DRS 1 filename1.htm HeartFlow, Inc. - DRS
As confidentially submitted to the U.S. Securities and Exchange Commission on February 5, 2025.
This draft registration statement has not been publicly filed with the U.S. Securities and Exchange Commission and all information herein remains strictly confidential.
Registration No. 333-           
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Heartflow, Inc.
(Exact name of registrant as specified in its charter)
Delaware
3841
26-0506743
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
331 E. Evelyn Avenue
Mountain View, California 94041
(650) 241-1221
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
John C.M. Farquhar
President and Chief Executive Officer
Heartflow, Inc.
331 E. Evelyn Avenue
Mountain View, California 94041
(650) 241-1221
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Shelly Heyduk
Angela Ahmad
Dave Peinsipp
Ryan Coombs
Heartflow, Inc.
Kristin VanderPas
O’Melveny & Myers LLP
331 E. Evelyn Avenue
Denny Won
610 Newport Center Drive, 17th Floor
Mountain View, California 94041
Charles S. Kim
Newport Beach, California 92660
(650) 241-1221
Cooley LLP
(949) 823-6900
3 Embarcadero Center, 20th Floor
San Francisco, California 94111
(415) 693-2000
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following
box. o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
x
Smaller reporting company
o
Emerging growth company
x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further
amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.
EXPLANATORY NOTE
Pursuant to the applicable provisions of the Fixing America’s Surface Transportation Act, we are omitting
our unaudited interim financial statements as of September 30, 2024 and for the nine months ended
September 30, 2024 and 2023 because they relate to historical periods that we believe will not be
required to be included in the prospectus at the time of the contemplated offering. We intend to amend the
registration statement to include all financial information required by Regulation S-X at the date of such
amendment before distributing a preliminary prospectus to investors.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective.
This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion, dated              , 2025
Preliminary prospectus
                         shares
heartflowlogo.jpg
Common stock
This is an initial public offering of shares of common stock of Heartflow, Inc. We are offering                shares of our
common stock to be sold in this offering. The initial public offering price is expected to be between $           and $          per
share.
Prior to this offering, there has been no public market for our common stock. We intend to apply to list our common stock
on              under the trading symbol “          ,” and this offering is contingent upon obtaining such approval.
We are an “emerging growth company” as defined under the U.S. federal securities laws and, as such, have elected to
comply with certain reduced public company reporting requirements in this prospectus and may elect to do so in future
filings. See the section titled “Prospectus summary—Implications of being an emerging growth company.”
Per share
Total
Initial public offering price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                   
$                   
Underwriting discounts and commissions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                   
$                   
Proceeds to Heartflow, Inc., before expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                   
$                   
(1)See the section titled “Underwriting” for a description of the compensation payable to the underwriters.
We have granted the underwriters an option for a period of 30 days to purchase up to                      additional shares of
common stock.
Investing in our common stock involves a high degree of risk. Please see “Risk factors” beginning on page 18.
Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The underwriters expect to deliver the shares of common stock to the purchasers on or about                     , 2025.
J.P. Morgan
Morgan Stanley
Piper Sandler
Stifel
Canaccord Genuity
                 , 2025
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Table of contents
Page
Prospectus summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special note regarding forward-looking statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market and industry data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividend policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive and director compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain relationships and related-party transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Principal stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of capital stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares eligible for future sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Material U.S. federal income tax consequences to non-U.S. holders . . . . . . . . . . . . . . . . . . . . . . . . .
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Where you can find additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Through and including             , 2025 (the 25th day after the date of this prospectus), all dealers effecting
transactions in our common stock, whether or not participating in this offering, may be required to deliver
a prospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when
acting as an underwriter and with respect to an unsold allotment or subscription.
We have not, and the underwriters have not, authorized anyone to provide you any information or to
make any representations other than those contained in this prospectus or in any free writing prospectus
prepared by or on behalf of us or to which we have referred you. Neither we nor the underwriters take
responsibility for, or provide any assurance as to the reliability of, any other information others may give
you. We and the underwriters are offering to sell only the shares offered hereby, and only under
circumstances and in jurisdictions where it is lawful to do so. We are not, and the underwriters are not,
making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The
ii
information contained in this prospectus is accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or any sale of the shares of our common stock. Our business,
financial condition, and results of operations may have changed since that date.
For investors outside the United States: We have not, and the underwriters have not, done anything that
would permit this offering or the possession or distribution of this prospectus or any free writing
prospectus in connection with this offering in any jurisdiction where action for that purpose is required,
other than in the United States. Persons outside the United States who come into possession of this
prospectus must inform themselves about, and observe any restrictions relating to, the offering of the
shares of common stock and the distribution of this prospectus outside the United States. “Heartflow,” the
Heartflow logos, and other trade names, trademarks, or service marks of Heartflow appearing in this
prospectus are the property of Heartflow. Other trade names, trademarks, or service marks appearing in
this prospectus are the property of their respective holders. We do not intend our use or display of other
companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or
sponsorship of us, by these other companies. Solely for convenience, trade names, trademarks, and
service marks referred to in this prospectus appear without the ®, ™, and SM symbols, but those
references are not intended to indicate, in any way, that we will not assert, to the fullest extent under
applicable law, our rights or that the applicable owner will not assert its rights, to these trade names,
trademarks, and service marks.
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Prospectus summary
This summary highlights select information contained in greater detail elsewhere in this prospectus. This
summary is not complete and does not contain all of the information you should consider in making your
investment decision. Before investing in our common stock, you should carefully read this entire
prospectus. You should carefully consider, among other things, the sections titled “Risk factors,” “Special
note regarding forward-looking statements,” “Business,” and “Management’s discussion and analysis of
financial condition and results of operations” and our consolidated financial statements and the related
notes included elsewhere in this prospectus before making an investment decision. Unless the context
otherwise requires, the terms “Heartflow,” “the Company,” “we,” “us,” and “our” in this prospectus refer to
Heartflow, Inc. and its wholly owned subsidiaries, or either or both of them as the context may require.
Overview
We have pioneered the use of software and AI to deliver a more accurate and clinically effective non-
invasive solution for diagnosing and managing coronary artery disease (“CAD”), a leading cause of death
worldwide. As of December 31, 2024, our Heartflow Platform has been used to assess CAD in more than
375,000 patients, including 132,000 in 2024 alone. We believe that we are the most widely adopted AI-
powered test for CAD. Our novel platform leverages AI and advanced computational fluid dynamics to
create a personalized 3D model of a patient’s heart from a single coronary computed tomography
angiography (“CCTA”), a specialized type of scan that provides detailed images of the heart’s arteries.
Our Heartflow Platform delivers actionable insights on blood flow, stenosis, plaque volume and plaque
composition thereby overcoming the limitations of traditional non-invasive imaging tests which rely on
indirect measures of coronary disease and lead to high false negative and false positive rates. We believe
the differentiated accuracy and clinical utility of our Heartflow Platform, along with its ability to enhance
workflows, will continue to support our growth and advance the “CCTA + Heartflow” pathway as the
definitive standard for the non-invasive diagnosis and management of CAD.
Cardiovascular disease is the leading cause of death worldwide, with CAD being the most lethal form.
CAD occurs when plaque—a buildup of cholesterol, fat, calcium and other substances—accumulates on
the walls of the coronary arteries, restricting blood flow and increasing the risk of heart attack or stroke.
This condition is responsible for half of all cardiovascular-related deaths globally. In the United States
alone, the Centers for Disease Control (“CDC”) estimates that approximately 805,000 people suffer a
heart attack each year. Despite significant advancements in therapeutic and interventional treatments,
CAD remains the leading cause of death globally because healthcare systems generally lack scalable
methods to efficiently detect, diagnose and quantify CAD at a personalized level.
We estimate that there were approximately 9.5 million non-invasive tests (“NITs”) in the United States in
2023 for patients experiencing stable or acute chest pain, which we refer to as symptomatic CAD
patients. These NITs primarily include stress tests, such as single-photon emission computed tomography
(“SPECT”), echocardiography, and positron emission tomography (“PET”), which infer the presence of
heart disease based on how well blood is supplied to the heart, and do not measure the actual disease
itself. Accordingly, these tests have been shown to be unreliable and inconsistent.
CCTA has emerged as a leading non-invasive imaging method for evaluating CAD, offering direct and
detailed visualization of the coronary arteries. Unlike traditional stress-based NITs, CCTA enables
physicians to identify the presence and extent of coronary blockage. As a result, CCTA has become the
preferred first-line test for patients with suspected CAD. However, while CCTA provides superior
anatomical imaging, it does not independently quantify the severity of CAD, assess blood flow limitations,
or characterize plaque composition—critical factors for determining the most appropriate, personalized
course of treatment for a patient.
Our Heartflow Platform builds upon the well established strengths of CCTA by going beyond its limitations
and providing new quantified insights and compelling visualizations of data. By applying our advanced AI-
powered technology to a single CCTA scan, we generate a precise, patient-specific analysis that
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quantifies blood flow, measures plaque burden, and characterizes plaque composition—at every point in
the major coronary arteries.
To date, we have developed three software products under the Heartflow Platform that provide physicians
with the critical insights needed to effectively diagnose and manage CAD:
•Heartflow RoadMap Analysis offers a highly intuitive anatomic visualization of the coronary arteries,
helping physicians quickly identify clinically relevant areas to focus their review.
•Heartflow FFRCT Analysis calculates blood flow and pinpoints functionally significant CAD at every
point in the major coronary arteries, guiding decisions on whether a patient requires invasive
revascularization.
•Heartflow Plaque Analysis provides a comprehensive assessment of coronary plaque, enabling
optimized medical treatment strategies.
We believe we are the first and most widely-adopted AI-powered test for CAD. With over a decade of
commercial presence, we have established a competitively differentiated data set of over 100 million
annotated images, driving continuous training and refinement of our algorithms for over 10 years and the
ability to train new AI models for future products.
We believe our Heartflow Platform delivers the following key benefits:
•More accurate non-invasive test for CAD, clinically validated to provide superior assessment of
blood flow, plaque volume and plaque characterization.
•More informed assessments, personalized care, and better risk stratification, positively
impacting physician decisions on which patients should receive an intervention, supporting more
efficient intervention planning and driving more personalized medical management.
•Superior economic efficiency and enhanced interventional treatment planning, accurately
identifying more patients who need interventional treatment while reducing unnecessary invasive
procedures—significantly improving the efficiency of the catheterization lab and therefore hospital
economics.
•Proprietary, secure bi-directional data communication with customers that feeds a growing
database of over 100 million annotated CCTA images that we leverage to improve the Heartflow
Platform’s accuracy, automation and clinical utility and seamlessly deliver new features and workflow
efficiencies to our customers.
•Improved workflow through our Heartflow RoadMap Analysis that reduces CCTA interpretation times
by approximately 25% and reduces variability between reviewing physicians by approximately 50%,
leading to more consistent diagnoses and standardized patient care.
•Better patient and provider experience, by leveraging a single CCTA for all of our products,
patients complete their test in approximately 20 minutes with significantly lower radiation exposure
compared to nuclear imaging tests such as SPECT and PET that take multiple hours and require
radioactive tracers to be injected into the bloodstream. By providing a definitive diagnosis upfront, the
Heartflow Platform eliminates the need for layered testing, streamlining the patient journey and
reducing anxiety associated with uncertain or inconclusive results.
We estimate our current market opportunity in the United States is approximately $5 billion. We believe
our Heartflow FFRCT Analysis is applicable to approximately 33% of NIT patients annually and the majority
of patients experiencing acute chest pain, which represents 3.1 million patients and an estimated market
opportunity of approximately $3.3 billion in the United States. We believe our Heartflow Plaque Analysis is
applicable to approximately 60% of NIT patients annually and the majority of patients experiencing acute
chest pain, which represents 5.5 million patients and an estimated market opportunity of an incremental
approximately $1.7 billion in the United States. Beyond the commercialization of Heartflow FFRCT Analysis
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and Heartflow Plaque Analysis in symptomatic CAD, we see a significant market opportunity for our
technologies in at-risk individuals who show no symptoms, a segment comprised of approximately 200
million people globally. To unlock this potential, we are continuing to evaluate new product opportunities
and appropriate clinical evidence supporting eventual regulatory approval, payor coverage and
commercialization.
We believe the Heartflow Platform is the most extensively studied AI-enabled test for CAD. Its accuracy,
clinical utility and economic benefits have been evaluated in over 100 clinical studies and more than
130,000 patients, including two large randomized controlled trials, with results published in over 600 peer-
reviewed clinical publications. Our studies have consistently demonstrated that the Heartflow Platform is
more accurate than traditional non-invasive tests and highly concordant to invasive testing, reduces
unnecessary invasive testing, and enables physicians to optimize treatment and ultimately provide more
efficient care.
We have developed a highly scalable, capital efficient commercial model that combines Territory Sales
Managers (“TSMs”) who drive new account adoption with Territory Account Managers (“TAMs”) who focus
on increasing utilization by educating referring physicians. Our commercial team does not cover cases or
otherwise spend time in an operating room or lab setting, which enables them to focus solely on driving
commercial adoption and educational activities.
Our technology is simple and intuitive and does not require the purchase of any capital equipment. Our
onboarding process seamlessly integrates the Heartflow Platform into the customer’s daily workflow.
These unique attributes of our business model afford our commercial organization a differentiated level of
efficiency and scalability.
Current clinical guidelines and reimbursement policies strongly support the adoption of the Heartflow
Platform. The CCTA + Heartflow FFRCT Analysis pathway is supported by the American Heart Association
(“AHA”) and American College of Cardiology (“ACC”) guidelines, with CCTA identified as a Class 1, Level
A test and Heartflow FFRCT Analysis identified as a Class 2a, Level B test for the diagnosis of CAD in
certain patients with stable or acute chest pain and no known CAD. Our Heartflow FFRCT Analysis is
reimbursed under a dedicated Category 1 Current Procedural Terminology (“CPT”) code, effective as of
January 1, 2024, and has established coverage policies representing approximately 99% of covered lives
in the United States. A Category 1 CPT code was also recently established for Heartflow Plaque Analysis,
which will take effect in January 2026, and it is covered by all seven Medicare administrative contractor
(“MACs”).
We primarily generate revenue on a “pay per click” basis each time a physician chooses to review either
our Heartflow FFRCT Analysis, Heartflow Plaque Analysis, or both. Heartflow FFRCT Analysis has served
as our commercial foundation, representing          % of our revenue in 2024. In the second half of 2023,
we initiated limited market education efforts for Heartflow Plaque Analysis, our second commercial
product. Our Heartflow RoadMap Analysis is generally provided as a workflow efficiency tool to drive
customer retention and loyalty and is not a stand-alone product.
We have experienced significant revenue growth since we began commercializing the Heartflow Platform
in 2015. We recognized revenue of $       million for the year ended December 31, 2024, compared to
revenue of $87.2 million for the year ended December 31, 2023, representing       % year-over-year
growth. The software-based nature of our Heartflow Platform produces an attractive gross margin profile,
which continues to expand as we leverage AI to automate an increasing portion of our “human-in-the
loop” quality control process, where learnings are fed back into our algorithms to make them smarter and
more efficient. For the twelve months ended December 31, 2024, we generated gross margins of       %,
an increase of        percentage points year-over-year. Our net losses were $95.7 million and $       million
for the years ended December 31, 2023 and 2024, respectively.
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Market overview and opportunity
Overview of CAD
Cardiovascular disease is the leading cause of death worldwide, with CAD being the most lethal form.
CAD occurs when plaque—a buildup of cholesterol, fat, calcium and other substances—accumulates on
the walls of the coronary arteries, restricting blood flow and increasing the risk of heart attack or stroke.
This condition is responsible for half of all cardiovascular-related deaths globally.
Key risk factors, including high cholesterol, hypertension, smoking, diabetes, obesity, physical inactivity,
and genetic predisposition, accelerate plaque formation and destabilization. In the United States alone,
the CDC estimates that approximately 805,000 people suffer a heart attack each year. CAD can be
effectively treated with well-established therapeutics designed to reduce plaque progression and change
its composition, or interventional procedures used to open the arteries and restore blood flow. However,
achieving an accurate diagnosis for the condition has historically been the primary roadblock for the
effective care and management of CAD.
NITs are the first line approach for detecting CAD in symptomatic patients. With 9.5 million tests
performed for the diagnosis of CAD in the United States in 2023, NITs are by far the most widely used
method to diagnose CAD. However, traditional NITs are not able to measure lesion-specific blood flow
and are not an efficient or effective way to calculate plaque volume and composition. As a result, they lack
the key metrics physicians need to guide treatment decisions and have been clinically shown to be
unreliable and inconsistent for diagnosing CAD.
Limitations of traditional non-invasive tests for CAD
There are two primary types of NITs: (i) stress tests, which infer the presence of CAD based on blood
perfusion, and (ii) CCTA which directly images the patient’s coronary arteries.
Stress-based NITs include SPECT, PET and stress echocardiography. Stress-based NITs rely on
surrogate markers of CAD to deduce the disease in the coronary artery without actually assessing the
disease itself. As a result, approximately 20-50% of patients who undergo stress-based NITs go home
with false negatives, or undetected CAD that should have required an intervention. In addition, up to 55%
of patients receive false positives and are sent to the cardiac catheterization lab for an invasive diagnostic
angiography when an intervention was never needed exposing patients to unnecessary risks including
vascular injury and bleeding complications. This results in significant additional costs to the healthcare
system and poor patient experience.
CCTA is a high-resolution 3D imaging method that uses X-rays to produce detailed pictures of the heart's
arteries and other structures. Unlike stress tests that rely on indirect measures to infer heart disease,
CCTA provides direct visualization of the patient’s anatomy and can allow for a comprehensive visual
assessment of coronary stenosis and plaque burden. CCTA has been clinically demonstrated to have the
highest diagnostic performance of all traditional non-invasive imaging tests for CAD. In recognition of its
superior diagnostic accuracy, in October 2021 the AHA and ACC elevated CCTA to a first line Class 1,
Level A test in the guidelines for certain patients with stable or acute chest pain and no known CAD,
above stress testing which is Class 1, Level B. While CCTA accurately identifies stenosis in the coronary
arteries, it does not calculate the blood flow through the arteries to identify whether the stenosis is
clinically significant and does not provide plaque quantification or composition without significant and
time-consuming and variable manual calculations.
Our Heartflow Platform significantly improves the clinical utility of CCTA and addresses the limitations of
traditional non-invasive CAD testing by combining existing CCTA images with our AI algorithms to provide
actionable data on blood flow, stenosis, plaque volume and plaque composition. This delivers superior
clinical utility relative to other NITs and compelling economic benefits, which are supported by extensive
clinical evidence. As a result, we believe the CCTA + Heartflow pathway will become the standard of care
for the non-invasive diagnosis of CAD over time.
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Traditional NITs vs. Heartflow
Stress Echocardiogram
SPECT and PET
CCTA
Heartflow FFRCT Analysis
prospectussummary1b.jpg
picture5.jpg
Figure 1: A comparison of the visual output of traditional non-invasive tests. Left: Stress echocardiogram.
Center: SPECT and PET. Right: CCTA image. Far Right: Heartflow FFRCT Analysis image which color
codes coronary blood flow to identify clinically significant blockages.
Our symptomatic CAD market opportunity
We estimate our current market opportunity in the United States is approximately $5 billion. We estimate
that there were approximately 9.5 million NITs in the United States for the diagnosis of CAD in 2023, and
8.6 million patients that were addressable with CCTA after accounting for layered testing and
contraindications to CCTA. CCTA testing volumes have grown rapidly, and we believe they will continue to
outpace the broader market growth driven by the recently established Class 1, Level A guidelines,
superior clinical utility to stress tests and improved reimbursement.
Our Heartflow FFRCT Analysis is reimbursed for use on any CCTA showing 40% to 90% stenosis, which
we estimate to be approximately 33% of all CCTAs annually. We believe that CCTA + Heartflow FFRCT
Analysis therefore is applicable to 33% of the NIT market and a majority of patients experiencing acute
chest pain, which represents 3.1 million patients and an estimated market opportunity of approximately
$3.3 billion in the United States. Our Heartflow Plaque Analysis is reimbursed for plaque identified on
CCTA with 1% to 69% stenosis, which we estimate to cover approximately 60% of all CCTAs annually and
a majority of patients experiencing acute chest pain. We believe that CCTA + Heartflow Plaque Analysis is
therefore applicable to 60% of the NIT market, which represents 5.5 million patients and an estimated
market opportunity of an incremental approximately $1.7 billion in the United States.
While our current focus is on the United States, we also have a commercial presence and regulatory
approval in certain international markets, including the United Kingdom, European Union and Japan,
which we estimate represents an additional 4.2 million potential CCTA patients. In the future we may
expand our international presence beyond these markets and extend our platform to additional
indications.
Our technology
Heartflow enhances CCTA, the most advanced non-invasive imaging modality for assessing CAD, with
AI-powered analysis to deliver more accurate and clinically actionable insights for diagnosing and
managing CAD. The Heartflow Platform applies deep learning, an advanced form of AI, and
computational fluid dynamics to CCTA images to create a personalized 3D model of a patient’s heart
based on a single CCTA image. This model provides actionable insights into blood flow, stenosis, plaque
6
volume and plaque composition allowing precise diagnosis, risk stratification, and treatment planning –
without the need for an invasive procedure.
The CCTA + Heartflow pathway addresses the limitations of traditional non-invasive tests that only assess
indirect measures for coronary disease and therefore result in high rates of false negative and false
positive CAD diagnoses. We believe the differentiated accuracy and clinical utility of the CCTA +
Heartflow pathway will continue to support our growth and advance the standard for the non-invasive
diagnosis and management of CAD.
We designed our AI-powered software platform to be highly scalable, seamlessly integrate into existing
physician workflows for diagnosing CAD, and improve as we ingest more data over time. By leveraging AI
to process massive volumes of cases and a “human-in-the loop” quality control process, where learnings
are fed back into our algorithms to improve their performance and efficiency, we have rapidly scaled our
platform to deliver accurate, timely results to benefit physicians and patients alike.
picture4.jpg
Figure 2: The CCTA + Heartflow pathway
Our product portfolio
To date, we have created three software products in a unified platform and user experience that provide
the critical data physicians need to effectively manage patients with suspected CAD.
Heartflow RoadMap Analysis: The Heartflow RoadMap Analysis
prospectussummary3ba.jpg
provides a highly intuitive anatomic visualization of the patient’s
coronary anatomy based on CCTA images. It rapidly orients the
imaging physician to clinically relevant areas of the patient anatomy
and provides a preview of what they will review in the native CCTA
images to aid the physician in accurately, efficiently and consistently
identifying stenosis in the coronary arteries. Heartflow RoadMap
Analysis supports more efficient radiology workflow, improving CCTA
read times by 25% and increasing consistency between reviewing
physicians by approximately 50%. Physicians use Heartflow Roadmap
Analysis as a first-line assessment tool along with CCTA interpretation
to determine whether to order our more detailed Heartflow FFRCT
Analysis or Heartflow Plaque Analysis reports. We generally provide
Heartflow RoadMap Analysis to accounts as an integrated feature to
enhance the efficiency and consistency of their CCTA programs and it
is not a stand-alone product. We believe the efficiency that Heartflow RoadMap Analysis provides our
customers has resulted in enhanced customer loyalty and retention.
7
Heartflow FFRCT Analysis: Our flagship product, Heartflow FFRCT
prospectussummary4b.jpg
Analysis, consists of a patient-specific, interactive, 3D anatomical
reconstruction of the coronary anatomy that identifies functionally
significant CAD at every point in the major coronary arteries to
determine the need for intervention. Our Heartflow FFRCT Analysis has
the highest diagnostic accuracy for a non-invasive CAD test and has
demonstrated a high level of concordance to invasive fractional flow
reserve (“FFR”). Current AHA and ACC guidelines designated CCTA as
a Class 1, Level A test for CAD in certain patients with stable or acute
chest pain and no known CAD, and Heartflow FFRCT Analysis as a
Class 2a, Level B test to help physicians guide patient treatment
decisions. As of December 31, 2024, Heartflow FFRCT Analysis
represented over      % of our total revenue.
Heartflow Plaque Analysis: Heartflow Plaque Analysis transforms
prospectussummary5b.jpg
coronary plaque assessment from a time-consuming and variable
manual process, which is seldom clinically used, into a rapid,
automated, and highly precise AI-driven solution. The Heartflow Plaque
Analysis automatically provides a comprehensive 3D assessment of a
patient’s coronary plaque, including a characterization of plaque types
and quantification of plaque volumes at every point in the major
coronary arteries. The Heartflow Plaque Analysis has been validated
against the reference standard of invasive intravascular ultrasound
(“IVUS”) and shown to have a 95% agreement with IVUS in quantifying
total coronary plaque volume. Because coronary plaque volume is a
strong predictor of a patient’s risk of having a heart attack, this data
offers incremental predictive power over risk factors and stenosis alone
and can aid the physician in optimizing medical management. Our
Heartflow Plaque Analysis was cleared by the Food and Drug
Administration (“FDA”) in October 2022. We began our limited market education efforts in the second half
of 2023, and we expect to broaden our market education efforts as payor coverage for Heartflow Plaque
Analysis increases.
Key benefits of our Heartflow Platform
We believe the unique features of our technology allow us to offer superior clinical utility and economic
value to our customers and the broader healthcare system. The key benefits offered by our Heartflow
Platform include:
•More accurate non-invasive test for CAD: Our Heartflow products provide a more accurate non-
invasive assessment of blood flow, plaque characterization and plaque volume compared to
traditional non-invasive tests. Our clinical trials have demonstrated that Heartflow FFRCT Analysis and
Heartflow Plaque Analysis have a high level of concordance to the invasive reference standards of
FFR and IVUS, respectively, and that Heartflow FFRCT Analysis has superior diagnostic accuracy to
CCTA alone as well as both SPECT and PET.
•More informed assessments and personalized care: Our Heartflow FFRCT Analysis and Heartflow
Plaque Analysis have been clinically demonstrated to improve physician decisions on intervention
and treatment planning. Multiple studies and registries have demonstrated that physicians changed
their treatment approach after reviewing our AI-powered reports.
8
•Superior economic efficiency: Our PRECISE prospective randomized controlled trial demonstrated
that our Heartflow FFRCT Analysis was 78% more likely to identify patients in need of
revascularization and showed a 69% reduction in unnecessary invasive tests as compared to a “usual
care” pathway. The net effect of this pathway was 2x the yield of invasive coronary angiography
leading to a revascularization procedure. As a result, our internal analysis based on the PRECISE
data demonstrated a 20% increase in net revenue for the cardiac catheterization lab, on average.
•Improved workflow: Our Heartflow RoadMap Analysis offers significant workflow benefits, including
improving workflow efficiency by reducing CCTA interpretation times by approximately 25%.
•Enhanced interventional treatment planning: The additional detail on individual patient anatomy
and disease state provided by our Heartflow Platform allows for pre-operative selection of appropriate
tools. We believe this saves valuable cardiac catheterization lab time and facilitates a more efficient
procedure.
•Better patient and provider experience: By leveraging a single CCTA for all of our products,
patients complete their test in approximately 20 minutes with significantly lower radiation exposure
compared to nuclear imaging tests such as SPECT and PET that take multiple hours and require
radioactive tracers to be injected into the bloodstream. By providing a definitive diagnosis upfront, the
Heartflow Platform eliminates the need for layered testing, streamlining the patient journey and
reducing anxiety associated with uncertain or inconclusive results.
We believe the benefits of our Heartflow Platform add significant value across all the subspecialties that
impact cardiovascular care including referring cardiologists, imaging physicians and interventionalists. We
have structured our sales force to efficiently call on these key physician stakeholders, with a primary
focus on the imaging physicians who are instrumental in new account adoption and the referring
physicians who are critical to driving volume growth at our existing accounts.
Our success factors
We believe the continued growth of our company will primarily be driven by the following success factors:
•Differentiated approach to the non-invasive diagnosis and management of CAD
•Market leader in AI-powered quantitative CAD analysis with strong customer relationships
•Attractive revenue model with significant operating leverage potential
•Large addressable market opportunity with a significant unmet need
•Robust and compelling portfolio of clinical evidence
•Established reimbursement coverage and favorable society support
•Unique and scalable AI, data and R&D capabilities
•Experienced leadership team
Our growth strategies
We believe the following key strategies will play a critical role in our continued growth:
•Expand adoption of our Heartflow Platform by new accounts
•Broaden awareness of the CCTA + Heartflow pathway to drive volume at existing accounts
•Launch and drive adoption of our Heartflow Plaque Analysis product
•Invest in additional clinical evidence to support adoption and expand our indications
9
•Extend our technology leadership through continued investment in our platform
•Leverage our platform to pursue adjacent and international markets
Risk factors summary
Our business is subject to a number of risks and uncertainties, as more fully described in the section titled
“Risk factors” immediately following this prospectus summary. You should read these risks before you
invest in our common stock. These risks include, among others, the following:
•We have incurred significant net losses since our inception, we expect to incur additional substantial
losses in the foreseeable future and we may not be able to achieve or sustain profitability.
•Our revenue is currently generated almost entirely from the sales of only one product, Heartflow
FFRCT Analysis, and we are therefore highly dependent on the success of this product, which makes
it difficult to evaluate our current business, predict our future prospects and forecast our financial
performance and any growth.
•If healthcare providers are unwilling to change their standard practice regarding the evaluation of
CAD, our business, financial condition, results of operations and prospects will be adversely affected.
•If third-party payors, including government payors, do not cover and provide adequate, or any,
reimbursement for the Heartflow Platform, or if existing payment amounts are reduced or coding
changes, adoption of the Heartflow Platform by healthcare providers will be negatively impacted, and
our business, financial condition, results of operations and prospects will be adversely affected.
•To date we have derived a significant amount of our revenue from a small number of customers, and
face risks associated with a more concentrated customer base.
•We face significant competition in an environment of rapid technological change, and there is a
possibility that our competitors may develop products that are more effective, accurate, reliable, cost-
effective or more advanced than ours, which may harm our financial condition. If we are unable to
compete successfully or our potential market share is reduced, we may be unable to increase or
sustain our revenue or achieve profitability.
•The commercialization of the Heartflow Plaque Analysis product is nascent, and we may not be able
to achieve or maintain sufficient market acceptance or the levels of utilization we expect from the
Heartflow Plaque Analysis product or any other future product.
•We face risks associated with our use and development of artificial intelligence models, which may
result in operational challenges, legal liability, reputational concerns and competitive risks.
•If we fail to properly manage our future growth, our business could suffer.
•Our business could be disrupted by catastrophic events.
•We depend on our information technology systems, and any failure of these systems could harm our
business and adversely affect our business and operating results.
•Our networks and those of our third-party service providers may become the target of bad actors or
security breaches that we cannot anticipate or successfully defend, which could have an adverse
impact on our business.
•We face extensive, regulatory requirements to bring our products to market, and our failure to receive
and maintain regulatory clearances or approvals of our current and future products in the United
States or abroad or to comply with medical device regulatory requirements could adversely affect our
business.
10
•If we are unable to obtain and maintain sufficient intellectual property rights, or the scope of our rights
is not sufficiently broad, third-parties could develop and commercialize technology and products
similar or identical to ours, and our ability to successfully commercialize our technology and products
may be adversely affected.
•Our credit agreement contains certain restrictions that may limit our ability to operate our business. If
we raise additional capital through debt financing, the terms of any new debt could further restrict our
ability to operate our business.
•There is substantial doubt about our ability to continue as a going concern.
•We have identified material weaknesses in our internal control over financial reporting and may
identify additional material weaknesses in the future or fail to remedy these material weaknesses or
otherwise continue to fail to maintain effective internal control over financial reporting, which may
result in material misstatements of our consolidated financial statements or cause us to fail to meet
our periodic reporting obligations or cause our access to the capital markets to be impaired.
The summary risk factors described above should be read together with the text of the full risk factors in
the section titled “Risk factors” and the other information set forth in this prospectus, including our
consolidated financial statements and the related notes. The risks summarized above or described in full
elsewhere in this prospectus are not the only risks that we face. Additional risks and uncertainties not
presently known to us, or that we currently deem to be immaterial, may also materially adversely affect
our business, financial condition, results of operations, and prospects.
Corporate information
We were incorporated under the laws of the State of Delaware in 2007. On March 1, 2021, we completed
an internal reorganization in which a newly formed parent holding company was put in place. The
previous holders of our common stock and preferred securities became holders of common stock and
preferred securities of HeartFlow Holding, Inc. The equity incentive plan, outstanding equity awards,
outstanding warrants and certain other equity-related agreements of HeartFlow, Inc. were assumed by
HeartFlow Holding, Inc. Our operations and business activities remained at HeartFlow, Inc., and the
wholly-owned non-U.S. subsidiaries of HeartFlow, Inc. remained in place. On               , 2025, we
consolidated HeartFlow Holding, Inc. into HeartFlow, Inc. and the previous holders of HeartFlow Holding,
Inc. common stock and preferred securities became holders of our common stock and preferred
securities, and the equity incentive plan, outstanding equity awards, warrants and certain other equity-
related agreements of HeartFlow Holding, Inc. were assumed by us. In connection with this consolidation,
we changed our name to Heartflow, Inc., whose name appears on the cover of this prospectus. Our
principal executive offices are located at 331 E. Evelyn Avenue, Mountain View, California 94041, and our
telephone number is (650) 241-1221. Our corporate website address is www.heartflow.com. Information
contained on, or accessible through, our website shall not be deemed incorporated into and is not a part
of this prospectus or the registration statement of which it forms a part. We have included our website in
this prospectus solely as an inactive textual reference.
Implications of being an emerging growth company
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of
2012 (the “JOBS Act”). We will remain an emerging growth company until the earliest of: (i) the last day of
the fiscal year following the fifth anniversary of the completion of this offering; (ii) the last day of the fiscal
year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal
year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market
value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of
the second fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in
non-convertible debt securities during the prior three-year period. An emerging growth company may take
11
advantage of specified reduced reporting requirements and is relieved of certain other significant
requirements that are otherwise generally applicable to public companies. As a result, the information that
we provide to our stockholders may be different than you might receive from other public reporting
companies in which you hold equity interests. 
As an emerging growth company, we have elected to take advantage of certain reduced disclosure
obligations in the registration statement that this prospectus is a part of, and may elect to take advantage
of other reduced reporting requirements in future filings. In particular:
•we will present in this prospectus only two years of audited financial statements, plus any required
unaudited financial statements, and related management’s discussion and analysis of financial
condition and results of operations;
•we will avail ourselves of the exemption from the requirement to obtain an attestation and report from
our independent registered public accounting firm on the assessment of our internal control over
financial reporting pursuant to the Sarbanes-Oxley Act of 2002;
•we will avail ourselves of relief from compliance with the requirements of the Public Company
Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s
report on the financial statements;
•we will provide less extensive disclosure about our executive compensation arrangements; and
•we will not be required to hold stockholder non-binding advisory votes on executive compensation or
golden parachute arrangements.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended
transition period for complying with new or revised accounting standards. This provision allows an
emerging growth company to delay the adoption of some accounting standards until those standards
would otherwise apply to private companies. We have elected to use the extended transition period for
any other new or revised accounting standards during the period in which we remain an emerging growth
company; however, we may adopt certain new or revised accounting standards early. As a result of these
elections, the information that we provide in this prospectus, including our financial statements, may be
different than the information you may receive from other public companies in which you hold equity
interests. In addition, it is possible that some investors will find our common stock less attractive as a
result of these elections, which may result in a less active trading market for our common stock and
higher volatility in our share price.
Basis of presentation
Certain monetary amounts, percentages, and other figures included elsewhere in this prospectus have
been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may
not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages
in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation
of the percentages that precede them.
The consolidated financial statements include the accounts of HeartFlow Holding, Inc. and its
subsidiaries. Prior to the completion of this offering, we will complete a consolidation pursuant to which
the previous holders of HeartFlow Holding, Inc. common stock and preferred securities will become
holders of our common stock and preferred securities and the equity incentive plan, outstanding equity
awards, the warrants and other equity agreements of HeartFlow Holding, Inc. will be assumed by us. We
expect that the consolidation will not have a material effect on our consolidated financial statements
included elsewhere in this prospectus. The consolidated financial statements of HeartFlow Holding, Inc.
are that of Heartflow, Inc., the registrant whose name appears on the cover of this prospectus.
12
The offering
Common stock offered by us . . .
                  shares.
Option to purchase additional
shares . . . . . . . . . . . . . . . . . . . . . . . .
We have granted the underwriters an option for a period of 30 days
to purchase up to                  additional shares of common stock
from us at the public offering price, less underwriting discounts and
commissions on the same terms as set forth in this prospectus.
Common stock to be
outstanding after this offering . .
                  shares (or                  shares if the underwriters exercise
in full their option to purchase additional shares).
Use of proceeds . . . . . . . . . . . . . . .
We estimate that the net proceeds from this offering will be
approximately $          million (or approximately $          million if the
underwriters exercise in full their option to purchase up
to                     additional shares of common stock), based on the
assumed initial public offering price of $          per share, which is
the midpoint of the estimated price range set forth on the cover
page of this prospectus, after deducting estimated underwriting
discounts and commissions and estimated offering expenses
payable by us.
In connection with the completion of this offering, we are obligated
to use certain of the net proceeds from this offering to repay $50.0
million (or $55.0 million if the underwriters exercise their option to
purchase additional shares of common stock) of the indebtedness
outstanding under the amended credit agreement and guaranty
(the “2024 Credit Agreement”) with Hayfin Services, LLP (“Hayfin”)
and to pay approximately $             million of fees in connection
therewith. We expect to use the remainder of the net proceeds
from this offering, together with our existing cash and cash
equivalents, to fund our sales and marketing efforts, fund research
and product development activities and for other general corporate
purposes, including working capital, operating expenses, and
capital expenditures.
We may also use a portion of the net proceeds from this offering to
acquire complementary businesses, products, services, or
technologies. We periodically evaluate strategic opportunities;
however, we have no current understandings or commitments to
enter into any such acquisitions or make any such investments.
We will have broad discretion in the way that we use the net
proceeds of this offering. See the section titled “Use of proceeds”
for additional information.
Risk factors . . . . . . . . . . . . . . . . . . .
You should read the section titled “Risk factors” for a discussion of
factors to consider carefully, together with all the other information
included in this prospectus, before deciding to invest in our
common stock.
13
Proposed          trading symbol .
“          ”
The number of shares of our common stock to be outstanding after this offering is based on             
shares of our common stock outstanding as of December 31, 2024 and excludes:
•             shares of our common stock issuable upon the exercise of outstanding stock options as of
December 31, 2024 under our HeartFlow Holding, Inc. Amended and Restated 2009 Equity Incentive
Plan (the “2009 Equity Incentive Plan”), with a weighted-average exercise price of $       per share;
•             shares of our common stock issuable upon the exercise of outstanding stock options granted
subsequent to December 31, 2024 under our 2009 Equity Incentive Plan, with a weighted-average
exercise price of $      per share;
•             shares of our common stock issuable upon the exercise of warrants outstanding as of
December 31, 2024 held by Hayfin, with an exercise price of $0.01 per share;
•             shares of our common stock reserved for future issuance under our 2009 Equity Incentive
Plan;
•             shares of our common stock to be reserved for future issuance under our 2025 Performance
Incentive Plan (the “2025 Plan”), which will become effective as of the date immediately prior to the
date our registration statement relating to this offering becomes effective, from which we will grant
restricted stock units (“RSUs”) covering approximately                shares of common stock concurrently
with this offering (based on the assumed initial public offering price of $          per share, which is the
midpoint of the price range set forth on the cover page of this prospectus), as well as any future
increases in the number of shares of common stock reserved for issuance under the 2025 Plan; and
•             shares of our common stock reserved for future issuance under our 2025 Employee Stock
Purchase Plan (the “ESPP”), which will become effective immediately prior to the date our registration
statement relating to this offering becomes effective, as well as any future increases in the number of
shares of common stock reserved for issuance under the ESPP.
Unless otherwise indicated, all information contained in this prospectus assumes or gives effect to: 
•the adoption, filing, and effectiveness of our amended and restated certificate of incorporation, to be
in effect immediately prior to the completion of this offering, and the adoption of our amended and
restated bylaws, to be in effect upon the effectiveness of the registration statement of which this
prospectus forms a part;
•the automatic conversion of all the outstanding shares of our Series A, Series B-1, Series B-2, Series
C, Series D, Series E, Series F and Series F-1 redeemable convertible preferred stock (collectively,
our “redeemable convertible preferred stock”) as of December 31, 2024 into an aggregate
of                  shares of our common stock, the conversion of which will occur immediately prior to the
completion of this offering (the “Preferred Stock Conversion”);
•the automatic conversion of $48,356,153.27 of convertible promissory notes with original maturity
dates of 48 months from the dates of issuance into an aggregate of                  shares of our common
stock (the “2025 Convertible Notes”), assuming the assumed initial public offering price of $            
per share, which is the midpoint of the estimated price range set forth on the cover page of this
prospectus, issued by us in January 2025, which will be automatically converted upon the
effectiveness of this offering into an aggregate of                shares of our common stock (the
“Convertible Notes Conversion”);
•a           -for-           reverse stock split of our common stock, which we effected on           , 2025 and a
corresponding adjustment to the ratio of the Preferred Stock Conversion, the Convertible Note
Conversion and adjustment to our outstanding warrants;
14
•no exercise, settlement or termination of the outstanding options or warrants described above; and
•no exercise by the underwriters of their option to purchase up to                   additional shares of our
common stock in this offering.
15
Summary consolidated financial data
The following tables summarize our consolidated financial data for the periods and as of the dates
indicated. The following summary consolidated statements of operations data for the years ended
December 31, 2023 and 2024 and our consolidated balance sheet data as of December 31, 2024 have
been derived from our audited consolidated financial statements and related notes included elsewhere in
this prospectus. Our audited consolidated financial statements included elsewhere in this prospectus
have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Our
historical results are not necessarily indicative of the results that may be expected for any period in the
future. You should read the following summary consolidated financial data together with our audited
consolidated financial statements and the related notes included elsewhere in this prospectus and the
section titled “Management’s discussion and analysis of financial condition and results of operations.” The
summary consolidated financial data included in this section are not intended to replace the consolidated
financial statements and the related notes included elsewhere in this prospectus and are qualified in their
entirety by the consolidated financial statements and the related notes thereto included elsewhere in this
prospectus.
Year ended December 31,
(in thousands, except share and per share amounts)
2023
2024
Consolidated statements of operations data:
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$87,174
$                    
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,123
Operating expenses:
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35,854
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95,111
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
130,965
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(72,914)
Interest income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(19,237)
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,957)
Loss before provision from income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(95,108)
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(547)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(95,655)
$
Cumulative dividends on Series C redeemable convertible preferred stock
(1,239)
Deemed dividend upon down round of redeemable convertible preferred
stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(26,794)
Net loss attributable to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(123,688)
$
Net loss per share attributable to common stockholders, basic and diluted(1) . .
$(8.67)
$
Weighted-average shares used to compute net loss per share attributable to
common stockholders, basic and diluted(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,265,293
Pro forma net loss per share attributable to common stockholders, basic and
diluted (unaudited)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Pro forma weighted-average shares used to compute net loss per share
attributable to common stockholders, basic and diluted (unaudited)(1) . . . . . .
(1)See Note 2 to our consolidated financial statements included elsewhere in this prospectus for an explanation of the calculation of our
basic and diluted net loss per share attributable to common stockholders and the weighted-average number of shares used in the
computation of the per share amounts.
(2)Unaudited pro forma net loss per share attributable to common stockholders, basic and diluted, for the year ended December 31, 2024
is calculated by giving effect to (i)  removal of the effect of interest expense related to the partial repayment of indebtedness with Hayfin,
(ii) reversal of accretion of cumulative dividends on Series C redeemable convertible preferred stock, (iii) the Preferred Stock
Conversion, as if the shares resulting from the Preferred Stock Conversion were outstanding as of the beginning of the period
16
presented, and (iv) the Convertible Notes Conversion, as if the shares resulting from the Convertible Notes Conversion were
outstanding as of the beginning of the period presented. The following table summarizes our unaudited pro forma net loss per share for
the year ended December 31, 2024:
Year ended
December 31,
2024
(in thousands, except share and per share amounts)
Numerator:
Net loss attributable to common stockholders, basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Pro forma adjustment to remove interest expense related to debt repayment . . . . . . . . . . .
Pro forma adjustment to reverse the accretion of cumulative dividends . . . . . . . . . . . . . . . . .
Pro forma net loss attributable to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Denominator:
Weighted-average shares used in computing net loss per share attributable to common
stockholders, basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro forma adjustment to reflect the Preferred Stock Conversion . . . . . . . . . . . . . . . . . . . . . . .
Pro forma adjustment to reflect the Convertible Notes Conversion . . . . . . . . . . . . . . . . . . . . .
Pro forma weighted-average shares used in computing pro forma net loss per share
attributable to common stockholders, basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro forma net loss per share attributable to common stockholders, basic and diluted . . . . . . . . .
$
As of December 31, 2024
(in thousands)
Actual
Pro forma(1)
Pro forma
as adjusted(2)(3)
Consolidated balance sheet data:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                   
$                   
$                   
Working capital(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redeemable convertible preferred stock . . . . . . . . . . . . . . . . . .
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity (deficit) . . . . . . . . . . . . . . . . . . . . . . . . .
(1)The pro forma column above reflects (a) the issuance and sale of the 2025 Convertible Notes and the 2024 Term Loan Conversion (as
defined in the section titled “Certain relationships and related-party transactions”) that occurred subsequent to December 31, 2024; (b)
the Preferred Stock Conversion; (c) the Convertible Notes Conversion; and (d) the adoption, filing, and effectiveness of our amended
and restated certificate of incorporation, to be in effect immediately prior to the completion of this offering.
(2)The pro forma as adjusted column gives effect to (a) the pro forma adjustments set forth in (1) above and (b) the issuance and sale
of            shares of our common stock in this offering at the assumed initial offering price of $             per share, which is the midpoint of
the estimated price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us and (c) assuming the repayment of $50.0 million of the indebtedness
outstanding under the 2024 Credit Agreement and payment of approximately $            million of fees in connection therewith.
(3)The pro forma as adjusted information above is illustrative only and will depend on the actual initial public offering price and other terms
of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $            per share
of our common stock, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase
or decrease, as applicable, each of our pro forma as adjusted cash and cash equivalents, working capital, total assets, and total
stockholders’ equity (deficit) by approximately $          million, assuming the number of shares offered by us, as set forth on the cover
page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated
offering expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of common stock
offered by us would increase or decrease, as applicable, each of our pro forma as adjusted cash and cash equivalents, working capital,
total assets, and total stockholders’ equity (deficit) by approximately $           million, assuming the assumed initial public offering price of
$             per share of our common stock, which is the midpoint of the estimated price range set forth on the cover page of this
17
prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering
expenses payable by us.
(4)Working capital is defined as current assets less current liabilities. See our consolidated financial statements and related notes included
elsewhere in this prospectus for further details regarding our current assets and current liabilities.
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Risk factors
Investing in our common stock involves a high degree of risk. You should carefully consider the risks
described below, as well as the other information in this prospectus, including our financial statements
and the related notes and “Management’s discussion and analysis of financial condition and results of
operations,” before deciding whether to invest in our common stock. The occurrence of any of the events
or developments described below could have a material adverse effect on our business, financial
condition, results of operations and prospects. In such an event, the market price of our common stock
could decline, and you may lose all or part of your investment. Additional risks and uncertainties not
presently known to us or that we currently believe are not material may also impair our business, financial
condition, results of operations and prospects. Please also see the sections titled “Special note regarding
forward-looking statements” and “Market and industry data.”
Risks related to our business and industry
We have incurred significant net losses since our inception, we expect to incur additional
substantial losses in the foreseeable future and we may not be able to achieve or sustain
profitability.
We have incurred significant net losses since our inception in 2007, and we expect to incur additional
substantial losses in the foreseeable future. For the fiscal years ended December 31, 2023 and 2024, we
incurred net losses of $95.7 million and $       million, respectively. As of December 31, 2024, we had an
accumulated deficit of $        million. Since inception, we have spent significant amounts of cash to
develop the Heartflow Platform, to fund research and development, including our preclinical research and
development activities and clinical trials related to our products, to scale our commercial operations and
to recruit and retain key talent.
The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a
period-to-period comparison of our results of operations may not be a good indication of our future
performance. We expect to continue to incur significant research and development, sales and marketing,
regulatory and other expenses as we expand our marketing efforts to increase adoption of our products,
expand existing relationships with our customers, obtain regulatory clearances or approvals for our
planned or future products, conduct clinical trials to extend applicability of our platform into new
indications or to develop new products or add new features to our existing products. The investments in
our business may be more costly than we expect, and if we do not achieve the benefits anticipated from
these investments, or if the realization of these benefits is delayed, they may not result in increased
revenue or growth in our business. In addition to the anticipated costs of growing our business, we expect
our general and administrative expenses to increase following this offering due to the additional costs of
being a public company. If our revenue growth does not increase to more than offset the anticipated
increases in our operating expenses, we may not be able to achieve or sustain profitability and our
business, financial condition, results of operations and prospects will be harmed.
In addition, our revenue may decline or our revenue growth, if any, may be constrained. Our ability to
increase sales is uncertain, and we may never be able to achieve or sustain profitability for many
reasons, including that: our Heartflow FFRCT Analysis may not achieve widespread adoption among
healthcare providers and we may be unable to increase revenue generated from sales of our Heartflow
FFRCT Analysis; our Heartflow Plaque Analysis may not achieve widespread adoption among healthcare
providers and we may be unable to generate sufficient revenue from sales of our Heartflow Plaque
Analysis; payors, such as insurance companies and government insurance programs, may decide not to
reimburse for our products, may set the amount of such reimbursement too low or reduce the amount of
such reimbursement; healthcare industry trends, including growth in CCTA usage, may move in directions
that do not allow for adoption of our products or that do not provide adequate incentives for the adoption
of our products; competitors may develop or acquire a product that successfully competes with ours;
manufacturers of CT scanners may partner with our competitors or develop or acquire a competing
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product and integrate one or more products that successfully competes with ours; we may not be able to
obtain regulatory approval for future versions of our products (including improved versions of our AI
algorithms), new indications for use of our products or other future products; and there may be changes in
existing or anticipated clinical guidelines, including the current ACC and AHA Class 1, Level A guidelines
for CCTA and Class 2a, Level B guidelines for Heartflow FFRCT Analysis for certain patients with stable or
acute chest pain and no known CAD, or the timing of adoption of positive clinical guidelines that support
the use of the Heartflow FFRCT Analysis.
Because of these and the other risks and uncertainties described in this prospectus, we are unable to
predict the extent to which we will be able to increase sales, if at all, or the timing for when or the extent to
which we will become profitable, if ever. We will need to generate significant additional revenue to achieve
and sustain profitability, and even if we do achieve profitability, we may not be able to sustain or increase
profitability. Our failure to become and remain profitable would depress the value of our company and our
stock price and could impair our ability to raise capital, fund our research and development efforts,
expand our business, diversify our product offerings or continue our operations. A decline in the value of
our company could cause you to lose all or part of your investment.
Our revenue is currently generated almost entirely from the sales of only one product, Heartflow
FFRCT Analysis, and we are therefore highly dependent on the success of this product, which
makes it difficult to evaluate our current business, predict our future prospects and forecast our
financial performance and any growth.
In 2024, our Heartflow FFRCT Analysis represented approximately      % of our revenues. In the second
half of 2023, we began limited market education efforts of our second product, Heartflow Plaque Analysis.
Over the next several years, we expect to continue to devote a substantial amount of resources to
increase sales of our Heartflow FFRCT Analysis and also expand our commercialization efforts and drive
increased adoption of our Heartflow Plaque Analysis. However, we may not succeed in increasing sales
of our Heartflow FFRCT Analysis or in increasing adoption of our Heartflow Plaque Analysis. We expect to
continue to derive almost all of our revenue from sales of Heartflow FFRCT Analysis for the foreseeable
future, so we are highly dependent on its success.
In addition, because we plan to devote substantial resources to increase sales of Heartflow FFRCT
Analysis and rely on it as our main source of revenue, any factors that negatively impact these efforts, our
Heartflow Plaque Analysis commercialization efforts or our ability to diversify our products would have a
material adverse effect on our business, financial condition, results of operations and prospects.
Therefore, it is difficult to predict our future prospects and forecast our financial performance and any
growth, and any such forecasts are inherently limited and subject to a number of uncertainties. If our
assumptions regarding the risks and uncertainties we face, which we use to plan our business, are
incorrect or change due to circumstances in our business or our markets, or if we do not address these
risks successfully, our operating and financial results could differ materially from our expectations and our
business, financial condition, results of operations and prospects could suffer.
If healthcare providers are unwilling to change their standard practice regarding the evaluation of
CAD, our business, financial condition, results of operations and prospects will be adversely
affected.
Our success depends on physicians, hospitals and other healthcare providers adopting and using the
Heartflow Platform to aid in the evaluation of CAD. While we have had some recent success in achieving
broader adoption of the Heartflow Platform, we have in the past faced, and may in the future face,
challenges in achieving higher rates of adoption. Many healthcare providers have extensive experience
with existing non-invasive tests for CAD and have established relationships with the companies that
provide these tests or in some instances own or manage the equipment for these tests in their offices.
Existing tests are performed in a high enough volume that healthcare providers generate sufficient
revenue from their use and are well versed in their use, reimbursement and outcomes. The outcomes and
workflow efficiencies that we believe our Heartflow Platform provides may not be valued by healthcare
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providers as highly as we expect or at all. In addition, healthcare providers have been, and may continue
to be, slower to adopt or recommend our products because we have a more limited commercial track
record and healthcare providers may feel they can generate more revenue from existing tests. Healthcare
providers also may not find our clinical data compelling and may not recommend or use our products until
they receive additional recommendations from other healthcare providers that our products have a clinical
benefit, or at all.
In addition, the Heartflow Platform relies on healthcare providers following the ACC and AHA guidelines
by referring certain patients with stable or acute chest pain and no known CAD to undergo a CCTA, with
the CCTA images to be analyzed by our Heartflow FFRCT Analysis. Although the ACC and AHA guidelines
support CCTA plus our Heartflow FFRCT Analysis as the preferred pathway for diagnosing and managing
CAD in certain patients with stable or acute chest pain and no known CAD, these guidelines may not be
widely adopted by healthcare providers. Moreover, healthcare providers may choose not to adopt the
Heartflow Platform if they are not able to obtain an adequate CCTA. Further, if future studies and trials or
other events, including reimbursement rates of CCTA, adversely impact the rate of use of CCTAs in
practice, then healthcare providers may be less willing to adopt a technology that uses CCTAs.
Also, the Heartflow Platform may be more difficult than we expect to integrate into standard practice
because a provider may be resistant to introduce our embedded information technology and workflow
infrastructure. Due to different laws, policies and preferences of healthcare providers regarding patient
privacy both in the United States and abroad, they may be averse to sending data externally (outside of
their facility) or abroad. Furthermore, if healthcare providers using the Heartflow Platform experience what
they perceive to be false negative result or imprecise readings, including due to user error, they may
determine not to continue using our platform going forward.
We expect that addressing these and similar issues will require a significant amount of our time and
resources, and if we are unsuccessful, we would be unable to achieve broader adoption of the Heartflow
Platform by healthcare providers. If our products do not gain broader acceptance by healthcare providers,
our business, financial condition, results of operations and prospects will be adversely affected.
If third-party payors, including government payors, do not cover and provide adequate, or any,
reimbursement for the Heartflow Platform, or if existing payment amounts are reduced or coding
changes, adoption of the Heartflow Platform by healthcare providers will be negatively impacted,
and our business, financial condition, results of operations and prospects will be adversely
affected.
Our ability to grow sales and revenue from our Heartflow FFRCT Analysis and to successfully
commercialize our Heartflow Plaque Analysis depend, in large part, on whether third-party payors,
including private health insurers, managed care plans and government healthcare programs, such as
Medicare and Medicaid, cover and adequately reimburse for the use of the Heartflow Platform and the
underlying CCTA. Patients generally rely on payors to reimburse all or a significant part of the costs
associated with their treatment. As a result, coverage determinations and reimbursement levels are
critical to the commercial success of the Heartflow Platform. Reimbursement is obtained from a variety of
sources, including government sponsored and private health insurance plans, and varies by country and
by region within some countries. These payors determine whether to provide coverage and payment for
specific products and procedures.
In addition, payors continually review new technologies and can, without notice, deny coverage. As a
result, the coverage determination process is often time consuming and costly, with no assurance that
coverage and adequate reimbursement will be obtained or maintained if obtained. If payors change their
reimbursement policies, including if the current Category 1 CPT codes related to our Heartflow FFRCT
Analysis or future Category 1 CPT codes related to our Heartflow Plaque Analysis are not favorably
priced, we would be unable to obtain favorable Medicare reimbursement for the Heartflow Platform.
Moreover, physicians, hospitals and other healthcare providers may decline to adopt or reduce usage of
the Heartflow Platform due to the economic impact a change in reimbursement may have on their
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business and, as a result, we may experience a significant loss of revenue, which would have a material
adverse effect on our business, financial condition, results of operations and prospects.
Given the evolving nature of the healthcare industry and ongoing healthcare cost reforms, we are and will
continue to be subject to effects of changes in the level of Medicare reimbursement for our products. A
reduction in coverage or payment by the Medicare program could cause some commercial third-party
payors to implement similar reductions in their coverage or payment amounts for the Heartflow Platform.
Unfavorable coverage or payment determinations at the national or local level could adversely affect our
business, financial condition, results of operations and prospects.
To date we have derived a significant amount of our revenue from a small number of customers,
and face risks associated with a more concentrated customer base.
We derive a significant amount of our revenue from a small number of customers. As of December 31,
2024, we have derived        % of our revenue from        customers. In addition, although our Heartflow
Platform had an installed base of over 1,100 accounts in the United States as of December 31, 2024, the
decision-making function for many of these accounts is concentrated in a relatively small number of
customers, such that the loss of one customer could result in a disproportionate loss across our accounts.
We cannot guarantee that that we will continue to generate revenue from these customers, whether due
to increase in competition, new technologies, our customers’ ability to terminate their contracts with us or
reduce order volumes, or other factors outside of our control. If we do not increase the number of our
customers and drive increased use of the Heartflow Platform as the preferred non-invasive testing
method for assessing CAD, we will continue to face risks associated with a more concentrated customer
base.
Revenue from these customers may fluctuate from time to time due to demand for the Heartflow Platform,
the timing of which may be affected by seasonality or other factors outside of our control such as CT
scanner capacity, contrast availability and staffing availability. These customers could also potentially
pressure us to reduce the prices we charge for the Heartflow Platform, which could have a material
adverse effect on our margins and business. In addition, if any of our largest customers terminates its
relationship with us or otherwise reduces its FFRCT Analysis volumes for any reason, we may be unable
to replace them with a customer who refers a similar number of patients for the Heartflow Platform, and
such termination or reduction in volume could have a material adverse effect on our business, financial
condition, results of operations and prospects.
We face significant competition in an environment of rapid technological change, and there is a
possibility that our competitors may develop products that are more effective, accurate, reliable,
cost-effective or more advanced than ours, which may harm our financial condition. If we are
unable to compete successfully or our potential market share is reduced, we may be unable to
increase or sustain our revenue or achieve profitability.
The medical technology industry is highly competitive, subject to rapid change and significantly affected
by the introduction of new products and technologies and other activities of industry participants. Because
of the size of the market opportunity for the treatment of CAD, we believe current and potential future
competitors will dedicate significant resources to aggressively promote their products or develop new
products or treatments. Our principal competition comes from companies that provide traditional non-
invasive tests that aid physicians in the evaluation of CAD, such as SPECT, stress echocardiography and
PET. Established, traditional non-invasive tests for CAD have been used for many years and are therefore
difficult to change or supplement. Many of the companies that sell these traditional non-invasive tests or
the equipment they require have established relationships with healthcare providers. One of the major
hurdles to adoption of our products is overcoming established testing patterns, which requires education
of physicians and supportive clinical data.
The companies that sell the traditional non-invasive tests for CAD include companies that offer: (i) cardiac
specific tests to primary care and cardiology offices, such as manufacturers of capital equipment for
22
stress echocardiography and SPECT, including GE Healthcare, Siemens Healthineers AG and Koninklijke
Philips N.V.; and (ii) products used for the invasive fractional flow reserve (“FFR”) testing market.
With the greater resources of some of these competitors and their more diversified product offerings, it is
possible that they or other entrants into the market may develop competing products or technologies that
could be more effective, accurate, reliable, cost-effective, more advanced or otherwise improved relative
to the Heartflow Platform, which could render our products obsolete or less competitive. In addition, one
or more competitors could develop and market an on-premise solution, which may be more appealing
than our cloud-based offering. Moreover, new treatments, such as GLP-1s, may indirectly reduce stenosis
or plaque build-up, which could reduce the market opportunity for non-invasive CAD tests and, as a
result, our Heartflow Platform. In addition, we currently target our Heartflow Platform for use only on
symptomatic patients and expanding the Heartflow Platform for asymptomatic patients may take years,
with potential delays due to the high-risk nature of the effort. Our competitors who offer traditional non-
invasive tests offer those tests to both symptomatic and asymptomatic patients, and this increased market
penetration could create additional price pressure for our products.
In addition, the field of cardiovascular genomics is subject to rapidly changing technology, and others may
invent and commercialize technology platforms such as next generation sequencing approaches that
could compete with our products or could make our products or any product we may sell in the future
obsolete. We also face competition and price pressure from companies that have developed or are
developing AI-based platforms that leverage CCTA to diagnose CAD, including earlier-stage companies
such as Cleerly, Inc., Elucid Bioimaging Inc. and Keya Medical Technology Co., Ltd. We may also face
competition from companies developing AI-based platforms, even if they are not currently in the CAD
market and recent and future advances in AI may allow other companies to quickly create competing
products, and they may be able to create such products less expensively and benefit from FDA and
reimbursement approvals we and others have obtained. For us to remain competitive, we must
continuously work on our products’ design and features, improve our algorithms, and invest in and
develop new technologies, including in the rapidly evolving area of AI. If we are unable to introduce
products, features and improvements aimed at increasing the value proposition of the Heartflow Platform
for our customers, or if the products, features and improvements we introduce are viewed less favorably
than our competitors’ products, we may be unable to compete successfully. If we are unable to compete
successfully against our current or future competitors, we may be unable to increase market acceptance
for our products, which could prevent us from increasing or sustaining our revenue or achieving
profitability and could cause the market price of our common stock to decline.
In addition, the Heartflow Platform relies on a CCTA first being performed. A number of companies
manufacture CT scanners, including, among others, GE Healthcare, Hitachi, Ltd., Koninklijke Philips N.V.,
Samsung Electronics Co., Ltd., Siemens Healthineers AG and Canon Medical Systems Corporation.
These companies are more diversified than we are and have substantial financial, manufacturing, sales
and marketing distribution and other resources. Any of these companies or others could determine to
develop, partner with or acquire and offer a product that competes with ours or manufacture CT scanners
that are no longer compatible with our Heartflow Platform. Further, these larger companies have market
penetration in the CT scanner market and understand the market for CAD and, if they are able to develop,
partner with or acquire a competing product, they may offer it as a bundle with the purchase of a CT
scanner, which could prevent us from increasing or sustaining our revenue or achieving profitability. In the
past, three of these companies, Siemens Healthineers AG, Koninklijke Philips N.V. and Canon Medical
Systems Corporation, considered development of a local workstation-based technology prototype aimed
at deriving CT-based blood flow data without an invasive procedure. If these companies decide to further
pursue this technology and obtain regulatory approval or clinical validation, it may become competitive
with our products.
There is substantial doubt about our ability to continue as a going concern.
We have prepared cash flow forecasts which indicate that, based on our expected operating losses and
negative cash flows, there is substantial doubt about our ability to continue as a going concern for the
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twelve months after the date that our consolidated financial statements for the year ended December 31,
2023 are issued. As a result, management has included disclosures in Note 1 of the financial statements
and our independent registered public accounting firm has included an explanatory paragraph in its report
on our consolidated financial statements for the fiscal year ended December 31, 2023 with respect to this
uncertainty. Our future viability as an ongoing business is dependent on our ability to generate cash from
our operating activities and to raise additional capital to finance our operations.
There is no assurance that we will succeed in obtaining sufficient funding on terms acceptable to us to
fund continuing operations, if at all. The perception that we might be unable to continue as a going
concern may also make it more difficult to obtain financing for the continuation of our operations on terms
that are favorable to us, or at all, and could result in the loss of confidence by investors and employees.
Our financial statements do not include any adjustments that might result from the outcome of this
uncertainty. If we are unable to continue as a going concern, we may have to liquidate our assets and
may receive less than the value at which those assets are carried on our financial statements, and it is
likely that our investors will lose all or a part of their investment.
The size and expected growth of our addressable market may be smaller than we estimate.
Our estimate of the addressable market for our current products and any future products is subject to
significant uncertainty and is based on assumptions and estimates, including our internal analysis and
industry experience. While we believe our assumptions and the data underlying our estimates are
reasonable, these assumptions and estimates may not be correct. As a result, our estimates of the
addressable market for our current or future products may prove to be incorrect. Moreover, our ability to
serve a significant portion of this estimated market is subject to many factors, including our success in
promoting the use of CCTA as a non-invasive diagnostic test that can be combined with the Heartflow
Platform, which is subject to many risks and uncertainties, and relies on the availability and proximity of
healthcare facilities with active CCTA programs to the patients in our estimated market. Accordingly, if we
are unable to increase the use of CCTA at the rates we estimate, if the actual number of patients who
would benefit from our products is less than we estimate, or if the price at which we can sell future
products or the reimbursement rate received by healthcare providers is less than we estimate, the size
and expected growth of our addressable market would be smaller than our estimates, which could have a
material adverse effect on our business, financial condition, results of operations and prospects.
We may not be successful in updating or otherwise enhancing the Heartflow Platform.
A part of our strategy is bringing new enhancements to our customers through updates to the Heartflow
Platform, which may include offering new products, additional features, applications and improvements to
our technology. We expect to make significant investments to advance these efforts, and enhancing the
Heartflow Platform is a complex and time-consuming endeavor. New products, additional features,
applications and improvements to our technology that initially show promise may fail to achieve the
desired results or may not achieve acceptable levels of analytical accuracy, utility or user friendliness.
Product development and improvement is expensive, may take months or years to complete and can
have uncertain outcomes. Failure can occur at any stage of the development or improvement process
and may occur only after substantial work has been completed, or after completion.
Even if, after development, an updated product appears successful, we may, depending on the nature of
the update, need to obtain regulatory clearances, authorizations or approvals before we can market the
updated product. Such regulatory clearances, authorizations or approvals are likely to require significant
time and expenditures and the applicable regulatory authority may not clear, authorize or approve any
product, update or new product we develop. Obtaining such clearances, authorizations or approvals may
require data from clinical trials, which can be costly and time-consuming to obtain. In certain jurisdictions
or in certain cases, clinical data may also be required in order to obtain reimbursement coverage, and this
clinical data may be in addition to data required to obtain regulatory clearances, authorizations or
approvals. Some clinical studies may fail to meet their endpoints, introducing risk or delay in the ability to
commercialize a new feature or product. In light of these requirements, we may choose to limit the scope
of any new products, additional features, applications and improvements we seek to develop.
24
Even if we develop a product update or new product that receives regulatory clearance, authorization or
approval, and for which we obtain sufficient commercial third-party and government reimbursement
coverage, we would need to commit substantial resources to commercialize and market the updated
product, new product or new application of our existing product, which may never achieve market
acceptance among various stakeholders or be commercially successful. Further, the applicable
regulations or the application of those regulations could change in ways that would impact the Heartflow
Platform and our ability to successfully manufacture or market our products. The expenses or losses
associated with unsuccessful updates to or expansion of the Heartflow Platform could adversely affect our
business, financial condition, results of operations and prospects.
The commercialization of Heartflow Plaque Analysis is nascent, and we may not be able to
achieve or maintain sufficient market acceptance or the levels of utilization we expect from
Heartflow Plaque Analysis or any other future product.
We began limited market education efforts for our Heartflow Plaque Analysis in the second half of 2023,
and we have generated very minimal revenue from this product. Heartflow Plaque Analysis has taken
time and significant resources to develop, and we may not be able to achieve customer acceptance or
broad commercial reimbursement coverage, which could limit its adoption.
The market for alternative plaque analysis products is competitive in terms of development, availability,
pricing, product quality and time-to-market. We face competition from companies that provide or are
developing similar plaque analysis products, which may distinguish themselves from us through, among
other things, perceived product quality, style and visuals, sleek design, enhanced user-friendliness and
innovative features. In addition, some of these competitors are agile, early-stage companies that may be
able to respond more quickly and effectively than we can to new or changing opportunities, technologies,
standards or customer requirements in the plaque analysis category. Some of these competitors
commercially launched competing plaque analysis products prior to our launch of Heartflow Plaque
Analysis and may have a first-mover advantage as a result. For more information on risks related to our
competition, see the risk factor titled “We face significant competition in an environment of rapid
technological change, and there is a possibility that our competitors may develop products that are more
effective, accurate, reliable, cost-effective or more advanced than ours, which may harm our financial
condition. If we are unable to compete successfully or our potential market share is reduced, we may be
unable to increase or sustain our revenue or achieve profitability.”
Our competitors may also be able to offer plaque analysis products similar or superior to ours at a more
attractive price than we can or may be better positioned to serve certain segments of our market, which
could create additional price pressure. For example, our competitors have in the past, and may in the
future, offer plaque analysis and other products at a more attractive price than we can such that current or
potential customers may select our competitors’ products in lieu of purchasing and using our Heartflow
Plaque Analysis. Moreover, our competitors have in the past, and may in the future, suggest that their
plaque analysis and other products could replace both our Heartflow Plaque Analysis and our Heartflow
FFRCT Analysis, which would adversely affect our ability to achieve sufficient market acceptance for our
Heartflow Plaque Analysis, could affect sales of our Heartflow FFRCT Analysis and could cause our
Heartflow FFRCT Analysis to lose market share. While we believe Heartflow Plaque Analysis represents a
significant long-term opportunity for us, there can be no assurances that we will successfully compete in
such market and our business, financial condition, results of operations and prospects could be materially
and adversely affected.
We face risks associated with our use and development of AI models, which may result in
operational challenges, legal liability, reputational concerns and competitive risks.
We use and develop AI and automated analysis and decision-making technologies, including proprietary
AI algorithms and models and computational fluid dynamics (collectively, “AI Technologies”) to power the
Heartflow Platform. In addition, we use AI Technologies to drive improvements in the performance of the
Heartflow Platform. We expect that significant increased investment will be required in the future to
improve our use and development of AI Technologies.
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As with many technological innovations, there are significant risks involved in developing, maintaining and
deploying these technologies. In particular, if the AI Technologies underlying our Heartflow Platform are
incorrectly designed or implemented; trained or reliant on incomplete, inadequate, inaccurate or otherwise
poor quality data; used without sufficient oversight and quality control; misused or used outside of scope
of applicable regulatory authorizations; and/or adversely impacted by unforeseen bugs, defects, technical
challenges, cybersecurity threats or material performance issues, the performance of our Heartflow
Platform and business, as well as our reputation and the reputations of our customers, could suffer or we
could incur liability resulting from the violation of laws or contracts to which we are a party, regulatory
enforcement actions or civil claims. This could result in fines, penalties and damage awards and
disgorgement of any output, development or technology developed as a result of such violations.
In addition, we leverage a human-in-the-loop AI system that combines advanced algorithms with an
analyst-based quality inspection and monitoring process to create patient-specific reports based on CCTA
images. While we constantly work to improve our Heartflow Platform and algorithms, the AI Technologies
we work with are novel and complex, and we cannot assure you that our AI Technologies will be able to
perform as intended under all circumstances, or that our analyst-based review process will identify and
correct any errors in the outputs of our AI Technologies.
The regulatory framework for AI Technologies is rapidly evolving as many federal, state and foreign
government bodies and agencies have introduced or are currently considering additional laws, regulations
and guidance. For example, the FDA has issued guidance documents relating to the incorporation of AI
Technologies into medical devices and marketing submissions for AI-enabled devices. Specifically, draft
guidance issued on January 7, 2025, titled Artificial Intelligence-Enabled Device Software Functions:
Lifecycle Management and Marketing Submission Recommendations, proposes recommendations for the
design, development and implementation of AI-enabled devices that FDA encourages manufacturers
consider using throughout the total product lifecycle. In addition, the California Privacy Protection Agency
has approved for rulemaking regulations under the CCPA regarding the use of automated decision-
making that may require risks and providing notice and rights to opt-out and access to information
underlying the logic and outputs. Colorado passed the Colorado AI Act, which will go into effect in
February 2026. This law creates duties for developers and deployers to use reasonable care to protect
consumers from any known or reasonably foreseeable risks of “algorithmic discrimination” arising from
the intended and contracted uses of “high-risk AI systems,” including those that impact healthcare
services. Such additional laws, regulations and guidance may impact our ability to develop, use and
commercialize AI Technologies in the future.
It is possible that further new laws and regulations will be adopted in the United States and in other non-
U.S. jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be
interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to
change the way we use AI Technologies in a manner that negatively affects the performance of our
Heartflow Platform and the way in which we use AI Technologies. We may need to expend resources to
adjust our Heartflow Platform in certain jurisdictions if the laws, regulations or decisions are not consistent
across jurisdictions. Further, the cost to comply with such laws, regulations or decisions and/or guidance
interpreting existing laws, could be significant and would increase our operating expenses (such as by
imposing additional reporting obligations regarding our use of AI Technologies). Such an increase in
operating expenses, as well as any actual or perceived failure to comply with such laws and regulations,
could materially and adversely affect our business, financial condition, results of operations and
prospects.
Our Heartflow Platform and the data and models it generates could have bugs, defects or errors,
including human quality control errors, or otherwise fail to meet the expectations of patients,
physicians and third-party payors, which could adversely affect our reputation, business and
operating results.
We cannot provide assurance that the proprietary technology and algorithms used in our Heartflow
Platform do not contain undetected bugs, defects or errors or that our analyst-based review process will
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identify and correct any errors in the outputs of our AI Technologies. We cannot provide assurance that
limitations of the inbound CCTA images and image quality will always allow a true representation of the
patient anatomy, and any such limitations in CCTA images could affect the results of our analyses. We
have in the past, and may in the future, experience defects or errors in our Heartflow Platform or the data
and models it generates that remain undetected by our analyst-based review process, our reputation,
business and operating results could be adversely affected.
Furthermore, the success of the Heartflow Platform depends in part on patients’, physicians’ and third-
party payors’ confidence that our platform can provide reliable, high-quality actionable data and analysis
that will improve clinical decision making. We believe that patients, physicians and third-party payors are
likely to be sensitive to product defects and errors in the use of our products, including if the defects and
errors affect a physician’s ability to use the CCTA imaging results or result in a misdiagnosis. As a result,
the failure of our Heartflow Platform to perform as expected, including to reduce unnecessary invasive
testing or fail to enable physicians to optimize treatment planning or provide more efficient care, could
significantly impact a physician’s willingness to use and rely on the Heartflow Platform, which would
impair our operating results and our reputation. In addition, we may be subject to legal claims arising from
any such failures.
Bugs, defects or errors in the Heartflow Platform or the failure of third-party service providers we rely on,
such as AWS or other cloud storage and telecommunications services providers, to block a virus or
prevent a security breach could harm our reputation and adversely impact our results of operations.
Defects may cause our products to be vulnerable to security attacks, cause them to fail to produce
accurate results or temporarily interrupt our commercial operations. Because the techniques used by
computer hackers to access or sabotage networks change frequently and generally are not recognized
until launched against a target, we or our third party services providers may be unable to anticipate these
techniques and provide a corrective measure in time to protect the Heartflow Platform and our networks.
Potential defects may further cause the platform to be unavailable for a period of time, affect ability of a
customer to access information, result in a slow or suboptimal user experience, impact turnaround time of
an analysis, or provide other forms of degradation to the overall service.
We depend on our talent to grow and operate our business, and if we are unable to hire, integrate,
develop, motivate and retain our personnel, including highly qualified, technical personnel, we
may not be able to grow effectively and this could adversely affect our business.
To execute our growth plan, we must attract and retain highly qualified, technical personnel. Competition
for these personnel is intense, especially for engineers with high levels of expertise in AI, cloud
architecture, 3D visualization, research scientists and senior sales executives with experience in the
cardiology industry. We may experience difficulty in hiring and retaining employees with appropriate
qualifications. Many of the companies with which we compete for experienced personnel have greater
resources than we have. We also compete with companies that are believed to have high potential growth
opportunities or that have experienced rapid recent growth.
Our future success depends in part on our ability to continue to retain our executive officers and other key
employees and to recruit and hire new employees, including engineers, research scientists, case analysts
and production team members. We do not maintain “key person” insurance for any of our executives or
other employees. The loss of the services of any of these persons could impede the achievement of our
development, research and commercialization objectives. Any of our executive officers and other
employees may terminate employment with us at any time with no advance notice. The replacement of
any of our key personnel likely would involve significant time and costs, may significantly delay or prevent
the achievement of our business objectives and may harm our business.
In addition, job candidates and existing employees often consider the value of the stock awards they
receive in connection with their employment. If the perceived value of our stock awards declines or is
perceived to be less valuable than stock awards of other competing employers, it may adversely affect
our ability to recruit and retain highly skilled employees. In addition, many of our employees have become
or will soon become vested in a substantial amount of stock or number of stock options. Our employees
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may be more likely to leave us if the shares they own or the shares underlying their vested options have
significantly appreciated in value relative to the original purchase prices of the shares or the exercise
prices of the options, or if the exercise prices of the options that they hold are significantly below the
market price of our common stock. If we fail to attract new personnel, or fail to retain and motivate our
current personnel, our business and prospects could be adversely affected.
If we fail to properly manage our future growth, our business could suffer.
We intend to continue to grow and may experience periods of rapid growth and expansion, which could
place a significant additional strain on our limited personnel, information technology systems and other
resources. Our future growth will impose significant added responsibilities on management, including the
need to identify, recruit, train and integrate additional employees. In order to manage our operations and
growth we will need to continue to improve our operational and management controls, administrative and
operational infrastructure, reporting and information technology systems and financial internal control
procedures. Due to our limited financial resources and the limited experience of our management team in
managing a company with such future growth expectations, we may not be able to effectively manage the
expected expansion of our operations or recruit and train additional qualified personnel. Moreover, the
expected expansion of our operations may lead to significant costs and may divert our management and
business development resources. Any inability to manage growth could delay the execution of our
business plans or disrupt our operations.
In addition, as demand for the Heartflow Platform increases, we will need to scale our capacity, expand
customer service and enhance our internal quality assurance program. We may fail to implement any
increases in scale, related improvements and quality assurance, and we may fail to find appropriate
personnel to facilitate the growth of our business. Due to our limited resources, we may not be able to
effectively manage this simultaneous execution and expansion of our operations. This may result in
weaknesses in our infrastructure, give rise to operational mistakes, legal or regulatory compliance
failures, loss of business opportunities, loss of employees and reduced productivity among remaining
employees. The expansion of our operations may lead to significant costs and may divert financial
resources from other projects, such as the development of any new products. If our management is
unable to effectively manage our expected development and expansion, our expenses may increase
more than expected, our ability to generate or increase our revenue could be reduced and we may not be
able to implement our business strategy. Our future financial performance and our ability to compete
effectively and commercialize our Heartflow Plaque Analysis or any of our future products will depend in
part on our ability to effectively manage the future growth and expansion of our company. If we are unable
to manage our growth effectively, it may be difficult for us to execute our business strategy and our
business, financial condition, results of operations and prospects may be adversely affected.
