HeartSciences Inc.

Notes to Condensed Unaudited Financial Statements

Note1. Basis of Presentation

HeartSciences Inc. (“HeartSciences” or the “Company”) is a healthcare information technology company focused on advancing electrocardiography (“ECG” or “EKG”) through the integration of artificial intelligence (“AI”). The Company has developed MyoVista Insights™, a cloud-native, vendor- and device-agnostic ECG management platform designed to improve workflow efficiency, streamline data management, and support the deployment ofthird-party AI-ECG algorithms. MyoVista Insights is classified as a Medical Device Data System (“MDDS”) and is exempt from U.S. Food and Drug Administration (“FDA”)510(k) requirements. HeartSciences has also developed the MyoVista®wavECG™ device, which provides conventional ECG functionality and is designed to host AI-ECG algorithms. The Company submitted the MyoVistawavECG device to the FDA for510(k) premarket clearance in* December 2025and has licensed or developed additional AI-ECG algorithms that may*be submitted for regulatory clearance in the future. The Company is a Texas corporation and is headquartered in Southlake, Texas.

On* June 23, 2026,*the Company and Cordis Acquisition, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Fortitude Mining Holdings, Inc., a Delaware corporation (“Seller”), Fortitude Mining HoldCo, LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Seller (“Fortitude”). The Merger Agreement provides that, subject to the satisfaction or waiver of certain closing conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), Merger Sub will merge with and into Fortitude, with Fortitude surviving the merger (the “Merger”) with the Company thereby becoming the sole managing member of the surviving company (the “Surviving Company”) following the consummation of the transactions contemplated by the Merger Agreement (such transactions, the “Transactions” and such consummation, the “Closing”). The completion of the proposed Merger and the other Transactions are subject to a number of closing conditions, including shareholder approval of the Transaction by our shareholders, which make the completion and timing of the completion of the proposed Merger and the other Transactions uncertain.

In connection with closing of the Transaction, Fortitude will receive a newly established class of common stock of HeartSciences, designated as Class V common, par value $0.0001 (“Class V Common Stock”) based on an exchange ratio tied to the Company's pre-closing shares count and stock price. Fortitude will also contribute $2.0 million in cash or Zcash cryptocurrency in exchange for shares of Class A common stock. Additionally, all outstanding shares of the Company's Series C Convertible Preferred Stock and Series D Convertible Preferred Stock that are issued and outstanding immediately prior to the effective time of the Merger, will convert into shares of Class A common stock at closing.

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Note2. Liquidity, Going Concern and Other Uncertainties

The Company is subject to a number of risks similar to those of early-stage companies, including dependence on key individuals and products, the difficulties inherent in the development of a commercial market, the need to obtain additional capital, competition from larger companies, and other technologies.

The Company has incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception. At* July 31, 2026* and* April 30, 2026*, the Company had an accumulated deficit of $88.4 million and $85.3 million, respectively. These factors raise substantial doubt regarding the Company's ability to continue as a going concern.

On* August 12, 2026,the Company sold and issued to Seller an aggregate of 411,522 shares of its Common Stock at a purchase price of $2.43 per share in a private placement offering. The investment was made pursuant to a subscription agreement entered into between the Company and Seller, dated as of August 12, 2026.The gross proceeds of the investment were approximately $1.0 million and the net proceeds will be used for operating expenses in the period leading up to the expected Merger closing. The shares issued in the private placement offering represent ordinary shares of Common Stock without any additional rights or preferences, however, such shares arenot* subject to the Exchange Ratio (as defined in the Merger Agreement) contemplated by the Proposed Transaction. Failure to complete the proposed Merger and the other Transactions would likely materially adversely affect our business, financial condition, results of operations and stock price.

On* January 13, 2026,the Company entered into a note purchase agreement (the “Note Purchase Agreement”) with Streeterville Capital, LLC, an accredited investor (“Streeterville”), pursuant to which the Company issued to Streeterville an unsecured promissory note in the original principal amount of $3,605,000 (the“$3.6M* Streeterville Note”). The Streeterville Note carried an OID of $600,000 and $5,000 was withheld from the*$3.6M* Streeterville Note for reimbursement of Streeterville's transaction expenses. As a result, the Company received aggregate net proceeds of approximately $3.0 million in connection with the issuance of the*$3.6M* Streeterville Note. On* June 23, 2026,the Company entered into an agreement with Streeterville, pursuant to which Streeterville exchanged the remaining balance of accrued interest of approximately $164,000 owed under the$2.5M* Streeterville Note for 78,103 shares of the Company's Common Stock. The*$2.5M* Streeterville Note and accrued interest was subsequently repaid in full (see Note4).

On* September 18, 2023,the Company entered into an Equity Distribution Agreement (the “EDA”) with an institutional investor, pursuant to which the Company mayoffer and sell an aggregate of up to $3.25 million of its shares of Common Stock in At-the-Market offerings (“ATM Facility”). In November 2023,the EDA was further amended increasing the aggregate amount of Common Stock that maybe sold under the ATM Facility to $15.0 million, and further amended again in August 2025,increasing the aggregate amount of Common Stock that maybe sold under the ATM Facility to $25.0 million. The Company is eligible to sell up to $14.7 million worth of shares of Common Stock as the aggregate market value of the Company’s shares of Common Stock eligible for sale under the EDA is subject to limitations of General InstructionI.B.6* of Form S-3 until such time that the Company's public float equals or exceeds $75.0 million. In the event the aggregate market value of the Company’s outstanding Common Stock held by non-affiliates equals or exceeds $75.0 million, then theone-third limitation on sales set forth in General InstructionI.B.6 of Form S-3 shallnot apply to additional sales made pursuant to the EDA. During thethree months ended* July 31, 2026*, the Company issued and sold 4,920 shares under the ATM Facility for net proceeds of approximately $10 thousand. Subsequent to* July 31, 2026,the Company issued and sold 397,762 shares under the ATM Facility for net proceeds of approximately $1.2 million (see Note9*). There was approximately $3.0 million available for issuance as of the date of this Quarterly Report on Form10-Q.

Based on the Company’s forecasts and cashflow projections, management believes that current resources would be insufficient to fund operations for the nexttwelve months following the issuance of these financial statements. Additionally, the FDA can delay, limit or deny clearance of a medical device for many reasons outside the Company’s control which* may*involve substantial unforeseen costs.

