Company: PFSA
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112723
Chunk: 189

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 8
Chunk 189
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 differences across regions. Global financial conditions have tightened notably this year,
leading to capital outflows. Amid heightened economic and geopolitical uncertainties, investors have aggressively pulled back from risk-taking
and adjusted their investment preferences generally. Key gauges of systemic risk, such as higher dollar funding costs and counterparty
credit spreads, have risen. There is a risk of a disorderly tightening of financial conditions that may be amplified by vulnerabilities
built over the years.

In addition, our business, growth, financial condition or results of
operations could be materially adversely affected by instability or changes in a country’s or region’s economic conditions; inflation;
changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise;
increased difficulty of conducting business in a country or region due to actual or potential political or military conflict; or action
by the U.S. or foreign governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals
or entities. A possible slowdown in global trade caused by increasing tariffs or other restrictions could decrease consumer or corporate
confidence and reduce consumer, government and corporate spending in countries inside or outside the U.S., which could adversely affect
our operations. Climate-related events, including extreme weather events and natural disasters and their effect on critical infrastructure
in the U.S. or internationally, could have similar adverse effects on our operations, users, or third-party suppliers.

Principles of Accounting and Consolidation

The accompanying condensed consolidated financial statements have been
prepared in conformity with U.S. GAAP and pursuant to applicable rules and regulations of the SEC and include all adjustments necessary
for the fair presentation of the Company’s financial position as of September 30, 2025 and 2024 and the results of operations and cash
flows for the three and nine month periods then ended. The accompanying condensed consolidated financial statements include the accounts
of Profusa Inc. and its wholly owned subsidiary, APAC. All intercompany balances and transactions have been eliminated in consolidation.

39

Components of Results of Operations

Government Grant Revenue

Government grant revenue consists of amounts we earn under grants from
two government agencies: NIH and DARPA. These grants are provided either in the form of expense reimbursement (expense reimbursement grants)
or on a fixed fee basis (fixed fee grants). Under the expense reimbursement grants the government agencies reimburse us for a portion
of our expenses (allowable expenses) that have been incurred in a given period on the basis of reports that we provide to these