10-Q 1 hscs-20230731.htm 10-Q 10-Q
false0001468492--04-30Q120240001468492us-gaap:AdditionalPaidInCapitalMemberhscs:SeriesCConvertiblePreferredStockMember2023-05-012023-07-310001468492us-gaap:CommonStockMember2023-05-012023-07-310001468492us-gaap:CommonStockMemberus-gaap:SubsequentEventMemberhscs:PurchaseAgreementAndRegistrationRightsAgreementMemberhscs:LincolnParkCapitalFundLlcMember2023-08-012023-09-140001468492us-gaap:PreferredStockMemberhscs:SeriesAConvertiblePreferredStockMember2022-05-012022-07-310001468492hscs:SeriesABCConvertiblePreferredStockMember2023-04-300001468492hscs:PurchaseAgreementAndRegistrationRightsAgreementMember2023-03-102023-03-100001468492hscs:WarrantsExercisableAtOnePointFiveZeroPerShareMemberhscs:MSWNoteMembersrt:MaximumMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492us-gaap:CommonStockMemberus-gaap:SubsequentEventMember2023-08-012023-09-140001468492hscs:WarrantsExercisableAtOnePointTwoFivePerShareMemberhscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:SecondDrawdownMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492hscs:SeriesBConvertiblePreferredStockMember2023-07-310001468492hscs:MSWNoteMemberhscs:WarrantsExercisableAtOnePointZeroZeroPerShareMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492hscs:MSWNoteMemberhscs:MatthewsSouthwestHoldingsIncMembersrt:ScenarioForecastMember2023-09-202023-09-200001468492us-gaap:RetainedEarningsMember2022-04-300001468492srt:DirectorMemberhscs:OneMillionNotesMember2020-04-300001468492hscs:OneMillionNotesMember2023-04-300001468492hscs:OnePointFiveMillionSecuredConvertiblePromissoryNotesMemberus-gaap:AdditionalPaidInCapitalMember2022-05-012022-07-310001468492us-gaap:IPOMember2022-05-012022-07-310001468492hscs:FrontRangeVenturesLlcMember2023-01-242023-01-240001468492us-gaap:CommonStockMemberus-gaap:IPOMember2022-05-012022-07-310001468492us-gaap:PreferredStockMemberhscs:SeriesCConvertiblePreferredStockMember2023-04-300001468492hscs:ServiceBasedStockOptionMember2023-05-012023-07-310001468492hscs:WarrantsExercisableAtOnePointTwoFivePerShareMemberhscs:MSWNoteMembersrt:MaximumMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492srt:MaximumMember2023-04-300001468492us-gaap:CommonStockMember2023-04-300001468492hscs:ServiceBasedStockOptionMember2023-07-310001468492hscs:SeriesBConvertiblePreferredStockMemberus-gaap:PreferredStockMember2022-04-300001468492hscs:OneMillionNotesMember2020-04-300001468492hscs:WarrantsExercisableAtOnePointFiveZeroPerShareMemberhscs:MSWNoteMembersrt:MaximumMemberus-gaap:SubsequentEventMemberhscs:SecondDrawdownMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492hscs:SeriesAAndBConvertiblePreferredStockMemberus-gaap:CommonStockMember2022-05-012022-07-310001468492us-gaap:AdditionalPaidInCapitalMember2023-04-300001468492hscs:MSWNoteMembersrt:MaximumMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492us-gaap:CommonStockMemberhscs:PurchaseAgreementAndRegistrationRightsAgreementMemberhscs:LincolnParkCapitalFundLlcMember2023-05-012023-07-310001468492hscs:PurchaseAgreementAndRegistrationRightsAgreementMember2023-03-012023-03-160001468492us-gaap:LeaseholdImprovementsMember2023-07-310001468492us-gaap:DomesticCountryMember2023-05-012023-07-310001468492hscs:PerformanceBasedStockOptionMember2023-05-012023-07-310001468492us-gaap:RoyaltyAgreementsMemberhscs:TwoThousandFourHunderedMyovistaDevicesMember2012-05-012013-04-300001468492us-gaap:RetainedEarningsMember2023-05-012023-07-310001468492hscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-082023-09-080001468492us-gaap:AdditionalPaidInCapitalMemberus-gaap:IPOMember2022-05-012022-07-310001468492us-gaap:CommonStockMemberus-gaap:SubsequentEventMemberhscs:PurchaseAgreementAndRegistrationRightsAgreementMember2023-08-012023-09-140001468492srt:MaximumMember2023-07-310001468492us-gaap:DomesticCountryMember2023-07-310001468492us-gaap:CommonStockMember2023-05-012023-07-310001468492us-gaap:RoyaltyAgreementsMemberhscs:LoanAndSecurityAgreementMember2013-04-300001468492us-gaap:AdditionalPaidInCapitalMember2022-04-300001468492us-gaap:PreferredStockMemberhscs:SeriesCConvertiblePreferredStockMember2023-05-012023-07-310001468492us-gaap:EquipmentMember2023-07-310001468