8-K: Profusa Amends Debt Deal, Issues New Convertible Note

Profusa, Inc. announced an amendment to its securities purchase agreement, the issuance of a new convertible note, and an exchange of existing notes for preferred stock.

Summary

• Profusa, Inc. has entered into Amendment No. 5 to its Securities Purchase Agreement, dated February 11, 2025.
• The amendment modifies the definition of 'Amendment Effective Date' and introduces a new form of convertible note.
• It also adjusts the exercise price of a previously issued warrant to $1.07 per share.
• On August 12, 2026, the company completed an additional closing under the Purchase Agreement, issuing a Senior Secured Convertible Promissory Note to Ascent Partners Fund LLC for $714,285.72 principal amount, purchased for $650,000.
• This note bears 7% annual interest, matures on August 12, 2027, and is convertible into common stock at $1.07 per share.
• Monthly amortization payments commence December 1, 2026, with the option to pay in common stock.
• A mandatory prepayment of 33% of net proceeds from any 'Subsequent Offering' is required.
• On August 19, 2026, Profusa entered into an Exchange Agreement with Ascent Partners Fund LLC to exchange existing Senior Secured Convertible Promissory Notes for shares of Series A Non-Voting Convertible Preferred Stock.
• The exchange rate is 0.93458 shares of preferred stock per $1,000 of outstanding notes and interest.
• As of August 18, 2026, the total amount due under existing notes was $6,137,958.66 ($5,529,722.96 principal and $608,235.70 interest).
• The preferred stock will automatically convert into common stock at an effective conversion price of $4.28 per share upon meeting certain conditions.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as slightly negative due to the continued reliance on convertible debt and the exchange of existing debt for preferred stock, indicating ongoing financial restructuring rather than organic growth.

Positives

• The company is actively managing its debt structure through amendments and exchanges.
• The new convertible note provides additional capital, albeit through debt.
• The exchange of existing notes for preferred stock potentially simplifies the capital structure and may offer more favorable terms for future conversion.
• The conversion price for the preferred stock implies a valuation of $4.28 per share, which is higher than the $1.07 conversion price of the new note.

Negatives

• The company continues to rely on debt financing, specifically convertible notes, which can lead to dilution.
• The exchange of existing notes for preferred stock indicates a restructuring of debt rather than a resolution of underlying financial challenges.
• The effective conversion price for the preferred stock ($4.28) is significantly higher than the conversion price of the new note ($1.07), suggesting a potential increase in the company's valuation or a different financing strategy.
• The company has substantial outstanding debt, with over $6.1 million due under existing notes as of August 18, 2026.

Risks

• Dilution risk for existing shareholders due to the conversion of convertible notes and preferred stock into common stock.
• Potential for increased interest expense if defaults occur, as the default interest rate is 18%.
• The company's ability to meet its amortization payments starting December 1, 2026.
• The mandatory prepayment requirement of 33% of net proceeds from any 'Subsequent Offering' could limit future capital raising flexibility.
• The company's obligations are secured by substantially all of its assets, increasing risk for creditors in case of default.

Future Outlook

The filing does not provide explicit forward-looking statements or guidance. However, the ongoing debt restructuring and issuance of convertible instruments suggest a continued focus on financial management and potential future equity dilution.

Management Comments

• No direct quotes from management are present in this filing.
• The filing is a factual report of material definitive agreements and financial obligations.

Industry Context

StockSavvy.ai notes that Profusa's actions reflect common strategies for early-stage or growth-stage companies facing capital needs and debt management challenges. The use of convertible instruments and preferred stock exchanges is typical in navigating funding rounds and restructuring existing obligations, especially in the biotechnology or medical device sectors where such financing is prevalent.

Comparison to Industry Standards

• Companies in the biotech and medical device sectors frequently utilize convertible debt and preferred stock to finance operations and R&D, especially when traditional equity markets are less accessible or favorable.
• The terms of the convertible note (7% interest, 1-year maturity, $1.07 conversion price) are within the typical range for such instruments, though the security interest granted is a significant factor.
• The exchange of debt for preferred stock at a higher effective conversion price ($4.28 vs $1.07) suggests a potential increase in the company's perceived valuation or a strategic move to reduce immediate debt obligations.
• The reliance on a single primary investor (Ascent Partners Fund LLC) for multiple financing rounds and debt instruments is common in venture debt and private equity financing.

Stakeholder Impact

• Shareholders: Potential for dilution due to the conversion of convertible notes and preferred stock into common stock. The higher effective conversion price for preferred stock may indicate a positive valuation trend, but the overall debt burden remains a concern.
• Creditors: The new note is secured by substantially all of the company's assets, increasing the security for Ascent Partners Fund LLC but potentially impacting other creditors in a liquidation scenario.
• Investors (Ascent Partners Fund LLC): Continues to hold significant financial instruments in the company, with a mix of debt and equity-like securities.

Next Steps

• Commencement of monthly amortization payments for the new note on December 1, 2026.
• Potential mandatory prepayment of 33% of net proceeds from any 'Subsequent Offering'.
• Automatic conversion of Series A Non-Voting Convertible Preferred Stock into Common Stock on a future date.
• The company must continue to meet reporting requirements under the Exchange Act.

Key Dates

Recommendation

The filing details ongoing financial restructuring and debt management, including the issuance of new convertible debt and an exchange of existing debt for preferred stock. While these actions address immediate financial obligations, they do not fundamentally alter the company's growth trajectory or profitability. The continued reliance on dilutive instruments and the substantial debt load warrant a cautious 'hold' stance until clearer signs of operational improvement or sustainable revenue growth emerge.

Keywords

convertible note, securities purchase agreement, preferred stock, debt restructuring, capital raise, warrant, exchange agreement, senior secured