Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to, those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K. See Cautionary Statement Regarding Forward-Looking Statements.”
Overview
HeartBeam is a medical technology company focused on transforming cardiac care through the power of personalized insights. Our aim is to deliver innovative, higher resolution ambulatory cardiac monitoring solutions that can be used by patients anywhere to enable the detection and monitoring of cardiac disease outside of a healthcare facility. Our ability to develop higher resolution Electrocardiogram (“ECG”) solutions is achieved through the development of our proprietary and patented technology platform that allows us to collect the heart’s electrical activity from three dimensions and synthesize a 12-Lead (“12L”) ECG from these signals.
We believe our Products (“Products” or “Product”) and services will benefit many stakeholders, including patients, healthcare providers, and healthcare payers, and will also address the rapidly growing field of ambulatory cardiac monitoring. As part of our long-term vision, we believe that we are uniquely positioned to play a central role in high-risk Coronary Artery Disease (“CAD”) monitoring, given positive, proof-of-concept data from the initial feasibility studies that demonstrated comparable performance of the HeartBeam System and the standard 12L ECG in ischemia detection. CAD patients are at increased risk for a heart attack or Myocardial Infarction (“MI”). Additionally, our unique portable form-factor will make high-fidelity insights easily accessible, wherever patients are, compared to a standard 12L ECG, which is typically limited to a healthcare setting.
Our initial product and service offering is the HeartBeam System. The HeartBeam System is the first U.S. Food and Drug Administration (“FDA”) cleared cable-free, ambulatory 12L ECG that captures the heart’s electrical signals from three dimensions for high-fidelity data collection and advanced diagnostics for arrhythmia assessment. The HeartBeam System is comprised of a credit card sized 3D ECG recording device, a patient application, a physician portal, and powerful cloud-based algorithms. Unlike any single-lead or 6-lead consumer device, HeartBeam’s patented cable-free technology captures the heart’s electrical signals in three non-coplanar dimensions and synthesizes them into a familiar 12L ECG display, using a personalized transformation matrix. This allows patients to obtain a 12L ECG reading for their arrhythmia from the comfort of home, or wherever they happen to be, representing a new level of convenience and peace of mind. The synthesized 12-lead ECG is promptly reviewed by an on-demand, board-certified cardiologist.
HeartBeam’s credit card sized 3D ECG technology received FDA clearance for arrhythmia assessment in December 2024 and the 12-Lead ECG synthesis software received FDA clearance for arrhythmia assessment in December 2025.
We are focused on advancing several key initiatives as part of our growth strategy:
Limited Launch : On the back of our recent FDA Clearance for the HeartBeam System, we are initiating a market introduction in early 2026, focusing on select concierge and preventive cardiology groups that have proactively signaled strong interest in adopting HeartBeam’s technology. This limited market release will enable the Company to validate real-world performance and establish reference sites for broader commercialization.
Heart Attack Detection : We are pursuing an expansion of our cleared indications through a heart attack detection indication, supported by compelling proof-of-concept data and representing a major expansion opportunity to tens of millions of patients in the U.S.
Extended Wear Patch : We are making significant advancements with an on-demand 12L ECG extended wear monitor. The Company has developed a working prototype of its novel 12L patch, which has the potential to be a best-in-class offering in an existing multi-billion-dollar market with reimbursement.
Longitudinal Data and AI : The Company believes it has the ability to unlock the power of the unique data-rich repository generated from our 3D ECG platform and deep learning algorithms. As adoption grows, the ability for patients to record synthesized 12L ECGs over time will create the opportunity to build AI-based screening and prediction algorithms that go beyond what is possible with single-timepoint ECGs or traditional wearables.
As of December 31, 2025, we had 16 employees. In January 2026, the Company hired a Chief Commercial Officer, Bryan Humbarger, bringing total headcount to 17 employees. Mr. Humbarger brings more than 25 years of experience in building and scaling groundbreaking medical technologies. While initially focused on launching the Company’s FDA-cleared 12L system for arrhythmia assessment, he will lead the Company’s broader commercialization strategy across key growth initiatives, including heart attack detection and the 12L ECG extended wear patch.
We intend to strike a balance of managing our headcount in line with cash resources, while also, at the appropriate time, hiring or engaging additional full-time professionals, employees, and/or consultants in alignment with our growth strategy. To that end, the Company does not anticipate the need to hire a large sales force during the initial launch of its HeartBeam System. We believe that a few well-placed resources will help provide the data points required to effectively invest into a broader launch based around a path to profitable growth.
Although the market is highly competitive for attracting and retaining highly qualified professionals in our industry, we continue our endeavor to find such candidates for our Company. Our management team and additional personnel that we may hire in the future will be primarily responsible for executing and implementing growth opportunities, making tactical decisions related to our strategy and pursuing opportunities to invest in new technologies through strategic partnerships and acquisitions.
Recent Developments
New and Existing Patent Assignments
We believe our intellectual property (“IP”) protects our innovations, and our goal is to become a leader in the ambulatory ECG sector. For some aspects of our proprietary technology, we rely on trade secret protection, while for others we pursue patent protection. It is our view that the combination of these two methods of IP protection maximizes our chances for success.
