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What changed in HeartSciences Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HeartSciences Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+279 added−285 removedSource: 10-K (2025-07-24) vs 10-K (2024-07-29)

Top changes in HeartSciences Inc.'s 2025 10-K

279 paragraphs added · 285 removed · 219 edited across 3 sections

Item 1. Business

Business — how the company describes what it does

163 edited+23 added−23 removed599 unchanged
Biggest changeRisks Related to the Ownership of our Securities: • The market price of our Common Stock may be highly volatile, and you could lose all or part of your investment; 24 Table of Contents • Future sales of a substantial number of shares of our Common Stock by our existing shareholders could cause our stock price to decline; • If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they publish negative reports regarding our business or our securities, our share price and trading volume could decline; • We have identified weaknesses in our internal controls, and we cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future; and • We are an “emerging growth company,” and any decision on our part to comply with certain reduced disclosure requirements applicable to emerging growth companies could make the Common Stock less attractive to investors. 25 Table of Contents RISK FACTORS Investing in our securities involves a high degree of risk.
Biggest changeRisks Related to Our License Agreements with Mount Sinai: • We are highly dependent on the Licenses, the termination of which may prevent us from commercializing our products, and which imposes significant obligations on us; • Our future financial performance will depend in part on the successful integration, improvement and software updates from the Mount Sinai algorithms; and • Our future success depends on our ability to develop, receive regulatory clearance or approval for, and introduce the algorithms underlying the Mount Sinai Licenses to the market in a timely manner. 23 Table of Contents Risks Related to the Ownership of our Securities: • The market price of our Common Stock may be highly volatile, and you could lose all or part of your investment; • Future sales of a substantial number of shares of our Common Stock by our existing shareholders could cause our stock price to decline; • If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they publish negative reports regarding our business or our securities, our share price and trading volume could decline; • We are an “emerging growth company,” and any decision on our part to comply with certain reduced disclosure requirements applicable to emerging growth companies could make the Common Stock less attractive to investors. 24 Table of Contents RISK FACTORS Investing in our securities involves a high degree of risk.
We previously submitted an FDA De Novo classification request in December 2019 and, following feedback and communications with the FDA during and since that submission, we have been making modifications to our device, including our proprietary algorithm.
We previously submitted an FDA De Novo classification request in December 2019 and, following feedback and communications with the FDA during and since that submission, we have been making modifications to our device, including our proprietary algorithm.
We have finished the patient recruitment and core lab work for our FDA validation study and have been undertaking device and algorithm development testing for a revised FDA submission.
We have finished the patient recruitment and core lab work for our FDA validation study and have been undertaking device and algorithm development testing for a revised FDA submission.
In order to sell in member countries of the EEA, our devices must now comply with the essential requirements of the EU MDR. Our CE Mark issued under the MDD lapsed in February 2022 and we will need to establish compliance under EU MDR.
In order to sell in member countries of the EEA, our devices must now comply with the essential requirements of the EU MDR. Our CE Mark issued under the MDD lapsed in February 2022 and we will need to establish compliance under EU MDR.
An updated CE mark certificate under EU MDR, which we have not yet obtained, would entitle the Company to market the MyoVista wav ECG in the European Economic Area as well as other countries for which CE Mark represents an appropriate regulatory standard.
An updated CE mark certificate under EU MDR, which we have not yet obtained, would entitle the Company to market the MyoVista wav ECG in the European Economic Area as well as other countries for which CE Mark represents an appropriate regulatory standard.
The clinical trial process is lengthy and expensive with uncertain outcomes, and often requires the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.
The clinical trial process is lengthy and expensive with uncertain outcomes, and often requires the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.
We may experience delays in our ongoing clinical studies for a number of reasons, which could adversely affect the costs, timing or successful completion of our clinical studies, including related to the following: • we may be required to submit an IDE application to the FDA, which must become effective prior to commencing certain human clinical studies of medical devices, and the FDA may reject our IDE application and notify us that we may not begin clinical studies; • regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical studies; • regulators and/or an Institutional Review Board, or IRB, or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site; • • we may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical studies or abandon product development programs; • the number of subjects or patients required for clinical studies may be larger than we anticipate, enrollment in these clinical studies may be insufficient or slower than we anticipate, and the number of clinical studies being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical studies at a higher rate than we anticipate; 39 Table of Contents • our third-party contractors, including those manufacturing products or conducting clinical studies on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we might have to suspend or terminate clinical studies for various reasons, including a finding that the subjects are being exposed to unacceptable health risks; • we may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB and/or regulatory authorities for re-examination; • regulators, IRBs, or other parties may require or recommend that we or our investigators suspend or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements; • the cost of clinical studies may be greater than we anticipate; • clinical sites may not adhere to the clinical protocol or may drop out of a clinical trial; • we may be unable to recruit a sufficient number of clinical trial sites; • regulators, IRBs, or other reviewing bodies may fail to approve or subsequently find fault with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical studies may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; • approval policies or regulations of the FDA or applicable foreign regulatory agencies may change in a manner rendering our clinical data insufficient for approval; and • our current or future products may have undesirable side effects or other unexpected characteristics.
We may experience delays in our ongoing clinical studies for a number of reasons, which could adversely affect the costs, timing or successful completion of our clinical studies, including related to the following: • we may be required to submit an IDE application to the FDA, which must become effective prior to commencing certain human clinical studies of medical devices, and the FDA may reject our IDE application and notify us that we may not begin clinical studies; • regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical studies; • regulators and/or an Institutional Review Board, or IRB, or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site; • 39 Table of Contents • we may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical studies may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical studies or abandon product development programs; • the number of subjects or patients required for clinical studies may be larger than we anticipate, enrollment in these clinical studies may be insufficient or slower than we anticipate, and the number of clinical studies being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical studies at a higher rate than we anticipate; • our third-party contractors, including those manufacturing products or conducting clinical studies on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we might have to suspend or terminate clinical studies for various reasons, including a finding that the subjects are being exposed to unacceptable health risks; • we may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB and/or regulatory authorities for re-examination; • regulators, IRBs, or other parties may require or recommend that we or our investigators suspend or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements; • the cost of clinical studies may be greater than we anticipate; • clinical sites may not adhere to the clinical protocol or may drop out of a clinical trial; • we may be unable to recruit a sufficient number of clinical trial sites; • regulators, IRBs, or other reviewing bodies may fail to approve or subsequently find fault with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical studies may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; • approval policies or regulations of the FDA or applicable foreign regulatory agencies may change in a manner rendering our clinical data insufficient for approval; and • our current or future products may have undesirable side effects or other unexpected characteristics.