Our business could be disrupted by catastrophic events.
The occurrence of any catastrophic event, including earthquake, fire, flood, tsunami or other weather
event, power loss, telecommunications failure, software or hardware malfunctions, pandemics, political
unrest, geopolitical instability, severe or prolonged economic downturn, cyberattack (including a
ransomware attack), war or terrorist attack, could result in lengthy interruptions in our ability to serve our
customers. In addition, acts of terrorism could cause disruptions to the internet or the economy as a
whole and could disproportionately affect us given our reliance on the internet and cloud-based services.
Specifically, our corporate headquarters are located in Mountain View, California and our production
related computers are currently located in our Mountain View office and in Austin, Texas. California is
considered to be an active earthquake zone, is prone to catastrophic fires, severe weather events and the
follow-on effects thereof, including tsunamis, mudslides, flooding, power outages and other events that
could disrupt our business. Texas is also subject to severe weather events, power outages and other
events that could disrupt our business. Any event that prevents our access to such facilities, physically or
virtually, would prevent us from operating our business and have an adverse effect on our business,
financial condition, results of operations and prospects.
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In addition, we rely on our network and third-party infrastructure, including our cloud-based infrastructure
which we outsource to Amazon Web Services (“AWS”), and enterprise applications, internal technology
systems and our website, for our development, marketing, operational support hosted services and sales
activities. In the event of a catastrophic event, we may be unable to continue our operations and may
endure system interruptions, delays in our ability to generate reports and output them to physicians,
reputational harm, delays in our product development, breaches of data security and loss of critical data,
all of which could have an adverse effect on our future operating results. If we are unable to develop
adequate plans to ensure that our business functions continue to operate during and after a disaster and
to execute successfully on those plans in the event of a disaster or emergency, our business would be
harmed. Even with our disaster recovery arrangements and insurance coverage, the ability of our
customers to access and utilize our Heartflow Platform could be interrupted, or we could close critical
data, which would have a negative impact on our business.
In addition, the occurrence of a catastrophic event could impact providers of CCTAs, contrast agents for
CCTAs or suppliers of iodinated contrast media or similar supplies that are necessary to perform CCTAs.
For example, in 2022, the shutdown of an iodinated contrast media manufacturing facility led to a
significant shortage of iodinated contrast media, which resulted in the cancellation or rescheduling of non-
urgent contrast-requiring cardiac procedures and imaging. Any of these events could affect demand for
the Heartflow Platform, which could have a material adverse effect on our business, financial condition,
results of operations and prospects.
Consolidation among healthcare providers could have an adverse effect on our business,
financial condition, results of operations and prospects.
In the United States, there has been a trend of consolidation among healthcare providers and purchasers
of medical technology devices, often to gain greater market power. As healthcare providers consolidate,
they may try to use their market power to negotiate price concessions or reductions for the products and
services they purchase and use, including our Heartflow Platform. As result, it is unknown whether such
purchasers will decide to stop purchasing our Heartflow Platform or demand discounts on our prices. If we
reduce our prices in response to these industry trends, our revenue would decrease, which could have a
material adverse effect on our business, financial condition, results of operations and prospects.
We may acquire other companies, solutions or technologies, which could divert our
management’s attention, result in additional dilution to our stockholders and otherwise disrupt
our operations and adversely affect our operating results.
We may in the future seek to acquire or invest in companies, solutions or technologies that we believe
could complement or expand our products, enhance our technical capabilities or otherwise offer growth
opportunities. The pursuit of potential acquisitions or other investment opportunities may divert the
attention of management and cause us to incur various expenses in identifying, investigating and
pursuing suitable transactions, whether or not they are consummated.
If we acquire any businesses, we may not be able to integrate the acquired personnel, operations and
technologies successfully, or effectively manage the combined business following the acquisition. We also
may not achieve the anticipated benefits from the acquired business due to a number of factors,
including: inability to integrate or benefit from acquired technologies or services in a profitable manner;
unanticipated costs or liabilities associated with the acquisition; incurrence of acquisition related costs;
difficulty integrating the accounting systems, operations and personnel of the acquired business;
difficulties and additional expenses associated with supporting legacy products and hosting infrastructure
of the acquired business; diversion of management’s attention from other business concerns; use of
resources that are needed in other parts of our business; adverse effects to our existing business
relationships with business partners and customers as a result of the acquisition; the potential loss of key
employees; and use of substantial portions of our available cash to consummate the acquisition.
In addition, a significant portion of the purchase price of any companies, solutions or technologies that we
may acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed
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for impairment at least annually. If our acquisitions do not yield expected returns, we may be required to
take charges to our operating results based on this impairment assessment process, which could
adversely affect our results of operations.
Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which
could adversely affect our operating results and cause the market price of our common stock to decline. If
an acquired company, solution or technology fails to meet our expectations and does not complement or
expand our products, enhance our technical capabilities or otherwise offer growth opportunities, our
business, financial condition, results of operations and prospects may suffer. In addition, the 2024 Credit
Agreement restricts our ability to pursue certain mergers, acquisitions, amalgamations or consolidations
that we may believe to be in our best interest.
Sales to customers outside the United States or with international operations expose us to risks
inherent in international sales.
In our fiscal years ended December 31, 2023 and 2024, sales to customers outside the United States
accounted for approximately           % and         % of our revenue, respectively. One element of our growth
strategy is to further expand our international operations and worldwide customer base. Operating in
international markets requires significant resources and management attention and subjects us to
regulatory, economic and political risks that are different from those in the United States.
We have limited operating experience in international markets, and we cannot assure you that our
existing presence in the United Kingdom, Europe and Japan or any expansion efforts into other
international markets will be successful. Our experience in the United States and international markets
may not be relevant to our ability to expand in other markets. Our international expansion efforts may not
be successful in creating further demand for our products outside of the United States or in effectively
selling our products in the international markets we enter. In addition, expansion into other international
markets will be costly and will impose additional burdens on our executive and administrative personnel,
finance and legal teams, sales and marketing teams and general managerial resources. If our efforts to
introduce our products into other international markets are not successful, we may have expended
significant resources without realizing the expected benefit. Ultimately, the investment required for
international expansion could exceed the results of operations generated from this expansion.
In addition, we operate in an industry which is subject to significant enforcement scrutiny by both U.S. and
non-U.S. government authorities. Our international business requires us to comply with U.S. and foreign
laws and regulations, such as various anti-bribery and anti-corruption laws, including the U.S. Foreign
Corrupt Practices Act (“FCPA”), the U.S. Fraud Act and in certain cases the U.K. Bribery Act of 2010.
Compliance with these is costly and exposes us to significant civil and criminal penalties for non-
compliance. Any failure to comply with applicable legal and regulatory obligations could impact us in a
variety of ways that include, but are not limited to, significant criminal, civil and administrative fines,
penalties and disgorgement of profits, including imprisonment of individuals, denial of export privileges,
seizure of shipments, restrictions on certain business activities and exclusion or debarment from
government contracting. Our international operations expose us to risks inherent in operating in foreign
jurisdictions that could adversely affect our business.
If we do not obtain and maintain international regulatory registrations, clearances or approvals for
our Heartflow Platform, we will be unable to market and sell our products outside of the United
States.
Any future sales of our products outside of the United States are subject to foreign regulatory
requirements that vary widely from country to country. While the regulations of some countries may not
impose barriers to marketing and selling our products or only require notification, others require that we
obtain the clearance or approval of a specified regulatory authority or a Certificate of Conformity of a
notified body. Complying with foreign regulatory requirements, including obtaining registrations,
clearances or approvals, can be expensive and time consuming and we may not receive regulatory
clearances or approvals in each country in which we plan to market our products or we may be unable to
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do so on a timely basis. The time required to obtain registrations, clearances or approvals, if required by
other countries, may be longer than that required for FDA clearance or approval, and requirements for
such registrations, clearances or approvals may significantly differ from FDA requirements. If we modify
our products, we may need to apply for regulatory clearances or approvals before we are permitted to sell
the modified product.
In addition, AI governing regulations around medical devices evolve rapidly and we may not continue to
meet the quality and safety standards required to maintain the authorizations that we have received. If we
are unable to maintain our authorizations in a particular country, we will no longer be able to sell the
applicable product in that country.
Regulatory registration, clearance, marketing authorization, or approval by the FDA does not ensure
registration, clearance, marketing authorization, or approval by foreign regulatory authorities or authorized
representatives in other countries. Registration, clearance, marketing authorization, or approval by one or
more foreign regulatory authorities or authorized representatives do not ensure registration, clearance,
marketing authorization, or approval by regulatory authorities in other foreign countries or by the FDA.
However, a failure or delay in obtaining registration or regulatory clearance or approval in one country
may have a negative effect on the regulatory process in others.
Risks related to data privacy and information technology
Failure to comply with laws and regulations affecting the transmission, security and privacy of
health information could result in significant penalties.
Federal, state and foreign government bodies and authorities have adopted, are considering adopting, or
may adopt laws and regulations regarding the collection, use, processing, storage and disclosure of
personal information obtained from consumers and individuals. Numerous federal and state laws and
regulations, including the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as
amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”),
govern the collection, dissemination, security, use and confidentiality of patient identifiable health
information. HIPAA and the HITECH Act require us to comply with standards for the use and disclosure of
health information within our company and with third-parties. The Standards for Privacy of Individually
Identifiable Health Information (“Privacy Standards”), and the Security Standards for the Protection of
Electronic Protected Health Information (“Security Standards”), under HIPAA establish a set of basic
national privacy and security standards for the protection of individually identifiable health information by
health plans, healthcare clearinghouses and certain healthcare providers, referred to as covered entities,
and the business associates with whom such covered entities contract for services. As a result, both
covered entities and business associates can be subject to significant civil and criminal penalties for
failure to comply with the Privacy Standards or the Security Standards.
HIPAA, the HITECH Act and the Affordable Care Act (“ACA”) also include standards for common
healthcare electronic transactions and code sets, such as claims information, plan eligibility, payment
information and the use of electronic signatures, unique identifiers, operating rules. Companies that bill
payors for healthcare-related services and device use are required to conform to the transaction
standards. CMS, on behalf of HHS, has the authority to investigate complaints and audit for compliance
with the HIPAA standards for transactions, code sets, unique identifiers and operating rules, including the
Administrative Simplification provisions of HIPAA and the ACA. Failure to comply with these standards,
and any investigation or audit and penalties imposed may have an adverse impact on our business.
HIPAA requires covered entities and business associates to develop and maintain policies and
procedures with respect to protected health information that is used or disclosed, including the adoption of
administrative, physical and technical safeguards to protect such information. The HITECH Act expands
the notification requirement for breaches of patient identifiable health information, restricts certain
disclosures and sales of patient identifiable health information and provides a tiered system for civil
monetary penalties for HIPAA violations. The Final HIPAA Omnibus Rule modifies the breach reporting
standard in a manner that will likely make more data security incidents qualify as reportable breaches.
The HITECH Act also increased the civil and criminal penalties that may be imposed against covered
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entities, business associates and possibly other persons and gave state attorneys general new authority
to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek
attorney fees and costs associated with pursuing federal civil actions. Additionally, states have adopted
comparable privacy and security laws and regulations that differ somewhat from federal and other states’
laws, and that govern where more stringent than federal law.
As a business associate under HIPAA, if we do not comply with the requirements of HIPAA, the HITECH
Act or applicable state privacy and security laws, we could be subject to criminal or civil sanctions that
could adversely affect our financial condition. The costs of complying with privacy and security related
legal and regulatory requirements are substantial and could have an adverse effect on our business. In
addition, we are unable to predict what changes to the HIPAA Privacy Standards and Security Standards
might be made in the future or how those changes could affect our business. Any new legislation or
regulation in the area of privacy and security of personal information, including personal health
information, could also adversely affect our business operations. In addition, a security breach could
require reporting to federal and state government entities, notification to affected individuals, expensive
investigation and remediation and mitigation. Government agencies could, in their discretion, impose fines
and penalties relating to the breach, that would have an adverse effect on our business.
Foreign data privacy regulations, such as the General Data Protection Regulation (E.U.) 2016/679
(“GDPR”), the European Union’s Data Protection Directive (Directive 95/46/EC), and the country specific
regulations that implement Directive 95/46/EC, also govern the processing of personally identifiable data,
and a number of these regulations are stricter than U.S. laws.
In addition, many states have laws, regulations and other authorities that govern data privacy, security
and breach notification. While some of these laws exempt protected health information subject to HIPAA,
they may apply to other personal information we collect, including personal information collected from
employees or from visitors to our website. Failure to comply with these authorities may have an adverse
impact on our business.
We expect to expend significant resources to comply with these laws and regulations. The functional and
operational requirements and costs of compliance with such laws and regulations may adversely impact
our business, and failure to enable our solutions to comply with such laws and regulations could lead to
significant fines and penalties imposed by regulators, as well as claims, lawsuits and contractual
indemnification obligations by or for our customers or third-parties and significant reputational harm.
We depend on our information technology systems, and any failure of these systems could harm
our business and adversely affect our business and operating results.
Information technology and telecommunications systems are vulnerable to damage from a variety of
sources, including telecommunications or network failures, failures during the processes of upgrading or
replacing software, power outages, hardware failures, user or human errors and natural disasters.
Moreover, despite network security and back up measures, some of our servers are potentially vulnerable
to cybersecurity incidents, including phishing attacks by computer hackers or other malicious human acts,
computer viruses, ransomware, malware and similar disruptive problems or other methods of
compromising employee or customer administrator credentials to access protected health information and
our internal data. Failures or significant downtime of our information technology or telecommunications
systems could prevent us from operating our business. Any disruption or loss of information technology or
telecommunications systems on which critical aspects of our operations depend could have an adverse
effect on our business and our operating results may suffer.
In addition, our brand, reputation and ability to attract, retain and serve our customers are dependent
upon the reliable performance of our Heartflow Platform, including our underlying information technology
systems and infrastructure. Our technical infrastructure may not be adequately designed with sufficient
reliability and redundancy to avoid performance delays or outages that could be harmful to our business.
If our Heartflow Platform is unavailable when physicians attempt to access it, or if it does not load as
quickly as they expect, physicians may not use our Heartflow Platform as often in the future, or at all. As
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our customer base continues to grow, we will need an increasing amount of technical infrastructure,
including network capacity and computing power, to continue to satisfy the needs of our users.
We rely upon AWS to operate our cloud offering; any disruption of or interference with our use of
AWS would adversely affect our business, results of operations and financial condition.
We outsource all of our cloud-based infrastructure to AWS. Our customers need to be able to access our
cloud-based infrastructure at any time, without interruption or degradation of performance. AWS runs its
own platform that we access, and we are, therefore, vulnerable to service interruptions at AWS. We may
experience interruptions, delays and outages in service and availability from time to time as a result of
problems with our AWS provided infrastructure. For example, in September 2015, AWS suffered a
significant outage that had a widespread impact on cloud-based software and services companies.
Although our customers were not affected by that outage, a similar outage could render our cloud offering
inaccessible to customers. Additionally, AWS has suffered outages at specific customer locations in the
past, rendering the customer unable to access our offering for periods of time. Lack of availability of our
AWS infrastructure could be due to a number of potential causes including technical failures, natural
disasters, fraud or security attacks that we cannot predict or prevent.
In addition, if the security of the AWS infrastructure is compromised or believed to have been
compromised, our business, results of operations and financial condition could be adversely affected. It is
possible that our customers and potential customers would hold us accountable for any breach of security
affecting the AWS infrastructure and we may incur significant liability from those customers and from third-
parties with respect to any breach affecting AWS systems. For more information, see the risk factor titled
“Failure to comply with laws and regulations affecting the transmission, security and privacy of health
information could result in significant penalties.” Because our agreement with AWS limits AWS’ liability for
damages, we may not be able to recover a material portion of our liabilities to our customers and third-
parties from AWS. Customers and potential customers may refuse to do business with us because of the
perceived or actual failure of our cloud offering as hosted by AWS and our operating results could be
harmed.
Our agreement with AWS allows AWS to terminate the agreement by providing 30 days’ advance notice,
and allows AWS to terminate in case of a material breach of contract if such breach is uncured for 30
days following receipt of notice of such breach, or to terminate immediately upon notice to us (i) if AWS
has the right to suspend our account; (ii) if AWS’ relationship with a third-party software or technology
provider terminates, expires or requires AWS to change the way it provides its services; or (iii) in order to
comply with the law or requests of governmental entities. Although we expect that we could receive
similar services from other third-parties, if any of our arrangements with AWS are terminated, we could
experience interruptions on our platform and in our ability to make our platform available to customers, as
well as delays and additional expenses in arranging alternative cloud infrastructure services.
If we fail to offer high quality customer support, our business and reputation could suffer.
Our customers rely on our customer support teams to resolve technical and operational issues if and
when they arise. We may be unable to respond quickly enough to accommodate short-term increases in
customer demand for customer support. We also may be unable to modify the nature, scope and delivery
of our customer support to compete with changes in customer support services provided by our
competitors or to adapt to product and industry developments. Increased customer demand for customer
support, without corresponding revenue, could increase costs and harm our results of operations. In
addition, as we continue to grow our operations and reach a large global customer base, we need to be
able to provide efficient customer support that meets our customers’ needs globally at scale. The number
of our customers has grown significantly, and that growth has and will continue to put additional pressure
on our support organization. As our business scales, we may need to engage third-party customer
support service providers, which could negatively impact the quality of our customer support if such third-
parties are unable to provide customer support that is as effective as that we provide ourselves. Our sales
are highly dependent on our business reputation and on positive recommendations from our existing
customers. Accordingly, high quality customer support is important for the renewal and expansion of our
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agreements with existing customers and any failure to maintain such standards of customer support, or a
market perception that we do not maintain high quality customer support, could harm our reputation, our
ability to sell product to existing and prospective customers and our business, financial condition, results
of operations and prospects.
We invest significantly in research and development, and to the extent our research and
development investments do not translate into new products, features or improvements to our
current products, or if we do not use those investments efficiently, our business, financial
condition, results of operations and prospects would be harmed.
A key element of our strategy is to invest significantly in our research and development efforts to
introduce new products, features and improvements aimed at increasing the value proposition of the
Heartflow Platform for our customers. For the years ended December 31, 2023 and 2024, our research
and development expenses were 41.2% and          % of our revenue, respectively. If we do not spend our
research and development budget efficiently or effectively on compelling innovation and technologies, our
business may be harmed and we may not realize the expected benefits of our strategy. Moreover,
research and development projects can be technically challenging and expensive. The nature of these
research and development cycles may cause us to experience delays between the time we incur
expenses associated with research and development and the time we are able to offer compelling
solutions and generate revenue, if any, from such investment. For example, investments made to expand
the Heartflow Platform to asymptomatic patients may be expensive, technically challenging, experience
delays and may not be successful. Additionally, anticipated customer demand for a product or feature we
are developing could decrease after the development cycle has commenced, and we would nonetheless
be unable to avoid substantial costs associated with the development of any such product or features. If
we expend a significant amount of resources on research and development and our efforts do not lead to
the successful introduction or improvement of products or features that are competitive in our current or
future markets, it would harm our business, financial condition, results of operations and prospects.
Our networks and those of our third-party service providers may become the target of bad actors
or security breaches that we cannot anticipate or successfully defend, which could have an
adverse impact on our business.
The Heartflow Platform involves the storage and transmission of our customers’ personal information or
identifying information of their patients. Increasingly, we and other companies are subject to a wide variety
of attacks on their networks on an ongoing basis. In addition to attacks from traditional computer
“hackers,” malicious code (such as viruses and worms), employee theft or misuse, ransomware attacks
and denial of service attacks, sophisticated nation state and nation state supported actors now engage in
intrusions and attacks (including advanced persistent threat intrusions), and add to the risks to our
internal networks and the information they store and process. Additionally, such bad actors frequently
attempt to fraudulently induce employees or customers into disclosing sensitive information such as user
names, passwords or other information in order to gain access to our customers’ data, their patient’s data
or our data, including our intellectual property and other confidential business information, or our
information technology systems. Because techniques used to obtain unauthorized access or to sabotage
systems change frequently and generally are not recognized until successfully launched against a target,
we may be unable to anticipate these techniques or to implement adequate preventative measures.
Despite significant efforts to create process and security barriers to such threats, it is virtually impossible
for us to entirely mitigate these risks. Any such breach could compromise our networks, creating system
disruptions or slowdowns and exploiting security vulnerabilities of our products, and the information stored
on our networks could be accessed, publicly disclosed, lost or stolen, which could subject us to liability
and cause us significant financial harm. Such breaches often result in reputational damage, negative
publicity, loss of industry data security certifications, customers and sales, increased costs to remedy any
problem, costly litigation and contractual indemnification obligations by or for impacted customers or third-
parties any of which could adversely affect our business. In addition, although we have, and intend to
maintain, insurance with respect to any such indemnification obligations, the coverage limits of our
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insurance policies may not be adequate and one or more successful claims brought against us may have
an adverse effect on our business, financial condition, results of operations and prospects.
We also rely on third-party service providers, such as cloud storage and telecommunications services
providers. Such service providers are also potentially vulnerable to cybersecurity incidents that could
result in the interruption of their services to us or unauthorized access, use or disclosure of our
confidential information and confidential information of our customers and protected health information of
their patients.
Our products are also targets for malicious cybersecurity acts. While some of our products contain
encryption or security algorithms to protect third-party content or patient information or other data stored
in our products, these products could still be hacked or targeted by malicious software programs or other
attacks or the encryption schemes could be compromised, breached or circumvented by motivated or
sophisticated hackers, which could harm our business and our reputation. In addition, see the risk factor
titled “Our Heartflow Platform and the data and models it generates could have bugs, defects or errors,
including human quality control errors, or otherwise fail to meet the expectations of patients, physicians
and third-party payors, which could adversely affect our reputation, business and operating results” for
more information on bugs, defects or errors in the Heartflow Platform.
Risks related to legal and regulatory matters
We face extensive, regulatory requirements to bring our products to market, and our failure to
receive and maintain regulatory clearances or approvals of our current and future products in the
United States or abroad or to comply with medical device regulatory requirements could
adversely affect our business.
In order to market any product, we must establish and comply with numerous and varying regulatory
requirements that vary by country and by region within certain countries. Approval, clearance or marketing
authorization in the United States by the FDA or by a regulatory authority or other body in another country
does not ensure approval by the regulatory authorities in other countries or jurisdictions or ensure
approval, clearance or other marketing authorization for the same conditions of use. Approval processes
vary among countries and can involve additional product testing and validation and additional
administrative review periods. In general, unless an exemption applies, in the U.S. current and future
versions of our products must receive pre-market notification (“510(k)”), de novo classification (“de novo”)
or pre-market approval (“PMA”) from the FDA before they can be marketed in the United States. We
cannot provide assurance that any of our future products, to the extent required, will be cleared, approved
or otherwise authorized by the FDA through any of its pre-market review processes, or that the FDA will
provide export certificates that are necessary to export certain products to certain countries. In addition,
the national health or social security organizations of certain foreign countries, including those outside
Europe, require our products to be qualified before they can be marketed in those countries. Failure to
receive, or delays in the receipt of, relevant foreign qualifications in the European Economic Area or other
foreign countries could have an adverse effect on our business.
Pre-market notification, de novo classification request or PMA applications may require support by data
from clinical trials. We are subject to requirements to publicly register and report the results of our clinical
trials. We must also abide by good clinical practice (“GCP”) requirements in the conduct and
documentation of our clinical trials and report to the FDA significant financial interests of investigators in
any clinical trials we submit to support marketing applications for our products. We, the FDA or an
institutional review board (“IRB”), may suspend or terminate clinical trials at any time on various grounds,
including a finding that patients are being exposed to an unacceptable health risk or that the treatment
does not have any effect. If the FDA considers data from our clinical trials to be actually or potentially
biased due to investigators’ financial interests, or unreliable due to GCP noncompliance, it can require us
to implement extensive data analyses or other corrective actions, or exclude data from consideration in
support of our marketing applications. These outcomes could result in delay or denial of FDA clearance or
approval and could result in the need to conduct additional, costly and time-consuming clinical trials.
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Additionally, we are required to obtain pre-market clearance or approval to market significantly modified
versions of our currently cleared Heartflow Platform, as well as to market the existing product for new
indications. The FDA requires us to make and document a determination as to whether or not a
modification requires a new 510(k) clearance, de novo classification or PMA approval; however, the FDA
can review and disagree with our decision. Although we have received 510(k) clearance from the FDA for
the current version of the Heartflow Platform, we may not be successful in receiving clearances, de novo
classifications or approvals in the future or the FDA may not agree with our decisions not to seek
clearances, de novo classifications or approvals for any new products or particular product modifications
or updates. The FDA may require us to obtain a new 510(k) clearance, de novo classifications or approval
for any past or future modification or a new indication for our existing products. Such submissions may
require the development and submission of additional data, may be time consuming and costly, and
ultimately may not be cleared or approved by the FDA.
If the FDA requires us to obtain pre-market clearances, de novo classifications or approvals for any
marketed modification to a previously cleared version of the Heartflow Platform, we may be required to
cease manufacturing and marketing of the modified product or to recall the modified product until we
obtain such FDA marketing authorization. The FDA may not clear, grant or approve such submissions in a
timely manner, if at all. The FDA also may change its policies, adopt additional regulations, or revise
existing regulations, each of which could prevent or delay pre-market clearance, de novo classification or
approval of our devices, or could impact our ability to market a device that was previously cleared. Any of
the foregoing could adversely impact our business and financial condition.
In addition, the FDA and other comparable foreign regulatory authorities may delay, limit or deny
clearance, de novo classification or approval of future versions of or future indications for our products or
any other potential product for many reasons, including, among others:
•the results of our clinical trials may not meet the level of statistically significant and clinically
meaningful efficacy with an acceptable safety profile as required by FDA, or other comparable
regulatory authorities in other countries, for marketing approval;
•the FDA or other comparable regulatory authorities in other countries may disagree with the number,
design, size, conduct or implementation of our clinical trials;
•the FDA or other comparable regulatory authorities in other countries may disagree with our
interpretation of data from our clinical trials;
•the FDA or other comparable regulatory authorities in other countries may not accept data generated
at one or more of our clinical trial sites;
•if our 510(k) notifications, de novo classification requests, PMA applications, or similar notifications or
applications, if and when submitted, are reviewed by the FDA or other comparable regulatory
authorities, as applicable, the regulatory authorities may have difficulties scheduling the necessary
review meetings in a timely manner, or may recommend against clearance or approval of our
application; or
•the FDA may determine that our 510(k) notifications for new indications, if and when submitted, must
follow a different regulatory pathway than we have attempted, and there may be potentially extended
standards, timelines, reviews (such as by an FDA Advisory Committee) and costs in order to pursue
approval.
Any of these factors, many of which are beyond our control, could jeopardize our ability to obtain
regulatory clearance, de novo classification or approval for current or future versions of the Heartflow
Platform and could result in difficulties and costs for us. If we fail to comply with regulatory requirements in
international markets or to obtain and maintain required marketing authorizations, or if marketing
authorizations in international markets are delayed, our ability to realize the full market potential of our
product candidates will be limited.
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Healthcare policy changes, including recently enacted legislation reforming the U.S. healthcare
system could have an adverse effect on our business, financial condition, results of operations
and prospects.
In the United States, there have been and continue to be a number of legislative and regulatory initiatives
to contain healthcare costs. Federal and state lawmakers regularly propose and, at times, enact
legislation that would result in significant changes to the U.S. healthcare system, some of which are
intended to contain or reduce the costs of medical products and services, including our own products.
Current and future legislative proposals to further reform healthcare or reduce healthcare costs may limit
coverage of or lower reimbursement for the diagnostic tests associated with the use of our products. The
cost containment measures that payors and providers are instituting and the effect of any healthcare
reform initiative implemented in the future could impact our revenue from the sale of our products.
We expect additional state and federal healthcare policies and reform measures to be adopted in the
future, particularly in light of the recent changes in the White House and Congress, any of which could
limit reimbursement for healthcare products and services or otherwise result in reduced demand for our
products or additional pricing pressure and have a material adverse effect on our industry generally and
on our customers. We cannot predict what other healthcare programs and regulations will ultimately be
implemented at the federal or state level or whether any future legislation or regulation in the United
States may negatively affect our business, financial condition, results of operations and prospects. The
continuing efforts of the government, insurance companies, managed care organizations and other
payors of healthcare services to contain or reduce costs of healthcare may adversely affect our ability to
set a price that we believe is fair for our products, our ability to generate revenue and achieve or maintain
profitability and the availability of capital.
Any changes of, or uncertainty with respect to, future coverage or reimbursement rates could affect
demand for our products, which may prevent us from being able to generate additional revenue or attain
profitability.
We are subject to many laws and governmental regulations affecting our marketed products, both
domestically and internationally, and any adverse regulatory action may adversely affect our
business, financial condition, results of operations and prospects.
The Heartflow Platform is subject to regulation by numerous government authorities, including the FDA
and comparable foreign authorities, after clearance or approval of current and future versions of the
product. To varying degrees, each of these authorities requires us to comply with laws and regulations
governing the development, design, testing, manufacture, labeling, advertising, promotion, distribution,
import and export of our products.
We currently have ongoing responsibilities under U.S., U.K., European Economic Area, Switzerland,
Canada, Australia, Japan, Saudi Arabia, United Arab Emirates, Bahrain and Israel (registered or licensed
regions) regulations. We are subject to periodic inspections and audits by the FDA, notified bodies,
authorized representatives and comparable foreign authorities to determine compliance with regulatory
requirements, including good manufacturing practices such as the Quality System Regulation of the FDA,
Medical Device Single Auditing Program, ISO 13485:2016, and EN ISO 13485:2021 concerning the EU,
establishment registration and device listing, medical device reporting, vigilance reporting of adverse
events, notification of corrections, recalls, field safety corrective actions and product labeling and
marketing. These inspections and audits can result in inspectional observations or reports, warning letters
or other forms of enforcement action. If the FDA or comparable foreign authorities conclude, as a result of
these inspections or audits or from any other source of information, that we are not in compliance with
applicable laws or regulations, or that our products are ineffective or pose an unreasonable health risk,
such authorities could ban these products, suspend or cancel our marketing authorizations, impose “stop
sale” and “stop import” orders, refuse to issue export certificates, detain or seize adulterated or
misbranded products, order a recall, repair, replacement, correction or refund of such products, require us
to conduct post-market surveillance studies or change the labeling for our products, or require us to notify
health professionals and others that the products present unreasonable risks of substantial harm to the
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public health. Failure to comply with regulatory requirements may also subject us to additional
administrative and judicially imposed sanctions, warning letters, civil and criminal penalties, injunctions,
interruption of manufacturing or clinical trials, total or partial suspension of production and resulting
adverse publicity.
Discovery of previously unknown problems with our products’ design or manufacture may result in
restrictions on the use of the Heartflow Platform, restrictions placed on us or our suppliers or withdrawal
of the existing regulatory clearance of the Heartflow Platform. The FDA or comparable foreign authorities
may also impose operating restrictions, enjoin and restrain violations of applicable law pertaining to
medical devices, assess civil or criminal penalties against our officers, employees or us or recommend
criminal prosecution of our company. Adverse regulatory action of a certain magnitude may restrict us
from effectively marketing and selling our products. In addition, negative publicity or product liability
claims resulting from any adverse regulatory action could have an adverse effect on our business,
financial condition, results of operations and prospects.
In many of the foreign countries in which we market our products, we are subject to extensive medical
device regulations that are similar to those of the FDA, including those in Europe. The regulation of our
products in Europe falls within the European Economic Area, which consists of the 27 member states of
the European Union, as well as Iceland, Liechtenstein and Norway. Only medical devices that comply with
certain conformity requirements of the Medical Devices Regulation (E.U.) 2017/745 (“MDR”) concerning
Medical Devices, or the E.U. Medical Devices Directive, Directive 2006/114/EC are allowed to be
marketed within the European Economic Area.
Foreign governmental regulations have become increasingly stringent and more extensive, and we may
become subject to even more rigorous regulation by foreign governmental authorities in the future.
Penalties for a company’s noncompliance with foreign governmental regulation could be severe, including
revocation or suspension of a company’s business license and civil or criminal sanctions. In some
jurisdictions, such as Germany, any violation of a law related to medical devices is also considered to be
a violation of unfair competition law. In such cases, governmental authorities, our competitors and
business or consumer associations may then file lawsuits to prohibit us from commercializing the
Heartflow Platform in such jurisdictions. Our competitors may also sue us for damages. Any domestic or
foreign governmental law or regulation imposed in the future may have an adverse effect on our business,
financial condition, results of operations and prospects.
Delays in the commencement or completion of future or ongoing clinical testing could result in
increased costs to us and delay our ability to market the Heartflow Platform for additional
indications.
We are currently enrolling patients for our DECIDE clinical trial to evaluate our Heartflow Plaque Analysis
in a real-world setting. We do not know whether our DECIDE clinical trial will be completed on schedule,
or at all. The commencement or completion of clinical trials can be disrupted for a variety of reasons,
including difficulties in:
•recruiting and enrolling patients to participate in, and investigators to conduct, a clinical trial;
•reaching agreements on acceptable terms with prospective clinical research organizations and trial
sites;
•obtaining approval of an investigational device exemption (“IDE”), application from the FDA or
equivalent authorization from foreign regulatory authorities, if required; or
•obtaining IRB approval to conduct a clinical trial at a prospective site.
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A clinical trial may also be suspended or terminated by us, an IRB, the FDA or other regulatory authorities
due to a number of factors, including:
•failure to conduct the clinical trial in accordance with regulatory requirements or in accordance with
our clinical protocols;
•inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting
in the imposition of a clinical hold;
•safety or effectiveness issues; or
•lack of adequate funding to continue the clinical trial.
In addition, changes in regulatory requirements and guidance may occur, and we may need to amend
clinical trial protocols to respond to such changes, which could impact the cost, timing or successful
completion of a clinical trial. If we experience delays in the commencement or completion of our clinical
trials, the commercial prospects for additional indications for our products will be harmed.
Interim, “top-line” and preliminary data from our clinical trials that we announce or publish from
time to time may change as more patient data become available and are subject to audit and
verification procedures that could result in material changes in the final data.
From time to time, we may publicly disclose interim, top-line or preliminary data from our clinical trials,
including our DECIDE clinical trial, which is based on a preliminary analysis of then-available data, and
the results and related findings and conclusions are subject to change following a more comprehensive
review of the data related to the particular trial or additional data collected at a later time. We also make
assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not
have received or had the opportunity to fully and carefully evaluate all data. As a result, the interim, top-
line or preliminary results that we report may differ from future results of the same trial, or different
conclusions or considerations may qualify such results, once additional data have been received and fully
evaluated. Interim, top-line or preliminary data also remain subject to audit and verification procedures
that may result in the final data being materially different from the interim, top-line or preliminary data we
previously announced. As a result, interim, top-line and preliminary data should be viewed with caution
until the final data are available. Adverse differences between interim data and final data could
significantly harm our business prospects. Further, disclosure of interim data by us or by our competitors
could result in volatility in our share price.
Further, others, including the FDA and other regulatory authorities or other bodies, may not accept or
agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh
the importance of data differently, which could impact the value of the particular trial, or the approvability
or potential for commercialization of the particular medical device. In addition, the information we choose
to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive
information, and others may not agree with what we determine is material or otherwise appropriate
information to include in our disclosure. The interim, top-line or preliminary data that we report may differ
from final results, and regulatory authorities and other bodies may disagree with the conclusions reached,
which may harm our ability to obtain marketing authorization for, and commercialize, our future products,
which could harm our business, financial condition, results of operations and prospects.
We may face product liability claims that could result in costly litigation and significant liabilities.
We may not be able to maintain adequate product liability insurance.
Development, marketing and clinical testing of our products may expose us to product liability and other
tort claims. Although we have, and intend to maintain, liability insurance, the coverage limits of our
insurance policies may not be adequate and one or more successful claims brought against us may have
an adverse effect on our business, financial condition, results of operations and prospects. For example,
the U.S. Supreme Court declined to hear an appeal where the U.S. Court of Appeals for the Ninth Circuit
ruled that the 1976 Medical Device Amendments to the Federal Food, Drug and Cosmetic Act did not
39
preempt state laws in a product liability case involving a medical device company. If other courts in the
United States adopt similar rulings, we may be subject to increased litigation risk in connection with our
products. Product liability claims could negatively affect our reputation, product sales, and our ability to
obtain and maintain regulatory approval for our products.
In addition, although we have product liability and clinical study liability insurance, this insurance is
subject to deductibles and coverage limitations. Our current product liability insurance may not continue to
be available to us on acceptable terms, if at all, and, if available, coverage may not be adequate to protect
us against any future product liability claims. If we are unable to obtain insurance at an acceptable cost,
on acceptable terms with adequate coverage, or at all, or otherwise protect against potential product
liability claims, we will be exposed to significant liabilities, which may harm our business. A product liability
claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured
liabilities could have an adverse effect on our reputation, business, financial condition, results of
operations and prospects.
The Heartflow Platform may be subject to recalls, which could be costly and could harm our
reputation and business.
We are subject to ongoing medical device reporting regulations that require us to report to the FDA or
similar governmental authorities in other countries if our products cause, or contribute to, death or serious
injury, or if they malfunction and would be likely to cause, or contribute to, death or serious injury if the
malfunction were to recur. We could voluntarily elect to, or the FDA and similar governmental authorities
in other countries could require us to, perform a correction, field safety corrective action, removal or other
recall of our products in the event of material deficiencies or defects in design, manufacturing or labeling
that could cause harm. Our products have been in the past, and may in the future, be the subject of
medical device reports of adverse events with the FDA’s Manufacturer and User Facility Device
Experience database, including reports of false negative results and incorrect or imprecise results or
readings. A government mandated or voluntary correction, field safety corrective action, removal or other
recall could occur as a result of manufacturing errors or design defects, including defects in labeling. Any
correction, field safety corrective action, removal or other recall would divert managerial and financial
resources and could lead to a substantial loss of physician and patient confidence in our products and,
consequently, have an adverse effect on our growth prospects or operating results. A correction, field
safety corrective action, removal or other recall could also result in substantial litigation, including product
liability claims, with liabilities well in excess of our insurance coverage limits. Any of these events could
have an adverse effect on our reputation, business, financial condition, results of operations and
prospects.
Off-label or other unlawful promotion of our products could result in costly investigations and
sanctions from the FDA and other regulatory bodies.
The Heartflow Platform has been cleared by the FDA, and the equivalent regulatory authorities in Israel,
Saudi Arabia, United Arab Emirates, licensed in Bahrain, CE Marked in the European Economic Area, the
United Kingdom and Australia, received medical device licensing in Canada and been approved for
marketing authorization in Japan by the Pharmaceuticals and Medical Devices Agency (“PMDA”), all for
specific indications for use. We may only promote or market our products for their specifically cleared or
approved indications. We train our marketing and sales force against promoting our products for uses
outside of the cleared or approved indications for use (“off-label use”).
If the FDA determines that our promotional materials or training constitute promotion of an off-label use,
or of claims that are not adequately substantiated or that are otherwise false or misleading, it could
request that we modify our training or promotional materials or subject us to regulatory or enforcement
actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or
criminal penalties. It is also possible that other federal, state or foreign enforcement authorities, including
the Federal Trade Commission or Department of Justice, might take action if they consider our business
activities to constitute promotion of an off-label use or other unlawful promotion, which could result in
significant penalties, including criminal, civil and administrative penalties, damages, fines, disgorgement,
40
exclusion from participation in government healthcare programs and the curtailment of our operations.
Any of these events could significantly harm our business, results of operations, financial condition and
prospects.
Further, the advertising and promotion of our products are subject to European Economic Area Member
States laws implementing the Medical Devices Directive concerning misleading and comparative
advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other European
Economic Area Member State legislation governing the advertising and promotion of medical devices.
European Economic Area Member State legislation may also restrict or impose limitations on our ability to
advertise our products directly to the general public. In addition, voluntary E.U. and national codes of
conduct provide guidelines on the advertising and promotion of our products to the general public and
may impose limitations on our promotional activities with healthcare professionals harming our business,
financial condition, results of operations and prospects.
We are subject to numerous federal, state and foreign healthcare fraud and abuse, compliance,
transparency and privacy laws and regulations, and a failure to comply with such laws and
regulations could have an adverse effect on our business; similarly, an investigation, inquiry or
audit by a government agency that alleges violations of law or regulations may have an adverse
effect on our business.
Our operations are, and will continue to be, directly and indirectly affected by various federal, state and/or
foreign healthcare laws, including those described below. In particular, because the use of our products
are directly or indirectly reimbursed by U.S. federal health care programs, for example Medicare, we are
subject to the federal Anti-Kickback Statute, a criminal law that prohibits, among other things, any person
or entity from knowingly and willfully offering, paying, soliciting or receiving any remuneration in cash or
in-kind (including any kickback or bribe, but also common forms of remuneration, such as service or
consulting fees, service fees, meals, travel expenses, discounts or rebates), directly or indirectly, overtly
or covertly, in cash or in kind, in return for or to induce the referring, ordering, leasing, purchasing or
arranging for or recommending the referring, ordering, purchasing or leasing of any good, facility, item or
service, for which payment may be made, in whole or in part, under federal healthcare programs, such as
the Medicare and Medicaid programs. The term “remuneration” has been broadly interpreted to include
anything of value. Although there are a number of statutory exceptions and regulatory safe harbors
protecting certain common activities, the exceptions and safe harbors are drawn narrowly. Failure to meet
all of the requirements of a statutory exception or regulatory safe harbor does not make the conduct per
se illegal under the Anti-Kickback Statute. Instead, the arrangement will be evaluated on a case-by-case
basis based on a cumulative review of all of its facts and circumstances. Several courts have interpreted
the statute’s intent requirement to mean that if any one purpose of an arrangement involving
remuneration is to induce referrals of (or purchases, uses or recommendations of prescriptions, uses or
purchases related to) federal healthcare program covered business, the Anti-Kickback Statute has been
implicated and potentially violated. Our practices may not in all cases meet all of the criteria for safe
harbor protection from Anti-Kickback Statute liability. Further, the ACA, amends the intent requirement of
the federal Anti-Kickback Statute and certain criminal healthcare fraud statutes. A person or entity no
longer needs to have actual knowledge of the statute or specific intent to violate it. In addition, the
government may assert that a claim for payment by a government health care program including items or
services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for
purposes of the false claims laws.
The U.S. civil False Claims Act prohibits, among other things, any person or entity from knowingly
presenting, or causing to be presented, a false or fraudulent claim for payment or approval to the federal
government or knowingly making, using, or causing to be made or used a false record or statement
material to a false or fraudulent claim to the federal government. A claim includes “any request or
demand” for money or property presented to the U.S. government. The civil False Claims Act also applies
to false submissions that cause the government to not receive a benefit to which it is entitled, such as a
discounted sales price for products covered by federal healthcare programs. Intent to deceive is not
required to establish liability under the civil False Claims Act. In addition, the civil False Claims Act
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includes a whistleblower provision that allows private citizens to bring claims on behalf of the U.S.
government alleging violations of the law. Whistleblowers may be entitled to up to as much as thirty
percent (30%) of the government’s financial recovery resulting from such claims. This incentivizes
potential whistleblowers to file complaints in federal court, which complaints are relied upon heavily by the
government to investigate and prosecute allegations of violations of both the civil False Claims Act and
the Anti-Kickback Statute. U.S. enforcement authorities or private whistleblowers acting on behalf of the
U.S. government may file complaints under the civil False Claims Act alleging that we have caused one or
more of our customers to submit false submissions for reimbursement from federal health care programs,
including Medicare, Medicaid, or the Veterans Affairs program due to alleged kickbacks, the sale of
adulterated or misbranded products, or the provision of false or misleading information to our customers
or other third-parties.
Additionally, under the federal Civil Money Penalty Statute, the Department of Health and Human
Services (“HHS”) may impose civil money penalties against entities that make offers to transfer or transfer
remuneration, including gifts, payments or routine waivers of co-payments or deductibles, to any
Medicare beneficiary in order to influence such individual to order or receive any item or service for which
payment may be made, in whole or in part, under Medicare and/or a State health care program.
Violations of these laws and regulations may result in significant criminal and/or civil fines and penalties,
as well as potential exclusion from participation in federal health care programs, that could significantly
impact our business and operations.
We are also subject to other federal and state fraud and abuse laws, including HIPAA’s fraud provisions,
which among other things, are criminal laws that prohibit, among other actions, knowingly and willfully
executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program,
including private payors, knowingly and willfully embezzling or stealing from a healthcare benefit program,
willfully preventing, obstructing, misleading, delaying or attempting to delay a criminal investigation of a
healthcare offense and knowingly and willfully falsifying, concealing or covering up a material fact or
making any materially false, fictitious or fraudulent statement or representation in connection with the
delivery of or payment for healthcare benefits, items or services. Many of these state laws closely mirror
the federal Anti-Kickback Statute or civil False Claims Act, but apply more broadly to products and
services that are paid for in any way, whereas the federal law pertains only to those reimbursed by federal
health care programs. In addition, many states have also adopted laws prohibiting fee-splitting (the
sharing of professional fees with non-state licensed persons or entities), restricting marketing activities
with physicians and/or prohibiting the practice of medicine (or the direction of the practice of medicine) by
corporations or others that are not specifically licensed to practice medicine within the state. While under
our model, licensed practitioners independently are providing any and all medical treatment and
diagnostic services for which a state license is required, these state laws still may apply to us.
We also are subject to foreign fraud and abuse laws and regulations, which vary by country, and can
prohibit many of the same activities addressed by U.S. laws.
We are also subject to the federal and state transparency reporting laws and regulations, gift bans and
compliance reporting provisions. The Physician Payments Sunshine Act (also known as Open Payments)
requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available
under Medicare, Medicaid or the State Children’s Health Insurance Program to report annually to the
Centers for Medicare and Medicaid Services information related to payments and other transfers of value
provided directly or indirectly to physicians (defined to include doctors, dentists, optometrists, podiatrists
and chiropractors), other healthcare providers (such as physician assistants and nurse practitioners) and
teaching hospitals. Such manufacturers are also required to annually report certain ownership and
investment interests held by such U.S. physicians and their immediate family members. Certain states,
like Massachusetts and Vermont have similar reporting requirements. Some states, like Vermont, prohibit
gifts and certain benefits from being provided to physicians licensed within that state. Other states, such
as California and Nevada mandate implementation of compliance programs to ensure compliance with
fraud and abuse laws and regulations, as well as with industry codes of conduct, such as the AdvaMed
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Code of Ethics on Interactions with Health Care Professionals. Our business is subject to these many
requirements, which can be nuanced and lacking in clear guidance. Our failure to comply with these laws
or regulations could result in substantial fines or penalties. Further, our reports made pursuant to these
laws may be used by enforcement authorities or whistleblowers to raise or substantiate allegations
against us.
We are also subject to the federal physician self-referral prohibitions, commonly known as the Stark Law,
which prohibits, among other things, physicians who have a financial relationship, including an
investment, ownership or compensation relationship with an entity that submits claims for payment to the
Medicare or Medicaid programs, from referring Medicare or Medicaid patients for certain “designated
health services,” which include diagnostic imaging services related to our products, unless an exception
applies. Similarly, entities may not bill Medicare or any other party for services furnished pursuant to a
prohibited referral. Many states have their own self-referral laws as well, which in some cases apply to all
payors, not just Medicare and Medicaid.
If our operations are found to be in violation of any of the laws described above or any other
governmental regulations that apply to us now or in the future, we may be subject to significant penalties,
including civil and criminal penalties, damages, fines, disgorgement, exclusion from governmental
healthcare programs and the curtailment or restructuring of our operations, any of which could adversely
affect our ability to operate our business and our financial results.
We also note that there is risk of our being found in violation of these laws by the fact that many of them
have not been fully, clearly or consistently interpreted by the regulatory authorities or the courts, and their
provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if
we successfully defend against it, could cause us to incur significant legal expenses and divert our
management’s attention from the operation of our business. Moreover, to achieve compliance with
applicable federal and state privacy, security and electronic transaction laws, we may be required to
modify our operations with respect to the handling of patient information. Similarly, to achieve compliance
with other applicable federal and state anti-fraud, open payments or other healthcare regulations, we may
be required to modify our operations. Implementing any of these modifications may prove costly. At this
time, we are not able to determine the full consequences to us, including the total cost of compliance, of
these various federal and state laws.
We are subject to U.S. and foreign anti-corruption and anti-money laundering laws with respect to
our operations and non-compliance with such laws can subject us to criminal and/or civil liability
and harm our business.
We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the
U.S. Travel Act, the USA PATRIOT Act, the U.K. Bribery Act of 2010 and Proceeds of Crime Act 2002 and
possibly other state and national anti-bribery and anti-money laundering laws in countries in which we
conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their
employees and third-party intermediaries from authorizing, promising, offering or providing, directly or
indirectly, improper payments or benefits to recipients in the public or private sector. We use third-party
representatives to support sales of our products abroad. In addition, as we increase our international
sales and business, we may engage with additional business partners and third-party intermediaries to
sell our products abroad and to obtain necessary permits, licenses and other regulatory approvals. We or
our third-party intermediaries may have direct or indirect interactions with officials and employees of
government agencies or state owned or affiliated entities. We can be held liable for the corrupt or other
illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners
and agents, even if we do not explicitly authorize or have actual knowledge of such activities.
Noncompliance with anti-corruption and anti-money laundering laws could subject us to whistleblower
complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement
of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension or
debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse
media coverage and other collateral consequences. If any subpoenas or investigations are launched, or
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governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal
litigation, our business, results of operations and financial condition could be materially harmed. In
addition, responding to any action will likely result in a materially significant diversion of management’s
attention and resources and significant defense and compliance costs and other professional fees. In
certain cases, enforcement authorities may even cause us to appoint an independent compliance monitor,
which can result in added costs and administrative burdens. As a general matter, enforcement actions
and sanctions could harm our business, financial condition, results of operations and prospects.
We are subject to governmental export and import controls that could impair our ability to
compete in international markets due to licensing requirements and subject us to liability if we are
not in compliance with applicable laws.
Our products are subject to export control and import laws and regulations, including the U.S. Export
Administration Regulations, U.S. Customs regulations and various economic and trade sanctions
regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control. Exports of
our products must be made in compliance with these laws and regulations. If we fail to comply with these
laws and regulations, we and certain of our employees could be subject to substantial civil or criminal
penalties, including: the possible loss of export or import privileges; fines, which may be imposed on us
and responsible employees or managers; and, in extreme cases, the incarceration of responsible
employees or managers. Obtaining the necessary authorizations, including any required license, for a
particular sale may be time consuming, is not guaranteed and may result in the delay or loss of sales
opportunities. In addition, changes in our products or changes in applicable export or import regulations
may create delays in the introduction and sale of our products in international markets, prevent our
customers with international operations from deploying our products or, in some cases, prevent the export
or import of our products to certain countries, governments or persons altogether. Any change in export or
import regulations, shift in the enforcement or scope of existing regulations or change in the countries,
governments, persons or technologies targeted by such regulations, could also result in decreased use of
our products, or in our decreased ability to export or sell our products to existing or potential customers
with international operations. Any decreased use of our products or limitation on our ability to export or
sell our products would likely adversely affect our business.
Furthermore, we incorporate encryption technology into certain of our products. Various countries
regulate the import of certain encryption technology, including through import permitting and licensing
requirements, and have enacted laws that could limit our ability to distribute our products or could limit our
customers’ ability to implement our products in those countries. Encrypted products and the underlying
technology may also be subject to export control restrictions. Governmental regulation of encryption
technology and regulation of imports or exports of encryption products, or our failure to obtain required
import or export approval for our products, when applicable, could harm our international sales and
adversely affect our revenue. Compliance with applicable regulatory requirements regarding the export of
our products, including with respect to new releases of our products, may create delays in the introduction
of our products in international markets, prevent our customers with international operations from
deploying our products throughout their globally distributed systems or, in some cases, prevent the export
of our products to some countries altogether.
Moreover, U.S. export control laws and economic sanctions programs prohibit the shipment of certain
products and services to countries, governments and persons that are subject to U.S. economic
embargoes and trade sanctions. Any violations of such economic embargoes and trade sanction
regulations could have negative consequences, including government investigations, penalties and
reputational harm.
Any future litigation against us could be costly and time-consuming to defend.
We have been in the past, and we may become in the future, subject to legal proceedings and claims that
arise in the ordinary course of business, such as claims brought by our third-party vendors, our customers
or their patients in connection with contractual disputes or the use of our Heartflow Platform, claims
brought by us or by competitors related to intellectual property or employment claims made by our current
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or former employees. Litigation might result in substantial costs and may divert management’s attention
and resources, which might seriously harm our business, financial condition, results of operations and
prospects. Insurance might not cover such claims, might not provide sufficient payments to cover all the
costs to resolve one or more such claims, and might not continue to be available at all or on terms
acceptable to us (including premium increases or the imposition of large deductible or co-insurance
requirements). A claim brought against us that is uninsured or underinsured could result in unanticipated
costs, potentially harming our business, financial condition, results of operations and prospects. In
addition, we cannot be sure that our existing insurance coverage will continue to be available on
acceptable terms or at all or that our insurers will not deny coverage as to any future claim.
Risks related to our intellectual property
If we are unable to obtain and maintain sufficient intellectual property rights, or the scope of our
rights is not sufficiently broad, third-parties could develop and commercialize technology and
products similar or identical to ours, and our ability to successfully commercialize our technology
and products may be adversely affected.
Our commercial success will depend, in part, on our ability to continue obtaining and maintaining
intellectual property protection for our technology and products, in both the United States and certain
other countries, successfully defending this intellectual property against third-party challenges and
successfully enforcing this intellectual property to prevent third-party infringement. We rely upon a
combination of patents, trade secrets, know-how, copyrights, trademarks, license agreements and
contractual provisions to establish our intellectual property rights and protect our products.
Our ability to protect our technologies and products from unauthorized or infringing use by third-parties
depends in substantial part on our ability to obtain and maintain valid and enforceable patents in both the
United States and certain other countries. The patent positions of medical technology and software
companies can be highly uncertain and involve complex legal, scientific and factual questions for which
important legal principles remain unresolved. In addition, the patent prosecution process is expensive,
time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce, defend or
license all necessary or desirable patents or patent applications at a reasonable cost or in a timely
manner, or in all jurisdictions.
We cannot guarantee that any patents will issue from any pending or future patent applications owned by
or licensed to us, or if issued, the breadth of such patent coverage. In particular, during prosecution of any
patent application, the issuance of any patents based on the application may depend upon our ability to
generate additional preclinical or clinical data that support the patentability of our proposed claims. We
may not be able to generate sufficient additional data on a timely basis, or at all. It is also possible that we
may fail to identify patentable aspects of inventions made in the course of our development and
commercial activities before it is too late to obtain patent protection on such inventions. If we fail to timely
file for patent protection in any jurisdiction, we may be precluded from doing so at a later date.
The issuance of a patent is not conclusive as to its inventorship, ownership, scope, validity or
enforceability, and our owned or licensed patents may be challenged in the courts or the patent offices of
the United States or abroad. Such challenges may result in a loss of exclusivity or in the patent’s claims
being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop
third-parties from using or commercializing similar or identical products, or limit the duration of patent
protection for our technology and products. In addition, changes in either the patent laws, implementing
regulations or interpretations of patent laws in the United States or foreign countries may diminish the
value of our patent rights.
Even if unchallenged, our owned or licensed patents may not provide us with exclusivity or commercial
value for our products or any significant protection against competitive products or prevent others from
designing around our claims. Our competitors might conduct research and development activities in
countries where we do not have patent rights (or in those countries where we do, under safe harbor
provisions) and then use the information learned from such activities to develop competitive products for
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sale in our major commercial markets. Further, if we encounter delays in regulatory approvals, the period
of time during which we could market our products under patent protection could be reduced. Any of
these outcomes could impair our ability to prevent competition from third-parties, which may have an
adverse impact on our business.
Patent applications are generally maintained in confidence until publication. In the United States, for
example, patent applications are maintained in secrecy for up to 18 months after their filing. Similarly,
publication of discoveries in scientific or patent literature often lag behind actual discoveries.
Consequently, we cannot be certain that we or our licensors were the first to invent, or the first to file
patent applications on our products. There is also no assurance that all of the potentially relevant prior art
relating to our patents and patent applications has been found, which could be used by a third-party to
challenge validity of our patents or prevent a patent from issuing from a pending patent application.
In addition to patents, proprietary trade secrets and unpatented know-how are important to our business.
For information about risks related to these intellectual property rights, see the risk factor titled “If we are
unable to protect the disclosure and use of our confidential information and trade secrets, the value of our
products and technologies and our business and competitive position could be harmed” below. We also
rely on the trademarks we own to distinguish our products from the products of our competitors. We
cannot guarantee that any trademark applications filed by us will be approved. Third-parties may also
oppose or attempt to cancel our trademark applications or trademarks, or otherwise challenge our use of
the trademarks. In the event that the trademarks we use are successfully challenged, we could be forced
to rebrand our products, which could result in loss of brand recognition, and could require us to devote
resources to advertising and marketing new brands. Competitors or other parties may adopt trade names
or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to
market confusion.
Further, we cannot provide assurance that competitors will not infringe the trademarks we use, or that we
will have adequate resources to enforce these trademarks. If we attempt to enforce our trademarks and
assert trademark infringement claims, a court may determine that the marks we have asserted are invalid
or unenforceable, or that the party against whom we have asserted trademark infringement has superior
rights to the marks in question. In this case, we could ultimately be forced to cease use of such
trademarks. We may license our trademarks and trade names to third-parties, such as distributors.
Though these license agreements may provide guidelines for how our trademarks and trade names may
be used, a breach of these agreements or misuse of our trademarks and trade names by our licensees
may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names.
Over the long term, if we are unable to establish name recognition based on our trademarks and trade
names, then we may not be able to compete effectively and our business may be adversely affected.
For information about risks related to our inability to protect our intellectual property rights outside the
United States, see the risk factor titled “We may not be able to adequately protect our intellectual property
rights throughout the world” below.
If we are unable to protect the disclosure and use of our confidential information and trade
secrets, the value of our products and technologies and our business and competitive position
could be harmed.
In addition to patent protection, we also rely on other intellectual property rights, including trade secrets,
know-how, and/or other proprietary information that is not patentable or that we elect not to patent.
However, trade secrets can be difficult to protect, and some courts are less willing or unwilling to protect
trade secrets. Although we have taken steps to protect our trade secrets and unpatented know-how,
including by entering into confidentiality agreements with third-parties, and proprietary information and
invention agreements with our employees, consultants and advisors, third-parties may still obtain this
information or we may be unable to protect our rights. There can be no assurance that binding
agreements will not be breached, that we would have adequate remedies for any breach, or that our trade
secrets and unpatented know-how will not otherwise become known or be independently discovered by
our competitors. We also seek to preserve the integrity and confidentiality of our data and trade secrets
46
by maintaining physical security of our premises and physical and electronic security of our information
technology systems. While we have confidence in these individuals, organizations and systems, our
security measures may be breached, and we may not have adequate remedies for any such breach.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we
would have no right to prevent them, or those to whom they communicate it, from using that information to
compete with us. Any exposure of our trade secrets and other proprietary information would impair our
competitive advantages and could have a material adverse effect on our business, financial condition,
results of operations and prospects. In particular, a failure to protect our proprietary rights may allow
competitors to copy our products or technologies, which could adversely affect our pricing and market
share. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products
or technologies that we consider proprietary.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our trade
secret rights and related confidentiality, non-disclosure and non-use provisions, and outcomes of such
litigation are unpredictable. Enforcing a claim that a party illegally disclosed, used or misappropriated a
trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. While we
use commonly accepted security measures, trade secret claims are often based on a combination of
federal and state law in the United States, and the criteria for protection of trade secrets can vary among
different jurisdictions. If the steps we have taken to maintain our trade secrets are deemed inadequate,
we may have insufficient recourse against third-parties for misappropriating the trade secret. In addition,
agreement terms that address non-competition are difficult to enforce in many jurisdictions and might not
be enforceable in certain cases. Even if we were to be successful in the enforcement of our claims, we
may not be able to obtain adequate remedies.
Reliance on third-parties requires us to share our trade secrets, which increases the possibility
that a competitor will discover them or that our trade secrets will be misappropriated or disclosed
to others.
Any collaboration or other engagement with third-parties for the development of our products may require
us, at times, to share trade secrets with them. We may also conduct joint research and development
programs that may require us to share trade secrets under the terms of our research and development
partnerships or similar agreements. We seek to protect our trade secrets and other proprietary technology
in part by entering into confidentiality agreements with third-parties prior to beginning research or
disclosing proprietary information. These agreements typically limit the rights of the third-parties to use or
disclose our confidential information, including our trade secrets. Despite the contractual provisions
employed when working with third-parties, the need to share trade secrets and other confidential
information increases the risk that such trade secrets become known by our competitors, are
inadvertently incorporated into the technology of others, or are disclosed or used in violation of these
agreements. Given that our proprietary Heartflow Platform is based, in part, on our know-how and trade
secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure could have
an adverse effect on our business, financial condition, results of operations and prospects.
In addition, these agreements typically restrict the ability of our advisors, employees, third-party
contractors and consultants to publish data potentially relating to our trade secrets. Despite our efforts to
protect our trade secrets, we may not be able to prevent the unauthorized disclosure or use of our
technical know-how or other trade secrets by the parties to these agreements. Moreover, we cannot
guarantee that we have entered into such agreements with each party that may have or have had access
to our confidential information or proprietary technology and processes. Monitoring unauthorized uses
and disclosures is difficult, and we do not know whether the steps we have taken to protect our
proprietary technologies will be effective. If any of the collaborators, scientific advisors, employees,
contractors and consultants who are parties to these agreements breaches or violates the terms of any of
these agreements, we may not have adequate remedies for any such breach or violation, and we could
lose our trade secrets as a result. Moreover, if confidential information that is licensed or disclosed to us
by our partners, collaborators, or others is inadvertently disclosed or subject to a breach or violation, we
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may be exposed to liability to the owner of that confidential information. Enforcing a claim that a third-
party illegally obtained and is using our trade secrets, like patent litigation, is expensive and time
consuming, and the outcome is unpredictable. In addition, courts outside the United States are
sometimes less willing to protect trade secrets, and we may need to share our trade secrets and
proprietary know-how with current or future partners, collaborators, contractors and others located in
countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or
foreign actors, and those affiliated with or controlled by state actors.
Obtaining and maintaining our patent protection depends on compliance with various procedural,
document submission, fee payment and other requirements imposed by governmental patent
agencies, and our patent protection could be reduced or eliminated for noncompliance with these
requirements.
The U.S. Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies
require compliance with a number of procedural, documentary, fee payment and other similar provisions
during the patent application process. In addition, periodic maintenance fees, renewal fees, annuity fees,
and various other government fees on patents and/or applications will be due to be paid to the USPTO
and various governmental patent agencies outside of the United States over the lifetime of our patents
and/or applications and any patent rights we may obtain in the future. We have systems in place to
remind us to pay these fees, and we employ outside firms to remind us to pay annuity fees due to patent
agencies on our patents and pending patent applications. In many cases, an inadvertent lapse can be
cured by payment of a late fee or by other means in accordance with the applicable rules. However, there
are situations in which noncompliance can result in abandonment or lapse of the patent or patent
application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an
event, our competitors might be able to enter the relevant market, which would have an adverse effect on
our business. Noncompliance events that could result in abandonment or lapse of a patent or patent
application include failure to respond to official actions within prescribed time limits, non-payment of fees
and failure to properly legalize and submit formal documents.
Changes in patent law, precedents and policies in the United States and other jurisdictions could
diminish the value of patents in general, thereby impairing our ability to protect our products.
Our ability to obtain patents is highly uncertain because, to date, some legal principles remain unresolved,
and there has not been a consistent policy regarding the breadth or interpretation of claims allowed in
patents in the United States. Furthermore, the specific content of patents and patent applications that are
necessary to support and interpret patent claims is highly uncertain due to the complex nature of the
relevant legal, scientific, and factual issues. The United States Supreme Court has ruled on several
patent cases in recent years, either narrowing the scope of patent protection available in certain
circumstances or weakening the rights of patent owners in certain situations. Changes in either the patent
laws or interpretations of patent laws in the United States or other jurisdictions may diminish the value of
our intellectual property. In the United States, in certain circumstances, court rulings may narrow the
scope of patent protection and weaken the rights of patent owners. We cannot predict how decisions by
the courts, the U.S. Congress, the USPTO or changes in the patent laws of other jurisdictions may impact
the value of our patents. Changes in the laws, regulations, precedents and procedures governing patents
could have a material adverse effect on our existing patent portfolio and our ability to protect and enforce
our intellectual property in the future, which could have a material adverse effect on our business,
financial condition, results of operations and prospects.
Further, patent coverage in medical devices and technologies is a subject of evolution and differences
between countries. This is especially true of the definition of patentable subject matter which affects both
computer related inventions and biological inventions. This evolution may cause current granted patents
to be considered non-patent eligible or prevent us from protecting future inventions. U.S. Supreme Court
and Federal Circuit decisions interpreting and/or limiting the scope of patentable subject matter under 35
U.S.C. § 101, in addition to examination guidelines from the USPTO, have made it more difficult for
patentees to obtain and/or maintain patent claims in the United States that are directed to medical
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technologies involving computer-implemented applications. Several precedential decisions regarding
patentable subject matter are of particular relevance to patents in the computer-implemented applications
space. Our efforts to seek patent protection for our technologies and products may be impacted by the
evolving case law and guidance or procedures issued by the USPTO or authorities in other jurisdictions
based on such evolving case law.
Similarly, changes in patent laws and regulations in other countries or jurisdictions, changes in the
governmental bodies that enforce them or changes in how the relevant governmental authority enforces
patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we may
obtain in the future. For example, the complexity and uncertainty of European patent laws have also
increased in recent years. In Europe, a new unitary patent system took effect June 1, 2023, which will
significantly impact European patents, including those granted before the introduction of the new unitary
patent system. Under the unitary patent system, European applications have the option, upon grant of a
patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the Unitary Patent Court
(“UPC”). As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty
of any litigation. Patents granted before the implementation of the UPC have the ability to opt out of the
jurisdiction of the UPC and remain as national patents in the UPC countries. The UPC will provide our
competitors with a new forum to centrally revoke European patents, and allow for the possibility of a
competitor to obtain pan-European injunctions, since patents that remain under the jurisdiction of the UPC
will be potentially vulnerable to a single UPC-based revocation challenge that, if successful, could
invalidate the patent in all countries who are signatories to the UPC. We cannot predict with certainty the
long-term effects of any potential changes.
Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the
same manner as the laws of the United States and Europe. As a result, we may encounter significant
problems in protecting and defending our intellectual property both in the United States and abroad. For
example, if the issuance in a given country of a patent covering an invention is not followed by the
issuance in other countries of patents covering the same invention, or if any judicial interpretation of the
validity, enforceability or scope of the claims or the written description or enablement, in a patent issued in
one country is not similar to the interpretation given to the corresponding patent issued in another country,
our ability to protect our intellectual property in those countries may be limited. Changes in either patent
laws or in interpretations of patent laws in the United States and other countries may materially diminish
the value of our intellectual property or narrow the scope of our patent protection.
In addition, on September 16, 2011, the Leahy-Smith America Invents Act (the “Leahy-Smith Act”) was
signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law.
Assuming that other requirements for patentability are met, prior to March 16, 2013, in the United States,
the first to invent the claimed invention was entitled to the patent, while outside the United States, the first
to file a patent application was entitled to the patent. On or after March 16, 2013, under the Leahy-Smith
Act, the United States transitioned to a first inventor to file system in which, assuming that other
requirements for patentability are met, the first inventor to file a patent application will be entitled to the
patent on an invention regardless of whether a third-party was the first to invent the claimed invention.
Under this system, a third-party that files a patent application in the USPTO before us could be awarded a
patent covering an invention of ours even if we had made the invention before it was made by such third-
party. Since patent applications in the United States and most other countries are confidential for a period
of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i)
file any patent application related to our products or (ii) invent any of the inventions claimed in our or our
licensors’ patents or patent applications.
The Leahy-Smith Act also changed the way patent applications are prosecuted, including by allowing
third-party submission of prior art to the USPTO during patent prosecution and additional procedures to
challenge the validity of a patent by USPTO administered post-grant proceedings to attack the validity of
a patent. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary
standard in U.S. federal courts necessary to invalidate a patent claim, a third-party could potentially
provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the
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same evidence might not be sufficient to invalidate the claim if presented in a district court action.
Accordingly, third-parties may use USPTO proceedings to invalidate our patent claims that would not
have been invalidated if first challenged in a district court action. Therefore, the Leahy-Smith Act and its
implementation could increase the uncertainties and costs surrounding the prosecution of our patent
applications and the enforcement or defense of our issued patents, which could have a material adverse
effect on our business, financial condition, results of operations and prospects.
We may not be able to adequately protect our intellectual property rights throughout the world.
Our patent portfolio includes patents and patent applications in countries outside of the United States,
including Japan, Korea, China, Canada, Australia, Israel, India and countries in Europe. The requirements
for patentability differ from country to country, the breadth of allowed patent claims can be inconsistent,
the scope of coverage provided by these patents varies and the laws of some foreign countries may not
protect our intellectual property rights to the same extent as laws in the United States. In addition, filing,
prosecuting and defending patents on our products in all countries throughout the world would be
prohibitively expensive. For those countries where we do not have granted patents, we may not have any
ability to prevent the unauthorized sale of our products.
In addition, we may decide to abandon national and regional patent applications before they are granted.
The examination of each national or regional patent application is an independent proceeding. As a result,
patent applications in the same family may issue as patents in some jurisdictions, such as in the United
States, but may issue as patents with claims of different scope or may even be refused in other
jurisdictions. It is also quite common that depending on the country, the scope of patent protection may
vary for the same product or technology. For example, certain jurisdictions do not allow for patent
protection with respect to methods of treatment.
Consequently, we may not be able to prevent third-parties from practicing our inventions in all countries
outside the United States. Competitors may use our technologies in jurisdictions where we have not
obtained patent protection to develop their own products and, further, may export otherwise infringing
products to territories in which we have patent protection that may not be sufficient to terminate infringing
activities. Accordingly, our efforts to enforce our intellectual property and proprietary rights around the
world may be inadequate to obtain a significant commercial advantage from the intellectual property that
we develop or license.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant
licenses to third-parties, government agencies or government contractors. In these countries, the patent
owner may have limited remedies, which could materially diminish the value of such patent. If we or any
of our licensors is forced to grant a license to third-parties with respect to any patents relevant to our
business, our competitive position may be impaired, and our business, financial condition, results of
operations and prospects may be adversely affected.
We do not seek or have patent rights in certain foreign countries in which a market may exist. Accordingly,
our efforts to protect our intellectual property rights in such countries may be inadequate, which may have
an adverse effect on our ability to successfully commercialize our products in all of our expected
significant foreign markets. Moreover, in foreign jurisdictions where we do have patent rights, proceedings
to enforce such rights could result in substantial costs and divert our efforts and attention from other
aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, and our
patent applications at risk of not issuing. Additionally, such proceedings could provoke third-parties to
assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other
remedies awarded, if any, may not be commercially meaningful. Thus, we may not be able to stop a
competitor from marketing and selling in foreign countries products that are the same as or similar to our
products, and our competitive position in the international market would be harmed.
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We may be involved in lawsuits to protect or enforce our patents or other intellectual property, or
the patents of our licensors, which could be expensive, time consuming and unsuccessful.
Competitors or other third-parties may infringe, misappropriate or otherwise violate our owned or licensed
patents, trade secrets or other intellectual property. To counter infringement or unauthorized use, we may
be compelled to file infringement or misappropriation claims, which can be expensive and time
consuming. We do not carry intellectual property insurance that would cover such claims. In certain
circumstances it may not be practicable or cost effective for us to enforce our intellectual property rights
fully, particularly in certain developing countries or where the initiation of a claim might harm our business
relationships. If we initiate legal proceedings against a third-party to enforce a patent covering our
products, the defendant could counterclaim that our patent(s) are invalid and/or unenforceable. In patent
litigation in the United States, counterclaims alleging invalidity and/or unenforceability are common, and
there are numerous grounds upon which a third-party can assert invalidity or unenforceability of a patent.
In an infringement proceeding, a court may decide that a patent we own or license is not valid, is
unenforceable or is not infringed, or may refuse to stop the other party from using the technology at issue
on the grounds that our patents do not cover the technology in question. The outcome following legal
assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for
example, we cannot be certain that there is no invalidating prior art. If a defendant were to prevail on a
legal assertion of invalidity and/or unenforceability, we may lose some, and perhaps all, of the patent
protection covering our products. An adverse result in any litigation or defense proceeding could put one
or more of our patents at risk of being invalidated or interpreted narrowly, could put our patent
applications at risk of not issuing and could have a material adverse impact on our business.
Our defense of litigation may fail and, even if successful, may result in substantial costs and distract our
management and other employees. Even if we establish infringement, the court may decide not to grant
an injunction against further infringing activity and instead award only monetary damages, which may or
may not be an adequate remedy. For example, the amount of any monetary damages may be inadequate
to compensate us for damage as a result of the infringement and the proceedings. We may not be able to
prevent, alone or with our suppliers, misappropriation of intellectual property rights important to our
business, particularly in countries where the laws may not protect those rights as fully as in the United
States.
Furthermore, because of the substantial amount of discovery required in connection with intellectual
property litigation, there is a risk that some of our confidential information could be compromised by
disclosure during this type of litigation. There could also be public announcements of the results of
hearings, motions or other interim proceedings or developments. If securities analysts or investors
perceive these results to be negative, it could have an adverse effect on the price of our common stock.
Third-party defendants may challenge any patent we own or in-license through adversarial proceedings in
the issuing offices, which could result in the invalidation or unenforceability of some or all of the relevant
patent claims. If a third-party asserts a substantial new question of patentability against any claim of a
U.S. patent we own or license, the USPTO may grant a request for reexamination, which may result in a
loss of scope of some claims or a loss of the entire patent. The adoption of the Leahy-Smith Act has
established additional opportunities for third-parties to invalidate U.S. patent claims, including inter partes
review and post grant review, on the basis of lower legal standards than reexamination and additional
grounds. Outside of the United States, patents we own or license may become subject to patent
opposition or similar proceedings, which may result in loss of scope of some claims or loss of the entire
patent. Participation in adversarial proceedings is very complex, expensive and may divert our
management’s attention from our core business and may result in unfavorable outcomes that could
adversely affect our ability to prevent third-parties from competing with us.
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We may be subject to claims challenging the inventorship or ownership of our patents and other
intellectual property rights or alleging that we have violated the intellectual property rights or
other proprietary rights of third-parties.
Our commercial success depends, in part, upon our ability to develop, manufacture, market and sell our
products and use our proprietary technologies without infringing the proprietary rights and intellectual
property of third-parties. The medical device industry is characterized by extensive and complex litigation
regarding patents and other intellectual property rights. We may be exposed to, or threatened with, future
litigation by third-parties having patent or other intellectual property rights alleging that our products or
proprietary technologies infringe on their intellectual property rights. There is a risk that third-parties may
choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us. Even
if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-
party patents are valid, enforceable and infringed, which could have a negative impact on our ability to
commercialize our products. This includes litigation, or threatened litigation, with non-practicing entities
that have no relevant product revenue and against whom our own patent portfolio may have no deterrent
effect. The legal threshold for initiating litigation or contested proceedings is low, so that even lawsuits or
proceedings with a low probability of success might be initiated and require significant resources to
defend.
We may also be subject to claims that former employees, collaborators or other third-parties have an
ownership interest in our patent rights or other intellectual property, for example, based on conflicting
obligations of consultants or others who are involved in developing our products. Although it is our policy
to require our employees and contractors who may be involved in the conception or development of
intellectual property to execute agreements assigning such intellectual property to us, we may be
unsuccessful in executing such an agreement with each party who, in fact, conceives or develops
intellectual property that we regard as our own, and we cannot be certain that our agreements with such
parties will be upheld in the face of a potential challenge, or that they will not be breached, for which we
may not have an adequate remedy. The assignment of intellectual property rights may not be self-
executing or the assignment agreements may be breached, and litigation may be necessary to defend
against these and other claims challenging inventorship or ownership. If we fail in defending any such
claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such
as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a
material adverse effect on our business. Even if we are successful in defending against such claims,
litigation could result in substantial costs and be a distraction to management and other employees.
We employ individuals who were previously employed at other medical technology companies. In
addition, we use publications that are subject to copyright, as well as proprietary information and
materials from third-parties in our research. Some of the information and materials we use from third-
parties may be subject to agreements that include restrictions on use or disclosure. Although we strive to
ensure proper safeguards, we cannot guarantee strict compliance with such agreements, nor can we be
sure that our employees, consultants and advisors do not use proprietary information, materials or know-
how of others in their work for us. In addition, we may be subject to claims that we or our employees,
consultants or independent contractors have inadvertently or otherwise used or disclosed alleged trade
secrets or other proprietary information of former employers or other third-parties. Although we have
procedures in place that seek to prevent our employees and consultants from using the intellectual
property, proprietary information, know how or trade secrets of others in their work for us, we may in the
future be subject to claims that we caused an employee to breach the terms of his or her non-competition
or non-solicitation agreement, or that we or these individuals have, inadvertently or otherwise, used or
disclosed the alleged trade secrets or other proprietary information of a former employer or competitor.
We may also be subject to claims that former employers or other third-parties have an ownership interest
in our future patents. In addition, we may be subject to claims that we are infringing other intellectual
property rights, such as trademarks or copyrights, and to the extent that our employees, consultants or
contractors use intellectual property or proprietary information owned by others in their work for us,
disputes may arise as to the rights in related or resulting know-how and inventions. Litigation may be
necessary to defend against these claims. There is no guarantee of success in defending these claims,
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and even if we are successful, litigation could result in substantial cost and be a distraction to our
management and other employees.
An unfavorable outcome for any such claim could require us to cease using the related technology or to
attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing
party does not offer us a license on commercially reasonable terms.
If a third-party claims that we infringe its intellectual property rights, we may face a number of issues,
including:
•infringement and other intellectual property claims which, regardless of merit, may be expensive and
time consuming to litigate and may divert our management’s attention from our core business;
•substantial damages for infringement, which we may have to pay if a court decides that the product at
issue infringes or violates the third-party’s rights, and if the court finds that the infringement was
willful, we could be ordered to pay treble damages and the patent owner’s attorneys’ fees;
•a court prohibiting us from selling or licensing the product unless the third-party licenses its product
rights to us, which it is not required to do;
•if a license is available from a third-party, we may have to pay substantial royalties, upfront fees or
grant cross licenses to intellectual property rights for our products; and
•redesigning our products or processes so they do not infringe, which may not be possible or may
require substantial monetary expenditures and time.
In order to successfully challenge the validity of a U.S. patent in federal court, we would need to
overcome a presumption of validity. As this burden is a high one requiring us to present clear and
convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court
of competent jurisdiction would invalidate the claims of any such U.S. patent. Foreign courts will have
similar burdens to overcome in order to successfully challenge a third-party claim of patent infringement.
Some of our competitors may be able to sustain the costs of complex patent litigation more effectively
than we can because they have substantially greater resources. In addition, any uncertainties resulting
from the initiation and continuation of any litigation could have an adverse effect on our ability to raise
additional funds or on our business, financial condition, results of operations and prospects.
The terms of our patents may not be sufficiently long to effectively protect our products and
business.
Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20
years after its first effective non-provisional filing date, but can be shorter due to terminal disclaimers or
similar term reductions in other jurisdictions. Although various extensions may be available, the term of a
patent, and the protection it affords, is limited. Even if patents covering our technologies or products are
obtained, once the patent term has expired, we may be open to competition. In addition, although upon
issuance in the United States, a patent’s term can be increased based on certain delays caused by the
USPTO, this increase can be reduced or eliminated based on certain delays caused by the patent
applicant during patent prosecution. Given the amount of time required for the development, testing and
regulatory review of products, patents protecting such product candidates might expire before or shortly
after such products are commercialized. If we do not have sufficient patent life to protect our technologies
and products, our business, financial condition, results of operations and prospects will be adversely
affected.
If we do not obtain additional protection under the Hatch-Waxman Amendments or similar foreign
legislation, our business may be materially affected.
Depending upon the timing, duration and specifics of FDA marketing approval for our future products, one
or more of our U.S. patents may be eligible for limited patent term restoration under the Drug Price
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Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Amendments”). The Hatch-
Waxman Amendments permit a patent term extension of up to five years beyond the normal expiration of
the patent as compensation for patent term lost during product development and the FDA regulatory
review process, which is limited to the approved indication (or any additional indications approved during
the period of extension). This extension is limited to one patent that covers the approved product, the
approved use of the product, or a method of manufacturing the product. A patent term extension cannot
extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and
only those claims covering such approved product, a method for using it or a method for manufacturing it
may be extended. However, the applicable authorities, including the FDA and the USPTO in the United
States, and any equivalent regulatory authority in other countries or areas, may not agree with our
assessment of whether such extensions are available, and may refuse to grant extensions to our patents,
or may grant more limited extensions than we request. We may not be granted an extension because of,
for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant
patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or
scope of patent protection afforded could be less than we request. If we are unable to obtain patent term
extension or restoration of the term of any such extension is less than we request, our competitors may
obtain approval for competing products following our patent expiration, and our ability to generate
revenues may be adversely affected.
Open-source software licenses often impose unanticipated or unclear restrictions on us or could
expose us to litigation, and using open-source software has inherent risks, any of which could
impair our ability to successfully commercialize the Heartflow Platform.
Our technology platform implements software modules licensed to us by third-parties under “open source”
licenses. The terms of many open source licenses have not been interpreted by U.S. courts, and there is
a risk that these licenses could be construed in ways that could impose unanticipated conditions or
restrictions on our ability to commercialize our products. Moreover, we cannot be certain that our
processes for controlling our use of open-source software in connection with our products will be
effective. From time to time, we may face claims from third-parties asserting ownership of, or demanding
release of, the open-source software or derivative works that we developed using such software (which
could include our proprietary source code), or otherwise seeking to enforce the terms of the applicable
open source license. These claims could result in litigation. If we are held to have breached the terms of
an open source software license, we could be required to seek licenses from third-parties to continue
offering our products on terms that are not economically feasible, to re-engineer our proprietary code, to
discontinue the sale of our products if re-engineering could not be accomplished on a timely or cost
effective basis, or to make generally available, in source code form, our proprietary code, any of which
could adversely affect our business, financial condition, results of operations and prospects.
The use of open-source software may entail greater risks than the use of third-party commercial software,
as open source licensors generally do not provide warranties or other contractual protections regarding
infringement or the quality or ownership of the code. Many of these risks cannot be eliminated, and could,
if not properly addressed, negatively affect our business. We cannot be sure that all open source software
is submitted for approval prior to use in connection with our products.
In addition, some open-source licenses contain requirements that we make available source code for
modifications or derivative works we create based upon the type of open-source software we use. If we
combine our proprietary software with open-source software in a certain manner, we could, under certain
open-source licenses, be required to release portions of the source code of our proprietary software to the
public. This would allow our competitors to create similar products with less development effort and time
and ultimately could result in a loss of sales for us.
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Intellectual property rights do not necessarily address all potential threats to our competitive
advantage.
The degree of future protection afforded by our intellectual property rights is uncertain because
intellectual property rights have limitations and may not adequately protect our business or permit us to
maintain our competitive advantage. The following examples are illustrative:
•others may be able to make products that are similar to or otherwise competitive with our product
candidates but that are not covered by the claims of our current or future patents;
•an in-license necessary for the manufacture, use, sale, offer for sale or importation of one or more of
our product candidates may be terminated by the licensor;
•we or future collaborators might not have been the first to make the inventions covered by our issued
or future issued patents or our pending patent applications;
•we or future collaborators might not have been the first to file patent applications covering certain of
our inventions;
•others may independently develop similar or alternative technologies or duplicate any of our
technologies without infringing our intellectual property rights;
•it is possible that our pending patent applications will not lead to issued patents;
•issued patents that we own or in-license may be held invalid or unenforceable as a result of legal
challenges by our competitors;
•issued patents that we own or in-license may not provide coverage for all aspects of our product
candidates in all countries;
•our competitors might conduct research and development activities in countries where we do not
have patent rights and then use the information learned from such activities to develop competitive
products for sale in our major commercial markets;
•we may not develop additional proprietary technologies that are patentable; and
•the patents of others may have an adverse effect on our business.
Should any of these events occur, they could significantly harm our business, results of operations and
prospects.
Risks related to financing and tax matters
We have identified material weaknesses in our internal control over financial reporting and may
identify additional material weaknesses in the future or otherwise continue to fail to maintain
effective internal control over financial reporting, which may result in material misstatements of
our consolidated financial statements or cause us to fail to meet our periodic reporting
obligations or cause our access to the capital markets to be impaired.
We have been a private company and had limited accounting and financial reporting personnel and other
resources with which to address our internal control over financial reporting. In connection with the
preparation of our consolidated financial statements, we identified material weaknesses in our internal
control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in
internal control over financial reporting such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented or detected on a timely
basis. The material weaknesses identified are as follows:
•We did not design and maintain an effective control environment commensurate with our financial
reporting requirements. Specifically, we did not maintain a sufficient complement of personnel with an
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appropriate degree of internal controls and accounting knowledge, experience, and training to
appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the
insufficient complement of personnel resulted in an inability to consistently establish appropriate
authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among
other things, insufficient segregation of duties in our finance and accounting functions. This material
weakness contributed to the following additional material weaknesses described below.
•We did not design and maintain effective controls to analyze, account for and disclose non-routine,
unusual or complex transactions. Specifically, we did not design and maintain controls to timely
analyze and account for warrants issued in connection with financial instruments, to account for an
amendment to our debt agreement as a debt modification and to account for features related to
features of our preferred stock financing.
These material weaknesses resulted in material adjustments to the redeemable convertible preferred
stock, accumulated deficit and deemed dividend accounts and related disclosures in the consolidated
financial statements for the year ended December 31, 2023. Additionally, during the years ended
December 31, 2019, 2020, 2021 and 2022, these material weaknesses resulted in audit adjustments to
prepaid expenses and other current assets, accounts payable, stock-based compensation expense,
accrued expenses, other current liabilities, warrant liabilities, other income (expense), additional paid-in
capital, which were recorded prior to the issuance of the consolidated financial statements.
Additionally, these material weaknesses could result in a misstatement of substantially all of our accounts
or disclosures that would result in a material misstatement to the annual or interim consolidated financial
statements that would not be prevented or detected.
The following additional material weakness was also identified:
•We did not design and maintain effective controls over information technology (“IT”) general controls
for information systems that are relevant to the preparation of our consolidated financial statements.
Specifically, we did not design and maintain: (i) program change management controls to ensure that
information technology program and data changes affecting financial IT applications and underlying
accounting records are identified, tested, authorized and implemented appropriately; (ii) user access
controls to ensure appropriate segregation of duties and that adequately restrict user and privileged
access to financial applications, programs and data to appropriate personnel; (iii) computer
operations controls to ensure data backups are authorized and monitored; and (iv) testing and
approval controls for program development to ensure that new software development is aligned with
business and IT requirements.
These IT deficiencies did not result in any adjustments to the consolidated financial statements. However,
the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as
the effectiveness of IT-dependent controls (such as automated controls that address the risk of material
misstatement to one or more assertions, along with the IT controls and underlying data that support the
effectiveness of system-generated data and reports) that could result in misstatements potentially
impacting all financial statement accounts and disclosures that would not be prevented or detected.
Accordingly, management has determined these deficiencies in the aggregate constitute a material
weakness.
With the oversight of senior management and our audit committee, we have executed implementation of
remediation steps. These efforts focused on (i) the hiring of personnel with technical accounting and
financial reporting experience, (ii) the engagement of a third-party firm to assist in the design and
implementation of controls, (iii) the design and implementation of accounting and financial reporting, and
IT general controls to improve the completeness, timeliness and accuracy of our financial reporting and
disclosures including non-routine, unusual or complex transactions such as the assessment of accounting
for warrants, debt modifications and preferred stock financing. We continue to test the operating
effectiveness of the controls designed and implemented. We are committed to continuing to improve our
internal control over financial reporting.
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While we continue to evaluate the controls we implemented to address the material weaknesses including
operating effectiveness for a sufficient period of time to support remediation, we cannot predict the
success of such plan or the outcome of our assessment of these plans at this time. We can give no
assurance that the controls designed and implemented will operate effectively to remediate these
deficiencies in internal control over financial reporting or that additional material weaknesses in our
internal control over financial reporting will not be identified in the future. Our failure to implement and
maintain effective internal control over financial reporting could result in material misstatements in our
financial statements that could result in a restatement of our financial statements, causing us to fail to
meet our reporting obligations.
As a public company, we will be required to provide a report by management on the effectiveness of our
internal control over financial reporting in connection with each annual report on Form 10-K to be filed
with the SEC. Once we cease to be an emerging growth company, our independent registered public
accounting firm will also be required to audit the effectiveness of our internal control over financial
reporting in connection with each annual report on Form 10-K to be filed with the SEC. We will be
required to disclose changes made in our internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting on a
quarterly basis.
We may require additional capital to support business growth, and this capital might not be
available on terms favorable to us, or at all, and may dilute ownership of our common stock for
our stockholders, including purchasers of common stock in this offering.
We intend to continue to make investments to support our business growth and may require additional
funds to respond to business challenges and opportunities, including the need to develop new products,
enhance our existing products, enhance our operating infrastructure, potentially expand internationally
and potentially acquire complementary businesses and technologies. In order to achieve these objectives,
we may make future commitments of capital resources. Accordingly, we may need to engage in equity or
debt financings to secure additional funds. If we raise additional funds through further issuances of equity
or convertible debt securities, our stockholders, including any purchasers of common stock in this
offering, could suffer significant dilution, and any new equity securities we issue could have rights,
preferences and privileges superior to those of holders of our common stock. In addition, our ability to
incur indebtedness is subject to limitations under the 2024 Credit Agreement and, if incurred, would
increase our fixed obligations and could include covenants or other restrictions that would impede our
ability to manage our operations. Further, if additional financing is needed, we may not be able to obtain
additional financing on terms favorable to us or at all. Our inability to obtain adequate financing or
financing on terms satisfactory to us, when we require it, could significantly limit our ability to continue
supporting our business growth and responding to business challenges and opportunities.
Our operating results may fluctuate significantly, which makes our future operating results
difficult to predict and could cause our operating results to fall below expectations or any
guidance we may provide.
Our quarterly revenue and results of operations may fluctuate from quarter to quarter due to, among
others, the following reasons:
•the level of physicians’ acceptance and adoption of our products, and changes in the rates at which
physicians order our Heartflow FFRCT Analysis or the percentage of CCTA scans for which our
Heartflow FFRCT Analysis is ordered;
•determinations, including the timing of determinations, by payers concerning coverage and
reimbursement of our products;
•changes in coverage amounts or government and payers’ reimbursement policies;
•the timing, expense and results of research and development activities, clinical trials and any
additional regulatory approvals;
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•changes in AHA or ACC guidelines, or guidelines in other countries, that lower support for our
products or elevate alternative products as the preferred pathway for diagnosis and management of
CAD;
•fluctuations in our expenses associated with expanding our commercial operations and operating as
a public company;
•patients meeting their annual health insurance deductible later in the calendar year;
•the introduction of new products and technologies by our competitors;
•changes in our pricing policies or in the pricing policies of our competitors;
•the productivity of our sales and marketing teams, and their ability to identify physicians who
consistently refer appropriate patients for CCTAs in accordance with AHA and ACC guidelines;
•quality problems with our products or the Heartflow Platform; and
•the impact of catastrophic events such as a pandemic.
Because of these and other factors, it is likely that in some future period our operating results will not
meet investor expectations or those of public market analysts. Any unanticipated change in revenue or
operating results is likely to cause our stock price to fluctuate. New information may cause investors and
analysts to revalue our business, which could cause a decline in our stock price.
Our credit agreement contains certain restrictions that may limit our ability to operate our
business. If we raise additional capital through debt financing, the terms of any new debt could
further restrict our ability to operate our business.
The terms of the 2024 Credit Agreement and related collateral documents contain, and any future debt
agreements would likely contain, a number of restrictive covenants that impose significant operating and
financial restrictions on us, including restrictions on our ability, and the ability of our subsidiaries, to take
actions that may be in our best interests, including, among others, disposing of assets, entering into
change of control transactions, mergers or acquisitions, incurring additional indebtedness, granting liens
on our assets and declaring and paying dividends. Our ability to meet covenants can be affected by
events beyond our control, and we may not be able to continue to meet such covenants. We have in the
past, and may in the future, breach our covenants under the 2024 Credit Agreement. In March 2023, we
entered into an agreement with Hayfin to temporarily waive certain covenant requirements that had not
been met pursuant to our prior credit agreement with Hayfin. In the future, a breach of the covenants or
the occurrence of other events (including, among others, a material adverse effect or the inability to
generate cash to service our obligations under our debt agreements) specified in the 2024 Credit
Agreement and/or the related collateral documents or a future debt agreement could result in an event of
default. Upon the occurrence of an event of default, our lenders could elect to declare all obligations
owing under the debt documents, if any, to be immediately due and payable, terminate all commitments to
extend further credit and/or proceed against the collateral, if any, pledged to them to secure such
indebtedness. For example, we have pledged substantially all of our assets, including, among others, our
intellectual property, all of Heartflow’s ownership interests in Heartflow, Inc. and our foreign subsidiaries
as collateral under the 2024 Credit Agreement and related collateral documents. For additional
information on the 2024 Credit Agreement, see the section titled “Management’s discussion and analysis
of financial condition and results of operations—Liquidity and capital resources—Hayfin credit
agreement.” If lenders accelerate the repayment of borrowings, if any, we may not have sufficient funds to
repay our existing debt and the lenders could seize collateral that was pledged as guarantee for the loan,
which would harm our business and financial condition.
Amounts borrowed under the 2024 Credit Agreement can be repaid at any time, subject to applicable
prepayment fees, prior to the June 14, 2028 maturity date, at which time all obligations owing under the
debt documents will be due and payable. The 2024 Credit Agreement contains customary affirmative and
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negative covenants, indemnification provisions and events of default. The affirmative covenants include,
among others, covenants requiring us to deliver certain financial reports and to maintain our legal
existence, regulatory authorizations and certain intellectual property rights. The negative covenants
include, among others, restrictions on changing our business activities, incurring additional indebtedness
and creating liens on our assets, requirements to maintain certain levels of liquidity and minimum net
sales, restrictions on making investments, paying dividends, issuing securities, engaging in mergers or
acquisitions, licensing our assets or making other distributions, in each case subject to customary
exceptions. If we default under the 2024 Credit Agreement, Hayfin will be able to declare all obligations
immediately due and payable and take control of our pledged assets, which may require us to renegotiate
our agreement on terms less favorable to us or to immediately cease operations. Any event of default by
us could significantly harm our business, financial condition, results of operations and prospects and
could cause the price of our common shares to decline. Further, if we are liquidated, Hayfin’s right to
repayment would be senior to the rights of the holders of our common shares to receive any proceeds
from the liquidation.
In connection with the completion of this offering, we are obligated to repay indebtedness outstanding
under the 2024 Credit Agreement in an amount equal to the lesser of (i) net cash proceeds in excess of
$150 million and (ii) $50 million (or $55 million if the underwriters exercise their option to purchase
additional shares). While we currently anticipate paying off $            million of outstanding indebtedness
under the 2024 Credit Agreement immediately following the completion of this offering, a portion of the
indebtedness under the 2024 Credit Agreement will remain outstanding and we will be subject to the
ongoing requirements of the 2024 Credit Agreement and related collateral documents.
We are subject to risks associated with currency fluctuations, and changes in foreign currency
exchange rates could impact our results of operations.
All of our revenue and the majority of our expense and capital purchasing activities through the year
ended December 31, 2024 were transacted in U.S. dollars. Approximately            % of our 2024 revenue
and approximately 11% of our 2023 revenue was generated from customers outside the United States.
However, because a portion of our operations consists of business activities outside of the United States,
we have foreign currency operating expenses as well as asset and liability balances. During the year
ended December 31, 2024, we were exposed to foreign currency risks in connection with our non-U.S.
operations, and we anticipate that, over time, an increasing portion of our international agreements may
provide for payment denominated in foreign currencies. Changes in the exchange rates between such
foreign currencies and the U.S. dollar could therefore materially impact our reported results of operations
and distort period-to-period comparisons. Fluctuations in foreign currency exchange rates also impact the
reporting of our receivables and payables in non-U.S. currencies. As a result of such foreign currency
fluctuations, it could be more difficult to detect underlying trends in our business and results of operations.
In addition, to the extent that fluctuations in currency exchange rates cause our results of operations to
differ from our expectations or the expectations of our investors, the trading price of our common stock
could be adversely affected.
We do not currently engage in currency hedging activities to limit the risk of exchange rate fluctuations. In
the future, we may engage in exchange rate hedging activities in an effort to mitigate the impact of
exchange rate fluctuations but we may not be successful in doing so. If our hedging activities are not
effective, changes in currency exchange rates may have a more significant impact on our results of
operations.
Our ability to use our net operating losses and tax credits to offset future taxable income and
taxes may be subject to certain limitations.
As of December 31, 2024, we had net operating loss (“NOL”) carryforwards of approximately
$          million and $          million for federal and state income tax purposes, respectively, which may be
utilized against future federal and state income taxes. Federal NOL carryforwards we generated in tax
years through December 31, 2017 generally may be carried forward for 20 years and may fully offset
taxable income in the year utilized, and federal NOLs we generated in tax years beginning after
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December 31, 2017 generally may be carried forward indefinitely but may only be used to offset 80% of
our taxable income annually for tax years beginning after December 31, 2017.
In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a
corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-
change NOLs, carryforwards and other tax attributes, such as research and development tax credits, to
offset future taxable income and taxes. In general, an ownership change occurs if the aggregate stock
ownership of certain stockholders, generally stockholders beneficially owning five percent or more of our
common stock, applying certain look through and aggregation rules, increases by more than 50% over
such stockholders’ lowest percentage ownership during the testing period, generally three years.
Purchases of our common stock in amounts greater than specified levels, which will be beyond our
control, could create a limitation on our ability to utilize our NOLs for tax purposes in the future. We are
currently completing a 382 study to determine whether the use of our NOLs is impaired. We may have
previously undergone an “ownership change.” In addition, this offering or future issuances or sales of our
stock, including certain transactions involving our stock that are outside of our control, could result in
future “ownership changes.” “Ownership changes” that have occurred in the past or that may occur in the
future, including in connection with this offering, could result in the imposition of an annual limit on the
amount of pre-ownership change NOLs and other tax attributes we can use to reduce our taxable income,
potentially increasing and accelerating our liability for income taxes, and also potentially causing those tax
attributes to expire unused.
If we are limited in our ability to use our NOLs and tax credits in future years in which we have taxable
income, we will pay more taxes than if we were able to fully utilize our NOLs and tax credits, and we could
be required to pay taxes earlier than we would otherwise be required, which could cause such NOLs to
expire unused. This could adversely affect our results of operations. Furthermore, we may not be able to
generate sufficient taxable income to utilize our pre-2018 NOLs before they expire beginning in 2030. If
any of these events occur, we may not derive some or all of the expected benefits from our NOLs, and
our business, financial condition, results of operations and prospects may be adversely affected as a
result.
Our international operations subject us to potentially adverse tax consequences.
We currently report our taxable income in various jurisdictions based upon our business operations in
those jurisdictions, including in the United States, United Kingdom, and Japan. We may in the future be
subject to reporting requirements in other foreign jurisdictions. The international nature and organization
of our business activities are subject to complex transfer pricing regulations administered by taxing
authorities in various jurisdictions. The relevant taxing authorities may disagree with our determinations
as to the income and expenses attributable to specific jurisdictions. If such a disagreement were to occur,
and our position were not sustained, we could be required to pay additional taxes, interest and penalties,
which could result in one time tax charges, higher effective tax rates, reduced cash flows and lower
overall profitability of our operations. We believe that our consolidated financial statements reflect
adequate reserves to cover such a contingency, but there can be no assurances in that regard.
Our effective tax rate may vary significantly from period to period.
Various internal and external factors may have favorable or unfavorable effects on our future effective tax
rate. These factors include, but are not limited to, changes in tax laws, regulations or rates, both within
and outside the United States, structural changes in our business, new accounting pronouncements or
changes to existing accounting pronouncements, non-deductible goodwill impairments, changing
interpretations of existing tax laws or regulations, changes in the relative proportions of revenue and
income before taxes in the various jurisdictions in which we operate that have different statutory tax rates,
the future levels of tax benefits of equity-based compensation, changes in overall levels of pretax
earnings or changes in the valuation of our deferred tax assets and liabilities. Additionally, we could be
challenged by state and local tax authorities as to the propriety of our sales tax compliance, and our
results could be materially impacted by these compliance determinations.
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In addition, our effective tax rate may vary significantly depending on the market price of our common
stock. The tax effects of the accounting for share-based compensation may significantly impact our
effective tax rate from period to period. In periods in which the market price of our common stock is higher
than the grant price of the share-based compensation vesting in that period, we will recognize excess tax
benefits that will decrease our effective tax rate. In future periods in which our stock price is lower than
the grant price of the share-based compensation vesting in that period, our effective tax rate may
increase. The amount and value of share-based compensation issued relative to our earnings in a
particular period will also affect the magnitude of the impact of share-based compensation on our effective
tax rate. These tax effects are dependent on the market price of our common stock, which we do not
control, and a decline in our stock price could significantly increase our effective tax rate and adversely
affect our financial condition.
Taxing authorities may successfully assert that we should have collected or in the future should
collect sales and use, value added or similar taxes, and we could be subject to tax liabilities with
respect to past or future sales, which could adversely affect our results of operations.
We do not collect sales and use, value added and similar taxes in all jurisdictions in which we have sales,
based on our belief that such taxes are not applicable or that we are not required to collect such taxes
with respect to the jurisdiction. Sales and use, value added and similar tax laws and rates vary greatly by
jurisdiction. Certain jurisdictions in which we do not collect such taxes may assert that such taxes are
applicable, which could result in tax assessments, penalties and interest, and we may be required to
collect such taxes in the future. Such tax assessments, penalties and interest or future requirements may
adversely affect our results of operations.
Risks related to our common stock and this offering
There may not be an active trading market for our common stock, which may cause shares of our
common stock to trade at a discount from the initial public offering price and make it difficult to
sell the shares of common stock you purchase.
Prior to this offering, there was no public market for our common stock. It is possible that after this
offering, an active trading market will not develop or, if developed, that any market will not be sustained,
which would make it difficult for you to sell your shares of common stock at an attractive price or at all.
The initial public offering price per share of common stock was determined by agreement among us and
the representatives of the underwriters and may not be indicative of the price at which shares of our
common stock will trade in the public market, if any, after this offering. The market value of our common
stock may decrease from the initial public offering price. It is possible that in one or more future periods
our results of operations may be below the expectations of public market analysts and investors, and, as
a result of these and other factors, the price of our common stock may fall. Furthermore, an inactive
market may also impair our ability to raise capital in the future by selling shares of our common stock.
The market price of our common stock may be volatile, which could cause the value of your
investment to decline and could result in substantial losses for investors purchasing shares in
this offering.
This initial public offering price may vary from the market price of our common stock after the offering. The
market price of our common stock may be highly volatile and could be subject to wide fluctuations.
Securities markets worldwide experience significant price and volume fluctuations. This market volatility,
as well as general economic, market or political conditions, could reduce the market price of our common
stock regardless of our operating performance. These fluctuations may be even more pronounced in the
trading market for our stock shortly following this offering. You may be unable to resell your shares of
common stock at or above the initial public offering price or at all.
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We are an emerging growth company, and the reduced reporting requirements applicable to
emerging growth companies could make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act. We will remain an “emerging growth
company” until the earliest to occur of:
•the last day of the fiscal year during which our total annual revenue equals or exceeds $1.235 billion
(subject to adjustment for inflation);
•the last day of the fiscal year following the fifth anniversary of this offering;
•the date on which we have, during the previous three-year period, issued more than $1 billion in non-
convertible debt; or
•the date on which we are deemed to be a “large accelerated filer” under the Exchange Act.
As a result of our “emerging growth company” status, we may take advantage of exemptions from various
reporting requirements that would otherwise be applicable to public companies including, but not limited
to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved.
Investors may find our common stock less attractive because we may rely on these exemptions. If some
investors find our common stock less attractive as a result, there may be a less active trading market for
our common stock and the market price of our common stock may be adversely affected and more
volatile.
We will incur increased costs and become subject to additional regulations and requirements as a
result of becoming a public company, which could lower our profits or make it more difficult to
run our business.
As a public company, we will incur significant legal, accounting and other expenses that we have not
incurred as a private company, including costs associated with public company reporting requirements.
We have also incurred and will continue to incur costs associated with the Sarbanes-Oxley Act and
related rules implemented by the SEC and the listing requirements of the              . The expenses
generally incurred by public companies for reporting and corporate governance purposes have been
increasing. We expect these rules and regulations to increase our legal and financial compliance costs
and to make some activities more time-consuming and costly, although we are currently unable to
estimate these costs with any degree of certainty. These laws and regulations also could make it more
difficult or costly for us to obtain certain types of insurance, including director and officer liability
insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially
higher costs to obtain the same or similar coverage. These laws and regulations could also make it more
difficult for us to attract and retain qualified persons to serve on our board of directors, on our board
committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a
public company, we could be subject to delisting of our common stock, fines, sanctions, other regulatory
action and potentially civil litigation.
If we are unable to design, implement and maintain effective internal control over financial
reporting in the future, investors may lose confidence in the accuracy and completeness of our
financial reports and the market price of our common stock may decline.
As a public company, we will be required to maintain internal control over financial reporting and to report
any material weaknesses in such internal controls. In addition, beginning with our second annual report
on Form 10-K, we will be required to furnish a report by management on the effectiveness of our internal
control over financial reporting, pursuant to the rules and regulations of the SEC regarding compliance
with Section 404 of the Sarbanes-Oxley Act. The process of designing, implementing and testing the
internal control over financial reporting required to comply with this obligation is time consuming, costly
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and complicated. We have identified control deficiencies including material weaknesses and may identify
control deficiencies, including material weaknesses in our internal control over financial reporting, in the
future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to
accurately report our financial condition, results of operations or cash flows. Further, if we identify one or
more material weaknesses in our internal control over financial reporting, if we are unable to comply with
the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or if we or, if required, our
auditors, are unable to assert that our internal control over financial reporting is effective, investors may
lose confidence in the accuracy and completeness of our financial reports and the market price of our
common stock could decline, and we could also become subject to investigations by the stock exchange
on which our common stock is listed, the SEC or other regulatory authorities, which could require
additional financial and management resources. Failure to remedy any material weakness in our internal
control over financial reporting, or to implement or maintain other effective control systems required of
public companies, could also restrict our future access to the capital markets.
Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Upon effectiveness of the registration statement of which this prospectus forms a part, we will become
subject to the periodic reporting requirements of the Exchange Act. Our disclosure controls and
procedures are designed to reasonably ensure that information required to be disclosed by us in reports
we file or submit under the Exchange Act is accumulated and communicated to management and
recorded, processed, summarized and reported within the time periods specified in the rules and forms of
the SEC. We believe that our disclosure controls and procedures as well as internal control over financial
reporting, no matter how well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are and will be met. These inherent limitations include
the realities that judgments in decision making can be faulty and that breakdowns can occur because of
simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons,
by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of
the inherent limitations in our control system, misstatements due to error or fraud may occur and not be
detected.
If our estimates or judgments relating to our critical accounting policies are based on
assumptions that change or prove to be incorrect, our operating results could fall below our
publicly announced guidance or the expectations of securities analysts and investors, resulting in
a decline in the market price of our common stock.
The preparation of financial statements in conformity with the United States generally accepted
accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, expenses and related disclosures. We base our estimates
on historical experience and various other factors that we believe are reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions and any such differences may be material. If our
assumptions change or if actual circumstances differ from our assumptions, our operating results may be
adversely affected and could fall below our publicly announced guidance or the expectations of analysts
and investors, resulting in a decline in the market price of our common stock.
Our principal stockholders and management own a significant percentage of our stock and will be
able to exert significant control over matters subject to stockholder approval.
Prior to this offering, as of December 31, 2024, our executive officers, directors, owners of more than 5%
of our capital stock and their respective affiliates beneficially owned approximately             % of our
outstanding shares and, upon the completion of this offering, that same group will beneficially own
approximately             % of our outstanding shares (assuming no exercise of the underwriters’ option to
purchase additional shares). Therefore, even after this offering, these stockholders will have the ability to
influence us through this ownership position. These stockholders may be able to determine all matters
requiring stockholder approval. For example, these stockholders may be able to control elections of
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directors, amendments of our organizational documents, or approval of any merger, sale of assets or
other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or
offers for our common stock that you may feel are in your best interest as one of our stockholders.
A significant portion of our total outstanding shares is restricted from immediate resale but may
be sold into the market in the near future, and any sales of a substantial number of shares of our
common stock in the public market could cause our stock price to decline significantly, even if
our business is doing well.
Sales of a substantial number of shares of our common stock in the public market could occur at any
time. These sales, or the perception in the market that the holders of a large number of shares of
common stock intend to sell shares, could reduce the market price of our common stock. If our existing
stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public
market after the lock-up agreements, market standoff and other legal restrictions on resale discussed in
this prospectus, including as described under the section titled “Shares eligible for future sale—Lock-up
agreements,” lapse, the trading price of our common stock could decline. Based upon the number of
shares outstanding as of December 31, 2024 and assuming (i) the Preferred Stock Conversion, (ii) the
Convertible Notes Conversion, (iii) no exercise of the underwriters’ option to purchase additional shares of
our common stock, and (iv) no exercise of outstanding options or warrants, upon the completion of this
offering, we will have outstanding a total of                 shares of common stock. Of these shares, all of the
shares of our common stock sold in this offering, plus any shares sold upon exercise of the underwriters’
option to purchase additional shares, if any, will be freely tradable, without restriction, in the public market
immediately following this offering, other than shares purchased by our “affiliates” (as such term is defined
in Rule 144 under the Securities Act). See the section titled “Shares eligible for future sale” in this
prospectus for restrictions applicable to our affiliates.
We and each of our directors, our executive officers and substantially all of our other securityholders have
entered or will enter into lock-up agreements with the underwriters prior to the completion of this offering,
which are described in the section titled “Underwriting”. After the expiration of the lock-up agreements, as
of December 31, 2024, up to approximately          million additional shares of common stock will be
eligible for sale in the public market, approximately        % of which shares are owned by directors,
executive officers and other owners of more than 5% of our outstanding common stock, stock options,
warrants and securities convertible into our common stock and will be subject to Rule 144 under the
Securities Act.
Furthermore, an additional approximately        % of our outstanding common stock, stock options,
warrants and other securities convertible into or exercisable or exchangeable for our common stock are
subject to market standoff restrictions with us that include restrictions on the sale, transfer or other
disposition of shares, among other things and subject to certain exceptions, for a period of 180 days
commencing on the date of this prospectus. As a result of the foregoing, substantially all of our
outstanding common stock, stock options, warrants and other securities convertible into or exercisable or
exchangeable for our common stock are subject to a lock-up agreement or market standoff provisions for
a period of 180 days commencing on the date of this prospectus. See the section titled “Shares eligible
for future sale” for additional information.
After this offering, based upon the number of shares outstanding as of December 31, 2024, the holders of
approximately         million shares of our common stock, or approximately        % of our total outstanding
common stock, will be entitled to rights with respect to the registration of their shares under the Securities
Act, subject to the lock-up agreements and market standoff restrictions described above. Registration of
these shares under the Securities Act would result in the shares becoming freely tradable without
restriction under the Securities Act, except for shares purchased by affiliates. Any sales of securities by
these stockholders or any perception that these shares may be sold could have a material adverse effect
on the trading price of our common stock. In addition, a security holder who is not subject to market
standoff restrictions with us nor a lock-up agreement with the underwriters may be able to sell, short sell,
transfer, pledge or otherwise dispose of their equity interests at any time.
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Our amended and restated certificate of incorporation will provide that the Court of Chancery of
the State of Delaware (or, if such court does not have jurisdiction, Delaware federal district court)
will be the exclusive forum for certain disputes between us and our stockholders, which could
limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our
directors, officers or employees.
Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the
selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the
Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) is the
exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a
claim of breach of fiduciary duty owed by any of our current or former directors, officers, employees or
stockholders to us or to our stockholders, any action asserting a claim against us arising pursuant to the
Delaware General Corporation Law, our amended and restated certificate of incorporation, or our
amended and restated bylaws (as either may be amended from time to time) or as to which the Delaware
General Corporation Law confers jurisdiction on the Delaware Court of Chancery, or any action asserting
a claim against us that is governed by the internal affairs doctrine of the State of Delaware. Our amended
and restated certificate of incorporation will also provide that the federal district courts of the United States
will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under
the Securities Act. Further, our amended and restated certificate of incorporation will provide that the
foregoing choice of forum provisions will not apply to suits brought to enforce any liability or duty created
by the Exchange Act, or any other claim for which the federal courts of the United States have exclusive
jurisdiction.
Our amended and restated certificate of incorporation will also provide that any person or entity
purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have
notice of and consented to the foregoing provisions of the amended and restated certificate of
incorporation. Although our amended and restated certificate of incorporation will contain the choice of
forum provision described above, it is possible that a court could find that such a provision is inapplicable
for a particular claim or action or that such provision is unenforceable.
We believe these provisions may benefit us by providing increased consistency in the application of
Delaware law and federal securities laws by chancellors and judges, as applicable, particularly
experienced in resolving corporate disputes, efficient administration of cases on a more expedited
schedule relative to other forums, and protection against the burdens of multi-forum litigation. However,
this choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it
finds favorable for disputes with us or any of our directors, officers, other employees or stockholders,
which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed
to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of
incorporation has been challenged in legal proceedings, and it is possible that a court could find these
types of provisions to be inapplicable or unenforceable. While the Delaware courts have determined that
such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in
a venue other than those designated in the exclusive forum provisions, and there can be no assurance
that such provisions will be enforced by a court in those other jurisdictions. If a court were to find the
choice of forum provision that will be contained in our amended and restated certificate of incorporation to
be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving
such action in other jurisdictions, which could adversely affect our business, financial condition, results of
operations and prospects.
General risk factors
We will have broad discretion in the use of net proceeds to us from this offering and may not use
them effectively.
In connection with the completion of this offering, we are obligated to use certain of the net proceeds from
this offering to repay approximately $               million of the indebtedness outstanding under the 2024
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Credit Agreement and to pay approximately $          million of fees in connection therewith. We expect to
use the remainder to fund our sales and marketing efforts, fund research and product development
activities and for other general corporate purposes, including working capital, operating expenses, and
capital expenditures. We may also use a portion of the net proceeds from this offering to acquire
complementary businesses, products, services, or technologies. We periodically evaluate strategic
opportunities; however, we have no current understandings or commitments to enter into any such
acquisitions or make any such investments. The expected use of net proceeds from this offering
represents our intentions based upon our present plans and business conditions. We cannot predict with
certainty all of the particular uses for the proceeds of this offering or the amounts that we will actually
spend on the uses set forth above. Accordingly, our management will have broad discretion in applying
the net proceeds of this offering, including for any of the purposes described in the section titled “Use of
proceeds,” and you will not have the opportunity as part of your investment decision to assess whether
the net proceeds are being used appropriately. The timing and amount of our actual expenditures will be
based on many factors, including cash flows from operations and the anticipated growth of our business.
Pending their use, we intend to invest the net proceeds of this offering in a variety of capital-preservation
investments, including government securities and money market funds.
If we do not use the net proceeds that we receive in this offering effectively, our business, financial
condition, results of operations and prospects could be harmed, and the market price of our common
stock could decline. Pending their use, we intend to invest the net proceeds of this offering in a variety of
capital-preservation investments, including government securities and money market funds. These
investments may not yield a favorable return to our investors.
Investors in this offering will experience immediate and substantial dilution.
The initial public offering price of our common stock is substantially higher than the pro forma as adjusted
net tangible book value per share of our common stock. Therefore, if you purchase shares of our common
stock in this offering, you will pay a price per share that substantially exceeds our pro forma as adjusted
net tangible book value per share after this offering. Based on the initial public offering price of $        per
share, you will experience immediate dilution of $          per share, representing the difference between
our pro forma as adjusted net tangible book value per share after giving effect to this offering and the
initial public offering price. In addition, purchasers of common stock in this offering will have
contributed        % of the aggregate price paid by all purchasers of our common stock but will own only
approximately        % of our total equity outstanding after this offering. Furthermore, you will experience
additional dilution if the underwriters exercise their option to purchase additional shares, outstanding
options and warrants are exercised, upon the vesting of outstanding restricted stock awards or when we
otherwise issue additional shares of common stock. For a further description of the dilution that you will
experience immediately after this offering, see the section titled “Dilution” included elsewhere in this
prospectus.
We do not intend to pay dividends in the foreseeable future. As a result, your ability to achieve a
return on your investment will depend on appreciation in the market price of our common stock.
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all
available funds and any future earnings, if any, to fund the development and expansion of our business,
and we do not anticipate paying any cash dividends in the foreseeable future. Any future determinations
regarding the declaration and payment of dividends, if any, will be at the discretion of our board of
directors, subject to applicable law, and will depend upon then-existing conditions, including our financial
condition, results of operations, contractual restrictions, general business conditions, capital
requirements, and other factors our board of directors may deem relevant. In addition, our ability to pay
cash dividends is currently restricted by the terms of the 2024 Credit Agreement. Our ability to pay cash
dividends on our capital stock in the future may also be limited by the terms of any preferred securities we
may issue or agreements governing any additional indebtedness we may incur.
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If our operating and financial performance in any given period does not meet any guidance that
we provide to the public, the market price of our common stock may decline.
We may, but are not obligated to, provide public guidance on our expected operating and financial results
for future periods. Any such guidance will be comprised of forward-looking statements subject to the risks
and uncertainties described in this prospectus, including in the section titled “Risk factors,” and in our
future public filings and public statements. Our actual results may not always be in line with or exceed any
guidance we have provided, especially in times of economic uncertainty. If actual circumstances differ
from those in our assumptions, our operating and financial results could fall below our publicly announced
guidance or the expectations of investors. If, in the future, our operating or financial results for a particular
period do not meet any guidance we provide or the expectations of investment analysts or investors
generally, or if we reduce our guidance for future periods, the market price of our common stock may
decline. Even if we do issue public guidance, there can be no assurance that we will continue to do so in
the future.
If securities or industry analysts do not publish research or reports about our business, or if they
issue an adverse or misleading opinion regarding our stock, our stock price and trading volume
could decline.
The trading market for our common stock will be influenced by the research and reports that industry or
securities analysts publish about us or our business. We do not currently have and may never obtain
research coverage by securities and industry analysts. If no or few securities or industry analysts
commence coverage of us, the market price for our stock would be negatively impacted. In the event we
obtain securities or industry analyst coverage, if any of the analysts who cover us downgrade their
evaluations of our stock or issue an adverse opinion regarding us, our business model, our intellectual
property or our stock performance, or if our results of operations fail to meet the expectations of analysts,
our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to
publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause
our stock price or trading volume to decline.
We may be subject to securities litigation, which is expensive and could divert management
attention.
In the past, following periods of volatility in the overall market and the market price of a company’s
securities, securities class action litigation has often been instituted against these companies. Because of
the potential volatility of our stock price, we may become the target of securities litigation in the future.
These events may also result in or be concurrent with investigations by the SEC. We may be exposed to
such litigation or investigation even if no wrongdoing occurred. Such litigation, if instituted against us,
could result in substantial costs and a diversion of our management’s attention and resources, which
could seriously harm our business.
Provisions in our charter documents and under Delaware law could discourage a takeover that
stockholders may consider favorable and may lead to entrenchment of management.
Our amended and restated certificate of incorporation, to be in effect immediately prior to the completion
of this offering, and our amended and restated bylaws, to be in effect upon the effectiveness of the
registration statement of which this prospectus forms a part, will contain provisions that could delay or
prevent changes in control or changes in our management without the consent of our board of directors.
These provisions will include the following:
•a classified board of directors with three-year staggered terms, which may delay the ability of
stockholders to change the membership of a majority of our board of directors;
•our directors may be removed by our stockholders only for cause;
•no cumulative voting in the election of directors, which limits the ability of minority stockholders to
elect director candidates;
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•the exclusive right of our board of directors to change the size of the board of directors and to elect a
director to fill a new directorship created by the expansion of the board of directors or a vacancy
created by the resignation, death or removal of a director, which prevents stockholders from being
able to change the board’s size or fill new directorships and vacancies on our board of directors;
•the ability of our board of directors to authorize the issuance of shares of preferred stock and to
determine the price and other terms of those shares, including preferences and voting rights, without
stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror or
adopt a stockholder rights plan;
•the ability of our board of directors to alter our amended and restated bylaws without obtaining
stockholder approval;
•the required approval of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all
then-outstanding shares of capital stock entitled to vote generally in the election of directors to adopt,
amend, alter or repeal our amended and restated bylaws and certain provisions of our amended and
restated certificate of incorporation;
•a prohibition on stockholder action by written consent, which forces stockholder action to be taken at
an annual or special meeting of our stockholders;
•the requirement that a special meeting of stockholders may be called only by our secretary at the
request of our board of directors, the chairman of our board of directors, or our chief executive officer,
which may delay the ability of our stockholders to force consideration of a proposal or to take action,
including the removal of directors; and
•advance notice procedures that stockholders must comply with in order to nominate candidates to our
board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may
discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s
own slate of directors or otherwise attempting to obtain control of us.
We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General
Corporation Law (“Section 203”). Under Section 203, a corporation may not, in general, engage in a
business combination (as defined in Section 203) with any interested stockholder (generally defined by
Section 203 to include holders of 15% or more of our capital stock) unless the interested stockholder has
held the stock for three years or, among other exceptions and exclusions, the board of directors has
approved the business combination transaction or the transaction that resulted in the stockholder
becoming an interested stockholder. For a description of our capital stock, see the section titled
“Description of capital stock.”
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Special note regarding forward-looking statements
This prospectus, including the sections titled “Prospectus summary,” “Risk factors,” “Management’s
discussion and analysis of financial condition and results of operations,” and “Business,” contains express
or implied forward-looking statements about us and our industry that involve substantial risks and
uncertainties. All statements other than statements of historical facts contained in this prospectus,
including statements regarding our strategy, future financial condition, future operations, projected costs,
prospects, plans, objectives of management, and expected market growth, are forward-looking
statements. In some cases, you can identify forward-looking statements by words such as “may,” “will,”
“shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,”
“believes,” “estimates,” “predicts,” “potential,” “goal,” “objective,” “seeks,” or “continue” or the negative of
these words or other similar terms or expressions that concern our expectations, strategy, plans, or
intentions. Forward-looking statements contained in this prospectus include, but are not limited to,
statements about:
•our business model and strategic plans for our products, technologies and business, including our
implementation thereof;
•our ability to continue improving our products and technologies, including our AI Technologies;
•our expectations regarding government and third-party payer coverage and reimbursement;
•the implementation of our business model and strategic plans;
•our ability to commercialize, manage and grow our business by increasing our sales to existing
customers or introducing our products to new customers;
•our ability to compete with other companies engaged in the development of products, including
algorithm-based diagnostic analysis products, that provide existing non-invasive tests that aid in the
evaluation of CAD;
•our expectations regarding the potential addressable market size for our products;
•our expectation about market trends;
•our ability to attract, hire and retain key personnel and additional qualified personnel;
•our ability to effectively manage our growth;
•FDA or other U.S. or foreign regulatory actions affecting us or the healthcare industry generally,
including potential effects of evolving and/or extensive government regulation;
•our ability to obtain, maintain and expand regulatory clearances for our products and any new
products we create;
•our ability to establish and maintain intellectual property protection for our products or avoid claims of
infringement;
•our expectations regarding the use of the net proceeds from this offering and our existing cash and
cash equivalents;
•estimates of our expenses, future revenue, capital requirements, needs for additional financing and
our ability to obtain additional capital;
•our ability to expand internationally;
•general economic, industry, and market conditions, including rising interest rates and inflation;
•our future financial performance; and
69
•other risks and uncertainties, including those listed under the caption “Risk factors.”
You should not rely on forward-looking statements as predictions of future events. We have based the
forward-looking statements contained in this prospectus primarily on our current expectations, estimates,
forecasts, and projections about future events and trends that we believe may affect our business,
financial condition, results of operations, and prospects. Although we believe that we have a reasonable
basis for each forward-looking statement contained in this prospectus, we cannot guarantee that the
future results, levels of activity, performance, or events and circumstances reflected in the forward-looking
statements will be achieved or occur at all. The outcome of the events described in these forward-looking
statements is subject to risks, uncertainties, and other factors described in the section titled “Risk factors”
and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict
all risks and uncertainties that could have an impact on the forward-looking statements contained in this
prospectus. The results, events, and circumstances reflected in the forward-looking statements may not
be achieved or occur, and actual results, events, or circumstances could differ materially from those
described in the forward-looking statements.
The forward-looking statements made in this prospectus relate only to events as of the date on which the
statements are made. We undertake no obligation to update any forward-looking statements made in this
prospectus to reflect events or circumstances after the date of this prospectus or to reflect new
information or the occurrence of unanticipated events, except as required by law. We may not actually
achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should
not place undue reliance on our forward-looking statements. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments
we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the
relevant subject. These statements are based upon information available to us as of the date of this
prospectus, and while we believe such information forms a reasonable basis for such statements, such
information may be limited or incomplete, and our statements should not be read to indicate that we have
conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These
statements are inherently uncertain, and you are cautioned not to unduly rely on these statements.
You should read this prospectus and the documents that we reference in this prospectus and have filed
as exhibits to the registration statement, of which this prospectus is a part, completely and with the
understanding that our actual future results may be materially different from what we expect. We qualify
all of the forward-looking statements in this prospectus by these cautionary statements.
70
Market and industry data
This prospectus contains estimates, projections, and other information concerning our industry and our
business, as well as data regarding market research, estimates, and forecasts prepared by our
management or third parties, including but not limited to, Clarivate™. Information that is based on
estimates, forecasts, projections, market research, or similar methodologies is inherently subject to
uncertainties, and actual events or circumstances may differ materially from events and circumstances
that are assumed in this information. These data and the industry in which we operate is subject to a high
degree of uncertainty and risk due to a variety of factors, including those described in the section titled
“Risk factors.” These and other factors could cause results to differ materially from those expressed in
these estimates, publications, and reports made by third parties or us. 
Unless otherwise expressly stated, we obtained such industry, business, market, and other data from
reports, research surveys, studies, and similar data prepared by market research firms and other third
parties, industry and general publications, government data, and similar sources. In some cases, we do
not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or
more sources of this type of data in any paragraph, you should assume that other data of this type
appearing in the same paragraph is derived from sources which we paid for, sponsored, or conducted,
unless otherwise expressly stated or the context otherwise requires. The content of these third-party
sources, except to the extent specifically set forth in this prospectus, does not constitute a portion of this
prospectus and is not incorporated herein.
Forecasts and other forward-looking information with respect to industry, business, market, and other data
are subject to the same qualifications and additional uncertainties regarding the other forward-looking
statements in this prospectus. See the section titled “Special note regarding forward-looking statements.”
71
Use of proceeds
We estimate that the net proceeds from this offering will be approximately $            million (or
approximately $            million if the underwriters exercise in full their option to purchase up
to               additional shares of common stock), based on the assumed initial public offering price of
$            per share, which is the midpoint of the estimated price range set forth on the cover page of this
prospectus, after deducting estimated underwriting discounts and commissions and estimated offering
expenses payable by us. 
Each $1.00 increase or decrease in the assumed initial public offering price of $            per share of our
common stock, which is the midpoint of the estimated price range set forth on the cover page of this
prospectus, would increase or decrease, as applicable, the net proceeds to us from this offering by
approximately $            million, assuming the number of shares offered by us, as set forth on the cover
page of this prospectus, remains the same, and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us. Similarly, each increase or decrease of 1.0
million shares in the number of shares of common stock offered by us would increase or decrease, as
applicable, the net proceeds to us from this offering by approximately $            million, assuming the
assumed initial public offering price of $            per share of our common stock, which is the midpoint of
the estimated price range set forth on the cover page of this prospectus, remains the same, and after
deducting estimated underwriting discounts and commissions and estimated offering expenses payable
by us.
In connection with the completion of this offering, we are obligated to use certain of the net proceeds from
this offering to repay $50.0 million (or $55.0 million if the underwriters exercise their option to purchase
additional shares of common stock) of the indebtedness outstanding under the 2024 Credit Agreement
and to pay approximately $            million of fees in connection therewith. We expect to use the remainder
of the net proceeds from this offering, together with our existing cash and cash equivalents, to fund our
sales and marketing efforts, fund research and product development activities and for other general
corporate purposes, including working capital, operating expenses, and capital expenditures. The 2024
Credit Agreement bears interest equal to the sum of (i) 7.0% (or 6.0% if the alternative base rate is in
effect) plus (ii) the greater of (x) the forward-looking term rate based on the Secured Overnight Financing
Rate (“SOFR”) for a respective tenor (or the alternative base rate, if applicable), and (y) 2.0%. The
alternative base rate equals to the sum of (i) 6.0% plus (ii) the greater of (1) the Wall Street Journal Prime
Rate, plus 0.5%, (2) the Federal Reserve Bank of New York rate plus 0.5% or (3) CBA Term SOFR for
one month tenor plus 1.0%. The 2024 Credit Agreement matures on June 14, 2028. Borrowings under the
2024 Credit Agreement were used to refinance outstanding indebtedness.
We may also use a portion of the net proceeds from this offering to acquire complementary businesses,
products, services, or technologies. We periodically evaluate strategic opportunities; however, we have no
current understandings or commitments to enter into any such acquisitions or make any such
investments.
Based on our current operating plan, we estimate that our existing cash and cash equivalents as of the
date of this prospectus, together with the estimated net proceeds from this offering, will be sufficient to
fund our planned operations through                     . We have based this estimate on our current
assumptions, which may prove to be wrong, and we may exhaust our available capital resources sooner
than we expect. The expected use of net proceeds from this offering represents our intentions based
upon our present plans and business conditions. We cannot predict with certainty all of the particular uses
for the proceeds of this offering or the amounts that we will actually spend on the uses set forth above.
Accordingly, our management will have broad discretion in applying the net proceeds of this offering, and
investors will be relying on the judgment of our management regarding the application of these net
proceeds. The timing and amount of our actual expenditures will be based on many factors, including
cash flows from operations and the anticipated growth of our business. Pending their use, we intend to
72
invest the net proceeds of this offering in a variety of capital-preservation investments, including
government securities and money market funds.
73
Dividend policy
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all
available funds and any future earnings, if any, to fund the development and expansion of our business,
and we do not anticipate paying any cash dividends in the foreseeable future. Any future determinations
regarding the declaration and payment of dividends, if any, will be at the discretion of our board of
directors, subject to applicable law, and will depend upon then-existing conditions, including our financial
condition, results of operations, contractual restrictions, general business conditions, capital
requirements, and other factors our board of directors may deem relevant. In addition, our ability to pay
cash dividends is currently restricted by the terms of our 2024 Credit Agreement. Our ability to pay cash
dividends on our capital stock in the future may also be limited by the terms of any preferred securities we
may issue or agreements governing any additional indebtedness we may incur.
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Capitalization
The following table sets forth our cash and cash equivalents and our capitalization, as of December 31,
2024: 
•on an actual basis;
•on a pro forma basis, to give effect to: (i) the issuance and sale of the 2025 Convertible Notes and the
2024 Term Loan Conversion that occurred subsequent to December 31, 2024; (ii) the Preferred Stock
Conversion; (iii) the Convertible Notes Conversion; and (iv) the adoption, filing, and effectiveness of
our amended and restated certificate of incorporation, to be in effect immediately prior to the
completion of this offering; and
•on a pro forma as adjusted basis, giving effect to (i) the pro forma adjustments discussed above, (ii)
the issuance and sale of          shares of common stock in this offering at the assumed initial offering
price of $           per share, which is the midpoint of the estimated price range set forth on the cover
page of this prospectus, after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us and (iii) the repayment of $50.0 million of the
indebtedness outstanding under the 2024 Credit Agreement and payment of approximately
$            million of fees in connection therewith.
You should read this table together with the sections titled “Summary consolidated financial data,”
“Management’s discussion and analysis of financial condition and results of operations” and our
consolidated financial statements and the related notes included elsewhere in this prospectus. The pro
forma as adjusted information below is illustrative only and our capitalization following the completion of
this offering will depend on the actual initial public offering price and other terms of this offering
determined at pricing.
As of December 31, 2024
(in thousands, except share and per share amounts)
Actual
Pro forma
Pro forma as
adjusted(1)
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                   
$                   
$                   
2024 Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                   
$                   
$                   
Redeemable convertible preferred stock, $0.001 par
value;                        shares authorized;                  shares
issued and outstanding, actual; no shares authorized,
issued or outstanding, pro forma and pro forma as
adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                   
$—
$—
Stockholders’ equity (deficit): . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preferred stock, $0.001 par value; no shares authorized,
issued and outstanding, actual;            shares
authorized, no shares issued or outstanding, pro
forma;                        shares authorized
and                   shares issued and outstanding, pro
forma as adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock, $0.001 par value;                        shares
authorized,                        shares issued and
outstanding, actual;                        shares authorized
and                        shares issued and outstanding, pro
forma;                        shares authorized
and                        shares issued and outstanding, pro
forma as adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
75
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity (deficit) . . . . . . . . . . . . . . . . . . . . . . . . .
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                   
$                   
$                   
(1)Each $1.00 increase or decrease in the assumed initial public offering price of $           per share of our common stock, which is the
midpoint of the estimated price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, each of
our pro forma as adjusted cash and cash equivalents, additional paid-in-capital, total stockholders’ equity (deficit), and total
capitalization by approximately $           million, assuming the number of shares offered by us, as set forth on the cover page of this
prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering
expenses payable by us. Similarly, each increase or decrease of 1.0 million shares in the number of shares of common stock offered by
us would increase or decrease, as applicable, each of our pro forma as adjusted cash and cash equivalents, additional paid-in-capital,
total stockholders’ equity (deficit), and total capitalization by approximately $           million, assuming the assumed initial public offering
price of $           per share of our common stock remains the same, and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us.
If the underwriters exercise in full their option to purchase up to                      additional shares of common
stock, pro forma as adjusted cash and cash equivalents, 2024 Term Loan, additional paid-in capital, total
stockholders’ equity (deficit), total capitalization, and shares of common stock outstanding as of
December 31, 2024 would be $           , $           , $           , $           , $           , and                      shares,
respectively.
The number of shares of our common stock to be outstanding after this offering, pro forma and pro forma
as adjusted, in the table above is based on                 shares of our common stock outstanding as of
December 31, 2024, after giving effect to (i) the issuance and sale of the 2025 Convertible Notes and the
2024 Term Loan Conversion that occurred subsequent to December 31, 2024, (ii) the Preferred Stock
Conversion, (iii) the Convertible Notes Conversion and (iv) the adoption, filing, and effectiveness of our
amended and restated certificate of incorporation, to be in effect immediately prior to the completion of
this offering, and excludes:
•                 shares of our common stock issuable upon the exercise of outstanding stock options as of
December 31, 2024 under our 2009 Equity Incentive Plan, with a weighted-average exercise price of
$      per share;
•                 shares of our common stock issuable upon the exercise of outstanding stock options
granted subsequent to December 31, 2024 under our 2009 Equity Incentive Plan, with a weighted-
average exercise price of $              per share;
•                 shares of our common stock issuable upon the exercise of warrants outstanding as of
December 31, 2024 held by Hayfin, with an exercise price of $0.01 per share;
•                 shares of our common stock reserved for future issuance under our 2009 Equity Incentive
Plan;
•                shares of our common stock to be reserved for future issuance under the 2025 Plan, which
will become effective as of the date immediately prior to the date our registration statement relating to
this offering becomes effective, from which we will grant RSUs covering approximately                
shares of common stock concurrently with this offering (based on the assumed initial public offering
price of $              per share, which is the midpoint of the price range set forth on the cover page of
this prospectus), as well as any future increases in the number of shares of common stock reserved
for issuance under the 2025 Plan; and
•                shares of our common stock reserved for future issuance under the ESPP, which will
become effective on the date immediately prior to the date our registration statement relating to this
offering becomes effective, as well as any future increases in the number of shares of common stock
reserved for issuance under the ESPP.
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Dilution
If you purchase shares of our common stock in this offering, your ownership interest will be immediately
and substantially diluted to the extent of the difference between the initial public offering price per share of
our common stock and the pro forma as adjusted net tangible book value per share of our common stock
immediately after this offering. 
As of December 31, 2024, our historical net tangible book value (deficit) was $            million, or
$            per share of our common stock. Our historical net tangible book value (deficit) is the amount of
our total tangible assets less our total liabilities, excluding the carrying values of our redeemable
convertible preferred stock, which is not included within stockholders’ deficit. Our historical net tangible
book value (deficit) per share represents historical net tangible book value (deficit) divided by the
aggregate number of shares of our common stock outstanding as of December 31, 2024. Total tangible
assets represents total assets less capitalized internal-use software, capitalized contract costs, deferred
debt financing costs, unamortized debt discount and issuance costs, and deferred initial public offering
costs.
Our pro forma net tangible book value (deficit) as of December 31, 2024 was $            million, or
$            per share. Pro forma net tangible book value per share represents total tangible assets, less total
liabilities, divided by the total aggregate number of shares of our common stock outstanding as of
December 31, 2024, after giving effect to:
•the issuance and sale of the 2025 Convertible Notes and the 2024 Term Loan Conversion that
occurred subsequent to December 31, 2024;
•the Preferred Stock Conversion;
•the Convertible Notes Conversion; and
•the adoption, filing, and effectiveness of our amended and restated certificate of incorporation, to be
in effect immediately prior to the completion of this offering.
After giving further effect to the issuance and sale by us of                  shares of our common stock in this
offering at the assumed initial public offering price of $            per share, which is the midpoint of the
estimated price range set forth on the cover page of this prospectus, and after deducting estimated
underwriting discounts and commissions and estimated offering expenses payable by us and the
repayment of $50.0 million of the indebtedness outstanding under the 2024 Credit Agreement and to pay
approximately $            million of fees in connection therewith, our pro forma as adjusted net tangible
book value (deficit) as of December 31, 2024 would have been $            million, or $            per share.
This represents an immediate increase in pro forma net tangible book value to existing stockholders of
$            per share and an immediate dilution in pro forma net tangible book value to new investors of
$            per share. Dilution per share represents the difference between the price per share to be paid by
new investors for the shares of our common stock sold in this offering and the pro forma as adjusted net
tangible book value per share immediately after this offering. 
77
The following table illustrates this dilution on a per share basis:
Assumed initial public offering price per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                    
Historical net tangible book value (deficit) per share as of December 31,
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                    
Pro forma increase in net tangible book value per share as of December 31,
2024 attributable to the pro forma adjustments described above . . . . . . . . .
Pro forma net tangible book value per share as of December 31, 2024 . . . . .
Increase in pro forma net tangible book value per share attributable to new
investors participating in this offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro forma as adjusted net tangible book value per share after this offering . . . .
Dilution per share to new investors participating in this offering . . . . . . . . . . . . . . .
$                    
The dilution information discussed above is illustrative only and may change based on the actual initial
public offering price, the number of shares we sell, and other terms of this offering that will be determined
at pricing.
Each $1.00 increase or decrease in the assumed initial public offering price of $           per share, which is
the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase or
decrease, as applicable, our pro forma as adjusted net tangible book value per share after this offering by
$           per share and the dilution per share to investors participating in this offering by $           per share,
assuming that the number of shares of common stock offered by us, as set forth on the cover page of this
prospectus, remains the same, and after deducting estimated underwriting discounts and commissions
and estimated offering expenses payable by us. Similarly, each 1.0 million share increase in the number
of shares offered by us would increase our pro forma as adjusted net tangible book value per share after
this offering by $           per share and decrease the dilution per share to investors participating in this
offering by $           per share, and each 1.0 million share decrease in the number of shares offered by us
would decrease our pro forma as adjusted net tangible book value per share after this offering by
$           per share and increase the dilution per share to investors participating in this offering by
$           per share, in each case assuming the initial public offering price of $           per share remains the
same, and after deducting estimated underwriting discounts and commissions and estimated offering
expenses payable by us.
If the underwriters exercise in full their option to purchase up to                      additional shares of common
stock, the pro forma as adjusted net tangible book value (deficit) per share of our common stock after this
offering would be $           per share, and the dilution per share to investors participating in this offering
would be $           per share, assuming the assumed initial public offering price of $           per share, which
is the midpoint of the estimated price range set forth on the cover page of this prospectus. 
The following table summarizes, as of December 31, 2024, on a pro forma as adjusted basis as described
above, the number of shares of our common stock, the total consideration and the average price per
share (i) paid to us by existing stockholders and (ii) to be paid by new investors acquiring our common
stock in this offering at the assumed initial public offering price of $           per share, the midpoint of the
estimated price range set forth on the cover page of this prospectus, before deducting estimated
underwriting discounts and commissions and estimated offering expenses payable by us. As the table
below shows, investors participating in this offering will pay an average price per share substantially
higher than our existing stockholders paid.
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Shares purchased
Total consideration
Weighted-
average price
per share
Number
Percent
Amount
Percent
Existing stockholders . . . . . . . . . . . .
%
$                  
%
$                  
New investors . . . . . . . . . . . . . . . . . . .
$ 
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
$                  
100%
$                  
Each $1.00 increase or decrease in the assumed initial public offering price of $           per share, which is
the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase or
decrease, as applicable, the total consideration paid by new investors and total consideration paid by all
stockholders by approximately $           million, assuming that the number of shares of common stock
offered by us, as set forth on the cover page of this prospectus, remains the same, before deducting
estimated underwriting discounts and commissions and estimated offering expenses payable by us.
Similarly, each 1.0 million share increase or decrease in the number of shares offered by us would
increase or decrease, as applicable, the total consideration paid by new investors and total consideration
paid by all stockholders by $           million, assuming the assumed initial public offering price of
$           per share of common stock remains the same, before deducting estimated underwriting discounts
and commissions.
Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters’
option to purchase additional shares. If the underwriters exercise in full their option to purchase up
to           additional shares of common stock, our existing stockholders would own           %, and our new
investors would own           % of the total number of shares of our common stock outstanding upon the
completion of this offering. 
The foregoing tables and calculations (other than historical net tangible book value) are based
on           shares of our common stock outstanding as of December 31, 2024, after giving effect to (i) the
issuance and sale of the 2025 Convertible Notes and the 2024 Term Loan Conversion that occurred
subsequent to December 31, 2024, (ii) the Preferred Stock Conversion, (iii) the Convertible Notes
Conversion and (iv) the adoption, filing, and effectiveness of our amended and restated certificate of
incorporation, to be in effect immediately prior to the completion of this offering, and excludes:
•                 shares of our common stock issuable upon the exercise of outstanding stock options as of
December 31, 2024 under our 2009 Equity Incentive Plan, with a weighted-average exercise price of
$         per share;
•                 shares of our common stock issuable upon the exercise of outstanding stock options
granted subsequent to December 31, 2024 under our 2009 Equity Incentive Plan, with a weighted-
average exercise price of $         per share;
•                 shares of our common stock issuable upon the exercise of warrants outstanding as of
December 31, 2024 held by Hayfin, with an exercise price of $0.01 per share;
•                 shares of our common stock reserved for future issuance under our 2009 Equity Incentive
Plan;
•                shares of our common stock to be reserved for future issuance under the 2025 Plan, which
will become effective as of the date immediately prior to the date our registration statement relating to
this offering becomes effective, from which we will grant RSUs covering approximately                
shares of common stock concurrently with this offering (based on the assumed initial public offering
price of $              per share, which is the midpoint of the price range set forth on the cover page of
this prospectus), as well as any future increases in the number of shares of common stock reserved
for issuance under the 2025 Plan; and
•                shares of our common stock reserved for future issuance under the ESPP, which will
become effective on the date immediately prior to the date our registration statement relating to this
79
offering becomes effective, as well as any future increases in the number of shares of common stock
reserved for issuance under the ESPP.
To the extent that any outstanding options are exercised, new options or other equity awards are issued
under our equity incentive plans, or we issue additional shares in the future, there will be further dilution to
new investors participating in this offering. In addition, we may choose to raise additional capital because
of market conditions or strategic considerations, even if we believe that we have sufficient funds for our
current or future operating plans. If we raise additional capital through the sale of equity or convertible
debt securities, the issuance of these securities could result in further dilution to our stockholders.
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Management’s discussion and analysis of financial condition
and results of operations
You should read the following discussion and analysis of our financial condition and results of operations
in conjunction with our consolidated financial statements and the related notes and other financial
information included elsewhere in this prospectus. This discussion and analysis and other parts of this
prospectus contain forward-looking statements based upon our current plans and expectations that
involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives,
expectations, intentions and beliefs. Our actual results and the timing of events could differ materially
from those anticipated in these forward-looking statements as a result of various factors, including those
set forth under the section titled “Risk factors” and elsewhere in this prospectus. You should carefully read
the section titled “Risk factors” to gain an understanding of the important factors that could cause actual
results to differ materially from our forward-looking statements. Please also see the section titled “Special
note regarding forward-looking statements.” Our historical results are not necessarily indicative of the
results that may be expected for any period in the future.
Overview
We have pioneered the use of software and AI to deliver a more accurate and clinically effective non-
invasive solution for diagnosing and managing coronary artery disease (“CAD”), the leading cause of
death worldwide. As of December 31, 2024, our Heartflow Platform has been used to assess CAD in
more than 375,000 patients, including 132,000 in 2024 alone. We believe that we are the most widely
adopted AI-powered test for CAD. Our novel platform leverages AI and advanced computational fluid
dynamics to create a personalized 3D model of a patient’s heart from a single coronary computed
tomography angiography (“CCTA”), a specialized type of scan that provides detailed images of the heart’s
arteries. Our Heartflow Platform delivers actionable insights on blood flow, stenosis, plaque volume and
plaque composition thereby overcoming the limitations of traditional non-invasive imaging tests which rely
on indirect measures of coronary disease and lead to high false negative and false positive rates. We
believe the differentiated accuracy and clinical utility of our Heartflow Platform, along with its ability to
enhance workflows, will continue to support our growth and advance the “CCTA + Heartflow” pathway as
the definitive standard for the non-invasive diagnosis and management of CAD.
To date, we have developed three software products under the Heartflow Platform that provide physicians
with the critical insights needed to effectively diagnose and manage CAD:
•Heartflow RoadMap Analysis offers a highly intuitive anatomic visualization of the coronary arteries,
helping physicians quickly identify clinically relevant areas to focus their review.
•Heartflow FFRCT Analysis calculates blood flow and pinpoints functionally significant CAD at every
point in the major coronary arteries, guiding decisions on whether a patient requires invasive
revascularization.
•Heartflow Plaque Analysis provides a comprehensive assessment of coronary plaque, enabling
optimized medical treatment strategies.
The Heartflow Platform is currently commercially available in the United States, United Kingdom, Europe,
and Japan. We have developed a highly scalable, capital efficient commercial model that combines
Territory Sales Managers (“TSMs”) who drive new account adoption with Territory Account Managers
(“TAMs”) who focus on increasing utilization by educating referring physicians. Our commercial team does
not cover cases or otherwise spend time in an operating room or lab setting, which enables them to focus
solely on driving commercial adoption and educational activities. We also have small, direct commercial
teams in our international markets. In the future, we may expand our international presence beyond these
markets.
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Our technology is simple and intuitive and does not require the purchase of any capital equipment. Our
onboarding process seamlessly integrates the Heartflow Platform into the customer’s daily workflow.
These unique attributes of our business model afford our commercial organization a differentiated level of
efficiency and scalability.
We have experienced considerable revenue growth since we began commercializing the Heartflow
Platform in 2015, driven primarily by growth in our account base and increasing test volumes at existing
accounts. We recognized revenue of $          million for the year ended December 31, 2024, compared to
revenue of $87.2 million for the year ended December 31, 2023. Substantially all of our revenue is
generated on a “pay per click” basis each time a physician chooses to review either our Heartflow FFRCT
Analysis, Heartflow Plaque Analysis, or both and we recognize usage-driven fee revenue upon delivery of
the requested analysis to the physician. Heartflow FFRCT Analysis has served as our commercial
foundation, representing          % of our revenue in 2024. In the second half of 2023, we initiated limited
market education efforts for Heartflow Plaque Analysis, our second commercial product. Our Heartflow
RoadMap Analysis is generally provided as a workflow efficiency tool to drive customer retention and
loyalty and is not a stand-alone product.
To date, we have primarily funded our operations with proceeds from sales of shares of our redeemable
convertible preferred stock, common stock and convertible promissory notes, borrowings under our term
loans and revenue received from our customers. As of December 31, 2024, we had $          million in cash
and cash equivalents. In January 2025, we issued $48.4 million in aggregate principle amount of the 2025
Convertible Notes to investors, including related parties, with original maturity dates of 48 months from
the dates of issuance. The consideration for the issuance of the 2025 Convertible Notes was comprised
of $25.4 million in cash and the exchange of $23 million of outstanding indebtedness under the 2024
Credit Agreement (as defined below).
We have incurred significant operating losses and negative cash flows since our inception. Our net loss
for the year ended December 31, 2024 and December 31, 2023 was $          million and $95.7 million,
respectively. As of December 31, 2024, we had an accumulated deficit of $          million.
Key factors affecting our results of operations and performance
We believe there are several important factors that have impacted and that we expect will continue to
impact our operating performance and results of operations for the foreseeable future. These factors
include, among others:
•Rate of adoption of CCTA in the market and our ability to increase adoption of the CCTA + Heartflow
pathway among both referring and reading physicians.
•Ability to successfully introduce our Heartflow Plaque Analysis and other new products and the rate at
which they are adopted by physicians.
•Ability to automate an increasing number of the manual components of our production process and
the rate at which we hire and train analysts to full productivity.
•We experience seasonality throughout the year based on a number of factors, including staff
availability, vacations, weather and other macro economic events.
•Publications of clinical results by us and third-parties.
Heartflow revenue cases
We regularly review a number of operating and financial metrics to evaluate our business, measure our
performance, identify trends affecting our business, formulate our business plan and make strategic
decisions. Substantially all of our revenue is generated on a “pay per click” basis each time a physician
chooses to review either our Heartflow FFRCT Analysis, Heartflow Plaque Analysis, or both and we
recognize usage-driven fee revenue upon delivery of the requested analysis to the physician. We define a
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“Heartflow revenue case” as each time an account orders and we deliver the requested analysis to the
physician. For example, the ordering of both an Heartflow FFRCT Analysis and a Heartflow Plaque
Analysis from a single CCTA counts as two revenue cases. We define an “account” as any individual
facility that orders a Heartflow analysis. Accounts may have more than one reading physician or CT
machine. The following table lists these revenue cases in each of the three month periods as indicated:
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Revenue cases .
12,316
12,701
14,865
16,697
19,537
21,769
23,195
24,897
The period-to-period change in Heartflow revenue cases is an indicator of our ability to drive adoption and
generate sales revenue, and is helpful in tracking the progress of our business. We believe that Heartflow
revenue cases are representative of our current business; however, we anticipate this metric may be
substituted for additional or different metrics as our business grows.
Components of our results of operations
Revenue
Substantially all of our revenue comprises usage-driven fees from accounts who order either our
Heartflow FFRCT Analysis, Heartflow Plaque Analysis, or both. We recognize usage-driven fee revenue
upon delivery of the requested analysis to the physician. Key factors that drive our revenue include the
success of our sales force in expanding adoption of the Heartflow Platform in new accounts and
expanding the utilization of our system in existing accounts. No single customer accounted for 10% or
more of our revenue during the year ended December 31, 2023.
Our revenue has fluctuated, and we expect it to continue to fluctuate from quarter-to-quarter due to a
variety of factors including the number of active accounts, the volume of Heartflow Platform usage at
existing accounts and seasonality. We may experience fluctuations in the volume of Heartflow Platform
usage by our customers based on seasonal factors that impact the number of radiologists and support
staff available to conduct CCTAs at customer accounts.
Cost of revenue and gross margin
Cost of revenue consists of personnel and related expenses, including stock-based compensation costs,
primarily related to our production team. Additional costs include third-party hosting fees, amortization of
capitalized internal-use software, amortization of contract fulfillment costs as well as royalties associated
with technology licenses used in connection with the delivery of our product and allocated overhead,
which includes facilities expenses, equipment, depreciation and technology services. The role of the
production team is to support our patient case volume revenue by performing defined quality-related
activities on CCTA scans submitted by our customers for analysis. The portion of these costs that
supports patient case volume revenue is recorded as cost of revenue. The production team also supports
activities in our clinical trials and research and development, which are allocated as research and
development expense. We expect cost of revenue to increase as we hire additional personnel in our
production team to support our increasing patient case volume.
We calculate gross margin as gross profit divided by revenue. Our gross margin has been and will
continue to be affected by a variety of factors, primarily by our production team costs, the timing of hiring
new production team members and training them to full productivity, the timing of our acquisition of new
customers and pricing and commercialization of Heartflow Plaque Analysis and other new products.
Although, we expect our gross margin to fluctuate from period to period, based upon the factors described
above, we believe our gross margin will increase over the long term as we leverage the AI-based nature
of our software platform to automate an increasing number of the manual components of our production
teams’ process, thereby lowering the cost of revenue per analysis. We also expect increased revenues
from our Heartflow Plaque Analysis, to positively impact our gross margin, as it runs on the same CCTA
scan as Heartflow FFRCT Analysis.
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Operating expenses
Research and development
Research and development expenses are incurred in connection with the advancement of the Heartflow
Platform with the goal to introduce products, features and improvements aimed at increasing the value
proposition for our customers by expanding its applicability to additional disease states and patient
populations. Research and development expenses consist primarily of engineering, product development,
consulting services, clinical studies to develop and support our products, regulatory activities, medical
affairs, and other costs associated with products and technologies that are in development. Research and
development expenses consist of personnel and related expenses, including stock-based compensation
costs, clinical trials, third-party consulting costs, the portion of the costs incurred by our production team
to support clinical trials and research and development efforts, and allocated overhead, including facilities
expenses, equipment and depreciation. Our research and development (“R&D”) team is comprised of
PhD research scientists with expertise in AI-based algorithms and medical imaging, alongside software
engineers skilled in cloud architecture, AI algorithms, machine and deep learning and 3D visualization, as
well as product managers and designers who ensure optimal customer experience and design. We record
research and development expenses in the periods in which they are incurred. We expect our research
and development expenses to increase as we conduct clinical studies for expanded indications for use
and to hire additional personnel to develop new product offerings and product enhancements.
Selling, general and administrative
Selling, general and administrative expenses consist of personnel and related expenses, including stock-
based compensation costs, related to selling and marketing, commercial operations, reimbursement,
finance, legal, information technology and human resources functions. Other expenses include sales
commission, marketing initiatives, professional service fees (including legal, audit, accounting and tax
fees), market access work to secure reimbursement for our technologies, travel expenses, conferences
and trade shows, and allocated overhead, which includes facilities expenses, software licenses,
depreciation and other miscellaneous expenses.
We expect that our selling, general and administrative expenses will increase in the future as a result of
expanding our operations, including hiring personnel, to both drive and support anticipated growth as well
as various incremental costs associated with operating as a public company. We expect that our costs will
increase related to legal, audit, accounting fees, consulting fees, regulatory and tax-related services
associated with maintaining compliance with exchange listing and SEC requirements, director and officer
insurance costs, investor and public relations costs and other expenses that we did not incur as a private
company. However, we expect selling, general and administrative expenses to decrease as a percentage
of revenue primarily as, and to the extent, our revenue grows.
Interest income (expense), net
Interest income (expense), net consists primarily of interest expense on our 2024 Term Loan and related
amortization of debt discount and debt issuance costs. Interest income is primarily interest earned on our
cash and cash equivalents.
Other income (expense), net
Other income (expense), net consists primarily of changes in fair value related to our Convertible Notes,
common stock warrant and derivative liability as well as foreign exchange transaction gains or losses
from transactions and asset and liability balances denominated in currencies other than the U.S. dollar.
We will continue to record adjustments to the estimated fair value of the common stock warrant until the
warrants are exercised or expire and on the derivative liability until a business combination or repayment
of the 2024 Term Loan.
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Provision for income taxes
Provision for income taxes consists of income tax expense in foreign jurisdictions. To date, we have not
recorded any U.S. federal or state income tax expense. We have net deferred tax assets for U.S. federal
income taxes for which we provide a full valuation allowance. Due to our history of net operating losses
since inception, we expect to maintain a full valuation allowance in the foreseeable future due to
uncertainties regarding our ability to realize these assets.
Results of operations
Comparison of years ended December 31, 2023 and 2024
The following table summarizes our results of operations for the years ended December 31, 2023 and
2024:
Year ended December 31,
Change
(dollars in thousands)
2023
2024
$
%
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$87,174
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . .
29,123
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,051
Operating expenses
Research and development . . . . . . . . . . . .
35,854
Selling, general and administrative . . . . . .
95,111
Total operating expenses . . . . . . . . . . . . . . . .
130,965
Loss from operations . . . . . . . . . . . . . . . . . . . .
(72,914)
Interest income (expense), net . . . . . . . . . . . .
(19,237)
Other income (expense), net . . . . . . . . . . . . .
(2,957)
Loss before provision for income taxes . . . .
(95,108)
Provision for income taxes . . . . . . . . . . . . . . .
(547)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(95,655)
Revenue
Revenue increased $          million, or          %, to $          million during the year ended December 31,
2024, compared to $87.2 million during the year ended December 31, 2023. The increase in revenue was
primarily attributable to an increase in volume from new and existing active accounts, partially offset by a
modest reduction in average sales price.
Cost of revenue and gross margin
Cost of revenue increased $          million, or          %, to $           million during the year ended December
31, 2024, compared to $29.1 million during the year ended December 31, 2023. This increase was
attributable to $          million in personnel and related expenses, $          million in allocated overhead,
$          million in amortization of capitalized internal-use software, $          million in third-party hosting
fees and $          million in royalties. Personnel and related expenses included $           million and $0.4
million of stock-based compensation costs during the year ended December 31, 2024 and 2023,
respectively. Gross margin for the year ended December 31, 2024 increased to          % as compared to
67% for the year ended December 31, 2023.
Research and development expenses
Research and development expenses increased $          million, or          %, to $          million during the
year ended December 31, 2024, compared to $35.9 million during the year ended December 31, 2023.
