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spk03: 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, heartsbeam.com. Your host today, Ranaslav Vadich, Chief Executive Officer and Founder, Rob Eno, President, and Rick Brownstein, Chief Financial Officer, will present results of operations for the first quarter ended March 31st, 2023. If you require operator assistance, please press star then zero. At this time, I will turn the call over to HeartBeam Chief Executive Officer, Bratislav Vatic.
spk01: Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's first quarter 2023 financial results conference call. On today's call, we will be speaking with you about some very important updates concerning our recent fundraising efforts and adjustments to our strategic focus. Recently, we completed a $25 million secondary offering and a $1.5 million registered direct offering. This $26.5 million will enable us to execute on upcoming product development, clinical and regulatory milestones, and it sets our cash runway into late 2024. With the addition of this funding, we took the opportunity to adjust our strategic focus to enable timely delivery of our ambulatory vector electrocardiogram, or VECG, products, our key future value drivers. Going forward, our immediate focus is on obtaining an FDA 510 clearance for the Harbin Amigo credit card size VECG device, followed by a second FDA clearance on the system's ability to synthesize a 12-lead electrocardiogram or ECG. Rob will focus on that topic and discuss in more detail our strategic focus and product timelines in a moment. Recently, we announced the acquisition of substantially all assets from Libmore, a digital health solution company. Libmore's Halo Plus AP detection system is the world's first FDA-cleared prescription variable for continuous cardiac rhythm monitoring. This acquisition extends our reach in remote monitoring and detection with full ownership of an FDA-cleared product. On May 3rd of this year, we closed a secondary offering of $45 million followed by a registered direct offering of $1.5 million for a total of $26.5 million. Working with public ventures, the offering was oversubscribed from the initial $15 million raise. Even at the $25 million level, we did not meet the demand. I believe this speaks to the quality of our company and the public venture community's understanding of our future. So, who is Public Ventures? They are fully owned subsidiary of MDB Capital Holdings. MDB and Public Ventures have proven to be a tremendous strategic partner to Harvey. Public Ventures is a member-driven investor community with a mission of backing visionary public companies that have the potential to become market leaders in their technology category. We are pleased that after extensive due diligence, MDB and Public Ventures strongly supported Hardin and themselves actually invested in our financing. We believe that we are the leader in the mobile VECG space, and we are encouraged that public ventures build their investment thesis around this position. I would like now to turn the call over to our president, Rob Eno, to further discuss our strategic focus and provide product updates. Rob.
spk05: Thank you, Branislav, and thanks to everyone joining us today. Expanding on Branislav's mention of our strategic focus, we're now primarily focused on obtaining an initial 510 clearance from FDA for the HeartBeam Amygo VECG device, followed by a second clearance on the system's ability to synthesize a 12-lead ECG. Together, these two HeartBeam Amygo FDA clearances, the hardware, and the system's ability to synthesize a 12-lead ECG will enable physicians to remotely monitor patients and immediately interpret any concerning cardiac events. We see this as an important value creation path. In addition, we'll be undertaking clinical trials in 2023 and beyond to demonstrate the performance of the HeartBeam AmyGo platform, which we believe is the most advanced ambulatory cardiac detection platform available. These initial studies will focus on the 12-lead synthesis and on the performance of the system as a whole. We believe these studies will be key to driving clinical and patient adoption. We also plan to add world-leading key opinion leaders to our medical advisory board. These KOLs will help guide our clinical and regulatory development will be announced in the near future. Our initial commercial launch activities will be for the second version of HeartBeam AmyGo after we obtain the FDA clearance for the 12 lead equivalents. We are not currently emphasizing commercial activities for either the HeartBeam Amy software product or the HeartBeam AmyGo V1 system. This year we will be undertaking an aggressive pre-commercial effort. We'll be defining the initial market segments for the HeartBeam AmyGo system and identifying potential business partners, both for HeartBeam AMI Go and other technologies in our portfolio. And finally, we'll continue aggressive development of our intellectual property through our partnership with PatentVest, a unified technology development and patent law firm focused on creating IP leadership for development stage technology companies. The partnership is focused on the goal of creating clear leadership in the area of ambulatory VECG cardiac detection. Now turning to our product timelines and updates, we expect to file for FDA 510 clearance for version one of the HeartBeam Amigo VECG device in the coming days. This submission is focused on the HeartBeam Amigo hardware as a three lead collection device. Our current estimate is for clearance by the fourth quarter of 2023. Following this first clearance, We're planning a second FDA submission for version two, which includes generation of a synthesized 12-lead ECG from the same device. Once we have both clearances in hand, we'll focus on a limited market release in pursuit of initial commercialization.
spk04: I'll now turn the call over to Rick Brownstein, Chief Financial Officer, to discuss operational updates and financials.
