Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 62

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 62
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-Scholes
option-pricing model, and the Company determined that the aggregate total fair value of the December 2024 Warrants amounted to approximately
$0.3 million, which were considered offering costs and were netted against the net proceeds received from the exercise of Series A Preferred
Warrants under the guidance of ASU 2021-04. These offering costs are offset in additional paid-in capital with no impact on equity.

On January 6, 2025, in connection
with the issuance of the January 2025 Common Warrants, the Company calculated the fair value of such warrants using the Black-Scholes
option-pricing model, and the Company determined that the aggregate total fair value of the January 2025 Common Warrants amounted to approximately
$0.7 million, which were considered offering costs and were netted against the net proceeds received from the exercise of Series A Preferred
Warrants under the guidance of ASU 2021-04. These offering costs are offset in additional paid-in capital with no impact on equity.

Preferred Warrants

The 2,500 Preferred Warrants
were initially exercisable for cash at an exercise price equal to $800. The exercise price was subject to adjustment for stock splits,
combinations and similar events, and, in the event of stock dividends and splits, the number of shares of Series A Preferred Stock issuable
upon the exercise of the Preferred Warrant will also be adjusted so that the aggregate exercise price shall be the same immediately before
and immediately after any such adjustment.

We had the right, conditional
upon the share price of CERO stock to be trading above $2,000.00 per share, to require the holders of Preferred Warrants to exercise such
Preferred Warrants into up to an aggregate number of shares of Preferred Stock equal to the holder’s pro rata amount of 2,500 shares
of Preferred Stock. In connection with the Series C PIPE Financing, we agreed with certain holders of the Preferred Warrants not to exercise
such right to require such exercise by the holders thereof in consideration for their investment in the Series C PIPE Financing.

The Preferred Warrants prohibited
us from entering into specified fundamental transactions unless the Successor assumes all of our obligations under the Preferred Warrants
under a written agreement before the transaction is completed. Upon specified corporate events, a holder of the Preferred Warrants thereafter
had the right to receive upon an exercise such shares, securities, cash, assets or any other property whatsoever which the holder would