Company: PFSA
Filing Date: 2025-02-12
Form Type: S-4/A
Source: 0001213900-25-012354
Chunk: 296

Company: Profusa, Inc.
Filing Date: 2025-02-12
Form: S-4/A
Chunk 296
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ed Cash Flow Analysis The major inputs and assumptions used in Marshall & Stevens’ discounted cash flow method were as follows: •As discussed above, Profusa provided a forecast through 2028 as the basis for the Discounted Cash Flow analysis. The revenue growth from 2027 to 2028 was approximately 72.7%. Given this significant growth, Marshall & Stevens did not determine a terminal value at that point, but rather extended those projections to 2031 by reflecting an expected ramp -downin revenue growth to a growth rate of approximately 9.4% in 2031 and an expected long term growth rate of 2.5% in the terminal period. Profit margins were maintained throughout the extension period. •A weighted average cost of capital (WACC) was used as the discount rate in Marshall & Stevens’ analysis and applied to debt free, after -taxcash flows. The WACC was calculated to be approximately 35.0% and was determined based upon a cost of equity of approximately 38.5% and an after -taxcost of debt of approximately 4.4%. •A cost of equity was determined using a 20 -yearU.S. Treasury Rate (4.08%), Equity Risk Premium of 6.22% (Kroll Cost of Capital Navigator 2022 (“KCOC”)), Re -leveredEquity beta of 1.14 based upon the Guideline Companies discussed below, a size premium of 4.80% based upon KCOC data for the 10 thdecile, and a company specific risk premium of 22.50% based upon anticipated forecast risk. •After -taxcost of debt was determined using BBB rated bond yields and a tax rate of 28.00%. •The debt -to-capitalratio was estimated at 10.0% and the equity -to-capitalratio was estimated at 90.0% using input from the Guideline Companies discussed below. •Estimated income tax expense of 28% of pre -taxincome; •Capital expenditures for projected year 2022, 2023, and 2025 based upon Profusa management estimates, remaining capital expenditures were projected at 1.00% of net revenue; •Working capital requirements were estimated based on Profusa’s normal debt -free, cash -freeworking capital to sales ratio of 29.5%, and the expectation that this level of debt -free, cash -freeworking capital would be sufficient going forward; •A terminal year multiple of approximately