Company: CERO
Filing Date: 2025-12-05
Form Type: S-1
Source: 0001213900-25-118817
Chunk: 438

Company: CERO THERAPEUTICS HOLDINGS, INC.
Filing Date: 2025-12-05
Form: S-1
Chunk 438
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 the simplified method described     
 in Staff Accounting Bulletin Topic 14 – Share-Based Payment. All incentive stock options awarded by the Company have terms consistent        
 with this approach, which is to calculate the weighted average midpoint between the vesting date of each vesting tranche and the termination 
 date of the option. Non-qualified stock options are valued using the contractual life as the expected term.                                  |

There were
no stock options granted by the Predecessor during the year ended December 31, 2023.

|                          |     |   December 31, |   |
|                          |     |           2024 |   |
|                          |     |     -Successor |   |
| Risk-free interest rate  |     |          3.75% 
        to 4.89 | % |
| Expected life (in years) |     |            5.0 
         to 7.0 |   |
| Expected dividend yield  |     |              - | % |
| Expected volatility      |     | 62.4% to 106.6 | % |

For the period from February 14, 2024 through December 31, 2024, the
Company recorded stock-based compensation expense of $, of which $ was related to research and development and $
was related to general and administrative. For the period from January 1, 2024 through February 13, 2024, Predecessor recorded an immaterial
amount of stock-based compensation expense.

For the year ended December
31, 2023, the Company recorded stock-based compensation expense of $, of which $ was related to R&D and $ was related
to general and administrative.

As of December 31, 2024, the Company had approximately $ of
unamortized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted average
period of years. The weighted average grant date calculated fair value per share of the Company’s options granted during the
period from February 14, 2024, through December 31, 2024, was $.

There were no Predecessor options granted in
the year ended December 31, 2023.

NOTE 12 – INCOME TAXES

A reconciliation between the expected income tax
provision at the federal statutory rate and the reported income tax provision is approximately as follows:

|                                                        |     | 2024 |            |   |     | 2023 |