Company: PFSA
Filing Date: 2025-06-13
Form Type: 10-Q
Source: 0001213900-25-054386
Chunk: 42

Company: Profusa, Inc.
Filing Date: 2025-06-13
Form: 10-Q
Item: Part I, Item 1
Chunk 42
---
 16,509  
     229,586 
  
    Fair value at March 31, 2024 
    $279,205  
    $21,632  
    $300,837 

    Convertible Promissory Note – related party 
  
    Fair value at December 31, 2024 
    $8,908,052 
  
    Change in fair value of convertible promissory note 
     225,330 
  
    Fair value at March 31, 2025 
    $9,133,382 

    Convertible
Promissory
Note – related party 
  
    Fair value at December 31, 2023 
    $944,118 
  
    Proceeds received through convertible promissory note 
     378,185 
  
    Change in fair value of convertible promissory note 
     (60,077)
  
    Fair value at March 31, 2024 
    $1,262,226 

The fair value of the Company’s convertible
promissory note is valued using a compound option formula on the convertible feature and a present value of the host contract. The valuation
technique requires inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s
own assumption about the assumptions a market participant would use in pricing the working capital loan.

The convertible promissory note was classified
within Level 3 of the fair value hierarchy due to the use of unobservable inputs. Inherent in pricing models are assumptions related
to expected share-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of its common stock
based on historical volatility that matches the expected remaining life of the note. The risk-free interest rate is based on the U.S.
Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the note. The expected life
of the note is assumed to be equivalent to their remaining contractual term.

    Securities Purchase Agreement 
  
    Fair value at February 11, 2025 
    $— 
  
    Change in fair value of securities purchase agreement 
     23,487 
  
    Fair value at March 31, 2025 
    $23,487 

The Company utilizes a Monte Carlo model to estimate
the fair value of the conversion feature within the securities purchase agreement, which is required to be recorded at its initial fair
value on the