2,386,239 | $5,222,964 |
| Net income, comparable 2021 period | $378,866 | $6,832 |
| Interest earned on trust investments | $314,714 | $371,914 |
| Gain from change in warrant fair value | $2,388,000 | $5,837,332 |
Reported net income primarily reflects non-operating gains from remeasuring warrant liabilities and trust-account interest, rather than operating activity. The company reported basic and diluted earnings of $0.08 per share for Q2 2022 and $0.17 for the first half; comparable 2021 amounts were $0.01 and $0.00, respectively.
At June 30, 2022, cash outside the trust was $69,182; trust investments were $250.3 million; total assets were $250.6 million; and total liabilities were $12.0 million. Current liabilities were $1.7 million, including $944,000 in related-party promissory notes. The company disclosed a working-capital deficit of $1.23 million, excluding specified tax and reimbursable franchise-tax amounts. Total warrant liabilities were $1.06 million, down from $6.90 million at December 31, 2021. The $8.75 million deferred underwriting fee is payable only if a business combination closes. Stockholders’ deficit was $11.5 million.
Cash used in operating activities was $1.12 million in the first half of 2022, versus $692,054 in the comparable 2021 period. Financing provided $900,000 from related-party notes, and $91,000 was withdrawn from the trust for taxes. Cash declined from $200,884 at year-end 2021 to $69,182 at June 30, 2022. Operating margins are not meaningful because the company had no operating revenue.
Changes, outlook, and risks
- The proposed business combination with Memic Innovative Surgery was terminated effective March 9, 2022. Related contingent legal and advisory fees were no longer due.
- The company had until December 22, 2022 to complete a business combination. Management said completion by that date was uncertain and identified substantial doubt about the company’s ability to continue as a going concern if it failed to close a transaction; failure would require liquidation and dissolution.
- No operating-business guidance or forecast was provided. Management expected continued costs while pursuing a transaction and said sponsor-related parties could provide additional loans but were not obligated to do so. A $500,000 sponsor convertible note was outstanding at quarter-end, under a facility of up to $1.5 million.
- Risks discussed include difficulty finding or completing a transaction, competition among SPACs, inflation and rising interest rates, COVID-19, geopolitical disruption, proposed SEC SPAC rules, and potential Investment Company Act consequences. The filing also notes potential CFIUS or foreign-ownership restrictions for certain U.S. targets.
- The company reported effective disclosure controls and stated that a previously identified material weakness in internal control over financial reporting was remediated by June 30, 2022.
Important facts to verify
- Confirm the filing belongs to the intended company: the document is for MedTech Acquisition Corporation, not TriSalus Life Sciences, Inc.
- Verify whether a business combination was completed by the December 22, 2022 deadline and the resulting treatment of public shares and warrants.
- Review the company’s available operating cash, related-party borrowing terms, and going-concern disclosures.
- Assess how much reported earnings depended on noncash warrant fair-value changes and the assumptions used to value private placement warrants.