CERO THERAPEUTICS HOLDINGS, INC. 8-K

What Happened

• Cero Therapeutics Holdings, Inc. announced on Feb 9, 2026 that it issued a convertible promissory note (Note) to Keystone Capital Partners. The investor paid $750,000 for a note with a principal face value of $937,500; the Note allows the company to borrow up to $1,000,000 in total, bears interest at 10% per year, and matures on July 9, 2027. The Note is convertible into common stock at a conversion price equal to the lesser of $0.05 or 80% of the average of the five lowest intraday prices during the 20 trading days before conversion, subject to a 4.99% beneficial ownership cap. The company must file a Form S-1 or S-3 registering the resale of shares issuable on conversion. The securities were issued under exemptions to registration (Section 4(a)(2) and Rule 506(b)).
• Separately, the company’s Audit Committee approved the dismissal of Wolf & Company, P.C. as the independent registered public accounting firm, effective Feb 13, 2026; Wolf’s prior audit reports for the year ended Dec 31, 2024 included an explanatory going-concern paragraph. Management previously disclosed a material weakness in internal control over financial reporting related to insufficient qualified resources.
• The Board increased its size from six to seven members and appointed Eric Francois as a director effective Feb 13, 2026; he is expected to stand for election at the 2026 Annual Meeting and may join the Audit Committee pending independence review. Francois’s background includes senior roles at Raymond James, Credit Suisse, and prior CFO experience at Scynexis.

Key Details

• Note economics: $750,000 purchase price; $937,500 principal face value; up to $1,000,000 available; 10% annual interest; maturity July 9, 2027.
• Conversion terms: conversion price = lesser of $0.05 or 80% of the average of the 5 lowest intraday prices during the 20 trading days before conversion; 4.99% beneficial ownership limitation.
• Auditor change: Wolf & Company dismissed effective Feb 13, 2026; prior audit included a going-concern explanatory paragraph; management disclosed a material weakness in internal controls in recent SEC filings.
• Board change: Eric Francois appointed Feb 13, 2026; board increased from 6 to 7 members; expected to stand for election in 2026; background in equity capital markets and biotech finance.

Why It Matters

• The convertible note provides near-term financing but increases the company’s obligations (10% interest, maturity mid‑2027) and could dilute shareholders if converted; conversion pricing includes a $0.05 floor or a market-based 20-day formula at a 20% discount, plus a 4.99% ownership cap that limits single‑investor dilution.
• The requirement to file a registration statement (S-1 or S-3) is important because conversion shares won’t be freely tradable until registered or an exemption applies.
• Changing auditors is material for governance and financial reporting oversight; while Wolf reported no disagreements, their prior going‑concern language and the disclosed material weakness in controls are investor-relevant signals about financial condition and reporting reliability.
• The addition of Eric Francois brings capital-markets and biotech finance experience to the board, which may affect future financing and governance decisions.