Company: CERO
Filing Date: 2025-12-05
Form Type: S-1
Source: 0001213900-25-118817
Chunk: 417

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-12-05
Form: S-1
Chunk 417
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 previously received for bridge loan proceeds. A portion of such Series A Preferred Stock was issued as consideration for the cancellation of outstanding indebtedness, including a promissory note of PBAX amounting to $ 1,555,000and the Predecessor’s convertible notes amounting to $ 627,154. 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 A, Series B Preferred Stock and Series C Preferred Stock, which have no cash redemption features outside of the Company’s control are treated as equity. The Company has also concluded that the Series A Common Warrants and Series C Common Warrants do not possess redemption features outside of the Company’s control and are treated as equity. Due to delayed filing and declaration of effectiveness relative to the deadlines defined in the Registration Rights Agreement, on June 30, 2024, the Company accrued a registration rights penalty amounting to $ 645,693, which was payable in cash to the holders of Series A Preferred Stock. On March 27, 2025, the Company entered into a Waiver of Registration Rights Penalties whereby the Investor agreed to waive registration rights penalty amounting to $ 568,400in exchange for the Company’s forgiveness of the $ 600,000Series A warrants exercise price shortfall. In December 2024, the Investor exercised its Series A Preferred Warrants to purchase shares of Series A Preferred stock of the Company for which the Investor remitted a partial exercise price amount of $ 100,000instead of the exercise price of $ 700,000. During the year ended December 31, 2024, 10,023shares of Series A Preferred Stock were converted into 86,194shares of Common Stock. The conversion ratio was based on the Series A Certificate of Designations and reflected the application of the Alternate Conversion Price described above, applicable as of each date of conversion plus a 25% premium for penalties due. As a result of the 25% premium, the Company recorded a deemed dividend of $ 2,419,750which represents the fair value of excess common shares transferred to the preferred shareholders based on an average per share common share price of $ 142.00, the effect of which was an increase in the net loss attributable to common shareholders in the statement of operations for the year ended December 31, 2024.