Greetings. And welcome to the HeartBeam Fourth Quarter and Full-Year 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors. A press release detailing these results crossed the wires this afternoon at 4:01 p.m. Eastern Time and is available in the Investor Relations section of our company's website, heartbeam.com. Your host today Branislav Vajdic, Chief Executive Officer and Founder; Rob Eno, President; and Rick Brounstein, Chief Financial Officer, will present results of operations for the fourth quarter and year ended December 31, 2022. At this time, I will turn the call over to HeartBeam Chief Executive Officer, Branislav Vajdic. You may being.

Thank you, operator. And good afternoon, everyone. I'm pleased to welcome you to today's fourth quarter and full-year 2022 financial results conference call. I could not be more enthusiastic about the future for HeartBeam, the rapid pace of our product timeline and our team's ability to trace our commercialization path. For those of you joining us for the first time, or who might have not had the opportunity to meet, I'd like to take a moment to introduce HeartBeam and our opportunity in a short video introduction. The video explores the HeartBeam AIMIGo technology, unique market opportunity and use in the heart attack detection case. HeartBeam AIMIGo is the first and only credit card size 12-Lead ECG device for most heart attack detection. While we are playing the video, for our dial in participants, unfortunately, it will be about three minutes of silence. But I'd like to remind you that this video is available on our website, heartbeam.com. [Video Presentation] It's important to understand how our ECG technology is different and vastly more powerful than ECG technologies that are in the marketplace today. Today, there are many ECG technologies offered to consumers and patients outside of a medical facility. What they all have in common is that they do not offer a standard of care 12-Lead ECG in a user-friendly, always-in-a-patient, easy-to-apply solution. That means that they are not capable of detecting a heart attack. In the great majority of cases, it is a single lead ECG. This may be adequate for some arrythmias, but it's certainly not capable of detecting a heart attack. Shown in this slide is the actual message from Apple Watch, warning the user of its inability to detect a heart attack. Similarly, AliveCor, with their cardiac product, prominently features on their website the same disclaimer…

Thank you, Branislav. And to everyone joining us today, I'm privileged to join HeartBeam at such an exciting time as the company prepares to enter a new phase of commercialization. Since joining in January, I've been incredibly impressed with the HeartBeam team, their accomplishments and diligence in working toward our mission. Turning to our product timelines and updates, we had several key developments related to our HeartBeam AIMI and HeartBeam AIMIGo platforms. As Branislav mentioned, we previously announced the 510(k) submission of our HeartBeam AIMI platform to the FDA. We received questions from FDA within the statutory 30 day review deadline, discussed the questions via teleconference with the FDA review team and provided written responses addressing the questions to the primary reviewer. The substantive review is in progress, and we expect to receive FDA clearance in the second quarter, followed by a limited market release in early Q3. Briefly, the total available market for the HeartBeam AIMI software solution is $500 million. And for AIMIGo, it is $12 billion. These are estimated market numbers for the US only. HeartBeam AIMIGo has a 510(k) regulatory pathway. We've already identified predicate devices and plan to demonstrate substantial equivalence with a validation study. Importantly, the clearance of the V1 device allows HeartBeam to collect 3D vector cardiogram data and use these data for conducting 12-Lead equivalent studies for the V2 product. Turning to HeartBeam AIMIGo product updates. In September, we were granted a patent that provides additional intellectual property protection for our HeartBeam AIMIGo technology, offering 12-Lead ECG capability in the form of a credit card sized device with the same footprint as the single lead products currently in the market today. We also partnered with Evolve Manufacturing Technologies, a contract medical device manufacturing company, to build the credit card sized HeartBeam AIMIGo…

Thank you, Rob. Turning to our financials. I will now give us a sneak preview of our financial results. A full breakdown is available in our regulatory filings and in the press release that just crossed wires after the close of market today. But let me start with Silicon Valley Bank. They were our checking account and payroll account. On March 10 last week, SVB was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. And as a result, we stood to lose approximately $600,000. On March 13, the Federal Reserve announced that the account holders would not bear the loss of this event. Nevertheless, before the issues with SVB, we had planned a move to a big four bank and we are currently completing that move. Turning now to the statement of operations. General and administrative expenses for the fourth quarter of 2022 were $2.1 million compared to $1.2 million for the fourth quarter of 2021. For the year ended December 31, 2022, G&A expense increased to $7.4 million compared to $2 million in the same period of 2021. This reflects the growth in our team and other costs in support of our being a public company. Research and development expenses for the fourth quarter of 2022 were $1.6 million compared to $96,000 in the fourth quarter of 2021. For the year ended December 31, 2022, research and development expenses increased to $5.7 million from $255,000 in the prior year. Most of 2021 was pre IPO. Our 2022 focus on R&D consisted largely of product development costs for HeartBeam AIMI, which is now essentially done, and also HeartBeam AIMIGo. HeartBeam AIMIGo includes both software and hardware, the latter with our professional services agreement with Triple Ring Technologies. Additionally, there are clinical costs…

