Company: PFSA
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001013762-25-004396
Chunk: 553

Company: Profusa, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 553
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 the gross proceeds of its initial public offering (exclusive of any applicable
finders’ fees which might become payable). In connection with the Business Combination, NorthView, I-Bankers and Dawson James amended
the Business Combination Marketing Agreement to revise a portion of the Business Combination Fee to be partially payable in NorthView
securities and partially payable in cash upon the closing of the Merger with Profusa, with such securities to be subject to lock-up provisions. 
Subsequently, on January 19, 2025, the agreement was modified by the parties such that the Company will be required to pay $2,000,000,
payable in cash, if a business combination is consummated.

Critical Accounting Estimates

Certain of our accounting policies require that
management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, management
reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented
fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and
information available from outside sources, as appropriate. Some of the more significant estimates are in connection with determining
the fair value of the warrant liabilities and convertible promissory note. However, by their nature, judgments are subject to an inherent
degree of uncertainty, and, therefore, actual results could differ from our estimates.

Convertible
Promissory Note

The
fair value of the Company’s convertible promissory note is valued using a compound option formula on the convertible feature and
a present value of the host contract. The valuation technique requires inputs that are both unobservable and significant to the overall
fair value measurement. These inputs reflect management’s own assumption about the assumptions a market participant would use in
pricing the working capital loan.

Warrant
Liabilities

We
account for the warrants issued in connection with the IPO in accordance with the guidance contained in ASC 815-40. Such guidance provides
that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly,
we classified each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date.
With each such re-measurement, the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in our
consolidated statements of operations.

In
determining the fair value of the Private Placement Warrants and the Representative