Company: PFSA
Filing Date: 2025-04-03
Form Type: CORRESP
Source: 0001213900-25-028546
Chunk: 8

Company: Profusa, Inc.
Filing Date: 2025-04-03
Form: CORRESP
Chunk 8
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750 shares are issued (for each Earnout). Since each of the milestones is a separate freestanding financial instrument, there is no variability in the number of shares issuable (i.e. no settlement contingency), the Earnouts are not precluded from being considered indexed to NorthView Common Stock.

Next, the Company considered whether the four Earnouts qualify for equity classification under ASC 815-40. The Merger Agreement does not include any provisions which may explicitly require the Company to net settle the Earnouts in cash. Pursuant to ASC 815-40, contracts that require physical settlement or net-share settlement, or contracts that give the company a choice of net-cash settlement, will be classified as equity provided that the criteria in ASC 815-40-25-7 through 25-35 are also met. Therefore, the Company applied criteria in ASC 815-40-25-7 through 25-35 to determine whether the earn-out is classified in equity. The Company has previously adopted ASU 2020-06.

a. Superseded by ASU 2020-06.

b. Entity has sufficient authorized and unissued shares available to settle the contract after considering all other commitments that may require the issuance of stock during the maximum period the derivative instrument could remain outstanding.

Met – NorthView has 100,000,000 authorized shares of common stock, while the total Common Stock shares on the expected closing date of the Business Combination is 33,002,012 shares issued and outstanding. There will be sufficient authorized and unissued shares available to settle the four Milestone Earnouts after considering all other commitments (i.e. warrants, options, other Earnouts and Inducement Recoupment)

c. The contract contains an explicit limit on the number of shares to be delivered in a share settlement.

Met – the Earnouts include fixed number of shares issuable upon exercise subject only to standard antidilution adjustments.

d. There are no required cash payments to the counterparty in the event the entity fails to make timely filings with the Securities and Exchanges Commission (SEC).

Met – there are no timely filing requirements.

e. There are no cash settled top-off or make-whole provisions.

Met – there are no such cash settled provisions related to the Earnouts.

Conclusion :Based on the above, the Company concluded that Earnouts are indexed to NorthView’s Common stock and will be classified as equity at fair value with no subsequent remeasurement.

| 14. | We refer you to Adjustment T