We may be subject to certain federal and state regulations, including the federal healthcare programs’ Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, offering, receiving, or paying any remuneration, directly or indirectly, in cash or in kind, to induce or reward purchasing, ordering or arranging for or recommending the purchase or order of any item or service for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of, or payment for, healthcare benefits, items or services; the federal Civil Monetary Penalties Law, which authorizes the imposition 46 Table of Contents of substantial civil monetary penalties against an entity that engages in activities including, among others (1) knowingly presenting, or causing to be presented, a claim for services not provided as claimed or that is otherwise false or fraudulent in any way; (2) arranging for or contracting with an individual or entity that is excluded from participation in federal healthcare programs to provide items or services reimbursable by a federal healthcare program; (3) violations of the federal Anti- Kickback Statute; or (4) failing to report and return a known overpayment; the federal False Statements Statute, which prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry, in connection with the delivery of or payment for healthcare benefits, items, or services; the federal civil False Claims Act, or the FCA, which prohibits, among other things, knowingly presenting, or causing to be presented claims for payment of government funds that are false or fraudulent, or knowingly making, using or causing to be made or used a false record or statement material to such a false or fraudulent claim, or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government; and other federal and state false claims laws.
We may be subject to certain federal and state regulations, including the federal healthcare programs’ Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, offering, receiving, or paying any remuneration, 46 Table of Contents directly or indirectly, in cash or in kind, to induce or reward purchasing, ordering or arranging for or recommending the purchase or order of any item or service for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of, or payment for, healthcare benefits, items or services; the federal Civil Monetary Penalties Law, which authorizes the imposition of substantial civil monetary penalties against an entity that engages in activities including, among others (1) knowingly presenting, or causing to be presented, a claim for services not provided as claimed or that is otherwise false or fraudulent in any way; (2) arranging for or contracting with an individual or entity that is excluded from participation in federal healthcare programs to provide items or services reimbursable by a federal healthcare program; (3) violations of the federal Anti- Kickback Statute; or (4) failing to report and return a known overpayment; the federal False Statements Statute, which prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry, in connection with the delivery of or payment for healthcare benefits, items, or services; the federal civil False Claims Act, or the FCA, which prohibits, among other things, knowingly presenting, or causing to be presented claims for payment of government funds that are false or fraudulent, or knowingly making, using or causing to be made or used a false record or statement material to such a false or fraudulent claim, or knowingly concealing or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government; and other federal and state false claims laws.
In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to, an existing product, we must first receive either approval of a Premarket Approval Application, or PMA, clearance under Section 510(k), or be granted a De Novo classification, in accordance with the FDCA.
In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to, an existing product, we must first receive either approval of a Premarket Approval Application, or PMA, clearance under Section 510(k), or be granted a De Novo classification, in accordance with the FDCA.
Sales of our products outside of the United States and the EEA are also subject to foreign regulatory requirements that vary widely from country to country. Approval procedures vary among countries and can involve additional testing.
Sales of our products outside of the United States and the EEA are also subject to foreign regulatory requirements that vary widely from country to country. Approval procedures vary among countries and can involve additional testing.
If we are unable to maintain our authorizations in a particular country, we will no longer be able to sell the applicable device in that country.
If we are unable to maintain our authorizations in a particular country, we will no longer be able to sell the applicable device in that country.
Regulatory clearance or approval by the FDA does not ensure registration, clearance or approval by regulatory authorities in other countries, and registration, clearance or approval by one or more foreign regulatory authorities does not ensure registration, clearance or approval by regulatory authorities in other foreign countries or by the FDA.
Regulatory clearance or approval by the FDA does not ensure registration, clearance or approval by regulatory authorities in other countries, and registration, clearance or approval by one or more foreign regulatory authorities does not ensure registration, clearance or approval by regulatory authorities in other foreign countries or by the FDA.
These include: • establishment registration and device listing with the FDA; • QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; • labeling and marketing regulations, which require that promotion is truthful, not misleading, fairly balanced and provide adequate directions for use and that all claims are substantiated, and also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; • clearance or approval of product modifications to 510(k)-cleared devices, or those re-classified to 510(k) cleared devices, that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of a supplement for certain modifications to PMA devices; • medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; 18 Table of Contents • correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; • complying with the new federal law and regulations requiring Unique Device Identifiers (UDI) on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database (GUDID); • the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and • post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These include: • establishment registration and device listing with the FDA; • QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; • labeling and marketing regulations, which require that promotion is truthful, not misleading, fairly balanced and provide adequate directions for use and that all claims are substantiated, and also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; 17 Table of Contents • clearance or approval of product modifications to 510(k)-cleared devices, or those re-classified to 510(k) cleared devices, that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of a supplement for certain modifications to PMA devices; • medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; • correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; • complying with the new federal law and regulations requiring Unique Device Identifiers (UDI) on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database (GUDID); • the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and • post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
We are an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act, and for as long as we continue to be an emerging growth company, we may choose to take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” among other exemptions, we will: • not be required to engage an independent registered public accounting firm to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; 61 Table of Contents • not be required to comply with the requirement in Public Company Accounting Oversight Board Auditing Standard 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, to communicate critical audit matters in the auditor’s report; • be permitted to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our periodic reports and registration statements, including in this prospectus; • not be required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation; or • not be required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,”“say-on-frequency,” and “say-on-golden parachutes.” In addition, the JOBS Act also permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies, meaning that we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We are an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act, and for as long as we continue to be an emerging growth company, we may choose to take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” among other exemptions, we will: • not be required to engage an independent registered public accounting firm to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; • not be required to comply with the requirement in Public Company Accounting Oversight Board Auditing Standard 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, to communicate critical audit matters in the auditor’s report; • be permitted to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our periodic reports and registration statements, including in this prospectus; • not be required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation; or • not be required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,”“say-on-frequency,” and “say-on-golden parachutes.” 60 Table of Contents In addition, the JOBS Act also permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies, meaning that we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
In particular, as an emerging growth company we: • are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act; • are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”); • are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes); 20 Table of Contents • are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure; • may present only two years of audited financial statements and only two years of related Management’s Discussion & Analysis of Financial Condition and Results of Operations (“MD&A”); and • are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.
In particular, as an emerging growth company we: • are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act; 19 Table of Contents • are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”); • are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes); • are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure; • may present only two years of audited financial statements and only two years of related Management’s Discussion & Analysis of Financial Condition and Results of Operations (“MD&A”); and • are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.
On January 30, 2024, we received a letter from the Panel advising that we have been granted an additional 180-day extension to July 29, 2024, to regain compliance with the Minimum Bid Price Requirement. On May 9, 2024, the Company received a staff determination from Nasdaq to delist the Company’s securities from the Nasdaq Capital Market (the “Staff Determination”).
On January 30, 2024, we received a letter from the Panel advising that we have been granted an additional 180-day extension to July 29, 2024, to regain compliance with the Minimum Bid Price Requirement. On May 9, 2024, we received a staff determination from Nasdaq to delist the Company’s securities from the Nasdaq Capital Market (the “Staff Determination”).