492hscs:BridgeNotesAndAccruedInterestMember2022-05-012022-07-310001468492hscs:WarrantsExercisableAtOnePointTwoFivePerShareMemberhscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492hscs:SeriesBConvertiblePreferredStockMemberus-gaap:PreferredStockMember2022-05-012022-07-310001468492us-gaap:RetainedEarningsMember2023-04-300001468492hscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-082023-09-0800014684922022-07-310001468492hscs:OneMillionNotesMember2020-09-042020-09-040001468492srt:DirectorMember2022-05-012023-04-300001468492hscs:OnePointFiveMillionSecuredConvertiblePromissoryNotesMember2022-07-310001468492us-gaap:PreferredStockMemberus-gaap:ConvertiblePreferredStockMember2022-04-300001468492us-gaap:CommonStockMember2023-07-310001468492us-gaap:AdditionalPaidInCapitalMemberhscs:BridgeNotesAndAccruedInterestMember2022-05-012022-07-310001468492us-gaap:AdditionalPaidInCapitalMemberhscs:SeriesCConvertiblePreferredStockMember2022-05-012022-07-3100014684922023-07-310001468492us-gaap:RoyaltyAgreementsMember2012-05-012013-04-300001468492us-gaap:AdditionalPaidInCapitalMemberus-gaap:IPOMember2023-05-012023-07-310001468492hscs:OneMillionNotesMember2021-11-032021-11-030001468492us-gaap:FurnitureAndFixturesMember2023-04-300001468492us-gaap:PreferredStockMemberhscs:SeriesCConvertiblePreferredStockMember2022-07-310001468492hscs:WarrantsExercisableAtOnePointZeroZeroPerShareMemberhscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:FirstDrawdownMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492us-gaap:DomesticCountryMember2023-04-300001468492hscs:MSWNoteMembersrt:MaximumMemberhscs:MatthewsSouthwestHoldingsIncMembersrt:ScenarioForecastMember2023-09-210001468492hscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-072023-09-070001468492hscs:OneMillionNotesMember2020-04-012020-04-300001468492hscs:ExecutiveDirectorsAndEmployeesMember2022-05-012023-04-300001468492us-gaap:CommonStockMemberus-gaap:SubsequentEventMember2023-09-140001468492hscs:WarrantsExercisableAtOnePointTwoFivePerShareMemberhscs:MSWNoteMembersrt:MaximumMemberus-gaap:SubsequentEventMemberhscs:SecondDrawdownMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492us-gaap:RoyaltyAgreementsMember2013-04-300001468492hscs:SeriesCConvertiblePreferredStockMemberus-gaap:CommonStockMember2022-05-012022-07-310001468492us-gaap:CommonStockMemberhscs:EquityLineMember2023-05-012023-07-310001468492hscs:WarrantsExercisableAtOnePointFiveZeroPerShareMemberhscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:SecondDrawdownMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492hscs:OneMillionNotesMember2022-05-242022-05-240001468492hscs:OneMillionNotesMember2023-07-310001468492srt:DirectorMemberhscs:OneMillionNotesMember2022-06-012022-06-300001468492us-gaap:WarrantMember2023-05-012023-07-310001468492us-gaap:PreferredStockMemberhscs:SeriesCConvertiblePreferredStockMember2022-04-300001468492hscs:NonEmployeeMember2022-05-012022-07-310001468492us-gaap:AdditionalPaidInCapitalMemberhscs:NonEmployeeMember2022-05-012022-07-310001468492srt:MaximumMemberus-gaap:CommonStockMemberhscs:PurchaseAgreementAndRegistrationRightsAgreementMember2023-03-102023-03-100001468492us-gaap:FurnitureAndFixturesMember2023-07-310001468492us-gaap:RoyaltyAgreementsMemberhscs:MyovistaDevicesMember2012-05-012013-04-300001468492hscs:SeriesCConvertiblePreferredStockMember2023-04-300001468492us-gaap:RoyaltyAgreementsMemberhscs:SecuredConvertiblePromissoryNotesMember2013-04-300001468492srt:DirectorMember2023-01-242023-01-240001468492us-gaap:PreferredStockMemberus-gaap:ConvertiblePreferredStockMember2022-07-310001468492hscs:PerformanceBasedStockOptionMember2022-05-012023-04-300001468492hscs:SeriesAAndBConvertiblePreferredStockMemberus-gaap:PreferredStockMember2022-05-012022-07-310001468492hscs:SeriesCConvertiblePreferredStockMemberus-gaap:CommonStockMember2023-05-012023-07-310001468492hscs:SeriesABCConvertiblePreferredStockMember2023-07-310001468492us-gaap:PreferredStockMemberus-gaap:ConvertiblePreferredStockMember2023-04-300001468492us-gaap:AdditionalPaidInCapitalMember2023-05-012023-07-310001468492hscs:ServiceBasedStockOptionMember2022-05-012023-04-300001468492hscs:FrontRangeVenturesLlcMembersrt:DirectorMemberhscs:OneMillionNotesMember2020-04-300001468492srt:MinimumMember2023-04-3000014684922023-04-300001468492srt:MaximumMemberus-gaap:CommonStockMemberhscs:PurchaseAgreementAndRegistrationRightsAgreementMember2023-03-012023-03-1600014684922022-05-012022-07-310001468492us-gaap:AdditionalPaidInCapitalMemberhscs:SeriesAAndBConvertiblePreferredStockMember2022-05-012022-07-310001468492hscs:FrontRangeVenturesLlcMembersrt:MinimumMemberhscs:SeriesCConvertiblePreferredStockMember2023-07-310001468492us-gaap:AdditionalPaidInCapitalMember2022-05-012022-07-310001468492hscs:SeriesAConvertiblePreferredStockMember2023-07-3100014684922022-05-012023-04-3000014684922023-01-310001468492hscs:OnePointFiveMillionSecuredConvertiblePromissoryNotesMember2022-05-012022-07-310001468492hscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-120001468492hscs:MSWNoteMemberhscs:MatthewsSouthwestHoldingsIncMembersrt:ScenarioForecastMember2023-09-202023-09-2000014684922023-05-012023-07-310001468492us-gaap:PreferredStockMemberus-gaap:ConvertiblePreferredStockMember2023-07-310001468492us-gaap:EquipmentMember2023-04-300001468492hscs:OneMillionNotesMember2020-07-022020-07-020001468492hscs:WarrantsExercisableAtOnePointFiveZeroPerShareMemberhscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492hscs:PerformanceBasedStockOptionMember2023-07-310001468492us-gaap:CommonStockMemberhscs:ConsultingServicesMember2023-05-012023-07-310001468492hscs:PerformanceBasedStockOptionMember2023-04-300001468492us-gaap:CommonStockMemberus-gaap:IPOMember2023-05-012023-07-310001468492us-gaap:CommonStockMember2022-04-300001468492us-gaap:IPOMember2023-05-012023-07-310001468492us-gaap:PreferredStockMemberhscs:SeriesCConvertiblePreferredStockMember2023-07-310001468492hscs:MSWNoteMembersrt:MaximumMemberhscs:MatthewsSouthwestHoldingsIncMembersrt:ScenarioForecastMember2023-09-212023-09-210001468492srt:MaximumMember2023-05-012023-07-310001468492us-gaap:CommonStockMember2022-07-310001468492hscs:BridgeNotesAndAccruedInterestMemberus-gaap:CommonStockMember2022-05-012022-07-310001468492srt:MinimumMember2023-05-012023-07-310001468492hscs:SeriesCConvertiblePreferredStockMember2023-05-012023-07-3100014684922023-09-120001468492hscs:ServiceBasedStockOptionMember2023-04-300001468492us-gaap:AdditionalPaidInCapitalMember2023-07-310001468492hscs:MSWNoteMembersrt:MaximumMemberhscs:MatthewsSouthwestHoldingsIncMembersrt:ScenarioForecastMember2023-09-300001468492hscs:OnePointFiveMillionSecuredConvertiblePromissoryNotesMemberus-gaap:CommonStockMember2022-05-012022-07-310001468492srt:MinimumMember2023-07-310001468492us-gaap:RetainedEarningsMember2023-07-3100014684922022-04-300001468492us-gaap:PreferredStockMemberhscs:SeriesAConvertiblePreferredStockMember2022-04-300001468492hscs:WarrantsExercisableAtOnePointTwoFivePerShareMemberhscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:FirstDrawdownMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492us-gaap:AdditionalPaidInCapitalMember2022-07-310001468492hscs:PurchaseAgreementAndRegistrationRightsAgreementMember2022-05-012023-04-300001468492us-gaap:RetainedEarningsMember2022-07-310001468492us-gaap:RetainedEarningsMember2022-05-012022-07-310001468492us-gaap:LeaseholdImprovementsMember2023-04-300001468492us-gaap:PreferredStockMemberus-gaap:ConvertiblePreferredStockMember2023-05-012023-07-310001468492hscs:CommonStockWarrantsMember2023-05-012023-07-310001468492us-gaap:PreferredStockMemberhscs:SeriesCConvertiblePreferredStockMember2022-05-012022-07-310001468492hscs:SeriesCConvertiblePreferredStockMember2023-07-310001468492us-gaap:CommonStockMember2023-07-312023-07-310001468492hscs:WarrantsExercisableAtOnePointFiveZeroPerShareMemberhscs:MSWNoteMemberus-gaap:SubsequentEventMemberhscs:FirstDrawdownMemberhscs:MatthewsSouthwestHoldingsIncMember2023-09-070001468492us-gaap:CommonStockMemberhscs:PurchaseAgreementAndRegistrationRightsAgreementMember2023-05-012023-07-310001468492hscs:TwoThousandTwentyThreeEquityIncentivePlanMembersrt:DirectorMember2023-03-150001468492us-gaap:CommonStockMemberhscs:PurchaseAgreementAndRegistrationRightsAgreementMember2023-07-312023-07-31xbrli:purexbrli:sharesiso4217:USDiso4217:USDxbrli:shares

