Company: PFSA
Filing Date: 2025-02-12
Form Type: S-4/A
Source: 0001213900-25-012354
Chunk: 336

Company: Profusa, Inc.
Filing Date: 2025-02-12
Form: S-4/A
Chunk 336
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italization whereby no goodwill or other intangible assets are recorded, net assets of NorthView being presented at historical costs. Operations prior to the Business Combination will be presented as those of Profusa. The unvested Milestone Earnout Rights, Sponsor Inducement Recoupment Earnout Rights and Profusa Inducement Recoupment Earnout Rights each represent a freestanding financial instrument because they are legally detachable from the shares of New Profusa that will be issued upon Merger, and (b) separately exercisable because their exercise conditions are separate and unrelated and exercise of each of the instruments does not terminate the other instruments. The issuance of the Milestone Earnout Rights, Sponsor Inducement Recoupment Earnout Rights and Profusa Inducement Recoupment Earnout Rights to the securityholders is not dependent on the securityholders’ employee or ex -employeestatus and, accordingly, these instruments are not considered to be compensatory in nature and are not within the scope of ASC 718 Compensation — Stock Compensation. Further, because the Milestone Earnout Rights, Sponsor Inducement Recoupment Earnout Rights and Profusa Inducement Recoupment Earnout Rights are not considered mandatorily redeemable shares, do not embody and obligation to repurchase New Profusa shares nor are indexed to such obligation, and do not represent an obligation that might be settled by issuing a variable number of shares, these instruments do not represent a liability under ASC 480 Distinguishing Liabilities from Equity. The Milestone Earnout Rights, Sponsor Inducement Recoupment Earnout Rights and Profusa Inducement Recoupment Earnout Rights meet the definition of a derivative instrument (i.e. they contain an underlying, notional amount and payment provisions, they require initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors, and they contain net settlement provisions as they relate to publicly traded shares). However, the Milestone Earnout Rights, Sponsor Inducement Recoupment Earnout Rights and Profusa Inducement Recoupment Earnout Rights are considered to be indexed to the New Profusa’s own stock because: (a)they are contingently exercisable exclusively on the basis of the New Profusa’s own share price and/or by reference to the Company’s own operations (i.e. revenue targets); (b)their settlement amount is equal the difference between the fair value of a fixed number of the New