Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2591

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 6
Chunk 2591
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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 were exercisable for Common Stock at an exercise
price equal to $1,000. The exercise price was 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 expired
five years after the original Predecessor Preferred Stock Warrants were issued, or November 14, 2024.

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 Stock Warrants into Series A Preferred Stock, which had a cash redemption feature outside of the control of Predecessor,
the Predecessor Preferred Stock Warrants were recorded as a derivative liability and were revalued at each reporting period, with the
change in value being recorded on the statement of operations.

Series A Common Warrants (Successor) - February 2024

The Company’s 6,127
Series A Common Warrants are initially exercisable for cash at an exercise price equal to the greater of (x) $920 (as adjusted for stock
splits, stock dividends, stock combinations, recapitalizations and similar events) and (y) the closing price of the Common Stock on the
trading day immediately prior to the Subscription Date (as defined in the Series A Common Warrant Agreement