HeartBeam, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

NOTE 5 – STOCK-BASED COMPENSATION

At the July 2025, annual stockholders’ meeting the 2022 Equity Incentive Plan was amended to increase the number of authorized shares from 8,900,000 shares to 11,900,000 shares and was approved by stockholders’.

STOCK OPTIONS

The following is a summary of stock option activity during the nine months ended September 30, 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		2,274,490			1.68
Options exercised		(82,076	)		0.66
Options cancelled		(551,013	)		1.62

Outstanding – September 30, 2025		9,027,770		$	2.16		8.03	$	893
Exercisable – September 30, 2025		3,567,180		$	2.12		7.13	$	762

During the nine months ended September 30, 2025 and September, 30, 2024, options were granted to consultants and employees. During the nine months ended September 30, 2025, 40,624 options were exercised by one of employees using net settlement, which resulted in net issuance of 9,081 shares. Additionally, during the nine months ended September 30, 2025, 41,451 options were exercised by 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 nine months ended September 30, 2025 and 2024, 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,
	2025		2024
Weighted-average Black-Scholes option pricing model assumptions:
Volatility	111.06% - 121.54%		125.33% - 128.85%
Expected term (in years)	5.00 - 6.08		6.00 - 7.00
Risk-free rate	3.74% - 4.41%		3.59% - 4.60%
Expected dividend yield		—		—
Weighted average grant date fair value per share	$0.98 - $1.99		$1.81 - $2.48

RESTRICTED STOCK UNITS

The following is a summary of RSU’s awards activity during the nine months ended September 30, 2025:


	Nine months ended September 30, 2025
	Numbers of Shares			Weighted Average Grant Date Fair value
Non-Vested at beginning of period		283,411		$	2.38
Shares granted		568,389		$	1.33
Shares vested		(331,853	)	$	2.21
Non-vested at the end of period		519,947		$	1.34

STOCK BASED COMPENSATION

The following is a summary of stock-based compensation expense (rounded):


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
General and administrative
Stock option expense	$	501,900	$	560,000	$	1,092,900	$	1,898,000
RSU expense		237,100		149,000		503,600		433,000
Total general and administrative expense		739,000		709,000		1,596,500		2,331,000
Research and development
Stock option expense		694,300		334,000		2,106,800		941,000
RSU expense		—		10,000		16,500		28,000
Total research and development expense		694,300		344,000		2,123,300		969,000
Total Stock Based Compensation Expense	$	1,433,300	$	1,053,000	$	3,719,800	$	3,300,000

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 September 30, 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 September 30, 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 September 30, 2025, total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately $6.9 million and $0.6 million, respectively, which is expected to be recognized over a weighted-average period of 2.46 years and 0.68 years, respectively.