Company: PFSA
Filing Date: 2025-10-29
Form Type: 424B3
Source: 0001213900-25-103174
Chunk: 413

Company: Profusa, Inc.
Filing Date: 2025-10-29
Form: 424B3
Chunk 413
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 tax loss and tax credit carry forwards. ASC 740 additionally
requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not
be realized. As of June 30, 2025 and December 31, 2024, the Company’s deferred tax asset had a full valuation allowance
recorded against it.

ASC 740 also clarifies
the accounting for uncertainty in income taxes recognized in an enterprise’s condensed consolidated financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination
by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition.

The Company recognizes interest
and penalties related to unrecognized tax benefits as a formation cost expense. The Company is currently not aware of any issues under
review that could result in significant payments, accruals or material deviation from its position. The Company incurred $340 and no amount
of interest and penalty expenses during the three and six months ended June 30, 2025 and 2024, respectively.

The Company has identified
the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities
since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax
jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of
unrecognized tax benefits will materially change over the next twelve months.

Derivative Financial Instruments

The Company evaluates its financial
instruments, such as warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives
in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value
on the grant date and re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements
of operations. Derivative assets and liabilities are classified in the condensed consolidated balance sheets as current or non-current based
on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet
date.

Convertible Promissory Note

The fair value of the Company’s
convertible promiss