Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION

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STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2023
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 974,454 are outstanding. The 2015 Plan was terminated upon shareholder approval of the 2022 Equity Incentive Plan (“2022 Equity Plan”) whereby no new awards can be issued under the 2015 Plan.

The Company’s shareholders approved the 2022 Equity Plan at the annual meeting of stockholders held on June 15, 2022, pursuant to which 1,900,000 shares of common stock were authorized for issuance. Under the 2022 Equity Plan, the number of shares available for issuance will be increased on the first day of each fiscal year beginning with the 2023 fiscal year, in an amount equal to the lesser of 3,800,000 shares, five percent (5%) of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, and a lesser number of shares determined by the administrator. On January 1, 2023 400,487 shares, equivalent to five percent (5%) of common stock outstanding were added to the shares available for issuance under the 2022 Equity Plan.

At the July 7, 2023, Annual Shareholders’ Meeting, the proposal to amend the 2022 Equity Incentive Plan to increase the number of authorized shares from 1,900,000 shares to 5,900,000 shares was approved.

The 2022 Equity Plan includes a provision to add-back any cancelled options from the 2015 Plan up to 1,372,816 shares. As of September 30, 2023, there are 252,856 shares from the 2015 Plan that are included in the 1,983,571 shares available for issuance under the 2022 Equity Plan.
The Company received proceeds of $0.1 million and $0.2 million from the exercise of stock options for the three and nine months ended September 30, 2023, respectively and a de minimis amount during the three and nine months ended September 30, 2022.
STOCK OPTIONS
The following is a summary of stock option activity during the nine months ended September 30, 2023:
Number of
options
outstanding		 Weighted
average
exercise
price		 Average
remaining
contractual life
(in years)		 Aggregate
intrinsic value
(in thousands)
Outstanding – December 31, 2022
 2,196,798  $ 1.76  8.7 $ 6,770 
Options granted
 3,229,400  2.80 
Options exercised
 (180,072) 1.19 
Options cancelled (288,001) 2.48 
Outstanding – September 30, 2023
 4,958,125  2.43  9.1 1,406 
Exercisable – September 30, 2023
 1,035,138  $ 1.71  7.4 $ 972 
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, 2023 and 2022, 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,
2023 2022
Weighted-average Black-Scholes option pricing model assumptions:
Volatility
110.23% - 110.64%
107.25% - 110.98%
Expected term (in years)
5.85 - 6.07
5.62 - 5.94
Risk-free rate
3.54% - 3.95%
1.47% - 3.10%
Expected dividend yield $ —  $ — 
Weighted average grant date fair value per share
$1.75 - $3.38
$1.08 - $1.75

RESTRICTED STOCK UNITS

The following is a summary of RSU’s awards activity:
Nine months ended September 30, 2023
Numbers of Shares Weighted Average Grant Date Fair value
Non-Vested at beginning of period 253,970  $ 1.47 
Shares granted 222,881  3.11 
Shares vested (255,220) 1.46 
Non-vested 221,631  $ 3.12 
STOCK BASED COMPENSATION

The following is a summary of stock-based compensation expense:
Three months ended September 30, Nine months ended September 30,
2023 2022 2023 2022
General and administration
Stock Options $ 589,500  $ 148,100  $ 1,352,100  $ 445,500 
RSU's 153,000  100,200  323,000  134,800 
Total general and administration 742,500  248,300  1,675,100  580,300 
Research and development
Stock Options 173,600  89,500  336,100  179,900 
RSU's 10,200  13,600  10,200  13,600 
Total research and development 183,800  103,100  346,300  193,500 
Total $ 926,300  $ 351,400  $ 2,021,400  $ 773,800 

As of September 30, 2023, total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately $7.8 million and $0.53 million, respectively, which is expected to be recognized over a weighted-average period of 2.60 years and 1.27 years, respectively.