beat-20231231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 001-41060

HEARTBEAM, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware						47-4881450
State or Other Jurisdiction of Incorporation or Organization						I.R.S. Employer Identification No.

2118 Walsh Avenue, Suite 210 Santa Clara, CA						95050
Address of Principal Executive Offices						Zip Code

(408) 899-4443

Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

BEAT

NASDAQ

Warrants

BEATW

NASDAQ

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐			Accelerated filer ☐
Non-accelerated filer ☒			Smaller reporting company ☒
			Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of June 30, 2023, there were 25,990,516 shares of the registrant’s common stock, par value $0.0001 per share, issued and outstanding, of these, 21,352,087 shares were held by non-affiliates of the registrant. The market value of securities held by non-affiliates was $51,458,385 as of June 30, 2023, based on the closing price of $2.41 for the registrant’s common stock on June 30, 2023.

As of March 19, 2024, there was 26,329,032 shares of the registrant’s common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

HEARTBEAM, INC.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In particular, statements contained in this Annual Report on Form 10-K, including but not limited to, statements regarding the sufficiency of our cash, our ability to finance our operations and business initiatives and obtain funding for such activities; our future results of operations and financial position, business strategy and plan prospects, or costs and objectives of management for future acquisitions, are forward looking statements. These forward looking statements relate to our future plans, objectives, expectations and intentions and may be identified by words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “seeks,” “goals,” “estimates,” “predicts,” “potential” and “continue” or similar words. Readers are cautioned that these forward-looking statements are based on our current beliefs, expectations and assumptions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified below, under Part II, Item lA. “Risk Factors” and elsewhere in this. Therefore, actual results may differ materially and adversely from those expressed, projected or implied in any forward-looking statements. We undertake no obligation to revise or update any forward looking statements for any reason.

The Company will continue to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). Forward-looking statements speak only as of the dates specified in such filings. Except as expressly required under federal securities laws and the rules and regulations of the SEC, we do not undertake any obligation to update any forward-looking statements to reflect events or circumstances arising after any such date, whether as a result of new information or future events or otherwise. You should not place undue reliance on the forward-looking statements included in this report or that may be made elsewhere from time to time by us, or on our behalf. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

NOTE REGARDING COMPANY REFERENCES

Throughout this Annual Report on Form 10-K, “HeartBeam,” the “Company,” “we,” “us” and “our” refer to HeartBeam, Inc.

Table of Contents


			Page
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Part I
Item 1. Business			5
Item 1A. Risk Factors			23
Item 1B. Unresolved Staff Comments			38
Item 1C. Cybersecurity			38
Item 2. Properties			39
Item 3. Legal Proceedings			39
Item 4. Mine Safety Disclosures			39
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			40
Item 6. RESERVED			42
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations			42
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			49
Item 8. Financial Statements and Supplementary Data			49
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures			49
Item 9A. Controls and Procedures			49
Item 9B. Other Information			50
Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections.			50
Part III
Item 10. Directors, Executive Officers and Corporate Governance			51
Item 11. Executive Compensation			57
Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters			61
Item 13. Certain Relationships and Related Transactions, and Director Independence			63
Item 14. Principal Accounting Fees and Services			63
Part IV
Item 15. Exhibits, Financial Statement Schedules			65
Item 16. Form 10-K Summary			67
Signatures			68

Part I

Item 1. Business

Overview

We are a medical technology company focused on transforming cardiac care through the power of personalized insights. Our aim is to deliver innovative, higher resolution ambulatory cardiac monitoring solutions that can be used by patients anywhere to enable the detection and monitoring of cardiac disease outside of a healthcare facility. Our ability to develop higher resolution Electrocardiogram (“ECG”) solutions is achieved through the development of our proprietary and patented Vector Electrocardiography (“VECG”) technology platform. Our VECG technology is capable of capturing three-dimensional (“3D”) vector images of the heart’s electrical activity and synthesizing a 12-Lead (“12L”) ECG from these signals. In early studies, our approach demonstrated equal or superior diagnostic capability than traditional hospital-based 12L ECG systems.

Our products (hereinafter “Product” or “Products”) require Food and Drug Administration (“FDA”) clearance and have not been cleared for marketing.

We believe our Products and services will benefit many stakeholders, including patients, healthcare providers, and healthcare payors. We are developing our initial Product (“HeartBeam AIMIGoTM” or “AIMIGo™”), to address the rapidly growing ambulatory cardiac monitoring market. HeartBeam AIMIGo is comprised of a credit-card sized electrocardiogram device, a patient application, a physician portal and powerful cloud-based algorithms. We intend to show that our easy-to-use device (without external electrodes) provides signals equivalent to a standard 12L device, and therefore will have a number of applications for ambulatory use. We believe that we are uniquely positioned to play a central role in ambulatory cardiac monitoring including high-risk coronary artery disease patients. Initial studies have shown that our ischemia detection system may be more accurate than existing ambulatory monitoring solutions. Coronary artery disease (“CAD”) patients are at increased risk for a heart attack or Myocardial Infarction (“MI”).

HBM_Device_Perspective_Open - updated.jpg

HeartBeam AIMIGo device in ready position (left) and the front view(right)

To date, we have developed working prototypes for HeartBeam AIMIGo and we have submitted the Product for FDA 510(k) clearance. To date, we have developed working prototypes for HeartBeam AIMIGo and we have submitted the Product for FDA 510(k) clearance. As more fully discussed in the Products and Technology section below, we have received questions from the FDA and are working through the stages of the FDA clearance process.

The custom software and hardware of our Products, we believe, are classified as Class II medical devices by the FDA, running on an FDA approved Class I registered software platform. Class II medical devices are those for which general controls alone are insufficient to provide reasonable assurance of safety and effectiveness and there is sufficient information to establish special controls. Special controls can include performance standards, post-market surveillance, patient histories and FDA guidance documents. Premarket review and clearance by the FDA for these devices is generally accomplished through the 510(k) or 510(k) de-novo premarket notification process.

HeartBeam has 13 issued and allowed U.S. patents (U.S. 10,433,744, U.S. 10,117,592, U.S. 11,071,490, U.S. 11,419,538, U.S. 11,445,963, U.S. 11,701,049, U.S. 11,529,085, U.S. 10,980,433, U.S. 11,412,972, U.S. 11,234,658, U.S. 11,793,444, U.S. 11,877,853, and allowed U.S. patent application no. 18/068,481), and nine pending U.S applications. Outside of the U.S., HeartBeam has four issued patents in Germany, France, Netherlands and United Kingdom and fourteen pending applications in Canada, China, the European Union, Japan, South Korea and Australia. HeartBeam has two pending Patent Cooperation Treaty applications. The issued patents are predicted to expire between April 11, 2036 and April 21, 2042.

Market Overview

Chronic diseases are the number one burden on the healthcare system, driving up costs each year, and cardiovascular illnesses are one of the top contributors. Regulators, payors, and providers are focused on earlier diagnosis and improved management of these conditions to drive better outcomes at lower cost. One way to accomplish this is through the use of Connected Medical Devices – solutions that use technology to provide healthcare services remotely and aim to reduce healthcare expenditures while allowing patients to engage with clinicians and better self-manage their care. The Connected Medical Device Market size is estimated at $66 billion in 2024, and is expected to reach $133 billion by 2029, growing at a compounded annual growth (“CAGR”) of 15% during the forecast period (2024-2029).

Cardiovascular disease is the most expensive disease to manage and is estimated to be responsible for one in every eight healthcare dollars spent in the US, projected to cost the US healthcare system $1 trillion by 2035. As cardiovascular

disease is the leading cause of death worldwide, early detection, diagnosis, and management of chronic cardiac conditions are necessary to relieve the increasing burden on the healthcare system. Diagnostic tests such as ECGs are used to detect, diagnose, and track numerous cardiovascular conditions. The market for cardiac monitoring technologies, such as Holter monitors, patch-based cardiac monitoring technologies, and any other ECG-based technology used for clinical diagnosis is projected to reach approximately $18 billion by 2030, a CAGR of approximately 8%.