Please see “Risk Factors—We are an ‘emerging growth company,’ and any decision on our part to comply with certain reduced disclosure requirements applicable to emerging growth companies could make the Common Stock less attractive to investors.” Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act, or such earlier time that we no longer meet the definition of an emerging growth company.
Please see “Risk Factors—We are an ‘emerging growth company,’ and any decision on our part to comply with certain reduced disclosure requirements applicable to emerging growth companies could make the Common Stock less attractive to investors.” Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity, or June 2027, pursuant to a registration statement declared effective under the Securities Act, or such earlier time that we no longer meet the definition of an emerging growth company.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions: • adverse publicity; • “it has come to our attention” letters, untitled letters or warning letters; 43 Table of Contents • fines, injunctions, consent decrees and civil penalties; • recalls, termination of distribution, administrative detention, or seizure of our device; • customer notifications or repair, replacement or refunds; • operating restrictions or partial suspension or total shutdown of production; • delays in or refusal to grant our requests for future clearances or approvals or foreign marketing authorizations of new products, new intended uses, or modifications to existing products; • withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our device; • FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and • criminal prosecution.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include any of the following sanctions: • adverse publicity; • “it has come to our attention” letters, untitled letters or warning letters; • fines, injunctions, consent decrees and civil penalties; • recalls, termination of distribution, administrative detention, or seizure of our device; • customer notifications or repair, replacement or refunds; • operating restrictions or partial suspension or total shutdown of production; • delays in or refusal to grant our requests for future clearances or approvals or foreign marketing authorizations of new products, new intended uses, or modifications to existing products; • withdrawals or suspensions of product clearances or approvals, resulting in prohibitions on sales of our device; • FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and • criminal prosecution.
We also anticipate that our expenses will increase substantially if and as we: • continue research and development; • are granted regulatory and marketing approvals; • establish a sales, marketing, and distribution infrastructure; • seek to identify, assess, acquire, license, and/or develop subsequent generations of our current products and any new products; • seek to maintain, protect, and expand our intellectual property portfolio; • seek to attract and retain skilled personnel; • create additional infrastructure to support our operations as a public company as well as our product development and planned future marketing efforts; and • experience any delays or encounter issues with respect to any of the above, including, but not limited to, failed studies, complex results, safety issues or other regulatory challenges that require longer follow-up of existing studies or additional supportive studies in order to pursue marketing approval.
We also anticipate that our expenses will increase substantially if and as we: • continue R&D; • are granted regulatory and marketing approvals; • establish a sales, marketing, and distribution infrastructure; • seek to identify, assess, acquire, license, and/or develop subsequent generations of our current products and any new products; • seek to maintain, protect, and expand our intellectual property portfolio; • seek to attract and retain skilled personnel; • create additional infrastructure to support our operations as a public company as well as our product development and planned future marketing efforts; and • experience any delays or encounter issues with respect to any of the above, including, but not limited to, failed studies, complex results, safety issues or other regulatory challenges that require longer follow-up of existing studies or additional supportive studies in order to pursue marketing approval.
These diagnostic tests are typically performed in a specialist cardiology or hospital setting and may include: • Stress ECG testing , a non-invasive diagnostic test with a cost of approximately $200 with, according to the American College of Cardiology, a sensitivity of 68% in the detection of CAD; 7 Table of Contents • Echocardiogram , or echo, a non-invasive diagnostic imaging test, similar to an ultrasound, which is effective in the detection of heart disease; however, the Medicare cost of an echo in a hospital is approximately $600 and can be as much as $3,000 if performed privately; • Cardiac imaging tests , such as nuclear stress tests and coronary computerized tomography angiograms alternatively can be conducted noninvasively, but typically cost $1,000 or more; or • Coronary angiogram , an invasive test in which dye that is visible by X-ray is injected into the blood vessels of the heart.
These diagnostic tests are typically performed in a specialist cardiology or hospital setting and may include: • Stress ECG testing , a non-invasive diagnostic test with a cost of approximately $200 with, according to the American College of Cardiology, a sensitivity of 68% in the detection of CAD; • Echocardiogram , or echo, a non-invasive diagnostic imaging test, similar to an ultrasound, which is effective in the detection of heart disease; however, the Medicare cost of an echo in a hospital is approximately $600 and can be as much as $3,000 if performed privately; • Cardiac imaging tests , such as nuclear stress tests and coronary computerized tomography angiograms alternatively can be conducted noninvasively, but typically cost $1,000 or more; or • Coronary angiogram , an invasive test in which dye that is visible by X-ray is injected into the blood vessels of the heart.
Our AI-ECG algorithms range of applications and potential uses are vast, and include providing: • Primary care — front-line cardiac testing/referral tool, heart disease screening. • Retail Healthcare — access to ECG testing at retail sites such as CVS and Walgreens. • Emergency Departments — enhanced ECG testing for emergency room patients. • Cardiologists — prescreening cardiology patients. • Hospitals — in-patient testing or testing prior to discharge, particularly cardiac wards. • Surgery — pre-anesthesia testing, pre/post intervention. • Life Insurance testing — ECGs when required in connection with the issuance of life insurance policies. • Specialty Environments — screening for conditions such as cardiomyopathy, cardiac oncology, drug trials, heart failure, and diabetes. • Athlete testing — cardiac screening programs for athletes.
Our AI-ECG algorithms range of applications and potential uses are vast, and include providing: • Primary care — front-line cardiac testing/referral tool, heart disease screening. • Retail Healthcare — access to ECG testing at retail sites such as CVS and Walgreens. • Emergency Departments — enhanced ECG testing for emergency room patients. • Cardiologists — prescreening cardiology patients. • Hospitals — in-patient testing or testing prior to discharge, particularly cardiac wards. • Surgery — pre-anesthesia testing, pre/post intervention. • Life Insurance testing — ECGs when required in connection with the issuance of life insurance policies. 11 Table of Contents • Specialty Environments — screening for conditions such as cardiomyopathy, cardiac oncology, drug trials, heart failure, and diabetes. • Athlete testing — cardiac screening programs for athletes.
We had been planning a revised submission under the De Novo pathway, however, in December 2023 the FDA confirmed that we could submit the MyoVista wav ECG device for clearance under the 510(k) pathway following the grant by the FDA in August 2023 of an industry-first De Novo clearance which created a new Class II product code for cardiovascular machine learning-based notification 6 Table of Contents software.
We had been planning a revised submission under 5 Table of Contents the De Novo pathway, however, in December 2023 the FDA confirmed that we could submit the MyoVista wav ECG device for clearance under the 510(k) pathway following the grant by the FDA in August 2023 of an industry-first De Novo clearance which created a new Class II product code for cardiovascular machine learning-based notification software.
If our Common Stock or IPO Warrants are delisted and we are not able to list such Common Stock and IPO Warrants on another national securities exchange, we expect our securities would be quoted on an over-the-counter market; However, if this were 27 Table of Contents to occur, our stockholders could face significant material adverse consequences, including limited availability of market quotations for our Common Stock and IPO Warrants and reduced liquidity for the trading of our securities.
