Heartbeam Inc (BEAT) Q1 2025 Earnings Call May 13, 2025 04:30 PM ET Company Participants Robert P. Eno - CEO & DirectorTimothy Cruickshank - Chief Financial OfficerBill Sutherland - Director of ResearchLarry Holub - Director Conference Call Participants Leo Carpio - Equity Research Analyst Operator Greetings, and welcome to the HeartBeam First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the ...

Financial Data and Key Metrics Changes - The company reported a net cash used in operating activities of $4.5 million for Q1 2025, with $3.6 million attributed to recurring baseline expenditures primarily for R&D and G&A aligned with milestones [34] - The company completed an $11.5 million common stock public offering to strategically fund operations while managing dilution [39] Business Line Data and Key Metrics Changes - The HeartBeam system is positioned as the first personal cable-free ECG capable of synthesizing a 12-lead ECG, with significant advancements in regulatory approvals and clinical studies [5][6] - The VALID ECG study met its clinical endpoints, supporting the FDA submission for the 12-lead synthesis software [41][70] Market Data and Key Metrics Changes - The target market segment for the HeartBeam system is estimated to be a $500 million serviceable market in the US, with strong demand from patients and physicians [28] - The coronary artery disease market is larger than the atrial fibrillation market, with 20 million patients in the US at elevated risk for heart attacks [29] Company Strategy and Development Direction - The company aims to secure FDA clearance for the 12-lead synthesis software and prepare for commercialization by the end of 2025 [42] - A strategic collaboration with AccuCardia is expected to enhance the commercial product offering by integrating ECG algorithms for rhythm classification [21][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing discussions with the FDA, indicating no disruptions or delays in the approval process [61][62] - The company is focused on building out infrastructure and customer support systems to ensure a successful product launch [25][32] Other Important Information - The company has achieved 20 issued patents worldwide, emphasizing the importance of intellectual property in its business strategy [26] - The early access program is providing valuable feedback on the product and its usability in real-world settings [25] Q&A Session Summary Question: Insights from the early access program - The company learned valuable insights from real patient interactions, including onboarding and training, which have helped refine the product [46][48] Question: Pricing strategy for commercialization - The anticipated pricing is expected to be between $50 to $100 per month, with potential tiered options for additional services [49][50] Question: Timing for building out infrastructure - The company plans to begin commercialization in Q4 2025, following FDA clearance, with initial efforts focused on two target markets [54][56] Question: Updates on FDA approval process - The company reported no disruptions from FDA staff attrition and remains on track for clearance by the end of the year [60][62] Question: Competitive position with AccuCardia partnership - The collaboration enhances the product offering by providing automated assessments for ECG readings, filling a critical gap in the workflow [64][66] Question: Manufacturing capabilities and tariff exposure - The company has secured a US-based contract manufacturer to mitigate tariff impacts and ensure quality control during initial production runs [72][74]

The Future of Cardiac Care First Quarter 2025 Financial Results Conference Call NASDAQ: BEAT MAY 13, 2025 The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Also, these forward-looking statements represent the Company's estimates and assumptions only as of the date of this presentation. The Company assumes no obligation to u ...

