Company: CERO
Filing Date: 2025-02-07
Form Type: 424B3
Source: 0001213900-25-011071
Chunk: 411

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-07
Form: 424B3
Chunk 411
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 use of an identified tangible asset for a period of time in exchange for consideration.

At lease inception, the Company recognizes a
lease liability equal to the present value of the remaining lease payments, and a right of use asset equal to the lease liability, subject
to certain adjustments, such as for lease incentives. In determining the present value of the lease payments, the Company uses its incremental
borrowing rate, determined by estimating the Company’s applicable, fully collateralized borrowing rate, with adjustment as appropriate
for lease term. The lease term at the lease commencement date is determined based on the non-cancellable period for which the Company
has the right to use the underlying asset, together with any periods covered by an extension option if the Company is reasonably certain
to exercise that option.

Right-of-use assets and obligations for leases
with an initial term of 12 months or less are considered short term and are (a) not recognized in the balance sheet and (b) recognized
as an expense on a straight-line basis over the lease term. The Company does not sublease any of its leased assets to third parties and
the Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.

The accounting for leases includes a number of
reassessment and re-measurement requirements for lessees based on certain triggering events or impairment conditions. There were no impairment
indicators identified during the years ended December 31, 2023 or 2022 that would require impairment testing of the Company’s
right-of-use assets.

Certain of the Company’s leases include
variable lease costs to reimburse the lessor for real estate tax and insurance expenses, and certain non-lease components that transfer
a distinct service to the Company, such as common area maintenance services. The Company has elected to separate the accounting for fixed
lease components and variable and non-lease components for real estate and equipment leases. The variable lease costs are recorded on
the statement of operations as rent expense, within general and administrative expenses. The Company does not have any financing leases
at December 31, 2023 or 2022.

Convertible preferred stock– The
Company’s convertible preferred stock is redeemable upon the liquidation or winding up of the Company, a change in control, or
a deemed liquidation event related to the sale of substantially all the assets of the Company. Based on the ownership of the Company’s
equity and associated board of director control, deemed liquidation events are not solely within the control of the Company. As