Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 216

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 216
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 other digital assets as a medium
of exchange and store of value, particularly on digital asset trading platforms. As of the date of this Report, two of the seven largest
digital assets by market capitalization are U.S. dollar-backed stablecoins.

55

Additionally, central banks in some countries have started to introduce
digital forms of legal tender. For example, China’s CBDC project was made available to consumers in January 2022, and governments
including the United States, the European Union, and Israel have been discussing the potential creation of new CBDCs. Whether or
not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete with, or
replace, bitcoin and other digital assets as a medium of exchange or store of value. As a result, the emergence or growth of these or
other digital assets could cause the market price of bitcoin to decrease, which could have a material adverse effect on our financial
condition, and operating results.

Our bitcoin holdings are less liquid than our existing cash and
cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Historically, the bitcoin markets have been characterized by significant
volatility in price, limited liquidity and trading volumes compared to sovereign currency markets, relative anonymity, a developing regulatory
landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various
other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not
be able to sell our bitcoin at favorable prices or at all. For example, a number of bitcoin trading venues temporarily halted deposits
and withdrawals in 2022. As a result, our bitcoin holdings may not be able to serve as a source of liquidity for us to the same extent
as cash and cash equivalents. Further, bitcoin we hold with our custodians and transact with our trade execution partners does not enjoy
the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the
Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into
term loans or other capital raising transactions collateralized by our unencumbered bitcoin or otherwise generate funds using our bitcoin
holdings, including in particular during times of market instability or when the price of bitcoin has declined significantly. If we are
unable to sell our bitcoin, enter into