Company: CERO
Filing Date: 2025-02-07
Form Type: 424B3
Source: 0001213900-25-011071
Chunk: 238

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-07
Form: 424B3
Chunk 238
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Years Ended December 31, 2023 and 2022

Net cash used in operating activities

Net cash used in operating
activities decreased $5.9 million from $11.7 million to $5.8 million in the years ended December 31, 2022, and 2023, respectively. Our
operating activities significantly slowed and headcount was reduced, resulting in a $4.5 million reduction in net loss in 2023 relative
to 2022, and an increase in accrued expenses and accounts payable of $2.1 million in 2023 relative to 2022 resulted in $6.6 million less
cash being expended in 2023 compared to 2022. The gain on the revaluation of the warrant liability resulted in a $0.25 million offset
and other non-cash components resulted in a $0.20 million offset to the decrease in the net loss in 2023 versus 2022.

Net cash used in investing activities

In the year ended December
31, 2022, we purchased $0.69 million of property and equipment, while no purchases were made in 2023. The majority of the purchases were
laboratory equipment.

Net cash provided by financing activities

Net cash provided in financing
activities increased $0.57 million from an immaterial amount to $0.57 million in the years ended December 31, 2022, and 2023, respectively.
The change was a result of the issuance of a bridge loan to investors that provided $0.57 million of net proceeds in 2023.

Contractual Obligations and Other Commitments

None.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America (“U.S.”) requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities
at the date of the financial statements, and the reported amounts of expenses incurred during the reporting period. Significant items
subject to such estimates and assumptions include the estimates of the fair values of convertible preferred stock, earnout-related Common
Stock, and preferred stock warrant liability, stock-based compensation expense, the fair value of right-to-use assets and lease liabilities,
and the valuation allowance associated with deferred tax assets. Actual results could differ from those estimates.

Predecessor and the Company
define its critical accounting policies as those accounting principles