What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-19 compared with 2025-08-14 · 545 added, 524 removed, 3 unchanged (100% of the section changed)

Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

References to the “Company,” “NorthView

Acquisition Corp.,” “NorthView,” “our,” “us” or “we” refer to NorthView Acquisition

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction

with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this report.

Certain information

contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act

of 1934, as amended (the “Exchange Act”).

We have based these forward-looking statements on our current expectations and

projections about future events.

These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions

about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future

results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you

can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,”

“expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,”

or the negative of such terms or other similar expressions.

Factors that might cause or contribute to such a discrepancy include, but

are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.

We are a blank check company incorporated on

April 19, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,

stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).

consummated our initial public offering on December 22, 2021 and have identified a target company for our business combination.

the cash proceeds from our Public Offering and the Private Placement described below as well as additional issuances, if any, of our

capital stock, debt or a combination of cash, stock and debt for the significant costs incurred to complete the Business Combination.

Business Combination

On November 7, 2022, NorthView entered into a

Merger Agreement and Plan of Reorganization (the “Merger Agreement”), by and among NorthView, NV Profusa Merger Sub Inc.,

a Delaware corporation and a direct, wholly-owned subsidiary of NorthView (“Merger Sub”), and Profusa, Inc., a California

corporation (“Profusa”).

The Merger Agreement provides that, among other

things, at the closing (the “Closing”) of the transactions contemplated by the Merger Agreement, Merger Sub will merge with

and into Profusa (the “Merger”), with Profusa surviving as a wholly-owned subsidiary of NorthView.

In connection with the

Merger, NorthView will change its name to “Profusa, Inc.” The Merger and the other transactions contemplated by the Merger

Agreement are hereinafter referred to as the “Business Combination.”

The Business Combination is subject to customary

closing conditions, including the satisfaction of the minimum available cash condition of $15,000,000, the receipt of certain governmental

approvals and the required approval by the stockholders of NorthView and Profusa.

The aggregate consideration to be received by

the Profusa stockholders is based on a pre-transaction equity value of $155,000,000.

The exchange ratio will be equal to (a) $155,000,000,

divided by an assumed value of NorthView Common Stock of $10.00 per share.

Pursuant to the Merger Agreement, subject to

certain future revenue and stock-price based milestones, Profusa stockholders will have the right to receive an aggregate of up to an

additional 3,875,000 shares of NorthView Common Stock (the “Earnout Shares”).

One-quarter of the Earnout Shares will be issued

if, between the 18-month anniversary and the two-year anniversary of the Closing, the combined company’s common stock achieves

a daily volume weighted average market price of at least $12.50 per share for any 20 trading days within a 30 consecutive trading day

period (“Milestone Event I”).

One-quarter of the Earnout Shares will be issued if, between the first and second anniversary

of the Closing, the combined company’s common stock achieves a daily volume weighted average market price of at least $14.50 per

share for a similar number of days (“Milestone Event II”).

Pursuant to the Merger Agreement, the remaining one-quarter of

the Earnout Shares were to be issued if the combined company achieves at least $5,100,000 in revenue in fiscal year 2023, and one-quarter

of the Earnout Shares will be issued if the combined company achieves at least $73,100,000 in revenue in fiscal year 2024, (or up to

one-half of the Earnout Shares if both milestones are achieved).

On September 12, 2023, the parties to the Merger

Agreement entered into Amendment No.

1 to the Merger Agreement ( “Amendment No.

1”) pursuant to which the parties agreed

to revise the revenue earnout milestones to reflect updated projections provided by Profusa.

Specifically, Amendment No.

1 revised the

definition of “Milestone Event III” and “Milestone Event IV” such that one-quarter of the Earnout Shares would

be issued to Profusa stockholders if the combined company achieves Earnout Revenue of $11,864,000 for the fiscal year ended December

31, 2024, and one-quarter of the Earnout Shares would be issued to Profusa stockholders if the combined company achieves Earnout Revenue

of $99,702,000 for the fiscal year ended December 31, 2025.

Amendment No.

1 also clarified the exercise price of certain the Company

Additionally, if Milestone Event I or Milestone

Event II are achieved by the second anniversary of the Closing, NorthView’s sponsor, NorthView Sponsor I, LLC and Profusa stockholders,

will be issued additional shares up to the amount of any shares forgone as an inducement to obtaining Additional Financings (as defined

in the Merger Agreement).

On February 11, 2025, the Company entered into

a securities purchase agreement (the “SPA”) with an institutional investor (the “Investor”).

Pursuant to the

SPA, the Investor is expected, subject to the conditions relating to such purchase set forth in the SPA, to purchase from the Company

senior secured convertible promissory notes in an aggregate principal amount of up to $22,222,222 (the “Convertible Notes”)

for a purchase price of up to $20,000,000, after a 10% original issue discount (“OID”).

On May 8, 2025, the Company entered into a non-redemption agreement

(the “Non-Redemption Agreement”) with I-Bankers Securities, Inc.

and Dawson James Securities, Inc.

(together, the “Investors”),

pursuant to which such Investors agreed that to the extent that redemptions in connection with the vote to approve the Business Combination

reduces the Company’s trust account balance below $1.25 million, the Investors would offer such redeeming shareholders an

opportunity to rescind the redemption of their shares and would instead purchase such shares.

Such purchases would be structured in compliance

with the requirements of Rule 14e-5 under the Exchange Act or would otherwise not constitute a tender offer pursuant

to the Exchange Act.

Merger Agreement Amendment and Termination

On January 12, 2024, the parties to the Merger

Agreement entered into an Amendment No.

2 to the Merger Agreement pursuant to which the parties agreed to revise the definition of “Milestone

Event III” and such that the Earnout Revenue milestone of $11,864,000 for the fiscal year ended December 31, 2024, was replaced

with a milestone of consummating the Tasly JV (as defined in the amended Merger Agreement) and receipt of the related funding during

the fiscal year ended December 31, 2024.

All other aspects of the Merger Agreement were unmodified.

On February 16, 2024, the Company’s Board

of Directors approved and authorized the Company to execute a binding term sheet (“Original term sheet”) between the Company

and Profusa, Inc.

(the “Target”) for PIPE funding with Vellar Opportunities Fund Master, Ltd.

agreed to subscribe for 2,500,000 shares of common and/or preferred stock of the Target upon the closing of the Business Combination

at a price of $2.00 per share, for a total amount of $5,000,000 to be funded by Vellar immediately prior to the Business Combination.

On May 9, 2024, the original term sheet between the Company and Profusa was amended and restated to clarify certain provisions of the

Original term sheet.

On March 4, 2024, the parties to the Merger Agreement

entered into Amendment No.

3 to the Merger Agreement pursuant to which the parties agreed to revise the definition of Company Reference

Value (as defined in the Merger Agreement) to adjust for financing proceeds and debt conversions that could be received by Profusa prior

to the Business Combination.

All other aspects of the Merger Agreement were unmodified.

On September 25, 2024, Vellar terminated

the Amended and Restated Binding Principal Terms and Conditions with the Company and Profusa, dated May 9, 2024.

On February 11, 2025, the parties entered into

Amendment No.

4 to the Merger Agreement pursuant to which the parties agreed to revise the Company Reference Value (as defined in the

Merger Agreement) to adjust for financing proceeds received by Profusa prior to the Business Combination, along with debt conversions

and incentive shares to be issued.

Additionally, the Amendment (i) revised the definition of “Milestone Event III” such that

the parties extended the period for Profusa to consummate the APAC Joint Venture (as defined in the Merger Agreement) and receive the

related funding from December 31, 2024 until December 31, 2025, and (ii) revised the definition of “Milestone Event IV” to

change the earnout revenue target from $99,702,000 for the fiscal year ended December 31, 2025 to an earnout revenue target of $11,864,000

for the fiscal year ended December 31, 2026.

