Quarterly report [Sections 13 or 15(d)]

STOCK-BASED COMPENSATION

v3.25.1
STOCK-BASED COMPENSATION
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION
At the April 15, 2025, Board of Directors meeting, the proposal to amend the 2022 Equity Incentive Plan to increase the number of authorized shares from 8,900,000 shares to 11,900,000 shares was approved, which is pending stockholders’ approval during upcoming annual meeting in July 2025.
STOCK OPTIONS
The following is a summary of stock option activity during the three months ended March 31, 2025:
Number of
options
outstanding		 Weighted
average
exercise
price		 Average
remaining
contractual life
(in years)		 Aggregate
intrinsic value
(in thousands)
Outstanding – December 31, 2024
 7,386,369  $ 2.26  8.36 $ 2,627 
Options granted
 152,400  2.29 
Options exercised
 (58,805) 0.91 
Options cancelled (308,126) 1.61 
Outstanding – March 31, 2025
 7,171,838  $ 2.30  8.06 $ 1,563 
Exercisable – March 31, 2025
 2,646,051  $ 2.06  7.05 $ 1,197 

During the three months ended March 31 2025, options were granted to a consultant and employee. During the three months ended March 31 2024, no options were granted to consultants and employees. During the three months ended March 31, 2025, 40,625 options were exercised by one of employees using net settlement, which resulted in net issuance of 9,081 shares. Additionally, during the three months ended March 31, 2025, 18,180 options were exercised by one of consultants for a de minimis amount of proceeds.
The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the three months ended March 31, 2025, 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:

Three months ended March 31,
2025
Weighted-average Black-Scholes option pricing model assumptions:
Volatility
111.06% - 116.28%
Expected term (in years)
5.00 - 6.08
Risk-free rate
4.34% - 4.41%
Expected dividend yield $ — 
Weighted average grant date fair value per share
$1.85 - $1.99

RESTRICTED STOCK UNITS
The following is a summary of RSU’s awards activity during the three months ended March 31, 2025:
Three months ended March 31, 2025
Numbers of Shares Weighted Average Grant Date Fair value
Non-Vested at beginning of period 283,411  $ 2.38 
Shares granted —  — 
Shares vested —  — 
Non-vested at the end of period 283,411  $ 2.38 

STOCK BASED COMPENSATION

The following is a summary of stock-based compensation expense (rounded):
Three months ended March 31,
2025 2024
General and administrative
Stock option expense $ 207,000  $ 736,000 
RSU expense 146,000  141,000 
Total general and administrative expense 353,000  877,000 
Research and development
Stock option expense 747,000  320,000 
RSU expense 9,000  10,000 
Total research and development expense 756,000  330,000 
Total Stock Based Compensation Expense $ 1,109,000  $ 1,207,000 

During 2023, the Company granted 2,208,000 options to various executives and employees. Sixty percent (60%) of these options vest based on FDA Clearance for marketing of HeartBeam’s synthesized 12L product and the remaining forty percent (40%) vest monthly over a period of 48 months. During the period ended March 31, 2025, management performed its probability assessment regarding the milestone achievement date and concluded that based on current status of discussion with FDA and planned V2 submission, no change in the estimated clearance date of December 31, 2025. The 60% milestone options are issued and outstanding as of March 31, 2025.
These performance-based options are expensed through the expected FDA clearance, which is based on management’s probability assessment performed on a quarterly basis.

As of March 31, 2025, total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately $6.6 million and $0.2 million, respectively, which is expected to be recognized over a weighted-average period of 2.4 years and 0.50 years, respectively.