Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2412

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 5
Chunk 2412
---
, and the Company does not expect to generate any revenue
from the sale of products in the foreseeable future. If the development efforts for the Company’s product candidates, each of which
is a specific product and indication combination, are successful and result in regulatory approval, or if the Company executes license
agreements with third parties, the Company may generate revenue from R&D services, from the achievement of development milestones
or from milestones and royalties related to product sales. However, there can be no assurance as to when any revenues will be generated,
if at all.

Operating Expenses

Research and Development Expenses

R&D expenses consist
of discovery activities, manufacturing development and production, preclinical and clinical development, and regulatory filing for product
candidates. R&D expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in R&D
are capitalized until the goods or services are received. Costs incurred in obtaining technology licenses through asset acquisitions,
if incurred, will be charged to R&D expense if the licensed technology has not reached technological feasibility and has no alternative
future use. R&D expenses include or could include:

●employee-related
                                            expenses, including salaries, bonuses, benefits, stock-based compensation and other related
                                            costs for those employees involved in R&D efforts;

103

    ●
    external R&D expenses incurred under agreements with preclinical research organizations, clinical research organizations, investigative sites, centralized clinical laboratories, and consultants to conduct preclinical and clinical studies;

●costs
                                            related to manufacturing material for preclinical studies and clinical trials, including
                                            fees paid to contract development and manufacturing organizations;

●product-liability
                                            insurance for clinical development product(s);

●laboratory
                                            supplies and research materials;

●software
                                            and systems related to R&D activities;

●costs
                                            related to regulatory filing and compliance; and

●facilities,
                                            depreciation and other allocated expenses, which include direct and allocated expenses for
                                            rent, maintenance of facilities, and equipment.

Product candidates in later
stages of development generally have higher development costs than those in earlier stages of clinical development, primarily due to the
increased size and duration of later-stage clinical trials. The Company plans to substantially increase its R&D expenses for the foreseeable
future as it continues the development of its product candidates through clinical development. The Company cannot determine with certainty
the timing of initiation, the duration or the costs of current or future preclinical studies and clinical trials required for regulatory
approval due to the inherently