HeartBeam Q3 2025: Contradictions in Marketing, Manufacturing, FDA Timelines, and Market Launch Strategies

Date of Call: September 30, 2025

Financials Results

• EPS: $0.15 loss per basic and diluted share (net loss $5.3M), consistent with the prior quarter

Guidance:

• Anticipate FDA 510(k) clearance for 12‑Lead synthesis software for arrhythmia assessment by year‑end and initial commercial launch early next year after clearance.
• Hire Chief Commercial Officer and build a small direct U.S. commercial team; pursue controlled market entry via concierge and preventive cardiology practices in two regions (Southern California, South Florida).
• Offer a 1‑year subscription (device + set number of cardiology reads); unlimited routine recordings enabled by future algorithm clearance; symptomatic readings use credits/read service.
• Expect modest early sales while optimizing UX, with meaningful ramp in H2 2026 and broader expansion in 2027; plan clinical work to pursue a myocardial infarction indication.

Business Commentary:

* FDA Clearance and Product Development: - HeartBeam is anticipating FDA clearance for its 12-Lead ECG synthesis software by the end of the year, which will be a major milestone for the company. - This clearance will form the product that HeartBeam will use for its initial commercialization, marking a pivotal stage in the company's growth.

• Financial Performance and Cash Management:
• HeartBeam reported a net loss of $5.3 million, consistent with prior quarters, reflecting strategic cash management and strong financial discipline.

• The company reduced net cash used in operating activities by 8% quarter-over-quarter, indicating their focus on maintaining a capital-efficient organization.

• Commercial Readiness and Launch Strategy:

• HeartBeam is preparing for commercialization with the hiring of a Chief Commercial Officer and key team members upon FDA clearance.

• The initial launch will be focused on two U.S. regions, with plans to expand further based on the success of the model and feedback from early adopters.

• Partnership and Cardiologist Services:

• The company has established a partnership with HeartNexus for on-demand board-certified cardiologist reviews of synthesized 12-week ECGs, enhancing the value of their system.

• This strategic collaboration provides 24/7 coverage across the U.S., ensuring timely care for patients and supporting the commercial launch.

• Intellectual Property and Recognition:

• HeartBeam has been recognized as a global IP leader, ranking #2 worldwide in 12-Lead ECG innovation, with 24 issued patents worldwide.
• This recognition highlights the company's advancements in portable cardiac diagnostics and its innovative approach to 12-Lead ECG technology.
  
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management repeatedly stated they "continue to anticipate FDA clearance before the end of the year" and called the pending clearance a "major inflection point." CFO noted disciplined cash management (net loss $5.3M; cash $1.9M) and reduced cash outflow, while management expressed confidence in manufacturing, commercial plans and near‑term financing optionality.

Q&A:

• Question from Kyle Bauser (ROTH Capital Partners): Maybe we could start off on the discussions you've had with the FDA. Can you talk a little bit more about sort of what you're working on and responses and factors that you'll want to address ahead of a clearance?
  Response: Interactions with the FDA are productive; we continue to answer routine questions and still anticipate 510(k) clearance before year‑end, but won't provide further detail now.

• Question from Kyle Bauser (ROTH Capital Partners): As you gear up for the commercial launch, you sort of talked about it a little bit, Rob. Are you still kind of focused on a couple of territories initially to gather feedback and intel ahead of a broader launch to, say, 5 to 10 territories?
  Response: Yes — start with a small number of prominent pilot accounts, focus deeply on two regions to validate the sales model, then expand region by region.

• Question from Kyle Bauser (ROTH Capital Partners): How should we be thinking about pricing regarding sort of symptomatic versus asymptomatic readings?
  Response: Plan is a one‑year subscription that includes the device and a set number of cardiology reads; routine (asymptomatic) recordings are intended to be unlimited once algorithm clearance is obtained, while symptomatic readings will consume credits/read services.

• Question from Kyle Bauser (ROTH Capital Partners): As you prepare for the commercial launch, how are you managing inventory levels? And how does your sort of manufacturing capabilities look at this point?
  Response: Manufacturing is with a U.S. contract partner using off‑the‑shelf components, so we have line‑of‑sight to parts and no near‑term build constraints; the bigger focus is onboarding and workflow.

• Question from William Sutherland (The Benchmark Company): Wanted to just maybe find out a little more color on the 2 initial market launches that you had planned. Maybe a sense of the available TAM that you're going to be looking at there? And just a couple of assumptions to help us think about the numbers that we might just begin to think about for next year and maybe the following year.
  Response: Initial geographies likely Southern California and South Florida with roughly 75,000 target patients per territory; expect modest early revenue while proving workflow, with penetration building in H2 2026 and further expansion in 2027.

• Question from William Sutherland (The Benchmark Company): How does the marketing target both the cardiologist and the patient given this is an out‑of‑pocket expense?
  Response: Go to market through prescription concierge and preventive cardiology practices, supporting practices in patient outreach initially; referrals and eventual DTC are secondary avenues as we scale.

