Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 143

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 143
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 to financing fees in accordance with US GAAP accounting for standby
equity purchase agreements (“SEPA”).

Issuance fees such as warrant costs associated to a SEPA or ELOC are
expensed upfront.. The associated equity classified warrants were not remeasured after initial issuance. In the instance of liability
classified warrants, the Company revalues the warrants in subsequent periods with the change in fair value recorded in earnings.

When the Company draws on the ELOC and issues shares, it recognizes
the proceeds in equity. The amount recorded is based on the fair value of the cash received. The Company records ELOC transactions based on the actual cash received for each draw, as this is clearly measurable and traceable.

Merger with Northview Acquisition Company

The Company accounted for the merger with Northview as a reverse recapitalization.
A reverse recapitalization occurs when the legal acquirer (the public shell company) issues shares to the shareholders of the legal acquiree
(the operating company), and the operating company’s shareholders obtain control of the combined entity. Because the public shell
company does not meet the definition of a business under ASC 805, the transaction is not accounted for as a business combination. Instead,
the transaction is accounted for as a capital transaction; that is, as a recapitalization of the operating company.

The historical financial statements are those of Legacy Profusa. The
September 30, 2025 financial statements are those of Profusa Inc., with the assets and liabilities of Northview recognized at fair value
as of the acquisition date. The equity structure, including the number and type of shares issued and outstanding reflects that of Legacy
Profusa, and includes the equity instruments issued to effect the merger.

Any contingent consideration is measured at fair value at the acquisition
date. For contingent consideration that does not meet all the criteria for equity classification, such contingent consideration is required
to be recorded at its initial fair value at the acquisition date, and on each balance sheet date thereafter. Changes in the estimated
fair value of liability-classified contingent consideration are recognized on the condensed consolidated statements of operations in the
period of change.

Accrued Liabilities

The Company recognizes accrued liabilities for expenses that have been incurred but not yet paid as of the reporting date. Accruals are
recorded when (i) an obligation has been incurred, (ii) the amount is reasonably estimable, and (iii) the related goods or services have
been received. Accrued liabilities primarily consist of compensation-related