8-K
Profusa, Inc. (PFSA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
July 11, 2025
PROFUSA, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41177 | 86-3437271 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (IRS Employer<br><br>Identification No.) |
626 Bancroft Way, Suite A
Berkeley,
CA 94710
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (
925) 997-6925
345 Allerton Ave.
South San Francisco, California 94080
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.0001 per share | PFSA | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Introductory Note
Unless the context otherwise requires, (i) following the Closing (as defined below), references to “we,” “us,” “our,” “New Profusa,” and the “Company” refer to Profusa, Inc., a Delaware corporation formerly known as NorthView Acquisition Corporation, and its consolidated subsidiaries, (ii) prior to the Closing, references to “NorthView” and the “Company” refer to NorthView Acquisition Corporation, (iii) prior to the Closing, references to “Profusa” refer to Profusa, Inc., a California corporation, and (iv) references to the “Board” refer to the board of directors of the Company.
Terms used in this Current Report on Form 8-K (this “Report”) but not defined herein, or for which definitions are not otherwise incorporated by reference herein, shall have the meaning given to such terms in the Proxy Statement (as defined below) in the section entitled “Frequently Used Terms” beginning on page iv thereof, and such definitions are incorporated herein by reference.
Overview of the Transaction
On July 11, 2025 (the “Closing Date”), Profusa, Inc., a Delaware corporation formerly known as NorthView Acquisition Corporation (the “Company”), consummated its previously announced business combination (the “Business Combination”) with Profusa, Inc., a California corporation (“Profusa”), pursuant to that certain Merger Agreement and Plan of Reorganization, dated as of November 7, 2022 (as the same has been amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), between the Company, Profusa, and NV Profusa Merger Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub” and, collectively, the “Parties”). The consummation of the Business Combination involved the merger (the “Merger”) of Merger Sub with and into Profusa, pursuant to which, at the closing of the transactions contemplated by the Merger Agreement (the “Closing”), the separate corporate existence of Merger Sub ceased, with Profusa as the surviving corporation becoming a wholly-owned subsidiary of the Company, pursuant to the terms of the Merger Agreement and in accordance with the DGCL. As a result of the Business Combination, the Company owns 100% of the outstanding common stock of Profusa. In connection with the closing of the Business Combination, the Company changed its name from “NorthView Acquisition Corporation” to “Profusa, Inc.”
Conversionof Securities and Merger Consideration
In accordance with the terms and subject to the conditions of the Merger Agreement, at Closing, each share of issued and outstanding Profusa Common Stock was converted into a number of shares of New Profusa common stock, par value $0.0001 per share (“New Profusa Common Stock”), based on the Exchange Ratio that reflects an equity valuation of Profusa of $155,000,000 (as adjusted for the Incentive Equity Value, the Private Placement Value and the Aggregate Company Incentive Amount), divided by an assumed value of New Profusa Common Stock of $10.00 per share. The Exchange Ratio and the Company Reference Share Value were $.94 and $9.40, respectively.
Pursuant to the Merger Agreement, at the effective time of the Merger, each option to purchase Profusa Common Stock was converted into an option to purchase New Profusa Common Stock based on the Exchange Ratio, and each warrant to purchase Profusa Common Stock was converted into a warrant to purchase New Profusa Common Stock based on the Warrant Ratio (as defined in the Merger Agreement).
The material terms and conditions of the Merger Agreement are described in greater detail in the Company’s definitive proxy statement/prospectus (as amended and supplemented, the “Proxy Statement”) filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(3) under the Securities Act of 1933, as amended (the “Securities Act”), on May 15, 2025, in the section entitled “Proposal 1 - The Business Combination Proposal - The Merger Agreement” beginning on page 108 of the Proxy Statement, which information is incorporated herein by reference.
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RelatedAgreements
This section, as well as Item 1.01 below, describes certain additional agreements entered into in connection with the Merger Agreement.
Profusa Support Agreement
In accordance with the Merger Agreement, certain stockholders of Profusa representing the requisite votes necessary to approve the Merger Agreement entered into support agreements (the “Stockholder Support Agreement”) with NorthView and Profusa, pursuant to which each such holder agreed to (i) vote all of its Profusa shares held of record in favor of the approving and adopting the Merger Agreement at any meeting of the stockholders of Profusa, (ii) be bound by certain other covenants and agreements related to the Business Combination, and (iii) be bound by certain transfer restrictions with respect to such securities, in each case, on the terms and subject to the conditions set forth in the Stockholder Support Agreement.
Additionally, in connection with the Stockholder Support Agreement, those certain Profusa shareholders receiving shares of New Profusa Common Stock in connection with the Business Combination agreed to be prohibited from selling or transferring their shares of New Profusa Common Stock for certain periods following the Closing (the “Lock-Up”). The applicable Lock-Up periods are (i) six months for 25% of the Lock-Up Shares (as defined in the Stockholder Support Agreement), (ii) nine months for 25% of the Lock-Up Shares, and (iii) one year for 50% of the Lock-Up shares. Separately, certain New Profusa shareholders are subject to a lock-up agreement in connection with the PIPE Subscription Agreement, as described further below.
The foregoing description of the Stockholder Support Agreement is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Sponsor Support Agreement
Concurrently with the execution of the Merger Agreement, NorthView, Profusa, and the Sponsor entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”) pursuant to which the Sponsor agreed to, among other things, (i) vote at any meeting of the stockholders of NorthView all of its shares of NorthView Common Stock held of record or thereafter acquired in favor of the proposals relating to the Business Combination, (ii) not redeem any of its shares of NorthView Common Stock in connection with the Business Combination, (iii) be bound by certain other covenants and agreements related to the Business Combination and (iv) be bound by certain transfer restrictions with respect to such securities, prior to the Closing of the Business Combination, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
The foregoing description of the Sponsor Support Agreement is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 10.2 hereto and incorporated herein by reference.
Lock-Up Agreement
In connection with the Closing, NorthView, the NorthView Initial Stockholders and certain Profusa shareholders entered into a Lock-Up Agreement, pursuant to which the New Profusa Common Stock issued to the NorthView Initial Stockholders in exchange for shares of NorthView Common Stock that constituted founder shares will be locked-up for 8 months after the Closing Date, subject to earlier release on (i) the last consecutive trading day where the sale price of New Profusa Common Stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 180 days after the Closing or (ii) such date on which New Profusa completes a liquidation, merger, stock exchange or other similar transaction that results in all of New Profusa’s stockholders having the right to exchange their shares of New Profusa Common Stock for cash, securities or other property. Separately, certain New Profusa shareholders are subject to a lock-up agreement in connection with the PIPE Subscription Agreement, as described further below.
The foregoing description of the Lock-Up Agreement is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 10.3 hereto and incorporated herein by reference.
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Business Combination Marketing Agreement andEngagement Letter
NorthView previously engaged I-Bankers and Dawson James as advisors to assist in holding meetings to discuss the potential business combination and the target business’ attributes, introduce NorthView to potential investors that are interested providing funding in connection with a Business Combination, assist NorthView in obtaining stockholder approval for such business combination and assist NorthView with its press releases and public filings in connection with such business combination. In connection with such engagement, NorthView agreed to pay I-Bankers and Dawson James an aggregate cash fee (the “Business Combination Fee”) for such services upon the consummation of a business combination in an amount equal to 3.68% of the gross proceeds of its initial public offering (exclusive of any applicable finders’ fees which might become payable). NorthView had also previously entered into an engagement letter (the “Engagement Letter”) contemplating the Business Combination Fee.
Pursuant to the Business Combination Marketing Agreement executed by NorthView, I-Bankers and Dawson James in connection with the IPO, as amended on November 7, 2022, and subsequently modified on January 19, 2025 in connection with the signing of the Merger Agreement, I-Bankers and Dawson James received a cash fee (the “Business Combination Marketing Fee”) from NorthView in connection with the Business Combination in an amount equal to $1,500,000 in the aggregate, with the remaining $500,000 balance deferred.
The foregoing description of the Business Combination Marketing Agreement is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 10.4 hereto and incorporated herein by reference.
Financial Advisory Arrangement with HCW
HCW acted as Profusa’s financial advisor in connection with the Business Combination and received a transaction fee in connection therewith of $1,000,000, payable in cash and 132,500 warrants to acquire an aggregate of 132,500 shares of New Profusa Common Stock at an exercise price of $0.01 per share.
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Item 1.01 Entry into a Material DefinitiveAgreement.
Agreements Ancillary to Merger Agreement
ClosingAgreement
On July 11, 2025, in connection with the Closing, NorthView, Profusa and the Merger Sub entered into a Closing Agreement, pursuant to which, among other things, the parties (i) agreed to waive a certain closing condition contemplated under the Merger Agreement and (ii) agreed to amend the definition of “Private Placement Basis” in the Merger Agreement to mean $2.22 or $0.50, as applicable, based on the cost basis of the security issued in the applicable Company Private Placement Financing (as defined in the Merger Agreement).
The foregoing description of the Closing Agreement is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 10.5 hereto and incorporated herein by reference.
Lock-Up Agreement
On July 11, 2025, in connection with the Closing, NorthView, the NorthView Initial Stockholders and certain Profusa shareholders entered into a Lock-Up Agreement, pursuant to which the New Profusa Common Stock issued to the NorthView Initial Stockholders in exchange for shares of NorthView Common Stock that constituted founder shares will be locked-up for 8 months after the Closing Date, subject to earlier release on (i) the last consecutive trading day where the sale price of New Profusa Common Stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 180 days after the Closing or (ii) such date on which New Profusa completes a liquidation, merger, stock exchange or other similar transaction that results in all of New Profusa’s stockholders having the right to exchange their shares of New Profusa Common Stock for cash, securities or other property. Separately, certain New Profusa shareholders are subject to a lock-up agreement in connection with the PIPE Subscription Agreement, as described further below.
The foregoing description of the Lock-Up Agreement is not complete and is qualified in its entirety by reference to the text of such document, a form of which is filed as Exhibit 10.3 hereto and incorporated herein by reference.
PIPE Transaction
Initial Note
On February 11, 2025, NorthView executed a Securities Purchase Agreement (the “PIPE Subscription Agreement”) with Ascent Partners Fund LLC (“Ascent”, and together with any additional investors who become parties to the PIPE Subscription Agreement, the “PIPE Investors”). Pursuant to the PIPE Subscription Agreement, the PIPE Investors are expected, subject to the conditions relating to such purchase set forth in the PIPE Subscription Agreement, to purchase from NorthView senior secured convertible notes in an aggregate principal amount of up to $22,222,222 (the “PIPE Convertible Notes”) for a an aggregate purchase price of up to $20,000,000, reflecting a 10% original issue discount to the face amount (“OID”).
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At the Closing and pursuant to the PIPE Subscription Agreement, New Profusa issued a PIPE Convertible Note in the principal amount of $10,000,000 (the “Initial Note”) for a purchase price of $9,000,000, reflecting a 10% OID. The Initial Note matures on the date that is 18-months from Closing (the “Maturity Date”) and is convertible at any time at the PIPE Investor’s option at a conversion price equal to the lower of $10 or 95% of the lowest daily volume-weighted average price per share (“VWAP”) of New Profusa Common Stock in the 10 trading days prior to the original issue date of the Initial Note and shall be adjusted, without limitation, based on down-round and most-favored nation (MFN) price and terms protections (the “Conversion Price”).
The Initial Note includes a “Minimum Interest Amount” equal to 10% of the principal amount, which represents a full year of interest payments under the Initial Note; provided, that such Minimum Interest Amount shall be reduced by the amount of interest accrued on the principal amount of the Initial Note. Interest shall accrue on the aggregate unconverted and then outstanding principal amount of the Initial Note at a rate of 10% per annum, provided that the Minimum Interest Amount shall be fully earned and accrued on the original issue date of the Initial Note. Upon an event of default, the interest rate shall be adjusted and increase to 24% per annum. Payments made in cash under the Initial Note shall be subject to a 5% fee, which shall be in addition to any amounts owed thereunder. The Initial Note provides for certain events of default that are typical for a transaction of this type, including, among other things, any breach of the representations or warranties made by New Profusa or its subsidiaries. The Initial Note also provides for a 10% late fee in case of late payments and mandatory prepayments upon Subsequent Offerings (as defined in the Initial Note) and, in the absence of an event of default, may be prepaid upon 10 business days prior notice, subject to certain conversion rights of the PIPE Investors.
The Initial Note may not be converted by the PIPE Investors into shares of New Profusa Common Stock if such conversion would result in the investors or their affiliates owning in excess of 4.99% of the number of shares of New Profusa Common Stock outstanding immediately after giving effect to the issuance of all shares issuable upon conversion of the Initial Note (the “Beneficial Ownership Limitation”); provided, that the PIPE Investors may increase or decrease the Beneficial Ownership Limitation upon at least 61 days’ prior notice to New Profusa so long as such increase does not exceed 9.99% of the number of shares of New Profusa Common Stock outstanding immediately after giving effect to the issuance of all shares issuable upon conversion of the Initial Note.
The Company issued the Initial Note pursuant to the exemption from the registration requirements of the Securities Act available under Section 4(a)(2).
The foregoing description of the Initial Note is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 10.6 hereto and incorporated herein by reference.
PIPE Lock-Up Agreement
On July 11, 2025, the PIPE Investors entered into a lock-up agreement (the “PIPE Lock-Up Agreement”), pursuant to which they agreed to, subject to certain customary exceptions, not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of any shares of New Profusa Common Stock or securities convertible, exchangeable or exercisable into shares of New Profusa Common Stock beneficially owned, held or acquired by them. The period for such restrictions shall apply from the Closing Date until the termination of the PIPE Lock-Up Agreement in accordance with its terms.
The foregoing description of the PIPE Lock-Up Agreement is not complete and is qualified in its entirety by reference to the text of such document, a form of which is filed as Exhibit 10.7 hereto and incorporated herein by reference.
PIPE Registration Rights Agreement
On July 11, 2025, New Profusa and the PIPE Investors entered into a registration rights agreement (the “PIPE Registration Rights Agreement”), which provides customary demand and piggyback registration rights.
Pursuant to the PIPE Registration Rights Agreement, New Profusa will, as soon as practicable, but in any event within 20 calendar days after the Closing Date, use its reasonable best efforts to file with the SEC a registration statement registering the resale of certain New Profusa Common Stock issuable to the PIPE Investors upon conversion of the PIPE Convertible Notes. New Profusa will use its reasonable efforts to have the registration statement declared effective within 45 days (but in any event no later than the 60^th^ calendar day) after the filing thereof.
The foregoing description of the PIPE Registration Rights Agreements is not complete and is qualified in its entirety by reference to the text of such document, a form of which is filed as Exhibit 10.8 hereto and incorporated herein by reference.
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Security Agreement
On July 11, 2025, New Profusa and Profusa (collectively, the “Profusa Parties”) entered into a Security Agreement with Ascent, as collateral agent (the “Security Agreement”), pursuant to which the Profusa Parties granted a security interest in substantially all of their respective assets to Ascent, to secure their respective obligations under the PIPE Convertible Notes.
The foregoing description of the Security Agreement is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 10.9 hereto and incorporated herein by reference.
Guaranty
On July 11, 2025, the Profusa Parties and their respective subsidiaries, successors and permitted assigns entered into a guaranty (the “Guaranty”), pursuant to which each such party guaranteed the other parties’ obligations under the PIPE Convertible Notes.
The foregoing description of the Guaranty is not complete and is qualified in its entirety by reference to the text of such document, which is filed as Exhibit 10.10 hereto and incorporated herein by reference.
Item 2.01 Completion of Acquisition or Dispositionof Assets.
The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference.
Item 2.03 Creation of a Direct Financial Obligation
The information in Item 1.01, under the heading “PIPE Transaction – Initial Note” is incorporated by reference in this Item 2.03 as if set forth herein.
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FORM 10 INFORMATION
Item 2.01(f) of Form 8-K provides that if the predecessor registrant was a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as NorthView was immediately before the Closing, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, the Company is providing the information below that would be included in a Form 10 if it were to file a Form 10. Please note that the information provided below relates to the Company after the Closing, unless otherwise specifically indicated or the context otherwise requires.
Cautionary Note Regarding Forward-Looking Statements
This Report, including the information incorporated herein by reference, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for the Company’s business. Specifically, forward-looking statements may include statements preceded by, followed by or that include the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions.
These forward-looking statements are based on information available as of the date of this Report and management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
| ● | the benefits of the Business Combination; |
|---|---|
| ● | the combined company’s financial performance following the Business Combination; |
| --- | --- |
| ● | the ability to maintain the listing of our securities on Nasdaq following the Business Combination; |
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| ● | changes in Profusa’s strategy, future operations, financial position, estimated revenues and losses,<br>projected costs, prospects and plans; |
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| ● | Profusa’s strategic advantages and the impact those advantages will have on future financial and<br>operational results; |
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| ● | expansion plans and opportunities; |
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| ● | Profusa’s ability to grow its business in a cost-effective manner; |
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| ● | the implementation, market acceptance and success of Profusa’s business model; |
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| ● | developments and projections relating to Profusa’s competitors and industry; |
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| ● | Profusa’s approach and goals with respect to technology; |
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| ● | Profusa’s expectations regarding its ability to obtain and maintain intellectual property protection<br>and not infringe on the rights of others; |
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| ● | political and economic instability, including the effects of Russia’s invasion of Ukraine and the<br>Middle East conflict; |
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| ● | changes in applicable laws or regulations; |
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| ● | the outcome of any known and unknown litigation and regulatory proceedings; and |
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| ● | other factors, including those set forth in the section of the Proxy Statement entitled “Risk Factors”<br>beginning on page 27. |
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Business
The information set forth in the section of the Proxy Statement entitled “Profusa’s Business” beginning on page 233 is incorporated herein by reference.
Risk Factors
The information set forth in the section of the Proxy Statement entitled “Risk Factors” beginning on page 27 is incorporated herein by reference.
Selected Consolidated Historical Financialand Other Information
The information set forth in the section of the Proxy Statement entitled “Selected Historical Financial and Operating Data of Profusa” beginning on page 22 is incorporated herein by reference.
Management’s Discussion and Analysisof Financial Condition and Results of Operations
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Business Overview
We are a clinical-stage digital health and medical technology company focused on developing biosensing solutions to improve health outcomes for patients in a variety of different diseases and conditions. Our first product is Lumee Oxygen, which enables physicians to ascertain the extent of perfusion, or passage of blood through the circulatory system to an organ or tissue, in patients with Critical Limb Ischemia (CLI) both during and after endovascular revascularization procedures. Lumee Oxygen has already received regulatory approval in Europe through the attainment of a CE mark; however, prior to commercialization in the U.S., Lumee Oxygen must obtain FDA clearance or approval.
The latest version of Lumee Oxygen is called Wireless Lumee Oxygen System. It has multiple components, one of which is a microsensor that is injected into the tissue of the patient using a hypodermic needle. The sensor is designed so it does not need to be removed as it overcomes the foreign body response that usually inhibits the ability of permanent implants to function. The sensor contains no electronics, utilizing luminescence to send a light signal to a reader that is placed over the incision site, which in turn can send a signal to an app on a smartphone. We are in clinical trials for Lumee Glucose, our sensing solution being developed for use in continuous glucose monitoring (CGM). This system targets diabetics and pre-diabetics to allow them real-time access to their glucose data, at a price point that our management thinks is comparable or lower to existing systems.
We already sell our oxygen sensor for research use only applications, namely animal models and in vitro testing. Management is targeting the European market (those jurisdictions that accept CE mark) for early launch for both Lumee Oxygen and Lumee Glucose. Lumee Oxygen’s launch in Europe occurred in 2023 and Lumee Glucose launch is expected to occur in 2025, subject to regulatory approval. We have access to key opinion leaders (KOLs) in both Europe and the United States, who deal with peripheral arterial disease (PAD) and Critical Limb Ischemia (CLI). We will sell directly to facilities based on the endorsement of these KOLs. In Germany, Austria and France, some KOLs have already used Lumee Oxygen on a trial basis. We have worked with reimbursement consultants to develop potential Category I CPT codes for Lumee Oxygen use.
Regarding Lumee Glucose, if and when we obtained marketing authorization, we plan to embark on a dual strategy of both direct to hospital sales, for our professional-use and personal-use CGM product, and direct to pharmacy sales for our personal use product only, thereby maximizing flexibility for the consumer. By aiming for coverage under a user’s pharmacy benefit, we believe we can diversify our user base, while accounting for any risk related to unlikely delay of attainment of a category I CPT code for sensor insertion. We feel a difference between other insertable or implantable CGMs and Lumee Glucose, is that the latter can be simply inserted with a hypodermic needle and does not require a surgical implantation, similar to how pharmacists use these needles to administer flu shots and other vaccines. At the same time, physicians can still leverage existing CPT codes related to interpretation of CGM data and we have, in parallel, initiated steps for CPT codes related to our sensor insertion. We will target both public and private payors for coverage.
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Since our launch, we have significantly devoted all of our resources to research and development, as well as all clinical study activities related but not limited to Lumee Oxygen, Lumee Glucose and prototypes for sensors of at least eight other analytes. We have also invested, on a smaller scale, in making sales of Lumee Oxygen for research- use only clients, which include entities working with animal models. Furthermore, we also performed research and development under government grants.
Since inception, we have incurred recurring annual losses from operations. For the three months ended March 31, 2025 and 2024, we incurred a net loss of $2.7 million and $2.4 million, respectively. During the three months ended March 31, 2025 and 2024, we have used $0.5 million and $0.7 million, respectively, of cash in our operating activities. We have notes and loans payable and interest due of $50.2 million within twelve months of March 31, 2025.
We have been able to finance our operations primarily with the proceeds from the issuance of equity and debt instruments and to a lesser extent, revenues from government grants. For the three months ending March 31, 2025, we obtained net cash from financing activities of $0.4 million compared to $0.6 million for the same period in 2024. We held cash of less than $0.1 million as of March 31, 2025, and $0.2 million as of December 31, 2024, respectively.
Additional funds may be necessary to maintain current operations and will be required for successful product commercialization efforts. Our management plans to monitor expenses and obtain additional funds through public or private equity offerings or debt financings, additional credit or loan facilities or a combination of one or more of these funding sources, which is intended to mitigate the relevant conditions or events that raise substantial doubt about our ability to continue as a going concern within one year from the date the unaudited condensed consolidated financial statements are available to be issued. As the ability to refinance our current debt or raise additional equity financing is outside of our management’s control, we cannot conclude that management’s plans will be effectively implemented within one year from the date the unaudited condensed consolidated financial statements are available to be issued. These factors raise substantial doubt about our ability to continue as a going concern within one year from the date the unaudited condensed consolidated financial statements are available to be issued. The unaudited condensed consolidated financial statements do not contain any adjustments that might result from the outcome of this uncertainty.
It is our expectation to continue to make substantial investments in building its European and United States commercial infrastructure and enhancing existing products and developing new ones. Furthermore, we aim to continue discussions with potential partners in Asia.
We expect to incur additional expenses due to operating as a public company, including expenses related to compliance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and those of the Nasdaq Stock Market LLC (“Nasdaq”), additional insurance expenses, investor relations activities and other administrative, professional and consulting services. As a result of these and other factors, we expect that we will require additional financing to fund our operations and planned growth. We may also seek additional financing of any kind. We may seek to raise any additional capital through public or private equity offerings or debt financings, additional credit or loan facilities or a combination of one or more of these funding sources. In the scenario that we are unable to acquire sufficient financing or financing on terms satisfactory to our management or Board of Directors, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, financial condition and results of operations could be materially adversely affected.
Business Combination
On November 7, 2022, the Company entered into the Merger Agreement with NorthView, and on July 11, 2025, the Business Combination closed. In accordance with the terms and subject to the conditions of the Merger Agreement, at Closing, each share of issued and outstanding Profusa Common Stock was converted into a number of shares of New Profusa Common Stock, based on the Exchange Ratio that reflects an equity valuation of Profusa of $155,000,000 (as adjusted for the Incentive Equity Value, the Private Placement Value and the Aggregate Company Incentive Amount), divided by an assumed value of New Profusa Common Stock of $10.00 per share. As of immediately following the Closing, there were 32,788,877 shares of Profusa Common Stock outstanding, no shares of Profusa preferred stock outstanding, and 17,404,250 Profusa warrants outstanding.
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The Business Combination was accounted for as a reverse capitalization in accordance with GAAP. Profusa was deemed the accounting predecessor of the combined business, and New Profusa is the successor SEC registrant, meaning that Profusa’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. The Business Combination is expected to have a significant impact on our future capital structure and operating results, de-risking our product development, manufacturing and commercialization.
In June 2023, the Company entered into a short-term loan agreement with a related party under which it may borrow up to $1.6 million, of which $1.0 million was borrowed on June 26, 2023, $0.3 million was borrowed on July 20, 2023, $0.3 million was borrowed on August 15, 2023 (the “Tasly Convertible Debt”). An additional amount of less than $0.02 million was drawn on February 6, 2024. The loans bear interest at a rate of 12% per annum with a default rate of 24% per annum and originally matured on December 31, 2023. The original maturity date was extended to March 31, 2024, subject to the parties’ decision to extend thereafter. This loan was to be repaid (and was repaid) in parallel with the closing of the Business Combination, and accordingly, the Company classified the entire amount outstanding under the Tasly Convertible Debt as current on the Consolidated Balance Sheet.
As a result of the Business Combination, we will be required to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting, legal and administrative resources.
Recent Developments
See above under the heading “Business Combination” regarding the closing of the Business Combination.
The world economy is experiencing stubbornly high inflation, a challenge not faced for decades. Following the global financial crisis, with inflationary pressures muted, interest rates were extremely low for years and investors became accustomed to low volatility. The resulting easing of financial conditions supported economic growth, but it also contributed to a buildup of financial vulnerabilities. With inflation at multi-decade highs, monetary authorities in advanced economies are accelerating the pace of policy normalization. Policymakers have continued to tighten policy against a backdrop of rising inflation and currency pressures, albeit with notable differences across regions. Global financial conditions have tightened notably this year, leading to capital outflows. Amid heightened economic and geopolitical uncertainties, investors have aggressively pulled back from risk-taking and adjusted their investment preferences generally. Key gauges of systemic risk, such as higher dollar funding costs and counterparty credit spreads, have risen. There is a risk of a disorderly tightening of financial conditions that may be amplified by vulnerabilities built over the years.
Principles of Accounting and Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to applicable rules and regulations of the Securities and Exchange Commission (“SEC”) and include all adjustments necessary for the fair presentation of the Company’s financial position as of March 31, 2025 and March 31, 2024 and the results of operations and cash flows for the periods ended March 31, 2025 and December 31 2024. The accompanying unaudited condensed consolidated financial statements include the accounts of Profusa, Inc. and its wholly owned subsidiary, Profusa Asia Pacific Pte. Ltd (“APAC”). All intercompany balances and transactions have been eliminated in consolidation.
Components of Results of Operations
Government Grant Revenue
Government grant revenue consists of amounts we earn under grants from two government agencies: NIH and DARPA. These grants are provided either in the form of expense reimbursement (expense reimbursement grants) or on a fixed fee basis (fixed fee grants). Under the expense reimbursement grants the government agencies reimburse us for a portion of our expenses (allowable expenses) that have been incurred in a given period on the basis of reports that we provide to these agencies. Fixed fee grants are awarded for specific research and development programs undertaken by us. Under these grants we receive milestone payments from the government agencies upon our submission and approval by the government of agreed upon deliverables, consisting primarily of the documented results of the specific research and development programs.
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Research and Development Expenses
Research and development expenses consist primarily of personnel expenses, including salaries, benefits, and stock-based compensation, costs of consulting, supplies, depreciation and amortization and allocations of facility- related expenses. We expect our research and development expenses to increase as we increase staffing to support product development, continue our clinical trials, build prototypes, and continue to explore and develop next generation technologies.
General and Administrative Expenses
General and administrative expenses consist of personnel expenses, including salaries, benefits, and stock-based compensation, related to executive management, finance, legal, human resource functions, and business development, contractor and professional services fees, audit and compliance expenses, insurance costs and general corporate expenses, including allocated facility-related expenses and information technology costs.
Loss on Change in the Fair Value of TaslyConvertible Debt
We elected to apply fair value option to account for the convertible loans issued between June 2023 and February 2024 (the “Tasly Convertible Debt”), under which none of the embedded conversion or redemption features were bifurcated and separately accounted for. Rather, the Tasly Convertible Debt in its entirety was recorded at fair value at inception and is subject to remeasurement to fair value at each balance sheet date, with the change in fair value reflected in the statements of operations and comprehensive loss.
Gain on PPP Loan Forgiveness
On April 16, 2020 and May 25, 2021, we borrowed $1.2 million (the “PPP Loan 1”) and $1.3 million (the “PPP Loan 2”), respectively, as a Paycheck Protection Program loan (together the “PPP Loans”). The Paycheck Protection Program, established as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, provides for loans to qualifying businesses and is administered by the U.S. Small Business Administration (the “SBA”). The annual interest rate of the PPP Loans is 1%. The PPP Loans are eligible for forgiveness, provided the borrower has met the respective forgiveness requirements, has timely submitted an application for forgiveness and the forgiveness has been granted by the SBA. PPP Loan 1 has been approved for loan forgiveness, and management intends to apply for PPP Loan 2 forgiveness in 2025. PPP Loan 2 is currently in default due to non-payment, and is classified as a current liability on the balance sheet.
Interest Expense
Interest expense consists primarily of the interest on our convertible notes, senior notes, Tasly convertible debt, and PPP Loans.
Other Income
Other income consists primarily of income earned from sale of equipment and a short-term sublease of a portion of our facilities.
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Results of Operations
Comparison of the Three Months Ended March 31, 2025 tothe Three Months Ended March 31, 2024
The following table sets forth our unaudited condensed consolidated statements of operations and comprehensive loss for the interim periods indicated (in thousands):
| Three Months Ended<br><br> March 31, | Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | % | |||||||||
| Revenue | — | $ | 25 | ) | (100 | )% | |||||
| Operating expenses: | |||||||||||
| Research and development | $ | 434 | $ | 506 | ) | (14 | )% | ||||
| General and administrative | 990 | 833 | 19 | % | |||||||
| Total operating expenses | 1,424 | 1,339 | 6 | % | |||||||
| Loss from operations | (1,424 | ) | (1,314 | ) | ) | 8 | % | ||||
| Other income (expense) | |||||||||||
| Gain (loss) on change in the fair value of related party Tasly convertible debt | (61 | ) | 4 | ) | (1,625 | )% | |||||
| Interest expense | (1,230 | ) | (1,080 | ) | ) | 14 | % | ||||
| Other income (expense) | (1 | ) | 5 | ) | (120 | )% | |||||
| Total other expense, net | (1,292 | ) | (1,071 | ) | ) | 21 | % | ||||
| Net loss | $ | (2,716 | ) | $ | (2,385 | ) | ) | 14 | % |
All values are in US Dollars.
Research and Development – Research and development expenses decreased by $0.1 million, or 14%, to $0.4 million during the three months ended March 31, 2025 from $0.5 million during the three months ended March 31, 2024. The decrease was driven primarily by the decrease in CRO and personnel costs of $0.1 million as a result of the completion of several clinical studies and a reduction of personnel.
General and Administrative – General and administrative expenses increased by $0.2 million, or 19%, to $1.0 million during the three months ended March 31, 2025 from $0.8 million during the three months ended March 31, 2024. The increase was driven primarily by the increase in accounting costs of $0.3 million as a result of increased audit fees, which was offset by a reduction in legal fees of $0.1 million as a result of legal fees being incurred primarily on the merger transaction which are deferred offering costs and not part of general and administrative expenses.
Gain (Loss) on Change in the FairValue of Related Party Tasly Convertible Debt – Loss on change in the fair value of the Tasly Convertible Loan was $0.1 million during the three months ended March 31, 2025, driven by the remeasurement of the Tasly Convertible Loans. There was no such loss during the three months ended March 31, 2024, as the Tasly Convertible Loan had a revaluation gain during the prior year period of less than $0.1 million.
Interest Expense – Interest expense increased by $0.2 million, or 14%, to $1.2 million during the three months ended March 31, 2025 from $1.1 million during the three months ended March 31, 2024. The increase was primarily due to the $2.0 million in additional senior notes that were issued.
Other Income (Expense) – Other income (expense) decreased by less than $0.1 million during the three months ended March 31, 2025.
Liquidity and Capital Resources
Sources of Liquidity
We incurred net losses and negative operating cash flows from operations since inception, and we expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully commence sustainable commercial operations. To date, we have funded our operations primarily with proceeds from the issuance of convertible preferred stock, junior and senior convertible notes, PPP Loans available to us under the Paycheck Protection Program and promissory notes. From inception through March 31, 2025, we raised gross proceeds of $97.3 million from the issuances of convertible preferred stock and convertible notes and loans, received $2.5 million from PPP Loans and received $0.9 million from issuance of promissory notes. As of March 31, 2025, we had cash and cash equivalents of less than $0.01 million.
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Our junior convertible notes bore interest at 12% per annum and, as of March 31, 2025, their then outstanding principal and accrued but unpaid interest of $19,611,880 was to automatically convert into New Profusa Common Stock at $7.00 per share upon consummation of the Merger transaction. In addition, following consummation of the Merger, all former holders of junior notes have a right to receive additional shares upon achievement by New Profusa of certain share price and sales milestones (the earnout shares).
Further, our junior notes were automatically convertible into the shares of convertible preferred stock issued upon consummation of a Qualified Financing (an equity financing with aggregate proceeds to the Company of not less than $20.0 million) at a conversion price equal to the lesser of (i) the per share price obtained by dividing $150.0 million by the Company’s fully diluted capitalization, or (ii) the per share price paid by investors in the Qualified Financing, subject to 30% discount. Upon occurrence of a change of control, the junior notes were required to be repaid in the amount equal to 200% of the junior notes’ outstanding principal balance plus accrued but unpaid interest.
We commenced issuance of our senior convertible notes in April 2021 and continued issuing them through June 9, 2025. Our senior convertible notes bore interest at 12% per annum and, as of March 31, 2025, their then outstanding principal and accrued but unpaid interest of $26,617,117 was to automatically convert into New Profusa Common Stock between $0.50 and $4.00 per share upon consummation of the Merger transaction based on the fixed conversion price defined in the agreement. In addition, all former senior noteholders have a right to receive additional shares upon achievement by New Profusa of certain share price and sales milestones (the earnout shares).
On August 8, 2023, a new wholly owned subsidiary, APAC, was created and incorporated by the Company under the laws of Singapore. Upon creation, the new entity was capitalized by the Company by payment of $1,000 for 1,000 Ordinary Shares. As a result, at the time of incorporation, the entity became a wholly owned subsidiary of the Company. The entity was created with the expectation of jointly conducting the business of developing, manufacturing and commercializing the Lumee Glucose and the Lumee Oxygen products, currently under development by the Company, together with a third party. No business or activities have been conducted by the entity from the date of formation through and until the closing date of the proposed License Agreement and Shareholders Agreement between the Company and Best Life Technology Ltd, an entity wholly owned and controlled by the Tasly Holding Group (“Tasly”). In connection with and on or around the same date as the closing of the Business Combination, the Company expects to sign and execute a License Agreement and Shareholders Agreement (the “APAC Joint Venture”) setting forth the relative and other terms under which the development and business activities of the entity will be conducted.
The Company is in the process of negotiating the formation of the joint venture (“APAC Joint Venture”), which includes the related party from which the amounts under the Tasly Convertible Debt was borrowed. The proceeds of the loan are intended to continue the development and commercialization of the Company’s technology in certain countries of the Asia Pacific region.
In the event we fail to complete the Merger, and either fail to complete the formation of the APAC Joint Venture or fail to repay the amounts under the Tasly Convertible Debt when they become due, the lender will have an option to convert the entire outstanding balance and accrued but unpaid interest (in part of in full) into either (i) senior unsecured promissory notes on substantially the same terms as the outstanding Senior Notes as of December 31, 2024, or (ii) our common stock at a conversion price of $2.33 per share.
Notwithstanding the conversion provisions above, any repayment obligations (in part or in full) of the outstanding principal balance and accrued but unpaid interest under the Tasly Convertible Debt may, at the lender’s option, be made through conversion of part or all amounts payable into (i) senior unsecured promissory notes on substantially the same terms as the outstanding Senior Notes as of December 31, 2024 (which terms include conversion into common stock of New Profusa in the event the Merger is consummated), or (ii) our common stock at a conversion price of $2.33 per share.
Our outstanding PPP Loan of $1.4 million bears interest at 1% per annum. The repayment of the PPP Loan is expected to be made in equal monthly payments of principal and interest from October 25, 2022 until May 25, 2026; however, we are currently in the process of applying for forgiveness for this loan.
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Our promissory notes accrued interest at 5% and 12% per annum, most of which did not have a set maturity date. The Company was in default, and agreed to repay all promissory notes in parallel with the closing of the Business Combination, and accordingly, the Company classified the entire outstanding amount as a current liability on the condensed consolidated balance sheet.
Additional funds may be necessary to maintain current operations and will be required for successful product commercialization efforts. Management plans to obtain additional funds as a result of the Business Combination and PIPE investment, issuance of additional equity or refinancing of current debt, which is intended to mitigate the relevant conditions or events that raise substantial doubt about our ability to continue as a going concern within one year from the date the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2025 are issued. As the ability to refinance our current debt or raise additional equity financing is outside of management's control, we cannot conclude that management's plans will be effectively implemented within one year from the date the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2025 are issued and as such, raises substantial doubt about our ability to continue as a going concern.
Since March 31, 2025, $0.7 million of additional working capital was raised to fund Company operations through the transaction closing date, of which $0.4 million were converted in 2025 upon the closing of the Company’s Qualified Financing transaction and $0.3 million were repaid in cash.
Long-Term Liquidity Requirements
We expect our cash and cash equivalents on hand, and cash that we expect to receive from the Business Combination and PIPE Investment, together with the cash we expect to generate from future operations will provide sufficient funding to support initial commercial operations. Until we generate sufficient operating cash flow to cover our operating expenses, working capital needs and planned capital expenditures, or if circumstances evolve differently than anticipated, we expect to utilize a combination of equity and debt financing to fund any future capital needs. If we raise funds by issuing equity securities, dilution to stockholders may result. Any equity securities issued may also provide for rights, preferences, or privileges senior to those of holders of common stock. If we raise funds by issuing debt securities, these debt securities would have rights, preferences, and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations. The capital markets are currently experiencing, and may continue to experience in the future, periods of upheaval that could impact the availability and cost of equity and debt financing.
Our principal uses of cash in recent periods have been funding our research and development activities and other personnel costs. Near-term capital requirements through March 31, 2025 leading to and supporting initial commercialization are estimated to total approximately $6.0 million and include further research and development to enable us to obtain the required regulatory approvals, manufacturing, commercialization and wide-scale marketing for our Lumee Oxygen and Lumee Glucose devices. Our future capital requirements will depend on many factors, including our revenue growth rate, the timing and the amount of cash received from our customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts. In the future, we may enter into arrangements to acquire or invest in complementary businesses, products, and technologies. We may be required to seek additional equity or debt financing. In the event that we require additional financing we may not be able to raise such financing on acceptable terms or at all. If we are unable to raise additional capital or generate cash flows necessary to continue our research and development and invest in continued innovation, we may not be able to compete successfully, which would harm our business, results of operations, and financial condition. If adequate funds are not available, we may need to reconsider our production investments, the pace of our production ramp-up, expansion plans or limit our research and development activities, which could have a material adverse impact on our business prospects and results of operations.
Cash Flow Summary
The following table summarizes our cash flows for the periods presented (in thousands):
| Three Months Ended<br><br> March 31, | ||||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||
| Net cash provided by (used in): | ||||||
| Operating activities | $ | (537 | ) | $ | (742 | ) |
| Investing activities | $ | — | $ | — | ||
| Financing activities | $ | 365 | $ | 610 |
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Operating Activities
Cash used in operating activities for the three months ended March 31, 2025 of $0.5 million was primarily driven by our net loss of $2.7 million, adjusted for non-cash charges of $1.3 million and net cash inflows of $0.9 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of non-cash interest expense of $1.2 million, and the change in the fair value of related party convertible loan of $0.1 million. The main driver of the cash inflows from the changes in operating assets and liabilities was primarily related to an increase in accounts payable of $0.8 million and in accrued liabilities of $0.1 million and a decrease in prepaid expenses and other current assets of less than $0.1 million.
Cash used in operating activities for the three months ended March 31, 2024 of $0.7 million was primarily driven by our net loss of $2.2 million, adjusted for non-cash charges of $1.1 million and net cash inflows of $0.4 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of non-cash interest expense of $1.1 million, partially offset by change in the fair value of related party convertible loan of less than $0.1 million. The main driver of the cash inflows from the changes in operating assets and liabilities was primarily related to an increase in accounts payable of $0.1 million and in accrued liabilities of $0.3 million and a decrease in prepaid expenses and other current assets of $0.1 million.
Financing Activities
Cash provided by financing activities was $0.4 million for the three months ended March 31, 2025, which consisted primarily of net proceeds from the issuance of senior notes of $0.8 million, offset by payment of deferred offering costs of $0.4 million.
Cash provided by financing activities was $0.6 million for the three months ended March 31, 2024, which consisted primarily of net proceeds from the issuance of senior notes of $0.7 million, an additional issuance of our Tasly Convertible Loan of less than $0.1 million, offset by payment of deferred offering costs of $0.1 million.
Contractual Obligations
The following table summarizes our contractual obligations as of March 31, 2025, and the years in which these obligations are due (in thousands):
| Total | 2025 | Thereafter | ||||
|---|---|---|---|---|---|---|
| Convertible notes | $ | 18,965 | $ | 18,965 | $ | — |
| Tasly convertible loan | 2,390 | 2,390 | — | |||
| Senior notes | 26,589 | 26,589 | — | |||
| Promissory notes | 925 | 925 | — | |||
| PPP loan | 1,379 | 1,379 | — | |||
| Total contractual obligations | $ | 50,248 | $ | 50,248 | $ | — |
Critical Accounting Estimates
The preparation of financial statements in conformity with GAAP requires Profusa’s management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Profusa’s critical accounting are described in Note 2 to Profusa’s consolidated financial statements as of and for the years ended December 31, 2024 and 2023 included in the Proxy Statement beginning at page F-28.
