HeartBeam, Inc. (BEAT) Earnings Call Transcript & Summary

Thanks, and I'm glad all of you could be on this conference call. I'll briefly walk you through our agenda. We'll cover the current status of our primary strategic initiatives, give you updates on our cardiac platform and heart attack detection—an amazing milestone that we reached during this quarter—and wrap up with the financials. Let's go to the next slide. Updates on the key strategic priorities. Those of you who have tracked the company will remember that back in July we presented our plan going forward and centered our attention on the core strategic priorities you see on this slide. The priorities were detecting myocardial infarction (MI), working closely with the FDA, advancing reimbursement, increasing the company's long-term value through AI and other technology efforts, and on the financial side, running the company with cost efficiency and strict controls. Turning to heart attack detection, I have to say Q3 was a terrific quarter for accomplishment over the last 90 days. I think that shows the focus we have and the move toward the priorities I already listed. For a small company, these milestones are fairly meaningful. Getting breakthrough device designation was something we actively sought and truly hoped to rely on. To put that in perspective, across the past five, six, or seven years, the FDA has granted only around 164 such designations on average. That stands as proof that the technology and the chance to improve patients' lives are meaningful where HeartBeam is concerned. It also made it possible for us to be accepted into their TAP program; the TAP program matters a great deal too, since it lets us communicate with the FDA on a faster timeline. Beyond that, it gives us access to CMS and payers, allowing us to talk with them about reimbursement and about what they need to see in our clinical trial in order to establish reimbursement. You're probably aware that at the TCT conference held late in October, we presented and published our findings. From where we sit, that was the inaugural trial—enrolling 132 patients—to genuinely examine, within an emergency department context, how the longstanding fifty-year benchmark, the 12-lead EKG, stacks up against our portable unit for identifying MI. Branislav will discuss those outcomes, which proved meaningful, a bit further along in this presentation. I'm not sure we've mentioned this previously. We mentioned we were putting in diligent effort together with the FDA on the question of whether a 510(k) or a de novo pathway would be the fit, and the outcome is a 510(k) route; that carries major significance because it trims the amount of time before we ultimately obtain clearance to roll out our MI initiatives. And last, to repeat, because of the TAP plus the breakthrough designation, we are in fact talking with the FDA on a continuing basis about our pivotal study; we have had a good number of interactions with them. We feel quite confident regarding how we have set up that pivotal trial. We feel just as sure that the FDA will grant us approval in the near future to begin that trial, and to have it underway perhaps within this year—though certainly by the first quarter of 2027. Now, on the subject of reimbursement, we have engaged a consultant who specializes in that area and are collaborating with them. As I mentioned earlier, we will be sitting down with CMS and with payers to learn what they require from us—whether that means clinical trial data or additional endpoints we could add—so that they are able to proceed and provide DRs or G-codes for the HeartBeam technology. So the progress on that front makes us happy. Regarding long-term value and AI, we'll get into that shortly. The opportunity in this market—something I'll discuss more—is frankly enormous. What's great about HeartBeam's technology is our ability to embed it across multiple form factors, which I'll also walk through. HeartBeam's true advantage lies in its 3D technology. I've noted before that what we've built is simply the finest signal-capturing and interrogation product available; that matters because we're now shifting toward leveraging AI to further streamline the technology. Having more data makes the information more useful, so we're genuinely enthusiastic—and Branislav will speak to this—about what we're doing with AI. And as Tim will also mention later, it's what we've been doing on the cost-control side and in managing our cash properly. Moving to the next slide; I'll now take us through the HeartBeam cardiac platform. Next slide—this one really captures, I think, the core of what HeartBeam is committed to accomplishing. The biggest cause of death is patients waiting to get to the hospital after symptoms begin. There's just no device a patient can keep with them—whether at home, on vacation, or while traveling—that would let them figure out whether they're experiencing a heart attack. And the data on the left-hand side of that page is extremely revealing about the harm that delay produces. Each 30-minute delay contributes an 8.7% added risk of heart failure. This is a huge problem, clearly, for the healthcare system. For people with congestive heart failure, they become repeat flyers, going in and out of the hospital, which brings enormous care costs and a 7.5% one-year mortality. And again, down at the bottom, one very costly way of handling delays. The ALIGN findings have us extremely enthusiastic, as you'll gather from the ALIGN study and its implications, together with the fact that we're committed to genuinely speeding up how fast a symptomatic patient reaches the hospital. And once more, let me stress this: at present, there's no at-home ECG device that reliably picks up heart attacks, so reaching the hospital is essential. On to the next slide. Regarding our core technology platform—a point I've mentioned a few times today, though it bears repeating—the total addressable market before us, specifically the cardiac platform opportunity, ranks among the biggest in all of healthcare. That's a $40 billion opportunity touching more than 50 million patients. Narrowing the focus to spotting heart attacks, the number of patients who'd be in danger exceeds 20 million; this again shows why a device carried on you constantly matters, particularly for someone who has undergone balloon angioplasty, cardiac surgery, or atrial fibrillation procedures, received coronary stents, or faces certain inherited risks concerning heart health.