On April 2, 2025, the parties to the Merger Agreement

entered into an Amendment No.

5 to the Merger Agreement (“Amendment No.

5”) pursuant to which Section 9.01 of the Merger

Agreement is hereby amended such that the reference to “March 22, 2025” shall be replaced with “June 22, 2025”

by which the Company must consummate a Business Combination.

On July 11, 2025, we completed our Business Combination

with Profusa.

Extension of Our Combination Period

On March 10, 2023, the Company held a vote to

amend its amended and restated certificate of incorporation to extend the date by which the Company must consummate a Business Combination

from March 22, 2023 to December 22, 2023 (the “First Extension Meeting”).

On December 21, 2023, the Company held a special

meeting of stockholders to vote on extending the Combination Period.

As a result, the Company has extended the Combination Period from

December 22, 2023 to March 22, 2024.

In connection with the extension, 140,663 shares of the Company’s common stock were redeemed,

with 6,027,219 shares of Common Stock remaining outstanding after the Redemption;

833,469 shares of Common Stock remaining outstanding

after the Redemption are shares issued in connection with our initial public offering.

In January 2024, $1,565,078 was paid from the

trust account to redeeming stockholders in connection with the extension.

On January 2, 2024, the Company and Continental

Stock Transfer & Trust Company (“CST”) entered into Amendment No.

1 to Investment Management Trust Agreement, dated December

20, 2021, by and between the Company and CST, to allow CST, upon written instruction of the Company, to (i) hold the funds in the Company’s

trust account uninvested or (ii) hold the funds in an interest-bearing bank demand deposit account.

On March 21, 2024, the Company held its 2024

Annual Meeting of Stockholders (the “Meeting”).

At the meeting, the Company’s stockholders approved the amendment of

the Company’s amended and restated certificate of incorporation to extend the date by which the Company must consummate a business

combination or, if it fails to do so, cease its operations and redeem or repurchase 100% of the shares of the Company’s common

stock issued in the Company’s initial public offering, from March 22, 2024, monthly for up to six additional months at the election

of the Company and only upon contribution of $0.05 per month per outstanding public share, ultimately until September 22, 2024.

In connection with the meeting, the holders of

95,394 Public Shares properly exercised their right to redeem, with 5,931,825 shares of Common Stock remaining outstanding after

the Redemption;

738,075 shares of Common Stock remaining outstanding after the Redemption are shares issued in connection with the initial

public offering.

Consequently, the contribution is $36,904 per month needed for the Company to continue to extend the Combination

Period monthly.

On May 8, 2024 and May 31, 2024, the Company made two deposits of $36,904 each for April and May extension contributions.

On September 10, 2024, the Company made a deposit of $112,114, of which $110,174 was for June, July and August extension contributions

and $1,400 for lost interest due to late trust payments.

On September 19, 2024, the Company held a special

meeting of stockholders.

At the meeting, the Company’s stockholders approved an amendment to the Company’s amended and restated

certificate of incorporation to extend the date by which the Company must consummate its initial Business Combination to March 22, 2025.

In connection with the approval of the extension amendment, holders of 50,556 shares of the Company’s common stock exercised

their right to redeem, with 5,881,269 shares of common stock remaining outstanding after the redemption;

687,519 shares of common stock

remaining outstanding after the redemption are shares issued in connection with our initial public offering.

Consequently, the contribution

is $34,376 per month needed for the Company to continue to extend the Combination Period monthly.

On October 4, 2024, the Company

made a deposit of $34,376 for the September extension contribution.

In October 2024, $595,439 was paid from the trust account to redeeming

stockholders in connection with the extension that took place at the September 19, 2024 stockholders meeting.

On December 13, 2024, the

Company made a deposit of $68,752 for the October and November extension contributions.

On December 23, 2024, the Company made a deposit

of $34,376 for the December extension contribution.

On February 27, 2025, the Company made a deposit of $49,376 for the January extension

contribution and a portion ($15,000) of the February extension contribution.

On March 7, 2025, the Company deposited the remainder of

the February extension contribution of $19,376, plus interest.

On March 18, 2025, the Company commenced a special

meeting of stockholders, which was adjourned until March 21, 2025 without conducting any business.

On March 21, 2025, the Company reconvened

the special meeting to approve an extension of time for the Company to consummate an initial business combination from March 22, 2025

to June 22, 2025.

The meeting was adjourned until March 21, 2025, at which the stockholders approve the extension of the business combination

period until June 22, 2025.

As a condition of the extension, the Company contributed $30,000 to the Trust Account, for the entire extension

period, on March 21, 2025.

On June 9, 2025, the Company held its a special

meeting of stockholders.

At the meeting, the Company’s stockholders approved Merger Agreement and the actions and transactions

contemplated thereby, including (i) adopt an amended and restated Certificate of Incorporation, to be effective upon closing of the Merger

(ii) approving certain advisory proposals related to the amended and restated Certificate of Incorporation, (iii) approved the issuance

of new shares of the Company’s Common Stock as merger consideration, (iv) elected new directors, and (v) approved new employee

incentive plans.

In connection with the meeting, the holders of

52,784 Public Shares properly exercised their right to redeem, with 5,295,527 shares of Common Stock remaining outstanding after such

On July 1, 2025, the Company filed an

amendment to its Certificate of Incorporation (the “Amendment”) to extend the date by which the Company must consummate

a business combination or, if it fails to do so, cease its operations and redeem or repurchase 100% of the shares of the

Company’s common stock issued in the Company’s initial public offering, from June 22, 2025 to August 22, 2025.

Previously, on June 27, 2025, the Company had filed a copy of the Amendment with a date that mistakenly referenced “July 22,

2025” rather than “August 22, 2025,” however such filing was corrected in connection with the filing of the

Amendment on July 1, 2025.

Promissory Note

On January 10, 2024, the Company’s Board

of Directors approved, and the Company amended, its Convertible Working Capital Promissory Note (the “Note”) with the sponsor

to increase the principal amount of the Note that could be drawn on to $1.5 million.

The amended and restated Note also allows for

the conversion of the outstanding principal balance of the Note to be repaid in shares of Company common stock at a price of $2.22 per

share at the election of the sponsor.

On May 31, 2024, the Company’s Board of

Directors approved, and the Company second amended its Convertible Working Capital Promissory Note with the sponsor to increase the principal

amount of the Note that could be drawn on to $2.5 million.

The second amended and restated Note also allows for the conversion of

the outstanding principal balance of the Note to be repaid in shares of Company common stock at a price of $2.22 per share at the election

of the sponsor.

The Company has deferred the repayment of the Note to six months after the Closing.

Nasdaq Delisting

On December 20, 2024, the Company received a

written notice from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market that the Company’s securities would

be delisted from The Nasdaq Stock Market by reason of the failure of the Company to complete its initial business combination by December

20, 2024 (36 months from the effectiveness of its IPO registration statement) as required by Listing Rule IM-5101-2.

Accordingly, trading

in the Company’s Common Stock, Rights and Warrants was suspended at the opening of business on December 27, 2024 and a Form 25-NSE

was filed by Nasdaq with the Securities and Exchange Commission, which removed the Company’s securities from on the Nasdaq Stock

The Company’s Common Stock, Rights and Warrants began to be quoted its on the Pink Markets operated on The OTC Market systems

(“OTC Market”) under the symbols “NVAC,” “NVACR” and “NVACW.”

Use of Funds Restricted for Payment of Taxes

From inception to date, we have withdrawn a total of $1,484,218 of interest from the Trust Account of which $1,453,297 was paid for franchise

and income taxes.

