Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 155

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 155
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view’s initial public offering (the “IPO”), 7,347,500 warrants issued in connection with private placement at the
time of the IPO (the “Private Placement Warrants”) and 569,250 warrants issued to the representative of the underwriters in
the IPO (the “Representative’s Warrants”) remained outstanding and became warrants for the Company. The Public Warrants
qualify for equity classification upon Closing, and were fair value adjusted with no future gains or losses on fair value adjustment being
recorded in future periods. The Private Placement Warrants and Representative’s Warrants contain provisions that preclude these
warrants from being indexed to the Company’s stock., the settlement amount depending on who holds the instrument, and the holder
is not an input to the fair value of a fixed-for-fixed option or forward on equity shares. As such, this provision would cause the warrants
to fail Step 2 of the indexation guidance. The Private Placement and Representative’s Warrants remained liability classified with
fair value adjustments being recorded through earnings each period.

16

Note 4 — Fair Value Measurement

Assets and liabilities recorded at fair value on a recurring basis
in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair
value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize
the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for
disclosure of fair value measurements as follows:

Level 1 — Inputs are unadjusted, quoted prices in active markets
for identical assets or liabilities at the measurement date;

Level 2 — Inputs are observable, unadjusted quoted prices in
active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that
are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of
the related assets or liabilities; and

Level 3 — Unobservable inputs that are significant to the measurement
of the fair value of the assets or liabilities that are supported by little or no market data.

In determining fair value, the Company utilizes valuation techniques
that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty
credit