What we aim to do is narrow the distance between when symptoms start and when care is received, by providing patients with a device they can keep on hand and that gives them an answer right away. This is a portable, cable-free EKG device, the first of its kind. It delivers a clinical-grade report to a group of cardiologists, who review that information and then notify the patient. Beyond that, we hold 25 issued patents around the world that incorporate our proprietary technology. And again, capturing the signal and being able to integrate it — the EKG signal, for us — simply creates additional opportunities ahead to keep improving the kinds of information we give to physicians and cardiologists, and to patients themselves. Next slide. You've also heard us mention, I believe, that this technology has already been proven. We have already developed it. We have used it across a number of clinical trials. There is nothing left for us to build when it comes to hardware and signal capturing. What we're doing at this point is enhancing it through AI initiatives. Thanks to that, we can take the technology and place it into different form factors depending on the application. On this slide, you can see the HeartBeam card, which is an item a person would carry with them. As you know, it's about the size of a credit card; it lets them figure out whether they have AFib or whether they are experiencing a heart attack. The patch is a different form factor and addresses another part of the model. It's aimed more at inpatient step-down units, where nurses are moving around and you might have an at-risk cardiac patient staying overnight or two. It would be great to have a patch on them where staff could say, listen, why don't you raise two fingers and we'll take a reading and see how you're doing. Of course, at discharge we want them leaving with either the card or the patch, again depending on the specifics of that particular patient; and then there's what we call the HeartBeam remote unit, which is, again, the same technology, but it's something we're looking at for outside the United States, in more remote locations where towns or villages or what have you, which lack great access to the newest and greatest technology, would in fact be able to offer the people of that particular area something that provides, again, the kind of information so critically important to their cardiac health. So, next slide please. Now, heart attack detection and the milestones we've achieved. We've touched on this, but here is the roadmap going forward. So when you consider HeartBeam, that's really how the company should be valued; these upcoming steps — and we take a lot of pride in the team we have, because in Q3 they executed flawlessly and, in my view, they will execute flawlessly on these next milestones as well. So we already know the pilot study data is positive, and Dr. Vajdic will speak to that. We have an agreement with the FDA on the 510(k), and we told you before that we believed that's how it would play out. We're in ongoing communication with them about the pivotal study, mainly about the statistical model that's required, which determines the number of patients. Once again, we're very confident about securing that approval with a study design and a patient count that we can handle extremely well. I said this already, and I don't want to sound overly