If our Common Stock or IPO Warrants are delisted and we are not able to list such Common Stock and IPO Warrants on another national securities exchange, we expect our securities would be quoted on an over-the-counter market; However, if this were to occur, our stockholders could face significant material adverse consequences, including limited availability of 26 Table of Contents market quotations for our Common Stock and IPO Warrants and reduced liquidity for the trading of our securities.
Please see the section, “ Agreements with Mount Sinai related to Commercialization of Multiple AI- ECG Cardiovascular ECG Algorithms developed by Mount Sinai ” for additional information regarding these license agreements.
Please see the section, “ Agreements with Mount Sinai related to Commercialization of Multiple AI- ECG Cardiovascular ECG Algorithms developed by Mount Sinai ” for additional information regarding the License Agreements.
This volatility could be the result of a variety of factors, which include: • whether we achieve our anticipated corporate objectives; • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in our financial or operational estimates or projections; • our ability to implement our operational plans; • termination of lock-up agreements or other restrictions on the ability of our shareholders to sell shares after the IPO; • changes in the economic performance or market valuations of companies similar to ours; • general economic or political conditions in the U.S. or elsewhere; and • other events or factors, including those resulting from war, incidents of terrorism or responses to these events.
This volatility could be the result of a variety of factors, which include: • whether we achieve our anticipated corporate objectives; • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in our financial or operational estimates or projections; • our ability to implement our operational plans; • termination of lock-up agreements or other restrictions on the ability of our shareholders to sell shares after the IPO; • changes in the economic performance or market valuations of companies similar to ours; • general economic or political conditions in the U.S. or elsewhere; and 58 Table of Contents • other events or factors, including those resulting from war, incidents of terrorism or responses to these events.
For 57 Table of Contents additional information on the PMA or the De Novo classification processes, see “Business — FDA and Other Government Regulation.” The FDA can delay, limit or deny clearance or approval of a medical device for many reasons, including: • we may not be able to demonstrate to the FDA’s satisfaction that the algorithms underlying the Mount Sinai Licenses are safe and effective for its intended use; • the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; and • the manufacturing process or facilities we use or contract to use may not meet applicable requirements.
For additional information on the PMA or the De Novo classification processes, see “Business — FDA and Other Government Regulation.” The FDA can delay, limit or deny clearance or approval of a medical device for many reasons, including: • we may not be able to demonstrate to the FDA’s satisfaction that the algorithms underlying the Mount Sinai Licenses are safe and effective for its intended use; • the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required; and • the manufacturing process or facilities we use or contract to use may not meet applicable requirements.
For additional information regarding risks related to our ability to successfully develop, market and sell our products, see “—Risks Related to Our Business and Industry—Our success will be dependent upon physician acceptance.” 28 Table of Contents We will need to raise substantial additional funding, which may not be available on acceptable terms, or at all.
For additional information regarding risks related to our ability to successfully develop, market and sell our products, see “—Risks Related to Our Business and Industry—Our success will be dependent upon physician acceptance.” 27 Table of Contents We will need to raise substantial additional funding, which may not be available on acceptable terms, or at all.
In addition, failure to comply with applicable FDA or state or foreign requirements or later discovery of previously unknown problems with our device or manufacturing processes could result in, among other things: warning letters or untitled letters; fines, injunctions or civil penalties; suspension or withdrawal of approvals; seizures or recalls of our device; total or partial suspension of production or distribution; administrative or judicially imposed sanctions; the FDA’s refusal to grant pending or future clearances or approvals for our device; clinical holds; refusal to permit the import or export of our device; and criminal prosecution of us, our suppliers or our employees.
In addition, failure to comply with applicable FDA or state or foreign requirements or later discovery of previously unknown problems with our device or manufacturing processes could result in, among other things: warning letters or untitled letters; fines, injunctions or civil penalties; suspension or withdrawal of approvals; seizures or recalls of our device; total or partial suspension of production or distribution; administrative or judicially imposed sanctions; the FDA’s refusal to grant pending or future clearances or approvals 44 Table of Contents for our device; clinical holds; refusal to permit the import or export of our device; and criminal prosecution of us, our suppliers or our employees.
Conventional resting ECGs have limited sensitivity in detecting structural and ischemic disease and are typically used for diagnosing cardiac rhythm abnormalities, such as atrial fibrillation, or acute coronary syndrome, such as a myocardial infarction which 5 Table of Contents is also known as a heart attack.
Conventional resting ECGs have limited sensitivity in detecting structural and ischemic disease and are typically used for diagnosing cardiac rhythm abnormalities, such as atrial fibrillation, or acute coronary syndrome, such as a myocardial infarction which 4 Table of Contents is also known as a heart attack.
We believe, based on our research and other published research, that further algorithms could be developed for a range of additional clinical indications. To accelerate HeartSciences’ route to market with additional algorithms we entered into multiple license agreements with Mount Sinai on September 20, 2023.
We believe, based on our research and other published research, that further algorithms could be developed for a range of additional clinical indications. To accelerate HeartSciences’ route to market with additional algorithms we entered into the License Agreements with Mount Sinai on September 20, 2023.
Other unanticipated costs may also arise. 26 Table of Contents If we are unable to maintain compliance with all applicable continued listing requirements and standards of Nasdaq, our Common Stock could be delisted from Nasdaq. Our Common Stock and IPO Warrants are currently listed on Nasdaq.
Other unanticipated costs may also arise. 25 Table of Contents If we are unable to maintain compliance with all applicable continued listing requirements and standards of Nasdaq, our Common Stock could be delisted from Nasdaq. Our Common Stock and IPO Warrants are currently listed on Nasdaq.
Under this licensing agreement, we obtained a non-exclusive, worldwide license with automatic renewal provisions and the right to license: (i) software modules for an Android-based platform for the analysis of resting 12-lead electrocardiograms and (ii) all intellectual property rights (including patents, copyright, trademarks, trade secrets and know-how) relating to the software modules to be used in the MyoVista wav ECG (the “Glasgow Licensing Agreement”).
Under this licensing agreement, we obtained a non-exclusive, worldwide license with automatic renewal provisions and the right to license: (i) software modules for an Android-based platform for the analysis of resting 12-lead electrocardiograms and (ii) all intellectual property rights (including patents, copyright, 8 Table of Contents trademarks, trade secrets and know-how) relating to the software modules to be used in the MyoVista wav ECG (the “Glasgow Licensing Agreement”).
In this regard, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our Common Stock held by non-affiliates (and are not otherwise eligible to be a smaller reporting company), or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.
In addition, the JOBS Act provides that we would cease to be an “emerging growth company” if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our Common Stock held by non-affiliates (and are not otherwise eligible to be a smaller reporting company), or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.
If our products receive clearance, authorization, or approval, we will be subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA when we receive or become aware of information that reasonably suggests that one or more of our devices may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur, could cause or contribute to a death or serious injury.
