Company: PFSA
Filing Date: 2025-05-09
Form Type: S-4/A
Source: 0001213900-25-041151
Chunk: 485

Company: Profusa, Inc.
Filing Date: 2025-05-09
Form: S-4/A
Chunk 485
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. We have 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. We have further concluded that Subtopic 958 -605, Not -for-Profit-Entities-Revenue Recognitiondoes not apply to the government grants received, as we are a business entity, and the grants are with governmental agencies or units. In absence of explicit U.S. GAAP guidance on contributions received by business entities, we 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 recognize grants at fair value only when there is reasonable assurance that we will comply with the conditions attaching to them, and that the grants will be received. We recognize 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. We recognize as income the amounts received or receivable from fixed fee grants by applying the proportional performance method. Under this method we recognize grant income 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 we entitled based on the submitted deliverables. Fair Value 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 -February2024 (Notes 3 and 5) is carried at fair value based on unobservable market inputs. Share-Based Compensation We account for share -basedcompensation arrangements with employees and non -employeesusing a fair value method which requires the recognition of compensation expense for costs related to all share -basedpayments including stock options. The fair value method requires us to estimate the fair value of share -basedpayment awards on the date of grant using an option pricing model. We use the Black -Scholespricing