QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
State or Other Jurisdiction of Incorporation or Organization | I.R.S. Employer Identification No. | |||||||
Address of Principal Executive Offices | Zip Code |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer ☐ | Accelerated filer ☐ | ||||
Smaller reporting company | |||||
Emerging growth company |
Page | ||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Prepaid expenses and other current assets | |||||||||||
Total Current Assets | $ | $ | |||||||||
Property and equipment, net | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable and accrued expenses (includes related party $ | |||||||||||
Total Liabilities | |||||||||||
Commitments | |||||||||||
Stockholders’ Equity | |||||||||||
Preferred stock - $ | |||||||||||
Common stock - $ | |||||||||||
Additional paid in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total Stockholders’ Equity | $ | $ | |||||||||
Total Liabilities and Stockholders’ Equity | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Operating Expenses: | |||||||||||||||||||||||
General and administrative | $ | $ | $ | $ | |||||||||||||||||||
Research and development | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Other Income | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Other Income | |||||||||||||||||||||||
Total other income | |||||||||||||||||||||||
Loss before provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
Net Loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average common shares outstanding, basic and diluted |
Three months ended September 30, 2023 | |||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance - June 30, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Stock based compensation expense | — | — | — | ||||||||||||||||||||||||||
Stock issuance upon exercise of stock options | — | — | |||||||||||||||||||||||||||
Stock issuance upon vesting of restricted stock awards | — | — | |||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Balance – September 30, 2023 | $ | $ | $ | $ | ( | $ |
Three months ended September 30, 2022 | |||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance – June 30, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Stock based compensation expense | — | — | — | ||||||||||||||||||||||||||
Stock issuance upon exercise of stock options | — | — | — | — | |||||||||||||||||||||||||
Stock issuance upon vesting of restricted stock units | |||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Balance – September 30, 2022 | $ | $ | $ | ( | $ |
Nine months ended September 30, 2023 | |||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance - December 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Stock based compensation, expense | — | — | — | ||||||||||||||||||||||||||
Sale of Common Stock, net of issuance costs | — | ||||||||||||||||||||||||||||
Stock issuance upon exercise of stock options | — | — | |||||||||||||||||||||||||||
Stock issuance upon vesting of restricted stock units | — | — | — | — | |||||||||||||||||||||||||
Stock issuance upon exercise of warrants | — | ||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Balance – September 30, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Nine months ended September 30, 2022 | |||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||
Balance – December 31, 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Stock based compensation, expense | — | — | — | ||||||||||||||||||||||||||
Sale of Common Stock and Warrants | — | — | |||||||||||||||||||||||||||
Stock issuance upon exercise of stock options | — | — | |||||||||||||||||||||||||||
Stock issuance upon vesting of restricted stock awards | — | — | — | — | |||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
Balance – September 30, 2022 | $ | $ | $ | ( | $ |
Nine Months ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Cash Flows From Operating Activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
Stock-based compensation expense | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Accounts payable and accrued expenses | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash Flows From Investing Activities | |||||||||||
Purchase of property and equipment | ( | ||||||||||
Net cash used in investing activities | ( | ||||||||||
Cash Flows From Financing Activities | |||||||||||
Proceeds from sale of equity, net of issuance costs | |||||||||||
Proceeds from exercise of stock options | |||||||||||
Proceeds from exercise of warrants | |||||||||||
Net cash provided by financing activities | |||||||||||
Net increase (decrease) in cash and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash - beginning of period | |||||||||||