• Question from Webcast (Unknown): You ended Q3 with $2 million in cash. What are your plans for additional funding?
  Response: We have multiple funding vehicles and sources/options; we are balancing minimizing dilution with building an appropriate balance sheet and expect to address funding strategically near‑term as milestones (e.g., FDA clearance) are achieved.

• Question from Webcast (Unknown): Are there any contracts that are currently sitting on your front burner?
  Response: We are in advanced, positive discussions with several prominent and large practices that could be early users and expect to announce agreements after FDA clearance and early commercialization.

• Question from Webcast (Unknown): Do you have any expectations for the level of sales next year following the commencement of commercialization?
  Response: No formal guidance; company will prioritize user experience and a cautious early rollout, anticipating more meaningful sales growth in H2 2026 based on inbound demand and modeled scenarios in coverage reports.

• Question from Webcast (Unknown): Once you obtain FDA clearance for arrhythmia detection, what is your planned pathway for pursuing an additional indication for myocardial infarction detection?
  Response: We plan to pursue an MI indication; initial discussions with FDA have begun and we expect to conduct a clinical study comparing our output to standard 12‑Lead ECGs per FDA guidance.

• Question from Webcast (Unknown): Will you work exclusively with HeartNexus? Or are you planning to — or open to expanding your network to other telcardiology firms?
  Response: HeartNexus is our primary partner with U.S. coverage and scalability for launch, but we will offer options for accounts to perform readings themselves and remain open to expanding the network as demand dictates.

• Question from Webcast (Unknown): Regarding your commercial launch, are you considering partnering with other companies as strategic partners to increase production or operational capabilities?
  Response: Yes — exploring distribution partners, concierge chains and collaborations on AI/data and co‑development to scale efficiently across sales, operations and technology areas.

Contradiction Point 1

Marketing Strategy and Target Customers

It involves differences in the company's approach to marketing, specifically focusing on the target customer segments and the strategy to promote their product, which impacts the company's go-to-market strategy and market penetration.

How do you plan to target marketing in these regions given the out-of-pocket expense? - William Sutherland(The Benchmark Company)

20251114-2025 Q3: We're targeting concierge and preventive cardiology practices. Practices will discuss the technology with their patients. Initially, we'll rely on practices to promote the product. - Rob Eno(CEO)

How are you planning to target marketing efforts given the prescription drug's nature and patient out-of-pocket costs? - Unknown Executive(Webcast)

2025Q3: We're really focusing on targeting those patients that are in the 40s to 70s that have lifestyles that lead to higher risks for heart attacks and strokes. - Rob Eno(CEO)

Contradiction Point 2

Manufacturing Capabilities and Strategy

It involves the company's approach to manufacturing, which impacts its production capacity and supply chain management, affecting the company's ability to meet demand and achieve revenue growth.

How are you managing inventory and manufacturing capabilities? - Kyle Bauser(ROTH Capital Partners)

20251114-2025 Q3: Our manufacturing partner is U.S.-based and uses off-the-shelf components. Manufacturing capabilities are built out, with no long lead-time parts needed. - Tim Cruickshank(CFO)

How are you managing inventory and manufacturing capabilities? - Kyle Bauser(ROTH Capital Partners, LLC, Research Division)

2025Q3: We're really excited about the manufacturing process. We've got a U.S.-based manufacturing partner. All of the components are off-the-shelf, so it really facilitates the manufacturing process. - Tim Cruickshank(CFO)

Contradiction Point 3

FDA Clearance and Regulatory Timeline

It involves the timeline and progress with the FDA for product clearance, which is crucial for the company's commercialization plans and revenue generation.

What are the key FDA discussions, ongoing efforts, and issues to resolve for approval? - Kyle Bauser(ROTH Capital Partners)

20251114-2025 Q3: Interactions with the FDA are categorized as productive. The normal process involves answering FDA questions, and we're expecting FDA clearance before the end of the year. - Rob Eno(CEO)

Can you discuss the discussions with the FDA regarding the clearance process? - Kyle Bauser(ROTH Capital Partners, LLC, Research Division)

2025Q3: We continue to anticipate FDA clearance before the end of the year. However, as I said, I can't provide you any specific details around the specifics of the questions that we're getting from the FDA. - Rob Eno(CEO)

Contradiction Point 4

Initial Market Launch Strategy

It involves the company's strategy for initial market launches, which is crucial for establishing a foothold and gathering feedback for broader expansion, impacting the company's market penetration and revenue growth.

Can you provide details on the two initial market launches and the available TAM in those regions? - William Sutherland(The Benchmark Company)

20251114-2025 Q3: The first two geographies are likely Southern California and South Florida, with each targeting approximately 75,000 patients. - Tim Cruickshank(CFO)

Can you provide more details on the two initial market launches and the available TAM in those regions? - William Sutherland(The Benchmark Company)

2025Q2: We're focused on a couple of geographic regions and a few practices that will serve as reference accounts. - Rob Eno(CEO)