Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2240

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 3
Chunk 2240
---
10,039 shares of Series A Preferred Stock, warrants to
purchase 6,127 shares of Common Stock (the “February 2024 PIPE Common Warrants”) and warrants to purchase 2,500 shares of
Series A Preferred Stock (the “Preferred Warrants”) (See Note 9 below), pursuant to the Amended and Restated Securities Purchase
Agreement, dated February 14, 2024, by and among the Company, PBAX and certain accredited investors (the “Initial Investors”)
for aggregate cash proceeds to the Company of approximately $10.0 million, including cash 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 $1,555,000 and 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 $568,400 in exchange
for the Company’s forgiveness of the $600,000 Series 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 $100,000 instead of the exercise price of $700,000.

During the year ended December
31, 2024, 10,023 shares of Series A Preferred Stock were converted into 1,723,880 shares