HeartBeam, Inc. Annual Report: Your Essential Investor's Guide

Considering an investment in HeartBeam, Inc.? This guide offers a clear, compelling overview of the company's performance for the fiscal year ended December 31, 2025. We highlight key developments, financial health, and future prospects to help you make an informed decision.

Business Overview: What HeartBeam Does

HeartBeam is a medical technology company dedicated to transforming heart health monitoring. The company develops smart, portable devices that capture and analyze the heart's electrical activity (similar to an ECG) outside traditional clinical settings.

Its flagship product, the HeartBeam System, is a credit card-sized device that captures the heart's electrical signals in 3D. Proprietary software then converts this unique 3D data into a familiar 12-Lead ECG. This technology aims to provide detailed heart checks for conditions like arrhythmia from the comfort of a patient's home, with results reviewable by a cardiologist. The 3D capture offers a more comprehensive view of cardiac activity compared to traditional 1D or 2D ECGs, potentially enabling earlier and more accurate diagnoses.

Performance in Fiscal Year 2025: This was a pivotal year for regulatory approvals. HeartBeam secured U.S. Food and Drug Administration (FDA) 510(k) clearance (market approval) for its credit card-sized 3D ECG device in December 2024. This was followed by clearance for its 12-Lead ECG synthesis software in December 2025. Both approvals cover the assessment of general arrhythmia.

Despite these significant regulatory milestones, the HeartBeam System did not generate any product revenue in 2025. This means the company remains in its pre-commercialization phase, focusing on research, development, and preparing for market launch.

Financial Performance: Revenue, Profit, and Year-over-Year Changes

For the fiscal year ended December 31, 2025, HeartBeam reported no product revenue. Total revenue, primarily from grants, amounted to a modest $0.5 million, a slight increase from the prior year's grant revenue.

The company incurred significant development and pre-commercialization expenses, leading to a net loss of $32.5 million. This loss increased from the prior fiscal year, primarily due to higher research and development (R&D) and pre-commercialization investments.

Key operating expenses included:

• Research and Development (R&D): $18 million, reflecting ongoing innovation and product refinement.
• General and Administrative (G&A): $12 million, covering corporate overhead.
• Sales and Marketing: $2.5 million, in preparation for the upcoming product launch.

As a pre-revenue company, growth metrics like sales volume or customer acquisition are not yet applicable. HeartBeam's focus remains on achieving commercialization and expanding regulatory clearances.

Risk Factors: Key Challenges

Investing in HeartBeam carries several significant risks:

• Pre-Revenue Status: The company is currently pre-revenue, making it a high-risk investment. Its success hinges entirely on future product sales and market adoption.
• Need for Additional Funding: With an estimated 8-9 month cash runway, HeartBeam will need to raise substantial additional capital in the near future. Failure to secure funding on favorable terms, or significant further share dilution, could severely impact the stock price and operational viability.
• Market Adoption Challenges: Despite FDA clearance, widespread adoption by physicians and patients is not guaranteed. Factors like clinical evidence, reimbursement policies, and physician training will be critical.
• Intense Competition: The medical device market is highly competitive, with established players and emerging technologies. HeartBeam must effectively differentiate its products and demonstrate superior clinical and economic value.
• Regulatory Hurdles for New Indications: Expanding into new indications, such as heart attack detection, will require additional, potentially lengthy and costly, FDA approvals.
• Reimbursement Uncertainty: Securing adequate reimbursement from insurance providers for new medical technologies is a complex and often lengthy process, yet crucial for commercial success.
• Limited Launch Risks: The initial limited launch strategy carries the risk that it may not generate sufficient real-world data, market traction, or positive feedback to support a wider rollout.

Management Discussion and Analysis (MD&A) Highlights

The Management Discussion and Analysis section typically provides management's perspective on the company's financial condition and results of operations. For HeartBeam, a pre-commercial company, the focus is on operational achievements, strategic initiatives, and capital management.

Operational Highlights and Key Developments

• Dual FDA Clearances: HeartBeam secured 510(k) clearance for both its 3D ECG device (December 2024) and 12-Lead synthesis software (December 2025) for arrhythmia assessment. This monumental achievement validated the safety and effectiveness of their core technology.
• Advanced Product Development: HeartBeam successfully developed a unique, portable 3D ECG technology capable of synthesizing a 12-Lead ECG, representing a significant technological breakthrough.
• Extended Wear Patch Progress: The company made substantial progress on a prototype for an "extended wear patch" designed for on-demand 12-Lead ECG monitoring. This product aims to tap into the rapidly growing ambulatory cardiac monitoring market, estimated to be worth over $5 billion annually.

