Company: PFSA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076861
Chunk: 132

Company: Profusa, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 132
---
—  
    $379,500  
    $— 
  
    Warrant liabilities – Private Placement Warrants 
     293,900  
     —  
     —  
     293,900 
  
    Warrant liabilities – Representative’s Warrants 
     22,770  
     —  
     —  
     22,770 
  
    Convertible Promissory Note – Related Party 
     8,908,052  
     —  
     —  
     8,908,052 
  
    Total 
    $9,604,222  
    $—  
    $379,500  
    $9,224,722 

21

The Public Warrants, the Private Placement Warrants
and the Representative’s Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within liabilities
on the condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis,
with changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of operations.

The Company utilized a Monte Carlo simulation
model for the initial valuation of the Public Warrants. The subsequent measurement of the Public Warrants at June 30, 2025 and December
31, 2024 was classified as Level 2 due to the lack of an active market. As of June 30, 2025 and December 31, 2024, the aggregate value
of Public Warrants was $3,795,000 and $379,500, respectively.

The Company uses a Monte Carlo simulation model
to value the Private Placement Warrants and the Representative’s Warrants. The Private Placement Warrants and the Representative’s
Warrants were classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs. Inherent in pricing models
are assumptions related to expected share-price volatility, expected life and risk-free interest rate. The Company estimates the volatility
of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate
is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the
warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term.

The key inputs into the Monte Carlo simulation
model for the warrant liabilities were as follows at