FDA Clearance and Product Development - The HeartBeam System received FDA clearance on December 13, 2024, as the first cable-free, ambulatory 3-D ECG device, capturing heart signals from three directions for advanced diagnostics [59]. - The company initiated an Early Access Program for the HeartBeam System to gather user feedback ahead of commercialization, which is expected to occur after FDA clearance for the 12L synthesis software [65][64]. - A strategic collaboration with AccurKardia was announced to integrate an automated ECG interpretation platform, expected to expedite product development and enhance diagnostic capabilities [66][72]. Financial Performance - Operating expenses for Q1 2025 totaled $5.5 million, a 15% increase from $4.8 million in Q1 2024, primarily driven by a 44% increase in research and development expenses [76][77]. - The net loss for Q1 2025 was $5.5 million, compared to a net loss of $4.6 million in Q1 2024, reflecting a 19% increase in losses year-over-year [76]. - Net cash used in operating activities for Q1 2025 was $4.5 million, primarily due to a net loss of $5.5 million, offset by $1.1 million in non-cash expenses [85]. - Net cash used in operating activities for Q1 2024 was $3.5 million, primarily due to a net loss of $4.6 million [86]. Cash and Investments - As of March 31, 2025, the company had cash and short-term investments of approximately $8.2 million, with a cash burn rate raising concerns about the ability to fund operations for the next twelve months [81][83]. - As of March 31, 2025, the company held cash and cash equivalents of $4.4 million, bringing total liquidity to $8.2 million [88]. - Net cash used in investing activities for Q1 2025 was $3.8 million, resulting from the purchase of short-term investments [87]. - Net cash used in investing activities for Q1 2024 was $0.1 million, attributed to the purchase of equipment [88]. Financing Activities - The company raised approximately $11.5 million in gross proceeds from a public offering in February 2025, selling shares at $1.70 each [72][74]. - Net cash provided by financing activities for Q1 2025 was $10.3 million, mainly from net proceeds from the sale of common stock [89]. - There was no financing activity reported for Q1 2024 [90]. Intellectual Property and Research - HeartBeam has 20 issued patents worldwide, including 15 in the U.S., enhancing its intellectual property portfolio and competitive position in the market [71][69]. - The company has acquired approximately one million standard 12L ECGs for AI development, aiming to improve diagnostic insights through deep learning algorithms [67]. Accounting and Financial Estimates - The company has not made any material changes to its critical accounting estimates since the 2024 Annual Report [91]. - The company did not hold any derivative instruments or engage in hedging activities [92].

Financial Data and Key Metrics Changes - Net cash used in operating activities was $14.5 million for FY 2024, representing a 20% increase year over year, primarily due to investments in R&D and achieving FDA clearance [37][38] - G&A expenses remained largely flat, with less than a 4% increase year over year, indicating financial discipline [39] Business Line Data and Key Metrics Changes - The company received its foundational FDA clearance in December 2024, which is a significant milestone for the HeartBeam system [10][16] - A second 510(k) application for the twelve-lead synthesis software was submitted in January 2025, currently under FDA review [17][48] Market Data and Key Metrics Changes - The initial target market includes concierge medicine, with approximately 1.5 million patients in the US, translating to a revenue opportunity of $250 to $500 million annually [29][30] - The broader direct patient pay market is estimated to be worth $1.3 to $2.6 billion annually, focusing on patients aged 35 to 74 with elevated cardiac risk [31] Company Strategy and Development Direction - The company aims to establish itself as the first personal cable-free synthesized twelve-lead ECG, starting with direct patient pay and expanding to payer plans and integrated healthcare systems [22][24] - The go-to-market strategy includes a pilot commercialization phase in two geographic markets, focusing on customer experience and retention [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving key milestones in 2025, including FDA clearance for the twelve-lead synthesis software and pilot commercialization [48][50] - The company is focused on minimizing cash burn while preparing for commercialization, with a baseline expenditure of $14.5 million for 2025 [40][62] Other Important Information - HeartBeam, Inc. was awarded the Diamond Pinnacle Health Care Award for medical device innovation, marking the third award received in the past year [14] - The company has initiated an early access program to refine workflows and establish a sales funnel ahead of commercialization [20][88] Q&A Session Summary Question: What went into your decision to not immediately commercialize upon clearance? - The initial clearance is for the system with three-lead output, and the company believes it is important to commercialize with the twelve-lead software for differentiation [54][55] Question: What are your expectations for cash burn in 2025 and timing of next raise? - The cash burn for 2025 is expected to align with the $14.5 million spent in 2024, with stable G&A costs and opportunistic R&D spending [57][60] Question: Can you discuss the pathway or roadmap to get to heart attack detection? - The company plans to engage with the FDA soon and initiate a clinical study for heart attack detection later this year [64][68] Question: Is there any competition in the same space? - The company does not see direct competitors for its small cable-free ECG that synthesizes a twelve-lead, as most existing devices are bulky or limited to basic arrhythmias [69][73] Question: Are you concerned about political changes affecting timely FDA approval? - Management has not seen an impact on their submission and feels confident about their interactions with the FDA [74][76] Question: Does your initial go-to-market plan include wearables? - The device is not a wearable, but there is potential for integration with wearable data [77][79] Question: Are you planning to initially commercialize this technology alone or with a partner? - The initial pilot commercialization will be conducted by the company's own team, with options for partnerships being assessed [80][82] Question: When is the expected clearance time from FDA for the second clearance? - The company estimates receiving clearance before the end of the year but acknowledges the challenges in predicting FDA review timelines [84][86] Question: Can you give us more details on the early access program? - The early access program aims to evaluate the offering, refine clinical workflows, and establish customer service operations [87][89]