The increase in research and development expenses was primarily attributable to an increase of
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$          million in personnel and related expenses, $          million in allocated overhead, $          million in
third-party consulting costs and $          million in clinical trial expenses, partially offset by $          million of
capitalized research and development expenses. Personnel and related expenses included $          million
and $3.3 million of stock-based compensation costs during the year ended December 31, 2024 and 2023,
respectively.
Selling, general and administrative expenses
Selling, general and administrative expenses increased $          million, or          %, to $          million
during the year ended December 31, 2024, compared to $95.1 million during the year ended
December 31, 2023. The increase in selling, general and administrative expenses was primarily
attributable to an increase of $          million in personnel and related expenses, $          million in allocated
overhead, $          million in legal, audit and other professional fees, $          million in third-party consulting
costs, $          million in travel and related expenses and $          million in marketing expenses. Personnel
and related expenses included $          million and $8.7 million of stock-based compensation costs for the
year ended December 31, 2024 and 2023, respectively.
Interest income (expense), net
Interest income (expense), net increased to expense of $          million during the year ended December
31, 2024, compared to expense of $19.2 million during the year ended December 31, 2023. This
increased expense was attributable to               . As of December 31, 2024 and 2023, the aggregate
outstanding principal balance (including interest paid-in-kind) under our 2024 Term Loan was
$          million and $138.1 million, respectively.
Other income (expense), net
Other income (expense), net increased to an expense of $          million during the year ended December
31, 2024, compared to expense of $3.0 million during the year ended December 31, 2023. The increase
was primarily attributable to the remeasurement and recognition of the changes in fair value related to our
Convertible Notes, common stock warrant and derivative liability.
Provision for income taxes
Provision for income taxes was $547,000 for the year ended December 31, 2023 related to our foreign
taxes.
Selected quarterly results of operations data
The following table sets forth selected unaudited quarterly statements of operations data for each of the
four fiscal quarters ended December 31, 2023 and 2024. The unaudited information for each of these
quarters has been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”),
on the same basis as our audited annual consolidated financial statements included elsewhere in this
prospectus and includes, in the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for the fair statement of the results of operations for these periods. This
data should be read in conjunction with our consolidated financial statements and related notes included
elsewhere in this prospectus. These historical quarterly operating results are not necessarily indicative of
our operating results for the full year or any future period.
Three months ended
(in thousands)
March 31,
2023
June 30,
2023
September
30, 2023
December
31, 2023
March 31,
2024
June 30,
2024
September
30, 2024
December
31, 2024
Revenue . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . .
Total operating expenses . . . . . . .
Loss from operations . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . .
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Quarterly trends
Revenue
Our quarterly revenue increased sequentially in each of the periods presented primarily due to the
addition of new customers and revenue growth from the expansion of revenue cases volume within our
existing customer base.
Cost of revenue and gross margin
With the exception of the three months ended September 30, 2023, cost of revenue generally increased
sequentially in each of the quarters presented, driven by increased sales. During the three months ended
September 30, 2023, cost of revenue decreased as we introduced the automation of certain manual
components of our production teams process thereby resulting in decreased personnel and related
expenses and allocated overhead.
Our quarterly gross margins have fluctuated between          % and          % in each period presented.
Operating expenses
Total operating expenses have generally increased sequentially in each period presented with the
exception of the three months ended September 30, 2023. Operating expenses fluctuate due to timing of
consulting projects, legal expenses, clinical studies, stock-based compensation and the capitalization of
research and development expenses.
Operating expenses also increased in the three months ended December 31, 2023 due to an increase of
$              million in allowance for credit losses and increases in the corporate bonus accrual and legal
and other professional fees.
Liquidity and capital resources
Sources of liquidity
Since inception, we have primarily funded our operations with proceeds from sales of shares of our
redeemable convertible preferred stock, common stock and convertible promissory notes, borrowings
under our term loans and revenue received from our customers. As of December 31, 2024, we had
$          million in cash and cash equivalents, accumulated deficit of $          million and $          million
outstanding under our 2024 Term Loan. On January 24, 2025 and January 31, 2025, we reduced our
outstanding indebtedness under our 2024 Term Loan by $23.0 million and received $25.4 million,
respectively, in cash in exchange for the issuance of $48.4 million in aggregate principal amount of 2025
Convertible Notes, as described below.
Our losses primarily resulted from the costs incurred in the development and sales and marketing of our
products and providing general and administrative support for our operations. We expect to continue to
incur losses and to expend significant amounts of cash in the foreseeable future as we continue to scale
our business, invest in research and development activities, increase sales and marketing efforts to
support commercial expansion, and increase general and administrative expenses to support being a
publicly-traded company.
Hayfin credit agreement
On June 14, 2024, we entered into a Credit Agreement and Guaranty for a $138.1 million term loan to
refinance the outstanding obligations under the initial credit agreement we entered into with Hayfin on
January 19, 2021 and the additional term loans entered into with Hayfin on March 17, 2022 in exchange
for the payment of exit fees and early prepayment fees in the aggregate amount of $8.3 million payable in
sixteen equal quarterly installments, or immediately upon the occurrence of a financing event, including
but not limited, to the completion of this offering. On January 24, 2025, in connection with the issuance of
the 2025 Convertible Notes as further described below, we entered into Amendment No. 1 to the Credit
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Agreement and Guaranty (as amended, the “2024 Credit Agreement”) to amend the terms and conditions
governing the term loan outstanding thereunder (as amended, the “2024 Term Loan”).
The 2024 Term Loan matures on June 14, 2028 and bears interest equal to the sum of (i) 7.0% (or 6.0% if
the alternative base rate (“ABR”) is in effect) plus (ii) the greater of (x) the forward-looking term rate based
on Secured Overnight Financing Rate (“SOFR”) for a respective tenor in effect on such day (or the
alternative base rate, if applicable), and (y) 2.0%. The ABR equals to the sum of (i) 6.0% plus (ii) the
greater of (1) the Wall Street Journal Prime Rate, plus 0.5%, (2) the Federal Reserve Bank of New York
rate plus 0.5% or (3) CBA Term SOFR for one month tenor plus 1.0%. We have an option to pay interest
in-kind at the rate equal to the cash interest rate plus 1.0% through the last interest period ending before
the 18th month anniversary of the 2024 Credit Agreement. We have an option to prepay the 2024 Term
Loan subject to a prepayment fee of 1.5% for prepayments after the second anniversary but on or prior to
the third anniversary of the 2024 Term Loan and a prepayment fee of 3% for prepayments thereafter. The
2024 Term Loan must be repaid in full immediately upon the occurrence of a change in control. In
connection with the completion of this offering, we are obligated to use certain of the net proceeds from
this offering to repay the 2024 Term Loan in an amount equal to the lesser of (i) the net cash proceeds of
this offering in excess of $150.0 million and (ii) $50.0 million (or $55.0 million if the underwriters exercise
their option to purchase additional shares).
The 2024 Credit Agreement contains customary representations and warranties, events of default and
affirmative and negative covenants, including, among others, covenants that limit or restrict our (and our
subsidiaries) ability to incur additional indebtedness, grant liens, merge or consolidate, make acquisitions,
pay dividends or other distributions or repurchase equity, make investments, dispose of assets and enter
into certain transactions with affiliates, in each case subject to certain exceptions. Financial covenants
require us to maintain a $15.0 million minimum liquidity balance in cash and cash equivalents at all times
and minimum net sales for twelve consecutive month periods ending on the last day of a fiscal quarter,
which is not tested as long as the we maintain minimum liquidity of at least $60.0 million and there has
been no decline in net sales for two-consecutive fiscal quarters at the end of such fiscal quarter. The
minimum twelve months trailing net sales covenant increases each quarter and is $78.8 million for the
quarter ended June 30, 2024 up to a minimum net sales amount of $110.0 million for the quarter ended
June 30, 2025 and each quarter thereafter. Events of default in the 2024 Credit Agreement include,
among others, non-payment of principal, interest or fees, violation of covenants, inaccuracy of
representations and warranties, bankruptcy and insolvency events, material judgments, cross-defaults to
material contracts and events constituting a change of control. Upon the occurrence of an event of
default, the interest rate applicable to the 2024 Term Loan shall increase by 3.0% per annum and the
outstanding principal balance, along with any accrued interest, shall become immediately due and
payable. As of December 31, 2024, we were in compliance with the 2024 Credit Agreement covenants.
Convertible notes
During the period from September 2022 through December 2022, we issued convertible promissory notes
(the “Convertible Notes”) to certain investors, with an aggregate principal amount of $40.0 million. The
Convertible Notes bore interest at a rate of 8% per annum, compounded monthly. The aggregate principal
amount and interest accrued on the Convertible Notes was due September 30, 2026, and could not be
prepaid by us without the consent of a majority of the Convertible Note investors.
In March 2023, we completed a Qualified Financing (as defined in the Convertible Notes) and all of the
Convertible Notes, including principal and interest, were converted into 21,465,064 shares of our Series
F-1 redeemable convertible preferred stock. In connection with the conversion of the Convertible Notes
into the shares of our Series F-1 redeemable convertible preferred stock, we derecognized the
Convertible Notes in our consolidated balance sheet. We remeasured the fair value of the Convertible
Notes immediately before the conversion and recognized a $5.1 million loss from the change in fair value
in the consolidated statement of operations and comprehensive loss for the year ended December 31,
2023.
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In January 2025, we issued convertible promissory notes to certain existing investors and certain
employees (the “Requisite Holders”) in the amount of up to $75.0 million (the “2025 Convertible Notes”).
The 2025 Convertible Notes are due and payable in full 48 months from the issue date. Upon completion
of an IPO transaction, the 2025 Convertible Notes shall automatically convert into shares of our common
stock at the IPO price per share at the lower of a 20% discount and a valuation cap of $2.0 billion on a
pre-money basis. In the event we complete a sale of shares of our preferred stock, the Requisite Holders
may elect to convert the outstanding 2025 Convertible Notes into shares of such series of preferred stock
at the same terms. Further, upon a change of control transaction, the Requisite Holders may elect to
convert the outstanding 2025 Convertible Notes into shares of our common stock at the lower of a 20%
discount to the implied price per share of common stock in the change of control transaction and a
valuation cap of $2.0 billion on a pre-money basis, or receive payment of all principal and any accrued but
unpaid 2025 Convertible Notes paid in-kind (“PIK”) interest. The 2025 Convertible Notes do not accrue
interest for one year following the date of issuance. Following the one-year anniversary of the issue date
and for the remainder of the term, the 2025 Convertible Notes interest will accrue on an annual basis at
the rate of 7.0% per annum. All PIK interest accrued and payable will be paid by capitalizing such interest
on an annual basis and adding it to the outstanding principal amount of the 2025 Convertible Notes.
In connection with the issuance of the 2025 Convertible Notes, we entered into Amendment No.1 to the
2024 Credit Agreement, in which our lender, Hayfin, converted $23.0 million of principal under the 2024
Term Loan to 2025 Convertible Notes under the same terms as the other purchasers of the 2025
Convertible Notes.
Cash flows
The following table summarizes our cash flows for each of the periods presented:
Year ended December 31,
(in thousands)
2023
2024
Net cash used in operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(76,434)
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,105)
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
169,318
Net cash used in operating activities
Net cash used in operating activities for the year ended December 31, 2024 was $          million,
attributable to a net loss of $          million and a net change in operating assets and liabilities of
$          million, partially offset by non-cash charges of $          million. The non-cash charges primarily
consisted of stock-based compensation expense, change in fair value of common stock warrant, change
in fair value of derivative liability, depreciation and amortization, and amortization of debt discount and
debt issuance costs. The increase in net operating assets was primarily due to an increase in accounts
receivable and a decrease in operating lease liabilities, partially offset by an increase in accrued
expenses and other current liabilities.
Net cash used in operating activities was $76.4 million for the year ended December 31, 2023,
attributable to a net loss of $95.7 million and a net change in operating assets and liabilities of $8.5
million, partially offset by non-cash charges of $27.8 million. Non-cash charges primarily consisted of
$11.9 million in stock-based compensation expense, $5.1 million of change in fair value of convertible
note, $4.7 million of depreciation and amortization, $3.6 million of amortization of debt discount and debt
issuance costs and $2.3 million of change in fair value of common stock warrant, partially offset by $4.2
million of change in fair value of derivative liability. The net changes in operating assets and liabilities
primarily consisted of an increase of $9.4 million in accounts receivable and a decrease of $1.8 million in
operating lease liabilities, partially offset by an increase of $3.8 million in accrued expenses and other
current liabilities.
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Net cash used in investing activities
Net cash used in investing activities for the year ended December 31, 2024 was $          million consisting
of purchases of property and equipment.
Net cash used in investing activities for the year ended December 31, 2023 was $6.1 million consisting of
purchases of property and equipment.
Net cash provided by financing activities
Net cash provided by financing activities for the year ended December 31, 2024 of $          million
primarily related to proceeds of $          million from our 2024 Term Loan re-financing and $          million in
proceeds from the exercise of stock options.
Net cash provided by financing activities for the year ended December 31, 2023 was $169.3 million,
primarily attributable to net proceeds of $169.0 million from the issuance of our Series F redeemable
convertible preferred stock.
Future funding requirements
Our recurring losses from operations and negative cash flows raise substantial doubt about our ability to
continue as a going concern within 12 months after the issuance date of the consolidated financial
statements as of and for the year ended December 31, 2023. See Note 1 to our consolidated financial
statements included elsewhere in this prospectus for additional information on our assessment. Similarly,
our independent registered public accounting firm included an explanatory paragraph in its report on
these financial statements as of and for the year ended December 31, 2023, describing the existence of
substantial doubt about our ability to continue as a going concern.
Based on our current operating plan, we believe that the estimated net proceeds from this offering
together with the expected cash generated from revenue transactions with customers and our existing
cash and cash equivalents, will be sufficient to fund our planned operating expenses and capital
expenditure requirements for at least the next 12 months. We have based this estimate on assumptions
that may prove to be wrong, and we could deplete our capital resources sooner than we expect. We may
experience lower than expected cash generated from operating activities or greater than expected capital
expenditures, cost of revenue, or operating expenses, and may need to raise additional capital to fund
operations, further research and development activities, or acquire, invest in, or in-license other
businesses, assets, or technologies.
Our future funding requirements will depend on many factors, including the following:
•the market acceptance of our products;
•the timing, scope, rate of progress, results and costs of our research and development activities;
•the number, scope and duration of current or future clinical studies and additional regulatory
clearances or approval;
•the effect of competing technological and market developments;
•the costs and timing of future commercialization activities, including marketing and sales, for
Heartflow Plaque Analysis and any other new products;
•the amount of revenue, if any, received from commercial sales of our Heartflow Plaque Analysis and
any other new products;
•the impact of competitors’ products and technological advances and other market developments;
•the expenses needed to attract and retain skilled personnel;
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•the size of the markets and degree of market acceptance of any products in territories in which we
receive regulatory approval, including product pricing, product coverage, and the adequacy of
reimbursement by third-party payors;
•Whether we acquire third-party companies, products or technologies;
•Restructuring, refinancing or repayment of debt;
•the increase in the number of our employees to support growth initiatives;
•the cost of attaining, defending and enforcing our patents and other intellectual property rights;
•the timing of when we pay our operating expenses;
•the costs associated with being a public company; and
•other factors, including economic uncertainty, geopolitical tensions, healthcare reform and changes in
administration, which may exacerbate the magnitude of the factors discussed above.
Furthermore, our operating plans may change, and we may need additional funds to meet operational
needs and capital requirements for clinical trials and other research and development expenditures.
Contractual obligations and commitments
Our contractual commitments will have an impact on our future liquidity. These commitments include
future payments on non-cancellable facility leases, purchase obligations related to research and
development and professional services under non-cancellable contracts, royalty obligations for exclusive
technology licensing agreements and future payments on our 2024 Term Loan. Where applicable, we
calculate our obligation based on termination fees that can be paid to exit the contract.
Lease agreements
We have operating lease arrangements for office space in Mountain View, California, Austin, Texas, and
Tokyo, Japan. As of December 31, 2024, we had total lease payment obligations under non-cancelable
leases of $           million, including $           million payable through December 31, 2025. See Note 6 and
Note 18 to our consolidated financial statements included elsewhere in this prospectus.
Royalty payments
We entered into various exclusive technology licensing agreements that requires us to make annual
royalty payments in fixed amounts as well as certain milestone and revenue-based payments. As of
December 31, 2024, we had total royalty obligations under these agreements of $           million, including
$           million payable through December 31, 2025. See Note 7 to our consolidated financial statements
included elsewhere in this prospectus.
2024 Term Loan
Principal payments required on debt outstanding under our 2024 Term Loan as of December 31, 2024
was $           million, which includes $           million of interest payable. See Note 8 and Note 18 to our
consolidated financial statements included elsewhere in this prospectus.
Recently issued accounting pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial
position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements
included elsewhere in this prospectus.
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Critical accounting policies and estimates
Our management’s discussion and analysis of our financial condition and results of operations is based
on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The
preparation of these consolidated financial statements requires us to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Our
estimates are based on our historical experience and various other factors that we believe are reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying
value of assets and liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions and any such differences may be
material.
While our significant accounting policies are described in more detail in Note 2 to our consolidated
financial statements included elsewhere in this prospectus, we believe that the following discussion
addresses our most critical accounting policies, which are those most important to our financial condition
and results of operations and require our most difficult, subjective and complex judgments.
Common stock warrants
We have issued freestanding warrants to purchase shares of common stock in connection with our 2024
Term Loan. We classify these warrants as a liability because they do not meet the equity indexation
criteria. We record the fair value of the warrant on the consolidated balance sheet upon issuance and is
subject to remeasurement at each balance sheet date. The changes in the fair value of the warrants are
recorded in the consolidated statement of operations and comprehensive loss. We utilize the Black-
Scholes option-pricing model, which incorporates assumptions and estimates, to value the common stock
warrant liability. Significant estimates and assumptions impacting fair value include the stock price,
contractual term, expected volatility and weighted average risk-free interest rate.
The estimated aggregate fair value of the warrants issued in connection with the 2024 Term Loan in
January 2021 and March 2022 was $4.3 million and $3.5 million, respectively. We recognized a $2.3
million loss from the change in fair value in the consolidated statement of operations and comprehensive
loss during the year ended December 31, 2023.
Derivative liability
We determined that our 2024 Term Loan contains certain prepayment features, default put option and
default interest adjustment features that were determined to be embedded derivatives requiring
bifurcation and separate accounting as a single compound derivative. The impact of bifurcation of the
embedded derivative on the date of issuance was reflected as a debt discount. The instrument was
classified as a liability on the consolidated balance sheet and is subject to remeasurement at each
balance sheet date. Any change in fair value of the derivative liability is recognized in the consolidated
statement of operations and comprehensive loss.
We utilize both the Black-Scholes-Merton and option-pricing method, which incorporates certain
assumptions and estimates, to value the derivative liability. These include the estimated time and
probability of a business combination or IPO, default, change of control and incurrence of new debt,
weighted common stock value, debt yield, expected volatility and risk-free interest rate.
The estimated fair value of the derivative liability was $2.1 million at the issuance date in January 2021.
We recognized a gain of $4.2 million from the change in fair value in the consolidated statement of
operations and comprehensive loss during the year ended December 31, 2023.
Stock-based compensation
Stock-based compensation related to share-based awards granted to employees, consultants and to
members of our board of directors is measured at fair value. Compensation expense for those awards is
recognized on a straight-line basis over the requisite service period, which is generally the vesting period.
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For performance-based stock options, we assess the probability of performance conditions being
achieved in each reporting period. The amount of stock-based compensation expense recognized in any
one period related to performance-based stock options can vary based on the achievement or anticipated
achievement of the performance conditions. We account for forfeitures of stock-based awards as they
occur.
We estimate the fair value of each option award on the date of grant using the Black-Scholes option -
pricing model. This model requires the use of highly subject assumptions to determine the fair value,
including:
•Fair value of common stock. See the subsection titled “—Determination of fair value of common
stock” below.
•Expected term. The expected term represents the period that the stock-based awards are expected to
be outstanding. The expected term for our stock options was calculated based on the weighted-
average vesting term of the awards and the contract period, or simplified method.
•Expected volatility. Since we are not yet a public company and do not have any trading history for our
common stock, the expected volatility was estimated based on the average historical volatilities of
common stock of comparable publicly traded entities over a period equal to the expected term of the
stock option grants. The comparable companies were chosen based on their size, stage of their life
cycle or area of specialty.
•Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield in effect at the
time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected
term of the awards.
•Expected dividend yield. The expected dividend yield is zero as we have not paid dividends nor do we
anticipate paying any dividends on our common stock.
We expect to continue to grant equity-based awards in the future, and to the extent that we do, our stock-
based compensation expense recognized in future periods will likely increase.
Determination of fair value of common stock
As there has been no public market for our common stock to date, the estimated fair value of our common
stock underlying our share-based awards was estimated on each grant date by our management and
approved by our board of directors. Our board of directors exercised reasonable judgment and
considered a number of objective and subjective factors, as well as valuations prepared by independent
third-party valuation firms. The methodologies used to estimate the enterprise value are performed using
methodologies, approaches and assumptions consistent with the American Institute of Certified Public
Accountants Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities
Issued as Compensation (the Practice Aid).
In addition to considering the results of independent third-party valuations, our board of directors
considered various objective and subjective factors to determine the fair value of common stock as of
each grant date, including:
•contemporaneous valuations performed by independent third-party specialists;
•the prices, rights, preferences and privileges of our redeemable convertible preferred stock relative to
those of our common stock;
•the prices of common or preferred stock sold to third-party investors by us and in secondary
transactions or repurchased by us in arms-length transactions;
•lack of marketability of our common stock;
•our actual operating and financial performance;
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•current business conditions and projections;
•our stage of development;
•likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition of
our company given prevailing market conditions;
•the market performance of comparable publicly traded companies; and
•the U.S. and global capital market conditions.
For our valuations performed, the allocation of these enterprise values to each our share classes utilized
the hybrid method. The hybrid method considered the stay private scenario and IPO exit scenario. In the
stay private scenario, three market methodologies were employed including (i) a market indexing
valuation analysis based on the Series F Preferred financing round, (ii) a guideline public company
analysis based on historical and forecast operating metrics for us, and (iii) a guideline transaction analysis
based on historical and forecast operating metrics for us. In the IPO exit scenario, the total equity value
was estimated based on the expected timing, offering size and pre-money valuation.
The assumptions underlying these valuations represented management’s best estimate, which involved
inherent uncertainties and the application of management’s judgment. As a result, if we had used
significantly different assumptions or estimates, the fair value of our common stock and our stock-based
compensation expense could be materially different.
Once a public trading market for our common stock has been established in connection with the
completion of this offering, it will no longer be necessary for our board of directors to estimate the fair
value of our common stock in connection with our accounting for share-based payments, as the fair value
of our common stock will be based on the quoted market price of our common stock.
Off-balance sheet arrangements
During the periods presented we did not have, nor do we currently have, any off-balance sheet
arrangements as defined in the rules and regulations of the SEC.
Quantitative and qualitative disclosures about market risks
Interest rate risk
As of December 31, 2024, we had cash and cash equivalents of $           million. Our cash and cash
equivalents are held for working capital purposes. We do not enter into investments for trading or
speculative purposes. Due to the short-term nature of our cash equivalents, we have not been exposed
to, nor do we anticipate being exposed to, material risks due to changes in interest rates.
Our exposures to market risk for changes in interest rates relate primarily to our 2024 Term Loan
(described above) which bears floating interest rates and a rising interest rate environment will increase
the amount of interest paid on these loans. Each 100 basis point increase in these initial rates would
increase annual interest expense by approximately $           million assuming the 2024 Term Loan remain
outstanding for the annual period.
Credit risk
Our cash and cash equivalents, which at times may exceed federally insured limits, is maintained with
large financial institutions. As of the issuance date of the financial statements included in this report, we
have not experienced any losses on our deposits and all of our cash deposits have been accessible to us.
Our accounts receivable primarily relate to revenue from the sale of our products to medical
providers.           customer and no customer represented 10% or more of our accounts receivable as of
December 31, 2024 and 2023, respectively.
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Foreign currency exchange risk
The vast majority of our cash generated from revenue is denominated in U.S. dollars, with a small amount
denominated in other foreign currencies. Our expenses are generally denominated in the currencies of
the jurisdictions in which we conduct our operations, which are primarily in the United States, United
Kingdom and Japan. Our results of operations and cash flows are, therefore, subject to fluctuations due to
changes in foreign currency exchange rates. The effect of a hypothetical 10% change in foreign currency
exchange rates applicable to our business would not have had a material impact on our consolidated
financial statements during the year ended December 31, 2024. As the impact of foreign currency
exchange rates has not been material to our historical operating results, we have not entered into
derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency
becomes more significant.
Effects of inflation
Inflation generally affects us by increasing our cost of labor and overhead costs. We do not believe that
inflation has had a material impact on our business, results of operations, or financial condition, or on our
consolidated financial statements included elsewhere in this prospectus.
Emerging growth company status
We are an “emerging growth company” under the JOBS Act, which permits us to take advantage of an
extended transition period to comply with new or revised accounting standards applicable to public
companies. We have elected to use this extended transition period until we are no longer an emerging
growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a
result, our consolidated financial statements may not be comparable to companies that comply with new
or revised accounting pronouncements applicable to public companies. The JOBS Act also exempts us
from having to provide an attestation and report from our independent registered public accounting firm
on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of
2002.
We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year
following the fifth anniversary of the completion of this offering; (ii) the last day of the fiscal year in which
we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which
we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which
would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of
the last business day of the second fiscal quarter of such year; or (iv) the date on which we have issued
more than $1.0 billion in non-convertible debt securities during the prior three-year period.
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Business
Overview
We have pioneered the use of software and AI to deliver a more accurate and clinically effective non-
invasive solution for diagnosing and managing coronary artery disease (“CAD”), a leading cause of death
worldwide. As of December 31, 2024, our Heartflow Platform has been used to assess CAD in more than
375,000 patients, including 132,000 in 2024 alone. We believe that we are the most widely adopted AI-
powered test for CAD. Our novel platform leverages AI and advanced computational fluid dynamics to
create a personalized 3D model of a patient’s heart from a single coronary computed tomography
angiography (“CCTA”), a specialized type of scan that provides detailed images of the heart’s arteries.
Our Heartflow Platform delivers actionable insights on blood flow, stenosis, plaque volume and plaque
composition thereby overcoming the limitations of traditional non-invasive imaging tests which rely on
indirect measures of coronary disease and lead to high false negative and false positive rates. We believe
the differentiated accuracy and clinical utility of our Heartflow Platform, along with its ability to enhance
workflows, will continue to support our growth and advance the “CCTA + Heartflow” pathway as the
definitive standard for the non-invasive diagnosis and management of CAD.
CAD occurs when plaque—a buildup of cholesterol, fat, calcium and other substances—accumulates on
the walls of the coronary arteries, restricting blood flow and increasing the risk of heart attack or stroke.
This condition is responsible for half of all cardiovascular-related deaths globally. In the United States
alone, the Centers for Disease Control (“CDC”) estimates that approximately 805,000 people suffer a
heart attack each year. Despite significant advancements in therapeutic and interventional treatments,
CAD remains the leading cause of death globally because healthcare systems generally lack scalable
methods to efficiently detect, diagnose and quantify CAD at a personalized level.
We estimate that there were approximately 9.5 million non-invasive tests (“NITs”) in the United States in
2023 for patients experiencing stable or acute chest pain, which we refer to as symptomatic CAD
patients. These NITs primarily include stress tests, such as single-photon emission computed tomography
(“SPECT”), echocardiography and positron emission tomography (“PET”), which infer the presence of
heart disease based on how well blood is supplied to the heart, and do not measure the actual disease
itself. Accordingly, these tests have been shown to be unreliable and inconsistent.
CCTA has emerged as a leading non-invasive imaging method for evaluating CAD, offering direct and
detailed visualization of the coronary arteries. Unlike traditional stress-based NITs, CCTA enables
physicians to identify the presence and extent of coronary blockage. As a result, CCTA has become the
preferred first-line test for patients with suspected CAD. However, while CCTA provides superior
anatomical imaging, it does not independently quantify the severity of CAD, assess blood flow limitations,
or characterize plaque composition—critical factors for determining the most appropriate, personalized
course of treatment for a patient.
Our Heartflow Platform builds upon the well established strengths of CCTA by going beyond its limitations
and providing new quantified insights and compelling visualizations of data. By applying our advanced AI-
powered technology to a single CCTA scan, we generate a precise, patient-specific analysis that
quantifies blood flow, measures plaque burden, and characterizes plaque composition—at every point in
the major coronary arteries.
To date, we have developed three software products under the Heartflow Platform that provide physicians
with the critical insights needed to effectively diagnose and manage CAD:
•Heartflow RoadMap Analysis offers a highly intuitive anatomic visualization of the coronary arteries,
helping physicians quickly identify clinically relevant areas to focus their review.
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•Heartflow FFRCT Analysis calculates blood flow and pinpoints functionally significant CAD at every
point in the major coronary arteries, guiding decisions on whether a patient requires invasive
revascularization.
•Heartflow Plaque Analysis provides a comprehensive assessment of coronary plaque, enabling
optimized medical treatment strategies.
We believe we are the first and most widely-adopted AI-powered test for CAD. With over a decade of
commercial presence, we have established a competitively differentiated data set of over 100 million
annotated images, driving continuous training and refinement of our algorithms for over 10 years and the
ability to train new AI models for future products.
We believe our Heartflow Platform delivers the following key benefits:
•More accurate non-invasive test for CAD, clinically validated to provide superior assessment of
blood flow, plaque volume and plaque characterization compared to traditional non-invasive methods.
•More informed assessments, personalized care, and better risk stratification, positively
impacting physician decisions on which patients should receive an intervention, supporting more
efficient intervention planning and driving more personalized medical management.
•Superior economic efficiency and enhanced interventional treatment planning, accurately
identifying more patients who need interventional treatment while reducing unnecessary invasive
procedures—significantly improving the efficiency of the catheterization lab and therefore hospital
economics.
•Proprietary, secure bi-directional data communication with customers that feeds a growing
database of over 100 million annotated CCTA images that we leverage to improve the Heartflow
Platform’s accuracy, automation and clinical utility and seamlessly deliver new features and workflow
efficiencies to our customers.
•Improved workflow through our Heartflow RoadMap Analysis that reduces CCTA interpretation times
by approximately 25% and reduces variability between reviewing physicians by approximately 50%,
leading to more consistent diagnoses and standardized patient care.
•Better patient and provider experience, by leveraging a single CCTA for all of our products,
patients complete their test in approximately 20 minutes with significantly lower radiation exposure
compared to nuclear imaging tests such as SPECT and PET that take multiple hours and require
radioactive tracers to be injected into the bloodstream. By providing a definitive diagnosis upfront, the
Heartflow Platform eliminates the need for layered testing, streamlining the patient journey and
reducing anxiety associated with uncertain or inconclusive results.
We estimate our current market opportunity in the United States is approximately $5 billion. We believe
our Heartflow FFRCT Analysis is applicable to approximately 33% of NIT patients annually and the majority
of patients experiencing acute chest pain, which represents 3.1 million patients and an estimated market
opportunity of approximately $3.3 billion in the United States. We believe our Heartflow Plaque Analysis is
applicable to approximately 60% of NIT patients annually and the majority of patients experiencing acute
chest pain, which represents 5.5 million patients and an estimated market opportunity of an incremental
approximately $1.7 billion in the United States. Beyond the commercialization of Heartflow FFRCT Analysis
and Heartflow Plaque Analysis in symptomatic CAD, we see a significant market opportunity for our
technologies in at-risk individuals who show no symptoms, a segment comprised of approximately 200
million people globally. To unlock this potential, we are continuing to evaluate new product opportunities
and appropriate clinical evidence supporting eventual regulatory approval, payor coverage and
commercialization.
We believe the Heartflow Platform is the most extensively studied AI-enabled test for CAD. Its accuracy,
clinical utility and economic benefits have been evaluated in over 100 clinical studies and more than
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130,000 patients, including two large randomized controlled trials, with results published in over 600 peer-
reviewed clinical publications. Our studies have consistently demonstrated that the Heartflow Platform is
more accurate than traditional non-invasive tests and highly concordant to invasive testing, reduces
unnecessary invasive testing, and enables physicians to optimize treatment and ultimately provide more
efficient care.
We have developed a highly scalable, capital efficient commercial model that combines Territory Sales
Managers (“TSMs”) who drive new account adoption with Territory Account Managers (“TAMs”) who focus
on increasing utilization by educating referring physicians. Our commercial team does not cover cases or
otherwise spend time in an operating room or lab setting, which enables them to focus solely on driving
commercial adoption and educational activities.
Our technology is simple and intuitive and does not require the purchase of any capital equipment. Our
onboarding process seamlessly integrates the Heartflow Platform into the customer’s daily workflow.
These unique attributes of our business model afford our commercial organization a differentiated level of
efficiency and scalability.
Current clinical guidelines and reimbursement policies strongly support the adoption of the Heartflow
Platform. The CCTA + Heartflow FFRCT Analysis pathway is supported by the American Heart Association
(“AHA”) and American College of Cardiology (“ACC”) guidelines, with CCTA identified as a Class 1, Level
A test and Heartflow FFRCT Analysis identified as a Class 2a, Level B test for the diagnosis of CAD in
certain patients with stable or acute chest pain and no known CAD. Our Heartflow FFRCT Analysis is
reimbursed under a dedicated Category 1 Current Procedural Terminology (“CPT”) code, effective as of
January 1, 2024, and has established coverage policies representing approximately 99% of covered lives
in the United States. A Category 1 CPT code was also recently established for Heartflow Plaque Analysis,
which will take effect in January 2026, and it is covered by all seven Medicare administrative contractor
(“MACs”).
We primarily generate revenue on a “pay per click” basis each time a physician chooses to review either
our Heartflow FFRCT Analysis, Heartflow Plaque Analysis, or both. Heartflow FFRCT Analysis has served
as our commercial foundation, representing        % of our revenue in 2024. In the second half of 2023, we
initiated limited market education efforts for Heartflow Plaque Analysis, our second commercial product.
Our Heartflow RoadMap Analysis is generally provided as a workflow efficiency tool to drive customer
retention and loyalty and is not a stand-alone product.
We have experienced significant revenue growth since we began commercializing the Heartflow Platform
in 2015. We recognized revenue of $        million for the year ended December 31, 2024, compared to
revenue of $87.2 million for the year ended December 31, 2023, representing        % year-over-year
growth. The software-based nature of our Heartflow Platform produces an attractive gross margin profile,
which continues to expand as we leverage AI to automate an increasing portion of our “human-in-the
loop” quality control process, where learnings are fed back into our algorithms to make them smarter and
more efficient. For the twelve months ended December 31, 2024, we generated gross margins of        %,
an increase of        percentage points year-over-year. Our net losses were $95.7 million and $        million
for the years ended December 31, 2023 and 2024, respectively.
Our success factors
We believe the continued growth of our company will primarily be driven by the following success factors:
•Differentiated approach to the non-invasive diagnosis and management of CAD: We are the
first medical technology company authorized for marketing in the United States to leverage software
and AI to accurately and non-invasively diagnose and manage CAD using a single CCTA. As of
December 31, 2024, our Heartflow Platform has been used to assess CAD in more than 375,000
patients, including 132,000 in 2024 alone. Our Heartflow Platform applies AI and advanced
computational fluid dynamics to generate a personalized 3D model of a patient’s heart, delivering
actionable data on blood flow, stenosis, plaque volume and plaque composition. This enables
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physicians to diagnose CAD, assess risk and develop individualized care plans without requiring an
invasive procedure. Unlike traditional NITs that use surrogate measures to diagnose heart disease,
which results in higher rates of false negatives and false positives, the Heartflow Platform measures
and quantifies the actual disease and has been proven to more accurately diagnose CAD. Our
proprietary database of more than 100 million annotated CCTA images, growing daily, has fueled
ongoing AI-driven algorithm refinement for over a decade—enhancing our platform’s value for
patients, physicians, and payors. We believe the unique software technology attributes of our
Heartflow Platform will continue to support our commercial presence and help us establish the CCTA
+ Heartflow pathway as the standard of care for the non-invasive diagnosis and management of CAD.
•Market leader in AI-powered quantitative CAD analysis with strong customer relationships: We
believe our Heartflow Platform is the most widely adopted AI-powered test for CAD, to date, with an
installed base of over 1,100 accounts in the United States as of December 31, 2024, including leading
academic institutions, integrated delivery networks, physician offices and outpatient imaging centers.
Our value proposition resonates across multiple subspecialties, including radiology, cardiology, and
interventional cardiology. Our deep integration into customer workflows and IT infrastructure,
including electronic medical record systems, ensures seamless utilization and efficiency. We believe
our long-standing customer relationships, continuously improving AI-powered software and the highly
embedded nature of our customer integrations will continue to support the rapid adoption of our
Platform. Additionally, as we expand our AI capabilities, introduce new applications such as Heartflow
Plaque Analysis, and further optimize workflow integration, we expect our Platform’s value proposition
to grow—deepening customer reliance on our solutions and accelerating broader market penetration.
•Attractive revenue model with significant operating leverage potential: We primarily generate
revenue on a scalable “pay per click” model, in which we charge per physician review of our Heartflow
FFRCT Analysis, Heartflow Plaque Analysis, or both. Utilization rates for Heartflow FFRCT Analysis
typically scale rapidly after onboarding, approaching approximately 33% of eligible CCTA tests within
an account—a level that is generally sustained over time. As CCTA + Heartflow referral volumes
increase, these stable utilization rates translate into increasing Heartflow revenue cases.These
aspects of our revenue model afford us significant predictability and consistency. Additionally, the AI-
based nature of our software platform produces an attractive gross margin profile that has improved
over time as we have leveraged AI to automate an increasing number of the manual components of
our “human-in-the loop” quality control process thereby lowering the cost of revenue per analysis. For
the twelve months ended December 31, 2024, we generated gross margins of       %, an increase
of       % year-over-year. Given our established relationships and bi-directional data sharing
infrastructure with customers, we also have the opportunity to add and rapidly scale revenue streams
from new software products or indications, such as Heartflow Plaque Analysis, with minimal additional
setup and installation cost and effort for our customers. Since Heartflow Plaque Analysis runs on the
same CCTA scan as Heartflow FFRCT Analysis, we expect favorable operating and gross margin
leverage as its adoption increases. We have also developed a highly scalable enterprise commercial
model that combines TSMs who focus on driving new account adoption with TAMs who educate
referring physicians and drive increased volumes at existing accounts. Unlike traditional medical
technology companies, our software is fully cloud-based, simple to implement, and does not require
case coverage or on-site support. This streamlined, capital-light model enables us to scale efficiently
while maintaining a lean commercial footprint. We believe these structural advantages will enable us
to continue investing in growth while advancing towards profitability.
•Large addressable market opportunity with a significant unmet need: CAD is the leading cause
of death and a highly prevalent condition worldwide with well-established pathways for diagnosis,
primarily through NITs. In the United States alone, approximately 9.5 million NITs were performed for
the diagnosis of CAD in 2023. However, the majority of these tests measure only surrogate markers
for CAD and are therefore often inaccurate leading to missed diagnosis or unnecessary invasive
procedures. By contrast, CCTA imaging combined with our Heartflow Platform provides a more
accurate and actionable NIT for CAD, driving rapid adoption. We believe this approach will ultimately
become the standard of care. Accordingly, we believe our market opportunity represents the 8.6
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million patients non-invasively tested for CAD in 2023 that are indicated for our Heartflow FFRCT
Analysis and Heartflow Plaque Analysis products based on their stenosis and plaque levels,
respectively, representing a market value of approximately $5 billion in the United States alone. While
we have rapidly scaled the adoption of our Heartflow Platform to achieve $       million of revenue in
2024, we believe the Heartflow Platform analyzed only approximately 10% of U.S. CCTA volumes and
represented less than 1% of all NITs in 2023, highlighting a substantial runway for growth. Looking
ahead, we see the potential to expand both our geographic footprint and clinical applications. Beyond
symptomatic CAD, we believe our technology can play a pivotal role in risk stratification and
preventive therapy optimization for the approximately 200 million asymptomatic individuals globally
considered high risk for a cardiac event.
•Robust and compelling portfolio of clinical evidence: We believe the Heartflow Platform is the
most extensively studied AI-enabled test for CAD. The accuracy, clinical utility and economic benefits
of our Heartflow Platform have been evaluated in over 100 clinical studies, encompassing more than
130,000 patients, including two large randomized controlled trials. These findings have been
published in over 600 peer-reviewed clinical publications. These studies have consistently
demonstrated that the Heartflow Platform is more accurate than traditional non-invasive tests and
highly concordant to invasive testing. As a result, the clinical evidence demonstrates that the
Heartflow Platform reduces unnecessary invasive testing, and enables physicians to make more
informed revascularization decisions, delivering more efficient, cost-effective care. For example, our
PRECISE randomized controlled trial showed that our Heartflow FFRCT Analysis was 78% more likely
than traditional testing to identify patients in need of intervention and 69% less likely to progress
patients to unnecessary invasive testing, leading to 2x the yield of ICA leading to revascularization
such as percutaneous coronary intervention (“PCI”) or coronary artery bypass grafting (“CABG”),
compared to standard care. This reduction in unnecessary diagnostic procedures and higher rate of
revascularization procedures represents a clinical benefit for patients and significant economic benefit
for providers. We believe that our extensive body of clinical evidence will drive continued adoption,
and we expect to continue to invest in evidence generation that will expand the applicability of our
Heartflow Platform into new indications.
•Established reimbursement coverage and favorable society support: Our rapid growth is
underpinned by a favorable reimbursement landscape and strong clinical guidelines that drive
adoption of the Heartflow Platform. Our Heartflow FFRCT Analysis is reimbursed under a dedicated
Category 1 CPT code, effective as of January 1, 2024, and has established coverage policies
encompassing approximately 99% of covered lives in the United States. In addition, a Category 1
CPT code was also recently established for our Heartflow Plaque Analysis, set to take effect in
January 2026. Heartflow Plaque Analysis is already covered by all seven local MAC regions, with five
of the seven MACs issuing final local coverage determinations (“LCD”). We expect to leverage our
experience in establishing commercial policies for Heartflow FFRCT Analysis to efficiently establish
commercial coverage for our Heartflow Plaque Analysis. In addition, CCTA combined with our
Heartflow FFRCT Analysis is supported by the AHA and ACC guidelines, with CCTA a Class 1, Level A
test and FFRCT a Class 2a, Level B test for the diagnosis of CAD in certain patients with stable or
acute chest pain and no known CAD. We believe our favorable reimbursement and society support
provides a strong foundation and tailwind for our continued growth.
•Unique and scalable AI, data and R&D capabilities: We designed our AI-powered software
platform to be high quality, highly scalable, integrate seamlessly with physician workflows and
improve as we ingest more data, and leverage that data to improve our algorithms’ performance and
our business efficiency. Our proprietary technology stack includes secure data transfer software, a
scalable cloud database, a web and mobile interface, quality review tools and an AI algorithm pipeline
that delivers diagnostic accuracy, utility, workflow efficiency, and operational scalability. By harnessing
AI to process massive volumes of cases while maintaining a “human-in-the loop” quality control
process, where learnings are fed back into our algorithms to improve their performance and
efficiency, we have been able to rapidly grow our platform while delivering accurate, timely results for
physicians and patients. We have also built a substantial and growing data asset that has driven
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ongoing refinement of our algorithms for more than 10 years with over 100 million annotated CCTA
images. Additionally, our bi-directional data sharing relationship with our customers enables us to
deliver even greater value by ensuring they benefit from ongoing feature additions, workflow
enhancements and performance improvements. Unlike traditional CAD diagnostic tools, our AI
platform can be updated with improved features, better performance and can improve from one of the
largest CCTA datasets globally, creating a competitive advantage that continues to grow over time.
We believe our differentiated AI, data and R&D capabilities and proven dedication to continuous
improvement ensures that Heartflow remains at the forefront of precision coronary care.
•Experienced leadership team: Our senior management team consists of seasoned executives with
deep industry expertise across various disciplines, including biomedical and software engineering,
clinical evidence, medical technology and medical imaging, AI, data science and sales and marketing.
With backgrounds at leading medical technology companies, our leadership has a proven track
record of scaling businesses, securing market adoption and driving innovation.
The convergence of AI advancements, cutting-edge imaging technologies, and broad-based guideline
adoption is accelerating a shift toward more precise, personalized approaches to cardiovascular care. By
integrating anatomical and physiological insights, our technology enables physicians to tailor therapies
more effectively, optimizing treatment decisions and improving patient outcomes. With Heartflow FFRCT
Analysis reimbursement firmly established, growing physician acceptance, and a proven track record of
real-world impact, Heartflow is well-positioned to lead the transformation of coronary care on a global
scale.
Our growth strategies
We believe the following strategies will play a critical role in our continued growth:
•Expand adoption of our Heartflow Platform by new accounts: We believe that all accounts with
an active CCTA program would benefit from adopting the Heartflow Platform into their workflow in
order to improve efficiency and patient care. We estimate that as of December 31, 2023, there were
approximately 2,700 hospitals and outpatient facilities in the United States that perform CCTA, and
this target account base has grown at a 10% CAGR from 2018 to 2023. As of December 31, 2024, we
have successfully deployed our Heartflow Platform in 1,100 accounts in the United States. Our TSMs
are responsible for acquiring new accounts. Our TSMs engage with physicians to communicate the
value proposition of the Heartflow Platform, leveraging our large base of clinical evidence to extoll its
clinical and economic benefits. Once onboarded, providers typically reach utilization rates
approaching 33% of CCTAs eligible for Heartflow FFRCT Analysis. Unlike traditional sales models, our
TSMs are not required to support case coverage or ongoing account maintenance, allowing them to
focus on new account acquisition efficiently. We intend to drive further adoption by leveraging our
existing  40 TSMs, as of December 31, 2024, while selectively expanding our team to capture
additional geographic opportunities.
•Broaden awareness of the CCTA + Heartflow pathway to drive volume at existing accounts:
While we have achieved significant commercial adoption to date, including 132,000 patients on our
Heartflow Platform in 2024 alone, we believe this represented less than 1% of our overall market
opportunity of 9.5 million total NITs, and approximately 10%, of current U.S. CCTA volumes. To
expand adoption, we are actively educating physicians on the AHA and ACC chest pain guidelines
that support CCTA plus Heartflow FFRCT Analysis as the preferred pathway for diagnosis and
management of CAD. Our commercial team includes TAMs who are responsible for educating the
cardiologists who refer patients to our active accounts and driving increasing Heartflow Platform
volumes. These TAMs utilize our extensive clinical compendium to educate and train physicians on
the benefits of our platform. Similar to our TSMs, our TAM model is highly efficient and scalable. We
also invest in robust medical education, including peer-to-peer discussions, symposiums, podium
presentations, and other educational events. These initiatives, combined with strong society support,
our leading field presence, and continued technology investment, contribute to the expansion of both
the CCTA market and the CCTA + Heartflow pathway.
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•Launch and drive adoption of our Heartflow Plaque Analysis product: We initiated limited market
education efforts for our second product, Heartflow Plaque Analysis, in the second half of 2023. We
believe there is broad recognition among the cardiology physician community of the importance of
quantifying and characterizing plaque composition as a key indicator of cardiovascular risk. Existing
clinical trials have demonstrated plaque volume and plaque composition correlate with heart attack
risk. There are also multiple pharmaceutical therapies that have proven to slow or halt plaque
progression and reduce the risk of cardiovascular events. However, current non-invasive risk
assessment methods are often inadequate due to their reliance on manual, time-consuming, or
largely visual assessments, leaving physicians with limited actionable data for prescribing optimal
therapies. Our Heartflow Plaque Analysis fills this critical gap in care by enabling rapid and precise
quantification of plaque volume and composition at the vessel and patient level, down to the cubic
millimeter. We believe that broad commercial reimbursement coverage will be important for
widespread adoption of Heartflow Plaque Analysis and are working to secure coverage. In 2024, CMS
assigned Heartflow Plaque Analysis a Category 1 CPT Code, which will be effective as of January
2026, and as of December 2024, Heartflow Plaque Analysis is covered by all MACs. We intend to
leverage our learnings from the successful reimbursement coverage expansion and commercial
launch of Heartflow FFRCT Analysis to drive commercial coverage and adoption of Heartflow Plaque
Analysis. Since Heartflow Plaque Analysis runs on the same CCTA scan as Heartflow FFRCT
Analysis, we expect favorable operating and gross margin leverage as its adoption increases.
•Invest in additional clinical evidence to support adoption and expand our indications: We
believe we have developed the largest clinical evidence base supporting a non-invasive AI-powered
diagnostic for CAD and that our extensive evidence demonstrates the superior accuracy, clinical utility
and economic benefits of our Heartflow Platform relative to other non-invasive methods. We expect to
continue to invest in clinical evidence to extend our leadership position. For example, we are currently
conducting the DECIDE registry, a 20,000-patient study which aims to demonstrate how Heartflow
Plaque Analysis impacts physician decision-making. Beyond the commercialization of Heartflow
FFRCT Analysis and Heartflow Plaque Analysis in symptomatic CAD, we see a significant market
opportunity for our technologies in at-risk individuals who show no symptoms, a segment comprised
of approximately 200 million people globally. To unlock this potential, we are continuing to evaluate
new product opportunities and appropriate clinical evidence supporting eventual regulatory approval,
payor coverage and commercialization.
•Extend our technology leadership through continued investment in our platform: Our ongoing
research and development initiatives are focused on introducing products, features and
improvements to maximize customer value. We prioritize advancements in four key areas including:
improving our algorithms by leveraging extensive clinical data to improve accuracy and efficiency;
optimizing clinical utility to better support physicians in diagnosis, patient management, and treatment
planning; enhancing ease of use through seamless workflow integration to improve operational
efficiency; and expanding our platform’s applications to serve a broader patient population. By
executing on these priorities, we aim to deepen engagement with existing customers, attract new
ones, and further solidify our leadership in AI-driven cardiovascular diagnostics.
•Leverage our platform to pursue adjacent and international markets: We believe our installed
base and deeply integrated platform technology approach allows us to add on new analysis and
insights within the same product experience. Our relationships with referring and imaging physicians
provide us with insights into unmet clinical and workflow needs, while our extensive database of
CCTA images and AI capabilities enable us to develop and integrate new algorithm-based solutions.
Additionally, while our current commercial focus is on the U.S. market, we have an existing presence
in the United Kingdom, European Union and Japan which we believe collectively represents a market
opportunity of approximately 4.2 million NITs annually or approximately half that of the United States.
In the future we may choose to selectively expand our geographic footprint by strengthening our
presence in existing international markets, entering new international markets, or exploring adjacent
market opportunities in the U.S. and abroad.
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Market overview and opportunity
Overview of CAD
Cardiovascular disease is the leading cause of death worldwide, with CAD being the most lethal form.
CAD occurs when plaque—a buildup of cholesterol, fat, calcium and other substances—accumulates on
the walls of the coronary arteries, restricting blood flow and increasing the risk of heart attack or stroke.
This condition is responsible for half of all cardiovascular-related deaths globally. Key risk factors,
including high cholesterol, hypertension, smoking, diabetes, obesity, physical inactivity, and genetic
predisposition, accelerate plaque formation and destabilization. In the United States alone, the CDC
estimates that approximately 805,000 people suffer a heart attack each year. The CDC estimates that
approximately 1 in 20 adults over the age of 20 have CAD, which is approximately 12.5 million individuals
with CAD in the United States. The CDC also estimates that CAD killed 371,506 people in 2022. Given its
morbidity and mortality, CAD places a significant cost burden on the healthcare system and is projected to
reach $215 billion by 2035.
CAD is caused by the build-up of calcified and non-calcified plaque in the coronary arteries. This plaque
build-up results in a narrowing of the arteries, or stenosis, which may require an intervention if the
reduction in blood flow caused by the stenosis is determined to be clinically significant. Effectively
diagnosing CAD in order to inform the optimal treatment pathway requires a measurement of the blood
flow through the stenosis as well as quantifying the amount and type of plaque causing the stenosis. For
example, the foundational FAME 1 and FAME 2 randomized controlled trials showed that deferring
intervention is superior when blood flow, as measured by fractional flow reserve (“FFR”), was greater than
0.80 but that when FFR was below this same level, intervention was superior to optimal medical therapy.
Similarly, a follow-up analysis to the foundational SCOT-HEART trial showed that plaque volumes greater
than 238 mm3 resulted in a 7x greater risk of heart attack than lower plaque volumes and higher
concentrations of low-attenuation plaque burden were associated with a nearly 5x greater risk of heart
attack. This is due to the unstable nature of low-attenuation plaque, which can result in a higher risk of
rupture leading to occlusion of coronary blood flow. Based on these trials, the cardiology community has
recognized the importance of accurately measuring FFR values and characterizing plaque, and has
supported this perspective with clinical guidelines that stratify treatment recommendations based on FFR
values and plaque metrics.
Traditional methods for the non-invasive diagnosis of CAD and their limitations
When patients present with symptoms of CAD, such as chest pain, they are typically referred for a NIT.
There are two primary types of NITs: stress-based tests, which measure surrogate markers for CAD to
infer the presence of heart disease based on blood perfusion, or CCTA which directly images the patient’s
coronary arteries. Based on the output of a patient’s NIT, the imaging physician and managing physician
determine the appropriate next step which can include sending the patient home with only lifestyle
modifications if the disease is not determined to be significant, initiating pharmaceutical therapy if there is
assumed plaque burden without significant stenosis, or sending the patient to catheterization lab for
intervention if there is significant stenosis.
When appropriately diagnosed and managed, CAD can be effectively treated with well-established
therapeutics and devices. These therapeutics, which include statins, PCSK-9s and GLP-1s, among
others, have been proven to effectively manage CAD by reducing plaque progression, changing plaque
composition, and reducing the risks of a major adverse cardiovascular event. Similarly, when indicated,
procedures to open the arteries, including percutaneous coronary intervention with intravascular
lithotripsy, atherectomy and/or stenting, and coronary artery bypass grafting, have been shown over
decades to be highly efficacious in reducing mortality risk and relieving the symptoms of CAD.
Stress tests
Stress-based NITs include SPECT, PET and stress echocardiography. These tests use imaging to
evaluate heart function under exercise or pharmacologically-induced stress. The tests image the heart
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muscles and identify the differences in blood perfusion to the myocardium between the rest and stress
state images to infer the presence of CAD. Stress-based NITs rely on surrogate markers of CAD to
deduce the disease in the coronary artery without actually assessing the coronary arteries or the disease
itself. Therefore, these NITs are inaccurate, a majority of the time, and often result in either missed CAD
diagnoses or unnecessary invasive procedures.
As a result, approximately 20–50% of patients who undergo stress-based NITs go home with false
negatives, or undetected CAD that should have required an intervention. In addition, up to 55% of
patients receive false positives and are sent to the cardiac catheterization lab for an invasive diagnostic
angiography when an intervention was never needed exposing patients to unnecessary risks including
vascular injury and bleeding complications. This results in significant additional costs to the healthcare
system and poor patient experience.
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Figure 3: Traditional non-invasive tests. Left: Stress echocardiogram. Right: SPECT and PET
CCTA
CCTA is a high-resolution 3D imaging method that uses X-rays to produce detailed pictures of the heart’s
arteries and other structures. CT imaging itself has been widely available and its use in cardiology is
growing rapidly. In October 2021, the AHA and ACC elevated CCTA to a first line Class 1, Level A test in
the guidelines for certain patients with stable or acute chest pain and no known CAD, above stress testing
which is Class 1, Level B. This made CCTA a first line test for CAD owing to the strong evidence
supporting its differentiated clinical utility. As of December 31, 2023, we estimate there were
approximately 2,700 sites with an active CCTA program in the United States. Similarly, CCTA now has
guideline support from the European Society of Cardiology Clinical Practice guidelines on Chronic
Coronary Syndromes (1B), is included in the National Institute for Health and Care Excellence (“NICE”)
guidelines in the United Kingdom, and in the Japanese Circulation Society (“JCS”) 2022 Guidelines in
Japan.
Unlike stress-based NITs that rely on indirect functional assessments of heart muscle activity to infer
CAD, CCTA enables direct visualization of the patient’s coronary anatomy and can allow for a
comprehensive assessment of coronary stenosis and plaque burden. CCTA has been clinically
demonstrated to have the highest diagnostic performance of all traditional non-invasive imaging tests for
CAD.
The foundational SCOT-HEART randomized controlled trial, highlighted the clinical superiority of CCTA
over traditional stress-based NITs. The study found a significant 41% reduction in the rate of death or
non-fatal heart attacks after five years in patients who underwent CCTA evaluations. The study also
demonstrated that patients in the CCTA group were more likely to be started on lipid lowering, anti-
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hypertensive, anti-platelet, and anti-anginal medication, which improved outcomes in patients with
disease that may not have been detected with stress-based testing alone.
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Figure 4: CCTA image
With the elevation of CCTA to a Class 1, Level A guideline recommendation by the AHA and ACC
guidelines in 2021, CCTA test volumes have grown at a 22% CAGR from 2018 to 2023 while SPECT
volumes have grown at a 2% CAGR over the same time period. We believe CCTA test volumes will
continue to grow rapidly, ultimately replacing other NIT methods based on increasing awareness of the
superior diagnostic accuracy, workflow efficiencies and clinical guideline recommendations. Furthermore,
favorable reimbursement trends are expected to accelerate adoption. In 2025, CMS reimbursement levels
for hospital outpatient CCTA are set to increase by 104% based on the OPPS final rule, published in the
Federal Register on November 27, 2024.
Catheterization lab-based invasive diagnostics for CAD
Invasive methods of diagnosing CAD are typically performed in the catheterization lab and provide highly
accurate assessments of blood-flow and plaque. However, they are not practical or cost-effective as a
first-line diagnostic due to procedural risks, patient discomfort, as well as cost and availability of
catheterization lab time. As a result, these technologies are utilized downstream in the catheterization lab
after a patient has been identified as having suspected CAD based on an NIT and referred for an
interventional procedure. Because of the invasive nature of these tests, they serve as valuable reference
points for validating the accuracy of our technology, however, we do not directly compete with them.
These invasive catheter-based procedures, which include FFR and Intravascular ultrasound (“IVUS”),
have been the reference standard for obtaining FFR values and assessing plaque burden for decades.
FFR requires inserting a pressure wire into the coronary arteries under stress conditions to assess the
severity of blood flow restriction and IVUS uses a catheter-based ultrasound probe to directly image
plaque within the arteries.
Our symptomatic CAD market opportunity
We estimate our current market opportunity in the United States is approximately $5 billion. We estimate
that there were approximately 9.5 million NITs performed for the diagnosis of CAD in the United States in
2023. This includes an estimated 6.8 million SPECTs, 0.8 million PETs, 1.2 million stress
echocardiograms, and 0.7 million CCTAs.
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(1)Definitive Heath, CMS claims data, CAGR 2018 - 2023
(2)~73,000 Heartflow tests billed in FY23
Figure 5: Pie chart of U.S. non-invasive test market
CCTA testing volumes have grown 22% between 2018 and 2023, and we believe they will continue to
outpace the broader NIT market growth driven by the recently established Class 1, Level A guidelines,
due to superior clinical utility compared to stress-based tests, and improved reimbursement. Of the
approximately 9.5 million NITs performed for the diagnosis of CAD in the United States in 2023, we
believe there were approximately 8.6 million patients that were addressable for CCTA after accounting for
layered testing due to the inconclusive nature of traditional tests and the need for multiple re-tests and
contraindications to CCTA.
Our Heartflow Platform significantly improves the clinical utility of CCTA and addresses the limitations of
traditional non-invasive CAD testing by combining existing CCTA images with our AI algorithms to provide
actionable data on blood flow, stenosis, plaque volume and plaque composition. This delivers superior
clinical utility relative to other NITs and compelling economic benefits, which are supported by extensive
clinical evidence. As a result, we believe the CCTA + Heartflow pathway will become the standard of care
for the non-invasive diagnosis of CAD over time.
Addressing the limitations of traditional CAD testing
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Figure 6: Image of SPECT test result on left; image of Heartflow FFRCT Analysis result on right
Our Heartflow FFRCT Analysis is reimbursed for use on any CCTA showing 40% to 90% stenosis, which
we estimate to be approximately 33% of all CCTAs annually. We believe the CCTA + Heartflow FFRCT
Analysis therefore is applicable to 33% of the NIT market and the majority of patients experiencing acute
chest pain, which represents 3.1 million patients and an estimated market opportunity of approximately
$3.3 billion in the United States. Our Heartflow Plaque Analysis is reimbursed for plaque identified on
CCTA with 1% to 69% stenosis, which we estimate to cover approximately 60% of all CCTAs annually and
the majority of patients experiencing acute chest pain. We believe the CCTA + Heartflow Plaque Analysis
is therefore applicable to 60% of the NIT market, which represents 5.5 million patients and an estimated
market opportunity of an incremental approximately $1.7 billion in the United States. While our current
focus is on the United States, we also have a commercial presence and regulatory approval in certain
international markets, including the United Kingdom, European Union and Japan, which we estimate
represents an additional 4.2 million potential CCTA patients. In the future we may expand our international
presence beyond these markets and extend our platform to additional indications.
Asymptomatic CAD market opportunity
For asymptomatic patients, current clinical practice guidelines (Class 1, Level B) recommend using risk
factors such as age, sex, smoking status, hyperlipidemia, hypertension, and diabetes, among others, to
calculate a risk score, called an ASCVD score, for assessing overall cardiovascular event risk and guiding
preventive therapy. However, this approach does not account for the actual disease state of an
individual’s arteries leading to imprecise risk assessment and suboptimal management. As a result,
despite the widespread availability of proven, preventative pharmaceutical treatments, up to 25% of heart
attacks occur in those with no symptoms and approximately 50% of heart deaths occur without any prior
diagnosis or testing.
We believe there is a significant opportunity for our Heartflow Platform to materially improve risk
stratification and patient management. Clinical data supports our belief that AI-based risk calculation
predicated on the combination of individual-specific CAD measures enables more accurate and effective
management and preventative measures as compared to those based on an ASCVD score alone. For
example, our EMERALD 2 study showed that combining certain CCTA-derived quantitative features from
coronary physiology via Heartflow FFRCT Analysis and from plaque metrics via Heartflow Plaque Analysis
predicted future plaque rupture more accurately than CCTA alone. Serial AI-based risk assessment of
asymptomatic patients can also capture temporal changes in disease state and cardiovascular risk, which
can be used to personalize preventative medical therapy over time. We estimate that there are
approximately 200 million patients globally with a high risk of cardiovascular events, of which 71 million
live in the United States. In the future, we believe certain sub-segments of this population may be
appropriate candidates for our platform.
Beyond the commercialization of Heartflow FFRCT Analysis and Heartflow Plaque Analysis in symptomatic
CAD, we see a significant market opportunity for our technologies in at-risk individuals who show no
symptoms, a segment comprised of approximately 200 million people globally. To unlock this potential, we
are continuing to evaluate new product opportunities and appropriate clinical evidence supporting
eventual regulatory approval, payor coverage and commercialization.
Our technology
Heartflow enhances CCTA, the most advanced non-invasive imaging modality for assessing CAD, with
AI-powered analysis to deliver more accurate and clinically actionable insights for diagnosing and
managing CAD. The Heartflow Platform applies deep learning, an advanced form of AI, and
computational fluid dynamics to CCTA images to create a personalized 3D model of a patient’s heart
based on a single CCTA image. This model provides actionable insights into blood flow, stenosis, plaque
volume and plaque composition allowing precise diagnosis, risk stratification, and treatment planning –
without the need for an invasive procedure.
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The CCTA + Heartflow pathway addresses the limitations of traditional non-invasive tests that only assess
indirect measures for coronary disease and therefore result in high rates of false negative and false
positive CAD diagnoses. We believe the differentiated accuracy and clinical utility of the CCTA +
Heartflow pathway will continue to support our growth and advance the standard for the non-invasive
diagnosis and management of CAD.
We designed our AI-powered software platform to be highly scalable, seamlessly integrate into existing
physician workflows for diagnosing CAD, and improve as we ingest more data over time. By leveraging AI
to process massive volumes of cases and a “human-in-the loop” quality control process, where learnings
are fed back into our algorithms to improve their performance and efficiency, we have rapidly scaled our
platform to deliver accurate, timely results to benefit physicians and patients alike. Our cloud-based
technology has enabled us to rapidly scale to an installed base of over 1,100 accounts in the United
States as of December 31, 2024. We have also built a substantial and growing data asset that has driven
continuous refinement of our algorithms for over 10 years and as of December 31, 2024, we have
analyzed and annotated over 100 million annotated CCTA images. Additionally, through our bi-directional
data sharing relationship with our customers we ensure continuous platform enhancements, delivering
immediate and tangible benefits through new features, workflow efficiencies, and improved performance.
The CCTA + Heartflow pathway
When a patient presents with symptoms of CAD and their physician follows the AHA and ACC Class 1,
Level A chest pain guidelines by referring the patient for a CCTA, the patient will undergo standard CCTA
imaging at the relevant hospital or outpatient facility. At Heartflow-enabled accounts, CCTA images are
securely transmitted directly to our cloud-based platform through our embedded software in the hospital
or outpatient imaging center. Leveraging proprietary AI and advanced computational fluid dynamics, we
create a personalized, 3D digital model of the patient’s coronary arteries, unlocking critical insights
beyond what is visible on standard imaging.
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Figure 7: The CCTA + Heartflow pathway
Our Heartflow Platform includes a suite of innovative, AI-powered products designed to deliver
comprehensive coronary artery assessment:
1)Heartflow RoadMap Analysis: Coronary anatomy modeling that enables clinicians to interpret CCTA
accurately, efficiently and consistently while identifying whether the patient requires further evaluation
with our other products.
2)Heartflow FFRCT Analysis: Accurate 3D model of blood flow that identifies clinically-significant CAD
at the lesion level to inform whether the patient requires revascularization and identifies which lesions
should be addressed.
3)Heartflow Plaque Analysis: Precise quantification of plaque volume and plaque composition down
to the cubic millimeter to help assess risk and determine optimal medical treatment.
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These analyses provide the critical complementary data that are lacking from other non-invasive tests but
that we believe physicians need to diagnose, assess risk and make optimal, patient-specific decisions
about medical and interventional therapies.
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Figure 8: The Heartflow Portfolio
Our Heartflow Platform seamlessly integrates into our customer workflows, providing clinically actionable
insights directly to the account in a median turnaround time of 1.6 hours, which we believe is sufficient for
the workflows of our customers. We deliver the Heartflow RoadMap Analysis automatically to the imaging
cardiologist or radiologist for every acceptable CCTA patient at our accounts to help drive more efficient
CCTA interpretation and workflows. In conjunction with the Heartflow RoadMap Analysis, we also provide
physicians with a case list that catalogs all their CCTAs and identifies the cases where our Heartflow
FFRCT Analysis, Heartflow Plaque Analysis or both would enable them to accurately diagnose clinically
significant CAD and plan treatment. With a single click, Physicians can access these analyses on-
demand, and we bill the account directly for each product selected. Because Heartflow FFRCT Analysis
and Heartflow Plaque Analysis have distinct clinical indications and dedicated billing codes, our workflow
helps ensure physicians can order the most appropriate analyses for each patient, supporting both high-
quality care and efficient reimbursement processes.
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Figure 9: The Heartflow Platform and workflow
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The Heartflow Platform portfolio
Heartflow RoadMap Analysis: The Heartflow RoadMap Analysis
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provides a highly intuitive anatomic visualization of the patient’s
coronary anatomy based on CCTA images. It rapidly orients the
imaging physician to clinically relevant areas of the patient anatomy
and provides a preview of what they will review in the native CCTA
images to aid the physician in accurately, efficiently and consistently
identifying stenosis in the coronary arteries. Heartflow RoadMap
Analysis supports more efficient radiology workflow, improving CCTA
read times by 25% and increasing consistency between reviewing
physicians by approximately 50%. Physicians use Heartflow Roadmap
Analysis as a first-line assessment tool along with CCTA interpretation
to determine whether to order our more detailed Heartflow FFRCT
Analysis or Heartflow Plaque Analysis reports. The Heartflow RoadMap
Analysis was cleared by the FDA in October 2022, and we began
providing it to our customers in the second quarter of 2023. We
generally provide Heartflow RoadMap Analysis to accounts as an
integrated feature to enhance the efficiency and consistency of their CCTA programs and it is not a stand-
alone product. We believe the efficiency that Heartflow RoadMap Analysis provides our customers has
resulted in enhanced customer loyalty and retention.
Heartflow FFRCT Analysis: Our flagship product, Heartflow FFRCT
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Analysis, consists of a patient-specific, interactive, 3D anatomical
reconstruction of the coronary anatomy that identifies functionally
significant CAD at every point in the major coronary arteries to
determine the need for intervention. The model is color-coded along
vessel length, indicating Heartflow FFRCT Analysis values which assist
the physician in rapidly and precisely assessing blood flow through the
coronary arteries. Our Heartflow FFRCT Analysis has the highest
diagnostic accuracy for a non-invasive CAD test and has demonstrated
a high level of concordance to invasive FFR. Our product can measure
the FFR value and determine whether a lesion is clinically significant –
a “clinically significant lesion” means an FFR value of below 0.80.
Because FFR values are the guideline directed measure to determine
the need for invasive revascularization, this data offers a more clinically
accurate, non-invasive basis for determining the need for interventional
treatment.
Current AHA and ACC guidelines support CCTA + Heartflow FFRCT Analysis as a more efficient care
pathway. The guidelines designate CCTA as a Class 1, Level A recommendation as the first-line test for
CAD in intermediate-high risk patients with stable chest pain and no known CAD, with our Heartflow
FFRCT Analysis given a Class 2a, Level B recognition to help physicians guide patient treatment
decisions. This CCTA + Heartflow FFRCT Analysis pathway enables physicians to identify lesions that
require revascularization in less than two hours, and guidelines recommend patients with positive
Heartflow FFRCT Analysis findings be sent directly to the cardiac catheterization lab for possible treatment.
Comparatively, AHA and ACC guidelines provide stress-based testing a Class 1, Level B
recommendation, suggesting patients with suspected CAD and positive stress-based test findings first
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initiate guideline directed medical therapy. Only if symptoms are not resolved by medical therapy, which
can last weeks or months, are patients then sent to the cardiac catheterization lab.
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Figure 10: AHA and ACC chest pain guidelines
Our Heartflow FFRCT Analysis is indicated for patients with stenosis levels between 40% and 90% in any
vessel because a physician’s review of a CCTA alone may not appropriately identify the need for
treatment in these cases. For example, in the figure below, two patients with >70% stenosis based on
CCTA alone would likely be referred for invasive coronary angiography. However, Heartflow FFRCT
Analysis reveals that while Patient A has an FFRCT value >0.80—indicating no need for intervention—
Patient B has an FFRCT value <0.80 and should be referred for revascularization. As of December 31,
2024, our Heartflow FFRCT Analysis represented over      % of our total revenues.
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Figure 11: Heartflow FFRCT  Analysis Significantly Improves CCTA – anatomy from CCTA + Physiology
from Heartflow FFRCT Analysis better informs clinical decisions
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Heartflow Plaque Analysis: Heartflow Plaque Analysis transforms
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coronary plaque assessment from a time-consuming and variable
manual process, which is seldom clinically used, into a rapid,
automated, and highly precise AI-driven solution. The Heartflow
Plaque Analysis automatically provides a comprehensive 3D
assessment of a patient’s coronary plaque, including a
characterization of plaque types and quantification of plaque
volumes at every point in the major coronary arteries. The
Heartflow Plaque Analysis has been validated against the reference
standard of invasive IVUS and shown to have a 95% agreement
with IVUS in quantifying total coronary plaque volume. Because
coronary plaque volume is a strong predictor of a patient’s risk of
having a heart attack regardless of ASCVD risk score, calcium
score, or stenosis, this data offers incremental predictive power
over risk factors and stenosis alone and can aid the physician in
optimizing medical management. Furthermore, only quantified
plaque analysis based on CCTA can assess non-calcified plaque,
which has a higher risk for causing a heart attack as compared to calcified plaque. We believe that our
Heartflow Plaque Analysis is applicable to the approximately 60% of CCTA patients identified as having
1% to 69% stenosis and adds significant value over review of CCTA alone, which is unable to precisely
quantify or characterize the type or volume of plaque that would impact a physician’s treatment plan.
Heartflow Plaque Analysis guides medical management
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Figure 12: Plaque is critical to guide medical management, regardless of FFRCT results
In addition to its comprehensive plaque assessment capabilities, Heartflow Plaque Analysis incorporates
a nomogram derived from an extensive international cohort of over 11,000 patients. This nomogram
stratifies coronary atherosclerotic plaque volumes by age and sex, providing physicians with a valuable
reference to contextualize individual patient data against population-based benchmarks. By leveraging
this tool, clinicians can more precisely assess a patient's CAD risk, facilitating personalized treatment
strategies. This integration of large-scale data enhances the actionable insights delivered by Heartflow
Plaque Analysis, supporting more informed clinical decision-making.
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Our Heartflow Plaque Analysis was cleared by the FDA in October 2022. We began our limited market
education efforts in the second half of 2023, and we expect to broaden our market education efforts as
payor coverage for Heartflow Plaque Analysis increases.
Key benefits of our Heartflow Platform
We believe the unique features of our technology allow us to offer superior clinical utility and economic
value to our customers and the broader healthcare system. The key benefits offered by our Heartflow
Platform include:
•More accurate non-invasive test for CAD: Our Heartflow products have been clinically validated to
provide a more accurate non-invasive assessment of blood flow, plaque characterization and plaque
volume compared to traditional non-invasive tests, parameters that have been established to be
highly clinically relevant. Our prospective, core-lab adjudicated NXT trial demonstrated that Heartflow
FFRCT Analysis is able to accurately calculate lesion-specific FFR values with a high level of
concordance to the invasive reference standard of FFR. In addition, our retrospective, core-lab
adjudicated PACIFIC trial demonstrated that our Heartflow FFRCT Analysis offered superior diagnostic
accuracy relative to CCTA alone as well as SPECT and PET. Individually and collectively, these
studies support the differentiated level of precision that Heartflow FFRCT Analysis offers relative to
other non-invasive tests as well as its clinical reliability. Similarly, our prospective REVEALPLAQUE
study validated our Heartflow Plaque Analysis relative to the invasive reference standard of IVUS,
demonstrating 95% agreement for overall plaque volume and excellent agreement in identifying
plaque volume and sub-types at the lesion level.
•More informed assessments and personalized care: Our Heartflow FFRCT Analysis has been
clinically demonstrated in multiple studies to positively impact physician decisions on intervention and
patient management. The ADVANCE prospective registry which included over 5,000 patients globally
showed that in 67% of cases physicians changed their patient management plans, predominantly with
respect to revascularization, based on review of Heartflow FFRCT Analysis relative to CCTA alone.
Similarly, our DECODE study, which included 100 patients, demonstrated that in 66% of cases
physicians changed preventative medical therapy plans based on a review of Heartflow Plaque
Analysis relative to CCTA alone. Further supporting the value of our Heartflow Plaque Analysis
product, among patients with a calcium score of 0, physicians revised their management plan in
nearly 50% of cases after reviewing our Heartflow Plaque Analysis report. In 63% of cases in the
DECODE study, physicians increased the dosage of the patient’s medication, indicating that patients
were being under-treated based on conventional non-invasive testing methods that fail to both
quantify and characterize plaque volumes.
•Superior economic efficiency: Our Heartflow FFRCT Analysis has been clinically demonstrated to
reduce rates of false positive CAD diagnoses relative to other non-invasive tests and more accurately
identify the patients that actually need an invasive procedure. Our PRECISE prospective randomized
controlled trial which enrolled over 2,100 patients and compared Heartflow FFRCT Analysis with
standard of care, demonstrated that our Heartflow FFRCT Analysis was 78% more likely to identify
patients in need of revascularization and showed a 69% reduction in false positives, or unnecessary
invasive coronary angiography tests. It also showed 2x the yield of invasive coronary angiography
leading to a revascularization procedure such as a PCI or CABG. These are economically important
procedures for our customers which, when done in place of a diagnostic only catheterization, result in
more efficient use of valuable cardiac catheterization lab facilities and staff time. As a result, our
calculations based on the PRECISE trial indicate that net average cardiac catheterization lab revenue
increased 20%.
•Improved workflow: Our Heartflow Platform offers significant workflow benefits, including improving
workflow efficiency and reducing CCTA interpretation times. Our SmartCT study demonstrated that
the use of our Heartflow RoadMap Analysis reduced read time by approximately 25%. In addition to
reducing read times, our Heartflow RoadMap Analysis enhances consistency across a radiology
program resulting in a more than 50% increase in inter-reader agreement. Given the intense
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demands on radiologist time resulting from an increasing number of images to review on a daily
basis, we believe this added efficiency and consistency strengthens the competitive differentiation of
our platform.
•Enhanced interventional treatment planning: Once the patient is diagnosed with clinically
significant CAD and referred to the catheterization lab for an intervention, our Heartflow Platform
provides information that is useful to interventional cardiologists in planning for the most efficient
treatment based on individual anatomy and disease state. The Heartflow Platform enables early,
detailed pre-operative planning, allowing physicians to triage patients to the most appropriate site of
service—whether a hospital-based catheterization lab or an outpatient interventional center. By
identifying the complexity and severity of disease in advance, our technology ensures that high-risk
patients receive care in fully equipped facilities, while lower-risk cases can be efficiently managed in
outpatient settings, reducing strain on hospital resources. Heartflow’s 3D model provides a precise
preview of the anatomy corresponding to specific views used in invasive catheterizations. Heartflow
FFRCT Analysis and Heartflow Plaque Analysis provide quantitative and visual insights on lesion
severity, plaque burden and type, and hemodynamic significance, which enable more precise pre-
selection of interventional tools. This allows catheterization labs to be better prepared with the
necessary guidewires, catheters, and adjunctive devices before the procedure, thereby reducing
inefficiencies. With growing demand for complex structural heart procedures—such as transcatheter
aortic valve replacement, left atrial appendage closure, and transcatheter mitral interventions—
catheterization lab capacity is increasingly a constraint for hospitals. By reducing unnecessary
diagnostic angiograms and increasing the efficiency of PCI planning, we believe the Heartflow
Platform frees up catheterization lab time for these higher-acuity, resource-intensive procedures.
•Better patient and provider experience: By leveraging a single CCTA for all of our products,
patients complete their test in approximately 20 minutes with significantly lower radiation exposure
compared to nuclear imaging tests such as SPECT and PET that take multiple hours and require
radioactive tracers to be injected into the bloodstream. A fundamental challenge with traditional
stress-based testing is the lack of a definitive diagnosis, which often results in a cascade of follow-up
tests. Stress tests frequently produce inconclusive or false-positive results, requiring additional
imaging studies such as cardiac catheterization to confirm or rule out disease. This layered testing
approach prolongs the diagnostic journey, delays appropriate treatment, and adds unnecessary costs
and inconvenience for patients. The Heartflow Platform offers an entirely digital and non-invasive
experience that better serves both patients and providers. The CCTA + Heartflow Pathway provides a
fulsome array of insights with only a single patient exam. All results can then be viewed and
distributed digitally to all of the patient’s care providers. In addition, our platform offers the flexibility to
add new visualizations, insights and updates as the technology evolves, and physicians can receive
the benefits of these updates conveniently through the same software platform. For example, when
Heartflow RoadMap Analysis and Heartflow Plaque Analysis were introduced, our accounts were able
to access these technologies through the same connection infrastructure and platform that they
utilized for Heartflow FFRCT Analysis without the need to buy new equipment or establish new
connections.
