Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 169

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 169
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. 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 promissory
notes accrue interest at 5% and 12% per annum, most of which do not have a set maturity date. Any promissory notes that did have an initial
maturity date, which has passed, the Company has verbally agreed to pay off these loans subsequent to the consummation of the Business
Combination. The Company is currently in default; accordingly, the Company classified the entire outstanding amount as a current liability
on the condensed consolidated balance sheet.

25

During the year ended December 31, 2022, the Company borrowed $0.3
million from two of its founders at zero interest rate to finance its short-term operations, from which $0.2 million was repaid in the
same period.

During the year ended December 31, 2023, the Company borrowed short-term
promissory notes of $0.3 million from an existing investor and additional $0.1 million from an unrelated party repayable on demand at
any time after December 31, 2023, with annual interest rate of 12%.

During the three and nine months ended September 30, 2025 and
2024, one note of $0.1 million was issued and the Company did not make any repayments from the outstanding balance of the promissory
notes.

As of September 30, 2025 and December 31, 2024, accrued and unpaid
interest on the promissory notes was $0.3 million and $0.3 million, respectively. Interest expense on the promissory notes was less than
$0.1 million for each of the three and nine months ended September 30, 2025 and