Heartbeam, Inc.

Greetings and welcome to the HeartBeam First Quarter 2025 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 call 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 presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision of 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 wire this afternoon and is available in the investor relations section of our company's website, heartbeam.com. Your hosts today, Rob Eno, Chief Executive Officer, and Tim Cruikshank, Chief Financial Officer, will present results of operations for the first quarter ended March 31, 2025. At this time, I will turn the call over to Heartbeam Chief Executive Officer, Mr. Rob Eno.

Thank you, operator.

The topics we'll cover on today's call are listed on the slide. We'll provide a brief reminder of the HeartBeam system and its status, followed by our progress to 2025 milestones. We'll then provide more details on the valid ECG data and the recently announced collaboration with AcuCardia. Next, we'll touch on our commercial readiness efforts and our long-term vision, followed by financial results before turning it over to Q&A. Before we dive into updates from the last quarter, I wanted to remind everyone about our initial product, the HeartBeam system. HeartBeam is developing the first-ever personal, capable-free ECG that can synthesize a 12-lead ECG. Our unique IP-protected approach captures the heart's electrical signals in three dimensions, or three non-coplanar directions, side-to-side, top-to-bottom, and into the body. We believe bringing this 12 lead capability directly into the hands of patients is extremely disruptive to how cardiac conditions are currently managed. The system is designed to be easy to carry and easy for patients to use wherever and whenever they have symptoms. We also believe this has the potential to be the highest resolution ambulatory ECG monitor and that adding artificial intelligence to these high resolution signals acquired by patients longitudinally over time can result in unsurpassed algorithms providing personalized cardiac insights. In December of last year, we received our foundational FDA 510K clearance. This is for the system as a whole for arrhythmia assessment, the credit card signal collection device, the patient application, a physician portal, and signal quality algorithms. The system outputs three ECG waveforms representing the three non-coplanar directions captured by our technology. In January, we submitted our second FDA 510K application. This is for the software that synthesizes the 12-lead ECG from our 3D signals for arrhythmia assessment. This is important because it takes the high resolution signals collected by the heartbeam system and synthesizes them into a familiar 12-lead ECG, something that physicians are used to reviewing on a daily basis. This application is currently being reviewed by the FDA. We continue to expect clearance for the software by the end of the year. These two clearances together will form the product with which we'll start our initial commercialization. We've achieved a number of important milestones since our last call. At the Heart Rhythm Society meeting last month, Dr. Tom Deering from the Piedmont Heart Institute presented the results of our valid ECG study. He announced that we met the endpoints for the study, which formed the basis of our FDA submission for the 12-lead synthesis software for arrhythmia assessment. We've also made progress on the regulatory front. We're in positive and productive discussions with the FDA on the 12-lead synthesis software submission. We're in the substantive review portion of the process, and we continue to anticipate clearance by the end of the year. FDA staff have been very engaged and responsive, and we've not experienced any delays or issues related to the recent events of the FDA. In addition, we started our interactions with the FDA on expanding our indication to include ischemia, which is inadequate blood flow to the heart. ECGs can detect electrical changes that occur during ischemic events, such as heart attacks. We're engaging with the FDA to discuss our rationale and clinical study plans. While we make progress with the FDA on the regulatory side, We're executing on our plans to become commercial ready. We're working to have the processes and systems in place to launch commercially after receiving FDA clearance on the 12 lead synthesis software. The collaboration we recently announced with Acucardia will add to our commercial efforts, and we'll describe that collaboration in more detail today. Other recent developments include two new issued U.S. patents, bringing the total to 20 issued patents worldwide. Intellectual property is very important to HeartBeam and will continue to invest in protecting our unique technology. Also, I was appointed to the board of directors. I'm excited to join the board and to continue to work closely with our existing board members as we drive toward commercialization of the HeartBeam system. Another expansion was to the membership of our scientific advisory board, adding Dr. Vivek Reddy from Mount Sinai. Dr. Reddy is a world-leading electrophysiologist, And his appointment further enhances this group of preeminent cardiology advisors, both in interventional cardiology and electrophysiology. At our call in November, we laid out this framework, demonstrating the key milestones for the end of 2024 and all of 2025. I'm pleased to say that we continue to make great progress in achieving these milestones. The three milestones in the circle are the ones we achieved since the call two months ago. announcing