Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2375

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 2375
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. The number of shares reserved under the 2024 ESPP is subject
to adjustment in the event of a stock split, stock dividend or other change in our capitalization. As of December 31, 2024, the board
of directors has granted an aggregate of 64,948 option awards under the 2024 Plan, leaving 215,232 shares reserved for future issuance
under the 2024 Plan.

The Company estimated the
fair value of stock options granted during the period February 14, 2024 through December 31, 2024 using Black-Scholes with the following
weighted average assumptions:

●The Common Stock expected dividend yield assumption of 0.0% is based on the expectation of no dividend
payouts to Common Stock.

●The risk-free interest rate assumption is based on the U.S. Department of Treasury instruments whose term
was most consistent with the expected life of the Company’s stock options.

●The expected stock price volatility assumption was determined by examining the historical volatilities
for industry peers, as the Company does not have sufficient public trading history for the Company’s Common Stock. The Company will
continue to analyze the historical stock price volatility and expected term assumption as more historical price data for the Company’s
Common Stock becomes available.

F-29

●The expected lives of the Company’s stock options are estimated based on the type of award issued
using approaches that do not rely on the historical data of the Company, as management has concluded there is insufficient data to provide
a reasonable forward-looking estimate. The expected life of an incentive stock option is estimated using the simplified method described
in Staff Accounting Bulletin Topic 14 – Share-Based Payment. All incentive stock options awarded by the Company have terms consistent
with this approach, which is to calculate the weighted average midpoint between the vesting date of each vesting tranche and the termination
date of the option. Non-qualified stock options are valued using the contractual life as the expected term.

The Company estimated the
fair value of the stock options during the year ended December 31, 2024 using Black-Scholes with the following assumptions. There were
no stock options granted by the Predecessor during the year ended December 31, 2023.

     December 31, 

     2024 

     (Successor)

    Risk-free interest rate 
     3.75%
to 4.89 %
  
    Expected life (in years) 
     5