Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 79

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 79
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, and material impact on reported results.

Valuation policies are reviewed quarterly, and inputs are updated based
on evolving market conditions and contractual developments. A change in the discount rate of +100 basis points would result in a fair
value change of approximately $17 thousand or (0.01)%, while a 10% change in volatility would impact fair value by approximately $152
thousand or 1.1%.

The Company classifies this instrument within Level 3 of the fair value
hierarchy and provides a reconciliation of beginning and ending balances in Note 4.

Recent Accounting Pronouncements

See the section titled “Recent Accounting Pronouncements”
in Note 2 of the notes to our unaudited condensed consolidated financial statements included in this Report for more information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the
Exchange Act and are not required to provide the information otherwise required under this item.

Item 4. Controls and Procedures Evaluation of Disclosure Controls
and Procedures

Disclosure controls are procedures that are designed with the objective
of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed,
summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the
objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and
chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

48

We have performed a formal evaluation of our internal control over
financial reporting under the supervision and with the participation of management, including our principal executive officer and principal
financial officer, as required by Section 404 of the Sarbanes-Oxley Act. Based upon their evaluation, our principal executive officer
and principal financial and accounting officer, concluded that our internal controls over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) were not effective as of September 30, 2025 due to the existence of material weaknesses. Our internal
controls were not adequately designed and appropriate to address the following material weaknesses related to (i) segregation of duties
in the financial statement close process, (ii) Lack of review controls and expertise to ensure accurate valuations and accounting of financial
instruments, (iii) lack of technical accounting expertise and internal controls to ensure accurate preparation of