With advances in mobile communications, diagnostic monitoring of cardiac conditions is increasingly occurring outside the hospital. Global sales of Patient Monitoring Devices in 2021 were $42 billion. With a CAGR of approximately 11% from 2022 to 2032, the market is projected to reach a valuation of $125 billion by 2032. The adoption of such technology was greatly accelerated by the COVID-19 pandemic.

We believe we will be able to show that our easy-to-use device (without external electrodes) provides signals that can provide a 12L ECG representation like the gold-standard and therefore will have a number of applications for ambulatory use. Our initial Product, HeartBeam AIMIGo, will allow physicians to evaluate the full range of cardiac conditions that they currently assess with a standard 12L ECG. Currently we believe there are no products on the market that are portable, easy to use, and always with the patient to provide physicians and patients with timely and highly accurate information about all heart conditions that could be detected with a 12L ECG, including potential ischemic events. In the US, someone has a heart attack every 40 seconds. We believe a tool that is always with the patient and decreases time to intervention would have a significant effect on saving lives and healthcare dollars. We believe our technology will address this problem by providing a convenient, cost-effective cardiac monitoring solution, including software and hardware for physicians and their patients.

In the US, mobile cardiac tests are primarily conducted through outsourced Independent Diagnostic Testing Facilities (“IDTFs”) or as part of an telehealth system. Reimbursement rates vary depending on the use case and generally are based on the value a technology offers to patients and healthcare providers. Actual reimbursed pricing is set by the Centers for Medicare & Medicaid Services (“CMS”). Reimbursement rates for private insurers typically provide for similar or higher reimbursement rates when compared to those set by the government for Medicare and Medicaid. Direct pay is an alternative for a product such as AIMIGo while data is being gathered.

Products and Technology

The foundation of our novel technology is the concept of VECG, a technology that has long been seen as superior to ECG in detecting MIs but is no longer used clinically because of the difficulty experienced by physicians interpreting the output. We solved the crucial problem of recording three orthogonal (x, y and z) projections of the heart vector with a device that is sized like a credit card. The thickness of our credit card-sized ECG signal collection device is about 1/8 inch (4 mm), and it weighs about 1 ounce (28 grams). The core technology consists of a series of patented inventions and associated algorithms. In addition to using VECG to get a more complete 3D characterization of cardiac activity, we use the concept of a baseline. We measure the change in cardiac parameters between an asymptomatic (baseline) recording and the symptomatic recording. It is personalized for every patient as every patient has a unique baseline. Our increase in diagnostic performance in detecting MIs, when compared to a panel of cardiologists, is attributed to a richer cardiac information set offered by VECG and the fact that our algorithms compare the patient’s personalized baseline and symptomatic recordings in the 3D space of VECG.

This novel technology has resulted in our initial Product, AIMIGo. Our AIMIGo ECG collection device is the size of a credit card and records cardiac signals with integrated electrodes rather than wires or self-adhesive electrodes. Unlike a standard 12L ECG machine that records signals in empirically determined locations on a human body, our approach is focused on recording three projections of the heart vector. The successful recording of the projections of the heart vector enables the synthesis, via a patented method, of a 12L signal set and internal algorithmic diagnostic work in the space of 3D heart vectors.

There are obvious ease-of-use advantages when comparing our credit card-sized device to the current 12L ECG machine. The small form factor of our device makes it portable and can be used by a patient at home or elsewhere. The device can be self-applied versus requiring a trained professional to apply. In addition, there are diagnostic performance advantages, including, based on our initial study, increased accuracy in diagnosing MIs. The collected data is sent to a physician to assess the patient’s ECG in the context of the patient’s baseline ECG, symptoms, and history.

Our HeartBeam AIMIGo system is initially expected to be a prescription-only cardiac monitoring system intended for individuals with known or suspected heart disease, including various arrhythmias and CAD. It helps physicians in choosing the best course of action for their patients who experience chest pain or other cardiac symptoms outside of a medical facility. HeartBeam AIMIGo will bring a medical grade ECG to patients and will enable them to receive a plan of action from a physician in a timely manner. At the time of onboarding, patients record a baseline 30-second ECG using our device. When a patient experiences symptoms, such as irregular heartbeats or chest pain, the patient simply opens the smartphone application and places the credit card sized device against the chest to collect signals. These signals are processed by cloud-based algorithms and converted to a synthesized 12L that is sent to the on-call physician, overlayed with the patient’s synthesized baseline ECG recording. In addition, the patient provides input on their symptoms that is sent, along with the ECG data, to the cloud for interpretation by a physician. From start to finish, the process takes just a few minutes.

