Annual report pursuant to Section 13 and 15(d)

STOCK-BASED COMPENSATION

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STOCK-BASED COMPENSATION
 12 Months Ended
Dec. 31, 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 provided for the grant of stock options and RSUs to purchase common stock of which 1,636,362 were authorized by the board, of these 1,243,194 are outstanding as of December 31, 2022. The 2015 Plan was terminated upon stockholder approval of the 2022 Equity Incentive Plan (“2022 Plan”) whereby no new awards can be issued under the 2015 Plan.

The Company’s stockholders 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 December 31, 2022, there are 64,917 shares from the 2015 Plan that are included in the 747,364 shares available for issuance under the 2022 Plan.

As of December 31, 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 years ended December 31, 2022 and 2021:
Number of
options
outstanding		 Weighted
average
exercise
price (*)		 Average
remaining
contractual life
(in years)		 Aggregate
intrinsic value
(in thousands)
(**)
Outstanding – December 31, 2020 466,742  $ 0.14  8.2 $ 81 
Options granted 679,495  3.22 
Forfeitures
 (5,453) 0.07 
Options exercised (34,846) — 
Outstanding – December 31, 2021 1,105,938  $ 2.03  8.8 $ 1,535 
Options granted
 1,251,000  1.70 
Forfeitures
 (121,334) 2.98 
Options exercised
 (38,806) — 
Outstanding – December 31, 2022 2,196,798  1.76  8.7 6,770 
Exercisable – December 31, 2022 640,514  $ 1.41  7.3 $ 2,222 

(*) $ - Indicates exercise price less than $0.01 per share
(**) Intrinsic value is based on the fair market value of the Company's common stock.

The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the years ended December 31, 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:
Year ended December 31,
2022 2021
Weighted-average Black-Scholes option pricing model assumptions:
Volatility
107.25% - 111.06%
90.01% - 106.22%
Expected term (in years)
5.62 - 5.94
5.69 - 5.93
Risk-free rate
1.47% - 3.17%
0.69% - 1.08%
Expected dividend yield $ —  $ — 
Weighted average grant date fair value per share
$1.08 - 3.34
$2.07 - 3.44
RESTRICTED STOCK UNITS

On December 14, 2021, the Company issued 30,000 shares of RSUs to a consultant to provide services over the next two years. The total fair value of the issuances is $96,000.

On July 15, 2022, the Company issued 238,970 and 10,000 shares of RSUs 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 RSUs 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 RSUs issued to the consultant vested immediately.

The following is a summary of RSUs award activity:
Year ended December 31,
2022 2021
Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value
Non-vested at beginning of the year 30,000  $ 3.20  —  $ — 
Shares granted 248,970  1.36  30,000  3.20 
Shares vested (25,000) 2.46  —  — 
Non-vested at end of year 253,970  $ 1.47  30,000  $ 3.20 

STOCK BASED COMPENSATION

The following is a summary of stock-based compensation expense:
Year ended December 31,
2022 2021
General and administration
Stock options $ 657,368  $ 164,933 
RSUs 235,035  — 
Total general and administration $ 892,403  $ 164,933 
R&D
Stock options $ 213,813  $ 27,376 
RSUs 13,601  — 
Total R&D $ 227,414  $ 27,376 
Total stock based compensation $ 1,119,817  $ 192,309 

As of December 31, 2022 total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately $2.2 million and $0.2 million, respectively, which is expected to be recognized over a weighted-average period of 2.56 years and 0.5 years, respectively.