Company: PFSA
Filing Date: 2025-08-29
Form Type: S-1
Source: 0001213900-25-082672
Chunk: 234

Company: Profusa, Inc.
Filing Date: 2025-08-29
Form: S-1
Chunk 234
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 of highly subjective assumptions, and changes in the assumptions used can materially affect the grant -datefair value of an award. These assumptions include the risk -freerate of interest, expected dividend yield, expected volatility, and the expected life of the award. Convertible Preferred Stock The Company records all shares of convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The convertible preferred stock is recorded outside of permanent equity because while it is not mandatorily redeemable, in certain events considered not solely within the Company’s control, such as a merger, acquisition, or sale of all or substantially all of the Company’s assets (each, a “deemed liquidation event”), the convertible preferred stock will become redeemable at the option of the holders of at least a majority of the then outstanding preferred shares. The Company has not adjusted the carrying values of the convertible preferred stock to its liquidation preference because a deemed liquidation event obligating the Company to pay the liquidation preferences to holders of shares of convertible preferred stock is not probable of occurring. Subsequent adjustments to the carrying values to the liquidation preferences will be made only when it becomes probable that such a deemed liquidation event will occur. Government Grants The Company receives payments from government entities under non -refundablegrants in support of our product development programs. The grants received fall within two categories: a.Expense Reimbursement Grants — grants in which the Company is entitled to claim from a government entity reimbursement of certain qualified expenses incurred to date. The nature and amount of such expenses are determined by each respective grant; b.Fixed Fee Grants — grants in which the total amount of the grant is fixed and the disbursements are made based on submission to the grantor of specified deliverables. The Company has 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 -exchangetransactions. The Company has further concluded that Subtopic 958 -605, Not -for-Profit-Entities-RevenueRecognition does 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, the Company made a policy decision to apply by analogy recognition and measurement guidance in International Accounting Standard 20 Accounting for Government Grants