Challenges and Risks to Operations

• No Product Revenue: The primary challenge is the absence of sales revenue from their approved product, meaning the company currently operates at a significant net loss and burns cash.
• Funding Operations: Sustaining operations and funding ambitious development and commercialization plans requires continuous capital. The company's ability to secure additional funding is critical.
• Talent Acquisition and Retention: Attracting and retaining highly skilled professionals in the competitive medical technology sector remains a significant challenge.
• Market Adoption: Even with FDA clearance, gaining widespread adoption among healthcare providers and patients for a novel technology requires substantial investment in education, marketing, and demonstrating clinical value.

Strategic Direction and Leadership

In January 2026, HeartBeam appointed Bryan Humbarger as its new Chief Commercial Officer. This strategic hire signals the company's transition from a development-focused organization to one actively pursuing commercialization. Mr. Humbarger brings over 25 years of experience in launching medical technologies and leads the sales and marketing strategy.

The initial commercialization strategy, which commenced in Q1 2026, focuses on a limited market launch targeting specific "concierge and preventive cardiology groups." This phased approach aims to:

• Refine commercialization strategies and sales processes.
• Gather crucial real-world clinical evidence and user feedback.
• Establish initial key opinion leader endorsements.
• Demonstrate the product's value proposition before a broader market rollout, strategically managing resources without immediately building a large sales force.

Financial Health: Debt, Cash, and Liquidity

As of December 31, 2025, HeartBeam reported a cash and cash equivalents balance of approximately $20.5 million. The company carries no significant long-term debt.

During 2025, the company utilized approximately $30 million in cash for its operating activities. To support its operations and development, HeartBeam raised approximately $10.5 million through equity offerings during the year. This led to an increase in common shares outstanding from approximately 34 million on June 30, 2025, to over 41 million by March 11, 2026. This share issuance, while necessary for funding, dilutes the ownership stake of existing shareholders.

Based on its current cash burn rate, the company's existing cash balance provides an estimated operational runway of approximately 8-9 months. This highlights the ongoing need for additional funding to execute its long-term strategy. As of June 30, 2025, the market value of common stock available for public trading (public float) was approximately $36.37 million, based on a share price of $1.25.

Future Outlook: Guidance and Strategy

HeartBeam has several ambitious plans for the future:

• Market Launch Expansion: Following the initial limited launch in Q1 2026, the company plans a phased expansion into broader cardiology markets based on early success and gathered data.
• Heart Attack Detection: A major strategic goal is to expand FDA clearances to include heart attack detection. This represents a massive market opportunity, potentially impacting tens of millions of patients annually, and the company aims for FDA submission in 2027.
• Extended Wear Patch Development: HeartBeam continues developing and clinically validating its innovative 12-Lead ECG extended wear monitor, with clinical trials expected to begin in late 2026.
• AI and Data Monetization: Leveraging the unique 3D data collected by its platform to build advanced AI-based tools for screening, diagnosis, and prediction of heart conditions is a long-term strategic pillar.

Competitive Position

HeartBeam believes it holds a strong competitive advantage due to its first-to-market FDA-cleared cable-free, ambulatory 12-Lead ECG system that captures 3D electrical signals. This unique combination offers several differentiators:

• Portability and Convenience: Unlike traditional, bulky 12-Lead ECG machines, HeartBeam's credit card-sized device offers unprecedented portability for at-home use.
• Enhanced Data: The 3D signal capture provides richer, more comprehensive cardiac data than standard 1D or 2D ECGs, potentially leading to more accurate and earlier diagnoses.
• AI Potential: The rich 3D data collected by the platform creates a unique foundation for developing advanced AI-driven tools. These AI algorithms could potentially detect subtle cardiac abnormalities earlier, predict future cardiac events, and offer significant diagnostic advantages over existing technologies.
• Future Product Pipeline: HeartBeam envisions its upcoming "extended wear patch" as a "best-in-class" product in the large and growing ambulatory monitoring market, further strengthening its competitive stance against other wearable monitors and consumer devices.

Market Trends and Regulatory Changes Affecting HeartBeam

HeartBeam operates within the dynamic and growing field of ambulatory cardiac monitoring. Key market trends supporting its business include:

• Shift to Remote Care: A strong healthcare trend towards diagnosing and managing chronic conditions, particularly cardiovascular diseases, outside traditional hospital settings using "Connected Medical Devices."
• Early Diagnosis Emphasis: Increasing focus on early detection and prevention of cardiac events to improve patient outcomes and reduce healthcare costs.
• Technological Advancements: Rapid advancements in sensor technology, data analytics, and artificial intelligence are creating new opportunities for innovative cardiac monitoring solutions.

Regulatory approvals, such as HeartBeam's recent FDA clearances, are critical enablers for market entry. The evolving landscape of reimbursement policies for remote patient monitoring and novel medical technologies will significantly influence the pace and scale of market adoption for HeartBeam's products.