NOTE 5 – 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 876,797 are outstanding as of December 31, 2024. 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. 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.

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

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 December 31, 2025, there are 295,674 shares from the 2015 Plan that are included in the 5,440,666 shares available for issuance under the 2022 Equity Plan.

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. The Company calculated the fair value for each of these grants using the Black-Scholes option pricing model and it is expensed based on management’s probability assessment of FDA clearance. During the year, management performed its probability assessment regarding the milestone achievement date and as a result of FDA clearance in December 2025, these awards are now fully vested as of December 31, 2025. The 60% milestone options are issued and outstanding as of December 31, 2025.

The Company received proceeds of $13,000 from the exercise of stock options during the year ended December 31, 2025 and $0.1 million during the year ended December 31, 2024.

STOCK OPTIONS

During the year ended December 31, 2025 and December 31, 2024, options were granted to consultants and employees. During the year ended December 31, 2025, 40,625 options were exercised by one employee using net settlement, which resulted in net issuance of 9,081 shares, 7,708 options were exercised by one employee using sell to cover, and 41,451 options were exercised by consultants for a de minimis amount of proceeds.

RESTRICTED STOCK UNITS

STOCK BASED COMPENSATION

As of December 31, 2025 total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately $6.0 million and $0.3 million, respectively, which is expected to be recognized over a weighted-average period of 2.40 years and 0.52 years, respectively.