Of the aggregate withdrawals, $30,922 was restricted for the payment of our income taxes.

We utilized $29,171 of these

withdrawals towards funding operating expenses, as well as the monthly extension deposits.

As of June 30, 2025, we have restricted cash

We intend to deposit $29,171 back into the Trust Account or use the $29,171 (or a portion thereof) for tax obligations until

a deposit is made into the trust on a future date.

Management’s Discussion

and Analysis of Financial Condition and Results of Operations.

This Report includes forward-looking statements within the meaning

of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange

We have based these forward-looking statements on our current expectations and projections about future events.

These forward-looking

statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of

activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements

expressed or implied by such forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such

as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,”

“believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions.

that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange

Commission (“SEC”) filings.

Business Overview

We are a clinical-stage digital health and medical technology company

focused on developing biosensing solutions to improve health outcome for patients in a variety of different diseases and conditions.

first product is Lumee Oxygen, which enables physicians to ascertain the extent of perfusion, or passage of blood through the circulatory

system to an organ or tissue, in patients with Critical Limb Ischemia (CLI) both during and after endovascular revascularization procedures.

Lumee Oxygen has already received regulatory approval in Europe through the attainment of a CE mark;

however, prior to commercialization

in the U.S., Lumee Oxygen must obtain FDA clearance or approval.

The latest version of Lumee Oxygen is called Wireless Lumee Oxygen

It has multiple components, one of which is a microsensor that is injected into the tissue of the patient using a hypodermic needle.

The sensor is designed so it does not need to be removed as it overcomes the foreign body response that usually inhibits the ability of

permanent implants to function.

The sensor contains no electronics, utilizing luminescence to send a light signal to a reader that is

placed over the incision site, which in turn can send a signal to an app on a smartphone.

We are in clinical trials for Lumee Glucose,

our sensing solution being developed for use in continuous glucose monitoring (CGM).

This system targets diabetics and pre-diabetics to

allow them realtime access to their glucose data, at a price point that our management thinks is comparable or lower to existing systems.

We already sell our oxygen sensor for research use only applications,

namely animal models and in vitro testing.

Management is targeting the European market (those jurisdictions that accept CE mark) for early

launch for both Lumee Oxygen and Lumee Glucose.

Lumee Oxygen’s launch in Europe occurred in 2023 and Lumee Glucose launch is expected

to occur in 2025, subject to regulatory approval.

We have access to key opinion leaders (KOLs) in both Europe and the United States, who

deal with peripheral arterial disease (PAD) and Critical Limb Ischemia (CLI).

We will sell directly to facilities based on the endorsement of these

In Germany, Austria and France, some KOLs have already used Lumee Oxygen on a trial basis.

We have worked with reimbursement consultants

to develop potential Category I CPT codes for Lumee Oxygen use.

Additionally, we have entered into commercial and clinical collaboration

agreements with practitioners and hospital departments in Austria, Belgium and France.

Regarding Lumee Glucose, if and when we obtained marketing authorization,

we plan to embark on a dual strategy of both direct to hospital sales, for our professional-use and personal-use CGM product, and direct

to pharmacy sales for our personal use product only, thereby maximizing flexibility for the consumer.

By aiming for coverage under a user’s

pharmacy benefit, we believe we can diversify our user base, while accounting for any risk related to unlikely delay of attainment of

a category I CPT code for sensor insertion.

We feel a difference between other insertable or implantable CGMs and Lumee Glucose, is that

the latter can be simply inserted with a hypodermic needle and does not require a surgical implantation, similar to how pharmacists use

these needles to administer flu shots and other vaccines.

At the same time, physicians can still leverage existing CPT codes related to

interpretation of CGM data and we have, in parallel, initiated steps for CPT codes related to our sensor insertion.

We will target both

public and private payors for coverage.

Since our launch, we have significantly devoted all of our resources

to research and development, as well as all clinical study activities related but not limited to Lumee Oxygen, Lumee Glucose and prototypes

for sensors of at least eight other analytes.

We have also invested, on a smaller scale, in making sales of Lumee Oxygen for research-

use only clients, which include entities working with animal models.

Furthermore, we also performed research and development under government

Since inception, we have incurred recurring annual losses from operations.

For the three months ended September 30, 2025 and 2024, we incurred a net loss of $22.2 million and $2.5 million, respectively.

nine months ended September 30, 2025 and 2024, we incurred a net loss of $27.3 million and $7.0 million, respectively.

During the nine

months ended September 30, 2025 and 2024, we have used $11.1 million and $1.8 million, respectively, of cash in our operating activities.

We have notes and loans payable and interest due of $6.7 million within twelve months of September 30, 2025.

Additionally, we have notes

and loans payable and interest due of $14.4 million which are considered non-current and are due after September 30, 2026.

We have been able to finance our operations primarily with the proceeds

from the issuance of equity and debt instruments.

For the nine months ending September 30, 2025, we obtained net cash from financing activities

of $14.9 million compared to $1.8 million for the same period in 2024.

We held cash of $3.0 million and $0.2 million as of September

30, 2025 and December 31, 2024, respectively.

The Company’s condensed consolidated financial statements have been

prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course

The Company has reviewed the relevant conditions and events surrounding its ability to continue as a going concern including

among others:

historical losses, projected future results, including the effects of COVID-19, cash requirements for the upcoming year,

funding capacity, net working capital, total stockholders’ deficit and future access to capital.

It is our expectation to continue to make substantial investments in

building its European and United States commercial infrastructure and enhancing existing products and developing new ones.

we aim to continue discussions with potential partners in Asia.

We expect to incur additional expenses due to operating as a public

company, including expenses related to compliance with the rules and regulations of the SEC and those of the Nasdaq Stock Market LLC,

additional insurance expenses, investor relations activities and other administrative, professional and consulting services.

of these and other factors, we expect that we will require additional financing to fund our operations and planned growth.

to raise any additional capital through equity offerings or debt financings, additional credit or loan facilities or a combination of

one or more of these funding sources.

In the scenario that we are unable to acquire sufficient financing or financing on terms satisfactory

to our management or Board of Directors, our ability to continue to pursue our business objectives and to respond to business opportunities,

challenges or unforeseen circumstances could be significantly limited, and our business, financial condition and results of operations

could be materially adversely affected.

For the current period and for twelve months following the issuance of these financial statements,

our risk of going concern has been mitigated but not fully alleviated by the Tranche 1 PIPE Convertible Note issued for a gross $10.0

Accounting for Business Combination

On July 11, 2025, the Business Combination was successfully completed

and was accounted for as a reverse capitalization in accordance with US GAAP.

Legacy Profusa was deemed the accounting predecessor of

the combined business, and the Company (“New Profusa”) as the parent company of the combined business, is the successor SEC

registrant, meaning that our financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed

with the SEC.

The Business Combination will have a significant impact on our future capital structure and operating results, de-risking

our product development, manufacturing and commercialization.

The most significant changes in New Profusa’s future reported financial

positions are expected to be an estimated increase in cash (as compared to our balance sheets at June 30, 2025 and at December 31, 2024)

of approximately $9.0 million in proceeds from the PIPE Investment.

This $9.0 million is offset by various deferred offering costs and

$2.0 million closing fees related to the underwriters marketing fee for the IPO, which became payable upon a successful consummation of

the Business Combination.

As a result of the Merger, the Company has become the successor to

an SEC-registered and Nasdaq- listed company, which will require us to hire additional personnel and implement procedures and processes

to address public company regulatory requirements and customary practices.

We expect to incur additional annual expenses as a public company

for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting,

legal and administrative resources.

