Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 103

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 103
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Material Weaknesses Identified

The material weaknesses
identified include:

●A
lack of sufficient personnel with appropriate technical accounting expertise and experience in U.S. GAAP and SEC reporting requirements;

●Inadequate
processes for assessing and accounting for the impact of preferred stock conversions, including the failure to properly evaluate embedded
features and related classification and measurement considerations; and

●Deficiencies
in the initial recognition and valuation of investments in equity securities, including insufficient documentation and analysis supporting
fair value determinations.

These control deficiencies
have resulted in the Company’s inability to timely file periodic reports and have led to errors in the initial accounting treatment
of complex financial instruments.

Remediation Plan

Management is actively developing
a remediation plan to address these material weaknesses. The plan includes:

●Recruiting
additional qualified accounting personnel with expertise in financial reporting and complex financial instruments;

●Engaging
third-party consultants to assist with technical accounting matters; and

●Implementing
enhanced financial reporting systems and internal controls.

Execution of this remediation
plan is contingent upon the availability of adequate financial resources.

Changes in Internal Control Over Financial
Reporting

During the most recently
completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, our internal control over financial reporting.

44

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may
become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. Although the results
of litigation and claims cannot be predicted with certainty, as of September 30, 2025, we do not believe we are party to any claim or
litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have
a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense
and settlement costs, diversion of management resources and other factors.

Item 1a. Risk Factors

Except as set forth below,
there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024,
filed with the SEC on April 15, 2025. Any of these factors could result in a significant or material adverse effect on our results of
operations or financial condition. Additional risk factors not presently known to us or that we currently