The Company’s patent portfolio includes twenty-five (25) issued patents worldwide, consisting of seventeen (17) issued patents in the United States and eight (8) issued patents outside of the United States, including one (1) European patent granted with unitary effect under the Unitary Patent system.
In the United States, the Company also has thirteen (13) additional pending patent applications. Outside the United States, the Company has twenty-two (22) pending patent applications in jurisdictions including Canada, China, the European Union, Japan, South Korea, and Australia.
The issued patents are expected to expire between April 11, 2036, and April 21, 2042. The pending applications, regardless of publication status, are projected to expire between April 11, 2036, and February 20, 2045.
Over the course of 2025 and into early 2026, we were granted a total of eight (8) new patents relating to its compact, mobile three-lead cardiac monitoring technologies and automated diagnostics, methods for atrial fibrillation detection, photoplethysmogram data analysis and presentation, and electrocardiogram patch devices and methods. These patents significantly strengthen HeartBeam’s intellectual property position surrounding its credit card–sized ECG device, reinforcing both the defensive and offensive moats around the company’s core technology. They also expand the application of risk-based diagnostic algorithms across HeartBeam’s wearable device portfolio and cover methods for automatically assessing a patient’s risk of an acute cardiac event by evaluating clinical risk factors and generating a diagnostic report.
In addition, HeartBeam continues to expand its intellectual property portfolio and filed two (2) non-provisional, three (3) provisional and three (3) continuing patent applications throughout 2025, further strengthening the protection of its proprietary technologies.
At-the-Market Offering
The Company has an At-the-Market (ATM) sales agreement with Public Ventures, pursuant to which we may offer and sell from time to time, at our option, shares of the Company’s common stock, $0.0001 par value per share (the “Shares”). We will pay Public Ventures a commission at a fixed rate of 3.0% of the aggregate gross proceeds from each sale of the Shares under the PV Sales Agreement. pursuant to which the Company may sell up to an aggregate of $17.0 million shares of the Company’s common stock. There were 5,859,704 shares issued under the ATM during the twelve months ended December 31, 2025, and 970,467 shares issued under the ATM after December 31, 2025. As of March 11, 2026, there was approximately $8.1 million available for issuance as of the financial statement issuance date, potentially subject to other baby shelf limitations.
HeartBeam Appoints Bryan Humbarger as Chief Commercial Officer
In January 2026, the Company hired Bryan Humbarger as Chief Commercial Officer. Mr. Humbarger brings more than 25 years of commercial leadership experience spanning large medical device organizations and high-growth MedTech companies. Most recently, he served as Chief Commercial Officer at the venture-backed surgical guidance company Proprio, where he led the go-to-market strategy and market development while establishing the company's sales and clinical support infrastructure. His background also includes senior commercial leadership roles at innovative cardiovascular and digital health companies Heartflow, AliveCor, and Eko Health—organizations that share important parallels with HeartBeam’s technology-driven, patient-centric approach.
While initially focused on launching the Company’s FDA-cleared 12L system for arrhythmia assessment, he will lead the Company’s broader commercialization strategy across key growth initiatives, including heart attack detection and the 12L ECG extended wear patch.
First Commercial Customer:
On March 4, 2026, the Company announced ClearCardio as its first commercial customer. ClearCardio is a leading preventive cardiology practice that has served thousands of patients through advanced heart health screening and personalized prevention programs. The partnership includes an initial staged rollout to ensure a seamless patient and physician experience and plans for broader expansion to thousands of highly engaged members across multiple U.S. geographies.
The initial agreement with ClearCardio is structured as a Letter of Intent (LOI), outlining the commercial terms and a collaborative rollout plan, including a subscription fee per patient. During the initial deployment phase, HeartBeam and ClearCardio intend to negotiate and execute a definitive agreement.
First Patients Enrolled in Heart Attack Detection Pilot Study:
On March 5, 2026, the Company announced it enrolled the first patients in the ALIGN-ACS study. HeartBeam’s technology is uniquely capable of assessing possible heart attacks outside of traditional clinical settings and this milestone signifies a key step toward a future FDA indication expansion for heart attack assessment.
The ALIGN-ACS pilot study is designed to enroll 100 patients presenting with chest pain in the emergency room (ER). Patients will be evaluated with both a standard 12-lead ECG and the HeartBeam device and both results will be compared with each patient’s final diagnosis at discharge. As the study is designed to enroll chest pain patients in the ER, enrollment is expected to progress quickly.
Strategic AI Collaboration:
On March 10, 2026, the Company and the Icahn School of Medicine at Mount Sinai in New York (“Mount Sinai”) entered into strategic AI collaboration to bring clinical-grade heart monitoring into the home. This collaboration will aim to accelerate development of personalized cardiac AI on the HeartBeam platform for wellness and clinical applications, including assessing heart attack risk. It combines Mount Sinai’s world-class AI and clinical expertise with HeartBeam’s groundbreaking 3D ECG signal collection technology. The partnership marks a significant milestone in the Company’s long-term strategy to build an ecosystem around its platform and strengthen its leadership in AI-enabled cardiac monitoring.
Results of operations for the years ended December 31, 2025 and 2024
The following table summarizes our results of operations for the periods presented on our statement of operations data. The year over year comparison of results of operations is not necessarily indicative of results of operations for future periods.
Years ended December 31,
$ Change
% Change
(In thousands, except percentages)
Operating expenses:
General and administrative
Research and development
Total operating expenses
Loss from operations
Interest income
Other income and expense (net)
Total other income
Income tax provision
Net loss
Summary of Statements of Operations for the year ended December 31, 2025 compared with the year ended December 31, 2024:
General and administrative expenses (“G&A”) are largely related to personnel and professional services. G&A expense decreased $1.1 million or 13% when compared to the same period in 2024. The $1.1 million decrease in G&A expense is primarily related to non-cash stock-based compensation expense amounting to $0.6 million driven by change in estimate for recognition of milestone options, from December 2024 to December 2025, lower consulting costs of $0.4 million related to finance consultants, lower employee cost of $0.3 million, offset by an increase of $0.2 million of consulting costs related to commercial readiness during current year compared to the prior year.
Research and development expenses (“R&D”) are primarily from software development and hardware related to our credit-card sized collection device for the HeartBeam System, as well as the development of a 12L patch monitor. R&D expense increased $2.4 million or 22% when compared with the same period in 2024. The $2.4 million increase is primarily related an increase of $1.5 million in product development costs related to the development of the HeartBeam System, an increase $1.2 million in headcount related costs resulting from reallocation of existing headcount into AI and R&D and of $1.4 million in non-cash stock-based compensation expense associated with additional awards granted compared to 2024, primarily offset by an decrease of $0.7 million related to clinical related cost driven by completion of clinical study and a decrease of $1.0 million of consulting expenses related to foundational clearance.
Other income is primarily interest income. The decrease is primarily related to our decreased cash balance used in operations.
Liquidity and Capital Resources
Our cash requirements are, and will continue to be, dependent upon a variety of factors. We expect to continue devoting capital resources to R&D for the development of software and hardware products and to sales & marketing for the limited launch and commercial strategy of our HeartBeam system.
As of December 31, 2025, we had approximately $4.4 million in cash and cash equivalents, a increase of $2.0 million from $2.4 million as of December 31, 2024.
During the year ended December 31, 2025, we raised $16.6 million from the net proceeds from sale of common stock. Subsequent to December 31, 2025, we have raised $1.5 million from the net proceeds under the ATM with Public Ventures.
Based on its current business plan assumptions and expected cash burn rate, the Company believes that the existing cash is insufficient to fund operations for the next twelve months following the issuance of these financial statements. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.
Our cash is as follows (in thousands):
December 31,
Cash and cash equivalents
Cash flows for the year ended December 31, 2025 and 2024 (in thousands):
December 31,
Net cash used in operating activities
Net cash used in investing activities
Net cash provided by financing activities
Operating Activities :
Net cash used in our operating activities of $14.0 million during the year ended December 31, 2025, was primarily due to our net loss of $21.0 million less $5.1 million in stock-based compensation expense, $0.2 million in stock issuance for services, $0.1 million in depreciation expense and $1.6 million of net changes from changes in operating assets and liabilities.
Net cash used in our operating activities of $14.5 million during the year ended December 31, 2024, was primarily due to our net loss of $19.5 million less $4.3 million in stock-based compensation expense and $0.7 million of net changes from changes in operating assets and liabilities.
Investing Activities:
Net cash used in investing activities during the year ended December 31, 2025, of $0.6 million, was primarily due to the purchase of property and equipment.
Net cash used in investing activities during the year ended December 31, 2024, of $0.2 million, was primarily due to the purchase of property and equipment.
Financing Activities :
During the year ended December 31, 2025, net cash provided by financing activities of $16.6 million, was primarily from the net proceeds from sale from sale of equity, net of issuance costs.
During the year ended December 31, 2024, net cash provided by financing activities of $0.9 million, was primarily from net proceeds from sale of equity, net of issuance costs.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Critical Accounting Estimates
The financial statements have been prepared in accordance with accounting principles generally accepted in the US, (“US GAAP”.) The preparation of these financial statements in accordance with US GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, assumptions and judgments. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions and the impact of such differences may be material to our financial statements.
We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors.
Stock-based compensation
The compensation cost for all stock-based awards is measured at the grant date, based on the fair value of the award, determined using a Black-Scholes option pricing model for stock options and fair value on the date of grant for non-vested restricted stock, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award). Determining the fair value of stock-based awards at the grant date requires significant estimates and judgments. Management has determined the vesting period of stock-based compensation to be a critical accounting estimate due to certain options containing performance-based vesting condition related to a milestone achievement date. Quarterly, the management performs its probability assessment regarding the achievement of the key milestone related to these awards. Based on this review, management modifies the vesting period if the expected regulatory approval date changes.
Item 7A. Quantitative and Qualit ative Disclosures about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