Recent Developments

Inflation, Monetary Response, and Economic Impacts

The world economy is experiencing stubbornly high inflation, a challenge

not faced for decades.

Following the global financial crisis, with inflationary pressures muted, interest rates were extremely low for

years and investors became accustomed to low volatility.

The resulting easing of financial conditions supported economic growth, but it

also contributed to a buildup of financial vulnerabilities.

With inflation at multi-decade highs, monetary authorities in advanced economies

are accelerating the pace of policy normalization.

Policymakers have continued to tighten policy against a backdrop of rising inflation

and currency pressures, albeit with notable differences across regions.

Global financial conditions have tightened notably this year,

leading to capital outflows.

Amid heightened economic and geopolitical uncertainties, investors have aggressively pulled back from risk-taking

and adjusted their investment preferences generally.

Key gauges of systemic risk, such as higher dollar funding costs and counterparty

credit spreads, have risen.

There is a risk of a disorderly tightening of financial conditions that may be amplified by vulnerabilities

built over the years.

In addition, our business, growth, financial condition or results of

operations could be materially adversely affected by instability or changes in a country’s or region’s economic conditions;

changes in laws or regulations or in the interpretation of existing laws or regulations, whether caused by a change in government or otherwise;

increased difficulty of conducting business in a country or region due to actual or potential political or military conflict;

or foreign governments that may restrict our ability to transact business in a foreign country or with certain foreign individuals

A possible slowdown in global trade caused by increasing tariffs or other restrictions could decrease consumer or corporate

confidence and reduce consumer, government and corporate spending in countries inside or outside the U.S., which could adversely affect

our operations.

Climate-related events, including extreme weather events and natural disasters and their effect on critical infrastructure

or internationally, could have similar adverse effects on our operations, users, or third-party suppliers.

Principles of Accounting and Consolidation

The accompanying condensed consolidated financial statements have been

prepared in conformity with U.S.

GAAP and pursuant to applicable rules and regulations of the SEC and include all adjustments necessary

for the fair presentation of the Company’s financial position as of September 30, 2025 and 2024 and the results of operations and cash

flows for the three and nine month periods then ended.

The accompanying condensed consolidated financial statements include the accounts

of Profusa Inc.

and its wholly owned subsidiary, APAC.

All intercompany balances and transactions have been eliminated in consolidation.

Components of Results of Operations

Government Grant Revenue

Government grant revenue consists of amounts we earn under grants from

two government agencies:

NIH and DARPA.

These grants are provided either in the form of expense reimbursement (expense reimbursement grants)

or on a fixed fee basis (fixed fee grants).

Under the expense reimbursement grants the government agencies reimburse us for a portion

of our expenses (allowable expenses) that have been incurred in a given period on the basis of reports that we provide to these agencies.

Fixed fee grants are awarded for specific research and development programs undertaken by us.

Under these grants we receive milestone

payments from the government agencies upon our submission and approval by the government of agreed upon deliverables, consisting primarily

of the documented results of the specific research and development programs.

Research and Development Expenses

Research and development expenses consist primarily of personnel expenses,

including salaries, benefits, and stock-based compensation, costs of consulting, supplies, depreciation and amortization and allocations

of facility- related expenses.

We expect our research and development expenses to increase as we increase staffing to support product

development, continue our clinical trials, build prototypes, and continue to explore and develop next generation technologies.

General and Administrative Expenses

General and administrative expenses consist of personnel

expenses, including salaries, benefits, and stock-based compensation, related to executive management, finance, legal, human

resource functions, and business development, contractor and professional services fees, audit and compliance expenses, insurance

costs and general corporate expenses, including allocated facility-related expenses and information technology costs.

Loss on Change in the Fair Value of Tasly Convertible Debt

We elected to apply fair value option to account for the convertible

loans issued between June 2023 and March 2024 (the “Tasly Convertible Debt”), under which none of the embedded conversion or

redemption features were bifurcated and separately accounted for.

Rather, the Tasly Convertible Debt in its entirety was recorded at fair

value at inception and is subject to remeasurement to fair value at each balance sheet date, with the change in fair value reflected in

the statements of operations and comprehensive loss.

Fair Value of Financial Instruments

The Company’s financial instruments consist of other receivables, accounts

payable, warrant liabilities, earnout, 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 receipt or 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.

Earnout Arrangements

In connection with the Business Combination, the Company entered into

earnout arrangements that provide for the issuance of additional shares of the Company’s Common Stock (or cash payments, if applicable)

to certain pre-Business Combination holders upon the achievement of specified post-closing share-price or operational milestones.

The Company evaluates earnout arrangements in a de-SPAC transaction

in accordance with ASC 805, Business Combinations , and the classification guidance under ASC 480, Distinguishing Liabilities

from Equity , and ASC 815, Derivatives and Hedging .

Earnouts that are contingent on future market-based or performance-based

conditions and each milestone is legally detachable and separate.

Milestones I, II, and IV are equity classified contingent consideration

which were fair-valued as of the Close Date at $1.7 million and will not be subsequently remeasured.

Milestone III was determined to be

liability-classified contingent consideration with no value associated due to a lack of probability.

This was continue to be revalued

through the Milestone III conclusion date which is December 31, 2025 with changes in fair value recognized in earnings.

The earnouts that meet the criteria for equity classification—generally

those settled in a fixed number of shares and not requiring cash settlement—are recorded within additional paid-in capital at the

acquisition-date fair value and are not subsequently remeasured.

The Company reviews the terms of warrants to purchase its common stock

to determine whether warrants should be classified as liabilities or stockholders’ deficit in its condensed consolidated balance

In order for a warrant to be classified in stockholders’ deficit, the warrant must be (i) indexed to the Company’s

equity and (ii) meet the conditions for equity classification.

If a warrant does not meet the conditions for stockholders’ deficit

classification, it is carried on the condensed consolidated balance sheets as a warrant liability measured at fair value, with subsequent

changes in the fair value of the warrant recorded in other non-operating losses (gains) in the condensed consolidated statements of operations.

If a warrant meets both conditions for equity classification, the warrant is initially recorded, at its relative fair value on the date

of issuance, in stockholders’ deficit in the condensed consolidated balance sheets, and the amount initially recorded is not subsequently

remeasured at fair value.

Gain on PPP Loan Forgiveness

On April 16, 2020 and May 25, 2021, we borrowed $1.2 million (the “PPP

Loan 1”) and $1.3 million (the “PPP Loan 2”), respectively, as a Paycheck Protection Program loan (together the “PPP

The Paycheck Protection Program, established as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”)

Act, provides for loans to qualifying businesses and is administered by the U.S.

Small Business Administration (the “SBA”).

The annual interest rate of the PPP Loans is 1%.

The PPP Loans are eligible for forgiveness, provided the borrower has met the respective

forgiveness requirements, has timely submitted an application for forgiveness and the forgiveness has been granted by the SBA.

1 has been approved for loan forgiveness, and management intends to apply for PPP Loan 2 forgiveness in 2025.

PPP Loan 2 is currently

in default due to non-payment, and is classified as a current liability on the balance sheet.

Interest Expense

Interest expense consists primarily of the interest on our convertible

notes, senior notes, Tasly convertible debt, promissory notes, and PPP Loans.

Other income consists primarily of income earned from sale of equipment

and a short-term sublease of a portion of our facilities.

Results of Operations

As of June 30, 2025, we had not commenced any

All activity for the period from April 19, 2021 (inception) through June 30, 2025 relates to our formation and the Initial

Public Offering, and, subsequent to the IPO, identifying a target company for a Business Combination.

We have neither engaged in any

operations nor generated any operating revenues to date.