If our products receive clearance, authorization, or approval, we will be subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA when we receive or become aware of information that reasonably suggests that one or more of our devices may have caused or contributed to a 45 Table of Contents death or serious injury or malfunctioned in a way that, if the malfunction were to recur, could cause or contribute to a death or serious injury.
As part of our normal operations, we expect to collect, process and retain personal identifying information regarding patients, including as a business associate of Covered Entities, so we expect to be subject to HIPAA, including changes implemented through HITECH, and we could be subject to criminal penalties if we improperly handle or knowingly obtain or disclose individually identifiable health information in a manner that is not authorized or permitted by HIPAA.
As part of our normal operations, we expect to collect, process and retain personal identifying information regarding patients, including as a business associate of Covered Entities, so we expect to be subject to HIPAA, including changes implemented through HITECH, and we 50 Table of Contents could be subject to criminal penalties if we improperly handle or knowingly obtain or disclose individually identifiable health information in a manner that is not authorized or permitted by HIPAA.
Our future success is dependent upon receiving FDA clearances for our products and additional funding may be required as part of achieving FDA clearance and thereafter would be required to support the sales launch, provide working capital and support further R&D.
Our future success is dependent upon receiving FDA clearances for our products and additional funding will be required as part of achieving FDA clearance and thereafter would be required to support the sales launch, provide working capital and support further R&D.
The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, import, export, adverse event reporting, advertising, promotion, marketing and distribution of medical devices to ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA.
The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, import, export, adverse event reporting, advertising, promotion, marketing and 13 Table of Contents distribution of medical devices to ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA.
Our independent registered public accounting firm was not required to perform an evaluation of our internal control over financial reporting as of either April 30, 2024 or April 30, 2023 in accordance with the provisions of the Sarbanes-Oxley Act.
Our independent registered public accounting firm was not required to perform an evaluation of our internal control over financial reporting as of either April 30, 2025 or April 30, 2024 in accordance with the provisions of the Sarbanes-Oxley Act.
We had been planning a revised submission under the De Novo pathway, however, in December 2023 the FDA confirmed that we could submit the MyoVista wav ECG for clearance under the 510(k) pathway following the grant by the FDA in August 2023, of an industry first De Novo clearance which created a new Class II product code for cardiovascular machine learning-based notification software.
We had been planning a revised submission under the De Novo pathway, however, in December 2023 the FDA confirmed that we could submit the MyoVista wav ECG for clearance under the 510(k) pathway following the grant by the FDA in August 2023, of an industry first De Novo clearance which created a new Class II product code for 30 Table of Contents cardiovascular machine learning-based notification software.
Our proprietary data analytics engine may not operate properly, which could damage our reputation, give rise to claims against us or divert application of our resources from other purposes, any of which could harm our business and operating results. The ECG data that is gathered through our products is evaluated using AI-based ECG algorithms that are part of our service.
Our proprietary data analytics engine may not operate properly, which could damage our reputation, give rise to claims against us or divert application of our resources from other purposes, any of which could harm our business and operating results. 33 Table of Contents The ECG data that is gathered through our products is evaluated using AI-based ECG algorithms that are part of our service.
Noninvasive cardiac tests are significant contributors to healthcare costs, accounting for greater than 40% of Medicare Part B spending on medical imaging, or over $17 billion annually according to the U.S. Centers for Medicare & Medicaid Services (“CMS”). There are a variety of effective, though expensive, diagnostic tests used for patients to detect heart disease.
Noninvasive cardiac tests are significant contributors to healthcare 6 Table of Contents costs, accounting for greater than 40% of Medicare Part B spending on medical imaging, or over $17 billion annually according to the U.S. Centers for Medicare & Medicaid Services (“CMS”). There are a variety of effective, though expensive, diagnostic tests used for patients to detect heart disease.
Further, because of the substantial discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be disclosed or otherwise compromised leading to others making, using, importing or selling products that are the same or substantially the same as ours, which could adversely affect our ability to compete in the market.
Further, because of the substantial discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be disclosed or otherwise 54 Table of Contents compromised leading to others making, using, importing or selling products that are the same or substantially the same as ours, which could adversely affect our ability to compete in the market.
All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and with respect to confidentiality. 22 Table of Contents It em 1A.
All of our employment and consulting agreements include employees’ and consultants’ undertakings with respect to non-competition and assignment to us of intellectual property rights developed in the course of employment and with respect to confidentiality. 21 Table of Contents It em 1A.
For more information regarding the process of receiving reimbursement approval, please see “Business—Market Strategy—Reimbursement.” We will be dependent upon third-party manufacturers and suppliers, making us vulnerable to supply shortages and problems, increased costs and quality or compliance issues, any of which could harm our business.
For more information regarding the process of receiving reimbursement approval, please see “Business—Market Strategy—Reimbursement.” 32 Table of Contents We will be dependent upon third-party manufacturers and suppliers, making us vulnerable to supply shortages and problems, increased costs and quality or compliance issues, any of which could harm our business.
Management and our independent registered public accounting firm, Haskell & White LLP, identified several material weaknesses in our internal control over financial reporting in connection with our preparation and the audits of our financial statements for Fiscal 2024.
Management and our independent registered public accounting firm, Haskell & White LLP, identified several material weaknesses in our internal control over financial reporting in connection with our preparation and the audits of our financial statements for Fiscal 2025.
Competition The medical device industry is characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products. There are many medical device companies, biotechnology companies, public and private universities and research organizations actively engaged in the research and development of products that may be similar to HeartSciences AI-ECG algorithms and MyoVista hardware.
Competition The medical device industry is characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products. There are many medical device companies, biotechnology companies, public and private universities and research organizations actively engaged in the R&D of products that may be similar to HeartSciences AI-ECG algorithms and MyoVista hardware.
If a prolonged government shutdown occurs, or if global health concerns 49 Table of Contents continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Under capitation, the amount of remuneration is based on the average expected healthcare utilization of that patient, with greater payment for patients with a significant history of medical problems. Approximately 48% (approximately 28 million people) of those covered by Medicare according to CMS are enrolled in a Medicare Advantage plan.
Under capitation, the amount of remuneration is based on the average expected healthcare utilization of that patient, with greater payment for patients with a significant history of medical problems. 10 Table of Contents Approximately 48% (approximately 28 million people) of those covered by Medicare according to CMS are enrolled in a Medicare Advantage plan.
Whether or not we have or are required to obtain FDA clearance or approval for a product, we will be required to obtain authorization before commencing clinical trials and to obtain marketing authorization or approval of our products under the comparable 14 Table of Contents regulatory authorities of countries outside of the United States before we can commence clinical trials or launch sales of our products in those countries.
Whether or not we have or are required to obtain FDA clearance or approval for a product, we will be required to obtain authorization before commencing clinical trials and to obtain marketing authorization or approval of our products under the comparable regulatory authorities of countries outside of the United States before we can commence clinical trials or launch sales of our products in those countries.
