Company: CERO
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044335
Chunk: 33

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 33
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 as described above, the Company recorded an inducement expense of $156,250, which represents the fair value of excess
common shares transferred to the preferred shareholders based on an average per share common share price of $4.75 and is reflected as
part of other income (expense), net, on the accompanying condensed consolidated statement of operations for the three months ended March
31, 2025. During the three months ended March 31, 2024, no shares of Series A Preferred Stock were converted into shares of Common Stock

Additionally, certain investors
are owed an aggregate of 13,835 shares of Common Stock of the Company due to shortfall in number of shares issued upon conversion, which
represents the 25% premium not received during the year ended December 31, 2024. Accordingly, during the year ended December 31, 2024,
the Company reduced additional paid-in capital by $85,500 and recorded a liability of $85,500, which is reflected on the accompanying
consolidated balance sheets as deemed dividend - common stock liability as of March 31, 2025 and December 31, 2024. As of March 31, 2025,
there were 1,429 remaining shares of Series A Preferred Stock, which were convertible into approximately 729,082 shares of Common Stock.

Successor Series B 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