Profusa, Inc. / NorthView Acquisition Corp. — Q3 2023 Form 10-Q
Entity note: The supplied filing is NorthView Acquisition Corp.’s Form 10-Q for the quarter ended September 30, 2023, not a standalone Profusa, Inc. quarterly report. NorthView was a blank-check company pursuing a merger with Profusa.
Business context and reporting period
NorthView had not begun operating activities or generated revenue. It was seeking to complete its proposed business combination with Profusa, which would make Profusa a wholly owned subsidiary and change NorthView’s name to Profusa, Inc. The filing was signed November 20, 2023.
Financial results and liquidity
| Metric | Three months ended September 30, 2023 | Nine months ended September 30, 2023 |
|---|---|---|
| Revenue | None | None |
| Formation and operating costs | $290,098 | $1,048,525 |
| Interest income from Trust Account | $138,725 | $2,103,111 |
| Net income (loss) | $(367,345) | $925,939 |
| Cash used in operating activities | Not provided for quarter | $1,719,650 |
- At September 30, 2023, cash outside the Trust Account was $17,342; Trust Account assets were $10,651,566. Working capital deficit was $2,846,203.
- Current liabilities were $2,999,170, including $1,848,455 of excise tax payable and a convertible promissory note carried at fair value of $601,239. The note’s outstanding principal was $713,015.
- Total liabilities were $3,666,878. No long-term debt or lease obligations were reported.
- Cash from investing activities was $185,676,327 and cash used in financing activities was $184,132,821 for the nine-month period, mainly reflecting the $184,845,836 share redemption and related Trust Account withdrawal.
- Profitability was materially affected by non-operating interest and changes in fair value of warrant and note liabilities; the filing reports no operating margins because there was no revenue.
Changes versus prior comparable periods
- Q3 net results shifted from income of $1,763,813 in 2022 to a loss of $367,345 in 2023. The 2023 quarter included a $243,659 warrant fair-value expense, versus a $1,074,374 gain in Q3 2022; Trust Account interest also fell to $138,725 from $1,136,826.
- Nine-month net income declined to $925,939 from $6,685,193 in 2022, primarily because the prior-year period included a $6,246,897 gain on warrant liabilities. Operating costs increased to $1,048,525 from $863,546.
- On March 22, 2023, holders redeemed 18,000,868 shares for $184,845,836. Redeemable shares fell from 18,975,000 at year-end 2022 to 974,132 at September 30, 2023; Trust Account assets fell from $194,224,782 to $10,651,566.
Merger, outlook, and risks
- The proposed merger had a $155 million pre-transaction equity valuation and required, among other conditions, at least $15 million in minimum available cash, regulatory approvals, and approval by NorthView and Profusa stockholders. Completion was not assured.
- A September 2023 amendment revised revenue earnout milestones: one-quarter of up to 3,875,000 earnout shares for combined-company revenue of $11,864,000 in 2024, and one-quarter for $99,702,000 in 2025. Other earnout shares depend on stock-price milestones.
- NorthView’s combination deadline was as late as December 22, 2023, subject to a possible further extension. Management said completion by the deadline was uncertain and concluded that failure to complete a business combination, followed by liquidation, raised substantial doubt about NorthView’s ability to continue as a going concern for the next twelve months.
- NorthView paid $340,947 in extension payments during the first nine months of 2023. Its Sponsor’s working-capital note is non-interest bearing, due at a business combination or liquidation, and may be converted into warrants.
- The company recorded an excise-tax liability of $1,848,455, equal to 1% of the 2023 share redemption value. Other disclosed risks include failure to complete the Profusa transaction or secure financing, possible Investment Company Act treatment, and potential CFIUS review of a U.S. target.
- No financial guidance was provided. Management stated that COVID-19 and the Russia-Ukraine war could adversely affect the company or its target search, but the specific impact was not determinable. Disclosure controls were assessed as effective; no material changes in internal control were reported.
Important facts for investors to verify
- Whether the Profusa merger closed, was extended, or was terminated after the filing date, and how the $15 million minimum-cash condition was addressed.
- NorthView’s cash needs and available financing given $17,342 of cash outside the Trust Account, a $2.85 million working-capital deficit, and the deadline-related going-concern warning.
- The status and payment treatment of the $1.85 million excise-tax liability and the Sponsor note, including any conversion into warrants.
- The revised earnout terms, any subsequent changes to projections, and the dilution implications of potential earnout shares and outstanding warrants.
- That the financial results belong to NorthView, a pre-combination SPAC, and do not describe Profusa’s standalone revenue, expenses, cash flows, or operating outlook.