Company: INDP
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0001493152-25-010136
Chunk: 574

Company: Indaptus Therapeutics, Inc.
Filing Date: 2025-03-13
Form: 10-K
Item: Item 3
Chunk 574
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for Research and Development Costs

We
record the costs associated with services provided by CROs and CMOs as they are incurred. Though the scope and timing of work are generally
based on signed agreements, some judgement is involved in determining periodic expenses because payment flows do not always match the
periods over which services and materials are provided to us. As a result, our management is required to make estimates of services received
and efforts expended pursuant to agreements established with these third-parties at each period-end date. During the year ended December
31, 2024, we incurred approximately $7.2 million of research and development expenses, of which approximately $4.0 million were for services
provided by our CROs and CMOs. As of December 31, 2024, we recorded an accrued liability of approximately $0.8 million for expenses incurred,
but not yet invoiced, and prepaid expenses and non-current other assets of approximately $0.8 million for payments made that relate to
future periods. Overestimating or underestimating the services received or efforts expended could cause us to overstate or understate
research and development expenses incurred within a reporting period, and related accrued and prepaid expenses.

69

Stock-Based
Compensation

Compensation
expense related to stock options granted is measured at the grant date based on the estimated fair value of the award and is recognized
over the requisite service period of the individual grant, generally equal to the vesting period, on a straight-line basis. We determine
the estimated fair value of each stock option on the date of grant using the Black-Scholes valuation model which uses assumptions regarding
a number of complex and subjective variables. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent
with the expected term of the option in effect at the time of the grant. Expected volatility is based on an analysis of the historical
volatility of a peer group of companies. The expected term represents the period that we expect our stock options to be outstanding.
The expected term assumption is estimated using the simplified method set forth in the U.S. Securities and Exchange Commission’s
Staff Accounting Bulletin Topic 14, which is the mid-point between the option vesting date and the expiration date. We have never declared
or paid dividends on our common stock and have no plans to do so in the foreseeable future. Changes in these assumptions may lead to
variability with respect to the amount of stock compensation expense we recognize related to