1

ROC

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-41422

 

HEART TEST LABORATORIES, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Texas

26-1344466

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

550 Reserve Street, Suite 360

Southlake, Texas

76092

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (682)-237-7781

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

HSCS

 

The Nasdaq Stock Market LLC

Warrants

 

HSCSW

 

The Nasdaq Stock Market LLC

 

 

 

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

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

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

 

 

 

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 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of September 14, 2023, the registrant had 10,920,980 shares of Common Stock outstanding.

 

 

 

 


2

HEART TEST LABORATORIES, INC.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements relate to our future plans, objectives, expectations and intentions and may be identified by terminology such as “may,” “will,” “should,” “expects,” “aims,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “intends,” or “continue,” or the negative of these terms or other comparable terminology. Readers are cautioned that these forward-looking statements are based on our current beliefs, expectations and assumptions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified below, under Part II, Item 1A “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and those risks identified under Part I, Item 1A of our Annual Report on Form 10-K for the year ended April 30, 2023 filed with the Securities and Exchange Commission on July 19, 2023 ("2023 Annual Report on Form 10-K"). Therefore, actual results may differ materially and adversely from those expressed, projected or implied in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.

These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, statements that contain projections of results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our device, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.

Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:

our expectation regarding the sufficiency of our existing cash and cash equivalents to fund our current operations;
our ability to receive regulatory clearance for the MyoVista wavECG, (the “MyoVista”), from the U.S. Food and Drug Administration, (the “FDA”), state regulators, if any, or other similar foreign regulatory agencies, including approval to conduct clinical trials, the timing and scope of those trials and the prospects for regulatory approval or clearance of, or other regulatory action with respect to the MyoVista or other future potential products;
our ability to advance the development of the MyoVista, our 12-lead electrocardiograph, (“ECG”), device that incorporates an additional proprietary artificial intelligence (“AI”)-based algorithm that has been designed to detect cardiac dysfunction and future potential products;
our ability to launch sales of the MyoVista into the U.S. and any future potential products into the U.S.;
our assessment of the potential of the MyoVista and future potential products;
our planned level of capital expenditures and liquidity;
our plans to continue to invest in research and development to develop technology for new products;
the regulatory environment and changes in the health policies and regimes in the countries in which we intend to operate, including the impact of any changes in regulation and legislation that could affect the medical device industry;
our ability to meet our expectations regarding the commercial supply of the MyoVista and any future products;
our ability to retain key executives;
our ability to internally develop new inventions and intellectual property;
the overall global economic environment;
the ultimate impact of the COVID-19 pandemic, or any other health epidemic, on our business, our clinical trials, our research programs, healthcare system or the global economy as a whole;
the impact of competition and new technologies;
general market, political and economic conditions in the countries in which we operate;
our ability to develop new devices and intellectual property;

 


3

changes in our strategy; and
potential litigation.

These statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise for any reason.

The Company will continue to file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). Forward-looking statements speak only as of the dates specified in such filings. Except as expressly required under federal securities laws and the rules and regulations of the SEC, we do not undertake any obligation to update any forward-looking statements to reflect events or circumstances arising after any such date, whether as a result of new information or future events or otherwise. You should not place undue reliance on the forward-looking statements included in this report or that may be made elsewhere from time to time by us, or on our behalf. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

NOTE REGARDING COMPANY REFERENCES

Throughout this Quarterly Report on Form 10-Q, “HeartSciences”, the “Company,” “we,” “us” and “our” refer to Heart Test Laboratories, Inc. References to “Fiscal 2024” refer to the 12 months ending April 30, 2024 and references to “Fiscal 2023” refer to the 12 months ended April 30, 2023.

 


i

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

 

 

 

Item 1.

Condensed Unaudited Financial Statements:

 

 

Condensed Balance Sheets as of July 31, 2023 and April 30, 2023

1

 

Condensed Statements of Operations for the three ended July 31, 2023 and 2022

2

 

Condensed Statements of Stockholders' Equity (Deficit) for the three months ended July 31, 2023 and 2022

3

 

Condensed Statements of Cash Flows for the three months ended July 31, 2023 and 2022

4

 

Notes to the Condensed Unaudited Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21

Item 4.

Controls and Procedures

21

 

 

 

PART II.

OTHER INFORMATION

23

 

 

 

Item 1.

Legal Proceedings

23

Item 1A.

Risk Factors

23

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23

Item 3.

Defaults Upon Senior Securities

23

Item 4.

Mine Safety Disclosures

23

Item 5.

Other Information

23

Item 6.

Exhibits

24

Signatures

27

 

i


1

HEART TEST LABORATORIES, INC.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Heart Test Laboratories, Inc.

Condensed Balance Sheets

 

 

July 31,

 

 

April 30,

 

 

 

2023

 

 

2023

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

575,654

 

 

$

1,660,467

 

Inventory

 

 

676,359

 

 

 

676,359

 

Prepaid expenses

 

 

452,961

 

 

 

143,460

 

Other current assets

 

 

40,374

 

 

 

40,374

 

Deferred offering costs

 

 

283,749

 

 

 

175,921

 

Total current assets

 

 

2,029,097

 

 

 

2,696,581

 

 

 

 

 

 

 

Property and equipment, net

 

 

59,000

 

 

 

61,428

 

Right-of-use assets, net

 

 

509,726

 

 

 

529,224

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

2,597,823

 

 

$

3,287,233

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

$

454,840

 

 

$

631,369

 

Accrued expenses

 

 

630,979

 

 

 

623,391

 

Operating lease liabilities

 

 

70,871

 

 

 

29,535

 

Current portion of notes payable

 

 

500,000

 

 

 

500,000

 

Other current liabilities

 

 

241,098

 

 

 

48,596

 

Total current liabilities

 

 

1,897,788

 

 

 

1,832,891

 

 

 

 

 

 

 

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

Notes payable

 

 

500,000

 

 

 

500,000

 

Accrued expenses

 

 

207,592

 

 

 

187,450

 

Operating lease liabilities, long-term

 

 

512,145

 

 

 

536,335

 

Total long-term liabilities

 

 

1,219,737

 

 

 

1,223,785

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

3,117,525

 

 

 

3,056,676

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (NOTE 2, 4-6, and 8)

 

 

 

 

 

 

STOCKHOLDERS (DEFICIT) EQUITY

 

 

 

 

 

 

Series A, B, and C convertible preferred stock, $0.001 par value, 20,000,000 shares authorized and 620,000 designated; 380,440 shares issued and outstanding as of July 31, 2023 and 380,871 shares issued and outstanding as of April 30, 2023.

 

 

380

 

 

 

381

 

Common stock, $0.001 par value, 500,000,000 shares authorized; 10,670,980 shares issued and outstanding as of July 31, 2023 and 10,118,440 shares issued and outstanding as of April 30, 2023.

 

 

10,671

 

 

 

10,118

 

Additional paid-in capital

 

 

61,593,300

 

 

 

60,977,256

 

Accumulated deficit

 

 

(62,124,053

)

 

 

(60,757,198

)

TOTAL STOCKHOLDERS (DEFICIT) EQUITY

 

 

(519,702

)

 

 

230,557

 

TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY

 

$

2,597,823

 

 

$

3,287,233

 

The accompanying notes are an integral part of these condensed unaudited financial statements.

