Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 53

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 53
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 value per share of the common stock
on the date of exercise.

The total fair value of options vested for the three and nine months
ended September 30, 2025 and 2024 was less than $0.1 million.

As of September 30, 2025, the total unrecognized stock-based compensation
expense for stock options was $3.0 million, which is expected to be recognized over a weighted-average period of 1.3 years. 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.

As of September 30, 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 1.1 years. 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.

Nonrecourse Promissory 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. The full
note amount of $428 thousand was considered settled and paid in full upon the Closing as this balance was netted within the total consideration
due to the Company’s CEO as payment for the successful Closing, and as such, the transaction was recorded in stock-based compensation.
The early exercised options were fully vested, with no remaining responsibility on a note as of July 11, 2025, at which time they converted
into Company Common Stock. On both July 11, 2025 and September 30, 2025 these exercised options are included in the Company’s Common
Stock outstanding.

31

Stock-Based Compensation Expense by Function

The following table is a summary of stock compensation expense