Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 49

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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Common Stock as they meet both steps in the criteria under ASC 815-40-15-7, as they are not contingently exercisable and they are now
considered indexed to equity, as the contingent settlement provisions are no longer applicable subsequent to the Close. The Public Warrants
strike price and the number of shares used to calculate the settlement amount are fixed, so the instrument can be considered indexed to
an entity’s own stock (as the only variables that could affect the settlement amount would be inputs to the fair value of a fixed-for-fixed
forward or option on equity shares).

The Private Warrants and Representative Warrants are not considered
indexed to an entity’s own stock, and fails Step 2 of ASC 815-40-15-7. As such, the Company continues to recognize the Private Placement
Warrants and Representative Share Warrants as liabilities at fair value as of the Closing Date, with an offsetting entry to additional
paid-in capital and adjusts the carrying value of the instruments to fair value through other income (expense) on the condensed consolidated
statement of operations at each reporting period until they are exercised. (See Note 4).

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HCW Warrants

HCW acted as Profusa’s financial advisor in connection with
the Business Combination and received a transaction fee in connection therewith of $1,000,000, payable in cash and 132,500 warrants to
acquire an aggregate of 132,500 shares of New Profusa Common Stock at an exercise price of $0.01 per share. The Company accounts for
the HCW warrants in accordance with the guidance contained in ASC 815. Such guidance provides that the HCW warrants are not precluded
from equity classification. Equity-classified contracts are initially measured at fair value. Subsequent changes in fair value are not
recognized as long as the contracts continue to be classified in equity. The Company determined the initial fair value using a Black
Scholes pricing model. The initial fair value was $0.3 million.

ELOC

On July 28, 2025, the Company entered into the Purchase Agreement
and the ELOC Registration Rights Agreement with Ascent. Upon the terms and subject to the satisfaction of the conditions contained in
the Purchase Agreement, from and after the Effective Date, the Company will have the right, in its sole discretion, to sell to Ascent
up to $100,000,000 of shares of its Common Stock, subject to certain limitations set forth in