Company: CERO
Filing Date: 2025-02-05
Form Type: S-1/A
Source: 0001213900-25-010230
Chunk: 343

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-05
Form: S-1/A
Chunk 343
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 Federal Deposit Insurance Corporation coverage limit of $. At December 31, 2023 and 2022, the Company has not experienced
losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Fair Value of Financial Instruments

The fair value of the Company’s
financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with
the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants
at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the
use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities
based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1: Quoted prices
in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for
the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

F-37 PHOENIX BIOTECH ACQUISITION CORP. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2023

Level 2: Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities
and quoted prices for identical assets or liabilities in markets that are not active.

Level 3: Unobservable
inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.

Income Taxes

The Company complies with
the accounting and reporting requirements of ASC 740, “Income Taxes” (“ASC 740”), which requires an asset and
liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for
differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts,
based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition
threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be