CROs, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medical care. 40 Table of Contents Development of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required and we may not adequately develop such protocols to support clearance and approval.
CROs, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medical care. Development of sufficient and appropriate clinical protocols to demonstrate safety and efficacy are required and we may not adequately develop such protocols to support clearance and approval.
In addition, governments may divert spending from other budgeted resources as they seek to reduce and/or stop the spread of COVID-19. Such events may result in a period of business and manufacturing disruption, and in reduced operations, any of which could materially affect our business, financial condition and results of operations.
In addition, governments may divert spending from other budgeted resources as they seek to reduce and/or stop the spread of pandemics. Such events may result in a period of business and manufacturing disruption, and in reduced operations, any of which could materially affect our business, financial condition and results of operations.
If we fail to comply with our reporting obligations, the FDA or other regulatory bodies could take action, including warning letters, untitled letters, administrative actions, criminal prosecution, 45 Table of Contents imposition of civil monetary penalties, revocation of our device clearance or approval, seizure of our device or delay in clearance or approval of future products.
If we fail to comply with our reporting obligations, the FDA or other regulatory bodies could take action, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device clearance or approval, seizure of our device or delay in clearance or approval of future products.
The legal systems of certain countries, particularly certain developing countries, do not favor 56 Table of Contents the enforcement of patents, trade secrets, and other intellectual property protection, which could make it difficult for us to stop the marketing of competing products or services in violation of our proprietary rights generally.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, which could make it difficult for us to stop the marketing of competing products or services in violation of our proprietary rights generally.
Early Target Markets Initially, our focus markets in the U.S. will include: cardiology; primary care providers that serve upper to middle income regions including concierge medicine providers; health systems; retail clinics; and insurers with high 12 Table of Contents levels of Medicare Advantage patients.
Early Target Markets Initially, our focus markets in the U.S. will include: cardiology; primary care providers that serve upper to middle income regions including concierge medicine providers; health systems; retail clinics; and insurers with high levels of Medicare Advantage patients.
None of our currently developed products require a PMA to be marketed. 16 Table of Contents De Novo Classification Medical device types that the FDA has not previously classified as Class I, II or III are automatically classified into Class III regardless of the level of risk they pose.
None of our currently developed products require a PMA to be marketed. De Novo Classification Medical device types that the FDA has not previously classified as Class I, II or III are automatically classified into Class III regardless of the level of risk they pose.
A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk 17 Table of Contents to a subject.
A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject.
The loss of key personnel may have an adverse effect on our operations and financial performance and adversely affect our ability to execute our business plan. 35 Table of Contents We expect to conduct business outside of the U.S. and doing so exposes us to additional business, regulatory, political, operational, financial and economic risks.
The loss of key personnel may have an adverse effect on our operations and financial performance and adversely affect our ability to execute our business plan. We expect to conduct business outside of the U.S. and doing so exposes us to additional business, regulatory, political, operational, financial and economic risks.
In addition, the occurrence of catastrophic events, such as war, hurricanes, storms, earthquakes, tsunamis, floods, medical epidemics and other catastrophes that adversely affect the business climate in any of our markets could have a material adverse effect on our business, financial condition and results of operations.
In addition, the occurrence of catastrophic events, such as war, hurricanes, storms, earthquakes, tsunamis, floods, medical epidemics and other catastrophes that adversely affect the business climate in any of our markets could 37 Table of Contents have a material adverse effect on our business, financial condition and results of operations.
Any new regulations or revisions or reinterpretations of existing regulations may impose 47 Table of Contents additional costs or lengthen review times of planned or future products. It is impossible to predict whether legislative changes will be enacted or FDA regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be.
Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of planned or future products. It is impossible to predict whether legislative changes will be enacted or FDA regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be.
PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel.
PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered 15 Table of Contents by the original PMA and may not require as extensive clinical data or the convening of an advisory panel.
Our clinical studies involve adults and, before we are permitted to enroll them in clinical studies, we must demonstrate that although the research may pose a risk to the subjects, there is a 41 Table of Contents prospect of direct benefit to each patient. We must do so to the satisfaction of each research site’s IRB.
Our clinical studies involve adults and, before we are permitted to enroll them in clinical studies, we must demonstrate that although the research may pose a risk to the subjects, there is a prospect of direct benefit to each patient. We must do so to the satisfaction of each research site’s IRB.
These material weaknesses resulted in adjustments to our prior year financial statements primarily related to equity accounts, accruals, and inventory and could result in a misstatement of any account balances or disclosures that 59 Table of Contents would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
These material weaknesses resulted in adjustments to our prior year financial statements primarily related to equity accounts, accruals, and inventory and could result in a misstatement of any account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and harm our business.
These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and harm our 29 Table of Contents business.
If the FDA disagrees with our determination and requires 38 Table of Contents us to submit new 510(k) notifications or even a PMA for modifications to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant enforcement actions.
If the FDA disagrees with our determination and requires us to submit new 510(k) notifications or even a PMA for modifications to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant enforcement actions.
A successful claim brought against us in excess of, or outside of, our insurance coverage could have a material adverse effect on our business, financial condition and results of operations. Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cybersecurity.
A successful claim brought against us in excess of, or outside of, our insurance coverage could have a material adverse effect on our business, financial condition and results of operations. 36 Table of Contents Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cybersecurity.
These modifications may have an effect on the way we conduct our business in the EEA. Healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations. Our industry is highly regulated and changes in law may adversely impact our business, operations or financial results.
These modifications may have an effect on the way we conduct our business in the EEA. 48 Table of Contents Healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations. Our industry is highly regulated and changes in law may adversely impact our business, operations or financial results.
In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that are directed at containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future or 48 Table of Contents their full impact.
In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that are directed at containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future or their full impact.
In the future we would expect to incorporate further AI-ECG algorithms in the MyoVista wav ECG. 9 Table of Contents MyoVista wav ECG device with 1 lead view of signal processed waveform Market Opportunity Diagnostic Gap We believe that the most significant diagnostic gap in heart disease is early identification.
In the future we would expect to incorporate further AI-ECG algorithms in the MyoVista wav ECG. MyoVista wav ECG device with 1 lead view of signal processed waveform Market Opportunity Diagnostic Gap We believe that the most significant diagnostic gap in heart disease is early identification.
In addition, competitors could attempt to reverse engineer our device to replicate some or all of the competitive advantages we derive from our development efforts, design around our protected technology, or develop their own competitive technologies that fall outside the scope of our patents.
In addition, competitors could attempt to reverse engineer our device to replicate some or all of the 53 Table of Contents competitive advantages we derive from our development efforts, design around our protected technology, or develop their own competitive technologies that fall outside the scope of our patents.
Advertising and Promotion The FDA and other regulatory agencies closely regulate the post-approval marketing and promotion of medical devices, including standards and regulations for direct-to-consumer advertising, communications about unapproved uses, industry-sponsored scientific and educational activities and promotional activities involving the internet.
