Trisalus Life Sciences, Inc. current report, 12 August 2021

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Form 8-K Summary

Reporting date: August 12, 2021, filed by MedTech Acquisition Corporation (MTAC), not Trisalus Life Sciences, Inc. The filing reports MTAC’s proposed business combination with Memic Innovative Surgery Ltd. and related transaction agreements.

Business Context and Transaction

  • MTAC entered into a Business Combination Agreement with Memic and Maestro Merger Sub, Inc., a wholly owned subsidiary of Memic.
  • Maestro Merger Sub will merge with and into MTAC, with MTAC surviving as a wholly owned subsidiary of Memic.
  • The transaction implies a $625 million enterprise valuation for Memic at signing.
  • Following closing, MTAC public stockholders are expected to own approximately 24.66% of the combined company, assuming no redemptions; the MTAC sponsor is expected to own approximately 6.16% and PIPE investors approximately 7.53%, subject to stated exclusions and adjustments.
  • The transaction includes conversion of Memic preferred shares, a reclassification of equity, a stock split, conversion of MTAC shares into Memic ordinary shares, and conversion of MTAC warrants into Memic warrants.

Financial Metrics, Funding, and Liquidity

  • The filing does not provide historical revenue, profit, operating cash flow, margins, or debt balances for MTAC or Memic.
  • Memic entered into PIPE subscription agreements for aggregate gross proceeds of $76.35 million.
  • A closing condition requires available trust-account cash after redemptions and eligible expenses, plus PIPE proceeds, to equal or exceed $250 million.
  • MTAC must have at least $5,000,001 of net tangible assets following public-stockholder redemptions.
  • Immediately after closing, MTAC must contribute at least 50% of its remaining cash and liquid assets to Memic Inc. in exchange for an interest of at least 80% in Memic Inc., subject to the transaction agreements.
  • Public stockholders may redeem all or part of their Class A shares for their pro rata share of the trust account, subject to the transaction terms and applicable limitations.

Material Changes and Capital Structure

  • The parties established Price Adjustment Rights for up to 17,235,450 additional Memic ordinary shares, subject to customary adjustments and market-price triggers.
  • The Price Adjustment Rights vest in four tranches if the stock price reaches $12.50, $15.00, $17.50, and $20.00, respectively, over specified trading periods before the fifth anniversary of closing. Unexercised tranches expire at that time, absent an acceleration event.
  • Memic will reserve shares equal to 15% of its post-closing fully diluted share amount, excluding Price Adjustment Rights, for a new equity incentive plan.
  • The post-closing board is expected to consist of seven directors, with at least a majority qualifying as independent under Nasdaq standards.
  • The transaction is subject to stockholder approvals, SEC effectiveness of a Form F-4 registration statement, Nasdaq listing approval, minimum cash requirements, and other customary closing conditions.

Guidance, Outlook, Risks, and Contingencies

  • No firm revenue or earnings guidance is provided in the filing. Any projections or financial information referenced in accompanying investor materials are identified as forward-looking and subject to significant uncertainty.
  • The agreement may be terminated if closing has not occurred by March 11, 2022, subject to contractual exceptions, or if other specified conditions fail.
  • Key contingencies include the level of public-stockholder redemptions, completion of the $76.35 million PIPE investment, satisfaction of the $250 million minimum funding condition, required stockholder approvals, SEC review, and Nasdaq listing.
  • Additional risks include failure to complete the merger, disruption to Memic’s operations, medical-device manufacturing and commercialization risks, regulatory changes, competition, COVID-19 and other health or economic conditions, Israeli operating risks, data-security and privacy risks, litigation, securities-price volatility, and unexpected costs.
  • Memic must obtain audited fiscal-year 2020 financial statements and other required financial statements from a “big four” accounting firm by October 12, 2021, as a condition related to MTAC’s termination rights.
  • Several agreements impose voting, transfer, lock-up, registration, and confidentiality restrictions on sponsors, insiders, and certain Memic shareholders.

Investor Verification Checklist

  • Verify the registrant and transaction target: this filing identifies MedTech Acquisition Corporation and Memic Innovative Surgery Ltd.; it does not identify Trisalus Life Sciences, Inc.
  • Review the complete Business Combination Agreement and schedules for the precise capitalization, redemption mechanics, closing conditions, termination rights, and Price Adjustment Rights.
  • Confirm Memic’s audited financial statements, historical operating results, cash needs, debt, and any projections in the eventual Form F-4.
  • Assess the impact of public-share redemptions on available cash, ownership dilution, and satisfaction of the $250 million funding threshold.
  • Review PIPE subscription terms, related-party participation by MTAC management or directors, registration rights, warrants, lock-ups, and the 15% equity incentive pool.
  • Confirm whether stockholder approvals, SEC effectiveness, Nasdaq listing, and all other closing conditions were ultimately satisfied and whether the merger closed.