Company: PFSA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076861
Chunk: 113

Company: Profusa, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 113
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 subject
to re-measurement at each balance sheet date, with changes in fair value recognized in the condensed consolidated statements of operations.

Warrant Liabilities

The Company accounts for the 17,404,250 warrants
issued in connection with the IPO (the 9,487,500 Public Warrants, the 7,347,500 Private Placement Warrants, and the 569,250 Representative
Warrants inclusive of the underwriters’ over-allotment option) 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, the Company has 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 the Company’s condensed consolidated statements of operations (See Note 8).

In determining the fair value of the Private
Placement Warrants and the Representative’s Warrants, assumptions related to expected share-price volatility, expected life and
risk-free interest rate are utilized. The Company estimates the volatility of its common stock based on historical volatility that matches
the expected remaining life of the warrants.

13

Net Loss Per Common Stock

The Company has two categories of shares, which
are referred to as common stock subject to possible redemption and common stock. Earnings and losses are shared pro rata between the
two categories of shares. The 17,404,250 potential shares of common stock for outstanding warrants to purchase the Company’s
shares were excluded from diluted earnings per share for the three and six months ended June 30, 2025 and 2024 because the warrants are
contingently exercisable, and the contingencies have not yet been met. As a result, diluted net loss per share of common stock is the
same as basic net loss per share of common stock for the periods presented. The table below presents a reconciliation of the numerator
and denominator used to compute basic and diluted net loss per share for each category of common stock:

The table below presents a reconciliation of
the numerator and denominator used to compute basic and diluted net loss per share for each category of common stock:

    For the Three Months Ended June 30,  
    For the Six Months Ended June 30,