Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 192

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 8
Chunk 192
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 Agreement”) with certain accredited investors.
Pursuant to the Fourth Securities Purchase Agreement, up to 10,000 shares of the Company’s Series D Preferred Stock shall be purchased
for an aggregate purchase price of up to $8 million in one or more closings.

20

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 in exchange for the receipt of 1,000,279 shares of Series D Preferred
Stock of Stella Diagnostics, Inc, (the “Stella Series D Preferred Stock”), in lieu of cash, which is included in investment
in equity securities on the accompanying unaudited condensed balance sheet as of September 30, 2025. Pursuant to the Fourth PIPE Financing,
on April 22, 2025, the Company issued 6,250 shares of its Series D Preferred Stock to investors in exchange for 1,000,279 shares of Series
D Preferred Stock of Stella Diagnostics, in which a portion of the Series D Preferred Stock of Stella Diagnostics was owned by a related
party investor (see Note 13). The fair 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 for $500,000 in cash, pursuant to a Stock
Purchase Agreement dated August 20, 2025 (see Note 14). Accordingly, the Company recognized the issuance of its Series D Preferred Stock
to investors at a cost of $500,000, which represents the fair 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 Preferred Stock
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