NOTE 15 – SUBSEQUENT EVENTS

Stock Purchase Agreement

On October 6, 2026, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with SRX. Subject to the terms and conditions of the Purchase Agreement, the Company will sell to the Buyer all of the outstanding capital stock of CERo Therapeutics, Inc., its wholly owned operating subsidiary (the “Subsidiary”), which sale is referred to herein as the “Transaction.” Upon completion of the Transaction (the “Closing”), the Company will cease to own the Subsidiary. In connection with signing the Stock Purchase Agreement, the maturity date of the Consolidated Note entered into on August 27, 2026 was extended to the date that is five (5) business days following the earlier of the Closing Date or the valid termination of the Stock Purchase Agreement pursuant to its terms.

At Closing, the Company will receive (i) shares of SRX common stock determined by dividing $1,000,000.00 by the lower of (a) closing price of SRX common stock on the NYSE American on the trading day immediately preceding the date of the Purchase Agreement, and (b) the 20-day volume-weighted average price (VWAP) of SRX common stock on the NYSE American ending on such date, subject to adjustment for specified changes in SRX’s capital structure; (ii) forgiveness, cancellation and discharge of all obligations under the Consolidated Note (in the original principal amount of up to $11,666,109) and related loan documents, plus accrued and unpaid interest, fees and expenses; and (iii) the Buyer’s assumption of the liabilities specified in the Purchase Agreement and related assumption agreement in the amount of approximately $1.5 million, with Buyer agreeing to defend, indemnify, and hold harmless the Company and its past, present, and future officers and directors from and against any and all claims, liabilities, and expenses arising out of or resulting from the assumed liabilities. The debt discharge will be accompanied by termination of the related Pledge Agreement, Asset Security Agreement, the Company’s Guaranty, and releases of liens securing the obligations represented by the Consolidated Note on the Subsidiary’s stock and assets.

The Purchase Agreement provides a 30-day go-shop period beginning on the signing date and ending thirty (30) days from the signing date (the “Go-Shop Period”). During this period, the Company and its representatives may actively solicit, initiate, facilitate, and encourage alternative acquisition proposals and provide nonpublic information under acceptable confidentiality agreements. The Company has retained Joseph Gunnar & Co., LLC to conduct the go-shop process. The Company must notify SRX within 24 hours after receipt of an acquisition proposal during the Go-Shop Period, identify the bidder and summarize the material terms, and keep SRX reasonably informed of material developments.

If the Company receives a Superior Proposal before the Go-Shop Period expires, the Purchase Agreement provides up to 45 additional days after the go-shop end date to negotiate that proposal and execute a definitive agreement. A “Superior Proposal” must, among other requirements, be a bona fide written proposal that the Company’s board determines in good faith, after consultation with its financial advisor and outside counsel, is more favorable to the Company than the Transaction, taking into account any revisions proposed by SRX. The proposal must not be subject to third-party financing and must require consummation no later than March 15, 2027. A qualifying alternative acquisition proposal must also contemplate full repayment of Company obligations under the Consolidated Note and related security documents, release of the related liens and payment of the applicable termination fee to SRX.

After the Go-Shop Period, the Purchase Agreement restricts further solicitation, information sharing, and negotiations, subject to negotiation of any Superior Proposal received during the Go-Shop Period, provisions and a fiduciary exception for qualifying unsolicited written proposals. Before terminating the Purchase Agreement to enter into an agreement for a Superior Proposal, the Company must comply with the applicable procedures, including at least three business days’ prior written notice to SRX and, if requested, good-faith negotiations regarding revisions offered by SRX. A material amendment to the competing proposal requires a new two-business-day notice period. The Company’s board must determine that the competing proposal remains superior after considering SRX’s proposed revisions, and the Company must pay the applicable termination fee in connection with termination.

The go-shop process expired with no Superior Proposals.

The Stock Purchase Agreement was entered into on October 6, 2026, after the balance sheet date. The Go-Shop Period provided for in the Purchase Agreement expired on November 5, 2026. No acquisition proposals were received during the Go-Shop Period or through the date of this filing. The Company evaluated the criteria in ASC 360-10-45-9 and concluded that the Subsidiary did not meet all the criteria to be classified as held for sale as of September 30, 2026. Accordingly, the assets and liabilities of the Subsidiary have not been reclassified in the accompanying unaudited condensed consolidated balance sheet. If the Transaction is completed, the Company expects the Subsidiary to be presented as a discontinued operation in accordance with ASC 205-20 in the period in which the held-for-sale criteria are met. 

The Purchase Agreement may be terminated in specified circumstances, including by mutual agreement, upon a final legal prohibition, for specified uncured breaches, or if Closing has not occurred by the applicable outside date. The Company may also terminate to enter into an agreement for a Superior Proposal in compliance with the go-shop procedures, and the Buyer may terminate for a breach of the go-shop provisions or an adverse change in the Company’s board recommendation.

The Company is required to pay a $750,000 termination fee in the circumstances specified in the Purchase Agreement, including if the Purchase Agreement is terminated in connection with the Company’s acceptance of a Superior Proposal or by the Buyer following certain breaches of the go-shop provisions or an adverse recommendation change. The fee may also become payable following certain terminations relating to the outside date or a breach by the Company if a qualifying acquisition proposal was outstanding and the Company enters into an agreement for, or completes, an alternative acquisition within 12 months following termination. SRX may also be required to pay to the Company $750,000 if the Purchase Agreement is terminated in specified circumstances involving SRX’s failure to fund or deliver the required consideration after the conditions to the Buyer’s obligations to consummate the Transaction have been satisfied, subject to the applicable termination and cure provisions of the Purchase Agreement.

The Purchase Agreement also provides for reimbursement of up to $100,000 of the Buyer’s reasonable, documented transaction expenses following certain Company-breach terminations, with amounts paid credited against a subsequently payable Company termination fee. Subject to the Purchase Agreement, the Company may elect specific performance instead of the reverse termination fee, and fraud and willful-breach remedies are preserved.

The Closing of the Transaction is conditioned upon SRX’s acquisition of the shares of the Company’s Series C, Series D and Series E preferred stock.

The Closing of the Transaction is also conditioned upon the holders of the Company’s Series A preferred stock holding the requisite percentage or amount of such preferred stock providing the applicable waivers or consents and/or converting their Series A preferred stock into the Company’s common stock, in each case as specified in the transaction documents.

In evaluating arrangements to satisfy the Series A preferred stock closing condition, discussions have occurred regarding potential minority equity participation in a post-closing acquisition entity; any such arrangements, if finalized, remain subject to definitive documentation, mutual agreement with the applicable preferred holders, and review by the Special Committee.

Completion remains subject to the satisfaction or permitted waiver of the applicable closing conditions, including specified consents, the accuracy of representations and warranties, material compliance with covenants, the absence of specified material adverse effects, the preferred stock arrangements described above, and delivery of the required transaction documents. The Company’s conditions include SRX’s funding of the required advances and delivery of the registration rights agreement providing for registration of the resale of the SRX shares issued to the Company or their subsequent distribution to the Company’s stockholders, and requiring SRX to use commercially reasonable efforts to obtain and maintain the effectiveness of the applicable registration statements, subject to the terms of that agreement. The Buyer’s obligations are not subject to a financing condition.

The Purchase Agreement contemplates Closing on the first business day following the end of the Go-Shop Period on which the closing conditions are satisfied or waived, unless the parties agree otherwise in writing, subject to the applicable Superior Proposal provisions.

The Company’s board, acting on the unanimous recommendation of a special committee of independent and disinterested directors, approved the Purchase Agreement and the Transaction. The Purchase Agreement contemplates the sale of pledged collateral under Section 272 of the Delaware General Corporation Law (“DGCL”). Pursuant to Section 272 of the DGCL, the Company’s board determined that the Shares constitute collateral pledged to SRX pursuant to the Pledge Agreement, that the sale represents an alternative sale of pledged collateral in lieu of foreclosure resulting in the elimination and reduction of the secured debt, and that the fair market value of the Shares does not exceed the total amount of secured liabilities and obligations being eliminated, discharged, or assumed by Buyer. Accordingly, no vote or consent of the holders of the Company’s common stock is required under Delaware law to authorize or consummate the Transaction, subject to the satisfaction of the preferred stock closing conditions described above.

The Purchase Agreement contains representations, warranties and covenants, including restrictions on the Subsidiary’s conduct before Closing. It contemplates employment agreements with certain key employees, 180-day lock-up agreements for specified recipients of consideration shares, and registration rights relating to the SRX shares. Pursuant to the Purchase Agreement, the Company may obtain, at its cost and expense, a prepaid “tail” directors’ and officers’ liability insurance policy covering current and former directors and officers of the Company and the Subsidiary, funded in part from funds previously set aside by the Company for such purpose. In addition, Buyer has unconditionally guaranteed all indemnification, advancement, and exculpation obligations of the Subsidiary, and effective upon the Closing, Buyer, on behalf of itself, its affiliates, and the acquired Subsidiary, has agreed to deliver a comprehensive mutual release extinguishing all pre-closing claims and liabilities against the Company and its current and former officers, directors, employees, and advisors, with such individuals designated as express third-party beneficiaries entitled to enforce such protections directly.

Advances on the Consolidated Note

During the period from October 1, 2026 to November 13, 2026, the Company received advances under the Consolidated Note from SRX in the gross amount of $1,424,673 and received net proceeds of $1,424,673.

Conversion of Series D Preferred Shares

During the period from October 1, 2026 to November 13, 2026, 36 shares of Series D Preferred Stock were converted into 3,600,000 shares of Common Stock at a conversion price of $0.01 per share.