Financial Data and Key Metrics Changes - Net cash used in operating activities was $14.5 million for FY 2024, representing a 20% increase year-over-year, primarily due to investments in R&D and achieving FDA clearance [37][38][40] - G&A expenses remained largely flat, with less than a 4% increase year-over-year, indicating financial discipline [39] Business Line Data and Key Metrics Changes - The company received FDA clearance for the HeartBeam system in December, marking a significant milestone [9][16] - A second 510(k) application for the twelve-lead synthesis software was submitted in January, currently under FDA review [10][17] Market Data and Key Metrics Changes - The initial target market includes concierge medicine patients, estimated at 1.5 million in the US, with a potential revenue opportunity of $250 to $500 million annually [29][30] - The broader direct patient pay market could represent a revenue opportunity of $1.3 to $2.6 billion annually, focusing on patients aged 35 to 74 with elevated cardiac risk [31] Company Strategy and Development Direction - The company aims to establish itself as the first personal cable-free synthesized twelve-lead ECG, starting with direct patient pay and expanding to payer plans and integrated healthcare systems [22][24] - The go-to-market strategy includes a pilot commercialization phase in two geographic markets, focusing on customer experience and retention [26][51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving key milestones in 2025, including FDA clearance for the twelve-lead synthesis software [48][50] - The company is focused on minimizing cash burn while preparing for commercialization, with a strong belief in the value of its technology [45][46] Other Important Information - The company completed a public offering of $11.5 million, which will support upcoming milestones and operational readiness [14][36] - HeartBeam, Inc. received the Diamond Pinnacle Health Care Award for medical device innovation, highlighting its contributions to patient care [15] Q&A Session Summary Question: What went into your decision to not immediately commercialize upon clearance? - The company decided to wait for the twelve-lead synthesis software clearance to ensure differentiation in the market [55] Question: What are your expectations for cash burn in 2025 and timing of next raise? - The expected cash burn for 2025 is similar to the $14.5 million spent in 2024, with a focus on prudent spending in the first half of the year [57][60] Question: Can you discuss the pathway or roadmap to get to heart attack detection? - The company plans to engage with the FDA soon and initiate a clinical study for heart attack detection later this year [64][68] Question: Is there any competition in the same space? - The company does not see direct competitors for its small cable-free ECG device that synthesizes a twelve-lead ECG, emphasizing its unique IP [69][72] Question: Are you concerned about political changes affecting timely FDA approval? - Management has not seen an impact on the FDA submission process and remains confident in their interactions with the review team [74][76] Question: Does your initial go-to-market plan include wearables? - The device is not a wearable, but there is potential for integration with wearable data [77][79] Question: Are you planning to initially commercialize this technology alone or with a partner? - The initial pilot commercialization will be conducted by the company's own team, with options for partnerships evaluated later [80][82] Question: When is the expected clearance time from FDA for the second clearance? - The company estimates receiving FDA clearance for the twelve-lead synthesis software before the end of the year [84][86] Question: Can you give us more details on the early access program? - The early access program aims to evaluate the offering and prepare for commercialization, involving hundreds of patients [87][89]

