HeartBeam, Inc.

NOTES TO CONDENSED UNAUD ITED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND OPERATIONS

HeartBeam, Inc. (“HeartBeam” or the “Company”) is a medical technology company focused on transforming cardiac care through the power of personalized insights. The Company’s 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. The Company’s ability to develop higher resolution Electrocardiogram (“ECG”) solutions is achieved through the development of a proprietary and patented technology platform that allows the collection of the heart’s electrical activity from three dimensions and synthesize a 12-Lead (“12L”) ECG from these signals.

The Company has validated this technology and has received U.S. Food and Drug Administration (“FDA”) clearance of its initial telehealth products. HeartBeam’s credit card sized 3D ECG technology received FDA clearance for arrhythmia assessment in December 2024 and the 12-Lead ECG synthesis software received FDA clearance in December 2025. During the three months ended March 31, 2025 and March 31, 2026, the HeartBeam System did not generate any revenue.

The Company was incorporated in 2015 as a Delaware corporation. The Company operates asone segment and its operations are based in Santa Clara, California.

NOTE 2 – GOING CONCERN AND OTHER UNCERTAINTIES

The Company has incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception. As of March 31, 2026, the Company has cash and cash equivalents of approximately$2.0 million. Refer to Note-9 Subsequent Event section for details on recent financing completed by the Company.

Based on the current business plan assumptions, existing financing arrangements and expected cash burn rate, the Company believes that its existing liquidity is insufficient to fund operations for the next twelve months following the issuance of these financial statements. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

Therefore, the Company’s continued operations will depend on its ability to raise additional capital through various potential sources, such as equity and/or debt financings or strategic relationships until sufficient revenue can be generated to achieve positive cash flow from operations as the Company expects no material commercial revenue in 2026. During the period, there were 970,467 shares issued under the At-the-Market (ATM) sales agreement with net proceeds amounting to $1.5 million.

The Company continues to maintain strong financial discipline as it achieves critical clinical and regulatory milestones and begins a limited commercial launch for the HeartBeam System. Management believes the continued achievement of these milestones will provide the Company the ability to raise additional capital. However, management can provide no assurance that such financing or strategic relationships will be available on acceptable terms, or at all, which if not consummated would likely have a material adverse effect on the Company and its financial statements. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern.

The Company is also subject to a number of risks similar to those of early stage companies, including dependence on key individuals and product candidates, the difficulties inherent in the development of a commercial market, competition from larger companies, other technology companies and other technologies.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying condensed unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP") and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”) and have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. In the opinion of management, the unaudited interim condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results of operations for the periods presented. The interim operating results are not necessarily indicative of results that may be expected for any subsequent period. The accompanying condensed unaudited financial statements should be read in conjunction with the Company’s audited annual financial statements and notes thereto included in the Company’s Form 10-K filed with the SEC on March 12, 2026 (“2025 Annual Report”).

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits. As of March 31, 2026, the Company has$2.0 million held as cash and cash equivalents, of which $0.6 million was held as cash equivalents. As of December 31, 2025, the Company had$4.4 million held as cash and cash equivalents, of which $0.1 million was held as cash equivalents. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”) and has cash balances in accounts which exceed the federally insured limits as of March 31, 2026 and December 31, 2025. The Company has made a deposit to the bank for their credit cards in the amount of$56,000 and$56,000 and is classified as restricted cash included in other assets as of March 31, 2026, and December 31, 2025, respectively.

USE OF ESTIMATES

The preparation of financial statements in conformity with US GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based on amounts that differ from those estimates.

NET LOSS PER COMMON SHARE

Basic net loss per share excludes the effect of dilution and is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding.

Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options and warrants to the extent dilutive. Basic net loss per share was the same as diluted net loss per share for the three months ended March 31, 2026 and 2025 as the inclusion of all potential common shares outstanding would have an anti-dilutive effect.

In accordance with ASC 260-10-45-13, exercisable penny options are included in the calculation of weighted average basic and diluted earnings per share. Penny options of 113,809 and 135,262 have been included in the calculation of weighted average basic and diluted earnings per share for thethree months ended March 31, 2026 and March 31, 2025, respectively.