The HeartBeam AIMIGo system consists of a number of capabilities that will be introduced over time. These are:

1.A credit card sized ECG collection device. The device captures cardiac signals that represent x, y and z projections of the heart vector and transmits them via Bluetooth connection to a smartphone. It is always with the patient given its small form factor. It is easy to use as all that is required of the patient is that the device be pressed against the chest.

2.A smartphone application that receives the ECG signals from the HeartBeam signal collection device. The application has several functions: guiding the patient through the signal collection, asking about symptoms, displaying the status of the data collection including real time signal quality check, and notifying the patient of the plan of action as determined by a physician. In addition, the application will contain HIPAA-compliant video conferencing or text capabilities for the healthcare provider to communicate directly with the patient.

3.A cloud-based software system that serves four basic functions: (1) Performing a final check of the ECG signal quality, (2) Synthesizing a 12L ECG from the three measured vector leads, (3) Creating a diagnostic suggestion based on 3D VECG interpretation, risk factors and symptoms and (4) Preparing a summary report for the physician. These software functions will be introduced to the HeartBeam AIMIGo product in a sequential manner. To facilitate a more accurate physician interpretation of the data, the software overlays the patient’s synthesized baseline 12L ECG waveform on the synthesized 12L ECG waveform from the current reading. To ensure high signal quality, the system checks for noise levels in the recorded signals. Those signals that can be effectively filtered are accepted and those that have a noise level above an empirically established threshold are rejected. If a recorded signal is rejected, the user is asked to repeat the recording.

4.A web-based physician portal capable of displaying the following relevant information for the physician to analyze: diagnostic suggestion, patient history, symptoms, baseline and current, synthesized 12L ECG, and recorded 3 vector leads. Our physician portal assists physicians with their diagnostic interpretation by providing both the baseline 12L synthesized ECG and the 12L synthesized ECG that is under evaluation.

5.A dedicated ECG monitoring and reading team of medical professionals to offer 24/7/365 services in order to provide a recommended course of action to patients based on the ECG signals, symptoms, and patient history. The patient will have the option of having a consult with a medical professional. This capability will be developed in-house or outsourced through a contracted third-party organization.

The market release of our Product will be in multiple versions.

The Initial Product will include a 3D VECG credit card-sized device that records the “X, Y, Z” cardiac activity as 3 leads and displays the signals for clinician review. The system also includes a patient application, a physician portal, and wireless communications among the elements. We anticipate this to be the first patient-friendly, portable VECG device to be cleared by the FDA and this will be a major milestone for the company. In addition, this clearance will provide the regulatory foundation for subsequent products in our product portfolio. An FDA 510(k) application was submitted in the 2nd quarter of 2023. The review remains active with FDA, as we have successfully passed the acceptance of the filing and have completed the initial, substantive review phase with questions and requests from FDA. As we continue to navigate the progress towards clearance, we have taken advantage of all available regulatory tools and opportunities to work interactively with FDA, gaining valuable official communication and feedback on our proposed response approach, including testing protocols. We have conducted this agreed upon testing to address FDA's open questions and are in the process of preparing our official responses. Once submitted, FDA will complete their review. We currently anticipate clearance by the end of Q2 2024.

Following the clearance of the Initial Product, we will be working to obtain a second 510(k) clearance. This clearance will be focused on the ability to offer to the physician a pair of baseline and symptomatic 12L ECGs, both synthesized from 3D VECG signals (X, Y, Z) recorded by the HeartBeam AIMIGo device. This approach leverages recently issued patents for a personalized system for synthesizing 12L ECG waveforms. The 510(k) application is planned to be submitted to FDA by Q3 2024. A key part of this submission will be a pivotal study demonstrating the similarity between the synthesized 12L output from AIMIGo and a simultaneously recorded standard 12L ECG. We have held two Pre-submission meetings with FDA on the 12L synthesis submission. These meetings have been focused primarily on the performance goals of our clinical study. Based on feedback from FDA and our clinical experts, we have designed our clinical study, “Clinical Validation of AIMIGo 12 Lead ECG Synthesis Software for Arrhythmia Detection: A Prospective Multicenter Pivotal Study,” (the “VALID-ECG Study”).

