Company: CERO
Filing Date: 2025-02-07
Form Type: 424B3
Source: 0001213900-25-011071
Chunk: 422

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-07
Form: 424B3
Chunk 422
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 the closing of an initial public
offering of the Company’s common stock at a price not less than $3.5142 per share and having aggregate cash proceeds of not less
than $60,000,000; and (iii) at the date specified by written consent or agreement of the holders of at least 60% of the outstanding
shares of Series A Preferred Stock, voting together as a single class. The conversion ratio for the conversion in the above scenarios
is currently 100%, determined by dividing the original issue price per share by the conversion price per share, which are each $0.8059
for Series Seed Preferred Stock and each $1.7571 for Series A Preferred Stock.

Redemption – Convertible preferred
stock is not mandatorily redeemable and is contingently redeemable only on defined 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 1,849,638 shares of Series A Preferred Stock at a price of $1.7571 per share. The warrants are exercisable into
shares of 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 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 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 are referred to as the “preferred stock warrants.” On February 14, 2024, the preferred stock warrants were
converted into warrants to purchase up to 324,999 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. The appraiser subsequently estimated the fair value of the preferred
stock warrants at December