Company: CERO
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001213900-25-079898
Chunk: 35

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 10-Q
Item: Item 1
Chunk 35
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, 2025, and 2) for 625 shares of Series A Preferred Stock converted after the
expiration of a Trigger Event as described above, the Company recorded a stock-based inducement expense of $156,250, which represents
the fair value of excess common shares transferred to the preferred shareholders based on an average per share common share price of $95.00
and is reflected as part of other income (expense), net, on the accompanying condensed consolidated statement of operations for the six
months ended June 30, 2025. Additionally, during the three and six months ended June 30, 2025, Series C Preferred Stock was converted
by investors at a conversion price lower than the conversion price of the Series A Preferred Stock then in effect. The lower conversion
price lowered the Series A Preferred Stock conversion price from $39.20 per share to $1.76 per share. In connection with this down round
triggering event, during the three and six months ended June 30, 2025, the Company recorded a deemed dividend of $14,871,551, which represents
the fair value of excess common shares convertible and issuable to the preferred shareholders upon occurrence of the trigger event based
on an average per share common share price of $19.18, the effect of which was an increase in the net loss attributable to common shareholders
in the accompanying consolidated statement of operations for the three and six months ended June 30, 2025,

 During the six months ended June 30, 2024, no shares of Series A Preferred Stock were converted into shares of
Common Stock.

Additionally,
certain investors are owed an aggregate of 692 shares of Common Stock of the Company due to shortfall in number of shares issued upon
conversion, which represents the 25% premium not received during the year ended December 31, 2024. Accordingly, during the year ended
December 31, 2024, 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 sheets as deemed dividend - common stock liability as of June 30, 2025 and December 31, 2024.

As of June 30, 2025, there were 1,429 remaining shares of Series A Preferred Stock, which were convertible into approximately 811,932
shares of Common Stock based on a conversion price of $1.76 per share.

Successor
Series B