Company: PFSA
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076861
Chunk: 24

Company: Profusa, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 shares of common stock
for an aggregate amount of $661,012.

As of June 30, 2025, $1,274,549 of the Trust
assets were classified as noncurrent assets and $661,012 of the Trust assets due to redeeming stockholders were classified as current
assets. As a result of the Business Combination, the $661,012 due to redeeming stockholders was paid at the Closing.

Fair Value of Financial Instruments

The fair value of the Company’s assets
and liabilities approximates the carrying amounts represented in the accompanying condensed consolidated balance sheets, primarily due
to their short-term nature, except for the warrant liabilities, convertible promissory note, and securities purchase agreement.

12

Income Taxes

The Company accounts for income taxes under ASC
740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the condensed consolidated financial statements and tax basis of assets and liabilities and for
the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation
allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of
June 30, 2025 and December 31, 2024, the Company’s deferred tax asset had a full valuation allowance recorded against it.

ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s condensed consolidated financial statements and prescribes a recognition threshold
and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax
return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and
transition.

The Company recognizes interest and penalties
related to unrecognized tax benefits as a formation cost expense. The Company is currently not aware of any issues under review that
could result in significant payments, accruals or material deviation from its position. The Company incurred $340 and no amount of interest
and penalty expenses during the three and six months ended June 30, 2025 and 2024, respectively.

The Company has identified the United States
as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception.