Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 389

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 4
Chunk 389
---
 short-term,
likely negatively impacted the adoption rate and use of bitcoin. Additional bankruptcies, closures, liquidations, regulatory enforcement
actions or other events involving participants in the digital assets industry in the future may further negatively impact the adoption
rate, price, and use of bitcoin, limit the availability to us of financing collateralized by bitcoin, or create or expose additional counterparty
risks.

Changes in our ownership of bitcoin could have accounting, regulatory
and other impacts. While we currently plan to own bitcoin directly, we may investigate other potential approaches to owning bitcoin,
including indirect ownership (for example, through ownership interests in a fund that owns bitcoin). If we were to own all or a portion
of our bitcoin in a different manner, the accounting treatment for our bitcoin, our ability to use our bitcoin as collateral for additional
borrowings, and the regulatory requirements to which we are subject, may correspondingly change. For example, the volatile nature of bitcoin
may force us to liquidate our holdings to use it as collateral, which could be negatively affected by any disruptions in the crypto market
and, if liquidated, the value of the collateral would not reflect potential gains in the market value of bitcoin, all of which could negatively
affect our business and implementation of our bitcoin strategy.

Changes in the accounting treatment of our bitcoin holdings could have
significant accounting impacts, including increasing the volatility of our results. In December 2023, the FASB issued ASU 2023-08, which
upon our adoption will require us to measure in-scope crypto assets (including our bitcoin holdings) at fair value in our statement of
financial position, and to recognize gains and losses from changes in the fair value of our bitcoin in net income each reporting period.
ASU 2023-08 will also require us to provide certain interim and annual disclosures with respect to our bitcoin holdings. Due to the volatility
in the price of bitcoin, the adoption of ASU 2023-08 could have a material impact on our financial results in future periods, increase
the volatility of our financial results, affect the carrying value of our bitcoin on our balance sheet, and could result in tax-related
adjustments, which in turn could have a material adverse effect on our financial results and the market price of our common stock.

51

The broader digital assets industry, including the technology associated
with digital assets, the rate of adoption and development of, and use cases for, digital assets, market perception of digital assets,
and the