Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2455

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 5
Chunk 2455
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 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 at February 14, 2024 
    $4,900,000 
  
    Gain on revaluation of earnout liability 
     (4,880,000)
  
    Balance at December 31, 2024 
    $20,000 

Research and development – R&D
costs consist primarily of salaries and benefits, including stock-based compensation, occupancy, materials and supplies, contracted research,
consulting arrangements, and other expenses incurred in the pursuit of the Company’s R&D programs. R&D costs are expensed
as incurred.

Stock-based compensation – The Company
periodically issues common stock and stock options to officers, directors, and consultants for services rendered. Stock-based compensation
accounting requires the recognition of stock-based compensation expense, using a grant date fair value-based method, for costs related
to all share-based payments including stock options and restricted stock awards granted to employees and non-employees. Companies are
required to estimate the