Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2364

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 2364
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 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). 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 February 2024 PIPE Common Warrants will also be adjusted so that the aggregate exercise
price shall be the same immediately before and immediately after any such adjustment. On stockholder approval for the issuance of shares
underlying the warrants, granted April 30, 2024, the exercise price of the Series A Common Warrants was adjusted to $139 per share, per
the terms of the Securities Purchase Agreement. On April 30, 2024, the Company calculated the total fair value of the consideration for
the modification of the Series A Common Warrants, which includes the incremental fair value of the Series A Common Warrants (determined
by comparing the fair values immediately prior to and immediately after the modification). The incremental fair value was calculated using
the Black-Scholes option-pricing model and amounted to $276,839, the effect of which was an increase in the net loss attributable to common
shareholders in the statement of operations for the year ended December 31, 2024. In calculating the incremental fair value om April 30,
2024, the Company used the following assumptions: risk-free interest rate

    Risk-free interest rate 
     4.72%
  
    Expected life (in years) 
     4.80 
  
    Expected dividend yield 
     0%
  
    Expected volatility 
     90%

F-23

The Series A Common Warrants
will be exercisable beginning six months after the issuance date (the “Initial Exercisability Date”) and expiring on the third
anniversary of the Initial Exercisability Date. The Series A Common Warrants require “buy-in” payments to be made by us for
failure to deliver any shares of Common Stock issuable upon exercise.

If at the time of exercise
of