On March 13, 2024, we enrolled the first patient in the VALID-ECG study. The VALID-ECG study is a prospective single-arm multicenter trial designed with the goal to validate the AIMIGo 12L ECG Synthesis Software by comparing its results with those of a standard FDA-cleared 12L ECG using both quantitative and qualitative assessment methodologies. We plan to enroll a total of approximately 198 patients presenting to an outpatient cardiology clinic or arrhythmia center for symptoms suggestive of cardiac arrhythmia or for routine checkup of previously diagnosed arrhythmia. The study is expected to include up to 5 sites. The primary objective is to demonstrate the equivalence of ECG waveforms between AIMIGo Synthesized 12L ECG and Standard 12L ECG, recorded simultaneously in each subject, by assessing intervals and amplitudes. In addition, we have completed an 70 patient pilot study, which mirrors the pivotal study. We anticipate to complete enrollment in the VALID-ECG study in Q2 2024 and submit the second 510(k) application by Q3 2024. We continue to anticipate that our limited launch of AIMIGo will occur by the end of 2024.

Future versions of the Product may include AI algorithms that automatically classify the 3-lead VECG signals, and identify common arrhythmias as well as normal sinus rhythm. Other potential enhancements include our proprietary ECG interpretation MI algorithms and our overall MI diagnostic suggestion.

Market Opportunity

ECGs are key diagnostic tests utilized in the diagnosis and monitoring of cardiovascular disease, the number one cause of death worldwide. According to the American Heart Association, there were approximately 130 million adults living with cardiovascular disease and approximately 20 million adults with diagnosed CAD in the US. The prevalence of these cardiac conditions and thus the market size is increasing, due to an aging population and lifestyle choices.

Every 40 seconds someone in the US has a heart attack, or MI. Unfortunately, there is no way for patients at home to distinguish if the symptoms they are experiencing are due to an MI, or some other more benign condition such as indigestion. As a result, patients often ignore symptoms and delay seeking care, which leads to worse outcomes and increased mortality. Shortening that time from symptoms to the door of a medical facility would reduce complications and save lives. On the other hand, many patients who go to the ED with chest pain are not experiencing an MI. Chest pain is the second most common reason for an ED visit in patients over 45, yet fewer than 20% of chest pain ED visits result in a diagnosis of a life-threatening condition. These unnecessary ED visits lead to well over $10 billion in unnecessary healthcare expenditures.

Most ECGs are conducted in a healthcare facility setting using a 12L ECG machine, the gold standard. ECGs taken outside of healthcare facilities are expected to grow more quickly than in-hospital ECGs. Monitoring cardiac patients outside of a hospital is a fast-growing trend, as it is less expensive and provides a better patient experience. However, while ambulatory cardiac monitoring devices are often much easier for patients to use, they have fewer leads than the gold standard and therefore cannot offer as comprehensive a picture of cardiac health.

While a standard 12L ECG readout is of great medical value, it is simply impractical to have a standard 12L machine next to patients when they experience symptoms outside the clinical setting, since recording the event requires attaching multiple electrodes to the patient’s body with professional assistance. While existing technologies use predominantly single lead ECG devices to monitor arrhythmias, these technologies do not provide information to the physician on the presence of life-threatening conditions such as acute coronary syndrome (ACS) including MIs, also known as heart attacks.

We believe our technology addresses these market needs and has several key attributes that make it a good fit for these patients. Our Product can be used anywhere when symptoms occur and offers the potential for lifelong patient usage. The device is practically always near the patient and ready to be used for recording a cardiac event. It enables real-time transmission of the 3D VECG signals and a synthesized 12L ECG. We believe physicians will typically prescribe our solution to chronic cardiovascular patients for long term monitoring, thereby enabling prolonged data collection and delivering a more complete picture for diagnosis. This will also enable the use of artificial intelligence (AI) on our future database that will have a unique set of longitudinal VECG signals and synthesized 12L ECGs.