spk06: Thank you, Rob. Turning to our financials, I'll now give a brief review of our financial results. A full breakdown is available in our regulatory filings, NQ was just issued, and in the press release that crossed the wire after the market closed today. General and administrative expenses for the first quarter of 2023 were $2.5 million, compared to $1.4 million for the first quarter of 2022. This reflects the growth in our team and other costs in support of being a public company. Research and development expenses for the first quarter of 2023 were $1.7 million compared to $0.7 million for the first quarter of 2022. Our focus on R&D consisted largely of product development and regulatory costs for both our products, and specifically for HeartBeam Amigo hardware, where we have utilized our professional services agreement with Triple Ring Technologies. Triple ring represented about 30% of our investment in R&D this quarter. Additionally, on the regulatory side, there are the costs of supporting our current and upcoming FDA submissions of our products. We also invest in research costs in support of future product pipeline coming from our patented VECG platform technology. And this is the basis for our patent portfolio, which now includes 10 issued patents. Net loss for the first quarter of 2023 was $4.1 million compared to $2.1 million for the first quarter of 2022. We ended the first quarter of 2023 with just under $1 million in cash and cash equivalents compared to $3.6 million as of December 31, 2022. Having invested the proceeds from that November IPO in 2021 to accelerate our product development path. This cash balance does not include the net proceeds of approximately 20.46 million from the common stock financings that we recently completed. Of importance in the recent financing is the fact that the 17.7 million shares offered did not include any warrants and our balance sheet as a result has a very simple and straightforward capital structure with approximately 20 million shares now outstanding. Regarding our capital raise, we intend to use these proceeds to achieve several important upcoming milestones. As a result of our new strategic goals in our commercialization plan, we've reduced our budgeted cash expenses to approximately $15 million for the next 12 months to focus on clinical and product development and FDA appearances. We will not undertake commercial efforts in this period. The balance of proceeds is expected to fund operations into late 2024 to provide us a cash runway as we develop our VECG products and as we prepare for commercialization. We expect no material commercial revenue for 2023, but believe we've raised sufficient funds to get us to this important inflection point, the FDA clearance of the second version of heartbeat main ego. To reemphasize this important point, With the capital just raised, we believe we have sufficient capital through late 2024. I'll now turn the call back over to Branislav for his closing thoughts.
spk01: Thank you, Rick. We are incredibly optimistic for the future of Harvey. After this capital raise, we are highly focused on executing on our product development, clinical, and regulatory milestones. and our cash runway is now extended into late 2024. We also are adjusting our strategic focus to enable timely delivery of our HeartBeam breakthrough ambulatory VECG products, the company's key future value drivers. The key element of this focus is the HeartBeam Amygo, credit card size, VECG device. Beyond that, looking at the product pipeline, we think that the application of our artificial intelligence methods will be of great value to us. We will have a unique data set from patients who have actually recorded their ECG on a periodic basis, monthly, weekly, or even more frequently. that longitudinal data for our patient population will be of tremendous value. Applying artificial intelligence to this data set, this is extremely data-rich, richer than the standard family DCG, will yield, we strongly believe, additional insight into cardiovascular disease and further help cardiovascular patients. On the right-hand side of this slide, we show the 12-lead patch. As we reported last quarter, we have received a patent on that technology, which is disruptive and has the potential to make a significant impact on the patch industry, projected to be at $4.8 billion by 2030. We are currently evaluating how and when to best take advantage of this patch. Looking ahead, we remain confident in our product milestones. Our next milestones on the commercialization path include 510 submission for the HeartBeam Amigo VCG version 1 product, followed by the FDA clearance. I'd like to share one final thought. We are all very excited about our partnership with public ventures and our refined strategic focus. We believe we are closer to our goal of making our VCD technology a new standard of care, which in turn will help millions of cardiovascular patients around the world. I look forward to providing our shareholders with further updates in the near term. I thank you all for your attention and would like at this point to answer any questions that you have operated.
spk03: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Again, it is star then one if you wish to ask an audio question. At this time, we will pause momentarily to assemble our roster. Okay, seeing that there are no audio questions, I would like to mention that we will now take questions from webcast viewers. First question for webcast viewers asked, you describe an adjustment to your strategic focus What exactly has changed from your previous strategy to now with the new strategy focus, and what are you not doing? Rob, would you like to comment?
spk05: Sure, I'll take this one. So, as we mentioned, the primary focus now is the HeartBeam Amygo device, and in particular, obtaining the two FDA clearances that we need, the first for the device and the second for the 12-lead synthesis. The biggest change in this strategy is de-emphasizing the commercialization of the Heartbeat Mamie software product, as well as version one of Heartbeat Mamie Go, which is the three-lead device before we add the 12-lead synthesis. In other words, the first product that we'll be commercializing is Heartbeat Mamie Go V2 system. However, this year we will be preparing for commercial efforts by defining the initial market segments for Heartbeat Mamie Go and identifying potential business partners both for Amigo and other technologies in the portfolio.
