Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 501

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part II, Item 1A
Chunk 501
---

impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.

The emergence or growth of other digital assets, including those
with significant private or public sector backing, could have a negative impact on the price of bitcoin and adversely affect our financial
condition and results of operations.

As a result of our bitcoin treasury strategy, a substantial amount
of our cash could be concentrated in our bitcoin holdings. Accordingly, the emergence or growth of digital assets other than bitcoin may
have a material adverse effect on our financial condition. While bitcoin is the largest digital asset by market capitalization as of the
date of this Report, there are numerous alternative digital assets and many entities, including consortiums and financial institutions,
are researching and investing resources into private or permissioned blockchain platforms or digital assets that do not use proof-of-work
mining like the bitcoin network. For example, in late 2022, the ethereum network transitioned to a “proof-of-stake” mechanism
for validating transactions that requires significantly less computing power than proof-of-work mining. The ethereum network has completed
another major upgrade since then and may undertake additional upgrades in the future. If the mechanisms for validating transactions in
ethereum and other alternative digital assets are perceived as superior to proof-of-work mining, those digital assets could gain market
share relative to bitcoin.

Other alternative digital assets that compete with bitcoin in certain
ways include “stablecoins,” which are designed to maintain a constant price because of, for instance, their issuers’
promise to hold high-quality liquid assets (such as U.S. dollar deposits and short-term U.S. treasury securities) equal to the
total value of stablecoins in circulation. Stablecoins have grown rapidly as an alternative to bitcoin and 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