Company: CERO
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001213900-25-079898
Chunk: 36

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 10-Q
Item: Item 1
Chunk 36
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 Convertible Preferred Stock

The
Company designated 626 shares of its authorized preferred stock as Series B Preferred Stock and established the rights, preferences and
privileges of the Series B Preferred Stock pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series
B Convertible Preferred Stock (the “Series B Certificate of Designations” and, together with the Series A Certificate of
Designations, the “Certificates of Designations”), as summarized below. Except as set forth below, the Series B Preferred
Stock has terms and provisions that are identical to those of the Series A Preferred Stock.

On
April 1, 2024, we consummated a private placement of 626 shares of the Company’s Series B Preferred Stock, pursuant to the Securities
Purchase Agreement, dated March 28, 2024, by and among us and certain accredited investors, for aggregate cash proceeds to us of approximately
$0.5 million. Such private placement closed on April 1, 2024.

The
holders of the Series B Preferred Stock have no voting rights.

The
Series B Preferred Stock ranks pari passu with the Series A Preferred Stock.

Due to delayed filing and declaration of effectiveness relative to
the deadlines defined in the Registration Rights Agreement, through December 31, 2024, the Company accrued a registration rights penalty
amounting to $55,000, which is payable in cash to the holders of Series B Preferred Stock and included in accrued liabilities on
the accompanying condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024.

During the three months ended
March 31, 2025, 75 shares of Series B Preferred Stock were converted into 2,500 shares of Common Stock. The conversion ratio was based
on the Series B Certificate of Designations and included the 25% premium to the greater of the conversion amount or the number of shares
multiplied by the highest closing price within the preceding 20 days. During the three months ended June 30, 2025, 198 shares of Series
B Preferred Stock were converted into 42,258 shares of Common Stock. The conversion ratio of 23 Series B Preferred Stock was based on
the Series B Certificate of Designations and included the 25% premium to the greater of the conversion amount or the number of shares
multiplied by the highest closing price within the preceding 20 days. As a result of the 25% premium, the Company