HeartSciences Inc
For the period ended Jan 31, 2025. Filed Mar 13, 2025.
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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.
Jan 31, 2025 · Filed Mar 13, 2025
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 2024-10-31; filed 2024-12-16.
0000950170-24-136607
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-01-31; filed 2025-03-13.
0000950170-25-038699
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 70 previous paragraphs and 75 current paragraphs.
55 unchanged; 13 reworded; 7 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 (7)
Current report
Series D Preferred Stock Offering
Current report
On March 10, 2025, the Company entered into a selling agency agreement (the“Selling Agency Agreement”) with Digital offering LLC (the“Digital Offering”), in connection with the Company's best efforts offering of up to 4,285,714 Units, with each Unit consisting of (a) one share of our Series D Convertible Preferred Stock (the“Series D Preferred Stock”) and (b) one warrant to purchase one share of our Common Stock, $0.001 par value, for a total of 4,285,714 shares of our Series D Preferred Stock and warrants to purchase up to an aggregate of 4,285,714 shares of our Common Stock. The Units will be sold at an offering price of $3.50 per Unit, for a maximum offering amount of $15.0 million worth of Units. Each warrant is exercisable at any time from the date of issuance through the third anniversary from the date of issuance, unless earlier redeemed and is exercisable to purchase one share of Common Stock at $5.00 per share, subject to customary adjustment.
Current report
Digital Offering will act as the lead selling agent for the offering pursuant to the terms of the Selling Agency Agreement. Under the Selling Agency Agreement, the Company has agreed to pay Digital Offering a commission of 7% of the gross proceeds received in the offering and the Company will reimburse Digital Offering for its reasonable and documented legal costs up to a maximum of $85,000, of which $25,000 has been paid to date. Digital Offering is acting on a “reasonable best efforts” basis, in connection with the offering. Digital Offering is under no obligation to purchase any of the units or arrange for the sale of any specific number or dollar amount of shares of the units.
Current report
In connection with the offering, the Company will enter into a subscription agreement (the “Subscription Agreement”), pursuant to which the Company agrees to sell to certain investors up to 4,285,714 Units. Each investor must complete a Subscription Agreement and submit the applicable subscription price as set forth therein.
Current report
The Company refers to the offering therein as the “Series D Preferred Stock Offering”. On February 10, 2025, in connection with the Series D Preferred Stock Offering, the Company’s board of directors adopted a Certificate of Designations to be filed with the Secretary of State of the State of Texas (the “TX Secretary”) to create, out of the Company’s authorized but unissued preferred stock, the Series D Preferred Stock (the “Certificates of Designations”). The Company intends to file the Certificate of Designations with the TX Secretary.
Current report
As of the date of this Quarterly Report on Form 10-Q, the Company has not received any proceeds from the offering.
Current report
Selling, general, and administrative expenses were approximately $1.3 million and $3.0 million for the three and nine months ended January 31, 2025, representing an increase of $312,000, or 30%, and an increase of $369,000, or 14%, when compared to the same periods in 2024. The increase is primarily related to legal, accounting, and other professional fee expenses amounting to approximately $611,000 resulting from the withdrawal of the Company's S-1/A registration statement in December 2024, offset by a decrease in investor relation related expenditures of approximately $150,000, a reduction in stock-based compensation of approximately $89,000, and reduced D&O premiums of approximately $25,000.
Removed paragraphs (2)
Previous 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.
Previous report
In September 2023, the Company entered into the MSW Note for up to $1.0 million, drawn in installments consisting of (i) $0.25 million on or prior to September 8, 2023, (ii) ) $0.25 million on or prior to September 20, 2023, and (iii) further drawdowns of up to $0.5 million in such amounts and such times to be mutually agreed upon between the Company and MSW. In September 2023, the Company drew $0.5 million under the MSW Note and in November 2023, the MSW Note was converted into shares of Common Stock.