Management’s plans include raising capital through the sale of additional equity securities, debt, or capital inflows from strategic partnerships. Management can provideno assurance that such financing or strategic relationships will be available on acceptable terms, or at all, which would likely have a material adverse effect on the Company and its financial statements.

The condensed unaudited financial statements donot include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern for a reasonable period.

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Note3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed 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 Form10-Q and Rule8-03 of Regulation S-X and the related rules and regulations of the U.S. Securities and Exchange Commissions (“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 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 arenot necessarily indicative of results that* maybe expected for any subsequent period. The accompanying unaudited condensed financial statements should be read in conjunction with the Company's audited financial statements and notes thereto included in the2026* Annual Report on Form10-K.

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 the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities ofthree months or less to be cash equivalents. The fair value of cash and cash equivalents approximates carrying value. At times, the Company’s cash balances* may*exceed the current insured amounts under the Federal Deposit Insurance Corporation (“FDIC”).

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Inventory

All inventories are stated at lower of cost or net realizable value, with cost determined substantially on a “first-in,first-out” basis. The following is a summary of the Company’s inventories at* July 31, 2026* and* April 30, 2026*:

Inventory consists of raw materials, sub-assemblies, work in progress and finished goods relating to the MyoVistawavECG device. As described in the Company’s Annual Report on Form10-K for the fiscal year ended* April 30, 2026,commercialization of the MyoVistawavECG device in the U.S. is dependent on FDA510*(k) clearance of the device, which remains under FDA review, and on the integration of an impaired cardiac relaxation (e’) AI-ECG algorithm, which requires additional development and validation to align with updated clinical standards and would be the subject of a separate FDA submission. The Company’s current primary commercial focus is the MyoVista Insights™ platform. In connection with the preparation of the Company’s financial statements for the quarter ended* July 31, 2026,management determined that the Company’s resources should continue to be directed principally toward the development and commercialization of MyoVista Insights™ and that, in light of these factors, a probable timeline to commercialization of the MyoVistawavECG device cannot currently be established. Accordingly, the Company recorded a reserve of $0.3 million against the remaining carrying value of inventory associated with the MyoVistawavECG device, reducing such inventory to management's estimate of net realizable value. In determining the amount of the reserve, management assessed the inventory on an item-by-item basis, applying a full write-off to device specific items determined to haveno* alternative use or salvage value, a partial write-off to device specific related items determined to retain limited residual value, an 80% write-down for low value items, and a 30% write-down to all remaining inventory. In establishing these write-down rates, management considered the amounts it believes could be realized upon a liquidation of this inventory, including through resale, salvage, or component reuse, given the absence of an established commercialization timeline for the MyoVistawavECG device. The510(k) submission remains pending, and the Company will continue to evaluate this inventory on a periodic basis.

Research and Development Expenses

In accordance with ASC Topic730, *Accounting for Research and Development Costs,*the Company accounts for research and development expenditures, including payments to collaborative research partners and regulatory filing costs, as research and development expenses.

Software Development Costs

The Company capitalizes certain costs incurred in the development and implementation of internal-use software in accordance with ASC350-40, Internal-Use Software. Internal-use software includes software developed or obtained for use in the Company's MyoVista Insights™ platform including software that supports the delivery of the Company's software-as-a-service (“SaaS”) offerings. Software development costs meeting the capitalization criteria, are capitalized once the preliminary project stage is complete, management authorizes and commits to funding the project, and it is probable the project will be completed and used as intended. Capitalized costs primarily consist of external contractor costs, employee compensation, and costs directly attributable to software development activities. Costs associated with upgrades and enhancements that result in additional functionality are capitalized, while costs incurred for maintenance, and support activities are expensed as incurred. Capitalized software costs are amortized over an estimated useful life, and amortization begins when the software is substantially complete and ready for its intended use. The Company evaluates capitalized internal-use software for impairment whenever events or changes in circumstances indicate that the carrying amount* may**not* be recoverable. As of* July 31, 2026*, capitalized product development costs related to MyoVista Insights™ were approximately $1.0 million. No amortization was recorded during the quarter ended* July 31, 2026*.

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Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives. The range of estimated useful lives used to calculate depreciation is generally 3 to 5 years. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. When items are retired or otherwise disposed, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in other income (expense).

The following is a summary of the Company’s property and equipment at* July 31, 2026* and* April 30, 2026*:

Deferred Offering Costs

The Company capitalizes certain legal, professional, and other-third party charges related to its efforts to raise capital and other ongoing equity financings as deferred offering costs until fully consummated. These costs are deferred until the completion of the offerings at which time they are reclassified to additional paid-in-capital as a reduction of the offering proceeds. If the Company terminates the planned offering, all of the deferred offering costs will be immediately written off to operating expenses.

In* September 2023,*the Company entered into an EDA to sell its Common Stock under the ATM Facility. Deferred offering costs associated with the ATM Facility are reclassified to additional paid in capital on a pro-rata basis.

As of* July 31, 2026* and* April 30, 2026*, $125 thousand and $147 thousand of deferred offering costs were capitalized on the balance sheet, respectively.

Fair Value Measurements

The accounting guidance establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset transaction between market participants on the measurement date. Where available, fair value is based on observable market prices or is derived from such prices. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, the accounting guidance establishes athree-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

In certain cases, the inputs used to measure fair value* may*fall into different levels of the fair value hierarchy. In such cases, the assignment of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The carrying amounts of the Company’s financial instruments, which primarily include cash and cash equivalents, accounts payable and accrued expenses, approximate their fair values due to their short-term nature. The carrying amounts of the Company’s existing notes payable approximate their fair values at the stated interest rates and are reflective of the prevailing market rates.

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Long-Lived Assets

Long-lived assets, such as equipment, software development costs, and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset* may**not* be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Companyfirst compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is determined tonot be recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent the carrying amount exceeds its fair value.

Leases

The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. Right-of-use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. The Company measures and records a right-of-use asset and lease liability based on the discount rate implicit in the lease, if known. In cases where the discount rate implicit in the lease isnot known, the Company measures the right-of-use assets and lease liabilities using a discount rate equal to the Company’s estimated incremental borrowing rate for loans with similar collateral and duration.

The Company elected tonot apply the recognition requirements to leases of all classes of underlying assets that, at the commencement date, have a lease term of12 months or less and donot include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Instead, lease payments for such short-term leases are recognized in operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Stock-Based Compensation

The Company accounts for employee and non-employee share-based compensation in accordance with the provisions of ASC718, Compensation–* Stock Compensation*. Under ASC718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant).

The Company grants stock options, restricted stock units (“RSUs”), and restricted stock awards (“RSAs”) under its2023 Equity Incentive Plan, as amended. The Company measures all share-based payment awards at their grant-date fair value. The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model that uses assumptions for expected volatility, expected dividends, expected forfeiture rate, expected term, and the risk-free interest rate. These assumptions are primarily based on historical data, peer company data and the judgment of management regarding future trends and other factors.

Management has estimated the expected term of its Common Stock options using the “simplified” method, whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the option due to its lack of sufficient historical data. The risk-free interest rates for periods within the expected term of the option are based on the US Treasury securities with a maturity date that commensurate with the expected term of the associated award. There isno expected dividend yield since the Company has never paid cash dividends and doesnot expect to pay cash dividends in the foreseeable future.

For stock options issued to employees and non-employees, the fair value of stock-based awards is recognized as compensation expense over the requisite service period, which is defined as the period during which an employee is required to provide service in exchange for an award. The Company uses a straight-line attribution method for all grants that include only a service condition. The Company accounts for forfeitures when they occur. Stock-based compensation expense recognized in the financial statements is reduced by actual awards forfeited. For RSUs issued to employees, the Company recognizes the grant date fair value of the RSUs over the requisite service period, which is generally the vesting term. For awards only subject to service-based vesting conditions, the Company recognizes stock-based compensation expense on a straight-line basis. For awards subject to performance-based vesting conditions, the Company recognizes stock-based compensation expense using the accelerated attribution method when the achievement of the performance condition becomes probable.

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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 shareholders by the weighted-average number of shares of Common Stock outstanding during the period, without consideration of potentially dilutive securities.

Diluted net loss per share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of Common Stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, convertible preferred stock, stock options, RSUs, Common Stock subject to repurchase related to early exercise of stock options, convertible stock warrants, and convertible notes are considered to be potentially dilutive securities. As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods.

Common Stock Warrants

The Company grants warrants to purchase Common Stock in connection with financing transactions. Warrants are valued based on Black-Scholes models and the fair value is recorded to additional paid-in-capital.

Revenue Recognition

In accordance with ASC606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains control of promised goods or services. The guidance focuses on the core principle for revenue recognition, which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company recognizes revenue in accordance with ASC606, which provides afive-step model for recognizing revenue from contracts with customers as follows:

A contract with a customer exists when (i) the Company enters into a legally enforceable contract with a customer, through a purchase order, that defines each party’s rights regarding the products to be transferred and identifies the payment terms related to these products, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for products that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The only performance obligation is to create and ship the product and each product has separate, distinct pricing. Performance obligations are met and revenue is recognized at a point in time when the order for its goods are shipped FOB manufacturer and control is transferred.

The transaction price is determined based on the amount expected to be entitled to in exchange for transferring the product to the customer net of any transaction price adjustments. The Company’s payment terms to customers generally range from30 to60 days.

Payment terms fall within theone-year guidance for the practical expedient which allows the Company to forgo adjustment of the promised amount of consideration for the effects of a significant financing component. The Company accepts product returns at its discretion or if the product is defective as manufactured. Historically, the actual product returns have been immaterial to the Company’s financial statements. The Company elected to treat shipping and handling costs as a fulfillment cost and included them in the cost of goods sold as incurred. Costs associated with product sales include commissions. The Company applies the practical expedient and recognizes commissions as expense when incurred because the expense is incurred at a point in time and the amortization period is less thanone year. Commissions are recorded as selling expense.

The Company didnot recognize material revenues during thethree month periods ended* July 31, 2026and2025*. The Company’s revenues donot require significant estimates or judgments. The Company isnot a party to contracts that include multiple performance obligations or material variable consideration. As of* July 31, 2026* and* April 30, 2026*, the Company didnot have any contract assets or liabilities from contracts with customers and there wereno remaining performance obligations that the Company hadnot satisfied.

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Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires recognition of deferred tax assets, subject to valuation allowances, and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Management considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent cumulative experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to the Company for tax reporting purposes, and other relevant factors.

In assessing the realizability of deferred tax assets, management considers whether it is more likely thannot that some portion or all of the deferred tax assets willnot be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. A valuation allowance is established if it is more likely thannot that all or a portion of the net deferred tax assets willnot be realized. Based upon the projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely thannot that the Company willnot realize the benefits of these deductible differences, and therefore, a full valuation allowance has been recorded at* July 31, 2026* and* April 30, 2026*.

Accruals for uncertain tax positions are provided for in accordance with applicable accounting standards. The Company* mayrecognize the tax benefits from an uncertain tax position only if it is more likely thannot* that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than50% likelihood of being realized upon ultimate settlement. Judgment is required in assessing the future tax consequences of events that have been recognized in the financial statements or tax returns.

Based on its analysis, management has determined that it hasnot incurred any liability for unrecognized tax benefits as of* July 31, 2026* and* April 30, 2026*.

The Company* maybe subject to potential examination by U.S. federal, U.S. states or foreign jurisdiction authorities in the areas of income taxes. These potential examinations may*include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws.

The Company is subject to income taxes in the U.S. federal jurisdiction and franchise taxes in the State of Texas. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Generally, the Company isno longer subject to income tax examinations by major taxing authorities for years before* April 30, 2021.*

Segments

Operating segments are identified as components of an enterprise about which discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in deciding resource allocation and assessing performance. The Company has determined that its CODM is its Chief Executive Officer. The Company's CODM reviews financial information presented for the purpose of making decisions, allocating resources and evaluating performance. The Company has determined it operates inone operating and reportable segment.

Recent Accounting Standards

In* December 2023,the Financial Standards Accounting Board (FASB) issued Accounting Standards Update (ASU)2023-09 "Income Taxes (Topics740): Improvements to Income Tax Disclosures*" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU2023-09 is effective for the Company’s annual periods beginning* January 1, 2025,with early adoption permitted. The adoption didnot* have a material impact on the Company’s financial statement disclosures.

In* November 2024,the FASB issued ASU2024*-03 (updated ASU2025-01 issued in* January 2025), "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses", which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement. ASU2024-03 is effective for annual reporting periods beginning after December 15, 2026,and interim periods beginning after December 15, 2027,with early adoption permitted, and maybe applied either prospectively or retrospectively to financial statements issued for reporting periods after the effective date of ASU2024*-03 or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU2024-03.