Thank you, Rick. Indeed, ours is a true platform technology. So far, we have developed two products that are either already submitted to the FDA, in the case of HeartBeam AIMI, or soon to be submitted to the FDA for the HeartBeam AIMIGo product. The recent LIVMOR asset purchase has also brought to HeartBeam LIVMOR's intellectual property, including three US patents, and the LIVMOR technology, including the Halo+ atrial fibrillation products as well. Halo+ is the world's first FDA cleared prescription wearable for continuous cardiac arrythmia monitoring. During the fourth quarter, we continued to operate from a position of strength, equipped with strategic partnerships to advance product development and near-term milestones. We continue to strengthen our IP with patents granted, most recently with the European patent for a signal transformation from vector electrocardiogram to 12-Lead ECG and the new patent for a 12-Lead ECG smartwatch-based monitor intended for detection of heart attacks and complex cardiac arrhythmias as well. We also acquired three issued United States patents as part of our LIVMOR asset purchase. All of these enhance our intellectual property and provide protection of our technology in priority global markets. Beyond that, looking at the product pipeline, we think that the application of artificial intelligence will be of great value to us. We will have a very unique data set of patients who actually have recorded their ECG on a daily, weekly or monthly basis. That longitudinal data for our patient population will be of tremendous value. Applying artificial intelligence to this data set that is extremely data rich, much richer than the standard 12-Lead ECG, will yield, we strongly believe, additional insight into cardiovascular disease and further help cardiovascular patients. On the right side of this slide is shown the 12-Lead patch. We have recently received a patent for…

[Operator Instructions]. Our first question comes from the line of Jason Kolbert with Dawson James.

My first question was regarding the recent acquisition. I know you got a lot of IP, but I think you also had a lot of intellectual capital. Can you talk a little bit about how many of those folks have come over to HeartBeam and what it is that they're really bringing to the company?

Yes, we've covered so far in our presentation the IP aspects of this acquisition in the form of three patents. They are very significant because they really give us an incredibly fast head start into the AFib detection. This is the company we wanted to get into. And with the addition of these three patents, we have an incredibly good entry point into the AFib market. Beyond that, we have acquired the whole technical team that has developed these technologies for LIVMOR. And in that sense, we 3have completed the whole circle in a way because we now have the FDA cleared product, we have three patents, we have the platform Halo+ platform, and we have all the key people that have developed this platform. So we are very excited about this acquisition and what it will mean for the future of HeartBeam.

I'd like to drill down on that. How does that break down in terms of software versus hardware? And is there even a manufacturing component associated with the hardware that you feel helps support HeartBeam in terms of its commercialization efforts and kind of managing that whole process?

LIVMOR technology is based on so-called PPG sensor, which is integral part of – in the case of – they developed a Samsung Watch. And so, the components of the hardware that LIVMOR has used comes from Samsung. What the real value for us is, is the full ownership of the Halo+ platform that we previously licensed and now we have a full ownership of it with all the source codes and ability to modify and extend it, plus the FDA cleared product. So, the main value points are centered around software, intellectual property and the team.

On the manufacturing side, is that something where you feel you're in a good position with your current contract manufacturers that you can make changes, revisions because, clearly, there's next generation product on the AIMI side here?

Yes. For our initial production goals, we have engaged Evolve Manufacturing, and that's clearly capable and willing of producing tens of thousands of our devices. We are working with Triple Ring and Evolve because they have really incredibly good teams on driving the costs down. Initially, these units, they're not cost effective. And with our current project, we are reducing the cost several times, four to five times reduction in cost. And we plan to go down that curve even further.

Yeah, that's exactly what I was looking for, Branislav, and it's not [Technical Difficulty], but it's a hard point for people to understand who haven't been in the business and having – you have a concept, you come up with units, but you know that you have to get the cost down when you get to scale. And it makes sense that a team that's already done that is going to add a lot of value as you pursue that. My last question has to do with both AIMI and AIMIGo, and it has to do with the time gap between when you complete the submission and when you get FDA clearance. And that's a relatively short time gap, about six months. And I guess that's pretty standard in the industry. You have confidence that that review time should work for you as well, is that right?

