Company: PFSA
Filing Date: 2025-02-12
Form Type: S-4/A
Source: 0001213900-25-012354
Chunk: 547

Company: Profusa, Inc.
Filing Date: 2025-02-12
Form: S-4/A
Chunk 547
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 2 — Summary of Significant Accounting Policies (cont.) Stock remaining outstanding after the Redemption are shares issued in connection with our initial public offering. In January 2024, $ 1,565,078was paid from the Trust Account to redeeming stockholders in connection with the extension. As a result, the Company has recorded a liability of $ 1,565,078as common stock to be redeemed and reduced common stock subject to possible redemption as of December 31, 2023 on the balance sheet. Additionally, as part of the adjustment of common stock subject to possible redemption, the Company classified $ 1,565,078of the trust account as a current asset on the consolidated balance sheets, which was paid from the Trust Account in January 2024 to redeeming stockholders. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short -termnature, except for the warrant liabilities and convertible promissory note. Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the consolidated financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from 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 December 31, 2023 and 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. Our effective tax rate was 28.22% and 6.5% for the years ended December 31, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the years ended December 31, 2023 and 2022, due to changes in fair value of warrant liabilities, penalties and interest, business combination expenses and the valuation allowance on the deferred tax assets. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s 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-notto be sustained upon examination by taxing authorities. ASC 740