Cash, cash equivalents and restricted cash - at end of period | $ | $ | |||||||||
Supplemental Disclosures of Cash Flow Information: | |||||||||||
Taxes paid | $ | $ | |||||||||
Interest paid | |||||||||||
Supplemental Disclosures of Non-cash Flow Information: | |||||||||||
Issuance of common stock and warrants to settle accrued expenses | |||||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash (included in other assets) |
September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Stock options (excluding exercisable penny stock options) | ||||||||||||||
Restricted stock awards | ||||||||||||||
Warrants | ||||||||||||||
Total |
Number of shares | Weighted average exercise price | Weighted average remaining life (years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||||
Outstanding - December 31, 2022 | $ | $ | |||||||||||||||||||||
Issued | — | — | |||||||||||||||||||||
Exercised | ( | — | — | ||||||||||||||||||||
Expired | ( | — | — | ||||||||||||||||||||
Outstanding and Exercisable – September 30, 2023 | $ | $ |
Number of options outstanding | Weighted average exercise price | Average remaining contractual life (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||||
Outstanding – December 31, 2022 | $ | $ | |||||||||||||||||||||
Options granted | |||||||||||||||||||||||
Options exercised | ( | ||||||||||||||||||||||
Options cancelled | ( | ||||||||||||||||||||||
Outstanding – September 30, 2023 | |||||||||||||||||||||||
Exercisable – September 30, 2023 | $ | $ |
Nine Months ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Weighted-average Black-Scholes option pricing model assumptions: | |||||||||||
Volatility | |||||||||||
Expected term (in years) | |||||||||||
Risk-free rate | |||||||||||
Expected dividend yield | $ | $ | |||||||||
Weighted average grant date fair value per share | $ | $ |
Nine months ended September 30, 2023 | ||||||||||||||
Numbers of Shares | Weighted Average Grant Date Fair value | |||||||||||||
Non-Vested at beginning of period | $ | |||||||||||||
Shares granted | ||||||||||||||
Shares vested | ( | |||||||||||||
Non-vested | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
General and administration | |||||||||||||||||||||||
Stock Options | $ | $ | $ | $ | |||||||||||||||||||
RSU's | |||||||||||||||||||||||
Total general and administration | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
Stock Options | |||||||||||||||||||||||
RSU's | |||||||||||||||||||||||
Total research and development | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
For the Three Months ended September 30, | For the Nine Months ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | $ | 2,114 | $ | 2,048 | $ | 66 | 3 | % | $ | 6,417 | $ | 5,256 | $ | 1,161 | 22 | % | |||||||||||||||||||||||||||||||
Research and development | 1,623 | 1,562 | 61 | 4 | % | 4,788 | 4,036 | 752 | 19 | % | |||||||||||||||||||||||||||||||||||||
Total operating expenses | 3,737 | 3,610 | 127 | 4 | % | 11,205 | 9,292 | 1,913 | 21 | % | |||||||||||||||||||||||||||||||||||||
Loss from operations | (3,737) | (3,610) | $ | (127) | 4 | % | (11,205) | (9,292) | (1,913) | 21 | % | ||||||||||||||||||||||||||||||||||||
Interest income (expense) | 267 | 28 | $ | 239 | 854 | % | 445 | 39 | 406 | 1,041 | % | ||||||||||||||||||||||||||||||||||||
Other Income | — | 3 | $ | (3) | (100) | % | — | 3 | $ | (3) | (100) | % | |||||||||||||||||||||||||||||||||||
Income tax provision | — | — | — | — | % | — | — | — | — | % | |||||||||||||||||||||||||||||||||||||
Net loss | $ | (3,470) | $ | (3,579) | $ | 109 | (3) | % | $ | (10,760) | $ | (9,250) | $ | (1,507) | 16 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||
Cash and cash equivalents | $ | 19,184 | $ | 3,594 |
Nine months ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net cash used in operating activities | $ | (9,235) | $ | (6,993) | ||||||||||
Net cash used in investing activities | (144) | — | ||||||||||||
Net cash provided by financing activities | 24,994 | 350 |
Exhibit Number | Description of Exhibit | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
3.4 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | XBRL Instance Document+ | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document+ | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document+ | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document+ | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document+ | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document+ | |||||||
104 | Cover Page Interactive Data File - The cover page iXBRL tags are embedded within the inline XBRL document+ | |||||||
* | Filed herewith. | |||||||
