Stock options plan

6 Months Ended

Jun. 30, 2022

Stock Options Plan

Stock options plan

Note 4 – Stock options plan

On December 23, 2020 the Company’s board of directors approved and the shareholders adopted a share-based compensation plan (“2020 Incentive Stock Plan”) for future grants by the Company.

As of June 30, 2022, the Company awarded to its employees and service providers options to purchase in the aggregate up to 9,442,843 shares of Common Stock , of which options for 8,762,843 shares were at an exercise price of US$ 0.32 per share, options for 480,000 shares were at an exercise price of 0.01 per share and options for 200,000 shares were are an exercise price of $0.64 per share. Of the options granted, options for 6,069,579 shares were vested upon grant and the remaining balance have a vesting period ranging between one to five years. The options are exercisable for periods ranging between three to ten years from the vesting date. The grant was approved following the adoption of the 2020 incentive stock plan (hereinafter the “Plan”) by the Company on December 23, 2020 and the adoption of the sub plan (the “Israeli appendix”) on April 29, 2021.

The Company recorded in the statement of operations a non-cash expense of $102 thousands during the six-month period ended June 30, 2022.

The stock-based compensation expenses for the six-month period ended June 30, 2022 were recognized in the statements of operations as follows; $47 thousands were recorded as research and development expenses, and $55 thousands were recorded as general and administrative expenses ($1,022 thousands were recognized for the six-month period ended June 30, 2021).

The stock-based compensation expenses for the three-month period ended June 30, 2022 were recognized in the statements of operations as follows; $26 thousands were recorded as research and development expenses, and $23 thousands were recorded as general and administrative expenses ($1,022 thousands were recognized for the three-month period ended June 30, 2021).

	For the six months
	ended June 30, 2022
Dividend yields (see (A) below)		0.0	%
Share price (in U.S. dollar) (see (B) below)		0.26-0.53
Expected volatility (see (C) below)		82.77%-142.57	%
Risk-free interest rates (see (D) below)		0.17%-2.63	%

IR-Med Inc.

Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Note 4 – Stock options plan (cont’d)

A. The Company used 0% as its expected dividend yield, based on historic policies and future plans.

B. The -Company’s common stock is quoted on the Over the Counter (“OTC”), QB tier. However, the Company considers its share price as it is traded on OTC to not be an appropriate representation of fair value, since it is not traded on an active market. The Group determined that the market is inactive due to low level of activity of the Company’s Common Stock, stale or non-current price quotes and price quotes that vary substantially either over time or among market makers. Consequently, the price of the Company’s Common Stock has been determined based on the April 2021 Private placement units of Common Stock and Warrants at a per unit purchase price of $0.64 and on April 2022 Private placement units of Common Stock and Warrants at a per unit purchase price of $0.88. In order to evaluate the price per share, the Warrant value has been deducted from the total unit price.

C. As the Company is at its early stage of operation, there is not sufficient historical volatility for the expected term of the stock options. Therefore, the Company uses an average historical share price volatility based on an analysis of reported data for a peer group of comparable publicly traded companies which were selected based upon industry similarities.

D. The Company determined the risk-free interest rate by using a weighted-average equivalent to the expected term based on the U.S. Treasury yield curve in effect as of the date of grant.