Our production process
Our production process involves a sophisticated and highly refined system that combines advanced
machine learning algorithms with “human-in-the loop” quality control process, where learnings are fed
back into our algorithms to improve their performance and efficiency. After the CCTA test is complete, the
patient’s images are securely transferred to our cloud-based system through our established software that
integrates directly into the account’s infrastructure.
When the images arrive, we leverage multiple machine learning algorithms which have been trained from
a database of millions of annotated CCTA images to precisely segment CCTA data and extract patient-
specific 3D anatomy, which includes the coronary tree, myocardium and other anatomic features. The
quality of CT images and the anatomy extracted by our algorithms is inspected through propriety software
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that guides quality-oriented production analysts through each step to review and potentially correct the
segmentation, as needed. Our machine learning algorithms then utilize any analyst inputs to generate a
final 3D model of the coronary vessels. Our algorithms then compute stenosis, plaque volumes and
plaque characteristics as well as blood flow simulation with computational fluid dynamics over the entire
coronary tree. The simulated blood flow and pressures allow calculation of quantitative Heartflow FFRCT
Analysis values at every point on the coronary tree. Once complete, our Heartflow RoadMap Analysis,
Heartflow FFRCT Analysis and Heartflow Plaque Analysis are securely delivered directly to the physician in
multiple formats: an interactive web experience where they can explore the data in detail, PDF
summaries, and direct delivery into the electronic medical record.
The corrections and changes from the analyst quality inspection step are stored in a database as labels
for training our algorithms. New and improved versions of our algorithms using the latest machine
learning methodologies are trained with incrementally more labels and released over time and
incorporated into our platform. The core algorithms for the 3D coronary anatomic model and Heartflow
FFRCT Analysis are now on their 3rd generation with improvements over time. This iterative approach of
combining improved algorithms with human quality control processes continues to enhance the accuracy
and efficiency of our technology.
We have also invested significantly in automating our production process through improved algorithm
performance, visualization, and internal workflow enhancements, which have materially reduced our
analyst processing times from 69 minutes in 2021 to 26 minutes in the fourth quarter of 2024, significantly
enhancing our margin profile.
Our data security
Our Heartflow Platform relies on industry-leading security controls, including encryption at rest and in
transit, multi-factor and single-sign on authentication, granular authorization and a secure development
lifecycle. We have designed the Heartflow Platform to de-identify data for processing, ensuring the most
identifiable sensitive data (including PHI) remains segregated, encrypted, and within source regions,
limiting privacy and security risk. Our commitment to information security is demonstrated by our
HITRUST, ISO 27001, and SOC 2 Type II certifications.
Our clinical results and economic evidence
We believe the Heartflow Platform is the most studied AI-enabled test for CAD. The accuracy, clinical
utility and economic benefits of our Heartflow Platform have been evaluated in over 100 clinical studies
and more than 130,000 patients, including two large randomized controlled trials, with results published in
over 600 peer-reviewed clinical publications. Collectively, this extensive body of clinical evidence has
supported regulatory approvals for our products, established broad payor coverage and society guideline
inclusion for our Heartflow FFRCT Analysis, and is driving rapid commercial adoption of our portfolio of
products. We have sponsored 50 of the 100 clinical studies and are continuing to invest in evidence that
highlights the clinical utility and economic benefits of our Heartflow Plaque Analysis to support expansion
of payor coverage and commercial adoption. In the future we may also invest in clinical studies of the
Heartflow Platform to expand indications to broader populations.
Our clinical programs have been focused on (i) validating the accuracy and reproducibility of our product
offerings relative to invasive reference standards and non-invasive alternatives, (ii) establishing the
differentiated clinical utility of our products relative to non-invasive alternatives, and (iii) demonstrating the
economic benefits associated with our products including reduced costs for payors and improved
efficiency for providers. Our studies have consistently demonstrated that the Heartflow Platform is more
accurate than traditional non-invasive tests and highly concordant to invasive testing, reduces
unnecessary invasive testing, and enables physicians to optimize treatment and ultimately provide more
efficient care.
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Our Heartflow FFRCT Analysis
Accuracy and reproducibility: Numerous foundational clinical trials in cardiology, including the FAME 1
and FAME 2 RCTs have demonstrated that FFR values are the most accurate predictors of the need for
intervention in patients with CAD. Key clinical studies that have supported the accuracy and
reproducibility of Heartflow FFRCT Analysis relative to invasive FFR testing and non-invasive alternatives
include:
•NXT: Our NXT trial was the was the basis for de novo 510(k) FDA clearance of Heartflow FFRCT
Analysis. It was a prospective, blinded, core-lab adjudicated trial in which CCTA was performed prior
to non-emergent invasive coronary angiography in stable patients with suspected CAD. Heartflow
FFRCT Analysis values based on the CCTA were compared to invasive FFR values. The trial also
compared the efficacy of Heartflow FFRCT Analysis relative to CCTA alone for predicting FFR values.
NXT enrolled 254 patients and studied 484 vessels at 10 centers in Europe, the United Kingdom,
Japan, Korea, and Australia. The results showed that Heartflow FFRCT Analysis is highly accurate
compared to the reference standard of invasive FFR, with a per vessel accuracy of 86% compared
with 65% for CCTA alone.
•PACIFIC: The PACIFIC trial was an investigator-initiated, prospective study to evaluate in a head-to-
head manner the diagnostic performance of several non-invasive tests commonly used to identify
functionally significant CAD. A total of 208 patients with suspected stable CAD underwent CCTA,
SPECT and PET, and then used ICA with invasive FFR as the reference standard. The Heartflow
FFRCT Analysis was not initially included in the PACIFIC study, but the investigators subsequently
undertook a retrospective PACIFIC FFRCT sub-study to evaluate the diagnostic performances of
Heartflow FFRCT Analysis compared to CCTA, SPECT, and PET. Using invasive FFR as the reference
standard, the Heartflow FFRCT Analysis demonstrated the highest diagnostic performance for vessel-
specific ischemia of all tested noninvasive tests, with an AUC (Area Under the Curve) of 0.94
compared with PET (0.87), CTA (0.83), and SPECT (0.70).
Differentiated utility, improved clinical and economic outcomes: Numerous studies have demonstrated
that use of Heartflow FFRCT Analysis favorably impacts clinical management, supporting physicians in
making more informed and better patient-specific decisions about intervention which drives more efficient
use of resources. Key company-sponsored clinical studies that demonstrated the impact of Heartflow
FFRCT Analysis on clinical decision-making, outcomes and provider and payor economics include:
•ADVANCE: Our ADVANCE prospective registry studied approximately 5,000 patients in the United
States, United Kingdom, Europe, and Japan whose CCTA showed CAD, in order to determine
whether the incremental addition of Heartflow FFRCT Analysis resulted in a change in patient
management. Results at 90 days showed that Heartflow FFRCT Analysis findings drove a change in
management plan for 67% of patients and that Heartflow FFRCT Analysis values >0.80 were
correlated with good outcomes, despite overwhelmingly non-invasive patient management.
Additionally, CCTA-based stenosis severity was determined to be a poor predictor of Heartflow FFRCT
Analysis values, demonstrating that CCTA alone was not as effective for clinical decision-making. A
review of outcomes at one year showed that physician management decisions were safe and durable
and that deferral of an invasive procedure based on Heartflow FFRCT Analysis was safe and
appropriate, as it was highly unlikely to result in a later revascularization or adverse clinical event.
•PRECISE: Our PRECISE trial was a prospective randomized controlled study conducted in the US,
Canada, the United Kingdom, and Europe which compared decision-making and outcomes based on
a CCTA + Heartflow FFRCT Analysis pathway with the “usual care” pathway which involved alternative
non-invasive or invasive testing methods. The study included 2,103 participants and had a median
follow up of 11.8 months found that, compared with the “usual care” pathways, CCTA + Heartflow
FFRCT Analysis was 78% more likely to identify patients in need of revascularization, and resulted in a
69% reduction in diagnostic-only invasive coronary angiography. The net effect of this pathway was
2x the yield of invasive coronary angiography leading to a revascularization procedure, from 30.5% of
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cases to 71.9% of cases. As a result, our internal analysis based on the PRECISE data demonstrated
a 20% increase in net revenue for the cardiac catheterization lab, on average.
•PLATFORM: Our PLATFORM trial was a prospective controlled study of sequential cohorts that
enrolled 584 patients in the United Kingdom and Europe and assessed the clinical and economic
impacts of using a CCTA + Heartflow FFRCT Analysis pathway to select patients for invasive coronary
angiography. The study compared outcomes between cohorts with a “usual care” invasive pathway to
a CCTA + Heartflow FFRCT Analysis pathway. The study found that the CCTA + Heartflow FFRCT
Analysis pathway reduced the rate of unnecessary invasive coronary angiography by 83% from 73%
to 12% and showed a 23% reduction in costs at 90 days and a 26% reduction in costs at one year
based primarily on the avoidance of unnecessary invasive procedures.
Our Heartflow Plaque Analysis
Our clinical portfolio includes 10 studies and over 25 peer-reviewed publications specific to Heartflow
Plaque Analysis. These studies and publications, which include large, multi-center, international trials,
document the performance, accuracy and clinical utility of Heartflow Plaque Analysis as well as its
positive impact on the physician’s ability to assess risk and manage outcomes. By providing more
accurate and detailed information on plaque types and volumes than can be achieved with traditional non-
invasive tests or risk measures, Heartflow Plaque Analysis supports more appropriate, precise medical
management. Key company-sponsored studies that support the clinical benefits of Heartflow Plaque
Analysis include:
•REVEALPLAQUE: Our REVEALPLAQUE study demonstrated the accuracy of Heartflow Plaque
Analysis relative to IVUS, the accepted reference standard for coronary plaque measurement and
characterization. REVEALPLAQUE was a prospective, blinded, core-lab adjudicated trial that enrolled
237 patients, with 432 lesions, in the US and Japan and compared coronary plaque quantification and
characterization between Heartflow Plaque Analysis and IVUS. The study showed that Heartflow’s
Plaque Analysis results for total plaque volume, calcified plaque, and non-calcified plaque were
strongly correlated with IVUS measurements, achieving 95% agreement with IVUS.
•DECODE: Our DECODE study evaluated the impact of the Heartflow Plaque Analysis on clinical
decision-making using data from 100 patients who underwent CCTA. For each case, three
cardiologists with expertise in reading CCTA and preventive therapies aligned on a management plan
based on patient demographics, clinical history, and the CCTA alone. The cardiologists were then
provided with Heartflow Plaque Analysis for the same patients and asked to determine a management
plan. The results showed that the use of Heartflow Plaque Analysis led to changes in treatment plans
for 66% of patients, including 63% of patients who had medical management up-titrated. The
likelihood of changing the management plan increased with higher coronary artery calcium scores
and was more pronounced in patients with significant coronary stenosis, however even 50% of
patients with a coronary artery calcium score of 0 had a revised management plan with Heartflow
Plaque Analysis.
•ADVANCEPLAQUE: Our ADVANCEPLAQUE study is a retrospective analysis of our ADVANCE trial
after 1-year follow up. In a multi-variate analysis of the data, high total plaque volume as identified by
Heartflow Plaque Analysis was shown to be an independent predictor for the risk of adverse clinical
cardiac events. In addition, the risk of an adverse cardiac event was shown to be 2x higher in patients
where Heartflow Plaque Analysis showed a higher total plaque burden compared to those with a
lower plaque burden.
•EMERALD 2: The EMERALD 2 study enrolled 351 patients who presented with acute coronary
syndrome, including specifically-identified culprit plaque rupture, within 3 years following a CCTA. The
study sought to investigate the additive value of AI–enabled quantitative coronary plaque analysis
together with hemodynamic analysis as predictors of the subsequent plaque rupture. The study
showed that adding the CCTA-derived, AI-enabled measures derived from FFRCT and Plaque
Analyses predicted plaque rupture more accurately the reference model of CCTA alone.
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•DECIDE: Based on the success of our DECODE study, which supported CMS coverage for Heartflow
Plaque Analysis, we have initiated the DECIDE registry, a prospective real world analysis measuring
the impact of Heartflow Plaque Analysis on changes in treatment decisions compared to CCTA alone
or alternative non-invasive tests. In contrast with DECODE in which physicians retrospectively
identified revised patient management plans, physicians in our DECIDE registry will use Heartflow
Plaque Analysis information to implement real world patient management changes. The study’s
primary endpoint is change in medical management following Heartflow Plaque Analysis compared to
CCTA alone, and the secondary endpoint will examine changes in key outcomes including death,
heart attack, revascularization, cardiovascular medication changes and cardiovascular
hospitalizations at both 90-days and one-year follow-up. DECIDE was initiated in March 2024 and we
expect to enroll approximately 20,000 patients across approximately 40 sites in the US. As of           ,
2025, we have enrolled over           patients. We believe that the outcomes of the DECIDE registry will
support expanded commercial payor coverage and continued adoption of Heartflow Plaque Analysis.
Other Company sponsored clinical studies
The table below summarizes the results of additional clinical studies of the Heartflow Platform that we
have sponsored to date.
Reference
Source
Study summary
Koo et al. (2011)
Journal of the
American
College of
Cardiology
DISCOVER-FLOW study
Authors: Bon-Kwon Koo, James K. Min, Bjarne L. Nørgaard, et al.
Institution: Seoul National University Hospital
N: 103
Description: Prospective, multicenter trial aimed at evaluating the
diagnostic performance of non-invasive fractional flow reserve derived
from CCTA in assessing the functional significance of coronary artery
disease. The study involved patients with suspected CAD who
underwent CCTA and Heartflow FFRCT Analysis, with results compared
to invasive FFR as the reference standard.
Conclusions: The study concluded that Heartflow FFRCT Analysis
demonstrated high diagnostic accuracy in identifying functionally
significant coronary stenosis, with improved sensitivity and specificity
compared to CCTA alone. These findings support the potential of
Heartflow FFRCT Analysis as a reliable non-invasive method for
assessing coronary artery disease, offering a promising alternative to
invasive FFR for guiding clinical decision-making.
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Reference
Source
Study summary
Morris et al. (2023)
Journal of
Cardiovascular
Computed
Tomography
SMART-CT 2.0
Authors: Michael F. Morris, Mahesh Chandrasekhar, Harish Gudi, et al.
Institution: Banner University Medical Center, Phoenix
N: 120
Description: The SMART-CT study was designed to evaluate the
effectiveness of an AI-informed coronary stenosis quantification tool,
known as AI-CSQ, in assisting the interpretation of CCTA. This tool,
aims to reduce the time required for CCTA interpretation, while
maintaining or enhancing the accuracy and confidence of the readers.
The study involved 120 CCTAs from patients with stable chest pain or
symptoms of CAD. These were analyzed by six readers of varying
experience levels, including cardiologists and radiologists, to determine
the impact of AI-CSQ on interpretation time, diagnostic accuracy, and
inter-reader variability.
Conclusions: The study concluded that the use of AI-CSQ significantly
decreased the overall time required for CCTA interpretation by 25.8%,
regardless of the reader's experience level. It also improved inter-
reader agreement and boosted reader confidence in diagnosing
coronary artery disease. These findings underscore the potential of
advanced AI tools like AI-CSQ to enhance the efficiency and reliability
of CCTA interpretation in clinical practice, addressing challenges such
as time-consuming post-processing and variability in reader accuracy.
Curzen et al.
(2020)
The Lancet
FORECAST
Authors: Nick Curzen, Juliet A. Usher-Smith, John R. Chambers, et al.
Institution: Multiple centers across the United Kingdom
N: 1,400
Description: The FORECAST (Fractional Flow Reserve Derived from
Computed Tomography Coronary Angiography in the Assessment and
Management of Stable Chest Pain) study was a prospective,
randomized controlled trial designed to assess the clinical and
economic impact of using CCTA combined with Heartflow FFRCT
Analysis in the management of patients presenting with stable chest
pain. The study compared this approach to standard care pathways
that did not include Heartflow FFRCT Analysis, aiming to determine its
effectiveness in reducing unnecessary invasive procedures and
improving patient outcomes.
Conclusions: The study concluded that the integration of CCTA with
Heartflow FFRCT Analysis into the diagnostic pathway for stable chest
pain resulted in a significant reduction in the need for ICA and
unnecessary procedures, without an increase in adverse patient
outcomes. It found that random assignment to the study arm using
CCTA and our Heartflow FFRCT Analysis was associated with a 22%
reduction in the need for ICA, a 52% reduction in the frequency of
unnecessary ICA, 40% fewer layered non-invasive tests, and no
increase in adverse patient outcomes or in costs (in the United
Kingdom).
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Reference
Source
Study summary
Min et al. (2012)
Journal of the
American
Medical
Association
DeFACTO study
Authors: James K. Min, Jonathon Leipsic, Michael J. Pencina, et al
Institution: Multiple international centers
N: 252
Description: Multicenter diagnostic performance study involving 252
stable patients with suspected or known CAD from 17 centers in 5
countries who underwent CT, invasive coronary angiography (“ICA”),
FFR, and Heartflow FFRCT Analysis between October 2010 and
October 2011. Computed tomography, ICA, FFR, and Heartflow FFRCT
Analysis were interpreted in blinded fashion by independent core
laboratories. Accuracy of Heartflow FFRCT Analysis plus CT for
diagnosis of ischemia was compared with an invasive FFR reference
standard. Ischemia was defined by an FFR or Heartflow FFRCT
Analysis of 0.80 or less, while anatomically obstructive CAD was
defined by a stenosis of 50% or larger on CT and ICA. The primary
study outcome assessed whether Heartflow FFRCT Analysis plus CT
could improve the per-patient diagnostic accuracy such that the lower
boundary of the 1-sided 95% confidence interval of this estimate
exceeded 70%.
Conclusions: The study did not meet its primary goal for per-patient
diagnostic accuracy, as it resulted in diagnostic accuracy of 73%, with a
lower bound of the 95% CI of 67%. However, the use of noninvasive
Heartflow FFRCT Analysis combined with CT in stable patients with
suspected or known CAD showed improved diagnostic accuracy and
discrimination compared to CT alone for identifying hemodynamically
significant CAD, using invasive FFR as the reference standard. This
suggests that Heartflow FFRCT Analysis could enhance the noninvasive
assessment of CAD by providing physiologic insights that CT alone
cannot offer, potentially reducing unnecessary invasive procedures.
Following the completion of the DeFACTO study, we substantially
redesigned our technology, which improved product performance. The
results of this improvement were validated in the NXT study, which
resulted in a per vessel 86% accuracy and was the central evidence for
the initial De Novo 510(k).
Sales and marketing
We believe the Heartflow Platform adds significant value across all the subspecialties that impact
cardiovascular care including referring cardiologists, imaging physicians, and interventionalists. We have
structured our sales force to efficiently call on these key physician stakeholders, with a primary focus on
the imaging physicians who are instrumental in new account adoption and the referring physicians who
are critical to driving volume growth at our existing accounts.
We market and sell our Heartflow Platform in United States through a direct sales organization. As of
December 31, 2024, our U.S. commercial team included 40 TSMs focused on opening new accounts, 48
TAMs who are focused on broadening referring physician awareness of the CCTA + Heartflow pathway
and driving increased volumes at our existing accounts, and our customer success organization that
supports seamless onboarding, implementation and ongoing utilization at our accounts. We support our
direct commercial efforts with a marketing team that generates demand for the CCTA + Heartflow
pathway and highlights clearly defined value propositions for the various stakeholders across our
customer base including cardiologists, radiologists and interventional cardiologists.
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Our TSMs engage with physicians to communicate the value proposition of the Heartflow Platform,
leveraging our large base of clinical evidence to highlight its clinical and economic benefits as well as the
lack of any new capital equipment purchase to drive new account adoption. Our TSMs have substantial
experience selling into cardiology and radiology practices as well as engaging with broad stakeholders to
establish new diagnostic and therapeutic solutions, employing an enterprise sales strategy. Our TAMs
utilize our extensive clinical compendium to educate and train physicians on the benefits of our platform,
ultimately driving more referrals to our accounts. Our TAMs have strong backgrounds in establishing new,
disruptive therapies and growing a cardiology referral base.
business15ba.jpg
Figure 13: Overview of Heartflow call points
Our software is simple, intuitive and does not require case coverage by our sales reps, which affords our
commercial organization a differentiated level of efficiency relative to most other medical device
technology companies. We intend to drive further adoption of our Heartflow Platform by leveraging our
existing and highly efficient cohort of TSMs and TAMs to continue opening new accounts and driving
volume growth. We expect to selectively add additional TSMs to grow our geographic presence where we
see areas of opportunity and modestly grow our team of TAMs to continue to drive awareness of the
benefits of our technology and broaden our referring physician population as our installed base grows.
We believe that all accounts with a CCTA program would benefit from adopting the Heartflow Platform.
We estimate that as of December 31, 2023, there were approximately 2,700 hospitals and outpatient
facilities in the United States that perform CCTA, and this target account base has grown at a 10% CAGR
from 2018 to 2023 as accounts increasingly recognize the benefits of a guideline directed CCTA program.
We also have small, direct commercial teams in the United Kingdom and Japan. We may continue to
expand our commercial activities outside the United States in areas where we see potential opportunity
and supportive reimbursement dynamics.
Research and development
We have invested significantly in research and development efforts over more than a decade to establish
the first and most widely adopted AI-enabled non-invasive test for CAD that is authorized for marketing in
the United States. We have built sophisticated AI-based algorithms and established an intuitive, easy to
use web and mobile customer interface, developed secure data transfer software, a scalable cloud
database, and quality review software, all while facilitating operational scalability. Our highly skilled and
focused research and development (“R&D”) team has been pioneering AI-based coronary imaging for
over a decade and remains uniquely positioned to continuously advance our Heartflow Platform. Our R&D
team is comprised of PhD research scientists with expertise in AI-based algorithms and medical imaging,
alongside software engineers skilled in cloud architecture, AI algorithms, machine and deep learning and
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3D visualization, as well as product managers and designers who ensure optimal customer experience
and design.
We are continuing to invest in research and development efforts with the goal of driving continuous
improvements to the Heartflow Platform and expanding its applicability to additional disease states and
patient populations. Our near to medium term research and development priorities include: (i) continuing
to train and improve our AI algorithms to drive greater quality and efficiency and reduce manual
involvement; (ii) enhancing product features for both Heartflow FFRCT Analysis and Heartflow Plaque
Analysis; (iii) developing additional workflow enhancements for our customers; and (iv) expanding
indications for our platform, including asymptomatic risk prediction.
Reimbursement
The ability of our customers to obtain third-party payor coverage and payment for the use of our Heartflow
Platform products for their patients is important to our business. Demand for our existing and new
products is, and will continue to be, affected by the extent to which government healthcare programs such
as Medicare and Medicaid and private health insurers reimburse our customers for the use of our
products with their patients in the countries where we do business. We have successfully engaged with
third-party payors in major markets throughout the world to obtain coverage, coding, and payment rates
for our products. Nonetheless, not all third-party payors reimburse our customers for our products in all
situations. Third-party payor reimbursement for the Heartflow FFRCT Analysis is broad; however,
Heartflow Plaque Analysis is our second commercial product and we continue to work to expand
coverage and payment for its use. Even if we develop or acquire a promising new product that has been
cleared for commercial distribution by the FDA, demand for the product may be limited unless our
customers are reimbursed at favorable rates by private health insurers and government health care
programs. Our Heartflow FFRCT Analysis is reimbursed under a dedicated Category 1 CPT code effective
as of January 1, 2024, and has established coverage policies representing approximately 99% of covered
lives in the United States. A Category 1 CPT code was also recently established for our Heartflow Plaque
Analysis, which will take effect in January 2026, and it is covered by the MACs, with five of the seven
MACs issuing final LCDs.
In the United States, our customers purchase Heartflow FFRCT Analysis and Heartflow Plaque Analysis
reports generated by our products for their patients. These customers then submit a claim to the
applicable third-party payor for reimbursement. To the extent that coverage is denied on such claims, or
the reimbursement paid does not exceed the customer’s cost for our products, demand for our products
will wane or the charges for our products would have to be materially reduced. Internationally, healthcare
reimbursement systems vary significantly. In some countries, our customers, such as hospitals, are
constrained by fixed budgets, regardless of the volume and nature of patient treatment. Other countries
require application for, and approval of, government or third-party payor reimbursement. Without both
favorable coverage determinations by, and the financial support of, government and private third-party
payors, the market for of our products would be adversely affected. We cannot be sure that third-party
payors will maintain the current level of coverage and payment to our customers for use of our existing
products. Adverse coverage determinations, or reductions in the amount of reimbursement, could harm
our business by discouraging customers’ ordering of, and reducing the prices they are willing to pay for,
our products.
It is our intent to complete additional clinical studies and analyses, as needed, to obtain and continue to
expand coverage and payment at favorable rates for our products in countries or regions where it makes
economic sense to do so. Nonetheless, coverage and payment for our products can differ from third-party
payor to third-party payor. Further, as a result of their purchasing power, third party payors have
implemented, and are continuing to implement, cost cutting measures such as seeking discounts, price
reductions or other incentives from medical products manufacturers, and imposing limitations on
coverage and payment for medical technologies and procedures. These trends could compel us to reduce
prices for our products and could cause a decrease in the size of the market or a potential increase in
competition that could negatively affect our business, financial condition and results of operations.
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In addition to uncertainties surrounding insurance coverage policies, there are periodic changes to
reimbursement levels by government payors and private health insurers. Third-party payors regularly
update reimbursement amounts and also from time to time revise the methodologies used to determine
reimbursement amounts. This includes routine, annual updates to payments to hospitals under the
outpatient prospective payment system (“OPPS”). These updates could directly impact the demand for
our products.
The overall escalating cost of medical products and services being paid for by the government and private
health insurance has led to, and may continue to lead to, increased pressures on the healthcare and
medical device industries to reduce the costs of products and services. Third-party payors are developing
increasingly sophisticated methods of controlling healthcare costs through prospective reimbursement
and capitation programs, group purchasing, redesign of benefits, and exploration of more cost-effective
methods of delivering healthcare. In the United States, some insured individuals enroll in managed care
programs, which monitor and often require pre-approval of the services that a member will receive. Some
managed care programs pay their providers on a per capita (patient) basis, which puts the providers at
financial risk for the services provided to their patients by paying these providers a predetermined
payment per member per month and, consequently, may limit the willingness of these providers to use
our products.
Competition
We consider our primary competition to be traditional non-invasive tests for CAD including primarily stress
tests such as SPECT, stress echocardiography and PET. The primary providers of imaging systems that
perform these tests include Siemens Healthineers AG, GE Healthcare, Koninklijke Philips N.V. and Canon
Medical Systems Corporation. These companies also manufacture CT scanners and therefore have a
vested interest in growing the CCTA market in addition to protecting their share of the non-invasive
market. These are large, multi-national, commercial organizations with significant resources and
distribution capabilities.
We also face competition from companies that have developed or are developing AI-based platforms that
leverage CCTA to diagnose CAD, including earlier-stage companies such as Cleerly, Inc., Elucid
Bioimaging Inc. and Keya Medical Technology Co., Ltd. We may also face competition from companies
developing AI-based platforms, even if they are not currently in the CAD market.
We believe the primary competitive factors in our market include: (i) the accuracy, reliability, and utility of
the test as demonstrated by the strength and quality of clinical data directly utilizing the test and
supporting it; (ii) speed and efficiency of achieving a definitive diagnosis at scale; (iii) per patient
economics including reimbursement rates and relative costs; (iv) availability and ease of use including
integration within hospital systems and clinical workflows as well as customer support; and (v) effective
marketing and physician education efforts as well as ability to impact physician mindshare and historical
practice patterns.
Intellectual property
Our success depends in part on our ability to obtain, maintain and defend our patent and other proprietary
rights for the Heartflow Platform, the validity and enforceability of our patents, our ability to operate
without infringing the valid and enforceable patents and proprietary rights of third-parties and the
continued confidentiality of our know-how and trade secrets. We are actively involved in research and
development and therefore seek to protect the investments we have made into the development of the
Heartflow Platform and our proprietary technology by relying on a combination of patents, trademarks,
trade secrets, and licenses, as well as through internal compartmentalization processes, confidentiality
agreements and proprietary information agreements with suppliers, employees, consultants and others
who may have or gain access to our proprietary information. We seek patent protection in the United
States and key markets internationally for the Heartflow Platform, and any other inventions to which we
have rights, where available and appropriate. We also rely upon trademarks to build and maintain the
integrity and identity of our brand, and we seek to protect the confidentiality of trade secrets that may be
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important to the development of our business, especially where we do not believe patent protection is
appropriate or obtainable. We license from third parties certain patent rights and proprietary know-how
that we believe to be useful to our business.
Our patent portfolio, described more fully below, includes claims directed to the Heartflow Platform and its
delivery, as embodied in various systems, computer programs, computer implemented methods and
related methods of use. These claims are directed to various aspects of deriving anatomical and
physiological information from image data for the Heartflow Platform, aspects of the Heartflow Platform
user interface, machine learning methods for generation of the 3D models used for our FFRCT Analysis
and Plaque Analysis products, and methods of deriving blood flow, anatomy, plaque and organ tissue
information from the image data. A number of our issued patents also cover indications other than CAD,
such as peripheral artery disease, stroke, or aneurysms as well as technical applications related to image
data analysis and processing, and platform-related PHI and data transfer methodologies and a number of
issued patents cover alternative methods such as deriving FFRCT using purely machine learning methods
or from other imaging modalities.
As of December 31, 2024, our owned and licensed patent portfolio includes approximately five hundred
and eighty-six (586) issued patents and one hundred and three (103) pending patent applications globally,
of which nine (9) are allowed. In the U.S. this includes three hundred and nine (309) issued U.S. patents
and fifty-six (56) pending non-provisional U.S. patent applications (of which three (3) are allowed). In
foreign jurisdictions our owned and licensed patent portfolio includes two-hundred and eighty (280) issued
foreign patents and forty-seven (47) pending foreign patent applications (of which five (5) are allowed).
The two-hundred and eighty (280) issued foreign patents include one or more issued patents in Europe,
Japan, Korea, China, Australia, Canada, India, Hong Kong, and Israel. The forty-seven (47) pending
foreign patent applications include one or more pending applications in jurisdictions such as Europe,
Canada, China, and Japan. We own all of our issued patents except for 7 issued U.S. patents and 8
issued foreign patents, for which we have exclusive licenses. All of the issued U.S. patents in the portfolio
are utility patents. Assuming payment of all appropriate maintenance, renewal, annuity or other
governmental fees, as applicable, our owned and licensed issued U.S. patents expire between 2018 and
2041. If issued, our last to expire pending patent application (without accounting for potentially applicable
patent term adjustments or extensions) is expected to expire in 2045. Our licensed U.S. patents expire in
2028. Our patents and applications generally fall into three broad categories:
•applications and patents relating to our Heartflow FFRCT Analysis, including claims directed to
segmentation, determining blood flow characteristics using artificial intelligence and/or fluid dynamics,
and visualization generation;
•applications and patents relating to our Heartflow Plaque Analysis, including claims directed to plaque
and vessel visualization and characterization; and
•applications and patents relating to our Heartflow RoadMap Analysis, including claims directed to
image quality and annotation, segmentation, and vascular tree generation.
The term of individual patents depends upon the legal term of the patents in the countries in which they
are obtained. In most countries in which we file or intend to file, including the United States, the patent
term is 20 years from the earliest date of filing a non-provisional patent application. Additionally, a U.S.
provisional patent application expires twelve months from its filing date, and its subject matter can only be
claimed in an issued patent if, among other things, we timely file a non-provisional patent application
making a valid priority claim to that provisional patent application before it expires. In the United States, a
patent’s term may be lengthened by patent term adjustment, which compensates a patentee for
administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent
is terminally disclaimed over an earlier filed patent. The coverage sought in a patent application can be
denied or significantly reduced either before or after the patent is issued. We cannot be sure that patents
will be granted with respect to any current pending patent application or with respect to any patent
applications filed by us in the future, nor can we be certain that any current pending or published patent
application will be granted with the current claims or that any current or future patents will be
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commercially useful in protecting the Heartflow Platform and our proprietary technology. In addition, any
patents that we may hold, whether owned or licensed, may be challenged, circumvented or invalidated by
third-parties.
The success of our business strategy also depends in part on our continued ability to protect our brand.
We own registered trademarks for the Heartflow Platform. We also own and maintain registration for a
number of domain names. As of December 31, 2024, we have registered the trademarks “HEARTFLOW”
word mark and logo with the USPTO. Although we own registered trademarks and domain names in the
United States and certain other countries, and have filed trademark applications and secured domain
name registrations in the United States and in certain other countries, we do not have assurance that our
trademark portfolio will be adequate to secure or protect all necessary trademarks that we use.
The Heartflow Platform also implements software modules licensed to us by third-party authors under
“open source” licenses. The use of open source software may entail greater risks than the use of third-
party commercial software. Please see “Risk factors—Risks related to our intellectual property” for more
description of these risks. We have established a review process for screening requests from our
development organizations for the use of such software that is designed to help us mitigate risks related
to the quality of any open source software implemented in our technology platform. We also review any
open source software used to support our software development, but not directly incorporated into the
Heartflow Platform, as part of our general quality management processes. While these review processes
help us mitigate risks associated with the quality of the open source software incorporated into or used in
developing the Heartflow Platform, we cannot be sure that all open source software is submitted for
approval prior to use in connection with the Heartflow Platform.
We also rely on trade secrets, including know-how, unpatented technology and other proprietary
information, to strengthen our competitive position. We seek to protect trade secrets and confidential and
unpatented know-how, in part, by entering into non-disclosure and confidentiality agreements with parties
who have access to such knowledge, such as our employees, collaborators, manufacturers, consultants,
advisors and other third parties. We also seek to enter into confidentiality and invention or patent
assignment agreements with our employees and consultants that obligate them to maintain confidentiality
and assign their inventions to us. We also seek to preserve the integrity and confidentiality of our data
and trade secrets by maintaining the physical security of our premises and physical and electronic
security of our information technology systems.
Our ability to stop third-parties from making, using, selling, offering to sell or importing the Heartflow
Platform depends on the extent to which we have rights under valid and enforceable patents, trade
secrets or other intellectual property and proprietary rights that cover these activities. We pursue
intellectual property protection to the extent we believe it would advance our business objectives.
Notwithstanding these efforts, there can be no assurance that we will adequately protect our intellectual
property or provide any competitive advantage. For more information regarding risks relating to
intellectual property, see “Risk factors—Risks related to our intellectual property.”
Government regulation
United States regulation of medical devices
Our products are medical devices subject to extensive and ongoing regulation by the United States Food
and Drug Administration (“FDA”), the Centers for Medicare and Medicaid Services (“CMS”), the
Department of Health and Human Services Office of Inspector General (“OIG”) and regulatory bodies in
the United States and other countries. Regulations govern virtually every critical aspect of a medical
device company’s business operations, including research activities, product development and testing,
manufacturing and production, contracting, reimbursement, product messaging, medical communications,
sales, marketing and advertising. In the United States, the Federal Food, Drug and Cosmetic Act
(“FDCA”) and the implementing regulations of the FDA govern product design and development,
preclinical and clinical testing, premarket clearance or approval, product manufacturing, product labeling,
product storage, advertising and promotion, product sales and distribution, import, export and post market
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clinical surveillance. Our business is subject to federal, state, local, and foreign regulations, such as ISO
13485:2016, ISO 14971:2019, FDA’s Quality System Regulation (“QSR”) contained in 21 CFR Part 820,
and the EU’s Medical Devices Directive 93/42/EEC and its replacement, Regulation (EU) 2017/745. The
Heartflow Platform consists of three main analyses; Heartflow FFRCT Analysis, Heartflow Roadmap
Analysis, and Heartflow Plaque Analysis. All three are authorized for clinical use in the United States,
Bahrain, Israel, Saudi Arabia, and the United Arab Emirates. Only the FFRCT Analyses is authorized for
clinical use in the European Economic Area, United Kingdom, Australia, Canada, and Japan.
FDA premarket clearance and approval requirements
Unless an exemption applies, each medical device commercially distributed in the United States requires
either FDA clearance of a 510(k) premarket notification, grant of a de novo classification request, or
approval of a premarket approval (“PMA”) application. Our Heartflow Platform is regulated in the United
States by the FDA as a Class II medical device. The FDA classifies medical devices into one of three
classes. Devices deemed to pose low to moderate risk are designated as either Class I or II. Class I
devices are subject to general controls such as establishment registration and device listing, labeling,
adherence to current good manufacturing practices outlined in the QSR, maintenance and investigation of
product complaint records, and adverse event reporting, but are usually exempt from premarket
notification requirements. Class II devices are subject to the same general controls and may be subject to
special controls such as performance standards, post-market surveillance, particularized labeling
requirements and/or clinical testing prior to clearance. Manufacturers of Class II devices, absent an
exemption, are required to submit to the FDA a premarket notification prior to commercial distribution.
Devices are designated as Class III, which requires approval of a PMA application, if they are deemed by
the FDA to pose the greatest risk. These high-risk devices include life sustaining or life supporting
devices, certain implantable devices, and other devices that are intended for a use that is of substantial
importance in preventing impairment of human health or that present a potential unreasonable risk of
illness or injury. The PMA approval process is more comprehensive than the 510(k) clearance process
and typically takes several years to complete.
510(k) clearance marketing pathway
A 510(k) notification requires the sponsor to demonstrate that a medical device is substantially equivalent
to another marketed device, termed a “predicate device,” that is legally marketed in the United States and
for which a PMA was not required. A device is substantially equivalent to a predicate device if it has the
same intended use and technological characteristics as the predicate, or has the same intended use but
different technological characteristics that do not raise new questions of safety and effectiveness, and
information submitted to the FDA demonstrates that the device is at least as safe and effective as the
predicate device.
If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market,
it will grant 510(k) clearance to commercially market the device. If there is no viable predicate device for a
new device because, for example, of a new intended use, the device is automatically designated as a
Class III device. Unless the De Novo pathway is available for the new device, the device sponsor must
fulfill more rigorous PMA requirements. The PMA process requires that the manufacturer demonstrate
that the device is safe and effective for its intended uses, which generally requires the submission of
extensive data, including results from pre-clinical studies and human clinical trials. A PMA must also
contain a full description of the device and its components, the methods, facilities, and controls used for
manufacturing, and proposed labeling. The PMA process is burdensome, and in practice, the FDA’s
review of a PMA application may take up to several years following initial submission.
After a device receives 510(k) clearance, any modification that could significantly affect its safety or
effectiveness, or that would constitute a new or major change in its intended use, requires a new 510(k)
clearance, or depending on the modification, could require the filing of a de novo classification request or
a PMA application, which would require the submission to the FDA of clinical trial data, among other
information. We are required to determine, for each modification to our cleared products, whether to
submit a new 510(k) notification for the modification, based on the nature of the modification. If we
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determine a new 510(k) submission is not required, the decision and justification are documented in a
“letter to file.” If the FDA disagrees with our determination, the FDA can require us to cease marketing or
recall the modified device until 510(k) clearance, grant of a de novo classification request or approval of a
PMA is obtained. We have made, and we plan to continue to make, minor product enhancements to our
cleared products that we believe do not require new 510(k) clearances and that we document in letters to
file. We also intend to make product enhancements from time to time that we expect may require new
510(k) clearances.
De novo classification process
A manufacturer can request a risk-based classification determination for a novel device in accordance
with the “de novo” process. Medical device types that the FDA has not previously classified as Class I, II,
or III are automatically classified into Class III regardless of the level of risk they pose. The Food and Drug
Administration Modernization Act of 1997 established a route to market for low-to-moderate risk medical
devices that are automatically placed into Class III due to the absence of a predicate device, called the
“Request for Evaluation of Automatic Class III Designation,” or the de novo classification procedure. This
procedure allows a manufacturer whose novel device is automatically classified into Class III to request
down-classification of its medical device into Class I or Class II on the basis that the device presents low
or moderate risk, rather than requiring the submission and approval of a PMA application. Pursuant to the
Food and Drug Administration Safety and Innovation Act (“FDASIA”), manufacturers may request de novo
classification directly without first submitting a 510(k) pre-market notification to the FDA and receiving a
not-substantially-equivalent determination. De novo classification requests, like PMA applications and
510(k) notifications, are subject to the payment of user fees.
Under the FDASIA, the FDA is required to reach a decision within 120 days following receipt of the de
novo request, although the process may take significantly longer. If the manufacturer seeks
reclassification into Class II, the manufacturer must include a draft proposal for special controls that are
necessary to provide a reasonable assurance of the safety and effectiveness of the medical device. If the
FDA grants the de novo request, the device may be legally marketed in the United States. However, the
FDA may reject the request if the FDA identifies a legally marketed predicate device that would be
appropriate for a 510(k) notification, determines that the device is not low-to-moderate risk, or determines
that General Controls would be inadequate to control the risks and/or special controls cannot be
developed. After a device receives de novo classification, any modification that could significantly affect
its safety or efficacy, or that would constitute a major change or modification in its intended use, will
require a new 510(k) clearance or, depending on the modification, another de novo request or even PMA
approval.
We obtained initial marketing authorization for Heartflow FFRCT Analysis through the FDA’s “de novo”
classification process, supported by clinical data from our NXT clinical trial. Through this process, the FDA
agreed that special controls provide reasonable assurance of the safety and effectiveness of the
Heartflow FFRCT Analysis and therefore it can be classified as a Class II device. We received a de novo
authorization on November 26, 2014 for version 1.4 of the Heartflow FFRCT Analysis. We received the
510(k) clearance for version 2.x of the FFRCT product in January 2015, and 510(k) clearance for a
modification to the intended use language in August 2016. Additional clearances were received for a
strategic architecture scope change in December 2018, which is the device we refer to as Heartflow
Platform. The Heartflow Platform version 3.0 received FDA clearance in January 2021, and the newest
product generation, Heartflow Platform version 3.18, adding Roadmap and Plaque functions, received
FDA clearance in October 2022.
Medical device clinical trials
Clinical trials are sometimes required to support 510(k) or de novo submissions. All clinical investigations
of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s
investigational device exemption (“IDE”) regulations which govern investigational device labeling, prohibit
promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring
responsibilities of study sponsors and study investigators. If the device presents a “significant risk” to
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human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application
to the FDA, which must become effective prior to commencing human clinical trials. If the device under
evaluation does not present a significant risk to human health, then the device sponsor is not required to
submit an IDE application to the FDA before initiating human clinical trials, but must still comply with
abbreviated IDE requirements when conducting such trials. A significant risk device is one that presents a
potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in
supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating
disease or otherwise preventing impairment of human health, or presents a potential for serious risk to a
patient in some other way. An IDE application must be supported by appropriate data, such as animal and
laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is
scientifically sound. The IDE will automatically become effective 30 days after receipt by the FDA unless
the FDA notifies the company that the investigation may not begin. If the FDA determines that there are
deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical
trial to proceed under a conditional approval.
Regardless of the degree of risk presented by the medical device, clinical studies must be approved by,
and conducted under the oversight of, an Institutional Review Board (“IRB”) for each clinical site. The IRB
is responsible for the initial and continuing review of the clinical study, and may pose additional
requirements for the conduct of the study. If an IDE application is approved by the FDA and one or more
IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number
of patients, as approved by the FDA. If the device presents a non-significant risk to the patient, a sponsor
may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate
approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the
investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping
requirements. Acceptance of an IDE application for review does not guarantee that the FDA will allow the
IDE to become effective and, if it does become effective, the FDA may or may not determine that the data
derived from the trials support the safety and effectiveness of the device or warrant the continuation of
clinical trials.
During a study, the sponsor is required to comply with the applicable FDA requirements, including, for
example, trial monitoring, selecting clinical investigators and providing them with the investigational plan,
ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of
investigational devices or on making safety or effectiveness claims for them. The clinical investigators in
the clinical study are also subject to FDA’s regulations and must obtain patient informed consent,
rigorously follow the investigational plan and study protocol, control the disposition of the investigational
device, and comply with all reporting and recordkeeping requirements. Additionally, after a trial begins,
we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, such as
strategic business decisions or a belief that the risks to study subjects may outweigh the anticipated
benefits.
Expedited development and review programs
Following passage of the 21st Century Cures Act, the FDA implemented the Breakthrough Devices
Program, which is a voluntary program offered to manufacturers of certain medical devices and device-
led combination products that may provide for more effective treatment or diagnosis of life-threatening or
irreversibly debilitating diseases or conditions. The goal of the program is to provide patients and
healthcare providers with more timely access to qualifying devices by expediting their development,
assessment and review, while preserving the statutory standards for PMA approval, 510(k) clearance and
de novo classification. The program is available for medical devices that meet certain eligibility criteria,
including that the device provides more effective treatment or diagnosis of a life-threatening or irreversibly
debilitating disease or condition, and that: (i) the device represents a breakthrough technology, (ii) no
approved or cleared alternatives exist, (iii) the device offers significant advantages over existing approved
or cleared alternatives, or (iv) the availability of the device is in the best interest of patients. Breakthrough
Device Designation provides certain benefits to device developers, including more interactive and timely
communications with FDA staff; use of post-market data collection, when scientifically appropriate, to
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facilitate expedited and efficient development and review of the device; opportunities for more efficient
and flexible clinical study design; and prioritized review of premarket submissions. When reviewing
Breakthrough Device Designation requests, the FDA may require a combination of literature or
preliminary bench, animal or clinical data to demonstrate a reasonable likelihood of clinical and
technological success. Receiving a Breakthrough Device Designation from the FDA does not guarantee
that the FDA will grant marketing authorization for the device.
Post-market regulation
After a device is approved or cleared and placed in commercial distribution, numerous FDA regulatory
requirements apply. These include, but are not limited to, requirements to:
•register establishments and list devices with the FDA;
•maintain a quality system that is compliant with the QSR, which governs design, development, and
manufacture of devices;
•establish various specifications and controls for incoming components and finished devices;
•ensure that devices are designed to meet user needs;
•verify that finished devices are manufactured to the appropriate controls and that they meet
specifications;
•ensure that devices are assigned and labeled with a Unique Device Identifier (“UDI”) and that certain
UDI information is provided to FDA’s Global Unique Identification Database (“GUDID”);
•ensure that labeling and advertising and promotional activities are consistent with cleared/approved
uses, adequately substantiated, and truthful and not misleading;
•analyze quality data to identify and correct quality problems;
•submit notifications or applications for clearance or approval of product modifications that could
significantly affect safety or effectiveness or that would constitute a major change in intended use;
•review, evaluate and investigate complaints and report adverse events to the FDA when a device may
have caused or contributed to a death or serious injury or malfunctioned in a way that would be likely
to cause or contribute to a death or serious injury if the malfunction were to recur;
•report to FDA corrections and removals undertaken to reduce a risk to health posed by the device or
to remedy a violation of the FDCA that may present a risk to health. In addition, FDA may order a
mandatory recall if there is a reasonable probability that the device would cause serious adverse
health consequences or death;
•comply with any post-approval restrictions or conditions, including requirements to conduct post-
market surveillance studies to establish continued safety data; and
•conduct clinical studies in accordance with good clinical practices and applicable regulations,
including requirements for clinical trial registration and results reporting on ClinicalTrials.gov.
Manufacturing processes for medical devices are required to comply with the applicable portions of the
QSR, which cover the methods and the facilities and controls for the design, manufacture, testing,
production processes and controls, quality assurance, labeling, packaging, distribution, installation and
servicing of finished devices intended for human use. The QSR also requires, among other things,
maintenance of a device master file, device history file, device history record and complaint files. As a
manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA. Failure to
maintain compliance with the QSR requirements could result in the shutdown of, or restrictions on,
manufacturing operations and the recall or seizure of marketed products. In February 2024, the FDA
issued the Quality Management System Regulation Final Rule (“QMSR”) to amend the QSR,
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incorporating by reference the international standard for medical device quality management systems,
ISO 13485:2016. The rule becomes effective on February 2, 2026. Until then, manufacturers are required
to comply with the QSR.
The FDA polices these requirements by inspection, review of required reports or submissions, and market
surveillance, and the agency has broad enforcement powers to address any violations. The FDA may
conduct announced or unannounced facility inspections to determine compliance with the QSR and other
regulations, and these inspections may include our manufacturing facilities. Failure to comply with
applicable regulatory requirements can result in enforcement action by the FDA or other regulatory
authorities, which may result in sanctions and related consequences, including:
•untitled letters or warning letters or it has come to our attention letters;
•injunctions or consent decrees;
•fines or civil penalties;
•recall, detention, or seizure of our product;
•operating restrictions, partial suspension, or total shutdown of production;
•the FDA’s refusal of or delay in granting 510(k) clearance or premarket approval of new or modified
products;
•withdrawal of 510(k) clearances or PMA approvals;
•the FDA’s refusal to grant export certificates;
•criminal prosecution;
•unanticipated expenditures to address or defend such actions; and
•reputational harm resulting from such actions.
Other regulatory authorities overseeing the implementation and adherence of applicable state, federal
and analogous foreign regulatory authorities may also conduct unannounced inspections. Such
inspections may result in similar administrative, civil and criminal penalties. The discovery of previously
unknown problems with marketed medical devices, including unanticipated adverse events or adverse
events of increasing severity or frequency, whether resulting from the use of the device within the scope
of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the
device, including the removal of the product from the market or voluntary or mandatory device recalls.
International regulation — European Union, United Kingdom, Japan and Canada
In order to market and sell our product outside of the United States, we must comply with numerous and
varying regulatory requirements of other countries and jurisdictions regarding quality, safety, and efficacy
and governing, among other things, clinical trials, marketing authorization, commercial sales and
distribution of our product.
Although many of the regulatory issues we face in the United States are similar to the issues in other
geographies, the approval or certification process varies between countries and jurisdictions and can
involve additional testing and additional administrative review periods. The time required to obtain
approval or certification in other countries and jurisdictions might differ from and be longer than that
required to obtain clearance from the FDA. Regulatory approval or certification in one country or
jurisdiction does not ensure regulatory approval or certification in another, but a failure or delay in
obtaining regulatory approval or certification in one country or jurisdiction may negatively impact the
regulatory process in others.
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European Union
The primary regulatory environment in Europe is that of the European Union, which includes most of the
major countries in Europe. The law regarding medical devices is harmonized in the European Union. Until
a few years ago, medical devices were governed by the Medical Devices Directive 93/42/EEC (“MDD”)
and the Active Implantable Medical Devices Directive 90/385/EEC (“AIMD”), implemented by the member
states of the European Union into their national law. However, on May 26, 2021,the Medical Devices
Regulation (EU) 2017/745 (“MDR”) entered into application, repealing and replacing the MDD and the
AIMD. As a Regulation, the MDR is directly applicable in all member states of the European Union and
does not require further implementation into national law. The MDR and its associated guidance
documents and harmonized standards govern, among other things, device design and development,
preclinical and clinical or performance testing, premarket conformity assessment, registration and listing,
manufacturing, labeling, storage, claims, sales and distribution, export and import and post-market
surveillance, vigilance, and market surveillance. The MDR is based on very similar general system as the
MDD, but adds obligations on manufacturers and distributors of medical devices.
Since May 26, 2021, medical devices placed on the European Union market must conform to the
requirements set out by the MDR. Medical devices must comply with the General Safety and
Performance Requirements (“GSPRs”) set out in Annex I of the MDR. Compliance with these
requirements is a prerequisite to be able to affix the CE mark to devices, without which they cannot be
marketed or sold in the European Union. To demonstrate compliance with the GSPRs provided in the
MDR and obtain the right to affix the CE mark, medical devices manufacturers must undergo a conformity
assessment procedure. The conformity assessment procedure varies depending on the class of the
product, but most cases involve an assessment by a Notified Body. Depending on the relevant conformity
assessment procedure, this assessment may consist of a review of the technical file submitted by the
manufacturer, an audit of the quality system of the manufacturer, and testing of the product of the
manufacturer. Even though a Notified Body is a private organization in one of the member states of the
European Union, all Notified Bodies in the European Union are designated and accredited by a national
government of the European Union based on stringent criteria. Only such accredited Notified Bodies may
give a CE Certificate of Conformity following successful completion of a conformity assessment procedure
conducted in relation to the medical device and its manufacturer and their conformity with the GSPRs.
The CE Certificate of Conformity confirms the conformity of the device to the GSPRs and allows the
applicant to affix the CE mark on the assessed medical device and to commercialize it in the European
Union after having prepared and signed a related European Union Declaration of Conformity.
As a general rule, demonstration of conformity of medical devices and their manufacturers with the
GSPRs must be based, among other things, on the evaluation of clinical data supporting the safety and
performance of the products during normal conditions of use. Specifically, a manufacturer must
demonstrate that the device achieves its intended performance during normal conditions of use and that
the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed
against the benefits of its intended performance, and that any claims made about the performance and
safety of the device (e.g., product labeling and instructions for use) are supported by suitable evidence.
This assessment must be based on clinical data, which can be obtained from (i) clinical studies conducted
on the devices being assessed, (ii) scientific literature from similar devices whose equivalence with the
assessed device can be demonstrated or (iii) both clinical studies and scientific literature. The conduct of
clinical studies in the European Union is governed by detailed regulatory obligations. These may include
the requirement of prior authorization by the Competent Authorities of the country in which the study takes
place and the requirement to obtain a positive opinion from a competent Ethics Committee. This process
can be expensive and time-consuming. After a device is placed on the market in the European Union, it
remains subject to significant regulatory requirements.
The MDR also establishes transitional provisions, amended by Regulation (EU) 2023/607, permitting
certain devices that have been CE marked in accordance with the MDD or the AIMD to continue to be
placed on the European Union market under strict conditions and for a specific period of time depending
on the risk classification of the device and the date of issuance of any related CE Certificate of
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Conformity. Accordingly, CE Certificates of Conformity issued by Notified Bodies in accordance with the
MDD or the AIMD from May 25, 2017, and which remained valid on May 26, 2021 and have not since
been withdrawn will, with certain exceptions, remain valid until December 31, 2027 for Class III and Class
IIb implantable medical devices and until December 31, 2028 for other Class IIb, Class IIa and Class I
devices with a measuring function or which are sterile. Class I medical devices, for which the conformity
assessment procedure in accordance with the MDD or the AIMD did not require the involvement of a
Notified Body but will require the involvement of a Notified Body in accordance with the MDR and for
which an European Union Declaration of Conformity was issued in accordance with the MDD or the AIMD
prior to May 26, 2021, can continue to be placed on the European Union market until December 31, 2028.
Manufacturers of medical devices may only benefit from the above extended transitional provisions
deadlines if the following conditions are fulfilled: (i) the devices continue to comply with the requirements
of the MDD or AIMD, as applicable, (ii) there are no significant changes in the design and intended
purpose, (iii) the devices do not present an unacceptable risk to the health or safety of patients, users or
other persons, or to other aspects of the protection of public health, (iv) the manufacturer implements a
quality management system by May 26, 2024 which complies with the requirements of the MDR, (v) by
May 26, 2024 an application is lodged with a Notified Body for conduct of the conformity assessment of
the devices covered by the CE Certificate of Conformity, or the devices intended to substitute for such
devices, in accordance with the MDR and a related written agreement is signed with the Notified Body by
September 26, 2024, and (vi) from May 26, 2021, compliance with the MDR relating to post-market
surveillance, market surveillance, vigilance, registration of economic operators and of devices is ensured
in place of the corresponding requirements in the MDD or AIMD.
In addition, CE Certificates of Conformity issued by Notified Bodies in accordance with the MDD or the
AIMD from May 25, 2017, which were valid on May 26, 2021 and have not been withdraw since but which
expired before March 20, 2023, will only continue to be valid in accordance with the extended transitional
deadlines above if either (i) the manufacturer signed a written agreement with a Notified Body for the
conformity assessment of the device covered by the expired CE Certificate of Conformity, or the device
intended to substitute that device, in accordance with the MDR before the date of expiry of the CE
Certificate of Conformity, or (ii) a competent authority of an European Union Member State has granted a
derogation from the application conformity assessment procedure in accordance with Article 59(1) or
Article 97(1) of the MDR.
On July 26, 2011, our Notified Body at the time, TUV Nord, issued a CE Certificate of Conformity for, and
thus allowed us to affix the CE mark, version 1.0 of the Heartflow Platform (July 26, 2011). The CE
Certificate of Conformity was subsequently reviewed for version 2.x of the Heartflow Platform and
confirmed in March of 2017. Our current version, version 3.x is also CE marked under the MDD
(November 20, 2019). We currently rely on the transitional provisions of the MDR to continue to place
version 3.x of the Heartflow Platform on the market in the European Union.
In addition, TUV Nord assessed the conformity of our quality management system (“QMS”) with the
industry standard, EN ISO 13485, and TUV Nord issued the certificate confirming that we meet all EN ISO
13485 requirements. Based on the EN ISO certificate, TUV Nord also issued a certificate under the
MDSAP (Medical Device Single Audit Program), stating that the requirements of EN ISO 13485:2016 for
quality management systems are met in Australia, Canada, USA and Japan.
In the second half of 2024, we changed Notified Bodies from TUV Nord to BSI by an agreement between
TUV Nord, BSI and us. BSI has taken over Notified Body responsibilities concerning all MDD/MDR
requirements. BSI has also taken over our QMS certifications. After this transfer, all certificates issued by
TUV Nord remain valid and in effect.
The advertising and promotion of medical devices in the European Union is subject to the national laws of
the individual European Union Member States that implemented the MDD, the AIMD and that apply the
MDR, Directive 2006/114/EC concerning misleading and comparative advertising, and Directive 2005/29/
EC on unfair commercial practices, as well as other national legislation of individual European Union
Member States governing the advertising and promotion of medical devices. European Union Member
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States’ national legislation may also restrict or impose limitations on our ability to advertise our products
directly to the general public. In addition, voluntary European Union and national industry Codes of
Conduct provide guidelines on the advertising and promotion of our products to the general public and
may impose limitations on our promotional activities with healthcare professionals.
In addition, other countries, such as Switzerland, have voluntarily adopted laws and regulations relating to
medical devices that mirror those of the European Union. Medical devices certified by a Notified Body and
CE marked in the European Union may be placed on Swiss market.
United Kingdom
The United Kingdom left the European Union in January of 2020 and the transitional period ended on
December 31, 2020. In light of the fact that the CE Marking process is set out in European Union law,
which no longer applies in the United Kingdom, the United Kingdom has devised a new route to market
culminating in a UKCA Mark to replace the CE Mark. Northern Ireland will, however, continue to be
covered by the regulations governing CE Marks. The United Kingdom Medicines and Healthcare products
Regulatory Agency (“MHRA”) has established transitional provision to recognize the acceptance of certain
CE marked medical devices on the Great Britain market until June 30, 2030, at the latest, depending on
the type of device and its classification. Accordingly, medical devices which, for example, meet all
requirements of the European Union MDD and have a valid CE Certificate of Conformity and European
Union Declaration of conformity issued under the MDD prior to May 26, 2021, may be placed on the
market until the sooner of expiry of the CE Certificate of Conformity or June 30, 2028. Medical devices
which meet all requirements of the European Union MDR may be placed on the market until June 30,
2030. Manufacturers of medical devices located outside the United Kingdom, including manufacturers of
CE marked medical devices, need to appoint a United Kingdom Responsible Person before the devices
may be placed on the United Kingdom market. The United Kingdom government plans on introducing
new legislation governing medical devices which will be delivered though secondary legislation. The first
piece of legislation was laid in 2024 and updates post-market surveillance requirements. Additional
instruments will follow in 2025 and 2026 to introduce new pre-market requirements including international
reliance, and further enhancements to the regulations.
Japan
We applied for marketing authorization with the PMDA in Japan in February 2015, which was approved in
November 2016. As a result, we are able to commercially market the product in Japan. Our initial
SHONIN application is still current and includes a minor change notification.
Canada
Heartflow received our initial Canadian Medical Device License in August 2015. This remains current and
updated frequently with amendments for every minor software release. As well, Canada recognizes the
Heartflow Mobile application as a separate device identified within our Heartflow device family and
requires amendments for Mobile updates.
Other regulations — federal and state fraud and abuse, data privacy and security and
transparency laws
In addition to FDA restrictions on marketing and promotion of medical devices, there are numerous U.S.
federal and state laws, regulations, and guidance documents pertaining to healthcare compliance
protections against fraud and abuse, including anti-kickback laws, payment transparency laws, patient
inducement laws, and false claims laws, and, in some states, prohibitions against the corporate practice
of medicine and the unlicensed practice of medicine (collectively, fraud and abuse laws and regulations).
Our relationships with physicians, hospitals and other healthcare providers and referral sources for our
products are subject to scrutiny under these laws. Violations of these laws may be punishable by criminal
and civil sanctions, including, in some instances, imprisonment and exclusion from participation in federal
and state healthcare programs, including the Medicare, Medicaid and Veterans Administration health
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programs. Because of the breadth and far-reaching nature of these laws, we may be required to alter or
discontinue one or more of our business practices to be in compliance with these laws.
These healthcare fraud and abuse laws and regulations are complex, and even minor departures from
what is expressly permitted under the laws and regulations can potentially give rise to claims that a
statute or regulation has been violated in a manner that could result in serious criminal or civil
consequences. Several of the more significant healthcare fraud and abuse laws and regulations that may
affect our business or ability to operate are summarized below.
The federal Anti-Kickback Statute is a criminal law that prohibits, among other things, knowingly and
willfully offering, paying, soliciting, or receiving any remuneration in cash or in-kind (including any
kickback or bribe, but also common forms of remuneration, such as service or consulting fees, service
fees, meals, travel expenses, discounts, or rebates), directly or indirectly, overtly or covertly, to induce or
in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order
of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal
healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value.
Although there are a number of statutory exceptions and regulatory safe harbors protecting some
common activities, the exceptions and safe harbors are drawn narrowly. Practices that involve
remuneration that may be alleged to be intended to induce prescribing, uses, purchases, or
recommendations of prescriptions, uses, or purchases of our products may be subject to scrutiny if they
do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular
applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under
the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case
basis based on a review of all relevant facts and circumstances. Several courts have interpreted the
statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is
to induce referrals of (or purchases, uses, or recommendations of prescriptions, uses, or purchases)
federal healthcare program covered business, the Anti-Kickback Statute has been implicated and
potentially violated.
Additionally, the Anti-Kickback Statute was amended by the ACA. Specifically, as noted above, under the
Anti-Kickback Statute, the government must prove that a defendant acted “knowingly” to prove a violation.
The ACA added a provision that clarifies that with respect to violations of the Anti-Kickback Statute, “a
person need not have actual knowledge” of the Statute or specific intent to commit a violation of the
Statute. This change effectively overturns case law interpretations that set a higher standard under which
prosecutors had to prove the specific intent to violate the law. In addition, the ACA codified case law that a
claim including items or services resulting from a violation of the federal Anti-Kickback Statute may
constitute a false or fraudulent claim for purpose of the federal civil False Claims Act.
The federal civil U.S. False Claims Act prohibits, among other things, any person or entity from knowingly
presenting, or causing to be presented, a false or fraudulent claim for payment or approval to the federal
government or knowingly making, using or causing to be made or used a false record or statement
material to a false or fraudulent claim to the federal government. A claim includes “any request or
demand” for money or property presented to the United States government. The civil False Claims Act
also applies to false submissions that cause the government to not receive a benefit to which it is entitled,
such as a discounted sales price for products covered by federal healthcare programs. Intent to deceive
is not required to establish liability under the civil False Claims Act. In addition, the civil False Claims Act
includes a whistleblower provision that allows private citizens to bring claims on behalf of the United
States government alleging violations of the law. Whistleblowers may be entitled to up to as much as
thirty percent (30%) of the government’s financial recovery resulting from such claims. This incentivizes
potential whistleblowers to file complaints in federal court, which complaints are relied upon heavily by the
government to investigate and prosecute allegations of violations of both the civil False Claims Act and
the Anti-Kickback Statute.
Many medical device, pharmaceutical, biotech and other healthcare companies have been investigated or
prosecuted under these healthcare fraud and abuse laws and regulations. Investigations, prosecutions
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(and settlements) relate to a wide range of activities, including among other things, improper clinical
studies, provision of consulting fees to physicians for services that were not commercially reasonable,
providing free product to customers to induce them to do business with the manufacturer, providing high
value meals to customers to induce them to do business with the manufacturer, or providing non-
compliant discounts or rebates to customers, with the expectation that the customers would bill federal
programs for the product or the medical services that involve the product. Other companies have been
investigated or prosecuted for causing false claims to be submitted by, among other things, marketing of
products for unapproved, and thus noncovered, uses, or for promotion of uses inconsistent with approved
labeling (“off label” promotion).
The United States government may further prosecute conduct constituting a false claim under the criminal
False Claims Act. The criminal False Claims Act prohibits the making or presenting of a claim to the
government knowing such claim to be false, fictitious, or fraudulent and, unlike the civil False Claims Act,
requires proof of intent to submit a false claim.
In addition to the Anti-Kickback Statute and the civil and criminal False Claims Acts, the United States
federal government has the authority to seek civil monetary penalties, assessments and exclusions
against an individual or entity based on a wide variety of prohibited conduct. For example, the Civil
Monetary Penalties Law authorizes the imposition of substantial civil money penalties against an entity
that engages in activities including: (i) knowingly presenting or causing to be presented, a claim for
services not provided as claimed or which is otherwise false or fraudulent in any way; (ii) knowingly giving
or causing to be given false or misleading information reasonably expected to influence the decision to
discharge a patient; (iii) offering or giving remuneration to any beneficiary of a federal healthcare program
likely to influence the receipt of reimbursable items or services; (iv) arranging for reimbursable services
with an entity which is excluded from participation from a federal healthcare program; (v) knowingly or
willfully soliciting or receiving remuneration for a referral of a federal healthcare program beneficiary; or
(vi) using a payment intended for a federal healthcare program beneficiary for another use.
There are other federal anti-fraud laws, including the Health Information Portability and Accountability
Act’s fraud provisions, that prohibit, among other actions, knowingly and willfully executing, or attempting
to execute, a scheme to defraud any healthcare benefit program, including private payors, knowingly and
willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal
investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a
material fact or making any materially false, fictitious or fraudulent statement in connection with the
delivery of or payment for healthcare benefits, items or services.
Finally, many states and foreign countries have similar healthcare fraud and abuse statutes or regulations
that may be broader in scope and may apply regardless of payor, in addition to items and services
reimbursed under Medicaid and other state programs.
Violations any of these laws or any other governmental regulations that may apply to us may result in
significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment or
exclusion of devices from government-funded healthcare programs, such as Medicare and Medicaid or
comparable foreign programs.
Physician Payment Sunshine Act
Transparency laws regarding payments or other transfers of value provided to certain licensed healthcare
professionals and teaching hospitals may also impact our business practices. The federal Physician
Payment Sunshine Act requires most medical device manufacturers, including Heartflow, to track and
report annually to the Secretary of the United States Department of Health and Human Services (“HHS”)
financial arrangements, payments, and other transfers of value made by that entity to physicians (defined
to include doctors, dentists, optometrists, podiatrists, and chiropractors), other healthcare providers (such
as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and
investment interests held by such physicians and their immediate family members. The payment
information is made publicly available in a searchable format on the CMS Open Payments website.
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Similar laws have been enacted or are under consideration in several states and foreign jurisdictions,
including states such as Massachusetts and Vermont, and countries like France, which has adopted the
Loi Bertrand, or French Sunshine Act, which became effective in 2013. We will need to dedicate
significant resources to establish and maintain systems and processes in order to comply with these
regulations. Failure to comply with these federal reporting requirements can result in significant civil
monetary penalties. In addition, information reported to HHS, since it is publicly reported, can potentially
be used by a whistleblower to bring claims under the civil False Claims Act alleging that certain payments
or transfers of value gave rise to kickbacks or false claims.
The Foreign Corrupt Practices Act
The U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits any U.S. individual or business from promising,
offering, paying, providing or authorizing the provision of money or anything else of value, directly or
indirectly, to any foreign official, political party candidate or certain other persons (including health care
professionals of state-funded hospitals) for the purpose of influencing any act or decision of the foreign
entity in order to assist the individual or business in obtaining, retaining or directing business. The FCPA
also obligates companies whose securities are listed in the United States to comply with accounting
provisions requiring them to maintain books and records that accurately and fairly reflect all transactions
of the corporation, including international subsidiaries, and to devise and maintain an adequate system of
internal accounting controls for domestic and international operations. Activities that violate the FCPA,
even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment,
disgorgement, oversight, and debarment from government contracts. In addition, several other domestic
and international anti-corruption or anti-bribery laws within and outside the United States apply to our
business.
Privacy, security and breach notification
Other federal and state laws and regulations restrict or otherwise impact our business practices. These
laws include, without limitation, data privacy, security and breach notification authorities.
HIPAA, as amended by HITECH, requires health plans, certain healthcare providers and healthcare
clearinghouses, referred to as “Covered Entities,” to protect the privacy and security of certain types of
health information, referred to as protected health information (“PHI”). HIPAA also imposes various
requirements on “Business Associates” — entities performing services for, or on behalf of, a Covered
Entity that has access to the Covered Entity’s PHI in connection with providing those services as well as
their covered subcontractors. Three key sets of federal regulations implementing HIPAA — the Privacy,
Security Breach Notification and Omnibus Rules (collectively, “HIPAA Rules”) set forth a number of
standards that Covered Entities and Business Associates must meet with respect to protecting the privacy
and security of PHI. HIPAA also regulates standardization of data content, codes and formats used in
healthcare transactions and standardization of identifiers for health plans and providers.
Our customers are Covered Entities under HIPAA, and, in some cases, Heartflow may be considered a
Business Associate to such Covered Entities when they pay Heartflow for certain services that involve the
sharing of PHI with Heartflow. When Heartflow bills payors directly for the services, Heartflow is acting as
a Covered Entity. Whether acting as a Business Associate, covered subcontractor, or a Covered Entity,
Heartflow has obligations to comply with HIPAA and the HIPAA Rules, and either contractual obligations
to its Covered Entity Customers or statutory and contractual obligations to ensure that any sub-Business
Associates comply. This requires risk assessments and a wide range of compliance policies, procedures
and practices to safeguard.
Penalties for violations of HIPAA regulations include civil and criminal penalties. Our failure to comply with
HIPAA could result in significant criminal and civil penalties and other damages which could adversely
affect our results of operations, financial position or cashflows. We have developed and implemented
processes designed to comply with HIPAA and are continuing to assess the need for additional
safeguards, policies, procedures, and programing and to develop them where necessary. The
requirements under HIPAA may change periodically and could have an effect on our business operations
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if compliance becomes substantially more costly than under current requirements. Additionally, a breach
of unsecured PHI, such as by employee error or an attack by an outsider, could have an adverse effect on
our business in terms of potential penalties and corrective action required, in addition to reputational
damage.
In addition to HIPAA and other federal privacy regulations, there are a number of state laws governing
privacy, confidentiality and security of health information that apply to our business. Most states also have
authorities governing breach notification. New laws governing privacy, security, and breach notification
may be adopted in the future as well. We have undertaken measures to comply with health information
privacy requirements to which we know we are subject. However, we can provide no assurance that we
are or will always remain in compliance with diverse and changing privacy, security, and breach
notification requirements in all of the jurisdictions in which we do business. Failure to comply with privacy
security or breach notification requirements could result in civil or criminal penalties, which could have an
adverse effect on our business. Our failure to adequately protect personal or health related information
could have an adverse effect on our business. A wide variety of provincial, state, national and
international laws and regulations apply to the creation, collection, use, retention, protection, disclosure,
transfer, and other processing of personal data, including protected health information. These data
protection and privacy and security related laws and regulations are evolving and being tested in courts,
and may result in ever increasing regulatory and public scrutiny and escalating levels of enforcement and
sanctions. Our failure to comply with applicable laws and regulations, or to protect such data, could result
in enforcement action against us, including fines, imprisonment of company officials and public censure,
claims for damages by end customers and other affected individuals, damage to our reputation and loss
of goodwill (both in relation to existing end customers and potential end customers), any of which could
have an adverse effect on our operations, financial performance, and business. Evolving and changing
definitions of personal data and personal information, within the European Union, the United States and
elsewhere, especially relating to classification of IP addresses, machine identification, location data, and
other information, may limit or inhibit our ability to operate or expand our business. Even the perception of
privacy concerns, whether or not valid, may harm our reputation and inhibit adoption of our product by
current and future end customers.
Healthcare reform
Current and future U.S. legislative proposals to further reform healthcare or reduce healthcare costs may
result in low, or even no, reimbursement for our product, or for the procedures associated with the use of
our product, or limit coverage of our product. The cost containment measures that payors and providers
are instituting and the effect of any healthcare reform initiative implemented in the future could
significantly reduce our revenues from the sale of our product. Alternatively, the shift away from fee-for-
service agreements to capitated payment models supports the value of our product, as they are intended
to reduce longitudinal resource utilization, which can be cost saving for both payors and providers.
The ACA was enacted in March 2010. As a U.S.-based company with anticipated sales in the United
States, these healthcare reform laws will materially impact our business. Certain provisions of the ACA
are still set to become effective in future years and the administrative agencies responsible for issuing
regulations that implement some aspects of the laws have yet to do so.
There have been numerous legal challenges and Congressional actions and amendments to certain
aspects of the ACA. For example, on August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was
signed into law, which, among other things, extends enhanced subsidies for individuals purchasing health
insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut
hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary
maximum out-of-pocket cost and creating a new manufacturer discount program. Further, it is unclear
whether the Trump administration and Republicans in the Congress and the states who oppose these
policies may try once again to repeal the ACA outright or pare back its subsidies and enrollment periods.
The uncertain fate of the ACA notwithstanding, we expect that the ACA, as well as other healthcare
reform measures that may be adopted in the future, particularly in light of the recent changes in the White
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House and Congress, may result in more rigorous coverage criteria and in additional downward pressure
on the price that we may receive for our products. Any reduction in payments from Medicare or other
government programs may result in a similar reduction in payments from private payors. The
implementation of cost containment measures or other healthcare reforms may prevent us from being
able to generate additional revenue or attain profitability.
Employees and human capital resources
As of December 31, 2024, we had 626 full-time employees globally. We believe the success of our
business will depend, in part, on our ability to attract and retain qualified personnel, in particular highly
skilled technology personnel. Our employees are not subject to a collective bargaining agreement, and
we believe that we have good relations with our employees.
Our human capital resources objectives include attracting and retaining top talent, investing in our talent
with leadership development and job-related technical training, and increasing diverse representation in
our employee base through inclusivity initiatives that build on our culture of inclusion and belonging. The
principal purposes of our equity incentive plans are to attract, retain and motivate employees, consultants
and directors through the granting of stock-based compensation awards and cash-based performance
bonus awards.
Facilities
Our corporate headquarters and research and development facilities are located in Mountain View,
California, where we lease approximately 61,500 square feet of office space under a lease agreement
that expires in August 2030. We also lease and occupy approximately 26,402 square feet in Austin, Texas
primarily for additional production personnel under a lease agreement that expires in December 2025. We
do not own any real property. We believe that these facilities are adequate for the foreseeable future.
Legal proceedings
We have become, and we may become in the future, involved in various legal proceedings arising from
the normal course of business activities. We are not presently a party to any litigation the outcome of
which, we believe, if determined adversely to us, would individually or taken together, materially and
adversely affect our business, financial condition, or results of operations. However, we may from time to
time be involved in various claims and legal proceedings of a nature we believe are normal and incidental
to a business such as ours. These matters may include employment, contract, intellectual property,
product liability and other general claims. Regardless of outcome, litigation can have an adverse impact
on us because of defense and settlement costs, diversion of management resources and other factors.
Corporate information
We were incorporated under the laws of the State of Delaware in 2007. On March 1, 2021, we completed
an internal reorganization in which a newly formed parent holding company was put in place. The
previous holders of our common stock and preferred securities became holders of common stock and
preferred securities of HeartFlow Holding, Inc. The equity incentive plan, outstanding equity awards,
outstanding warrants and certain other equity-related agreements of HeartFlow, Inc. were assumed by
HeartFlow Holding, Inc. Our operations and business activities remained at HeartFlow, Inc., and the
wholly-owned non-U.S. subsidiaries of HeartFlow, Inc. remained in place. On         , 2025, we
consolidated HeartFlow Holding, Inc. into HeartFlow, Inc. and the previous holders of HeartFlow Holding,
Inc. common stock and preferred securities became holders of our common stock and preferred
securities and the equity incentive plan, outstanding equity awards, outstanding warrants and certain
other equity-related agreements of HeartFlow Holding, Inc. were assumed by us. In connection with this
consolidation, we changed our name to Heartflow, Inc. Our principal executive offices are located at 331
E. Evelyn Avenue, Mountain View, California 94041, and our telephone number is (650) 241-1221. Our
corporate website address is www.heartflow.com. Information contained on, or accessible through, our
website shall not be deemed incorporated into and is not a part of this prospectus or the registration
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statement of which it forms a part. We have included our website in this prospectus solely as an inactive
textual reference.
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Management
The following table sets forth information regarding our executive officers and directors, including their
ages as of December 31, 2024:
Name
Age
Position(s)
Executive officers and employee
director
John C.M. Farquhar . . . . . . . . . . . . . . . . . . .
52
President, Chief Executive Officer and Director
Vikram Verghese . . . . . . . . . . . . . . . . . . . . .
41
Chief Financial Officer
Tim A. Fonte . . . . . . . . . . . . . . . . . . . . . . . . .
42
Chief Technology Officer
Campbell D.K. Rogers, M.D. . . . . . . . . . . .
63
Chief Medical Officer
Non-employee directors
William C. Weldon . . . . . . . . . . . . . . . . . . . .
76
Director and Chair of the Board of Directors
Timothy C. Barabe . . . . . . . . . . . . . . . . . . . .
71
Director
Julie A. Cullivan . . . . . . . . . . . . . . . . . . . . . .
58
Director
Nicholas Downing, M.D. . . . . . . . . . . . . . . .
39
Director
Jeffrey C. Lightcap . . . . . . . . . . . . . . . . . . . .
65
Director
Wayne J. Riley, M.D. . . . . . . . . . . . . . . . . . .
65
Director
Lonnie M. Smith . . . . . . . . . . . . . . . . . . . . . .
80
Director
Casey M. Tansey . . . . . . . . . . . . . . . . . . . . .
67
Director
Charles A. Taylor, Jr., Ph.D. . . . . . . . . . . . .
61
Director
(1)Member of our audit committee.
(2)Member of our compensation committee.
(3)Member of our nominating and corporate governance committee.
Executive officers and employee director
John C.M. Farquhar has served as our Chief Executive Officer and as a member of our board of
directors since March 2022, and as our President since January 2022, and he served as our Chief
Operating Officer from July 2021 to March 2022. Prior to joining the Company, from March 2008 to July
2021, Mr. Farquhar held numerous positions of increasing responsibility across the cardiovascular and
diabetes portfolios of Medtronic plc (“Medtronic”), a global medical technology company, most recently
serving as a President and General Manager from June 2018 until July 2021. Prior to that, Mr. Farquhar
served as a Marketing Manager at General Mills, Inc., a multinational manufacturer and marketer of
branded processed consumer foods, from January 2004 until March 2008. He received a B.A. in
Psychology and History from Duke University and an M.B.A. from Northwestern University’s Kellogg
School of Management. We believe that Mr. Farquhar’s extensive experience in the medical sector
qualifies Mr. Farquhar to serve on our board of directors and his role as our Chief Executive Officer
provides a vital link between our board of directors and our management team.
Vikram Verghese has served as our Chief Financial Officer since June 2023. He joined the Company in
November 2021 as Senior Vice President of Upstream Marketing, Business Development, and Strategy.
