Company: CERO
Filing Date: 2025-01-21
Form Type: S-1/A
Source: 0001213900-25-004742
Chunk: 374

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-01-21
Form: S-1/A
Chunk 374
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 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 fair value of all share-based payment awards on the date of grant using an option pricing model, and the Company
uses a Black-Scholes option pricing model (“Black-Scholes”) to estimate option award fair value. The fair value of restricted
stock awards is based upon the estimated share price of the common shares on the date of grant. Forfeitures are accounted for as they
occur, and the Company applies the simplified method to estimate expected term of “plain vanilla” options. All options and
restricted stock awards granted since inception are expensed on a straight-line basis over the requisite service period, which is usually
the vesting period, and the related amount is recognized in the statements of operations.

The accounting for stock options granted to outside
consultants is consistent with the accounting for stock-based payments to officers and directors, as described above, by measuring the
cost of services received in exchange for equity awards utilizing the grant date fair value of the awards, with the cost recognized as
stock-based compensation expense on the straight-line basis in the Company’s financial statements over the vesting period of the
awards.

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.

F-58 CERo Therapeutics, Inc. Notes to Financial Statements 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