Recent Accounting Pronouncements
A discussion of recent accounting pronouncements applicable to Profusa is described in Note 2, Summary of Significant Accounting Policies, in the unaudited condensed consolidated unaudited financial statements of Profusa as of March 31, 2025 and for the three months ended March 31, 2025 and 2024, filed as Exhibit 99.2 to this Report.
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Security Ownership of Certain Beneficial Ownersand Management
The following table sets forth information known to the Company regarding beneficial ownership of shares of the Company’s Common Stock immediately following the Closing by:
| ● | Each person known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding Common Stock; |
|---|---|
| ● | Each of the Company’s named executive officers and directors; and |
| --- | --- |
| ● | All executive officers and directors as a group. |
| --- | --- |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options, warrants and certain other derivative securities that are currently exercisable or will become exercisable within 60 days.
The percentage of beneficial ownership is based on 32,788,877 shares of Common Stock issued and outstanding immediately following the Closing.
In accordance with SEC rules, shares of our Common Stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the Closing are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person.
Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is 626 Bancroft Way, Suite A, Berkeley, CA 94710. Unless otherwise indicated and subject to community property laws and similar laws, the Company believes that all parties named in the table below have sole voting and investment power with respect to all shares of Common Stock beneficially owned by them.
Beneficial Ownership Table
| Post-Business Combination | |||||
|---|---|---|---|---|---|
| Name of Beneficial Owner | Number | Percentage | |||
| Executive Officers and Directors: | |||||
| Ben Hwang, Ph.D.^(1)^ | 844,228 | 2.6 | % | ||
| Fred Knechtel^(2)^ | 8,985,042 | 24.0 | % | ||
| Rajesh Asarpota | - | - | |||
| Lauren Chung | - | - | |||
| Peter O’Rourke | - | - | |||
| Jack Stover^(3)^ | 8,658,652 | 23.1 | % | ||
| All directors and executive officers as a<br> group (six individuals)^(1)(2)(3)^ | 9,829,270 | 26.2 | % | ||
| Five Percent or More Holders: | |||||
| NorthView Sponsor I, LLC^(4)^ | 8,658,652 | 23.1 | % | ||
| BC hSensor Limited ^(5)^ | 1,797,938 | 5.5 | % | ||
| Ascent Capital Partners^(6)^ | 4,008,510 | 11.9 | % | ||
| Jesse Santana | 2,140,055 | 6.5 | % | ||
| (1) | Includes 366,886 shares held by Samantha Chiu, the spouse of Ben Hwang, Ph.D. | ||||
| --- | --- | ||||
| (2) | Consists of (i) 288,407 shares and 37,983 shares issuable upon exercise of warrants held directly by Mr. Knechtel and (ii) shares and<br>shares issuable upon exercise of warrants held by NorthView Sponsor I, LLC, of which Mr. Knechtel is a manager. Mr. Knechtel disclaims<br>beneficial ownership of the reported shares other than to the extent of his ultimate pecuniary interest therein. | ||||
| --- | --- | ||||
| (3) | Consists of shares and shares issuable upon exercise of warrants held by NorthView Sponsor I, LLC, of which Mr. Stover is a manager. Mr.<br>Stover disclaims beneficial ownership of the reported shares other than to the extent of his ultimate pecuniary interest therein. | ||||
| --- | --- | ||||
| (4) | Consists of 4,033,530 shares and 4,625,122 shares issuable upon exercise of warrants. The business address of NorthView Sponsor, LLC is 207 West 25^th^ St, 9^th^ Floor, New York, NY 10001. | ||||
| --- | --- | ||||
| (5) | The business address of BC hSensor Limited is P.O. Box 4301, Road Town,<br>Tortola, British Virgin Islands. | ||||
| --- | --- | ||||
| (6) | Comprised of 3,008,510 shares<br>currently outstanding and issued on the Closing Date and 1,000,000 shares issuable upon conversion of the Initial Note, with such conversion shares subject to the beneficial ownership limitation of between 4.99% and 9.99%. The business<br>address of Ascent Capital Partners is 19505 Biscayne Blvd., Suite 2350, Aventura, FL 33180. |
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Directors and Executive Officers
Information with respect to the Company’s directors and executive officers immediately after the Closing, including biographical information regarding these individuals, is set forth in the Proxy Statement in the section entitled “Management of New Profusa After the Business Combination” beginning on page 292, which information is incorporated herein by reference.
At the special meeting, NorthView’s shareholders elected the following individuals to serve as directors of the Company, effective upon consummation of the Business Combination:
| ● | Lauren Chung was designated as a Class I director whose term expires at the first annual meeting of stockholders<br>to be held after the completion of the Business Combination, or until such director’s successor has been duly elected and qualified,<br>or until such director’s earlier death, resignation, retirement or removal; |
|---|---|
| ● | Jack Stover and Peter O’Rourke were designated as Class II directors whose terms expire at the second<br>annual meeting of stockholders to be held after the completion of the Business Combination, or until each such director’s successor<br>has been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal; and |
| --- | --- |
| ● | Ben Hwang and Rajesh Asarpota were designated as Class III directors whose terms expire at the third annual<br>meeting of stockholders to be held after the completion of the Business Combination, or until each such director’s successor has<br>been duly elected and qualified, or until each such director’s earlier death, resignation, retirement or removal. |
| --- | --- |
Director Independence
Nasdaq listing rules require that a majority of the board of directors of a company listed on Nasdaq be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. The Company’s Board has determined that each of Peter O’Rourke, Rajesh Asorpota, and Lauren Chung is an independent director under the Nasdaq listing rules and Rule 10A-3 of the Exchange Act. In making these determinations, the Board considered the current and prior relationships that each non-employee director had with Profusa and has with the Company and all other facts and circumstances the Board deemed relevant in determining independence, including the beneficial ownership of our Common Stock by each non-employee director.
Committees of the Board of Directors
The standing committees of Company’s Board consists of an Audit Committee, a Compensation Committee, and a Nominating Committee. The composition of each committee following the Business Combination is set forth below.
Audit Committee
The Company’s Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act and consists of Lauren Chung, Rajesh Asarpota and Peter O’Rourke, each of whom is an independent director and is “financially literate” as defined under the Nasdaq listing standards. Lauren Chung serves as chair of the Audit Committee. The Company’s Board has determined that each member of the Audit Committee qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.
Compensation Committee
The Company’s Compensation Committee consists of Rajesh Asarpota, Lauren Chung, and Peter O’Rourke, each of whom is an independent director under Nasdaq’s listing standards, and Rajesh Asarpota serves as chair of the Compensation Committee.
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Nominating Committee
The Company’s Nominating Committee consists of Peter O’Rourke, Jack Stover and Lauren Chung, each of whom is an independent director under Nasdaq’s listing standards, and Peter O’Rourke serves as the chair of the Nominating Committee. The Nominating Committee is responsible for overseeing the selection of persons to be nominated to serve on the Board. The Nominating Committee considers persons identified by its members, management, shareholders, investment bankers and others.
Executive Officers
The following persons were appointed to serve as the Company’s executive officers immediately following the Closing:
| Name | Age | Position |
|---|---|---|
| Ben C. Hwang, Ph.D. | 57 | Chairman of the Board; Chief Executive Officer |
| Fred Knechtel | 64 | Chief Financial Officer |
In connection with the Closing, each of the Company’s executive officers prior to the Closing other than Mr. Knechtel resigned from his or her respective position as an executive officer of the Company, in each case effective as of the Closing.
Executive Compensation
The compensation of the Company’s named executive officers who served before the consummation of the Business Combination is described in the Proxy Statement in the section entitled “Management of Profusa - Executive and Director Compensation of Profusa” beginning on page 262, and that information is incorporated herein by reference.
Director Compensation
A description of the compensation of the Company’s directors before the consummation of the Business Combination is set forth in the Proxy Statement in the sections entitled “Management of Profusa - Executive and Director Compensation of Profusa” beginning on page 262, and that information is incorporated herein by reference.
We anticipate that following the Closing, the New Profusa Board will approve a non-employee director compensation program providing for cash and equity compensation of non-employee directors.
Certain Relationships and Related Transactions
Information about certain relationships and related party transactions is set forth in the section of the Proxy Statement entitled “Certain Relationships and Related Person Transactions” on page 277, which information is incorporated herein by reference.
Legal Proceedings
None.
Market Price of and Dividends on the Registrant’sCommon Equity and Related Stockholder Matters
Information regarding holders of the Company’s securities is set forth under “Description of the Company’s Securities” below.
Following the Closing, on July 14, 2025, the New Profusa Common Stock began trading on Nasdaq under the symbol “PFSA.” The public units of NorthView automatically separated into the component securities upon consummation of the Business Combination and, as a result, no longer trade as a separate security. The public warrants continue to trade on the OTC Market under the symbol “PFSAW.”
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The Company has not paid any cash dividends on its shares of its Common Stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the Board.
Recent Sales of Unregistered Securities
Reference is made to the disclosure set forth below under Item 3.02 of this Report concerning the issuance and sale by the Company of certain unregistered securities, which is incorporated herein by reference.
Description of the Company’s Securities
The Company has authorized 305,000,000 shares of capital stock, consisting of (a) 300,000,000 shares of Common Stock, par value $0.0001 per share, and (b) 5,000,000 shares of preferred stock, par value $0.0001 per share. The outstanding shares of the Company’s Common Stock are fully paid and non-assessable. As of immediately after the Closing, there were 32,788,877 shares of New Profusa Common Stock outstanding, no shares of preferred stock outstanding, and 17,404,250 warrants outstanding.
As of July 16, 2025, there were 209 holders of record of New Profusa Common Stock and 5 holders of record of New Profusa warrants.
Financial Statements, Supplementary Dataand Exhibits
The information set forth in Item 9.01 of this Report is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information in Item 1.01, under the heading “PIPE Transaction – Initial Note” is incorporated by reference in this Item 3.02 as if set forth herein.
Item 3.03 Material Modification to Rights ofSecurity Holders.
On the Closing Date, the Company filed the Amended and Restated Certificate of Incorporation of the Company (the “A&R Certificate”) with the Secretary of State of the State of Delaware. The material terms of the A&R Certificate and the general effect upon the rights of holders of the Company’s capital stock are described in the sections of the Proxy Statement entitled “Proposal No. 2 - Charter Proposal,” beginning on page 199, which information is incorporated herein by reference. A copy of the A&R Certificate is filed as Exhibit 3.1 to this Report and is incorporated herein by reference.
In addition, upon the Closing, pursuant to the terms of the Merger Agreement, the Company amended and restated its bylaws. A copy of the Company’s Amended and Restated Bylaws is filed as Exhibit 3.2 to this Report and is incorporated herein by reference.
Item 5.01 Changes in Control of Registrant.
The information set forth in the “Introductory Note” and in Item 2.01 of this Report is incorporated herein by reference.
Item 5.02 Departure of Directors or CertainOfficers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Directors and Executive Officers
Information with respect to the Company’s directors and executive officers before and after the consummation of the Business Combination is set forth in (i) the Proxy Statement in the sections entitled “Information about NorthView – Directors and Executive Officers” beginning on page 220, and (ii) “Management of New Profusa After the Business Combination” beginning on page 292, both of which are incorporated herein by reference.
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The information regarding the Company’s officers and directors set forth under the headings “Directors and Executive Officers” and “Executive Compensation” in Item 2.01 of this Report is incorporated herein by reference.
Director Compensation
The information set forth under the heading “Director Compensation” in Item 2.01 of this Report is incorporated herein by reference.
Item 5.06 Change in Shell Company Status.
As a result of the Business Combination, which fulfilled the definition of an “initial business combination” as required by NorthView’s Amended and Restated Certificate of Incorporation, NorthView ceased to be a shell company upon the Closing. The material terms of the Business Combination are described in the section of the Proxy Statement entitled “Proposal No. 1 - The Business Combination Proposal” beginning on page 108, which information is incorporated herein by reference.
Item 8.01 Other Events
On July 11, 2025, the parties issued a joint press release announcing the completion of the Business Combination. A copy of the press release is filed as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired
The audited financial statements of Profusa as of December 31, 2024 and 2023 and for the years then ended are included in the Proxy Statement beginning at page F-28 and are incorporated herein by reference.
The unaudited financial statements of Profusa as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 are filed as Exhibit 99.2 to this Report and are incorporated herein by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined balance sheet and statements of operations of the Company as of March 31, 2025 and for the three month period ended March 31, 2025 is filed as Exhibit 99.3 to this Report and is incorporated by reference herein.
(c) Exhibits
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EXHIBIT INDEX
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SIGNATURE
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.
| Dated: July 18, 2025 | Profusa, Inc. | |
|---|---|---|
| By: | /s/ Ben Hwang | |
| Name: | Ben Hwang | |
| Title: | Chief Executive Officer |
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Exhibit 10.5
**NORTHVIEW ACQUISITION CORP.**207 West 25th St., 9th Floor
New York, 10001
July 11, 2025
| NV Profusa Merger Sub, Inc. | |
|---|---|
| Profusa, Inc. | 207 West 25th St, 9th Floor |
| 345 Allerton Ave. | New York, NY 10001 |
| South San Francisco, CA 94080<br> Attention: Ben Hwang<br> Email: ben.hwang@profusa.com<br><br> <br>NorthView Acquisition Corp.<br> 207 West 25th St, 9th Floor <br> New York, NY 10001 <br> Attention: Jack Stover<br> Email: jstover@comcast.net | Attention: Jack Stover<br> Email: jstover@comcast.net |
| Re: | Closing Agreement re Merger Agreement and Plan of Reorganization |
| --- | --- |
Ladies and Gentlemen:
Reference is hereby made to that certain Merger Agreement and Plan of Reorganization, dated as of November 7, 2022 (as amended, the “Merger Agreement”), by and among (i) NorthView Acquisition Corp., a Delaware corporation (“Parent”), (ii) NV Profusa Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Parent (“Merger Sub”), and (iii) Profusa, Inc., a California corporation (the “Company”). Capitalized terms used but not otherwise defined in this letter agreement (this “Closing Agreement”) shall have the meanings ascribed to such terms in the Merger Agreement.
In consideration of the mutual promises and agreements contained in this Closing Agreement and the Merger Agreement, and for other good and valuable consideration, the sufficiency and adequacy of which is hereby acknowledged, the undersigned hereby agree as follows:
PrivatePlacement Basis. The parties hereby acknowledge that pursuant to Section 1.01 of the Merger Agreement, the term “Private Placement Basis” is defined to mean $2.22. The parties hereby acknowledge that certain securities issued in the Company Private Placement Financing had a cost basis of $0.50, whereas other securities had a cost basis of $2.22. The Company and the Parent hereby agree to amend the definition of “Private Placement Basis” to mean “$2.22 or $0.50, as applicable, based on the cost basis of the security issued in the applicable Company Private Placement Financing.
Lock-UpAgreements. The parties hereby acknowledge that pursuant to Section 8.02(e) of the Merger Agreement, as a condition to the Closing, certain specified stockholders of the Company are required to deliver duly executed copies of the Lock-Up Agreements to Parent. As of the date hereof, the stockholders listed on Exhibit A hereto (the “Exempted Stockholders”) have not delivered duly executed copies of the Lock-Up Agreements to the Parent. The Parent and the Company hereby agree to waive the requirement to deliver the Lock-Up Agreements at Closing for the Exempted Stockholders and to temporarily extend the time for such Exempted Stockholders to provide the Lock-Up Agreements. The Company and Parent agree to use commercially reasonable efforts to obtain the aforementioned Lock-Up Agreements from the Exempted Stockholders promptly following the Closing.
Miscellaneous. Except as expressly provided in this Closing Agreement, all of the terms and provisions in the Merger Agreement and the Ancillary Documents are and shall remain in full force and effect, on the terms and subject to the conditions set forth therein. This Closing Agreement does not constitute, directly or by implication, an amendment, modification or waiver of any provision of the Merger Agreement or any Ancillary Document, or any other right, remedy, power or privilege of any party to the Merger Agreement, except as expressly set forth herein. Any reference to the Merger Agreement in the Merger Agreement or any other agreement, document, instrument or certificate entered into or issued in connection therewith shall hereinafter mean the Merger Agreement, as amended or modified, or the provisions thereof waived, by this Closing Agreement (or as the Merger Agreement may be further amended or modified after the date hereof in accordance with the terms thereof). The Merger Agreement, as amended and modified by this Closing Agreement, and the documents or instruments attached hereto or referenced herein, constitutes the entire agreement between the parties with respect to the subject matter of the Merger Agreement, as amended by this Closing Agreement, and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to its subject matter. The provisions of Sections 10.01 through 10.11 (excluding the first sentence of Section 10.04) of the Merger Agreement are hereby incorporated herein by reference and apply to this Closing Agreement as if all references to the “Agreement” contained therein were instead references to this Closing Agreement.
[Remainder of Page Intentionally Left Blank;Signature Page Follows]
To indicate your acceptance to the provisions of this Closing Agreement, please sign in the space provided below.
Sincerely,
| Parent: | ||
|---|---|---|
| NORTHVIEW ACQUISITION CORP. | ||
| By: | /s/ Fred Knechtel | |
| Name: | Fred Knechtel | |
| Title: | Chief Financial Officer | |
| Merger Sub: | ||
| NV Profusa Merger Sub, Inc. | ||
| By: | /s/ Fred Knechtel | |
| Name: | Fred Knechtel | |
| Title: | Secretary |
Acknowledged and Agreed effective as of thedate first set forth above:
| The Company: | |
|---|---|
| PROFUSA, INC. | |
| By: | /s/ Ben Hwang |
| Name: | Ben Hwang |
| Title: | Chief Executive Officer |
[Signature Page to Closing Agreement]
Exhibit A
Exempted Shareholders
Atinum Fast Growing Companies Fund*
BC hSensor Limited*
Blue Sky Capital PSP*
Irwin Lieber*
Yetta Tropper*
| * | The noted parties are party to the Company Support Agreement,<br>dated November 7, 2022, pursuant to which their shares are subject to lock-up provisions for a period of 12 months following the closing<br>date. |
|---|
[Signature Page to Closing Agreement]
Exhibit 10.6
THIS SECURITY HAS NOT BEEN REGISTERED UNDERTHE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES REGULATIONS AND, ACCORDINGLY,MAY NOT BE SOLD, OFFERED FOR SALE OR PLEDGED AS SECURITY IN THE ABSENCE OF SUCH REGISTRATION WITHOUT RELIANCE ON AN EXEMPTION UNDER THESECURITIES ACT AND COMPLIANCE WITH APPLICABLE STATE SECURITIES REGULATIONS.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUEDISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), BEN C. HWANG, A REPRESENTATIVE OF THE COMPANY WILL,BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBEDIN TREASURY REGULATION §1.1275-3(b)(1)(i). BEN C. HWANG MAY BE REACHED AT (415) 655-9861, BEN.HWANG@PROFUSA.COM.
SENIORSECURED CONVERTIBLE PROMISSORY NOTE
DUE****JANUARY 11, 2027
| Original Issue Date: July 11, 2025 | Principal Amount: $10,000,000 |
|---|---|
| Purchase Price: $9,000,000 |
This Senior Secured Convertible PromissoryNote is one of a series of duly authorized and validly issued Senior Secured Convertible Promissory Notes of Profusa, Inc. (formerly, NorthView Acquisition Corporation), a Delaware corporation (the “Company”), designated as its Senior Secured Convertible Promissory Note due January 11, 2027 (this “Note” and, collectively with the other Notes of such series, the “Notes”), issued and sold by the Company pursuant to the Securities Purchase Agreement, dated as of February 11, 2025, by and among the Company and Ascent Partners Fund LLC (together with its successors and registered assigns, the “Holder”), a Delaware limited liability company (as amended, restated or supplemented from time to time, the “Purchase Agreement”). Capitalized terms used but not otherwise defined herein are used as defined in the Purchase Agreement, with such amendments as may be acceptable to the Holder in its sole discretion). This Note is entered into pursuant to the Purchase Agreement and is subject to the terms and conditions thereof.
FOR VALUE RECEIVED, the Company promises to pay to the order of the Holder the principal amount first written above on January 11, 2027 (the “Maturity Date”) in full in cash or on such earlier date as this Note is required or permitted to be repaid as provided hereunder, in each case together with all accrued but unpaid interest thereon and all other Obligations (as defined below), and otherwise to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note and such other Obligations in accordance with the provisions hereof. Amounts repaid will not be advanced again.
This Note is subject to the following additional provisions:
Section1. Definitions
For the purposes hereof, in addition to terms defined elsewhere in this Note or not defined in this Note but defined in the Purchase Agreement, the following terms shall have the following meanings:
“Alternate Consideration” has the meaning specified in Section 5(e).
“Amortization Payment” has the meaning specified in Section 2(a).
“Amortization PaymentDate” has the meaning specified in Section 2(a).
“Amortization Price” means, as of any date, the lower of (i) the Conversion Price on such date and (ii) 95% of the lowest VWAP in the ten (10) Trading Days prior to such date.
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“Attribution Parties” has the meaning specified in Section 4(d).
“Base Share Price” has the meaning specified in Section 5(c).
“Beneficial OwnershipLimitation” has the meaning specified in Section 4(d).
“Buy-In” has the meaning specified in Section 4(c)(vii).
“Capital Lease” means, as applied to any Person, any lease of, or other arrangement conveying the right to use, any property (whether real, personal or mixed) by that Person as lessee that, in conformity with U.S. generally accepted accounting principles (GAAP) consistently applied, is or should be accounted for as a capital lease on the balance sheet of that Person.
“Capital Stock” means any share, participation or other equivalent (however designated) of the capital stock of a corporation, any equivalent ownership interest in any other Person, including partnership interests and membership interests, and any warrant, right or option to purchase or other arrangement (including through a conversion or exchange of any other property) to acquire or subscribe for any item otherwise satisfying the definition of “Capital Stock,” whether or not presently convertible, exchangeable or exercisable.
“Cash Payment Fee” has the meaning specified in Section 2(g).
“Change of Control” means the occurrence of any of the following: (a) any Person or group of Persons (within the meaning of the Exchange Act) shall have acquired legal or beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Exchange Act) of (i) 50% prior to any initial public offering of the Common Stock and (ii) 20% thereafter or more of the issued and outstanding Voting Stock of any Company Party (whether on an as converted, fully diluted basis or without taking into account any potential conversion or dilution of Stock Equivalents), other than by acquiring such Common Stock directly in an offering made to the general public, (b) during any period of twelve consecutive calendar months, individuals who, at the beginning of such period, constituted the board of directors of the Company (together with any new directors whose election by the board of directors of the Company or whose nomination for election by the stockholders of the Company was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose elections or nomination for election was previously so approved) cease for any reason other than death or disability to constitute a majority of the directors then in office or (c) the Company shall cease to own and control all of the economic and voting rights associated with all of the outstanding Stock of the other Company Parties.
“Closing Bid Price” and “Closing Sale Price” means, for any Security as of any date:
(i) the last closing bid price and last closing trade price, respectively, for such Security on the Principal Trading Market for such Security, as reported by Bloomberg; or
(ii) if such Principal Trading Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be), then the last bid price or last trade price, respectively, of such Security prior to 4:00:00 p.m., New York time, as reported by Bloomberg; or
(iii) if such Security no longer trades on its Principal Trading Market, then the last closing bid price or last trade price, respectively, of such Security on the principal Trading Market where such Security is listed or traded as reported by Bloomberg; or
(iv) if such Security no longer trades on a Trading Market, the last closing bid price or last trade price, respectively, of such Security in the over-the-counter market on the electronic bulletin board for such Security as reported by Bloomberg; or
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(v) if no closing bid price or last trade price, respectively, is reported for such Security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such Security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly, Pink Sheets LLC); or
(vi) if the “Closing Bid Price” or the “Closing Sale Price” cannot be calculated for a Security on a particular date based on the foregoing, the “Closing Bid Price” and the “Closing Sale Price” of such Security on such date shall be the fair market value as mutually determined by the Company and the Holder; or
(vii) if the Company and the Holder are unable to agree upon the fair market value of such Security, then such dispute shall be resolved, and such fair market value (and therefore the “Closing Bid Price” and “Closing Sale Price”) shall be determined, in accordance with the procedures set forth in Section 8(d).
All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions during such period.
“CommonStock” means the common stock of the Company, par value $0.0001 per share, and any other Capital Stock into which such shares of common stock may hereafter be changed or any share capital resulting from a reclassification of such common stock.
“Conversion” has the meaning specified in Section 4.
“Conversion Date” has the meaning specified in Section 4(a).
“Conversion Price” has the meaning specified in Section 4(b).
“Conversion Schedule” means the Conversion Schedule in the form of Schedule 1.
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof, including shares of Common Stock issued upon conversion, redemption, or amortization of this Note, and shares of Common Stock issued and issuable in lieu of the cash payment of interest on this Note in accordance with the terms of this Note.
“Customary PermittedLiens” means all of the following, for any Person:
(i) Liens securing the payment of taxes, assessments or other charges or levies imposed by any Governmental Authority which are either not yet overdue or the validity of which are being contested in good faith by appropriate proceedings diligently pursued and with respect to which adequate reserves have been set aside on such Person’s books;
(ii) non-consensual statutory Liens (other than Liens securing the payment of taxes) arising in the ordinary course of business to the extent (A) such Liens secure Indebtedness that is not overdue for a period of more than 30 days or (B) such Liens secure Indebtedness relating to claims or liabilities that are fully insured and being defended at the sole cost and expense and at the sole risk of the insurer or being contested in good faith by appropriate proceedings diligently pursued, in each case prior to the commencement of foreclosure or other similar proceedings and with respect to which adequate reserves have been set aside on such Person’s books;
(iii) zoning, building and land use restrictions, easements, servitudes, encumbrances, licenses, covenants and other restrictions affecting the use of real property or minor defects or irregularities in title thereto that do not interfere in any material respect with the use of such real property or the ordinary conduct of the business of the Company and its Subsidiaries as presently conducted thereon or materially impair the value of the real property that may be subject thereto;
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(iv) pledges and deposits of cash in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security benefits consistent with current practices as in effect on the date hereof;
(v) undetermined or inchoate Liens and charges arising or potentially arising under statutory provisions which have not at the time been filed or registered in accordance with applicable Regulation or of which written notice has not been duly given in accordance with applicable Regulation or which although filed or registered, relate to obligations not due or delinquent, including without limitation statutory Liens incurred, or pledges or deposits made, under worker’s compensation, employment insurance and other social security legislation;
(vi) Liens or deposits to secure the performance of bids, tenders, expropriation proceedings, trade contracts, leases, statutory obligations, surety and performance bonds and other obligations of a like nature (other than for borrowed money), and deposits to secure equipment contracts, in each case incurred in the ordinary course of business;
(vii) appeal bonds;
(viii) landlord Liens for rent not yet due and payable;
(ix) Liens arising from operating leases and the precautionary UCC financing statement filings in respect thereof;
(x) judgments and other similar Liens arising in connection with court proceedings that do not constitute a Default or Event of Default; provided, that, (A) such Liens are being contested in good faith and by appropriate proceedings diligently pursued, (B) adequate reserves or other appropriate provision, if any, as are required by U.S. generally accepted accounting principles, consistently applied, have been made therefor and (C) a stay of enforcement of any such Liens is in effect; and
(xi) customary rights of set-off or combination of accounts in favor of a financial institution with respect to deposits maintained by such Person.
“Default” means any event which, with the passing of time or the giving of notice or both, would become an Event of Default.
“Default Rate” means twenty-four percent (24%) per annum.
“Derivative” means (a) any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, (b) any foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap or other similar agreement or arrangement, (c) any futures or forward contract, spot transaction, commodity swap, purchase or option agreement, other commodity price hedging arrangement, cap, floor or collar transaction, any credit default or total return swap, and (d) any other derivative instrument, any other similar speculative transaction and any other similar agreement or arrangement designed to alter the risks of any Person arising from fluctuations in any underlying variable, including interest rates, currency values, insurance, catastrophic losses, climatic or geological conditions or the price or value of any other derivative instrument. For the purposes of this definition, “derivative instrument” means “any derivative instrument” as defined in Statement of Financial Accounting Standards No. 133 (Accounting for Derivative Instruments and Hedging Activities) of the United States Financial Accounting Standards Board, and any defined with a term similar effect in any successor statement or any supplement to, or replacement of, any such statement.
“Dilutive Issuance” has the meaning specified in Section 5(c).
“Dilutive IssuanceNotice” has the meaning specified in Section 5(c).
“Dispute SubmissionDeadline” has the meaning specified in Section 8(d)(ii).
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“DTC” means the Depository Trust Company.
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer Program.
“DWAC Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements, including transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion Shares are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.
“Equity Payment Conditions” means, as of any date, (a) no Default or Event of Default is continuing, (b) the Common Stock is trading on its Principal Trading Market and all of the Conversion Shares are listed or quoted for trading in such Principal Trading Market and comply with all of the conditions for such listing or quotations (and the Company reasonably believes that trading of the Common Stock on such Principal Trading Market will continue uninterrupted, and shall continue to comply with the conditions for listing or quotation for trading in such Principal Trading Market, for the 180 days following such date), (c) the Company has timely filed (or obtained extensions in respect thereof and filed within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act and the Company has met the current public information requirements of Rule 144(c) under the Securities Act as of the end of the period in question, (d) the average daily dollar trading volume of the Common Stock for the twenty (20) full Trading Days preceding such date exceeds at least 12.5% of the aggregate “Initial Principal Amounts” of all of the Purchase Agreement Notes, (e) the Company shares of common stock are DWAC Eligible and not subject to a “DTC chill,” and (f) the Common Stock does not constitute “penny stock” under and as defined in the Exchange Act and the corresponding Regulation, and (g) all Conversion Shares are freely tradeable and registered under the Securities Act for unrestricted resale.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Cap” has the meaning specified in Section 4(e).
“Exchange Cap Allocation” has the meaning specified in Section 4(e).
“Exchange Cap Shares” has the meaning specified in Section 4(e).
“Event of Default” has the meaning specified in Section 7(a).
“Fundamental Transaction” means any of the following transactions, whether effected directly or indirectly or through on or a series of related transactions: (i) any merger or consolidation of the Company, (ii) any merger or consolidation of any other Company Party with or into another Person that is not a Company Party; (iii) any Sale or license of any right, title or interest in the assets of any Company Party, other than to a Company Party and other than transactions in the ordinary course of business and transactions that, individually or in the aggregate, affect less than 10% of the market value of the consolidated assets of the Company Parties, (iv) the completion of any purchase offer, tender offer or exchange offer (whether by the Company or another Person) pursuant to which holders of Common Stock Sell, tender or exchange their shares for other Securities, cash or property, and (v) any other corporate reorganization, Securities purchase or other business combination involving the Company or, if all surviving entities are not a Company Party, any other Company Party, including any spin-off or scheme of arrangement of any Company Party, any reorganization, recapitalization or reclassification of the Common Stock, any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other Securities, cash or other assets.
“Late Fee” has the meaning specified in Section 2(f).
“Mandatory PrepaymentAmount” has the meaning specified in Section 2(b).
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“Minimum InterestAmount” means 10% of the Initial Principal Amount of this Note, which amounts represents a full year of interest payments hereunder; provided, that such amount shall be reduced by the amount of interest accrued hereunder on the principal amount of this Note.
“Note Register” has the meaning specified in Section 3(c).
“Notice of Conversion” has the meaning specified in Section 4(a).
“Obligations” means all amounts, indebtedness, obligations, liabilities, covenants and duties of every type and description owing by any Company Party from time to time to the Holder, the Collateral Agent or any of their Purchaser Parties under this Note or any other Transaction Document, whether direct or indirect, joint or several, absolute or contingent, due or to become due, liquidated or unliquidated, secured or unsecured, now existing or hereafter arising and however acquired (regardless of whether acquired by assignment), whether or not evidenced by any note or other instrument or for the payment of money, including, without duplication, (i) the principal amount of the Note owing by the Company or any other Company Party (including any Mandatory Prepayment Amount, any Optional Prepayment Amount and any Minimum Interest Amount owing hereunder), (ii) all other amounts, fees (including all Late Fees and any Cash Payment Fees), interest (including the Minimum Interest Amount and interest accruing at the Default Rate), liquidated damages, commissions, charges, costs, expenses, attorneys’ fees and disbursements, indemnities (including Losses and other amounts for which any Company Party is required to indemnify the Collateral Agent, the Holder, or any of their Purchaser Parties under the Purchase Agreement), reimbursement of amounts paid and other sums chargeable to any Company Party under any Transaction Document or otherwise arising under any Transaction Document and (iii) all interest on any item otherwise qualifying as “Obligation” hereunder, whether or not accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or similar proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding.
“Optional PrepaymentAmount” means, at any time with respect to any principal amount, the sum of (a) one hundred (100%) of such principal amount and all accrued interest hereon outstanding as of such time (including any Minimum Interest Amount remaining outstanding on such principal amount as of such time) and (b) all other amounts, costs, fees (including Late Fees and Cash Payment Fees), expenses, indemnification and liquidated and other damages and other amounts due to the Holder, the Collateral Agent or any of their Purchaser Parties in respect of this Note or any other Transaction Document.
“Original Issue Date” means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Note.
“Permitted Debt” means all of the following: (i) Indebtedness owing to any Secured Party under any Transaction Document; (ii) unsecured intercompany Indebtedness between the Company and its Subsidiaries in the ordinary course of business; (iii) unsecured Indebtedness of the Company or any of its Subsidiaries to trade creditors (including overdue amounts on invoices) incurred on customary terms in the ordinary course of business; (vi) Indebtedness of the Company or any Subsidiary under Capital Leases for equipment or Indebtedness of the Company or any Subsidiary secured by a Purchase Money Lien, which Indebtedness shall not at any time exceed $50,000 in the aggregate for the Company and its Subsidiaries; and (vii) Indebtedness of the Company or any of its Subsidiaries under leases for facilities that are treated as Capital Leases under GAAP.
“Permitted Liens” means (i) the Liens of the Secured Parties as provided for in any Transaction Document; (ii) Customary Permitted Liens of the Company Parties; and (iii) Purchase Money Liens granted to or held by Purchase Money Lien lenders in connection with the purchase, leasing or acquisition of capital equipment in the ordinary course of business and without resulting in a contravention of any applicable provisions of this Note.
“Purchase AgreementNotes” means all “Notes” issued under, and as defined in, the Purchase Agreement.
“Purchase Money Lien” means any Lien securing Indebtedness (i) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment or (ii) existing on such equipment at the time of its acquisition, in each case provided, that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment.
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“Required DisputeDocumentation” has the meaning specified in Section 8(d)(ii).
“Secured Parties” means the Holder, the Collateral Agent and each other holder of Purchased Securities, each beneficiary of any indemnification or reimbursement obligation by any Company Party under the Purchase Agreement or any other Transaction Document.
“Share Delivery Date” has the meaning specified in Section 4(c)(ii).
“Subsequent Offering” has the meaning specified in Section 2(b).
“Successor Entity” has the meaning specified in Section 5(e).
“VWAP” means, for or as of any date for any Security, the following:
(i) the dollar volume-weighted average price for such Security on the Principal Trading Market for such Security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average); or,
(ii) if Bloomberg does not report such a price, the dollar volume-weighted average price of such Security in the over-the-counter market on the electronic bulletin board for such Security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg; or
(iii) if no dollar volume-weighted average price is reported for such Security by Bloomberg for such hours, the average of the highest Closing Bid Price and the lowest Closing Ask Price of any of the market makers for such Security on such date as reported in the “pink sheets” by OTC Markets Group Inc. (formerly, Pink Sheets LLC); or
(iv) if the VWAP cannot be calculated for such Security on such date on any of the foregoing bases, the VWAP of such Security on such date shall be the fair market value as mutually determined by the Company and the Holder.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
Section2. REPAYMENT
a) Amortizationof Principal. Commencing on February 1, 2026, and continuing on the first day of each calendar month thereafter (each an “AmortizationPayment Date”), the Company shall pay in full the portion of the principal amount of this Note set forth on Schedule 2 opposite such date (each, an “Amortization Payment”). Each Amortization Payment may, at the option of the Company but subject to the satisfaction of the Equity Payment Conditions on the date of such Amortization Payment (or due waiver by the Holder), be made instead of cash in Common Stock valued at the Amortization Price on the date of such payment. In addition, the Company shall pay in full on the Maturity Date all remaining Obligations then outstanding.
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b) MandatoryPrepayments. On the next Business Day following the Company consummating any public or private offering or any other issuance of any Capital Stock or any other issuance of any Capital Stock (other than any issuance of Common Stock to the general public), Stock Equivalents or of any other Securities or Indebtedness (including entering into any Equity Line of Credit or issuing any Variable-Priced Equity-Linked Instrument) or any other debt or equity financing or capital-raising transaction of any kind (each a “Subsequent Offering”) on any date other than the Maturity Date, the Company shall, subject to the Holder’s conversion rights set forth herein, pay to the Holder in cash an amount equal to (i) in the case of a Subsequent Offering other than an Equity Line of Credit, 25% of the net proceeds of such Subsequent Offering and (ii) in the case of Subsequent Offering that is an Equity line of Credit, 17.5% of the net proceeds, to repay the Obligations (a “Mandatory Prepayment Amount”). The Mandatory Prepayment Amount shall not be subject to the Cash Payment Fee. The Company shall provide notice to the Holder of the closing of such Subsequent Offering, including the expected net proceeds thereof, not later than the 10^th^ day preceding the date of consummation of such Subsequent Offering, which notice shall be irrevocable and constitute an agreement to pay the Mandatory Prepayment Amount on the date of consummation of such Subsequent Offering. The Holder may continue to convert the principal amounts to be prepaid under this Note until the date of consummation of such Subsequent Offering; provided, that, if the Company does not provide such notice, in addition to all other remedies provided under the Transaction Documents for failure to comply with this Note, the Holder may convert the Note in the amount of such payment and, in its sole discretion, either return such payment or apply such payment to other outstanding Obligations, if any. In the event that the terms of the Subsequent Offering do not provide for the repayment in cash in full of all outstanding Obligations, the Holder may choose, in its sole discretion, to adjust the Conversion Price to match the price of the Common Stock issued or implied by such Subsequent Offering. This Section 2(b) is merely a requirement to redeem this Note and not an authorization to consummate any Subsequent Offering otherwise prohibited by the Transaction Documents.
c) VoluntaryPrepayments. So long as no Default or Event of Default exists, at any time upon ten (10) Business Days’ prior written notice to the Holder (which notice shall be a Transaction Document and constitute an irrevocable agreement to pay such amount on the date set forth on such notice) stating the proposed date and proposed principal amount of such prepayment, but subject to the Holder’s conversion rights set forth herein, the Company may prepay any portion of the principal amount of this Note, any accrued and unpaid interest, and any other amounts due under this Note. If the Company exercises its right to prepay the Note, instead of such principal amount, the Company shall pay to the Holder in cash an amount equal to the full Optional Prepayment Amount for such principal amount prepaid. The Holder may continue to convert the principal amount of the Note to be prepared after the date notice of the prepayment is given until the date it receives such Optional Prepayment Amount in full in cash.
d) Interest. The Company shall pay interest to the Holder on the aggregate then-outstanding principal amount of this Note (and the then-outstanding principal amount of any other Obligation owing that does not expressly provide for any other rate of interest), which shall accrue daily at the rate of ten percent (10%) per annum from the date this Note is issued (or in the case of any other Obligation, from the date such obligation becomes due and payable) through the date such principal amount or other Obligation is paid in full; provided, that the Minimum Interest Amount shall be fully earned and accrued on the Original Issue Date. Accrued interest shall replace and not add to the Minimum Interest Amount and all payments of such accrued interest shall cause a corresponding reduction in any remaining Minimum Interest Amount. Accrued and unpaid interest shall be due and payable on the first day of each calendar month, on each Conversion Date and on the Maturity Date, or as otherwise set forth herein. Any interest accrued and unpaid on any principal amount, and any remaining Minimum Interest Amount on such principal amount, shall be due and payable upon any repayment of such principal amount under this Note; provided, that, if such principal repayment is a regularly scheduled Amortization Payment set forth on Schedule 2, any remaining Minimum Interest Amount shall due and be payable (until such remaining Minimum Interest Amount shall be fully paid) in the amounts and on the dates on which accrued interest would have been due if such Amortization Payments had not been made and interest had accrued on such principal. Subject to satisfaction (or due waiver by the Holder) of the Equity Payment Conditions on the date of such payment, interest (including any remaining Minimum Interest Amount) may be paid in Common Stock in the Company’s discretion at the Amortization Price. Upon an Event of Default, the interest rate set forth hereunder shall increase as provided in clause (e) below. The Minimum Interest Amount is intended to compensate the Holder for a lesser profit in case of early repayment and for the internal and external work and expenditure of time and money involved in the evaluation and preparation of the Transaction Documents and the consummation of the transactions contemplated thereunder. The Minimum Interest Amount is not to be construed to cover or be applied against any indemnity or any out-of-pocket fees, costs or expenses incurred in any action to collect any Obligation or to foreclose any Lien securing the same. This provision shall not affect or limit the Holder’s rights or remedies with respect to any Event of Default.
e) DefaultRate. Immediately on and after the occurrence of any Event of Default, without need for notice or demand all of which are waived, interest on this Note shall, in whole, automatically and without the need for any notice, demand or any other action by the Collateral Agent or the Holder all of which are hereby waived, accrue and be owed daily at an increased interest rate equal to the lower of the Default Rate or the maximum rate permitted under applicable Regulations. If an Event of Default (after giving effect to notice periods and grace periods) occurs, the Default Rate shall become effective as of the date the Default that because such Event of Default first occurred, without consideration for any notice provision or grace period.
