Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 349

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 3
Chunk 349
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 regulatory developments related to crypto
assets and crypto asset markets, which could adversely affect our business, financial condition, and results of operations.

As bitcoin and other digital assets are relatively novel and the application
of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, it is possible that
regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely
affects the price of bitcoin. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new
laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin
or the ability of individuals or institutions such as us to own or transfer bitcoin. For examples, see “Risk Factors-Risks Related
to Our Bitcoin Treasury Strategy and Holdings-Bitcoin and other digital assets are novel assets, and are subject to significant legal,
commercial, regulatory and technical uncertainty” elsewhere in this Report.

Our bitcoin treasury strategy exposes us to risk of non-performance
by counterparties.

Our bitcoin treasury strategy exposes us to the risk of non-performance
by counterparties, whether contractual or otherwise. Risk of non-performance includes inability or refusal of a counterparty to perform
because of a deterioration in the counterparty’s financial condition and liquidity or for any other reason. For example, our execution
partners, custodians, or other counterparties might fail to perform in accordance with the terms of our agreements with them, which could
result in a loss of bitcoin, a loss of the opportunity to generate funds, or other losses.

We expect our primary counterparty risk with respect to our bitcoin
will be custodian performance obligations under the various custody arrangements we enter into. A series of recent high-profile bankruptcies,
closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry,
the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry,
SEC enforcement actions against other providers, or placement into receivership or civil fraud lawsuit against digital asset industry
participants have highlighted the perceived and actual counterparty risk applicable to digital asset ownership and trading. Legal precedent
created in these bankruptcy and other proceedings may increase the risk of future rulings adverse to our interests in the event one or
more of our custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency or similar proceedings.

While our custodians will