HSCSWHIGH SIGNALFINANCIAL10-K

HeartSciences experienced a severe financial deterioration with stockholders' equity collapsing from $7.3M to $205K while cash reserves declined dramatically from $5.8M to $1.1M.

The company appears to be in financial distress with equity nearly wiped out and cash burning at an unsustainable rate, raising serious going-concern questions. The combination of substantially reduced revenue, meaningfully higher R&D spending, and depleted cash position suggests the company may face near-term liquidity challenges without additional financing.

Comparing 2025-07-24 vs 2024-07-29View on EDGAR →
FINANCIAL ANALYSIS

HeartSciences suffered across virtually all financial metrics, with stockholders' equity declining 97% to just $205K and cash reserves falling 81% to $1.1M. Revenue dropped substantially while R&D expenses grew meaningfully to $4.4M, creating an unsustainable cash burn situation. The company's balance sheet deteriorated significantly with total assets declining 56% and liabilities increasing 84%, painting a picture of acute financial stress that threatens the company's viability without immediate capital infusion.

FINANCIAL STATEMENT CHANGES
Stockholders Equity
Balance Sheet
-97.2%
$7.3M→$205K

Equity declined sharply — large losses, buybacks, or write-downs reducing book value significantly.

Capital Expenditure
Cash Flow
-95.1%
$64K→$3K

Capex reduced 95.1% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Accounts Receivable
Balance Sheet
+87.4%
$2K→$4K

Receivables surged 87.4% — revenue recognized but not yet collected; watch for collection issues or channel stuffing.

Total Liabilities
Balance Sheet
+83.8%
$2.2M→$4.0M

Liabilities grew 83.8% — significant increase in debt or obligations, assess impact on financial flexibility.

Cash & Equivalents
Balance Sheet
-81.1%
$5.8M→$1.1M

Cash declined 81.1% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Gross Profit
P&L
-80.3%
$13K→$2K

Gross margin compression — rising input costs, pricing pressure, or unfavorable product mix shift.

Revenue
P&L
-76.6%
$19K→$4K

Revenue declined 76.6% — significant demand weakness or market share loss warrants investigation.

Current Assets
Balance Sheet
-70.5%
$7.4M→$2.2M

Current assets declined 70.5% — monitor working capital adequacy and short-term liquidity.

Total Assets
Balance Sheet
-55.6%
$9.5M→$4.2M

Total assets contracted 55.6% — asset sales, write-downs, or balance sheet optimization underway.

R&D Expense
P&L
+52.4%
$2.9M→$4.4M

R&D investment increased 52.4% — signals commitment to future product development, though near-term margin impact.

LANGUAGE CHANGES
NEW — 2025-07-24
PRIOR — 2024-07-29
ADDED
At July 23, 2025, the registrant had 1,934,280 shares of Common Stock, par value $0.001 per share, issued and outstanding.
References to "Fiscal 2026" refer to the 12-months ending April 30, 2026, references to "Fiscal 2025" refer to the 12-months ended April 30, 2025, and references to "Fiscal 2024" refer to the 12-months ended April 30, 2024.
In June 2025 we received Breakthrough Device designation from the FDA for the aortic stenosis algorithm licensed from Mount Sinai.
In July 2025, the American Society of Echocardiography released updated guidelines for evaluating Left Ventricular Diastolic Dysfunction ( LVDD ), placing increased emphasis on the echocardiographic measure for impaired cardiac relaxation (e ) and now requiring age-based threshold adjustments.
The device s embedded impaired cardiac relaxation algorithm already incorporates age-adjusted measures, previously agreed with the FDA.
HeartSciences is now evaluating alignment with the newly published standards prior to submission, with validation against our existing FDA study dataset still available.
We have been preparing for a 510(k) FDA submission in calendar 2025.
However, in July 2025, the American Society of Echocardiography released updated guidelines for evaluating LVDD, placing increased emphasis on the echocardiographic measure for impaired cardiac relaxation (e ) and now requiring age-based threshold adjustments.
The device s embedded impaired cardiac relaxation algorithm already incorporates age-adjusted measures, previously agreed with the FDA.
We are now evaluating alignment with the newly published standards prior to submission.
REMOVED
The stock price and the number of shares at October 31, 2023 takes into account a 1-for-100 reverse stock split which became effective on May 17, 2024 (the Reverse Stock Split ).
At July 26, 2024, the registrant had 855,966 shares of Common Stock, par value $0.001 per share, issued and outstanding post the Reverse Stock Split.
References to "Fiscal 2025" refer to the 12-months ending April 30, 2025, references to "Fiscal 2024" refer to the 12-months ended April 30, 2024, and references to "Fiscal 2023" refer to the 12-months ended April 30, 2023.
References to our IPO refer to the initial public offering of Heart Test Laboratories, Inc.
REVERSE STOCK SPLIT Effective May 17, 2024, the Company effected a 1-for-100 reverse stock split of its issued and outstanding shares of Common Stock (the Reverse Stock Split ).
As a result of the Reverse Stock Split, every 100 shares of the Company's issued and outstanding pre-reverse split shares of common stock, par value $0.001 per share (the Common Stock ), were combined into one share of Common Stock, except to the extent that the Reverse Stock Split resulted in any of the Company's shareholders owning a fractional share, which was rounded up to the next highest whole share.
In connection with the Reverse Stock Split, there was no change in the par value per share of $0.001.
Correspondingly, the exercise price per share of Common Stock attributable to the Company's warrants and stock options and the conversion price of its other convertible instruments immediately prior to the Reverse Stock Split was proportionately increased by a multiple of 100 following the Reverse Stock Split.
All Common Stock share and per share data, and exercise price data for applicable Common Stock equivalents, included in these financial statements have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated.
We have been adjusting the algorithm to reflect updated echo measurement thresholds in respect of 60 year old patients.
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