Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

v3.22.2.2
STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
In 2015, the Company’s Board of Directors approved the HeartBeam, Inc. 2015 Equity Incentive Plan ("2015 Plan"), to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors, and consultants, and to promote the success of the Company’s business. The 2015 Plan provides for the grant of stock options and RSU’s to purchase common stock of which 1,636,362 were authorized by the board of which 1,252,068 are outstanding. The 2015 Plan was terminated upon shareholder approval of the 2022 Equity Incentive Plan (“2022 Plan”) whereby no new awards can be issued under the 2015 Plan.

The Company’s shareholders approved the 2022 Plan at the annual meeting of stockholders held on June 15, 2022, pursuant to which 1,900,000 shares of common stock was authorized for issuance. The 2022 Plan includes a provision for add back of any cancelled options from the 2015 Plan up to 1,372,816 shares, and as of September 30, 2022, there are 64,917 shares from the 2015 Plan that are included in the 847,364 shares available for issuance under the 2022 Plan.
As of September 30, 2022 and 2021, the Company received proceeds of a de minimis amount from the exercise of stock options.
STOCK OPTIONS
The following is a summary of stock option activity during the nine months ended September 30, 2022:
Number of
options
outstanding		 Weighted
average
exercise
price (*)		 Average
remaining
contractual life
(in years)		 Aggregate
intrinsic value
(in thousands)
Outstanding – December 31, 2021
 1,105,938  $ 2.03  8.8 $ 1,535 
Options granted
 1,131,000  1.44 
Options exercised
 (33,683) — 
Options cancelled (101,334) 3.19 
Outstanding – September 30, 2022
 2,101,921  1.69  8.9 4,802 
Exercisable – September 30, 2022
 556,005  $ 1.33  7.3 $ 1,505 
(*) $ - Indicates exercise price less than $0.01 per share

During the nine months ended September 30, 2022 the Company modified stock options to purchase 183,636 shares of common stock. The total incremental cost of the modification was de minimis.
The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the nine months ended September 30, 2022 and 2021, the assumptions used in the Black-Scholes option pricing model, which was used to estimate the grant date fair value per option, were as follows:
Nine Months ended September 30,
2022 2021
Weighted-average Black-Scholes option pricing model assumptions:
Volatility
107.25% - 110.98%
90.01% - 93.02%
Expected term (in years)
5.62 - 5.94
5.69 - 5.98
Risk-free rate
1.47% - 3.10%
0.69% - 0.82%
Expected dividend yield —  — 
Weighted average grant date fair value per share
$1.08 - $1.75
$2.07 - $3.00
RESTRICTED STOCK UNITS

The following is a summary of RSU’s awards activity:
Nine months ended September 30, 2022
Numbers of Shares Weighted Average Grant Date Fair value
Non-Vested at beginning of period 30,000  $ 3.20 
Shares granted 248,970  1.36 
Shares vested (21,250) 2.33 
Non-vested 257,720  $ 1.49 

On July 15, 2022, the Company issued 238,970 and 10,000 shares of RSU’s to the Board of Directors of the Company and a consultant, respectively. The total fair value of the issuances is approximately $325,000 and $13,600, respectively. The RSU’s issued to the Board of Directors will vest upon the earlier of the one year anniversary of the Grant Date or the next annual meeting of the Company’s stockholders. The RSU’s issued to the consultant vested immediately.
STOCK BASED COMPENSATION

The following is a summary of stock-based compensation expense:
Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
General and administration
Stock options 148,196  48,594  445,522  75,049 
RSU’s 100,191  —  134,841  — 
Total general and administration 248,387  48,594  580,363  75,049 
R&D
Stock options 89,469  3,916  179,878  10,160 
RSU’s 13,600  —  13,600  — 
Total $ 351,456  $ 52,510  $ 773,841  $ 85,209 

As of September 30, 2022, total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately $2.1 million and $0.3 million, respectively, which is expected to be recognized over a weighted-average period of 3.26 years and 0.8 years, respectively.