Company: PFSA
Filing Date: 2025-10-29
Form Type: 424B3
Source: 0001213900-25-103174
Chunk: 171

Company: Profusa, Inc.
Filing Date: 2025-10-29
Form: 424B3
Chunk 171
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 build prototypes, and continue to explore and develop next generation
technologies.

General and Administrative Expenses

General and administrative
expenses consist of personnel expenses, including salaries, benefits, and stock-based compensation, related to executive management, 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 March 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.

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Other Income

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

Results of Operations

Comparison of the Three months ended June