Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 82

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 82
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 to facilitate the recent adoption
our bitcoin treasury strategy and we will need to continually examine the risks and rewards of this new strategy. This new strategy has
not been tested over an extended period of time or under different market conditions. For example, although we believe bitcoin, due to
its limited supply, has the potential to serve as a hedge against inflation in the long term, the short-term price of bitcoin declined
in recent periods during which the inflation rate increased. Some investors and other market participants may disagree with our bitcoin
treasury strategy or actions we undertake to implement it. If bitcoin prices were to decrease or our bitcoin treasury strategy otherwise
proves unsuccessful, our financial condition, results of operations, and the market price of our common stock could be materially adversely
affected.

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We are subject to counterparty risks, including in particular risks
relating to our custodians. Although we intend to implement various measures that are designed to mitigate our counterparty risks,
including by storing substantially all of the bitcoin we own in custody accounts at U.S.-based, institutional-grade custodians and negotiating
contractual arrangements intended to establish that our property interest in custodially-held bitcoin is not subject to claims of our
custodians’ creditors, applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial
accounts. If our custodially-held bitcoin were nevertheless considered to be the property of our custodians’ estates in the event
that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated as a general unsecured
creditor of such custodians, inhibiting our ability to exercise ownership rights with respect to such bitcoin and this may ultimately
result in the loss of the value related to some or all of such bitcoin. Even if we are able to prevent our bitcoin from being considered
the property of a custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed
or may otherwise experience difficulty in accessing our bitcoin held by the affected custodian during the pendency of the insolvency proceedings.
Any such outcome could have a material adverse effect on our financial condition and the market price of our common stock.

The broader digital assets industry is subject to counterparty risks,
which could adversely impact the adoption rate, price, and use of bitcoin. A series of recent high-profile bankruptcies, closures,
liquidations, regulatory enforcement actions and other events relating to companies operating