Company: CERO
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001213900-25-079898
Chunk: 24

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 10-Q
Item: Item 1
Chunk 24
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 stock price-based earnout targets and 100 shares of which are subject to vesting upon a change of control, respectively.

4.Certain holders of Predecessor’s common stock received a pro rata portion of 438 earnout shares of Common Stock, valued at $4.29 million, which became fully vested upon the Closing.

5.Certain holders of Predecessor’s common stock and convertible bridge notes received a pro rata portion of 500 earnout shares (the “IND Earnout shares”) of restricted Common Stock, valued at $4,900,000, which vested when the Company filed an investigational new drug (“IND”) application with the Food and Drug Administration (“FDA”). The earning of these shares was accompanied by a forfeiture of 500 restricted shares of Common Stock held by the sponsor following receipt of an acknowledgement notice by the Sponsor.

6.Each
                                            outstanding Predecessor option was converted into an option to purchase a number of shares
                                            of Common Stock, equal to the Predecessor’s common stock underlying the option multiplied
                                            by the Exchange Ratio factor of 0.064452, at an exercise price per share equal to the Predecessor
                                            option exercise price divided by the Exchange Ratio factor.

7.Each warrant to purchase the Predecessor’s preferred stock was converted into a warrant to acquire a number of shares of Common Stock obtained by dividing the warrant as-if-exercised liquidation preference by $1,000.00, with the exercise price equal to the total Predecessor warrant exercise amount divided by the number of shares of Common Stock issuable upon exercise.

8.The Predecessor’s bridge notes automatically converted into shares of the Company’s Series A Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), at a conversion price equal to $750 per share of Series A Preferred Stock.

11

The
Company issued, transferred from the Sponsor, or reserved for issuance an aggregate of 4,200 shares of Common Stock to the holders of
Predecessor common stock and Predecessor preferred stock or reserved for issuance upon exercise of rollover (from Predecessor to Successor)
options and warrants as consideration in the Merger.

Asset
Acquisition Method of Accounting - The Merger was accounted for using the asset acquisition method in accordance with GAAP. Under
this method of accounting, PBAX was considered to be the accounting acquirer based on the terms of the Merger. Upon consummation of the
Merger