We will not generate any operating revenues until after the completion of our

initial Business Combination, at the earliest.

We will generate non-operating income in the form of interest income and unrealized gains

from the cash and marketable securities held in the Trust Account.

We expect to incur expenses as a result of being a public company

(for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended June 30, 2025, we

had net loss of $8,196,876, which consisted of operating costs of $967,084, change in fair value of our warrant liabilities of $5,917,445,

income tax provision of $2,386, change in fair value of convertible note of $1,154,729, and change in fair value of securities purchase

agreement of $170,391 offset by interest income on cash held in the Trust Account of $15,159.

For the six months ended June 30, 2025, we had

net loss of $9,316,786, which consisted of operating costs of $1,550,665, change in fair value of our warrant liabilities of $6,265,530,

income tax provision of $21,738, change in fair value of convertible note of $1,380,059, and change in fair value of securities purchase

agreement of $193,878 offset by interest income on cash held in the Trust Account of $95,084.

For the three months ended June 30, 2024, we

had net loss of $397,487, which consisted of operating costs of $253,130, income tax provision of $23,026, and a loss of $295,872 for

the change in fair value of our warrant liabilities, offset by interest income on securities held in the Trust Account of $108,520 and

change in fair value of convertible note of $66,021.

For the six months ended June 30, 2024, we had

net loss of $1,217,764, which consisted of operating costs of $723,971, income tax provision of $44,480, and a loss of $800,595 for the

change in fair value of our warrant liabilities, offset by interest income on securities held in the Trust Account of $225,184 and change

in fair value of convertible note of $126,098.

Liquidity and Going Concern

As of June 30, 2025, we had $1,751 in restricted

cash and a working capital deficit of $15,492,554.

For the six months June 30, 2025, cash used in

operating activities was $501,614.

Net loss of $9,316,786 was impacted primarily by trust interest income of $95,084, change in fair

value of our warrant liabilities of $6,265,530, change in fair value of convertible note of $1,380,059, change in fair value of securities

purchase agreement of $193,878 and changes in operating assets and liabilities reflected cash provided by operating activities of $1,070,789

during such period.

For the six months June 30, 2025, cash provided

by investing activities included $99,285 of extension payments made to the trust, $78,813 of reimbursement from the trust of franchise

and income tax payments and cash withdrawn from the trust of $6,510,830 in relation to stock redemptions.

For the six months June 30, 2025, cash used in

financing activities included $507,633 of an advance from Profusa and $6,510,830 paid out in relation to stock redemptions.

For the six months ended June 30, 2024, cash

used in operating activities was $675,730.

Net loss of $1,217,764 was impacted primarily by trust interest income of $225,184, change

in fair value of convertible note of $126,098 and change in fair value of our warrant liabilities of $800,595.

Changes in operating assets

and liabilities reflected cash provided of $92,721 from operating activities during such period.

For the six months ended June 30, 2024, cash

provided by investing activities included $235,733 of extension payments made to the trust, $204,460 of reimbursement from the trust

of franchise and income tax payments and cash withdrawn from the trust of $2,653,439 in relation to stock redemptions.

For the six months ended June 30, 2024, cash

used in financing activities included $708,981 of proceeds from a convertible promissory note and $2,653,439 paid out in relation to

stock redemptions.

Prior to the completion of the initial public

offering, our liquidity needs had been satisfied through a capital contribution from the sponsor of $25,000 for the founder shares to

cover certain of the offering costs and the loan under an unsecured promissory note from the sponsor of $204,841, which was fully paid

upon the initial public offering.

Subsequent to the consummation of the initial public offering and private placement, our liquidity

needs have been satisfied through the proceeds from the consummation of the private placement not held in the trust account, and the

drawdowns on the convertible promissory note.

In order to finance transaction costs in connection

with an intended Business Combination, the initial stockholders or an affiliate of the initial stockholders or certain of the Company’s

officers and directors may, but are not obligated to, provide the Company Working Capital Loans (see Note 5).

On April 27, 2023, the Company signed a Convertible

Working Capital Promissory Note (“the Note”) with the Sponsor for $1,200,000.

The Note is non-interest bearing and is due

the earlier of the consummation of a business combination or the date of liquidation.

The Sponsor may elect to convert all or any portion

of the unpaid principal balance of this Note into warrants, at a price of $1.00 per warrant.

On January 10, 2024, the Company’s

Board of Directors approved, and the Company amended the Note to increase the principal amount of the Note that could be drawn on to

$1.5 million.

The amended and restated Note also allows for the conversion of the outstanding principal balance of the Note to be

repaid in shares of Company common stock at a price of $2.22 per share at the election of the sponsor.

On May 31, 2024, the Company’s

Board of Directors approved and the Company entered into a second amendment of its Convertible Working Capital Promissory Note with the

sponsor to increase the principal amount of the Note that could be drawn on to $2.5 million.

The second amended and restated Note

also allows for the conversion of the outstanding principal balance of the Note to be repaid in shares of Company common stock at a price

of $2.22 per share at the election of the sponsor.

The Company had principal outstanding of $1,919,796 and is presenting the Note

at fair value on its balance sheet at June 30, 2025 and December 31, 2024 in the amount of $10,288,111 and $8,908,052, respectively.

The Company incurred significant costs in pursuit

of its Business Combination.

As part of the closing, the Company had cash inflows of $1.3 million from the Trust Account, net of redemptions,

and the $9 million net PIPE convertible note.

Cash outflows included marketing fees and vendor payments which totaled $3.4 million due

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting

Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about

an Entity’s Ability to Continue as a Going Concern,” management believes that subsequent to the closing of the Merger, there

continue to be factors which raise substantial doubt about the Company’s ability to continue as a going concern within one year

from the date the condensed consolidated financial statements are issued.

The condensed consolidated financial statements do not contain

any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Financing Arrangements

We did not have any off-balance sheet arrangements

as of June 30, 2025 and December 31, 2024.

Comparison of the Three Months Ended September 30, 2025 to the

Three Months Ended September 30, 2024

The following table sets forth our unaudited condensed consolidated

statements of operations and comprehensive loss for the interim periods indicated (in thousands):

For the three months

ended September 30,

Government grant revenue

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expenses)

Gain (loss) on change in the fair value of related party convertible debt

Gain on change in fair value of warrant liabilities

Loss on change in fair value of digital assets

Interest expense (including related parties amounts of $629 and $575 for the three months ended September 30, 2025 and September 30, 2024, and $1,962 and $1,774 for the nine months ended September 30, 2025 and September 30, 2024, respectively)

Financing costs

Total other expense, net

Net loss and comprehensive loss

Revenue – Grant revenue was recognized in 2024, while

no grant revenue was recognized in 2025, as the Company focused on closing the Business Combination.

Research and Development – Research and development expenses

increased by $311 thousand or 76% during the three months ended September 30, 2025 due to an increase in personnel and regulatory fees.

General and Administrative – General and administrative

expenses increased by $20,220 thousand, or 2636%, to $20,987 thousand during the three months ended September 30, 2025 from $767 thousand

during the three months ended September 30, 2024.

The increase was driven primarily by the increase in transaction costs of $15,219 thousand

related to the closing of the Business Combination, an increase related to stock based compensation relating to the non-recourse note

settlement of $428 thousand, an increase in insurance and legal fees of $294 thousand, an increase in accounting costs of $457 thousand

as a result of increased audit fees, $700 thousand increase in general other expenses such as professional consulting services and travel

costs, along with $3,395 thousand increase in personnel costs due to additional headcount and transaction completion bonus accruals.

