Company: CERO
Filing Date: 2025-02-07
Form Type: 424B3
Source: 0001213900-25-011071
Chunk: 240

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-02-07
Form: 424B3
Chunk 240
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 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 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
and comprehensive loss. 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 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 2020 are subject to examination by federal and state authorities.

Recent Accounting Pronouncements

The Company has concluded
that there are no recent accounting pronouncements expected to have a material impact on the Company’s financial statements.

Qualitative and Quantitative Disclosures About Market Risk

The Company’s primary
exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly
because of the Company