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f) LateFee. The Company shall pay a late fee (each a “Late Fee”) on any Obligation that is not paid when due (after taking into account applicable grace periods set forth in Section 5(a)(i) hereof), in an amount equal to ten percent (10%) of such payment, to the Person owed such Obligation. This Late Fee shall be due and payable immediately upon such failure. It is intended to cover the inconvenience and additional internal, administrative and other fees, costs and expenses involved in processing delinquent payments and is not to be construed to cover or be applied against any indemnity or any out-of-pocket fees, costs or expenses incurred in any action to collect any Obligation or to foreclose any Lien securing the same. This provision shall not affect or limit the Holder’s rights or remedies with respect to any Event of Default. This obligation to pay a Late Fee is a separate obligation and, once it has arisen hereunder, a failure to pay such Late Fee will not be cured implicitly by any waiver of any Event of Default or similar event that may have caused the payment that gave rise to such Late Fee.
g) CashPayment Fee. The Company shall pay a cash payment fee (each a “Cash Payment Fee”) in an amount equal to five percent (5%) of the amount of any repayment of the principal amount of this Note that is made in cash at any time when (i) the Company shall not have received a notice from the Holder or the Collateral Agent that an Event of Default exists, or (ii) the Company shall have received such a notice and such Event of Default shall have been cured to the satisfaction of the Holder. This Cash Payment Fee shall be due and payable together with such repayment and is intended to cover any loss in revenues resulting from such repayment being made in cash instead of using Common Stock, as well as other internal costs and expenses and is not to be construed to cover or be applied against any indemnity or any out-of-pocket fees, costs or expenses incurred in any action to collect any Obligation or to foreclose any Lien securing the same. The Cash Payment Fee shall not be applicable to the payment of any Mandatory Prepayment Amount. This provision shall not affect or limit the Holder’s rights or remedies with respect to any Event of Default. This obligation to pay a Cash Payment Fee is a separate obligation hereunder and, once arisen, shall be owed regardless of whether such payment is later returned, reversed, forgiven, waived or voided.
h) Calculationsand Payment Provisions. All payments made to the Holder, the Collateral Agent and their Purchaser Parties under any Transaction Document, except as otherwise expressly provided in any Transaction Document, shall be made in cash, which shall mean in immediately available dollars and without set off or counterclaim. Interest and fees owing to any of them shall be calculated on the basis of a 360-day year consisting of twelve thirty (30)-day periods, for the actual number of days occurring, in whole or in part, in the applicable period. The Holder (or, for payments owing to it, the Collateral Agent) shall have the option to refuse or accept, in their sole discretion, any payment to the Collateral Agent, the Holder or their Purchaser Parties attempted to be made without a required notice, without a required Optional Prepayment Amount, a Minimum Interest Amount or a required fee. The Holder (or, for payments owing to the Collateral Agent, the Collateral Agent) may, in its sole discretion, apply or recharacterize any payment made under any Transaction Document to the payment of any outstanding Obligation, regardless of the intended characterization thereof by any Company Party, including by recharacterizing a payment of principal made to a payment of an Optional Prepayment Amount, a Minimum Interest Amount or a required fee, even if this characterization results in a smaller payment of principal. The Company hereby irrevocably waives the right to direct the application of any payment (or, after any Event of Default, any proceeds of Collateral) to any Obligation. Whenever any payment under any Transaction Document shall be stated to be due on a day other than a Business Day, such payment shall be due on the next succeeding Business Day, including for purposes of the calculation of interest and fees. Any payment of any Obligation received by the Holder, the Collateral Agent or any Purchaser Party after 3 p.m. on any day shall be deemed received on the next Business Day. Each determination by the Holder (or, for payments owing to it, the Collateral Agent) of an amount of interest or fee due hereunder shall be conclusive and binding for all purposes, absent manifest error.
Section3. Registration of Transfers and Exchanges
a) DifferentDenominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
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b) InvestmentRepresentations. This Note has been issued subject to certain investment representations of the original Holder and may be transferred or exchanged only in compliance with applicable federal and state securities Regulations.
c) Relianceon Note Register. The Company shall maintain in its records a list of the Holders and of registration and transfers of the Note (the “Note Register”). The initial Holder is listed herein. Any Holder may later notify in writing the Company of an assignment or transfer and the Company shall notify such transfer in the Note Register. Failure by the Company to duly notify such transfer in the Note Register shall not affect the validity of such assignment or transfer. Nevertheless, if the Company has not received notice of any transfer of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue. Upon request by the Holder, the Company shall immediately execute and deliver to such Holder replacement Note or Notes, which may involve executing multiple Notes with split amounts to reflect partial assignments. Promptly upon receipt of such replacement Note or Notes, such Holder shall deliver the original Note back to the Company or, if the original Note is lost or stolen, provide an affidavit to the Company to that effect.
Section4. Conversion
a) VoluntaryConversion. At any time after the Original Issue Date, all Obligations with respect to this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, in its sole discretion, at any time and from time to time (subject to the conversion limitations set forth in Section 4(d)). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the amount of such Obligations to be converted and the date on which such conversion shall be effected (such date, the “ConversionDate”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note by an amount equal to the applicable conversion. The Holder and the Company shall maintain a Conversion Schedule, containing at a minimum the information shown on Schedule 1, and showing historically, among other things, the principal amounts converted and the date of such conversions. The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.
b) ConversionPrice. The conversion price in effect on any Conversion Date shall be equal to $10.00 (the “Conversion Price”). The Conversion Price, will be proportionately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that decreases or increases the number of shares of Common Stock issued to ensure that, in the case of the Conversion Price, the percentage of shares of Common Stock held by the Holder upon full conversion at the Conversion Price and, in each case, that the percentage of the value of the Company allocated to such Common Stock, both remain unchanged by any such transaction. Upon such adjustment, the Conversion Price shall be rounded down to the nearest $0.01.
c) Mechanicsof Conversion.
i. ConversionShares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount and interest of this Note to be converted by (y) the Conversion Price.
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ii. Deliveryof Certificate Upon Conversion. Not later than one (1) Trading Day after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing the Conversion Shares which, on or after the date on which such Conversion Shares are eligible to be sold under Rule 144 without the need for current public information and the Company has received an opinion of counsel to such effect, which such opinion must be acceptable to the Holder in its sole and absolute discretion (which opinion the Company shall be responsible for obtaining at its sole cost and expense) shall be free of restrictive legends and trading restrictions, representing the number of Conversion Shares being acquired upon the conversion of this Note. Each certificate required to be delivered by the Company under this Section 4(c) shall be delivered electronically through the Depository Trust Company or another established clearing corporation performing similar functions. If the Conversion Date is prior to the date on which such Conversion Shares are eligible to be sold under Rule 144 without the need for current public information, or there is no registration statement in effect covering the Conversion Shares, the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:
“THE ISSUANCE AND SALE OF THESECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATESECURITIES REGULATIONS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVEREGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALLBE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANTTO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGINACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
Notwithstanding the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public information requirements, the Company, upon written request and at the sole cost and expense of the Company, shall obtain a legal opinion that is acceptable to the Holder in its sole and absolute discretion, to allow for such sales under Rule 144.
iii. Reservationof Conversion Shares. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal the Reserve Amount for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Purchase Agreement Notes). The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable. The Company shall calculate and readjust the Reserve Amount on the first Business Day of each month so long as any Purchased Security remains outstanding.
iv. FractionalShares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.
v. TransferTaxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided, that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion
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vi. Failureto Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to the Holder pursuant to the rescinded Notice of Conversion.
vii. ObligationAbsolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, the existence of any Default or Event of Default, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of Regulations by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of Regulation, Contractual Obligation or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought. If the injunction is not granted, the Company shall promptly comply with all conversion obligations herein. If the injunction is obtained, the Company must post a surety bond for the benefit of the Holder in the amount of one hundred fifty percent (150%) of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of seeking such injunction, the Company shall issue Conversion Shares (or, where applicable and required hereunder, cash), upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 7 for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable Regulation.
viii. Compensationfor Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, in its sole discretion, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.
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ix. NoLimitation on Damages. More generally, nothing in this Section 4, including the availability of the option to convert the Note, shall limit the Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 7 and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including a decree of specific performance and/or injunctive relief. The exercise of any rights under this Section 4 shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable Regulation.
d) Holder’sConversion Limitations. The Company shall not effect any conversion of principal or interest of this Note, and the Holder shall not have the right to convert any principal or interest of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates, the “Attribution Parties”) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Attribution Parties shall include the number of Conversion Shares issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other Securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including any other Notes) beneficially owned by the Holder or any of its Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination of whether this Note is convertible (in relation to other Securities owned by the Holder together with any Attribution Parties) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other Securities owned by the Holder together with any Attribution Parties) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the SEC, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of Securities of the Company, including this Note, by the Holder or its Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of all Conversion Shares to be held by the Holder. The Holder, upon not less than sixty-one (61) days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(d); provided, that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder. Any such increase or decrease will not be effective until the sixty-first (61^st^) day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this Section 4(d) shall apply to a successor Holder of this Note.
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e) ExchangeCap. The Company shall not issue any shares of Common Stock upon conversion of this Note or otherwise pursuant to the terms of this Note if the issuance of such shares of Common Stock would exceed the aggregate number of shares of Common Stock which the Company may issue upon conversion of this Note or otherwise pursuant to the terms of this Note without breaching the Company’s obligations under the rules or regulations of the Principal Trading Market for the Common Stock (the number of shares which may be issued without violating such rules and regulations, the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (i) obtains the approval of its stockholders as required by the applicable rules of such Principal Trading Market for issuances of shares of Common Stock in excess of such amount or (ii) obtains a written opinion from outside counsel to the Company that such approval is not required, which opinion shall be in form and substance reasonably satisfactory to the Holder. Until such approval or such written opinion is obtained, the Holder shall not be issued in the aggregate, upon conversion of this Note or otherwise pursuant to the terms of this Note, shares of Common Stock in an amount greater than the product of (A) the Exchange Cap as of the proposed date of issuance for such shares multiplied by (B) the quotient of (1) the aggregate original Principal Amount of this Note when issued to the applicable Purchaser pursuant to the Purchase Agreement divided by (2) the aggregate original Principal Amount of all Purchase Agreement Notes when issued (the “Exchange Cap Allocation”). In the event that the Holder sells or otherwise transfer any portion of this Note, the transferee shall be allocated a pro rata portion of the Holder’s Exchange Cap Allocation with respect to such portion of this Note so transferred, and the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation so allocated to such transferee. Upon conversion in full of any holder of any Purchase Agreement Note, the difference (if any) between such holder’s “exchange cap allocation” (under and as defined in such Purchase Agreement Note) and the number of shares of Common Stock actually issued to such holder upon such holder’s conversion in full of any Purchase Agreement Note shall be allocated to the respective Exchange Cap Allocations of the remaining holders of such Purchase Agreement Notes (including the Holder) on a pro rata basis in proportion to the shares of Common Stock underlying such Purchase Agreement Notes then held by each such holder. In the event that the Company is prohibited from issuing any shares of Common Stock pursuant to this Section 4(e)(the “Exchange Cap Shares”) to the Holder, the Company shall pay cash to the Holder in exchange for the redemption of such portions of this Note that are not convertible into such Exchange Cap Shares at a price equal to the sum of (A) the product of (1) such number of Exchange Cap Shares and (2) the Closing Sale Price on the Trading Day immediately preceding the date the Holder delivers the applicable Notice of Conversion with respect to such Exchange Cap Shares to the Company, and (B) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Exchange Cap Shares, brokerage commissions, if any, of the Holder incurred in connection therewith.
Section5. Certain Adjustments
a) StockDividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a Restricted Payment payable in shares of Common Stock on shares of Common Stock or any Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, this Note); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 5(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
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b) Changein Option Price or Rate of Conversion. If the purchase or exercise price provided for in any options to purchase Common Stock, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Stock Equivalents into Common Stock, or the rate at which any Stock Equivalents are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than any change to the Conversion Price in this Note or any changes to the exercise price in the Warrants), the Conversion Price in effect at the time of such increase or decrease shall be adjusted to account proportionately, for such increase or decrease. For purposes of this Section 5(b), if the terms of any option or Stock Equivalents are increased or decreased in the manner described in the immediately preceding sentence, then such option or Stock Equivalents and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 5(b) shall be made to the Conversion Price if such adjustment would result in an increase to the Conversion Price.
c) SubsequentEquity Sales. If any Company Party or any Subsidiary thereof, at any time while any Obligation is outstanding or the Holder has not yet received any Conversion Shares in connection with a conversion, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any shares of Common Stock or Stock Equivalents convertible or exchangeable into Common Stock, in each case other than as an Exempt Issuance, at an effective price per share that, after giving effect to any other adjustment provided in this Note, is less than the Conversion Price then in effect (such lower price, the “Base Share Price” and such issuances collectively, a “Dilutive Issuance”) then, simultaneously with the consummation of each Dilutive Issuance the Conversion Price shall be reduced and only reduced to equal the Base Share Price. For the avoidance of doubt, it is understood and agreed that if a holder of the shares of Common Stock or Stock Equivalents so issued shall, at any time after the issuance, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is less than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance at such effective price. Such adjustment shall be made whenever such shares of Common Stock or Stock Equivalents are issued. No later than 8:00 am on the Trading Day following the issuance or deemed issuance of any shares of Common Stock or Stock Equivalents subject to this Section 5(c), the Company shall (i) notify the Holder, in writing, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”) and (ii) publicly disclose the transaction resulting in such issuance or deemed issuance in a filing with the SEC. For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(c), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the Notice of Conversion.
d) ProRata Distributions. While this Note is outstanding, the Company shall not declare or make any Restricted Payment (or rights to receive Restricted Payments). In the event that the Note is repaid at the time of such Restricted Payment, the Holder shall not be entitled to participate in such Restricted Payment. If the Holder and the Company mutually agree, and the Note is not repaid at the time of such Restricted Payment, then the Holder shall be entitled to participate in such Restricted Payment to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Note (without regard to any limitations on exercise hereof, including the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Restricted Payment, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Restricted Payment (provided, that to the extent that the Holder’s right to participate in any such Restricted Payment would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Restricted Payment to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Restricted Payment to such extent) and the portion of such Restricted Payment shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
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e) Effectof Fundamental Transactions. Upon the occurrence of any Fundamental Transaction, the Holder, upon any subsequent conversion of this Note, shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(c) on the conversion of this Note), any consideration receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible (or holder of any equity Securities of any Company Party) immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(c) on the conversion of this Note) (the “Alternate Consideration”), including shares of Common Stock of any successor or acquiring corporation or of the Company, in the case of a merger where it is the surviving entity. To the extent such Alternate Consideration includes Securities, the Holder shall have the option to either treat the Note as converted on the date of consummation of such Fundamental Transaction and obtain such Securities outright or adjust the Conversion Shares to include such additional Securities. For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company Parties shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. In a Fundamental Transaction where holders of Common Stock (or, as the case may be, Securities of any Company Party) are given any choice as to the Alternate Consideration to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any acquiring, successor, surviving or replacement entities in any Fundamental Transaction (the “Successor Entity”) to become a Company Party effective immediately upon the consummation of such Fundamental Transaction and shall become a party to all Transaction Documents in the same capacity and to the same extent as the Company Party involved in such Fundamental Transaction and, if such Fundamental Transaction involves the Company, from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company” shall, without any further action, refer instead to the Successor Entity or to both Companies, as appropriate. In the case of a Fundamental Transaction resulting in the Company no longer be in existence, the Successor Entity shall succeed to all obligations of the Company and may exercise every right and power of the Company and shall assume all of the Obligations of the Company with the same effect as if such Successor Entity had been named as the Company herein. The parties hereto shall amend all Transaction Documents (or execute new Transaction Documents, including replacement Notes and an assumption of the Company’s Obligations) to reflect such change; provided that the failure to amend or execute any such Transaction Document shall not render this clause (e) ineffective. For the avoidance of doubt, this clause (e) is not intended to permit any Fundamental Transaction. The Company shall ensure that the Holder approves all drafts of such amendments and new Transaction Documents prior to the consummation of, and as a condition to the consummation of, such Fundamental Transaction. Without limitation, if the Fundamental Transaction involves the Company, the definition of Conversion Shares and Conversion Price hereunder shall be adjusted to include Securities of the Successor Entity and to ensure the new Notes of the Holder convert into Securities so as to protect the economic value of this Note, taking into account the relative values of the existing and replacement Conversion Shares, and give the Holder upon conversion of this Note the Conversion Shares equivalent to the Conversion Shares it would have received upon conversion of this Note prior to such Fundamental Transaction at an equivalent Conversion Price.
f) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
g) Noticesto the Holder.
i. Adjustmentsto Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall not later than 8:00 am on the Trading Day following such adjustment (i) deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a statement of all of the facts requiring such adjustment and the calculation thereof, and (ii) publicly disclose the transaction resulting in such adjustment in a filing with the SEC. Notwithstanding anything in this Section 5 to the contrary, no adjustment pursuant to this Section 5 shall increase the Conversion Price other than proportional increases upon the occurrence of a reverse stock split in accordance with Section 5(a). For the avoidance of doubt, the Holder will be entitled to each such adjustment on the terms set forth in this Agreement whether or not the Company provides such notice, and the calculation set forth in such notice shall not be binding on the Holder.
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ii. Noticeto Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution or other Restricted Payment in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of Capital Stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other Securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distribution, Restricted Payment, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for Securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section6. NEGATIVE COVENANTS
a) As long as the outstanding principal amount of the Notes exceeds $200,000.00, no Company Party shall, and no Company Party shall permit any of its Subsidiaries to, directly or indirectly, do, or enter into any agreement to do, any of the following (except for Sections 6(a)(xiii) and (ix) which shall be binding on each Company Party and all its Subsidiaries so long as any portion of this Note or any other Obligations is not paid in full):
i. create, incur, assume, enter into or suffer to exist, any Indebtedness (other than Permitted Debt) or any Guaranty Obligations with respect thereto, or repay the principal amount of, redeem, purchase or otherwise acquire or offer to repay the principal amount of, redeem, repurchase or otherwise acquire, any Indebtedness (other than Permitted Debt) or any Guaranty Obligation with respect thereto, whether or not existing on the Original Issue Date (other than the Purchase Agreement Notes on a pro rata basis based on the principal amounts outstanding);
ii. create, incur, assume, permit or suffer to exist any Lien of any kind, on or with respect to any of its assets now owned or hereafter acquired or any interest therein or any income or profits therefrom, other than the Liens securing the Obligations created pursuant to the Transactions Documents and Permitted Liens;
iii. Sell any of its assets other than disposition of assets in the ordinary course of business;
iv. make, approve, or offer to make any Restricted Payment with respect to any shares of Capital Stock (other than the issuance and distribution of the Transaction Securities, and then only as otherwise required under the Transaction Documents);
v. issue any Capital Stock to any Related Party that is not a Company Party or a Subsidiary of any Company Party, except for Exempt Issuances;
vi. consummate a Fundamental Transaction, amend its charter documents in any manner that materially and adversely affects any rights of the Holder or change the nature of its business from the business conducted by it on the date hereof (and, after the consummation of the Business Combination, the business conducted by any party to the Business Combination on the date hereof);
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vii. enter into any other transaction with, or make any other payment to, any Related Party of the Company that is not a Company Party or Subsidiary of any Company Party, including (A) investments by any Company Party or any Subsidiary thereof in such other Related Party, whether in Capital Stock, Stock Equivalents, other Securities, Indebtedness owing by such Related Party or otherwise, or Indebtedness owing to any such other Related Party and (B) transfers, sales, leases, assignments or other acquisitions or dispositions of any asset), except for (x) payments with respect to Permitted Debt permitted pursuant to Section 6a)(i) above, (y) transactions in the ordinary course of business on a basis no less favorable to the Company Parties and their Subsidiaries as would be obtained in a comparable arm’s length transaction with a Person not a Related Party and that are expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval) and (z) salaries and other director or employee or other staff or agent compensation, including expense reimbursements and employee benefits, of the Company Parties and their Subsidiaries that, in the case of officers, directors and employees, staff and agents that are also Related Parties even if their employee, staff or agent relationship is not taken into account, does not include any increase from the compensation in effect on, and disclosed to the Collateral Agent and the Holder on or before the date hereof;
viii. fail to use the proceeds of the Note as represented in Section 3.1(gg) of the Purchase Agreement (including by being engaged in operations involving the financing of any investments or activities in, or any payments to, any Sanctioned Person) or conduct its business in a manner that causes it to become an “investment company” subject to registration under the Investment Company Act of 1940, as amended, or a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended) or fail to provide a certification to the Holder with respect to any of the foregoing items in this clause (viii) upon the Holder’s request; or
ix. directly or indirectly (including through agents, contractors, trustees, representatives or advisors) (a) be in violation of any Sanctions Law or engage in, or conspire or attempt to engage in, any transaction evading or avoiding any prohibition in any Sanctions Law, (b) be a Sanctioned Person or derive revenues from investments in, or transactions with Sanctioned Persons, (c) have any assets located in Sanctioned Jurisdictions, (d) deal in, or otherwise engage in any transactions relating to, any property or interest in property blocked pursuant to any Regulation administered or enforced by OFAC or (e) fail to comply with any material Regulations or Contractual Obligations applicable to it or fail to obtain or comply with any material Permits.
Section7. Events of Default
a) “Eventof Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by Regulation or pursuant to any judgment, decree or order of any court, or any order, rule or Regulation of any Governmental Authority):
i. any default in the payment of (A) the principal amount of this Note when due or (B) any interest, fees, liquidated damages or any other Obligation owing to the Holder, the Collateral Agent or any of their Purchaser Parties under any Transaction Document, within (5) Business Days after such principal, interest, fee, liquidated damage or other Obligation shall become due and payable, whether on the Maturity Date or otherwise;
ii. any Company Party shall fail for any reason to comply with Section 2.2(a) (Deliveries to Initial Purchasers), Section 2.4 (Post-ClosingDeliveries) or Section 4.12 (Trading Activities of Purchasers) of the Purchase Agreement or Section 2(b), Section2(f), Section 4(c) (including Section 4(c)(iii)), Section 6, Section 8(k), and Section 8(l) of this Note or any other Section of this Note or any Transaction Document that provides for an action after a notice period or that provides a specific period of time for the Company Parties to comply with;
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iii. any representation or warranty made by any Company Party in this Note, any other Transaction Document, any other Contractual Obligation with, or any other report, financial statement, document, written statement or certificate made or delivered to, the Holder or any other Holder Party shall be untrue or incorrect in any material respect as of the date when made or deemed made;
iv. any Company Party shall provide at any time notice to the Holder, including by way of public announcement, of such Company Party’s intention to not honor any provision of this Note or any other Transaction Document (including requests for conversions of this Note in accordance with the terms hereof);
v. any Company Party shall fail to observe or perform any other covenant, provision, or agreement contained in this Note or any other Transaction Document which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days after notice of such failure sent by the Holder or by any other Holder Party to the Company and (B) ten (10) Trading Days after any Company Party has become or should have become aware of such failure;
vi. a breach, default or event of default (without regard for any cure period therefor provided therein) shall have occurred under any Indebtedness of any Company Party (A) having (individually or in the aggregate for all such Indebtedness) an aggregate maximum principal amount or commitment greater than Two Hundred Thousand Dollars ($200,000), or (B) any such Indebtedness shall become or be declared due and payable prior to the date on which it would otherwise become due and payable;
vii. a breach, default or event of default (without regard to any grace or cure period provided in the applicable agreement, document or instrument or any subsequent waiver or other modification thereto) shall have occurred under any other Contractual Obligation to which any Company Party is obligated that, if determined to be adverse to any Company Party, could reasonably be expected to result in any injunction affecting any Company Party or any Loss to the Company Parties in excess of Two Hundred Thousand Dollars ($200,000);
viii. any monetary judgment, writ or similar final process shall be entered or filed against any Company Party, any Subsidiary of any Company Party or any of their assets for an injunction or for monetary damages of more than Two Hundred Thousand Dollars ($200,000), and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of forty-five (45) calendar days;
ix. the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any asset of any Company Party or any Subsidiary of any Company Party having an aggregate fair value or repair cost (as the case may be) in excess of Two Hundred Thousand Dollars ($200,000) individually or in the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within forty-five (45) calendar days after the date thereof;
x. (A) any Company Party or any Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) of any Company Party shall commence a case or other Proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, winding up, reorganization, arrangement, adjustment, protection, relief or composition of debts or liquidation or similar Regulation of any jurisdiction relating to the Company or any such Subsidiary or any Proceeding seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee, liquidator or other similar official for it or for any of its assets, (B) any such case or other Proceeding shall be commenced against any Company Party or any such Subsidiary by any other Person and such case or other Proceeding is not dismissed within forty-five (45) days after commencement, (C) any Company Party or any such Subsidiary shall be adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or other Proceeding is entered, (D) any Company Party or any such Subsidiary shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts as they mature or shall make a general assignment for the benefit of creditors, (E) any Company Party or any such Subsidiary thereof shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (F) any Company Party or any such Subsidiary, by any act or failure to act, shall expressly indicate its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action (including convening a meeting of the board) to authorize or otherwise for the purpose of effecting any of the foregoing;
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xi. the occurrence of any Change of Control Transaction;
xii. (A) the Common Stock shall become “penny stock” as defined in Regulations for purposes of 3(a)(51) of the Exchange Act, (B) there shall be no Trading Market for the Common Stock and the Common Stock shall not be eligible for listing or quotation for trading thereon and shall not be eligible to resume listing or quotation for trading thereon within five (5) Trading Days or (C) the transfer of shares of Common Stock through the Depository Trust Company System shall become no longer available or shall be “chilled”;
xiii. the Company shall not meet the current public information requirements under Rule 144, and such failure is not cured, if it is possible to cure it, within two (2) Trading Days after the expiration of the applicable grace period permitted under Rule 12b-25 of the Exchange Act; unless the Company files a Form 12b-25 for the relevant report required to meet the current public information requirements under Rule 144; or
xiv. the Company shall fail to deliver Common Stock by the Share Delivery Date upon conversion of any portion of this Note.
The clauses in the definition of “Eventof Default” above operate independently, so that any action or event that falls within any such clause shall constitute an Event of Default regardless of, whether because of a grace period or threshold or otherwise, it falls outside the language of any other clause.
b) RemediesUpon Event of Default. If any Event of Default occurs, then the outstanding principal amount of this Note and all other Obligations shall become, at the Holder’s election in its sole discretion, in whole or in part (or, in the case of and Event of Default described in Section 7(a)(x)(A) through (C), in whole, automatically and without the need for any notice, demand or any other action by the Collateral Agent or the Holder all of which are hereby waived), immediately due and payable, in cash (while remaining subject to the Holder’s conversion option). In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind (other than the Holder’s election to declare such acceleration), and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable Regulations. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent Default or Event of Default or impair any right consequent thereon.
Section8. Miscellaneous
a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including any Notice of Conversion, shall be in writing and delivered as set forth in Section 6.4 (Notices) of the Purchase Agreement. All notices and other communications delivered hereunder shall be effective as provided in the Purchase Agreement.
b) AbsoluteObligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note, without set off or counterclaim, at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Purchase Agreement Notes now or hereafter issued under the terms set forth in the Transaction Documents and is at least pari passu with all Indebtedness and other obligations of the Company, and is not subordinated to any such Indebtedness or other obligation.
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c) Lostor Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
d) DisputeResolution.
i. In the case of a dispute relating to, or, when an agreement between the Company and the Holder is required hereunder, an inability to agree on, a Conversion Price, a Closing Bid Price, a Closing Sale Price, a VWAP or a fair market value (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile or electronic transmission (A) if by the Company, within two (2) Trading Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute, at any time after the second (2^nd^) Trading Day following such initial notice, then the Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.
ii. The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with clause 8(d) and (B) written documentation (together with such copy of such submission, the “Required DisputeDocumentation”) supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5^th^) Trading Day immediately following the date on which the Holder selected such investment bank (the “DisputeSubmission Deadline”). If either party fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then such party shall no longer be entitled to (and hereby waives its right to) deliver or submit any document or other supporting evidence to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline. Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute other than the Required Dispute Documentation.
iii. The Company and the Holder shall ensure that such investment bank determines the resolution of such dispute and notify the Company and the Holder of such resolution no later than ten (10) Trading Days immediately following the Dispute Submission Deadline. The fees and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final and binding upon all parties absent manifest error.
e) GoverningLaw; Courts. **As provided in Section 6.6 (Governing Law; Courts) of the Purchase Agreement, this Note, and all claims, disputes,Proceedings (other than as set forth in clause 8(d) above) and matters related hereto or arising hereunder or arising from or relatingto the relationship among any of the parties hereto, are governed by, and shall be construed, interpreted and enforced exclusively inaccordance with, the laws of the State of Delaware (without giving effect to the conflict of lawsprovisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction otherthan those of the State of Delaware). Any such Proceeding shall be brought exclusively in the Delaware state courts sitting inWilmington, DE or the federal courts of the United States of America for the District of Delaware sitting in Wilmington, DE; provided,that the Collateral Agent, the Holder and the other Purchaser Parties may bring Proceedings in other jurisdictions to enforce this Note.**The parties hereto have accepted such jurisdiction and waived venue and other objections and have agreed to the means for service of process in such Section 6.6.
f) Characterizations. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof).
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g) Paymentson Next Business Day. Whenever any payment Obligation shall be due on a day other than a Business Day, such payment shall be due instead on the next succeeding Business Day.
h) Paymentof Collection, Enforcement and Other Costs. In addition to, and not in substitution for and not to limit (but without duplication), any other right to reimbursement under this Note or any other Transaction Document, (i) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any Proceeding or the Holder otherwise takes action to collect amounts due under this Note or to enforce the provisions of this Note or (ii) there occurs any bankruptcy, reorganization, receivership of the Company or other Proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay all out-of-pocket costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other Proceeding, including, but not limited to, attorneys’ fees and disbursements.
i) SecurityInterest. The Obligations of the Company Parties under this Note and the other Transaction Documents are secured by the Security Agreement and the Intellectual Property Security Agreement, as well as other Transaction Documents.
j) Useof Proceeds. All proceeds of the purchase of this Note and the other Purchased Securities shall be used as provided in the Purchase Agreement.
k) Non-PublicInformation. Except with respect to the Transaction Documents and the transactions contemplated thereunder, which shall be disclosed as provided in the Purchase Agreement**,** each Company Party covenants and agrees that neither it, nor any other Person acting on its behalf has provided nor will provide the Holder or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto the Holder shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. Any non-disclosure agreement entered into with the Holder and any Company Party are terminated as provided in Section 4.10 (Securities Laws Disclosures) of the Purchase Agreement. The Holder does not have any duty of confidentiality (or a duty not to trade on the basis of material non-public information) to any Company Party or any of their Affiliates, or any of their respective officers, directors, agents, members, stockholders, managers, employees and is governed only by application Regulations. Each Company Party understands and confirms that the Holder shall be relying on all of the foregoing covenants in trading Securities of the Company.
l) PublicDisclosures. The Company Parties and the Holder shall consult with each other in issuing any other public disclosure with respect to the transactions contemplated hereby, and no Company Party or the Holder shall issue any such public disclosure nor otherwise make any such public statement without the prior consent of the Company and the Holder, each of which consent shall not unreasonably be withheld or delayed, except if such disclosure is reasonably viewed as required by any Regulation, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, no Company Party shall, and each Company Party shall ensure that their Subsidiaries do not, publicly disclose the name, trademark, service mark, symbol, logo (or any abbreviation, contraction or simulation thereof) of, or otherwise refer to, the Holder or any other Purchaser Party (including in any filing with the SEC, regulatory agency or Trading Market for any Securities of any Company Party or their Subsidiaries, including the 8-K filing referenced above) without the prior consent of the Holder and the Collateral Agent (including in any press release, letterhead, public announcement or marketing material), except, and then only after consulting with such Holder and the Collateral Agent, to the extent required to do so under applicable Regulations (including as required in any registration statement filed with the SEC). None of the Company Parties and their Affiliates shall represent that any Company Party or any of its Affiliates, any product or service of the Company Parties or their Affiliates, or any know how or policy or practice of the Company Parties or their Affiliates has been approved or endorsed by any Purchaser Party.
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m) Interpretation. This Note is a Transaction Document and as such is subject to various interpretative, amendment and third party beneficiary and other miscellaneous provisions set forth in the Purchase Agreement that expressly apply to Transaction Documents, located principally in ArticleVI (Miscellaneous) thereof (including Section 4.10 (Securities Law Disclosures) which, among other things, restrict public disclosures of the name of the Holder, Section 6.15 (Interpretation) that provides, among other things, that payments due on a day that is not a Business Day may be made on the next Business Day), as well as, without limitation, set off provisions in Section6.5 (Set Off) thereof whereby amounts owing hereunder may be set off against amounts owed by the Holder and certain related entities, indemnification and expense reimbursement provisions in Sections 4.15 (Indemnification of Each Purchaser Party) and 6.2 (Feesand Expenses) thereof that benefit the Holder, among others. In particular, without limitation, (i) none of the terms or provisions of this Note may be waived, amended, supplemented or otherwise modified except in accordance with Section 6.3(b) (Amendments) of the Purchase Agreement and (ii) as described in Section 6.3(a) (Entire Agreement) of the Purchase Agreement, this Note and the other Transaction Documents contain and constitute the entire agreement of the parties with respect to the subject matter hereof. Any Holder also benefits from various provisions of the Purchase Agreement applicable to “Purchasers” (whether by virtue of being an “Initial Purchaser” or successor in interest thereto) and agrees to be bound by the provisions of the Purchase Agreement applicable to it in such capacity, including Article V (Collateral Agent) thereof that describes its relationship with the Collateral Agent and contains an indemnification provision in Section 5.9 (Indemnification) thereof. Finally, in addition to these provisions, unless otherwise expressly provided in any Transaction Document, “outstanding” when referring in any Transaction Document to the principal amount owing under this Note shall mean “outstanding and unconverted.”
n) Beneficiaries; Successors and Assigns. As provided in Section 6.3(c) (Beneficiaries; Successors and Assigns) of the Purchase Agreement, this Note shall be binding upon the successors and assigns of the Company and shall inure solely to the benefit of the Holder, each Company Party, the Collateral Agent, each of their Purchaser Parties and their respective successors and, if permitted, assigns; provided, that no Company Party may assign any part of this Note, or any right, obligation, benefit, title or interest hereunder except as authorized in the Purchase Agreement.
o) Counterparts. As provided in clauses (e) (Counterparts) and (f) (Electronic Signatures) of Section 6.3 of the Purchase Agreement, this Note may be executed in any number of counterparts, which may be signed and transmitted electronically.
p) Severability. As provided in Section 6.7 (Severability) of the Purchase Agreement, any provision of this Note being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Note or any part of such provision in any other jurisdiction, so long as the economic or legal substance of the transaction contemplated hereby is not affected in any manner adverse to any party.
q) Waiverof Jury Trial. As provided in Section 6.17 (Waiver of Jury Trial and Certain Other Rights), each party hereto has irrevocably and unconditionallywaived, to the fullest extent permitted by applicable Regulations, trial by jury of any claim or cause of action or in any Proceeding,directly or indirectly with respect to, or directly or indirectly based upon or arising out of, under or in connection with this Noteor any other Transaction Document or the transactions contemplated therein or related thereto (whether founded in contract, tort or anyother theory). Each party hereto (A) certifies that no other party, no Purchaser Party and no Affiliate of any of them and no attorney, agent or other representative of any of the foregoing has represented, expressly or otherwise, that any Person would not, in the event of litigation, seek to enforce the foregoing waiver and (B) acknowledges that it and the other parties hereto have been induced to enter into this Note by, among other things, the mutual waivers and certifications in this Section 8(q).
***[***SignaturePages Follow]
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In witnesswhereof, each of the undersigned has duly executed this Note as of the date first written above.
| PROFUSA, INC., a Delaware corporation | |
|---|---|
| By: | /s/ Fred Knechtel |
| Name: | Fred Knechtel |
| Title: | CFO |
| Accepted and Agreed: | |
| --- | --- |
| ASCENT PARTNERS FUND LLC | |
| By: | /s/ Mikhail Gurevich |
| Name: | Mikhail Gurevich |
| Title: | Authorized Signatory |
Address:
19505 Buscayne Blvd
Suite 2350
Aventura, FL 33180
ANNEXA
NOTICE OF CONVERSION
The undersigned hereby elects to convert principal under the Senior Secured Convertible Promissory Note (as the same may be amended or otherwise modified from time to time (the “Note); capitalized terms used but not defined herein are used as defined in the Note, including if defined by reference to other agreements**)**, due January 11, 2027, and issued by Profusa, Inc. (formerly, NorthView Acquisition Corporation), a Delaware corporation (together with its successors and, if permitted, assigns, the “Company”), into shares of common stock (the “Common Stock”) of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.
By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of the Note, as determined in accordance with Section 13(d) of the Exchange Act.
The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.
Conversion calculations:
| Date to Effect Conversion: | |
|---|---|
| Principal Amount of Note to be Converted: | |
| Payment of Interest in Common Stock<br>__ yes __ no | |
| If yes, $_____ of Interest Accrued on<br>Account of Conversion at Issue. | |
| Number of shares of Common Stock to be issued: |
This Notice of Conversion is a Transaction Document and, as such is subject to various provisions of the Purchase Agreement applicable to Transaction Documents, including, among others, choice of law, forum, and waiver of jury trial.
| By: |
|---|
| Name: |
| Title: |
| Delivery Instructions: |
Schedule1
CONVERSION SCHEDULE
This Conversion Schedule is part of, and reflects conversions made under Section 4 of, the Senior Secured Convertible Promissory Note, due on January 11, 2027, and issued by Profusa, Inc. (formerly, NorthView Acquisition Corporation), a Delaware Corporation, in the original principal amount of $10,000,000.
Dated:
| Date of Conversion<br><br>(or for first entry, Original Issue Date) | Amount of Conversion | Aggregate Principal Amount Remaining Subsequent to Conversion<br><br>(or original Principal Amount) | Company Attest |
|---|
Schedule2
PaymentSchedule
Exhibit 10.7
LOCK-UP AGREEMENT
Ascent Partners Fund LLC
19505 Biscayne Blvd., Suite 2350
Aventura, FL 33180
As of July 11, 2025
Ladies and Gentlemen:
The undersigned understands that Northview Acquisition Corp., a Delaware corporation (together with its successors and, if permitted, assigns, the “Company”) intends to enter into a Securities Purchase Agreement (as modified from time to time, the “Purchase Agreement”) dated as of February 11, 2025, with each purchaser (together with its successors and, if permitted, assigns, an “Investor”) identified on the signature page thereof, and Ascent Partners Fund LLC, as collateral agent for Investors, providing for the purchase (the “Transaction”) of certain senior secured convertible promissory notes (the “Notes”), and, in connection therewith, the Company also intends to enter into a registration rights agreement with the Investors (the “Registration Rights Agreement”). Capitalized terms are used as defined in the Annex hereto (which is hereby incorporated and made a part of this agreement) and other capitalized terms used but not defined in this agreement shall have the meanings ascribed to such terms in the Purchase Agreement unless otherwise indicated.
To induce the Company to enter into and consummate the Transaction, the undersigned hereby irrevocably enters into this Lock-Up Agreement (this “Agreement”) with the Investors and agrees that, during the period commencing on the date hereof and ending on the earlier of (i) the date that is six (6) months after the Initial Registration Statement (as defined in the Registration Rights Agreement) has been declared effective by (ii) the date after the date that the Initial Registration Statement (as defined in the Registration Rights Agreement) has been declared effective, that the daily VWAP of the Common Stock equals or exceeds $5.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any twenty (20) Trading Days during any thirty (30) Trading Day period (such period, the “Lock-UpPeriod”), the undersigned will not do any of the following, and will not publicly disclose any intention to do any of the following: (1) offer, pledge or otherwise grant any Lien over, transfer, dispose of or otherwise Sell (or enter into any option or other Contractual Obligation to transfer, dispose of or otherwise Sell), lend, in each case directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for, shares of Common Stock, or any other Common Stock Equivalents, whether now owned or hereafter acquired by the undersigned (or any Affiliate of the undersigned) or with respect to which the undersigned (or any Affiliate of the undersigned) has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”); (2) enter into any swap or other Derivative or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, in each case whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Securities, in cash or otherwise; or (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities.
Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer Lock-Up Securities in connection with:
| 1. | transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or to a family member<br>or trust for the benefit of the undersigned (for purposes of this lock-up agreement, “family member” means any relationship<br>by blood, marriage or adoption, not more remote than first cousin); provided that the transferee agrees to be bound by the terms<br>of this agreement and signs and delivers to the Investors a lock-up agreement in the form hereof; |
|---|---|
| 2. | transfers of Lock-Up Securities to a charity or educational institution; |
| --- | --- |
| 3. | if the undersigned is a corporation, partnership, limited liability company or other business entity,<br>(i) any transfers of Lock-Up Securities to another corporation, partnership or other business entity that controls, is controlled by or<br>is under common control with the undersigned or (ii) distributions of Lock-Up Securities to members, partners, stockholders, subsidiaries<br>or affiliates (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned as of the date of this<br>Agreement, provided that the transferee agrees to be bound by the terms of this agreement and signs and delivers to the Investors<br>a lock- up agreement in the form hereof; |
| --- | --- |
| 4. | if the undersigned is a trust, to a trustee or beneficiary of the trust provided that any such<br>transfer shall not involve a disposition for value, (ii) such transferee agrees to be bound by the terms of this agreement and signs and<br>delivers to the Investors a lock-up agreement in the form hereof and (iii) no filing under Section 13 of the Securities Exchange Act of<br>1934, as amended (the “Exchange Act”) or other public announcement shall be required or shall be voluntarily<br>made during the Lock-Up Period; |
| --- | --- |
| 5. | the receipt by the undersigned from the Company of shares of Common Stock upon the vesting of restricted<br>stock awards or stock units or upon the exercise of options to purchase shares of Common Stock issued under an equity incentive plan of<br>the Company or an employment arrangement or the transfer or withholding of shares of Common Stock or any securities convertible into shares<br>of Common Stock to the Company upon a vesting event of the Company’s securities or upon the exercise of options to purchase the<br>Company’s securities, in each case on a “cashless” or “net exercise” basis or to cover tax obligations of<br>the undersigned in connection with such vesting or exercise provided that (i) such shares are covered by this agreement and |
| --- | --- |
| (ii) if the undersigned is required to file a report under Section 13 of the Exchange Act reporting<br> a reduction in beneficial ownership of shares of Common Stock during the Lock-Up Period, the undersigned shall include a statement<br> in such schedule or report to the effect that such reduction is attributable to the “cashless” or “net<br> exercise” of the options or to cover tax withholding obligations of the undersigned in connection with such vesting or<br> exercise; | |
| --- | |
| 6. | the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of<br>Lock- Up Securities provided that (i) such plan does not provide for the transfer of Lock-Up Securities during the Lock-Up Period<br>and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf<br>of the undersigned or the Company regarding the establishment of such plan, such public announcement or filing shall include a statement<br>to the effect that no transfer of Lock-Up Securities may be made under such plan during the Lock-Up Period; |
| --- | --- |
| 7. | the transfer of Lock-Up Securities that occurs by operation of law, such as pursuant to a qualified domestic<br>order or in connection with a divorce settlement, provided that such transferee agrees to be bound by the terms of this agreement<br>and signs and delivers to the Investors a lock-up agreement in the form hereof, and provided further that any filing under Section<br>13 of the Exchange Act that is required to be made during the Lock-Up Period as a result of such transfer shall include a statement that<br>such transfer has occurred by operation of law; and |
| --- | --- |
| 8. | the transfer of Lock-Up Securities pursuant to a bona fide third party tender offer, merger, consolidation<br>or other similar transaction made to all holders of shares of Common Stock involving a change of control (as defined below) of the Company<br>after the closing of the Transaction and approved by the Company’s board of directors; provided that in the event that the<br>tender offer, merger, consolidation or other such transaction is not completed, the Lock-Up Securities owned by the undersigned shall<br>remain subject to the restrictions contained in this agreement. “change of control” means the consummation of any bona<br>fide third party tender offer, merger, amalgamation, consolidation or other similar transaction the result of which is that any “person”<br>(as defined in Section 13(d)(3) of the Exchange Act), or group of persons, becomes the beneficial owner (as defined in Rules 13d-3 and<br>13d-5 of the Exchange Act) of a majority of total voting power of the voting stock of the Company. The undersigned also agrees and consents<br>to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s<br>Lock- Up Securities except in compliance with this agreement. |
| --- | --- |
2
Further to the foregoing, the Investors agree that they will agree to amend the Lock-Up period if such amendment shall be reasonably necessary to meet the listing standards of the Principal Trading Market in connection with listing of the Common Stock on the Principal Trading Market following the Business Combination or to satisfy other regulatory requirements.
This agreement shall terminate and be void and no longer of further force and effect on the earlier of (i) the irrevocable payment in full in cash (or conversion) of all of the Notes and the related Obligations and (ii) the date of termination of the Purchase Agreement in accordance with its terms if the closing for the Transaction has not occurred before the deadline set forth therein. Notwithstanding the foregoing, this agreement is a Transaction Document and is subject to certain provisions of the Purchase Agreement, including Section 6.11 (Marshaling; Payment Set Aside) thereof which provides that if any payment of the Obligations (including by set off or enforcement) is subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or is required to be refunded, repaid or otherwise restored to the Company or its Affiliates, a trustee, receiver or any other Person under any Regulation (including any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied, this agreement and all rights and remedies thereunder, shall be revived and continued in full force and effect as if such payment had not been made.
The undersigned understands that the Investors are relying upon this agreement in entering into the Purchase Agreement, the other Transaction Documents and the Transaction. Whether or not the Transaction actually occurs depends on a number of factors, including market conditions. Any Transaction will only be made pursuant to the Purchase Agreement.
This agreement (i) is irrevocable and shall be binding upon the undersigned’s heirs, legal representative, successors and, if permitted, assigns, (ii) has been executed in the English language, and the English text shall prevail over any translation, (iii) is for the exclusive benefit of the parties hereto and their respective successors and, if permitted, assigns, constitutes the entire agreement of such parties, superseding all prior agreements among them, with respect to the subject matter hereof except for written agreements with respect to confidentiality, (iv) may be modified, waived or assigned only by a writing signed by the parties hereto (and any attempt to assign any right, title, benefit or obligation under this agreement without such writing shall be null and void) and (v) may be executed in counterparts, which may be transmitted by fax or e-mail and which, together, shall constitute one and the same instrument. This agreement does not intend to create any agency, joint venture or other relationship between the undersigned and any Investor and that no Investor is entitled to cast any votes on the matters herein contemplated.
This agreement and all claims, disputes, Proceedingsand matters related hereto or arising hereunder or arising from or relating to the relationship among any of the parties hereto or thereto,are governed by, and shall be construed, interpreted and enforced exclusively in accordance with, the laws of the State of Delaware (withoutgiving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the applicationof the laws of any jurisdiction other than those of the State of Delaware). Any such Proceeding shall be brought exclusively in the Delawarestate courts sitting in Wilmington, DE or the federal courts of the United States of America for the District of Delaware sitting inWilmington, DE; provided, that the Collateral Agent and any Purchaser may bring Proceedings in other jurisdictions to enforce any TransactionDocument. Each Company Party (i) accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of such courts, (ii) irrevocably and unconditionally waives any objection, including any objection to the laying of venue, whether based on the grounds of forum non conveniens or on the fact that such jurisdiction is improper or otherwise, or any other objection that such party is not subject to the jurisdiction of such courts, that it may now or hereafter have to the bringing of any Proceeding in that jurisdiction, (iii) irrevocably and unconditionally consents to the service of process of any court referred to above in any Proceeding by the mailing of copies of the process to the parties hereto at the notice address used in this agreement and (iv) irrevocably and unconditionally agrees that a final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Service effected as provided in this manner will become effective ten (10) calendar days after the mailing of the process. Notwithstanding the foregoing, nothing contained in any Transaction Document shall affect the right of any Investor to serve process in any other manner permitted by applicable Regulations or commence Proceedings or otherwise proceed against any the undersigned in any other jurisdiction. **The parties hereto hereby irrevocably and unconditionallywaive, to the fullest extent permitted by applicable Regulations, any right that they may have to trial by jury of any claim or causeof action or in any Proceeding, directly or indirectly based upon or arising out of, under or in connection with, this agreement or anyTransaction Document, the Transaction or the transactions contemplated therein or related thereto (whether founded in contract, tortor any other theory). Each party hereto (a) certifies that no other party and no Affiliate of any of them and no attorney, agent or otherrepresentative of any of the foregoing has represented, expressly or otherwise, that any Person would not, in the event of litigation,seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this agreement,the Purchase Agreement and the other Transaction Documents by, among other things, the mutual waivers and certifications in this paragraph.**The undersigned acknowledges and agrees that the foregoing waivers are a material inducement to the Investors to enter into and accept this Agreement and the Purchase Agreement and Transaction Documents. The undersigned has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial rights following consultation with such legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. This paragraph shall not restrict a party from exercising pre-judgment remedies under applicable Regulations.
[Signature Page Follows]
3
The undersigned has read and agrees to be bound by the terms of this Lock-Up Agreement as of the date first written above:
| Very truly yours, |
|---|
| (Signature) |
| Name: |
| Address: |
| Email: |
Acknowledged and Agreed
As of the date first written above:
ASCENT PARTNERS FUND LLC,
as Investor and Collateral Agent
| By: |
|---|
| Name: |
| Title: |
Address for Notices:
4
ANNEX TO LOCK-UP AGREEMENT
DEFINITIONS
“Affiliate” means each Person that controls, is controlled by or is under common control with such Person or any Affiliate of such Person. For purpose of this definition, “control” and related words are used as such terms are used in and construed under Rule 405 under the Securities Act. Notwithstanding the foregoing, the Purchaser and its Subsidiaries, on the one hand, and the Company Parties and their Subsidiaries, on the other hand, shall not be considered “Affiliates” of each other.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, any Capital Stock into which such shares of common stock shall have been changed, and any share capital resulting from a reclassification of such common stock.
“Common Stock Equivalents” means any securities of any Company Party which would entitle the holder thereof to acquire at any time Common Stock, including whether or not presently convertible, exchangeable or exercisable, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to purchase, subscribe or otherwise receive, Common Stock.
“Derivative” means any futures or forward contract, spot transaction, purchase or option agreement, hedging arrangement, swap agreement, cap, floor or collar transaction, hedging transaction, any other derivative instrument, any other similar speculative transaction and any other similar agreement or arrangement designed to alter the risks of any Person arising from fluctuations in any underlying variable, including the price or value of any other derivative instrument. For the purposes of this definition, “derivative instrument” means “any derivative instrument” as defined in Statement of Financial Accounting Standards No. 133 (Accounting for Derivative Instruments and Hedging Activities) of the United States Financial Accounting Standards Board, and any defined with a term similar effect in any successor statement or any supplement to, or replacement of, any such statement.
**“Governmental Authority”**means any nation, sovereign or government, any state, province, territory or other political subdivision thereof, any municipality, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing, including any central bank stock exchange regulatory body arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).
“Obligations” means all amounts, indebtedness, obligations, liabilities, covenants and duties of every type and description owing by the Company or any other Company Party from time to time to any Investor, the Collateral Agent or any of their Purchaser Parties under the Note or any other Transaction Document, whether direct or indirect, joint or several, absolute or contingent, due or to become due, liquidated or unliquidated, secured or unsecured, now existing or hereafter arising and however acquired (regardless of whether acquired by assignment), whether or not evidenced by any note or other instrument or for the payment of money, including, without duplication, (i) the principal amount of the Note owing by the Company or any other Company Party, (ii) all other amounts, fees, interest, liquidated damages, commissions, charges, costs, expenses, attorneys’ fees and disbursements, indemnities, reimbursement of amounts paid and other sums chargeable to any Company Party under any Transaction Document or otherwise arising under any Transaction Document and (iii) all interest on any item otherwise qualifying as “Obligation” hereunder, whether or not accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or similar proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding.
5
“Person” means an individual, partnership, corporation, incorporated or unincorporated association, limited liability company, limited liability partnership, joint stock company, land trust, business trust or unincorporated organization, or a government or agency, department or other subdivision thereof or other entity of any kind.
“Proceeding” against a Person means an action, suit, litigation, arbitration, investigation, complaint, dispute, contest, hearing, inquiry, inquest, audit, examination or other proceeding threatened or pending against, affecting or purporting to affect such Person or its property, whether civil, criminal, administrative, investigative or appellate, in law or equity before any arbitrator or Governmental Authority.
“Regulation” means, all international, federal, state, provincial and local laws (whether civil or common law or rule of equity and whether U.S. or non- U.S.), treaties, constitutions, statutes, codes, tariffs, rules, guidelines, regulations, writs, injunctions, orders, judgments, awards, decrees, rulings, ordinances and administrative or judicial precedents or authorities, including, in each case whether or not having the force of law, the interpretation or administration thereof by any Governmental Authority, all policies, recommendations, directives, requirements, determinations, guidance and requests of any Governmental Authority and all administrative orders, directed duties and stipulations entered by or with a Governmental Authority.
“Sale” means a sale, lease or sublease (as lessor or sublessor), sale and leaseback, conveyance, transfer, assignment or other disposition to, or any exchange of property (other than cash and cash equivalents) with, any Person of, or any other transaction permitting any Person to acquire, in one transaction or a series of transactions, any interest in, all or any part of a business or any property of any kind (other than cash and cash equivalents) including a sale, factoring at maturity, collection of or other disposal, with or without recourse, of any notes or accounts receivable. To “Sell” shall have a correlative meaning.
“Subsidiary” means of any Person, any other Person (other than natural persons) the management of which is, directly or indirectly, controlled by, or of which an aggregate of fifty percent (50%) or more of the outstanding voting securities is, at the time, owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person.
“VWAP” means, for or as of any date for the Common Stock, the following:
(i) the Dollar volume-weighted average price of the Common Stock on the Principal Trading Market during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average); or,
(ii) if Bloomberg does not report such a price, the Dollar volume-weighted average price of the Common Stock in the over-the-counter market on the electronic bulletin board for the Common Stock during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg; or
(iii) if no Dollar volume-weighted average price is reported for the Common Stock by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such the Common Stock on such date as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC); or
(iv) if the VWAP cannot be calculated for the Common Stock on such date on any of the foregoing bases, the VWAP of the Common Stock on such date shall be the fair market value as mutually determined by the Company and the Investors.
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Exhibit 10.8
REGISTRATION RIGHTS AGREEMENT
This Registration RightsAgreement (this “Agreement”), dated as of July 11, 2025, is entered into by and among Profusa, Inc. (formerly, NorthView Acquisition Corporation), a Delaware corporation (together with its successors and, if permitted, assigns, the “Company”), and the holders identified on the signature pages hereto (each, together with its successors and, if permitted, assigns, and together with each other holder of Registrable Securities from time to time, a “Holder”).
**WHEREAS,**pursuant to the Securities Purchase Agreement, dated as of February 11, 2025, between the Company and each of the Holders (the “Purchase Agreement”), the Holders shall acquire certain Transaction Securities (as defined therein), which may result in the Holders holding Registrable Securities (as defined below); and
WHEREAS, the Company has agreed to register the Registrable Securities;
Now,therefore, in consideration of the representations, warranties and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
| 1. | Definitions. |
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(a) Capitalized terms used but not defined herein are used as defined in the Purchase Agreement or, if not defined therein, encompass all items covered by the definition of such term in any Note.
(b) As used in this Agreement, the following terms shall have the following meanings:
“Advice” has the meaning specified in Section 3(c).
“Black Out Period” has the meaning specified in Section 3(e).
‘**Discontinuation Event”**has the meaning specified in Section 3(c).
‘**Discontinuation Notice”**has the meaning specified in Section 3(c).
“Effectiveness Deadline” means, with respect to the Initial Registration Statement required to be filed hereunder, the sixtieth (60^th^) calendar day following the Filing Date; provided, that, in the event the Company is notified by the SEC that the Registration Statement will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to such Registration Statement shall be the fifth (5th) Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, that, if such Effectiveness Deadline falls on a day that is not a Trading Day, then the Effectiveness Deadline shall be the next succeeding Trading Day.
“Effectiveness Period” has the meaning specified in Section 2(a).
“Event” has the meaning specified in Section 2(e).
“Event Date” has the meaning specified in Section 2(e).
“Filing Date” means, (i) with respect to the Initial Registration Statement, the twentieth (20^th^) calendar day after the date hereof, (ii) with respect to any additional Registration Statements which may be required pursuant to Sections 2(a)(ii)(1), 2(a)(ii)(2) or 2(a)(iii), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities and (iii) with respect to any Registration Statement to be filed pursuant to **Section 2(a)(iv),**the later of (A) the “Filing Date” for the Initial Registration Statement and (B) if applicable, the earlier of (1) thirty (30) days after the filing of a registration statement covered by Section 2(a)(ii) that relates to an underwritten primary offering of Securities of the Company or (2) the date such offering has been withdrawn.
“Initial Registration Statement” means a registration statement on Form S-1 or Form S-3 or on such other form promulgated by the SEC for which the Company then qualifies and which counsel for the Company shall deem appropriate, and which form shall be available for the registration of the resale by the Purchaser of the Registrable Securities under the Securities Act, which registration statement provides for the resale from time to time of the Registrable Securities as provided herein.
“Losses” has the meaning specified in Section 5.
“Prospectus” means any prospectus included in any Registration Statement (including a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the SEC pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
“Required Holders” means Holders of a majority of the Registrable Securities, assuming, for purposes of this definition, that all Stock Equivalents convertible or exchangeable into Registrable Securities shall have been so converted or exchanged.
“Registrable Securities”^1^ means, as of any date of determination, all Issuable Securities, including (a) all of the shares of Common Stock then issued and issuable upon conversion in full of the Notes (assuming on such date the Notes are converted in full without regard to any conversion limitations therein), (b) all shares of Common Stock issued and issuable as interest or principal on the Notes assuming all permissible interest and principal payments are made in shares of Common Stock and the Notes are held until maturity, (c) all of the shares of Common Stock then issued and issuable in connection with any anti-dilution or any remedies provisions in the Notes (without giving effect to any limitations on conversion therein), and (d) any Securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, that “Registrable Securities” shall cease to include (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) any Securities with respect to which, and for so long as, the following is true: (x) a Registration Statement with respect to the sale of such Securities is declared effective by the SEC under the Securities Act and such Securities have been disposed of by the Holders in accordance with such effective Registration Statement, (y) such Securities have been previously sold in accordance with Rule 144, or (z) such Securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such Securities and any Securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such Securities were issued or are issuable, were at no time held by any Affiliate of the Company), as reasonably determined by the Company, upon the advice of counsel to the Company.
“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) or otherwise filed with respect to any Registrable Security, including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre-and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.
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“Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
“Selling Stockholder Questionnaire” has the meaning specified in Section 3(a).
“SEC Guidance” means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff and (ii) the Securities Act and related Regulations.
| 2. | Registration. |
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(a) RegistrationStatements.
(i) Initial. No later than the applicable Filing Date, the Company shall file with the SEC the Initial Registration Statement relating to the resale by the Holders of all (or, if lower, the highest number as the SEC will permit) of the Registrable Securities.
(ii) Additional.
(1) If the Company has filed a Registration Statement and the SEC informs the Company that all of the Registrable Securities listed in such Registration Statement cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform each Holder and shall, as soon as practicable but not later than the applicable Filing Date, use its best efforts to file amendments to such Registration Statement as required by the SEC, covering the maximum number of Registrable Securities permitted to be registered by the SEC (on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering), (x) with respect to filing on Form S-3 or other appropriate form, subject to the provisions of Section 2(f) and (y) with respect to the payment of liquidated damages, subject to the provisions of Section 2(e); provided, that prior to filing such amendment, the Company shall be obligated to use diligent efforts to advocate with the SEC for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including Compliance and Disclosure Interpretation 612.09.
(2) Otherwise, if, at any time during the Effectiveness Period, the number of Registrable Securities exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file, as soon as practicable but not later than the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities.
(iii) Piggy-Back Registrations. If, at any time during the Effectiveness Period, no effective Registration Statement covers all of the Registrable Securities and the Company intends to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity Securities (other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity Securities to be issued solely in connection with any acquisition of any entity or business or equity Securities issuable in connection with the Company’s stock option or other employee benefit plans), then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen (15) days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall, as soon as practicable but not later than the applicable Filing Date, include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided, that the Company shall not be required to register any Registrable Securities pursuant to this clause (iii) that are eligible for resale pursuant to Rule 144 (without volume restrictions or current public information requirements) promulgated by the SEC pursuant to the Securities Act or that are the subject of a then effective Registration Statement.
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(iv) Demand. As soon as practicable but nevertheless on or prior to the applicable Filing Date, the Company shall, upon written demand of any Holder, register, on at most two (2) occasions for each Holder, all or any portion of the Registrable Securities of such Holder; provided, that the Company shall not be required to file such a Registration Statement with respect to Registrable Securities already covered under another previously-filed Registration Statement or that such Holder has requested to be included in another registration statement pursuant to clause (iii) above. Within thirty (30) days after effective delivery of such written demand by such Holder, the Company shall file a registration statement with the SEC covering the portion of the Registrable Securities identified in such Demand Notice.
(b) FormUsed. The Company shall use its commercially reasonable to maintain eligibility for use of Form S-1 (or any successor form thereto) for the registration of the resale of Registrable Securities. If Form S-1 is not available for the registration of the resale of Registrable Securities pursuant to clauses (a)(i), (a)(ii) or (a)(iv) of Section 2, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-1 as soon as such form is available; provided, that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-1 covering the Registrable Securities has been declared effective by the SEC.
(c) EffectivenessPeriod. Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement (including under Section(a)(ii)) to be declared effective under the Securities Act within forty-five (45) days after the filing thereof, but in any event no later than the applicable Effectiveness Deadline, and shall use its commercially reasonable to keep all Registration Statements covering Registrable Securities continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement (x) have been sold, thereunder or pursuant to Rule 144, or (y) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected Holder (the period between (A) the earlier of the date the Registration Statement is effective and the Effectiveness Deadline and (B) the earlier of (x) or (y) above, being the “EffectivenessPeriod”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall promptly notify the Holders of the effectiveness of a Registration Statement after the Company telephonically confirms effectiveness with the SEC. The Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the SEC as required by Rule 424. Failure to so notify the Holders within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(e).
(d) ReducedCoverage. Notwithstanding any other provision of this Agreement and subject to the payment of liquidated damages pursuant to **Section 2(e)**if the SEC or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the SEC for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:
(i) first, the Company shall reduce or eliminate any Securities to be included by any Person other than a Holder;
(ii) second, the Company shall, unless the Required Holders instruct the Company to treat Warrant Shares like Convertible Shares under this clause (d) (in which case the Company shall do so), reduce or eliminate any Registrable Securities consisting of Warrant Shares (applied to the Holders on a pro rata basis based on the number of unregistered Warrant Shares); and
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(iii) third, the Company shall reduce Registrable Securities represented by Conversion Shares (applied, in the case that some Conversion Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Conversion Shares held by such Holders); provided, that each Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement and shall have the option to transfer its pro rata share to another Holder.
In the event of a cutback hereunder, the Company shall give each Holder at least five (5) Trading Days prior written notice along with the calculations as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its commercially reasonable to file with the SEC, as promptly as allowed by SEC or SEC Guidance provided to the Company or to registrants of Securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.
(e) PartialLiquidated Damages. Provided that no Default or Event of Default exists, if (i) a Registration Statement required to be filed hereunder is not filed on or prior to its Filing Date or if the Company files such Registration Statement without providing the Holders the opportunity to review and comment on the same as required by Section 3(a), (ii) the Company fails to file with the SEC a request for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the SEC pursuant to the Securities Act, within five (5) Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be “reviewed” or will not be subject to further review, (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the SEC in respect of such Registration Statement within ten (10) calendar days after the receipt of comments by or notice from the SEC that such amendment is required in order for such Registration Statement to be declared effective, (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective by the SEC by the Effectiveness Deadline, or (v) during the Effectiveness Period of a Registration Statement, after such Registration Statement has become effective, (A) a Discontinuation Event arises or such Registration Statement otherwise ceases for any other reason to remain continuously effective as to all Registrable Securities included in such Registration Statement, or (B) a Black Out Period arises or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities and, in each case clause (A) and (B) above, occurs for more than ten (10) consecutive calendar days or more than an aggregate of fifteen (15) calendar days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach, an “Event” and the expiration of the grace period for such Event specified above, the “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable Regulation, on each such Event Date and on each monthly anniversary of each such Event Date thereafter (if the applicable Event shall not have been cured by such date) or any pro rata portion thereof, until the applicable Event is cured or sixty (60) calendar days after the applicable Event Date, whichever occurs first, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of two percent (2.0%) multiplied by the Subscription Amount paid by such Holder for the Purchased Securities pursuant to the Purchase Agreement; provided, that the maximum amount payable thereunder shall not exceed 4% of such Subscription Amount paid by such Holder. If the Company fails to pay any partial liquidated damages to any Holder pursuant to this Section 2(e) in full within seven (7) days after the date payable, the Company will pay interest thereon at a rate of sixteen percent (16%) per annum (or such lesser maximum amount that is permitted to be paid by applicable Regulation) to such Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.
(f) NoHolder Underwriter. Notwithstanding anything to the contrary contained herein but subject to comments by the SEC, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as an underwriter without the prior written consent of such Holder.
| 3. | Registration Procedures. |
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(a) Reviewof Document. Not less than three (3) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of the Holders, and (ii) cause its officers, directors, managers, staff, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to any Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Required Holders shall reasonably object, provided, that, the Company is notified of such objection in writing no later than five (5) Trading Days after all Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after all Holders have been furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex A (a “Selling StockholderQuestionnaire”) on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4^th^) Trading Day following the date on which such Holder receives draft materials in accordance with this Section 3(a). The Company shall not distribute any offering material in connection with any offering or sale that includes any Registrable Securities except for Registration Statements (including Prospectuses) approved by the Required Holders.
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(b) Compliancewith Regulations and SEC Requests. The Company shall (i) comply with all applicable Regulations applicable to Registration Statements, as well as all requests by the SEC and other Governmental Authorities, and the offer and sale of Securities thereunder (including Sales done, subject to this Agreement, using the intended methods of disposition by the Holders), including ensuring that all such Registration Statements, offers and sales conform to the requirements of, and comply with the Exchange Act, the Securities Act and all other applicable Regulations, including meeting the requirements of Rule 415, (ii) prepare and file with the SEC such amendments, including post-effective amendments, to Registration Statements (including Prospectuses) as may be necessary to comply with applicable Regulations or otherwise to keep such Registration Statements continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (iii) cause the related Prospectus to be amended or supplemented by any Prospectus supplement, as may be required by Regulations and the SEC (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iv) respond as promptly as reasonably practicable to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and provide promptly to the Holders, without charge, true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided, that the Company shall redact any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries), (v) use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (A) any order stopping or suspending the effectiveness of a Registration Statement, or (B) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment and (vi) deliver or made available to the Investor through the SEC’s website (www.sec.gov), true and complete copies of all Registration Statements, including Prospectuses and amendments and supplements, and all other SEC Reports.
(c) Noticesto Holders; Discontinuation Events. The Company shall notify the Holders of Registrable Securities to be sold as promptly as possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing and, if requested by any Holder, confirm such notice in writing no later than one (1) Trading Day following the day of such filing) of all of the following: (i)(A) any proposal to file any Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement, (B) any notice by the SEC to the Company on whether there will be a “review” of such Registration Statement and any written comment on such Registration Statement received by the Company from the SEC, and (C) the effectiveness of any Registration Statement or any post-effective amendment, (ii) any request by the SEC or any other Governmental Authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) the issuance by the SEC or any other Governmental Authority of any stop order or other Regulation suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose and (v) the occurrence of any event (including the passage of time) that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other document to ensure that such Registration Statement, Prospectus or other document will not contain any untrue statement of a material fact and will not omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (any event described in clauses (iii) through (v) above a “Discontinuation Event” and any notice given hereunder pursuant to any such clauses, a “DiscontinuationNotice”), provided, that any Discontinuation Notice shall be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made; and, provided, further, that, in no event shall any notice sent pursuant to this clause (c) contain any information which would constitute material, non-public information regarding the Company or any of its Subsidiaries. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of any Discontinuation Notice, such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its commercially reasonable to ensure that the use of the Prospectus may be resumed as promptly as is practicable.
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(d) AmendmentsAfter Discontinuation Events. Promptly upon the occurrence of any event contemplated pursuant to clause (c)(ii) above or a Discontinuation Event contemplated by clause (c) above, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company sends a Discontinuation Notice under clause (c) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its commercially reasonable to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this clause (d) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section 2(e), for a period not to exceed sixty (60) calendar days (which need not be consecutive days) in any 12-month period.
(e) BlackOut Periods. The Company may, from time to time by notice to the Holders, suspend the use of the Registration Statement during certain periods (each a “Black Out Period”) in the event that the Company determines in its sole discretion in good faith that such suspension is necessary during such Black Out Period to (i) delay the disclosure of material non-public information concerning the Company, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company or (ii) amend or supplement the Registration Statement or any related Prospectus so that the Registration Statement or such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading**; provided**, that (w) no such Black Out Period shall be longer than 90 days, (x) the Black Out Periods established during any calendar year shall not have more than 120 days in the aggregate, (y) no Black Out Period shall be more restrictive or longer than any comparable restriction imposed on Sales of equity Securities by the Company’s directors and senior officers and (z) each Black Out Period shall immediately end upon public disclosure of the material non-public information that caused such Black Out Period to be established. The Holders agrees that, during such Black Out Periods, they shall not sell any Registrable Securities of the Company pursuant to the Registration Statement; provided, that, for the avoidance of doubt, the Holders may Sell such Registrable Securities pursuant to any available exemption from registration, subject to compliance with applicable Regulations.
(f) ConfirmedCopy. The Company shall furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement (including amendments and supplements), including Prospectuses, financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form. Subject to the terms of this Agreement, the Company hereby consents to the use of each Registration Statement (including Prospectuses and all amendments and supplements thereto) by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Registration Statement, except after the giving of any Discontinuation Notice pursuant to clause (c) above and during a Black Out Period.
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(g) **Resales.**The Company shall cooperate with any broker-dealer through which a Holder proposes to resell its Registrable Securities in effecting a filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as requested by any such Holder, and the Company shall pay the filing fee required by such filing within two (2) Business Days of receipt of a request therefor. Prior to any resale of Registrable Securities by a Holder, the Company shall use its commercially reasonable to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by each Holder under the securities or Blue Sky Regulations of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction. If requested by a Holder, the Company shall cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request. The Company may require from each selling Holder a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and the name(s) of the natural persons thereof that have voting and dispositive control over the Common Stock underlying the Note(s). During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three (3) Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to all Holders until such information is delivered to the Company.
- Registration Expenses. In addition to, and not in substitution for, any other provision in any Transaction Document requiring any Company Party to reimburse expenses, the Company shall pay (or, if applicable, reimburse the Holders and their Related Parties for) all costs, fees and expenses incident to the performance of or compliance with, this Agreement by the Company, whether or not any Registrable Securities are sold pursuant to a Registration Statement, including (i) all registration and filing fees, costs and expenses (including fees, costs and expenses of counsel to the Company and of the independent registered public accountants of the Company) in connection with this Agreement or the transactions contemplated herein, including (A) filing SEC Reports, (B) filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (C) compliance with applicable state or other securities Regulations, including Blue Sky Regulations and (D) filings that may be required to be made by any broker through which a Holder intends to Sell Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing fees, costs and expenses (including fees, costs and expenses of printing Registration Statements, Prospectuses and certificates for Registrable Securities), (iii) messenger, telephone and delivery fees, costs and expenses, (iv) internal expenses of the Company incurred in connection with this Agreement or any transaction contemplated herewith (including all salaries and expenses of its officers, managers, directors and staff performing legal or accounting duties), (v) fees, costs and expenses in corrected in connection with any annual audit, (vi) fees, costs and expenses incurred in connection with the listing of the Registrable Securities on any Trading Market or other securities exchange, (vii) fees, costs and expenses of counsel for the Company, including in connection with Blue Sky qualifications or exemptions of the Registrable Securities, (viii) Securities Act and similar liability insurance for the Company and (ix) fees, costs and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In no event shall the Company be responsible for any broker or similar commissions of any Holder, except as otherwise provided in any other Transaction Document.
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- Indemnification.
(a) The Company shall, notwithstanding any termination of this Agreement, in addition to and not in substitution or limitation for, any other indemnification provision by the Company, indemnify and hold harmless each Holder, the officers, directors, managers, managing members, members, partners, advisors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), staff members (whether or not classified as employees or independent contractors), investment advisors and (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, managers, managing members, members, stockholders, staff members (whether or not classified as employees or independent contractors), partners, advisors, agents (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable Regulation, from and against any and all losses, claims, damages, liabilities, costs (including attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any other securities Regulation, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (x) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (y) in the case of an occurrence of a Discontinuation Event, the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section , but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity is in addition and not in substitution for any other indemnification provision in any Transaction Document and shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders.
(b) In connection with any Registration Statement in which the Holders are participating, each Holder agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 5(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each, a “Company Party” and collectively, the “Company Parties”), against any Losses to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Losses are directly the result, as determined in a final non-appealable judgement of court having competent jurisdiction, of any intentionally untrue statements or intentional omissions regarding such Holder furnished in writing to the Company by such Holder expressly for use in connection with a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus.
| 6. | Miscellaneous. |
|---|
(a) Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by Regulation and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.
(b) NoOther Registration Statements. Neither the Company nor any of its holders of its Securities (other than the Holders in such capacity pursuant hereto) may include Securities of the Company in any Registration Statements other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the SEC, provided that this Section 6(b), (i) shall not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement and (ii) shall not prohibit the Company from filing a registration statement on Form S-3 for a primary offering by the Company, provided, that the Company makes no offering of Securities pursuant to such shelf registration statement prior to the effective date of the Registration Statement required hereunder that includes all of the Registrable Securities.
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(c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to a Registration Statement.
(d) **Notices.**All notices, requests and demands to or upon any Holder or the Company hereunder shall be effected in the manner provided for in Section 6.4(Notices) of the Purchase Agreement.
(e) Successorsand Assigns. This Agreement shall be binding upon, and inure to the benefit of, the Company, the Holders and their successors and assigns; provided, that the Company may not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Required Holders (and any attempt to effect such assignment, transfer or delegation without such consent shall be null and void at the outset). Each Holder may assign this Agreement in whole or in part to the extent permitted by Section 6.3(c)(Beneficiaries, Successors and Assigns) of the Purchase Agreement, as well as applicable securities Regulations and in connection with the assignment of any Registrable Securities.
(f) Amendments. No amendment, modification or termination of any provision of this Agreement shall be effective without the written consent of the Company and the Required Holders; provided, that (i) if any such amendment, modification or termination disproportionately and adversely impacts a Holder (or group of Holders), the consent of holders of a majority of the Registrable Shares held by such disproportionately impacted Holder (or group of Holders) shall also be required and (ii) this sentence in this Section 6(f) may only be modified with the consent of all Holders. In addition, as provided by Section 6.3(b) of the Purchase Agreement, no waiver or consent shall be effective against any party unless given in writing by such party and then any such waiver shall then be effective only in the specific instance and for the specific purpose for which it was given. Where the consent or waiver of the Holders generally (and not each Holder) is required, it may be given by the Required Holders. Any modification effected in accordance with accordance with this clause (f) shall be binding upon each Holder and the Company. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.
(g) EntireAgreement; Counterparts; Electronic Signatures. As described in Section 6.3(a) (Entire Agreement) of the Purchase Agreement, this Agreement and the other Transaction Documents contain and constitute the entire agreement of the parties with respect to the subject matter hereof. This Agreement may be executed in counterparts as provided in Section 6.3(e) (Counterparts) of the Purchase Agreement and, as provided in Section 6.3(f) (Electronic Signatures) of the Purchase Agreement, electronic signatures have the same force and effect as manual signatures.
(h) NoInconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its Securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.
(i) FurtherAssurances. The Company hereby agrees to take, promptly after any Holder’s request, such further actions, including executing or causing to be executed and delivering to such Holder such further documents, as such Holder shall reasonably request from time to time in connection herewith to evidence, give effect to or carry out the intent of this Agreement and the transactions contemplated hereby.
(j) CumulativeRemedies; Several Obligations of Holders. The remedies provided herein are cumulative and not exclusive of any other remedies provided by Regulation. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other Transaction Document, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.
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(k) GoverningLaw. Each party hereto hereby agrees to the provisions of Section 6.6 (Governing Law; Courts) of the Purchase Agreement, including that (a) this Agreement and all claims, disputes, Proceedings, and matters related hereto or thereto or arising hereunder or thereunder or arising from or relating to the relationship among any of the parties hereto or thereto, are governed by, and shall be construed, interpreted and enforced exclusively in accordance with, the laws of the State of Delaware **(**without giving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of Delaware) and (b) any such Proceeding shall be brought exclusively in the Delaware state courts sitting in Wilmington, DE or the federal courts of the United States of America for the District of Delaware sitting in Wilmington, DE; provided, that any Holder may bring Proceedings in other jurisdictions to enforce any Transaction Document. Each such party hereby accepts such jurisdiction, waives any objections to venue, and agrees that a final judgment in any such Proceedingshall be conclusive and enforceable in other jurisdictions, all as provided in the Purchase Agreement and accepts that service of processmay be made in the way set forth in the Purchase Agreement.
(l) Waiverof Jury Trial. Each party hereto hereby agree to Section 6.16 (Waiver of Jury Trial and Certain Other Rights) of the PurchaseAgreement whereby, among other things, it irrevocably waives trial by jury in any Proceeding with respect to, or directly or indirectlyarising out of, relating to or in connection with, this Agreement or any other Transaction Document or the transactions contemplated thereinor related thereto (whether founded in contract, tort or any other theory). Each party hereto (a) certifies that no representative, agentor attorney of any other party or beneficiary hereof has represented, expressly or otherwise, that such other parties would not, in theevent of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced toenter into this Agreement and the other Transaction Documents by, among other things, the mutual waivers and certifications in this section.
(m) Interpretation. This Agreement is a Transaction Document and as such is subject to various interpretative, amendment and third party beneficiary and other miscellaneous provisions set forth in the Purchase Agreement that expressly apply to Transaction Documents, located principally in Article VI(Miscellaneous) thereof, including Sections 6.3(d) (No Implied Waivers or Notice Rights), 6.5 (Set off), 6.7 (Severability) and 6.11 (Marshaling, Payments Set Aside) but also Article IV (Other Agreements of the Parties) thereof, which contains indemnification obligations, and Sections 3.1 (Representations and Warranties of the Company Parties) and 6.2 (Fees and Expenses) thereof**,**which the Company, in the case of representations and warranties, expressly makes herein for the benefit of each Holder whenever those are made under the Purchase Agreement, and, for other provisions, agrees to comply therewith.
[Signature Pages Follow]
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Inwitness whereof, each of the undersigned has duly executed this Agreement as of the date first written above.
| PROFUSA, INC. | |
|---|---|
| By: | |
| Name: | Ben C. Hwang |
| Title: | Chief Executive Officer |
| Date signed: |
| Ascent Partners Fund LLC, | |
|---|---|
| as Holder | |
| By: | |
| Name: | Mikhail Gurevich |
| Title: | Authorized Signatory |
| Date signed: | |
| REGISTRATION RIGHTS AGREEMENT | |
| --- |
ANNEX A
PROFUSA, INC.
Selling Stockholder Notice and Questionnaire
The undersigned beneficial owner of shares of Common Stock (the “Registrable Securities”) of profusa, inc. (the “Company”) understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “SEC”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) by and among the Company, the undersigned and the other Holders of Registrable Securities, dated as of ________________ __, 20__. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein has the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “SellingStockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
| 1. | Name. |
|---|---|
| (a) | Full Legal Name of Selling Stockholder |
| --- | --- |
| (b) | Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities<br>are held: |
| --- | --- |
| (c) | Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone<br>or with others has power to vote or dispose of the Securities covered by this Questionnaire): |
| --- | --- |
- Address for Notices to Selling Stockholder:
| Telephone: _____ |
|---|
| Email: ___ |
| Contact Person: ___ |
| -2- |
| --- |
- Broker-Dealer Status:
| (a) | Are you a broker-dealer? |
|---|
Yes ☐ No ☐
| (b) | If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for<br>investment banking services to the Company? |
|---|
Yes ☐ No ☐
| Note: | If “no” to Section 3(b), the SEC’s staff<br>has indicated that you should be identified as an underwriter in the Registration Statement. |
|---|---|
| (c) | Are you an affiliate of a broker-dealer? |
| --- | --- |
Yes ☐ No ☐
| (d) | If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities<br>in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements<br>or understandings, directly or indirectly, with any person to distribute the Registrable Securities? |
|---|
Yes ☐ No ☐
| Note: | If “no” to Section 3(d), the SEC’s staff<br>has indicated that you should be identified as an underwriter in the Registration Statement. |
|---|
- Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any Securities of the Company other than the Registrable Securities and the Transaction Securities pursuant to the Purchase Agreement.
| (a) | Type and Amount of other Securities beneficially owned by the Selling Stockholder: |
|---|---|
| -3- | |
| --- |
- Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity Securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:
The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify the Company of any changes to the number of Securities held or owned by the undersigned or its affiliates.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Date: _______________________________
Beneficial Owner: ______________________
| By: |
|---|
| Name: |
| Title: |
PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:
[______________________]
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Exhibit 10.9
securityagreement
This Security Agreement (this “Agreement”), dated as of July 11, 2025, is entered into by and among Profusa, Inc., a Delaware corporation (formerly, NorthView Acquisition Corporation) (the “Company”) and each of the other entities listed on the signature pages hereof or that becomes a party hereto pursuant to Section 7.5 (together with the Company, the “Grantors”) in favor of Ascent Partners Fund LLC, a Delaware limited liability company, for itself and as collateral agent (in such capacity and together with any successor and any replacement named in accordance with the Purchase Agreement, the “Collateral Agent”) for the Purchaser Parties, including the holders (the “Holders” or the “Purchasers”) of the Notes issued and sold by the Company pursuant to the Securities Purchase Agreement, dated as of February 11, 2025, by and among the Company, the Collateral Agent and the Holders (the “Purchase Agreement”).
recitals
Whereas, pursuant to the Purchase Agreement, the initial Purchasers are purchasing the Notes from the Company upon the terms and subject to the conditions set forth therein;
Whereas, each Grantor has, among other things, guaranteed the Obligations of the Company under the Notes pursuant to a Guaranty of even date herewith and will derive substantial direct and indirect benefits from the purchase of the Notes under the Purchase Agreement; and
Whereas, it is a condition precedent to the obligation of each Initial Holder to purchase the Notes from the Company under the Purchase Agreement and for the Collateral Agent to sign the Purchase Agreement that the Grantors shall have executed this Agreement and delivered it to the Collateral Agent and the initial Purchasers;
Now,therefore, in consideration of the representations, warranties and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I Definitions
1.1****Definitions.
(a) Capitalized terms used but not defined herein are used as defined in the Purchase Agreement or, if not defined therein, encompass all items covered by the definition of such term in any Note.
(b) The following terms shall have the following meanings:
“ApplicableIP Office” means the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency within or outside the United States.
“Collateral” has the meaning specified in Section 2.1.
“ControlAgreement” means, with respect to any deposit account, any securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance satisfactory to the Collateral Agent, among the Collateral Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the party maintaining such account, to the extent (a) such financial institution or other Person is acceptable to the Collateral Agent in its sole discretion and (b) such agreement is effective to grant “control” (as defined under each applicable UCC) over such account, entitlement or contract to the Collateral Agent.
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“Copyrights” means all rights, title and interests (and all related IP Ancillary Rights) arising under any Regulation in or relating to copyrights and all mask work, database and design rights, whether or not registered or published, together with all registrations, recordations and applications relating to any of the foregoing, all rights to obtain any renewal of any of the foregoing and all rights, title and interests to any of the foregoing throughout the world.
