Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 44

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 44
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all prior provisions relating to “Additional Closings” and “Additional Notes,” and all references to such terms
in the PIPE Subscription Agreement and related documents are to be construed in accordance with the new tranche structure.

Concurrently, on August 25, 2025, the Company entered into Amendment
No. 1 (the “Note Amendment”) to the Initial Note. The Note Amendment modifies the terms of the Initial Note, specifically
amending Section 4(b) to revise the conversion price provisions on any conversion date to be the lower of (i) the Conversion Price on
such date and (ii) ninety-five percent (95%) of the lowest daily VWAP for the Company’s Common Stock during the ten consecutive
trading days immediately preceding the applicable conversion date (the “Alternate Conversion Price”), provided that in no
event shall the conversion price be less than the floor price of $0.10 which was calculated based on twenty percent (20%) of the closing
sale price of the common stock on the principal trading market on the trading day immediately preceding the Note Amendment’s
effective date, which was August 22, 2025.

The Company has elected the fair value option under ASC
825-10, Financial Instruments - Fair Value Option, for its loans payable - related party under ASC 825, Financial Instruments.
The election simplifies accounting by measuring the entire instrument at fair value, with changes in fair value recognized in earnings.
As such, the Company does not separately recognize any interest, unamortized discount, premium, issuance costs, or other basis adjustments;
these amounts are included in the carrying amount of the liability that is adjusted to fair value each period. Fair value is determined
using observable market data when available and valuation models when observable inputs are not readily available. Changes in fair value
attributable to both credit risk and market risk are recorded in Loss on change in fair value of related party convertible debt in the
Condensed Consolidated Statement of Operations. See Note 4, Fair Value Measurement for further information.

As of September 30, 2025, there was $14.4 million loans payable outstanding
which has been classified as long-term in the condensed consolidated balance sheet.

Promissory Notes

In a series of transactions during 2010 and 2011, two of the Company’s
founders provided $0.2 million to the Company to fund general corporate purposes in exchange for promissory notes. Our outstanding promiss