Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 72

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 72
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3,138) thousand during the nine months
ended September 30, 2024. The increase was primarily due to junior and senior convertible notes being converted and settled on July 11,
2025 which reduced quarterly accrued interest on these notes from the usual 12 weeks, down to 1.5 weeks of accrued interest.

Financing Costs – Increased by $1,443 thousand in relation
to the issuance of shares on the ELOC agreement.

Other Income (expense) – Other income increased by an
immaterial $10 thousand during the nine months ended September 30, 2025 relating to income on our operating account.

43

Liquidity and Capital Resources

Sources of Liquidity

We incurred net losses and negative operating cash flows from operations
since inception, and we expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully
commence sustainable commercial operations. To date, we have funded our operations primarily with proceeds from the issuance of convertible
preferred stock, junior and senior convertible notes, related party loans payable, ELOC, PPP Loans available to us under the Paycheck
Protection Program and promissory notes. From inception through September 30, 2025, we raised gross proceeds of $98.0 million from the
issuances of convertible preferred stock and convertible notes and loans, $11 million from related party loans payable, $3.5 million from
ELOC, $2.5 million from PPP Loans and $0.9 million from issuance of promissory notes. As of September 30, 2025, we had cash and cash equivalents
of $3,009 thousand.

Our junior convertible notes bore interest at 12% per annum and their
outstanding principal and accrued but unpaid interest automatically converted into shares of Company Common Stock at $7.00 per share upon
consummation of the Business Combination. In addition, upon consummation of the Business Combination, all junior noteholders have a right
to receive additional shares upon achievement by the Company of certain share price and sales milestones (the earnout shares).

We commenced issuance of our senior convertible notes in April 2021
and continued issuing them until the Closing. Our senior convertible notes bore interest at 12% per annum and their outstanding principal
and accrued but unpaid interest automatically converted into shares of Company Common Stock between $0.50 and $4.00 per share upon consummation
of the Business Combination, based on the fixed conversion price defined in