As we believe our VECG platform demonstrates 12L equivalence and clinical & cost-effectiveness advantages, coupled with a patent protected technology, we believe this might open multiple licensing and/or partnering opportunities with players in the ECG, cardiac monitoring patch and smart watch verticals.

Market Strategy

Our goal is to establish our Products as key solutions for cardiology practices. Our efforts to enter the market involve establishing clinical evidence and demonstrating the cost-effectiveness of adopting our Products. The initial geographic market for HeartBeam AIMIGo is the US.

We believe that both HeartBeam AIMIGo Products will be subject to the US FDA’s 510(k) review process. An FDA 510(k) application for the initial Product was submitted in Q2 2023.

The primary customers are cardiology practices and the cardiology departments of hospitals. Healthcare insurers are another important customer, as they will potentially benefit from the reduced costs to the healthcare system. We are working to develop new clinical studies and publish results of completed clinical studies and plan to demonstrate real world cost-effectiveness of the use of the solution.

Our initial targets for HeartBeam AIMIGo are market segments that see value in an easy-to-use device that can generate synthesized 12L ECG recordings. These will be segments in which payment for the device will be outside of the established reimbursement system. These target segments may include concierge practices, hospital-at-home segment and use in clinical trials. As we establish data on the clinical efficacy and cost-effectiveness of HeartBeam AIMIGo, we will target at-risk cardiology practices, including high-risk patients being discharged from hospitals after experiencing an MI.

Our long-term strategy is to generate sufficient evidence of clinical efficacy and cost-effectiveness to generate reimbursement coverage and payment specifically for the HeartBeam AIMIGo solution. We expect to be able to demonstrate significant clinical benefits for patients and savings to the healthcare system, justifying appropriate reimbursement levels.

Our primary marketing strategy will focus on the medical community with continued validation of clinical efficacy and cost-effectiveness and the establishment of reference sites. We will also create educational materials and provide other support to help educate our customers’ patients.

We will explore other business models. For example, hospitals face CMS penalties if their 30-day readmission rates for patients who are discharged after an MI exceed certain thresholds. These CMS penalties are levied on all hospital CMS payments, so the impact can be significant. Our Product can be a tool to help hospitals manage these patients after discharge. We will explore models in which hospitals pay for the device and for the initial 30 days of service. In addition, we will explore models for value-based care, in which the use of Product reduces overall costs.

We are currently speaking with hospitals in large healthcare systems to educate them about our first two Products. These are sophisticated customers, and we plan to use technical presentations, peer-reviewed clinical data, and demonstration projects to achieve penetration of this market. We plan to continue to utilize the expertise of our medical advisory board, conduct clinical trials with leading cardiologists to increase the body of evidence, and establish reference sites among these customers.

We expect our value proposition will be progressively increased as we gradually add additional functionality to our monitoring solutions and drive down the cost by increasing scale and automation. We expect our HeartBeam AIMIGo device to incorporate internally developed algorithms with the capabilities of detecting heart conditions that can be detected via a standard 12L ECG device. Additionally, as we collect rich longitudinal data sets from our patients, we expect to train AI and ML algorithms that could potentially have predictive capabilities regarding different heart conditions. Over time and with scale we expect our costs to decrease and provide more and better services to our patients by improving our capabilities.

We plan to establish a direct sales network with relationships and experience selling to our target markets.

Clinical Data

A landmark clinical study on the HeartBeam technology was published in the August 2023 issue of the journal JACC: Advances. The publication, “Coronary Artery Occlusion Detection Using 3-Lead ECG System Suitable for Credit Card-Size Personal Device Integration” demonstrated that HeartBeam’s VECG technology detects the presence of a coronary occlusion, the cause of heart attacks, with the same accuracy as a standard 12L ECG.

Both 12L ECG and VECG signals were recorded in patients undergoing percutaneous coronary intervention. Readings were taken before and after a 90 second balloon inflation that occluded the artery, a surrogate for a heart attack. Automated computer analysis of the ST segment of the 12L ECG and VECG was performed. In addition, a panel of three cardiologists analyzed the 12L ECGs.

