CERO THERAPEUTICS HOLDINGS INC
For the period ended Sep 30, 2024. Filed Nov 19, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 19, 2024
CERO$0.010.0%Stored close · as of Jul 8, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001213900-24-069055
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsDefaults Upon Senior SecuritiesMine Safety DisclosuresCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-19.
0001213900-24-100245
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsDefaults Upon Senior SecuritiesMine Safety DisclosuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 24 previous paragraphs and 25 current paragraphs.
16 unchanged; 6 reworded; 3 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
As of November 1, 2024, the Company currently has outstanding (i) 3,075 shares of Series A Preferred Stock, convertible into 64,062,500 shares of Common Stock at the current effective conversion price of $0.06; (ii) 486 shares of Series B Preferred Stock, convertible into 10,125,000 shares of Common Stock at the current effective conversion price of $0.06; (iii) 2,853 shares of Series C Preferred Stock, convertible into 12,736,607 shares of Common Stock at the current effective conversion price of $0.224; (iv) 2,462 Preferred Warrants to purchase shares of Series A Preferred Stock at an exercise price of $800, which would result in 2,462 shares of Series A Preferred Stock, convertible into 49,797,736 shares of Common Stock at the current effective conversion price of $0.06; (v) 612,746 Series A Warrants to purchase shares of Common Stock at an exercise price of $1.39 per share; (vi) 8,175,166 warrants (“Series C Warrants”) to purchase shares of Common Stock at an exercise price of $0.098; and (vii) 9,879,858 Public Warrants and Private Placement Warrants to purchase shares of Common Stock at exercise prices ranging from $9.20 to $11.50 per share. As of the date of this prospectus, holders of 7,069 shares of Series A Preferred Stock, 140 shares of Series B Preferred Stock and 38 Preferred Warrants have converted such shares into an aggregate of approximately 110.9 million shares of Common Stock.
Current report
In August 2024, we issued 1,613,944 shares of Common Stock to an investor as commitment shares in consideration for entering into an equity line of credit with us. As of November 1, 2024 we have issued an aggregate of 23,377,921 shares of Common Stock to such investor, including 12,997,921 shares during the three months ended September 30, 2024, pursuant to the equity line of credit. The issuance of these securities was made pursuant to Section 4(a)(2) of the Securities Act, and the rules promulgated thereunder, to an accredited investor.
Current report
In September 2024, we issued an aggregate of 2,853 shares of Series C Preferred Stock, at a price of $1,000 per share, and 8,175,166 shares of Series C Warrants, resulting in aggregate gross proceeds to us of approximately $1.25 million. The issuance of these securities was made pursuant to 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D, and the rules promulgated thereunder, to accredited investors.
Removed paragraphs (2)
Previous report
As of the date of this report, the Company currently has outstanding 7,406 shares of Series A Preferred Stock with a stated value of approximately 7.4 million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a conversion price of $1.00, 486 shares of Series B Preferred Stock with a stated value of approximately $0.49 million, convertible into shares of Common Stock at a conversion rate of the stated value thereof divided by a conversion price of $1.00, and 0.5 million Common Warrants to purchase shares of Common Stock at an exercise price of $1.40. Since the closing of the Business Combination through the date of this report, holders of 2,634 shares of Series A Preferred Stock and 140 shares of Series B Preferred Stock converted such shares into an aggregate of approximately 25.0 million shares of Common Stock.
Previous report
On June 10, 2024, the Company issued 254,351 shares of our common stock to an accredited investor in connection with an exercise of warrants to purchase 38 shares of Series A Preferred Stock, which were immediately converted to common shares, which were previously issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act, at an effective exercise price equal to $1,000 and a conversion price of $0.15. The issuance was exempt from registration under Section 3(a)(9) of the Securities Act.
Reworded paragraphs (6)
Previous wording
Although each of the conversion price of the Series A Preferred Stock and the Series B Preferred Stock and the exercise price of the Common Warrants are above the trading price of our Common Stock as of the date of this report, if such trading price increases, such conversion prices and exercise price 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 and the Series B 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. 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 14, 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 all of the conversions since the Business Combination described in the preceding paragraph 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.
Current wording
Although each of the conversion price of the preferred shares and the exercise price of the Series A Preferred Warrants are at or above the trading price of our Common Stock as of the date of this report, if such trading price increases, such conversion prices and exercise price 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 B Preferred Stock and the Series C 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 14, 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 all of the conversions since the Business Combination described in the preceding paragraph 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.