Yes, we have a very close interaction with the FDA. We have just completed another meeting with them and the interaction is very productive. And we remain confident that the results will be positive. And that's all I can say. It has been perhaps a process that extended a bit longer than we expected. But it's very much an unpredictable process. And in our case, included a holiday season, and so on and so on. So, yeah, we remain very optimistic about the prospect of getting the clearance for AIMI, and again, submit AIMIGo in Q2 of this year.

In terms of a successful financing, that seems to be critical now as you look because clearly there's going to be a rise in SG&A spending as you anticipate the beginning of commercialization into the second half of this year and next year, right? That's correct?

Yes. Rick, maybe you want to comment on this question?

Absolutely. And obviously, not only we have the S-1 registration as it works out, of course, but we have the S-3 in place, the ATM facility. So we have ability to sort of bridge ourselves as we need. I think most people saw we did a deal with Maverick that gives us a short-term capability for $4 million. So we're careful. It's clearly challenging in these times, but we can moderate ourselves, and we think we have the capability to get things done.

That's exactly the comment I was looking forward to, is that you don't have a gun pointing out at you. The ATM offers you a bit of a bridge and some breathing room, so that you can kind of build a syndicate towards a successful capital raise. Right?

Yeah, absolutely.

Our next question comes from the line of Bill Sutherland with The Benchmark Company.

I was intrigued with the patent on the patch and wondering if there's any preliminary ideas at this point about the path for that to get to a commercial live stage.

Yes. The more we look at the patch – we have two patents actually that will protect this invention extremely well – the more we realize the value of this technology and product for the future of HeartBeam. As it stands right now, we realize that this market is projected to be about $4.8 billion by the end of the year 2030. And our ability to develop this product is very real. And in terms of time and money needed to arrive with a prototype, we are seeing some estimates that are very attractive. So at this point, it's under consideration. But everything we have seen is pointing to the direction of doing the patch sooner rather than later, which does not put any concrete start date for these projects. But we really like what we are seeing instead terms of the value and potential disruptive effect it may have with this well-established market with a $3 billion company market cap being the leader.

Interesting comparison. The other very fascinating development is the AI development. And curious how you might benefit from the data that you're going to be – being able to analyze and work with. Is that quite an elite product or monetization of some kind?

The data component of our technology is very powerful, actually, because we have a set of parameters, ECG parameters describing that heart, patient's heart that go well beyond the 12-Lead ECG. And applying AI to this data set, we strongly believe, will not only provide an increased value for reacting to an event, such as heart attack, but actually offering predictive and preventive value, which will be huge, we strongly believe. So, all in all, we are focusing right now on reacting to that heart attack system, right, doing the right thing for the patient, getting the right people to care or keep it running at home, basically saving lives and saving healthcare dollars. But we believe strongly that this data component of our data set will be hugely valuable going forward.

Our next question comes from the line of Ben Haynor with Alliance Global Partner.

First off, for me, Rob, nice to meet you over the conference call. But I was curious on what attracted you to HeartBeam and what are you most excited about going forward?

Happy to talk about that. Just with my background, I have 28 years in medical technology, and it's all based around bringing disruptive new technologies through commercialization and scale up. And I joined because I believe in the company and I believe in the technology and think this could be absolutely a chance to bring a game changing technology to market, being able to get a 12-Lead EKG into patients hands and with the VECG technology potentially being able to go beyond that, and the data aspects that Branislav mentioned. So I see it as a way to really influence a tremendous number of patients lives, address a major healthcare issue that has not yet been adequately addressed, and take part in what I think is going to be an amazing company going forward.

Have you had quite a few discussions with folks that could serve or could be potential customers down the road of AIMI, AIMIGo and the other products? Any color on those, if so?

Sorry, can you repeat that? Just make sure I understand.

I was just curious, with your background, clearly, you probably a role that [indiscernible] talking to folks that could be potential customers of AIMI, AIMIGo, the other products. Can you talk about any conversations that you've had and any color on those?

Yeah, absolutely talk to a number of cardiologists. And what strikes me is – what I hear constantly is 12-Lead EKG itself is limited to hospitals, but it's also a 100-year-old technology. And many of them know of the VECG process or the VCG process, vector cardiography. It was taught in medical schools years ago. It really never took off because physicians having to interpret 3D loops in space was very difficult. But they understand that studies, even decades ago, show that it had a number of benefits beyond standard EKG. So, we get a lot of excitement that the company has figured out a way to take ECG, harness it and bring it to patients. And then I hear a lot of physicians where we describe the concept of a full 12-Lead ECG or potentially beyond that in the hands of patients saying game changing, and they can think of all kinds of different applications for it. So, I've been very pleased with the excitement of the physicians, the willingness to partner with us and help us, both in terms of potential clinical studies, early sites and helping us figure out the best strategies to scale the technology.

