Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 346

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1
Chunk 346
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 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) 
     5.0
to 7.0 
  
    Expected dividend yield 
     -%
  
    Expected volatility 
     62.4% to 106.6%

For the period from February 14, 2024 through December 31, 2024, the
Company recorded stock-based compensation expense of $924,668, of which $547,910 was related to research and development and $376,758
was related to general and administrative. For the period from January 1, 2024 through February 13, 2024, Predecessor recorded an immaterial
amount of stock-based compensation expense.

For the year ended December
31, 2023, the Company recorded stock-based compensation expense of $96,896, of which $91,664 was related to R&D and $5,232 was related
to general and administrative.

As of December 31, 2024, the Company had approximately $1,009,000 of
unamortized