Company: CERO
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044335
Chunk: 36

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 36
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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 at a 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 81,753 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.

19

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 Preferred Stock, which
has no cash redemption features outside of the Company’s control are treated as equity. The Company has also concluded that the
Series C Common Warrants do not possess redemption features outside of the Company’s control and are treated as equity.

On March 10, 2025, the Company
paid certain investors $395,000 for the redemption of 316 shares of the Series C Preferred Stock, which included $267,856 of the initial
purchase price and a cash redemption premium of $127,144. During the three months ended March 31, 2025, the $127,144 excess paid over
the initial purchase price was included in deemed dividend on the accompanying condensed consolidated statement of operations.

As of March 31, 2025, there were 2,537 remaining shares of Series C
Preferred Stock, which were convertible into approximately 1,294,388 shares of Common Stock.

Predecessor Preferred Stock Conversion to Common Stock

At December 31, 2023, Predecessor
had 75,120,105 shares of capital stock authorized, consisting of 45,350,000 shares of Predecessor common stock and 29,770,105 shares of
Predecessor convertible preferred