Company: CERO
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001213900-25-079898
Chunk: 58

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 10-Q
Item: Item 1
Chunk 58
---
 of the Aggregate
Black Scholes Value attributable to such Shares (the “Share Value Increment”), with the aggregate number of Shares issuable
upon exercise of the Rights with respect to the first Successor Share Value Increment determined based on 70% of the Closing Bid Price
of the Shares on the date the Rights are issued and on each of the nine subsequent Trading Days, in each case, the aggregate number of
additional Shares issuable upon exercise of the Rights shall be determined based upon a Share Value Increment at 70% of the Closing Bid
Price of the Shares in effect for such corresponding Trading Day (such ten (10) Trading Day period commencing on, and including, the
date the Rights are issued, the “Rights Measuring Period”), or (II) in cash; provided, that the Company shall not consummate
a Fundamental Transaction if the Corporate Event Consideration includes capital stock or other equity interest (the “Successor
Shares”) either in an entity that is not listed on an Eligible Market or an entity in which the daily share volume for the applicable
Successor Shares for each of the twenty Trading Days prior to the date of consummation of such Fundamental Transaction is less than the
aggregate number of Successor Shares issuable to the Holder upon conversion in full of the applicable Rights (without regard to any limitations
on conversion therein, assuming the exercise in full of the Rights on the date of issuance of the Rights and assuming the Closing Bid
Price of the Successor Shares for each Trading Day in the Rights Measuring Period is the Closing Bid Price on the Trading Day ended immediately
prior to the time of consummation of the Fundamental Transaction).

The
Company’s December 2024 Common Warrants and January 2025 Common Warrants are exercisable into Common Stock, which has no cash redemption
features that require liability treatment. The Company has recorded the December 2024 Common Warrants and January 2025 Common Warrants
as equity.

On
December 23, 2024, in connection with the issuance of the December 2024 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 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.