Company: CERO
Filing Date: 2025-08-22
Form Type: 424B3
Source: 0001213900-25-080017
Chunk: 39

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 424B3
Chunk 39
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 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 six months ended June 30, 2025, the $127,144 of excess paid over the initial purchase price was included
in deemed dividend on the accompanying condensed consolidated statement of operations.

During the three months ended
June 30, 2025, 2,477 shares of Series C Preferred Stock were converted into 808,444 shares of Common Stock. The conversion ratios were
agreed upon by the Company and investors and ranged from $1.76 to $5.00 per share, which was lower than the conversion price based on
the Series C Certificate of Designations Alternate Conversion price. As a result, pursuant to ASC 470-20, upon initial down round triggering
events, the Company recorded a stock-based inducement expense of $707,300, which represents the fair value of excess common shares transferred
to the preferred shareholders based on an average per share common share price of $7.50 and is reflected as part of other income (expense),
net, on the accompanying condensed consolidated statement of operations for both the three and six months ended June 30, 2025. Additionally,
subsequent to the initial triggering events, 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 contractual conversion price of the Series C Preferred Stock then in effect. The initial
triggering events lowered the Series C Preferred Stock conversion price from $39.20 per share to $5.00 and from $5.00 per share to $1.76
per share. In connection with these down round triggering events, during the three and six months ended June 30, 2025, the Company recorded
a deemed dividend of $9,340,120, which represents the fair value of excess common shares convertible and issuable to the preferred shareholders
upon the occurrence of the initial trigger event based on an average per share common share price of $10.37,