Company: CERO
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044335
Chunk: 154

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 3
Chunk 154
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 the Company and failure to deliver shares of Common Stock upon conversion in a
timely manner. For example, the penalties and adjustments include a 25% premium added to the stated value for determining the conversion
rate in connection with breaches other than the breach of the requirement to redeem the shares of Series A Preferred Stock and Series
B Preferred Stock by August 14, 2025, which results in a 50% premium, and the addition to the stated value of an amount equal to the value
of the shares of Common Stock into which the Series A Preferred Stock or Series B Preferred Stock would have been convertible if the conversion
price were equal to 80% of the lowest volume weighted average price during the five trading days immediately prior to conversion. Such
penalties and adjustments, which applied during the period when substantially all of the conversions since the Business Combination occurred
as a result of a failure to file and cause the SEC to declare a registration statement with respect to the resale of the underlying shares
in a timely manner, have resulted and may in the future result in the issuance of shares of Common Stock at an effective conversion price
below the trading price of our Common Stock at the time of such conversion.

40

We cannot assure you that we will remain in compliance
with all of the terms of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock
and that such penalties and adjustments will not apply in the future. In addition, we cannot assure you that we will not issue additional
convertible or other derivative securities with highly dilutive penalty or adjustment provisions. As described elsewhere in this Quarterly
Report, the Company needs to obtain financing to fund its research and development activities and clinical trials, as well as other operations.
Under challenging conditions in the equity capital markets, particularly for pre-commercialization biotech companies, we may have no viable
alternatives to agreeing to inclusion of such provisions in the terms of future financings.

Unstable market and
economic conditions may have serious adverse consequences on our business, financial condition and stock price.

The global economy, including
credit and financial markets, has experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability,
declines in consumer confidence, declines in economic growth, increases in unemployment rates, increases in inflation rates, higher interest
rates and uncertainty about economic stability. For example, the Russia-Ukraine war and the Israel-Hamas war created volatility in the
global capital markets and may have further global economic consequences, including disruptions of