Company: PFSA
Filing Date: 2025-08-29
Form Type: S-1
Source: 0001213900-25-082672
Chunk: 157

Company: Profusa, Inc.
Filing Date: 2025-08-29
Form: S-1
Chunk 157
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 is carried at fair value based on unobservable market inputs. The fair value of financial instruments is determined using various valuation techniques, including the market approach. Where observable market prices are not available, we use models that incorporate assumptions about credit risk, interest rates, and market volatility. These estimates require significant judgment, particularly for instruments classified as Level 3 in the fair value hierarchy. Changes in these assumptions could materially affect the reported fair values and related income or expense. We regularly review and update our valuation to reflect current market conditions and ensure consistency with accounting standards. Level 3 fair value financial liabilities consisted of solely the Tasly convertible debt which was $2.2 million as of December 31, 2024 and $2.5 million as of June 30, 2025. Share-Based Compensation •We account for share -basedcompensation arrangements with employees and non -employeesusing a fair value method which requires the recognition of compensation expense for costs related to all share -basedpayments including stock options. The fair value method requires us to estimate the fair value of share -basedpayment awards on the date of grant using an option pricing model. We use the Black -Scholespricing model to estimate the fair value of options granted that are then expensed on a straight -linebasis over the vesting period. We account for forfeitures as they occur. Option valuation models, including the Black -Scholesoption -pricingmodel, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant -datefair value of an award and affect the amount of compensation expense recognized. These assumptions include the risk -freerate of interest, expected dividend yield, expected volatility, and the expected life of the award. These assumptions involve significant judgment and are based on historical data and future expectations. We periodically reassess our estimates and assumptions to reflect actual experience and any changes in future expectations. • Expected Term. The expected term is calculated using the simplified method, which is available where there is insufficient historical data about exercise patterns and post -vestingemployment termination behavior. The simplified method is based on the vesting period and the contractual term for each grant, or for each vesting -tranchefor awards with graded vesting. The mid -pointbetween the vesting date and the maximum contractual expiration date is used as the expected term under this method. For awards with multiple vesting -tranches, the times from grant until the mid -pointsfor each of the tranches may be averaged to provide an overall expected