Company: PFSA
Filing Date: 2025-05-09
Form Type: S-4/A
Source: 0001213900-25-041151
Chunk: 358

Company: Profusa, Inc.
Filing Date: 2025-05-09
Form: S-4/A
Chunk 358
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 financial instruments that each met the equity scope exception. Based on these conclusions, the Company has disclosed that Earnouts would be classified as equity and initially recorded at fair value with no subsequent remeasurement. The Company further reviewed the updated Milestone III and Milestone IV and updated their analysis with the conclusion that the revised Milestones continue to be indexed to the Company’s (or New Profusa’s) stock. Since the Milestone Earnout Rights, Sponsor Inducement Recoupment Earnout Rights and Profusa Inducement Recoupment Earnout Rights are considered to be indexed to the New Profusa’s own stock, and because other criteria of ASC 815 Derivatives and Hedging for equity classification are met, these instruments are expected to be classified as equity measured at fair value as at the date of the Merger, with no subsequent remeasurement at each reporting date. The issuance of Milestone Earnout Rights and Profusa Inducement Recoupment Earnout Rights to the equity holders of Profusa are expected to be treated as dividend distributions and recorded in additional paid -incapital. The preliminary estimated aggregate fair value of Milestone Earnout Rights and Profusa Inducement Recoupment Earnout Rights is $9.6 million, which 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. All outstanding capital stock of Profusa will be converted into shares of common stock of Profusa, with the corresponding increase in the par value of common stock being recognized against additional paid -incapital. All outstanding junior convertible notes and senior convertible notes are expected to convert into the shares of New Profusa based on their respective conversion teams. Accordingly, no gain or loss is expected to be recognized upon conversion of the junior convertible notes and senior convertible notes. Outstanding vested and unvested share -basedawards of Profusa will be converted into the right to exercise such awards for common shares of New Profusa, adjusted proportionately based on the Exchange Ratio. Issuance of the Milestone Earnouts and Profusa Inducement Recoupment Earn