Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 39

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 39
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shares of Common Stock. The conversion ratio of 23 Series B Preferred Stock was based on the Series B Certificate of Designations and
included the 25% premium to the greater of the conversion amount or the number of shares multiplied by the highest closing price within
the preceding 20 days. As a result of the 25% premium, the Company recorded a deemed dividend of $0 and $30,250, which represents the
fair value of excess common stock transferred to the preferred shareholders based on an average per share common share price of $37.50,
the effect of which was an increase in the net loss attributable to common shareholders in the accompanying condensed consolidated statement
of operations for the three and nine months ended September 30, 2025, respectively. Additionally, during the nine months ended September
30, 2025, the Company converted 175 shares of Series B Preferred stock at a conversion price lower than the contractual conversion price
of the Series B Preferred Stock. These shares were converted after the expiration of a prior Trigger Event. The lower conversion price
lowered the Series B Preferred Stock conversion price from the contractual conversion price to $1.76 per share. In connection with this
down round triggering event, during the nine months ended September 30, 2025, the Company recorded a deemed dividend of $482,953, which
represents the fair value of excess common stock convertible and issuable to the preferred shareholders upon occurrence of the trigger
event based on a per share common share price of $6.87, the effect of which was an increase in the net loss attributable to common shareholders
in the accompanying condensed consolidated statement of operations for the nine months ended September 30, 2025. As of the date of this
triggering event and September 30, 2025, 70,299 shares of common stock remain issuable to then holder of Series B Preferred Stock.

As of September 30, 2025,
there were no remaining shares of Series B Preferred Stock.

Successor Series C Convertible Preferred Stock

The Company designated 2,853
shares of its authorized preferred stock as the Series C Preferred Stock and the rights, preferences and privileges of the Series C Preferred
Stock are summarized below.

Each share of Series C Preferred
Stock has a stated value of $1,000 per share and, when issued, the Series C Preferred Stock was fully paid and non-assessable. The Series
C Preferred Stock ranks senior to all other Company capital stock unless