optimistic, but there's a possibility we enroll the first patient before year-end, and if that doesn't happen, we're very confident in Q1 2027. And again, given the conversations we're having and the size of the trial I believe we'll be running, we'd expect the pivotal trial probably to be complete by mid-2027. After that, it's simply a matter of compiling the data and submitting that information to the FDA for clearance. I can't share much more about the clearance timeline, since much of it depends on when the trial starts and how many patients there are; but looking at all this, the one word that should come to mind is execution; we know how to execute and we know precisely what's needed to earn a green check in each of those boxes; we have an excellent relationship with the FDA. The breakthrough device designation and the TAP have genuinely strengthened our ability to move through in a truly expeditious manner. Next slide, and I'll hand it over to Branislav. Thank you, Rich. Actually, I want to highlight two points. The first is the alignment with the FDA on our 510(k) pathway, which is a hugely important step; it clarifies the regulatory path for heart attack assessment, and it clarifies and we believe it also shortens that path. Second, breakthrough device designation and TAP give us prioritized interaction and dedicated FDA advisors as we finalize the pivotal study design; we expect to complete the pivotal study design in the fourth quarter of this year. The interaction with the FDA — and I've been part of all these interactions — through the Breakthrough and TAP programs has been outstanding. The level of engagement and availability gives us opportunities to iterate faster and provides us with a greater level of confidence. Now, let me walk you through the data behind this progress. Next slide, please. Earlier this month at TCT 2026 in San Diego, Dr. Graham Nicol from the University of Washington walked us through the findings from our ALIGN-ACS pivotal trial. That trial involved 132 adults recruited in the emergency departments at two major cardiology centers located in Belgrade, Serbia. It assessed how accurately the HeartBeam system diagnosed compared with a standard 12-lead ECG when evaluating acute coronary syndrome, which also covers heart attacks. Eight cardiologists, kept unaware of each patient's diagnosis, read both the HeartBeam and standard 12-lead ECG recordings independently. Reading of the HeartBeam recordings was done with help from a clinical decision support system. Those readings were then set against each patient's final diagnosis, or gold standard. At the highest level, the findings indicate that the patient-recorded HeartBeam 3D ECG matched the accuracy of the standard 12-lead ECG. Specificity was higher for HeartBeam, at 81.8%, versus 71.4% for the standard 12-lead ECG, while sensitivity was comparable, at 60.2% against 63.0% — quite similar, which suggests potential as a rule-in diagnostic aid. Over on the right-hand side, I'd like to point you toward further results from this study that are genuinely very encouraging. The area under the curve, known as AUC, measures overall diagnostic accuracy. In fact, you can think of it as measuring the information content present in our 3D 3-lead and standard 3-lead signals too. Both the 3D 3-lead and the 12-lead had the same area under the curve, an identical AUC.

