Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 402

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 4
Chunk 402
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, and are not registered as an “investment company” under the 1940 Act as of the date of this Report.

While senior SEC officials have stated their view that bitcoin is not
a “security” for purposes of the federal securities laws, a contrary determination by the SEC could lead to our classification
as an “investment company” under the 1940 Act, if the portion of our assets consists of investments in bitcoins exceeds 40%
safe harbor limits prescribed in the 1940 Act, which would subject us to significant additional regulatory controls that could have a
material adverse effect on our business and operations and may also require us to change the manner in which we conduct our business.

We monitor our assets and income for compliance under the 1940 Act
and seek to conduct our business activities in a manner such that we do not fall within its definitions of “investment company”
or that we qualify under one of the exemptions or exclusions provided by the 1940 Act and corresponding SEC regulations. If bitcoin is
determined to constitute a security for purposes of the federal securities laws, we would take steps to reduce the percentage of bitcoins
that constitute investment assets under the 1940 Act. These steps may include, among others, selling bitcoins that we might otherwise
hold for the long term and deploying our cash in non-investment assets, and we may be forced to sell our bitcoins at unattractive prices.
We may also seek to acquire additional non-investment assets to maintain compliance with the 1940 Act, and we may need to incur debt,
issue additional equity or enter into other financing arrangements that are not otherwise attractive to our business. Any of these actions
could have a material adverse effect on our results of operations and financial condition. Moreover, we can make no assurance that we
would successfully be able to take the necessary steps to avoid being deemed to be an investment company in accordance with the safe harbor.
If we were unsuccessful, and if bitcoin is determined to constitute a security for purposes of the federal securities laws, then we would
have to register as an investment company, and the additional regulatory restrictions imposed by 1940 Act could adversely affect the market
price of bitcoin and in turn adversely affect the market price of our common stock.

58

We may be subject to 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