Prior to that, Mr. Verghese held various positions at Medtronic from 2008 until 2021 in various leadership
roles spanning global marketing, regulatory and clinical affairs and business development. After
completing his undergraduate degree in Electrical and Electronic Engineering in India, Mr. Verghese
received an M.S. in Biomedical Engineering from the University of Southern California and an M.B.A. from
University of Pennsylvania’s The Wharton School. He is also a CFA charter holder.
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Timothy A. Fonte has served as our Chief Technology Officer since November 2023. Mr. Fonte joined
the Company in 2010 and held various roles spanning product, technology, and commercial leadership
prior to becoming the Company’s Chief Technology Officer. Prior to joining the Company, Mr. Fonte led
design engineering at Cameron Health, Inc. (acquired by Boston Scientific Corporation), a cardioverter-
defibrillator medical device company, from 2006 until 2010. Mr. Fonte also co-founded Bespoke, Inc. (d/b/
a Sculpt), a company developing custom-fit healthcare products, and was a researcher in blood flow
modeling from medical image data at Stanford University from 2004 through 2005. He received a B.S. in
Mechanical Engineering from Rensselaer Polytechnic Institute and an M.S. in Mechanical Engineering
from Stanford University.
Campbell D.K. Rogers, M.D. has served as our Chief Medical Officer since March 2012. Prior to joining
the Company, Dr. Rogers was the Chief Scientific Officer and Global Head of Research and Development
at Cordis Corporation (“Cordis”), a medical device company that was formerly part of the Johnson &
Johnson family of companies, from July 2006 until February 2012, where he was responsible for leading
investments and research in cardiovascular devices. Prior to Cordis, Dr. Rogers was an Associate
Professor of Medicine at Harvard Medical School and the Harvard-M.I.T. Division of Health Sciences and
Technology from July 1994 until July 2006, and a director of the Cardiac Catheterization and Experimental
Cardiovascular Interventional Laboratories at Brigham and Women’s Hospital in Massachusetts from
October 2000 until June 2006, where he was responsible for clinical care, education and research. Dr.
Rogers served as a Principal Investigator for numerous interventional cardiology device, diagnostic, and
pharmacology trials, is the author of numerous publications in the area of coronary artery and other
cardiovascular diseases, and was the recipient of research grant awards from the National Institute of
Health and American Heart Association. He received an A.B. in English from Harvard College and an
M.D. from Harvard Medical School.
Non-employee directors
William C. Weldon has served as Chair of our board of directors since June 2017 and as a member of
our board of directors since September 2014. Mr. Weldon is the former Chairman of the board and Chief
Executive Officer of Johnson & Johnson (Nasdaq: JNJ), a global developer and manufacturer of
healthcare products, having served in those positions from 2002 until his retirement in 2012. Mr. Weldon
previously served in a variety of senior executive positions during his 41-year career with Johnson &
Johnson until his appointment as Chairman of the board and Chief Executive Officer. Mr. Weldon
previously served as a director of CVS Health Corporation (NYSE: CVS) until his retirement from that
board in May 2023, Exxon Mobil Corporation (NYSE: XOM) until his retirement from that board in May
2021, JPMorgan Chase & Co. (NYSE: JPM) until his retirement from that board in May 2019, and The
Chubb Corporation until its acquisition by ACE Limited in January 2016. He is a member of various not-
for-profit organizations and is also a member of the Board of Trustees for Quinnipiac University. Mr.
Weldon received his B.A. in Biology from Quinnipiac University. We believe that Mr. Weldon’s knowledge
of the healthcare industry and his experience as chief executive officer and chairman of the board at
Johnson & Johnson and on the boards of other publicly traded companies, which have exposed him to
reporting and governance requirements, qualify him to serve on our board of directors.
Timothy C. Barabe has served as a member of our board of directors since January 2022. Mr. Barabe
served as the Chief Financial Officer and Executive Vice President at Affymetrix Inc. (acquired by Thermo
Fisher Scientific, Inc.), a provider of life science productions and molecular diagnostic products, from
2010 until his retirement in June 2013. Prior to that, Mr. Barabe served as Senior Vice President and
Chief Financial Officer of Human Genome Sciences, Inc., a biopharmaceutical company, from July 2006
until March 2010. From 2004 until 2006, he served as Chief Financial Officer of Regent Medical Limited, a
U.K.-based, privately held surgical supply company, and with Novartis AG, a pharmaceutical company,
from 1982 until August 2004 in a succession of senior executive positions in finance and general
management, most recently as the Chief Financial Officer of Sandoz GmbH, the generic pharmaceutical
subsidiary of Novartis AG. Prior to that, Mr. Barabe served as the President of the Specialty Lens
Business Franchise and Group Vice President and Chief Financial Officer of CIBA Vision Corporation, a
contact lenses and lens care product manufacturer, until 2003. Mr. Barabe has served on the board of
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directors of Cartesian Therapeutics, Inc. (Nasdaq: RNAC) since 2016 and previously served on the board
of directors of Veeva Systems Inc. (NYSE: VEEV) from September 2015 until June 2021, ArQule, Inc.,
from 2001 until January 2020, and Opexa Therapeutics, Inc. from 2014 until 2017. Mr. Barabe also
currently serves on the board of directors of Vigilant Biosciences, Inc., a private company. Mr. Barabe
received a B.B.A. in General Business, Finance from the University of Massachusetts at Amherst and an
M.B.A. from the University of Chicago. We believe that Mr. Barabe’s extensive finance experience, and
his service on the board of directors of several other publicly traded companies, qualifies Mr. Barabe to
serve on our board of directors.
Julie A. Cullivan has served as a member of our board of directors since November 2020. She currently
serves as a Special Advisor to Brighton Park Capital, L.P., an investment firm specializing in software,
information services and technology-enabled services, and previously served as the Chief Technology
and People Officer at Forescout Technologies Inc. (“Forescout”), a network security software company,
from June 2017 until January 2021. Prior to joining Forescout, Ms. Cullivan served as the Executive Vice
President, Business Operations and Chief Information Officer of FireEye, Inc., an enterprise cybersecurity
company, from January 2013 until May 2017, and as a Senior Vice President at McAfee Corp., a global
computer security software company, from April 2008 until October 2011. Earlier in her career, Ms.
Cullivan held executive roles at Autodesk, Inc., EMC Corporation, and Oracle Corporation. Ms. Cullivan
has served on the board of directors of Axon Enterprise, Inc. (Nasdaq: AXON) since 2017, Cobalt Labs
Inc. (dba Cobalt.io) since 2022 and OPSWAT Inc. since 2021, and previously served on the boards of
Astra Space Inc. (Nasdaq: ASTR), AaDya Security Inc. (dba Judy Security) and SADA, Inc. Ms. Cullivan
received a B.S. in Finance from Santa Clara University. We believe that Ms. Cullivan’s extensive
experience in the technology sector, including her past roles at leading technology, cybersecurity and
digital infrastructure companies, qualifies Ms. Cullivan to serve on our board of directors.
Nicholas Downing, M.D. has served as a member of our board of directors since March 2023. Since
2018, Dr. Downing has worked at Bain Capital, a private investment firm, currently serving as a Managing
Director on the Bain Capital Life Sciences team. Prior to joining Bain Capital, Dr. Downing was a Resident
Physician at the Brigham and Women’s Hospital in Boston from 2015 until 2018. Dr. Downing is the
author of over 40 peer-reviewed scientific articles. Prior to his medical career, Dr. Downing was a
Consultant at McKinsey and Company, a global management consulting firm, where he worked with
clients in the pharmaceutical, hospital and financial services industries. Dr. Downing received an A.B. in
Chemistry from Harvard College and an M.D. from Yale University School of Medicine. We believe that
Dr. Downing’s extensive investment and financial experience, particularly in the medical sector, as well as
his medical background qualifies Dr. Downing to serve on our board of directors.
Jeffrey C. Lightcap has served as a member of our board of directors since December 2011. Since
2007, Mr. Lightcap has served as a Senior Managing Director at HealthCor Partners Management, L.P.
(“HealthCor Partners”), a venture capital investment manager focused on late-stage venture and early
commercial stage healthcare companies in the diagnostic, therapeutic and medtech sectors. Since 2019,
Mr. Lightcap has also served as a Senior Managing Director at Healthcare Venture Partners, LLC, a
venture capital investment manager focused on healthcare companies. From 1997 until 2006, Mr.
Lightcap served as a Senior Managing Director at JLL Partners, a leading middle-market private equity
firm. Prior to JLL Partners, from 1993 until 1997, Mr. Lightcap served as a Managing Director in the
mergers and acquisitions group at Merrill Lynch & Co., Inc. (“Merrill Lynch”), a global financial services
company. Prior to joining Merrill Lynch, Mr. Lightcap was a Senior Vice President in the mergers and
acquisitions group at Kidder, Peabody & Co., a brokerage company, and at Salomon Brothers, a global
financial institution. Mr. Lightcap currently serves on the board of directors of Careview Communications,
Inc. (OTC: CRVW), RTI Surgical Inc. and KellBenx, Inc. Mr. Lightcap also previously served on the board
of directors of a number of HealthCor Partners’ portfolio of private companies, including AccessClosure,
Inc., Sadra Medical, Inc., Practice Partners in Healthcare, Inc. and Paradigm Spine, LLC. Mr. Lightcap
received a B.E. in Mechanical Engineering from the State University of New York at Stony Brook and an
M.B.A. from the University of Chicago. We believe that Mr. Lightcap’s extensive experience in the medical
sector, including his service on the boards of directors of multiple healthcare companies, qualifies Mr.
Lightcap to serve on our board of directors.
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Wayne J. Riley, M.D. has served as a member of our board of directors since November 2021. Dr. Riley
has served as the President of the State University of New York Downstate Health Sciences University
since April 2017, where he is also a Tenured Professor of Internal Medicine and Health Policy and
Management. From 2013 until 2017, Dr. Riley was an Adjunct Professor of Healthcare Management at
Owen Graduate School of Management, Vanderbilt University and a Clinical Professor of Medicine at
Vanderbilt University School of Medicine. From 2007 until 2013, Dr. Riley served as President and Chief
Executive Officer of Meharry Medical College, and from 2003 until 2006, served as Vice President and
Vice Dean of Health Affairs and Governmental Relations at Baylor College of Medicine. Dr. Riley has
served on the board of directors of Compass Pathways, plc (Nasdaq: CMPS) since 2021 and HCA
Healthcare, Inc. (NYSE: HCA) since 2012, where he also serves as the chair of the patient safety and
quality committee and as a member of the audit and compliance committee and nominating and corporate
governance committee. Dr. Riley previously served as a director of Vertex Pharmaceuticals Inc. (Nasdaq:
VTRX) from 2010 until 2015, Pinnacle Financial Partners, Inc. from 2007 until 2013, and the Federal
Reserve Bank of Atlanta, Nashville Branch Bank Board from January 2013 to June 2013. He is President
Emeritus of the American College of Physicians and an elected member of the National Academy of
Medicine. Dr. Riley is also a commissioner of the Medicare Payment Advisory Commission, chair of the
Board of Trustees and of The New York Academy of Medicine since 2019. Dr. Riley received a B.A. in
Anthropology from Yale University, an M.P.H. in Health Systems Management from the Tulane University
School of Public Health and Topical Medicine, an M.D. from the Morehouse School of Medicine, and an
M.B.A. from Rice University’s Jesse H. Jones Graduate School of Business. We believe that Dr. Riley’s
experience as a practicing physician and his leadership, executive management and patient care skills at
other leading medical and educational institutions, as well as his prior public company board service,
qualify him to serve on our board of directors.
Lonnie M. Smith has served as a member of our board of directors since September 2011. From 1997
until April 2020, Mr. Smith was the President and Chief Executive Officer and then Chairman of Intuitive
Surgical, Inc., a developer and manufacturer of surgical robotic products designed to improve clinical
outcomes of patients. From 1978 until 1997, Mr. Smith was Senior Executive Vice President of
Hillenbrand Industries, a manufacturer and provider of products and services for the health care and
funeral services industries. During his tenure at Hillenbrand Industries, he was a member of the executive
committee, the office of the president and the board of directors. Mr. Smith has also held positions at The
Boston Consulting Group, a management consulting firm, and International Business Machines Corp, a
technology and consulting company. Mr. Smith served as chairman of the board of Tandem Diabetes
Care, Inc. (Nasdaq: TNDM), from 2013 until 2015. Mr. Smith received a B.S.E.E. from Utah State
University and an M.B.A. from Harvard Business School. We believe that Mr. Smith’s extensive medical,
management and directorship experience in the medical sector qualifies him to serve on our board of
directors.
Casey M. Tansey has served as a member of our board of directors since August 2010. Since 2005, he
has served as a General Partner of U.S. Venture Partners, a venture capital firm. From 2001 until 2004,
Mr. Tansey served as the Chief Executive Officer and President of Epicor Medical, a medical device
company. Prior to Epicor Medical, Mr. Tansey was Chief Executive Officer and President of Heartport,
Inc., a medical device company, which is now part of the Johnson & Johnson family of companies. Prior
to that, he was with the cardiovascular division at Baxter Edward, a medical technology company, for
nearly ten years, holding various sales and marketing positions. Mr. Tansey currently serves on the board
of directors and as a member of the organization and compensation committee of Inspire Medical
Systems, Inc. (NYSE: INSP) and previously served on the board of directors of Intersect ENT, Inc. from
2006 until 2017. He also serves on the board of directors for a number of U.S. Venture Partners’ portfolio
of private companies, including Cagent Vascular LLC, Dstillery, HighLife Medical Inc., Luminopia, Inc.,
MicroTransponder Inc., Neochord, Inc., Neuros Medical, Inc., ShiraTronics, Inc. and Shoulder
Innovations. Mr. Tansey received a B.S. and an M.B.A. from the Notre Dame De Namur University. We
believe that Mr. Tansey’s extensive experience as a venture capital investor and as a member of the
boards of directors of multiple companies in the medical sector qualify him to serve on our board of
directors.
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Charles A. Taylor, Ph.D. is one of our founders, and has served as a member of our board of directors
since July 2007. He is currently the W.A. “Tex” Moncrief, Jr., Chair in Computational Medicine, and a
Professor in the Department of Internal Medicine and the Oden Institute for Computational Engineering
and Sciences at the University of Texas at Austin. Dr. Taylor served as the Chief Technology Officer from
April 2010 to February 2022 and then Chief Scientific Officer of the Company from February 2022 through
December 2023. Prior to joining the Company, Dr. Taylor was an Associate Professor in the Department
of Bioengineering and Surgery at Stanford University from July 1997 until August 2010, where he held
courtesy faculty appointments in the Departments of Mechanical Engineering and Radiology. He received
a B.S. in Mechanical Engineering, M.S. in Mechanical Engineering and M.S. in Mathematics from
Rensselaer Polytechnic Institute and a Ph.D. in Mechanical Engineering from Stanford University. Dr.
Taylor has published over 450 publications in scientific journals and conference papers related to
cardiovascular bioengineering and patient-specific modeling of blood flow in the cardiovascular system
and is also an inventor on more than 300 issued patents worldwide. In 2024, Dr. Taylor was inducted into
the U.S. National Academy of Engineering. We believe that Dr. Taylor’s extensive knowledge of the
Company as its founder, Chief Technology Officer and Chief Scientific Officer, experience as an inventor
and knowledge of our industry qualifies him to serve on our board of directors.
Family relationships
There are no family relationships among any of our executive officers or directors.
Board composition
Our business and affairs are managed under the direction of our board of directors. Our board of directors
currently consists of ten members: Mr. Barabe, Ms. Cullivan, Dr. Downing, Mr. Farquhar, Mr. Lightcap, Dr.
Riley, Mr. Smith, Mr. Tansey, Dr. Taylor, and Mr. Weldon. The authorized number of directors may be
changed by resolution of our board of directors, subject to the terms of our amended and restated
certificate of incorporation.
Director independence
We have applied to have our common stock listed on                     and this offering is contingent upon
obtaining such approval. Under the listing rules of                    (“Listing Rules”), independent directors
must comprise a majority of a listed company’s board of directors within a specified period following
completion of this offering. In addition, the Listing Rules require that, subject to specified exceptions, each
member of a listed company’s audit, compensation, and nominating and corporate governance
committees be independent. Under these rules, a director will only qualify as an “independent director” if,
in the business judgment of the company’s board of directors, that person does not have a relationship
that would interfere with the exercise of independent judgment in carrying out the responsibilities of a
director. Under the Listing Rules, certain types of relationships generally occurring within the last three
years will automatically disqualify a director as independent, such as if the director is one of our
employees, is in receipt of direct compensation from us in excess of $120,000 in a twelve-month period,
or is engaged, directly or indirectly in certain business dealings with us in excess of specified thresholds.
Our board of directors has determined that none of Mr. Barabe, Ms. Cullivan, Dr. Downing, Mr. Lightcap,
Dr. Riley, Mr. Smith, Mr. Tansey, Dr. Taylor or Mr. Weldon has a relationship that would interfere with the
exercise of independent judgment in carrying out the responsibilities of a director, and that each of such
individuals are “independent directors” in accordance with the listing rules of the                    (the “Listing
Rules”). In making these determinations, our board of directors reviewed and discussed information
provided by the directors and us with regard to each director’s business and personal activities and
relationships as they may relate to us and our management. Mr. Farquhar is not considered independent
by virtue of his position as our Chief Executive Officer, and Dr. Taylor is not considered independent by
virtue of his former employment with us within the last three years.
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Classified board of directors
In accordance with our amended and restated certificate of incorporation, which will be effective
immediately prior to the completion of this offering, our board of directors will be divided into three classes
with staggered three-year terms. At each annual general meeting of stockholders, the successors to
directors whose terms then expire will be elected to serve from the time of election and qualification until
the third annual meeting following election. Our directors will be divided among the three classes as
follows: 
•The Class I directors will be            ,              , and                    , and their terms will expire at the first
annual meeting of stockholders following the completion of this offering;
•The Class II directors will be            ,              , and                  , and their terms will expire at the
second annual meeting of stockholders following the completion of this offering; and
•The Class III directors will be                 ,                 ,                , and                    , and their terms will
expire at the third annual meeting of stockholders following the completion of this offering.
The division of our board of directors into three classes with staggered three-year terms may delay or
prevent a change of our management or a change in control.
Leadership structure of the board
Our corporate governance guidelines to be in place immediately prior to the completion of this offering will
provide our board of directors with flexibility to combine or separate the positions of Chair of the board of
directors and Chief Executive Officer and to implement a lead independent director in accordance with its
determination regarding which structure would be in the best interests of our company.
Mr. Weldon currently serves as our Chair of the board of directors and Mr. Farquhar serves as our Chief
Executive Officer. Our board of directors has concluded that our current leadership structure is
appropriate at this time. However, our board of directors will continue to periodically review our leadership
structure and may make such changes in the future as it deems appropriate. 
Board committees
Our board of directors has established an audit committee, a compensation committee, and a nominating
and corporate governance committee. Our board of directors may establish other committees to facilitate
the management of our business. The composition and functions of each committee are described below.
Members serve on these committees until their resignation or until otherwise determined by our board of
directors. Each committee intends to adopt a written charter that satisfies the applicable rules and
regulations of the Securities and Exchange Commission (the “SEC”) and Listing Rules, which we will post
on our website at www.heartflow.com upon the completion of this offering. 
Audit committee
Our audit committee oversees our corporate accounting and financial reporting process and the quality
and integrity of our financial statements, the qualifications and performance of our independent registered
public accounting firm, our internal audit function and our risk management program. Among other
matters, the audit committee:
•oversees our independent registered public accounting firm, and has sole responsibility for the
appointment, compensation, retention and oversight of the work of our independent registered public
accounting firm;
•evaluates the independent registered public accounting firm’s qualifications, independence, and
performance;
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•reviews and approves the scope of the annual audit and pre-approves all audit and non-audit fees
and services to be performed by our independent registered public accounting firm;
•reviews with management and our independent registered public accounting firm the results of the
annual audit and the review of our interim financial statements, and reviews our financial statements
and our management’s discussion and analysis of financial condition and results of operations to be
included in our annual and quarterly reports to be filed with the SEC;
•oversees our internal audit function;
•oversees our risk management program and reviews risks related to major financial risk exposures,
information security, regulatory compliance, and the steps our management has taken to monitor and
control these risks and exposures;
•establishes procedures for the receipt, retention, and treatment of any complaints received by us
regarding accounting, internal accounting controls, or auditing matters;
•reviews and approves all related person transactions; and
•reviews the audit committee charter and the audit committee’s performance on an annual basis.
Our audit committee consists of           ,           , and           . Our board of directors has determined that all
members are independent under the Listing Rules and Rule 10A-3(b)(1) of the Exchange Act. The chair
of our audit committee is            . Our board of directors has determined that           and           are each an
“audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K.
Our board of directors has also determined that each member of our audit committee can read and
understand fundamental financial statements as required by the Listing Rules.
Compensation committee 
Our compensation committee oversees our compensation policies, plans and benefit programs,
particularly as they apply to our executive officers. Among other matters, the compensation committee:
•reviews and approves corporate goals and objectives relevant to compensation of our Chief
Executive Officer, evaluates the performance of the Chief Executive Officer in light of those goals and
objectives and approves the compensation of Chief Executive Officer based on such evaluations;
•reviews and approves the compensation of our other executive officers;
•reviews and makes recommendations to our board of directors regarding non-employee director
compensation;
•reviews and approves or makes recommendations to our board of directors regarding the issuance of
stock options and other equity awards under our performance incentive plans;
•engages in risk assessments of our compensation programs; and
•reviews the compensation committee charter and the compensation committee’s performance on
annual basis.
Our compensation committee consists of                    ,                    , and                    . Our board of
directors has determined that all members are independent under the Listing Rules and are non-
employee directors, as defined by Rule 16b-3 promulgated under the Exchange Act. The chair of our
compensation committee is                    .
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Nominating and corporate governance committee 
Our nominating and corporate governance committee oversees the nomination process for our directors
and policies relating to our corporate governance. Among other matters, the nominating and corporate
governance committee:
•identifies individuals qualified to be members of our board of directors, including candidates
recommended by stockholders, consistent with criteria approved by our board of directors;
•evaluates and makes recommendations to our board of directors of candidates for membership on
our board of directors and on each of the board’s committees;
•develops and reviews the adequacy of our corporate governance guidelines and code of business
conduct and ethics and recommends and proposed changes to our board of directors;
•oversees the process of evaluating the performance of our board of directors;
•oversees management succession planning; and
•assists our board of directors on corporate governance matters and board of directors performance
matters, including recommendations regarding the size, structure and composition of our board of
directors and its committees.
Our nominating and corporate governance committee consists of           ,           , and           . Our board of
directors has determined that all members are independent under the Listing Rules. The chair of our
nominating and corporate governance committee is           .
Compensation committee interlocks and insider participation 
None of the members of our compensation committee (                      ,                      , and                      ) is
or has been during the past fiscal year one of our employees or has been at any time one of our officers,
and none of such individuals has any relationship requiring disclosure under SEC rules applicable to
related person transactions. None of our executive officers currently serves, or has served during the last
fiscal year, as a member of the board of directors or compensation committee (or other board committee
performing equivalent functions) of any entity that has one or more executive officers serving as a
member of our board of directors or on our compensation committee.
Code of business conduct and ethics 
In connection with this offering, our board of directors intends to adopt a written code of business conduct
and ethics that applies to all of our directors, executive officers, and employees, including our principal
executive officer, principal financial officer, and principal accounting officer or controller, or persons
performing similar functions. The full text of our code of business conduct and ethics will be posted on our
website at www.heartflow.com upon the completion of this offering. The nominating and corporate
governance committee of our board of directors will be responsible for overseeing our code of business
conduct and ethics. We intend to disclose any future amendments to or waivers of our code of business
conduct and ethics applicable to our directors and officers, including our principal executive officer,
principal financial officer, principal accounting officer or controller, or persons performing similar functions
to the extent required by applicable rules of the SEC or                      , on our website at the address
identified above.
Limitations on liability and indemnification matters 
Our amended and restated certificate of incorporation, which will become effective immediately prior to
the completion of this offering, limit our directors’ and officers’ liability to us and our stockholders for
monetary damages for breach of fiduciary duty as a director or officer to the fullest extent permitted under
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the General Corporation Law of the State of Delaware (the “DGCL”). Such provision will not eliminate or
limit the liability of:
•a director or officer for any breach of the director’s or officer’s duty of loyalty to the corporation or its
stockholders;
•a director or officer for any act or omission not in good faith or that involves intentional misconduct or
a knowing violation of law;
•a director for an unlawful payment of dividends or redemption of shares;
•a director or officer for any transaction from which the director or officer derived an improper personal
benefit; or
•an officer in any action by or in the right of the corporation.
These limitations of liability do not apply to liabilities arising under federal securities laws and do not affect
the availability of equitable remedies such as injunctive relief or rescission.
As permitted by the DGCL, our amended and restated certificate of incorporation provides that we will, in
certain situations, indemnify our directors and officers and may indemnify other employees and other
agents, to the fullest extent permitted by law. Any indemnified person is also entitled, subject to certain
limitations, to payment of expenses (including attorneys’ fees) in advance of the final disposition of the
proceeding.
In addition, we have entered, and intend to continue to enter, into separate indemnification agreements
with our directors and officers. These indemnification agreements, among other things, require us to
indemnify our directors and officers for certain expenses, including attorneys’ fees, judgments, fines, and
settlement amounts incurred by a director or officer in any action or proceeding arising out of their
services as a director or officer, or any other company or enterprise to which the person provides services
at our request. We also maintain a directors’ and officers’ insurance policy pursuant to which our directors
and officers are insured against liability for actions taken in their capacities as directors and officers.
We believe that these provisions in our amended and restated certificate of incorporation and these
indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors,
officers, or control persons, in the opinion of the SEC, such indemnification is against public policy, as
expressed in the Securities Act and is therefore unenforceable.
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Executive and director compensation
This section discusses the material components of the executive compensation program for our executive
officers who are named in the “Summary Compensation Table” below. In 2024, our “named executive
officers,” comprised of our principal executive officer and the two most highly compensated executive
officers (other than our principal executive officer) and their positions with the Company, were as follows:
•John C.M. Farquhar, President and Chief Executive Officer;
•Vikram Verghese, Chief Financial Officer; and
•Timothy A. Fonte, Chief Technology Officer.
As an “emerging growth company” as defined in the JOBS Act, we are not required to include a
Compensation Discussion and Analysis section and have elected to comply with the scaled disclosure
requirements applicable to emerging growth companies.
2024 summary compensation table
The following table sets forth information concerning the compensation of our named executive officers
for the year ended December 31, 2024:
Name and principal position
Salary
($)
Option
awards
($)(1)
Non-equity
incentive plan
compensation
($)(2)
All other
compensation
($)(3)
Total ($)
John C.M. Farquhar . . . . . . . . . . .
590,480
1,030,400
654,369
5,200
2,280,449
President and Chief
Executive Officer
Vikram Verghese . . . . . . . . . . . . .
400,548
1,067,295
222,338
5,200
1,695,381
Chief Financial Officer
Timothy A. Fonte . . . . . . . . . . . . .
358,750
998,784
202,125
5,200
1,564,859
Chief Technology Officer
(1)Amounts reflect the grant date fair value of stock options granted during 2024 computed in accordance with ASC Topic 718, rather than
the amounts paid to or realized by the named individual. See Note 14 of the consolidated financial statements elsewhere included in
this prospectus for a discussion of valuation assumptions made in determining the grant date fair value and compensation expense of
our stock options.
(2)Amounts represent annual bonuses earned by each named executive officer in 2024 which were paid by us after certification of
performance achievement in early 2025. See “2024 Bonuses” below.
(3)Amounts disclosed reflect Company contributions to our 401(k) plan.               .
Narrative to the summary compensation table
Elements of compensation
2024 salaries
In 2024, the named executive officers received an annual base salary to compensate them for services
rendered to the company. The base salary payable to each named executive officer is intended to provide
a fixed component of compensation reflecting the executive’s skill set, experience, role, and
responsibilities.
For fiscal year 2024, Mr. Farquhar’s annual base salary was $594,881 effective as of March 3, 2024 (and
it was $572,000 prior), Mr. Verghese’s base salary was $404,250 effective as of March 3, 2024 (and it
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was $385,000 prior) and Mr. Fonte’s base salary was $367,500 effective as of March 3, 2024 (and it was
$350,000 prior).
2024 bonuses
In 2024, Mr. Farquhar, Mr. Verghese and Mr. Fonte were eligible to earn annual cash bonuses targeted at
100%, 50% and 50%, respectively, of their annual base salaries. Pursuant to our annual cash bonus
program, each named executive officer was eligible to earn his annual cash bonus based on the
attainment of pre-established annual company objectives. These pre-established objectives include
revenue, with a target of $    million (weighted 40%), gross margin, with a target of    % (weighted 20%),
interactive product validation (weighted 20%), asymptomatic strategy (weighted 10%) and patient care
(weighted 10%). The actual achieved bonus amount was paid in 2025 based on achievement of such
objectives.
Equity compensation
Each of our named executive officers currently holds outstanding stock option awards granted pursuant to
the Company’s 2009 Equity Incentive Plan.
In connection with this offering, we intend to adopt the 2025 Plan (as defined below) in order to facilitate
the grant of cash and equity incentives to directors, employees (including our named executive officers)
and consultants of our company and certain of our subsidiaries (if any) and to enable us to obtain and
retain the services of these individuals, which is essential to our long-term success. We expect that the
2025 Plan will be effective as of the date immediately preceding the date on which this offering is
completed. For additional information about the 2025 Plan, please see the section titled “—2025
performance incentive plan” below.
Other elements of compensation
Retirement plans
We maintain a 401(k) retirement savings plan for our employees, including our named executive officers,
who satisfy certain eligibility requirements. Our named executive officers are eligible to participate in the
401(k) plan on the same terms as other full-time employees. We anticipate that, following the completion
of this offering, our named executive officers will continue to participate in this 401(k) plan on the same
terms as other full-time employees.
Employee benefits and perquisites
All of our full-time employees, including our named executive officers, are eligible to participate in our
health and welfare plans, including:
•medical, dental, and vision benefits;
•medical and dependent care flexible spending accounts;
•short-term and long-term disability insurance; and
•life insurance.
We believe that the employee benefits described above are necessary and appropriate to provide a
competitive compensation package to our named executive officers.
No tax gross-ups
We do not make gross-up payments to cover our named executive officers’ personal income taxes that
may pertain to any of the compensation or perquisites paid or provided by the Company.
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Outstanding equity awards at fiscal year-end
The following table summarizes the number of shares of common stock underlying outstanding equity
incentive plan awards for each named executive officer as of December 31, 2024:
Name
Grant date
Option awards
Number of
securities
underlying
unexercised
options -
exercisable
(#)(1)
Number of
securities
underlying
unexercised
options -
unexercisable
(#)(2)
Option
exercise price
($)
Option
expiration date
John C.M. Farquhar . . . . . . .
8/24/2021(3)
166,666
33,334
$2.85
8/24/2031
3/23/2022(3)
206,250
93,750
$2.85
3/23/2032
7/10/2023
1,367,644
4,482,084
$0.76
7/10/2033
12/26/2024
11,666
548,334
$3.28
12/26/2034
Vikram Verghese . . . . . . . . . .
3/23/2022(3)
—
22,917
$2.85
3/23/2032
7/10/2023
—
226,042
$0.76
7/10/2033
12/24/2023
—
325,963
$0.76
12/24/2033
12/26/2024
—
576,916
$3.28
12/26/2034
Timothy A. Fonte . . . . . . . . . .
7/11/2017
15,000
—
$2.85
7/11/2027
9/20/2019
5,000
—
$2.85
9/20/2029
2/28/2020
20,000
—
$2.85
2/28/2030
4/22/2020
3,600
—
$2.85
4/22/2030
4/2/2021
9,166
834
$2.85
4/2/2031
4/12/2021
4,264
186
$2.85
4/12/2031
7/10/2023
46,041
83,959
$0.76
7/10/2033
12/24/2023
31,048
293,974
$0.76
12/24/2033
12/26/2024
—
539,883
$3.28
12/26/2034
(1)Amounts disclosed in this column reflect the number of options granted to our named executive officers that were subject to time-based
vesting and have vested.
(2)Unless otherwise noted, the stock option vests and becomes exercisable as to 1/48th of the total number of shares underlying the stock
option monthly following the vesting commencement date, subject to the applicable named executive officer’s continued service through
the applicable vesting date.
(3)The stock option vests and becomes exercisable as to 1/4th of the total number of shares underlying the stock option on the first
anniversary of the vesting commencement date and 1/48th monthly thereafter, subject to the applicable named executive officer’s
continued service through the applicable vesting date.
Executive compensation arrangements
In connection with the completion of this offering, we will enter into employment agreements or offer
letters with each of our named executive officers setting forth the terms and conditions of such executive’s
employment with us.
2024 non-employee director compensation table
We have paid certain of our non-employee directors, Mr. Weldon, Mr. Barabe, Mr. Riley, Mr. Smith, Mr.
Taylor and Ms. Cullivan, cash fees as set forth in the table below for their service on our board. From time
to time, we have granted equity awards to certain non-employee directors for their service on our board of
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directors during the 2024 fiscal year. We have also reimbursed our directors for expenses associated with
attending meetings of our board of directors and committees of our board of directors.
In addition to his service on the board, Mr. Taylor serves as a consultant to us and was paid a cash fee of
$3,178 in consideration of his consulting services.
The following table sets forth information regarding the compensation of our non-employee directors for
the fiscal year ended December 31, 2024:
Name
Fees earned or
paid in cash
($)
Option awards
($)(1)
All other
compensation
($)
Total
($)
William C. Weldon . . . . . . . . . . . . . . . . . . . . . . .
65,000
—
—
65,000
Timothy C. Barabe . . . . . . . . . . . . . . . . . . . . . . .
40,000
—
—
40,000
Julie A. Cullivan . . . . . . . . . . . . . . . . . . . . . . . . .
40,000
—
—
40,000
Nicholas Downing, M.D. . . . . . . . . . . . . . . . . . .
—
—
—
—
Jeffrey C. Lightcap . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
—
Wayne J. Riley, M.D. . . . . . . . . . . . . . . . . . . . . .
40,000
—
—
40,000
Lonnie M. Smith . . . . . . . . . . . . . . . . . . . . . . . . .
40,000
—
—
40,000
Casey M. Tansey . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
—
Charles A. Taylor, Jr., Ph.D. . . . . . . . . . . . . . . .
40,000
—
3,178
43,178
(1)The aggregate number of stock option awards (whether exercisable or unexercisable) held as of December 31, 2024, by Mr. Weldon,
Mr. Barabe, Ms. Cullivan, Dr. Downing, Mr. Lightcap, Mr. Riley, Mr. Smith, Mr. Tansey and Mr. Taylor was 520,730, 100,730, 87,188, 0,
0, 185,000, 135,000, 0 and 460,301, respectively.
In connection with the completion of this offering, we intend to approve and implement a compensation
program for our non-employee directors that consists of annual retainer fees and long-term equity
awards.
2025 performance incentive plan
The following summarizes the material terms of our Amended and Restated 2009 Equity Incentive Plan
(the “2009 Plan”), under which we have previously made periodic grants of equity and equity-based
awards to our named executive officers and other key employees. In addition, we intend to adopt a 2025
Performance Incentive Plan (the “2025 Plan”) and an employee stock purchase plan (the “ESPP”), which
will become effective in connection with the completion of this offering. The terms of the 2025 Plan and
the ESPP have not yet been finalized.
Amended and restated 2009 equity incentive plan
The 2009 Plan was adopted by the board of directors of Heartflow, Inc. in 2009 and was amended and
restated effective March 1, 2021 in connection with a reorganization of Heartflow, Inc. in which the 2009
Plan and all outstanding award agreements thereunder were assigned to and assumed by HeartFlow
Holding, Inc. As of December 31, 2024, a total of           shares of common stock were then subject to
outstanding awards granted under the 2009 Plan, and an additional           shares of common stock were
then available for new award grants under the 2009 Plan. With respect to the stock options then-
outstanding on this date, the weighted-average exercise price of such options was $           per share, and
the weighted-average remaining term of these options was           years.
Purpose
The purpose of the 2009 Plan is to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to employees, directors and consultants, and to
promote the success of our business.
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Administration
The 2009 Plan is administered by our board of directors (the “Board”) or a committee thereof (the
“Administrator”). The Administrator has the discretion to (i) determine the fair market value of our common
stock, (ii) select the employees, directors and consultants to whom awards may be granted under the
2009 Plan, (iii) determine the number of shares of our common stock to be covered by each award
granted under the 2009 Plan, (iv) approve forms of award agreements for use under the 2009 Plan, (v)
determine the terms and conditions of any award granted under the 2009 Plan, (vi) institute and
determine the terms and conditions of an award exchange, (vii) construe and interpret the terms of the
2009 Plan and awards granted thereunder, (viii) prescribe, amend and rescind rules and regulations
relating to the 2009 Plan, (ix) modify or amend outstanding awards granted under the 2009 Plan, subject
to certain restrictions set forth in the 2009 Plan, (x) determine procedures for recipients to satisfy
withholding tax obligations, (xi) authorize any person to execute on our behalf any instrument required to
effect the grant of an award previously granted by the Administrator, (xii) allow a recipient to defer the
receipt of the payment of cash or the delivery of shares that otherwise would be due to such recipient
under an award, (xiii) establish additional rules to accommodate the rules or laws of applicable non-U.S.
jurisdictions and afford recipients who are foreign nationals or are employed outside the United States
favorable treatment under such rules or laws, and (xiv) make all other determinations deemed necessary
or advisable for administering the 2009 Plan. All decisions, or actions taken, by the plan administrator or
in connection with the administration of the 2009 Plan shall be final, conclusive and binding on all persons
having an interest in the 2009 Plan.
Eligibility
Our employees and consultants, employees and consultants of our parents or subsidiaries (if any), and
non-employee members of our Board are eligible to receive awards under the 2009 Plan, provided that
only employees may be granted awards intended as incentive stock options. As of December 31, 2024,
approximately           of our and our subsidiaries’ officers and employees (including all of our named
executive officers), and each of the           non-employee members of our Board, were considered eligible
under the 2009 Plan. In addition, approximately           individual consultants and advisors engaged by us
and our subsidiaries were then considered eligible under the 2009 Plan.
Share reserve
As of December 31, 2024, a total of           shares of our common stock had been authorized for issuance
under the 2009 Plan,           shares were subject to stock options then-outstanding under the 2009
Plan,           shares were subject to restricted stock and restricted stock unit awards then-outstanding
under the 2009 Plan, and           shares were available for issuance under the 2009 Plan.
Types of awards
The 2009 Plan authorizes the grant of stock options, stock appreciation rights, restricted stock and
restricted stock units. Awards granted under the 2009 Plan are generally not transferable by the recipient
other than by will or the laws of descent and distribution and are generally exercisable, during the
recipient’s lifetime, only by the recipient.
•Stock Options. A stock option is the right to purchase shares of our common stock at a future date at
a specified price per share (the “exercise price”). The per share exercise price of an option generally
may not be less than the fair market value of a share of our common stock on the date of grant. The
maximum term of an option is ten years from the date of grant. An option may either be an incentive
stock option or a non-qualified stock option. Incentive stock option benefits are taxed differently from
nonqualified stock options, are subject to more restrictive terms, and are limited in amount by the U.S.
Internal Revenue Code and the 2009 Plan. Incentive stock options may only be granted to our and
our subsidiaries’ employees.
•Stock Appreciation Rights. A stock appreciation right is the right to receive payment of an amount
equal to the excess of the fair market value of share of our common stock on the date of exercise of
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the stock appreciation right over the base price of the stock appreciation right. The base price will be
established by the Administrator at the time of grant of the stock appreciation right and generally may
not be less than the fair market value of a share of our common stock on the date of grant. Stock
appreciation rights may be granted in connection with other awards or independently.
•Restricted Stock. A share of restricted stock is granted subject to vesting, transfer restrictions and
other restrictions as determined by the Administrator, or is a share issued pursuant to the early
exercise of a stock option. Recipients of restricted stock, unlike recipients of stock options and
restricted stock units, have voting rights and the right to receive dividends, if any, prior to the time
restrictions lapse with respect to such shares, however, extraordinary dividends will generally be
placed in escrow, and will not be released until restrictions are removed or expire.
•Restricted Stock Units. A restricted stock unit is a bookkeeping entry representing an amount equal to
the fair market value of a share that is granted subject to vesting, transfer restrictions and other
restrictions as determined by the Administrator. Unlike restricted stock, shares underlying restricted
stock units will not be issued until the restricted stock units have vested, and recipients of restricted
stock units generally have no voting or dividend rights prior such conditions being satisfied.
Adjustments
As is customary in incentive plans of this nature, the share limit, the number and kind of shares available
under the 2009 Plan, any outstanding awards as well as the exercise or purchase prices of awards, and
performance targets under certain types of performance-based awards, are subject to adjustment in the
event of certain reorganizations, mergers, combinations, recapitalizations, stock splits, stock dividends, or
other similar events that change the number or kind of shares outstanding, and extraordinary dividends or
distributions of property to the stockholders.
Assumption and termination of awards
If an event occurs that results in a change in control of us or in which we otherwise do not survive (or do
not survive as a public company in respect of our common stock), including, without limitation, a merger,
combination, consolidation, conversion, exchange of securities, or other reorganization, or a sale of all or
substantially all of our business, stock or assets, awards then-outstanding under the 2009 Plan will not
automatically become fully vested pursuant to the provisions of the 2009 Plan so long as such awards are
assumed or substituted. However, if awards then-outstanding under the 2009 Plan are to be terminated in
such circumstances (without being assumed or substituted), such awards would generally become fully
vested (with any performance goals applicable to the award being deemed met at the “target”
performance level and all other terms and conditions met), subject to any exceptions that the
Administrator may provide for in an applicable award agreement. The Administrator also has the
discretion to establish other change in control provisions with respect to awards granted under the 2009
Plan. If we are wound up pursuant to a dissolution or liquidation, awards then-outstanding under the 2009
Plan will terminate immediately prior to such event.
No limit on other authority
The 2009 Plan does not limit the authority of the Board or any committee thereof to grant awards or
authorize any other compensation, with or without reference to our common stock, under any other plan
or authority.
Termination of or changes to the 2009 plan
The Board may amend or terminate the 2009 Plan at any time and in any manner. Stockholder approval
for an amendment will be required only to the extent then required by applicable law or deemed
necessary or advisable by the Board. Unless terminated earlier by the Board, the authority to grant new
awards under the 2009 Plan will terminate on March 21, 2031. Outstanding awards, as well as the
Administrator’s authority with respect thereto, generally will continue following the expiration or
termination of the 2009 Plan. Generally speaking, outstanding awards may be amended by the
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Administrator (except for a repricing), but the consent of the award holder is required if the amendment
(or any plan amendment) impair the rights of the holder.
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Certain relationships and related-party transactions
The following includes a summary of transactions since January 1, 2022 and any currently proposed
transactions to which we were or are expected to be a participant in which (i) the amount involved
exceeded or will exceed $120,000, and (ii) any of our directors, executive officers, or holders of more than
5% of our capital stock, or any affiliate or member of the immediate family of the foregoing persons, had
or will have a direct or indirect material interest, other than compensation and other arrangements that are
described under the section titled “Executive and director compensation.”
2025 convertible promissory notes financing
In January 2025, we entered into a note purchase agreement with various investors, pursuant to which
we issued an aggregate of $48,356,153.27 in principal amount of subordinated convertible promissory
notes (the “2025 Convertible Notes”) to investors, including related parties, with original maturity dates of
48 months from the initial issuance of the notes. The first closing occurred on January 24, 2025, at which
time we issued $44,656,153.27 in principal amount of the 2025 Convertible Notes. The second closing
occurred on January 31, 2025, at which time we issued $3,700,000.00 in principal amount of the 2025
Convertible Notes. The aggregate principal amount outstanding under the 2025 Convertible Notes will be
automatically converted upon the effectiveness of this offering into shares of our common stock without
interest.
The following related parties, or their respective affiliates, participated in the 2025 Convertible Notes
offering:
Name(1)
Aggregate
purchase price ($)
Hayfin HeartFlow UK Limited(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$23,000,000.00
BCLS Fund III Investments, LP(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6,595,648.51
Capricorn Entities(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,078,516.75
Timothy C. Barabe(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,000,000.00
Lonnie M. Smith(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,822,713.44
HCPCIV 1, LLC(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,460,234.00
U.S. Venture Partners Funds(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$811,558.22
Casey M. Tansey(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$250,000.00
Vikram Verghese(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$144,650.88
(1)For additional information regarding these stockholders and their equity holdings, see the section titled “Principal stockholders.”
(2)Hayfin HeartFlow UK Limited and entities affiliated with Hayfin HeartFlow UK Limited own more than 5% of our outstanding capital.
(3)BCLS Fund III Investments, LP owns more than 5% of our outstanding capital. Mr. Nicholas Downing, M.D. is a member of our board of
directors and is a managing director of Bain Capital Life Sciences.
(4)Consists of $1,929,687.95 in principal amount of the 2025 Convertible Notes purchased by Capricorn Healthcare Special Opportunities
II, L.P., $57,996.00 in principal amount of the 2025 Convertible Notes purchased by The Skoll Foundation, $52,169.37 in principal
amount of the 2025 Convertible Notes purchased by Capricorn Healthcare Special Opportunities II-A, L.P., and $38,663.43 in principal
amount of the 2025 Convertible Notes purchased by The Skoll Fund. Capricorn Entities own more than 5% of our outstanding capital.
(5)Mr. Timothy C. Barabe is a member of our board of directors.
(6)Mr. Lonnie M. Smith and entities affiliated with Mr. Smith own more than 5% of our outstanding capital. Mr. Smith is a member of our
board of directors.
(7)HCPCIV 1, LLC and entities affiliated with HCPCIV 1, LLC own more than 5% of our outstanding capital. Mr. Jeffrey C. Lightcap is a
member of our board of directors and is a controlling member of HCPCIV 1, LLC.
(8)Consists of $786,399.92 in principal amount of the 2025 Convertible Notes purchased by U.S. Venture Partners X, L.P. and $25,158.30
in principal amount of the 2025 Convertible Notes purchased by USVP X Affiliates, L.P. U.S. Venture Partners Funds own more than 5%
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of our outstanding capital. Mr. Casey M. Tansey is a member of our board of directors and is a controlling member of U.S. Venture
Partners Funds.
(9)Mr. Casey M. Tansey is a member of our board of directors.
(10)Mr. Vikram Verghese is our Chief Financial Officer.
Amendment No. 1 to 2024 Credit Agreement and related matters
On January 24, 2025, in connection with the issuance of the 2025 Convertible Notes, we entered into
Amendment No. 1 to the 2024 Credit Agreement, pursuant to which our lender, Hayfin, converted $23.0
million of outstanding indebtedness under the 2024 Term Loan to 2025 Convertible Notes (the “2024 Term
Loan Conversion”) under the same terms as the other purchasers of the 2025 Convertible Notes, as
described above. As a result, Hayfin became a holder of 5% or more of our capital stock. For more
information about the 2024 Credit Agreement, as amended, see “Management’s discussion and analysis
of financial condition and results of operations—Liquidity and capital resources—Hayfin credit agreement”
and Note 18 to our consolidated financial statements included elsewhere in this prospectus.
In connection with the prior credit agreement with Hayfin that was refinanced by the 2024 Credit
Agreement, we issued warrants to purchase an aggregate of 541,389 shares of common stock to Hayfin.
As a result of the Series F redeemable convertible preferred stock financing referred to below, the
antidilution adjustments of these warrants resulted in the issuance to Hayfin in March 2023 of additional
warrants to purchase an aggregate of 4,269,801 shares of our common stock. The warrants have an
exercise price of $0.01 per share of common stock.
Series F and Series F-1 redeemable convertible preferred stock financing
In March 2023, we entered into a Series F and Series F-1 redeemable convertible preferred stock
purchase agreement with various investors, pursuant to which we issued an aggregate of 61,344,029
shares of Series F redeemable convertible preferred stock at a cash purchase price of $2.8505 per share
for gross proceeds of $174.9 million in multiple closings and 21,465,064 shares of Series F-1 redeemable
convertible preferred stock at a purchase price of $1.9098 per share for gross proceeds of $41.0 million
(the “Series F and Series F-1 redeemable convertible preferred stock financing”). The Series F-1
redeemable convertible preferred stock was issued upon conversion of the indebtedness under
outstanding subordinated convertible promissory notes issued by the Company from September 30, 2022
to December 16, 2022, in the aggregate principal amount of $40.0 million.
The table below sets forth the number of shares of our Series F and Series F-1 redeemable convertible
preferred stock purchased by our executive officers, directors, holders of more than 5% of our capital
stock at the time of the transaction, and their affiliated entities or immediate family members. Each share
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of Series F and Series F-1 redeemable convertible preferred stock in the table below will convert into one
share of our common stock upon the effectiveness of this offering.
Name(1)
Series F
redeemable
convertible
preferred stock
(#)
Series F-1
redeemable
convertible
preferred stock
(#)
Aggregate
purchase price
($)(2)
BCLS Fund III Investments, LP(3) . . . . . . . . . . . . . . . . . . . . . .
35,081,564
—
$99,999,998.18
The Lonnie and Cheryl Smith Family Trust(4) . . . . . . . . . . . .
—
8,068,125
$15,408,505.15
Hayfin HeartFlow UK Limited(5) . . . . . . . . . . . . . . . . . . . . . . .
3,508,156
2,689,375
$15,136,167.06
HCPCIV 1, LLC(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,905,025
1,321,383
$13,654,851.50
Wellington Investors(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,169,444
—
$11,885,000.12
U.S. Venture Partners Funds(8) . . . . . . . . . . . . . . . . . . . . . . . .
3,508,156
—
$9,999,998.68
Capricorn Entities(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,013,904
—
$8,591,133.35
The Schiehallion Fund Limited(10) . . . . . . . . . . . . . . . . . . . . . .
2,490,791
—
$7,099,999.75
William C. Weldon(11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73,469
80,898
$363,922.46
(1)For additional information regarding these stockholders and their equity holdings, see the section titled “Principal stockholders.”
(2)The consideration for the Series F-1 redeemable convertible preferred stock was funded through the conversion of outstanding
subordinated convertible promissory notes.
(3)BCLS Fund III Investments, LP owns more than 5% of our outstanding capital. Mr. Nicholas Downing, M.D. is a member of our board of
directors and is a managing director of Bain Capital Life Sciences.
(4)Mr. Lonnie M. Smith and entities affiliated with Mr. Smith own more than 5% of our outstanding capital. Mr. Smith is a member of our
board of directors.
(5)Hayfin HeartFlow UK Limited and entities affiliated with Hayfin HeartFlow UK Limited own more than 5% of our outstanding capital.
(6)HCPCIV 1, LLC and entities affiliated with HCPCIV 1, LLC own more than 5% of our outstanding capital. Mr. Jeffrey C. Lightcap is a
member of our board of directors and is a controlling member of HCPCIV 1, LLC.
(7)Consists of 3,176,720 shares of Series F redeemable convertible preferred stock held by Hadley Harbor Master Investors (Cayman) II
LP and 992,724 shares of Series F redeemable convertible preferred stock held by Texas Hidalgo CoInvestment Fund, L.P. Wellington
Investors own more than 5% of our outstanding capital.
(8)Consists of 3,399,403 shares of Series F redeemable convertible preferred stock held by U.S. Venture Partners X, L.P. and 108,753
shares of Series F redeemable convertible preferred stock held by USVP X Affiliates, L.P. U.S. Venture Partners Funds own more than
5% of our outstanding capital.
(9)Consists of 1,402,222 shares of Series F redeemable convertible preferred stock held by Capricorn Healthcare Special Opportunities II,
L.P., 37,909 shares of Series F redeemable convertible preferred stock held by Capricorn Healthcare Special Opportunities II-A, L.P.,
12,729 shares of Series F redeemable convertible preferred stock held by Carthage, LP, 1,142,851 shares of Series F redeemable
convertible preferred stock held by Pacific Sequoia Holdings, LLC, 223,661 shares of Series F redeemable convertible preferred stock
held by The Skoll Foundation, and 194,532 shares of Series F redeemable convertible preferred stock held by The Skoll Fund.
Capricorn Entities own more than 5% of our outstanding capital.
(10)The Schiehallion Fund Limited and Baillie Gifford Funds affiliated with The Schiehallion Fund Limited own more than 5% of our
outstanding capital.
(11)Mr. William C. Weldon is a member of our board of directors
2022 convertible promissory notes financing
In September 2022, we entered into a note purchase agreement with various investors, pursuant to which
we issued an aggregate of $40.0 million in principal amount of subordinated convertible promissory notes
(the “2022 Convertible Notes”) to investors with original maturity dates of 48 months from the dates of
issuance. The 2022 Convertible Notes automatically converted into shares of Series F-1 convertible
preferred stock on March 2, 2023. For more information, see the subsection titled “—Series F and Series
F-1 redeemable convertible preferred stock financing.”
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The following related parties, or their respective affiliates, participated in the 2022 Convertible Notes
offering:
Name(1)
Aggregate
purchase price ($)
The Lonnie and Cheryl Smith Family Trust(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$15,000,000.00
Hayfin HeartFlow UK Limited(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,000,000.00
HCPCIV 1, LLC(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,458,284.00
William C. Weldon(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$150,501.65
(1)For additional information regarding these stockholders and their equity holdings, see the section titled “Principal stockholders.”
(2)Mr. Lonnie M. Smith and entities affiliated with Mr. Smith own more than 5% of our outstanding capital. Mr. Smith is a member of our
board of directors.
(3)Hayfin HeartFlow UK Limited and entities affiliated with Hayfin HeartFlow UK Limited own more than 5% of our outstanding capital.
(4)HCPCIV 1, LLC and entities affiliated with HCPCIV 1, LLC own more than 5% of our outstanding capital. Mr. Jeffrey C. Lightcap is a
member of our board of directors and is a controlling member of HCPCIV 1, LLC.
(5)Mr. William C. Weldon is a member of our board of directors.
Investors’ rights agreement
We are party to an amended and restated investors’ rights agreement, as amended, dated March 2, 2023,
with the purchasers of our outstanding redeemable convertible preferred stock, including certain of our
directors, holders of more than 5% of our capital stock and entities with which certain of our directors are
affiliated. Following the completion of this offering, the holders of approximately                  million shares
of our common stock issuable upon the conversion of our outstanding redeemable convertible preferred
stock are entitled to rights with respect to the registration of their shares under the Securities Act. For a
more detailed description of these registration rights, see the section titled “Shares eligible for future sale
—Registration rights.”
Voting agreement
We are party to an amended and restated voting agreement, as amended, with certain holders of our
common stock and redeemable convertible preferred stock, including certain of our directors and
executive officers, holders of more than 5% of our capital stock, and entities with which certain of our
directors are affiliated. Upon the completion of this offering, the amended and restated voting agreement
will terminate. Members previously elected to our board of directors pursuant to this agreement will
continue to serve as directors until they resign, are removed or their successors are duly elected by
holders of our common stock. The composition of our board of directors after this offering is described in
more detail in the section title “Management—Board composition.”
Right of first refusal and co-sale agreement
We are party to an amended and restated right of first refusal and co-sale agreement with certain holders
of our common stock and redeemable convertible preferred stock, including certain of our directors,
holders of more than 5% of our capital stock, and entities with which certain of our directors are affiliated.
This agreement provides for rights of first refusal and co-sale relating to the shares of our common stock
and convertible securities, other than Series F and Series F-1 redeemable convertible preferred stock and
the common stock issuable upon conversion of such preferred stock, held by certain parties to the
agreement. Upon the completion of this offering, the amended and restated right of first refusal and co-
sale agreement will terminate.
Management rights letters
In connection with the issuance of our Series F and Series F-1 convertible preferred stock, we entered
into management rights letters with certain purchasers of our redeemable convertible preferred stock,
159
including holders of more than 5% of our capital stock and entities with which certain of our directors or
officers are affiliated, pursuant to which such entities were granted certain management rights, including
the right to consult with and advise our management on significant business issues, review our operating
plans, examine our books and records and inspect our facilities. These management rights letters and the
rights granted to the parties thereto will terminate upon completion of this offering. Certain of our
obligations under the management rights letters will remain in effect after the completion of this offering,
including certain tax reporting and financial disclosures.
Letter agreement with Bain Capital Life Science
In connection with our Series F redeemable convertible preferred stock financing, we entered into a letter
agreement with BCLS Fund III Investments, LP (the “BCLS Letter Agreement”), which holds more than
5% of our outstanding capital stock. Pursuant to the BCLS Letter Agreement, BCLS Fund III Investments,
LP was granted the right to designate a board observer in a nonvoting capacity, which right will terminate
upon the completion of this offering. Certain of our obligations under the BCLS Letter Agreement will
remain in effect after the completion of this offering, including certain indemnification obligations.
Letter agreement with Wellington Investors
In connection with our Series F redeemable convertible preferred stock financing, we entered into a letter
agreement with the Wellington Investors (the “Wellington Letter Agreement”), which collectively hold more
than 5% of our outstanding capital stock. Pursuant to the Wellington Letter Agreement, the Wellington
Investors were granted the right to designate a board observer in a nonvoting capacity, which right will
terminate upon the completion of this offering. The Wellington Letter Agreement will terminate by its terms
in connection with the completion of this offering and the Wellington Investors will not have any continuing
rights following this offering.
Letter agreement with Capricorn Entities
In connection with our Series F redeemable convertible preferred stock financing, we entered into a letter
agreement with the Capricorn Entities (the “Capricorn Letter Agreement”), which collectively hold more
than 5% of our outstanding capital stock. Pursuant to the Capricorn Letter Agreement, the Capricorn
Entities were granted the right to designate a board observer in a nonvoting capacity. The Capricorn
Letter Agreement will terminate by its terms in connection with the completion of this offering and the
Capricorn Entities will not have any continuing rights following this offering.
2023 Taylor Trust repurchase
On March 29, 2023, we entered into a common stock repurchase agreement in connection with the
Series F and Series F-1 redeemable convertible preferred stock financing, pursuant to which we
repurchased 300,000 shares of common stock from the Taylor Family Revocable Trust, a family trust held
by Charles A. Taylor, Jr., Ph.D., one of our directors, at $2.8505 per share for an aggregate purchase
price of $855,150.00.
Other
Michael Smith, a relative of Mr. Lonnie M. Smith, one of our directors, has been one of our non-executive
employees since 2014. His overall cash compensation for each of 2022, 2023 and 2024 did not exceed
$300,000. He did not receive any equity compensation in 2024, and has received an aggregate of less
than 50,000 incentive stock options during his employment with us.
Executive officer and director compensation
Please see the section titled “Executive and director compensation” for information regarding the
compensation of our directors and executive officers.
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Employment agreements
We have entered into change in control and severance agreements with our executive officers that,
among other things, provide for certain compensatory and change-in-control benefits, as well as
severance benefits. For a description of these agreements with our named executive officers, see the
section titled “Executive and director compensation.”
Indemnification agreements
We have entered into indemnification agreements with certain of our current directors and executive
officers and intend to enter into new indemnification agreements with each of our current directors and
executive officers before the completion of this offering. Our amended and restated certificate of
incorporation and our amended and restated bylaws will provide that we will indemnify our directors and
officers to the fullest extent permitted by applicable law. Further, we have purchased a policy of directors’
and officer’ liability insurance that insures our directors and officers against the cost of defense,
settlement or payment of a judgment under certain circumstances. See the section titled “Management—
Limitations on liability and indemnification matters.”
Policies and procedures for related-party transactions
Prior to the completion of this offering, our board of directors will adopt a written related-party transaction
policy, to be effective upon the completion of this offering, setting forth the policies and procedures for the
review and approval or ratification of related-party transactions. This policy will cover, with certain
exceptions set forth in Item 404 of Regulation S-K, any transaction, arrangement, or relationship, or any
series of similar transactions, arrangements, or relationships, in which we were or are to be a participant,
where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect
material interest, including without limitation purchases of goods or services by or from the related person
or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness,
and employment by us of a related person. In reviewing and approving any such transactions, our audit
committee is tasked to consider all relevant facts and circumstances, including but not limited to whether
the transaction is on terms comparable to those that could be obtained in an arm’s length transaction with
an unrelated third party and the extent of the related person’s interest in the transaction. All of the
transactions described in this section occurred prior to the adoption of this policy.
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Principal stockholders
The following table sets forth, as of              , 2025, information regarding beneficial ownership of our
capital stock by:
•each person, or group of affiliated persons, known by us to beneficially own more than 5% of our
common stock;
•each of our named executive officers;
•each of our directors; and
•all of our executive officers and directors as a group.
The percentage ownership information under the column titled “Beneficial ownership prior to this offering”
is based on                  shares of our common stock outstanding as of             , 2025
including            shares of our common stock resulting from the Preferred Stock Conversion
and              shares of our common stock resulting from the conversion of the 2025 Convertible Notes, in
each case as if such conversion had occurred as of                  , 2025. The ownership information under
the column titled “Beneficial ownership after this offering” assumes the foregoing and the issuance
of                  shares of common stock in this offering and assumes no exercise of the underwriters’ option
to purchase additional shares. In addition, the following table does not reflect any shares of common
stock that may be purchased in this offering.
We have determined beneficial ownership according to the rules and regulations of the SEC, which
generally means that a person has beneficial ownership of a security if they or it possesses sole or
shared voting or investment power of that security. In addition, shares of common stock issuable upon the
exercise of stock options or warrants that are currently exercisable or exercisable within 60 days
of                  , 2025 are included in the following table. These shares are deemed to be outstanding and
beneficially owned by the person holding those options or warrants for the purpose of computing the
percentage ownership of that person, but they are not treated as outstanding for the purpose of
computing the percentage ownership of any other person. The information contained in the following table
does not necessarily indicate beneficial ownership for any other purpose. Unless otherwise indicated, the
persons or entities identified in this table have sole voting and investment power with respect to all shares
shown as beneficially owned by them, subject to applicable community property laws.
Unless otherwise noted below, the address for each beneficial owner listed in the table below is c/o
Heartflow, Inc., 331 E. Evelyn Avenue, Mountain View, California 94041.
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Beneficial ownership
prior to this offering
Beneficial ownership
after this offering
Name of beneficial owner
Number of
shares
beneficially
owned
Percentage of
beneficial
ownership
Number of
shares
beneficially
owned
Percentage of
beneficial
ownership
5% and greater stockholders:
BCLS Fund III Investments, LP(1) . . . . . . . . . .
%
%
HealthCor Partners Funds(2) . . . . . . . . . . . . . . .
%
%
Wellington Investors(3) . . . . . . . . . . . . . . . . . . . .
%
%
Capricorn Funds(4) . . . . . . . . . . . . . . . . . . . . . . .
%
%
Entities affiliated with Hayfin Services, LLP (5)
%
%
Lonnie M. Smith(6) . . . . . . . . . . . . . . . . . . . . . . .
%
%
U.S. Venture Partners Funds(7) . . . . . . . . . . . .
%
%
Baillie Gifford Funds(8) . . . . . . . . . . . . . . . . . . . .
%
%
Named executive officers and directors:
John C.M. Farquhar(9) . . . . . . . . . . . . . . . . . . . .
%
%
Vikram Verghese(10) . . . . . . . . . . . . . . . . . . . . . .
%
%
Timothy A. Fonte(11) . . . . . . . . . . . . . . . . . . . . . .
%
%
Campbell D.K. Rogers, M.D.(12) . . . . . . . . . . . .
%
%
William C. Weldon(13) . . . . . . . . . . . . . . . . . . . . .
%
%
Timothy C. Barabe(14) . . . . . . . . . . . . . . . . . . . . .
%
%
Julie A. Cullivan(15) . . . . . . . . . . . . . . . . . . . . . . .
%
%
Nicholas Downing, M.D.(16) . . . . . . . . . . . . . . . .
%
%
Jeffrey C. Lightcap(2) . . . . . . . . . . . . . . . . . . . . .
%
%
Wayne Riley, M.D.(17) . . . . . . . . . . . . . . . . . . . . .
%
%
Lonnie M. Smith(6) . . . . . . . . . . . . . . . . . . . . . . .
%
%
Casey M. Tansey(7) . . . . . . . . . . . . . . . . . . . . . . .
%
%
Charles A. Taylor, Jr., Ph.D.(18) . . . . . . . . . . . . .
%
%
All current directors and executive officers as
a group (13 persons)(19) . . . . . . . . . . . . . . . . .
%
%
*Indicates beneficial ownership of less than 1% of the total outstanding common stock.
(1)Consists of             shares of our common stock issuable upon conversion of our Series F redeemable convertible preferred stock. Bain
Capital Life Sciences Investors, LLC ("BCLSI") is the manager of Bain Capital Life Sciences III General Partner, LLC, which is the
general partner of Bain Capital Life Sciences Fund III, L.P., which is the managing member of BCLS Fund III Investments GP, LLC,
which is the general partner of BCLS Fund III Investments, LP. As a result, BCLSI may be deemed to share voting and dispositive
power with respect to the securities held by BCLS Fund III Investments, LP. The principal address for BCLS Fund III Investments, LP is
200 Clarendon Street, Boston, Massachusetts 02116.
(2)Consists of (A) shares of our common stock issuable upon conversion of our redeemable convertible preferred stock expected to be
held by the following entities, collectively referred to as “HealthCor Partners Funds”: (i)             shares of common stock issuable upon
conversion of our redeemable convertible preferred stock held by HCPCIV 1, LLC; (ii)              shares of common stock issuable upon
conversion of our redeemable convertible preferred stock held by HealthCor Partners Fund, L.P; and (iii)                shares of common
stock issuable upon conversion of our redeemable convertible preferred stock held by HealthCor Partners Fund II, L.P. and (B)
            shares of common stock issuable upon conversion of the 2025 Convertible Notes purchased by HCPCIV 1, LLC. Mr. Lightcap, a
member of our board of directors, is a controlling member of each of the HealthCor Partners Funds. Mr. Lightcap disclaims beneficial
ownership of these shares except to the extent of his pecuniary interest therein. The address for the HealthCor Partners Funds is 186
Seven Farms Drive, Suite F-371, Daniel Island, South Carolina 29492.
(3)Consists of (i)              shares of common stock issuable upon conversion of our redeemable convertible preferred stock held by Hadley
Harbor Master Investors (Cayman) II LP and (ii)              shares of our common stock issuable upon conversion of our redeemable
convertible preferred stock expected to be held by Texas Hidalgo Co-Investment Fund, L.P. (each a “Wellington Investor” and,
collectively, the “Wellington Investors”). Wellington Management Company LLP, a registered investment adviser under the Investment
Advisers Act of 1940, as amended, is the investment adviser to each Wellington Investor, and Wellington Alternative Investments LLC is
its general partner. Wellington Management Investment, Inc. is the managing member of Wellington Alternative Investments LLC.
163
Wellington Management Company LLP is an indirect subsidiary of Wellington Management Group LLP. Wellington Management Group
LLP and Wellington Management Company LLP may be deemed beneficial owners with shared voting and investment power over the
shares held by each Wellington Investor. The address for each Wellington Investor and the Wellington entities is 280 Congress Street,
Boston, Massachusetts 02210.
(4)Consists of (A) shares of our common stock issuable upon conversion of our redeemable convertible preferred stock held by the
following entities, collectively referred to as the “Capricorn Funds”: (i)              shares of common stock issuable upon conversion of our
redeemable convertible preferred stock held by Capricorn Healthcare and Special Opportunities, LP; (ii)              shares of common
stock issuable upon conversion of our redeemable convertible preferred stock held by Capricorn Healthcare and Special Opportunities
II, LP; (iii)              shares of common stock issuable upon conversion of our redeemable convertible preferred stock held by Capricorn
Healthcare and Special Opportunities II-A, LP; (iv)              shares of common stock issuable upon conversion of our redeemable
convertible preferred stock held by Capricorn S.A. SICAV — SIF — Global Non-Marketable Strategies Sub-Fund; (v)              shares of
common stock issuable upon conversion of our redeemable convertible preferred stock held by Carthage, LP; (vi)              shares of
common stock issuable upon conversion of our redeemable convertible preferred stock held by CHSO CIG, LP; (vii)              shares of
common stock issuable upon conversion of our redeemable convertible preferred stock held by CHSO SFP, LP; (viii)              shares of
common stock issuable upon conversion of our redeemable convertible preferred stock held by CHSO TSF, LP; (ix)              shares of
common stock issuable upon conversion of our redeemable convertible preferred stock held by Pacific Sequoia Holdings, LLC;
(x)              shares of common stock issuable upon conversion of our redeemable convertible preferred stock held by The Skoll
Foundation; and (xi)              shares of common stock issuable upon conversion of our redeemable convertible preferred stock held by
The Skoll Fund and (B)             shares of common stock issuable upon conversion of the 2025 Convertible Notes purchased by
Capricorn Healthcare Special Opportunities II, L.P.,              shares of common stock issuable upon conversion of the 2025 Convertible
Notes purchased by The Skoll Foundation,              shares of common stock issuable upon conversion of the 2025 Convertible Notes
purchased by Capricorn Healthcare Special Opportunities II-A, L.P., and              shares of common stock issuable upon conversion of
the 2025 Convertible Notes purchased by The Skoll Fund.
CHSO Partners, LLC, is the general partner of Capricorn Healthcare and Special Opportunities, LP, CHSO CIG, LP, CHSO SFP, LP,
and CHSO TSF, LP. CHSO Partners, LLC has sole investment and voting authority over the shares held by these funds. Voting and
dispositive decisions on behalf of CHSO Partners LLC are made by the separate decisions of Barry Uphoff, the Principal Manager of
CHSO Partners LLC and a majority of the CIG Managers of CHSO Partners. Messrs. Eric Techel and Ion Yadigaroglu are the CIG
Managers of CHSO Partners LLC. Messrs. Uphoff, Techel and Yadigaroglu may be deemed to have shared voting and investment
control with respect to the shares held by the funds managed by CHSO Partners LLC.
CHSO Partners II, LLC, is the general partner of Capricorn Healthcare and Special Opportunities II, LP and Capricorn Healthcare &
Special Opportunities II-A, LP. CHSO Partners II, LLC has sole investment and voting authority over the shares held by these funds.
Voting and dispositive decisions on behalf of CHSO Partners II, LLC are made by the separate decisions of Barry Uphoff, the Principal
Manager of CHSO Partners II, LLC and one designated representative of Capricorn Investment Group, LLC. Mr. Uphoff and Capricorn
Investment Group may be deemed to have shared voting and investment control with respect to the shares held by the funds managed
by CHSO Partners II, LLC.
Capricorn Investment Group, LLC is the general partner of Carthage, LP and the investment manager of Pacific Sequoia Holdings, LLC,
The Skoll Foundation and The Skoll Fund.
The address for each of the Capricorn Funds is c/o Capricorn Investment Group LLC, 250 University Avenue, Palo Alto, California
94301. CHSO Partners, LLC and CHSO Partners II, LLC’s address is 2020 K Street NW, STE 720, Washington, DC 20006
(5)Consists of (A) (i)              shares of our common stock issuable upon conversion of our redeemable convertible preferred stock
expected to be held by Hayfin Heartflow UK Limited and (ii)              shares of our common stock subject to warrants exercisable by
Hayfin Tourmaline Luxco S.a.r.l. within 60 days of              , 2025 and (B)              shares of common stock issuable upon conversion of
the 2025 Convertible Notes purchased by H. The principal address for the Hayfin Services, LLP is 65 Davies Street, London W1K5JL.
(6)Consists of (A) (i)              shares of our common stock issuable upon conversion of our redeemable convertible preferred stock
expected to be held by Lonnie M. Smith HeartFlow IV Grantor Retained Annuity Trust u/a June 24, 2023, (ii)              shares of our
common stock issuable upon conversion of our redeemable convertible preferred stock held by Lonnie M. Smith HeartFlow GRAT III,
(iii)              shares of our common stock issuable upon conversion of our redeemable convertible preferred stock held by McKram
Investment Capital II LLC, (iv)              shares of our common stock issuable upon conversion of our redeemable convertible preferred
stock held directly by Mr. Smith and (v)          shares of our common stock subject to options exercisable by Mr. Smith within 60 days
of              , 2025 and (B)              shares of common stock issuable upon conversion of the 2025 Convertible Notes purchased by
Lonnie M. Smith. Mr. Smith has voting and investment power over the shares held by McKram Investment Capital II LLC.
(7)Consists of (A) shares of our common stock issuable upon conversion of our redeemable convertible preferred stock expected to be
held by the following entities, collectively referred to as the “U.S. Venture Partners Funds”: (i)              shares of common stock issuable
upon conversion of our redeemable convertible preferred stock held by U.S. Venture Partners X, L.P. and (ii)              shares of common
stock issuable upon conversion of our redeemable convertible preferred stock held by USVP X Affiliates, L.P. and (B)              shares of
common stock issuable upon conversion of the 2025 Convertible Notes purchased by U.S. Venture Partners X, L.P. and              shares
of common stock issuable upon conversion of the 2025 Convertible Notes purchased by USVP X Affiliates, L.P. Presidio Management
Group X, L.L.C. (“PMG X”) is the general partner of the U.S. Venture Partners Funds. The managing members of PMG X are Irwin
Federman, Steven M. Krausz, Rick Lewis, Paul Matteucci, Jonathan D. Root and Casey Tansey, all of whom may be deemed to share
voting and investment power over these shares, but disclaim beneficial ownership except to the extent of their pecuniary interests
therein. The address for the U.S. Venture Partners Funds is 2735 Sand Hill Road, Menlo Park, California 94025.
(8)Consists of shares of our common stock issuable upon conversion of our redeemable convertible preferred stock expected to be held
by the following entities, collectively referred to as “Baillie Gifford Funds”: (i)              shares of common stock issuable upon conversion
of our redeemable convertible preferred stock held by Host-Plus Pty Limited, (ii)              shares of common stock issuable upon
164
conversion of our redeemable convertible preferred stock held by Interventure Equity Investments Limited, (iii) an aggregate
of              shares of common stock issuable upon conversion of our redeemable convertible preferred stock held by Scottish Mortgage
Investment Trust plc, (iv)              shares of common stock issuable upon conversion of our redeemable convertible preferred stock held
by The Board of Trustees of the Saskatchewan Healthcare Employees' Pension Plan, (v)              shares of common stock issuable
upon conversion of our redeemable convertible preferred stock held by The Schiehallion Fund Limited, (vi)              shares of common
stock issuable upon conversion of our redeemable convertible preferred stock held by The States of Jersey Public Employees
Contributory Retirement Scheme, (vii)              shares of common stock issuable upon conversion of our redeemable convertible
preferred stock held by Vision Super Pty Ltd, and (viii)              shares of common stock issuable upon conversion of our redeemable
convertible preferred stock held by Warman Investments Pty Limited. Baillie Gifford Overseas Limited has been appointed to act for and
on behalf of, as direct investment manager, for each of the Baillie Gifford Funds with full voting and investment power. The address for
the Baillie Gifford Funds is Calton Square, 1 Greenside Row, Edinburgh EH1 3AN, Scotland, United Kingdom.
(9)Consists of              shares of our common stock and               shares of our common stock subject to options exercisable within 60
days of           , 2025.
(10)Consists of (A)               shares of our common stock and               shares of our common stock subject to options exercisable within 60
days of           , 2025 and (B)              shares of common stock issuable upon conversion of the 2025 Convertible Notes purchased by
Vikram Verghese.
(11)Consists of               shares of our common stock and               shares of our common stock subject to options exercisable within 60
days of           , 2025.
(12)Consists of               shares of our common stock and               shares of our common stock subject to options exercisable within 60
days of           , 2025. Includes               shares expected to be held by family trusts established by Dr. Rogers for the benefit of certain
members of his family and               shares expected to be held by a trust beneficially owned by his wife. Dr. Rogers may be deemed to
beneficially own such shares.
(13)Consists of (i)               shares of our common stock, (ii)               shares of our common stock issuable upon conversion of our
redeemable convertible preferred stock and (iii)               shares of our common stock subject to options exercisable within 60 days
of           , 2025.
(14)Consists of (A)               shares of our common stock and               shares of our common stock subject to options exercisable within 60
days of           , 2025 and (B)              shares of common stock issuable upon conversion of the 2025 Convertible Notes purchased by
Timothy C. Barabe.
(15)Consists of               shares of our common stock and               shares of our common stock subject to options exercisable within 60
days of           , 2025.
(16)Does not include shares of our common stock issuable upon conversion of our Series F convertible preferred stock held by BCLS Fund
III Investments, LP. Dr. Downing is a managing director of Bain Capital Life Sciences.
(17)Consists of               shares of our common stock subject to options exercisable within 60 days of           , 2025.
(18)Consists of               shares of our common stock and               shares of our common stock subject to options exercisable within 60
days of           , 2025. Includes               shares expected to be held by various family trusts established by Dr. Taylor
and               shares expected to be held by various family members. Dr. Taylor may be deemed to beneficially own such
shares.            shares expected to be held by Dr. Taylor have been pledged to Section Capital Partners, LP.
(19)Includes the shares described in footnotes 1, 2, 6, 7 and 9 through 18 above and              shares of common stock subject to options
that are exercisable within 60 days of           , 2025
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Description of capital stock
The following descriptions are summaries of our capital stock and the material terms of our amended and
restated certificate of incorporation and our amended and restated bylaws, which will become effective
immediately prior to the completion of this offering. Because the following descriptions are only
summaries, they do not contain all of the information that may be important to you. Reference is made to
the more detailed provisions of, and the descriptions are qualified in their entirety by reference to, these
documents, copies of which are filed with the SEC as exhibits to the registration statement of which this
prospectus is a part, and applicable law.
General
Upon the completion of this offering and the filing of our amended and restated certificate of incorporation,
our authorized capital stock will consist of                  shares of capital stock, par value $0.001 per share,
of which:
•                  shares are designated as common stock; and
•                  shares are designated as preferred stock.
As of December 31, 2024, there were                shares of common stock outstanding, held of record
by               stockholders, assuming the conversion of all our outstanding shares of preferred stock or
convertible securities into                 shares of common stock immediately prior to the completion of this
offering. On                   , 2025, we consummated a           -for-         reverse stock split of our common
stock.
Common stock
Voting rights
Holders of our common stock are entitled to one vote per share on all matters submitted to a vote of
stockholders.
Our amended and restated certificate of incorporation will not provide for cumulative voting for the
election of directors. Subject to the rights of the holders of one or more series of preferred stock, director
candidates standing for election will be elected by a plurality of the votes cast by our stockholders present
in person or represented by proxy at the meeting and entitled to vote thereon. Our amended and restated
certificate of incorporation will retain a classified board of directors, divided into three classes with
staggered three-year terms. Only one class of directors will be elected at each annual meeting of our
stockholders, with the other classes continuing for the remainder of their respective terms.
Dividend rights
Subject to preferences that may be applicable to any preferred stock, the holders of our common stock
will be entitled to receive ratably, on a per share basis, any dividends declared by our board of directors
out of assets legally available.
Liquidation rights
Subject to preferences that may be applicable to any preferred stock, in the event of any voluntary or
involuntary liquidation, dissolution or winding up, after payment or provision for payment of our debts and
other liabilities, the holders of shares of our common stock will be entitled to receive, ratably in proportion
to the number of shares held by the holder, all our remaining assets available for distribution to our
stockholders.
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No preemptive or similar rights
The holders of our common stock will not be entitled to preemptive, subscription or conversion rights.
There will be no redemption or sinking fund provisions.
Preferred stock
Our amended and restated certificate of incorporation will authorize                   shares of preferred stock
and will provide that preferred stock may be issued from time to time in one or more series. Our board of
directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative,
participating, optional, special and other rights and any qualifications, limitations and restrictions thereof,
applicable to the shares of each series. Our board of directors will be able to, without stockholder
approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting
power and other rights of the holders of the common stock and could have anti-takeover effects. The
ability of our board of directors to issue shares of preferred stock without stockholder approval could have
the effect of delaying, deferring or preventing a change of control or the removal of existing management.