The study showed that the automated analysis of the VECG and 12L ECG signals had similar performance in determining whether the artery was occluded. Also in the study, the human interpretation of the 12L ECGs had significant intra- and inter-observer variability, which does not occur with automated readings.

Both the 12L ECGs and the VECG readings were analyzed in two ways: a “spot” reading, when only a single recording was considered, and a “comparative” reading when a separate “normal baseline” recording was available for comparison. The presence of the “normal baseline” recording, a novel feature that is integral to HeartBeam’s VECG technology, dramatically improved the accuracy of interpretation, increasing the Area Under the Curve (AUC), a standard measure of diagnostic performance, from 0.72 to 0.95. This is particularly important since physicians who are analyzing 12L ECGs often do not have access to a normal baseline, implying that the HeartBeam system could outperform this approach.

In addition, HeartBeam has had data on its deep learning algorithm accepted for presentation at two prestigious Electrophysiology conferences: the European Heart Rhythm Society, to be held in Berlin, Germany in April 2024 and the Heart Rhythm Society, to be held in Boston MA in May 2024.

Competition

The cardiac monitoring and detection market is characterized by rapid technological change and strong competition. There are numerous companies developing technologies that are competitive, in a broad sense, to our products, and many of these companies have significantly greater resources than HeartBeam.

In the category of ambulatory cardiac monitors — devices that are intended to be used outside of a health facility setting — there are two major segments: consumer devices and devices prescribed for ACS.

Consumer Devices

The consumer device segment consists of devices that are FDA cleared but are sold directly to patients, without a prescription. Generally, these devices are single lead ECG devices intended to recognize heart rhythm abnormalities, such as atrial fibrillation, but are not intended for ischemia detection or for life threatening conditions such as heart attack.

•Apple Inc, a public company located in Cupertino, CA, produces the Apple Watch, which includes ECG functionality. The Apple Watch is a single lead ECG with two electrodes that contact the wrist and the finger and is intended to detect some common cardiac arrhythmias, such as Atrial Fibrillation.

•AliveCor Inc, a private company located in Mountain View, CA, produces the KardiaMobile, KardiaMobile Card and KardiaMobile 6L devices. These devices are intended to detect some common cardiac arrhythmias, such as Atrial Fibrillation.

•Google Inc, a public company located in Mountain View, CA, produces the Pixel 2 smartwatch and ECG app. The Pixel 2 watch is a single lead ECG with two electrodes that contact the fingers and is intended to detect some common cardiac arrhythmias, such as Atrial Fibrillation.

•Samsung Electronics Co., Ltd, based in Seoul, South Korea, is publicly traded in Korea. It produces the Galaxy Watch3 and Galaxy Watch Active2 smartwatches with ECG functionality, intended to detect some common cardiac arrhythmias, such as Atrial Fibrillation.

Devices prescribed for ischemia detection

There are a small number of devices that have been cleared by FDA to be used outside of healthcare facilities that provide information for patients with potential ischemic events such as MIs.

•Angel Medical Systems, Inc. is a private company based in Eatontown, NJ. The AngelMed Guardian is an implantable cardiac monitor for patients who are deemed to be extremely high risk for an MI. Physicians implant the AngelMed Guardian in patients. We believe that the HeartBeam AIMIGo device will be a viable alternative to the AngelMed Guardian, as it does not require an implant and does not have a high up-front cost.

•SHL Telemedicine Ltd., is based in Tel Aviv, Israel and is publicly traded. It produces Smartheart, a 12L ECG indicated for patient use at home. Smartheart Pro is larger and more complex than our telehealth solution, requiring the placement of an electrode belt, two underarm electrodes and a waist electrode, and moistening the areas before use. Most patients would find this technology impractical to be carried with them at all times because of the large size and complex lead attachment procedure.

Intellectual Property

We believe our intellectual property (“IP”) protects our innovations, and our goal is to become a leader in the ambulatory VECG sector. For some aspects of our proprietary technology, we rely on trade secret protection. It is our view that the combination of these two methods of IP protection maximizes our chances for success.

