STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2022

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

NOTE 6: STOCK-BASED COMPENSATION

In June 2021, the Intec Israel shareholders voted to approve the Indaptus 2021 Stock Incentive Plan, an equity incentive plan for grants to employees, officers, consultants, directors and other service providers, (the “2021 Plan”), that became effective upon the closing of the Merger. The 2021 Plan provides for up to 1,864,963 shares of the Company’s common stock.

The 2021 Plan provides for the grant of non-qualified stock options, incentive stock options, restricted stock awards, restricted stock units, unrestricted stock awards, stock appreciation rights and other forms of stock-based compensation. The 2021 Plan permits the Company’s board to change the type, terms and conditions of awards as circumstances may change. This flexibility to adjust the type of compensation to be granted is particularly important given current economic and world events.

On January 26, 2022, Indaptus’ board of directors approved grant of options to purchase 289,200 shares of common stock to executives. The options are exercisable at $4.90 per share, vest over three years, and expire ten years after grant.

On February 1, 2022, Indaptus’ board of directors approved a grant of options to purchase 90,000 shares of common stock to a new employee. The options are exercisable at $4.97 per share, vest over three years, and expire ten years after grant.

On February 25, 2022, Indaptus’ board of directors approved a grant of options to purchase 60,000 shares of common stock to an executive. The options are exercisable at $4.18 per share, vest over three years, and expire ten years after grant.

A summary of the stock option activity during the three months ended March 31, 2022, is presented in the table below:

				Weighted average
	Number of options			Exercise price		Remaining contractual life (in years)		Intrinsic value
Outstanding as of January 1, 2022		1,174,600		$	17.10		9.1	$	241,103
Granted		439,200		$	4.82		9.8	$	-
Exercised		-		$	-		-	$	-
Forfeited and cancelled		(33,237	)	$	11.46		9.3	$	-
Outstanding as of March 31, 2022		1,580,623		$	13.80		9.2	$	96,870
Exercisable as of March 31, 2022		127,749		$	81.20		6.3	$	96,870
Vested and expected to vest March 31, 2022		1,580,623		$	13.80		9.2	$	96,870

The Company recognized stock-based compensation expense of $831,183 and $20,445 during the three months ended March 31, 2022 and 2021, respectively. The following table summarizes the total stock-based compensation expense included in the condensed consolidated statements of operations for the periods presented:

	For the three months ended March 31,
	2022		2021
Research and development	$	170,163	$	8,189
General and administrative		661,020		12,256
Total stock-based compensation expense	$	831,183	$	20,445

As of March 31, 2022, total compensation cost not yet recognized related to unvested stock options was approximately $6.7 million, which is expected to be recognized over a weighted-average period of 2.3 years.

The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. The weighted average inputs used to measure the value of the options granted during the three months ended March 31, 2022 are presented in the table below. The weighted average fair value of stock options issued during the three months ended March 31, 2022 was $3.89 per share.

	2022
Stock price	$	4.82
Exercise price	$	4.82
Expected term (in years)		5.9
Volatility		105.5	%
Risk free rate		1.7	%
Dividend yield		0.0	%

The following table presents the exercise price of outstanding stock options as of March 31, 2022:

Exercise price	Options outstanding
$0.01 - $8.00		539,925
$8.01 - $16.00		1,006,000
$16.00 or higher		34,698
Total		1,580,623