8-K: Profusa Amends Funding Terms, Lowers Share Price Floor

Profusa, Inc. has amended its securities purchase agreement and convertible promissory note with Ascent Partners Fund LLC, adjusting share sale floor prices and debt repayment terms to facilitate ongoing financing.

Summary

• Amendment No. 1 to the Securities Purchase Agreement (SPA) with Ascent Partners Fund LLC, dated December 22, 2025, modifies the 'Floor Price' for common stock sales.
• During a 'Modification Period' (from the Amendment Effective Date until a reverse stock split expected in January 2026), the Floor Price is set at $0.111 per share for up to 13,650,000 shares sold below $0.14.
• After this period or share cap, the Floor Price reverts to $0.14 per share (or 20% of the Official Closing Price on July 25, 2025, adjusted).
• Amendment No. 2 to the Senior Secured Convertible Promissory Note (Note) with Ascent Partners Fund LLC, dated December 22, 2025, eliminates amortization provisions and related payments from the Note.
• The Second Note Amendment also revises the Mandatory Prepayment Amount for Subsequent Offerings that are an Equity Line of Credit from 17.5% to 33.3% of net proceeds.
• The elimination of amortization provisions was an intended change from Amendment No. 1 (August 25, 2025) that was inadvertently omitted.

Sentiment

Score: 4

Explanation: The amendments indicate a need for more flexible financing terms, including a lower floor price for share sales and an increased mandatory prepayment for future equity lines, which could be perceived negatively by investors due to potential dilution and reduced net proceeds from future raises. However, the elimination of amortization payments provides some immediate relief.

Positives

• Elimination of amortization payments on the Senior Secured Convertible Promissory Note provides immediate cash flow relief by removing scheduled debt repayments.
• The temporary reduction of the Floor Price to $0.111 per share for a limited number of shares (13,650,000) offers increased flexibility for the company to raise capital during the Modification Period.

Negatives

• The temporary reduction of the Floor Price to $0.111 per share for up to 13,650,000 shares suggests the company may need to issue shares at a lower valuation, potentially leading to increased dilution for existing shareholders.
• The increase in the Mandatory Prepayment Amount for Equity Line of Credit offerings from 17.5% to 33.3% of net proceeds means a larger portion of future equity line proceeds will be used to repay the convertible note, reducing net funds available for operations.

Risks

• Dilution Risk: The ability to sell shares at a lower Floor Price ($0.111) for a significant number of shares (13,650,000) increases the risk of substantial dilution for current shareholders.
• Reverse Stock Split Risk: A reverse stock split is expected to be presented to stockholders in January 2026, which, while potentially increasing per-share price, does not change overall market capitalization and can sometimes be viewed negatively by the market.
• Financing Dependency: Continued reliance on Ascent Partners Fund LLC for financing through convertible notes and equity lines, with terms that can be adjusted, indicates ongoing capital needs.
• Increased Prepayment Burden: The higher mandatory prepayment percentage for equity lines means less capital from future equity raises will be available for company operations, potentially straining liquidity.

Future Outlook

A reverse stock split is expected to be presented to the company's stockholders for approval in January 2026.

Management Comments

• The modification of Section 2(a) of the Note addressed in Section 2 below reflects that understanding of the parties concluded at the time of the execution of Amendment No. 1 that failed to be reflected in Amendment No. 1.

Industry Context

The amendments reflect a common strategy for smaller, growth-stage companies to secure ongoing financing through flexible equity and debt instruments, often involving convertible notes and equity lines of credit. The adjustments to floor prices and prepayment terms indicate a need to adapt financing structures to current market conditions or company-specific liquidity requirements, a frequent occurrence in the biotech or medical device sectors where Profusa likely operates. The planned reverse stock split is also a common tactic for companies to maintain listing compliance or improve stock perception.

Corporate Governance

Related Party Transactions

• The company has entered into a Securities Purchase Agreement and a Senior Secured Convertible Promissory Note with Ascent Partners Fund LLC, which is a significant financing partner. The amendments further modify the terms of these agreements.

Stakeholder Impact

• Shareholders: Face potential dilution from shares sold at a lower floor price and the impact of a future reverse stock split.
• Creditors (Ascent Partners Fund LLC): Benefit from increased mandatory prepayment from future equity lines, strengthening their position.
• Company Operations: Benefit from the elimination of amortization payments, freeing up cash flow, but may see reduced net proceeds from future equity lines due to higher prepayments.

Next Steps

• Present a reverse stock split proposal to stockholders for approval in January 2026.

Key Dates

Recommendation

The amendments reflect a company actively managing its financing structure, but the terms, particularly the lower temporary floor price for share sales and the increased mandatory prepayment for equity lines, suggest ongoing capital needs and potential dilution. While the elimination of amortization payments offers some relief, the overall picture indicates a company navigating challenging financing conditions. Investors should hold and monitor the outcome of the reverse stock split and future capital raises for clearer direction.

Keywords

Profusa, Ascent Partners Fund, Securities Purchase Agreement, Convertible Promissory Note, Floor Price, Equity Line of Credit, Reverse Stock Split, Capital Raise, Dilution, Debt Amendment