Our issued and pending U.S. patent applications cover compact VECG systems for remote detection and/or diagnosis of acute myocardial infarction (“AMI”). Outside of the U.S., the pending EU, Australian (“AU”), Japanese (“JP”) and Chinese (“CN”) patent applications correspond to the pending and issued US cases. The pending PCT applications cover methods and apparatuses for automatic cardiac diagnosis as well as compact systems including retractable electrodes.

The following table sets forth a brief description of issued and pending patents, including their respective titles:

Patent Type

Application No. Pat. No.

Status

Predicted Expiration

Title Summary

Utility
(US)

15/096,159
US 10,433,744

Issued

Sep 15, 2036

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(US)

15/632,155
US 10,117,592

Issued

Apr 11, 2036

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(US)

17/092,152
US 11,877,853

Issued

Jun 2, 2037

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(US)

17/202,299
US 11,071,490

Issued

Apr 11, 2036

ELECTROCARDIOGRAM PATCH DEVICES AND METHODS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(CN)

201680030550.5

Published

Apr 11, 2036

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(DE)

16777474.4
DE 602016073016.2

Issued

Apr 11, 2036

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(FR)

16777474.4
FR 3280326

Issued

Apr 11, 2036

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(GB)

16777474.4
GB 3280326

Issued

Apr 11, 2036

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(NL)

16777474.4
NL 3280326

Issued

Apr 11, 2036

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(EU)

22174820.5

Pending

Apr 11, 2036

MOBILE THREE-LEAD CARDIAC MONITORING DEVICE AND METHOD FOR AUTOMATED DIAGNOSTICS
Methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(EU)

198948150

Pending

Nov 18, 2039

HAND HELD DEVICE FOR AUTOMATIC CARDIAC RISK AND DIAGNOSTIC ASSESSMENT
Method and apparatus for performing automatic cardiac diagnosis.

Utility
(US)

17/296,669
US 11,701,049

Issued

Nov 18, 2039

HAND HELD DEVICE FOR AUTOMATIC CARDIAC RISK AND DIAGNOSTIC ASSESSMENT
Method and apparatus for performing automatic cardiac diagnosis.

Utility
(US)

18,324,111

Pending

Nov 18, 2039

HAND HELD DEVICE FOR AUTOMATIC CARDIAC RISK AND DIAGNOSTIC ASSESSMENT
Method and apparatus for performing automatic cardiac diagnosis.

Utility
(US)

17/443,456
US 11,793,444

Issued

Apr 11, 2036

ELECTROCARDIOGRAM PATCH DEVICES AND METHODS

Adhesive patch methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(US)

17/570,368

US 11,419,538

Issued

Apr 11, 2036

ELECTROCARDIOGRAM PATCH DEVICES AND METHODS
Adhesive patch methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(US)

18/363685

Issued

Apr 11, 2036

ELECTROCARDIOGRAM PATCH DEVICES AND METHODS
Adhesive patch methods and apparatuses for remote and detection and/or diagnosis of acute myocardial infarction (AMI).

Utility
(US)

17/609,014

Pending

May 20, 2040

COMPACT MOBILE THREE-LEAD CARDIAC MONITORING DEVICE
Compact, mobile three-lead cardiac monitoring devices for remote detection and/or diagnosis of cardiac events.

Utility
(AU)

2020275409

Pending

May 20, 2040

COMPACT MOBILE THREE-LEAD CARDIAC MONITORING DEVICE
Compact, mobile three-lead cardiac monitoring devices for remote detection and/or diagnosis of cardiac events.

Utility
(CA)

3137669

Pending

May 20, 2040

COMPACT MOBILE THREE-LEAD CARDIAC MONITORING DEVICE

Compact, mobile three-lead cardiac monitoring devices for remote detection and/or diagnosis of cardiac events.

Utility
(EU)

208063123

Pending

May 20, 2040

COMPACT MOBILE THREE-LEAD CARDIAC MONITORING DEVICE

Compact, mobile three-lead cardiac monitoring devices for remote detection and/or diagnosis of cardiac events.

Utility
(JP)

SEC Form 10-K filed by Heartbeam Inc.