The following is a summary of awards outstanding as of March 31, 2026 and 2025, which are not included in the computation of basic and diluted weighted average shares:

Segment Reporting

The Company operates inone reporting segment. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM uses operating expenses to measure performance against progress in its clinical trials and its product development. The determination of a single business segment is consistent with the financial information regularly provided to the Company’s CODM. The Company’s CODM reviews and evaluates the total net loss for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods. In addition to the significant expense categories included within the total net loss presented on the Company's Statements of Operations, the following table sets forth significant segment expenses:

*Other primarily includes patent, software, product testing and other miscellaneous expenses for thethree months ended March 31, 2026 and 2025.

NOTE 4 – BALANCE SHEET COMPONENTS

PROPERTY AND EQUIPMENT, NET

The following table presents the components of property and equipment, net as ofthree months ended March 31, 2026 and the year ended December 31, 2025 (in thousands):

Depreciation was$24,400 and$7,500 for the three months ended March 31, 2026 and March 31, 2025, respectively.

NOTE 5 – STOCKHOLDERS’ EQUITY

During the three months ended March 31, 2026, there were 970,467 shares issued under the ATM with net proceeds amounting to $1.5 million.

WARRANTS

The following is a summary of warrant activity during thethree months ended March 31, 2026:

NOTE 6 – STOCK-BASED COMPENSATION

STOCK OPTIONS

The following is a summary of stock option activity during thethree months ended March 31, 2026:

The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For thethree months ended March 31, 2026 and 2025, the assumptions used in the Black-Scholes option pricing model, which was used to estimate the grant date fair value per option, were as follows:

RESTRICTED STOCK UNITS

The following is a summary of RSU’s awards activity during thethree months ended March 31, 2026:

STOCK BASED COMPENSATION

The following is a summary of stock-based compensation expense (rounded):

As of March 31, 2026, total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately$6.0 million and$0.2 million, respectively, which is expected to be recognized over a weighted-average period of 2.3 years and 0.27 years, respectively.

NOTE 7 – RELATED PARTY TRANSACTIONS

In April 2024, the Company entered into a consulting agreement withone of the independent Board of Directors to provide business development consulting services. For these consulting services, the Company agreed to pay $5,000 per month as remuneration and granted 70,000 options to vest over a period of 36 months. During thethree months ended March 31, 2026 and March 31, 2025, the Company recognized$25,400 and$25,400, respectively related to these consulting services, which includes stock based compensation expense of$10,400 and$10,400, respectively.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

From time to time, the Company may be involved in certain claims and litigation arising out of the ordinary course and conduct of business. Management assesses such claims and, if it considers that it is probable that an asset had been impaired or a liability had been incurred and the amount of loss can be reasonably estimated, provisions for loss are made based on management’s assessment of the most likely outcome.

Professional Services Agreement

On August 12, 2025, the Company has entered into an agreement with an independent contractor to perform certain services related to development and enhancement of the HeartBeam 12-lead ECG patch. Further on January 14, 2026, the Company entered into an addendum to the original agreement for further services. As per terms of the agreement, the Company will pay the contractor approximately $0.8 million for these services. For the three months ended, March 31, 2026, the Company has expensed $0.1 million based on actual services performed by the contractor and accrued liability balance of $0.4 million as of March 31, 2026. As of March 31, 2026, the Company hasno more remaining committed amounts with this independent contractor.

NOTE 9 - SUBSEQUENT EVENTS

On April 14, 2026, the Company entered into an underwriting agreement to consummate an offering of 12,500,000 shares of common stock for gross proceeds of $10.0 million, before deducting underwriting discounts, commissions, and offering expenses. In addition, the Company granted the underwriters a 30-day option to purchase up to an additional 1,875,000 shares to cover overallotments.

The offering closed on April 16, 2026. The Company received approximately $10.0 million in gross proceeds from the offering, before deducting underwriting discounts, commissions and offering expenses. In addition, on May 7, 2026, the underwriter exercised its overallotment in full, resulting in 1,875,000 shares of common stock for $1.5 million in gross proceeds.

After giving effect to the exercise of the over-allotment option, the Company sold an aggregate of 14,375,000 common shares for gross proceeds of approximately $11.5 million, before deducting underwriting discounts, commissions, and offering expenses.

Members of the Company’s board and executive leadership participated in the offering, purchasing an aggregate of $1.0 million of shares.

As part of the agreement, the Company agreed to issue to the underwriter, or its designees, warrants to purchase a number of shares of common stock equal to 5% of the total number of shares sold in the offering. The underwriter warrants are exercisable immediately upon issuance, in whole or in part, and will expire on thefive-year anniversary of the underwriting agreement.