Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 483

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Part II, Item 1
Chunk 483
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 Quarterly Report,
if such trading price increases, such conversion prices and exercise prices will not change as a result thereof and could be below the
trading price of our Common Stock as of the date of any future conversion or exercise thereof, resulting in dilution to our stockholders.
In addition, the terms of the Series A Preferred Stock, the Series C Preferred Stock, Series D Preferred Stock and Series E Preferred
Stock contain certain penalties and adjustments to the amount included in determination of the conversion rate following certain breaches
of the Company’s obligations thereunder, including, among other things, as a result of a failure to file or cause the SEC to declare
one or more registration statements relating to the resale of the shares of Common Stock issuable upon conversion thereof by specified
deadlines, certain defaults under indebtedness of the Company or judgments against the Company and failure to deliver shares of Common
Stock upon conversion in a timely manner. For example, the penalties and adjustments include a 25% premium added to the stated value
for determining the conversion rate in connection with breaches other than the breach of the requirement to redeem the shares of Series
A Preferred Stock and Series B Preferred Stock by August 19, 2025, which results in a 50% premium, and the addition to the stated value
of an amount equal to the value of the shares of Common Stock into which the Series A Preferred Stock or Series B Preferred Stock would
have been convertible if the conversion price were equal to 80% of the lowest volume weighted average price during the five trading days
immediately prior to conversion. Such penalties and adjustments, which applied during the period when substantially all of the conversions
since the Business Combination occurred as a result of a failure to file and cause the SEC to declare a registration statement with respect
to the resale of the underlying shares in a timely manner, have resulted and may in the future result in the issuance of shares of Common
Stock at an effective conversion price below the trading price of our Common Stock at the time of such conversion.

We cannot assure you that
we will remain in compliance with all of the terms of the Series A Preferred Stock, Series C Preferred Stock, Series D Preferred Stock
or Series E Preferred Stock and that such penalties and adjustments will not apply in the future. In addition, we cannot assure you that
we will not issue additional convertible or other derivative securities with highly dilutive penalty or adjustment provisions. As described
elsewhere in this Quarterly Report, the Company needs to obtain financing to fund its research