Company: PFSA
Filing Date: 2025-06-13
Form Type: 10-Q
Source: 0001213900-25-054386
Chunk: 99

Company: Profusa, Inc.
Filing Date: 2025-06-13
Form: 10-Q
Item: Part I, Item 8
Chunk 99
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 31, 2025, all of the Trust assets
were classified as noncurrent assets.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities approximates
the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due to their short-term nature,
except for the warrant liabilities, convertible promissory note, and securities purchase agreement.

12

Income Taxes

The Company accounts for income taxes under ASC
740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the condensed consolidated financial statements and tax basis of assets and liabilities and for
the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of
March 31, 2025 and December 31, 2024, the Company’s deferred tax asset had a full valuation allowance recorded against it.

ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s condensed consolidated financial statements and prescribes a recognition threshold
and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax
return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and
transition.

The Company recognizes interest and penalties
related to unrecognized tax benefits as a formation cost expense. The Company is currently not aware of any issues under review that
could result in significant payments, accruals or material deviation from its position. There were no interest and penalty expenses incurred
during the three months ended March 31, 2025 and 2024.

The Company has identified the United States
as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception.
These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and
compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax
benefits will materially change over the next twelve months.

Derivative Financial Instruments

The Company evaluates its financial instruments,
such as warrants, to determine if such instruments are