Heart Test Laboratories(HSCS) - 2026 Q1 - Quarterly Report

Financial Performance - Revenues for the three months ended July 31, 2025, were $2,000, with a cost of sales of $1,000, resulting in a gross margin of $1,000 [193]. - The Company incurred a net loss of $2.1 million for the period ended July 31, 2025, with an accumulated deficit of $78.2 million [198]. - Cash and cash equivalents increased to approximately $2.8 million as of July 31, 2025, up from $1.1 million as of April 30, 2025 [205]. - Net cash used in operating activities was $1.9 million during the three months ended July 31, 2025, primarily due to the net loss [207]. - Net cash provided by financing activities was $3.6 million during the three months ended July 31, 2025, primarily from the issuance of Series D Preferred Stock and warrants [209]. Research and Development - The company is focused on developing AI and innovative software technology to enhance the clinical usefulness of ECGs, aiming to provide modernized ECG solutions for a broader range of heart disease detection [155]. - Phase 1 of the MyoVista Insights Cloud Platform has been launched, with expected revenue from installation fees and SaaS-based usage fees, adopting a recurring subscription revenue model for AI-ECG algorithms [157]. - The company has been granted a foundational patent covering the estimation of echocardiography parameters indicative of heart function using an ECG in June 2025 [175]. - Research and development expenses decreased by $228,000, or 19%, to $997,000 for the three months ended July 31, 2025, primarily due to reduced cloud consulting costs [194]. Regulatory and Compliance - The company received FDA "Breakthrough Device" designation for its aortic stenosis ECG algorithm in June 2025 [176]. - The company plans to submit the MyoVista wavECG device for FDA clearance under the 510(k) pathway in calendar 2025 [170]. - The company aims for an FDA submission of a low-ejection fraction algorithm during the first half of calendar 2026 [170]. Capital and Financing - The company has entered into a Series D Preferred Stock offering with a maximum amount of $15.0 million, priced at $3.50 per unit [178]. - The Company issued 1,556,409 Units consisting of Series D Preferred Stock and Warrants for gross proceeds of approximately $5.4 million as of the date of the Quarterly Report [181]. - The Company expects to continue raising capital through the sale of additional equity securities, debt, or strategic partnerships to fund ongoing operations [204]. Operational Challenges - The company has experienced recurring losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern [172]. - As of January 31, 2025, the company's stockholders' equity was reported at $1,786,689, below the Nasdaq minimum requirement of $2.5 million [173]. - Selling, general, and administrative expenses increased by $27,000, or 3%, to approximately $878,000 for the three months ended July 31, 2025, mainly due to increased stock compensation expense [195]. - Interest expense rose to $184,000 for the three months ended July 31, 2025, an increase of $161,000 or 715% compared to the same period in 2024 [196]. Accounting and Reporting - No material changes to critical accounting policies and estimates from the 2025 Annual Report on Form 10-K [211]. - Smaller reporting company is not required to provide quantitative and qualitative disclosures about market risk [212].