Company: PFSA
Filing Date: 2025-04-03
Form Type: CORRESP
Source: 0001213900-25-028546
Chunk: 10

Company: Profusa, Inc.
Filing Date: 2025-04-03
Form: CORRESP
Chunk 10
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 ordinary activities.”

Further: Based on the guidance applied to this transaction,
the Tasly JV represents a partial sale of non-financial assets. Per ASC 610-20-05-2: The term transfer in this Subtopic is used broadly
and includes sales and situations in which a parent transfers ownership interests (or variable interests) in a consolidated subsidiary
or other changes in facts and circumstances that result in the derecognition of nonfinancial assets or in substance nonfinancial assets
that do not constitute a business. For example, an entity may lose control of nonfinancial assets or in substance nonfinancial assets
because of the expiration or termination of an existing contractual arrangement, a dilution event, a government action, or upon default
of a subsidiary's nonrecourse debt. An entity also may lose control of nonfinancial assets or in substance nonfinancial assets by contributing those assets to a joint venture or other noncontrolled investee.

In this transaction, when a partial sale of non-financial
assets occur under scope of ASC 610-20 and the derecognition criteria have been met, the entire gain or loss on sale would be recorded
(Example PWC PPE 6-8).

Equity method investment is recognized when control of the
non-cash assets are transferred to the JV investee.

It is expected that the Company’s equity investment
of $4 million, representing the Company’s 40% interest in the ordinary shares of the APAC JV, will be recorded upon signing of the
License Agreement, which corresponds to the timing when control of the License in the APAC Territory transfers to the JV and Tasly (via
its 60% voting equity interest).

Management of the Co-Registrants also notes that the
APAC agreement with Tasly is based on an estimated fair value of $10 million for the license transferred, which was determined by
Tasly and agreed on with Profusa Management. Prior to the execution of the joint venture, Tasly will engage a third-party valuation
firm to conclude on the value of the license and adjustments can be made to the contract as needed based on the result of the
valuation. Both parties are currently in alignment with the expected valuation of $10 million, which is written in the
agreement.

Management additionally acknowledges the Staff’s comment
and agrees that although this is a one-time transaction and does not have a continuing impact, this gain should be presented on the Income
Statement as well. As such, the $6 million gain is recognized