HeartBeam, Inc. (BEAT) Bundle
Understanding HeartBeam, Inc. (BEAT) Revenue Streams
Understanding HeartBeam, Inc.’s Revenue Streams
As of September 30, 2024, HeartBeam, Inc. has not generated any material commercial revenue. The company continues to focus on research and development, with the expectation of no significant revenue in 2024.
Breakdown of Primary Revenue Sources
Currently, HeartBeam has no established revenue streams from products or services, as the company is still in the process of seeking FDA clearance for its initial telehealth products. The focus remains on developing its proprietary Vector Electrocardiography (VECG) technology.
Year-over-Year Revenue Growth Rate
Due to the lack of revenue generation, year-over-year growth rates cannot be calculated for 2024. Historical trends indicate that the company has consistently reported net losses, with a net loss of $14.5 million for the nine months ended September 30, 2024, compared to a net loss of $10.8 million during the same period in 2023, reflecting an increase in losses.
Contribution of Different Business Segments to Overall Revenue
As of the latest reports, all revenue contributions from business segments are non-existent. The company is primarily investing in R&D and operational capacities, rather than generating revenue.
Analysis of Significant Changes in Revenue Streams
With no revenue streams currently established, the company’s financial statements reflect a focus on operational expenditures rather than income generation. The total operating expenses for the nine months ended September 30, 2024, amounted to $14.9 million, compared to $11.2 million for the same period in 2023, indicating a significant increase in costs associated with R&D and administrative functions.
| Financial Metric | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Net Loss | $14.5 million | $10.8 million |
| Total Operating Expenses | $14.9 million | $11.2 million |
The company has incurred a net cash used in operating activities of $10.3 million during the nine months ended September 30, 2024, compared to $9.2 million for the same period in 2023, further emphasizing the lack of revenue generation while expenses continue to rise.
A Deep Dive into HeartBeam, Inc. (BEAT) Profitability
Profitability Metrics
Gross Profit Margin: For the nine months ending September 30, 2024, the gross profit margin was reported as -100%, reflecting a total revenue of $0 against total costs of goods sold.
Operating Profit Margin: The operating profit margin for the same period was -100%, with total operating expenses amounting to $14.9 million and no revenue generated.
Net Profit Margin: The net profit margin for the nine months ended September 30, 2024, was also -100%, resulting from a net loss of $14.5 million against zero revenue.
| Period | Gross Profit Margin | Operating Profit Margin | Net Profit Margin |
|---|---|---|---|
| 9 Months Ended September 30, 2024 | -100% | -100% | -100% |
| 9 Months Ended September 30, 2023 | -100% | -100% | -100% |
Trends in profitability over time indicate a consistent challenge in achieving positive margins. For the nine months ending September 30, 2023, the gross profit margin was also -100%, with a net loss of $10.8 million.
Comparison of Profitability Ratios: In comparison to industry averages, which typically range from 10% to 20% for gross profit margins in the healthcare sector, the company's performance indicates significant operational challenges.
Operational Efficiency Analysis: The total operating expenses for the nine months ended September 30, 2024, were $14.9 million, which included:
- General and administrative expenses: $6.8 million
- Research and development expenses: $8.2 million
The increase in operating expenses reflects a 33% increase from the previous year, primarily due to higher R&D investments aimed at product development.
| Expense Type | 9 Months Ended September 30, 2024 | 9 Months Ended September 30, 2023 |
|---|---|---|
| General and Administrative | $6.8 million | $6.4 million |
| Research and Development | $8.2 million | $4.8 million |
| Total Operating Expenses | $14.9 million | $11.2 million |
Debt vs. Equity: How HeartBeam, Inc. (BEAT) Finances Its Growth
Debt vs. Equity: How HeartBeam, Inc. Finances Its Growth
Debt Levels:
As of September 30, 2024, HeartBeam, Inc. has total current liabilities of $1.856 million. The company does not report any long-term debt, indicating a reliance on equity financing for its operations.
Debt-to-Equity Ratio:
HeartBeam's debt-to-equity ratio is calculated by dividing total liabilities by total stockholders' equity. As of September 30, 2024, the total stockholders' equity is $4.801 million. Therefore, the debt-to-equity ratio is:
Debt-to-Equity Ratio = Total Liabilities / Total Stockholders' Equity = $1.856 million / $4.801 million = 0.39
This ratio is below the industry average, which generally ranges from 0.5 to 1.0, suggesting that the company has a conservative approach to leveraging its capital structure.
Recent Debt Issuances and Credit Ratings:
HeartBeam has not engaged in any recent debt issuances. The company is primarily focused on raising capital through equity financing. As of the latest reports, there is no publicly available credit rating for HeartBeam, indicating that it may not currently have a significant debt profile to warrant such a rating.
Equity Funding:
HeartBeam has been active in issuing equity to fund its operations. In the first nine months of 2024, the company raised approximately $76,000 from the sale of common stock under an At-the-Market (ATM) offering. Additionally, it has the potential to raise up to $17 million under the current ATM agreement with Public Ventures.
