Company: CERO
Filing Date: 2025-01-21
Form Type: S-1/A
Source: 0001213900-25-004742
Chunk: 372

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-01-21
Form: S-1/A
Chunk 372
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 warrant was issued in a transaction with other instrument(s). If a freestanding warrant is issued with other instruments
in a single transaction, then the proceeds of the transaction are allocated first to the fair value of the warrant, with the remainder
being allocated to the other instruments. The warrants are remeasured as of each reporting period end, with any changes in fair value
recognized as interest and other income, net in the statement of operations. The Company has determined that the warrant liability is
a Level 3 instrument in the fair value measurements hierarchy. The Company has not included the effect of the preferred stock warrants
in the calculation of diluted loss per share since the inclusion of such warrants would be anti-dilutive.

Fair value measurements – The Company’s
assets and liabilities are carried at fair value. Fair value is the amount that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants on the measurement date. In determining fair value, the assumptions
that market participants would use in pricing an asset or liability (the inputs) are based on a tiered fair value hierarchy consisting
of three levels, as follows:

| Level 1 | – | Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. |

| Level 2 | – | Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |

| Level 3 | – | Unobservable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants would price the asset or liability. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |

Carrying amounts of certain of the Company’s
financial instruments, including cash, restricted cash, and cash equivalents, prepaid expenses and other current assets, accounts payable,
and accrued liabilities approximate fair value due to their relatively short maturities.

Non-financial assets such as property and equipment
are evaluated for impairment and adjusted to fair value using Level 3 inputs only when impairment is recognized. Fair values are
considered Level 3 when management makes significant assumptions in developing a discounted cash flow model based upon a number of
considerations including projections of revenues, earnings, and a discount rate. To