Stock options
As of                    , 2025, we had outstanding                    options to acquire our common stock, of
which                    were vested, with a weighted average exercise price of approximately $            per
share, and                  were unvested, with a weighted average exercise price of approximately
$            per share. For additional information regarding the terms of our equity incentive plans, see the
section titled “Executive and director compensation—2025 Performance incentive plan.”
Warrants
As of                    , 2025, we had outstanding warrants to purchase an aggregate of                    shares of
our common stock, with an exercise price of $0.01 per share, issuable upon the exercise of such
outstanding warrants.
Registration rights
Upon the completion of this offering and subject to the lock-up agreements entered into in connection with
this offering and federal securities laws, holders of shares of our common stock that will be issued upon
the conversion of our redeemable convertible preferred stock in connection with this offering and the
holder of shares of our common stock issuable or issued upon exercise of certain outstanding warrants to
purchase shares of our common stock will initially be entitled to certain registration rights under the
Securities Act. These securities are referred to as registrable securities. The holders of these registrable
securities possess registration rights pursuant to the terms of our amended and restated investors’ rights
agreement and are described in additional detail below. The registration of shares of our common stock
pursuant to the exercise of the registration rights described below would enable the holders to trade the
registered shares without restriction under the Securities Act when the applicable registration statement is
declared effective. We will pay the registration expenses, other than underwriting discounts, selling
commissions, stock transfer taxes, and fees and disbursements in excess of $100,000 to one counsel for
the holders, of the securities registered pursuant to the demand, Form S-3 and piggyback registrations
described below.
Generally, in an underwritten offering, the managing underwriter, if any, has the right, subject to specified
conditions and limitations, to limit the number of securities the holders may include. The demand, Form
S-3 and piggyback registration rights described below will terminate upon the earliest to occur of (i) a
Liquidation Event (as defined in the amended and restated certificate of incorporation, dated March 2,
2023, of HeartFlow Holding, Inc.) where the stockholders receive cash and/or publicly traded securities or
the holders receive reasonably comparable registration rights, (ii) with respect to each holder, such time
after the completion of this offering after which Rule 144 of the Securities Act (“Rule 144”) or another
similar exemption under the Securities Act is available for the sale of all of such holder’s shares without
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limitation, during a three-month period without registration and such holder holds less than 1% of the
outstanding capital stock of the company or (iii) the date three years after the completion of this offering.
Demand registration rights
Upon the completion of this offering, holders of up to approximately         million shares of our common
stock issued upon conversion of our redeemable convertible preferred stock and the holder of warrants to
purchase up to an aggregate of         shares of our common stock will be entitled to certain demand
registration rights. Beginning six months after the effectiveness of the registration statement of which this
prospectus is a part, holders holding, collectively, at least a majority of the registrable securities held by
the holders of common stock issued upon conversion of our redeemable convertible preferred stock then
outstanding may, on not more than two occasions, request that we register at least 40% of the registrable
securities held by the holders of common stock issued upon conversion of our redeemable convertible
preferred stock then outstanding on a Form S-1 registration statement, subject to certain specified
exceptions. If we determine that it would be seriously detrimental to us and our stockholders to effect
such a demand registration, we have the right to defer such registration, not more than twice in any 12-
month period, for a period of up to 120 days. In addition, we will not be required to effect a demand
registration during the period beginning 60 days prior to our good faith estimate of the date of the filing of
and ending on a date 180 days following the effectiveness of a registration statement relating to a
registration initiated by us or if registration on Form S-3 is available.
Form S-3 registration rights
Upon the completion of this offering, holders of up to approximately          million shares of our common
stock issued upon conversion of our redeemable convertible preferred stock and the holder of warrants to
purchase up to an aggregate of           shares of our common stock will be entitled to certain Form S-3
registration rights. At any time when the company is qualified to file a Form S-3 registration statement,
holders holding, collectively, at least 30% of the registrable securities then outstanding may request that
we register registrable securities having an anticipated aggregate offering price of at least $10.0 million,
net of underwriting discounts and certain other expenses. These holders may make an unlimited number
of requests for registration on Form S-3; however, we will not be required to effect a registration on Form
S-3 if we have effected two such registrations pursuant to such requests within the 12-month period
preceding the date of the request. In addition, if we determine that it would be seriously detrimental to us
and our stockholders to effect such a registration, we have the right to defer such registration, not more
than twice in any 12-month period, for a period of up to 120 days. Lastly, we will not be required to effect a
registration on Form S-3 during the period beginning 30 days prior to our good faith estimate of the date
of the filing of and ending on a date 90 days following the effectiveness of a registration statement relating
to a registration initiated by us.
Piggyback registration rights
Pursuant to the investor rights agreement, if we register any of our securities either for our own account or
for the account of other security holders, other than through this offering, holders of up to
approximately             million shares of our common stock issued upon conversion of our redeemable
convertible preferred stock and the holder of warrants to purchase up to an aggregate of             shares of
our common stock will be entitled to customary “piggyback” registration rights allowing them to include
their securities in such registration, subject to specified conditions, limitations and exceptions.
Anti-takeover effects of provisions of the proposed amended and restated
certificate of incorporation and bylaws and applicable law
Our amended and restated certificate of incorporation and bylaws will contain provisions that could have
the effect of delaying, deferring or discouraging another party from acquiring control of us. These
provisions and certain provisions of Delaware law, which are summarized below, could discourage
takeovers, coercive or otherwise, and as a consequence, they might also inhibit temporary fluctuations in
the market price of our common stock that often result from actual or rumored hostile takeover attempts.
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These provisions are also designed, in part, to encourage persons seeking to acquire control of us to
negotiate first with our board of directors. It is also possible that these provisions might have the effect of
preventing changes in our management and could make it more difficult to accomplish transactions that
stockholders might otherwise deem to be in their best interests.
Classified board of directors
Our amended and restated certificate of incorporation will provide that our board of directors be classified
into three classes of directors, with each class serving a staggered three-year term. As a result, in most
circumstances, a person can gain control of our board of directors only by successfully engaging in a
proxy contest at two or more annual meetings of our stockholders.
Authorized but unissued shares
Our authorized but unissued common stock and preferred stock will be available for future issuances
without stockholder approval and could be utilized for a variety of corporate purposes, including future
offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized
but unissued and unreserved common stock and preferred stock could render more difficult or discourage
an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Written consent; special meeting of stockholders
Our amended and restated certificate of incorporation and bylaws will provide that stockholder action may
not be taken by written consent, which forces stockholder action to be taken at an annual or special
meeting of our stockholders.
Our amended and restated certificate of incorporation and bylaws will provide that, subject to the rights of
any holders of preferred stock, special meetings of our stockholders, for any purpose or purposes, may
be called only by (i) the chair of the board, (ii) the chief executive officer or (iii) the secretary at the
direction of our board of directors pursuant to a resolution adopted by a majority of our board of directors.
Advance notice requirements for stockholder proposals and director nominations
Our amended and restated bylaws will provide that stockholders seeking to bring business before the
annual meeting of our stockholders or to nominate candidates for election as directors at the annual
meeting of our stockholders or, in certain instances as provided in our bylaws, a special meeting of our
stockholders must provide timely notice of their intent in writing.
To give timely notice, the notice must be delivered to the secretary at our principal executive offices not
later than the close of business on the 90th day nor earlier than the 120th day prior to the first anniversary
of the preceding year’s annual meeting. However, if the date of the annual meeting is more than 30 days
before or more than 70 days after such anniversary date, the notice must be delivered not earlier than the
120th day prior to such annual meeting and not later than the close of business on the later of the 90th
day prior to such annual meeting or the tenth day following the day on which public announcement of the
date of the annual meeting is first made or sent by us.
Our amended and restated bylaws will also specify certain informational and other requirements as to the
form and content of the notice. These provisions, if not satisfied on a timely basis or at all, may preclude
our stockholders from bringing business or director nominations before the meeting of our stockholders.
Election and removal of directors
Our amended and restated certificate of incorporation and bylaws will contain provisions that establish
specific procedures for appointing and removing members of the board of directors.
Under the amended and restated certificate of incorporation, our directors may be removed from office,
but only for cause, which requires approval by the holders of a majority of our outstanding capital stock
then entitled to vote in the election of directors.
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Vacancies and newly created directorships on our board of directors may be filled only by a majority vote
of the directors then in office, even if less than a quorum, or by a sole remaining director (and not by
stockholders). Any new director shall hold office for the remainder of the full term of the class of directors
to which the new directorship was added or in which the vacancy occurred and until his or her successor
has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement,
disqualification or removal. The treatment of vacancies has the effect of making it more difficult for
stockholders to change the composition of the board of directors.
No cumulative voting
The DGCL provides that stockholders are not entitled to cumulate votes in the election of directors unless
a corporation’s certificate of incorporation provides otherwise. Our amended and restated certificate of
incorporation will not authorize cumulative voting rights for our stockholders.
The absence of cumulative voting makes it more difficult for a minority stockholder to gain a seat on our
board of directors to influence a decision by our board of directors, including regarding any potential
merger, tender offer or other potential takeover transaction.
Amendments to our certificate of incorporation and bylaws
Our amended and restated certificate of incorporation and bylaws will provide that the affirmative vote of
holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all then-outstanding
shares of capital stock entitled to vote generally in the election of directors is required to amend certain
provisions of our certificate of incorporation, including provisions relating to the size of the board, removal
of directors, special meetings, actions by written consent and cumulative voting. The affirmative vote of
holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then
outstanding shares of capital stock entitled to vote generally in the election of directors will be required to
amend or repeal our bylaws, although our bylaws may be amended by a simple majority vote of our board
of directors.
Delaware anti-takeover statute
We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. In general,
Section 203 prohibits a publicly held Delaware corporation from engaging, under certain circumstances, in
a business combination with an interested stockholder for a period of three years following the date the
person became an interested stockholder unless:
•prior to the date of the transaction, our board of directors approved either the business combination or
the transaction that resulted in the stockholder becoming an interested stockholder;
•upon completion of the transaction that resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for purposes of determining the voting
stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (A)
shares owned by persons who are directors and also officers and (B) shares owned by employee
stock plans in which employee participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange offer; or
•at or subsequent to the date of the transaction, the business combination is approved by our board of
directors and authorized at an annual or special meeting of stockholders, and not by written consent,
by the affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of the outstanding voting
stock that is not owned by the interested stockholder.
Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in
a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder”
is a person who, together with affiliates and associates, owns or, within three years prior to the
determination of interested stockholder status, owned 15% or more of our outstanding voting stock. This
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provision is expected to have an anti-takeover effect with respect to transactions our board of directors
does not approve in advance. Moreover, Section 203 may discourage attempts that might result in a
premium over the market price for the shares of our common stock held by stockholders.
Choice of forum
Our amended and restated certificate of incorporation will generally designate, unless we otherwise
consent in writing, the Court of Chancery (or, if such court does not have subject matter jurisdiction
thereof, the federal district court of the State of Delaware) as the sole and exclusive forum for (i) any
derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a
fiduciary duty owed by any current or former director, officer, employee or agent to us or our stockholders,
or any claim for aiding and abetting any such alleged breach, (iii) any action asserting a claim arising
pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or bylaws or
as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any
action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware.
Our amended and restated certificate of incorporation will also provide that the federal district courts of
the United States will be the exclusive forum for the resolution of any complaint asserting a cause of
action arising under the Securities Act. Further, our amended and restated certificate of incorporation will
provide that the foregoing choice of forum provisions will not apply to suits brought to enforce any liability
or duty created by the Exchange Act, or any other claim for which the federal courts of the United States
have exclusive jurisdiction.
Our amended and restated certificate of incorporation will also provide that any person or entity
purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have
notice of and consented to the foregoing provisions of the amended and restated certificate of
incorporation. Although our amended and restated certificate of incorporation will contain the choice of
forum provision described above, it is possible that a court could find that such a provision is inapplicable
for a particular claim or action or that such provision is unenforceable.
This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it
finds favorable for disputes with us or any of our directors, officers, other employees or stockholders,
which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed
to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Furthermore, the enforceability of similar choice of forum provisions in other companies' certificates of
incorporation has been challenged in legal proceedings, and it is possible that a court could find these
types of provisions to be inapplicable or unenforceable.
Limitations on liability and indemnification
For a discussion of liability and indemnification, see the section titled “Management—Limitations on
liability and indemnification matters.”
Transfer agent and registrar
The transfer agent and registrar for our common stock will be                    . The transfer agent’s address
is                                .
                listing
We intend to apply to list our common stock on the               under the symbol “         ,” and this offering is
contingent upon obtaining such approval.
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Shares eligible for future sale
Prior to this offering, there has been no public market for our common stock, and a liquid trading market
for our common stock may not develop or be sustained after this offering. Future sales of our common
stock, including shares issued upon the Preferred Stock Conversion, the Convertible Notes Conversion
and the exercise of outstanding options or warrants, in the public market after the completion of this
offering, or the perception that those sales may occur, could adversely affect the prevailing market price
for our common stock from time to time or impair our ability to raise equity capital in the future. Although
we have applied to have our common stock listed on                      , we cannot assure you that there will
be an active public market for our common stock. As described below, only a limited number of shares of
our common stock will be available for sale in the public market for a period of several months after the
completion of this offering due to contractual and legal restrictions on resale described below. Future
sales of our common stock in the public market either before or after restrictions lapse, or the perception
that those sales may occur, could adversely affect the prevailing market price of our common stock at
such time and our ability to raise equity capital at a time and price we deem appropriate.
Sale of restricted shares
Based on the number of shares of our common stock outstanding as of December 31, 2024, upon the
completion of this offering and assuming (i) the Preferred Stock Conversion, (ii) the Convertible Notes
Conversion, (iii) no exercise of the underwriters’ option to purchase additional shares of our common
stock and (iv) no exercise of outstanding options or warrants, we will have outstanding an aggregate
of                   shares of common stock.
Of these shares, all of the                   shares of common stock to be sold in this offering will be freely
tradable in the public market without restriction or further registration under the Securities Act, unless the
shares are held by any of our “affiliates” as such term is defined in Rule 144 or subject to lock-up
agreements. All remaining shares of common stock held by existing stockholders will be “restricted
securities,” as such term is defined in Rule 144. These restricted securities were issued and sold by us in
private transactions and are eligible for public sale only if registered under the Securities Act or if they
qualify for an exemption from registration under the Securities Act, including the exemptions provided by
Rule 144 or Rule 701 of the Securities Act (“Rule 701”), which rules are summarized below.
As a result of the lock-up agreements referred to below and the provisions of Rule 144 and Rule 701,
based on the number of shares of our common stock outstanding (calculated as of December 31, 2024
on the basis of the assumptions described above and assuming no exercise of the underwriters’ option to
purchase additional shares, if any, and no exercise of outstanding options), the shares of our common
stock (excluding the shares sold in this offering) that will be available for sale in the public market are as
follows:
Approximate
number of shares
First date available for sale into public market
shares
181 days after the date of this prospectus, upon expiration of the lock-up market stand-off
agreements referred to below, subject in some cases to applicable volume, manner of
sale and other limitations under Rule 144 and Rule 701.
We may issue shares of common stock from time to time as consideration for future acquisitions,
investments, or other corporate purposes. In the event that any such acquisition, investment, or other
transaction is significant, the number of shares of common stock that we may issue may in turn be
significant. We may also grant registration rights covering those shares of common stock issued in
connection with any such acquisition and investment. 
In addition, the shares of common stock reserved for future issuance under the 2025 Plan will become
eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules,
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the lock-up agreements, a registration statement under the Securities Act, or an exemption from
registration, including Rule 144 and Rule 701.
Rule 144
Under Rule 144, as currently in effect, once we have been subject to the public company reporting
requirements of the Exchange Act for at least 90 days, and we are current in our Exchange Act reporting
at the time of sale, a person (or persons whose shares are required to be aggregated) who is not deemed
to have been one of our “affiliates” for purposes of Rule 144 at any time during the 90 days preceding a
sale and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six
months, including the holding period of any prior owner other than one of our “affiliates,” is entitled to sell
those shares in the public market (subject to the lock-up agreement referred to below, if applicable)
without complying with the manner of sale, volume limitations, or notice provisions of Rule 144, but
subject to compliance with the public information requirements of Rule 144. If such a person
has beneficially owned the shares proposed to be sold for at least one year, including the holding period
of any prior owner other than “affiliates,” then such person is entitled to sell such shares in the public
market without complying with any of the requirements of Rule 144 (subject to the lock-up agreement
referred to below, if applicable).
In general, under Rule 144, as currently in effect, once we have been subject to the public company
reporting requirements of the Exchange Act for at least 90 days, our “affiliates,” as defined in Rule 144,
who have beneficially owned the shares proposed to be sold for at least six months, are entitled to sell in
the public market, upon expiration of any applicable lock-up agreements and within any three-month
period, a number of those shares of our common stock that does not exceed the greater of:
•1% of the number of shares of common stock then outstanding, which will equal
approximately                           shares of common stock immediately upon the completion of this
offering (calculated as of December 31, 2024 on the basis of the assumptions described above and
assuming no exercise of the underwriters’ option to purchase additional shares and no exercise of
outstanding options or warrants subsequent to December 31, 2024); or
•the average weekly trading volume of our common stock on the                          during the four
calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.
Such sales under Rule 144 by our “affiliates” or persons selling shares on behalf of our “affiliates” are also
subject to certain manner of sale provisions, notice requirements, and requirements related to the
availability of current public information about us. Notwithstanding the availability of Rule 144, the holders
of substantially all of our restricted securities have entered into lock-up agreements as referenced above,
and their restricted securities will become eligible for sale (subject to the above limitations under Rule
144) upon the expiration of the restrictions set forth in those agreements.
Rule 701
In general, under Rule 701 as currently in effect, any of our employees, directors, officers, consultants, or
advisors who acquired common stock from us in connection with a written compensatory stock or option
plan or other written agreement in compliance with Rule 701 before the effective date of the registration
statement of which this prospectus is a part (to the extent such common stock is not subject to a lock-up
agreement) and who are not our “affiliates” as defined in Rule 144 during the immediately preceding 90
days, is entitled to rely on Rule 701 to resell such shares beginning 90 days after the date of this
prospectus in reliance on Rule 144, but without complying with the notice, manner of sale, public
information requirements, or volume limitation provisions of Rule 144. Persons who are our “affiliates”
may resell those shares beginning 90 days after the date of this prospectus without compliance with
minimum holding period requirements under Rule 144 (subject to the terms of the lock-up agreement
referred to below, if applicable).
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Lock-up and market stand-off agreements
In connection with this offering, we, our directors, our executive officers, and the holders of substantially
all of our common stock, stock options, and other securities convertible into or exercisable or
exchangeable for our common stock, have agreed, that without the prior written consent of J.P. Morgan
Securities LLC, Morgan Stanley & Co. LLC and Piper Sandler & Co. on behalf of the underwriters, subject
to certain exceptions more fully described under the section titled “Underwriting”, we and they will not,
among other things, sell or otherwise transfer or dispose of any of our securities during the period from
the date of this prospectus continuing through the date 180 days after the date of this prospectus. See the
section titled “Underwriting” for additional information.
In addition to the restrictions contained in the lock-up agreements described above, we have entered into
agreements with certain securityholders, including the amended and restated investors’ rights agreement,
our standard form of option agreement and warrants that contain market stand-off provisions or
incorporate market stand-off provisions from our equity incentive plan imposing restrictions on the ability
of such securityholders to offer, sell, or transfer our equity securities for a period of 180 days following the
date of this prospectus.
Following the lock-up periods set forth in the agreements described above, and assuming that J.P.
Morgan Securities LLC, Morgan Stanley & Co. LLC and Piper Sandler & Co. do not release any parties
from these agreements, all of the shares of our common stock that are restricted securities or are held by
our affiliates as of the date of this prospectus will be eligible for sale in the public market in compliance
with Rule 144 under the Securities Act.
Registration rights
Upon the completion of this offering, the holders of approximately                  shares of our common stock
will be entitled to rights with respect to the registration of their shares under the Securities Act, subject to
the lock-up agreements described under “—Lock-up agreements” above. Registration of these shares
under the Securities Act would result in the shares becoming freely tradable without restriction under the
Securities Act, except for shares purchased by affiliates, immediately upon the effectiveness of the
relevant filed registration statement, subject to the terms of the lock-up agreements described above. Any
sales of securities by these stockholders could have a material adverse effect on the trading price of our
common stock.
Equity incentive plans
We intend to file with the SEC a registration statement on Form S-8 under the Securities Act to register
our shares issued or reserved for issuance under our equity incentive plans. Such registration statement
is expected to be filed and become effective as soon as practicable after the completion of this offering.
Accordingly, shares registered under such registration statement will be available for sale in the open
market following its effective date, subject to Rule 144 volume limitations, vesting restrictions, and the
lock-up agreements described above, if applicable.
Rule 10b5-1 trading plans
Following the completion of this offering, certain of our officers, directors, and significant stockholders may
adopt written plans, known as Rule 10b5-1 trading plans, in which they will contract with a broker to buy
or sell shares of our common stock on a periodic basis to diversify their assets and investments. Under
these Rule 10b5-1 trading plans, a broker may execute trades pursuant to parameters established by the
officer, director, or stockholder when entering into the plan, without further direction from such officer,
director, or stockholder. Such sales would not commence until the expiration of the applicable lock-up
agreements entered into by such officer, director, or stockholder in connection with this offering.
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Material U.S. federal income tax consequences to non-U.S.
holders
The following discussion is a summary of the material U.S. federal income tax consequences to Non-U.S.
Holders (as defined below) of the purchase, ownership, and disposition of our common stock issued
pursuant to this offering, but does not purport to be a complete analysis of all potential tax effects. The
effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local, or
non-U.S. tax laws are not discussed. This discussion is based on the U.S. Internal Revenue Code of
1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, judicial decisions, and
published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in
each case in effect as of the date hereof. These authorities may change or be subject to differing
interpretations. Any such change or differing interpretation may be applied retroactively in a manner that
could adversely affect a Non-U.S. Holder. We have not sought and will not seek any rulings from the IRS
regarding the matters discussed below. There can be no assurance the IRS or a court will not take a
contrary position to that discussed below regarding the tax consequences of the purchase, ownership,
and disposition of our common stock.
This discussion is limited to Non-U.S. Holders that hold our common stock as a “capital asset” within the
meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not
address all U.S. federal income tax consequences relevant to a Non-U.S. Holder’s particular
circumstances, including the impact of the Medicare contribution tax on net investment income and the
alternative minimum tax. In addition, it does not address consequences relevant to Non-U.S. Holders
subject to special rules, including, without limitation:
•U.S. expatriates and former citizens or long-term residents of the United States;
•persons holding our common stock as part of a hedge, straddle, or other risk reduction strategy or as
part of a conversion transaction or other integrated investment;
•banks, insurance companies, and other financial institutions;
•brokers, dealers, or traders in securities;
•“controlled foreign corporations,” “passive foreign investment companies,” and corporations that
accumulate earnings to avoid U.S. federal income tax;
•partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax
purposes (and investors therein);
•tax-exempt organizations or governmental organizations;
•persons deemed to sell our common stock under the constructive sale provisions of the Code;
•persons who hold or receive our common stock pursuant to the exercise of any employee stock
option or otherwise as compensation;
•tax-qualified retirement plans; and
•“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the
interests of which are held by qualified foreign pension funds.
If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax
treatment of a partner in the partnership will depend on the status of the partner, the activities of the
partnership, and certain determinations made at the partner level. Accordingly, partnerships holding our
common stock and the partners in such partnerships should consult their tax advisors regarding the U.S.
federal income tax consequences to them.
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THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE.
INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION
OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS
ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF OUR
COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER
THE LAWS OF ANY STATE, LOCAL, OR NON-U.S. TAXING JURISDICTION OR UNDER ANY
APPLICABLE INCOME TAX TREATY.
Definition of a Non-U.S. Holder
For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is
neither a “U.S. person” nor an entity treated as a partnership for U.S. federal income tax purposes. A U.S.
person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:
•an individual who is a citizen or resident of the United States;
•a corporation created or organized under the laws of the United States, any state thereof or the
District of Columbia;
•an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
•a trust that (i) is subject to the primary supervision of a U.S. court and all substantial decisions of
which are subject to the control of one or more “United States persons” (within the meaning of Section
7701(a)(30) of the Code), or (ii) has a valid election in effect to be treated as a United States person
for U.S. federal income tax purposes.
Distributions
As described in the section titled “Dividend policy,” we do not anticipate paying any cash dividends in the
foreseeable future. However, if we do make distributions of cash or property on our common stock, such
distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our
current or accumulated earnings and profits, as determined under U.S. federal income tax principles.
Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital
and first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in its common stock, but
not below zero. Any excess will be treated as capital gain and will be treated as described under the
subsection titled “—Sale or other taxable disposition” below.
Subject to the discussion below regarding effectively connected income, dividends paid to a Non-U.S.
Holder will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends
(or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. Holder furnishes a
valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the
lower treaty rate). A Non-U.S. Holder that does not timely furnish the required documentation, but that
qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an
appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding
their entitlement to benefits under any applicable tax treaties.
If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a
trade or business within the United States (and, if required by an applicable income tax treaty, the Non-
U.S. Holder maintains a permanent establishment in the United States to which such dividends are
attributable), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above.
To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS
Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct
of a trade or business within the United States.
Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis
at the regular rates applicable to U.S. persons. A Non-U.S. Holder that is a corporation also may be
subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax
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treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should
consult their tax advisors regarding any applicable tax treaties that may provide for different rules.
Sale or other taxable disposition
A Non-U.S. Holder will not be subject to U.S. federal income tax on any gain realized upon the sale or
other taxable disposition of our common stock unless:
•the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the
United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a
permanent establishment in the United States to which such gain is attributable);
•the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or
more during the taxable year of the disposition and certain other requirements are met; or
•our common stock constitutes a U.S. real property interest (“USRPI”) by reason of our status as a
U.S. real property holding corporation (“USRPHC”) for U.S. federal income tax purposes.
Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net
income basis at the regular rates applicable to U.S. persons. A Non-U.S. Holder that is a corporation also
may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable
income tax treaty) on such effectively connected gain, as adjusted for certain items.
A Non-U.S. Holder described in the second bullet point above will be subject to U.S. federal income tax at
a rate of 30% (or such lower rate specified by an applicable income tax treaty) on gain realized upon the
sale or other taxable disposition of our common stock, which may be offset by certain U.S. source capital
losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United
States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to
such losses.
With respect to the third bullet point above, we believe we currently are not, and do not anticipate
becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on
the fair market value of our USRPIs relative to the fair market value of our non-U.S. real property interests
and our other business assets, there can be no assurance we currently are not a USRPHC or will not
become one in the future. Even if we are or were to become a USRPHC, gain arising from the sale or
other taxable disposition of our common stock by a Non-U.S. Holder will not be subject to U.S. federal
income tax if our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on
an established securities market, and such Non-U.S. Holder owned, actually and constructively, 5% or
less of our common stock throughout the shorter of the five-year period ending on the date of the sale or
other taxable disposition or the Non-U.S. Holder’s holding period.
Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide
for different rules.
Information reporting and backup withholding
Payments of dividends on our common stock will not be subject to backup withholding, provided the Non-
U.S. Holder certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN, W-8BEN-E, or
W-8ECI, or otherwise establishes an exemption. However, information returns are required to be filed with
the IRS in connection with any distributions on our common stock paid to the Non-U.S. Holder, regardless
of whether such distributions constitute dividends or whether any tax was actually withheld. In addition,
proceeds of the sale or other taxable disposition of our common stock within the United States or
conducted through certain U.S.-related brokers generally will not be subject to backup withholding or
information reporting if the applicable withholding agent receives the certification described above or the
Non-U.S. Holder otherwise establishes an exemption. Proceeds of a disposition of our common stock
conducted through a non-U.S. office of a non-U.S. broker that does not have certain enumerated
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relationships with the United States generally will not be subject to backup withholding or information
reporting.
Copies of information returns that are filed with the IRS may also be made available under the provisions
of an applicable treaty or agreement to the tax authorities of the country in which the Non-U.S. Holder
resides or is established.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules
may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability,
provided the required information is timely furnished to the IRS.
Additional withholding tax on payments made to foreign accounts
Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such Sections commonly
referred to as the Foreign Account Tax Compliance Act (“FATCA”)) on certain types of payments made to
non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may
be imposed on dividends on, or (subject to the proposed Treasury Regulations discussed below) gross
proceeds from the sale or other disposition of, our common stock paid to a “foreign financial institution” or
a “non-financial foreign entity” (each as defined in the Code), unless (i) the foreign financial institution
undertakes certain diligence and reporting obligations, (ii) the non-financial foreign entity either certifies it
does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying
information regarding each substantial United States owner, or (iii) the foreign financial institution or non-
financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign
financial institution and is subject to the diligence and reporting requirements in (i) above, it must enter
into an agreement with the U.S. Department of the Treasury requiring, among other things, that it
undertake to identify accounts held by certain “specified United States persons” or “United States owned
foreign entities” (each as defined in the Code), annually report certain information about such accounts,
and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other
account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental
agreement with the United States governing FATCA may be subject to different rules.
Under applicable Treasury Regulations and administrative guidance, withholding under FATCA generally
applies to payments of dividends on our common stock. While withholding under FATCA would have
applied also to payments of gross proceeds from the sale or other disposition of our common stock
beginning on January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments
of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until
final Treasury Regulations are issued.
Prospective investors should consult their tax advisors regarding the potential application of withholding
under FATCA to their investment in our common stock.
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Underwriting
We are offering the shares of common stock described in this prospectus through a number of
underwriters. J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Piper Sandler & Co. are acting
as joint book-running managers of the offering and as representatives of the underwriters. We have
entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the
underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has severally
agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth
on the cover page of this prospectus, the number of shares of common stock listed next to its name in the
following table:
Name
Number of shares
J.P. Morgan Securities LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Morgan Stanley & Co. LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Piper Sandler & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stifel, Nicolaus & Company, Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canaccord Genuity LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The underwriters are committed to purchase all the shares of common stock offered by us if they
purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may also be increased or the offering may be
terminated.
The underwriters propose to offer the shares of common stock directly to the public at the initial public
offering price set forth on the cover page of this prospectus and to certain dealers at that price less a
concession not in excess of $           per share. After the initial offering of the shares to the public, if all of
the shares of common stock are not sold at the initial public offering price, the underwriters may change
the offering price and the other selling terms. Sales of any shares made outside of the United States may
be made by affiliates of the underwriters.
The underwriters have an option to buy up to               additional shares of common stock from us to
cover sales of shares by the underwriters which exceed the number of shares specified in the table
above. The underwriters have 30 days from the date of this prospectus to exercise this option to purchase
additional shares. If any shares are purchased with this option to purchase additional shares, the
underwriters will purchase shares in approximately the same proportion as shown in the table above. If
any additional shares of common stock are purchased, the underwriters will offer the additional shares on
the same terms as those on which the shares are being offered.
The underwriting fee is equal to the public offering price per share of common stock less the amount paid
by the underwriters to us per share of common stock. The underwriting fee is $           per share. The
following table shows the per share and total underwriting discounts and commissions to be paid to the
underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase
additional shares.
Without option
to purchase
additional
shares exercise
With full option
to purchase
additional
shares exercise
Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                    
$                    
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                    
$                    
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We estimate that the total expenses of this offering, including registration, filing and listing fees, printing
fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will
be approximately $           . We have agreed to reimburse the underwriters for expenses relating to the
clearance of this offering with the Financial Industry Regulatory Authority, Inc. in an amount up to $           .
A prospectus in electronic format may be made available on the web sites maintained by one or more
underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to
allocate a number of shares to underwriters and selling group members for sale to their online brokerage
account holders. Internet distributions will be allocated by the representatives to underwriters and selling
group members that may make Internet distributions on the same basis as other allocations.
We have agreed that we will not, subject to certain exceptions, (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, hedge, lend, or otherwise transfer or dispose of, directly or indirectly, or submit to, or
file with, the SEC a registration statement under the Securities Act relating to, any shares of our common
stock or any securities convertible into or exercisable or exchangeable for any shares of our common
stock, or (ii) enter into any swap, hedging, or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of any shares of common stock or any such other securities, or
publicly disclose the intention to undertake any of the foregoing (regardless of whether any of these
transactions are to be settled by the delivery of shares of common stock or such other securities, in cash
or otherwise), in each case without the prior written consent of J.P. Morgan Securities LLC, Morgan
Stanley & Co. LLC and Piper Sandler & Co. for a period of 180 days after the date of this prospectus,
other than the shares of our common stock to be sold in this offering.
The restrictions on our actions, as described above, do not apply to certain transactions, including (i) the
issuance of shares of common stock or securities convertible into or exercisable for shares of our
common stock pursuant to the conversion or exchange of convertible or exchangeable securities or the
exercise of warrants or options (including net exercise) or the settlement of RSUs (including net
settlement), in each case outstanding on the date of the underwriting agreement and described in this
prospectus; (ii) grants of stock options, stock awards, restricted stock, RSUs, or other equity awards and
the issuance of shares of our common stock or securities convertible into or exercisable or exchangeable
for shares of our common stock (whether upon the exercise of stock options or otherwise) to our
employees, officers, directors, advisors, or consultants pursuant to the terms of an equity compensation
plan in effect as of the closing date of this offering and described in this prospectus, provided that such
recipients enter into a lock-up agreement with the underwriters; (iii) the issuance of up to 5% of the
outstanding shares of our common stock, or securities convertible into, exercisable for, or which are
otherwise exchangeable for, our common stock, immediately following the closing date of this offering, in
acquisitions or other similar strategic transactions, provided that such recipients enter into a lock-up
agreement with the underwriters; or (iv) the filing of any registration statement on Form S-8 relating to
securities granted or to be granted pursuant to any plan in effect on the date of the underwriting
agreement and described in this prospectus or any assumed benefit plan pursuant to an acquisition or
similar strategic transaction.
Our directors and executive officers, and substantially all of our securityholders (such persons, the “lock-
up parties”) have entered into lock-up agreements with the underwriters prior to the commencement of
this offering pursuant to which each lock-up party, with limited exceptions, for a period of 180 days after
the date of this prospectus (such period, the “restricted period”), may not and may not cause any of their
direct or indirect affiliates to, without the prior written consent of J.P. Morgan Securities LLC, Morgan
Stanley & Co. LLC and Piper Sandler & Co., (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock
or any securities convertible into or exercisable or exchangeable for our common stock (including without
limitation, our common stock or such other securities which may be deemed to be beneficially owned by
the lock-up party in accordance with the rules and regulations of the SEC and securities which may be
issued upon exercise of a stock option or warrant) (collectively with our common stock and any common
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stock of HeartFlow Holding, Inc. prior to the consolidation of HeartFlow Holding, Inc. into HeartFlow, Inc.,
the “lock-up securities”), (ii) enter into any hedging, swap or other agreement or transaction that transfers,
in whole or in part, any of the economic consequences of ownership of the lock-up securities, whether
any such transaction described in clause (i) or (ii) above is to be settled by delivery of the lock-up
securities, in cash or otherwise, (iii) make any demand for or exercise any right with respect to the
registration of any lock-up securities, or (iv) publicly disclose the intention to do any of the foregoing.
Such persons or entities have further acknowledged that these undertakings preclude them from
engaging in any hedging or other transactions or arrangements (including, without limitation, any short
sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap
or any other derivative transaction or instrument, however described or defined) designed or intended, or
which could reasonably be expected to lead to or result in, a sale or disposition or transfer (whether by
the lock-up party or any other person) of any economic consequences of ownership, in whole or in part,
directly or indirectly, of any lock-up securities, whether any such transaction or arrangement (or
instrument provided for thereunder) would be settled by delivery of lock-up securities, in cash or
otherwise. Such persons or entities further confirmed that they have furnished the representatives with
the details of any transaction such persons or entities, or any of their respective affiliates, is a party to as
of the date of the lock-up agreements, which transaction would have been restricted by the lock-up
agreements if it had been entered into by such persons or entities during the restricted period.
The restrictions described in the immediately preceding paragraph and contained in the lock-up
agreements between the underwriters and the lock-up parties do not apply, subject in certain cases to
various conditions, to certain transactions, including (a) transfers of lock-up securities: (i) as a bona fide
gift or gifts or charitable contribution, or for bona fide estate planning purposes, (ii) by will or intestacy or
any other testamentary document, (iii) to any member of the lock-up party’s immediate family or to any
trust for the direct or indirect benefit of the lock-up party or the immediate family of the lock-up party, or if
the lock-up party is a trust, to a trustor, trustee or beneficiary of the trust or to the estate of a trustor,
trustee or beneficiary of such trust (for purposes of the lock-up agreement, “immediate family” means any
relationship by blood, current or former marriage, domestic partnership or adoption, not more remote than
first cousin), (iv) to a corporation, partnership, limited liability company, investment fund or other entity (A)
of which the lock-up party and/or the immediate family of the lock-up party are the legal and beneficial
owner of all of the outstanding equity securities or similar interests, or (B) controlled by, or under common
control with, the lock-up party or the immediate family of the lock-up party, (v) to a nominee or custodian
of a person or entity to whom a disposition or transfer would be permissible under clauses (i) through (iv)
above, (vi) in the case of a corporation, partnership, limited liability company, trust or other business
entity, (A) to another corporation, partnership, limited liability company, trust or other business entity that
is an affiliate of the lock-up party, or to any investment fund or other entity controlling, controlled by,
managing or managed by or under common control or common investment management with the lock-up
party or its affiliates or (B) as part of a disposition, transfer or distribution to limited partners, members or
shareholders of the lock-up party; (vii) by operation of law, such as pursuant to a qualified domestic order,
divorce settlement, divorce decree or separation agreement, (viii) to us upon death or disability of the
lock-up party, or, if the lock-up party is an employee of ours upon death, disability or termination of
employment, in each case, of such employee, (ix) as part of a sale or transfer of lock-up securities
acquired (A) from the underwriters in this offering or (B) in open market transactions after the completion
of this offering, (x) to us in connection with the vesting, settlement, or exercise of restricted stock units,
options, warrants or other rights to purchase shares of our common stock (including, in each case, by way
of “net” or “cashless” exercise), including for the payment of exercise price and tax and remittance
payments due as a result of the vesting, settlement, or exercise of such restricted stock units, options,
warrants or rights, provided that any such shares of our common stock received upon such exercise,
vesting or settlement shall be subject to the terms of the lock-up agreement, and provided further that any
such restricted stock units, options, warrants or rights are held by the lock-up party pursuant to an
agreement or equity awards granted under a stock incentive plan or other equity award plan, each such
agreement or plan which is described herein, or (xi) pursuant to a bona fide third-party tender offer,
merger, consolidation or other similar transaction that is approved by the Board of Directors and made to
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all holders of our capital stock involving a Change of Control (for purposes hereof, “Change of Control”
means the transfer (whether by tender offer, merger, consolidation or other similar transaction), in one
transaction or a series of related transactions, to a person or group of affiliated persons, of shares of
capital stock if, after such transfer, such person or group of affiliated persons would hold more than 50%
of our outstanding voting securities (or the surviving entity)); provided that in the event that such tender
offer, merger, consolidation or other similar transaction is not completed, the lock-up party’s lock-up
securities shall remain subject to the restrictions in the immediately preceding paragraph; (b) exercise of
the options, settlement of RSUs or other equity awards, or the exercise of warrants granted pursuant to
plans described in this prospectus, provided that any lock-up securities received upon such exercise,
vesting or settlement be subject to restrictions similar to those in the immediately preceding paragraph;
(c) the conversion of outstanding preferred stock, warrants to acquire preferred stock, or convertible
securities into shares of our common stock or warrants to acquire shares of our common stock, provided
that any common stock or warrant received upon such conversion would be subject to restrictions similar
to those in the immediately preceding paragraph; and (d) the establishment by lock-up parties of trading
plans under Rule 10b5-1 under the Exchange Act, provided that (1) such plans do not provide for the
transfer of lock-up securities during the restricted period and (2) any required public announcement or
filing under the Exchange Act made by any person regarding the establishment of such plan during the
restricted period shall include a statement that the lock-up party is not permitted to transfer, sell or
otherwise dispose of lock-up securities under such plan during the restricted period in contravention of the
lock-up agreement and no public filing, report or announcement by any party shall be made voluntarily in
connection with such trading plan.
J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Piper Sandler & Co., in their sole discretion,
may release the securities subject to any of the lock-up agreements with the underwriters described
above, in whole or in part at any time.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the
Securities Act.
We will apply to have our common stock approved for listing on the                     under the symbol “         ”
and this offering is contingent upon obtaining approval of such listing.
In connection with this offering, the underwriters may engage in stabilizing transactions, which involves
making bids for, purchasing and selling shares of common stock in the open market for the purpose of
preventing or retarding a decline in the market price of the common stock while this offering is in
progress. These stabilizing transactions may include making short sales of common stock, which involves
the sale by the underwriters of a greater number of shares of common stock than they are required to
purchase in this offering, and purchasing shares of common stock on the open market to cover positions
created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not
greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked”
shorts, which are short positions in excess of that amount.
The underwriters may close out any covered short position either by exercising their option to purchase
additional shares, in whole or in part, or by purchasing shares in the open market. In making this
determination, the underwriters will consider, among other things, the price of shares available for
purchase in the open market compared to the price at which the underwriters may purchase shares
through the option to purchase additional shares. A naked short position is more likely to be created if the
underwriters are concerned that there may be downward pressure on the price of the common stock in
the open market that could adversely affect investors who purchase in this offering. To the extent that the
underwriters create a naked short position, they will purchase shares in the open market to cover the
position.
The underwriters have advised us that, pursuant to Regulation M of the Securities Act, they may also
engage in other activities that stabilize, maintain or otherwise affect the price of the common stock,
including the imposition of penalty bids. This means that if the representatives of the underwriters
purchase common stock in the open market in stabilizing transactions or to cover short sales, the
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representatives can require the underwriters that sold those shares as part of this offering to repay the
underwriting discount received by them.
These activities may have the effect of raising or maintaining the market price of the common stock or
preventing or retarding a decline in the market price of the common stock, and, as a result, the price of
the common stock may be higher than the price that otherwise might exist in the open market. If the
underwriters commence these activities, they may discontinue them at any time. The underwriters may
carry out these transactions on                , in the over-the-counter market or otherwise.
Prior to this offering, there has been no public market for our common stock. The initial public offering
price will be determined by negotiations between us and the representatives of the underwriters. In
determining the initial public offering price, we and the representatives of the underwriters expect to
consider a number of factors including:
•the information set forth in this prospectus and otherwise available to the representatives;
•our prospects and the history and prospects for the industry in which we compete;
•an assessment of our management;
•our prospects for future earnings;
•the general condition of the securities markets at the time of this offering;
•the recent market prices of, and demand for, publicly traded common stock of generally comparable
companies; and
•other factors deemed relevant by the underwriters and us.
Neither we nor the underwriters can assure investors that an active trading market will develop for shares
of our common stock, or that the shares will trade in the public market at or above the initial public offering
price.
Other relationships
Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may
provide from time to time in the future certain commercial banking, financial advisory, investment banking
and other services for us and such affiliates in the ordinary course of their business, for which they have
received and may continue to receive customary fees and commissions. In addition, from time to time,
certain of the underwriters and their affiliates may effect transactions for their own account or the account
of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or
equity securities or loans, and may do so in the future.
Selling restrictions
Other than in the United States, no action has been taken by us or the underwriters that would permit a
public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose
is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor
may this prospectus or any other offering material or advertisements in connection with the offer and sale
of any such securities be distributed or published in any jurisdiction, except under circumstances that will
result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose
possession this prospectus comes are advised to inform themselves about and to observe any
restrictions relating to the offering and the distribution of this prospectus. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any
jurisdiction in which such an offer or a solicitation is unlawful.
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Notice to prospective investors in the European Economic Area
In relation to each Member State of the European Economic Area (each a “Relevant State”), no shares
have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the
publication of a prospectus in relation to the shares which has been approved by the competent authority
in that Relevant State or, where appropriate, approved in another Relevant State and notified to the
competent authority in that Relevant State, all in accordance with the Prospectus Regulation, except that
offers of shares may be made to the public in that Relevant State at any time under the following
exemptions under the Prospectus Regulation:
(i)to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus
Regulation;
(ii)to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of
the Prospectus Regulation), subject to obtaining the prior consent of the underwriters; or
(iii)in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of shares shall require us or any underwriter to publish a prospectus pursuant
to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the
Prospectus Regulation. and each person who initially acquires any shares or to whom any offer is made
will be deemed to have represented, acknowledged and agreed to and with each of the underwriters and
to us that it is a “qualified investor” within the meaning of Article 2(e) of the Prospectus Regulation. In the
case of any shares being offered to a financial intermediary as that term is used in the Prospectus
Regulation, each such financial intermediary will be deemed to have represented, acknowledged and
agreed that the shares acquired by it in the offer have not been acquired on a non-discretionary basis on
behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances
which may give rise to an offer of any shares to the public other than their offer or resale in a Relevant
State to qualified investors as so defined or in circumstances in which the prior consent of the
underwriters have been obtained to each such proposed offer or resale.
For the purposes of this provision, the expression an “offer to the public” in relation to shares in any
Relevant State means the communication in any form and by any means of sufficient information on the
terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or
subscribe for any shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
Notice to prospective investors in the United Kingdom
No shares have been offered or will be offered pursuant to the offering to the public in the United Kingdom
prior to the publication of a prospectus in relation to the shares which (i) has been approved by the
Financial Conduct Authority or (ii) is to be treated as if it had been approved by the Financial Conduct
Authority in accordance with the transitional provisions in Article 74 (transitional provisions) of the
Prospectus Amendment etc (EU Exit) Regulations 2019/1234, except that the shares may be offered to
the public in the United Kingdom at any time:
(i)to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus
Regulation;
(ii)to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of
the UK Prospectus Regulation), subject to obtaining the prior consent of underwriters for any such
offer; or
(iii)in any other circumstances falling within Section 86 of the FSMA,
provided that no such offer of the shares shall require the Issuer or any Manager to publish a prospectus
pursuant to Section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK
Prospectus Regulation. For the purposes of this provision, the expression an “offer to the public” in
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relation to the shares in the United Kingdom means the communication in any form and by any means of
sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to
decide to purchase or subscribe for any shares and the expression “UK Prospectus Regulation” means
Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal)
Act 2018.
In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and
any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in
the Prospectus Regulation) (i) who have professional experience in matters relating to investments falling
within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as
amended (the “Order”) and/or (ii) who are high net worth companies (or persons to whom it may
otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons
together being referred to as “relevant persons”) or otherwise in circumstances which have not resulted
and will not result in an offer to the public of the shares in the United Kingdom within the meaning of the
Financial Services and Markets Act 2000.
Any person in the United Kingdom that is not a relevant person should not act or rely on the information
included in this document or use it as basis for taking any action. In the United Kingdom, any investment
or investment activity that this document relates to may be made or taken exclusively by relevant persons.
Notice to prospective investors in Canada
The shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are
accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection
73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the shares
must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus
requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies
for rescission or damages if this prospectus (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser
within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The
purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the
underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding
underwriter conflicts of interest in connection with this offering.
Notice to prospective investors in Switzerland
This prospectus does not constitute an offer to the public or a solicitation to purchase or invest in any
shares. No shares have been offered or will be offered to the public in Switzerland, except that offers of
shares may be made to the public in Switzerland at any time under the following exemptions under the
Swiss Financial Services Act (“FinSA”):
(i)to any person which is a professional client as defined under the FinSA;
(ii)to fewer than 500 persons (other than professional clients as defined under the FinSA), subject to
obtaining the prior consent of the representatives of the underwriters for any such offer; or
(iii)in any other circumstances falling within Article 36 FinSA in connection with Article 44 of the Swiss
Financial Services Ordinance,
provided that no such offer of shares shall require the Company or any investment bank to publish a
prospectus pursuant to Article 35 FinSA.
185
The shares have not been and will not be listed or admitted to trading on a trading venue in Switzerland.
Neither this document nor any other offering or marketing material relating to the shares constitutes a
prospectus as such term is understood pursuant to the FinSA and neither this document nor any other
offering or marketing material relating to the shares may be publicly distributed or otherwise made publicly
available in Switzerland.
Notice to prospective investors in the Dubai International Financial Centre
This document relates to an Exempt Offer in accordance with the Markets Law, DIFC Law No. 1 of 2012,
as amended. This document is intended for distribution only to persons of a type specified in the Markets
Law, DIFC Law No. 1 of 2012, as amended. It must not be delivered to, or relied on by, any other person.
The Dubai Financial Services Authority (DFSA) has no responsibility for reviewing or verifying any
documents in connection with Exempt Offers. The DFSA has not approved this prospectus supplement
nor taken steps to verify the information set forth herein and has no responsibility for this document. The
securities to which this document relates may be illiquid and/or subject to restrictions on their resale.
Prospective purchasers of the securities offered should conduct their own due diligence on the securities.
If you do not understand the contents of this document you should consult an authorized financial advisor.
In relation to its use in the DIFC, this document is strictly private and confidential and is being distributed
to a limited number of investors and must not be provided to any person other than the original recipient,
and may not be reproduced or used for any other purpose. The interests in the securities may not be
offered or sold directly or indirectly to the public in the DIFC.
Notice to prospective investors in the United Arab Emirates
The shares have not been, and are not being, publicly offered, sold, promoted or advertised in the United
Arab Emirates (including the Dubai International Financial Centre) other than in compliance with the laws
of the United Arab Emirates (and the Dubai International Financial Centre) governing the issue, offering
and sale of securities. Further, this prospectus does not constitute a public offer of securities in the United
Arab Emirates (including the Dubai International Financial Centre) and is not intended to be a public offer.
This prospectus has not been approved by or filed with the Central Bank of the United Arab Emirates, the
Securities and Commodities Authority, Financial Services Regulatory Authority (FSRA) or the Dubai
Financial Services Authority (DFSA). 
Notice to prospective investors in Australia
This prospectus:
•does not constitute a disclosure document or a prospectus under Chapter 6D.2 of the Corporations
Act 2001 (Cth) (the “Corporations Act”);
•has not been, and will not be, lodged with the Australian Securities and Investments Commission
(“ASIC”), as a disclosure document for the purposes of the Corporations Act and does not purport to
include the information required of a disclosure document for the purposes of the Corporations Act;
and
•may only be provided in Australia to select investors who are able to demonstrate that they fall within
one or more of the categories of investors, available under section 708 of the Corporations Act
(“Exempt Investors”).
The shares may not be directly or indirectly offered for subscription or purchased or sold, and no
invitations to subscribe for or buy the shares may be issued, and no draft or definitive offering
memorandum, advertisement or other offering material relating to any shares may be distributed in
Australia, except where disclosure to investors is not required under Chapter 6D of the Corporations Act
or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an
application for the shares, you represent and warrant to us that you are an Exempt Investor.
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As any offer of shares of our common stock under this prospectus will be made without disclosure in
Australia under Chapter 6D.2 of the Corporations Act, the offer of those securities for resale in Australia
within 12 months may, under section 707 of the Corporations Act, require disclosure to investors under
Chapter 6D.2 if none of the exemptions in section 708 applies to that resale. By applying for the shares of
our common stock you undertake to us that you will not, for a period of 12 months from the date of issue
of the shares, offer, transfer, assign or otherwise alienate those shares of our common stock to investors
in Australia except in circumstances where disclosure to investors is not required under Chapter 6D.2 of
the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.
Notice to prospective investors in Japan
The shares have not been and will not be registered pursuant to Article 4, Paragraph 1 of the Financial
Instruments and Exchange Act. Accordingly, none of the shares nor any interest therein may be offered or
sold, directly or indirectly, in Japan or to, or for the benefit of, any “resident” of Japan (which term as used
herein means any person resident in Japan, including any corporation or other entity organized under the
laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to or for the benefit of
a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise
in compliance with, the Financial Instruments and Exchange Act and any other applicable laws,
regulations and ministerial guidelines of Japan in effect at the relevant time.
Notice to prospective investors in Hong Kong
The shares have not been offered or sold and will not be offered or sold in Hong Kong, by means of any
document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance
(Cap. 571 of the Laws of Hong Kong) (the “SFO”) of Hong Kong and any rules made thereunder; or (b) in
other circumstances which do not result in the document being a “prospectus” as defined in the
Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong) (the “CO”) or
which do not constitute an offer to the public within the meaning of the CO. No advertisement, invitation or
document relating to the shares has been or may be issued or has been or may be in the possession of
any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the
contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do
so under the securities laws of Hong Kong) other than with respect to shares which are or are intended to
be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the
SFO and any rules made thereunder.
Notice to prospective investors in Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore.
Accordingly, no shares have been or will be offered or sold and no shares have been or will be made the
subject of an invitation for subscription or purchase, and no prospectus or any other document or material
in connection with the offer or sale, or invitation for subscription or purchase, of the shares, has been or
will be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (i) to
an institutional investor (as defined in Section 4A of the Securities and Futures Act 2001 of Singapore, as
modified or amended from time to time (the “SFA”)) pursuant to Section 274 of the SFA, (ii) to a relevant
person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person
pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of
the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable
provision of the SFA.
Singapore SFA Product Classification — In connection with Section 309B of the SFA and the CMP
Regulations 2018, unless otherwise specified before an offer of shares of our common stock, we have
determined, and hereby notify all relevant persons (as defined in Section 309A(1) of the SFA), that the
shares of common stock are ‘‘prescribed capital markets products’’ (as defined in the CMP Regulations
2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of
Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
187
Notice to prospective investors in Bermuda
Shares may be offered or sold in Bermuda only in compliance with the provisions of the Investment
Business Act of 2003 of Bermuda which regulates the sale of securities in Bermuda. Additionally, non-
Bermudian persons (including companies) may not carry on or engage in any trade or business in
Bermuda unless such persons are permitted to do so under applicable Bermuda legislation.
Notice to prospective investors in Saudi Arabia
This document may not be distributed in the Kingdom of Saudi Arabia except to such persons as are
permitted under the Rules on the Offer of Securities and Continuing Obligations Regulations as issued by
the board of the Saudi Arabian Capital Market Authority (“CMA”) pursuant to resolution number
3-123-2017 dated 27 December 2017, as amended (the “CMA Regulations”). The CMA does not make
any representation as to the accuracy or completeness of this document and expressly disclaims any
liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document.
Prospective purchasers of the securities offered hereby should conduct their own due diligence on the
accuracy of the information relating to the securities. If you do not understand the contents of this
document, you should consult an authorised financial adviser.
Notice to prospective investors in the British Virgin Islands
The shares are not being, and may not be offered to the public or to any person in the British Virgin
Islands for purchase or subscription by or on behalf of us. The shares may be offered to companies
incorporated under the BVI Business Companies Act, 2004 (British Virgin Islands), “BVI Companies”), but
only where the offer will be made to, and received by, the relevant BVI Company entirely outside of the
British Virgin Islands.
Notice to prospective investors in China
This prospectus will not be circulated or distributed in the PRC and the shares will not be offered or sold,
and will not be offered or sold to any person for re-offering or resale directly or indirectly to any residents
of the PRC (for such purposes, not including the Hong Kong and Macau Special Administrative Regions
or Taiwan), except pursuant to any applicable laws and regulations of the PRC. Neither this prospectus
nor any advertisement or other offering material may be distributed or published in the PRC, except under
circumstances that will result in compliance with applicable laws and regulations.
Notice to prospective investors in Korea
The shares have not been and will not be registered under the Financial Investments Services and
Capital Markets Act of Korea and the decrees and regulations thereunder (the “FSCMA”), and the shares
have been and will be offered in Korea as a private placement under the FSCMA. None of the shares
may be offered, sold or delivered directly or indirectly, or offered or sold to any person for re-offering or
resale, directly or indirectly, in Korea or to any resident of Korea except pursuant to the applicable laws
and regulations of Korea, including the FSCMA and the Foreign Exchange Transaction Law of Korea and
the decrees and regulations thereunder (the “FETL”). Furthermore, the purchaser of the shares shall
comply with all applicable regulatory requirements (including but not limited to requirements under the
FETL) in connection with the purchase of the shares. By the purchase of the shares, the relevant holder
thereof will be deemed to represent and warrant that if it is in Korea or is a resident of Korea, it purchased
the shares pursuant to the applicable laws and regulations of Korea.
Notice to prospective investors in Malaysia
No prospectus or other offering material or document in connection with the offer and sale of the shares
has been or will be registered with the Securities Commission of Malaysia (“Commission”) for the
Commission’s approval pursuant to the Capital Markets and Services Act 2007. Accordingly, this
prospectus and any other document or material in connection with the offer or sale, or invitation for
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subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be
offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or
indirectly, to persons in Malaysia other than (i) a closed end fund approved by the Commission; (ii) a
holder of a Capital Markets Services Licence; (iii) a person who acquires the shares, as principal, if the
offer is on terms that the shares may only be acquired at a consideration of not less than RM250,000 (or
its equivalent in foreign currencies) for each transaction; (iv) an individual whose total net personal assets
or total net joint assets with his or her spouse exceeds RM3 million (or its equivalent in foreign
currencies), excluding the value of the primary residence of the individual; (v) an individual who has a
gross annual income exceeding RM300,000 (or its equivalent in foreign currencies) per annum in the
preceding twelve months; (vi) an individual who, jointly with his or her spouse, has a gross annual income
of RM400,000 (or its equivalent in foreign currencies), per annum in the preceding twelve months; (vii) a
corporation with total net assets exceeding RM10 million (or its equivalent in a foreign currencies) based
on the last audited accounts; (viii) a partnership with total net assets exceeding RM10 million (or its
equivalent in foreign currencies); (ix) a bank licensee or insurance licensee as defined in the Labuan
Financial Services and Securities Act 2010; (x) an Islamic bank licensee or takaful licensee as defined in
the Labuan Financial Services and Securities Act 2010; and (xi) any other person as may be specified by
the Commission; provided that, in the each of the preceding categories (i) to (xi), the distribution of the
shares is made by a holder of a Capital Markets Services License who carries on the business of dealing
in securities. The distribution in Malaysia of this prospectus is subject to Malaysian laws. This prospectus
does not constitute and may not be used for the purpose of public offering or an issue, offer for
subscription or purchase, invitation to subscribe for or purchase any securities requiring the registration of
a prospectus with the Commission under the Capital Markets and Services Act 2007.
Notice to prospective investors in Taiwan
The shares have not been and will not be registered with the Financial Supervisory Commission of
Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered within
Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the
Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial
Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorised to offer, sell, give
advice regarding or otherwise intermediate the offering and sale of the shares in Taiwan.
Notice to prospective investors in South Africa
Due to restrictions under the securities laws of South Africa, no “offer to the public” (as such term is
defined in the South African Companies Act, No. 71 of 2008 (as amended or re-enacted) (the “South
African Companies Act”) is being made in connection with the issue of the shares in South Africa.
Accordingly, this document does not, nor is it intended to, constitute a “registered prospectus” (as that
term is defined in the South African Companies Act) prepared and registered under the South African
Companies Act and has not been approved by, and/or filed with, the South African Companies and
Intellectual Property Commission or any other regulatory authority in South Africa. The shares are not
offered, and the offer shall not be transferred, sold, renounced or delivered, in South Africa or to a person
with an address in South Africa, unless one or other of the following exemptions stipulated in section 96
(1) applies:
Section 96 (1) (a)
the offer, transfer, sale, renunciation or delivery is to:
(i) persons whose ordinary business, or part of whose ordinary business, is to deal in
securities, as principal or agent;
(ii) the South African Public Investment Corporation;
(iii) persons or entities regulated by the Reserve Bank of South Africa;
(iv) authorised financial service providers under South African law;
(v) financial institutions recognised as such under South African law;
189
(vi) a wholly-owned subsidiary of any person or entity contemplated in (c), (d) or (e),
acting as agent in the capacity of an authorised portfolio manager for a pension fund,
or as manager for a collective investment scheme (in each case duly registered as
such under South African law); or
(vii) any combination of the person in (i) to (vi); or
Section 96 (1) (b)
the total contemplated acquisition cost of the securities, for any single addressee
acting as principal is equal to or greater than ZAR1,000,000 or such higher amount as
may be promulgated by notice in the Government Gazette of South Africa pursuant to
section 96(2)(a) of the South African Companies Act.
Information made available in this prospectus should not be considered as “advice” as defined in the
South African Financial Advisory and Intermediary Services Act, 2002.
Notice to prospective investors in Israel
This prospectus does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the
Israeli Securities Law, and has not been filed with or approved by the Israel Securities Authority. In Israel,
this prospectus is being distributed only to, and is directed only at, and any offer of the shares is directed
only at, (i) a limited number of persons in accordance with the Israeli Securities Law and (ii) investors
listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint
investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment
advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with
equity in excess of NIS 50 million and “qualified individuals,” each as defined in the Addendum (as it may
be amended from time to time), or, collectively referred to as qualified investors (in each case, purchasing
for their own account or, where permitted under the Addendum, for the accounts of their clients who are
investors listed in the Addendum). Qualified investors are required to submit written confirmation that they
fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
190
Legal matters
The validity of the issuance of our common stock offered in this prospectus will be passed upon for us by
O’Melveny & Myers LLP. King & Spalding LLP is acting as regulatory counsel to us in connection with this
offering and will pass upon certain legal matters. Certain legal matters in connection with this offering will
be passed upon for the underwriters by Cooley LLP, San Francisco, California. 
Experts
The financial statements as of December 31, 2023 and for the year then ended included in this
Prospectus have been so included in reliance on the report (which contains an explanatory paragraph
relating to the Company’s ability to continue as a going concern as described in Note 1 to the financial
statements) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on
the authority of said firm as experts in auditing and accounting.
Where you can find additional information
We have filed with the SEC a registration statement on Form S-1, including exhibits and schedules, under
the Securities Act, with respect to the shares of common stock being offered by this prospectus. This
prospectus, which constitutes part of the registration statement, does not contain all of the information in
the registration statement and its exhibits. For further information with respect to us and the common
stock offered by this prospectus, we refer you to the registration statement and its exhibits. Statements
contained in this prospectus as to the contents of any contract or any other document referred to are
summary in nature and not necessarily complete, and in each instance, we refer you to the copy of the
contract or other document filed as an exhibit to the registration statement. Each of these statements is
qualified in all respects by reference to the full text of such contract or other document. 
You may read our SEC filings, including this registration statement, over the Internet at the SEC’s website
at www.sec.gov. Upon the completion of this offering, we will be subject to the information reporting
requirements of the Exchange Act, and we will file reports, proxy statements, and other information with
the SEC. These reports, proxy statements, and other information will be available for review at the SEC’s
website referred to above. We also maintain a website at www.heartflow.com, at which, following the
completion of this offering, you may access these materials free of charge as soon as reasonably
practicable after they are electronically filed with, or furnished to, the SEC. Information contained on or
accessible through our website is not a part of this prospectus or the registration statement of which it
forms a part, and the inclusion of our website address in this prospectus is an inactive textual reference
only. You should not consider the contents of our website in making an investment decision with respect
to our common stock.
F-1
HeartFlow Holding, Inc.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements:
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Operations and Comprehensive Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-2
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of HeartFlow Holding, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of HeartFlow Holding, Inc. and its
subsidiaries (the "Company") as of December 31, 2023, and the related consolidated statements of
operations and comprehensive loss, of redeemable convertible preferred stock and stockholders’ deficit
and of cash flows for the year then ended, including the related notes (collectively referred to as the
"consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of December 31, 2023, and the results of
its operations and its cash flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
Substantial Doubt About the Company's Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the
Company has incurred recurring losses from operations and negative cash outflows from operating
activities that raise substantial doubt about its ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 1. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the Company’s consolidated financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audit of these consolidated financial statements in accordance with the standards of
the PCAOB and in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated
financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audit also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audit provides a reasonable
basis for our opinion.
/s/ PricewaterhouseCoopers LLP
San Jose, California
February 5, 2025
We have served as the Company’s auditor since 2009, which includes periods before the Company
became subject to SEC reporting requirements.
F-3
HeartFlow Holding, Inc.
Consolidated Balance Sheet
(in thousands, except share and per share amounts)
December 31,
2023
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$122,767
Accounts receivable, net of allowance for credit losses of $1,058 . . . . . . . . . . . . . . . . . . . .
20,546
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,134
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
148,447
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,921
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,961
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,467
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,255
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$185,051
Liabilities, redeemable convertible preferred stock and stockholders' deficit
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,887
Accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,790
Operating lease liabilities, current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,138
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32,815
Term loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
134,008
Common stock warrant liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,440
Derivative liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
903
Operating lease liabilities, non-current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,454
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
429
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
194,049
Commitments and contingencies (Note 7)
Redeemable convertible preferred stock issuable in series, $0.001 par value;
122,231,454 shares authorized, issued and outstanding as of December 31, 2023;
aggregate liquidation value of $951,917 as of December 31, 2023 . . . . . . . . . . . . . . . . . . .
768,566
Stockholders’ deficit:
Common stock, $0.001 par value; 210,000,000 shares authorized as of December 31,
2023; 14,427,925 shares issued and outstanding as of December 31, 2023 . . . . . . . . . . .
14
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,456
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(501)
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(874,533)
Total stockholders’ deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(777,564)
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit . . . .
$185,051
The accompanying notes are an integral part of these consolidated financial statements.
F-4
HeartFlow Holding, Inc.
Consolidated Statement of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
Year Ended
December 31,
2023
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$87,174
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29,123
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,051
Operating expenses: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35,854
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95,111
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
130,965
Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(72,914)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,457
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(24,694)
Change in fair value of convertible note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,120)
Change in fair value of common stock warrant liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,320)
Change in fair value of derivative liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,158
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
325
Loss before provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(95,108)
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(547)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(95,655)
Cumulative dividends on Series C redeemable convertible preferred stock . . . . . . . . . . . . . .
(1,239)
Deemed dividend upon down round of redeemable convertible preferred stock . . . . . . . . . .
(26,794)
Net loss attributable to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(123,688)
Comprehensive loss: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(95,655)
Other comprehensive loss: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(504)
Total comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(96,159)
Net loss per share attributable to common stockholders, basic and diluted . . . . . . . . . . . . . .
$(8.67)
Weighted-average shares used to compute net loss per share attributable to common
stockholders, basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,265,293
The accompanying notes are an integral part of these consolidated financial statements.
F-5
HeartFlow Holding, Inc.
Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders’ Deficit
(in thousands, except share and per share amounts)
Redeemable Convertible
Preferred Stock
Common Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Deficit
Shares
Amount
Shares
Amount
Balance at January 1, 2023 . . .
39,422,361
$538,423
14,436,169
$14
$58,427
$3
$(752,084)
$(693,640)
Issuance of common stock
upon exercise of stock
options . . . . . . . . . . . . . . . . . .
—
—
291,756
—
589
—
—
589
Issuance of Series F
redeemable convertible
preferred stock at $2.8505
per share, net of issuance
costs of $5,904 . . . . . . . . . . .
61,344,029
168,957
—
—
—
—
—
—
Issuance of Series F-1
redeemable convertible
preferred stock at $1.9098
per share upon conversion
of convertible notes and
accrued interest . . . . . . . . . . .
21,465,064
61,186
—
—
—
—
—
—
Deemed dividend upon down
round of redeemable
convertible preferred stock .
—
—
—
—
26,794
—
(26,794)
—
Repurchase of common stock
—
—
(300,000)
—
(228)
—
—
(228)
Stock-based compensation
expense . . . . . . . . . . . . . . . . .
—
—
—
—
11,874
—
—
(11,874)
Foreign currency translation
loss . . . . . . . . . . . . . . . . . . . . .
—
—
—
—
—
(504)
—
(504)
Net loss . . . . . . . . . . . . . . . . . . .
—
—
—
—
—
—
(95,655)
(95,655)
Balance at December 31, 2023
122,231,454
$768,566
14,427,925
$14
$97,456
$(501)
$(874,533)
$(777,564)
The accompanying notes are an integral part of these consolidated financial statements
F-6
HeartFlow Holding, Inc.
Consolidated Statement of Cash Flows
(in thousands)
Year Ended
December 31,
2023
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(95,655)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,744
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,874
Amortization of debt discount and debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,642
Amortization of right-of-use asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,889
Change in fair value of convertible note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,120
Change in fair value of common stock warrant liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,320
Change in fair value of derivative liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,158)
Paid-in-kind interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
144
Allowance for credit losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,190
Changes in assets and liabilities: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9,350)
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(357)
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(402)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(623)
Accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,759
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,761)
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
190
Net cash used in operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(76,434)
Cash flows from investing activities
Purchase of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,105)
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,105)
Cash flows from financing activities
Proceeds from issuance of Series F redeemable convertible preferred shares, net of
issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
168,957
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
589
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(228)
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
169,318
Effect of foreign exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(504)
Net increase in cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . .
86,275
Balance, beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,959
Balance, end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$127,234
Supplemental disclosure of cash flow information:
Cash paid for taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$405
Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20,800
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable . . . . . . . . . . . . . . . . .
$808
Reduction in right-of-use asset and lease obligation due to amendment in lease terms .
$1,776
Deemed dividend upon down round of redeemable convertible preferred stock . . . . . . . .
$26,794
Conversion of convertible note into Series F-1 redeemable convertible preferred stock .
$61,186
The accompanying notes are an integral part of these consolidated financial statements.
F-7
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
1. Business Overview
Description of Business
HeartFlow Holding, Inc. (the “Company”) was incorporated in the state of Delaware in July 2007 as
Cardiovascular Simulation, Inc. and changed its name to HeartFlow, Inc. in May 2009. On March 1, 2021,
the Company completed an internal reorganization in which a newly formed parent holding company,
HeartFlow Holding, Inc., was established.
The Company is a commercial-stage medical technology company that has pioneered the use of software
and AI to deliver a non-invasive solution for diagnosing and managing coronary artery disease (“CAD”).
The Company’s novel HeartFlow Platform uses AI and advanced computational fluid dynamics to create a
personalized 3D model of a patient’s heart based off a single coronary computed tomography
angiography (“CCTA”). This results in actionable data on blood flow, stenosis, plaque volume and plaque
composition. The Company’s HeartFlow FFRCT Analysis software assists physicians in diagnosing,
managing and delivering precision care to patients with CAD. The Company was awarded Conformité
Européene Mark (“CE Mark”) for its HeartFlow FFRCT Analysis in July 2011. The Company received
clearance from the U.S. Food and Drug Administration (“FDA”) in November 2014.
The Company’s United States (“U.S.”) headquarters is located in Mountain View, California, and the
Company also has offices in Austin, Texas, and Tokyo, Japan.
The Company had the following wholly-owned subsidiaries as of December 31, 2023:
Entity Name
Country of Incorporation
HeartFlow, Inc.
United States
HeartFlow Japan G.K.
Japan
HeartFlow International Sarl
Switzerland
HeartFlow U.K. Ltd
United Kingdom
HeartFlow Technology U.K. Limited
United Kingdom
Effective July 2024, HeartFlow International Sarl was dissolved.
Liquidity and Going Concern
The Company has incurred operating losses and negative cash flows from operations since its inception
and has an accumulated deficit of $874.5 million as of December 31, 2023. The Company expects to
incur losses for the foreseeable future. Historically, the Company’s activities have been financed through
sales of shares of redeemable convertible preferred stock, common stock and convertible promissory
notes, borrowings under term loans and revenue received from customers.
Management does not believe that the Company’s existing cash and cash equivalents of $122.8 million
as of December 31, 2023 as well as its expected revenues will provide sufficient funds to allow the
Company to continue its planned operations for at least the next 12 months from the date of the issuance
of these consolidated financial statements.
The Company expects to seek additional funding in the form of debt or equity financings to make strategic
investments in its business; however, there can be no assurance that such efforts will be successful or
that, in the event that they are successful, the terms and conditions of such financing will be favorable. If
the Company’s revenue levels are not sufficient or if the Company is unable to secure additional funding
when desired, the Company may need to delay or abandon some or all of its development programs and
scale back its business and operations, which could materially harm the Company’s business, financial
F-8
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
condition and results of operations. These factors raise substantial doubt about the Company’s ability to
continue as a going concern.
The accompanying consolidated financial statements do not include any adjustments that might result
from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been
prepared on a basis that assumes the Company will continue as a going concern and which contemplates
the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Company as well as its
wholly owned subsidiaries and have been prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”). All significant intercompany balances and
transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Management used significant judgement when making estimates in the
determination of the fair value of its common stock and stock options, deferred income tax valuation
allowance, capitalized internal-use software, depreciation of property and equipment, allowance for credit
losses, revenue recognition, valuation of operating lease right-of-use (“ROU”) assets and operating lease
liabilities, and the fair value of convertible debt, warrants to purchase common stock and embedded
derivatives. Management evaluates its estimates and assumptions on an ongoing basis using historical
experience and other factors and adjusts those estimates and assumptions as facts and circumstances
dictate. Actual results could materially differ from those estimates.
Segment Information
The Company operates and manages its business as one reportable and operating segment, which is the
business of research and development of non-invasive coronary artery detection solutions. The
Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial
information on an aggregate basis for purposes of allocating resources and evaluating financial
performance. The Company’s long-lived assets are primarily in the United States of America.
Cash, Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments that are readily convertible to known amounts of
cash and purchased with an original maturity of three months or less to be cash equivalents. Cash
equivalents consist primarily of amounts invested in money market accounts.
The following table provides a reconciliation of cash, cash equivalents and restricted cash within the
consolidated balance sheet to the total shown in the consolidated statement of cash flows (in thousands):
December 31,
2023
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$122,767
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,467
Total cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$127,234
As of December 31, 2023, restricted cash represents deposits held as security in connection with the
Company’s facility lease agreements.
F-9
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Fair Value of Financial Instruments
The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value
is an exit price, representing the amount that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use in
pricing an asset or a liability.
The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest
priority to valuations based upon unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs
that are significant to the valuation (Level 3 measurements). The accounting guidance establishes three
levels of the fair value hierarchy as follows:
Level 1 - Observable inputs, such as quoted prices in active markets for identical assets or liabilities;
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or
liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities;
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to
the fair value of the assets or liabilities.
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of
input that is significant to the fair value measurement. The Company’s assessment of the significance of a
particular input to the fair value measurement in its entirety requires management to make judgments and
considers factors specific to the asset or liability.
As of December 31, 2023, the carrying amounts of the Company’s financial instruments, including cash
equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to
their relatively short maturities and market interest rates, if applicable. Management believes that the
Company’s Term Loan bears interest at the prevailing market rates for instruments with similar
characteristics; accordingly, the carrying value of this instrument approximates its fair value. Fair value
accounting is applied to the convertible notes, common stock warrant liability and derivative liability.
Concentration of Credit Risk and Significant Customers
Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash
equivalents, restricted cash and accounts receivable. The Company maintains bank deposits in federally
insured financial institutions and these deposits may at times exceed federally insured limits. To date, the
Company has not experienced any losses on its cash deposits. The Company currently has full control of
its cash and cash equivalents balance.
On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial
Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as
receiver. On March 13, 2023, the FDIC announced that it had transferred all insured and uninsured
deposits and substantially all assets of SVB to a newly created, full-service FDIC-operated “bridge bank”
called Silicon Valley Bridge Bank, N.A. (“SVBB”), where depositors would have full access to their money
immediately. On March 27, 2023, First Citizens BancShares, Inc. (“First Citizens Bank”) acquired SVBB
from the FDIC and operated SVBB as Silicon Valley Bank, a division of First Citizens Bank. The Company
successfully transferred all funds to another financial institution and did not incur any losses on its
deposits as a result of SVB’s closure.
No single customer represented more than 10% of the Company’s revenue during the year ended
December 31, 2023.
F-10
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
No single customer represented more than 10% of the Company’s accounts receivable as of
December 31, 2023.
Accounts Receivable
The Company performs ongoing credit evaluations of its customers’ financial conditions and generally
extends credit to customers without requiring collateral. Accounts receivable are recorded at the amounts
billed less estimated allowances for credit losses for any potential uncollectible amounts. The Company
continually monitors customer payments and maintains an allowance for estimated losses resulting from a
customer’s inability to make required payments. The Company considers factors such as historical
experience, credit quality, age of the accounts receivable balances, geographic related risks and
economic conditions that may affect a customer’s ability to pay. Accounts receivable are written-off and
charged against an allowance for credit losses when the Company has exhausted collection efforts
without success.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation or amortization. Depreciation
and amortization is computed using the straight-line method over the estimated useful lives of assets,
which generally ranges from two to five years. Leasehold improvements are amortized over the lesser of
their useful life or the remaining life of the lease. Upon sale or retirement of assets, the cost and related
accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected
in results from operations in the period realized. Maintenance and repairs are expensed as incurred.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets, including property and equipment, for impairment at least
annually and whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible
impairment, the Company uses an estimate of the related undiscounted future cash flows over the
remaining useful life of the long-lived assets in measuring whether they are recoverable. If the carrying
value of the asset exceeds the estimated undiscounted future cash flows, a loss is recorded as the
excess of the asset’s carrying value over its fair value. No assets were determined to be impaired during
the year ended December 31, 2023.
Deferred Offering Costs
The Company capitalizes certain legal, accounting and other third-party fees that are directly associated
with in-process equity financings as deferred offering costs until such financings are consummated. After
consummation of the equity financing, these costs are recorded as a reduction of the proceeds from the
offering, either as a reduction of the carrying value of preferred stock or in stockholders’ deficit as a
reduction of additional paid-in capital generated as a result of the offering. Should the in-process equity
financing be abandoned, the deferred offering costs would be expensed immediately as a charge to
operating expenses in the consolidated statement of operations and comprehensive loss. No deferred
offering costs were capitalized as of December 31, 2023.
Internal-Use Software
The Company capitalizes certain costs related to internal-use software during the application
development stage. Costs related to planning and post implementation activities are expensed as
incurred. Capitalized internal-use software is amortized on a straight-line basis over the estimated useful
life, which is generally two years, after the product is deployed and ready for use. The Company
evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events
or changes in circumstances occur that could impact the recoverability of these assets. Capitalized
internal-use software costs are classified as a component of property and equipment, net.
F-11
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Leases
At the inception of a contractual arrangement, the Company determines whether the contract contains a
lease by assessing whether there is an identified asset and whether the contract conveys the right to
control the use of the identified asset in exchange for consideration over a period of time.
An ROU asset and corresponding lease liability are recorded on the consolidated balance sheet based on
the present value of lease payments over the lease term. An ROU asset represents the right to control the
use of an identified asset over the lease term and a lease liability represents the obligation to make lease
payments arising from the lease. Leases with an initial term of 12 months or less are not recorded in the
consolidated balance sheet. The Company uses its incremental borrowing rate to determine the present
value of lease payments, as the discount rate implicit in the lease is not readily available. The lease terms
used to calculate the ROU asset and related lease liabilities include options to extend or terminate the
lease when it is reasonably certain that the Company will exercise that option. The Company elected to
account for contracts that contain lease and non-lease components as a single lease component. For the
year ended December 31, 2023, the Company’s only leases were for its facilities, which are classified as
operating leases with lease expense recognized on a straight-line basis over the lease term. Variable
lease costs, which primarily consist of common area maintenance, taxes, and utility charges are
expensed as incurred. The Company does not have any finance leases.
Term Loan
The Term Loan is accounted for at amortized cost. Original debt issuance costs are deferred and
presented as a reduction to the carrying value of the Term Loan. Debt discount and debt issuance costs
are amortized using the effective interest method and recorded in interest expense within the
consolidated statement of operations and comprehensive loss. Refer to Note 8 for additional information.