** | Furnished herewith. | |||||||
+ | Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
HEARTBEAM, Inc. | ||||||||
By: | /s/ Branislav Vajdic | |||||||
Name: | Branislav Vajdic | |||||||
Title: | Chief Executive Officer | |||||||
(Principal Executive Officer) | ||||||||
By: | /s/ Richard Brounstein | |||||||
Name: | Richard Brounstein | |||||||
Title: | Chief Financial Officer | |||||||
Dated: November 14, 2023 | (Principal Financial and Accounting Officer) |
Date: November 14, 2023 | By: /s/ Branislav Vajdic | |||||||
Branislav Vajdic | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
Date: November 14, 2023 | By: /s/ Richard Brounstein | |||||||
Richard Brounstein | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
Date: November 14, 2023 | By: /s/ Branislav Vajdic | |||||||
Branislav Vajdic | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
Date: November 14, 2023 | By: /s/ Richard Brounstein | |||||||
Richard Brounstein | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Current Assets: | ||
Cash and cash equivalents | $ 19,184 | $ 3,594 |
Prepaid expenses and other current assets | 295 | 445 |
Total Current Assets | 19,479 | 4,039 |
Property and equipment, net | 144 | 0 |
Other assets | 25 | 0 |
Total Assets | 19,648 | 4,039 |
Current Liabilities: | ||
Accounts payable and accrued expenses (includes related party $2) | 1,019 | 1,665 |
Total Liabilities | 1,019 | 1,665 |
Commitments | ||
Stockholders’ Equity | ||
Preferred stock - $0.0001 par value; 10,000,000 authorized; 0 shares outstanding at September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock - $0.0001 par value; 100,000,000 shares authorized; 26,325,282 and 8,009,743 shares issued and outstanding at September 30, 2023 and December 31, 2022 | 3 | 1 |
Additional paid in capital | 51,572 | 24,559 |
Accumulated deficit | (32,946) | (22,186) |
Total Stockholders’ Equity | 18,629 | 2,374 |
Total Liabilities and Stockholders’ Equity | $ 19,648 | $ 4,039 |
Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Current Liabilities: | ||
Related party accounts payable and accrued expenses | $ 1,019 | $ 1,665 |
Stockholders’ Equity | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 26,325,282 | 8,009,743 |
Common stock, shares outstanding (in shares) | 26,325,282 | 8,009,743 |
Related Party | ||
Current Liabilities: | ||
Related party accounts payable and accrued expenses | $ 2 | $ 2 |
Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Operating Expenses: | ||||
General and administrative | $ 2,114 | $ 2,048 | $ 6,417 | $ 5,256 |
Research and development | 1,623 | 1,562 | 4,788 | 4,036 |
Total operating expenses | 3,737 | 3,610 | 11,205 | 9,292 |
Loss from operations | (3,737) | (3,610) | (11,205) | (9,292) |
Other Income | ||||
Interest income | 267 | 28 | 445 | 39 |
Other Income | 0 | 3 | 0 | 3 |
Total other income | 267 | 31 | 445 | 42 |
Loss before provision for income taxes | (3,470) | (3,579) | (10,760) | (9,250) |
Income tax provision | 0 | 0 | 0 | 0 |
Net Loss | $ (3,470) | $ (3,579) | $ (10,760) | $ (9,250) |
Net loss per share, basic (in dollars per share) | $ (0.13) | $ (0.44) | $ (0.59) | $ (1.14) |
Net loss per share, diluted (in dollars per share) | $ (0.13) | $ (0.44) | $ (0.59) | $ (1.14) |
Weighted average common shares outstanding, basic (in shares) | 26,449,168 | 8,147,024 | 18,252,654 | 8,107,359 |
Weighted average common shares outstanding, diluted (in shares) | 26,449,168 | 8,147,024 | 18,252,654 | 8,107,359 |
ORGANIZATION AND OPERATIONS |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND OPERATIONS | ORGANIZATION AND OPERATIONS HeartBeam, Inc. (“HeartBeam” or the “Company”) is a cardiac technology company focusing on developing and commercializing higher resolution ambulatory Electrocardiogram (“ECG”) solutions that enable the detection and monitoring of cardiac disease outside a healthcare facility setting. The Company’s ability to develop higher resolution ECG solutions is achieved through the development of the Company’s proprietary and patented Vector Electrocardiography (“VECG”) technology platform. HeartBeam’s VECG is capable of developing three-dimensional (3D) images of cardiac electrical activity by displaying the spatial locations of ECG waveforms that demonstrated in early studies to deliver equal or superior diagnostic capability than traditional hospital-based ECG systems. The Company has validated this novel technology and is seeking U.S. Food and Drug Administration (“FDA”) clearance of its initial telehealth products during 2024. The Company was incorporated in 2015 as a Delaware corporation. The Company’s operations are based in Santa Clara, California and operates as one segment.
