Company: CERO
Filing Date: 2025-02-07
Form Type: 424B3
Source: 0001213900-25-011071
Chunk: 331

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-07
Form: 424B3
Chunk 331
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 input that is significant to the fair value measurement.

The carrying amounts of cash, restricted cash,
and cash equivalents, prepaid expenses and other current assets, accounts payable, and accrued liabilities approximate fair value due
to their relatively short-term maturities.

Research and development– R&D
costs consist primarily of salaries and benefits, including stock-based compensation, occupancy, materials and supplies, contracted research,
consulting arrangements, and other expenses incurred in the pursuit of R&D programs. R&D 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