Company: CERO
Filing Date: 2025-01-21
Form Type: S-1/A
Source: 0001213900-25-004742
Chunk: 381

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-01-21
Form: S-1/A
Chunk 381
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 liquidation events not solely in the control of the Company and without fixed or determinable dates.

NOTE 8 – CONVERTIBLE PREFERRED STOCK Warrant liability

On November 14, 2019, the Company issued warrants
to purchase a total of shares of Series A Preferred Stock at a price of $ per share. The warrants are exercisable into
shares of Series A Preferred Stock at the discretion of the holder, at any time in the after issuance. The warrants were
analyzed and determined to be freestanding instruments issued in a transaction including the conversion or sale of Series A Preferred
Stock. A warrant to purchase up to shares of Series A Preferred Stock was issued in a transaction that included the conversion
of shares of Series 1 Preferred Stock into shares of Series A Preferred Stock. Another warrant to purchase up to
shares of Series A Preferred Stock was issued concurrent with the purchase of shares of Series A Preferred Stock. These warrants
are collectively are referred to as the “preferred stock warrants.” On February 14, 2024, the preferred stock warrants were
converted into warrants to purchase up to shares of New CERo Common Stock.

The Company initially recorded the warrants at
fair value as valued by a third-party appraiser, who estimated fair value using with estimates of the value and volatility of the Company’s
Series A Preferred Stock as well as estimation of the risk-free rate.

|                          |     | December 31, |      |   |     |      |      |   |
|                          |     |         2023 |      |   |     | 2022 |      |   |
| Risk-free interest rate  |     |              |  5.4 | % |     |      |  4.7 | % |
| Expected life (in years) |     |              | 0.25 |   |     |      |  1.0 |   |
| Expected dividend yield  |     |              |    - | % |     |      |    - | % |
| Expected volatility      |     |              | 65.9 | % |     |      | 85.0 | % |

At December 31, 2023 and 2022, the preferred
stock warrants were exercisable and remained outstanding.

F-62 CERo Therapeutics, Inc. Notes to Financial Statements

NOTE 9 – COMMON STOCK

In September 2016, the Company issued
shares of common stock to the founders (“Founder Stock