That's a genuinely significant result, and it's going to inform how we lock down the design for our pivotal U.S. trial. Beyond that, all of the patients in the study were able to obtain a HeartBeam recording without trouble, which is quite encouraging when it comes to usability. For STEMI heart attacks — the most time-critical type of heart attack — sensitivity was 82.9% with HeartBeam compared with 83.8% for the conventional 12-lead ECG, so once again the two are very close. On top of that, cardiologists who interpreted the HeartBeam recordings showed greater agreement with one another, posting a reader agreement score — Cohen's kappa — of 0.73, whereas the standard 12-lead ECG came in at 0.54. As Rich said, the insights gained from this key trial will inform how we design our pivotal U.S. study, which we intend to launch in Q1 of 2027, or possibly a bit sooner should things move faster. As Dr. Nicol pointed out, these initial results demonstrate the potential this technology holds for reducing the time to care for heart attack patients. We'd like to express our gratitude to Dr. Nicol, every one of our investigators, the patients, and all who contributed support to this significant study. May we have the next slide, please. HEADSTART-ACS represents one of the expanding collections of clinical evidence we have. During October, we completed enrollment for our HEADSTART-ACS trial earlier than planned; this is the biggest study evaluating heart attack detection that has ever used HeartBeam technology. The research was conducted in Indonesia, a nation with 288 million residents distributed over thousands of populated islands, where numerous patients find it difficult to obtain a 12-lead ECG promptly when symptoms arise. A total of 486 patients who arrived at the emergency department of the National Cardiovascular Center Harapan Kita in Jakarta, Indonesia, with chest pain were enrolled in the study. Analysis of the data is currently in progress, and we anticipate sharing the findings at a cardiology conference in 2027. Alongside ALIGN-ACS, we have now accumulated clinical experience involving over 600 patients in heart attack assessment. Coming up next are our U.S. There's a pivotal study slated to kick off at the start of 2027. That trial will back the FDA filing we're preparing for our heart attack assessment offering. We also became a contributing partner in October of the EU co-funded EXIT-CVD research consortium, joining Philips, Medtronic, GE HealthCare, and other worldwide healthcare organizations. HeartBeam is set to lead the HEART-CHECK study, which is among the project's 22 clinical studies looking at high-risk patients. Those studies keep growing our clinical evidence base in heart attack assessment and, in fact, form a core piece of the commercialization plan for our heart attack detection product. Let's move to the next slide. Beyond the clinical and regulatory efforts, we're laying the groundwork for reimbursement of our heart attack assessment product. Three areas are worth calling out. To start, being accepted into the FDA's TAP program lets us engage early with CMS, payers, patients, and provider groups while we generate real-world evidence and evaluate coding, coverage, and payment routes. A breakthrough device designation is likewise a requirement for some expedited Medicare coverage tracks. Accordingly, under the proposed rapid pathway, CMS would issue a proposed national coverage determination on the same day an eligible breakthrough device receives FDA clearance. That rapid pathway remains a proposal rather than a final rule, and we are actively examining how it might apply to heart attack assessment. Next, new CPT codes are being released, including a recent category III CPT code for algorithm-assisted ECG analysis intended to detect heart attacks. That marks a positive development, though CMS and payer coverage and payment choices remain distinct issues that have yet to be resolved. Third, we are putting together the evidence showing how we help shorten the interval between symptom onset and the first medical contact. We are working to define reimbursement-related endpoints for a heart attack assessment study, informed by our early interactions with CMS and payers via the TAP program. Moving to the next slide. I will finish with an update on our AI program, which rests on the same 3D ECG platform. Our dataset holds more than 168,000 ECGs for heart attack training, along with over 2,100 recordings from HeartBeam devices for testing. We've finished work on the arrhythmia AI model, and at this point all of our attention is directed toward the heart attack assessment AI model. When the AI reviewed HeartBeam recordings in early internal analysis, it detected more heart attacks than physicians reading the same recordings. Across all heart attacks, our AI's positivity rate was about 12 percentage points greater, and for non-ST-elevation heart attacks it was 19 percentage points greater, while specificity was comparable. We find those results highly encouraging, though they are early, internal, and have not yet been peer-reviewed, and the HeartBeam AI is still investigational and not FDA cleared at this time. Our first algorithm for atrial flutter came out of work done jointly with the University Hospital of Basel, Switzerland. Against electrophysiology study it demonstrated 97% accuracy over 600 recordings taken from standard 12-lead ECGs. That network was presented as an abstract at the EHRA 2026 European Conference, appeared in Europace, and the complete manuscript has been accepted by the Canadian Journal of Cardiology. We are additionally working with Mount Sinai Hospital in New York and University Hospital Basel, Switzerland on AI applications. To finish, I want to stress our broader objective: reducing the interval from when symptoms first appear to when a decision is made to get medical help. Our plan for that is to give both patients and their physicians clinical-grade cardiac information, because we know every minute matters. We think HeartBeam is able to bridge that gap for the millions of individuals in danger; having said that, I'd like to pass things back to Rich. Thanks, Branislav. As a matter of fact, the following slide sets things up for Tim to cover the financials.