spk02: Our next question asks, what is PatentVest?
spk03: How will you work with them? And what does this say about your IP position?
spk01: Let me answer that question. As we described in the call, PatentVest actually subsidiary of MDB, is a unified technology development as well as a patent law firm focused on creating IP leadership for companies like ours. The partnership with Patentvest is focused on the goal of creating clear leadership in the area of ambulatory VECG cardiac detection. And we believe that we have a very strong and growing actually IP position and that we are the leaders in this emerging field of ambulatory VECG. In our interactions due diligence with MDB and public ventures, we know that they fully subscribe to that view and share our view as well. PatentVest is one of the attractive elements of public ventures, and we believe we'll add significant value to our IP portfolio, and at this point, we are confident that their strategic contributions to our IP strategy will actually strengthen our IP position significantly.
spk03: Our next question asks, is the decision to de-emphasize the AMI product related to any difficulties with the FDA? Rob, please go ahead.
spk05: Great. Thank you. And it looks like we have a couple other similar questions on this, so hopefully this addresses it. So no difficulties in the FDA process. In fact, the regulatory process for heartbeam AMI is well underway, and we've had very positive discussions with FDA. We are still pursuing the heartbeam AMI clearance for a couple of reasons. First, the AMI algorithm is a key part of our future AMI-go product roadmap. It uses the VECG technology to provide additional information on top of the 12 lead for patients with potential heart attacks, and that's going to be an important differentiator for us. In addition, while our current focus is clearly on the development and regulatory clearances for HeartBeam AMI-GO, we do continue to think that the AMI product can make a big impact in the hospital and the emergency room environment. So we're going to be exploring various options around its commercialization
spk04: both in terms of timing and approach.
spk03: Our next question asks, what are you doing with the other products you discussed in the presentation, such as the watch and AI?
spk01: Let me just say that the priority is very much with the Amygo system and the upcoming FDA clearances. At the same time, we continue to have advanced development efforts on these other products. In particular, we are developing our artificial intelligence AI strategy and continue to believe this is a very compelling area and source of differentiation in the future. This is all driven by the wealth of rich data our system The same goes for the watch. We believe that in the future, this will make for a very compelling product offering.
spk03: Our next question asks, can you outline the next upcoming milestones that we should look forward to track your new direction?
spk01: Yes, in full alignment with our refined focus here, we remain focused on the major event of FDA submission and actual clearance for our Amigo product. We will submit the initial FDA 510K application for the first version of this product in the coming days. The other upcoming milestones include 510 clearance of the first version of the device and submission of the second version of the device that will clear the synthesized 12 lead ECG. We will continue, of course, to update you on our plans. But I would like to conclude by saying that we plan to announce new key members of the management team as well as the medical advisory board.
spk03: Our next question asks, if you were approached by a company interested in licensing your technology, would you consider it?
spk05: I can take that and feel free to add on. As we've talked about, business development is the really important part of our focus. We realize that we're a small company with a lot of great technologies and IT in our portfolio. So we will be certainly open to talking with all potential partners about involvement throughout the portfolio. It's too early to say specifically about licensing for any particular technology, but wanted to emphasize that business development discussions with a range of partners is a really key part of our strategy going forward.
spk03: And our last webcast question asks, how dependent do you expect the second product will be on the commercial success of the first product?
spk05: Yeah, and I just have to say I'm not 100% sure on the definitions in this product of the first and second product, so I apologize if I don't answer this question correctly, as intended when it was asked. The first product that we've discussed in the past is the AMI software product. We are planning to go through, as we say, with the FDA clearance for that, which is underway. And we do not have current plans to commercialize that. As I mentioned, we will be focusing on placing that algorithm into our Amigo platform going forward, as well as looking at all options of commercializing that either directly through partners, et cetera. And then the other product that we've talked about is the Amigo V1, which we are close to submitting that FDA application, as we've said. And that one, again, will not be commercialized on its own. That is the hardware, the three-lead device. And we're going to use that as the basis of our second clearance, where we do the 12-lead synthesis on top of that. That's Amigo V2, which we will be commercializing. So Amigo V2 is the first product we're commercializing.
spk04: Amy and AmyGo V1 are still key parts of the strategy as building blocks.
spk03: Okay, and now I'd like to just ask again, if anyone has an audio question, you may press star then one on a touch tone phone.
spk02: Again, it is star then one if you have an audio question. And if you have a question on the audio side, press star then one.
spk03: Seeing no audio questions, I would now like to turn the call back over to Dr. Vadich for his closing remarks.
spk01: 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 will be more than happy to assist. Thank you and have a good day.
spk03: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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