Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2305

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 2305
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 million, and changes in operating
asset and liabilities primarily consisting of an increase in prepaid expenses and other current assets of $0.1 million, an increase in
accounts payable of $0.2 million, an increase in accrued liabilities of $2.3 million, and a decrease in operating lease liabilities of
$0.8 million.

Net cash used in operating activities for the year ended December 31,
2023 primarily reflected a net loss of $7.3 million, adjusted for the reconciliation of non-cash items such as depreciation expense of
$0.5 million, stock-based compensation of $0.1 million, amortization of right-of-use asset of $0.7 million and a gain on revaluation of
the preferred stock warrant liability of $0.3 million, and changes in operating asset and liabilities primarily consisting of an increase
in prepaid expenses and other current assets of $0.1 million, an increase in accounts payable of $1.3 million, and a decrease in operating
lease liabilities of $0.7 million.

Net cash provided by financing activities

Net cash provided by financing
activities for the year ended December 31, 2024 amounted to $13.73 million as compared to $0.6 million for the year ended December 31,
2023.

During the year ended December 31, 2024, net cash provided by financing
activities of $13.7 million was primarily attributable to the receipt of net proceeds of $7.2 million from the issuance of Series A and
B Preferred Stock, net proceeds of $0.8 million from the issuance of Series C Preferred Stock and associated warrants, net proceeds of
$4.8 million for the sale of common stock under the ELOC, and proceeds from the exercise of Series A warrants of $0.9 million.

During the year ended December
31, 2023, net cash provided by financing activities of $0.6 million was primarily attributable to the receipt of net proceeds of $0.6
million from the issuance of convertible notes payable.

Critical Accounting Estimates

Earnout liability - As a result
of the Merger in February 2024, the Company recognized an earnout liability of $4.9 million on the merger date. The earnout liability
is measured using unobservable (Level 3) inputs and was included in current liabilities on balance sheet. The Company estimated
the fair value of the earnout liability by applying a Monte-Carlo simulation method using the Company’s