In* September 2025,the FASB issued ASU2025*-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic350*-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU2025*-06"), which requires software capitalization to begin when both of the following occur: (1) management has authorized and committed to funding the software project; and (2) it is probable that the project will be completed and the software will be used to perform the function intended. For public entities, the provisions within ASU2025-06 are effective for thefirst annual and interim reporting periods beginning after* December 15, 2027,with early adoption permitted. The provisions within ASU2025*-06 allow for a prospective, modified, or retrospective transition approach. The Company early adopted ASU2025-06 on a prospective basis effective* May**1,* 2025. The adoption didnot have a material impact on the Company’s financial statements.

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Note4. Debt

Debt consists of the following:

Loan and Security Agreement

In* April 2020,the Company entered into a loan and security agreement (the “Loan and Security Agreement”) pursuant to which a secured promissory note in the original principal amount of $500,000 (the “FRV Note”) was issued to each of Front Range Ventures LLC (“FRV”) and John Q. Adams (the “JQA Note”), who were both shareholders of the Company at the time of issuance. John Q. Adams was also a director of the Company at the time of entering into the Loan and Security Agreement. Each party committed to lend a principal amount of $500,000, totaling $1,000,000, and the loan was drawn inthree installments of $300,000 upon execution of the loan agreement, $350,000 on or about July 2, 2020and $350,000 on or about September 4, 2020.The loan accrued interest at a rate of 12% per annum, compounded annually, payable at maturity. The Company is also required to pay default interest at a rate of 18% per annum, compounded annually, on any unpaid amounts after the applicable due date until the loan amounts are fully re-paid. The loan is collateralized by substantially all of the Company’s assets and intellectual property, except for the secured interest on the covered technology as discussed in Note7.*

The loan had an original maturity date of* September 30, 2021,which was amended in September 2021making the note repayable on demand. The loan was amended in November 2021,extending the maturity to September 30, 2022;further amended in May 2022to extend the maturity to September 30, 2023;amended again in January 2023to (i) further extend the maturity date of the FRV Note to September 30, 2024,on which date the principal amount and all accrued interest thereon would be due and payable; and (ii) amend the dates on which principal and accrued interest was due under the JQA Note, such that interest accrued would have been due and payable on September 30, 2023,and the principal amount together with all accrued interest after September 30, 2023would be due and payable on March 31, 2024.*

In* October 2023,the Company issued to FRV and Mr. Adams warrants ("$1M* Lender Warrants") to purchase an aggregate of 2,000 shares of Common Stock as consideration for the extension of the interest maturity date toone lender. On* November 16, 2023,the Company entered into a note conversion letter agreement with John Q. Adams (the “Adams Note Conversion Letter Agreement”). Pursuant to the Adams Note Conversion Letter Agreement, in consideration for the conversion of the principal and interest in the amounts of $585,006 due under the JQA Note, on November 16, 2023,the Company: (1) issued 36,563 shares of Common Stock to Mr. Adams; and (2) entered into a Adams Warrant Amendment (as defined below) with Mr. Adams, amending the$1M* Lender Warrants to reduce the exercise price of an aggregate of 1,076 $1M Lender Warrants to $16.00 per share (the “Adams Warrant Amendment”).

On* August 19, 2024,the Company and FRV entered into AmendmentNo.* 6 to the Loan and Security Agreement to further extend the maturity date of the FRV Note to* September 30, 2025.As per the amendment, the Company paid approximately $305,000 in accrued interest to FRV in Fiscal2025.*

On* September 26, 2025,the Company and FRV entered into AmendmentNo.* 7 of the Loan and Security Agreement to further extend the maturity date to* September 30, 2026and pay the outstanding accrued interest as follows: (i) a payment of accrued interest on or before September 30, 2025and (ii) thereafter all accrued interest due shall be payable at maturity. The Company mayelect to repay all or any part of the FRV Note, as amended, in its sole discretion at any time prior to the extended maturity date, provided such repayment shallnot* be less than $50,000 and shallfirst be applied to accrued interest and thereafter to outstanding principal. As per the amendment, the Company paid approximately $61,000 in accrued interest to FRV.

As of* July 31, 2026* and* April 30, 2026*, accrued interest was approximately $51,000 and $35,000, respectively, and is included in accrued interest expense in the accompanying condensed balance sheets.

$2.5M and$3.6M Streeterville Notes**

In* September 2024,the Company entered into a Note Purchase Agreement with Streeterville, pursuant to which the Company issued to Streeterville an unsecured promissory note in the original principal amount of $2,510,000 (the"$2.5M* Streeterville Note"). The$2.5M Streeterville Note carried an Original Issue Discount (the “OID”) of $500,000 and $10,000 was withheld from the$2.5M Streeterville Note for reimbursement of Streeterville's transaction expenses. Additionally, the Company incurred debt financing costs of $159,700. As a result, the Company received aggregate net proceeds of approximately $1.9 million in connection with the issuance of the$2.5M Streeterville Note.

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The$2.5M Streeterville Note bears interest at the rate of 8.5% per annum and matures in* March 2026.From time to time, beginningsix* months after issuance, Streeterville* mayredeem a portion of the$2.5M Streeterville Note,not to exceed $270,000 per month. In the event the Company hasnot* reduced the outstanding balance under the$2.5M Streeterville Note by at least $900,000 by the12-month anniversary following the issuance date, then the outstanding balance at such time will automatically increase by 5%. Subject to terms and conditions set forth in the$2.5M Streeterville Note, the Company* may*prepay all or any portion of the outstanding balance of the$2.5M Streeterville Note at any time.

During the term of the note, the Company entered into multiple agreements with Streeterville, pursuant to which Streeterville exchanged $2,060,000 in aggregate principal and $45,000 in accrued interest owed under the$2.5M Streeterville Note for 597,578 shares of the Company's Common Stock and repaid $450,000 in aggregate principal. The issuance of the shares was made pursuant to the exemption from the registration requirements afforded by Section3(a)(9) of the Securities Act.

On* March 11, 2026,the Company and Streeterville amended the$2.5M Streeterville Note to extend the maturity date to June 30, 2026.*

On* June 23, 2026,the Company entered into an agreement with Streeterville, pursuant to which Streeterville exchanged the remaining balance of accrued interest of approximately $164,000 owed under the$2.5M Streeterville Note for 78,103 shares of the Company's Common Stock. As of July 31, 2026,the$2.5M* Streeterville Note and accrued interest was repaid in full.