Financial Performance - The company reported a net loss of $19.448 million for the year ended December 31, 2024, compared to a net loss of $14.639 million in 2023, representing a 33% increase in losses [255]. - The company reported a net loss of $19.5 million for the year ended December 31, 2024 [264]. - Net cash used in operating activities for the year ended December 31, 2024, was $14.5 million, compared to $12.1 million for the year ended December 31, 2023 [264][265]. - Net cash provided by financing activities decreased significantly from $24.9 million in 2023 to $0.9 million in 2024 [267]. - The company expects existing cash to be insufficient to fund operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern [261]. Research and Development - Research and development expenses increased by 63% to $11.051 million in 2024, up from $6.798 million in 2023 [255]. - Research and development (R&D) expenses increased by $4.3 million or 63% compared to the same period in 2023, primarily due to increased headcount and clinical-related costs [257]. - The VALID-ECG pivotal study enrolled 198 patients across five clinical sites to validate the HeartBeam 12 Lead ECG Synthesis Software for arrhythmia detection [236]. - The company has acquired approximately one million 12L ECGs to support its AI development efforts [238]. Leadership Changes - The company appointed Timothy Cruickshank as CFO and Robert Eno as CEO in 2024, indicating a strategic leadership transition [250][252]. Patents and Intellectual Property - As of December 31, 2024, the company had 14 issued U.S. patents and 9 pending applications, with patents expected to expire between April 11, 2036, and April 21, 2042 [241]. Capital and Financing - The company entered into a PV Sales Agreement to offer up to $17 million of common stock, with approximately $16.2 million available for issuance as of December 31, 2024 [247]. - The company raised $0.7 million from the sale of common stock and $0.1 million from stock options during the year ended December 31, 2024 [260]. - Subsequent to year-end, the company raised $11.5 million through a public offering [260]. Operating Expenses - Total operating expenses rose by 30% to $19.887 million in 2024, compared to $15.314 million in 2023 [255]. - Net cash used in investing activities was $0.2 million in 2024, consistent with $0.3 million in 2023, primarily for property and equipment purchases [266]. Product Development - The HeartBeam System received FDA clearance on December 13, 2024, marking it as the first FDA cleared cable-free, ambulatory ECG device [231]. - The company plans to initiate an Early Access Program for the HeartBeam System to gather user feedback before commercialization [237]. Cash Position - As of December 31, 2024, the company had approximately $2.4 million in cash and cash equivalents, a decrease of $13.8 million from $16.2 million as of December 31, 2023 [259]. - The company does not have any off-balance sheet arrangements [268].

Financial Data and Key Metrics Changes - The net loss for Q3 2024 was approximately $4.979 million, with adjusted net cash used in operating activities at $3.3 million, primarily focused on R&D and clinical initiatives [27] - The cash balance as of September 30, 2024, was $5.8 million [27] Business Line Data and Key Metrics Changes - HeartBeam has developed a cable-free 12-lead ECG technology that captures high-resolution cardiac data, positioning itself to disrupt the cardiac care market valued at over $100 billion annually in the U.S. [6][7] - The company has a growing body of clinical evidence, with nine peer-reviewed publications and over 500 patients enrolled in studies demonstrating the technology's potential [21] Market Data and Key Metrics Changes - HeartBeam's technology is applicable in multiple large markets, with a strategy that includes symptom-driven diagnosis, monitoring, and ultimately replacing traditional ECGs [7] - The company received recognition as a "Rising Star" at the Global Healthcare Conference and a MedTech Breakthrough Award for best new ECG technology solution [24] Company Strategy and Development Direction - The company is focused on achieving FDA clearance as a foundational milestone, which will enable future product submissions and commercialization efforts [31][36] - HeartBeam's initial go-to-market strategy targets direct patient pay in concierge and preventive cardiology practices, with plans to gather evidence for insurance reimbursement [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving FDA clearance and emphasized the importance of the upcoming early access program for user feedback [40][41] - The company is preparing for commercialization and aims to minimize cash burn while delivering on key milestones [38] Other Important Information - The management team has evolved to better position the company for commercialization, with new appointments including a Chief AI Officer [37] - HeartBeam is engaged in productive discussions with the FDA and remains optimistic about achieving foundational clearance [36] Q&A Session Summary Question: Can you provide more detail on the timing of the FDA clearance? What are the outstanding items? - Management reiterated that the FDA is engaged and responsive, expressing confidence in achieving clearance in the near term [40] Question: Given your cash burn, what are your plans for raising capital? - The company is managing cash burn closely and has strong support from existing shareholders, focusing on maintaining and adding value-add investors [42][43] Question: Can you provide more context on the timing and reason for the change in CEO from Branislav to Rob? - The transition was planned, with Branislav focusing on technical efforts while Rob leads commercialization due to his commercial background [44][46][47] Question: Can you provide an update on the VALID-ECG study? - Enrollment for the 198-patient VALID-ECG study has been completed, and data will be the basis for the upcoming FDA submission [48][49] Question: If everything goes right with the FDA, what could 2025 revenues look like for HeartBeam? - The company does not anticipate significant revenue in 2025 but aims to refine its go-to-market strategy and gather critical user feedback [50][52]

