Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2474

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 5
Chunk 2474
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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 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.

As of December 31, 2024,
there were 2,853 remaining shares of Series C Preferred Stock, which were convertible into 490,206 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 stock. All classes of the Predecessor’s stock had a par value of $0.0001. On February 14, 2024,
on the close of the Merger, the Predecessor’s outstanding convertible preferred stock converted to Common Stock at a conversion
ratio of 0.0806 and 0.01757 shares of Common Stock for each share of Predecessor Series Seed Convertible Preferred Stock and Predecessor
Series A Convertible Preferred Stock, respectively. This resulted in the issuance of 4,155 and 40,000 shares of Common Stock for the Predecessor’s
Series Seed Preferred Stock and Predecessor Series A Preferred Stock, respectively.

Predecessor’s Series
Seed and Series A Preferred Stock had cash redemption features outside of its control, and therefore were classified in a mezzanine section
presented on the balance sheets between liabilities and stockholders’ deficit.

Purchase of Common Stock by Keystone Capital Partners under the