Company: PFSA
Filing Date: 2025-10-29
Form Type: 424B3
Source: 0001213900-25-103174
Chunk: 271

Company: Profusa, Inc.
Filing Date: 2025-10-29
Form: 424B3
Chunk 271
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 and non-employees using a fair value method which requires the recognition of
compensation expense for costs related to all share-based payments including stock options. The fair value method requires the
Company to estimate the fair value of share-based payment awards on the date of grant using an option pricing model. The Company
uses the Black-Scholes pricing model to estimate the fair value of options granted that are then expensed on a straight-line basis
over the vesting period. The Company accounts for forfeitures as they occur. Option valuation models, including the Black-Scholes
option-pricing model, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect
the grant-date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected
volatility, and the expected life of the award.

<div align='center'>F-9

PROFUSA, INC. AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</div>

Note 2 — Summary of Significant Accounting Policies (cont.)

Convertible Preferred Stock

The Company records all shares
of convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The convertible preferred
stock is recorded outside of permanent equity because while it is not mandatorily redeemable, in certain events considered not solely
within the Company’s control, such as a merger, acquisition, or sale of all or substantially all of the Company’s assets (each,
a “deemed liquidation event”), the convertible preferred stock will become redeemable at the option of the holders of at least
a majority of the then outstanding preferred shares. The Company has not adjusted the carrying values of the convertible preferred stock
to its liquidation preference because a deemed liquidation event obligating the Company to pay the liquidation preferences to holders
of shares of convertible preferred stock is not probable of occurring. Subsequent adjustments to the carrying values to the liquidation
preferences will be made only when it becomes probable that such a deemed liquidation event will occur.

Government Grants

The Company receives payments
from government entities under non-refundable grants in support of our product development programs. The grants received fall within two
categories:

| a. | Expense Reimbursement Grants — grants in which the Company is entitled to claim from a                                                
 government entity reimbursement of certain qualified expenses incurred to date. The nature and amount of such expenses are determined 
 by each respective grant;                                                                                                             |

|