Thanks very much, Rich, and Branislav — we found those updates quite useful. Now moving to the Q3 2026 financials, I'll begin with cash flow. Net cash used in operating activities for the quarter totaled $2.6 million. Compared with the second quarter of 2026, that's a 23% reduction in operating cash outflow, and it's also 18% lower than the equivalent quarter last year. On our prior quarter's call, we walked you through the anticipated step-down in cash flows, which was intended to bring baseline Q4 2026 operating cash flow below $2.5 million. We're glad to report that this is on track and in fact running slightly ahead of schedule, and I'll have more to say about that in a moment. Operating expenses overall came in at $3.5 million — that's 32% below Q2 and 35% under what we saw in last year's third quarter. The biggest factors started with R&D, which dropped $1.2 million compared with the same quarter a year ago. Within that figure, $0.8 million was tied to finishing up development work and associated consulting expenses on the HeartBeam system and the prototype patch, which Rich touched on earlier. Since development is basically complete now, we're seeing reductions pretty much everywhere in that line. Completing the ALIGN-ACS pilot study accounted for another $0.3 million, and reduced employee costs added a further $0.1 million. Turning to SG&A, that line is down $0.7 million, reflecting a $0.4 million decline in non-cash stock-based compensation along with $0.3 million in lower employee costs. On the cash flow front, what we're seeing is that concentrating on the heart attack detection program is opening the door to better capital efficiency. I've discussed many times before how our cost basis varies, and how that provides us with considerable leeway when making decisions. Our employee base is quite small, and we rely heavily on experienced consultants who are committed to particular projects and goals. As a result, when we chose to commit fully to speeding up our heart attack detection work, we were able to reallocate capital rapidly and, on top of that, reduce total spending by a meaningful amount. We're now seeing proof of that close to a quarter earlier than expected. Turning to the balance sheet: our cash and cash equivalents stood at $6.1 million as of September 30, 2026, versus $4.4 million at the close of last year. Since the quarter ended, we've brought in about $4 million in net proceeds by making careful use of our at-the-market facility. All told, that leaves us with a pro forma cash position of roughly $10.1 million. Going forward, as we laid out last quarter, we anticipate baseline operating cash outflow in the fourth quarter will come in under $2.5 million, and we're tracking right on schedule. That pro forma cash figure I just mentioned, combined with our ongoing work to cut non-core spending, pushes our cash runway deeper into 2027 and keeps us on track to hit several important upcoming milestones. We're moving the U.S. timeline up. That key study could add to the roughly $2.5 million of cash outflows we're projecting for Q4, but we'd be glad to spend it if it helps us keep pushing the program forward faster. For all of 2026, we now anticipate net operating cash outflow between $12 million and $12.5 million, which is a further decrease from the guidance we gave earlier in the year of remaining under $14 million. So those results please us, and it's good to see the cash figures arriving as expected. Turning to the next slide and the income statement: SG&A was $1.3 million, compared with $2 million in last year's third quarter and $2.8 million in Q2. Research and development came in at $2.1 million, compared with $3.3 million a year ago and $2.3 million in Q2. Operating expenses overall totaled $3.5 million, down from $5.3 million last year and $5.1 million in Q2. The quarter's net loss was $3 million, against $5.3 million in the comparable quarter of 2025 and $5 million in Q2. So in both SG&A and R&D, you can see the results of the steps we've taken to improve capital efficiency — visible in cash flow and continuing to show up in the P&L. We've been at this steadily for the past year, but over the last quarter we significantly picked up the pace. Comparing Q3 2026 with Q3 2025 on the screen gives you a clear picture of how much we've contained costs. Across the year's first nine months, operating expenses total $13.3 million, down from $15.8 million — a 16% reduction for that period. Our net loss came to $12.7 million, compared with $15.7 million in the same nine months a year earlier, while cash used in operating activities was $9.5 million versus $11.1 million, which works out to a 14% decline. When you consider the $9.5 million net cash used in operating activities over those nine months, it becomes easy to see how we arrive at the $12 million to $12.5 million range for the entire year, given our expected $2.5 million in spending, and we've added a buffer there for any acceleration in the pivotal study. To sum up, because our cost base is variable by design, we were able to pivot rapidly. Our entire focus is on speeding up the route to FDA clearance for heart attack assessment, and those efforts show up in our milestones, yet remarkably they also show up in our cash reductions. We’re handling shareholder dilution through one of the most controllable approaches—cutting our spending outside the core and tightly restricting cash going out. That capital efficiency stretches how long our funds last and brings our expenditures in line with hitting the important milestones ahead. With that said, Rich, I’ll hand it back to you.

