Company: CERO
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001213900-25-079898
Chunk: 19

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-08-22
Form: 10-Q
Item: Item 1
Chunk 19
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, the Company has not recorded any adjustments to fair value related to impairment on property and equipment
or operating lease right-of-use assets.

On June 30, 2025 and December 31,
2024, the fair value of the Company’s earnout liability (see Note 10 for details) was classified as follows: 

    June
    30, 2025 

    Level
    1  
    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 
     (4,700,000)
  
    Balance at June 30, 2024 
    $200,000 

    Earnout liability (Successor): 

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

9

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,