Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 1777

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 1777
---
 alternatively elect to
convert the Series C Preferred Stock at the “Alternate Conversion Price” equal to the lesser of the then current Conversion
Price and the greater of $1.96 (the “Series C Conversion Price Floor”) or 80% of the trailing 5-day daily volume weighted
average price of a share of Common Stock. Trigger Events include customary terms related to exchange listing, registration rights, failure
to deliver shares on conversion or exercise of derivative instruments, or insolvency. Notwithstanding the Series C Conversion Price Floor,
if the Series C Conversion Price Floor is greater than 80% of the 5-day volume weighted average price of a share of Common Stock, then
the Conversion Amount (as defined in the Series C Certificate of Designation) for such Series C Preferred Stock is increased by a multiplier
resulting in the convertibility of the shares of Series C Preferred Stock into the number of shares of Common Stock that would have been
issuable if the Alternate Conversion Price had been equal to such lower volume weighted average price.

Redemptions: Upon bankruptcy or liquidation,
Series C Preferred Stock will be redeemed at a 25% premium to the conversion amount multiplied by the highest Alternative Conversion Price
within the preceding 20 days multiplied by 125% of the greatest closing sale price of the Common Stock on any day immediately following
public announcement of insolvency and the date the entire redemption payment has been made. Additionally, the Company may voluntarily
redeem the Series C Preferred Stock as at 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.

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

In September 2024, the Company
consummated a private placement (the “Series C PIPE Financing”) of 2,853 shares of Series C Preferred Stock and warrants to
purchase 81,752 shares of Common Stock (the “September 2024 PIPE Common Warrants”) (See Note 9 below), pursuant to the Securities
Purchase Agreement, dated September 25, 2024, by and among the Company and certain accredited investors for aggregate gross cash proceeds
to the Company of approximately $1.25 million.

The Company accounts for
preferred stock as either equity or debt-like securities based on an assessment of the Preferred Stock rights and preferences and applicable
authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging. The Company has concluded that the Series C