Yes, thank you. The final slide gives the summary along with the key takeaways; we hope what we presented today was clear, and there should be no question that detecting heart attacks is our number one strategic priority as we move ahead. We also hope you can see how significant the HeartBeam technology is and how large the market opportunity before us happens to be. The team we have is truly exceptional, and I believe that reflects well on the leadership Branislav and our internal team have shown on several fronts. When I look ahead, when I consider what HeartBeam is doing, when I consider how important this technology is for saving millions and millions of lives — and many of you have heard me say this before — we have a clear path across the next 12 months; we know precisely what has to be done. Our communications with the FDA are great. We're focused on the truly critical, important elements that drive shareholder value. And from now until the end of 2027, I would tell you there is very little risk in the path ahead of us; it is pure execution. And I hope all of you can appreciate that we said this 90 days ago, and we have delivered on every single element of execution that we laid out, and we're extremely confident about the next series of execution milestones. So I'll stop there. And I think we're going to move into questions, and I'm happy to answer as many of those as we can.

Good evening, and thanks for taking my question. First, you said the U.S. pivotal study design is probably being finalized, hopefully by the end of this quarter. Could you share any information, perhaps more detail on how large that study might be? What primary and secondary endpoints do you expect, and how long will enrollment take?

Yes, I can — this is Rich. I'll give you a few points on that, and Branislav, maybe you'll want to close with a couple of points. What I can tell you is that we don't yet have agreement on the trial's size, but our conversations with the FDA have been very, very good. There's a proposal in front of the FDA that relies on a statistical model developed at Harvard University, and the range we see as most probable I'd share with you — likely a trial size of about 300 patients. So with that in mind, we'll be enrolling at approximately eight centers, perhaps 10. And if you took a very, very conservative view of enrollment — bear in mind, these are the country's leading cardiac centers — let's simply assume conservatively that each enrolls 10 patients per month. If it were eight centers... let's just say 10 centers, which makes the math much simpler, that works out to 100 patients enrolled in the trial each and every month. So roughly speaking, you'd reach 300 patients within three months — that's a ballpark figure. It could take us four months to complete enrollment, or something along those lines, but the reality is that every other trial we've actually launched has filled up more quickly than we anticipated. So I'd say we have a strong level of confidence. As Branislav mentioned, our sites are enthusiastic. ALIGN-ACS essentially serves as the stand-in, so to speak, for the pivotal study. That leaves us quite confident about securing FDA approval, and as I said, the only open question is whether that comes through before the close of the year or right at the start of 2027. Absolutely, let me add a bit to that. Through the breakthrough program, we now have a proposal in front of the FDA that should generate feedback fairly quickly, and as it stands, that proposal is quite strong. Our belief is that it speaks to every one of the concerns raised. Still, we can't really predict how the FDA will respond at this stage, even though we feel very good about what we're putting before them. Some details could shift somewhat from what Rich has laid out, but our confidence in the materials we're submitting is very high. Right, you also raised a question about the secondary endpoints — as far as I can tell, we haven't fully settled on what those will be, since those discussions are still underway, though the final package will spell them out.

Right, no, I get it. I realize it's still early and nothing has been finalized, but I do appreciate all of that additional detail. So, perhaps picking up from there on the FDA regulatory pathway: which clinical evidence and performance thresholds do you believe the FDA would need in order to grant that 510(k) clearance? Branislav, please go ahead and address that.

The ACS study we presented just recently at the TCT conference essentially mirrors the endpoints we are now proposing to the FDA, correct? And I walked through our results, and within those results you saw in my slide there, there will be endpoints that we propose; and once more, the performance observed in this pilot study is genuinely very encouraging. And the pivotal study could be seen as a larger version of the same design we have already tested in this pilot study known as ALIGN-ACS.

All right, got it. So this will probably be my final question. You already hold FDA clearance for arrhythmia detection — I realize that — but could there be ways to generate revenue from that existing clearance, perhaps via licensing or some kind of strategic partnership, where you wouldn't need to commit much capital or many resources, yet could still capture some value from it?

That's a really good question, I'd say. As we've told you previously, our priority with arrhythmia detection at present is not to pursue large-scale monetization in any meaningful way; though, frankly, as we've noted before, we're collaborating with a number of strong concierge practices. Those practices are placing units directly with patients. At this point it isn't a major event beyond serving as learning about and understanding the use parameters; and, as you can imagine, ever since the ALIGN-ACS data came out, quite a few parties have shown interest in what we're doing and in whether the technology could be applied to something they're working on. Still, it's genuinely too soon to tell. We're definitely receptive to such conversations, but right now commercialization remains modest, and we're probing the market, seeking clarity on reimbursement, seeking clarity on the use parameters, and seeking clarity on how physicians will — for lack of a better word — prescribe our product for their patients.