HeartSciences Inc
For the period ended Oct 31, 2024. Filed Dec 16, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Oct 31, 2024 · Filed Dec 16, 2024
HSCS$2.83+6.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-07-31; filed 2024-09-12.
0000950170-24-105914
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-10-31; filed 2024-12-16.
0000950170-24-136607
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 70 current paragraphs.
49 unchanged; 16 reworded; 5 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Corporate Name Change
Current report
On October 17, 2024, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Formation with the Secretary of State of Texas to change the Company's corporate name to “HeartSciences Inc.”, with an effective date of October 17, 2024. The Name Change was approved by the Company's shareholders at the Company's Annual Meeting of Shareholders held on January 17, 2024. The Name Change became effective at the open of market on October 23, 2024, and does not affect the Company’s ticker symbols or the applicable CUSIP number for the Company’s outstanding shares of Common Stock and public warrants.
Current report
In July 2024, we were granted a patent allowance from the United States Patent and Trademark Office for the detection of left ventricular and/or right ventricular dysfunction using deep learning.
Current report
There were no revenues for the three and six months ended October 31, 2024. Revenues were $4,000 and cost of sales were $2,000 for the three and six months ended October 31, 2023. Our revenues to date have been mainly generated in the establishment of distributor relationships outside the United States as part of obtaining feedback during product development and improvement of the MyoVistawav ECG.
Current report
Selling, general, and administrative expenses were approximately $0.8 million and $1.6 million for the three and six months ended October 31, 2024, representing a decrease of $29,000, or 4%, and an increase of $57,000, or 4%, when compared to the same periods in 2023. The decrease noted during the three month period is primarily related to reduction in stock compensation expense of $14,000 and reduction of marketing costs and other professional fees of $15,000. The increase noted during the six month period is primarily related to an increase in legal expenses of $82,000 and rent expense of $16,000, offset by reductions in stock compensation expense of $45,000.
Removed paragraphs (2)
Previous report
The Streeterville Note bears interest at the rate of 8.5% per annum and matures in 18 months after its issuance date. From time to time, beginning six months after issuance, Streeterville may redeem a portion of the Streeterville Note, not to exceed $270,000 per month. In the event the Company has not reduced the outstanding balance under the Streeterville Note by at least $900,000 by the 12-month anniversary following the issuance date, then the outstanding balance at such time will automatically increase by 5%. Subject to terms and conditions set forth in the Streeterville Note, the Company may prepay all or any portion of the outstanding balance of the Streeterville Note at any time.
Previous report
Selling, general, and administrative expenses were approximately $0.9 million for the three months ended July 31, 2024, representing an increase of $86,000, or 11% when compared to the same periods in 2023. The increase is primarily due to payroll related and professional expenses related to the reverse stock split.
Reworded paragraphs (16)
Previous wording
To date we have not yet entered into a discussion with the FDA regarding the MyoVista Insights Cloud Platform or Mount Sinai licensed AI-ECG algorithms but are aiming to start that process in the current calendar year. We expect these products to fall under the 510(k) pathway and are aiming for an FDA submission of our MyoVista Insights Cloud Platform and low ejection fraction algorithm in the middle of 2025.
Current wording
To date we have not yet entered into a discussion with the FDA regarding the MyoVista Insights Cloud Platform or Mount Sinai licensed AI-ECG algorithms but we expect these products to fall under the 510(k) pathway and are aiming for an FDA submission of our MyoVista Insights Cloud Platform and low ejection fraction algorithm in the second half of 2025.
Previous wording
On August 19, 2024, the Company and FRV entered into Amendment No. 6 to the Loan and Security Agreement to further extend the maturity date of the FRV Note to September 30, 2025 and pay the outstanding accrued interest as follows: (i) a payment of all accrued interest outstanding within five (5) business days of execution of the agreement; (ii) a payment of accrued interest on September 30, 2024 and (iii) thereafter all accrued interest due shall be payable at maturity. In August 2024, the Company paid approximately $300,000 in accrued interest to FRV.
Current wording
On August 19, 2024, the Company and FRV entered into Amendment No. 6 to the Loan and Security Agreement to further extend the maturity date of the FRV Note to September 30, 2025 and pay the outstanding accrued interest as follows: (i) a payment of all accrued interest outstanding within five (5) business days of execution of the agreement; (ii) a payment of accrued interest on September 30, 2024 and (iii) thereafter all accrued interest due shall be payable at maturity. In August and September 2024, the Company paid approximately $305,000 in accrued interest to FRV.
