Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2009

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1C
Chunk 2009
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 owed an aggregate of 13,835 shares of Common Stock
of the Company due to shortfall in number of shares issued upon conversion, which represents the 25% premium not received. Accordingly,
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 sheet as deemed dividend - common stock liability. As of December 31, 2024, there were 1,894 remaining shares of
Series A Preferred Stock, which were convertible into 473,500 shares of Common Stock.

Successor Series B Convertible Preferred Stock

The Company designated 626
shares of its authorized preferred stock as Series B Preferred Stock and established the rights, preferences and privileges of the Series
B Preferred Stock pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series B Convertible Preferred
Stock (the “Series B Certificate of Designations” and, together with the Series A Certificate of Designations, the “Certificates
of Designations”), as summarized below. Except as set forth below, the Series B Preferred Stock has terms and provisions that are
identical to those of the Series A Preferred Stock.

F-19

On April 1, 2024, we consummated
a private placement of 626 shares of the Company’s Series B Preferred Stock, pursuant to the Securities Purchase Agreement, dated
March 28, 2024, by and among us and certain accredited investors (the “Additional Investors” and, together with the Initial
Investors, the “PIPE Investors”), for aggregate cash proceeds to us of approximately $0.5 million. Such private placement
closed on April 1, 2024.

The holders of the Series
B Preferred Stock have no voting rights.

The Series B Preferred Stock ranks pari passu with the Series A Preferred
Stock.

Due to delayed filing and
declaration of effectiveness relative to the deadlines defined in the Registration Rights Agreement, through December 31, 2024, the Company
accrued a registration rights penalty amounting to $55,000, which is payable in cash to the holders of Series B Preferred Stock
and included in accrued liabilities on the accompanying consolidated balance sheet as of December 31, 2024.

During the year ended December 31, 2024, 353 shares of Series B Preferred
Stock were converted into 53,815 shares of Common Stock. The conversion ratio was based on the Series B Certificate