Company: CERO
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001213900-25-079898
Chunk: 298

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 10-Q
Item: Item 2
Chunk 298
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.76 to $5.00 per share, which was lower than the conversion price based on the Series C Certificate of Designations
Alternate Conversion Price.

On
April 22, 2025, pursuant to the Fourth Securities Purchase Agreement, the Company issued and sold, and the investors purchased, in a
private placement (the “Fourth PIPE Financing”): 6,250 shares of the Series D Preferred Stock to investors for aggregate
consideration of $500,000, paid through the transfer of 1,000,279 shares of Series D Preferred Stock of Stella Diagnostics, Inc. owned
by such investors, in lieu of cash, which are included in investment in equity securities on the accompany unaudited condensed balance
sheet as of June 30, 2025. The date of the first closing is referred to as the “First Closing Date.” The value of Stella’s
Series D Preferred Stock received was determined to be $500,000 as of the transaction date, based on the subsequent sale of the 1,000,279
Stella Series D Preferred Stock $500,000 in cash, pursuant to a Stock Purchase Agreement dated August 20, 2025. Accordingly, the Company
recognized the issuance of its Series D Preferred Stock to investors at a cost of $500,000, which represents the value of the consideration
received. The difference between the stated value of the Company’s Series D Preferred Stock ($5.0 million) and the fair value of
the consideration received ($500,000) was recorded as a decrease to additional paid-in capital, which amounted to $4.5 million. The investment
in Stella’s Series D is classified as an equity security without a readily determinable fair value and is accounted for under the
measurement alternative in accordance with ASC 321, Investments – Equity Securities. Under this method, the investment
is initially recorded at cost, which was determined to be equal to the fair value of the consideration received, and is subsequently
adjusted for observable price changes in orderly transactions for the same or similar securities and for impairment, if any. There was
no impairment identified on the investment in equity securities during the period ended June 30, 2025. This non-cash transaction did
not impact the Company’s cash flows and is disclosed as a non-cash investing and financing activity in the condensed consolidated
statement of cash flows in accordance with ASC 230, Statement of Cash Flows.

On
June 5, 2025,