Company: TACOW
Filing Date: 2025-03-21
Form Type: S-1
Source: 0001829126-25-001978
Chunk: 324

Company: Berto Acquisition Corp.
Filing Date: 2025-03-21
Form: S-1
Chunk 324
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”. For derivative financial instruments that are accounted for as liabilities, the
derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with
changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities
are classified in the balance sheet as current or non-current based on whether or not net cash settlement or conversion of the
instrument could be required within 12 months of the balance sheet date.

The underwriters’ over-allotment option
is deemed to be a freestanding financial instrument indexed on the shares subject to redemption and will be accounted for as a
liability pursuant to ASC 480 if not fully exercised at the time of the Proposed Public Offering.

Warrant Instruments

The Company will account for the Public and
Private Warrants to be issued in connection with the Proposed Public Offering and the private placement in accordance with the
guidance contained in FASB ASC Topic 815, “Derivatives and Hedging”. Accordingly, the Company evaluated and will classify
the warrant instruments under equity treatment at their assigned values. There are no Public or Private Warrants currently outstanding
as of December 31, 2024.

<div align='center'>F-11

BERTO ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2024</div>

Stock Compensation

The Company’s policy is to account for
stock-based compensation expense in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation” ​(“ASC
718”). Under ASC 718, stock-based compensation associated with equity awards is measured at fair value upon the grant date
and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the
amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition,
with compensation recognized once the event is deemed probable to occur. Forfeitures are recognized as incurred.

Taxes

The Company accounts for income taxes under
ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting
for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax
bases of assets and liabilities that will result in future taxable or