“ExcludedProperty” means, collectively, (i) any Permit or similar Contractual Obligation listed on the Disclosure Certificate as “ExcludedProperty” and entered into by any Grantor prior to the date hereof or entered into by any Grantor with the consent of the Collateral Agent after the date hereof (A) that prohibits or requires the consent of any Person other than the Company, any other Company Party or any of their respective Affiliates as a condition to the creation by such Grantor of a Lien on any right, title or interest in such Permit or other agreement or any Capital Stock or Stock Equivalent related thereto, or (B) to the extent that any Regulation applicable thereto prohibits the creation of a Lien thereon, but only, with respect to the prohibition in (A) and (B), and for as long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC or any other Regulation, (ii) fixed or capital assets owned by any Grantor that is subject to a purchase money security interest or a Capital Lease if the documentation pursuant to which such Lien is granted (or in the documentation providing for such Capital Lease) prohibits or requires the consent of any Person (other than the Company, any other Company Party and their respective Affiliates) as a condition to the creation of any other Lien on such equipment and (iii) any “intent to use” Trademark applications for which a statement of use has not been filed (but only until such statement is filed); provided, that “Excluded Property” shall not include any proceeds, products, substitutions or replacements of Excluded Property (unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Property), all of which shall therefore be included in Collateral as provided hereunder.
“IntellectualProperty” means any “Intellectual Property Rights” as defined in the Purchase Agreement, including all applicable Copyrights, Trademarks, Patents, Internet Domain Names, Trade Secrets and IP Licenses.
“InternetDomain Names” means all rights, title and interests (and all related IP Ancillary Rights) arising under any Regulation in or relating to Internet domain names.
“IP AncillaryRights” means, with respect to any Intellectual Property, as applicable, all rights, title and interests in foreign counterparts to, and all divisionals, reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and Losses at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights, title and interests to obtain any other IP Ancillary Right.
“IP License” means all rights, title and interests under any Contractual Obligation, including licenses, and other documentation (and all related IP Ancillary Rights), whether written or oral, granting or receiving any right title or interest in or relating to any Intellectual Property.
“Patents” means all rights, title and interests (and all related IP Ancillary Rights) arising under any Regulation in or relating to any and all patents, together with all registrations, recordations and applications relating to the foregoing, all inventions and improvements described and claimed in any of the foregoing, all rights to obtain any renewal of any of the foregoing and all rights, title and interests to any of the foregoing throughout the world.
“PledgedCertificated Stock” means all certificated securities and any other Capital Stock or Stock Equivalent of any Person evidenced by a certificate, instrument or other similar documentation (as defined in the UCC), in each case owned by any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Capital Stock and Stock Equivalents set forth on the Disclosure Certificate. “Pledged Certificated Stock” excludes any Excluded Property.
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“PledgedCollateral” means, collectively, the Pledged Stock and the Pledged Debt Instruments.
“PledgedDebt Instruments” means all right, title and interests of any Grantor in instruments evidencing any Indebtedness owed to such Grantor or other obligations, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Indebtedness set forth on the Disclosure Certificate, issued by the obligors named therein.
“PledgedInvestment Property” means any investment property of any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, other than any Pledged Collateral.
“PledgedStock” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.
“PledgedUncertificated Stock” means any Capital Stock or Stock Equivalent of any Person that is not Pledged Certificated Stock, including all rights, title and interests of any Grantor as a limited or general partner in any partnership not constituting Pledged Certificated Stock or as a member of any limited liability company, all rights, title and interests of any Grantor in, to and under any constituent documentation of any partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including in each case those interests set forth on the Disclosure Certificate, to the extent such interests are not certificated. “Pledged Uncertificated Stock” excludes any Excluded Property.
“Software” means (a) all computer programs, including source code and object code versions, (b) all data, databases and compilations of data, whether machine readable or otherwise, and (c) all documentation, training materials and configurations related to any of the foregoing.
“Trademarks” means all rights, title and interests (and all related IP Ancillary Rights) arising under any Regulation in or relating to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each case, all goodwill associated therewith, together with all applications, registrations and recordations relating to the foregoing, including registrations and registration applications in the Applicable IP Office, all common law trademarks and the goodwill of the business symbolized by any of the foregoing, all rights to obtain any renewal of any of the foregoing, and all rights, title and interests to any of the foregoing throughout the world.
“Trade Secrets” means all right, title and interests (and all related IP Ancillary Rights) arising under any Regulation in or relating to trade secrets, together with all rights, title and interests to any of the foregoing throughout the world (including, where applicable, any registrations, recordations and applications relating to any of the foregoing and all rights to obtain any renewal of any of the foregoing).
“UCC” means the Uniform Commercial Code as from time to time in effect in the State of Delaware; provided, however, that, in the event that, by reason of mandatory provisions of any applicable Regulation, any of the attachment, perfection or priority of any other Purchaser Party’s security interest in any Collateral is governed by the Uniform Commercial Code or comparable Regulation of a jurisdiction other than the State of Delaware, “UCC” shall mean the Uniform Commercial Code or comparable Regulation as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions.
“Vehicles” means all vehicles covered by a certificate of title law of any state.
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(c) The following terms have the meanings given to them in the UCC and terms used herein without definition that are defined in the UCC have the meanings given to them in the UCC (such meanings to be equally applicable to both the singular and plural forms of the terms defined), including the following: “account,” “account debtor,” “as-extracted collateral,” “certificated security,” “chattel paper,” “commercial tort claim,” “commodity contract,” “deposit account,” “documents,” “electronic chattel paper,” “equipment,” “farm products,” “fixture,” “general intangible,” “goods,” “health-care-insurance receivable,” “instruments,” “inventory,” “investment property,” “letter-of-credit right,” “payment intangible,” “proceeds,” “record,” “securities account,” “security,” “supporting obligation” and “tangible chattel paper.”
1.2****Certain Other Terms.
(a) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The terms “herein,” “hereof” and similar terms refer to this Agreement as a whole and not to any particular Article, Section or clause in this Agreement. References herein to an Annex, Article, Section or clause refer to the appropriate Annex to, or Article, Section or clause in this Agreement. Where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall refer to such Grantor’s Collateral or any relevant part thereof.
(b) Section 6.15 (Interpretation) of the Purchase Agreement is applicable to this Agreement in accordance with its terms, as well as several other provisions of Article VI (Miscellaneous) of the Purchase Agreement. In addition, whenever used in this Agreement, “in the ordinary course of business of a Person” shall mean “in the ordinary course of business in all material respects consistent with past custom and practice of such Person as in effect on the date hereof with such changes as may be agreed to in writing by the Collateral Agent”.
Article II Grantof Security Interest
2.1****Collateral. For the purposes of this Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interest is collectively referred to as the “Collateral”:
(a) all accounts, as-extracted collateral, chattel paper, deposit accounts, documents, equipment, general intangibles (including all payment intangibles, Intellectual Property, rights to tax refunds, intercompany notes, rights arising out of leases, licenses, and contracts which are not accounts, computer software, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, options, warranties, service contracts, program services, rights to refund, reimbursement, indemnification, and subrogation, goodwill, licenses, royalties, franchises, customer lists, reversions from any retirement plan or arrangement, money, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the Code), instruments (including dividends and rights to payment arising out of partnership agreements and management contracts), inventory, investment property (including any Pledged Collateral and Pledged Investment Property) and any supporting obligations related thereto;
(b) any commercial tort claims set forth on the Disclosure Certificate;
(c) all books, records, ledgers, files, writings, data bases, plans, drawings, and information relating to any of the foregoing, pertaining to the other property described in this Section 2.1;
(d) all property of such Grantor held by any Purchaser Party, including all property of every description, in the custody of or in transit to such Purchaser Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power, including cash;
(e) all other goods, fixtures, improvements (not constituting real property), and other personal property of such Grantor, whether tangible or intangible and wherever located; and
(f) to the extent not otherwise included, all cryptocurrency and other blockchain assets; and
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(g) to the extent not otherwise included, all proceeds of the foregoing, including insurance proceeds (including any surrender value therefor, any right to return, or unearned premiums), causes and rights of action, remedies, privileges, settlements, judicial and arbitration judgments and awards, indemnities, Liens, warranties, or guaranties payable from time to time with respect to, or Lien or other security for, any of the foregoing;
provided, that “Collateral” shall not include any Excluded Property; and provided, further, that if and when any property shall cease to be Excluded Property, such property shall be deemed at all times from and after the date hereof to constitute Collateral.
2.2****Grant of Security Interest in Collateral. Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations of such Grantor (the “Secured Obligations”), hereby mortgages, pledges and hypothecates to the Collateral Agent, as agent for the Purchaser Parties, and grants to the Collateral Agent, as agent for the Purchaser Parties, a Lien on and security interest in, all of its rights, title and interests in, to and under the Collateral of such Grantor.
Article III Representationsand Warranties
To induce the initial Holders and the Collateral Agent to enter into the Transaction Documents, each Grantor hereby jointly and severally represents and warrants each of the following to the Collateral Agent, as agent for the other Purchaser Parties:
3.1****Title; No Other Liens. Except for the Lien granted to the Purchaser Parties pursuant to this Agreement and other Permitted Liens under any Transaction Document (including Section 3.2), such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b) has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien.
3.2****Perfection and Priority. The security interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor of the Collateral Agent, as agent for the Purchaser Parties, in all Collateral subject, for the following Collateral, to the occurrence of the following: (i) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of such filings set forth on the Disclosure Certificate (which have been delivered to the Collateral Agent in completed and duly authorized form), (ii) with respect to any deposit account, the execution of Control Agreements, (iii) in the case of all Copyrights, Trademarks, Patents and other Intellectual Property for which UCC filings are insufficient, the making of all appropriate filings with the United States Copyright Office or the United States Patent and Trademark Office, as applicable, (iv) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of an agreement granting control to the Collateral Agent over such letter-of-credit rights, (v) in the case of electronic chattel paper, the completion of all steps necessary to grant control to the Collateral Agent over such electronic chattel paper and (vi) in the case of Vehicles, the actions required under Section 4.1(e). Such security interest shall be prior to all other Liens on the Collateral except as permitted by any Transaction Document upon (i) in the case of all Pledged Investment Property having instruments or certificates, Pledged Certificated Stock and Pledged Debt Instruments, the delivery thereof to the Collateral Agent of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property, in each case properly endorsed for transfer to the Collateral Agent or in blank, (ii) in the case of all Pledged Investment Property not having instruments or certificates and Pledged Uncertificated Stock, the execution of Control Agreements with respect to such investment property and (iii) in the case of all other instruments and tangible chattel paper that are not Pledged Collateral or Pledged Investment Property, the delivery thereof to the Collateral Agent of such instruments and tangible chattel paper. Except as set forth in this Section 3.2, all actions by each Grantor necessary or desirable and that have been requested by the Collateral Agent to protect and perfect the Lien granted hereunder on the Collateral have been duly taken.
3.3****Jurisdiction of Organization; Chief Executive Office. The following is set forth on the Disclosure Certificate for such Grantor, in each case as of the date hereof and for the last five years, (i) in the case of an individual, such Grantor’s tax identification number, full legal name and address of legal residence and (ii) in the case of an entity, such Grantor’s jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Grantor’s chief executive office or sole place of business.
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3.4 Locations of Inventory, Equipment and Books and Records. On the date hereof and for the last five years, the location of such Grantor’s inventory and equipment (other than inventory or equipment in transit) and the location of all books and records concerning the Collateral are all listed in the Disclosure Certificates.
3.5****Pledged Collateral.
(a) The Pledged Stock pledged by such Grantor hereunder (i) is set forth on the Disclosure Certificate and constitutes that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on the Disclosure Certificate, (ii) has been duly authorized, validly issued and is fully paid and nonassessable (other than Pledged Stock in limited liability companies and partnerships) and (iii) constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms.
(b) As of the date hereof, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment Property consisting of instruments and certificates has been delivered to the Collateral Agent in accordance with Section 4.3(a).
(c) Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall be entitled to exercise all of the rights of the Grantor granting the security interest in any Pledged Stock, and a transferee or assignee of such Pledged Stock shall, to the same extent as such Grantor, become a holder of such Pledged Stock and be entitled to participate in the management of the issuer of such Pledged Stock and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.
3.6****Instruments and Tangible Chattel Paper Formerly Accounts. No amount payable to such Grantor under or in connection with any account is evidenced by any instrument or tangible chattel paper that has not been delivered to the Collateral Agent, properly endorsed for transfer, to the extent delivery is required by Section 4.6(a).
3.7****Intellectual Property.
(a) The Disclosure Certificate sets forth a true and complete list of the following Intellectual Property such Grantor owns, licenses or otherwise has the right to use: (i) Intellectual Property that is registered or subject to applications for registration, (ii) Internet Domain Names and (iii) Intellectual Property and Software, separately identifying that owned and licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the title, (3) the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4) as applicable, the registration or application number and registration or application date and (5) any IP Licenses or other rights (including franchises) granted by the Grantor with respect thereto.
(b) On the date hereof, all Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired and enforceable, and no Intellectual Property has been abandoned. No breach or default of any material IP License shall be caused by any of the following, and none of the following shall limit or impair the ownership, use, validity or enforceability of, or any rights of such Grantor in, any Intellectual Property: (i) the consummation of the transactions contemplated by any Transaction Document or (ii) any holding, decision, judgment or order rendered by any Governmental Authority. There are no pending (or, to the knowledge of such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes challenging the ownership, use, validity, enforceability of, or such Grantor’s rights in, any Intellectual Property of such Grantor. To such Grantor’s knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise impairing any Intellectual Property of such Grantor. Such Grantor, and to such Grantor’s knowledge each other party thereto, is not in material breach or default of any material IP License.
3.8****Commercial Tort Claims. The only commercial tort claims of any Grantor existing on the date hereof (regardless of whether the amount, defendant or other material facts can be determined and regardless of whether such commercial tort claim has been asserted, threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on the Disclosure Certificate, which sets forth such information separately for each Grantor.
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3.9 Specific Collateral. None of the Collateral is, or constitutes proceeds or products of, farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut.
3.10****Enforcement. No Permit, notice to or filing with any Governmental Authority or any other Person or any consent from any Person is required for the exercise by the Collateral Agent of its rights (including voting rights) provided for in this Agreement or the other Transaction Documents the enforcement of remedies in respect of the Collateral pursuant to this Agreement or any other Transactions Documents, including the transfer of any Collateral, except as may be required in connection with the disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally or any approvals that may be required to be obtained from any bailees or landlords to collect the Collateral.
3.11****Representations and Warranties under the Purchase Agreement. The representations and warranties as to such Grantor and its Subsidiaries made in Article III (Representations and Warranties) of the Purchase Agreement are true and correct on each date when made.
Article IV****Covenants
Each Grantor agrees with the Collateral Agent and the other Purchaser Parties to the following, as long as any Obligation remains outstanding and, in each case, unless the Collateral Agent and the Required Purchasers otherwise consent in writing:
4.1****Maintenance of Perfected Security Interest; Bank Accounts; Further Documentation and Consents.
(a) Such Grantor shall (i) not use or permit any Collateral to be used unlawfully or in violation of any provision of any Transaction Document, any Regulation or any policy of insurance covering the Collateral and (ii) not enter into any agreement, obligation or undertaking restricting the right or ability of such Grantor or the Collateral Agent to enter into an Asset Sale, if such restriction would have a Material Adverse Effect.
(b) Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 3.2 and shall defend such security interest and such priority against the claims and demands of all Persons (other than the Purchaser Parties).
(c) Such Grantor shall furnish to the Collateral Agent from time to time updates to the Disclosure Certificate and other lists, schedules and other documentation as may be requested by the Collateral Agent further identifying and describing the Collateral and such other documentation in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail and in form and substance satisfactory to the Collateral Agent.
(d) Such Grantor shall deposit all cash it receives in deposit accounts subject to Control Agreements; provided, that such Grantor may maintain payroll, withholding tax and other fiduciary accounts in deposit accounts that are not subject to Control Agreements.
(e) At any time and from time to time, upon the written request of the Collateral Agent, such Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have recorded, such further documentation, including an authorization to file (or, as applicable, the filing) of any financing statement or amendment under the UCC (or other filings under similar Regulations) in effect in any jurisdiction with respect to the security interest created hereby and (ii) take such further action as the Collateral Agent may reasonably request, including (A) using its commercially reasonable efforts to secure all approvals necessary or appropriate for the assignment to or for the benefit of the Collateral Agent of any Permit or other agreement, including any IP License, held by such Grantor and to enforce the security interests granted hereunder and (B) executing and delivering any Control Agreements with respect to deposit accounts and securities accounts and using commercially reasonable efforts to cause the financial institutions where such deposit accounts and securities accounts are maintained to execute and deliver such Control Agreements to the Collateral Agent (or, if such institution does not do so, promptly and in any event within 45 days of such request, close such deposit accounts and security accounts).
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(f) If requested by the Collateral Agent, the Grantor shall arrange for the Collateral Agent’s first priority security interest to be noted on the certificate of title of each Vehicle and shall file any other necessary documentation in each jurisdiction that the Collateral Agent shall deem advisable to perfect its security interests in any Vehicle.
(g) To ensure that any of the Excluded Property set forth in clause (ii) of the definition of “Excluded Property” becomes part of the Collateral, such Grantor shall use its commercially reasonable efforts to obtain any required consents from any Person (other than the Company, any Company Party and their respective Affiliates) with respect to any Permit or Contractual Obligation with such Person entered into by such Grantor that requires such consent as a condition to the creation by such Grantor of a Lien on all or part of such Excluded Property.
4.2****Changes in Locations, Name, Etc.
(a) Except upon 30 days’ prior written notice to the Collateral Agent and delivery to the Collateral Agent of all documentation reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests granted in the Transaction Documents, such Grantor shall not do any of the following:
(i) change its jurisdiction of organization or its location, in each case from that referred to in Section 3.3; or
(ii) change its legal name or organizational identification number, if any, or corporation, limited liability company, partnership or other organizational structure to such an extent that any financing statement filed in connection with this Agreement would become misleading.
(b) Such Grantor shall not permit any inventory or equipment to be kept at a location other than those listed on the Disclosure Certificate, except for inventory or equipment in transit.
4.3****Pledged Collateral(a).
(a) Delivery. Such Grantor shall (i) deliver to the Collateral Agent, in suitable form for transfer and in form and substance satisfactory to the Collateral Agent, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments evidencing Pledged Investment Property and (ii) maintain all Pledged Uncertificated Stock of a type that can be maintained in a securities account and all other Pledged Investment Property in a securities account subject to a Control Agreement.
(b) Event of Default. During the continuance of an Event of Default, the Collateral Agent shall have the right, at any time in its discretion and without notice to the Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any Pledged Investment Property and (ii) exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged Investment Property for certificates or instruments of smaller or larger denominations.
(c) Cash Distributions with respect to Pledged Collateral. Except as provided in Article V, such Grantor shall be entitled to receive all cash distributions paid in respect of the Pledged Collateral.
(d) Voting Rights. Except as provided in Article V, such Grantor shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral; provided, that no vote shall be cast, consent given or right exercised or other action taken by such Grantor that would reasonably be expected to impair the value of the Collateral or result in any violation in any material respect of any provision of any Transaction Document.
4.4****Accounts.
(a) Such Grantor shall not, other than in the ordinary course of business, (i) grant any extension of the time of payment of any account, (ii) compromise or settle any account for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any account, (iv) allow any credit or discount on any account or (v) amend, supplement or modify any account in any manner that could adversely affect the value thereof.
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(b) Such Grantor shall (i) instruct each account debtor and each other Person obligated to make a payment to it under any account or general intangible to make payments into deposit accounts subject to a Control Agreement (and use reasonable commercial efforts to cause each such account debtor and other Person does so) and (ii) immediately upon receipt, deposit in a deposit account subject to a Control Agreement all proceeds of such accounts and general intangibles not otherwise deposited directly to such a deposit account.
(c) The Collateral Agent shall have the right to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable and of which it notifies such Grantor (it being understood and agreed that the Collateral Agent, in doing any of the foregoing, will not take any action that could reasonably be expected to interfere or otherwise adversely affect such Grantor’s commercial relationship with its customers), and, subject to the requirements set forth in Sections 8(k) (Non-PublicInformation) of each Note and other provisions of the Transaction Documents containing restrictions on providing material non-public information, such Grantor shall furnish all such assistance and information as the Collateral Agent may reasonably require in connection therewith. At any time and from time to time, upon the Collateral Agent’s request, but not more frequently than once during each 12-month period, except during the continuance of an Event of Default, subject to the requirements set forth in Sections 8(k)(Non-Public Information) of each Note and other provisions of the Transaction Documents containing restrictions on providing material non-public information, such Grantor shall cause independent public accountants or others satisfactory to the Collateral Agent to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the accounts.
4.5****Equipment and Commodity Contracts.
(a) Such Grantor will use all equipment constituting Collateral solely in the ordinary course of business, will keep all tangible Collateral in good order and repair, and will not waste or destroy any part of the Collateral. Grantors will not use any of the Collateral in violation of any Regulation in any material respect.
(b) Except in the ordinary course of business (to the extent disclosed to the Purchasers and the Collateral Agent prior to the date hereof) and except as expressly permitted by this Agreement or the Purchase Agreement, the Collateral Agent does not authorize such Grantor to, and such Grantor will not, without the Collateral Agent’s prior written consent, sell, lease, assign, license, transfer, or otherwise dispose of or in any manner alter, modify, manufacture, process, or assemble the Collateral or any part thereof.
(c) Such Grantor may dispose of any equipment constituting Collateral which is worn out, destroyed, or damaged beyond repair; provided, that such Grantor (i) promptly replaces such disposed of equipment with new equipment, free of any Lien except for Permitted Liens, which has a value or utility at least equal as of the date of replacement to the value or utility of the replaced equipment as of the date hereof, except to the extent such Grantor does not do so in the ordinary course of business, and (ii) provides the Collateral Agent with at least five (5) Business Days’ prior written notice of any such disposition of Equipment.
(d) Such Grantor shall not have any commodity contract other than with a Person approved by the Collateral Agent and subject to a Control Agreement.
4.6****Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and ElectronicChattel Paper.
(a) If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by an instrument or tangible chattel paper other than such instrument delivered in accordance with Section 4.3(a) and in the possession of the Collateral Agent, such Grantor shall mark all such instruments and tangible chattel paper with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interest ASCENT PARTNERS FUND LLC, as Collateral Agent” and, at the request of the Collateral Agent, shall immediately deliver such instrument or tangible chattel paper to the Collateral Agent, duly indorsed in a manner satisfactory to the Collateral Agent.
(b) Such Grantor shall not grant “control” (within the meaning of such term under Article 9-106 of the UCC) over any investment property to any Person other than the Collateral Agent.
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(c) If such Grantor is or becomes the beneficiary of a letter of credit that is not a supporting obligation of any Collateral, such Grantor shall promptly, and in any event within two (2) Business Days after becoming a beneficiary, notify the Collateral Agent thereof and enter into an agreement with the Collateral Agent, the issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights under such letter of credit. Such agreement shall assign such letter-of-credit rights to the Collateral Agent and such assignment shall be sufficient to grant control for the purposes of Section 9-107 of the UCC (or any similar section under any equivalent UCC). Such agreement shall also direct all payments thereunder to an account controlled (as defined in the UCC) by the Collateral Agent. The provisions of such agreement shall be in form and substance reasonably satisfactory to the Collateral Agent.
(d) If any amount payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by electronic chattel paper, such Grantor shall take all steps necessary to grant the Collateral Agent control of all such electronic chattel paper for the purposes of Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.
4.7****Intellectual Property.
(a) Within 60 days after acquisition of any new Intellectual Property (whether by creation, acquisition, transfer or otherwise), such Grantor shall provide the Collateral Agent notification thereof and the short-form intellectual property agreements and assignments as described in this Section 4.7 and other documentation that the Collateral Agent reasonably requests with respect thereto.
(b) Such Grantor shall (and shall cause all its licensees to) (i) (1) continue to use each Trademark included in the Intellectual Property in order to maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of quality of products and services offered under such Trademark as are currently maintained, (3) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable Regulations, (4) not adopt or use any other Trademark that is confusingly similar or a colorable imitation of such Trademark unless the Collateral Agent shall obtain a perfected security interest in such other Trademark pursuant to this Agreement and (ii) not do any act or omit to do any act whereby (w) such Trademark (or any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any way, (x) any Patent included in the Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights included in the Intellectual Property may become invalidated, otherwise impaired or fall into the public domain or (z) any Trade Secret that is Intellectual Property may become publicly available or otherwise unprotectable.
(c) Such Grantor shall notify the Collateral Agent promptly if it knows, or has reason to know, that any application or registration relating to any Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any adverse determination or development regarding the validity or enforceability or such Grantor’s ownership of, interest in, right to use, register, own or maintain any Intellectual Property (including the institution of, or any such determination or development in, any proceeding relating to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are necessary or reasonably requested by the Collateral Agent to maintain and pursue each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation included in the Intellectual Property.
(d) Such Grantor shall not knowingly do any act or omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair the Intellectual Property of any other Person. In the event that any Intellectual Property of such Grantor is or has been infringed, misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall take such action as it reasonably deems appropriate under the circumstances in response thereto, including promptly bringing suit and recovering all damages therefor.
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(e) Such Grantor shall execute and deliver to the Collateral Agent in form and substance reasonably acceptable to the Collateral Agent and suitable for (i) filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as Annex 3 for all Copyrights, Trademarks, Patents and IP Licenses of such Grantor and (ii) recording with the appropriate Internet domain name registrar, a duly executed form of assignment for all Internet Domain Names of such Grantor (together with appropriate supporting documentation as may be requested by the Collateral Agent).
4.8****Landlord Waivers. If any material portion of the Collateral is at any time not in transit and located on any real property not owned and possessed by a Grantor, such Grantor shall provide prompt written notice to the Collateral Agent and notify any owner, lessor, licensor of any part of, or any other Person having any right to enter on any part of, such real property of the Collateral Agent’s security interest in such Collateral. Upon the Collateral Agent’s request and option, such Grantor shall (i) instruct each such owner, lessor, licensor and other Person to hold all such Collateral for the Collateral Agent’s account subject to such Grantor’s instructions, or, if an Event of Default shall have occurred, subject to the Collateral Agent’s instructions and (ii) use reasonable commercial efforts to cause each such owner, lessor, licensor and other Person to enter into a landlord waiver in form and substance satisfactory to the Collateral Agent.
4.9****Third-Party Possession or Control. If any material portion of the Collateral is at any time in the possession or control of any warehouseman, bailee, agent or independent contractor, such Grantor shall provide prompt written notice to the Collateral Agent and notify such warehouseman, bailee, agent or independent contractor of the Collateral Agent’s security interest in such Collateral. Upon the Collateral Agent’s request and option, such Grantor shall (i) instruct any such warehouseman, bailee, agent or independent contractor to hold all such Collateral for the Collateral Agent’s account subject to such Grantor’s instructions, or, if an Event of Default shall have occurred, subject to the Collateral Agent’s instructions and (ii) use reasonable commercial efforts to cause any such warehouseman, bailee, agent or independent contractor to enter into a collateral access agreement in form and substance satisfactory to the Collateral Agent.
4.10****Real Property. Upon request of the Collateral Agent, each Grantor shall execute and deliver to the Collateral Agent a mortgage, as well as assignment of rents and leases and permits and other documents reasonably appropriate to grant to the Collateral Agent a Lien over any real property owned by such Grantor, using the form generally used by the Collateral Agent and its affiliates with such changes acceptable to the Collateral Agent in its sole discretion necessary to conform to applicable local laws. In addition, in the event any Grantor hereafter acquires any ownership interest in any real property, such Grantor shall promptly: (a) provide the Collateral Agent with a description of the location of the applicable real property; (b) provide the Collateral Agent with a legal description of such real property sufficient to enable the Collateral Agent to record the financing statements in the appropriate real property records and the name of the record owner of the real estate if other than the Grantor and real estate descriptions; and (c) pay to the Collateral Agent the related filing fee and any recording or stamp taxes due in connection with such filings.
4.11****Notices. Such Grantor shall promptly notify the Collateral Agent in writing of its acquisition of any interest hereafter in property that is of a type where a security interest or lien must be or may be registered, recorded or filed under, or notice thereof given under, any federal statute or regulation. In addition, such Grantor shall promptly notify the Collateral Agent of each of the following: (a) any material adverse change in such Grantor’s financial condition or any change that materially affects any of the Collateral or the related security interest, (b) any claim, action, or proceeding which could materially and adversely affect the value of, or any such Grantor’s title to, any of the Collateral, or the effectiveness of the security interest, and (c) the occurrence of any Event of Default.
4.12****Notice of Commercial Tort Claims. Such Grantor agrees that, if it shall acquire any interest in any commercial tort claim (whether from another Person or because such commercial tort claim shall have come into existence), (i) such Grantor shall deliver to the Collateral Agent within fifteen (15) calendar days of such acquisition, an update to the Disclosure Certificate that shall include a specific description of such commercial tort claim and such Grantor shall deliver any information about such commercial tort claim as the Collateral Agent shall reasonable request, (ii) Section 2.1 shall apply to such commercial tort claim and (iii) within fifteen (15) calendar days of such acquisition, such Grantor shall execute and deliver to the Collateral Agent, in each case in form and substance satisfactory to the Collateral Agent, any documentation, and take all other action, deemed by the Collateral Agent to be reasonably necessary or appropriate for the Collateral Agent to obtain, a perfected security interest having at least the priority set forth in Section 3.2 in all such commercial tort claims.
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4.13 Compliance with Purchase Agreement. Such Grantor hereby makes all representations and warranties, and agrees to comply with all covenants and other provisions, applicable to it or any of its Subsidiaries under the Purchase Agreement, including Article IV (Other Agreements of the Parties) thereof**,** which includes indemnification provisions, and Sections 3.1 (Representations and Warranties of the Company Parties), 5.8 (Collateral Agent May File Proof of Claims) and 6.2 (Feesand Expenses) thereof, the Notes, including Section 6 (Negative Covenants) thereof, and the other Transaction Documents and agrees to the same submission to jurisdiction as that agreed to by the Company in the Purchase Agreement. Any update to the Disclosure Certificate delivered in accordance with the Transaction Documents shall, after the receipt thereof by the Collateral Agent, become part of the Disclosure Certificate for all purposes hereunder other than in respect of representations and warranties made prior to the date of such receipt.
Article V****Remedies
5.1****Code and Other Remedies.
(a) UCC Remedies. During the continuance of an Event of Default, the Collateral Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement or any other Transaction Document and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights and remedies of a secured party under the UCC or any other applicable law.
(b) Disposition of Collateral. Without limiting the generality of the foregoing, the Collateral Agent may, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys), (i) enter upon the premises where any Collateral is located, if it can do so without breach of the peace, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or any other Person notice or opportunity for a hearing on the Collateral Agent’s claim or action, (ii) collect, receive, appropriate and realize upon any Collateral, (iii) deliver notices under Control Agreements over deposit accounts and securities accounts to block the access of the Grantors and exercise control over such deposit accounts and securities accounts and transfer the content of such accounts, and direct other payments to be made to, to the Collateral Agent or other Persons (and each Grantor hereby irrevocably waives the right to direct, during the continuance of an Event of Default, the application of all funds and securities in any deposit account or securities account subject to a Control Agreement, and (iv) as further set forth herein, enter into transfers, sales, or other dispositions of, grant option or options to purchase and deliver, any Collateral (enter into any Contractual Obligation to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of any Purchaser Party or elsewhere upon such terms and conditions and times and locations as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk.
(c) RegulatedSales. To the extent, and only to the extent, required by Regulation and prohibited by Regulation to be waived by the applicable Grantors (which the Grantors hereby expressly waive to the fullest extent permitted by Regulation), the Grantors agree that ten (10) days’ written notice is reasonable notice within the meaning of Section 9-611 of the UCC or its equivalent in other jurisdictions of the Collateral Agent’s intention to make any transfer, sale or other dispositions of any Collateral. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may determine in its sole and absolute discretion. The Collateral Agent shall not be obligated to sell any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but none of the Collateral Agent or the other Purchaser Parties shall incur any Loss in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by Regulations, private) sale made in accordance with the Transaction Documents, the Collateral Agent and any other Purchaser Party may bid for or purchase, free (to the extent permitted by Regulation) from any right or equity of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any Obligation then due and payable to the Purchaser Parties (in the case of the Collateral Agent) or, as the case may be, such Purchaser Party from any Grantor as a credit against the purchase price, and the Collateral Agent (or, as the case may be, such Purchaser Party) may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement, all Events of Default shall have been remedied and no Obligation shall remain outstanding. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 5.1 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the UCC or its equivalent in other jurisdictions.
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(d) Management of the Collateral. Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at the Collateral Agent’s request, it shall assemble the Collateral and make it available to the Collateral Agent at places that the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere, (ii) without limiting the foregoing, the Collateral Agent also has the right to require that each Grantor store and keep any Collateral pending further action by the Collateral Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii) until the Collateral Agent is able to enter into an asset sale with respect to any Collateral, the Collateral Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent and (iv) the Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of the Collateral Agent‘s remedies (for the benefit of the Purchaser Parties), with respect to such appointment without prior notice or hearing as to such appointment. The Collateral Agent shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral while such Collateral is in the possession of the Collateral Agent.
(e) Application of Proceeds. The Collateral Agent shall apply the cash proceeds of any action taken by it pursuant to this Section 5.1, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and any other Purchaser Party hereunder, including reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, as set forth in the Purchase Agreement, and only after such application and after the payment by the Collateral Agent of any other amount required by any Regulation, need the Collateral Agent account for the surplus, if any, to any Grantor.
(f) Direct Obligation. Neither the Collateral Agent nor any other Purchaser Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor, any other Purchaser Party or any other Person with respect to the payment of the Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof. All of the rights and remedies of the Collateral Agent and any other Purchaser Party under any Transaction Document shall be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Regulation. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Collateral Agent, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice of a proposed sale or other disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
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(g) Commercially Reasonable. To the extent that applicable Regulations impose duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for the Collateral Agent to do any of the following:
(i) fail to incur significant costs, expenses or other Losses reasonably deemed as such by the Collateral Agent to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;
(ii) fail to obtain Permits, or other consents, for access to any Collateral to dispose of, or for the collection of, any Collateral, or, if not required by other Regulations, fail to obtain Permits or other consents for the collection or disposition of any Collateral;
(iii) fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;
(iv) advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;
(v) exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the Collateral Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;
(vi) dispose of assets in private sales instead of, or through exchange or wholesale rather than, retail markets;
(vii) disclaim disposition warranties, such as title, possession or quiet enjoyment; or
(viii) purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of any Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of any Collateral.
Each Grantor acknowledges that the purpose of this Section 5.1 is to provide a non-exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Purchaser Parties shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 5.1. Without limitation upon the foregoing, nothing contained in this Section 5.1 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable Regulations in the absence of this Section 5.1.
(h) IP Licenses. For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Section 5.1 (including in order to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, enter into an asset sale with respect to, or grant options to purchase any Collateral) at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent, for the benefit of the Purchaser Parties, (i) an irrevocable, nonexclusive, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), including in such license the right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by such Grantor and access to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation or printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to such Grantor) to use, operate and occupy all real property owned, operated, leased, subleased or otherwise occupied by such Grantor; provided that such licenses shall only be exercised by the Collateral Agent during the continuance of an Event of Default.
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(i) Performanceby the Collateral Agent or any other Purchaser Party. The Collateral Agent may, but is not obligated to, perform or attempt to perform any Contractual Obligation of any Grantor contained herein with or without prior written notice to such Grantor. If any material part of the Collateral becomes the subject of any Proceeding and any such Grantor fails to defend fully such Proceeding and to protect such Grantor’s and Purchaser Parties’ rights in such Collateral in good faith, the Collateral Agent may during the continuance of an Event of Default, at its option but at Grantors’ cost, elect to defend and control the defense of such litigation or other proceeding, and may (i) select and retain counsel, (ii) determine whether settlement shall be offered or accepted, and (iii) determine and negotiate all settlement terms.
5.2****Accounts and Payments in Respect of General Intangibles
(a) In addition to, and not in substitution for, any similar requirement in the Purchase Agreement, if required by the Collateral Agent at any time during the continuance of an Event of Default, any payment of accounts or payment in respect of general intangibles, when collected by any Grantor, shall be promptly (and, in any event, within two (2) Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent, in a Collection Account, subject to withdrawal by the Collateral Agent as provided in Section 5.4. Until so turned over, such payment shall be held by such Grantor in trust for the Collateral Agent, segregated from other funds of such Grantor. Each such deposit of proceeds of accounts and payments in respect of general intangibles shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.
(b) At any time during the continuance of an Event of Default:
(i) each Grantor shall, upon the Collateral Agent’s request, deliver to the Collateral Agent all original and other documentation evidencing, and relating to, the agreements, arrangements and transactions that gave rise to any account or any payment in respect of general intangibles, including all original orders, invoices and shipping receipts and notify account debtors that the accounts or general intangibles have been collaterally assigned to the Collateral Agent and that payments in respect thereof shall be made directly to the Collateral Agent;
(ii) the Collateral Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a Grantor to collect its accounts or amounts due under general intangibles or any thereof and, in its own name or in the name of others, communicate with account debtors to verify with them to the Collateral Agent’s satisfaction the existence, amount and terms of any account or amounts due under any general intangible. In addition, the Collateral Agent may at any time enforce such Grantor’s rights against such account debtors and obligors of general intangibles; and
(iii) each Grantor shall take all actions, deliver all documentation and provide all information necessary or reasonably requested by the Collateral Agent to ensure any Internet Domain Name is registered.
(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each account and each payment in respect of general intangibles to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. No Purchaser Party shall have any obligation or liability under any agreement giving rise to an account or a payment in respect of a general intangible by reason of or arising out of any Transaction Document or the receipt by any Purchaser Party of any payment relating thereto, nor shall any Purchaser Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any agreement giving rise to an account or a payment in respect of a general intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
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5.3 Pledged Collateral.
(a) VotingRights. During the continuance of an Event of Default, upon notice by the Collateral Agent to the relevant Grantor or Grantors, the Collateral Agent or its nominee may exercise (A) any voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent may determine), all without liability except to account for property actually received by it; provided, however, that the Collateral Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
(b) Proxies. In order to permit the Collateral Agent to exercise the voting and other consensual rights that it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Collateral Agent all such proxies, dividend payment orders and other instruments as the Collateral Agent may from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to the Collateral Agent an irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall remain in place as long as any Obligation shall remain outstanding.
(c) Authorization of Issuers. Each Grantor hereby expressly irrevocably authorizes and instructs, without any further instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from the Collateral Agent in writing that states that an Event of Default is continuing and is otherwise in accordance with the terms of this Agreement and each Grantor agrees that such issuer shall be fully protected from Losses to such Grantor in so complying and (ii) unless otherwise expressly permitted hereby, pay any dividend or make any other payment with respect to the Pledged Collateral directly to the Collateral Agent, in each case, during the continuance of an Event of Default.
5.4****Proceeds to be Turned over to and Held by Collateral Agent. Unless otherwise expressly provided in the Purchase Agreement or this Agreement, after (i) acceleration of any part of the Secured Obligations of any Grantor or (ii) upon notice by the Collateral Agent to any Grantor during the continuation of an Event of Default, all proceeds of any Collateral received by such Grantor hereunder in Cash, certificates of deposit, bankers’ acceptances, time and demand deposits and other similar cash equivalents shall be held by such Grantor in trust for the Collateral Agent and the other Purchaser Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over to the Collateral Agent in the exact form received (with any necessary endorsement). All such proceeds and other proceeds being held by the Collateral Agent (or by such Grantor in trust for the Collateral Agent) shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in the Purchase Agreement.
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5.5 Saleof Pledged Collateral..
(a) Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under applicable state securities laws even if such issuer would agree to do so.
(b) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of any portion of the Pledged Collateral pursuant to this Section 5.5 valid and binding and in compliance with all applicable Regulations. Each Grantor further agrees that a breach of any covenant contained in this Section 5.5 will cause irreparable injury to the Collateral Agent and other Purchaser Parties, that the Collateral Agent and the other Purchaser Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 5.5 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Purchase Agreement.
5.5****Deficiency. Each Grantor shall remain jointly and severally liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the reasonable fees and disbursements of any attorney or agent employed by the Collateral Agent or any other Purchaser Party to collect such deficiency.
Article VI****ADDITIONALrights of Collateral Agent
6.1****Collateral Agent’s Appointment as Attorney-in-Fact.
(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of the Transaction Documents, to take any appropriate action and to execute any documentation or instrument that may be necessary or desirable to accomplish the purposes of the Transaction Documents when an Event of Default shall be continuing, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:
(i) in the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the payment of moneys due under any account or general intangible or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any such moneys due under any account or general intangible or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property owned by or licensed to the Grantors, execute, deliver and have recorded any documentation that the Collateral Agent may request to evidence, effect, publicize or record the Collateral Agent’s security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or pay any insurance called for by the terms of the Purchase Agreement (including all or any part of the premiums therefor and the costs thereof);
(iv) execute, in connection with any sale provided for in this Agreement or any other Transfer Document, any documentation to effect or otherwise necessary or appropriate in relation to evidence the transfer of any Collateral; or
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(v) (A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct, (B) ask or demand for, and collect and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) sign and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and other documentation in connection with any Collateral, (D) commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (E) defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought against such Grantor with respect to any Collateral, (F) settle, compromise or adjust any such actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate, (G) assign any Intellectual Property owned by the Grantors or any IP Licenses of the Grantors throughout the world on such terms and conditions and in such manner as the Collateral Agent shall in its sole discretion determine, including the execution and filing of any documentation necessary to effectuate or record such assignment, (H) deliver notices under Control Agreements over deposit accounts and securities accounts to present the access of the Grantors and exercise control over such deposit accounts and securities accounts and transfer the content of such accounts to, and direct other payments to be made to, the Collateral Agent or other Persons and (I) generally, enter into an Asset Sale with respect to, grant a Lien on, enter into any agreement or other obligation with respect to and otherwise deal with, any Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes and do, at the Collateral Agent’s option, at any time or from time to time, all acts and things that the Collateral Agent deems necessary to protect, preserve or realize upon any Collateral and the Purchaser Parties’ security interests therein and to effect the intent of the Transaction Documents, all as fully and effectively as such Grantor might do.