|
LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES | 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 potential need to obtain additional capital, competition from larger companies, other technology 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. As of September 30, 2023 the Company has a cash and cash equivalents balance of approximately $19.2 million. Based on its current business plan assumptions and expected cash burn rate, the Company believes that the existing cash and cash equivalents are sufficient to fund operations for the next twelve months following the issuance of these unaudited condensed financial statements. 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, strategic relationships and revenue. The Company expects no material commercial revenue in 2023. Management can provide no 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.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 financial statements and notes thereto included in the Company’s Form 10-K filed with the SEC on March 16, 2023 (“2022 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. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation and has cash balances in accounts which exceed the federally insured limits as of September 30, 2023 and December 31, 2022. The Company has made a deposit to the bank for their credit cards in the amount of $25,000 and is classified as restricted cash included in other assets as of September 30, 2023. PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment, net, to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are expensed as incurred. As of September 30, 2023, property and equipment, net represents construction-in-progress of $144,000 related to tooling development that has not been placed into service. Construction-in-progress amounts are not subject to depreciation as such assets are not yet available for their intended use. 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 and nine months ended September 30, 2023 and 2022 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. As of September 30, 2023, 176,105 penny options have been included in the calculation of weighted average basic and diluted earnings per share. The following is a summary of awards outstanding for three and nine months ended September 30, 2023 and 2022, which are not included in the computation of basic and diluted weighted average shares:
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STOCKHOLDERS’ EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY COMMON STOCK On May 2, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor, for the purchase and sale in a registered direct offering of 1,000,000 shares of the Company’s common stock at a price of $1.50 per share, generating net proceeds from the offering of approximately $1.1 million after deducting financial advisory and legal fees as well as other estimated offering expenses. On April 20, 2023, the Company entered into a Placement Agency Agreement with Public Ventures, LLC to consummate an offering of 16,666,666 shares of Common Stock at an offering price of $1.50 per share, which closed in accordance with the subscription agreement dated May 2, 2023. The Company received $23.2 million in net proceeds from the offering after deducting placement agent discounts and commission and other estimated offering expenses payable by the Company. In addition, the subscription agreement grants placement agent warrants as part of this transaction. See Warrants section below. On February 2, 2023, the Company entered into a securities purchase agreement and a note purchase agreement (“SPA”, NPA” or together “Agreements”) with Maverick Capital Partners, LLC (“Investor”). Pursuant to the terms of the Agreements, as amended, the Company agreed to sell up to $4,000,000 of the Company’s common stock at 75% of the average calculated Volume Weighted Average Price per share. On February 28, 2023, the Company issued a $500,000 Convertible Note to the Investor pursuant to the NPA. On March 9, 2023, the Convertible Note was settled upon the execution of the SPA and related issuance of 200,105 shares of common stock pursuant to the SPA draw down notice dated March 9, 2023. These shares of common stock were registered under the Company’s registration statement on Form S-3 dated February 10, 2023 and the related prospectus supplement dated March 9, 2023, whereby, the Company received total proceeds of $500,000. These were the only transactions consummated under the SPA and NPA and the respective agreements expired on May 31 2023. On February 1, 2023, the Company entered into an At-the-Market Sales Agreement (“ATM” or “Sales Agreement”) with A.G.P./ Alliance Global Partners as placement agent, to issue and sell shares of the Company’s common stock. The issuance and sale of shares of Common Stock to or through the placement agent are effected pursuant to the Registration Statement dated February 2, 2023. The Company shall pay to the sales agent in cash, upon each sale of placement shares through the placement agent pursuant to the Sales Agreement, an amount equal to 3.00% of the aggregate gross proceeds from each sale of placement shares. In connection to the Sales Agreement, on February 17, 2023 and February 22, 2023, the Company sold 6,184 shares at $3.76 per share for gross proceeds of approximately $23,000. As of September 30, 2023 there was approximately $11.0 million available for issuance under the ATM. Total stock issuance costs, which consist primarily of legal, accounting and underwriting fees in connection with the above stated transactions was approximately $174,000, which as of September 30 2023, was recorded in additional paid in capital. WARRANTS On May 2, 2023 the Company issued 1,666,666 placement agent warrants to purchase shares of Common Stock sold in the offering, with an exercise price of $1.875 per share and are exercisable for five years from the date of issuance. During 2019, milestone warrants to purchase common stock were issued to certain executives totaling 407,272 warrants (“Penny Warrants”). These warrants were valued on the date of grant at $0.0003 and vest upon meeting certain milestones. These warrants expired unissued in February 2023. The following is a summary of warrant activity during the nine months ended September 30, 2023:
