Company: CERO
Filing Date: 2025-02-07
Form Type: 424B3
Source: 0001213900-25-011071
Chunk: 343

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-07
Form: 424B3
Chunk 343
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Conversion warrants

On November 14, 2019, Predecessor issued warrants
to purchase a total of 1,849,638 shares of Predecessor Series A Preferred Stock at a price of $1.7571 per share. The warrants were exercisable
into shares of Predecessor Series A Preferred Stock at the discretion of the holder, at any time in the five years after issuance.
The warrants were analyzed and determined to be freestanding instruments issued in a transaction including the conversion or sale of
the Series A Preferred Stock. A warrant to purchase up to 426,839 shares of Series A Preferred Stock was issued in a transaction that
included the conversion of 100 shares of Series 1 Preferred Stock into 2,845,597 shares of Predecessor Series A Preferred Stock. Another
warrant to purchase up to 1,422,799 shares of Series A Preferred Stock was issued concurrent with the purchase of 2,845,597 shares of
Series A Preferred Stock. These warrants are collectively referred to as the “Predecessor preferred stock warrants.” On February
14, 2024, the Predecessor preferred stock warrants were converted into warrants to purchase up to 3,250 shares of Common Stock (“Conversion
Warrants”).

The Conversion Warrants will initially be exercisable
for Common Stock at an exercise price equal to $100.00. The exercise price is subject to adjustment for stock splits, combinations and
similar events, and, in the event of stock dividends and splits, the number of shares of Common Stock issuable upon the exercise of the
Conversion Warrant will also be adjusted so that the aggregate exercise price shall be the same immediately before and immediately after
any such adjustment.

The Conversion Warrants will expire five years
after the original Predecessor warrants were issued, or November 14, 2024. The Conversion Warrants will automatically convert at the
end of the exercise period if the fair market value (as determined in the Conversion Warrants) of a share of Common Stock underlying
the Conversion Warrants is greater than the exercise price in effect on such date.

As discussed above, Predecessor 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. Based on the exercisability of the Predecessor
Preferred Warrants into Series A