Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 1913

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1B
Chunk 1913
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    Section 174 research and development capitalization 
     2,999,000  
     2,490,000 
  
    Research credits 
     1,943,000  
     1,535,000 
  
    Fixed assets and intangible assets 
     403,000  
     401,000 
  
    Right of use asset 
     (410,000) 
     (613,000)
  
    Lease liability, net 
     251,000  
     657,000 
  
    Accruals and others 
     230,000  
     66,000 

     17,643,000  
     13,603,000 
  
    Less: valuation allowance 
     (17,643,000) 
     (13,603,000)
  
    Net deferred tax assets 
    $-  
    $- 

F-30

The Company has incurred
significant tax losses since inception. Based on the available objective evidence, management cannot conclude it is more likely than not
that the net deferred tax assets will be fully realizable. Accordingly, the Company has provided a full valuation allowance against its
net deferred tax assets. For the periods ended December 31, 2024 and 2023, the valuation allowance increased by approximately $4,040,000
and $4,433,000, respectively.

At December 31, 2024, the
Company has federal net operating loss carryforwards of approximately $727,000 that begin to expire in 2036. The Company also has federal
net operating losses of $39,687,000 that arose after the 2017 tax year that will carry forward indefinitely and the utilization of which
is limited to 80% of taxable income for tax years beginning after 2021. The Company has state net operating loss carryforwards of approximately
$53,559,000 that will begin to expire in 2036.

Under the Tax Reform Act
of 1986, the amount of and benefits from net operating loss carry forwards may be impaired or limited in certain circumstances. Events
which cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited
to, a cumulative ownership change of more than 50%, as defined, over a three-year period. The impact of any limitations that may be imposed
due to such ownership changes has