In* January 2026,the Company entered into asecond* Note Purchase Agreement with Streeterville, pursuant to which the Company issued to Streeterville an unsecured promissory note in the original principal amount of $3,605,000 (the*"$3.6M* Streeterville Note"). The$3.6M Streeterville Note carried an OID of $600,000 and $5,000 was withheld from the$3.6M Streeterville Note for reimbursement of Streeterville's transaction expenses. As a result, the Company received aggregate net proceeds of approximately $3.0 million in connection with the issuance of the$3.6M Streeterville Note.

The$3.6M Streeterville Note bears interest at the rate of 12.0% per annum and matures in* July 2027.From time to time, beginningsix* months after issuance, Streeterville* mayredeem a portion of the$3.6M Streeterville Note,not to exceed $405,000 per month. In the event the Company hasnot* reduced the outstanding balance under the$3.6M Streeterville Note by at least $1,250,000 by the12-month anniversary following the issuance date, then the outstanding balance at such time will automatically increase by 5%. Subject to terms and conditions set forth in the$3.6M Streeterville Note, the Company* may*prepay all or any portion of the outstanding balance of the$3.6M Streeterville Note at any time.

Subsequent to* July 31, 2026,the Company entered into an agreement with Streeterville, pursuant to which Streeterville exchanged $200,000 in aggregate principal under the$3.6M* Streeterville Note for 95,602 shares of the Company's Common Stock (see Note9). The issuance of the shares was made pursuant to the exemption from the registration requirements afforded by Section3(a)(9) of the Securities Act.

The*$2.5M* Streeterville Note and the*$3.6M* Streeterville Note contain customary events of default, including if the Company undertakes a fundamental transaction (including consolidations, mergers, and certain changes in control of the Company), without Streeterville’s prior written consent. Upon the occurrence of certain events of default, the outstanding balance of such notes will become automatically due and payable. Additionally, upon an event of default described in such notes (i.e., the failure to pay amounts under such notes when due or to observe any covenant under the Note Purchase Agreements), the outstanding balance of these notes automatically increase to the lesser of 18% or the maximum rate permitted by law.

As of* July 31, 2026* and* April 30, 2026*, accrued interest was approximately $0.2 million and $0.3 million, respectively, and is included in accrued interest expense in the accompanying condensed balance sheets.

Note5. Stockholders’** Equity**

Preferred Stock

The Company is authorized to issue 20,000,000 shares of preferred stock, par value $0.001 per share (“Preferred Stock”), of which 10,000 shares have been designated as Series A Convertible Preferred Stock,10,000 shares have been designated as Series B Convertible Preferred Stock,600,000 shares have been designated as Series C Convertible Preferred Stock (the “Series C Preferred Stock”), and 4,285,714 shares have been designated as Series D Preferred Stock.

Series C Preferred Stock

The Series C Preferred Stock was originally issued at $25.00 per share. An amendment to, or waiver of rights in, the Series C Preferred Stock certificate of designation requires the approval of holders of a majority of the outstanding shares of Series C Preferred Stock and FRV (so long as FRV owns at least 71,000 shares of Series C Preferred Stock).

At* July 31, 2026* and* April 30, 2026*, there were 380,440 shares of Series C Preferred Stock outstanding.

Holders of the Series C Preferred Stock are entitled to receive dividends at an annual rate of $1.50 per share of Series C Preferred Stock, shall accrue and are payable out of funds legally available, are payable only when and if declared by the board of directors, and are noncumulative. No dividends have been declared to date. The holders of the shares of Series C Preferred Stock have voting rights equal to an equivalent number of shares of Common Stock into which it is convertible and vote together asone class with Common Stock.

Each share of Series C Preferred Stock is convertible, at the option of the holder at any time, into such number of fully paid and non-assessable shares of Common Stock determined by dividing the original issue price of $25.00 by the conversion price for such series in effect at the time of conversion for the Series C Preferred Stock. The conversion price for the Series C Preferred Stock is subject to adjustment in accordance with conversion provisions contained in the Company's certificate of formation, as amended, including as a result of the Proposed Transaction and the private placement with Fortitude.

At* July 31, 2026*, the outstanding shares of Series C Preferred Stock were convertible into 295,141 shares of Common Stock at a conversion price of $32.22 per share.

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Series D Preferred Stock

On* March 10, 2025,the Company entered into a selling agency agreement (the “Placement Agent Agreement”) with Digital offering LLC (“Digital Offering”) to act as sole placement agent (the “Placement Agent”) on a “best efforts” offering of up to 4,285,714 Units, with each Unit consisting of (a)one share of the Company's Series D Preferred Stock and (b)one warrant to purchaseone share of the Company's Common Stock, for a total of 4,285,714 shares of the Company's Series D Preferred Stock and warrants to purchase up to an aggregate of 4,285,714 shares of Common Stock (collectively, the “Offering”), pursuant to certain subscription agreements with certain investors, upon which each investor must complete a Subscription Agreement and submit the applicable subscription price as set forth therein. The offering price is $3.50 per Unit, for a maximum offering amount of $15.0 million worth of Units. Each warrant is exercisable at any time from the date of issuance through thethird* anniversary from the date of issuance, unless earlier redeemed and is exercisable to purchaseone share of Common Stock at $5.00 per share, subject to customary adjustment.

Pursuant to the Placement Agent Agreement, the Placement Agent is entitled to receive from each closing of the Offering (i) a cash fee of 7% of the gross proceeds received by the Company from such closing, (ii) warrants (the “Agent Unit Warrants”) to purchase 3% of the total number of Units sold by the Company at such closing (the “Agent Units”) at an exercise price of $4.375 per Agent Unit Warrant, with each Agent Unit consisting ofone share of Series D Preferred Stock (the “Agent Preferred Shares”) andone Warrant (the “Agent Warrants” and the shares of Common Stock underlying such Agent Warrants, the “Agent Warrant Shares”), and (iii) reimbursement of certain of its out-of-pocket expenses. Digital Offering is acting on a “reasonable best efforts” basis, in connection with the Offering and is underno obligation to purchase any of the Units or arrange for the sale of any specific number or dollar amount of shares of the Units.

