Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 16

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 16
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, cash and cash equivalents consist
of cash deposited with banks, including a money market sweep account, and restricted cash of $74,756 and $74,756, respectively, held on
account by a financial institution as collateral for a demand letter of credit issued as a real estate security deposit.

Investment in equity securities
- The Company’s investment in equity securities consisted of Series D Preferred Stock of Stella Diagnostics, Inc. (“Stella”),
which was held by the Company as of June 30, 2025 and sold during the three months ended September 30, 2025. Investments in equity securities
are initially measured at cost. Cost is based upon either the cost of the investment or the estimated market value of the investment at
the time it was acquired, whichever can be more clearly determined. The Company has elected the measurement alternative for equity securities
without readily determinable fair values. Under this alternative, if the Company identifies an observable price change in an orderly transaction
for an identical or similar investment of the same issuer, the Company measures the equity security at fair value as of the date that
the observable transaction occurred. Any adjustments resulting from observable price changes are recognized in earnings. The Company monitors
these investments for changes in observable prices from orderly transactions and assesses them for impairment. If an equity security is
deemed to be impaired, an impairment loss is recognized in earnings, measured as the difference between the investment’s cost and
its fair value at the impairment assessment date.

Concentration of credit
risk – Financial instruments that potentially subject the Company to credit risk consist primarily of cash, restricted cash,
and cash equivalents. The Company’s cash, restricted cash, and cash equivalents are on deposit with two financial institutions that
management believe are of sufficiently high credit quality. Deposits at any of the Company’s financial institutions may, at times,
exceed federal insured limits.

Property and equipment
– Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method
over the estimated useful lives of the respective assets, generally three to five years or the remaining lease term for leasehold improvements,
if shorter. Expenditures for repairs and maintenance are charged to expense as incurred. Upon disposition, the cost and related accumulated
depreciation are removed from the accounts and the resulting gain or loss is reflected in the condensed consolidated statements of operations.

Impairment of long-lived
assets – The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that