Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2476

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 5
Chunk 2476
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 SPC
II, Ltd. (“Arena”) for the Arena ELOC

On February 23, 2024, the
Company entered into a common stock purchase agreement (the “Arena Purchase Agreement”) with Arena, pursuant to which we may
sell and issue, and Arena is obligated to purchase, up to $25,000,000 of Common Stock. The price of the shares purchased by Arena under
the ELOC is 90% of various VWAP and closing price-based formulae, and requires a waiver, should the selling price be below $25.00 per
share. As consideration for Arena commitment to purchase shares of Common Stock pursuant to the Arena Purchase Agreement, in May 2024,
the Company issued 3,456 shares of Common Stock to Arena during the period from February 14, 2024 through December 31, 2024 valued at
$500,000, which is reflected as deferred offering costs on the accompanying consolidated balance sheet as of December 31, 2024. The Company
has sold no shares of Common Stock to Arena under the Arena ELOC during the period ended December 31, 2024.

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 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