Balance Between Debt Financing and Equity Funding:
The company has opted for equity financing over debt, primarily due to its ongoing need for capital to fund research and development. As of September 30, 2024, HeartBeam holds $5.768 million in cash and cash equivalents, which is critical for its operational sustainability. The reliance on equity financing minimizes the burden of interest payments and provides flexibility in managing cash flows.
| Financial Metric | Value |
|---|---|
| Total Current Liabilities | $1.856 million |
| Total Stockholders' Equity | $4.801 million |
| Debt-to-Equity Ratio | 0.39 |
| Cash and Cash Equivalents | $5.768 million |
| Proceeds from Equity Issuance (2024) | $76,000 |
| ATM Offering Potential | $17 million |
Assessing HeartBeam, Inc. (BEAT) Liquidity
Assessing HeartBeam, Inc. Liquidity
As of September 30, 2024, HeartBeam, Inc. reported a current ratio of 3.31, calculated as current assets of $6.144 million divided by current liabilities of $1.856 million. The quick ratio stands at 3.31 as well, since the company has no significant inventory, making the quick assets equal to current assets.
Working Capital Trends
Working capital, defined as current assets minus current liabilities, is currently $4.288 million. This represents a significant decrease from $15.631 million as of December 31, 2023, primarily due to a cash reduction of $10.421 million over the period. The working capital trend indicates a substantial decline in liquidity, raising concerns about operational sustainability.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, HeartBeam, Inc. reported the following cash flow trends (in thousands):
| Cash Flow Activity | 2024 | 2023 |
|---|---|---|
| Net cash used in operating activities | $(10,319) | $(9,235) |
| Net cash used in investing activities | $(201) | $(144) |
| Net cash provided by financing activities | $105 | $24,994 |
| Net increase (decrease) in cash | $(10,415) | $15,615 |
The net cash used in operating activities increased from $(9.235 million) in 2023 to $(10.319 million) in 2024, indicating a worsening operational cash flow. Investing activities also saw a slight increase in cash outflow. However, financing activities dropped drastically from $24.994 million in 2023 to $0.105 million in 2024, highlighting challenges in raising capital.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, HeartBeam, Inc. had $5.768 million in cash and cash equivalents, down from $16.189 million at the end of 2023. The company expects its existing cash to be insufficient to fund operations for the next twelve months, raising substantial doubt regarding its ability to continue as a going concern . This situation underscores the importance of securing additional financing to support ongoing operations and development efforts.
Is HeartBeam, Inc. (BEAT) Overvalued or Undervalued?
Valuation Analysis
In evaluating the financial health of the company, a detailed valuation analysis is essential to determine if the company is overvalued or undervalued. Key metrics include the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The current stock price is approximately $2.20 per share. For the nine months ended September 30, 2024, the net loss was $14.5 million, resulting in a basic net loss per share of $0.55. Consequently, the P/E ratio cannot be calculated as the company is currently operating at a loss.
Price-to-Book (P/B) Ratio
As of September 30, 2024, the total stockholders' equity was $4.8 million with 26,594,928 shares outstanding. The book value per share is calculated as follows:
Book Value Per Share = Total Stockholders' Equity / Total Shares Outstanding
Book Value Per Share = $4,801,000 / 26,594,928 ≈ $0.18
The P/B ratio is then:
P/B Ratio = Stock Price / Book Value Per Share
P/B Ratio = $2.20 / $0.18 ≈ 12.22
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value is calculated by taking the market capitalization and adding total debt while subtracting cash. As of September 30, 2024, cash and cash equivalents were $5.8 million, and the company had no reported long-term debt. The market capitalization can be calculated as:
Market Capitalization = Stock Price Total Shares Outstanding
Market Capitalization = $2.20 26,594,928 ≈ $58.5 million
Thus, the enterprise value (EV) is:
EV = Market Capitalization + Total Debt - Cash
EV = $58.5 million + $0 - $5.8 million ≈ $52.7 million
To calculate EBITDA, we consider the operating loss of $14.9 million for the nine months ended September 30, 2024. Since there are no interest, tax, depreciation, or amortization expenses reported, EBITDA can be approximated as:
EBITDA ≈ Operating Loss = $14.9 million
The EV/EBITDA ratio is:
EV/EBITDA = EV / EBITDA
EV/EBITDA = $52.7 million / $14.9 million ≈ 3.53
Stock Price Trends
Over the past 12 months, the stock price has exhibited significant volatility, starting at approximately $4.00 and declining to the current price of $2.20, representing a decrease of 45%.
Dividend Yield and Payout Ratios
The company does not currently pay dividends. Therefore, the dividend yield is 0%, and the payout ratio is also 0%.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a hold rating, reflecting concerns about the company's ability to achieve profitability and maintain liquidity in the near term.
| Metric | Value |
|---|---|
| Stock Price | $2.20 |
| P/E Ratio | N/A |
| P/B Ratio | 12.22 |
| EV | $52.7 million |
| EBITDA | $14.9 million |
| EV/EBITDA | 3.53 |
| 12-Month Price Range | $2.20 - $4.00 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
Key Risks Facing HeartBeam, Inc. (BEAT)
Key Risks Facing HeartBeam, Inc. (BEAT)
Overview of Internal and External Risks
HeartBeam, Inc. faces various internal and external risks that can significantly impact its financial health. The company operates in a highly competitive environment with numerous players in the cardiac technology and medical device sectors. As of September 30, 2024, HeartBeam reported a cash and cash equivalents balance of approximately $5.8 million, a decrease from $16.2 million at the end of 2023 . These figures raise concerns regarding its ability to sustain operations without additional funding.
Industry Competition
- HeartBeam competes with larger companies and other emerging medical technology firms, which could limit its market share and pricing power.
- The company is reliant on the successful commercialization of its proprietary Vector Electrocardiography (VECG) technology, which is subject to competitive pressures from existing and new technologies in cardiac monitoring.
Regulatory Changes
- The company is subject to stringent regulatory requirements, including FDA approvals. Any delays or rejections in obtaining necessary regulatory clearances could adversely affect its market entry and revenue generation.
- HeartBeam filed a 510(k) submission in 2023 for its initial VECG product, which remains a critical milestone .
Market Conditions
- The overall economic climate, including fluctuations in healthcare spending and changes in insurance reimbursement policies, can impact HeartBeam's financial performance.
- The company expects no material commercial revenue in 2024, indicating a challenging market environment .
Operational Risks
- HeartBeam has incurred losses every year since inception, with a net loss of $14.541 million for the nine months ended September 30, 2024, compared to $10.76 million for the same period in the previous year .
- The company has a cash burn rate that raises substantial doubt regarding its ability to continue as a going concern .
Financial Risks
- As of September 30, 2024, HeartBeam's total stockholders' equity stood at $4.801 million, significantly down from $15.937 million at the end of 2023 .
- The company’s accumulated deficit reached $51.366 million as of September 30, 2024 .
Mitigation Strategies
- HeartBeam is actively pursuing additional capital through equity and/or debt financing. As of May 2, 2024, the company entered into a Sales Agreement to sell up to $17 million in common stock .
- Management emphasizes strong financial discipline as it seeks to achieve critical R&D milestones that are essential for future funding .
| Risk Factor | Description | Current Impact |
|---|---|---|
| Industry Competition | Numerous competitors in the cardiac technology space. | Market share pressure |
| Regulatory Changes | Dependence on FDA approvals for product commercialization. | Potential delays in market entry |
| Market Conditions | Economic fluctuations affecting healthcare spending. | Expected no revenue in 2024 |
| Operational Risks | Consistent annual losses since inception. | Negative cash flow concerns |
| Financial Risks | Significant accumulated deficit and equity decrease. | Financial health deterioration |
Future Growth Prospects for HeartBeam, Inc. (BEAT)
Future Growth Prospects for HeartBeam, Inc.
Analysis of Key Growth Drivers
The company is focused on developing and commercializing innovative cardiac technology, particularly through its proprietary Vector Electrocardiography (VECG) platform. This technology allows for higher resolution electrocardiograms (ECGs), which can detect and monitor cardiac diseases outside of traditional healthcare settings. As of September 30, 2024, HeartBeam reported a net loss of $14,541,000, compared to $10,760,000 for the same period in 2023.
Future Revenue Growth Projections and Earnings Estimates
Despite the current net losses, the company anticipates future revenue growth primarily through its upcoming FDA submissions for telehealth products. The company's cash balance as of September 30, 2024, was $5,824,000, a significant decrease from $16,239,000 at the beginning of the year. Analysts project that successful product launches could lead to substantial revenue streams, although no material commercial revenue is expected in 2024.
Strategic Initiatives or Partnerships That May Drive Future Growth
HeartBeam has entered into a Sales Agreement with Public Ventures, LLC, which allows the company to sell up to $17 million worth of its common stock. As of September 30, 2024, approximately $16.9 million remains available for issuance under this agreement. This funding could support further product development and regulatory processes.
Competitive Advantages That Position the Company for Growth
The company's VECG technology has shown potential to deliver diagnostic capabilities that are equal to or superior to traditional hospital-based ECG systems. HeartBeam's ability to synthesize a 12-lead ECG from a handheld device positions it favorably within the telehealth market. Furthermore, the company has granted stock options totaling 2,208,000 options to its executives and employees, incentivizing staff to focus on achieving critical milestones.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Loss | $14,541,000 | $10,760,000 |
| Cash Balance | $5,824,000 | $19,209,000 |
| Total Operating Expenses | $14,943,000 | $11,205,000 |
| Proceeds from Sale of Equity | $76,000 | $24,764,000 |
| Remaining Funds Under ATM | $16,900,000 | N/A |
As the company navigates its growth strategy, it will be critical to monitor these financial metrics to assess the efficacy of its initiatives and partnerships in driving future growth.
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Resources:
- HeartBeam, Inc. (BEAT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of HeartBeam, Inc. (BEAT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View HeartBeam, Inc. (BEAT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.