a strategic collaboration with Acucardia on the arrhythmia classification algorithm, initiating discussions with the FDA on our ischemia indication, and the presentation of the valid ECG data. On the arrhythmia classifications, I mentioned on the last call that we made a decision to prioritize a collaboration for the arrhythmia detection algorithm, pivoting from the earlier plan of conducting a clinical study on the algorithm that we developed internally. We anticipate that the collaboration will result in significant savings both in time and money. I'll describe the acucardia collaboration in more detail in a minute. On the ischemia indication, we have strong proof-of-concept data on our system's ability to detect ECG changes that are related to heart attacks and other acute coronary changes. We're excited to be engaging with the FDA to determine the regulatory and clinical plan to expand into this new indication. We continue to anticipate that later this year we'll initiate a pilot clinical study on the use of our system in patients with ischemia. On the valid ECG data, the results of the pivotal study were presented last month at the Heart Rhythm Society, and I'll provide more details on the next slide. Before moving on, I wanted to add that one of the main objectives that Tim and I had when we started on our new positions late last year was communicating and then executing on these important milestones. Since creating this list and showing it at the earnings call in November, the team has done an exceptional job to achieve the milestones we said we were going to achieve. The main focus for the company for the remainder of 2025 is working with FDA on the review of our 510K application and on our commercial readiness efforts. Completing these milestones will put us in a great position for a successful commercial launch. Next, I'd like to spend a little time providing more details on two of the recent milestones, the valid ECG study and the AcuCardia collaboration, as well as on our commercial readiness efforts. I wanted to dive deeper into the clinical results of the VALID-ECG pivotal study, which formed the basis of our submission to the FDA on the 12-lead synthesis software for arrhythmia assessment. Dr. Tom Deering from Piedmont Heart Institute in Atlanta and the former president of the Heart Rhythm Society presented the results. The study enrolled 198 patients at five U.S. centers, These patients were in arrhythmia clinics and included patients with sinus rhythm and a variety of arrhythmias. They had simultaneously recorded standard 12-lead ECGs and our device. Our system then synthesized the 12-lead ECG from our signals, and these were compared to the standard 12-lead ECGs. The heartbeam system is designed to be used by patients at home, so this is a very important study to determine how similar our synthesized 12-lead ECGs are compared to standard 12-lead ECGs. for arrhythmia assessment. The study compared the ECG signals quantitatively. You can see an example from one of the patients here and how similar the waveforms are. The study looked at a series of ECG intervals. Those are the time between different points of the signals and amplitudes. That's the height of specific points of the signals. We reported mean differences between the standard 12 lead ECGs and our synthesized 12-lead ECGs for several intervals and amplitudes. For each of these, the differences were less than the margin of error you would normally see when a person measures an ECG. As you can see on the graph, the standard ECG paper is made up of large boxes and small boxes. The differences between the synthesized and standard 12-lead ECGs in the study were tiny, all less than one-fifth of the size of a small box. In addition, physicians reviewed all of the ECGs and classified them as normal sinus rhythm or one of a series of arrhythmias. The physicians looked at the ECGs independently and in a blinded manner. A total of 93.4% of the time, the classification was the same between the standard 12 lead and the heartbeam 12 lead. This is a high level of agreement, similar to what you would expect when two physicians review the same ECG. So in short, the goal of the study was to demonstrate for physicians and for the FDA that synthesized 12-lead ECGs produced from RECG taken by patients closely approximate the signals from a standard 12-lead ECG for arrhythmia assessment. The study met these performance goals. Thank you to Dr. Deering and all the investigators, collaborators, and the patients in the study for helping us achieve this very positive result. Next. We're very excited to have recently announced a strategic collaboration with Acucardia. Based in New York, Acucardia is an ECG-led diagnostics software company. They're developing a suite of ECG algorithms, both classification and detection algorithms. The collaboration is focused on adding to the HeartBeam system Acucardia's FDA-cleared Acure ECG algorithm, which automatically classifies the rhythm from the ECG signals. The HeartBeam system is designed to have two workflows. When a patient's experiencing symptoms, the ECG will be sent to a cardiologist to review and to provide the interpretation back to the patient. However, we want to encourage our users to take as many readings as they like to practice and to build up their data. Over time, the patient's prescribing physician can review the ECGs and notice any underlying trends. For this asymptomatic use case, we'd like our patients to receive an automated assessment of the rhythm. This is where AcuCardia's Acura ECG comes in. We've reported previously that Heartbeam has