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

Company: Profusa, Inc.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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 as a reverse recapitalization.
A reverse recapitalization occurs when the legal acquirer (the public shell company) issues shares to the shareholders of the legal acquiree
(the operating company), and the operating company’s shareholders obtain control of the combined entity. Because the public shell
company does not meet the definition of a business under ASC 805, the transaction is not accounted for as a business combination. Instead,
the transaction is accounted for as a capital transaction; that is, as a recapitalization of the operating company.

The historical financial statements are those of Legacy Profusa. The
September 30, 2025 financial statements are those of Profusa Inc., with the assets and liabilities of Northview recognized at fair value
as of the acquisition date. The equity structure, including the number and type of shares issued and outstanding reflects that of Legacy
Profusa, and includes the equity instruments issued to effect the merger.

Any contingent consideration is measured at fair value at the acquisition
date. For contingent consideration that does not meet all the criteria for equity classification, such contingent consideration is required
to be recorded at its initial fair value at the acquisition date, and on each balance sheet date thereafter. Changes in the estimated
fair value of liability-classified contingent consideration are recognized on the condensed consolidated statements of operations in the
period of change.

Accrued Liabilities

The Company recognizes accrued liabilities for expenses that have been incurred but not yet paid as of the reporting date. Accruals are
recorded when (i) an obligation has been incurred, (ii) the amount is reasonably estimable, and (iii) the related goods or services have
been received. Accrued liabilities primarily consist of compensation-related expenses (including salaries, bonuses, payroll taxes and
benefits), professional fees, interest expense, operating costs, and other incurred but unpaid obligations.

Management evaluates all known and estimated obligations at each reporting
period and updates accruals based on the best available information. Accrued liabilities are classified as current when the Company expects
to settle the obligation within one year. Changes in estimates are recognized in the period in which such changes become known.

11

Due to Related Parties

Amounts due to related parties represent
liabilities arising from transactions with entities or individuals that meet the definition of a related party under ASC 850, Related
Party Disclosures. Such balances generally consist of short-term, non-interest-bearing payables for advances, expense reimbursements,
shared services, or other operating costs incurred on