Previous wording
In September 2024, the Company entered into a Note Purchase Agreement with Streeterville pursuant to which Streeterville issued the Company an unsecured promissory note in the amount of $2,510,000 which included an original issuance discount of $500,000 and reimbursement of Streeterville's transaction expenses of $10,000. The Company incurred placement agent fees equal to 7% of the gross proceeds received from the sale of the Streeterville Note. The Company received approximately $1.9 million in net cash proceeds from the sale of the Streeterville Note.
Current wording
In September 2024, the Company entered into a Note Purchase Agreement with Streeterville, pursuant to which the Company issued to Streeterville the unsecured Streeterville Note in the original principal amount of $2,510,000. The Streeterville Note carried an OID of $500,000 and $10,000 was withheld from the Streeterville Note for reimbursement of Streeterville's transaction expenses. Additionally, the Company incurred debt financing costs of $159,700. As a result, the Company received aggregate net proceeds of approximately $1.9 million in connection with the issuance of the Streeterville Note.
Previous wording
Our research and development activities primarily consist of clinical, regulatory, engineering and research work associated with our MyoVista wavECG device. Research and development expenses include payroll and personnel-related costs for our research and development, clinical and regulatory personnel, including expenses related to stock-based compensation for such employees, consulting services, clinical trial expenses, regulatory expenses, prototyping and testing. Research and development expenses also include costs attributable to clinical trial expenses including clinical trial design, site development and study costs, data, related travel expenses, the cost of products used for clinical activities, internal and external costs associated with regulatory compliance and patent costs. We have expensed research and development costs as they have been incurred.
Current wording
Our research and development activities primarily consist of clinical, regulatory, engineering and research work associated with our MyoVista wavECG device and Myo Vista Insights Cloud Platform. Research and development expenses include payroll and personnel-related costs for our research and development, clinical and regulatory personnel, including expenses related to stock-based compensation for such employees, consulting services, clinical trial expenses, regulatory expenses, prototyping and testing. Research and development expenses also include costs attributable to clinical trial expenses including clinical trial design, site development and study costs, data, related travel expenses, the cost of products used for clinical activities, internal and external costs associated with regulatory compliance and patent costs. We have expensed research and development costs as they have been incurred.
Previous wording
Interest expense relates to our loan facilities and convertible notes.
Current wording
Interest expense relates to our loan facilities.
Previous wording
Summary of Statements of Operations for the three months ended July 31, 2024 compared with the three months ended July 31, 2023:
Current wording
Summary of Statements of Operations for the three and six months ended October 31, 2024 compared with the three and six months ended October 31, 2023:
Previous wording
Research and development expenses were $1.2 million for the three months ended July 31, 2024, representing an increase of $659,000, or 117% when compared to the same periods in 2023. The increase is primarily due to consulting costs incurred for development of our MyoVista Insights Cloud Platform and increase in headcount and professional services supporting the FDA submission process.
Current wording
Research and development expenses were $1.2 million and $2.4 million for the three and six months ended October 31, 2024, representing an increase of $442,000, or 58% , and an increase of $1.1 million, or 83%, when compared to the same periods in 2023. The increase is primarily due to consulting costs incurred for development of our MyoVista Insights Cloud Platform and increase in headcount and professional services supporting the FDA submission process.
Previous wording
Interest expense was $23,000 for the three months ended July 31, 2024, representing a decrease of $13,000 or 36% when compared to the same periods in 2023. Interest expense in Fiscal 2025 is related to interest on the FRV Note. The JQA Note and related accrued interest and the MSW Note converted to equity in November 2023.
Current wording
Interest expense was $118,000 and $140,000 for the three and six months ended October 31, 2024, representing a decrease of $61,000, or 34%, and a decrease of $75,000, or 35%, when compared to the same periods in 2023. Interest expense in Fiscal 2025 is related to interest on the FRV Note and interest and debt service amortization on the Streeterville Note. The JQA Note and related accrued interest converted to equity in November 2023.
Previous wording
Other income of $47,000 during the three months ended July 31, 2024 is related to interest earned on our cash balances.
