HeartSciences Inc. (HSCS) - 10-K Summary
Business Context and Reporting Period
Company: HeartSciences Inc.
Filing Type: Form 10-K (Annual Report)
Fiscal Year Ended: April 30, 2026
Business Overview: HeartSciences is a healthcare information technology company developing AI-integrated electrocardiography (ECG) solutions. Its primary offerings include MyoVista Insights, a cloud-native, device-agnostic ECG management platform (classified as a Medical Device Data System and exempt from FDA 510(k)), and the MyoVista wavECG, a 12-lead ECG device currently under FDA 510(k) review (submitted December 2025). The company operates as a single segment focused on cardiovascular diagnostic technology.
Key Financial Metrics (Fiscal Year 2026)
| Metric | Fiscal 2026 | Fiscal 2025 |
|---|---|---|
| Revenue | $4,319 | $4,350 |
| Net Loss | $(9,141,875) | $(8,765,229) |
| Operating Expenses | $8,415,418 | $8,355,041 |
| Cash and Cash Equivalents (End of Period) | $1,656,814 | $1,098,098 |
| Accumulated Deficit | $(85,269,510) | $(76,127,635) |
| Stockholders' Equity | $226,060 | $205,171 |
| Working Capital | Deficit of ~$2.3 million | Deficit |
Note: Revenue remains negligible, derived primarily from limited international device sales during development. The company has not generated significant recurring revenue from its SaaS platform.
Material Changes vs. Prior Period
- Revenue: Remained flat at approximately $4k year-over-year.
- Net Loss: Increased by 4% to $9.1 million, driven by higher interest expense and SG&A costs.
- Operating Expenses:
- R&D: Decreased 35% to $2.8 million due to reduced consulting costs and capitalization of ~$0.7 million in software costs for MyoVista Insights.
- SG&A: Increased 41% to $5.6 million, primarily due to increased stock-based compensation ($1.0 million) and professional fees related to the Form 1-A offering ($0.7 million).
- Debt: The company issued a new $3.6 million unsecured promissory note (Streeterville Note) in January 2026. The previous $2.5 million Streeterville Note was repaid in full via cash and stock conversion in June 2026.
- Equity: Issued 1.9 million Units (Series D Preferred Stock + Warrants) raising ~$6.7 million gross proceeds. Terminated the Regulation A offering in June 2026.
Outlook, Risks, and Unusual Items
- Going Concern: The independent auditor issued an opinion with an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern due to recurring losses, negative cash flows, and limited capital resources. Management plans to raise additional capital through equity or debt, but cannot guarantee availability.
- Proposed Merger: On June 23, 2026, the company entered into a definitive Merger Agreement with Fortitude Mining Holdings, Inc. The transaction is subject to stockholder approval and other closing conditions. Upon closing, HeartSciences shareholders are expected to own approximately 5% of the combined entity, while Fortitude shareholders will own approximately 95%.
- Regulatory Status:
- MyoVista wavECG: FDA 510(k) submission remains under review. No assurance of clearance timing or outcome.
- MyoVista Insights: Received Epic Toolbox designation in March 2026. Launched version 1.3 with an AI-ECG Algorithm Marketplace in June 2026. Signed first commercial SaaS agreements in May 2026.
- Internal Controls: The company identified material weaknesses in internal control over financial reporting, including lack of proper approval processes, insufficient accounting resources, and inadequate segregation of duties.
- Nasdaq Compliance: As of April 30, 2026, stockholders' equity ($0.2 million) was below the $2.5 million minimum required for Nasdaq listing. The company expects to receive a notice of non-compliance and must regain compliance to avoid delisting.
Key Facts for Investor Verification
- Merger Certainty: Verify the status of the Fortitude Merger Agreement, specifically the likelihood of stockholder approval and the potential for the transaction to fail, which could leave the company with insufficient capital.
- Liquidity Runway: Confirm the company's ability to fund operations beyond the next 12 months given the "substantial doubt" going concern opinion and the termination of the Regulation A offering.
- Regulatory Milestones: Monitor the FDA review status of the MyoVista wavECG device; commercial success is entirely dependent on this clearance.
- Listing Status: Track the company's progress in regaining compliance with Nasdaq's minimum stockholders' equity requirement to avoid delisting and potential "penny stock" status.
- Internal Control Remediation: Assess the timeline and effectiveness of the remediation plan for the identified material weaknesses in financial reporting.