Company: CERO
Filing Date: 2025-02-05
Form Type: S-1/A
Source: 0001213900-25-010230
Chunk: 306

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-05
Form: S-1/A
Chunk 306
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 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. The Company accounts
for stock-based compensation as measured at grant date, based on the fair value of the award. The Company uses a Black-Scholes option
pricing model (“Black-Scholes”) to estimate option award fair value, which requires the input of subjective assumptions, including
the expected volatility of the Company’s Common Stock, expected risk-free interest rate, and the option’s expected life. The
Company also evaluates the impact of modifications made to the original terms of equity awards when they occur. The fair value of restricted
stock awards is based upon the share price of the Common Stock on the date of grant.

The fair value of equity awards that are expected
to vest is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recognized net of
actual forfeitures when they occur, as an increase to additional paid-in capital in the condensed consolidated balance sheets and in research
and development or, general and administrative expenses in the condensed consolidated statements of operations. All stock-based compensation
costs are recorded in the condensed consolidated statements of operations based upon the underlying employee’s role within the Company.

Income taxes– The Company accounts
for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences
are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts
expected to be realized.

The Company follows tax accounting requirements
for the recognition, measurement, presentation, and disclosure in the financial statements of any uncertain tax positions that have been
taken or expected to be taken on a tax return. No liability related to uncertain tax positions is recorded in the financial statements.
It is the Company’s policy to include penalties and interest expense related to income taxes as a component of income tax expense,
as necessary. The Company has not recorded any interest or penalties associated with income tax since inception. Tax years subsequent
to 2020 are subject to examination by federal and state authorities.

F-12

NOTE 3 – NET LOSS PER SHARE OF COMMON STOCK

The accounting standards require the presentation
of both basic and diluted earnings per share on the face of the statements of operations. The Company’s basic net loss per share
is