Reworded paragraphs (13)
Previous wording
New Class II devices, such as our products, require FDA premarket review. The MyoVistawav ECG device along with its proprietary software and hardware is classified as a Class II medical device by the FDA. Premarket review and clearance by the FDA for these devices is generally accomplished through the 510(k) premarket notification process or De Novo classification request, or petition process. We previously submitted an FDA De Novo classification request in December 2019 and, following feedback and communications with the FDA during and since that submission, we have been making modifications to our device, including our proprietary algorithm. We have finished the patient recruitment and core lab work for our FDA validation study and have been undertaking device and algorithm development testing for a revised FDA submission. We had been planning a revised submission under the De Novo pathway, however, in December 2023 the FDA confirmed that we could submit the MyoVistawav ECG device for clearance under the 510(k) pathway following the grant by the FDA in August 2023 of an industry-first De Novo clearance which created a new Class II product code for cardiovascular machine learning-based notification software. This was in respect of a hypertrophic cardiomyopathy algorithm and in late September 2023, the FDA cleared an algorithm for low ejection fraction (less than 40%) under the 510(k) pathway using this new product code. Accordingly, we are now preparing for a 510(k) FDA submission and are aiming for a submission in the first calendar quarter of 2025. If successful, FDA clearance would provide us the ability to market and sell the MyoVistawav ECG device in the U.S. and additional funding would be required to support the sales launch of the MyoVistawav ECG device in the U.S., provide working capital and support further R&D.
Current wording
New Class II devices, such as our products, require FDA premarket review. The MyoVistawav ECG device along with its proprietary software and hardware is classified as a Class II medical device by the FDA. Premarket review and clearance by the FDA for these devices is generally accomplished through the 510(k) premarket notification process or De Novo classification request, or petition process. We previously submitted an FDA De Novo classification request in December 2019 and, following feedback and communications with the FDA during and since that submission, we have been making modifications to our device, including our proprietary algorithm. We have finished the patient recruitment and core lab work for our FDA validation study and have been undertaking device and algorithm development testing for a revised FDA submission. We had been planning a revised submission under the De Novo pathway, however, in December 2023 the FDA confirmed that we could submit the MyoVistawav ECG device for clearance under the 510(k) pathway following the grant by the FDA in August 2023 of an industry-first De Novo clearance which created a new Class II product code for cardiovascular machine learning-based notification software. This was in respect of a hypertrophic cardiomyopathy algorithm and in late September 2023, the FDA cleared an algorithm for low ejection fraction (less than 40%) under the 510(k) pathway using this new product code. Accordingly, we are now preparing for a 510(k) FDA submission and are aiming for a submission in the first half of 2025. If successful, FDA clearance would provide us the ability to market and sell the MyoVistawav ECG device in the U.S. and additional funding would be required to support the sales launch of the MyoVistawav ECG device in the U.S., provide working capital and support further R&D.
Previous 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:
Current wording
Summary of Statements of Operations for the three and nine months ended January 31, 2025 compared with the three and nine months ended January 31, 2024:
Previous wording
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 wording
There were no revenues for the three and nine months ended January 31, 2025. Revenues were $15,000 and cost of sales were $5,000 for the three and nine months ended January 31, 2024. 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.
Previous 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.
Current wording
Research and development expenses were $1.0 million and $3.5 million for the three and nine months ended January 31, 2025, representing an increase of $524,000, or 103% , and an increase of $1.6 million, or 89%, when compared to the same periods in 2024. 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 $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.
Current wording
Interest expense was $179,000 and $320,000 for the three and nine months ended January 31, 2025, representing an increase of $61,000, or 52%, and a decrease of $14,000, or 4%, when compared to the same periods in 2024. 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 $20,000 and $66,000 during the three and six months ended October 31, 2024 is related to interest earned on our cash balances.
Current wording
Other income of $15,000 and $81,000 during the three and nine months ended January 31, 2025 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 $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.
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 $6.7 million for the period ended January 31, 2025. As of January 31, 2025, we had an accumulated deficit of $74.0 million and stockholder's equity of $1.8 million and working capital of $64,000.
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 $1.8 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.
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 $2.1 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 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.
Current wording
Since our inception, we have raised capital through the public and private sale of debt and equity. As of January 31, 2025, we had cash and cash equivalents balance of approximately $2.6 million, a decrease of $3.2 million from $5.8 million as of April 30, 2024.
Previous 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.
Current wording
Net cash used by our operating activities of $5.8 million during the nine months ended January 31, 2025 is primarily due to our net loss of $6.7 million, plus $437,000 in non-cash expenses plus $405,000 of net changes in operating assets and liabilities.
Previous 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.
Current wording
Net cash used by our operating activities of $4.5 million during the nine months ended January 31, 2024 is primarily due to our net loss of $4.8 million plus $831,000 in non-cash expenses less $565,000 of net changes in operating assets and liabilities.
Previous 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.
Current wording
Net cash provided by financing activities of $2.6 million during the nine months ended January 31, 2025 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 $0.8 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.
Current wording
Net cash provided by financing activities of $10.0 million during the nine months ended January 31, 2024 is primarily from the issuance of Common Stock under the Equity Line, ATM Facility, and net proceeds from the MSW Note.