Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 296

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 2
Chunk 296
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 receivership or similar insolvency proceeding, no assurance can be provided
that our custodially-held bitcoin will not become part of the custodian’s insolvency estate if one or more of our custodians enters
bankruptcy, receivership or similar insolvency proceedings. Additionally, if we pursue any strategies to create income streams or otherwise
generate funds using our bitcoin holdings, we would become subject to additional counterparty risks. We will need to carefully evaluate
market conditions, including price volatility as well as service provider terms and market reputations and performance, among others,
prior to implementing any such strategy, all of which could effect our ability to successfully implement and execute on any such future
strategy. These risks, along with any significant non-performance by counterparties, including in particular the custodian or custodians
with which we will custody substantially all of our bitcoin, could have a material adverse effect on our business, prospects, financial
condition, and operating results.

If bitcoin is determined to constitute a security for purposes of the
federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price
of bitcoin and in turn adversely affect the market price of our common stock. See “Risk Factors — 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” above. Moreover, the risks of us engaging in a bitcoin treasury strategy could create complications due
to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and
officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

59

A temporary or permanent blockchain “fork” to bitcoin
or other crypto assets could adversely affect our business.

Blockchain protocols, including bitcoin, are open source. Any user
can download the software, modify it, and then propose that bitcoin or other blockchain protocols users and miners adopt the modification.
When a modification is introduced and a substantial majority of users and miners consent to the modification, the change is implemented
and the bitcoin or other blockchain protocol networks, as applicable, remain uninterrupted. However, if less than a substantial majority
of users and miners consent to the proposed modification, and the modification is not compatible with the software prior to its modification,
the consequence would