Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2356

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 2356
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2,419,750 which represents the fair value of excess common shares transferred to the preferred shareholders based on an average per
share common share price of $7.10, the effect of which was an increase in the net loss attributable to common shareholders in the statement
of operations for the year ended December 31, 2024. 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. Accordingly,
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 sheet as deemed dividend - common stock liability. As of December 31, 2024, there were 1,894 remaining shares of
Series A Preferred Stock, which were convertible into 473,500 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.

F-19

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 (the “Additional Investors” and, together with the Initial
Investors, the “PIPE 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