Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2109

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 2
Chunk 2109
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observable inputs for which there is little or no market data and which require the Company to develop its own assumptions about how market participants would price the asset or liability. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Carrying amounts of certain
of the Company’s financial instruments, including cash, restricted cash, and cash equivalents, prepaid expenses and other current
assets, accounts payable, accrued liabilities, and short-term notes payable approximate fair value due to their relatively short maturities.

F-10

Non-financial assets such as property and equipment are evaluated for
impairment and adjusted to fair value using Level 3 inputs only when impairment is recognized. Fair values are considered Level 3
when management makes significant assumptions in developing a discounted cash flow model based upon a number of considerations including
projections of revenues, earnings, and a discount rate. To date, the Company has not recorded any adjustments to fair value related to
impairment on property and equipment. At December 31, 2024 and 2023, the fair value of the Company’s earnout liability and
preferred stock warrant liability (see Note 10 for details) was classified as follows:

    December 31, 2024 

    Level 1  
    Level 2  
    Level 3  
    Total 
  
    Earnout liability 
    $     -  
    $     -  
    $20,000  
    $20,000 

    December 31, 2023 

    Level 1  
    Level 2  
    Level 3  
    Total 
  
    Preferred stock warrant liability 
    $     -  
    $     -  
    $320,117  
    $320,117 

The change in the fair value measurement using
significant inputs (Level 3) is summarized below:

    Preferred stock warrant liability (Predecessor): 

    Balance at January 1, 2023 
    $610,381 
  
    Gain on revaluation of warrant liability 
     (290,264)
  
    Balance at December 31, 2023 
     320,117 
  
    Gain on revaluation of warrant liability 
     (320,117)
  
    Balance at February 14, 2024 
    $- 

    Earnout liability (Successor): 

    Balance