(b) If any Grantor fails to perform or comply with any obligation contained herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such obligation upon notice to such Grantor.
(c) The reasonable expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 6.1, together with interest thereon at the highest interest rate applicable to the principal amount of any Note, as set forth in any Section 2(d) (Interest) of any such Note, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 6.1. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.
6.2****Authorization to File Financing Statements. Each Grantor authorizes the Collateral Agent, its Affiliates and their Related Parties, contractors and agents, at any time and from time to time, to file or record financing statements, amendments thereto, and other filing or recording documentation or instruments with respect to any Collateral in such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent under this Agreement, and such financing statements and amendments may describe the Collateral covered thereby as “all assets of the debtor” or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the applicable UCC, and contain any other information required pursuant to the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including, in the case of financing statements filed as fixture filings or indicating Collateral as as-extracted collateral or as otherwise required by applicable Regulation, a sufficient description of the real property related to the applicable Collateral. A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording documentation or instrument for filing or recording in any jurisdiction. Such Grantor also hereby ratifies its authorization for the Collateral Agent to have filed any initial financing statement or amendment thereto under the UCC (or other similar laws) in effect in any jurisdiction if filed prior to the date hereof.
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6.3 Authority of Collateral Agent. Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Collateral Agent and the other Purchaser Parties, be governed by the Purchase Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Purchaser Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.
6.4****Duty; Obligations and Losses. The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. The powers conferred on the Collateral Agent hereunder are solely to protect the Collateral Agent’s interest in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers. The Collateral Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Affiliates shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. In addition, the Collateral Agent shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, and shall not suffer any other Loss by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.
6.5****Obligations and Losses with respect to Collateral. No Purchaser Party and no Affiliate thereof shall be liable or otherwise incur any Loss for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The powers conferred on the Collateral Agent hereunder shall not impose any duty upon any other Purchaser Party to exercise any such powers. The other Purchaser Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
Article VII****Miscellaneous
7.1****Reinstatement. Each Grantor agrees that, if any payment made by any Purchaser Party or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Purchaser Party to such Purchaser Party, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such payment had never been made. If, prior to any of the foregoing, any Lien or other Collateral securing such Grantor’s liability hereunder shall have been released or terminated by virtue of the foregoing or (b) any other provision of this Agreement shall have been terminated, cancelled or surrendered, such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.
7.2****Independent Obligations. The obligations of each Grantor hereunder are independent of and separate from the Secured Obligations. If any Secured Obligation is not paid when due, or upon any Event of Default, the Collateral Agent may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral to collect and recover the full amount of any Secured Obligation then due, without first proceeding against any other Grantor, any other Company Party or any other Collateral and without first joining any other Grantor or any other Company Party in any proceeding.
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7.3 NoWaiver by Course of Conduct. No Purchaser Party shall by any act (except by a written instrument pursuant to Section 7.4), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Purchaser Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by any Purchaser Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Purchaser Party would otherwise have on any future occasion.
7.4****Amendments in Writing; Entire Agreement. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 6.3(b) of the Purchase Agreement; provided, that annexes to this Agreement may be supplemented (but no existing provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder Agreements (each as defined below), in substantially the form of Annex 1 and Annex 2, respectively, in each case duly executed by the Collateral Agent and each Grantor directly affected thereby. Furthermore, as described in Section 6.3(a) (Entire Agreement) of the Purchase Agreement, this Agreement and the other Transaction Documents contain and constitute the entire agreement of the parties with respect to the subject matter hereof.
7.5****Additional Grantors; Additional Pledged Collateral.
(a) Joinder Agreements. The Company shall cause any Subsidiary that is not a Grantor to become a Grantor hereunder. Each such Subsidiary shall execute and deliver to the Collateral Agent a Joinder Agreement substantially in the form of Annex 2 (each a “JoinderAgreement”) and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the date hereof.
(b) Pledge Amendments. To the extent any Pledged Collateral has not been delivered as of the date hereof, such Grantor shall deliver a pledge amendment duly executed by the Grantor in substantially the form of Annex 1 (each, a “Pledge Amendment”). Such Grantor authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement.
7.6****Notices. All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Section 6.4 (Notices) of the Purchase Agreement; provided, that any such notice, request or demand to or upon any Grantor shall be addressed to the Company’s notice address set forth in such Section 6.4.
7.7****Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of each Purchaser Party and their successors and assigns; provided, that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent and the Required Purchasers (and any attempt to effect such assignment, transfer or delegation without such consent shall be null and void at the outset), unless expressly authorized by the Purchase Agreement.
7.8****Amendments; Counterparts; Electronic Signatures. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 6.3(b) (Amendments) of the Purchase Agreement. This Agreement may be executed in counterparts as provided in Section6.3(e) (Counterparts) of the Purchase Agreement and, as provided in Section 6.3(f) (Electronic Signatures) of the Purchase Agreement, electronic signatures have the same force and effect as manual signatures.
7.9 Survival. All representations and warranties made by the Grantors in the Transaction Documents (including any such representation or warranty made in or in connection with any amendment thereto) shall constitute representations and warranties made under this Agreement. All representations and warranties made by the Grantors under this Agreement (including those representations and warranties set forth in the immediately preceding sentence) shall be made or deemed to be made at and as of the date hereof (except those that are expressly made as of a specific date), shall survive after the date hereof and shall not be waived by the execution and delivery of this Agreement, any investigation made by or on behalf of the Collateral Agent or the purchase of any Note under the Purchase Agreement. Notwithstanding any termination of this Agreement, the indemnities to which the Purchaser Parties are entitled under the provisions of this Agreement or any other Transaction Document shall continue in full force and effect and shall protect the Purchaser Parties against events arising after such termination as well as before. This Agreement shall be reinstated at any time any payment of any Secured Obligation, in whole or in part, is rescinded or must otherwise be returned by the Collateral Agent upon the insolvency, bankruptcy or reorganization of any Grantor or other Company Party or otherwise, all as though such payment had not been made.
| - 20 - |
|---|
7.10****Security Interest Absolute. All rights of the Collateral Agent hereunder, the grant of the security interest in the Collateral, and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of any Transaction Document or any agreement with respect to any of the Secured Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Transaction Documents or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Secured Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Secured Obligations or this Agreement (other than payment of the outstanding Secured Obligations).
7.11****Governing Law. Each Grantor agrees to Section 6.6 (Governing Law; Courts) of the Purchase Agreement, including that (a) this Agreement and all claims, disputes, Proceedings, and matters related hereto or thereto or arising hereunder or thereunder or arising from or relating to the relationship among any of the parties hereto or thereto, are governed by, and shall be construed, interpreted and enforced exclusively in accordance with, the laws of the State of Delaware (without giving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of Delaware) and (b) any such Proceeding shall be brought exclusively in the Delaware state courts sitting in Wilmington, DE or the federal courts of the United States of America for the District of Delaware sitting in Wilmington, DE; provided, that the Collateral Agent and any Purchaser Party may bring Proceedings in other jurisdictions to enforce any Transaction Document. Each Company Partyhereby accepts such jurisdiction, waives any objections to venue, and agrees that a final judgment in any such Proceeding shall be conclusiveand enforceable in other jurisdictions, all as provided in the Purchase Agreement and accepts that service of process may be made in theway set forth in the Purchase Agreement.
7.12****Waiver of Jury Trial(a). Each party hereto hereby agree to Section 6.16 (Waiver of Jury Trial and Certain Other Rights) of the Purchase Agreement whereby, among other things, it irrevocably waives trial by jury in any Proceeding with respect to, or directly or indirectly arising out of, relating to or in connection with, this Guaranty or any other Transaction Document or the transactions contemplated therein or related thereto (whether founded in contract, tort or any other theory). Each party hereto (a) certifies that no representative, agent or attorney of any other party or beneficiary hereof has represented, expressly or otherwise, that such other parties would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties have been induced to enter into this Agreement and the other Transaction Documents by, among other things, the mutual waivers and certifications in this section.
7.13****Interpretation. This Agreement is a Transaction Document and as such is subject to various interpretative, amendment and third party beneficiary and other miscellaneous provisions set forth in the Purchase Agreement that expressly apply to Transaction Documents, located principally in Article VI thereof, including Sections 6.3(d) (No Implied Waivers or Notice Rights),6.5 (Set off), 6.7 (Severability) and 6.11 (Marshaling, Payments Set Aside) thereof.
[Signature Pages Follow]
| - 21 - |
|---|
Inwitness whereof, each of the undersigned has duly executed this Agreement as of the date first written above.
| PROFUSA, INC. (formerly NorthviewAcquisition Corporation),<br><br>a Delaware Corporation | ||
|---|---|---|
| as Company and Grantor | ||
| By: | /s/ Fred Knechtel | |
| Name: | Fed Knechtel | |
| Title: | Chief Financial Officer | |
| PROFUSA, INC., a California corporation | ||
| as Grantor | ||
| By: | /s/ Ben Hwang | |
| Name: | Ben Hwang | |
| Title: | CEO |
Accepted and Agreed
as of the date first written above:
ASCENTPARTNERS FUND LLC
as Collateral Agent
| By: | /s/ Mikhail Gurevich | |
|---|---|---|
| Name: | Mikhail Gurevich | |
| Title: | Authorized Signatory | |
| SECURITY AGREEMENT | ||
| --- |
ANNEX 1 to SecurityAgreement^1^
Form of Pledge Amendment
This Pledge Amendment, dated as of __________ __, 20__, is delivered pursuant to Section 7.5 of the Security Agreement, dated as of __________ __, 20__, by Profusa, Inc. (formerly, NorthView Acquisition Corporation) (the “Company”), the undersigned Grantors and the other Company Parties and Affiliates of the Company from time to time party thereto as Grantors in favor of ASCENT PARTNERS FUND LLC, as collateral agent for the Purchaser Parties referred to therein (the “Security Agreement”). Capitalized terms used herein without definition are used as defined in the Security Agreement.
The undersigned hereby agrees that this Pledge Amendment may be attached to the Security Agreement and that the Pledged Collateral listed on Annex 1-A to this Pledge Amendment shall be and become part of the Collateral referred to in the Security Agreement and shall secure all Secured Obligations of the undersigned.
The undersigned hereby represents and warrants that each of the representations and warranties contained in Sections 3.1, 3.2, 3.5 and 3.10 of the Security Agreement is true and correct and as of the date hereof as if made on and as of such date.
| [Grantor] | |
|---|---|
| By: | |
| --- | --- |
| Name: | |
| Title: |
Acknowledged and Agreed
as of the date first written above:
ASCENT PARTNERS FUND LLC,
as Collateral Agent
| By: | ||
|---|---|---|
| Name: | ||
| Title: | Authorized Signatory |
To be used for pledge of Additional Pledged Collateral by existing Grantor.
-
A1.1 -
Annex 1-A
ANNEX 1 to Security Agreement^1^
| PLEDGED STOCK | ||||
|---|---|---|---|---|
| Issuer | Class | Certificate No(s). | Par Value | Number of Shares, Units or Interests |
| PLEDGED DEBT INSTRUMENTS | ||||
| --- | --- | --- | --- | --- |
| Issuer | Description of Debt | Certificate No(s). | Final Maturity | Principal Amount |
To be used for pledge of Additional Pledged Collateral by existing Grantor.
-
A1.1 -
ANNEX2 to Security Agreement
Form of Joinder Agreement
This Joinder Agreement, dated as of _________ __, 20__, is delivered pursuant to Section 7.5 of the Security Agreement, dated as of __________ __, 20__, by and among Profusa, Inc. (formerly, NorthView Acquisition Corporation) (together with its successors and, if permitted, assigns the “Company”) and the Affiliates of the Company from time to time party thereto as Grantors in favor of Ascent Partners Fund LLC, a Delaware limited liability company, for itself and as collateral agent for the Purchaser Parties referred to therein (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Security Agreement”). Capitalized terms used but not defined herein are used as defined in the Security Agreement.
By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 7.5 of the Security Agreement, hereby becomes a party to the Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and, without limiting the generality of the foregoing, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Purchaser Parties, and grants to the Collateral Agent for the benefit of the Purchaser Parties a lien on and security interest in, all of its rights, title and interests in, to and under the Collateral of the undersigned and expressly assumes all obligations and liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of the Security Agreement.
The information set forth in Annex 1 hereto is hereby added to the information set forth in the Disclosure Certificate. By acknowledging and agreeing to this Joinder Agreement, the undersigned hereby agree that this Joinder Agreement may be attached to the Purchase Agreement and that the Pledged Collateral listed on Annex 1 to this Joinder Amendment shall be and become part of the Collateral referred to in the Security Agreement and shall secure all Secured Obligations of the undersigned.
The undersigned hereby represents and warrants that each of the representations and warranties contained in Article III of the Security Agreement (including by reference to the Purchase Agreement) applicable to it and its Subsidiaries is true and correct on and as the date hereof as if made on and as of such date.
Inwitness whereof, each of the undersigned has duly executed this Joinder Agreement as of the date first written above.
| [Additional Grantor] |
|---|
| By: |
| Name: |
| Title: |
-
A2.1 -
Acknowledged and Agreed
as of the date first written above:
[EACH GRANTOR PLEDGING
ADDITIONAL COLLATERAL]
| By: | |
|---|---|
| Name: | |
| Title: |
ASCENT PARTNERS FUND LLC,
as Collateral Agent
| By: | ||
|---|---|---|
| Name: | ||
| Title: | Authorized Signatory | |
| - A2. 2 - | ||
| --- |
annex3 TO SECURITY AGREEMENT
Form oF
Intellectual PropertySecurity Agreement^1^
This [Copyright] [Patent][Trademark] Security Agreement, dated as of _________ __, 20__, is made by each of the entities listed on the signature pages hereof (each, together with their successors and, if permitted, assigns, a “Grantor” and, collectively, the “Grantors”), in favor of _________________________, for itself and as collateral agent for certain Purchaser Parties (as defined in the Purchase Agreement) (in such capacity, together with its successors and permitted assigns, the “CollateralAgent”).
W I T N E S S E TH:
Whereas, pursuant to the Purchase Agreement, dated as of __________ __, 20__ (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), between the Company, various purchasers listed therein (together with their successors and permitted assigns, the “Purchasers”) and the Collateral Agent, the Purchasers have agreed to purchase secured notes from the Company upon the terms and subject to the conditions set forth therein and the Collateral Agent has agreed to act as collateral agent of the Purchasers; and
Whereas, each Grantor (other than the Company) has guaranteed the Obligations (as defined in the Purchase Agreement) of the Company and other Company Parties (as defined in the Purchase Agreement) and all of the Grantors are party to a Security Agreement of even date herewith with the Collateral Agent (the “Security Agreement”) pursuant to which the Grantors are required to execute and deliver this [Copyright] [Patent] [Trademark] Security Agreement.
Now,Therefore**,** in consideration of the premises and to induce the Collateral Agent to enter into the Purchase Agreement and to induce the initial Purchasers to make purchase notes from the Company thereunder, each Grantor hereby agrees with the Collateral Agent as follows:
Section 1. DefinedTerms. Capitalized terms used herein without definition have the meanings ascribed to such terms in the Security Agreement.
Section 2. Grant of Security Interest in [Copyright] [Trademark] [Patent] Collateral. Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Collateral Agent for the benefit of the Purchaser Parties, and grants to the Collateral Agent for the benefit of the Purchaser Parties a Lien on and security interest in, all of its rights, title and interests in, to and under the following Collateral of such Grantor (the “[Copyright] [Patent] [Trademark] Collateral”):
| 1 | Separate agreements should be executed relating to each Grantor’s<br>respective Copyrights, Patents, and Trademarks. |
|---|
- A3.1 -
(a) [all of its Copyrights and all IP Licenses providing for the grant by or to such Grantor of any right under any Copyright, including, without limitation, those referred to on Schedule 1 hereto;
(b) all renewals, reversions and extensions of the foregoing; and
(c) all income, royalties, proceeds and Losses at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
or
(a) [all of its Patents and all IP Licenses providing for the grant by or to such Grantor of any right under any Patent, including, without limitation, those referred to on Schedule 1 hereto;
(b) all reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals and extensions of the foregoing; and
(c) all income, royalties, proceeds and Losses at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.]
or
(a) all of its Trademarks and all IP Licenses providing for the grant by or to such Grantor of any right under any Trademark, including, without limitation, those referred to on Schedule 1 hereto;
(b) all renewals and extensions of the foregoing;
(c) all goodwill of the business connected with the use of, and symbolized by, each such Trademark; and
(d) all income, royalties, proceeds and Losses at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.
Section 3. Security Agreement. The security interest granted pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and each Grantor hereby acknowledges and agrees that the rights and remedies of the Collateral Agent with respect to the security interest in the [Copyright] [Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.
Section 4. Grantor Remains Liable. Each Grantor hereby agrees that, anything herein to the contrary notwithstanding, such Grantor shall assume full and complete responsibility for the prosecution, defense, enforcement or any other necessary or desirable actions in connection with their [Copyrights] [Patents] [Trademarks] and IP Licenses subject to a security interest hereunder.
Section 5. Counterparts. This [Copyright] [Patent] [Trademark] Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.
Section 6.Governing Law. This [Copyright] [Patent] [Trademark] Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of Delaware.
[Signature Pages Follow]
| - A3. 2 - |
|---|
Inwitness whereof, each Grantor has caused this [Copyright] [Patent] [Trademark] Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.
| Very truly yours, | |
|---|---|
| [Grantor] | |
| as Grantor | |
| By: | |
| Name: | |
| Title: |
Acknowledgment of Grantor
| State of | ) | |
|---|---|---|
| ) | ss. | |
| County of | ) |
On this ___ day of ________, 20__ before me personally appeared ______________________, proved to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument on behalf of ________________, who being by me duly sworn did depose and say that he is an authorized officer of said [corporation][limited liability company], that the said instrument was signed on behalf of said [corporation][limited liability company] as authorized by its [Board of Directors][Board of Managers] and that he acknowledged said instrument to be the free act and deed of said [corporation][limited liability company].
____________________________
Notary Public
| - A3. 3 - |
|---|
Schedule 1 to[Copyright] [Patent] [Trademark] Security Agreement
[Copyright] [Patent] [Trademark] Registrations
A. REGISTERED [COPYRIGHTS] [PATENTS] [TRADEMARKS]
[Include Registration Number and Date]
B. [COPYRIGHT] [PATENT] [TRADEMARK] APPLICATIONS
[Include Application Number and Date]
C. IP LICENSES
[Include complete legal description of agreement (name of agreement, parties and date)]
| -A3.I - |
|---|
Exhibit 10.10
GUARANTY
This Guaranty (this “Guaranty”), dated as of July 11, 2025, by Profusa, Inc. (formerly, NorthView Acquisition Corporation), a Delaware corporation (together with its successors and, if permitted, assigns, the “Company”)), and Profusa, Inc., a California corporation and each of the other entities listed on the signature pages hereof as a guarantor or that becomes a party hereto as such pursuant to Section 4 of Article II (together with their successors and, if permitted, assigns, the “Guarantors”), in favor of Ascent Partners Fund LLC, a Delaware limited liability company, as collateral agent (in such capacity, and together with its successors and, if permitted, assigns, the “Collateral Agent”) under the Purchase Agreement (as defined below), the holders (together with their successors and, if permitted, assigns, the “Holders” or the “Purchasers”) of the Notes issued and sold by the Company pursuant to the Securities Purchase Agreement, dated as of February 11, 2025, by and among the Company and the Holders (the “Purchase Agreement”) and the other Purchaser Parties (as defined in the Purchase Agreement). Capitalized terms used but not defined herein are used as defined in the Purchase Agreement or, if not defined therein, encompass all items covered by the definition of such term in any Note.
W it n e s s e t h:
Whereas, pursuant to the Purchase Agreement, the Holders have severally agreed to purchase the Notes from the Company upon the terms and subject to the conditions set forth therein;
Whereas, the Collateral Agent has agreed to serve as collateral agent for the Holders under the Purchase Agreement;
Whereas, each Guarantor has agreed to guaranty the Guaranteed Obligations, as defined below;
WHEREAS, each Guarantor will derive substantial direct and indirect benefits from the purchase of the Notes under the Purchase Agreement; and
Whereas, it is a condition precedent to the obligation of the initial Holders to purchase the Notes from the Company under the Purchase Agreement that the Guarantors shall have executed this Guaranty and delivered it to such initial Holders;
Now,therefore, in consideration of the representations, warranties and covenants contained in this Agreement, to induce the initial Holders and the Collateral Agent to enter into the Purchase Agreement and the initial Holders to purchase the Notes from the Company thereunder, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Article I GUARANTY
Guaranty. To induce the initial Holders to purchase the Notes and the Collateral Agent to enter into the Purchase Agreement, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Transaction Document, of all the Obligations owing by any other Company Party to any Holder, the Collateral Agent or any other Purchaser Party whether existing on the date hereof or hereinafter incurred or created (the “Guaranteed Obligations”). This guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.
-1-
Limitation of Guaranty. Any term or provision of this Guaranty or any other Transaction Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor that is not a direct or indirect owner of stock in the Company (each, a “Subsidiary Guarantor”) shall be liable hereunder shall not exceed the maximum amount for which such Subsidiary Guarantor can be liable without rendering this Guaranty or any other Transaction Document, as it relates to such Subsidiary Guarantor, subject to avoidance under applicable Regulations relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States Code or any applicable provisions of comparable Requirements of Law) (collectively, “Fraudulent Transfer Laws”). Any analysis of the provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in Section 3 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under this Guaranty.
Contribution. To the extent that any Subsidiary Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the economic benefit actually received by such Subsidiary Guarantor from the Notes and other Obligations owing to each Holder, the Collateral Agent and each Purchaser Party and (b) the amount such Subsidiary Guarantor would otherwise have paid if such Subsidiary Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by the Company and any Guarantor that is not a Subsidiary Guarantor) in the same proportion as such Subsidiary Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Subsidiary Guarantors on such date, then such Subsidiary Guarantor shall be reimbursed by such other Subsidiary Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Subsidiary Guarantors on such date.
Authorization; Other Agreements. The Holders, the Collateral Agent, the Purchaser Parties and each other holder of an Obligation or holder or beneficiary of a Guaranteed Obligation or beneficiary of a Lien granted under any Transactional Document (collectively, and together with their successors and permitted assigns, the “Beneficiaries”) are hereby authorized, without notice to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to time, to do each of the following in accordance with the terms of the Transaction Documents:
(a) (i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change the time of payment or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or any Transaction Document;
(b) apply any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided in the Transaction Documents;
(c) refund at any time any payment received by any Beneficiary in respect of any Guaranteed Obligation;
(d) (i) enter into an sale, lease, license, assignment, transfer, conveyance or other disposition with respect to, or exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or release, any Collateral for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner with the Company and any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and
(e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.
| -2- |
| --- |
- Guaranty Absolute and Unconditional. Each Guarantor hereby waives and agrees not to assert any defense, whether arising in connection with or in respect of any of the following or otherwise (other than the defense of the payment in full of the Guaranteed Obligations), and hereby agrees that its obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in writing by the Collateral Agent):
(a) the invalidity or unenforceability of any obligation of the Company or any other Guarantor under any Transaction Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the Guaranteed Obligations or any part thereof;
(b) the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof or from the Company or any other Guarantor or other action to enforce any of the same or (ii) any action to enforce any Transaction Document or any Lien thereunder;
(c) the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any Collateral;
(d) any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against the Company, any other Guarantor or any of the Company’s other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;
(e) any foreclosure, whether or not through judicial sale, and any other Sale involving Collateral or any election following the occurrence of an Event of Default by any Beneficiary to proceed separately against any Collateral in accordance with such Beneficiary’s rights under any applicable law (including any applicable Regulation or Consent of any Governmental Authority); or
(f) any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of the Company, any other Guarantor or any of the Company’s other Subsidiaries, in each case other than the payment in full of the Guaranteed Obligations.
Waivers. Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder (except for those of the foregoing that cannot be waived by law) including any of the following: (a) any demand for payment or performance and protest and notice of protest, (b) any notice of acceptance, (c) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of the Company or any other Guarantor. Each Guarantor further unconditionally and irrevocably agrees not to, until payment in full of the Guaranteed Obligations (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against the Company or any other Guarantor by reason of any Transaction Document or any payment made thereunder or (y) assert any claim, defense, setoff or counterclaim it may have against any other Company Party or set off any of its obligations to such other Company Party against obligations of such Company Party to such Guarantor. No obligation of any Guarantor hereunder shall be discharged other than by complete performance.
-3- Reliance. Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of the Company, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof, that diligent inquiry would reveal, and each Guarantor hereby agrees that no Beneficiary shall have any duty to advise any Guarantor of information known to it regarding such condition or any such circumstances. In the event any Beneficiary, in its sole discretion, undertakes at any time or from time to time to provide any such information to any Guarantor, such Beneficiary shall be under no obligation to (a) undertake any investigation not a part of its regular business routine, (b) disclose any information that such Beneficiary, pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any Guarantor.
Article II Miscellaneous
- Representations and Warranties; Covenants. To induce the initial Holders and the Collateral Agent to enter into the Transaction Documents, each Guarantor hereby agrees to each of the following with the Holders, the Collateral Agent and the other Beneficiaries, as long as any Guaranteed Obligation remains outstanding with respect to any Guarantor:
(a) the representations and warranties as to such Guarantor and its Subsidiaries made by the Company in Section 3.1 (Representations and Warranties of the Company Parties) of the Purchase Agreement are true and correct on each date it is made thereunder; and
(b) such Guarantor agrees to comply with all covenants and other provisions applicable to it under the Purchase Agreement and each Note, including Article IV (Other Agreements of the Parties) of the Purchase Agreement, which includes indemnification provisions and Section 6.2 (Fees and Expenses) of the Purchase Agreement, and Sections 6 (Negative Covenants), 7 (Events of Default), 8(k) (Non-Public Information) and 8(l) (Public Disclosures) of each Note.
Independent Obligations. The obligations of each Guarantor hereunder are independent of and separate from the Guaranteed Obligations. If any Guaranteed Obligation is not paid when due, or upon any Event of Default, a Holder, the Collateral Agent or any other Beneficiary may, at its sole election, proceed directly and at once, without notice, against any Guarantor to collect and recover the full amount or any portion of any Guaranteed Obligation then due, without first proceeding against any other Guarantor or any other Company Party and without first joining any other Guarantor or any other Company Party in any proceeding.
Amendments; Counterparts; Electronic Signatures; Entire Agreement. None of the terms or provisions of this Guaranty may be waived, amended, supplemented or otherwise modified except in accordance with Section 6.3(b) (Amendments) of the Purchase Agreement. Furthermore, this Guaranty may be executed in counterparts as provided in Section 6.3(e) (Counterparts) of the Purchase Agreement and, as provided in Section 6.3(f) (Electronic Signatures) of the Purchase Agreement, electronic signatures have the same force and effect as manual signatures. Finally, as described in Section 6.3(a) (Entire Agreement) of the Purchase Agreement, this Guaranty and the other Transaction Documents contain and constitute the entire agreement of the parties with respect to the subject matter hereof.
Additional Guarantors. The Company shall cause any Subsidiary that is not a Guarantor to become a Guarantor hereunder, such Subsidiary shall execute and deliver to the Holders and the Collateral Agent a Joinder Agreement substantially in the form of Annex 1 and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Guarantor party hereto on the date hereof.
-4- Successors and Assigns. This Guaranty shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit of each Beneficiary and their successors and assigns; provided, however, that no Guarantor may assign, transfer or delegate any of its rights or obligations under this Guaranty without the prior written consent of the Required Purchasers and the Collateral Agent (and any attempt to effect such assignment, transfer or delegation without such consent shall be null and void at the outset) unless specifically authorized in the Purchase Agreement.
Notices. All notices, requests and demands to or upon any Holder, the Collateral Agent or any Guarantor hereunder shall be effected in the manner provided for in Section 6.4 (Notices) of the Purchase Agreement; provided, that any such notice, request or demand to or upon any Guarantor shall be addressed to the Company’s notice address set forth in such Section 6.4.
Governing Law. Each Guarantor agrees to Section 6.6 (Governing Law; Courts) of the Purchase Agreement, including that (a) this Guaranty and all claims, disputes, Proceedings, and matters related hereto or thereto or arising hereunder or thereunder or arising from or relating to the relationship among any of the parties hereto or thereto, are governed by, and shall be construed, interpreted and enforced exclusively in accordance with, the laws of the State of Delaware (without giving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of Delaware) and (b) any such Proceeding shall be brought exclusively in the Delaware state courts sitting in Wilmington, DE or the federal courts of the United States of America for the District of Delaware sitting in Wilmington, DE; provided, that the Collateral Agent, any Holder and any Purchaser Party may bring Proceedings in other jurisdictions to enforce any Transaction Document. Each Company Party hereby accepts such jurisdiction, waives any objections to venue, and agrees that a final judgment in any such Proceeding shall be conclusive and enforceable in other jurisdictions, all as provided in the Purchase Agreement and accepts that service of process may be made in the way set forth in the Purchase Agreement.
Waiver of Jury Trial. Each party hereto hereby agree to Section 6.16 (Waiver of Jury Trial and Certain Other Rights) of the Purchase Agreement whereby, among other things, it irrevocably waives trial by jury in any Proceeding with respect to, or directly or indirectly arising out of, relating to or in connection with, this Guaranty or any other Transaction Document or the transactions contemplated therein or related thereto (whether founded in contract, tort or any other theory). Each party hereto (a) certifies that no other party, no Beneficiary and no affiliate or representative of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Guaranty by the mutual waivers and certifications in this Section 8.
Interpretation. This Guaranty is a Transaction Document and as such is subject to various interpretative, amendment and third party beneficiary and other miscellaneous provisions set forth in the Purchase Agreement that expressly apply to Transaction Documents, located principally in Article VI thereof, including Sections 6.3(d) (No Implied Waivers or Notice Rights), 6.5 (Set off), 6.7 (Severability), 6.11 (Marshaling, Payments Set Aside) and 6.12 (Usury) thereof.
***[***SignaturePages Follow]
| -5- |
| --- |
Inwitness whereof, each of the undersigned has duly executed this Guaranty as of the date first written above.
| COMPANY: | ||
|---|---|---|
| PROFUSA, INC., a Delaware corporation | ||
| By: | /s/ Fred Knechtel | |
| Name: | Fred Knechtel | |
| Title: | Chief Financial Officer | |
| GUARANTOR: | ||
| Profusa, inc., a California corporation | ||
| By: | /s/ Ben Hwang | |
| Name: | Ben Hwang | |
| Title: | CEO |
Accepted and Agreed
as of the date first above written:
COLLATERAL AGENT AND HOLDER:
| ASCENT PARTNERS FUND LLC | ||
|---|---|---|
| By: | /s/ Mikhail<br> Gurevich | |
| Name: | Mikhail Gurevich | |
| Title: | Authorized Signatory |
| **GUARANTY** |
| --- |
ANNEX1 to Guaranty
Formof Joinder Agreement
This Joinder Agreement, dated as of _________ __, 20__, is delivered pursuant to Section 4 of Article II of the Guaranty, dated as of July 11, 2025, by and among Profusa, Inc. California corporation (the “Guarantor”), Profusa, Inc., (formerly, NorthView Acquisition Corporation), a Delaware corporation (the “Company”) and its Affiliates from time to time party thereto as Guarantors in favor of Ascent Partners Fund LLC, as Collateral Agent and the Holders and other Beneficiaries referred to therein (the “Guaranty”). Capitalized terms used herein without definition are used as defined in the Guaranty.
By executing and delivering this Joinder Agreement, the undersigned, as provided in Section 4 of Article II of the Guaranty, hereby becomes a party to the Guaranty as a Guarantor thereunder with the same force and effect as if originally named as a Guarantor therein and, without limiting the generality of the foregoing, expressly assumes all obligations and liabilities of a Guarantor thereunder and hereby agrees to be bound as a Guarantor for purposes thereof.
The undersigned hereby represents and warrants that each of the representations and warranties contained in Section 1 of Article II of the Guaranty applicable to it is true and correct on and as the date hereof as if made on and as of such date and agrees to comply with the covenants set forth in such Section and applicable to it.
Inwitness whereof, each of the undersigned has duly executed this Joinder Agreement as of the date first written above.
| [Additional Guarantor] |
|---|
| By: |
| Name: |
| Title: |
Acknowledged and Agreed
as of the date first written above:
ASCENT PARTNERS FUND LLC,
as Holder and Collateral Agent
| By: | ||
|---|---|---|
| Name: | ||
| Title: | Authorized Signatory |
Exhibit 99.1
Profusa Announces Closing of Business Combinationand the Commencement of Trading on Nasdaq
Profusa's Common Stock is Expected to BeginTrading on Nasdaq on Monday, July 14, 2025 Under the Ticker “PFSA”
BERKELEY, Calif, July 11, 2025 (GLOBE NEWSWIRE) -- Profusa, Inc. (“Profusa” or the “Company”) (Nasdaq: PFSA), a commercial stage digital health company pioneering the next generation of technology platform enabling the continuous monitoring of an individual’s biochemistry, today announced the closing of its business combination with NorthView Acquisition Corp. (“NVAC”), a special purpose acquisition company, which was approved by NVAC’s shareholders on June 9, 2025. The combined company will operate under the name Profusa, Inc., with its common stock expected to begin trading on Nasdaq under the ticker symbol “PFSA”, beginning on July 14, 2025. The Company’s warrants will not trade on Nasdaq but rather will continue to trade on the OTCID market.
“In a journey that began over a decade ago, driven by a mission to harness transformative science to positively impact quality of daily living and chronic disease management, we are excited to mark a key milestone of going public and trading on Nasdaq. We believe being a public company better positions us to advance our vision in pioneering tissue-integrating biosensors platform that could function for months at a time, with transformative lower costs, and continuously monitor and transmit body chemistries to smart phone applications, and leveraging the best-in-class data analytics and AI technologies, allowing users and healthcare professionals to make real-time actionable decisions that improve general health or manage a chronic disease such as diabetes or critical limb ischemia (CLI), and peripheral arterial disease (PAD),” said Ben Hwang, Ph.D., Profusa’s Chairman and CEO. “Thanks to the support of our dedicated employees, partners and investors for leading us to this exciting moment in our company’s history.”
In connection with the business combination, the combined company has also issued a secured convertible promissory note to an institutional investor, raising $9 million to cover transaction costs and support future working capital needs, with up to a total of $20 million available under the convertible note facility.
Advisors
A.G.P./Alliance Global Partners, I-Bankers Securities and Dawson James Securities acted as financial advisor to NVAC. Ellenoff Grossman & Schole LLP acted as legal advisor to Profusa. ArentFox Schiff LLP acted as legal advisor to NorthView Acquisition Corp. and Lucosky Brookman LLP acted as legal advisor to the institutional investor in connection with the secured convertible promissory note issued by the combined company.
About Profusa
Based in Berkeley, Calif., Profusa is a commercial stage digital health company led by visionary scientific founders, an experienced management team and a world-class board of directors in the development of a new generation of tissue-integrated sensors to detect and continuously transmit actionable, medical-grade data for personal and medical use. With its long-lasting, injectable and affordable biosensors and its intelligent data platform, Profusa aims to provide people with a personalized biochemical signature rooted in data that clinicians can trust and rely on.
“LUMEE”, “PROFUSA” and the PROFUSA logo are registered trademarks of Profusa Inc. in the United States, Canada, European Union, China, Japan, South Korea and Australia.
For more information, visit https://profusa.com.
Special Note Regarding Forward-Looking Statements
Certain statements in this press release (this “Press Release”) may be considered “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or future financial or operating performance of Profusa or the combined company. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “propose,” “seek,” “should,” “strive,” “will,” or “would” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which may be beyond the control of Profusa and could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Profusa and its management are inherently uncertain. Profusa cautions you that these statements are based on a combination of facts and factors currently known and projections of the future, which are inherently uncertain. There are risks and uncertainties described in the definitive proxy/final prospectus relating to the business combination, which has been filed with the SEC, and described in other documents filed by NVAC or Profusa from time to time with the SEC. These filings may identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Profusa cannot assure you that the forward-looking statements in this communication will prove to be accurate.
Contacts
Investor and Media Contacts
Profusa: brets@coreir.com
Exhibit 99.2
PROFUSA,INC. AND SUBSIDIARY
CONDENSEDCONSOLIDATED BALANCE SHEETS
(INTHOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| December<br> 31 <br> 2024 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current<br> assets: | |||||
| Cash | 19 | $ | 191 | ||
| Other<br> receivables | — | — | |||
| Prepaid<br> expenses and other current assets | 87 | 69 | |||
| Total<br> current assets | 106 | 260 | |||
| Deferred<br> offering costs | 3,078 | 2,757 | |||
| Other<br> non-current assets | 55 | 56 | |||
| Total<br> assets | 3,239 | $ | 3,073 | ||
| Liabilities,<br> convertible preferred stock, and stockholders’ deficit | |||||
| Current<br> liabilities: | |||||
| Accounts<br> payable | 5,654 | $ | 4,954 | ||
| Accrued<br> liabilities | 4,104 | 3,968 | |||
| Convertible<br> debt payable (including loans and notes payable to a related party of 25,805 and 25,056 as of March 31, 2025 and December<br> 31, 2024, respectively.) | 47,944 | 45,921 | |||
| Promissory<br> notes (including notes payable to related parties of 863 and 850 as of March 31, 2025 and <br> December 31, 2024, respectively) | 925 | 910 | |||
| PPP<br> loan | 1,379 | 1,376 | |||
| Total<br> current liabilities | 60,006 | 57,129 | |||
| Total<br> liabilities | 60,006 | 57,129 | |||
| Commitments<br> and contingencies (Note 6) | |||||
| Convertible<br> Preferred Stock: | |||||
| Series<br> A convertible preferred stock: 0.0001 par value – 4,350,314 shares authorized at March 31, 2025 and December 31, 2024, and<br> 4,350,314 shares issued and outstanding at March 31, 2025 and December 31, 2024, (Liquidation preference 5,307 at March 31, 2025<br> and December 31, 2024) | 5,231 | 5,231 | |||
| Series<br> B convertible preferred stock: 0.0001 par value – 5,293,175 shares authorized at March 31, 2025 and December 31, 2024, and<br> 5,293,175 shares issued and outstanding at March 31, 2025 and December 31, 2024, (Liquidation preference 13,815 at March 31, 2025<br> and December 31, 2024) | 13,701 | 13,701 | |||
| Series<br> C/C-1 convertible preferred stock: 0.001 par value – 8,907,893 shares authorized at March 31, 2025 and December 31, 2024,<br> and 8,220,445 shares issued and outstanding at March 31, 2025 and December 31, 2024, (Liquidation preference 45,062 at March 31,<br> 2025 and December 31, 2024) | 46,217 | 46,217 | |||
| Total<br> convertible preferred stock | 65,149 | 65,149 | |||
| Stockholders’<br> deficit: | |||||
| Common<br> stock: 0.0001 par value – 40,000,000 authorized shares at March 31, 2025 and December 31, 2024, and 5,604,651 shares issued<br> and outstanding at March 31, 2025 and December 31, 2024, respectively | — | — | |||
| Additional<br> paid-in-capital | 5,758 | 5,753 | |||
| Accumulated<br> deficit | (127,674 | ) | (124,958 | ) | |
| Total<br> stockholders’ deficit | (121,916 | ) | (119,205 | ) | |
| Total<br> liabilities, convertible preferred stock and stockholders’ deficit | 3,239 | $ | 3,073 |
All values are in US Dollars.
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
PROFUSA,INC. AND SUBSIDIARY
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
(INTHOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
| 2024 | |||||
| Government grant revenue | - | $ | 25 | ||
| Operating expenses: | |||||
| Research and development | 434 | 506 | |||
| General<br> and administrative | 990 | 833 | |||
| Total operating expenses | 1,424 | 1,339 | |||
| Loss from operations | (1,424 | ) | (1,314 | ) | |
| Other income (expenses) | |||||
| Gain (loss) on change<br> in the fair value of related party Tasly convertible debt | (61 | ) | 4 | ||
| Interest<br> expense (including related parties amounts of 704 and 624 for the three months ended March 31, 2025 and March 31, 2024, respectively) | (1,230 | ) | (1,080 | ) | |
| Other<br> income (loss) | (1 | ) | 5 | ||
| Total other expense,<br> net | (1,292 | ) | (1,071 | ) | |
| Net loss and comprehensive<br> loss | (2,716 | ) | $ | (2,385 | ) |
| Net loss per share,<br> basic and diluted | (0.48 | ) | $ | (0.43 | ) |
| Weighted-average common<br> shares outstanding, basic and diluted | 5,604,651 | 5,601,651 |
All values are in US Dollars.