On* February 10, 2025,in connection with the Series D Preferred Stock Offering, the Company’s Board of Directors adopted a Certificate of Designations of Series D Preferred Stock, which was filed with the Secretary of State of the state of Texas (the “Texas Secretary of State”) on May 21, 2025,to create, out of the Company’s authorized but unissued preferred stock, the Series D Preferred Stock (the “Certificate of Designations of Series D Preferred Stock”). On May 28, 2025,*the Company was notified by the Texas Secretary of State that the Company’s Certificate of Designations of Series D Preferred Stock was made effective as of the filing date.

The Series D Preferred Stock has an initial stated value of $3.50 per share which is equal to the price per Unit, subject to appropriate adjustment in relation to certain events, such as recapitalizations, stock dividends, stock splits, stock combinations, reclassifications or similar events. The Series D Preferred Stock ranks, as to dividend rights and rights upon the Company’s liquidation, dissolution, or winding up, senior to all classes or series of the Company’s Common Stock. The terms of the Series D Preferred Stock donot limit the Company's ability to (i) incur indebtedness or (ii) issue additional equity securities that are equal or junior in rank to the shares of the Company's Series D Preferred Stock as to distribution rights and rights upon our liquidation, dissolution or winding up.

Holders of the Series D Preferred Stock are entitled to receive dividends, when, as and if declared by the board of directors, in its sole discretion, out of funds legally available for that purpose. Any dividends that* may*be declared shall be non-cumulative. No dividends have been declared to date.

The liquidation preference for each share of Series D Preferred Stock is $3.50. Upon a liquidation, dissolution or winding up of the Company, holders of shares of Series D Preferred Stock will be entitled to receive the liquidation preference with respect to their shares.

Each share of Series D Preferred Stock is convertible intoone share of Common Stock, at the option of the holder at any time. The conversion rate shallnot be adjusted for stock splits, stock dividends, recapitalizations or similar events. At any time after issuance upon the occurrence of any of the following events, the Company shall have a right to direct the mandatory conversion of the Series D Preferred Stock: (a) a change in control, (b) if the price of the Common Stock closes at or above $5.00 per share for10 consecutive trading days, or (c) if the Company consummates a firm commitment public offering of Common Stock for gross proceeds of at least $15 million at an offering price per share equal to or greater than $5.00.

The Company* may**not* authorize or issue any class or series of equity securities ranking senior to the Series D Preferred Stock as to dividends or distributions upon liquidation (including securities convertible into or exchangeable for any such senior equity securities) or amend the Company's Amended and Restated Certificate of Formation, as amended (whether by merger, consolidation, or otherwise), to materially, and adversely change the terms of the Series D Preferred Stock without the affirmative vote of at least a majority of the votes entitled to be cast on such matter by holders of the Company's outstanding shares of Series D Preferred Stock, voting together as a class. Otherwise, holders of the Company's Series D Preferred Stock donot have any voting rights.

During the year ended* April 30, 2026,the Company issued 1,912,383 Units consisting of Series D Preferred Stock and warrants to purchase shares of Common Stock for gross proceeds of approximately $6.7 million. There wereno shares issued during thethree* months ended* July 31, 2026.Since inception and through July 31, 2026,1,487,119 shares of Series D Preferred Stock converted into 1,487,119 shares of the Company's Common Stock. At July 31, 2026*, there were 425,264 shares of Series D Preferred Stock outstanding.

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Common Stock

The Company’s Certificate of Formation, as amended, authorizes 500,000,000 shares of Common Stock. As of* July 31, 2026* and* April 30, 2026*, the Company had 3,904,983 and 3,188,380 shares of Common Stock issued and outstanding, respectively.

During thethree months ended* July 31, 2026*, the Company entered into an agreement with Streeterville that exchanged approximately $164,000 of accrued interest on its*$2.5M* Streeterville Note for 78,103 shares of the Company's Common Stock. The issuance of the shares was made pursuant to the exemption from the registration requirements afforded by Section3(a)(9) of the Securities Act.

During thethree months ended* July 31, 2026*, the Company issued 107,330 shares of Common Stock as a result of conversions of Series D Preferred Stock.

On* September 18, 2023,the Company entered into an Equity Distribution Agreement (the “EDA”) with Maxim Group LLC as sales agent pursuant to which the Company mayoffer and sell up to $3.25 million shares of Common Stock under the ATM Facility. The shares maybe issued and sold from time to time through or to the placement agent acting as sales agent or principal pursuant to our shelf registration statement on Form S-3 (the “Shelf S-3”), as filed with the SEC on September 18, 2023.The $3.25 million shares comprised of Common Stock that maybe offered, issued and sold under the at-the-market offering prospectus is included in the $50.0 million of securities that maybe offered, issued, and sold by the Company under the base prospectus of the Shelf S-3. The Shelf S-3 was declared effective by the SEC on September 28, 2023.*

On* November 9, 2023,the Company entered into AmendmentNo.* 1 to the EDA with Maxim, pursuant to which the Company* may*sell up to $10.0 million shares of Common Stock from time to time through the sales agent.

On* November 17, 2023,the Company entered into AmendmentNo.* 2 to the EDA with Maxim, pursuant to which the Company* may*sell up to $15.0 million shares of Common Stock from time to time through the sales agent.

On* August 3, 2025,the Company entered into AmendmentNo.* 3 to the EDA with Maxim Group pursuant to which the Company* mayoffer and sell, from time to time, up to $25,000,000 of shares of Common Stock and the parties further agreed that Maxim will be entitled to compensation at a commission rate equal to 4.0% of the gross sales price per share sold pursuant to the EDA up to a maximum of $11,036,310 in gross proceeds to the Company, and 3.0% of the gross sales price per share sold pursuant to the EDA from any gross proceeds to the Company in excess of such amount; provided, however, that inno* event will the Company issue or sell through the Sales Agent such number of shares of Common Stock that would cause the Company or the offering of its shares of Common Stock tonot satisfy the eligibility and transaction requirements for use of Form S-3 (including General InstructionI.B.6 of Form S-3).

During thethree months ended* July 31, 2026*, the Company issued and sold 4,920 shares of Common Stock under the ATM Facility.

During thethree months ended* July 31, 2026*, the Company issued 425,000 shares of restricted stock to management and 101,250 RSUs vested and settled into the same number of shares of Common Stock. See further discussion in Note6.

The holders of Common Stock are entitled to receive dividends whenever funds and assets are legally available and when declared by the board of directors, subject to the rights of holders of Preferred Stock outstanding. No dividends were declared as of or through thethree months ended* July 31, 2026* and the year ended* April 30, 2026*.