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STOCK-BASED COMPENSATION |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION In 2015, the Company’s Board of Directors approved the HeartBeam, Inc. 2015 Equity Incentive Plan ("2015 Plan"), to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors, and consultants, and to promote the success of the Company’s business. The 2015 Plan provides for the grant of stock options and RSU’s to purchase common stock of which 1,636,362 were authorized by the board of which 974,454 are outstanding. The 2015 Plan was terminated upon shareholder approval of the 2022 Equity Incentive Plan (“2022 Equity Plan”) whereby no new awards can be issued under the 2015 Plan. The Company’s shareholders approved the 2022 Equity Plan at the annual meeting of stockholders held on June 15, 2022, pursuant to which 1,900,000 shares of common stock were authorized for issuance. Under the 2022 Equity Plan, the number of shares available for issuance will be increased on the first day of each fiscal year beginning with the 2023 fiscal year, in an amount equal to the lesser of 3,800,000 shares, five percent (5%) of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, and a lesser number of shares determined by the administrator. On January 1, 2023 400,487 shares, equivalent to five percent (5%) of common stock outstanding were added to the shares available for issuance under the 2022 Equity Plan. At the July 7, 2023, Annual Shareholders’ Meeting, the proposal to amend the 2022 Equity Incentive Plan to increase the number of authorized shares from 1,900,000 shares to 5,900,000 shares was approved. The 2022 Equity Plan includes a provision to add-back any cancelled options from the 2015 Plan up to 1,372,816 shares. As of September 30, 2023, there are 252,856 shares from the 2015 Plan that are included in the 1,983,571 shares available for issuance under the 2022 Equity Plan. The Company received proceeds of $0.1 million and $0.2 million from the exercise of stock options for the three and nine months ended September 30, 2023, respectively and a de minimis amount during the three and nine months ended September 30, 2022. STOCK OPTIONS The following is a summary of stock option activity during the nine months ended September 30, 2023:
The Company estimates the fair values of stock options using the Black-Scholes option-pricing model on the date of grant. For the nine months ended September 30, 2023 and 2022, 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:
STOCK BASED COMPENSATION The following is a summary of stock-based compensation expense:
As of September 30, 2023, total compensation cost not yet recognized related to unvested stock options and unvested RSUs was approximately $7.8 million and $0.53 million, respectively, which is expected to be recognized over a weighted-average period of 2.60 years and 1.27 years, respectively.
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RELATED PARTY TRANSACTIONS |
9 Months Ended |
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Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSDuring the course of business, the Company obtains accounting services from CTRLCFO, a firm in which an executive of the Company has significant influence. The Company incurred accounting fees from this firm of approximately $5,000 and $15,000 during the three and nine months ended September 30, 2023, respectively and approximately $5,000 and $16,000 during the three and nine months ended September 30, 2022, respectively. The Company had balances due to this firm amounting to approximately $2,000 as of September 30, 2023 and December 31, 2022. |
COMMITMENTS |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | COMMITMENTS Lease Obligations On May 1, 2019, the Company entered into a month to month lease agreement for their headquarters. The agreement is for an undefined term and can be cancelled at any time, given one month’s notice by either party. The Company’s monthly rent expense associated with this agreement is approximately $1,440. The Company’s month to month headquarters lease is in the name of the Company’s Chief Executive Officer, and the cost is reimbursed monthly. For the three and nine months ended September 30, 2023 and 2022, rent expense was approximately $4,000 and $12,000, respectively for each period. Professional Services Agreement In March 2022, the Company entered into a professional services agreement with Triple Ring Technologies, Inc (“TRT”) a co-development company, which was followed by several amendments. The Company currently has one open committed project totaling $1.7 million. As of September 30, 2023 the Company has a remaining commitment of $0.6 million.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATIONThe 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 financial statements and notes thereto included in the Company’s Form 10-K filed with the SEC on March 16, 2023 (“2022 Annual Report”). |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 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. The Company maintains its cash in institutions insured by the Federal Deposit Insurance Corporation and has cash balances in accounts which exceed the federally insured limits as of September 30, 2023 and December 31, 2022. The Company has made a deposit to the bank for their credit cards in the amount of $25,000 and is classified as restricted cash included in other assets as of September 30, 2023.
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PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NETProperty and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The Company regularly evaluates the estimated remaining useful lives of the Company’s property and equipment, net, to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation. Maintenance and repairs are expensed as incurred. |
USE OF ESTIMATES | 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.
