Company: PFSA
Filing Date: 2025-02-12
Form Type: S-4/A
Source: 0001213900-25-012354
Chunk: 609

Company: Profusa, Inc.
Filing Date: 2025-02-12
Form: S-4/A
Chunk 609
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 31, 2023                                                                           |     | $            | 1,714 |     | $                 |      — |   |

The Company elected to measure its Tasly Convertible Debt at fair value (Note 5) with changes in fair value reported in earnings as they occur. The Tasly Convertible Debt fair values were determined using the discounted cash flow methodology based on probability weighted scenarios of the convertible notes conversion. At issuance of the first $1 million on June 26, 2023, the time to event was .28 years and the discount rate applied was 14.54%. At issuance of the next $0.3 million on July 20, 2023, the time to event was .22 years and the discount rate applied was 13.82%. At issuance of the final $0.3 million on August 15, 2023, the time to event was .15 years and the discount rate applied was 13.70%. On December 31, 2023, the time event was .25 years and the discount rate applied was 12.95%. The fair value of the compound derivative liability has been estimated at the date of inception and at the subsequent balance sheet date using a two -stepapproach to valuation, employing a probability -weightedscenario valuation method and then comparing the instrument’s value with -and-withoutthe derivative features in order to estimate its combined fair value, using unobservable inputs, which are classified as Level 3 within the fair value hierarchy. In order to estimate the fair value of the convertible notes, the Company estimated the future payoff in each scenario, discounted it to a present value and then probability weighted it based upon management’s best estimate of the likelihood of each event occurring.

F-83

PROFUSA, INC. AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 3 — Fair Value Measurement (cont.) Convertible Promissory Notes Derivative Liabilities Assumptions The primary inputs for the valuation approach included the probability of achieving various settlement scenarios that provide the lenders the rights or the obligations to receive cash or a variable or fixed number of shares upon the completion of a capital transaction. The derivative liability resulting from the modification of the convertible promissory notes in December 2021 (see Note 5) was estimated at zero dollars as of December 31, 2022 due to the contractual maturities of the convertible promissory notes occurring prior to the expected time to occurrence of the