Common Stock Warrants

The Company has issued warrants to investors in connection with funding or for services rendered and these warrants are convertible into a number of shares of the Company’s Common Stock for a period of 5 years from the date of issuance.

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

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Note6. Stock-based Compensation

The Company grants certain employees and board members stock option awards where vesting is contingent upon a service period, as it believes that such awards better align the interests of its employees with those of its shareholders. Stock option awards are granted with an exercise price equal to or above the market price of the Company’s stock at the date of grant. Certain stock option awards provide for accelerated vesting if there is a change in control, as defined in the Nonstatutory Stock Option Agreement. Unvested stock options forfeit when an employee leaves the Company.

Time-based grants generally vest quarterly based on 3 years continuous service for executive directors and employees, or 12 months continuous service for directors and have 10-year contractual terms. The Company also grants stock option awards where vesting is contingent upon meeting various departmental and company-wide performance goals, including FDA and CE Mark regulatory approval and certain EBITDA and funding thresholds. Such performance-based stock options are expected to vest when the performance criteria and metrics have been met. These stock options have contractual lives often years.

2023 Equity Incentive Plan

On* March 15, 2023,the Company’s Board of Directors adopted the2023* Equity Incentive Plan (as amended, the “Equity Incentive Plan”). The Company's shareholders approved the Equity Incentive Plan at the Company's2023 annual shareholder meeting held on* January 17, 2024.The Equity Incentive Plan provides for the grant of nonstatutory stock options, incentive stock options, restricted stock, RSUs, performance units, performance shares, and other share-based awards. On November 27, 2023,the Company's Board of Directors approved and entered into AmendmentNo.* 1 to the Equity Incentive Plan to increase the initial number of shares issuable under the Plan from 25,000 shares to 85,000 shares.

On* July 9, 2025,the Company’s Board of Directors approved and entered into AmendmentNo.* 2 to the Equity Incentive Plan, to increase the maximum aggregate number of shares of the Company’s Common Stock, $0.001 par value per share, that* may*be issued under the Equity Incentive Plan to 1,000,000 shares of Common Stock, plus such number of shares of Company's Common Stock, which is equal to the lesser of (i)25% of the total number of shares of all classes of Company's Common Stock and the Company’s preferred stock, $0.001 par value per share (the “Preferred Stock”), as converted to Common Stock, outstanding on the last day of each the immediately preceding fiscal year, and (ii) a lesser number of shares of our common stock determined by the Administrator (as defined in the Equity Incentive Plan) (collectively, the “Evergreen Shares”).

On* November 28, 2025,the Company’s Board of Directors approved and entered into AmendmentNo.* 3 to the Equity Incentive Plan to increase the maximum aggregate number of shares of the Company’s Common Stock, that* maybe issued under the Equity Incentive Plan to 1,250,000 shares of Common Stock. The number of shares of Common Stock available for issuance under the Equity Incentive Plan will be subject to automatic increase on thefirst* day of each fiscal year of the Company beginning with fiscal year beginning* May 1, 2026,so that the number of shares of Common Stock available for issuance under the Equity Incentive Plan is equal to the lesser of: (i)25% of the total number of shares of all classes of Common Stock and preferred stock of the Company as converted to Common Stock outstanding on the last day of the immediately preceding fiscal year, and (ii) a lesser number of shares of Common Stock determined by the Administrator (as defined in the Equity Incentive Plan). The amendment was approved at the annual shareholder meeting held on April 30, 2026.*

On* June 22, 2026,in connection with the execution of the Merger Agreement, the Board approved and entered into AmendmentNo.* 4 to the Equity Incentive Plan to increase the maximum aggregate number of shares of Common Stock that* may*be issued under the plan by an additional 475,000 shares and the Evergreen Shares. The amendment is subject to approval of the Company’s shareholders and shall be considered and voted upon by the Company’s shareholders as part of the stockholder proposals to be submitted to the Company’s shareholders in connection with Merger Agreement.

On* June 23, 2026,the Company's Board of Directors deemed that the execution of the Merger Agreement satisfied the vesting conditions of a total of 101,250 RSUs and 260,000 options granted to Mark Hilz, a former officer and director of the Company, who ceased being the Company's director due to his passing on April 1, 2026.The RSUs were settled into 101,250 shares of the Company's Common Stock in June 2026.During thethree* months ended* July 31, 2026,*the Company recognized stock compensation of approximately $0.3 million related to the accelerated vesting of Mr. Hilz's options and approximately $0.2 million related to the accelerated vesting of Mr. Hilz's RSUs.

The following is a summary of service-based stock option activity during thethree months ended* July 31, 2026*:

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The following is a summary of performance-based stock option activity during thethree months ended* July 31, 2026*:

During thethree months ended* July 31, 2026and2025,* the Company recognized stock-based compensation for stock options of approximately $0.5 million and $0.2 million, respectively.

As of* July 31, 2026*, there was approximately $0.3 million of unrecognized compensation costs related to non-vested service-based Common Stock options and approximately $0.1 million of unrecognized compensation costs related to non-vested performance-based Common Stock options.

Restricted Stock Units and Restricted Shares Issued

The following is a summary of RSUs and restricted stock award activity during thethree months ended* July 31, 2026*.

In connection with the execution of the Merger Agreement and subject to closing, the Compensation Committee of the Board (the “Compensation Committee”) granted an award of 425,000 restricted shares of Common Stock (the “Shares”) to the Company's Chief Executive Officer under the Equity Incentive Plan as a retention bonus in connection with the transactions to lead the Company’s and the Merger Sub’s efforts to close the transactions and to lead the current legacy business of the Company after the closing, and to provide public-company, SEC-reporting and capital-markets guidance and transition support to the Company following the closing. The Shares will be non-voting until they vest. The Shares were issued on* June 22, 2026,before the signing of the Merger Agreement. The Shares shall vest in full subject to the satisfaction of all of the following conditions (the “Conditions”): (i) occurrence of the Closing and (ii)(x)one-fourth of the Shares shall vest on thethree*-month anniversary of the date of the Closing (the “Initial Vesting Date”) and (y) thereafter,one-fourth of the Shares shall vest on each subsequentthree-month anniversary of the Initial Vesting Date (each an “Additional Initial Vesting Date” and together with the Initial Vesting Date, the “Vesting Dates”), such that all of the Shares shall fully vest on theone-year anniversary of the date of the Closing.