Sounds like [indiscernible] support on your decision to join from folks that are trained about the technology. And then, on LIVMOR, congrats on the acquisition there. Are there any plans to commercialize the Halo+ AF detection system immediately? Or what's kind of the commercialization thoughts there?

Yes, let me answer that question. We have acquired this system. And we have established that, actually, in terms of a potential product, what makes sense is an integration of Halo+ platform for AFib detection with our AIMIGo product. Why does that make sense? Well, as I said before, Halo+ is watch based. And it can provide a sort of an alert for AIMIGo to do a 12-Lead ECG where there are indications from the watch that there are things that are getting outside of the normal, right? And so, we believe that getting the AIMIGo to the FDA cleared state will enable us to consider offering an integrated product, where you have a watch that's working with AIMIGo for a full-blown ability to detect a variety of conditions through our 12-Lead ECG. And what's interesting about that is that physicians under this scenario here would get something that was alerted by the watch, that they have learned is not very reliable, getting very many false positives, false negatives, et cetera. In this case, it will be validated by AIMIGo device. And that double validation, if you want, would probably mean that they believe in this referral from our system with a much higher degree of feasibility. So all in all, an integration makes sense. But AIMIGo is very much front and center of that system, potential integrated system. So we are still focused on AIMIGo totally and the potential integration into an integrated offering will translate.

That integration definitely makes sense. And then lastly for me, just given the optimism on the FDA timelines in your interactions with the agency, can you maybe characterize the questions that you've received? It doesn't sound like there's any showstoppers in there. But just any areas that common questions were arising or anything you could provide there would be helpful?

Well, I'm not at liberty to really talk about much detail there. I would just say that, at the top level, they are focused on cybersecurity, and rightfully so. So I think that's as much as I can go into details, but all in all, again, productive interactions with the FDA.

And this concludes our dial in Q&A session. And we will now have questions via the webcast.

Our first questioner asked, based on your IP, you can pursue several very interesting opportunities beyond AIMI and the initial AIMIGo planned releases. They would like to know what is the next product that you will start developing?

Let me reiterate that AIMIGo is front and center of our development efforts and commercialization of that. As far as our IP is concerned, the good news is that we have incredibly deep IP portfolio here, including a watch, which I happen to believe is the ultimate solution here. You really don't have to have any other device other than your watch to be able to do a 12-Lead ECG. But that's not in the near-term focus. And perhaps that presents a partnership opportunity. Right? There are many players, well known players out there with a single lead ECG watch, and we have extremely well covered our intellectual property for the 12-Lead watch. So that's not going to be on our immediate development list, but, again, partnership opportunities probably very significant. Secondly, as far as patch is concerned, as I alluded to, we are very seriously considering the opportunities that it presents, well established markets, changing form factors, but technology wise, there is very little change that would be required between going from a credit card sized AIMIGo, HeartBeam AIMIGo device to a patch. So that is very much on our radar screen.

And the next question asked, direct pay go-to-market is somewhat of a new direction. Can you shed some light on why this is potentially a superior strategy compared to RPM?

I can take that one. Yeah, what we discussed is the refinement of the go-to-market strategy. And first, for those who don't know, RPM, remote physiologic monitoring, are existing codes paid to physicians who prescribe devices to remotely monitored patients. What we've done is we've identified a number of market segments. RPM certainly could be one of them, but we've identified a number of additional market segments that we think are both big sized and also where there's an entity that's willing to pay for the solution outside of the reimbursement system. That's what we're describing as direct pay. And some of these require data that shows that we're equivalent to a standard 12-Lead ECG, and we have those listed in the slide. And then others that are more value based, we'll be developing data on clinical and cost effectiveness. And the beauty of that is that we can start right away with the 12-Lead ECG, but then the data we gather for the value based usage is the same data that's going to be useful for our efforts to establish a unique reimbursement code. So we think that these market segments we've identified have the potential to result in more value in a HeartBeam potentially than an RPM approach as well as being in alignment with this long term strategy of obtaining our own unique reimbursement code.

And that concludes our webcast Q&A.

Thank you. And I would now like to turn the call back over to Dr. Vajdic for closing remarks.

Thank you, operator. I would like to thank each of you for joining our earnings conference call today and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions, please reach out to our IR firm, MZ Group, who would be more than happy to assist. Thank you again, and all the best.

And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.