Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 153

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 153
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 conditions were all met, the earnout is considered both indexed to the entity’s own stock (or within the scope exception),
and meet the equity classification requirements. These earnouts were fair valued on the Closing Date and will not be remeasured. Similarly,
Milestone III was fair valued on the Closing Date and was determined to have a $0 value due to the current probability input of the event
occurring being 0%. Additionally, this Milestone III was revalued as of September 30, 2025 and continues to have a current probability
of 0% and no value was associated with the milestone. On the Closing Date, Milestones I and II had a value of $1.7 million, while Milestone
IV had a value of $0 as this was also deemed improbable of occurring. Milestone III does not meet the indexed guidance as it is based
on an event occurring to achieve $6 million in, which is not a market data or input. The Milestone IV Earnout does meet the scope exception
ASC 815-10-15-59(d) from derivative accounting since payments under these milestones are based on revenue amounts..

The earn-outs are considered to be part of the overall reverse recapitalization
as it was negotiated between NorthView Sponsor I, LLC, the sponsor of NorthView (the “Sponsor”), and the selling shareholders.
As such, it is represented as an equity restructuring that is accounted for as a reduction in additional paid-in capital. As this is an
equity classified transaction the contingent consideration creates a reduction to the additional paid in capital account of $1.7 million,
with an offset to additional paid in capital -Earn-out equity instrument. This accounting results in no impact on the face of the
Statement of Stockholders’ Deficit until all necessary conditions to issue such shares have been satisfied by the end of the period.
Once these contingently issuable shares are deemed issuable, they will also be included in earnings per share.

15

The following table reconciles the elements of the Business Combination
to the consolidated statements of cash flows and the consolidated statement of changes in stockholders’ equity:

    Cash-Trust Account, net of redemptions 
    $1,276 
  
    Less: transaction costs and professional fees, paid directly from Trust Account 
     1,274 
  
    Net proceeds received from Trust 
     2 
  
    Less: private and representative warrant liabilities 
     (1,193)