Company: PFSA
Filing Date: 2025-07-18
Form Type: 8-K
Source: 0001213900-25-065686
Chunk: 8

Company: Profusa, Inc.
Filing Date: 2025-07-18
Form: 8-K
Item: Item 2.03
Chunk 8
---
 grants the government agencies
reimburse us for a portion of our expenses (allowable expenses) that have been incurred in a given period on the basis of reports that
we provide to these agencies. Fixed fee grants are awarded for specific research and development programs undertaken by us. Under these
grants we receive milestone payments from the government agencies upon our submission and approval by the government of agreed upon deliverables,
consisting primarily of the documented results of the specific research and development programs.

Research and Development Expenses

Research and development expenses
consist primarily of personnel expenses, including salaries, benefits, and stock-based compensation, costs of consulting, supplies, depreciation
and amortization and allocations of facility- related expenses. We expect our research and development expenses to increase as we increase
staffing to support product development, continue our clinical trials, build prototypes, and continue to explore and develop next generation
technologies.

General and Administrative Expenses

General and administrative
expenses consist of personnel expenses, including salaries, benefits, and stock-based compensation, related to executive management, finance,
legal, human resource functions, and business development, contractor and professional services fees, audit and compliance expenses, insurance
costs and general corporate expenses, including allocated facility-related expenses and information technology costs.

Loss on Change in the Fair Value of Tasly
Convertible Debt

We elected to apply fair value
option to account for the convertible loans issued between June 2023 and February 2024 (the “ Tasly Convertible Debt”), under
which none of the embedded conversion or redemption features were bifurcated and separately accounted for. Rather, the Tasly Convertible
Debt in its entirety was recorded at fair value at inception and is subject to remeasurement to fair value at each balance sheet date,
with the change in fair value reflected in the statements of operations and comprehensive loss.

Gain on PPP Loan Forgiveness

On April 16, 2020 and May
25, 2021, we borrowed $1.2 million (the “ PPP Loan 1”) and $1.3 million (the “ PPP Loan 2”), respectively, as a
Paycheck Protection Program loan (together the “ PPP Loans”). The Paycheck Protection Program, established as part of the Coronavirus
Aid, Relief, and Economic Security (“ CARES”) Act, provides for loans to qualifying businesses and is administered by the U. S.
Small Business Administration (the “ SBA”). The annual interest rate of the PPP Loans is 1%. The