Company: CERO
Filing Date: 2025-12-05
Form Type: S-1
Source: 0001213900-25-118817
Chunk: 403

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-12-05
Form: S-1
Chunk 403
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 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 assumptions used in
calculating the fair value of stock-based awards represent management’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 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-44 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 –