Trisalus Life Sciences, Inc. quarterly report, Q3 FY2021

Full document

Business context and reporting period

Important issuer mismatch: The supplied filing is MedTech Acquisition Corporation’s unaudited Form 10-Q for the quarter ended September 30, 2021—not a filing by TriSalus Life Sciences, Inc. MedTech was a blank-check company seeking a business combination and reported no operating business or revenue. This summary reflects the supplied filing.

Financial results and position

  • Revenue and margins: No operating revenue; the company had not commenced operations. Margins are not meaningful.
  • Net income: $1.865 million for Q3 2021 and $1.872 million for the nine months ended September 30, 2021. Results primarily reflected noncash gains from changes in warrant fair value: $2.653 million for the quarter and $3.715 million year to date. General and administrative expenses were $807,259 and $1.899 million, respectively; trust-account interest was $18,665 and $56,081.
  • Cash flow: Operating activities used $1.057 million in the first nine months of 2021. Cash outside the trust account was $277,805 at quarter-end.
  • Liquidity and assets: Trust-account investments totaled $250.059 million; current assets were $702,373 and working capital deficit was $5,807. Total assets were $250.762 million.
  • Liabilities and debt: Total liabilities were $20.375 million, including $10.928 million of warrant liabilities and $8.750 million of deferred underwriting fees. The filing reports no long-term debt and no working capital loans outstanding. Class A shares subject to redemption, totaling $250 million, were presented as temporary equity outside liabilities and stockholders’ deficit.
  • Equity: Stockholders’ deficit was $19.613 million at September 30, 2021.

Changes versus the prior comparable period

The filing’s 2020 comparison covers only the period from inception on September 11 through September 30, 2020, so it is not a comparable operating period. The company reported a $1,000 net loss then. For balance-sheet comparison, from December 31, 2020 to September 30, 2021, cash outside the trust fell from $1.335 million to $277,805; warrant liabilities declined from $14.643 million to $10.928 million, principally reflecting fair-value changes. The trust balance remained approximately $250 million.

Outlook, transaction, risks and unusual items

  • On August 12, 2021, MedTech agreed to combine with Memic Innovative Surgery Ltd. The proposed transaction cited a $625 million implied enterprise valuation and a $76.35 million PIPE investment, subject to closing conditions. The filing does not provide a completed transaction outcome.
  • The SPAC’s business-combination deadline was December 22, 2022. If no transaction closed by then, it was required to wind up and redeem public shares, while warrants could expire worthless.
  • Management said existing working capital and potential borrowing capacity should meet needs through the earlier of a business combination or one year from filing; sponsor-related parties were not obligated to provide loans. Additional financing could be needed if costs exceeded estimates or redemptions were significant.
  • Management noted that COVID-19 could adversely affect the company’s financial position, results, or target search, but the impact was not determinable. There was no operating guidance.
  • The company revised its presentation to classify all redeemable Class A shares as temporary equity and revised per-share income allocation between Class A and Class B. It said the revision did not change total assets, liabilities, or operating results. The filing also states that a previously identified material weakness related to warrant accounting was remediated by June 30, 2021; management concluded disclosure controls were effective.

Investor verification priorities

  1. Confirm the issuer and intended filing: this document is for MedTech Acquisition Corporation, not TriSalus Life Sciences.
  2. Verify the proposed Memic transaction’s subsequent status, closing conditions, redemptions, PIPE funding, and final capitalization.
  3. Assess the limited unrestricted cash, working capital deficit, and dependence on completing a business combination or obtaining optional sponsor financing.
  4. Review warrant valuation assumptions and the temporary-equity revision, including the disclosed remediation of the prior accounting-control weakness.
  5. Check the transaction deadline and potential consequences for public shares and warrants if a business combination is not completed.