Company: CERO
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044335
Chunk: 40

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 40
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 not to exceed $15,000.

The Company’s
directors and executive officers agreed not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or
otherwise dispose of any shares of common stock or other securities convertible into or exercisable or exchangeable for common stock
for a period of 90 days following the closing date of the Offering, which terms may be waived in the sole discretion of and without
notice by the Placement Agent, subject to certain exceptions. In addition, the Company has agreed to not enter into variable rate
financings for a period of 180 days following the closing date, subject to certain exceptions, or enter into any equity financings
for a period of 60 days following the closing date, subject to certain exceptions.

In connection with the Offering,
the Conversion Price of the Series A Preferred Stock and Series C Preferred Stock reset to $1.96 per share of Common Stock. No shares
of Series A Preferred Stock or Series C Preferred Stock were converted after the Offering, during the three months ended March 31, 2025.

21

NOTE 9 – WARRANTS

Accounting for warrants

The Company 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. The assessment considers whether the instruments
are free standing financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments
meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s
own common stock and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside
of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional
judgment, was conducted at the time of warrant issuance and as of each subsequent period end date while the instruments are outstanding.

Public and Private Placement Warrants (Successor)

At March 31, 2025 and December
31, 2024, there were 91,925 Public and Private Placement Warrants outstanding, each with a right to purchase one share of Common Stock
for $1,150. The Public and Private Placement Warrants became exercisable 30 days after the Merger. No warrants will be exercisable for
cash unless the Company has an effective and current registration