Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 280

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 2
Chunk 280
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 to our custodians. Although we intend to implement various measures that are designed to mitigate our counterparty risks,
including by storing substantially all of the bitcoin we own in custody accounts at U.S.-based, institutional-grade custodians and negotiating
contractual arrangements intended to establish that our property interest in custodially-held bitcoin is not subject to claims of our
custodians’ creditors, applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial
accounts. If our custodially-held bitcoin were nevertheless considered to be the property of our custodians’ estates in the event
that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated as a general unsecured
creditor of such custodians, inhibiting our ability to exercise ownership rights with respect to such bitcoin and this may ultimately
result in the loss of the value related to some or all of such bitcoin. Even if we are able to prevent our bitcoin from being considered
the property of a custodian’s bankruptcy estate as part of an insolvency proceeding, it is possible that we would still be delayed
or may otherwise experience difficulty in accessing our bitcoin held by the affected custodian during the pendency of the insolvency proceedings.
Any such outcome could have a material adverse effect on our financial condition and the market price of our common stock.

The broader digital assets industry is subject to counterparty risks,
which could adversely impact the adoption rate, price, and use of bitcoin. A series of recent high-profile bankruptcies, closures,
liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry, including
the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, FTX Trading and Genesis Global Capital,
the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry,
including Signature Bank and Silvergate Bank, SEC enforcement actions against Coinbase, Inc. and Binance Holdings Ltd., the placement
of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s Department of Business and Industry,
and the filing and subsequent settlement of a civil fraud lawsuit by the New York Attorney General against Genesis Global Capital,
its parent company Digital Currency Group, Inc., and former partner Gemini Trust Company, have highlighted the counterparty risks applicable
to owning and transacting in digital assets. Although these bankruptcies, closures, liquidations and other events have not