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
PROFUSA,INC. AND SUBSIDIARY
CONDENSEDCONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
(INTHOUSANDS, EXCEPT SHARE AMOUNTS)
| Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series C/C-1 Convertible Preferred Stock | Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||
| Balance<br> at January 1, 2024 | 4,350,314 | $ | 5,231 | 5,293,175 | $ | 13,701 | 8,220,445 | $ | 46,217 | 5,604,651 | $ | — | $ | 5,732 | $ | (115,728 | ) | $ | (109,996 | ) |
| Stock-based<br> compensation expense | — | — | — | — | — | — | — | — | 5 | — | 5 | |||||||||
| Net<br> loss | — | — | — | — | — | — | — | — | — | (2,385 | ) | (2,385 | ) | |||||||
| Balance<br> at March 31, 2024 | 4,350,314 | $ | 5,231 | 5,293,175 | $ | 13,701 | 8,220,445 | $ | 46,217 | 5,604,651 | $ | — | $ | 5,737 | $ | (118,113 | ) | $ | (112,376 | ) |
| Balance<br> at January 1, 2025 | 4,350,314 | $ | 5,231 | 5,293,175 | $ | 13,701 | 8,220,445 | $ | 46,217 | 5,604,651 | $ | — | $ | 5,753 | $ | (124,958 | ) | $ | (119,205 | ) |
| Stock-based<br> compensation expense | — | — | — | — | — | — | — | — | 5 | — | 5 | |||||||||
| Net<br> loss | — | — | — | — | — | — | — | — | — | (2,716 | ) | (2,716 | ) | |||||||
| Balance<br> at March 31, 2025 | 4,350,314 | $ | 5,231 | 5,293,175 | $ | 13,701 | 8,220,445 | $ | 46,217 | 5,604,651 | $ | — | $ | 5,758 | $ | (127,674 | ) | $ | (121,916 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
PROFUSA,INC. AND SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(INTHOUSANDS)
| Three<br> Months Ended<br><br> March 31, | ||||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||
| Cash flows from operating activities | ||||||
| Net loss | $ | (2,716 | ) | $ | (2,385 | ) |
| Adjustments to reconcile net loss to net cash<br> used in operating activities: | ||||||
| Non-cash interest expense | 1,230 | 1,081 | ||||
| Gain on change in fair value of related party<br> convertible debt | 61 | (4 | ) | |||
| Loss on disposition of property and equipment,<br> net | — | 2 | ||||
| Stock-based compensation expenses | 5 | 5 | ||||
| Changes in assets and liabilities: | ||||||
| Other receivables | — | 20 | ||||
| Prepaid expenses and other current assets | (18 | ) | (61 | ) | ||
| Other non-current assets | 1 | 2 | ||||
| Accounts payable | 764 | 316 | ||||
| Accrued liabilities | 136 | 282 | ||||
| Net cash used in operating<br> activities | (537 | ) | (742 | ) | ||
| Cash flows from investing<br> activities | ||||||
| Proceeds from issuance of senior notes | 750 | 675 | ||||
| Proceeds from issuance of convertible loan | — | 16 | ||||
| Payment of deferred<br> offering costs | (385 | ) | (81 | ) | ||
| Net cash provided by<br> financing activities | 365 | 610 | ||||
| Net (decrease) in cash | (172 | ) | (132 | ) | ||
| Cash at the beginning<br> of the period | 191 | 142 | ||||
| Cash at the end of the<br> period | $ | 19 | $ | 10 | ||
| Supplemental disclosures<br> of non-cash investing and financing information: | ||||||
| Increase (decrease)<br> in unpaid deferred offering costs | $ | (64 | ) | $ | 212 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
PROFUSA,INC. AND SUBSIDIARY
NOTESTO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note1 — Organization, Description of Business, Going Concern and Significant Risks and Uncertainties
Descriptionof Business
Profusa, Inc. (the “Company”) was incorporated in the state of California on May 11, 2009. The Company is engaged in the development of a new generation of biointegrated sensors that potentially empowers the individual with the ability to monitor their unique body chemistry.
The Company’s technology enables the development of bioengineered sensors that are designed to become one with the body to detect and continuously transmit actionable, clinical-grade data for personal and medical use. The Company’s first offering in the European Union, the Lumee™ Oxygen Platform, is designed to report reliable tissue oxygen levels at various regions of interest, both acutely and long-term. The Lumee™ Oxygen Platform has been designed for use in applications where monitoring of compromised tissue is beneficial, such as peripheral artery disease that results in narrowing of blood vessels and reduced blood flow to the lower limbs; chronic wounds (diabetic ulcers, pressure sores) that do not heal properly; and reconstructive surgery.
The Company’s research and development efforts are primarily focused on its Lumee™ Glucose Platform, which is a system designed to monitor glucose levels in interstitial fluid, continuously and long-term. A tiny, biocompatible gel injected under the skin acts as a continuous glucose monitor (CGM) for several months. The ability of Lumee™ Glucose to provide continuous glucose monitoring with only an initial single injection, is an attractive alternative for people with diabetes to manage their disease without the need for frequent finger sticks required by standard glucometers, or the need for weekly sensor replacement as required by current short-term needle-type CGMs.
On November 6, 2022, the Company’s board of directors unanimously approved the pursuit of a Business Combination transaction involving the Company. On November 7, 2022, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) with NorthView Acquisition Corp (“NorthView”).
On February 11, 2025, the parties to the Merger Agreement entered into Amendment No. 4 to the Merger Agreement (the “Amendment”) pursuant to which the parties agreed to revise the Company Reference Value (as defined in the Merger Agreement) to adjust for financing proceeds received by Profusa prior to the Business Combination, along with debt conversions and incentive shares to be issued. Additionally, the Amendment (i) revised the definition of “Milestone Event III” such that the parties extended the period for Profusa to consummate the APAC Joint Venture (as defined in the Merger Agreement) and receive the related funding from December 31, 2024 until December 31, 2025, and (ii) revised the definition of “Milestone Event IV” to change the earnout revenue target from $99,702,000 for the fiscal year ended December 31, 2025 to an earnout revenue target of $11,864,000 for the fiscal year ended December 31, 2026.
In relation to Milestone Event III: On August 8, 2023, a new wholly owned subsidiary, Profusa Asia Pacific Pte. Ltd (“APAC”), was created and incorporated by the Company under the laws of Singapore. Upon creation, the new entity was capitalized by the Company by payment of $1,000 for 1,000 Ordinary Shares. As a result, at the time of incorporation, the entity became a wholly owned subsidiary of the Company. The entity was created with the expectation of jointly conducting the business of developing, manufacturing and commercializing the Lumee Glucose and the Lumee Oxygen products, currently under development by the Company, together with a third party. No business or activities will have been conducted by the entity from the date of formation through and until the closing date of the proposed License Agreement and Shareholders Agreement between the Company and Best Life Technology Ltd, an entity wholly owned and controlled by the Tasly Holding Group (“Tasly”) which is a related party of the Company. In connection with and on or around the same date as the closing of the proposed Business Combination between the Company and NorthView, the Company expects to sign and execute a License Agreement and Shareholders Agreement (the “APAC Joint Venture”) setting forth the relative and other terms under which the development and business activities of the entity will be conducted.
As further described in the subsequent events, the Company obtained Shareholder approval for the merger where a subsidiary of NorthView will merge with the Company, with the Company surviving the merger as a wholly owned subsidiary of NorthView (the “Business Combination”) (See Note 14).
5
GoingConcern
The Company has incurred significant net operating losses from operations. For the three months ended March 31, 2025, the Company incurred a net loss of approximately $2.7 million and used approximately $0.5 million of cash in operating activities.
The Company has been able to finance its operations primarily with the proceeds from the issuance of equity and debt instruments and to a lesser extent, revenues from government grants. Additional funds may be necessary to maintain current operations and will be required for successful product commercialization efforts. The Company’s management plans to obtain additional funds through the merger with a special purpose acquisition company (“SPAC”), issuance of additional equity or refinancing of current debt, which is intended to mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the condensed consolidated financial statements are issued. As the ability to refinance its current debt or raise additional equity financing is outside of management’s control, the Company cannot conclude that management’s plans will be effectively implemented within one year from the date the condensed consolidated financial statements are issued. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the condensed consolidated financial statements are issued. The condensed consolidated financial statements do not contain any adjustments that might result from the outcome of this uncertainty.
SignificantRisks and Uncertainties
The Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Company’s ability to attract and retain employees necessary to support its growth.
Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary approvals. If the Company is denied approval, approval is delayed or the Company is unable to maintain approval, it could have a materially adverse impact on the Company.
The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company will require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which would materially and adversely affect its business, financial condition and results of operations.
Inflation,Monetary Response, and Economic Impacts
The world economy is experiencing stubbornly high inflation, a challenge not faced for decades. Following the global financial crisis, with inflationary pressures muted, interest rates were extremely low for years and investors became accustomed to low volatility. The resulting easing of financial conditions supported economic growth, but it also contributed to a buildup of financial vulnerabilities. With inflation at multi-decade highs, monetary authorities in advanced economies are accelerating the pace of policy normalization. Policymakers have continued to tighten policy against a backdrop of rising inflation and currency pressures, albeit with notable differences across regions. Global financial conditions have tightened notably this year, leading to capital outflows. Amid heightened economic and geopolitical uncertainties, investors have aggressively pulled back from risk-taking and adjusted their investment preferences generally. Key gauges of systemic risk, such as higher dollar funding costs and counterparty credit spreads, have risen. There is a risk of a disorderly tightening of financial conditions that may be amplified by vulnerabilities built over the years.
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Note2 — Summary of Significant Accounting Policies
Basisof Presentation
The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to applicable rules and regulations of the Securities and Exchange Commission (“SEC”).
UnauditedInterim Financial Information
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements for the year ended December 31, 2024 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2025 and the results of its operations and its cash flows for the three months ended March 31, 2025 and 2024. The results for the three months ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending December 31, 2025, any other interim periods, or any future year or period. The consolidated balance sheet as of December 31, 2024 included herein was derived from the audited financial statements as of that date. Certain disclosures have been consolidated or omitted from the unaudited interim condensed consolidated financial statements.
The accompanying interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related disclosures as of December 31, 2024 and for the year then ended as found in the Form S-4/A filed by the Company with the SEC on April 3, 2025.
Useof Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses in the condensed consolidated financial statements and accompanying notes. The Company’s management regularly assesses these estimates, including those related to accrued liabilities, valuation of the convertible debt, and senior notes, valuation allowance for deferred tax assets, and valuation of stock-based awards. Actual results could differ from these estimates, and such differences could be material to the Company’s financial position and results of operations.
AccountsReceivable and Allowance for Credit Losses
The Company does not have any accounts receivable with customers in the three months ended March 31, 2025 and 2024. The Company has developed policies that when accounts receivables are held with customers, they are recorded at the point in time in which management determines it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services transferred to the customer.
The Company will then perform ongoing credit evaluations of its customers and, if necessary, recognize allowances for potential credit losses. The Company does not require any allowance for credit losses as of March 31, 2025 and 2024.
Concentrationof Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and other receivables. Substantially all of the Company’s cash is held by one financial institution. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its cash.
The Company’s other receivables are represented by amounts owned by two government agencies under the government grants.
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Cashand Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of March 31, 2025 and 2024, cash consisted of cash on deposit with a bank denominated in U.S. dollars.
DeferredOffering Costs
Specific incremental costs, consisting of legal, accounting and other fees and costs, directly attributable to a proposed or actual offering of securities are deferred and charged against the gross proceeds of the offering. In the event of a significant delay or cancellation of a planned offering of securities, all of the costs are expensed. Offering costs capitalized as of March 31, 2025 and December 31, 2024 were $3.1 million and $2.8 million, respectively. The deferred offering costs as of March 31, 2025 and December 31, 2024 includes $1.2 million and $0.8 million respectively, of advances to NorthView to fund costs associated with the potential Business Combination.
GovernmentGrants
The Company receives payments from government entities under non-refundable grants in support of product development programs. The grants received fall within two categories:
| a. | Expense<br> Reimbursement Grants – grants in which the Company is entitled to claim from a government<br> entity reimbursement of certain qualified expenses incurred to date. The nature and amount<br> of such expenses are determined by each respective grant; and |
|---|---|
| b. | Fixed<br> Fee Grants – grants in which the total amount of the grant is fixed and the disbursements<br> are made based on submission to the grantor of specified deliverables. |
| --- | --- |
The Company has concluded that all government grants received are outside the scope of ASC 606 Revenue from Contracts with Customers, because such grants do not involve a reciprocal transfer in which each party receives and sacrifices approximately commensurate value. Therefore, the grants meet the definition of a contribution and are non-exchange transactions. The Company has further concluded that Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition does not apply to the government grants received, as the Company is a business entity, and the grants are with governmental agencies or units.
In the absence of explicit U.S. GAAP guidance on contributions received by business entities, the Company made a policy decision to apply by analogy recognition and measurement guidance in International Accounting Standard 20 Accounting for Government Grants and Disclosure of Government Assistance (“IAS 20”). Under this approach, the Company recognizes grants at fair value only when there is reasonable assurance that the Company will comply with the conditions attaching to them, and that the grants will be received. The Company recognizes as income the amounts received or receivable from expense reimbursement grants to the extent, and in the period in which, the qualifying costs have been incurred. The Company recognizes as income the amounts received or receivable from fixed fee grants by applying the proportional performance method. Under this method, grant income is recognized using the same proportion as the costs incurred to date to the total expected cost of the project, but limiting the income to be recognized to the amount to which the Company is entitled based on the submitted deliverables.
FairValue of Financial Instruments
The Company’s financial instruments consist of other receivables, accounts payable, promissory notes, convertible promissory notes and senior notes. The Company states accounts payable at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. The promissory notes are stated at amortized cost, which approximates their fair value, because the Company believes their terms approximate those that would be available to it on a similar loan from an unrelated party. The Tasly convertible debt issued between June 2023-February 2024 (Note 5) is carried at fair value based on unobservable market inputs.
RecentAccounting Standards
From time to time, new accounting standards are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. During the three months ended March 31, 2025 and through the date of issuance of these condensed consolidated financial statements, there have been no new, or existing, recently issued accounting pronouncements that are of significance, or potential significance, that impact the Company’s condensed consolidated financial statements.
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Recentlyissued accounting standards not yet adopted
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures”, to expand the disclosure requirements for income taxes, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the ASU to determine its impact on the income tax disclosures. No material financial impact will result in this expanded disclosure requirement.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (“DISE”). ASU 2024-03 requires disaggregated disclosure of income statement expenses for public business entities. ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. As revised by ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. With the exception of expanding disclosures to include more granular income statement expense categories, the Company does not expect the adoption of ASU 2024-03 to have a material effect on our consolidated financial statements taken as a whole.
Note3 — Fair Value Measurement
Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
| Level 1 | — | Inputs<br> are unadjusted, quoted prices in active markets for identical assets or liabilities at the<br> measurement date; |
|---|---|---|
| Level 2 | — | Inputs<br> are observable, unadjusted quoted prices in active markets for similar assets or liabilities,<br> unadjusted quoted prices for identical or similar assets or liabilities in markets that are<br> not active, or other inputs that are observable or can be corroborated by observable market<br> data for substantially the full term of the related assets or liabilities; and |
| --- | --- | --- |
| Level 3 | — | Unobservable<br> inputs that are significant to the measurement of the fair value of the assets or liabilities<br> that are supported by little or no market data. |
| --- | --- | --- |
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.
As of March 31, 2025 and December 31, 2024, the Company had no financial assets measured at fair value on a recurring basis.
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As of March 31, 2025, the Company’s financial liabilities measured at fair value on a recurring basis, were as follows (in thousands):
| Fair<br> value as of March 31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Level<br> 1 | Level<br> 2 | Level<br> 3 | Total | |||||
| Liabilities: | ||||||||
| Convertible<br> Notes at fair value | $ | — | $ | — | $ | 2,390 | $ | 2,390 |
| Total<br> liabilities measured at fair value | $ | — | $ | — | $ | 2,390 | $ | 2,390 |
| Fair<br> value as of December 31, 2024 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Level<br> 1 | Level<br> 2 | Level<br> 3 | Total | |||||
| Liabilities: | ||||||||
| Convertible<br> Notes at fair value | $ | — | $ | — | $ | 2,234 | $ | 2,234 |
| Total<br> liabilities measured at fair value | $ | — | $ | — | $ | 2,234 | $ | 2,234 |
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments for the three months ended March 31, 2025 and 2024 (in thousands):
| Tasly<br> convertible<br><br> debt at fair value | |||
|---|---|---|---|
| Fair value<br> as of January 1, 2024 | $ | 1,714 | |
| Issuance of Convertible Notes | 16 | ||
| Accrued stated interest | 48 | ||
| Change in fair value<br> included in other income and gain on change in the fair value of Tasly convertible debt | (4 | ) | |
| Fair value as of March<br> 31, 2024 | $ | 1,774 | |
| Fair value as of January<br> 1, 2025 | $ | 2,234 | |
| Issuance of Convertible Notes | — | ||
| Accrued stated interest | 95 | ||
| Change in fair value<br> included in other income and gain on change in the fair value of Tasly convertible debt | 61 | ||
| Fair value as of March<br> 31, 2025 | $ | 2,390 |
The Company elected to measure its Tasly convertible debt at fair value (Note 5) with changes in fair value reported in earnings as they occur. The Convertible Debt fair values were determined using the discounted cash flow methodology based on probability weighted scenarios of the convertible notes conversion. At issuance of the first $1 million on June 26, 2023 the time to event was .28 years and the discount rate applied was 14.54%. At issuance of the next $0.3 million on July 20, 2023, the time to event was .22 years and the discount rate applied was 13.82%. At issuance of the additional $0.3 million on August 15, 2023, the time to event was .15 years and the discount rate applied was 13.70%. The final amount which was less than $0.02 million was issued on February 6, 2024; the time to event was .66 years and the discount rate applied was 13.69%.
On March 31, 2025, the time event was .25 years and the discount rate applied was 13.21%. Based on this method, the fair value of the convertible debt at the date of inception was $1,616,490, and the fair value at March 31, 2025 was $2,010,545.
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Note 4— Balance Sheet Components
Prepaidexpenses and other current assets (in thousands)
| As<br> of <br><br> March 31, <br><br> 2025 | As<br> of<br><br> December 31,<br><br> 2024 | |||
|---|---|---|---|---|
| Prepaid legal | 48 | 25 | ||
| Prepaid insurance | 32 | 37 | ||
| Prepaid other | 7 | 7 | ||
| $ | 87 | $ | 69 |
AccruedLiabilities (in thousands)
| As<br> of<br><br> March 31,<br><br> 2025 | As<br> of<br><br> December 31, <br><br> 2024 | |||||
|---|---|---|---|---|---|---|
| Accrued compensation | $ | (3,851 | ) | $ | (3,472 | ) |
| Accrued other liabilities | (253 | ) | (496 | ) | ||
| $ | (4,104 | ) | $ | (3,968 | ) |
Note5 — Debt
The following table sets forth a summary of the debt instruments and their changes during the three months ended March 31, 2025 and 2024 (in thousands):
| Convertible<br> Notes | Tasly<br> Convertible<br><br> Debt | Senior<br> Notes | Promissory<br> Notes | PPP<br> Loan | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at January 1, 2025 | $ | 18,419 | $ | 2,234 | $ | 25,268 | $ | 910 | $ | 1,376 | |
| Issuance of debt | — | — | 750 | — | — | ||||||
| Debt repayments | — | — | — | — | — | ||||||
| Change in fair value | — | 61 | — | — | — | ||||||
| Stated interest | 545 | 95 | 572 | 15 | 3 | ||||||
| Amortization<br> of debt discount and issuance costs | 1 | — | (1 | ) | — | — | |||||
| Balance at March 31,<br> 2025 | $ | 18,965 | $ | 2,390 | $ | 26,589 | $ | 925 | $ | 1,379 | |
| Less:<br> Current portion | 18,965 | 2,390 | 26,589 | 925 | 1,379 | ||||||
| Long<br> term debt | $ | — | $ | — | $ | — | $ | — | $ | — |
| Convertible<br> Notes | Tasly<br> Convertible<br><br> Debt | Senior<br> Notes | Promissory<br><br> Notes | PPP<br> Loan | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at January 1, 2024 | 16,316 | 1,714 | 20,155 | 849 | 1,362 | ||||||
| Issuance of debt | — | 16 | 675 | — | — | ||||||
| Change in fair value | — | (4 | ) | — | — | — | |||||
| Stated mterest | 490 | 48 | 494 | 15 | 4 | ||||||
| Amortization<br> of debt discount and issuance costs | 30 | — | — | — | — | ||||||
| Balance at March 31, 2024 | 16,836 | 1,774 | 21,324 | 864 | 1,366 | ||||||
| Less:<br> Current portion | 16,836 | 1,774 | 21,324 | 864 | 1,366 | ||||||
| Net of current portion | $ | — | $ | — | $ | — | $ | — | — |
ConvertibleDebt
ConvertibleNotes
The annual effective interest rate of Convertible Notes was estimated from 12.54% to 53.28% per year for the three months ended March 31, 2025 and 13.28% to 53.28% per year for the three months ended March 31, 2024. The interest expense for the three months ended March 31, 2025, and 2024 was $0.5 million and $0.5 million, respectively.
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As of March 31, 2025 the outstanding balance of convertible notes includes related party convertible notes of $13.7 million.
TaslyConvertible Debt
In June 2023, the Company entered into a short-term loan agreement with a related party under which it may borrow up to $1.6 million, of which $1.0 million was borrowed on June 26, 2023, $0.3 million was borrowed on July 20, 2023, $0.3 million was borrowed on August 15, 2023 and the final $0.02 million was borrowed in February 2024 (the “Convertible debt”).
The loans bears interest at a stated rate of 12% per annum, 24% per annum upon default, and originally matured on December 31, 2023. The original maturity date was extended to the earlier of the closing of the Business Combination, or March 31, 2024, subject to the parties’ decision to extend thereafter. The Company is currently in default, as this loan will be repaid in parallel with the closing of the SPAC transaction. Accordingly, the Company classified the entire amount outstanding under the Tasly Convertible debt as current on the Consolidated Balance Sheet. Upon occurrence of certain events of default by the Company, including failure to repay in full the amounts owed at maturity, the lender will have an option to convert the entire outstanding balance and accrued but unpaid interest under the Convertible debt into senior unsecured promissory notes on substantially the same terms as the outstanding Senior Notes as of March 31, 2025. In the event the Company fails to complete the Business Combination, the lender will have an option to convert the entire outstanding balance and accrued but unpaid interest under the Convertible debt into either (i) senior unsecured promissory notes on substantially the same terms as the outstanding Senior Notes as of March 31, 2025, or (ii) the Company’s common stock at a conversion price of $1.92 per share.
The Company elected to apply the fair value option to account for the Convertible debt. Accordingly, no features of the Convertible debt are bifurcated and separately accounted for. The fair value of the Convertible debt was $2.4 million as of March 31, 2025. Accrued stated interest on the Convertible debt was $0.1 million for the three months ended March 31, 2025. The loss on fair value remeasurement was $0.4 million through March 31, 2025 and a gain on fair value remeasurement was recognized of less than $0.01 million through March 31, 2024.
SeniorNotes
January-March2024 Senior Notes — During the months January through March 2024, the Company issued additional Senior Notes to investors with the principal amount of \million on substantially the same terms as the Senior Notes issued in 2022 (as amended in November 2022).
January-March2025 Senior Notes — During the months January through March 2025, the Company issued Senior Secured Convertible Notes to investors with the principal amount of $0.8 million on substantially the same terms as the Senior Notes issued in 2022 (as amended in November 2022). These notes were issued at the same 12% interest terms as all of their other Senior Secured Convertible Notes, and will convert into New Profusa shares at $0.50 per share. This note has an 18-month maturity, which will be accelerated and convert into New Profusa shares upon the successful closing of the Business Combination.
Of the $26.6 million of Senior Notes, as of March 31, 2025, $9.7 million is outstanding with related parties and $16.9 million is outstanding with unrelated parties. Of the $21.3 million of Senior Notes, as of March 31, 2024, $8.5 million is outstanding with related parties and $12.8 million is outstanding with unrelated parties.
The annual effective interest rate of Senior Notes was estimated from 0% to 12.15% and 0% to 12.61% per year for the three months ended March 31, 2025 and 2024, respectively. The interest expense for the three months ended March 31, 2025 and 2024 was $0.6 million and $0.5 million, respectively.
As of March 31, 2025, future minimum payments for the convertible notes payable were as follows (in thousands):
| Convertible<br><br> Notes | Tasly<br><br> Convertible<br><br> Debt | Senior<br> Notes | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Total future<br> payments | $ | 19,533 | $ | 2,094 | $ | 25,931 | |||
| Less: fair value remeasurement | - | 394 | - | ||||||
| Less: unamortized debt<br> premium (discount) | (2 | ) | - | 1,481 | |||||
| Less:<br> interest | (566 | ) | (98 | ) | (823 | ) | |||
| Total convertible notes<br> payable | $ | 18,965 | $ | 2,390 | $ | 26,589 |
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PromissoryNotes
In a series of transactions during 2010 and 2011, two of the Company’s founders provided $0.2 million to the Company to fund general corporate purposes in exchange for promissory notes. The notes accrue interest annually at a simple interest rate of 5% with no set maturity date.
During the year ended December 31, 2022, the Company borrowed $0.3 million from two of its founders at zero percent interest rate to finance its short-term operations, from which $0.2 million was repaid in the same period.
During the year ended December 31, 2023, the Company borrowed short-term promissory notes of $0.3 million from an existing investor and additional $0.1 million from an unrelated party repayable on demand at any time after December 31, 2023, with annual interest rate of 12%. No new issuances or repayments of promissory notes occurred during the year ended December 31, 2024 or during the three months ended March 31, 2025.
As of March 31, 2025 and December 31, 2024, accrued and unpaid interest on the promissory notes was $0.3 million and $0.3 million, respectively. Interest expense on the promissory notes was less than $0.1 million for each of the three months ended March 31, 2025 and 2024. The carrying value of the promissory notes as of March 31, 2025 and December 31, 2024 was $0.9 million and $0.9 million, respectively. The Company recognized that the promissory notes are in default as of the date of this filing. The note holders will be repaid subsequent to the potential closing of the Business Combination, and the full balance of these notes are held in current liabilities on the Consolidated Balance Sheets.
PaycheckProtection Program
On May 25, 2021, the Company borrowed $1.3 million (the “PPP Loan 2”) as a Paycheck Protection Program loan. The Paycheck Protection Program, established as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, provides for loans to qualifying businesses and is administered by the U.S. Small Business Administration (the “SBA”). The annual interest rate of the PPP Loan 2 is 1%.
Under the terms of PPP Loan 2, if the Company does not submit forgiveness application within 24 weeks the initial disbursement of the loan (the “Covered Period”), the Company must begin to make equal monthly payments of principal and interest starting 10 months from the end of the Covered Period until May 25, 2026. Interest on the loan continues to accumulate during any deferment period. As of March 31, 2025, the Company has not applied for forgiveness under PPP Loan 2.
As of December 31, 2024 and March 31, 2025, the Company was in default on PPP Loan 2 due to non-payment of minimal repayment amounts required by the terms of PPP Loan 2. Accordingly, the Company classified the entire amount outstanding under PPP Loan 2 as current and accrued respective late penalties for the total amount of less than $0.1 million as of March 31, 2025 and December 31, 2024, respectively. The total past due amount of PPP Loan 2 repayments as of March 31, 2025 and December 31, 2024 was $0.9 million and $0.8 million, respectively.
As of March 31, 2025, the contractual future minimum payments for the PPP Loan 2 were as follows (in thousands):
| Year Ending December 31, | Amount | |
|---|---|---|
| 2025 (remainder) | 1,234 | |
| 2026 | 145 | |
| Total | $ | 1,379 |
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Note6 — Commitments and Contingencies
OperatingLease Obligations
On August 1, 2022 the Company entered into a new lease agreement (the “Amended Lease”) whereby the Company agreed to rent its office and lab facilities under month-to-month tenancy. The monthly rent payable under the Amended Lease was $25 thousand. This month-to-month lease ended in July 2024.
Beginning in October 2024, the Company entered into a new lease agreement whereby the Company agreed to rent its office and lab facilities under month-to-month tenancy. The monthly rent payable under the new lease is also $25 thousand. This month-to-month lease automatically renews every four months, unless written termination is provided.
Operating costs for short-term leases and variable lease costs were $0.1 million and less than $0.1 million during the three months ended March 31, 2025 and 2024, respectively. The Company additionally recognized a total of $0.1 million in lease expense for each of the three months ended March 31, 2025 and 2024.
Contingenciesand Indemnifications
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and that such expenditures can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount.
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but that have not yet been made.
To date, the Company has not paid any claims; however, the Company may record charges in the future as a result of these indemnification obligations. The Company is currently defending one litigation with a vendor. Management has accrued estimated incremental legal costs which totals less than $0.1 million related to the matter.
Note7 — Convertible Preferred Stock
Under the Company’s Amended and Restated Certificate of Incorporation, as amended, (the “Company Charter”), the Company is authorized to issue two classes of shares: preferred and common stock. The preferred stock is issuable in series, and the Company’s Board of Directors is authorized to determine the rights, preferences, and terms of each series. Under the Company’s Charter, the Company is authorized to issue 18,551,382 shares of convertible preferred stock at a par value of $0.0001.
Convertible preferred stock as of March 31, 2025 and December 31, 2024 consisted of the following:
| Shares<br><br> Authorized | Share<br> Issued<br><br> and<br><br> Outstanding | Liquidation<br><br> Preference | Carrying<br><br> Amount | Original<br><br> Issue Price | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| New Series A | 4,350,314 | 4,350,314 | $ | 5,307 | $ | 5,231 | $ | 1.22 | ||
| New Series B | 5,293,175 | 5,293,175 | $ | 13,815 | $ | 13,701 | $ | 2.61 | ||
| New Series C | 7,358,151 | 6,670,703 | $ | 37,623 | $ | 37,476 | $ | 5.64 | ||
| New Series C-1 | 1,549,742 | 1,549,742 | $ | 7,439 | $ | 8,741 | $ | 4.80 | ||
| 18,551,382 | 17,863,934 | $ | 64,184 | $ | 65,149 |
VotingRights
The holders of convertible preferred stock shares are entitled to vote on all matters on which the common stockholders are entitled to vote. Each holder of convertible preferred stock is entitled to the number of votes equal to the number of common stock shares into which the shares held by such holder could be converted as of a record date. Holders of convertible preferred stock and common stock generally vote as a single class.
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Dividends
Holders of convertible preferred stock are entitled to receive dividends, when, as and if declared by the Company’s Board of Directors, at the annual rate of 8% of the original issue price, payable in preference and priority to any declaration or payment of any distribution on common stock of the Company in such calendar year. No distributions may be made with respect to the common stock unless dividends on the convertible preferred stock have been declared and all declared dividends on the convertible preferred stock have been paid or set aside for payment to the holders of the convertible preferred stock. Dividends are noncumulative, and none were declared as of March 31, 2025 and December 31, 2024.
LiquidationPreference
In the event of any liquidation, dissolution, or winding up of the Company, the holders of Series C/C-1 convertible preferred stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of the Series B convertible preferred stock, the Series A convertible preferred stock or common stock, an amount per share for each share of Series C/C-1 convertible preferred stock held by them equal to the sum of the liquidation preference amount of respective original issue price per share, as adjusted for any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar event (“anti-dilution adjustments”) plus all declared but unpaid dividends on such shares. Should the Company’s legally available assets be insufficient to satisfy the liquidation preferences, the funds will be distributed with equal priority and prorata among the holders of Series C/C-1 convertible preferred stock in proportion to the preferential amount each holder is otherwise entitled to receive.
After full payment to holders of the Series C/C-1 convertible preferred stock, payment should be made to the holders of Series B convertible preferred stock, in preference to the holders of the Series A convertible preferred stock or common stock, in the amount per share for each share of Series B convertible preferred stock held by them equal to the original issue price of such share, adjusted for any anti-dilution adjustments, plus all declared and unpaid dividends on such shares. Should the Company’s legally available assets be insufficient to satisfy the liquidation preferences, the funds will be distributed with equal priority and pro rata among the holders of Series B convertible preferred stock in proportion to the preferential amount each holder is otherwise entitled to receive.
After full payment to holders of the Series B convertible preferred stock, payment should be made to the holders of Series A convertible preferred stock, in preference to the holders of the common stock, in the amount per share for each share of Series A convertible preferred stock held by them equal to the original issue price of such share, adjusted for any anti-dilution adjustments, plus all declared and unpaid dividends on such shares. Should the Company’s legally available assets be insufficient to satisfy the liquidation preferences, the funds will be distributed with equal priority and pro rata among the holders of Series A convertible preferred stock in proportion to the preferential amount each holder is otherwise entitled to receive.
After the payment to the holders of convertible preferred stock of the full preferential amounts specified above, the entire remaining assets of the Company legally available for distribution by the Company shall be distributed with equal priority and pro rata among the holders of the common stock and holders of convertible preferred stock as-if-converted to common stock basis in proportion to the number of shares of common stock held by them.
Conversion
Each share of convertible preferred stock is convertible, at the option of the holder, into the number of fully-paid and non-assessable shares of common stock that result from dividing the applicable original issue price per share by the applicable conversion price per share at the time of conversion, as adjusted for any anti-dilution adjustments If, after the issuance date of convertible preferred stock, the Company issues or sells, or is deemed to have sold, additional shares of common stock at a price lower than the original issuance price, except for certain exceptions allowed, the conversion price of convertible preferred stock would be adjusted. As of March 31, 2025 and December 31, 2024, the Company’s convertible preferred stock was convertible into shares of the Company’s common stock on a one-for-one basis.
15
Each share of convertible preferred stock is convertible into common stock automatically upon the earlier of (i) immediately upon the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of any class or security of the Company in which (a) the gross offering price per share reflects a pre-offering valuation of the Company of not less than $200 million, calculated on a fully-diluted and as-converted basis before giving effect to the issuance of the securities to be sold in such public offering, and (b) the cash proceeds to the Company (net of underwriting discounts and commissions) are at least $50 million (a “Qualified IPO”); or (ii) the Company’s receipt of a written request for such conversion from at least a majority of holders of the then outstanding shares of convertible preferred stock, voting as a single class on an as-if-converted basis.
Redemptionand Balance Sheet Classification
Convertible preferred stock is recorded in mezzanine equity because while it is not mandatorily redeemable, it will become redeemable at the option of the stockholders upon the occurrence of certain deemed liquidation events that are considered not solely within the Company’s control.
Note8 — Common Stock
As of March 31, 2025 and December 31, 2024, the Company’s Charter authorized issuance of 40,000,000 shares of common stock. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to prior rights of the preferred stockholders. As of March 31, 2025, no dividends have been declared to date.
The Company had reserved shares of common stock, on an as-converted basis, for future issuance as follows:
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Conversion of Series A preferred<br> stock | 4,350,314 | 4,350,314 | ||
| Conversion of Series B preferred stock | 5,293,175 | 5,293,175 | ||
| Conversion of Series C/C-1 preferred stock | 8,220,445 | 8,220,445 | ||
| Outstanding options under 2010 Plan | 2,975,055 | 2,972,055 | ||
| Issuance of options<br> under the 2010 Plan | 1,557,091 | 1,560,091 | ||
| 22,396,080 | 22,396,080 |
Note9 — Stock Option Plan
In 2010, the Company adopted the 2010 Equity Incentive Plan (the “Plan”) under which 2,000,000 shares of the Company’s common stock have been initially reserved for issuance to employees, directors and consultants. The number of reserved shares has been increased over the years and currently equals 4,636,454 shares. Options granted under the Plan may be either incentive stock options (“ISO”) or nonqualified stock options (“NSO”). ISOs may be granted only to Company employees, including officers and directors who are also employees. NSOs may be granted to Company employees, consultants and advisors.
A person who owns (or is deemed to own) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company will not be granted an ISO unless the exercise price of such option is at least one hundred ten percent (110%) of the Fair Market Value on the date of grant and the option is not exercisable after the expiration of five years from the date of grant. Options granted generally vest over four years.
16
Activity under the Plan is set forth below:
| Options<br> Outstanding | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Stock Option Activity | Shares<br> Available for Grant | Number<br> of Options | Weighted-Average<br> Exercise Price Per Share | Weighted-Average<br> Remaining Contractual Term (in years) | |||||
| Balances at January 1, 2025 | 1,560,091 | 2,972,055 | $ | 0.40 | 3.00 | ||||
| Options granted | — | — | $ | - | |||||
| Options exercised | — | — | $ | - | |||||
| Options expired | 7,000 | (7,000 | ) | $ | 0.760 | ||||
| Options cancelled/forfeited | — | — | $ | - | |||||
| Balances at March 31,<br> 2025 | 1,567,091 | 2,965,055 | $ | 0.40 | 2.82 | ||||
| Exercisable at March 31, 2025 | 1,570,034 | $ | 0.48 | 4.14 | |||||
| Vested and expected to vest<br> at March 31, 2025 | 2,965,055 | 0.40 | 2.82 | ||||||
| Options<br> Outstanding | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Stock Option Activity | Shares<br> Available for Grant | Number<br> of Options | Weighted-Average<br> Exercise Price Per Share | Weighted-Average<br> Remaining Contractual Term (in years) | |||||
| Balances at January 1, 2024 | 1,550,091 | 2,982,055 | $ | 0.40 | 3.70 | ||||
| Options granted | — | — | $ | - | |||||
| Options exercised | — | — | $ | - | |||||
| Options expired | 10,000 | (10,000 | ) | $ | 0.001 | ||||
| Options cancelled/forfeited | — | — | $ | - | |||||
| Balances at March 31,<br> 2024 | 1,560,091 | 2,972,055 | $ | 0.40 | 3.53 | ||||
| Exercisable at March 31, 2024 | 1,464,429 | $ | 0.49 | 4.88 | |||||
| Vested and expected to vest<br> at March 31, 2024 | 2,972,055 | 0.40 | 3.53 |
There were no new options granted or exercised during the three months ended March 31, 2025 or 2024. Intrinsic values are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock for the options that had exercise prices that were lower than the fair value per share of the common stock on the date of exercise.
The total fair value of options vested for the three months ended March 31, 2025 and 2024 was less than $0.1 million.
As of March 31, 2025 and 2024, the total unrecognized stock-based compensation expense for stock options was less than $0.1 million which is expected to be recognized over a weighted-average period of 0.3 years for the three months ended March 2025, and 1.1 years for the 3 months ended March 31, 2024. The Company estimates the fair value of stock options using the Black Scholes option-pricing model. The fair value of stock options is being recognized on a straight-line basis over the requisite service period of the awards.
NonrecoursePromissory Notes to Early Exercise Stock Options
In 2018, one of the Company’s executives early exercised 1,380,015 of his stock options by issuing a promissory note to the Company. As the promissory note is nonrecourse this exercise of stock options with a promissory note is not considered a substantive exercise for accounting purposes. Therefore, no receivable for the promissory note was recorded on the Company’s balance sheet. This arrangement was accounted for as modifications to the original stock options which were exercised by issuing a promissory note. Such modification did not result in additional stock-based compensation expense. As of March 31, 2025, these options were fully vested.
17
Stock-BasedCompensation Expense by Function
The following table is a summary of stock compensation expense by function recognized for the three months ended March 31, 2025 and 2024 (in thousands):
| Three<br> months ended <br><br> March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| General Administrative | $ | 2 | $ | 2 |
| Research and development | 3 | 3 | ||
| $ | 5 | $ | 5 |
Note10 — Related Party Transactions
The Company issued convertible notes (also referred to as junior notes), Tasly convertible debt, and promissory notes to certain shareholders. Refer to Note 5 for detail.
Note11 — Net Loss per Share Attributable to Common Stockholders
Net loss per common share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. The computation of diluted net loss per share does not include dilutive common stock equivalents in the weighted-average shares outstanding, as the inclusion of common share equivalents would be antidilutive. The common share equivalents consist of stock options, convertible notes, convertible preferred stock and common stock.
The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data):
| Three Months<br> Ended | Three Months<br> Ended | |||||
|---|---|---|---|---|---|---|
| March<br> 31,<br><br> 2025 | March<br> 31,<br><br> 2024 | |||||
| Numerator: | ||||||
| Net<br> loss | $ | (2,716 | ) | $ | (2,385 | ) |
| Denominator: | ||||||
| Weighted<br> average shares used to computing basic and diluted net loss per share | 5,604,651 | 5,601,651 | ||||
| Net<br> loss per share attributable to common stockholders - basic and diluted: | $ | (0.48 | ) | $ | (0.43 | ) |
The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:
| Three<br> months ended<br> March 31, | ||||||
|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||
| Convertible preferred stock | 17,863,934 | 17,863,934 | ||||
| Convertible notes payable | 46,912,311 | 24,630,146 | ^(1)^ | |||
| Convertible loans | — | ^(2)^ | — | |||
| Options to purchase<br> common stock | 2,972,055 | 2,972,055 | ||||
| Total | 67,748,300 | 45,466,135 | ||||
| (1) | The conversion<br> of the Convertible Notes and Senior Notes to common stock is dependent on the price of the<br> Business Combination or other equity offering and the completion date of such offerings.<br> These factors are not estimable, therefore, the number of shares of common stock is not determinable. | |||||
| --- | --- | |||||
| (2) | The Tasly Convertible<br> Notes issued between June and August 2023 and completed in February 2024 are convertible<br> upon occurrence of various conversion scenarios. Therefore, the number of common stock shares<br> issuable upon their conversion is not currently estimable. | |||||
| --- | --- |
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Note12 — Government Grant Revenue
Government grant revenue consists of amounts the Company earns under grants from two government agencies: NIH and DARPA. These grants are provided either in the form of expense reimbursement (expense reimbursement grants) or as on a fixed fee basis (fixed fee grants). Under the expense reimbursement grants, the government agencies reimburse us for a portion of our expenses (allowable expenses) that have been incurred in a given period on the basis of reports that the Company provides to these agencies. Fixed fee grants are awarded for specific research and development programs undertaken by us. Under these grants, the Company receives milestone payments from the government agencies upon our submission and approval by the government of agreed upon deliverables, consisting primarily of the documented results of the specific research and development programs.
