Company: CERO
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032134
Chunk: 2569

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 6
Chunk 2569
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 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, or upon the completion of certain performance-based
vesting terms and the related amounts are recognized in the consolidated 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 consolidated 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-11

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 2021 are subject to examination
by federal and state authorities.

Earnings per share – The Company
reports both basic and diluted earnings per share. Basic earnings per share is calculated based on the weighted average number of shares
of common stock outstanding and excludes the dilutive effect of convertible preferred stock, convertible preferred stock warrants, stock
options or any other type of convertible securities. Diluted earnings per share is calculated based on the weighted average number of
shares of common stock outstanding and when the effect of stock options, warrants and other types of convertible securities is dilutive,
they are included in the calculation. Dilutive securities are excluded from the diluted earnings