Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 325

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 2
Chunk 325
---
 result of the delisting, we could face significant material adverse
consequences, including:

●a limited availability of market quotations for our securities;

●reduced liquidity with respect to our securities;

45

●a determination that our shares of common stock are “penny
stock”, which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting
in a reduced level of trading activity in the secondary trading market for our shares of common stock;

●a limited amount of news and analyst coverage for our company;
and

●a decreased ability to issue additional securities or obtain
additional financing, including pursuant to the Fifth Securities Purchase Agreement, the July 2025 Keystone Purchase Agreement, or otherwise,
in the future.

The National Securities
Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities,
which are referred to as “covered securities.” Because they have been delisted, our securities would not be covered securities
and we would be subject to regulation in each state in which we offer our securities. This state level regulation introduces additional
compliance requirements for brokers to consider making markets in our securities and will further negatively impact any trading liquidity
in our securities.

We may pursue orphan drug designation for
certain of our product candidates, and we may not be able to obtain such designation, or obtain or maintain the benefits of such designation
including orphan drug exclusivity, and even if we do, that exclusivity may not prevent regulatory authorities from approving other competing
products.

In June 2025, the FDA granted
orphan drug designation to CER-1236 for the treatment of AML. We may seek orphan designation for additional product candidates in the
future; however, we may never receive such designations. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug
if it is a drug or biologic intended to treat a rare disease or condition, defined as a patient population of fewer than 200,000 in the
U.S., or a patient population greater than 200,000 in the U.S. where there is no reasonable expectation that the cost of developing the
drug will be recovered from sales in the U.S. Orphan drug designation must be requested before submitting an NDA. A similar regulatory
scheme governs orphan products in the EU.

Orphan drug designation
entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs