Company: CERO
Filing Date: 2025-02-07
Form Type: 424B3
Source: 0001213900-25-011071
Chunk: 239

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-07
Form: 424B3
Chunk 239
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 that require it to make subjective estimates and judgments about
matters that are uncertain and are likely to have a material impact on its financial condition and results of operations, as well as
the specific manner in which it applies those principles. While significant accounting policies are more fully described in Note 2 to
the Company’s unaudited financial statements appearing elsewhere in this prospectus, the Company believes the following are the
critical accounting policies used in the preparation of its financial statements that require significant estimates and judgments.

Fair value measurements- Fair value is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants on the measurement date. In determining fair value, the assumptions that market participants would use in pricing
an asset or liability (the inputs) are based on a tiered fair value hierarchy consisting of three levels, as follows:

| Level 
 1     | - | Observable inputs such                                                                                      
 as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. |

| Level 
 2     | - | Inputs (other than quoted                                                                                                             
 prices included in Level 1) that are either directly or indirectly observable for the asset or liability. These include quoted prices 
 for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that  
 are not active.                                                                                                                       |

| Level 
 3     | - | Unobservable inputs for                                                                                                            
 which there is little or no market data and which require the Company to develop its own assumptions about how market participants 
 would price the asset or liability. Consideration is given to the risk inherent in the valuation technique and the risk inherent   
 in the inputs to the model.                                                                                                        |

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The categorization of a
financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying amounts of
cash, restricted cash, and cash equivalents, prepaid expenses and other current assets, accounts payable, and accrued liabilities approximate
fair value due to their relatively short-term maturities.

Research and development

R&D costs consist primarily
of salaries and benefits, including stock-based compensation, occupancy, materials and supplies, contracted research, consulting arrangements,
and other expenses incurred in the pursuit of R&D programs. R&D costs are expensed as incurred.

Stock-based compensation

The Company periodically
issues Common Stock and stock options to officers, directors, and consultants for services rendered.