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NET LOSS PER COMMON SHARE | 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 and nine months ended September 30, 2023 and 2022 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.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Basic and Diluted Weighted Average Shares | The following is a summary of awards outstanding for three and nine months ended September 30, 2023 and 2022, which are not included in the computation of basic and diluted weighted average shares:
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STOCKHOLDERS’ EQUITY (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | The following is a summary of warrant activity during the nine months ended September 30, 2023:
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STOCK-BASED COMPENSATION (Tables) |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Payment Arrangement, Option, Activity | The following is a summary of stock option activity during the nine months ended September 30, 2023:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | For the nine months ended September 30, 2023 and 2022, 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:
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Schedule of Nonvested Restricted Stock Units Activity | The following is a summary of RSU’s awards activity:
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Schedule of Stock-Based Compensation Expense | The following is a summary of stock-based compensation expense:
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ORGANIZATION AND OPERATIONS (Details) |
9 Months Ended |
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Sep. 30, 2023
segment
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 1 |
LIQUIDITY, GOING CONCERN AND OTHER UNCERTAINTIES (Details) $ in Millions |
Sep. 30, 2023
USD ($)
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash, cash equivalents, and short term investments | $ 19.2 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
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Sep. 30, 2023 |
Sep. 30, 2022 |
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Accounting Policies [Abstract] | ||
Restricted cash (included in other assets) | $ 25 | $ 0 |
Construction in progress | $ 144 | |
Exercisable penny options (in shares) | 176,105 |
STOCKHOLDERS’ EQUITY - Warrants (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | |||
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Sep. 30, 2023 |
May 02, 2023 |
Dec. 31, 2022 |
Dec. 31, 2019 |
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Equity [Abstract] | ||||
Warrants outstanding (in shares) | 5,152,397 | 1,666,666 | 3,908,276 | 407,272 |
Exercise price of warrants (in dollars per share) | $ 4.71 | $ 1.875 | $ 5.42 | |
Grant date fair value per share, warrants (in dollars per share) | $ 0.0003 | |||
Warrants exercised (in shares) | 11,638 | |||
Cashless warrants exercised (in shares) | 5,817 | |||
Number of warrants utilized in cashless exercise (in shares) | 4,346 | |||
Stock issuance upon exercise of warrants (in shares) | 1,471 | |||
Number of warrants exercised for cash (in shares) | 5,821 | |||
Payments for repurchase of warrants | $ 16 | |||
Warrant exercisable term | 5 years |
STOCK-BASED COMPENSATION - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - USD ($) |
9 Months Ended | |
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Sep. 30, 2023 |
Sep. 30, 2022 |
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Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 110.23% | 107.25% |
Expected term (in years) | 5 years 10 months 6 days | 5 years 7 months 13 days |
Risk-free rate | 3.54% | 1.47% |
Weighted average grant date fair value per share (in dollars per share) | $ 1.75 | $ 1.08 |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 110.64% | 110.98% |
Expected term (in years) | 6 years 25 days | 5 years 11 months 8 days |
Risk-free rate | 3.95% | 3.10% |
Weighted average grant date fair value per share (in dollars per share) | $ 3.38 | $ 1.75 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | $ 0 | $ 0 |
STOCK-BASED COMPENSATION - Schedule of Nonvested Restricted Stock Units Activity (Details) - RSU's |
9 Months Ended |
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Sep. 30, 2023
$ / shares
shares
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Numbers of Shares | |
Non-vested, beginning balance (in shares) | shares | 253,970 |
Shares granted (in shares) | shares | 222,881 |
Shares vested (in shares) | shares | (255,220) |
Non-vested, ending balance (in shares) | shares | 221,631 |
Weighted Average Grant Date Fair value | |
Non-Vested at beginning of period (in dollars per share) | $ / shares | $ 1.47 |
Shares granted (in dollars per share) | $ / shares | 3.11 |
Shares vested (in dollars per share) | $ / shares | 1.46 |
Non-vested, ending balance (in dollars per share) | $ / shares | $ 3.12 |
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Related Party Transaction [Line Items] | |||||
Investments from related parties | $ 5 | $ 5 | $ 15 | $ 16 | |
Related party accounts payable and accrued expenses | 1,019 | 1,019 | $ 1,665 | ||
Related Party | |||||
Related Party Transaction [Line Items] | |||||
Related party accounts payable and accrued expenses | $ 2 | $ 2 | $ 2 |
COMMITMENTS (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
May 01, 2019 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Commitments and Contingencies Disclosure [Abstract] | |||||
Operating lease, prior notice for cancellation | 1 month | ||||
Monthly rent expense | $ 1,440 | ||||
Rent expense | $ 4,000 | $ 12,000 | $ 4,000 | $ 12,000 | |
Committed project for device cost reductions | 1,700,000 | ||||
Remaining commitment | $ 600,000 | $ 600,000 |
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