Company: PFSA
Filing Date: 2025-10-29
Form Type: 424B3
Source: 0001213900-25-103174
Chunk: 182

Company: Profusa, Inc.
Filing Date: 2025-10-29
Form: 424B3
Chunk 182
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 been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements
requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences
may be material.

We consider an accounting estimate
to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time
the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use
of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition
or results of operations.

Management has discussed the
development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors. In addition, there
are other items within our financial statements that require estimation, but are not deemed critical as defined above. Changes in estimates
used in these and other items could have a material impact on our financial statements.

Fair Value of Financial Instruments

The Company’s financial
instruments consist of other receivables, accounts payable, promissory notes, convertible promissory notes and senior notes. The Company
states accounts payable at their carrying value, which approximates fair value due to the short time to the expected payment. The promissory
notes are stated at amortized cost, which approximates their fair value, because the Company believes their terms approximate those that
would be available to it on a similar loan from an unrelated party.

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The Tasly convertible debt
issued between June 2023-February 2024 (Notes 3 and 5) is carried at fair value based on unobservable market inputs. The fair
value of financial instruments is determined using various valuation techniques, including the market approach. Where observable market
prices are not available, we use models that incorporate assumptions about credit risk, interest rates, and market volatility. These estimates
require significant judgment, particularly for instruments classified as Level 3 in the fair value hierarchy. Changes in these assumptions
could materially affect the reported fair values and related income or expense. We