Gain on Change in the Fair Value of Related Party Convertible Debt

– Gain on change in the fair value of the related party convertible loan was $258 thousand during the three months ended September

The gain during the three months ended September 30, 2025 was driven by the remeasurement of the Tasly Convertible Loan, the

Ascent PIPE loan, and the Sponsor Working Capital loan.

Interest Expense – Interest expense decreased by $904

thousand to $(169) thousand during the three months ended September 30, 2025 from $(1,073) thousand during the three months ended September

The decrease was primarily due to the repayment of convertible notes upon conversion of the loans on July 11, 2025 when the

Company successfully completed the business combination.

Financing Costs – Increased by $1,443 thousand in relation

to the issuance of shares on the ELOC agreement.

Other Income (expense) – Other income (expense) increased

by an immaterial $16 thousand during the three months ended September 30, 2025 relating to income on our operating account.

Comparison of the Nine Months Ended September 30, 2025 to the

Nine Months Ended September 30, 2024

The following table sets forth our unaudited condensed consolidated

statements of operations and comprehensive loss for the interim periods indicated (in thousands):

Nine Months Ended

September 30,

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense)

Loss on change in the fair value of related party convertible debt

Interest expense

Gain on change in fair value of warrant liabilities

Loss on change in fair value of digital assets

Financing costs

Total other expense, net

Research and Development – Research and development expenses

increased by $200 thousand, or 15%, to $1,549 thousand during the nine months ended September 30, 2025 from $1,349 thousand during the

nine months ended September 30, 2024.

The increase was driven primarily by the increase in regulatory and CRO costs of $300 thousand,

plus laboratory rent costs of $115 thousand, which is in line with the Company’s intent to focus on research and development to

complete device functionality and reach the point of commercialization in the near future.

This increase is then partially offset by personnel

costs decrease of $253 thousand as a result of a reduced headcount on the direct labor and research team.

General and Administrative – General and administrative

expenses increased by $20,418 thousand, or 941%, to $22,587 thousand during the nine months ended September 30, 2025 from $2,169 thousand

during the nine months ended September 30, 2024.

The increase was driven primarily by the increase in transaction closing costs of $15,219

plus accounting fees increase of $680 thousand, an increase related to stock-based compensation relating to the non resourse note settlement

of $428 thousand, $766 thousand of professional services, an increase to office rent of $49 thousand, and a new increase to insurance

and legal fees of $129 thousand.

Loss on Change in the Fair Value of Related Party Convertible Debt

– Loss on change in the fair value of related party convertible debt was $52 thousand during the nine months ended September 30,

The loss during the nine months ended September 30, 2025 was driven by the remeasurement of the Tasly Convertible Loan, the Ascent

PIPE note, and the Northview Sponsor working capital convertible loan.

Interest Expense – Interest expense decreased by $375

thousand, or -20%, to $(2,496) thousand during the nine months ended September 30, 2025 from $(3,138) thousand during the nine months

ended September 30, 2024.

The increase was primarily due to junior and senior convertible notes being converted and settled on July 11,

2025 which reduced quarterly accrued interest on these notes from the usual 12 weeks, down to 1.5 weeks of accrued interest.

Financing Costs – Increased by $1,443 thousand in relation

to the issuance of shares on the ELOC agreement.

Other Income (expense) – Other income increased by an

immaterial $10 thousand during the nine months ended September 30, 2025 relating to income on our operating account.

Liquidity and Capital Resources

Sources of Liquidity

We incurred net losses and negative operating cash flows from operations

since inception, and we expect to continue to incur losses and negative operating cash flows for the foreseeable future until we successfully

commence sustainable commercial operations.

To date, we have funded our operations primarily with proceeds from the issuance of convertible

preferred stock, junior and senior convertible notes, related party loans payable, ELOC, PPP Loans available to us under the Paycheck

Protection Program and promissory notes.

From inception through September 30, 2025, we raised gross proceeds of $98.0 million from the

issuances of convertible preferred stock and convertible notes and loans, $11 million from related party loans payable, $3.5 million from

ELOC, $2.5 million from PPP Loans and $0.9 million from issuance of promissory notes.

As of September 30, 2025, we had cash and cash equivalents

of $3,009 thousand.

Our junior convertible notes bore interest at 12% per annum and their

outstanding principal and accrued but unpaid interest automatically converted into shares of Company Common Stock at $7.00 per share upon

consummation of the Business Combination.

In addition, upon consummation of the Business Combination, all junior noteholders have a right

to receive additional shares upon achievement by the Company of certain share price and sales milestones (the earnout shares).

We commenced issuance of our senior convertible notes in April 2021

and continued issuing them until the Closing.

Our senior convertible notes bore interest at 12% per annum and their outstanding principal

and accrued but unpaid interest automatically converted into shares of Company Common Stock between $0.50 and $4.00 per share upon consummation

of the Business Combination, based on the fixed conversion price defined in the notes.

In addition, upon consummation of the Business

Combination, all senior noteholders obtained the right to receive additional shares upon achievement by the Company of certain share price

and sales milestones (the earnout shares).

On August 8, 2023, a new wholly owned subsidiary, Profusa Asia

Ltd (“APAC”), was created and incorporated by Legacy Profusa under the laws of Singapore.

Upon creation,

the new entity was capitalized by Legacy Profusa by payment of $1,000 for 1,000 Ordinary Shares.

As a result, at the time of

incorporation, the entity became a wholly owned subsidiary of Legacy Profusa.

The entity was created with the expectation of jointly

conducting the business of developing, manufacturing and commercializing the Lumee Glucose and the Lumee Oxygen products, currently

under development by the Company, together with a third party.

No business or activities will have been conducted by the entity from

the date of formation through and until the closing date of the proposed License Agreement and Shareholders Agreement between the

Company and Best Life Technology Ltd, an entity wholly owned and controlled by the Tasly.

Subsequent to the Closing of the Business

Combination, the Company expects to sign and execute a License Agreement and Shareholders Agreement (the “APAC Joint

Venture”) setting forth the relative and other terms under which the development and business activities of the entity will be

The Company is in the process of negotiating the formation of the APAC

Joint Venture, which includes the related party from which the amounts under the Tasly Convertible Debt was borrowed.

The proceeds of

the loan are intended to continue the development and commercialization of the Company’s technology in certain countries of the Asia Pacific

In the event we either fail to complete the formation of the APAC Joint

Venture or fail to repay the amounts under the Tasly Convertible Debt when they become due, the lender will have an option to convert

the outstanding balance and accrued but unpaid interest (in part or in full) into senior unsecured promissory notes on substantially the

same terms as the outstanding Senior Notes as of September 30, 2025 (which terms include conversion into Company Common Stock).

Notwithstanding

the conversion provisions above, any repayment obligations (in part or in full) of the outstanding principal balance and accrued but unpaid

interest under the Tasly Convertible Debt may, at the lender’s option, be made through conversion of part or all amounts payable into

(i) senior unsecured promissory notes on substantially the same terms as the outstanding Senior Notes as of September 30, 2025, $0.50

per share, or (ii) Company Common Stock at a conversion price of $1.92 per share.

Our outstanding PPP Loan of $1.4 million bears interest at 1% per annum.

The repayment of the PPP Loan was expected to be made in equal monthly payments of principal and interest from October 25, 2022 until

May 25, 2026;

however, we are currently in the process of applying for forgiveness for this loan.

Our outstanding promissory notes accrue interest at 5% and 12% per

annum, most of which do not have a set maturity date.

Any promissory notes that did have an initial maturity date, which has passed, the

Company has verbally agreed to pay off these loans subsequent to the Closing.

The Company is currently in default;

accordingly, the Company

classified the entire outstanding amount as a current liability on the condensed consolidated balance sheet.

Additional funds may be necessary to maintain current operations and

will be required for successful product commercialization efforts.

