Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 54

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 54
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85,000, non-accountable expenses
of up to $25,000 and has agreed to reimburse Jones for all reasonable and documented out-of-pocket fees and expenses, including but not
limited to travel and other out-of-pocket expenses in an amount not to exceed $15,000.

The Company’s directors
and executive officers agreed not to offer, issue, sell, contract 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.

22

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.

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 September 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.