Company: CERO
Filing Date: 2025-07-21
Form Type: S-1
Source: 0001213900-25-066152
Chunk: 224

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-07-21
Form: S-1
Chunk 224
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 the fair value of the earnout liability. The liability is remeasured to fair value using the Monte-Carlo simulation method at each reporting period, and the change in fair value is recognized in other income (expense) until the contingency is resolved. During the three months ended March 31, 2025, the Company recorded a gain from change of fair value of the earnout liability of $1,800,000, which is included in other income (expenses), net on the accompanying consolidated statement of operations. During the year ended December 31, 2024, the Company recorded a gain from change of fair value of the earnout liability of $4,880,000, which is included in other income, net on the accompanying consolidated statement of operations. Stock-based compensation– The 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 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 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. 127 MANAGEMENT Executive Officers and Directors As of June 30, 2025, our directors and executive officers were as follows