Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 208

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 8
Chunk 208
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No expiration date   February 2025 Common Warrants   127,551    39.20    4.36   Outstanding as of September 30, 2025   159,724   $707.39    4.14  

NOTE 10 – FAIR VALUE MEASUREMENTS

Investment in equity securities

On April 22, 2025, pursuant
to the Fourth Securities Purchase Agreement, the Company issued and sold, and the investors purchased, in a private placement (the “Fourth
PIPE Financing”), 6,250 shares of its Series D Preferred Stock to investors in exchange for the receipt of 1,000,279 shares of the
Stella Series D Preferred Stock, in which a portion of the Stella Series D Preferred Stock was owned by a related party investor (see
Note 13). The exchange of shares was in lieu of cash, the cost of which was initially included in investment in equity securities. The
fair value of Stella’s Series D Preferred Stock received was determined to be $500,000 as of the transaction date, based on the
subsequent sale of the 1,000,279 Stella Series D Preferred Stock $500,000 in cash, pursuant to a Stock Purchase Agreement dated August
20, 2025. Accordingly, the Company determined that the fair value of the equity securities on the date of the Fourth Securities Purchase
Agreement of April 21, 2025 was equal to $500,000. Additionally, the Company recognized the issuance of its Series D Preferred Stock to
investors at a cost of $500,000, which represented the fair value of the consideration received. The difference between the stated value
of the Company’s Series D Preferred Stock ($5.0 million) and the fair value of the consideration received ($500,000) was recorded
as a decrease to additional paid-in capital, which amounted to $4.5 million, during the three months ended June 30, 2025. The investment
in Stella’s Series D Preferred Stock was classified as an equity security without a readily determinable fair value and was accounted
for under the measurement alternative in accordance with ASC 321, Investments – Equity Securities. Under this method,
the investment was initially recorded at cost, which was determined to be equal to the fair value of the consideration received, and is
subsequently adjusted for observable price changes in orderly transactions for the same or similar securities and for