Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 164

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 8
Chunk 164
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 Level 2  
    Level 3  
    Total 
  
    Earnout liability 
    $-  
    $     -  
    $20,000  
    $20,000 

    December 31, 2024 

    Level 1  
    Level 2  
    Level 3  
    Total 
  
    Earnout liability 
    $-  
    $     -  
    $20,000  
    $20,000 

The change in the fair value measurement using
significant inputs (Level 3) is summarized below:

    Preferred stock warrant liability (Predecessor): 

    Balance at December 31, 2023 
    $320,117 
  
    Gain on revaluation of warrant liability 
     (320,117)
  
    Balance at February 14, 2024 
    $- 

    Earnout liability (Successor): 

    Balance at February 14, 2024 
    $4,900,000 
  
    Gain on revaluation of earnout liability 
     (4,870,000)
  
    Balance at September 30, 2024 
    $30,000 

    Earnout liability (Successor): 

    Balance at December 31, 2024 
    $20,000 
  
    Gain on revaluation of earnout liability 
     - 
  
    Balance at September 30, 2025 
    $20,000 

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 the Company’s 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.
Stock-based compensation accounting requires the recognition of stock-based compensation expense, using a grant date fair value-based
method, for costs related to all share-based payments including stock options and restricted stock awards granted to employees and non-employees.
Companies are required to estimate the fair value of all share-based payment awards on the date of grant using an option pricing model,
and the Company uses a Black-Scholes option pricing model (“Black-Scholes”) to estimate option award fair value. The assumptions
used in calculating the fair value of stock