HeartSciences Inc. (HSCS) - 10-Q Summary for Period Ended October 31, 2025
Business Context and Reporting Period
HeartSciences Inc. is a healthcare information technology company developing AI-driven electrocardiography (ECG) solutions, specifically the MyoVista wav ECG device and the MyoVista Insights platform. This report covers the quarterly period ended October 31, 2025 (Q2 Fiscal 2026). The Company is classified as a non-accelerated filer and a smaller reporting company. As of December 12, 2025, there were 3,178,207 shares of Common Stock outstanding.
Key Financial Metrics
| Metric | Six Months Ended Oct 31, 2025 | Six Months Ended Oct 31, 2024 |
|---|---|---|
| Revenue | $4,319 | $0 |
| Net Loss | $(4,405,763) | $(4,134,607) |
| Net Loss Per Share (Basic/Diluted) | $(2.10) | $(4.88) |
| Cash and Cash Equivalents (Oct 31, 2025) | $1,951,103 | $4,052,120 (Oct 31, 2024) |
| Total Assets | $5,996,117 | $4,222,909 (Apr 30, 2025) |
| Total Liabilities | $1,813,647 | $4,017,738 (Apr 30, 2025) |
| Stockholders' Equity | $4,182,470 | $205,171 (Apr 30, 2025) |
| Accumulated Deficit | $(80,533,398) | $(76,127,635) (Apr 30, 2025) |
Debt and Liquidity: As of October 31, 2025, the Company held $500,000 in notes payable (FRV Note). The Streeterville Note was repaid in full during the period through a combination of cash repayment and debt-for-equity exchange. Working capital is approximately $2.2 million.
Material Changes vs. Prior Period
- Revenue Generation: The Company recorded minimal revenue ($4,319 for the six months) compared to zero in the prior year, derived from international distributor relationships.
- Operating Expenses: Total operating expenses decreased slightly to $3.95 million (vs. $4.06 million prior year). Research and Development (R&D) expenses decreased by 29% to $1.72 million due to reduced cloud consulting costs and capitalization of software costs. Conversely, Selling, General, and Administrative (SG&A) expenses increased by 36% to $2.23 million, driven primarily by a $484,000 increase in stock-based compensation.
- Interest Expense: Interest expense increased significantly by 231% to $463,222, largely due to the write-off of approximately $264,000 in unamortized original issue discount (OID) and debt issuance costs upon the full repayment of the Streeterville Note.
- Capital Structure: Stockholders' equity increased from $205,171 at April 30, 2025, to $4.18 million at October 31, 2025, primarily due to the issuance of Series D Preferred Stock and warrants.
Guidance, Outlook, and Risks
Going Concern: The Company has incurred losses since inception and experienced negative cash flows from operations. Management believes current resources are insufficient to fund operations for the next twelve months, raising substantial doubt about the Company's ability to continue as a going concern. Additional capital is required for working capital, R&D, and regulatory clearance.
Regulatory Status: The MyoVista wav ECG device was submitted to the FDA for 510(k) premarket clearance in December 2025. The Company received "Breakthrough Device" designation for its aortic stenosis ECG algorithm in June 2025. The MyoVista Insights platform is classified as a Medical Device Data System (MDDS) and is exempt from 510(k) requirements.
Financing Activities:
- Series D Offering: Commenced a "best efforts" offering of up to $15.0 million in Units (Series D Preferred Stock + Warrants). As of the report date, $6.7 million in gross proceeds were raised from 1,912,383 Units.
- ATM Facility: Amended the Equity Distribution Agreement to allow sales up to $25.0 million. Sold 48,858 shares for net proceeds of approximately $0.2 million during the period.
- Debt Repayment: Repaid the Streeterville Note ($2.51M principal) via cash ($450k) and exchange of $2.02M in principal/interest for 570,626 shares of Common Stock.
Internal Controls: Management identified material weaknesses in internal controls over financial reporting, including lack of proper approval processes, insufficient accounting resources, and inadequate segregation of duties. Remediation steps are underway.
Investor Verification Checklist
- Cash Runway: Verify the sufficiency of the $1.95 million cash balance against the stated burn rate and the timeline for FDA clearance of the MyoVista wav ECG.
- Dilution Risk: Assess the impact of the ongoing Series D offering, ATM facility, and existing warrants/options (approx. 2.9 million shares underlying) on future share count.
- Regulatory Milestones: Monitor the status of the FDA 510(k) submission for the MyoVista wav ECG device and the development of the impaired cardiac relaxation algorithm.
- Internal Controls: Review progress on remediation of material weaknesses in internal controls over financial reporting.
- Debt Obligations: Confirm the terms and maturity of the remaining $500,000 FRV Note and any potential future financing needs.