 

1


2

Heart Test Laboratories, Inc.

Condensed Statements of Operations

 

 

 

Three Months Ended
July 31,

 

 

 

2023

 

 

2022

 

 

 

(Unaudited)

 

Revenue

 

$

 

 

$

3,200

 

 

 

 

 

 

 

 

Cost of sales

 

 

 

 

 

2,036

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

1,164

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

565,632

 

 

 

434,198

 

Selling, general and administrative

 

 

765,023

 

 

 

997,063

 

Total operating expenses

 

 

1,330,655

 

 

 

1,431,261

 

 

 

 

 

 

 

 

Loss from operations

 

 

(1,330,655

)

 

 

(1,430,097

)

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

Interest expense

 

 

(36,260

)

 

 

(143,607

)

Other income

 

 

60

 

 

 

401

 

Total other expense

 

 

(36,200

)

 

 

(143,206

)

 

 

 

 

 

 

 

Net loss

 

$

(1,366,855

)

 

$

(1,573,303

)

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.13

)

 

$

(0.28

)

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic and diluted

 

 

10,331,505

 

 

 

5,645,230

 

The accompanying notes are an integral part of these condensed unaudited financial statements.

 

2


3

Heart Test Laboratories, Inc.

Condensed Statements of Stockholders' Equity (Deficit) (Unaudited)

Three Month Periods Ended July 31, 2023 and 2022

 

Series A Convertible
Preferred Stock

 

 

Series B Convertible
Preferred Stock

 

 

Series C Convertible
Preferred Stock

 

 

Total
Convertible
Preferred

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated

 

 

Total
Stockholder's

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Stock

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AT APRIL 30, 2023

 

 

 

$

 

 

 

 

 

$

 

 

 

380,871

 

 

$

381

 

 

$

381

 

 

 

10,118,440

 

 

$

10,118

 

 

$

60,977,256

 

 

$

(60,757,198

)

 

$

230,557

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of common stock, net of fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

441,906

 

 

 

442

 

 

 

391,508

 

 

 

 

 

 

391,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for consulting services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

108,696

 

 

 

109

 

 

 

99,891

 

 

 

 

 

 

100,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued upon conversion of Series C Convertible Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

(431

)

 

 

(1

)

 

 

(1

)

 

 

1,938

 

 

 

2

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation - management & other employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

124,646

 

 

 

 

 

 

124,646

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,366,855

)

 

 

(1,366,855

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AT JULY 31, 2023

 

 

 

$

 

 

 

 

 

$

 

 

 

380,440

 

 

$

380

 

 

$

380

 

 

 

10,670,980

 

 

$

10,671

 

 

$

61,593,300

 

 

$

(62,124,053

)

 

$

(519,702

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE AT APRIL 30, 2022

 

10,000

 

 

$

10

 

 

 

10,000

 

 

$

10

 

 

 

463,265

 

 

$

463

 

 

$

483

 

 

 

3,323,942

 

 

$

3,323

 

 

$

48,343,305

 

 

$

(54,402,908

)

 

$

(6,055,797

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of common stock and warrants, net of fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,500,000

 

 

 

1,500

 

 

 

5,193,240

 

 

 

 

 

 

5,194,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued upon conversion of $1.5M Notes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

909,071

 

 

 

909

 

 

 

1,499,091

 

 

 

 

 

 

1,500,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued upon conversion of Bridge Notes and accrued interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,544,114

 

 

 

1,544

 

 

 

3,617,160

 

 

 

 

 

 

3,618,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued upon conversion of Series A and B Convertible Preferred Stock

 

(10,000

)

 

 

(10

)

 

 

(10,000

)

 

 

(10

)

 

 

 

 

 

 

 

 

(20

)

 

 

703,290

 

 

 

703

 

 

 

(683

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued upon conversion of Series C Convertible Preferred Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

(50,676

)

 

 

(50

)

 

 

(50

)

 

 

193,958

 

 

 

194

 

 

 

(144

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation - management & other employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

145,722

 

 

 

 

 

 

145,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants issued in IPO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,250

 

 

 

 

 

 

17,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrants issued to non-employees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39,953

 

 

 

 

 

 

39,953

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,573,303

)

 

 

(1,573,303

)