Current wording
Other income of $20,000 and $66,000 during the three and six months ended October 31, 2024 is related to interest earned on our cash balances.
Previous wording
We have incurred losses each year since inception and have experienced negative cash flows from operations in each year since inception. We incurred a net loss of $2.1 million for the period ended July 31, 2024. As of July 31, 2024, we had an accumulated deficit of $69.4 million and stockholder's equity of $5.9 million and working capital of $4.7 million.
Current wording
We have incurred losses each year since inception and have experienced negative cash flows from operations in each year since inception. We incurred a net loss of $4.1 million for the period ended October 31, 2024. As of October 31, 2024, we had an accumulated deficit of $71.5 million and stockholder's equity of $4.0 million and working capital of $2.4 million.
Previous wording
On March 10, 2023, we entered into the Lincoln Park Purchase Agreement providing for the purchase, from time to time at our discretion, of up to $15.0 million of our Common Stock, over the 36-month term of the agreement. Actual sales of shares of Common Stock will depend on a variety of factors to be determined by us from time to time. The net proceeds received from these purchases will depend on the frequency and prices at which we sell shares of our Common Stock to Lincoln Park. As of the date of this Quarterly Report, we have received approximately $1.6 million from the sale of Common Stock pursuant to the Lincoln Park Purchase Agreement. We expect that any proceeds received from such sales to Lincoln Park will be used for working capital and general corporate purposes.
Current wording
On March 10, 2023, we entered into the Lincoln Park Purchase Agreement providing for the purchase, from time to time at our discretion, of up to $15.0 million of our Common Stock, over the 36-month term of the agreement. Actual sales of shares of Common Stock will depend on a variety of factors to be determined by us from time to time. The net proceeds received from these purchases will depend on the frequency and prices at which we sell shares of our Common Stock to Lincoln Park. As of the date of this Quarterly Report, we have received approximately $1.8 million from the sale of Common Stock pursuant to the Lincoln Park Purchase Agreement. We expect that any proceeds received from such sales to Lincoln Park will be used for working capital and general corporate purposes.
Previous wording
Since our inception, we have raised capital through the public and private sale of debt and equity. As of July 31, 2024, we had cash and cash equivalents balance of approximately $4.3 million, a decrease of $1.5 million from $5.8 million as of April 30, 2024.
Current wording
Since our inception, we have raised capital through the public and private sale of debt and equity. As of October 31, 2024, we had cash and cash equivalents balance of approximately $4.1 million, a decrease of $1.8 million from $5.8 million as of April 30, 2024.
Previous wording
Net cash used by our operating activities of $2.0 million during the three months ended July 31, 2024 is primarily due to our net loss of $2.1 million, plus $98,000 in non-cash expenses less $65,000 of net changes in operating assets and liabilities.
Current wording
Net cash used by our operating activities of $4.2 million during the six months ended October 31, 2024 is primarily due to our net loss of $4.1 million, plus $243,000 in non-cash expenses less $311,000 of net changes in operating assets and liabilities.
Previous wording
Net cash used by our operating activities of $1.4 million during the three months ended July 31, 2023 is primarily due to our net loss of $1.4 million plus $232,000 in non-cash expenses less $269,000 of net changes in operating assets and liabilities.
Current wording
Net cash used by our operating activities of $2.4 million during the six months ended October 31, 2023 is primarily due to our net loss of $3.1 million plus $587,000 in non-cash expenses plus $135,000 of net changes in operating assets and liabilities.
Previous wording
Net cash provided by financing activities of $0.3 million during the three months ended July 31, 2023 is primarily from the issuance of Common Stock under the Equity Line.
Current wording
Net cash provided by financing activities of $2.4 million during the six months ended October 31, 2024 is primarily from the issuance of Common Stock under the Equity Line, the ATM Facility, and net proceeds from the Streeterville Note.
Previous wording
Net cash provided by financing activities of $0.6 million during the three months ended July 31, 2024 is primarily from the issuance of Common Stock under the Equity Line and the ATM Facility.
Current wording
Net cash provided by financing activities of $0.8 million during the six months ended October 31, 2023 is primarily from the issuance of Common Stock under the Equity Line, ATM Facility, and net proceeds from the MSW Note.