Company: PFSA
Filing Date: 2025-07-18
Form Type: 8-K
Source: 0001213900-25-065686
Chunk: 39

Company: Profusa, Inc.
Filing Date: 2025-07-18
Form: 8-K
Chunk 39
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 finance,
legal, human resource functions, and business development, contractor and professional services fees, audit and compliance expenses, insurance
costs and general corporate expenses, including allocated facility-related expenses and information technology costs.

Loss on Change in the Fair Value of Tasly Convertible Debt

We elected to apply fair value
option to account for the convertible loans issued between June 2023 and February 2024 (the “Tasly Convertible Debt”), under
which none of the embedded conversion or redemption features were bifurcated and separately accounted for. Rather, the Tasly Convertible
Debt in its entirety was recorded at fair value at inception and is subject to remeasurement to fair value at each balance sheet date,
with the change in fair value reflected in the statements of operations and comprehensive loss.

Gain on PPP Loan Forgiveness

On April 16, 2020 and May
25, 2021, we borrowed $1.2 million (the “PPP Loan 1”) and $1.3 million (the “PPP Loan 2”), respectively, as a
Paycheck Protection Program loan (together the “PPP Loans”). The Paycheck Protection Program, established as part of the Coronavirus
Aid, Relief, and Economic Security (“CARES”) Act, provides for loans to qualifying businesses and is administered by the U.S.
Small Business Administration (the “SBA”). The annual interest rate of the PPP Loans is 1%. The PPP Loans are eligible for
forgiveness, provided the borrower has met the respective forgiveness requirements, has timely submitted an application for forgiveness
and the forgiveness has been granted by the SBA. PPP Loan 1 has been approved for loan forgiveness, and management intends to apply for
PPP Loan 2 forgiveness in 2025. PPP Loan 2 is currently in default due to non-payment, and is classified as a current liability on the
balance sheet.

Interest Expense

Interest expense consists
primarily of the interest on our convertible notes, senior notes, Tasly convertible debt, and PPP Loans.

Other Income

Other income consists primarily
of income earned from sale of equipment and a short-term sublease of a portion of our facilities.

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Results of Operations

Comparison of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

The following table sets forth
our unaudited condensed consolidated statements of operations and comprehensive loss for the interim periods indicated (in