Subsequent to the period ended September 30, 2025, management obtained

additional funds from the ELOC, however, conditions exist that raise substantial doubt about our ability to continue as a going concern

within one year from the date the unaudited condensed consolidated financial statements as of and for the nine months ended September

30, 2025 are issued.

Long-Term Liquidity Requirements

We expect our cash and cash equivalents on hand, and cash that we received

from the Business Combination and PIPE Investment, together with proceeds from the ELOC and the cash we expect to generate from future

operations, will provide sufficient funding to support initial commercial operations.

The cash generated from the Business Combination

includes an initial net $9 million in PIPE proceeds from the first tranche and net $2 million from the second tranche of a convertible

The cash generated from the ELOC was $3.5 million in the third quarter.

Until we generate sufficient operating cash flow to cover

our operating expenses, working capital needs and planned capital expenditures, or if circumstances evolve differently than anticipated,

we expect to utilize a combination of equity and debt financing to fund any future capital needs.

If we raise funds by issuing equity

securities, dilution to stockholders may result.

Any equity securities issued may also provide for rights, preferences, or privileges

senior to those of holders of common stock.

If we raise funds by issuing debt securities, these debt securities may have rights, preferences,

and privileges senior to those of common stockholders.

The terms of debt securities or borrowings could impose significant restrictions

on our operations.

The capital markets are currently experiencing, and may continue to experience in the future, periods of upheaval that

could impact the availability and cost of equity and debt financing.

Our principal uses of cash in recent periods have been funding our

research and development activities, legal and bank transaction fees, and other personnel cost.

Near-term capital requirements through

September 30, 2025 leading to and supporting initial commercialization are estimated to total approximately $19.4 million and include

further research and development to enable us to obtain the required regulatory approvals, manufacturing, commercialization and wide-scale

marketing for our Lumee Oxygen and Lumee Glucose devices.

Our future capital requirements will depend on many factors, including our revenue

growth rate, the timing and the amount of cash received from our customers, the expansion of sales and marketing activities, the timing

and extent of spending to support development efforts.

In the future, we may enter into arrangements to acquire or invest in complementary

businesses, products, and technologies.

For any periods after the twelve months subsequent to the filing of these financial statements

as of September 30, 2025, we may be required to seek additional equity or debt financing.

In the event that we require additional financing

we may not be able to raise such financing on acceptable terms or at all.

If we are unable to raise additional capital or generate cash

flows necessary to continue our research and development and invest in continued innovation, we may not be able to compete successfully,

which would harm our business, results of operations, and financial condition.

If adequate funds are not available, we may need to reconsider

our production investments, the pace of our production ramp-up, expansion plans or limit our research and development activities, which

could have a material adverse impact on our business prospects and results of operations.

Cash Flow Summary

The following table summarizes our cash flows for the periods presented

(in thousands):

For the nine months ended,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Operating Activities

Cash used in operating activities for the nine months ended September

30, 2025 of $11.1 million was primarily driven by our net loss of $27.3 million, adjusted for non-cash charges of $10.7 million and net

cash inflows of $5.4 million provided by changes in our operating assets and liabilities.

Non-cash charges primarily consisted of non-cash

interest expense of $2.5 million, the change in the fair value of related party convertible loan of $0.2 million, net with $7.6 million

in non-cash issuance of shares through the private placement and issuance of shares associated with transaction costs, 1.0 million in

non-cash issuance of ELOC Warrants, stock-based compensation of $0.7 million, and offset by a gain on fair value of warrant liabilities

of $0.9 million.

The main driver of the cash inflows from the changes in operating assets and liabilities was primarily related to an

increase in accounts payable of $3.2 million and in accrued liabilities of $2.3 million and a decrease in prepaid expenses and other current

assets of less than $0.1 million.

Cash used in operating activities for the nine months ended September

30, 2024 of $1.8 million was primarily driven by our net loss of $7.0 million, adjusted for non-cash charges of $3.6 million and net cash

inflows of $1.5 million provided by changes in our operating assets and liabilities.

Non-cash charges primarily consisted of non-cash

interest expense of $3.2 million, partially offset by change in the fair value of related party convertible loan of $0.3 million.

main driver of the cash inflows from the changes in operating assets and liabilities was primarily related to an increase in accounts

payable of $0.7 million and in accrued liabilities of $1.1 million and a decrease in prepaid expenses and other current assets of $0.3

Financing Activities

Cash provided by financing activities was $14.9 million the nine months

ended September 30, 2025, which consisted primarily of net proceeds from the issuance of senior notes, PIPE proceeds, ELOC proceeds, and

the close of the business combination (as discussed above).

Cash provided by financing activities was $1.8 million for the nine

months ended September 30, 2024, which consisted primarily of net proceeds from the issuance of senior notes of $2.1 million, offset by

payment of deferred offering costs of $0.1 million and repayment of related party promissory notes of $0.2 million.

Contractual Obligations

As of June 30, 2025 and December 31, 2024, we

did not have any long-term debt or capital or operating lease obligations.

We entered into an administrative services agreement

with our sponsor pursuant to which we pay for office space and secretarial and administrative services provided to members of our management

team, in an amount of $5,000 per month.

As of June 30, 2023, the Company and the sponsor terminated this agreement.

For the three and

six months ended June 30, 2025 and 2024, $0 had been incurred and billed relating to the administrative service fee.

As of June 30, 2025

and December 31, 2024, $50,000 relating to the administrative service fee was not paid and recorded as due to related party.

NorthView previously engaged I-Bankers as an

advisor to assist in holding meetings to discuss the potential business combination and the target business’ attributes, introduce

NorthView to potential investors that are interested providing funding in connection with a Business Combination, assist NorthView in

obtaining stockholder approval for such business combination and assist NorthView with its press releases and public filings in connection

with such business combination (the “Business Combination Marketing Agreement”).

In connection with such engagement, NorthView

agreed to pay I-Bankers and Dawson James a cash fee (the “Business Combination Fee”) for such services upon the consummation

of a business combination in an amount equal to 3.68% of the gross proceeds of its initial public offering (exclusive of any applicable

finders’ fees which might become payable).

In connection with the Business Combination, NorthView, I-Bankers and Dawson James amended

the Business Combination Marketing Agreement to revise a portion of the Business Combination Fee to be partially payable in NorthView

securities and partially payable in cash upon the closing of the Merger with Profusa, with such securities to be subject to lock-up provisions.

Subsequently, on January 19, 2025, the agreement was modified by the parties such that the Company will be required to pay $2,000,000,

payable in cash, if a business combination is consummated.

As a result of the Business Combination, I-Bankers was paid $900,000 and Dawson

James was paid $600,000 under the Business Combination marketing agreement.

The payment of the remaining $500,000 has been deferred until

after the Closing.

On December 19, 2024, the Company engaged A.G.P

to serve as the placement agent in connection with a proposed business combination transaction.

The Company shall pay to A.G.P.

fee (the “Cash Fee”) equal to 9.0% in a convertible note offering, note, or other similar equity-linked offerings, and shall

be calculated from the face value of notes issued, which is payable at the close of a Business Combination.

On June 17, 2025, the Company

entered a settlement agreement with A.G.P.

for the Cash Fee of $968,000 related to the debt private placement (the “Offering”)

to be issued at the Closing.

Pursuant to the settlement agreement, as a result of the Business Combination, the Company paid A.G.P.

at the Closing and the remaining $418,000 of the fees were deferred and due on the earlier of (i) the second tranche of the debt private

placement being issued and (ii) December 31, 2025.

The Company also agreed to reimburse A.G.P.

$50,000 for expenses incurred in connection

with the offering.