Product Development and Technology - The HeartBeam System, a credit card-sized ECG device, is in the substantive review phase with the FDA, aiming for clearance as the first patient-held VECG device [61]. - A total of 198 patients were enrolled in the VALID-ECG Study to demonstrate the equivalence of the HeartBeam Synthesized 12L ECG to a standard 12L ECG [63]. - The company has developed initial deep learning algorithms for detecting cardiac arrhythmias, with data presented at two major electrophysiology conferences in 2024 [67]. - The HeartBeam technology demonstrated the ability to detect coronary artery occlusion with accuracy comparable to standard 12L ECGs, improving diagnostic performance metrics significantly [69][70]. - The company anticipates that the Early Access Program for the HeartBeam System will provide valuable user feedback in the coming months [65]. Financial Performance - General and administrative (G&A) expenses increased by approximately $0.06 million or 3% for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to increased headcount and higher consultant costs [85]. - Research and development (R&D) expenses increased by approximately $1.3 million or 78% for the three months ended September 30, 2024, driven by increased headcount, clinical and AI-related costs, and consulting spend [87]. - Total operating expenses for the three months ended September 30, 2024, were $5.069 million, a 36% increase from $3.737 million in the same period of 2023 [85]. - Net loss for the three months ended September 30, 2024, was $4.979 million, representing a 43% increase from a net loss of $3.470 million in the same period of 2023 [85]. - Cash and cash equivalents as of September 30, 2024, were approximately $5.8 million, a decrease of $10.4 million from $16.2 million as of December 31, 2023 [94]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $10.319 million, compared to $9.235 million for the same period in 2023 [94]. - R&D expenses for the nine months ended September 30, 2024, increased by approximately $3.4 million or 71% compared to the same period in 2023, primarily due to increased clinical and AI-related costs [88]. - The company expects no material commercial revenue in 2024 and faces substantial doubt regarding its ability to continue as a going concern without raising additional capital [93]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $0.105 million, a significant decrease from $24.994 million in the same period of 2023 [98]. - The company has incurred losses each year since inception and has experienced negative cash flows from operations in each year since inception [92]. Management Changes - Timothy Cruickshank was appointed as CFO on September 10, 2024, succeeding Richard Brounstein [81]. - Robert Eno was appointed as CEO on October 17, 2024, succeeding founder Branislav Vajdic, who will focus on R&D and AI applications [83]. Intellectual Property - The company has been granted two new U.S. patents in 2024, bringing the total to 17 issued patents worldwide [75]. Workforce and Growth - As of September 30, 2024, the company had 20 employees and plans to hire additional professionals to support growth strategies [72].

| --- | --- | --- | --- | --- | --- | |-------------------------------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Power of a 12-Lead ECG Always with the patient | | | | | | | Second Quarter 2024 Financial Results Conference Call | | | | | | | NASDAQ: BEAT August 14, 2024 | | | | | | Second Quarter 2024 Financial Results Conference Call 2 DISCLAIMERS This presentation contains forward-looking statements. All sta ...