Heart Test Laboratories(HSCS) - 2023 Q2 - Quarterly Report

Financial Performance - The company reported no revenue for the three months ended October 31, 2022, and minimal revenue of $3,000 for the six months ended October 31, 2022, representing a decline of $4,000 or 57% compared to the same period in 2021[143]. - For the six months ended October 31, 2022, net cash used in operating activities was $2.9 million, primarily due to a net loss of $3.4 million[153]. - The company reported a net cash used in operating activities of $1.5 million for the same period in 2021[153]. - The net change in cash and cash equivalents during the six months ended October 31, 2022, was an increase of $2.2 million[152]. Expenses - Research and development expenses increased to $849,000 and $1.3 million for the three and six months ended October 31, 2022, respectively, reflecting increases of 56% and 36% compared to the same periods in 2021[146]. - Selling, general, and administrative expenses rose to $926,000 and $1.9 million for the three and six months ended October 31, 2022, representing increases of 125% and 180% compared to the same periods in 2021[147]. - The company incurred an interest expense of $33,000 and $176,000 for the three and six months ended October 31, 2022, related to its loan and security agreements[148]. Product Development - The MyoVista device, which is pending FDA clearance, aims to enhance ECG's clinical utility in detecting cardiac dysfunction, particularly in frontline healthcare settings[123]. - The company has entered into a multi-year collaboration agreement with Rutgers University to develop AI-based ECG algorithms, expected to accelerate product development[133]. - The company is partially through a pivotal clinical validation study for the MyoVista device, with a revised FDA De Novo submission expected later in the fiscal year ending April 30, 2023[131]. - The MyoVista device is classified as a Class II medical device by the FDA, requiring De Novo premarket review for clearance[131]. Financial Position - As of October 31, 2022, the company had approximately $3.1 million in cash, an increase of $2.2 million from $918,000 as of April 30, 2022[150]. - The company completed its IPO on June 17, 2022, raising approximately $5.2 million in net proceeds after expenses[151]. - Net cash provided by financing activities was $5.1 million during the six months ended October 31, 2022, mainly from the IPO[154]. - The company experienced a net cash provided by financing activities of $1.1 million during the six months ended October 31, 2021[154]. Risks and Concerns - The company has experienced recurring losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern[132]. - The company cannot assure the successful sale of future equity and debt securities on acceptable terms[149]. Intellectual Property - The company was granted two patents in September and October 2022, enhancing its intellectual property portfolio related to ECG technology[136]. Future Plans - The company plans to continue significant capital investment in R&D, clinical studies, and go-to-market strategies[149]. - There have been no material changes to the company's critical accounting policies and estimates[155].