Advertising and Promotion 18 Table of Contents The FDA and other regulatory agencies closely regulate the post-approval marketing and promotion of medical devices, including standards and regulations for direct-to-consumer advertising, communications about unapproved uses, industry-sponsored scientific and educational activities and promotional activities involving the internet.
The 36 Table of Contents risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
HITECH also increased the civil and criminal penalties that may be imposed against Covered Entities and business associates and 50 Table of Contents gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and its implementing regulations and seek attorney’s fees and costs associated with pursuing federal civil actions.
HITECH also increased the civil and criminal penalties that may be imposed against Covered Entities and business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and its implementing regulations and seek attorney’s fees and costs associated with pursuing federal civil actions.
If our data analytics platform does not function reliably or fails to meet physician or payor expectations 33 Table of Contents in terms of performance, physicians may stop prescribing our service and payors may attempt to deny coverage or payment for our products.
If our data analytics platform does not function reliably or fails to meet physician or payor expectations in terms of performance, physicians may stop prescribing our service and payors may attempt to deny coverage or payment for our products.
As a result, fewer broker- dealers may be willing to make a market in our Common Stock, reducing a stockholder’s ability to resell shares of our Common Stock. If our shares become subject to the penny stock rules, it would become more difficult to trade our shares.
As a result, fewer broker- dealers may be willing to make a market in our Common Stock, reducing a stockholder’s ability to resell shares of our Common Stock. 61 Table of Contents If our shares become subject to the penny stock rules, it would become more difficult to trade our shares.
Foreign Regulation 19 Table of Contents As we plan to market our device in the EU and other foreign markets, in addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our device in foreign countries.
Foreign Regulation As we plan to market our device in the EU and other foreign markets, in addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our device in foreign countries.
The GDPR applies to any company established in the EEA as well as to those outside the EEA if they collect, process, and use personal data in connection with the offering of goods or services to individuals in the EEA or the monitoring of their behavior.
The GDPR applies to any company established in the EEA as well as to those outside the EEA if they collect, process, and use personal data in connection with the offering of goods or 51 Table of Contents services to individuals in the EEA or the monitoring of their behavior.
We believe that undiagnosed heart 11 Table of Contents disease represents a significant problem, and we believe insurance plans that have a high number of Medicare Advantage patients could be a target market for the MyoVista cloud-based and hardware-based platforms.
We believe that undiagnosed heart disease represents a significant problem, and we believe insurance plans that have a high number of Medicare Advantage patients could be a target market for the MyoVista cloud-based and hardware-based platforms.
We attended an August 17, 2023 hearing before the Nasdaq Hearing Panel (the “Panel”) , and requested the continued listing of its securities on the Nasdaq Capital Market pending our return to compliance with the Minimum Stockholder's Equity Requirement and Minimum Bid Price Requirement.
We attended an August 17, 2023 hearing before the Nasdaq Hearing Panel (the “Panel”), and requested the continued listing of our securities on the Nasdaq Capital Market pending our return to compliance with the Minimum Bid Price Requirement.
The clinical trial process may 42 Table of Contents fail to demonstrate that our product candidates are safe and effective for the proposed indicated uses, which could cause us to abandon a product candidate and may delay development of others.
The clinical trial process may fail to demonstrate that our product candidates are safe and effective for the proposed indicated uses, which could cause us to abandon a product candidate and may delay development of others.
For more information regarding risks related to our dependence on physician acceptance, see “— Our success will be dependent upon physician acceptance.” If our competitors offer significant discounts on certain products and solutions, we may need to lower our prices or offer other favorable terms in order to compete successfully.
For more information regarding risks related to our dependence on physician acceptance, see “— Our success will be dependent upon physician acceptance.” 34 Table of Contents If our competitors offer significant discounts on certain products and solutions, we may need to lower our prices or offer other favorable terms in order to compete successfully.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Remaining Pre-Funded Bridge Warrant will take on the registered characteristics of the existing Bridge Warrants as in effect prior to the Bridge Warrant Amendment No. 2. • In March 2023, we issued warrants to purchase an aggregate amount of 2,500 shares of our Common Stock at an exercise price of $104.00 per share as consideration, in lieu of cash, for approximately $203,000 billed in respect of research and development services rendered by a third-party to the Company. • In March 2023, we issued 5 shares of our Common Stock to a certain unrelated third party for consideration of $20,000. 66 Table of Contents • In July 2023, we issued 1,087 shares of Common Stock as consideration for consulting services. • In September 2023, we issued warrants to purchase an aggregate amount of 150 shares of our Common Stock at an exercise price of $73.00 per share as consideration for consulting services. • In November 2023, we issued warrants to purchase an aggregate amount of 2,400 shares of our Common Stock at an exercise price of $17.00 per share as consideration, in lieu of cash, for approximately $102,000 billed in respect of research and development services rendered by a third-party to the Company. • In June 2024, we issued warrants to purchase an aggregate amount of 2,000 shares of our Common Stock at an exercise price of $5.15 per share as consideration for consulting services.
Biggest changeThe Remaining Pre-Funded Bridge Warrant will take on the registered characteristics of the existing Bridge Warrants as in effect prior to the Bridge Warrant Amendment No. 2. • In March 2023, we issued warrants to purchase an aggregate amount of 2,500 shares of our Common Stock at an exercise price of $104.00 per share as consideration, in lieu of cash, for approximately $203,000 billed in respect of R&D services rendered by a third-party to the Company. • In March 2023, we issued 5 shares of our Common Stock to a certain unrelated third party for consideration of $20,000. • In July 2023, we issued 1,087 shares of Common Stock as consideration for consulting services. • In September 2023, we issued warrants to purchase an aggregate amount of 150 shares of our Common Stock at an exercise price of $73.00 per share as consideration for consulting services. • In November 2023, we issued warrants to purchase an aggregate amount of 2,400 shares of our Common Stock at an exercise price of $17.00 per share as consideration, in lieu of cash, for approximately $102,000 billed in respect of R&D services rendered by a third-party to the Company. • In June 2024, we issued warrants to purchase an aggregate amount of 2,500 shares of our Common Stock at an exercise price of $5.15 per share as consideration for consulting services. • In February 2025, we issued warrants to purchase an aggregate amount of 12,000 shares of our Common Stock at an weighted average exercise price of $3.75 per share as consideration for consulting services. • In April 2025, we issued warrants to purchase an aggregate amount of 50,000 shares of our Common Stock at an exercise price of $3.35 per share as consideration for consulting services.
Our lack of cash resources and our potential inability to continue as a going concern may materially adversely affect our share price and our ability to raise new capital, enter into critical contractual relations with third parties and otherwise execute our business objectives.
Our lack of cash resources and our potential inability to continue as a going concern may materially adversely affect our share price and our ability to raise new capital, enter into critical contractual relations with third parties and otherwise execute our business objectives.
