Company: PFSA
Filing Date: 2025-10-29
Form Type: 424B3
Source: 0001213900-25-103174
Chunk: 272

Company: Profusa, Inc.
Filing Date: 2025-10-29
Form: 424B3
Chunk 272
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 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-exchange transactions. The Company has further concluded that Subtopic 958-605, Not-for-Profit-Entities-Revenue
Recognition 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 and Disclosure of Government Assistance (“IAS
20”). Under this approach recognize grants at fair value only when there is reasonable assurance that the Company will comply with
the conditions attaching to them, and that the grants will be received. The Company recognizes as income the amounts received or receivable
from expense reimbursement grants to the extent, and in the period in which, the qualifying costs have been incurred. The Company recognizes
as income the amounts received or receivable from fixed fee grants by applying the proportional performance method. Under this method
the Company recognizes grant income using the same proportion as the costs incurred to date to the total expected cost of the project,
but limiting the income to be recognized to the amount to which it is entitled based on the submitted deliverables.

Fair Value of Financial Instruments

The Company’s financial instruments consist
primarily of other receivables, accounts payable, promissory notes, convertible promissory notes and senior notes. The Company states
accounts payable at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. The
promissory notes are stated at amortized cost, which approximates their fair value, because the Company believes their terms approximate
those that would be available to it on a similar loan from an unrelated party. The Tasly convertible debt issued between June 2023-February
2024 (Notes 3 and 5) carried at fair value based on unobservable market inputs.

<div align='center'>F-10

PROFUSA, INC. AND