Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 293

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 2
Chunk 293
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hold on our behalf could be subject to insolvency proceedings and we could be treated as a general unsecured creditor of the custodian,
inhibiting our ability to exercise ownership rights with respect to such bitcoin. Any loss associated with such insolvency proceedings
is unlikely to be covered by any insurance coverage we maintain related to our bitcoin.

57

Bitcoin is controllable only by the possessor of both the unique public
key and private key(s) relating to the local or online digital wallet in which the bitcoin is held. While the bitcoin blockchain
ledger requires a public key relating to a digital wallet to be published when used in a transaction, private keys must be safeguarded
and kept private in order to prevent a third party from accessing the bitcoin held in such wallet. To the extent the private key(s) for
a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor
our custodians will be able to access the bitcoin held in the related digital wallet. Furthermore, we cannot provide assurance that our
digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised as a result of a cyberattack. The
bitcoin and blockchain ledger, as well as other digital assets and blockchain technologies, have been, and may in the future be, subject
to security breaches, cyberattacks, or other malicious activities.

Regulatory change reclassifying bitcoin as a security could lead
to our classification as an “investment company” under the Investment Company Act of 1940, as amended, or the 1940
Act, and could adversely affect the market price of bitcoin and the market price of our common stock.

Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company
generally will be deemed to be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out
as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it
engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes
to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities
and cash items) on an