On* July 7, 2026,the Compensation Committee granted an award of 25,000 RSUs to the Company's Chief Financial Officer under the Equity Incentive Plan. The RSUs vest in full subject to the satisfaction of all of the following conditions: (i) occurrence of the Closing and (ii)(x)one-fourth shall vest on the Initial Vesting Date and (y) thereafter,one-fourth shall vest on each subsequent additional initial vesting date, such that all of the RSUs shall fully vest on theone*-year anniversary of the date of the Closing.

During thethree months ended* July 31, 2026,the Company recognized stock-based compensation for vested RSUs of approximately $0.2 million. As of July 31, 2026,total unrecognized stock-based compensation expense related to performance-based non-vested RSUs totaled approximately $0.3 million. As of July 31, 2026,*total unrecognized stock-based compensation expense related to time-based non-vested RSUs and restricted stock awards totaled approximately $1.2 million.

Note7. Commitments and Contingencies

Operating Leases

The Company has a long-term operating lease for office, industrial, and laboratory space which was entered into in* May 2017.On September 27, 2022,the Company entered into the First Amendment to Lease (the “Lease Amendment”), which amended the Lease Agreement to document the exercise of its option to extend the term of the lease for an additional 64 months, commencing February 1, 2023,and expiring on May 31, 2028 (the “Extension Term”). Pursuant to the amendment, the Company will pay initial monthly payments of $13,129, beginning February 2023,subject to 3% annual increases. Rent expense for thethree* months ended* July 31, 2026* was approximately $35,000.

The Company records right-of-use assets and liabilities at the present value of the fixed lease payments over the term at the commencement date. The Company uses its incremental borrowing rate of 12% to determine the present value of the lease as the rate implicit in the lease is typicallynot readily available.

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Information related to the Company’s right-of-use assets and lease liabilities consist of the following:

As of* July 31, 2026*, future maturities of lease liabilities due under lease agreements for the period ended are as follows:

Litigation

From time to time, the Company* maybe subject to legal proceedings and claims that arise in the ordinary course of business. The Company doesnot* believe that the outcome of those matters will have a material adverse effect to the financial position, operating results or cash flows. However, there can beno assurance such legal proceedings willnot have a material impact.

The Company is a party to a certain legal proceeding. The claimant is seeking damages of $180,000, plus prejudgment interest costs and attorney fees. Because a loss isnot currently considered probable,no liability has been recorded in the accompanying financial statements. The assessment of the matter and the estimate of potential loss are based on information available to the Company as of the date of these financial statements and are subject to change as additional information becomes available or developments occur in the proceeding. The matter is in its preliminary stages, and the ultimate outcome cannot presently be determined. The Company has hired counsel and intends to vigorously defend itself against the claims asserted. Actual loss* may*differ from the Company's current estimate.

Royalty Agreements

In2013, the Company entered into an agreement (the “Technology Agreement”) with its founder, conveying ownership of all intellectual property and rights to the Company. As part of that agreement, the Company will make royalty payments, based upon paid MyoVistawavECG device unit sales, as follows:

The royalty obligation has afirst priority security interest and pledge on the covered technology (as defined in the Technology Agreement, which essentially is comprised of the intellectual property of the MyoVistawavECG device) in priority to the debt holders of the Loan and Security Agreement as discussed further in Note4.

Upon (i) the aggregate payment of $3,000,000 of royalties; (ii) the Common Stock having a closing quoted share price of $6,875 per share or more; or (iii) receipt by the Company of a bona fide offer valuing the Common Stock at $6,875 or more, then the secured interest and pledge shall be released.

In the event of a bankruptcy of the Company, any balance of the $3,500,000 royaltynot paid at that point would accelerate and become an immediately due debt obligation of the Company with the benefit of the secured interest and pledge (if it remained at such time).

In* December 2015,the Company entered into an agreement with The University Court of The University of Glasgow (“Glasgow”) for a non-exclusive license of the Glasgow algorithm interpretive analysis for the conventional ECG trace. The agreement was amended in March 2023,and as part of the agreement, the Company is required to make royalty payments, based upon MyoVistawavECG device unit sales dependent on sale volumes per year, subject to minimum annual fees. To date, such amounts have been expensed to research and development as the Glasgow algorithm has been part of the device development and will form part of the submission for FDA clearance of the MyoVistawav*ECG device.

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Collaboration Agreements

Mount Sinai Collaboration Agreement

On* September 20, 2023,the Company entered into multiple definitive license agreements (each a “License Agreement” and collectively, the “License Agreements”) with Mount Sinai to commercialize a range of AI cardiovascular algorithms developed by Mount Sinai as well as a memorandum of understanding for ongoing cooperation encompassing de-identified data access, on-going research, and the evaluation of the MyoVistawav*ECG. The License Agreements, of which there areeleven in total, cover rights tothirteen AI cardiovascular algorithms, two data science methods for use with ECG waveforms andthree filed patents.

Note8. Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the CODM in deciding how to allocate resources and in assessing performance. The Company has determined that its CODM is its Chief Executive Officer.

Management and the CODM view the Company’s operations and manage its business inone operating segment, which is the business of identifying, developing and commercializing products and AI-ECG solutions in the cardiovascular diagnostic technology field. The CODM uses operating expenses to measure performance against progress in its clinical trials and its product development. 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.

The following table summarizes the segment's financial information including the Company's significant segment expenses:

Note9. Subsequent Events

Management has evaluated subsequent events after the balance sheet date of* July 31, 2026*, through the date of filing.

Subsequent to* July 31, 2026,*the Company issued and sold 397,762 shares under the ATM Facility for net proceeds of approximately $1.2 million.

On* August 12, 2026,the Company entered into a subscription agreement with Seller, pursuant to which the Company issued 411,522 shares of Common Stock at a purchase price of $2.43 per share for gross proceeds of approximately $1.0 million. The proceeds will be used for operating expenses in the period leading up to the expected Merger closing. The shares issued in the private placement offering represent ordinary shares of Common Stock without any additional rights or preferences, however, such shares arenot* subject to the Exchange Ratio (as defined in the Merger Agreement) contemplated by the Proposed Transaction.

On* August 19, 2026,the Company entered into an agreement with Streeterville, pursuant to which Streeterville exchanged $200,000 in aggregate principal under the$3.6M* Streeterville Note for 95,602 shares of the Company's Common Stock. The issuance of the shares was made pursuant to the exemption from the registration requirements afforded by Section3(a)(9) of the Securities Act.

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