Company: INDP
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0001493152-25-010136
Chunk: 188

Company: Indaptus Therapeutics, Inc.
Filing Date: 2025-03-13
Form: 10-K
Item: Item 8
Chunk 188
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 largest amount that is greater than 50% likely of being realized. Changes in recognition or
measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized
tax benefits in interest expense and penalties in general and administrative expenses.

Stock-based
compensation

The
Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined
using the Black-Scholes-Merton (“Black-Scholes”) model as of the date of grant. The Company recognizes stock-based compensation
expense over the requisite service period of the individual grant, generally equal to the vesting period, on a straight-line basis.

The
Black-Scholes model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based payment
awards, including the option’s expected term and the price volatility of the underlying stock. The Company estimates the fair value
of options granted by using the Black-Scholes model with the following assumptions:

Expected
Volatility—The Company estimates volatility for option grants by evaluating the historical volatility of a peer group of companies
for the period immediately preceding the option grant for a term that is approximately equal to the options’ expected term.

    F-9

Expected
Term—The expected term of the Company’s options represents the period that the stock-based payment awards are expected
to be outstanding. The expected term is estimated using the simplified method for employee stock options since the Company does not have
adequate historical exercise data to estimate the expected term.

Risk-Free
Interest Rate—The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero-coupon issues
with a term that is equal to the options’ expected term at the grant date.

Dividend
Yield—The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend
yield has been estimated to be zero.

The
Company has elected to recognize forfeitures as they occur.

Fair
value measurements

Fair
value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability
in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the
measurement date. The Company follows the established framework for measuring fair value and providing disclosures about fair value measurements.

The
accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: