Company: CERO
Filing Date: 2025-05-27
Form Type: POS AM
Source: 0001213900-25-047469
Chunk: 365

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-05-27
Form: POS AM
Chunk 365
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 to research
and development expense as IPR&D if the technology licensed has not reached technological feasibility and has no alternative future
use. The IPR&D recorded at the Closing of $ million is reflected “on the line” in the Company’s opening accumulated
deficit. To estimate the value of the acquired IPR&D, the Company used the avoided cost method, which calculates a present value of
a % return on research and development effort applied to research and development expenditures over the life of the Predecessor. The
determination of the fair value requires management to make a significant estimate of the return on research and development expenditures.
Changes in these assumptions could have a significant impact on the fair value of the IPR&D. The estimate of the return on research
and development expenditures was based on multiple published studies analyzing actual returns of research and development expenditures.

The following is a summary
of the purchase price calculation:

| Number of shares of Common Stock                                                                                    |     |   |     50,000 |
|:--------------------------------------------------------------------------------------------------------------------|:----|:--|-----------:|
| Multiplied by PBAX’s share price, as of the Closing                                                                 |     | $ |     585.00 |
| Total                                                                                                               |     | $ | 29,250,000 |
| Fair value of PBAX founder’s shares converted to shares of Common Stock and transferred to Predecessor stockholders |     | $ |  5,118,750 |
| Fair value of contingent Common Stock consideration                                                                 |     | $ | 12,870,000 |
| Total Common Stock consideration                                                                                    |     | $ | 47,238,750 |
| Assumed liabilities                                                                                                 |     |   |  3,311,153 |
| Total purchase price                                                                                                |     | $ | 50,549,903 |

The allocation of the purchase price was as follows:

| Cash                                                              |     | $ |    963,855 |   |
| Net working capital deficit (excluding cash and cash equivalents) |     |   | (1,819,514 | ) |
| Fixed assets                                                      |     |   |    929,346 |   |
| Acquired in-process research and development                      |     |   | 45,640,000 |   |
| Net assets acquired                                               |     |   | 45,713,687 |   |
| Loss on consolidation of VIE                                      |     |   |  4,836,216 |   |
| Total purchase price                                              |