8-K: Profusa Secures New Funding, Adjusts Conversion Terms

Profusa, Inc. announced Amendment No. 3 to its Securities Purchase Agreement, securing up to $5 million in new funding and revising conversion terms and the Floor Price for its convertible notes.

Summary

• Profusa, Inc. entered into Amendment No. 3 to its Securities Purchase Agreement with Ascent Partners Fund LLC on December 29, 2025.
• The amendment obligates purchasers to buy additional Notes in an aggregate principal amount of up to $5,555,556 for a purchase price of up to $5,000,000, subject to specific conditions.
• Key conditions for the full funding include the outstanding principal balance of the First and Second Tranches being reduced to zero, no Nasdaq continued-listing deficiency notice, an effective Registration Statement for all Conversion Shares, and required Stockholder Approval.
• If the Nasdaq listing condition is not met, the initial purchaser will still be obligated to purchase a reduced principal amount of up to $3,333,333.60 for a proportional purchase price of up to $3,000,000.
• The Mandatory Prepayment Amount for a Subsequent Offering that is an Equity Line of Credit was amended to 33.3% of net proceeds for shares under the current Form S-1 (File No. 333-290805) or 50.0% for shares under any Form S-1 filed after the Third Amendment date.
• The Floor Price for conversion of the Notes was modified to $0.35 per share of the Company's common stock, effective as of the Third Amendment Effective Date, with the conversion price at no time being less than this Floor Price.
• Previously, Amendment No. 2 had set a Floor Price of $0.111 per share for up to 13,650,000 shares during a 'Modification Period' ending with the expected reverse stock split in January 2026, after which it would revert to $0.14.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While securing new funding is a positive, the conditions attached to the full amount, the increased Floor Price, and higher mandatory prepayment percentages for future equity lines introduce complexities and potential challenges, balancing the overall outlook.

Positives

• Secured commitment for additional financing of up to $5,000,000, providing capital for ongoing operations.
• The financing is structured with a fallback option of $3,000,000 even if a Nasdaq listing deficiency exists, ensuring some capital access.

Negatives

• Full access to the $5,000,000 funding is contingent on several conditions, including Nasdaq compliance and stockholder approval, which introduces uncertainty.
• The increase in the Floor Price to $0.35 per share from previous levels ($0.111 or $0.14) could make future conversions less favorable for purchasers if the stock price remains low, potentially impacting the effectiveness of the convertible notes as a financing mechanism.
• Higher mandatory prepayment percentages (33.3% or 50.0%) for future equity lines of credit mean a larger portion of future capital raises will be used to repay existing obligations, potentially limiting net proceeds for company growth.

Risks

• Failure to obtain required Stockholder Approval could prevent access to the full $5,000,000 in additional funding.
• Receiving a Nasdaq continued-listing deficiency notice would reduce the available funding to $3,000,000.
• The effectiveness of a Registration Statement covering all Conversion Shares is a condition for the third tranche, posing a regulatory risk.
• The company is planning to present a reverse stock split to stockholders in January 2026, which carries inherent risks related to market perception and share liquidity.
• The company's ability to reduce the outstanding principal balance of the First and Second Tranches to zero through conversion and/or repayment is a prerequisite for the new funding.

Future Outlook

The company anticipates presenting a reverse stock split to its stockholders in January 2026 for approval. Future capital raises through equity lines of credit will be subject to mandatory prepayment obligations of 33.3% or 50.0% of net proceeds, depending on the registration statement under which shares are issued. The company aims to satisfy conditions for the third tranche of funding, including achieving an effective Registration Statement for conversion shares and obtaining stockholder approval.

Management Comments

• "Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized." Ben Hwang, Chief Executive Officer, Profusa, Inc.

Industry Context

This financing amendment reflects a common strategy for emerging growth companies, particularly in the biotech or medical device sector (implied by 'Profusa'), to secure capital through convertible debt instruments. Such companies often rely on staged financing and may face challenges maintaining Nasdaq listing compliance, necessitating flexible financing terms. The adjustment of conversion prices and floor prices is typical in such agreements, reflecting ongoing negotiations between the company and its investors regarding valuation and risk.

Comparison to Industry Standards

• NA

Corporate Governance

Related Party Transactions

• The amendment is with Ascent Partners Fund LLC, a party to the original Securities Purchase Agreement and a holder of the Senior Secured Convertible Promissory Notes. This is a continuation of an existing financing relationship.

Stakeholder Impact

• Shareholders: Potential for dilution from future conversions, impact of the increased Floor Price on conversion economics, and the need for their approval for the third tranche funding and a planned reverse stock split.
• Purchasers (Ascent Partners Fund LLC): Obligated to provide additional funding under specified conditions, subject to new conversion terms and mandatory prepayment provisions.
• Company (Profusa, Inc.): Gains access to additional capital, but with conditions and potentially higher costs for future equity financing through mandatory prepayments.

Next Steps

• Reduce the outstanding principal balance of the First Tranche and Second Tranche to zero through conversion and/or repayment.
• Ensure no Nasdaq continued-listing deficiency notice is received for the Company's Common Stock.
• Achieve effectiveness of a Registration Statement covering all Conversion Shares issuable upon conversion of the Notes issued in the first, second, and third tranches.
• Obtain required Stockholder Approval for the third tranche funding and potentially for the planned reverse stock split.
• Designate a Trading Day for the Purchasers to buy additional Notes, no later than 10 Trading Days after the Company's notice.

Key Dates

Keywords

Profusa, PFSA, Securities Purchase Agreement, Convertible Notes, Financing, Capital Raise, Floor Price, Nasdaq, Stockholder Approval, Equity Line of Credit, Reverse Stock Split