Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 437

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 4
Chunk 437
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, and other components critical to our research and development activities.

The United States has imposed
significant tariffs on a range of imported goods, including a baseline tariff of 10% and higher rates targeting specific countries. In
response, several countries have enacted retaliatory measures, and the situation remains unpredictable. While pharmaceutical end-products
are currently excluded from certain tariffs, current or future tariffs will result in increased research and development expenses, including
with respect to increased costs associated with active pharmaceutical ingredients (APIs), raw materials, laboratory equipment and research
materials and components. In addition, the U.S. Department of Commerce is conducting a Section 232 investigation to assess the national
security implications of pharmaceutical and API imports. The outcome of this investigation could result in additional trade restrictions,
including tariffs, consistent with ongoing efforts to reshore pharmaceutical manufacturing. Further, the United States and the European
Union have announced the framework of a trade agreement that could impose a 15% tariff on most imports from the EU, including pharmaceutical
products and inputs. However, the details of this trade agreement remain uncertain, including whether and to what extent such agreement
may be impacted by the results of the Section 232 investigation.

We may face increased costs
and operational disruptions if existing or future tariffs are applied to materials or components used in the development and manufacture
of our product candidates. These risks also extend to indirect effects, such as retaliatory tariffs imposed by other countries or additional
non-tariff trade barriers. As a result, our research and development activities, manufacturing timelines, and overall financial condition
could be materially adversely affected.

Changes in tax laws or regulations that
are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results
of operations.

New income, sales, use or
other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect our business operations
and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified
or applied adversely to us. For example, the OBBBA was signed into law on July 4, 2025 and made significant changes to U.S. federal tax
law. Under Section 174 of the Code, in taxable years beginning after December 31, 2021, expenses that are incurred for research and development
performed outside the U.S. will be capitalized and amortized, which may have an adverse effect on our cash flow