developed a deep learning-based algorithm to classify arrhythmias. We determined that the time and the expense required to bring our own solution to market would be prohibitive right now. We're excited that we can combine AcuCardia's FDA-cleared solution with the FDA-cleared Heartbeam solution. We're currently working with AcuCardia to determine the steps to clear this joint solution, and we'll have more details in an upcoming call. In addition, the agreement with AcuCardia has an economic framework that we'll be finalizing as we move to the commercial stage. At a high level, there's no upfront payment, but we will be paying a reasonable per-user fee for integrating their algorithm. Finally, while the scope of the collaboration is currently limited to the Acure ECG algorithm, AcuCardia has an exciting pipeline of technology, and there's a potential for expanded collaborations in the future. The two major efforts for HeartBeam this year are securing the FDA clearance for our 12-lead synthesis software and undertaking the necessary steps to become commercial ready in advance of our commercial launch, which is expected by the end of the year. We've started our early access program in which we're testing the product with concierge accounts and patients. This program is giving us incredibly valuable feedback on all aspects of our offering, including the onboarding workflow and physician and patient training. while generating additional data on real-world use of the Heartbeam system. Other aspects of commercial readiness that are underway include building out the infrastructure to support the end-to-end workflow from the physician's office to the patient's home and implementing the customer support function. We're also establishing inventory and logistics support and have selected a contract manufacturer, all of which will allow us to scale the business. Meanwhile, we're developing a comprehensive launch plan and we'll share more details as launch approaches. In summary, our preparations for initial commercial launch are progressing well. Before Tim discusses the financials, I wanted to step back and articulate what we see as the value we're creating here at HeartBeam. Everything starts with our strong IP position. We now have 20 issued patents worldwide. The core of the technology enables us to create the smallest, easy-to-use, and first cable-free ECG device that synthesizes a 12-lead ECG. We've significantly de-risked the business through our foundational FDA clearance and significant clinical data showing similarity to a standard 12-week ECG for arrhythmia assessment. Next, the upcoming market introduction holds significant promise. As we described previously, our target market segment of patients who are members of concierge and preventive cardiology practices is a $500 million serviceable market in the U.S. with a high margin recurring revenue model. Market research indicates that there's extremely strong demand from our target patients and physicians. We believe the concept is compelling and it's resonating. The unique combination of a cable-free ECG that produces a 12 lead read by cardiologists. We're exploring a number of wraparound features and services to add additional value and to drive adoption and stickiness. Beyond our initial indication of arrhythmia, the potential to expand into ischemia and heart attack detection opens up a huge opportunity. The coronary artery disease market is larger than the atrial fibrillation market, with 20 million patients in the US who have had a prior heart attack or who are at elevated risk for one. We intend to demonstrate our system's ability to reduce the time from the onset of symptoms to the emergency room door. A technology that achieves this will have dramatic clinical and healthcare economic benefits and the potential for significant payment by the healthcare system. And that ties to our next area. There are a number of ways which we can expand beyond patient pay and have our technology paid for by the healthcare system. As we discussed in our last call, there are new category three CPT codes that have the potential to cover our technology. In addition, there are several clinical use cases in which high risk patients can benefit from having an easy to use 12 lead ECG with them at home to drive more proactive and less expensive care. We intend to engage with Medicare Advantage plans, including the so-called special needs plans or SNPs, who have an incentive to include technologies that improve clinical care and reduce costs. Finally, one of the most exciting elements of our technology is the breadth of opportunities that the core technology can address. First, predictive algorithms on 12 lead ECGs can screen for or even predict the likelihood of developing a variety of medical conditions. Applying these algorithms could allow HeartBeam users to have valuable and proactive information about their heart health. Training algorithms on longitudinal data taken with the HeartBeam system could allow for trending data that has not been possible. HeartBeam has issued patents on additional form factors. An on-demand 12-lead patch could be a best-in-class offering in the multi-billion-dollar extended wear patch market. incorporating Heartbeam's technology into a watch form factor would seamlessly integrate with continuous monitors in a single device. In all, we're excited about Heartbeam's IP protection, de-risking, and the immediate market opportunity, but we also see it as an open-ended opportunity with the ability to make a dramatic impact on a large number of patients and change the way that cardiac care is managed.