Note13 – Segments
The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, Ben Hwang, who reviews financial information presented on a consolidated net loss basis as reported on the consolidated condensed statement of operations and comprehensive loss in order to make decisions about allocating resources and assessing performance for the entire Company. The CODM also utilizes the Company’s long-range plan, which includes product development roadmaps and long-range financial models, as a key input to resource allocation. The CODM function approves of key operating and strategic decisions. The CODM function views the Company’s operations and manages its business on a consolidated basis and as a single reportable operating segment. The CODM function is regularly provided with the following significant segment expenses. Significant expenses include research and development and general and administrative expenses, which are each separately presented in the Company’s consolidated condensed statements of operations and comprehensive loss. The CODM reviews significant expenses within both the research and development and the general and administrative categories. Other segment items within net loss include interest income, interest expense and loss on change in fair value of related party loan. See the consolidated condensed financial statements for other financial information regarding the Company’s operating segment.
| 2024 | |||||
| Government<br> grant revenue | — | $ | 25 | ||
| Operating<br> expenses: | |||||
| Research<br> personnel compensation costs, including stock-based compensation | 338 | 433 | |||
| CRO<br> and regulatory costs | — | 15 | |||
| Administrative<br> personnel compensation costs, including stock-based compensation | 335 | 362 | |||
| Rent<br> and office costs | 200 | 82 | |||
| Legal<br> and accounting costs | 539 | 413 | |||
| Other<br> expenses(1) | 12 | 34 | |||
| Total<br> segment expenses | 1,424 | 1,339 | |||
| Loss<br> from operations | (1,424 | ) | (1,314 | ) | |
| Other<br> income (expense) | |||||
| Loss<br> on change in the fair value of related party Tasly convertible debt | (61 | ) | 4 | ||
| Interest<br> expense (including related parties amounts of 704 and 624 for the three months ended March 31, 2025 and March 31, 2024, respectively) | (1,230 | ) | (1,080 | ) | |
| Other<br> income | (1 | ) | 5 | ||
| Total<br> other expense, net | (1,292 | ) | (1,071 | ) | |
| Net<br> loss and comprehensive loss | (2,716 | ) | $ | (2,385 | ) |
All values are in US Dollars.
| ^(1)^ | Other<br> expenses includes small balances of research materials and supplies along with insurance<br> costs. |
|---|
The Company has no significant long-lived assets recognized on the Consolidated Balance Sheets.
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Note14 — Subsequent Events
The Company has evaluated its subsequent events from March 31, 2025, through the date these condensed consolidated financial statements were issued and has determined that there are no subsequent events requiring disclosure in these condensed consolidated financial statements other than the items noted below.
On various dates in April and May 2025, the Company issued Senior Secured Convertible Notes for an aggregate amount of $0.7 million, of which $0.4 million will be converted in 2025 upon the closing of the Company’s Qualified Financing transaction and $0.3 million will be repaid in cash.
On April 2, 2025, the parties to the Merger Agreement entered into an Amendment No. 5 to the Merger Agreement (“Amendment No. 5”) pursuant to which Section 9.01 of the Merger Agreement was amended such that the reference to “March 22, 2025” as the outside date was replaced with “June 22, 2025”. Despite the passing of June 22, 2025, the Merger Agreement did not automatically terminate and remains in effect until the date that one of the parties sends written notice to the other party that it has elected to unilaterally terminate the Merger Agreement. Neither party has elected to terminate the Business Combination as of the date of this filing.
On April 30, 2025, Marcum informed the Company that Marcum resigned as the Company’s independent registered public accounting firm. Also on April 30, 2025, the Company engaged CBIZ CPAs P.C. as the Company’s independent registered public accounting firm.
On May 8, 2025, Northview and the Company entered into a non-redemption agreement (the “Non-Redemption Agreement”) with I-Bankers Securities, Inc. and Dawson James Securities, Inc. (together, the “Investors”), pursuant to which such Investors agreed that to the extent that redemptions in connection with the vote to approve the Business Combination reduces the Company’s trust account balance below $1.25 million, the Investors would offer such redeeming shareholders an opportunity to rescind the redemption of their shares and would instead purchase such shares. Such purchases would be structured in compliance with the requirements of Rule 14e-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or would otherwise not constitute a tender offer pursuant to the Exchange Act.
Effective as of June 16, 2025, by written consent, (i) the stockholders holding a majority of the Company’s common stock and preferred stock authorized, among other things, (a) entering into the Business Combination Agreement, and (b) the consummation of the Business Combination and the other transactions contemplated thereby, and (ii) the stockholders holding a majority of the Company’s preferred stock approved (a) the waiver of their liquidation preference and (b) the automatic conversion of their preferred stock immediately prior to the Business Combination.
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Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIALINFORMATION
Introduction
The following unaudited pro forma condensed combined financial information presents the combination of financial information of Northview Acquisition, Corporation (“NorthView”) and Profusa, Inc. (“Profusa”), adjusted to give effect to the Business Combination and related transactions. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.
Unless the context otherwise requires, following the Closing (as defined below), references to “we,” “us,” “our,” “New Profusa,” and the “Company” refer to Profusa, Inc., a Delaware corporation formerly known as NorthView Acquisition Corporation, and its consolidated subsidiaries.
The following unaudited pro forma condensed combined balance sheet as of March 31, 2025, assumes that the Business Combination occurred on March 31, 2025. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2025, and for the year ended December 31, 2024, present pro forma effect to the Business Combination as if it had been completed on January 1, 2024.
The Business Combination is accounted for as a reverse recapitalization under U.S. GAAP. Under this method of accounting, NorthView will be treated as the “acquired” company for financial reporting purposes. This determination is primarily based on Profusa Stockholders comprising a relative majority of the voting power of Profusa (the combined entity) and having the ability to nominate majority of the members of the New Profusa Board, Profusa’s operations prior to the acquisition comprising the only ongoing operations of New Profusa, and Profusa’s senior management comprising the senior management of New Profusa. Accordingly, for accounting purposes, the financial statements of New Profusa will represent a continuation of the financial statements of Profusa with the Business Combination treated as the equivalent of Profusa issuing stock for the net assets of NorthView, accompanied by a recapitalization. The net assets of NorthView will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be presented as those of Profusa in future reports of New Profusa.
The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what the Combined Company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. Further, the pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the Combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The historical financial information of NorthView was derived from the unaudited financial statements of Northview as of and for the three months ended March 31, 2025, and the audited financial statements of NorthView as of and for the year ended December 31, 2024, which are included in the Proxy Statement/Prospectus. The historical financial information of Profusa was derived from the unaudited financial statements of Profusa as of and for the three months ended March 31, 2025, and audited financial statements of Profusa as of and for the year ended December 31, 2024, which are included in the Proxy Statement/Prospectus. This information should be read together with NorthView’s and Profusa’s audited financial statements, and related notes, the sections titled “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations of NorthView” and “Management’s Discussion and Analysis of Financial Condition and Results of Operationsof Profusa” and other financial information included in the Proxy Statement/Prospectus.
Description of the Business Combination
| ● | On November 7, 2022, NorthView entered into a<br>Merger Agreement with Profusa and Merger Sub, pursuant to which, Merger Sub merged with and into Profusa with Profusa as the surviving<br>corporation and becoming a wholly-owned subsidiary of NorthView. In connection with the Merger, NorthView changed its name to “Profusa,<br>Inc.” |
|---|
More specifically, and as described in greater detail below, at the Effective Time of the Merger:
| a. | each share of issued and outstanding Profusa Common Stock was converted into a number of shares of New<br>Profusa common stock, par value $0.0001 per share (“New Profusa Common Stock”), based on the Exchange Ratio that reflects<br>an equity valuation of Profusa of $155,000,000 (as adjusted for the Incentive Equity Value, the Private Placement Value and the Aggregate<br>Company Incentive Amount), divided by an assumed value of New Profusa Common Stock of $10.00 per share. |
|---|---|
| b. | each option to purchase Profusa Common Stock was converted into an option to purchase New Profusa Common<br>Stock based on the Exchange Ratio, and |
| --- | --- |
| c. | each warrant to purchase Profusa Common Stock was converted into a warrant to purchase New Profusa Common<br>Stock based on the Warrant Ratio (as defined in the Merger Agreement). |
| --- | --- |
PIPE Transaction
| ● | On February 11, 2025, NorthView executed a Securities<br>Purchase Agreement (the “PIPE Subscription Agreement”) with Ascent Partners Fund LLC (“Ascent”, and together with<br>any additional investors who become parties to the PIPE Subscription Agreement, the “PIPE Investors”). Pursuant to the PIPE<br>Subscription Agreement, the PIPE Investors are expected, subject to the conditions relating to such purchase set forth in the PIPE Subscription<br>Agreement, to purchase from NorthView senior secured convertible notes in an aggregate principal amount of up to $22,222,222 (the “PIPE<br>Convertible Notes”) for a purchase price of up to $20,000,000, after 10% OID. |
|---|
At the Closing and pursuant to the PIPE Subscription Agreement, New Profusa issued a PIPE Convertible Note in the principal amount of $10,000,000 (the “Initial Note”), reflecting a 10% original issue discount to the face amount (“OID”) thereof. The Initial Note matures on the date that is 18-months from Closing (the “Maturity Date”) and is convertible at any time at the holder’s option at the lower of $10 or 95% of the lowest daily volume-weighted average price per share (“VWAP”) of New Profusa Common Stock in the 10 trading days prior to the original issue date for each PIPE Convertible and shall be adjusted, without limitation, based on down-round and most-favored nation (MFN) price and terms protections (the “Conversion Price”).
Interest shall accrue on the aggregate unconverted and then outstanding principal amount of the Initial Note at a rate of 10% per annum and increase upon an event of default to 24% per annum. Payments made in cash under the Initial Note shall be subject to a 5% fee, which shall be in addition to any amounts owed thereunder. The Initial Note provides for certain events of default that are typical for a transaction of this type, including, among other things, any breach of the representations or warranties made by New Profusa or its subsidiaries. The Initial Note also provides for a 10% late fee in case of late payments and mandatory prepayments upon Subsequent Offerings (as defined in the Initial Note) and, in the absence of an event of default, may be prepaid upon 10 business day’s prior notice, subject to certain conversion rights of the PIPE Investors.
The Initial Note may not be converted by the PIPE Investors into shares of New Profusa Common Stock if such conversion would result in the investors or their affiliates owning in excess of 4.99% of the number of shares of New Profusa Common Stock outstanding immediately after giving effect to the issuance of all shares issuable upon conversion of the Initial Note.
The outstanding principal balance of the Profusa Senior Convertible Promissory Notes and all accrued but unpaid interest converted into Profusa Common Stock and NorthView exchanged the Profusa Common Stock for 4,170,932 shares of New Profusa, on an as converted price of $0.34 per share. The Exchange Ratio and the Company Reference Share Value were $0.94 and $9.40, respectively.
The outstanding principal balance of the Profusa Senior Secured Convertible Promissory Notes and all accrued but unpaid interest converted into Profusa Common Stock and NorthView exchanged the Profusa Common Stock for 5,542,261 shares of New Profusa, an as converted price of $0.50 per share.
| ● | NorthView’s Convertible Working Capital<br>loan was converted at close of the Business Combination. The current balance of the note is $1,919,796, which has been fair value adjusted<br>on the balance sheet and which is included in the pro forma at the current balance as no interest accrues on this note and was converted<br>into 863,908 shares of New Profusa, at an as converted price of $2.22 per share. |
|---|
2
| ● | Upon consummation of the Merger the former holders<br>of Profusa’s common stock, senior convertible notes, junior convertible notes and vested in-the-money Profusa Options (the<br>“Participating Securityholders”) received certain rights, under which in the future New Profusa may issue to the Participating<br>Securityholders an aggregate of 3,875,000 shares of New Profusa’s common stock (the “Milestone Earnout Shares”)<br>during the respective earnout periods in equal ¼ installments upon achievement of the following four Milestone Events: |
|---|---|
| - | Milestone I Earnout Rights: share<br>price of New Profusa Common Stock is equal to or greater than $12.50 for any 20 trading days during any 30 days trading period<br>or consummation of a Subsequent Transaction where the stockholders of New Profusa will receive a consideration of at least $12.50 for<br>each share of New Profusa Common Stock (“Milestone Event I”). The Milestone I period will commence on the 18-month anniversary<br>and end on the two-year anniversary of the closing date of the Merger (“Milestone Event I Period”); |
| --- | --- |
| - | Milestone II Earnout Rights: share<br>price of New Profusa Common Stock is equal to or greater than $14.50 for any 20 trading days during any 30 days trading period<br>or consummation of a Subsequent Transaction where the stockholders of New Profusa will receive a consideration of at least $14.50 for<br>each share of New Profusa Common Stock (“Milestone Event II”). The Milestone II period will commence on the 360-day anniversary<br>and end on the two-year anniversary of the closing date of the Merger (“Milestone Event II Period”); provided that<br>such 30 days trading period does not overlap with the 30 days trading period used to satisfy the requirements of Milestone Event I;<br>provided, further, that in the event that such 30 days trading period could satisfy either Milestone Event I or Milestone Event II,<br>then Milestone Event II shall be deemed to be satisfied first; |
| --- | --- |
| - | Milestone III Earnout: the<br>closing of the APAC Joint Venture, as described in this proxy statement/prospectus, and the Companies receipt of the related $6 million<br>funding, during the fiscal year ended December 31, 2025 (“Milestone Event III”); |
| --- | --- |
| - | Milestone IV Earnout: achievement<br>of revenue of $11,864,000 for the fiscal year ended December 31, 2026 (“Milestone Event IV,” and, together with Milestone<br>Event I, Milestone Event II and Milestone Event III the “Milestone Events”). Milestone I Earnout Rights,<br>Milestone II Earnout Rights, Milestone III Earnout Rights and Milestone IV Earnout Rights are further referred to collectively<br>as “Milestone Earnout Rights”. |
| --- | --- |
PIPE Lock-Up Agreement
On July 11 , 2025, the PIPE Investors entered into a lock-up agreement (the “PIPE Lock-Up Agreement”), pursuant to which they agreed to, subject to certain customary exceptions, not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of any shares of New Profusa Common Stock or securities convertible, exchangeable or exercisable into, shares of New Profusa Common Stock beneficially owned, held or acquired by them. The period for such restrictions shall apply from the Closing date until the termination of the PIPE Lock-Up Agreement in accordance with its terms.
The foregoing description of the PIPE Lock-Up Agreement is not complete and is qualified in its entirety by reference to the text of such document, a form of which is filed as Exhibit 10.8 hereto and incorporated herein by reference.
PIPE Registration Rights Agreement
On July 11, 2025, New Profusa and the PIPE Investors entered into a registration rights agreement (the “PIPE Registration Rights Agreement”). The PIPE Registration Rights Agreement provides customary demand and piggyback registration rights.
Pursuant to the PIPE Registration Rights Agreement, New Profusa will, as soon as practicable, but in any event within 20 calendar days after the Closing Date, use its reasonable best efforts to file with the SEC a registration statement registering the resale of certain New Profusa Common Stock issuable to the PIPE Investors upon conversion of the PIPE Convertible Notes. New Profusa will use its reasonable efforts to have the registration statement declared effective as soon as practicable after the filing thereof, but no later than the 45^h^ calendar day (but in any event no later than the 60^th^ calendar day) following the Closing.
After giving effect to the Business Combination transaction and the issuance of the Merger Consideration described above, there are 33,161,159 shares of our Common Stock issued and outstanding.
3
The following summarizes the pro forma Common Stock:
| Pro Forma Combined | ||||
|---|---|---|---|---|
| Shareholder | Shares | % | ||
| NorthView public shareholders ^(3)^ | 1,999,277 | 6.0 | ||
| NorthView other shareholders ^(1)^ | 3,902,280 | 11.8 | ||
| Former Profusa shareholders ^(2)^ | 15,500,000 | 46.7 | ||
| Shares issued to other parties ^(4)^ | 182,500 | 0.6 | ||
| Senior secured convertible note ^(6)^ | 5,542,261 | 16.7 | ||
| Profusa bridge notes ^(7)^ | 4,170,932 | 12.6 | ||
| Northview working capital loan ^(8)^ | 863,908 | 2.6 | ||
| PIPE Subscription ^(5)^ | 1,000,000 | 3.0 | ||
| Total Common Stock shares on closing date of the Business Combination | 33,161,159 | 100.0 | ||
| (1) | Includes Sponsor and Representative shares in NorthView and<br>has been reduced by the 710,220 sponsor shares allocated to the senior secured convertible note holders. | |||
| --- | --- | |||
| (2) | Includes 8,670,876 shares issued to existing Profusa common<br>and preferred shareholders, 6,699,365 shares issued to the holders of Profusa’s junior convertible notes and senior convertible<br>notes, and 206,644 shares reserved for Profusa option holders. | |||
| --- | --- | |||
| (3) | Includes 1,897,500 shares issuable pursuant to outstanding NorthView<br>Rights. | |||
| --- | --- | |||
| (4) | Represents $1,825,000 of transaction costs paid in shares of<br>New Profusa Common Stock at $10 per share. | |||
| --- | --- | |||
| (5) | 1,000,000 shares issued upon conversion of the $10 million first<br>tranche of the PIPE Investor convertible note facility ($22.22 million total) at $10 per share. | |||
| --- | --- | |||
| (6) | Senior secured convertible note which includes 710,220 Sponsor<br>shares that were utilized as inducement shares for the notes. | |||
| --- | --- | |||
| (7) | Represents 1,277,502 shares issued upon the conversion and exchange<br>of Profusa bridge notes and 2,893,430 shares issued in exchange for the shares issued pursuant to the Bridge Note Buyout Agreement. | |||
| --- | --- | |||
| (8) | Represents shares from the conversion of the NorthView working<br>capital convertible loan at a $2.22 per share. | |||
| --- | --- |
The following unaudited pro forma condensed combined balance sheet as of March 31, 2025 and the unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2025 and for the year ended December 31, 2024 are based on the unaudited and audited historical financial statements of NorthView and Profusa. The unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information.
4
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCESHEET
As of March 31, 2025
(in thousands, except share and per share data)
| NorthView <br> (Historical) | Transaction Accounting Adjustments | Pro Forma Combined | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | 19 | $ | 18 | $ | 1,920 | B | $ | 3,387 | ||||
| 9,000 | C | |||||||||||
| (4,146 | ) | F | ||||||||||
| (328 | ) | G | ||||||||||
| (934 | ) | H | ||||||||||
| (1,648 | ) | I | ||||||||||
| (661 | ) | S | ||||||||||
| (253 | ) | N | ||||||||||
| 400 | T | |||||||||||
| Prepaid taxes | 32 | — | 32 | |||||||||
| Prepaid expenses and other current assets | 87 | 14 | — | 101 | ||||||||
| Total current assets | 106 | 64 | 3,350 | 3,520 | ||||||||
| Investments held in Trust account | — | 1,920 | (1,920 | ) | B | — | ||||||
| Deferred offering costs | 3,078 | — | (1,901 | ) | G | — | ||||||
| (1,177 | ) | J | — | |||||||||
| Other non-current assets | 55 | — | — | 55 | ||||||||
| Total Assets | 3,239 | $ | 1,984 | $ | (1,648 | ) | $ | 3,575 | ||||
| LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | 5,654 | $ | 41 | $ | — | $ | 5,695 | |||||
| Excise tax payable | — | 1,946 | — | 1,946 | ||||||||
| Accrued expenses and other current liabilities | 4,104 | 2,134 | (1,177 | ) | J | 3,799 | ||||||
| 5,971 | E | |||||||||||
| (934 | ) | H | ||||||||||
| (5,971 | ) | F | ||||||||||
| (328 | ) | G | ||||||||||
| Convertible debt payable, net of discount | 47,944 | 9,133 | (26,588 | ) | N | 11,391 | ||||||
| 9,000 | C | |||||||||||
| (18,965 | ) | O | ||||||||||
| (9,133 | ) | R | ||||||||||
| Promissory notes | 925 | — | — | 925 | ||||||||
| PPP loan | 1,379 | — | — | 1,379 | ||||||||
| Total current liabilities | 60,006 | 13,254 | (48,125 | ) | 25,135 | |||||||
| Warrant liability | — | 1,044 | — | 1,044 | ||||||||
| Total liabilities | 60,006 | 14,298 | (48,125 | ) | 26,179 | |||||||
| Commitments and contingencies | ||||||||||||
| — | ||||||||||||
| Convertible Preferred Stock: | — | — | — | — | ||||||||
| Series A convertible preferred stock: 0.0001 par value – 4,350,314 shares authorized at March 31, 2025 and December 31, 2024, and 4,350,314 shares issued and outstanding at March 31, 2025 and December 31, 2024, (Liquidation Preference 5,307 at March 31, 2025 and December 31, 2024) | 5,231 | — | (5,231 | ) | K | — | ||||||
| Series B convertible preferred stock: 0.0001 par value – 5,293,175 shares authorized at March 31, 2025 and December 31, 2024, and 5,293,175 shares issued and outstanding at March 31, 2025 and December 31, 2024, (Liquidation preference 13,815 at March 31, 2025 and December 31, 2024) | 13,701 | — | (13,701 | ) | L | — | ||||||
| Series C/C-1 convertible preferred stock: 0.0001 par value – 8,907,893 shares authorized at March 31, 2025 and December 31, 2024, and 8,220,445 shares issued and outstanding at March 31, 2025 and December 31, 2024, (Liquidation preference 45,062 at March 31, 2025 and December 31, 2024) | 46,217 | — | (46,217 | ) | M | — | ||||||
| Common shares subject to possible redemption | — | 1,983 | (1,983 | ) | A | — | ||||||
| Stockholders’ equity (deficit): | ||||||||||||
| Common Stock | ||||||||||||
| Common stock, 0.0001 par value; 100,000,000 shares authorized; pro forma; 33,002,012 shares issued and outstanding (assuming No Redemption Scenario) and 32,847,451 shares issued and outstanding (assuming Maximum Redemption Scenario) | — | 1 | 1 | N | 2 | |||||||
| Additional paid-in capital | 5,758 | — | 1,983 | A | 103,231 | |||||||
| (14,298 | ) | D | ||||||||||
| (5,971 | ) | E | ||||||||||
| 46,217 | M | |||||||||||
| 5,231 | K | |||||||||||
| 13,701 | L | |||||||||||
| 1,825 | F | |||||||||||
| (1,901 | ) | G | ||||||||||
| 26,334 | N | |||||||||||
| 1,920 | R | |||||||||||
| 18,965 | O | |||||||||||
| 3,728 | Q | |||||||||||
| 400 | T | |||||||||||
| (661 | ) | S | ||||||||||
| Accumulated deficit | (127,674 | ) | (14,298 | ) | 14,298 | D | (125,837 | ) | ||||
| (1,648 | ) | I | ||||||||||
| (3,728 | ) | Q | ||||||||||
| 7,213 | R | |||||||||||
| Total stockholders’ equity (deficit) | (121,916 | ) | (14,297 | ) | 113,609 | (22,604 | ) | |||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | 3,239 | $ | 1,984 | $ | (1,648 | ) | $ | 3,575 |
All values are in US Dollars.
5
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTOF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2025
(in thousands, except share and per share data)
| Profusa, Inc. (Historical) | NorthView (Historical) | Transaction Accounting Adjustments | Pro Forma Combined | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $ | — | — | — | — | ||||||||
| Operating expenses: | |||||||||||||
| Research and development | 434 | $ | — | $ | — | $ | 434 | ||||||
| General and administrative | 990 | 584 | 1,648 | FF | 6,950 | ||||||||
| 3,728 | HH | ||||||||||||
| Total operating expenses | 1,424 | 584 | 5,376 | 7,384 | |||||||||
| Loss from operations | (1,424 | ) | (584 | ) | (5,376 | ) | (7,384 | ) | |||||
| Other income (expenses) | |||||||||||||
| Interest income earned on cash and marketable securities held in Trust Account | — | 80 | (80 | ) | AA | — | |||||||
| Change in fair value of convertible loan | (61 | ) | (225 | ) | 225 | DD | (61 | ) | |||||
| Interest expense | (1,230 | ) | — | 1,212 | BB | (6 | ) | ||||||
| 12 | EE | ||||||||||||
| (417 | ) | II | |||||||||||
| Change in fair value of warrant liabilities | — | (348 | ) | — | (348 | ) | |||||||
| Other income (expense), net | (1 | ) | — | — | (1 | ) | |||||||
| Net income (loss) before income taxes | (2,716 | ) | (1,077 | ) | (4,423 | ) | (7,800 | ) | |||||
| Provision for income taxes | — | 19 | (19 | ) | CC | — | |||||||
| Net income (loss) | $ | (2,716 | ) | $ | (1,096 | ) | $ | (4,404 | ) | $ | (7,800 | ) | |
| Deemed dividend | — | — | (9,684 | ) | GG | (9,684 | ) | ||||||
| Net loss attributable to common stockholders | (2,716 | ) | (1,096 | ) | (14,088 | ) | (17,484 | ) | |||||
| Basic and diluted net income (loss) per share subject to possible redemption | $ | (0.19 | ) | ||||||||||
| Basic and diluted weighted average shares outstanding, common stock subject to possible redemption | 657,910 | ||||||||||||
| Basic and diluted net income per share, common stock | $ | (0.19 | ) | ||||||||||
| Basic and diluted weighted average shares outstanding, common stock | 5,193,750 | ||||||||||||
| Basic and diluted net loss per share- Profusa | $ | (0.48 | ) | ||||||||||
| Weighted average shares outstanding of Profusa Common Stock | 5,604,651 | ||||||||||||
| Basic and diluted net loss per share of New Profusa common stock | $ | (0.53 | ) | ||||||||||
| Weighted average shares outstanding of New Profusa common stock - basic and diluted | 33,161,159 |
6
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTOF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2024
(in thousands, except share and per share data)
| Profusa, Inc. (Historical) | NorthView (Historical) | Transaction Accounting Adjustments | Pro Forma Combined | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $ | 100 | — | — | 100 | ||||||||
| Operating expenses: | |||||||||||||
| Research and development | 1,608 | $ | — | $ | — | $ | 1,608 | ||||||
| General and administrative | 2,992 | 1,351 | 1,606 | FF | 9,704 | ||||||||
| 3,755 | HH | ||||||||||||
| Total operating expenses | 4,600 | 1,351 | 5,361 | 11,312 | |||||||||
| Loss from operations | (4,500 | ) | (1,351 | ) | (5,361 | ) | (11,212 | ) | |||||
| Other income (expenses) | |||||||||||||
| Interest income earned on cash and marketable securities held in Trust Account | — | 425 | (425 | ) | AA | — | |||||||
| Change in fair value of convertible loan | (311 | ) | (7,166 | ) | 7,166 | DD | (311 | ) | |||||
| Interest expense | (4,424 | ) | — | 4,349 | BB | (1,638 | ) | ||||||
| 104 | EE | ||||||||||||
| (1,667 | ) | II | |||||||||||
| Change in fair value of warrant liabilities | — | (539 | ) | — | (539 | ) | |||||||
| Other income (expense), net | 5 | — | — | 5 | |||||||||
| Net income (loss) before income taxes | (9,230 | ) | (8,631 | ) | 4,166 | (13,695 | ) | ||||||
| Provision for income taxes | — | 81 | (81 | ) | CC | — | |||||||
| Net income (loss) | $ | (9,230 | ) | $ | (8,712 | ) | $ | 4,247 | $ | (13,695 | ) | ||
| Deemed dividend | — | — | (9,684 | ) | GG | (9,684 | ) | ||||||
| Net loss attributable to common stockholders | (9,230 | ) | (8,712 | ) | (5,437 | ) | (23,379 | ) | |||||
| Basic and diluted net income (loss) per share subject to possible redemption | $ | (1.47 | ) | ||||||||||
| Basic and diluted weighted average shares outstanding, common stock subject to possible redemption | 747,644 | ||||||||||||
| Basic and diluted net income per share, common stock | $ | (1.47 | ) | ||||||||||
| Basic and diluted weighted average shares outstanding, common stock | 5,193,750 | ||||||||||||
| Basic and diluted net loss per share- Profusa | $ | (1.65 | ) | ||||||||||
| Weighted average shares outstanding of Profusa Common Stock | 5,604,651 | ||||||||||||
| Basic and diluted net loss per share of New Profusa common stock | $ | (0.71 | ) | ||||||||||
| Weighted average shares outstanding of New Profusa common stock - basic and diluted | 33,002,012 |
7
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINEDFINANCIAL INFORMATION
1. Basis of Presentation
The Business Combination will be accounted for as a reverse recapitalization under U.S. GAAP. Under this method of accounting, NorthView Acquisition Corporation (“NorthView”), will be treated as the “acquired” company for financial reporting purposes. This determination is primarily based on Profusa, Inc. (“Profusa”) Stockholders comprising a relative majority of the voting power of Profusa (the combined entity) and having the ability to nominate majority of the members of the New Profusa Board, Profusa’s operations prior to the acquisition comprising the only ongoing operations of New Profusa, and Profusa’s senior management comprising the senior management of New Profusa. Accordingly, for accounting purposes, the financial statements of New Profusa will represent a continuation of the financial statements of Profusa with the Business Combination treated as the equivalent of Profusa issuing stock for the net assets of NorthView, accompanied by a recapitalization. The net assets of NorthView will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be presented as those of Profusa in future reports of New Profusa.
As a result of the Business Combination, all outstanding stock of Profusa were cancelled in exchange for the right to receive newly issued shares of Common Stock of New Profusa, par value $0.0001 per share (“Common Stock”), and all outstanding options to purchase Profusa stock were exchanged for options exercisable for newly issued shares of New Profusa Common Stock.
The total consideration received by Profusa Security Holders at the Closing of the transactions contemplated by the Merger Agreement is the newly issued shares of Common Stock and securities convertible or exchangeable for newly issued shares of Common Stock with an aggregate value equal $255,958,617, with each Profusa Stockholder receiving for each share of Profusa Common Stock held (after giving effect to the exchange or conversion of all outstanding Profusa Preferred Stock for shares of Profusa Common Stock and treating all vested in-the-money Profusa Convertible Securities (including, on a net exercise basis, all vested qualified Profusa Options) as if such securities had been exercised as of immediately prior to the Merger, but excluding all unvested Profusa Options) a number of shares of Common Stock equal to a conversion ratio of approximately 0.34. As a result, the Profusa Security Holders received an aggregate of 25,595,862 shares of newly issued Common Stock as Merger Consideration.
As an additional consideration, each Profusa Stockholder is entitled to earn, on a pro rata basis, an aggregate of 3,875,000 shares of New Profusa’s common stock (the “Milestone Earnout Shares”) during the respective earnout periods in equal ¼ installments upon achievement of the following the defined Milestone Events. The Milestone Earnout Shares will be placed in escrow and will be outstanding from and after the Closing, subject to cancellation if the applicable price targets are not achieved. While in escrow, the shares will be non-voting.
The unaudited pro forma combined financial information contained herein does not account for the assumption by New Profusa at the Closing of unvested Profusa Stock Options or future issuances of shares of Common Stock upon exercise thereof.
After giving effect to the Business Combination transaction and the issuance of the Merger Consideration described above, there are 33,161,159 shares of our Common Stock issued and outstanding.
8
2. Basis of Pro Forma Presentation
The unaudited pro forma condensed combined balance sheet as of March 31, 2025 assumes that the Business Combination and related transactions occurred on March 31, 2025. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2025 and for the year ended December 31, 2024 presents pro forma effect to the Business Combination as if it had been completed on January 1, 2024.
The unaudited pro forma condensed combined balance sheet as of March 31, 2025 has been prepared using, and should be read in conjunction with, the following:
| ● | NorthView’s<br>unaudited condensed consolidated balance sheet as of March 31, 2025 and the related notes for the three months ended March 31, 2025,<br>included in the Proxy Statement/Prospectus; and |
|---|---|
| ● | Profusa’s<br>unaudited condensed consolidated balance sheet as of March 31, 2025 and the related notes for the three months ended March 31, 2025,<br>included in the Proxy Statement/Prospectus. |
| --- | --- |
The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2025 has been prepared using, and should be read in conjunction with, the following:
| ● | NorthView’s unaudited condensed consolidated<br>statement of operations for the three months ended March 31, 2025 and the related notes, included in the Proxy Statement/Prospectus; and |
|---|---|
| ● | Profusa’s unaudited condensed consolidated<br>statement of operations for the three months ended March 31, 2025 and the related notes, included in the Proxy Statement/Prospectus. |
| --- | --- |
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024 has been prepared using, and should be read in conjunction with, the following:
| ● | NorthView’s audited consolidated statement<br>of operations for the year ended December 31, 2024 and the related notes, included in the Proxy Statement/Prospectus; and |
|---|---|
| ● | Profusa’s audited consolidated statement<br>of operations for the year ended December 31, 2024 and the related notes, included in the Proxy Statement/Prospectus. |
| --- | --- |
As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the Business Combination.
The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Combined Company. They should be read in conjunction with the historical financial statements and notes thereto of NorthView and Profusa.
9
3. Accounting Policies and Reclassifications
Upon consummation of the Business Combination, management has performed a comprehensive review of the two entities’ accounting policies. As a result of the review, management has not identified differences between the accounting policies of the two entities which have a material impact on the financial statements of the Combined Company. Based on its analysis, management did not identify any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.
4. Adjustments to Unaudited Pro Forma CondensedCombined Financial Information
The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and has been prepared for informational purposes only.
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). NorthView has elected not to present Management’s Adjustments and is only presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to include all necessary Transaction Accounting Adjustments pursuant to Article 11 of Regulation S-X, including those that are not expected to have a continuing impact.
The audited historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to transaction accounting adjustments that reflect the accounting for the transaction under GAAP. All activity between Profusa and Northview has been eliminated between the companies on the pro forma statement under tick mark J.
The pro forma combined statement of operations does not reflect a provision for income taxes or any amounts that would have resulted had the Combined Company filed consolidated income tax returns during the periods presented. The pro forma condensed combined balance sheet does not reflect the deferred taxes of the Combined Company as a result of the Business Combination. Upon Closing of the Business Combination, it is likely that the Combined Company will record a full valuation allowance against the total U.S. and state deferred tax assets given the net operating losses and valuation allowance of Profusa as the recoverability of the tax assets is uncertain. The Company used the separate return method in calculating the pro forma tax provision and tax effects of our pro forma adjustments.
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations are based upon the number of the Combined Company’s shares outstanding, assuming the Business Combination occurred on January 1, 2024.
Transaction Accounting Adjustments toUnaudited Pro Forma Condensed Combined Balance Sheet
The Transaction Accounting Adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2025 are as follows:
| A. | Reflects the reclassification of the remaining shares of NorthView Common Stock to permanent equity immediately<br>prior to the Merger. |
|---|---|
| B. | Reflects the liquidation and reclassification of the balance<br>of investments held in the trust account to cash and cash equivalents that becomes available to fund the Transaction. This is the full<br>trust account balance as of March 31, 2025, which is further adjusted for redemptions reflected in adjustment (S) below to reflect the<br>remaining trust account balance following such redemptions which was distributed at closing. |
| --- | --- |
10
| C. | Reflects the gross proceeds from the issuance and sale of PIPE<br>Convertible Notes of NorthView that are convertible into shares of NorthView common stock at $10.00 per share pursuant to the PIPE Subscription<br>Agreement entered into with the PIPE Investors, assuming no redemptions. The PIPE Subscription Agreement provides for a total facility<br>up to $22.22 million which is split into tranches. The Initial Note was funded upon closing the merger for $10 million which<br>was subject to a 10% OID ($9.0 million net). The notes did not convert as of the closing date. As such, the notes will remain in<br>the pro forma balance sheet for pro forma purposes, as the notes convert at the election of the note holder until the shares are registered. |
|---|---|
| D. | Reflects the recapitalization and elimination of Northview’s pre-merger accumulated<br>deficit balance. |
| --- | --- |
| E. | Represents direct and incremental transaction costs incurred<br>by New Profusa related to the Merger and PIPE Subscription Agreement of approximately $6.0 million for advisory, banking, printing,<br>legal and accounting that are incurred and anticipated to be incurred. These costs will not affect the Company’s combined statements<br>of operations and comprehensive loss beyond 12 months after the acquisition date. |
| --- | --- |
| F. | Represents the payment of estimated direct and incremental transaction<br>costs that are incurred and anticipated to be incurred, of which $1.8 million is expected to be paid in shares and $4.2 million<br>is expected to be paid in cash, including the Business Combination Marketing Fee of $2.0 million. These costs will not affect the<br>Company’s combined statements of operations and comprehensive loss beyond 12 months after the acquisition date. |
| --- | --- |
| G. | Represents reclassification of Profusa’s deferred offering<br>costs to permanent equity and payment of the respective accrued and unpaid portion of the deferred offering costs. |
| --- | --- |
| H. | Represents payment of Northview accrued offering costs and expenses. |
| --- | --- |
| I. | Represents payment of direct and incremental transaction costs<br>incurred by NorthView of approximately $1.6 million in advisory, banking, printing, legal, and accounting fees and other transaction<br>related expenses in connection with the Merger and PIPE Subscription Agreement. |
| --- | --- |
| J. | Elimination of transactions between the two companies. |
| --- | --- |
| K. | Reflects exchange of Profusa’s Series A Convertible<br>Preferred Stock for common stock of Profusa with $0.0001 par value. |
| --- | --- |
| L. | Reflects exchange of Profusa’s Series B Convertible<br>Preferred Stock for common stock of Profusa with $0.0001 par value. |
| --- | --- |
| M. | Reflects exchange of Profusa’s Series C/C1 Convertible<br>Preferred Stock for common stock of Profusa with $0.0001 par value. |
| --- | --- |
| N. | Reflects conversion of Senior Notes and Senior Bridge Notes<br>into 6,819,763 shares of Profusa in accordance with their terms. |
| --- | --- |
| O. | Reflects conversion of Junior Notes into 2,801,697 shares of<br>Profusa in accordance with their terms. |
| --- | --- |
| P. | Reference not used. |
| --- | --- |
| Q. | Represents reclassification of Profusa’s transaction costs<br>incurred in excess of proceeds received from additional paid-in capital to accumulated deficit. |
| --- | --- |
| R. | Represents issuance of shares in New Profusa upon conversion<br>of Northview’s convertible loan at the Closing of the Merger. The balance of the note was $1,919,796, which was fair value adjusted<br>on the balance sheet to $9,133,382 is included in the pro forma at the current balance as no interest accrues on this note and was converted<br>into 863,908 shares of New Profusa, at an as converted price of $2.22 per share. |
| --- | --- |
| S. | Reflects the 154,561 shares of NorthView common stock redeemed<br>subsequent to March 31, 2025 for an aggregate redemption amount of approximately $0.7 million, which also includes a pro rata portion<br>of the extension payments and interest that accrued between March 2025 and the various redemption dates. |
| --- | --- |
| T. | Reflects the conversion of the Profusa Senior Secured Convertible<br>Notes issued subsequent to March 31, 2025 which converted into shares of New Profusa common stock. |
| --- | --- |
11
Transaction Accounting Adjustments to UnauditedPro Forma Condensed Combined Statements of Operations
The Transaction Accounting Adjustments included in the unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2025 and the year ended December 31, 2024 are as follows:
AA. Represents the elimination of investment income related to the investments held in the NorthView Trust Account.
BB. Represents elimination of interest expense related to Profusa’s Junior Notes, and the interest expense related to Profusa’s Senior Notes Senior Secured Notes, and Senior Bridge Notes which was incurred following the modification of the Senior Notes on September 27, 2022 which was accounted for as debt extinguishment. Interest expense incurred prior to the September 27, 2022 modification is not eliminated because prior to that date the Senior Notes did not contain conversion feature requiring conversion of the Senior Notes upon a merger with a SPAC. Accordingly, the Senior Notes were deemed to have been extinguished as of September 27, 2022, and re-issued immediately as new debt that is convertible upon the Merger. All expenses incurred with respect to the Senior Notes following the September 27, 2022 modification, including interest expense and gains or losses incurred with subsequent modifications of the Senior Notes, are eliminated.
CC. Represents the income tax impact on the elimination of investment income related to the investments held in NorthView’s Trust Account.
DD. Represents elimination of the changes in the fair value of Northview’s convertible loan upon the closing of the Business Combination.
EE. To account for the Profusa Senior Secured Working Capital Loan interest at 12.0% during the three months ended March 31, 2025 and the year ended December 31, 2024, for the portion not already accounted for in accrued interest.
FF. Represents the accrual of estimated Transaction related costs incurred by NorthView after March 31, 2025 and December 31, 2024, respectively.
GG. Represents issuance of the Milestone Earnout Rights and Profusa Inducement Recoupment Earnout Rights to the equity holders of Profusa, which are treated as dividend distributions and recorded in additional paid-in capital. Earnout right represents a right to receive shares in future upon meeting certain earnout targets. The issuance date fair values of Milestone Earnout Rights and Profusa Inducement Recoupment Earnout Rights was determined using Monte Carlo Simulation approach. The Company estimated the vesting and payoff of the Milestone Earnout Shares and the Inducement Shares related to Milestone I Event and Milestone II Event for each simulated stock price path, and the vesting and payoff of the Milestone Earnout Shares related to Milestone III Event and Milestone IV Event for each simulated revenue path and the correlated stock price path. The fair value is then determined by averaging the payoff across all simulated paths and discounting it to the valuation date.
HH. Reflects transaction costs incurred in excess of proceeds.
II. To account for the PIPE Investors interest at 10% related to the first tranche of the PIPE Convertible Note.
4. Net Loss per Share
Represents the net loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2024. As the Business Combination and related transactions are being reflected as if they had occurred at the beginning of January 1, 2024, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination have been outstanding for the entire periods presented.
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The unaudited pro forma condensed combined financial information has been prepared with the actual redemptions of Public Shares by NorthView Public Stockholders for the three months ended March 31, 2025 and for the year ended December 31, 2024:
| Year Ended<br><br>December 31,<br><br>2024 | Three Months<br><br>Ended<br><br>March 31,<br><br>2025 | |||||
|---|---|---|---|---|---|---|
| Pro forma net loss | $ | (13,695 | ) | $ | (7,800 | ) |
| Deemed dividend | $ | (9,684 | ) | (9,684 | ) | |
| Pro forma net loss used in calculation of weighted-average pro forma net loss per share | $ | (23,379 | ) | $ | (17,484 | ) |
| Basic weighted average shares outstanding | 33,002,012 | 33,161,159 | ||||
| Pro forma net loss per share - Basic and Diluted | $ | (0.71 | ) | $ | (0.53 | ) |
| Weighted average shares outstanding-basic and diluted | ||||||
| NorthView Common shareholders | 6,535,591 | 5,901,557 | ||||
| Former Profusa shareholders | 15,500,000 | 15,500,000 | ||||
| Shares issued to underwriters | 157,500 | 182,500 | ||||
| Senior secured convertible note | 4,660,000 | 5,542,261 | ||||
| Profusa bridge notes | 4,285,012 | 4,170,932 | ||||
| Northview working capital loan | 863,908 | 863,908 | ||||
| PIPE Subscription | 1,000,000 | 1,000,000 | ||||
| 33,002,012 | 33,161,159 |
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