Company: PFSA
Filing Date: 2025-05-13
Form Type: S-4/A
Source: 0001213900-25-042224
Chunk: 310

Company: Profusa, Inc.
Filing Date: 2025-05-13
Form: S-4/A
Chunk 310
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 value” basis, which is defined as the market value of invested capital (i.e., equity, debt and preferred equity, if any), less cash. Discounted Cash Flow Analysis The major inputs and assumptions used in Marshall & Stevens’ discounted cash flow method were as follows: •As discussed above, Profusa provided a forecast through 2028 as the basis for the Discounted Cash Flow analysis. The revenue growth from 2027 to 2028 was approximately 72.7%. Given this significant growth, Marshall & Stevens did not determine a terminal value at that point, but rather extended those projections to 2031 by reflecting an expected ramp -downin revenue growth to a growth rate of approximately 9.4% in 2031 and an expected long term growth rate of 2.5% in the terminal period. Profit margins were maintained throughout the extension period. •A weighted average cost of capital (WACC) was used as the discount rate in Marshall & Stevens’ analysis and applied to debt free, after -taxcash flows. The WACC was calculated to be approximately 35.0% and was determined based upon a cost of equity of approximately 38.5% and an after -taxcost of debt of approximately 4.4%. •A cost of equity was determined using a 20 -yearU.S. Treasury Rate (4.08%), Equity Risk Premium of 6.22% (Kroll Cost of Capital Navigator 2022 (“KCOC”)), Re -leveredEquity beta of 1.14 based upon the Guideline Companies discussed below, a size premium of 4.80% based upon KCOC data for the 10 thdecile, and a company specific risk premium of 22.50% based upon anticipated forecast risk. •After -taxcost of debt was determined using BBB rated bond yields and a tax rate of 28.00%. •The debt -to-capitalratio was estimated at 10.0% and the equity -to-capitalratio was estimated at 90.0% using input from the Guideline Companies discussed below.

152 •Estimated income tax expense of 28% of pre -taxincome; •Capital expenditures for projected year 2022, 2023, and 2025 based upon Profusa management estimates, remaining capital expenditures were projected at 1.00% of net revenue; •Working capital requirements were estimated based on Profusa’s normal debt -free, cash -freeworking capital to sales ratio of 29