Company: CERO
Filing Date: 2025-11-19
Form Type: 10-Q
Source: 0001213900-25-112619
Chunk: 102

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-11-19
Form: 10-Q
Item: Item 1
Chunk 102
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’s best estimates and involve inherent uncertainties
and the application of management’s judgment. The fair value of restricted stock awards is based upon the estimated share price
of the common stock 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 as certain performance-based vesting
terms become probable and the related amounts are recognized in the condensed 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 financial statements over the
vesting period of the awards.

Recent Accounting Standards

See the section titled in
Note 2 to the Company’s condensed consolidated financial statements for the quarter ended September 30, 2025, appearing elsewhere
herein.

43

Item 3. Quantitative and Qualitative Disclosures
about Market Risk

As a smaller reporting company
defined by Rule 12b-2 of the Securities Exchange Act of 1934, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Disclosure controls are
procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the
Exchange Act is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure
controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including
the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

The Company’s Principal
Executive Officer and Principal Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures
as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the certifying officers
concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective
due to the existence of material weaknesses in internal control over financial reporting.