STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATIONIn 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

1,083,749 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.

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 June 30, 2023, there are 160,689 shares from the 2015 Plan that are included in the 222,885 shares available for issuance under the 2022 Equity Plan.

The Company received proceeds of $0.1 million from the exercise of stock options during the quarter ended June 30, 2023 and a de minimis amount during the quarter ended June 30, 2022.

STOCK OPTIONS

The following is a summary of stock option activity during the six months ended June 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	1,115,800	2.62		—	—
Options exercised	(88,026)	1.17		—	—
Options cancelled	(195,834)	1.70		—	—

Outstanding – June 30, 2023	3,028,738	2.10		8.7	2,040
Exercisable – June 30, 2023	1,052,605	$	1.64	7.6	$	1,177

The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the six months ended June 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:


	Six months ended June 30,
	2023		2022
Weighted-average Black-Scholes option pricing model assumptions:
Volatility	110.23% - 111.73%		107.25% - 110.98%
Expected term (in years)	5.71 - 6.07		5.73 - 5.80
Risk-free rate	3.54% - 3.80%		1.47% - 2.85%
Expected dividend yield	$	—	$	—
Weighted average grant date fair value per share	$1.73 - $3.38		$1.08 - $1.75

RESTRICTED STOCK UNITS

The following is a summary of RSU’s awards activity:


	Six months ended June 30, 2023
	Numbers of Shares	Weighted Average Grant Date Fair value
Non-Vested at beginning of period	253,970	$	1.47
Shares granted	5,000	2.24
Shares vested	(12,500)	2.82
Non-vested	246,470	$	1.44

STOCK BASED COMPENSATION

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


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
General and administrative
Stock options	507,200		175,900		707,200		296,800
RSU’s	116,400		23,100		217,400		35,000
Total general and administrative	623,600		199,000		924,600		331,800
R&D
Stock options	78,800		64,800		170,800		90,900
Total	$	702,400	$	263,800	$	1,095,400	$	422,700

As of June 30, 2023, total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately $3.5 million and $0.01 million, respectively, which is expected to be recognized over a weighted-average period of 2.23 years and 0.03 years, respectively.