June 15, 2023, the Company engaged the Benchmark Company LLC (“Benchmark”) to provide advisory services related to the Business

Combination and the Convertible Notes.

The Company was to pay Benchmark at the closing of the Business Combination an advisory fee of

$750,000 in two tranches.

The first tranche will be $500,000 earned upon the closing of the Business Combination in the surviving public

entity’s common stock (“Tranche 1”) .

The number of

shares to be issued is calculated on the 30 th day following the Closing by dividing $500,000 and the trailing 5-day VWAP of

the Company’s common stock as calculated by Bloomburg with a minimum price of $2.00.

The second tranche will be $250,000,

at the Company’s option, in either cash or in the surviving entity’s common shares calculated by dividing $250,000 by the

lowest trailing 5-day VWAP in the prior 30 days (“Tranche 2”).

Upon funding of the Convertible Notes by investors introduced

by Benchmark, the Company will pay to Benchmark fees in cash equal to 5% of the net proceeds of any Convertible Note draw at the time

of funding of such draw (“Arrangement Fees”).

The Tranche 2 fee shall be reduced by the amount of any fees paid to Benchmark

for other transactions during the Term other than Arrangement Fees associated with Convertible Notes, after the Business Combination,

up to $250,000.

As a result of the Business Combination, Benchmark was paid in shares of the post-combination company in the amount of

Non-Redemption Agreement

On May 8, 2025, the Company entered into a non-redemption agreement

(the “Non-Redemption Agreement”) with I-Bankers Securities, Inc.

and Dawson James Securities, Inc.

(together, the “Investors”),

pursuant to which such Investors agreed that to the extent that redemptions in connection with the vote to approve the Business Combination

reduces the Company’s trust account balance below $1.25 million, the Investors would offer such redeeming shareholders an

opportunity to rescind the redemption of their shares and would instead purchase such shares.

Such purchases would be structured in compliance

with the requirements of Rule 14e-5 under the Exchange Act or would otherwise not constitute a tender offer pursuant

to the Exchange Act.

As of the Closing Date, the Company’s trust account balance was not below $1.25 million.

The following table summarizes our contractual obligations as of September

30, 2025, and the years in which these obligations are due (in thousands):

Tasly Convertible Debt - Related Party

Convertible promissory note - related party

Loans payable - related party

Promissory notes

Total contractual obligations

Critical Accounting Estimates

Certain of our accounting policies require that

management apply significant judgments in defining the appropriate assumptions integral to financial estimates.

On an ongoing basis,

management reviews the accounting policies, assumptions, estimates and judgments to ensure that our condensed consolidated financial

statements are presented fairly and in accordance with U.S.

Judgments are based on historical experience, terms of existing contracts,

industry trends and information available from outside sources, as appropriate.

Some of the more significant estimates are in connection

with determining the fair value of the warrant liabilities and convertible promissory note.

However, by their nature, judgments are subject

to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.

Convertible Promissory Note

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.

Warrant Liabilities

We account for the warrants issued in connection

with the IPO in accordance with the guidance contained in ASC 815-40.

Such guidance provides that because the warrants do not meet the

criteria for equity treatment thereunder, each warrant must be recorded as a liability.

Accordingly, we classified each warrant as a

liability at its fair value.

This liability is subject to re-measurement at each balance sheet date.

With each such re-measurement,

the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in our condensed consolidated statements

of operations.

In determining the fair value of the Private

Placement Warrants and the Representative’s Warrants assumptions related to expected share-price volatility, expected life and

risk-free interest rate are utilized.

The Company estimates the volatility of its common stock based on historical volatility that matches

the expected remaining life of the warrants.

Securities Purchase Agreement

The fair value of the Company’s securities purchase agreement

is valued using Monte Carlo models 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.

The instrument is subject to re-measurement

at each balance sheet date, with changes in fair value recognized in the condensed consolidated statements of operations.

Recent Accounting Standards

Standards Adopted

In November 2023, the FASB issued ASU 2023-07, Segment

Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments in this ASU require disclosures,

on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker

(“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss.

The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the

reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

Public entities

will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a

single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment

disclosures in Topic 280.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU 2023-07, which was applied

retrospectively to all prior periods presented.

See Note 9 for further details regarding this adoption.

Standards not yet Adopted

In December 2023, the FASB issued ASU No.

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose

specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that

meet a quantitative threshold.

ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal,

state and foreign taxes, with further disaggregation required for significant individual jurisdictions.

ASU 2023-09 will become effective

for annual periods beginning after December 15, 2024.

The Company is still reviewing the impact of ASU 2023-09.

Our management does not believe that any other

recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed

consolidated financial statements.

The JOBS Act contains provisions that,

among other things, relax certain reporting requirements for qualifying public companies.

We qualify as an “emerging growth company”

under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for

private (not publicly traded) companies.

We are electing to delay the adoption of new or revised accounting standards, and as a result,

we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for

non-emerging growth companies.

As a result, our condensed consolidated financial statements may not be comparable to companies that

comply with new or revised accounting pronouncements as of public company effective dates.

Additionally, we are in the process of evaluating

the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.

Subject to certain conditions set

forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required

to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal

controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth

public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may

be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent registered public accounting firm’s

report providing additional information about the audit and the condensed consolidated financial statements (auditor discussion and analysis),

and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance

and comparisons of the CEO’s compensation to median employee compensation.

These exemptions will apply for a period of five years

following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever

Quantitative and Qualitative

Disclosures About Market Risk

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Management’s discussion and analysis of our financial condition and

results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with

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 several significant accounting estimates and

believes that the fair value of the related party Ascent PIPE Convertible note is the only accounting estimate that rises to the level

of a critical accounting estimate.

The related party convertible loan is carried at fair value based on

unobservable market inputs.

The fair value of financial instrument is determined using various valuation techniques, including the market

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

Changes in these assumptions could materially affect the reported fair values and related income or expense.

We regularly review

and update our valuation to reflect current market conditions and ensure consistency with accounting standards.

Management considered various fair value instruments;

however, only

the Ascent PIPE convertible note is both classified as a Level 3 fair value instrument and is considered very material, and individually

over $5.0 million.

The Ascent PIPE convertible loan was valued at $14.4 million as of September 30, 2025, and is a new loan that was issued

on the Closing Date.

As such, we have one critical accounting estimates to report, and have included our considerations below.

Ascent PIPE Convertible Related Party Loan

The Company has elected to account for its convertible loan from a

related party at fair value under ASC 825, “Financial Instruments.” The loan is classified as a Level 3 financial instrument

due to the absence of observable market inputs and the significant use of management judgment in determining fair value.

The fair value is estimated using a probability-weighted discounted

cash flow model that incorporates multiple scenarios, including conversion, repayment, and extension.

Key inputs include the discount

rate, expected term, volatility, and conversion likelihood.

Because the loan is with a related party, observable market data is limited,

and management applies significant judgment in assessing the economic substance of the arrangement.

Changes in fair value are recognized in earnings each period.

considers this estimate critical due to its complexity, subjectivity, and material impact on reported results.

Valuation policies are reviewed quarterly, and inputs are updated based

on evolving market conditions and contractual developments.

A change in the discount rate of +100 basis points would result in a fair

value change of approximately $17 thousand or (0.01)%, while a 10% change in volatility would impact fair value by approximately $152

thousand or 1.1%.

The Company classifies this instrument within Level 3 of the fair value

hierarchy and provides a reconciliation of beginning and ending balances in Note 4.

Recent Accounting Pronouncements

See the section titled “Recent Accounting Pronouncements”

in Note 2 of the notes to our unaudited condensed consolidated financial statements included in this Report for more information.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the

Exchange Act and are not required to provide the information otherwise required under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis