Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 188

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 188
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 current period and for twelve months following the issuance of these financial statements,
our risk of going concern has been mitigated but not fully alleviated by the Tranche 1 PIPE Convertible Note issued for a gross $10.0
million.

38

Accounting for Business Combination

On July 11, 2025, the Business Combination was successfully completed
and was accounted for as a reverse capitalization in accordance with US GAAP. Legacy Profusa was deemed the accounting predecessor of
the combined business, and the Company (“New Profusa”) as the parent company of the combined business, is the successor SEC
registrant, meaning that our financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed
with the SEC. The Business Combination will have a significant impact on our future capital structure and operating results, de-risking
our product development, manufacturing and commercialization. The most significant changes in New Profusa’s future reported financial
positions are expected to be an estimated increase in cash (as compared to our balance sheets at June 30, 2025 and at December 31, 2024)
of approximately $9.0 million in proceeds from the PIPE Investment. This $9.0 million is offset by various deferred offering costs and
$2.0 million closing fees related to the underwriters marketing fee for the IPO, which became payable upon a successful consummation of
the Business Combination.

As a result of the Merger, the Company has become the successor to
an SEC-registered and Nasdaq- listed company, which will require us 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

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