HeartSciences Reports Decrease in Cash and Cash Equivalents, Net Loss Increase in Latest Quarter

Heart Test Laboratories, Inc. (d/b/a HeartSciences) reported significant financial developments in its latest 10-Q filing for the period ending July 31, 2024. The company, which focuses on AI-based technology for electrocardiograph (ECG) devices, experienced a decrease in cash and cash equivalents, reporting $4.34 million, down from $5.81 million as of April 30, 2024. Total current assets also fell to $6.07 million from $7.35 million, while total assets decreased from $9.50 million to $8.19 million during the same period.

The company reported a net loss of $2.05 million for the three months ended July 31, 2024, compared to a net loss of $1.37 million for the same period in 2023, marking a 50% increase in losses. Operating expenses rose significantly to $2.08 million, up from $1.33 million year-over-year, driven primarily by a 117% increase in research and development expenses, which reached $1.22 million due to consulting costs and increased headcount for the MyoVista Insights Cloud Platform development.

HeartSciences' total stockholders' equity decreased from $7.32 million to $5.93 million, reflecting the ongoing financial challenges. The company’s accumulated deficit increased to $69.41 million as of July 31, 2024, up from $67.36 million at the end of the previous fiscal period.

In terms of strategic developments, HeartSciences executed a reverse stock split on May 17, 2024, to comply with Nasdaq's minimum bid price requirement, which was successfully regained by June 3, 2024. The company has also entered into various financing agreements, including a Note Purchase Agreement with Streeterville Capital for $2.51 million, which netted approximately $1.9 million in cash proceeds.

The company continues to focus on the development of its MyoVista wavECG device, which integrates proprietary AI-ECG algorithms. Future plans include seeking FDA submission for its AI-ECG solutions in Q1 2025. HeartSciences has also entered into licensing agreements with Mount Sinai to commercialize AI cardiovascular algorithms, furthering its product development efforts.

Despite these advancements, management has indicated that current resources may be insufficient to fund necessary operations for commercialization, highlighting the need for additional capital through equity securities, debt, or strategic partnerships. The company has identified material weaknesses in its internal controls over financial reporting, which may impact its operational efficiency moving forward.