Company: CERO
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001213900-25-079898
Chunk: 51

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 10-Q
Item: Item 1
Chunk 51
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 to sell, encumber, grant any option for the
sale of or otherwise dispose of any shares of common stock or other securities convertible into or exercisable or exchangeable for common
stock for a period of 90 days following the closing date of the Offering, which terms may be waived in the sole discretion of and without
notice by the Placement Agent, subject to certain exceptions. In addition, the Company has agreed to not enter into variable rate financings
for a period of 180 days following the closing date, subject to certain exceptions, or enter into any equity financings for a period
of 60 days following the closing date, subject to certain exceptions.

In connection with the Offering, the Conversion Price of the Series
A Preferred Stock and Series C Preferred Stock reset to $39.20 per share of Common Stock.

22

NOTE 9
– WARRANTS

Accounting
for warrants

The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’
specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging. The assessment considers whether
the instruments are free standing financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480,
and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are
indexed to the Company’s own common stock and whether the instrument holders could potentially require “net cash settlement”
in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires
the use of professional judgment, was conducted at the time of warrant issuance and as of each subsequent period end date while the instruments
are outstanding.

Public
and Private Placement Warrants (Successor)

As
of June 30, 2025 and December 31, 2024, there were 4,596 Public and Private Placement Warrants outstanding, each with a right to purchase
one share of Common Stock for $23,000. The Public and Private Placement Warrants became exercisable 30 days after the Merger. No warrants
will be exercisable for cash unless the Company has an effective and current registration statement covering the Common Stock issuable
upon exercise of the warrants and a current prospectus relating to such Common Stock. The Public and Private Placement Warrants were
registered under a resale registration statement on Form S-1 (File No. 333-279156), which was declared