Convertible Notes
The Company issued Convertible Notes from September 2022 to December 2022, which were all
converted to Series F redeemable convertible preferred stock in March 2023. Refer to Notes 9 and 10 for
additional information. The Convertible Notes contained embedded features that provided the Note
Investors with multiple settlement alternatives. Rather than accounting for the embedded features that
qualified as derivatives separately, the Company elected to account for the Convertible Notes at fair value
each reporting period. Debt issuance costs were expensed as incurred. The Company recognized the
changes in fair value (including interest) as change in fair value of convertible note within the consolidated
statement of operations and comprehensive loss.
Common Stock Warrants
The Company’s warrants to purchase common stock that were issued in connection with the Term Loan
do not meet the equity indexation criteria and are classified as a liability. The warrants are recorded at fair
value upon issuance and are subject to remeasurement to fair value at each balance sheet date, with any
changes in fair value recognized as change in fair value of common stock warrant within the consolidated
statement of operations and comprehensive loss. Refer to Note 12 for additional information.
Embedded Derivative
The Term Loan contains certain prepayment features, default put option and default interest adjustment
features that were determined to be embedded derivatives requiring bifurcation and separate accounting
as a single compound derivative, as discussed in Note 13. The impact of bifurcation of the embedded
derivative on the date of issuance was reflected as a debt discount. The fair value of the derivative liability
related to the Company’s Term Loan, as discussed in Note 8, was estimated using a scenario-based
analysis comparing the probability-weighted present value of the Term Loan payoff at maturity with and
without the bifurcated features. This method isolates the value of the embedded derivative by measuring
the difference in the host contract’s value with and without the isolated features. The resulting cash flows
F-12
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
are discounted at the Company’s borrowing rate, as adjusted for fluctuations in the market interest rate
from the inception of the Company’s comparative borrowings to the reporting date, to measure the fair
value of the embedded derivative. The derivative liability is remeasured to fair value at each reporting
period and the related change is reflected as change in fair value of derivative liability on the consolidated
statement of operations and comprehensive loss.
Redeemable Convertible Preferred Stock
The Company records redeemable convertible preferred stock at fair value on the dates of issuance, net
of issuance costs. The redeemable convertible preferred stock is recorded outside of stockholders’ deficit
because the preferred shares are contingently redeemable upon the occurrence of an event that is
outside of the Company’s control. The Company has elected not to adjust the carrying values of the
redeemable convertible preferred stock to the liquidation preferences of such shares because it is
uncertain whether or when an event would occur that would obligate the Company to pay the liquidation
preferences to holders of shares of redeemable convertible preferred stock. Subsequent adjustments to
the carrying values to the liquidation preferences will be made only when it becomes probable that such
liquidation event will occur. The redemption value of each series of redeemable convertible preferred
stock is equal to their respective original issue price plus accrued but unpaid dividends on Series C
redeemable convertible preferred shares and all declared but unpaid dividends (if any) for other series of
redeemable convertible preferred shares. In connection with the Series F redeemable convertible
preferred stock financing, the cumulative dividends payable to holders of Series C redeemable convertible
preferred stock upon a liquidation event were capped from $6.66 to $8.25 per share depending on the
time of issuance, with an aggregate total of $88.5 million. Refer to Note 10 for additional information.
Revenue Recognition
The Company sells its HeartFlow Platform to medical providers in the United States and in select
international markets. The Company determines revenue recognition through the following steps:
•Identification of the contract, or contracts, with a customer;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenue when, or as, the Company satisfies a performance obligation.
The Company identified a single performance obligation, which is comprised of a highly interdependent
bundle of goods or services that are not distinct on their own but are as a group and consists of providing
implementation services and the requested analysis, including an image file and related licenses and
support. Revenue recognition commences only after completion of installation, implementation and
training for new customer accounts. The Company’s service consists of providing a visualization of the
patient’s coronary arteries and enables physicians to create more effective treatment plans. This service
is normally billable upon delivery of the analysis to the physician.
Substantially all of the Company’s revenue is from usage-driven fees and generated on a “pay per click”
basis each time a physician orders the Company’s HeartFlow FFRCT Analysis. The Company also derives
revenue from subscription fees from customers accessing the Company’s hosted software service during
the subscription period. During the year ended December 31, 2023, 98.1% of revenue was from usage-
driven fees and the remainder was from subscription fees.
Revenue is recognized when control of these services is transferred to the customer, at an amount that
reflects the consideration the Company expects to be entitled to receive in exchange for those services.
The Company recognizes usage-driven fee revenue upon delivery of the requested analysis to the
F-13
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
physician, which is when control of these services is transferred to the customer. The Company
recognizes revenue on a straight-line basis over the contract term for subscriptions where the customer
pays a fixed amount upfront for unlimited analyses. Contracts with customers typically include a fixed
amount of consideration and are generally cancellable with 30 days’ written notice.
The transaction price consists of fixed consideration and variable consideration such as utilization and
volume rebates for reimbursement claims from government and commercial payers. The transaction price
(inclusive of both fixed consideration and variable consideration that is not constrained) is recognized as
revenue when control transfers. The Company uses a portfolio approach to estimate variable
consideration using the expected value method.
Unbilled Receivables
Unbilled receivables represent revenue from claims made to third-party payers that are expected to be
reimbursed upon delivery of the requested analysis to the physician prior to being invoiced. The Company
records unbilled receivables within accounts receivable, net on the consolidated balance sheet, based on
the Company’s unconditional right to payment at the end of the applicable period.
Contract Costs
Costs associated with product revenue include a flat rate commission per analysis and new customer site
commissions as well as implementation and onboarding costs. The Company capitalizes new customer
site commissions and certain implementation and onboarding costs that are considered to be incremental
to the acquisition of new customer contracts and amortizes these costs over an estimated period of
benefit of two years. The estimated period of benefit is determined by evaluating average customer life,
the nature of the related benefit, and the specific facts and circumstances of its arrangements. The
Company evaluates these assumptions at least annually and periodically reviews whether events or
changes in circumstances have occurred that could impact the period of benefit.
The Company expenses flat rate commissions when incurred as commensurate with its usage-driven fee
revenue recognition and amortizes capitalized new customer site commissions to selling, general and
administrative expense in the consolidated statement of operations and comprehensive loss. During the
year ended December 31, 2023, new site commission costs were not capitalized as the amount was not
material. Capitalized implementation and onboarding costs are included in prepaid expenses and other
current assets in the consolidated balance sheet and are amortized to cost of revenue in the consolidated
statement of operations and comprehensive loss. 
Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents the transaction price allocated to
performance obligations that are unsatisfied, or partially unsatisfied. It includes contract liabilities and
amounts that will be invoiced and recognized as revenue in future periods and does not include contracts
where the customer is not committed. The customer is not considered committed when they are able to
terminate for convenience without payment of a substantive penalty under the contract. Additionally, as a
practical expedient, the Company has not disclosed the value of unsatisfied performance obligations for
contracts with an original expected length of one year or less.
Contract Liabilities
The Company records contract liabilities when billings or payments are received in advance of revenue
recognition from subscription services. The contract liabilities balance is reduced as the revenue
recognition criteria are met, generally within 12 months. Once services are available to customers, the
Company records amounts due in accounts receivable, net and contract liabilities within accrued
expenses and other current liabilities on the consolidated balance sheet. To the extent the Company bills
customers in advance of the billing period commencement date, the accounts receivable and
F-14
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
corresponding contract liabilities amount are netted to zero on the consolidated balance sheet, unless
such amounts have been paid as of the balance sheet date.
Cost of Revenue
Cost of revenue includes, but is not limited to, personnel and related expenses, stock-based
compensation costs, amortization of capitalized internal-use software, amortization of contract fulfillment
costs as well as royalties associated with technology licenses used in connection with the delivery of the
Company’s HeartFlow Platform and allocated overhead, including rent, equipment, depreciation,
technology services and utilities, related to the Company’s production team. The role of the production
team is to support the Company’s patient case volume revenue by performing defined quality-related
activities. The production team also supports clinical trial, research and development, and business
development activities. The portion of these costs that supports patient case volume revenue is recorded
as cost of revenue, the costs to support clinical trials and research and development efforts are recorded
as research and development expense, and the costs incurred in support of business development efforts
are recorded as selling, general and administrative expenses.
Research and Development
Costs related to research, design, development and clinical trials are charged to research and
development and are expensed as incurred. These costs include, but are not limited to, personnel and
related expenses, clinical trials, stock-based compensation costs, third-party consulting costs, the portion
of the costs incurred by the production team to support clinical trials and research and development
efforts, and allocated overhead, including rent, equipment, depreciation and utilities.
Clinical Trials
The Company accrues and expenses costs for its clinical trial activities performed by third parties,
including clinical research organizations and other service providers, based upon estimates of the work
completed over the life of the individual study in accordance with associated agreements. The Company
determines these estimates through discussion with internal personnel and outside service providers as
to progress or stage of completion of trials or services pursuant to contracts with clinical research
organizations and other service providers and the agreed-upon fee to be paid for such services.
Advertising Costs
The Company expenses advertising costs as incurred. Advertising costs includes design and production
costs, including website development, testimonial videos, written media campaigns and other items.
Advertising costs of $778,000 was expensed during the year ended December 31, 2023.
Stock-Based Compensation
The Company accounts for share-based payments at fair value. The grant date fair value of options
granted is measured using the Black-Scholes option pricing model. Option awards vest based on the
satisfaction of a service requirement and stock-based compensation expense is recorded on a straight-
line basis over the applicable service period, which is generally four years. For performance-based stock
options, the Company will assess the probability of performance conditions being achieved in each
reporting period. The amount of stock-based compensation expense recognized in any one period related
to performance-based stock options can vary based on the achievement or anticipated achievement of
the performance conditions. Forfeitures are recognized in the period in which the forfeiture occurs.
Income Taxes
The Company accounts for income taxes under the asset and liability method. Under this method,
deferred tax assets and liabilities are determined based on the temporary differences between the
financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in
F-15
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
which the differences are expected to reverse. As a result of the history of net operating losses, the
Company has provided for a full valuation allowance against the deferred tax assets for assets that are
not more-likely-than-not to be realized.
The Company applies a comprehensive model for the recognition, measurement, presentation and
disclosure in the consolidated financial statements of any uncertain tax positions that have been taken or
expected to be taken on a tax return using a two-step approach. The first step is to evaluate the tax
position taken or expected to be taken in a tax return by determining if the weight of available evidence
indicates that it is more likely than not that the tax position will be sustained upon examination by the
relevant taxing authorities, based on the technical merits of the position. For tax positions that are more
likely than not to be sustained upon audit, the second step is to measure the tax benefit in the financial
statements as the largest benefit that has a greater than 50% likelihood of being sustained upon
settlement. Significant judgment is required to evaluate uncertain tax positions. Changes in facts and
circumstances could have a material impact on the Company’s effective tax rate and results of operations.
The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as a
component of provision for income taxes in the consolidated statement of operations and comprehensive
loss.
Comprehensive Loss
Comprehensive loss is comprised of net loss and foreign currency translation loss.
Foreign Currency
The functional currency of the Company’s foreign subsidiaries is the U.S. Dollar, except for HeartFlow
Japan G.K., HeartFlow Technology U.K. Limited, and HeartFlow U.K. Limited, which have Japanese Yen
and British Pounds as functional currencies, respectively. For all non-functional currency balances, the
remeasurement of such balances to the functional currency results in either a foreign exchange
transaction gain or loss, which is recorded within other income (expense), net within the consolidated
statement of operations and comprehensive loss. The Company recognized foreign exchange transaction
losses of $172,000 during the year ended December 31, 2023. During 2023, the Company recognized
$504,000 of foreign currency translation loss in the statement of comprehensive loss related to foreign
subsidiaries which have local functional currencies.
Net Loss Per Share Attributable to Common Stockholders
Basic net loss per common share is calculated by dividing the net loss attributable to common
stockholders by the weighted-average number of shares of common stock outstanding during the period,
without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing
the net loss attributable to common stockholders by the weighted-average number of shares of common
stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per
share calculation, the redeemable convertible preferred stock, common stock warrants and stock options
are considered to be potentially dilutive securities.
Basic and diluted net loss attributable to common stockholders per share is presented in conformity with
the two-class method required for participating securities as the redeemable convertible preferred stock
and common stock subject to repurchase are considered participating securities. The Company’s
participating securities do not have a contractual obligation to share in the Company’s losses. As such,
the net loss is attributed entirely to common stockholders. Diluted net loss per share is the same as basic
net loss per share because the effects of potentially dilutive items were anti-dilutive given the Company’s
net loss position during the year ended December 31, 2023.
F-16
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards
Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified
effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our
Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to
complying with new or revised accounting standards, which means that when a standard is issued or
revised and it has different application dates for public and nonpublic companies, the Company will adopt
the new or revised standard at the time nonpublic companies adopt the new or revised standard and will
do so until such time that the Company either i) irrevocably elects to “opt out” of such extended transition
period or ii) no longer qualifies as an emerging growth company. The Company may choose to early
adopt any new or revised accounting standards whenever such early adoption is permitted for nonpublic
companies.
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments
— Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which has
been updated by subsequent amendments. ASU 2016-13 revises the measurement of credit losses for
most financial instruments measured at amortized cost, including trade receivables, from an incurred loss
methodology to an expected loss methodology which results in earlier recognition of credit losses. Under
the incurred loss model, a loss is not recognized until it is probable that the loss-causing event has
already occurred. The ASU introduces a forward-looking expected credit loss model that requires an
estimate of the expected credit losses over the life of the instrument by considering all relevant
information including historical experience, current conditions, and reasonable and supportable forecasts
that affect collectability. The ASU was effective for fiscal year beginning after December 15, 2022 and
required a modified-retrospective approach with a cumulative-effect adjustment to retained earnings as of
the beginning of the first reporting period. Early adoption is permitted. The Company adopted this ASU
effective January 1, 2023, and the adoption did not have a material impact on the Company’s
consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40):
Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU simplifies the
accounting for certain financial instruments with characteristics of liabilities and equity, including
convertible instruments and contracts on an entity’s own equity. Specifically, the ASU removes: (i) major
separation models required under GAAP and (ii) certain settlement conditions that are required for equity
contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify
for the exception. For public business entities that meet the definition of an SEC filer, excluding entities
eligible to be smaller reporting companies as defined by the SEC, this ASU is effective for interim and
annual reporting periods beginning after December 15, 2021. For all other entities, the amendments are
effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal
years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020,
including interim periods within those fiscal years. The Company adopted this ASU effective January 1,
2023, and the adoption did not have an impact on the Company’s consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to
Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and
interim basis, of significant segment expenses that are regularly provided to the chief operating decision
maker (“CODM”), as well as the aggregate amount of other segment items included in the reported
measure of segment profit or loss. This ASU requires that a public entity disclose the title and position of
the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss
F-17
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
in assessing segment performance and deciding how to allocate resources. Public entities will be required
to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a
single reportable segment are required to provide all the disclosures required by the amendments in this
ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after
December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early
adoption permitted. The amendments in this ASU should be applied retrospectively to all prior periods
presented in the financial statements. The adoption of this standard will only impact the Company’s
disclosures in the consolidated financial statements and the Company is currently evaluating the effect of
adopting the new disclosure requirements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income
Tax Disclosures, which requires enhanced income tax disclosures, including specific categories and
disaggregation of information in the effective tax rate reconciliation, disaggregated information related to
income taxes paid, income or loss from continuing operations before income tax expense or benefit, and
income tax expense or benefit from continuing operations. This guidance is effective for annual periods
beginning after December 15, 2024, with early adoption permitted. The Company is currently in the
process of evaluating the impact of this pronouncement on the disclosures in its consolidated financial
statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive
Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses, which requires more detailed disclosures about specified categories of expenses (including
employee compensation, depreciation, and amortization) included in certain expense captions presented
on the face of the income statement. This ASU is effective for fiscal years beginning after December 15,
2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption
permitted. The amendments may be applied either (i) prospectively to financial statements issued for
reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in
the financial statements. The Company is currently evaluating the impact of this pronouncement on the
disclosures in its consolidated financial statements.
3. Revenue and Contract Balances
Disaggregation of Revenue
The following table summarizes total revenue from customers by geographic region (in thousands):
Year ended
December 31,
2023
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$77,725
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,492
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,003
Rest of Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
954
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$87,174
Revenues by geography are determined based on the region of the Company's contracting entity, which
may be different than the region of the customer.
Contract Balances
Unbilled receivables included within accounts receivable on the consolidated balance sheet as of
December 31, 2023 was $342,000.
F-18
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
The following table provides the breakdown of capitalized contract costs as of December 31, 2023 (in
thousands):
Contract
Costs
Balance as of January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,077
Contract costs capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,081
Contract costs amortized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2,217)
Balance as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,941
Contract costs included in prepaid expenses and other current assets . . . . . . . . . . . . . . . . . .
$1,953
Long-term contract costs included in other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . .
$988
The following table provides the breakdown of contract liabilities included within accrued expenses and
other current liabilities on the consolidated balance sheet as of December 31, 2023 (in thousands):
Contract
Liabilities
Balance as of January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$118
Contract liabilities added . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
470
Contract liabilities recognized as revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(90)
Balance as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$498
4. Fair Value Measurement
The following table summarizes the Company’s financial assets and liabilities measured at fair value on a
recurring basis by level within the fair value hierarchy (in thousands):
December 31, 2023
Level 1
Level 2
Level 3
Total
Assets
Money market funds included in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . . .
$115,636
$—
$—
$115,636
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$115,636
$—
$—
$115,636
Liabilities
Common stock warrant liability . . . . . . . . . . .
$—
$—
$4,440
$4,440
Derivative liability . . . . . . . . . . . . . . . . . . . . . . .
—
—
903
903
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$—
$—
$5,343
$5,343
F-19
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
The following tables present a reconciliation of the Company’s financial liabilities measured at fair value
as of December 31, 2023 using significant unobservable inputs (Level 3), and the change in fair value (in
thousands):
Convertible
Notes
Fair value as of January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$56,066
Change in fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,120
Derecognition of convertible notes upon conversion into redeemable convertible preferred
stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(61,186)
Fair value as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$—
The Convertible Notes, which are not regularly traded, are classified as Level 3, since their values cannot
be determined by using readily observable inputs or measures, such as market prices (see Note 9). The
fair value of the Convertible Notes was estimated as the sum of its components (conversion features and
the debt component) as of the issuance dates and as of the subsequent balance sheet dates. To value
each of the conversion features, a “with and without” methodology was employed. The debt component
was valued using a discounted cash flow method that measured the net present value of the principal and
interest payments to be received by the holders of the Convertible Notes (excluding the conversion
features) through the estimated maturity date.
Common
Stock
Warrant
Liability
Fair value as of January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,120
Change in fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,320
Fair value as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,440
In determining the fair value of the common stock warrant liability, the Company used the Black-Scholes
option pricing model to estimate the fair value using unobservable inputs including the expected term,
expected volatility, risk-free interest rate and dividend yield (see Note 12).
Derivative
Liability
Fair value as of January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,061
Change in fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,158)
Fair value as of December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$903
In determining the fair value of the derivative liability, a two-step valuation approach was employed, which
included a probability-weighted scenario valuation method, the Black-Scholes-Merton method, and the
option pricing method, using unobservable inputs (see Note 13), which are classified as Level 3 within the
fair value hierarchy, and then comparing the instrument’s value with and without the derivative features to
estimate their combined fair value. The debt instrument is carried at amortized cost, which approximates
its fair value.
F-20
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
5. Balance Sheet Components
Allowance for Credit Losses
The following table presents a reconciliation of the allowance for credit losses (in thousands):
Year Ended
December 31,
2023
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$212
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,190
Write-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(344)
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,058
Property and equipment, net
Property and equipment consisted of the following (in thousands):
December 31,
2023
Property and equipment at cost:
Computer equipment and software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$8,842
Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,095
Capitalized internal-use software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,535
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,057
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57
Total property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,586
Less: Accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(50,665)
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$9,921
The Company capitalized certain internal-use software costs totaling $4.6 million, including stock-based
compensation of $408,000 related to internal-use software development efforts, during the year ended
December 31, 2023. Amortization of capitalized internal-use software totaled $3.2 million for the year
ended December 31, 2023.
Depreciation and amortization expense related to property and equipment, excluding capitalized internal-
use software, was $1.5 million for the year ended December 31, 2023.
Other Non-Current Assets
Other non-current assets are comprised of the following (in thousands):
December 31,
2023
Contract costs, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$988
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
267
Total other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,255
F-21
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities are comprised of the following (in thousands):
December 31,
2023
Accrued payroll and related expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$15,228
Customer contract and rebate liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,109
Accrued royalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,604
Accrued professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,188
Accrued clinical trial expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,148
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,513
Total accrued expenses and other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$24,790
6. Leases
The Company leases office space in Mountain View, California, Austin, Texas, and Tokyo, Japan.
Mountain View, California
In August 2021, the Company entered into a facility lease agreement with MV Campus Owner, LLC. (the
“Landlord”), for approximately 61,000 rentable square feet in Mountain View, California through August
2030. The Company received a tenant improvement allowance of $1.8 million, in which the remaining
unused amount of $1.4 million was credited against rent expense during the year ended December 31,
2023. In connection with the lease, the Company established a standby letter of credit for the benefit of
the landlord in the amount of $4.3 million in August 2021, which is classified as non-current restricted
cash on the consolidated balance sheet as of December 31, 2023.
Austin, Texas
In January 2023, the Company amended its facility lease agreement in Austin, Texas, which provides for
approximately 26,000 square feet of space, to extend the lease term which expired in November 2023
with a five-year renewal option to December 2025 with no renewal option. In connection with the lease
amendment, the Company recorded a reduction of $1.8 million in ROU asset and lease liability from the
remeasurement that previously included the renewal option. As of December 31, 2023, a security deposit
of $150,000 was recorded as non-current restricted cash on the consolidated balance sheet related to this
lease.
Tokyo, Japan
The Company has one non-cancellable operating lease for its facility in Tokyo, Japan which expires in
November 2024.
Operating lease cost consisted of the following (in thousands):
December 31,
2023
Operating lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$4,906
Variable lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,120
Total lease cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6,026
Cash paid for amounts included in the measurement of operating lease liabilities during the year ended
December 31, 2023 was $4.1 million.
F-22
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
The following table summarizes the maturities of the aggregate lease payments under the Company’s
operating lease liabilities as of December 31, 2023 (in thousands):
Year ending December 31,
Operating
Leases
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$5,355
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,397
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,859
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,005
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,155
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,952
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34,723
Less: Amount of lease payments representing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8,131)
Present value of future minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$26,592
Less: current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,138
Operating lease liabilities, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$21,454
The following table summarizes additional information related to the Company’s operating leases (in
thousands, except weighted-average data):
December 31,
2023
Right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20,961
Weighted-average remaining lease term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.5
Weighted-average discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.0%
7. Commitments and Contingencies
Royalty Commitments
The Company has entered into various exclusive technology licensing agreements and other software
licensing agreements. The terms of the agreements require the Company to make annual royalty
payments in fixed amounts as well as certain milestone and revenue-based payments. The revenue-
based royalty percentage is in the low single digits, subject to reductions and offsets in certain
circumstances with a minimum royalty commitment of $50,000 annually. Future minimum royalty
commitments due under the terms of these exclusive agreements as of December 31, 2023 are as
follows (in thousands):
Year ending December 31,
Minimum
Royalty
Commitments
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$50
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100
Total minimum royalty commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$350
F-23
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
The Company incurred royalty expense of $2.1 million for the year ended December 31, 2023.
Purchase Commitments
Open purchase commitments are for the purchase of goods and services related to, but not limited to,
research and development and professional services under non-cancellable contracts. These amounts
were not recorded as liabilities on the consolidated balance sheet as of December 31, 2023 as the
Company had not yet received the related goods or services. As of December 31, 2023, the Company
had estimated open purchase commitments for goods and services of $880,000 based on management’s
estimate of patient participation in clinical trials through the next four years.
Contingencies
From time to time, the Company may identify certain contingent liabilities that arise in the ordinary course
of its business activities. The Company accrues a liability for such matters when it is probable that a
future loss will be incurred and such loss can be reasonably estimated. As of December 31, 2023, no
accruals were required for such contingencies.
Indemnifications
The Company provides general indemnifications to management and the members of the Company’s
board of directors (the “Board of Directors”) when they act, in good faith, in the best interest of the
Company. The Company is unable to develop an estimate of the maximum potential amount of future
payments that could potentially result from any hypothetical future claim, but expects the risk of having to
make any payments under these general business indemnifications to be remote. The Company also
maintains insurance coverage that would generally enable the Company to recover a portion of any future
amounts paid.
8. Term Loan
Initial Term Loan
On January 19, 2021, the Company entered into a Credit Agreement with Hayfin Services, LLP (“Hayfin”)
for total borrowings of up to $70.0 million (the “Initial Term Loan”). The Company received net cash
proceeds of $68.1 million, after deducting $1.3 million of lender fees as a discount to the debt, and
$629,000 of debt issuance costs. The Company also issued a warrant to the lender to purchase a total of
315,810 shares of its common stock. The fair value of the warrant was $4.3 million as of the issuance
date, which was also accounted for as a debt discount. Refer to Note 12 for additional information.
New Money Term Loan
On March 17, 2022, the Company entered into Amendment No. 1 to the Credit Agreement with Hayfin for
an additional $50.0 million term loan (the “New Money Term Loan”), collectively with the Initial Term Loan,
the “Term Loan”) which was considered a modification of the original Credit Agreement for accounting
purposes. Additionally, certain terms of the Initial Term Loan were amended. The Company received net
cash proceeds of $49.2 million, after deducting $820,000 of lender fees as a discount to the debt. Since
the issuance of the New Money Term Loan was accounted for as a debt modification, debt issuance costs
were expensed as incurred. The Company also issued an additional warrant to the lender to purchase a
total of 225,579 shares of common stock. The fair value of the warrant was $3.5 million as of the issuance
date, which was also accounted for as a debt discount. Refer to Note 12 for additional information.
Other Amendments
The Company entered into Amendments No. 2 and No. 3 to the Credit Agreement in September 2022 and
December 2022, which enabled the Company to issue Subordinated Convertible Promissory Notes and to
increase the aggregate principal of the Subordinated Convertible Promissory Notes that can be issued to
F-24
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
$42.0 million (see Note 9). The two amendments were accounted for as debt modifications. In connection
with these amendments, the Company paid $51,000 in lender fees, which were capitalized as an
additional debt discount to the Term Loans.
In the first quarter of 2023, the Company entered into three amendments to the Credit Agreement with
Hayfin. In March 2023, the Company entered into Amendment No. 4 and Waiver to Credit Agreement with
Hayfin to temporarily waive various covenant requirements that had not been met through the waiver date
and to enable the Company to amend certain terms of the Credit Agreement. Under Amendment No. 4, as
part of the Series F redeemable convertible preferred stock financing closing (see Note 10), the Company
issued to Hayfin 4,269,801 warrants for shares of common stock for no consideration and committed to
sell 2,689,375 and 3,508,156 shares of Series F-1 and Series F redeemable convertible preferred stock,
respectively. These shares were issued to Hayfin Heartflow UK Limited upon Convertible Note conversion
and upon the initial closing of Series F redeemable convertible preferred stock with the same terms as all
other investors. In March 2023, the Company entered into Amendment No. 5 to the Credit Agreement with
Hayfin, which required the Company’s securities at JPMorgan Chase Bank to become a “Controlled
Account”, as defined by the Credit Agreement. Also in March 2023, the Company entered into
Amendment No. 6 to the Credit Agreement with Hayfin, which permitted the reacquisition of 300,000
shares of common stock from an employee/founder of the Company. In connection with these
amendments, the Company paid $94,000 in lender fees, which were recorded as a debt discount.
Amendments No. 4 through No. 6 were accounted for as debt modifications for accounting purposes.
Prepayment terms
Both the Initial Term Loan and the New Money Term Loan are due January 19, 2026. The Company can
prepay the outstanding principal of the Term Loan, in whole or in part, upon five business days of written
notice. In addition, immediately upon the consummation of an initial public offering (“IPO”) or acquisition
by Special Purpose Acquisition Company (“SPAC”) as defined in the Credit Agreement, the Company
shall repay the Term Loan in an amount equal to the lesser of (i) the net cash proceeds of such IPO or
SPAC in excess of $150.0 million and (ii) $35.0 million. Furthermore, the Company shall repay the Term
Loans upon certain disposition, certain Event of Loss, incurrence of certain debt securities, Event of
Default, and Change in Control as defined in the amended Credit Agreement.
Any prepayment or repayment of the principal balance of the Term Loan are subject to an exit fee. The
Company is accreting the exit fee over the loan term using the effective interest method. The exit fee of
the Initial Term Loan shall equal (i) on or prior to January 19, 2023, 1% of the prepaid or repaid principal,
(ii) at any time after January 19, 2023 but prior to December 31, 2023, 2% of the prepaid or repaid
principal and (iii) at any time on or after December 31, 2023, 3% of the prepaid or repaid principal. The
exit fee of the New Money Term Loan shall equal (i) at any time prior to December 31, 2023, 2% of the
prepaid or repaid principal and (ii) at any time on or after December 31, 2023, 3% of the prepaid or repaid
principal.
Any prepayment (except for in connection with certain disposition, certain Event of Loss, and the
consummation of an IPO or SPAC) that incurs prior to March 17, 2025 is subject to an early prepayment
fee equal to (i) at any time on or prior to March 17, 2024, an amount equal to 5% of the prepaid principal;
(ii) at any time after March 17, 2024 and on or prior to March 17, 2025, an amount equal to 3% of the
prepaid principal; and (iii) at any time after March 17, 2025, none. In addition, the early prepayment fee
such that no early prepayment fee should be paid in respect to any voluntary prepayment or repayment in
a single principal amount equal to or greater than $20.0 million generated from certain permitted sources.
Interest
The Initial Term Loan has an interest rate equal to the sum of the applicable margin of 6.0% plus the
higher of LIBOR and 1.0%, and the New Money Term Loan has an interest rate equal to the sum of the
applicable margin of 15.25% plus the higher of the adjusted term for such interest period and 1.0%.
Interest payments are due quarterly.
F-25
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Regarding the Initial Term Loan, the Company may elect to pay the quarterly interest in-kind through the
last interest period ending before the second anniversary of the original Credit Agreement. However, if the
Company elects to pay interest in-kind after the first anniversary, the applicable margin increases by
1.0%.
With respect to the New Money Term Loan, the Company may elect to pay PIK Interest, provided that, (i)
prior to December 31, 2023, a minimum of 3% per annum shall be payable in cash and (ii) on or after
December 31, 2023, a minimum of 6% per annum shall be payable in cash.
During the year ended December 31, 2023, $144,000 of interest was paid-in-kind (“PIK”) and was added
to the outstanding principal balance of the Term Loan.
Debt Issuance Costs and Debt Discount
Debt issuance costs include third-party costs incurred in connection with the original Credit Agreement.
Debt discount includes fees paid to the lender, warrants issued to the lender and the embedded derivative
liability as described below.
Certain prepayment features of the Term Loan, default put option and default interest adjustment features
are embedded derivatives requiring bifurcation and separate accounting for at fair value as a single
compound derivative. The fair value of the derivative liability was $2.1 million, as of the issuance date in
January 2021, and is remeasured to fair value at each reporting period. Refer to Note 13 for additional
information.
The debt issuance costs and debt discount are classified as an offset to the Term Loan on the
consolidated balance sheet, and is accreted over the loan term using the effective interest method.
As of December 31, 2023, the effective interest rate of the Initial Term Loan and the New Money Term
Loan was 16.1% and 26.8%, respectively.
Collateral and Covenants
The Term Loan is collateralized by substantially all of the Company’s assets. The Term Loan Agreement
contains customary representations and warranties, covenants, events of default and termination
provisions. The Company is subject to financial covenants which requires the Company to maintain a
$25.0 million minimum liquidity balance in cash and cash equivalents at all times and minimum net sales
for twelve consecutive month periods ending on the last day of a fiscal quarter, which is not tested as long
as the Company maintains minimum liquidity of at least $60.0 million and there has been no decline in net
sales for two-consecutive fiscal quarters at the end of such fiscal quarter. The minimum twelve months
trailing net sales covenant increases each quarter and is $70.0 million for the quarter ended March 31,
2024 up to a minimum net sales amount of $110.0 million for the quarter ended June 30, 2025 and each
quarter thereafter. Other non-financial covenants are outlined in the agreement. As of December 31,
2022, the Company was not in compliance with several non-financial covenants and therefore, on March
2, 2023, the Company entered into Amendment No. 4 and Waiver to Credit Agreement and Guaranty with
Hayfin, which temporarily waived the specific non-compliance of the covenant violations existing as of
December 31, 2022. As of December 31, 2023, the Company was in compliance with the Term Loan
covenants.
F-26
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Debt Components
As of December 31, 2023, the components of the Term Loan are as follows (in thousands):
December 31,
2023
Principal value of Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$120,000
PIK interest added to principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,118
Accreted exit fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,819
Debt discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,664)
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(265)
Total Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$134,008
The Term Loan was classified as long-term on the consolidated balance sheet as of December 31, 2023.
As of December 31, 2023, the estimated fair value of the Term Loan was $132.4 million.
9. Convertible Notes
During the period from September 2022 through December 2022, the Company issued convertible
promissory notes to certain investors (the “Note Investors”), with an aggregate principal amount of $40.0
million (the “Convertible Notes”). The Convertible Notes bore interest at a rate of 8% per annum,
compounded monthly. The aggregate principal amount and interest accrued on the Convertible Notes was
due September 30, 2026, and could not be prepaid by the Company without the consent of a majority of
the Note Investors.
The principal and accrued interest on the Convertible Notes was subject to automatic conversion upon a
Qualified Financing (defined as a transaction or series of transactions in which the Company sells shares
of its capital stock for cash proceeds of at least $100 million, including the Convertible Notes) at a
conversion price equal to 67% of the price per share paid by the investors purchasing such capital stock
in such Qualified Financing. Upon a Non-Qualified Financing, whereby the cash proceeds are less than
$100 million, upon the written consent of a majority of the Note Investors, the Convertible Notes shall
convert on the same terms as a Qualified Financing.
The Convertible Notes were also subject to repayment upon a Change of Control. A Change of Control is
defined as a sale of all or substantially all of the Company’s assets, a merger or business combination
with a change in more than 50% of the voting interest, or after a person or group, directly or indirectly,
owns more than 35% of the capital stock of the Company after the Company becomes publicly traded.
In March 2023, the Company completed a Qualified Financing and all of the Convertible Notes, including
principal and interest, were converted into 21,465,064 shares of Series F-1 redeemable convertible
preferred stock and the Company derecognized the Convertible Notes from its consolidated balance
sheet. The Company remeasured the fair value of the Convertible Notes immediately before the
conversion and recognized a loss of $5.1 million from the change in fair value within the consolidated
statement of operations and comprehensive loss for the year ended December 31, 2023.
10. Redeemable Convertible Preferred Stock
In March 2023, the Company issued 61,344,029 shares of Series F redeemable convertible preferred
stock to existing and new investors at a price per share of $2.8505 for an aggregate cash consideration of
$174.9 million, net of $5.9 million issuance costs. Contemporaneously with the issuance of the Series F
redeemable convertible preferred stock, the Company converted all of the outstanding Convertible Notes
issued by the Company from September 30, 2022 to December 16, 2022, in the aggregate principal
amount of $40.0 million plus accrued, unpaid interest of $994,000 into 21,465,064 shares of Series F-1
F-27
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
redeemable convertible preferred stock at a price per share of $1.9098, which represents a discount of
33% from the cash purchase price per share. Additionally, in connection with the Series F redeemable
convertible preferred stock financing, the cumulative dividends payable to holders of Series C redeemable
convertible preferred stock upon a liquidation event were capped from $6.66 to $8.25 per share
depending on the time of issuance, with an aggregate total of $88.5 million.
The issuance of the Series F redeemable convertible preferred stock triggered the anti-dilution protection
provision for Series B-1, Series B-2, Series C, Series D and Series E stockholders. As a result, the
Company recorded a $26.8 million deemed dividend in the amount equal to the change in fair value of the
abovementioned series of convertible preferred stock before and after the anti-dilution adjustment. The
fair value of the Series B-1, Series B-2, Series C, Series D and Series E redeemable convertible preferred
stock was determined using a “with-and-without” model under which the equity value of the Company was
allocated using a hybrid method, whereby the enterprise value in the IPO scenario is allocated to each
class of shares using the fully-diluted shares outstanding and whereby the enterprise value in the non-
IPO scenario is allocated using an option-pricing model to reflect the full distribution of possible non-IPO
outcomes, both before and after the anti-dilution adjustment. The following table summarizes information
about the significant Level 3 unobservable inputs used to estimate the fair value of the Company’s
preferred stock at the modification date:
March 2, 2023
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.8%
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88.0%
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.0
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.0%
Redeemable convertible preferred stock consists of the following (in thousands, except share amounts):
December 31, 2023
Series
Number of
Shares
Authorized
Number of
Shares
Issued
and
Outstanding
Carrying
Value
Liquidation
Value
Series A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,082,965
4,082,965
$2,041
$2,041
Series B-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,954,846
1,954,846
6,940
6,940
Series B-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,848,263
2,848,263
10,111
10,111
Series C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,343,434
11,343,434
104,378
193,167
Series D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,151,873
7,151,873
110,756
110,854
Series E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,040,980
12,040,980
304,197
305,018
Series F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61,344,029
61,344,029
168,957
262,295
Series F-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21,465,064
21,465,064
61,186
61,491
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
122,231,454
122,231,454
$768,566
$951,917
The significant rights and obligations of the Company’s redeemable convertible preferred stock are as
follows:
Dividends
The holders of Series A, Series B-1, Series B-2, Series C, Series D, Series E, Series F and Series F-1
redeemable convertible preferred stock are entitled, on a pro rata, pari passu basis, when and if declared
by the Board of Directors, to non-cumulative dividends out of the Company's assets legally available
F-28
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
therefore at the rate of $0.030, $0.284, $0.284, $0.7384, $1.24, $2.026, $0.2281 and $0.1528 per share
per annum, respectively. No distributions will be made with respect to the common stock until all declared
but unpaid dividends on redeemable convertible preferred stock have been paid or set aside for payment
to the convertible preferred stockholders. Except with respect to the rights of the holders of Series C
redeemable convertible preferred stock upon a liquidation event, the right to receive dividends on shares
of redeemable convertible preferred stock are non-cumulative, and no right to such dividends accrues to
holders of redeemable convertible preferred stock by reason of the fact that dividends on such shares are
not declared or paid in any years. At December 31, 2023, no dividends had been declared or paid.
Dividends are payable to preferred stockholders in the order of: first, the Series F and Series F-1
redeemable convertible preferred stock, then the Series E redeemable convertible preferred stock, then
the Series D redeemable convertible preferred stock, then the Series C redeemable convertible preferred
stock, then the Series B-1 and B-2 redeemable convertible preferred stock, and then finally, the Series A
redeemable convertible preferred stock. After payment of the full amount of any dividends described
above, any additional dividends shall be distributed among all holders of common stock and all holders of
redeemable convertible preferred stock on an as-converted basis.
The holders of Series C redeemable convertible preferred stock are the only preferred stockholders
entitled to cumulative dividends upon a liquidation event. In connection with the Series F redeemable
convertible preferred stock financing, the cumulative dividends payable to holders of Series C redeemable
convertible preferred stock upon a liquidation event were capped from $6.66 to $8.25 per share
depending on the time of issuance, with an aggregate total of $88.5 million, provided, however, that the
Company shall be under no obligation to pay such Series C preferred accruing dividends until a
liquidation event; provided further, that a holder of shares of Series C redeemable convertible preferred
stock shall automatically forfeit any then accrued but unpaid Series C redeemable convertible preferred
accruing dividends with respect to such shares upon conversion of such shares into shares of common
stock. As of December 31, 2023, the total accumulated, but not yet declared or paid, dividends of $88.5
million related to the Series C redeemable convertible preferred stock was not recorded in the
consolidated financial statements as an accrued dividend as such an event was not considered probable
to occur.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary,
the holders of Series F, Series F-1, Series E, Series D, Series C, Series B-1, Series B-2 and Series A
redeemable convertible preferred stock are entitled to liquidation preferences in the amount of $4.2758,
$2.8647, $25.3317, $15.50, $9.23, $3.55, $3.55, and $0.50 per share, respectively, for each outstanding
share plus all declared but unpaid dividends, if the shares are not converted to common stock.
Payment of liquidation rights to preferred stockholders are in the order of: first, the Series F and Series
F-1 redeemable convertible preferred stock, then the Series E redeemable convertible preferred stock,
then the Series D redeemable convertible preferred stock, then the Series C redeemable convertible
preferred stock, then the Series B-1 and B-2 redeemable convertible preferred stock, and then finally, the
Series A redeemable convertible preferred stock. The remaining assets, if any, shall be distributed to the
holders of common stock.
If upon the liquidation, dissolution or winding up of the Company, the assets of the Company legally
available for distribution to the holders of the Series F, Series F-1, Series E, Series D, Series C, Series
B-1, Series B-2 and Series A redeemable convertible preferred stock are insufficient to permit the
payment to such holders of the full liquidation preferences to which they are entitled, then the holders of
the Company’s common stock will receive nothing in respect of their equity holdings in the Company.
Upon such an event, the assets of the Company legally available for distribution shall satisfy the
respective liquidation preferences of the preferred stockholders with equal pro rata priority in the same
preferential order as described above.
F-29
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Conversion Rights
Each share of Series A, Series B-1, Series B-2, Series C, Series D, Series E, Series F and Series F-1
redeemable convertible preferred stock shall automatically be converted into fully-paid, nonassessable
shares of common stock at the then effective conversion rate per share (currently $0.50, $3.02, $3.02,
$5.48, $8.21, $12.48, $2.85 and $1.91, respectively) for such share prior to the closing of a firm
commitment underwritten IPO pursuant to an effective registration statement filed under the Securities Act
of 1933, as amended, or SPAC transaction covering the offer and sale of the Company’s common stock,
provided that (i) the aggregate gross proceeds to the Company are not less than $100,000,000 and
(ii) the per share price of the shares sold in the public offering shall be no less than $4.9884 per share or
$5.7010 per share (subject to adjustment from time to time for Recapitalizations and as otherwise set
forth elsewhere herein) so long as a certain investor holds at least 11,693,855 shares of Series F
redeemable convertible preferred stock (a ‘‘Qualified Public Offering’’) shall automatically be converted
into fully-paid, nonassessable shares of common stock at the then effective conversion rate for such
share upon the written consent of the holders of a majority of the Series F and F-1 redeemable
convertible preferred stock (voting as a single class and on an as-converted basis). The conversion rates
per share for previously issued preferred stock were amended as a result of the Series F redeemable
convertible preferred stock financing from the original conversion rates per share for Series B-1, Series
B-2, Series C, Series D and Series E redeemable convertible preferred stock ($3.55, $3.55, $9.23, $15.50
and 25.3317, respectively). Upon a Qualified Public Offering, shares of each series of the outstanding
redeemable convertible preferred stock are convertible into the number of shares of common stock
determined by dividing the original issue price for the relevant series of redeemable convertible preferred
stock by the conversion price for such series. As of December 31, 2023, shares of each series of the
outstanding redeemable convertible preferred stock are convertible into shares of common stock on a 1:1
basis.
Voting Rights
The holder of each share of Series A, Series B-1, Series B-2, Series C, Series D, Series E, Series F and
Series F-1 redeemable convertible preferred stock is entitled to one vote for each share of common stock
into which it could be converted.
11. Common Stock
Under the Company’s Amended and Restated Certificate of Incorporation, the Company is authorized to
issue 210,000,000 shares of $0.001 par value common stock.
Common stock reserved for issuance, on an as-converted basis, consisted of the following as of
December 31, 2023:
Year Ended
December 31,
2023
Redeemable convertible preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
122,231,454
Options to purchase common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,146,541
Common stock warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,811,190
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
151,189,185
12. Common Stock Warrant Liability
On January 19, 2021, in connection with entering into the Credit Agreement, the Company issued Hayfin 
a warrant to purchase 315,810 shares of common stock at an exercise price of $0.01 per share. On
March 17, 2022, upon amendment to the Credit Agreement, the Company issued Hayfin a warrant to
F-30
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
purchase 225,579 shares of common stock at an exercise price of $0.01 per share. On March 3, 2023,
upon Amendment No. 4 to the Credit Agreement and as a result of antidilution adjustment provisions in
connection with the Series F redeemable convertible preferred stock financing, the Company issued
Hayfin a warrant to purchase 4,269,801 shares of common stock at an exercise price of $0.01 per share
(collectively, the “Warrants”). As of December 31, 2023, all warrants remained outstanding.
These Warrants have a net exercise provision under which their holders may, in lieu of payment of the
exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market
value of the Company’s stock at the time of exercise of the Warrants after deduction of the aggregate
exercise price. The Warrants contain provisions for adjustment of the exercise price and number of
shares issuable upon the exercise of the Warrants, if upon the issuance of next round securities, the
Warrants are then currently exercisable and the next round price is less than $25.3317 per share (as
adjusted for any stock splits, recapitalizations, and the like). In such case, the number of exercise shares
shall be increased to equal the quotient obtained by dividing (a) $8.0 million by (b) the next round price.
The Warrants also have customary antidilution protection provisions.
The aggregate fair value of the Warrants issued in connection with the initial Credit Agreement and the
amended Credit Agreement was $4.3 million and $3.5 million, respectively, at issuance and was
recognized as a debt discount and recorded as a warrant liability.
The warrant liabilities were remeasured to fair value as of December 31, 2023, resulting in a loss of
$2.3 million within the consolidated statement of operations and comprehensive loss.
The fair value of the common stock warrant liability was determined using the Black-Scholes option
pricing model based on the following weighted average assumptions:
Year Ended
December 31,
2023
Stock price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.93
Exercise price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.01
Contractual term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.6
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84.5%
Weighted-average risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.88%
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
13. Derivative Liability
The Term Loan contains certain prepayment features, default put option and default interest adjustment
features that were determined to be embedded derivatives requiring bifurcation and separate accounting
as a single compound derivative, as discussed in Note 8. The fair value of the derivative liability was
recorded at the issuance date as a debt discount and reduction to the carrying value of long-term debt on
the consolidated balance sheet. The derivative liability is remeasured to fair value at each reporting period
and the related changes in fair value are recorded on the consolidated statement of operations and
comprehensive loss. The Company will continue to adjust the derivative liability for changes in fair value
until the earlier of the consummation of a business combination, in connection with the sale of the
Company or repayment of the Term Loan.
Estimating fair values of the derivative liability requires the development of significant and subjective
estimates that may, and are likely to, change over the duration of the instrument with related changes in
internal and external market factors. Since the derivative financial instrument is initially and subsequently
carried at fair value, the Company’s income will reflect the volatility in these estimate and assumption
changes.
F-31
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
The derivative liability was remeasured to fair value as of December 31, 2023, resulting in a gain of $4.2
million within the consolidated statement of operations and comprehensive loss.
The fair value of the derivative liability was estimated using a scenario-based analysis comparing the
probability-weighted present value of the Term Loan payoff at maturity with and without the bifurcated
features. The Company used both the Black-Scholes-Merton and option pricing method to estimate the
fair value of the derivative liability because it believes these techniques are reflective of all significant
assumption types and ranges of assumption inputs that market participants would likely consider in
transactions involving compound embedded derivatives. The option pricing method was employed as part
of a back-solve analysis to the Company’s Series F Preferred round of financing. The Company’s
assumptions used in determining the fair value of the derivative liability as of December 31, 2023 is as
follows:
December 31,
2023
Weighted common stock value (minority, non-marketable) . . . . . . . . . . . . . . . . . . . . . . . . .
$0.93
Debt yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17.7%
Probability of business combination or IPO (with feature) . . . . . . . . . . . . . . . . . . . . . . . . . .
70.0%
Event date of business combination or IPO (with feature) . . . . . . . . . . . . . . . . . . . . . . . . . .
6/30/2025
Probability of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.0%
Event date of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9/30/2025
Probability to incur new debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.0%
Event date to incur new debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
n/a
Probability of change of control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.0%
Event date of change of control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6/30/2025
Event date (without feature) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1/19/2026
Common equity expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83.60%-85.20%
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.88%
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
Debt yield — Discount rate that reconciles the total fair value of the Warrants and Credit Agreement with
the transaction value. Debt yield reflects a change in the credit benchmark for a “CCC” rated obligation.
Expected volatility — The expected volatility is the class specific volatility, which is estimated using
comparable public company volatility for a similar expected term and indicated value of related stock
class.
Risk-free interest rate — The risk-free interest rate is interpolated from U.S. Government Constant
Maturity Treasury rates for a period corresponding to the expected date of financing or maturity.
Expected dividend yield— The Company has never paid dividends and has no plans to pay dividends.
14. Equity Incentive Plan
In 2009, the Company adopted its 2009 Equity Incentive Plan (the “Plan”) which provides for the grant of
stock options to the Company’s employees, members of the Board of Directors and consultants. Options
granted under the Plan may be either incentive stock options (“ISOs”) or nonqualified stock options
(“NSOs”). ISOs may be granted only to employees. NSOs, Stock Appreciation Rights, Restricted Stock,
and Restricted Stock Units may be granted to employees, members of the Board of Directors and
consultants. As of December 31, 2023, the Company reserved 29,741,957 shares for issuance under the
Plan.
F-32
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Options under the Plan have a term of ten years from the grant date. The option exercise price will be
determined by the Board of Directors, but will be no less than 100% of the fair market value per share on
the date of grant. In addition, in the case of an ISO granted to an employee who owns stock representing
more than 10% of the voting power of all classes of stock of the Company, the per share exercise price
will be no less than 110% of the fair market value per share on the date of grant. Through December 31,
2023, options granted generally vest over (i) four years with 25% vesting on the first anniversary of the
issuance date and 1/48th per month thereafter or (ii) vesting monthly in equal installments over four
years.
Stock option activity under the Company’s 2009 Equity Incentive Plan is set forth below (in thousands,
except share and per share amounts):
Shares
Available for
Grant
Number of
Options
Awards
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic
Value
Balance at December 31, 2022 . .
4,312,292
9,420,310
$9.77
6.17
$3,561
Authorized . . . . . . . . . . . . . . . . . . . .
16,018,730
—
—
Options granted . . . . . . . . . . . . . . .
(16,881,199)
16,881,199
$0.76
Options exercised . . . . . . . . . . . . . .
—
(291,756)
$2.02
Options forfeited . . . . . . . . . . . . . . .
1,863,212
(1,863,212)
$6.11
Balance at December 31, 2023 . .
5,313,035
24,146,541
$1.41
8.19
$–
Vested and exercisable,
December 31, 2023 . . . . . . . . . .
7,463,990
$2.39
5.59
$–
Vested and expected to vest,
December 31, 2023 . . . . . . . . . .
24,146,541
$1.41
8.19
$–
The weighted-average grant date fair value of options granted during the year ended December 31, 2023 
was $0.43 per share. The total grant date fair value of options vested was $3.2 million during the year
ended December 31, 2023.
The following table summarizes information about stock options outstanding as of December 31, 2023:
Range of
Exercise Prices
Number
Outstanding
as of
December 31,
2023
Weighted-
Average
Remaining
Contractual
Life (Years)
Weighted-
Average
Exercise
Price
Number
Exercisable
as of
December 31,
2023
Weighted-
Average
Exercise
Price
$0.76 - $0.76 . . . . . . . . . . . .
16,568,771
9.49
$0.76
1,618,070
$0.76
$2.06 - $2.06 . . . . . . . . . . . .
766,695
0.75
$2.06
766,695
$2.06
$2.85 - $2.85 . . . . . . . . . . . .
6,632,075
5.93
$2.85
4,900,225
$2.85
$4.20 - $4.20 . . . . . . . . . . . .
15,000
1.60
$4.20
15,000
$4.20
$4.24 - $4.24 . . . . . . . . . . . .
104,000
2.41
$4.24
104,000
$4.24
$9.58 - $9.58 . . . . . . . . . . . .
60,000
4.86
$9.58
60,000
$9.58
$0.76 - $9.58 . . . . . . . . . . . .
24,146,541
8.19
$1.41
7,463,990
$2.39
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
stock options and the fair value of the Company’s common stock for stock options that were in-the-money
at each reporting period. The aggregate intrinsic value of stock options exercised for the year ended
December 31, 2023 was $4,000.
F-33
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Stock-Based Compensation
The Company estimated the fair value of stock options using the Black-Scholes option-pricing model
based on the following weighted-average assumptions for the year ended December 31, 2023:
Year Ended
December 31,
2023
Expected life (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.0
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54.7%-55.7%
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2%
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
–%
The significant assumptions used in these calculations are summarized as follows:
Fair value of common stock. Because there has been no public market for the Company’s common stock,
the fair value of common stock shares underlying stock options has historically been determined by the
Board of Directors at the time of option grant by considering independent valuation performed by third-
party valuation firm as well as a number of objective and subjective factors, including valuation of
comparable companies, sales of convertible preferred stock to unrelated third parties, operating and
financial performance, the lack of liquidity of capital stock and general and industry specific economic
outlook, among other factors. The fair value of common stock was determined in accordance with
applicable elements of the American Institute of Certified Public Accountants Practice Aid, Valuation of
Privately-Held-Company Equity Securities Issued as Compensation. In 2023, the Company considered
the stay private scenario and IPO exit scenario. In the stay private scenario, three market methodologies
were employed including (i) a market indexing valuation analysis based on the Series F Preferred
financing round, (ii) a guideline public company analysis based on the Company’s historical and forecast
operating metrics, and (iii) a guideline transaction analysis based on the Company’s historical and
forecast operating metrics. In the IPO exit scenario, the total equity value was estimated based on the
expected timing, offering size and pre-money valuation. A hybrid method was used to allocate equity
value to common stock under the stay private and IPO scenarios.
Expected term. The expected term of stock options represents the weighted-average period the stock
options are expected to remain outstanding. The Company does not have sufficient historical exercise
and post-vesting termination activity to provide accurate data for estimating the expected term of options
and has opted to use the “simplified method,” whereby the expected term equals the arithmetic average
of the vesting term and the original contractual term of the option.
Expected Volatility. As the Company is not publicly traded, the expected volatility for the Company’s stock
options was determined by using an average of historical volatilities of selected industry peers deemed to
be comparable to the Company’s business corresponding to the expected term of the awards.
Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the
time of grant for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of
the awards.
Expected dividend yield. The expected dividend rate is zero as the Company currently has no history or
expectation of declaring dividends on its common stock.
The Company also issues stock options with vesting based upon completion of performance goals. The
fair value for these performance-based awards is recognized over the period during which the goals are
to be achieved. Stock-based compensation expense recognized at fair value includes the impact of
estimated probability that the goals would be achieved, which is assessed prior to the requisite service
period for the specific goals.
F-34
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Total stock-based compensation expense is as follows (in thousands):
Year Ended
December 31,
2023
Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$440
Research and development(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,339
Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,722
Total stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$12,501
(1)Includes stock-based compensation expense of $627,000 related to a repurchase of common shares from one employee, as described
below.
As of December 31, 2023, total unrecognized stock-based compensation costs related to unvested stock
options was $20.7 million, which is expected to be recognized over a remaining weighted-average period
of 3.22 years.
In January 2023, the fair value of the Company’s common stock declined from $14.27 to $0.76 per share,
prompting the Company to reduce the exercise price of certain stock options to $0.76, effective July 10,
2023. No other changes to the stock options’ terms were made. The Company calculated the incremental
fair value by calculating the fair value of the award immediately before and immediately after the
modification. The fair value of the award immediately before the repricing is based on assumptions
(including volatility, expected term and risk free interest rate) that reflect the facts and circumstances on
the modification date and therefore, differ from the fair value calculated on the grant date. The average
additional compensation per award from the modification was $0.09 and the aggregate incremental
expense was $649,000, of which $340,000 was immediately recognized on the modification date and the
remaining amount is recognized over the options’ remaining requisite service period.
In March 2023, the Board of Directors approved a repurchase of 300,000 common shares from an
employee of the Company at a purchase price of $2.8505 per share for total consideration of $855,000.
The fair value of the repurchased common shares was $228,000, and the difference between the
repurchase price and fair value of the common shares of $627,000 was recorded as stock-based
compensation expense within research and development expense in the consolidated statement of
operations and comprehensive loss.
15. Employee Retirement Plan
The Company has a qualified retirement plan under section 401(k) of the Internal Revenue Code (“IRC”)
under which participants may contribute up to 100% of their eligible compensation, subject to maximum
deferral limits specified by the IRC. The Company may make matching contributions of up to 4.0% of an
employee’s eligible compensation, subject to conditions specified by the IRC. During the year ended
December 31, 2023, the Company’s matching contributions totaled $1.4 million.
F-35
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
16. Net Loss Per Share Attributable to Common Stockholders
The following table sets forth the computation of basic and diluted net loss per share attributable to
common stockholders (in thousands, except share and per share amounts):
Year Ended
December 31,
2023
Numerator:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(95,655)
Cumulative dividends on Series C redeemable convertible preferred stock . . . . . . . . . . . . . .
(1,239)
Deemed dividend upon down round of redeemable convertible preferred stock . . . . . . . . . .
(26,794)
Net loss attributable to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(123,688)
Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted . . . . . . . .
14,265,293
Net loss per share attributable to common stockholders, basic and diluted . . . . . . . . . . . . . .
$(8.67)
The following outstanding shares of potentially dilutive securities were excluded from the computation of
diluted net loss per share attributable to common stockholders for the period presented because including
them would have been antidilutive:
December 31,
2023
Redeemable convertible preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
122,231,454
Outstanding options to purchase common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,146,541
Common stock warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,811,190
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
151,189,185
17. Income Taxes
The components of net loss before income taxes are as follows (in thousands):
December 31,
2023
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(95,634)
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
526
Net loss before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(95,108)
For the year ended December 31, 2023, the Company did not record any federal or state provision for
income tax expense. For the year ended December 31, 2023, the Company recorded an income tax
provision of $547,000 from international jurisdictions.
The following table presents a reconciliation of the statutory federal rate and the Company’s effective tax
rate for the year end December 31, 2023 (in thousands):
F-36
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
Year Ended
December 31,
2023
Tax at federal statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(20,003)
State taxes, net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,032)
Change in valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20,418
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,722
Fair value remeasurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,075
R&D credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(391)
Foreign rate differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(50)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(192)
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(547)
Significant components of the net deferred tax assets for federal and state income taxes are as follows (in
thousands):
Year Ended
December 31,
2023
Deferred tax assets:
Net operating loss carry forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$142,089
Research and development credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,586
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,316
Accruals and reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,044
Fixed asset and intangible asset basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,250
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,791
Section 174 research and development capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12,432
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
184,508
Deferred tax liabilities:
Capitalized implementation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(756)
Operating lease right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5,346)
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6,102)
Deferred tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
178,406
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(178,406)
As the Company has incurred annual net operating losses since inception, a full valuation allowance is
provided against U.S. net deferred tax assets due to uncertainties regarding the Company’s ability to
realize these assets. The net valuation allowance increased by $20.4 million during the year ended
December 31, 2023.
As of December 31, 2023, the Company had net operating loss carryforwards of approximately $517.2
million and $139.7 million available to reduce future taxable income, if any, for federal and state income
tax purposes, respectively. Of these amounts, $330.2 million of federal net operating losses are carried
forward indefinitely, and $187.0 million are limited to 80% of future taxable income. The remaining federal
net operating losses will expire starting in 2030. Utilization of net operating loss carryforwards may be
subject to an annual limitation in certain situations where changes occur in the stock ownership of a
F-37
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
company. In the event the Company has undergone or undergoes a change in ownership, utilization of
the carryforwards could be limited.
The Company also had federal and California research and development credit carryforwards of
approximately $8.6 million and $6.7 million, respectively, as of December 31, 2023. The federal credits
will expire starting in 2030, if not utilized. The California credits have no expiration date.
Deferred income taxes have not been provided for undistributed earnings of the Company’s consolidated
foreign subsidiaries because of the Company’s intent to reinvest such earnings indefinitely in active
foreign operations. The Company believes that future domestic cash generation will be sufficient to meet
future domestic cash needs. The Company has not recorded a deferred tax liability on the undistributed
earnings of non-U.S. subsidiaries. The foreign withholding taxes would not have a material impact on the
Company’s financial position and results of operation. As of December 31, 2023, the Company had $0.6
million in unremitted earnings that were indefinitely reinvested related to its consolidated foreign
subsidiaries.
The Company’s gross unrecognized tax benefits as of December 31, 2023 is $8.2 million, all of which
would affect the Company’s income tax expense if recognized before consideration of the Company’s
valuation allowance. The Company does not expect its unrecognized tax benefits to change significantly
over the next 12 months. The Company recognizes interest and penalties accrued on any unrecognized
tax benefits as a component of provision for income taxes.
The following table summarizes the activity related to unrecognized tax benefits as follows (in thousands):
Unrecognized
Tax Benefits
Balance at January 1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$7,371
Increase related to current year tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
817
Balance at December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$8,188
The Company files income tax returns in the U.S. federal jurisdiction, various state and certain foreign
jurisdictions. In the normal course of business, the Company is subject to examination by their respective
taxing authorities. The Company has been selected for audit by the Internal Revenue Service for its 2022
tax year. The examination is at its early stages. However, no tax adjustments are anticipated. The statute
of limitations remains effectively open for the U.S. federal and state tax jurisdictions for all tax years from
2011 through 2023. Tax years outside the normal statute of limitations remain open to examination by tax
authorities due to tax attributes generated in earlier years which have been carried forward and may be
examined and adjusted in subsequent years when utilized.
18. Subsequent Events
The Company has reviewed and evaluated subsequent events as of December 31, 2023 through
February 5, 2025, the date that the consolidated financial statements were available to be issued.
2024 Credit Agreement
On June 14, 2024, the Company entered into a Credit Agreement and Guaranty (the “2024 Credit
Agreement”) with Hayfin for a $138.1 million term loan (the “2024 Term Loan”) to refinance its outstanding
loan obligations under the 2021 Credit Agreement, as amended. In addition, in connection with the 2024
Term Loan, the Company entered into several other adjoining agreements with Hayfin. The 2024 Term
Loan matures on June 14, 2028.
The 2024 Term Loan bears interest at a floating per annum rate in an amount equal to the sum of (i) 7.0%
(or 6.0% if the alternative base rate (“ABR”) is in effect) plus (ii) the greater of (x) the forward-looking term
rate based on SOFR for a respective tenor (or the alternative base rate, if applicable), and (y) 2.0%. The
F-38
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
ABR equals to the sum of (i) 6.0% plus (ii) the greater of (1) the Wall Street Journal Prime Rate, plus
0.5%, (2) the Federal Reserve Bank of New York rate plus 0.5% or (3) CBA Term SOFR for one month
tenor plus 1.0%. The Company has the option to pay interest in-kind at the rate equal to the cash interest
rate plus 1.0%. The Company also has the option to prepay the 2024 Term Loan subject to a prepayment
fee of 1.5% for prepayments after the second anniversary but on or prior to the third anniversary of the
2024 Term Loan and a prepayment fee of 3% for prepayments thereafter. The Company must repay the
loan in full immediately upon the occurrence of a change in control. In addition, immediately upon the
consummation of an IPO or SPAC, as defined in the terms of the 2024 Credit Agreement, the Company
shall repay the 2024 Term Loan in an amount equal to the lesser of (i) the net cash proceeds of such IPO
or SPAC in excess of $150.0 million and (ii) $35.0 million.
The 2024 Credit Agreement contains certain customary representations and warranties, events of default
and affirmative and negative covenants, including, among others, covenants that limit or restrict the
Company’s (and its subsidiaries) ability to incur additional indebtedness, grant liens, merge or
consolidate, make acquisitions, pay dividends or other distributions or repurchase equity, make
investments, dispose of assets and enter into certain transactions with affiliates, in each case subject to
certain exceptions. There were no changes to the financial covenant requirements as described earlier in
Note 8. Events of Default on the 2024 Term Loan include, among others, non-payment of principal,
interest or fees, violation of covenants, inaccuracy of representations and warranties, bankruptcy and
insolvency events, material judgments, cross-defaults to material contracts and events constituting a
change of control. Upon the occurrence of an event of default, the interest rate applicable to the 2024
Term Loan shall increase by 3.0% per annum and the outstanding principal balance, along with any
accrued interest, shall become immediately due and payable.
On June 14, 2024, concurrently upon entering the 2024 Term Loan, the Company signed a fee letter
agreement with Hayfin under which the Company agreed to pay $9.2 million in fees to Hayfin, which
consists of the exit fee and the early prepayment fee due under the 2021 Credit Agreement, as amended,
in the amount of $8.3 million payable in sixteen equal quarterly installments of approximately $518,000
through March 31, 2028, agent fees of $150,000, due in annual installments of $30,000 through March
31, 2028 and an upfront fee of $721,000. The Company paid the $721,000 upfront fee and $30,000 agent
fee upon the closing of the 2024 Term Loan. The exit fee and early prepayment fee must be repaid in full
immediately upon the occurrence of a financing event, including, but not limited to, any IPO, SPAC, or
issuance of convertible notes or equity.
The 2024 Credit Agreement was accounted for as a debt modification for accounting purposes.
2024 Facility Sublease
In October 2024, the Company entered into an agreement to sublease approximately 4,000 rentable
square feet of office space in Santa Rosa, California for 29 months commencing on November 1, 2024. In
connection with this sublease, the Company paid a security deposit of $8,000. Monthly base rent is
approximately $7,000 during the sublease term.
2025 Convertible Notes
In January 2025, the Company issued convertible promissory notes to certain existing investors and
certain employees (the “Requisite Holders”) in the amount of up to $75.0 million (the “2025 Convertible
Notes”). The 2025 Convertible Notes are due and payable in full 48 months from the issue date. Upon
completion of an IPO transaction, the 2025 Convertible Notes shall automatically convert into shares of
the Company’s common stock at the IPO price per share at the lower of a 20% discount and a valuation
cap of $2.0 billion on a pre-money basis. In the event the Company completes a sale of shares of
preferred stock, the Requisite Holders may elect to convert the outstanding 2025 Convertible Notes into
shares of such series of preferred stock at the same terms. Further, upon a change of control transaction,
the Requisite Holders may elect to convert the outstanding 2025 Convertible Notes into shares of the
Company’s common stock at the lower of a 20% discount to the implied price per share of common stock
F-39
HeartFlow Holding, Inc.
Notes to Consolidated Financial Statements
in the change of control transaction and a valuation cap of $2.0 billion on a pre-money basis, or receive
payment of all principal and any accrued but unpaid PIK interest. The 2025 Convertible Notes do not
accrue interest for one year following the date of issuance. Following the one-year anniversary of the
issue date and for the remainder of the term, the 2025 Convertible Notes interest will accrue on an annual
basis at the rate of 7.0% per annum (PIK Interest). All PIK Interest accrued and payable will be paid by
capitalizing such interest on an annual basis and adding it to the outstanding principal amount of the 2025
Convertible Notes.
2025 Amendment to 2024 Credit Agreement
On January 24, 2025, in connection with the issuance of the 2025 Convertible Notes, the Company
entered into Amendment No.1 to the 2024 Credit Agreement, in which its lender, Hayfin, converted $23.0
million of principal under the 2024 Term Loan to 2025 Convertible Notes under the same terms as the
other purchasers of the 2025 Convertible Notes. The principal balance outstanding under the 2024 Term
Loan, as amended, is $115.1 million. The minimum liquidity cash balance covenant under the 2024 Term
Loan was reduced to $15.0 million from the previous $25.0 million. In addition, the amount immediately
payable upon the consummation of an IPO or SPAC, as defined in the terms of the 2024 Credit
Agreement, was amended where repayment of the 2024 Term Loan will be at an amount equal to the
lesser of (i) the net cash proceeds of such IPO or SPAC in excess of $150.0 million and (ii) $50.0 million
(or $55.0 million if the underwriters exercise in full their option to purchase additional shares). The exit fee
and prepayment fee remaining under the original terms of the 2024 Term Loan, which were immediately
due and payable upon issuance of the 2025 Convertible Notes was also amended to be immediately due
and payable upon the next occurrence of a financing event as described above.
                         shares
heartflowlogo.jpg
Common stock
Preliminary prospectus
J.P. Morgan
Morgan Stanley
Piper Sandler
Stifel
Canaccord Genuity
                    , 2025
II-1
Part II
Information not required in prospectus
Item 13. Other expenses of issuance and distribution.
The following table sets forth the costs and expenses, other than the underwriting discounts and
commissions, payable by Heartflow, Inc. (the “Registrant”) in connection with the sale of the Registrant’s
common stock, par value $0.001 per share (the “Common Stock”), being registered. All amounts are
estimates except for the Securities and Exchange Commission (the “SEC”) registration fee, the Financial
Industry Regulatory Authority (“FINRA”) filing fee, and the                                 listing fee.
Amount to be
paid
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                  *
FINRA filing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
           listing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
Transfer agent’s fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
Printing and engraving expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
*
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$                  *
*To be filed by amendment.
Item 14. Indemnification of directors and officers. 
Section 145 of the General Corporation Law of the State of Delaware (the “Delaware General Corporation
Law”) provides that a corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by such person in connection with any threatened, pending, or
completed actions, suits, or proceedings in which such person is made a party by reason of such person
being or having been a director, officer, employee, or agent to the Registrant. The Delaware General
Corporation Law provides that Section 145 is not exclusive of other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise. Article            of the Registrant’s amended and restated certificate of incorporation
provides for indemnification by the Registrant of its directors, officers, and employees to the fullest extent
permitted by the Delaware General Corporation Law. The Registrant has entered into indemnification
agreements with each of its current directors, executive officers, and certain other officers to provide
these directors and officers additional contractual assurances regarding the scope of the indemnification
set forth in the Registrant’s amended and restated certificate of incorporation and amended and restated
bylaws and to provide additional procedural protections. There is no pending litigation or proceeding
involving a director or executive officer of the Registrant for which indemnification is sought.
Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its
certificate of incorporation that a director or an officer of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or an
officer, except for liability (i) for any breach of the director’s or officer’s duty of loyalty to the corporation or
its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) in the case of directors, for unlawful payments of dividends or unlawful stock
repurchases, redemptions, or other distributions, or (iv) for any transaction from which the director or
officer derived an improper personal benefit; provided that officers may not be indemnified for actions by
II-2
or in the right of the corporation. The Registrant’s amended and restated certificate of incorporation
provides for such limitation of liability.
The Registrant maintains standard policies of insurance under which coverage is provided (a) to its
directors and officers against loss rising from claims made by reason of breach of duty or other wrongful
act and (b) to the Registrant with respect to payments that may be made by the Registrant to such
officers and directors pursuant to the above indemnification provision or otherwise as a matter of law.
The proposed form of underwriting agreement to be filed as Exhibit 1.1. to this registration statement
provides for indemnification of officers and directors of the Registrant by the underwriters against certain
liabilities.
Item 15. Recent sales of unregistered securities.
Since January 1, 2022, the Registrant made sales of the following unregistered securities:
(a) Equity plan-related issuances
1.Since January 1, 2022, the Registrant granted to its directors, employees, consultants, and other
service providers options to purchase an aggregate of                 shares of its Common Stock under
its HeartFlow Holding, Inc. Amended and Restated 2009 Equity Incentive Plan (“2009 Equity Incentive
Plan”), at exercise prices ranging from $                 to $                 per share.
2.Since January 1, 2022, the Registrant issued and sold to its directors, employees, consultants, and
other service providers an aggregate of                 shares of its Common Stock upon the exercise of
stock options under its 2009 Equity Incentive Plan, at exercise prices ranging from $                 to
$                  per share.
(b) Sales of preferred stock
3.In March 2023, the Registrant sold an aggregate of (i) 61,344,029 shares of its Series F redeemable
convertible preferred stock to 29 accredited investors at a purchase price of $2.8505 per share and
(ii) 21,465,064 shares of its Series F-1 redeemable convertible preferred stock to 19 accredited
investors at a purchase price of $1.9098 per share, for an aggregate purchase price of $215.9 million.
The Series F-1 redeemable convertible preferred stock were issued upon conversion of the
indebtedness under outstanding subordinated convertible promissory notes.
(c) Warrants
4.On March 17, 2022, the Registrant issued a warrant to Hayfin Tourmaline Luxco S.a.r.l. to purchase
an aggregate of 225,579 shares of its Common Stock at a purchase price of $0.01 per share (the
“2022 Hayfin Warrant”).
5.On March 2, 2023, the warrant issued to Hayfin Tourmaline Luxco S.a.r.l. on January 19, 2021 (the
“2021 Hayfin Warrant”) was adjusted in connection with the Series F and Series F-1 Convertible
Preferred Stock Financing, allowing Hayfin Tourmaline Luxco S.a.r.l. to purchase an aggregate of
2,806,525 shares of its Common Stock at a purchase price of $0.01 per share pursuant to the 2021
Hayfin Warrant.
6.On March 2, 2023, the 2022 Hayfin Warrant was adjusted in connection with the Series F and
Series F-1 Convertible Preferred Stock Financing, allowing Hayfin Tourmaline Luxco S.a.r.l. to
purchase an aggregate of 2,004,665 shares of its Common Stock at a purchase price of $0.01 per
share pursuant to the 2021 Hayfin Warrant.
(d) Convertible notes
7.From September 30, 2022 to December 16, 2022, the Registrant issued $40,000,000 principal
amount of the 2022 Convertible Promissory Notes to investors, including related parties, with original
II-3
maturity dates of 48 months from the dates of issuance. The 2022 Convertible Notes automatically
converted into shares of Series F-1 convertible preferred stock on March 2, 2023.
8.In January 2025, the Registrant issued $48,356,153.27 principal amount of the 2025 Convertible
Promissory Notes to investors, including related parties, with original maturity dates of 48 months
from the dates of issuance. The 2025 Convertible Promissory Notes will be automatically converted
upon the effectiveness of this registration statement into shares of Common Stock.
No underwriters were involved in these transactions. The offers, sales, and issuances of the securities
described in paragraphs (1) through (2) were deemed to be exempt from registration under Rule 701
promulgated under the Securities Act of 1933, as amended (the “Securities Act”) as transactions under
compensatory benefit plans and contracts relating to compensation, or under Section 4(a)(2) of the
Securities Act as a transaction by an issuer not involving a public offering. The recipients of such
securities were our directors, employees, or bona fide consultants and received the securities under the
Registrant’s equity incentive plans. Appropriate legends were affixed to the securities issued in these
transactions. Each of the recipients of securities in these transactions had adequate access, through
employment, business or other relationships, to information about the Registrant.
The offers, sales, and issuances of the securities described in paragraphs (3) through (8) were deemed to
be exempt under Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D under the Securities
Act as a transaction by an issuer not involving a public offering. The recipients of securities in each of
these transactions acquired the securities for investment only and not with a view to or for sale in
connection with any distribution thereof and appropriate legends were affixed to the securities issued in
these transactions. Each of the recipients of securities in these transactions was an accredited investor
within the meaning of Rule 501 of Regulation D under the Securities Act and had adequate access to
information about the Registrant.
Item 16. Exhibits and financial statement schedules.
(a)Exhibits. See the Exhibit Index attached to this registration statement, which Exhibit Index is
incorporated herein by reference.
(b)Consolidated financial statement schedules. Schedules not listed above have been omitted
because the information required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors,
officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue. 
The undersigned Registrant hereby undertakes that:
1.For purposes of determining any liability under the Securities Act, the information omitted from the
form of prospectus filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration statement as of the time it was
declared effective.
II-4
2.For the purpose of determining any liability under the Securities Act, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Exhibit index
Exhibit
number
Exhibit description
1.1*
Form of Underwriting Agreement.
3.1*
Amended and Restated Certificate of Incorporation, as amended, currently in effect.
3.2*
Form of Amended and Restated Certificate of Incorporation, to be in effect immediately prior
to the completion of this offering.
3.3*
Amended and Restated Bylaws, currently in effect.
3.4*
Form of Amended and Restated Bylaws, to be in effect immediately prior to the completion
of this offering.
4.1*
Form of Common Stock Certificate.
4.2+
Warrant to Purchase Common Stock, dated January 19, 2021, between Hayfin Tourmaline
Luxco S.a.r.l. and HeartFlow, Inc.
4.3+
Warrant to Purchase Common Stock, dated March 17, 2022, between Hayfin Tourmaline
Luxco S.a.r.l. and HeartFlow Holding, Inc.
4.4+†
Amended and Restated Investors’ Rights Agreement, dated March 2, 2023, by and among
HeartFlow Holding, Inc. and the investors listed therein.
5.1*
Opinion of O’Melveny & Myers LLP.
10.1#+
HeartFlow Holding, Inc. Amended and Restated 2009 Equity Incentive Plan and forms of
award agreements.
10.2#*
2025 Performance Incentive Plan, to become effective on the date the registration statement
is declared effective, and forms of award agreements.
10.3#*
2025 Employee Stock Purchase Plan, to become effective on the date the registration
statement is declared effective, and forms of award agreements.
10.4+†
Lease, dated August 9, 2021, by and between MV Campus Owner, LLC and HeartFlow, Inc.
10.5+†
Credit Agreement and Guaranty, dated June 14, 2024, by and among HeartFlow, Inc.,
HeartFlow Holding, Inc., Hayfin Tourmaline Luxco S.a.r.l. and Hayfin Services, LLP.
10.6+
Amendment No. 1 to Credit Agreement and Guaranty, dated January 24, 2025, by and
among HeartFlow, Inc., HeartFlow Holding, Inc., Hayfin Tourmaline Luxco S.a.r.l. and Hayfin
Services, LLP.
21.1+
List of Subsidiaries.
23.1*
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
23.2*
Consent of O’Melveny & Myers LLP (included in Exhibit 5.1).
24.1*
Power of Attorney (reference is made to the signature page to the Registration Statement).
107.1*
Filing Fee Table.
*To be filed by amendment.
#Indicates management contract or compensatory plan. 
+Filed herewith.
†Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish
supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request.
Signatures
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of
Mountain View, State of California on                 , 2025. 
HEARTFLOW, INC.
By:
John C.M. Farquhar
President and Chief Executive Officer
Signatures and power of attorney
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Vikram Verghese, Angela Ahmad and Mhairi L. Jones, and each of them, as their true and lawful
attorneys-in-fact and agents, each with the full power of substitution, for them and in their name, place, or
stead, in any and all capacities, to sign any and all amendments to this registration statement (including
post-effective amendments), and to sign any registration statement for the same offering covered by this
registration statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the
Securities Act, and all post-effective amendments thereto, and to file the same, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises, as fully to all intents
and purposes as they might or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed
by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
President, Chief Executive Officer and Director
John C.M. Farquhar
(Principal Executive Officer)
          , 2025
Chief Financial Officer
Vikram Verghese
(Principal Financial Officer)
          , 2025
Chief Accounting Officer
Mhairi L. Jones
(Principal Accounting Officer)
          , 2025
William C. Weldon
Chair of the Board of Directors
          , 2025
Timothy C. Barabe
Director
          , 2025
Julie A. Cullivan
Director
          , 2025
Nicholas Downing, M.D.
Director
          , 2025
Jeffrey C. Lightcap
Director
          , 2025
Wayne J. Riley, M.D.
Director
          , 2025
Lonnie M. Smith
Director
          , 2025
Casey M. Tansey
Director
          , 2025
Charles A. Taylor, Jr., Ph.D
Director
          , 2025