Previous wording
We cannot assure you that we will remain in compliance with all of the terms of the Series A Preferred Stock or Series B 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 report, the Company needs to obtain financing to fund its research and development activities and, if the IND is accepted, clinical trials, as well as other operations. Under challenging conditions in the equity capital markets, particularly for pre-commercialization biotech companies, we may have no viable alternatives to agreeing to inclusion of such provisions in the terms of future financings.
Current wording
We cannot assure you that we will remain in compliance with all of the terms of the Series A Preferred Stock, Series B Preferred Stock or Series C 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 report, the Company needs to obtain financing to fund its research and development activities and, if the IND is accepted, clinical trials, as well as other operations. Under challenging conditions in the equity capital markets, particularly for pre-commercialization biotech companies, we may have no viable alternatives to agreeing to inclusion of such provisions in the terms of future financings.
Previous wording
We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such clinical trials are being conducted, by the Data Safety Monitoring Board for such clinical trial or by the FDA or other regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from the product candidates, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. For example, in July 2024, we announced a clinical hold as a result of insufficient data provided with regard to two issues within pharmacology and toxicology of CER-1236. We plan to work expeditiously to resolve this clinical hold so that CER-1236 may proceed to the clinic, but there is no guarantee that we will be able to address the clinical hold issues to FDA’s satisfaction or in a timely manner to resume development.
Current wording
We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such clinical trials are being conducted, by the Data Safety Monitoring Board for such clinical trial or by the FDA or other regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from the product candidates, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. For example, in July 2024, we announced a clinical hold as a result of insufficient data provided with regard to two issues within pharmacology and toxicology of CER-1236. We have requested a meeting with FDA and plan to work expeditiously to resolve this clinical hold so that CER-1236 may proceed to the clinic, but there is no guarantee that we will be able to address the clinical hold issues to FDA’s satisfaction or in a timely manner to resume development.
Previous wording
As previously announced by the Company in July 2024, the FDA placed a full clinical hold on CER-1236 as a result of insufficient data provided with regard to two issues within pharmacology and toxicology of CER-1236. We plan to work expeditiously to resolve this clinical hold so that CER-1236 may proceed to the clinic, but there is no guarantee that we will be able to address the clinical hold issues to FDA’s satisfaction or in a timely manner to resume development. If the FDA does not lift the clinical hold in a timely manner, or at all, our long-term development timeline for CER-1236 and our business, financial condition or results of operations, may be adversely affected.
Current wording
As previously announced by the Company in July 2024, the FDA placed a full clinical hold on CER-1236 as a result of insufficient data provided with regard to two issues within pharmacology and toxicology of CER-1236. We have requested a meeting with FDA and plan to work expeditiously to resolve this clinical hold so that CER-1236 may proceed to the clinic, but there is no guarantee that we will be able to address the clinical hold issues to FDA’s satisfaction or in a timely manner to resume development. If the FDA does not lift the clinical hold in a timely manner, or at all, our long-term development timeline for CER-1236 and our business, financial condition or results of operations, may be adversely affected.
Previous wording
Between June 5, 2024 and August 13, 2024, the Company issued approximately 25.4 million shares of our common stock to accredited investors in connection with the conversion of an aggregate of 2,777 shares of our Series A Preferred Stock, which were previously issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act, at a weighted average effective conversion price equal to $0.11 The issuance was exempt from registration under Section 3(a)(9) of the Securities Act.
Current wording
Between July 1, 2024 and September 30, 2024, the Company issued approximately 108.9 million shares of our common stock to accredited investors in connection with the conversion of an aggregate of 7,005 shares of our Series A Preferred Stock which were previously issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act, at a weighted average effective conversion price equal to $0.065 The issuance was exempt from registration under Section 3(a)(9) of the Securities Act.
Previous wording
Between June 5, 2024 and August 13, 2024, the Company issued approximately 1.2 million shares of our Common Stock to accredited investors in connection with the conversion of an aggregate of 140 shares of our Series B Preferred Stock, which were previously issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act, at a weighted average effective conversion price equal to $0.11 Each issuance of shares of Common Stock upon conversion was exempt from registration under Section 3(a)(9) of the Securities Act.
Current wording
Between July 1, 2024 and September 30, 2024, the Company issued approximately 1.2 million shares of our Common Stock to accredited investors in connection with the conversion of an aggregate of 140 shares of our Series B Preferred Stock, which were previously issued in a private placement exempt from registration under Section 4(a)(2) of the Securities Act, at a weighted average effective conversion price equal to $0.075 Each issuance of shares of Common Stock upon conversion was exempt from registration under Section 3(a)(9) of the Securities Act.