Company: PFSA
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001013762-25-004396
Chunk: 819

Company: Profusa, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 4
Chunk 819
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    $316,670 

    Private Placement Warrants  
    Representative’s Warrants  
    Warrant Liability 
  
    Fair value at December 31, 2022 
    $377,857  
    $29,274  
    $407,131 
  
    Change in fair value of warrant liabilities 
     (311,729) 
     (24,151) 
     (335,880)
  
    Fair value at December 31, 2023 
    $66,128  
    $5,123  
    $71,251 

    Convertible Promissory Note 
  
    Fair value at December 31, 2023 
    $944,118 
  
    Principal borrowing 
     797,981 
  
    Change in fair value of convertible promissory note 
     7,165,953 
  
    Fair value at December 31, 2024 
    $8,908,052 

    Convertible Promissory Note 
  
    Fair value at December 31, 2022 
    $— 
  
    Principal borrowing 
     1,121,815 
  
    Change in fair value of convertible promissory note 
     (177,697)
  
    Fair value at December 31, 2023 
    $944,118 

The fair value of the Company’s convertible
promissory note is valued using a compound option formula on the convertible feature and a present value of the host contract. The valuation
technique requires inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s
own assumption about the assumptions a market participant would use in pricing the working capital loan.

F-21

The convertible promissory note was classified
within Level 3 of the fair value hierarchy due to the use of unobservable inputs. Inherent in pricing models are assumptions related to
expected share-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of its common stock based
on historical volatility that matches the expected remaining life of the note. The risk-free interest rate is based on the U.S. Treasury
zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the note. The expected life of the
note is assumed to be equivalent to their remaining contractual term.

Note
9 – Income Taxes

The
Company’s net deferred tax assets are as