Company: CERO
Filing Date: 2025-05-27
Form Type: POS AM
Source: 0001213900-25-047469
Chunk: 356

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-05-27
Form: POS AM
Chunk 356
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ued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. Convertible preferred stock– The Predecessor’s convertible preferred stock was redeemable upon the liquidation or winding up of the Company, a change in control, or a deemed liquidation event related to the sale of substantially all the assets of the Company. Based on the ownership of the Company’s equity and associated board of director control, deemed liquidation events were not solely within the control of the Company. As a result, the shares of the Predecessor’s convertible preferred stock were considered contingently redeemable. The Company had elected to present it’s the Predecessor’s convertible preferred stock as mezzanine equity in its balance sheet. Further, the Company elected not to adjust the carrying values of the Predecessor’s convertible preferred stock to the redemption value of such shares, since it was uncertain whether or when a redemption event would occur. Subsequent adjustments to increase the carrying values to the redemption values were to be made when it became probable that such redemption would occur. The Company has not included the effect of the Predecessor’s convertible preferred stock in the calculation of diluted loss per share, since the inclusion of such convertible preferred stock would be anti-dilutive. F-38

Preferred stock warrant liability –
Warrant accounting requires liability classification of warrants when the warrants include a conditional obligation, once the warrant
is exercised, that would require the Company to redeem its equity shares. As stated above, the shares of the predecessor Company’s
convertible preferred stock are considered contingently redeemable and therefore, any preferred stock warrants to purchase preferred shares
was classified as a liability in the Company’s balance sheets. The warrants are analyzed to determine whether the warrant is a freestanding
instrument and if so, whether the warrant was issued in a transaction with other instrument(s). If a freestanding warrant is issued with
other instruments in a single transaction, then the proceeds of the transaction are allocated first to the fair value of the warrant,
with the remainder being allocated to the other instruments. The warrants are remeasured as of each reporting period end, with any changes
in fair value recognized as interest and other income, net in the statement of operations. The Company has determined that the warrant
liability is a Level