The Bridge Warrant Amendment No. 1, including the issuance of the shares of Common Stock underlying the Bridge Warrants and of the amended and restated Bridge Warrants to accredited investors, was completed in accordance with Section 3(a)(9) of the Securities Act, as securities exchanged by the Company with its existing security holders in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange, and/or Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving any public offering. • In January 2023, the lead investor under the Securities Purchase Agreement we entered into with the Bridge Purchasers in connection with the 2021 Bridge Financing (the “Bridge SPA”), exercised its Pre-Funded Bridge Warrants in full to acquire 1,394 shares of Common Stock at an exercise price of $0.01 per share, for a total price of $13.94. • In February 2023, we entered into Amendment No. 2 to Bridge Warrant by and between the Company and the lead investor under the Bridge SPA, dated February 3, 2023 (the “Bridge Warrant Amendment No. 2”), which included the issuance of the shares of Common Stock underlying the Bridge Warrants and the amended and restated Bridge Warrants to accredited investors, was completed in accordance with Section 3(a)(9) of the Securities Act, as securities exchanged by the Company with its existing security holders in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange, and/or Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving any public offering.
The Bridge Warrant Amendment No. 1, including the issuance of the shares of Common Stock underlying the Bridge Warrants and of the amended and restated Bridge Warrants to accredited investors, was completed in accordance with Section 3(a)(9) of the Securities Act, as securities exchanged by the Company with its existing security holders in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange, and/or Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving any public offering. • In January 2023, the lead investor under the Securities Purchase Agreement we entered into with the Bridge Purchasers in connection with the 2021 Bridge Financing (the “Bridge SPA”), exercised its Pre-Funded Bridge Warrants in full to acquire 1,394 shares of Common Stock at an exercise price of $0.01 per share, for a total price of $13.94. 64 Table of Contents • In February 2023, we entered into Amendment No. 2 to Bridge Warrant by and between the Company and the lead investor under the Bridge SPA, dated February 3, 2023 (the “Bridge Warrant Amendment No. 2”), which included the issuance of the shares of Common Stock underlying the Bridge Warrants and the amended and restated Bridge Warrants to accredited investors, was completed in accordance with Section 3(a)(9) of the Securities Act, as securities exchanged by the Company with its existing security holders in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange, and/or Section 4(a)(2) of the Securities Act, as a transaction by an issuer not involving any public offering.
In the event we did not regain compliance during this period, we were eligible to seek an additional 180 calendar day compliance period if we met the Nasdaq continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the Minimum Bid Price Requirement, and provide written notice to Nasdaq of our intent to cure the deficiency during this second compliance period.
In the event we did not regain compliance during this period, we were eligible to seek an additional 180 calendar day compliance period if we met the Nasdaq continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the Minimum Bid Price Requirement, and provided written notice to Nasdaq of our intent to cure the deficiency during this second compliance period.
As of the date of this Annual Report, we have received approximately $9.7 million in net proceeds, after Maxim fees, legal fees and other costs, from the sale of Common Stock pursuant to the amended EDA. We expect that any proceeds received from such sales under the ATM Facility will be used for working capital and general corporate purposes.
As of the date of this Annual Report, we have received approximately $9.8 million in net proceeds, after Maxim fees, legal fees and other costs, from the sale of Common Stock pursuant to the amended EDA. We expect that any proceeds received from such sales under the ATM Facility will be used for working capital and general corporate purposes.
We cannot be certain that additional funding will be available to us when 76 Table of Contents needed on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or efforts with respect to launch of sales of our products.
We cannot be certain that additional funding will be available to us when 75 Table of Contents needed on acceptable terms, if at all. If funds are not available, we may be required to delay, reduce the scope of, or eliminate research or development plans for, or efforts with respect to launch of sales of our products.
It em 4. Mine Safety Disclosures. Not applicable 64 Table of Contents PART II It em 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock and IPO Warrants are traded on Nasdaq under the symbols “HSCS” and “HSCSW,” respectively.
It em 4. Mine Safety Disclosures. Not applicable 63 Table of Contents PART II It em 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock and IPO Warrants are traded on Nasdaq under the symbols “HSCS” and “HSCSW,” respectively.
Although many think of the ECG as the frontline test for heart disease, in 2012, the United States Preventive Services Task Force conducted an evaluation of conventional ECG testing and stated: “There is no good evidence the test, called an ECG, helps doctors predict heart risks any better than traditional considerations such as smoking, blood pressure and cholesterol levels in people with no symptoms.” 68 Table of Contents ECG devices record the electrical signals of a patient’s heart.
Although many think of the ECG as the frontline test for heart disease, in 2012, the United States Preventive Services Task Force conducted an evaluation of conventional ECG testing and stated: “There is no good evidence the test, called an ECG, helps doctors predict heart risks any better than traditional considerations such as smoking, blood pressure and cholesterol levels in people with no symptoms.” ECG devices record the electrical signals of a patient’s heart.
If we are unable to continue as a going concern, we may have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in 75 Table of Contents our financial statements.
If we are unable to continue as a going concern, we may have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in 74 Table of Contents our financial statements.
The Company accounts for forfeitures when they occur. Stock-based compensation expense recognized in the financial statements is reduced by actual awards forfeited. 77 Table of Contents Pricing and Valuation of Inventories Inventory consists of finished goods, work in progress, sub-assemblies and raw materials and is stated at the lower of cost or net realizable value.
The Company accounts for forfeitures when they occur. Stock-based compensation expense recognized in the financial statements is reduced by actual awards forfeited. Pricing and Valuation of Inventories Inventory consists of finished goods, work in progress, sub-assemblies and raw materials and is stated at the lower of cost or net realizable value.
On May 17, 2024, the Company effected the Reverse Stock Split, such that a s a result of the Reverse Stock Split, every 100 shares of the Company's issued and outstanding pre-reverse split common stock were combined into one share of Common Stock.
On May 17, 2024, we effected the Reverse Stock Split, such that a s a result of the Reverse Stock Split, every 100 shares of the Company's issued and outstanding pre-reverse split Common Stock were combined into one share of Common Stock.
We have 69 Table of Contents finished the patient recruitment and core lab work for our FDA validation study and have been undertaking device and algorithm development testing for a revised FDA submission.
We have finished the patient recruitment and core lab work for our FDA validation study and have been undertaking device 68 Table of Contents and algorithm development testing for a revised FDA submission.
Research and development expenses also include costs attributable to clinical trial expenses including clinical trial design, site development and study costs, data, related travel expenses, the cost of products used for clinical activities, internal and external costs associated with regulatory compliance and patent costs. We have expensed research and development costs as they have been incurred.
R&D expenses also include costs attributable to clinical trial expenses including clinical trial design, site development and study costs, data, related travel expenses, the cost of products used for clinical activities, internal and external costs associated with regulatory compliance and patent costs. We have expensed R&D costs as they have been incurred.
As of the date of this Annual Report, we have received approximately $1.6 million from the sale of Common Stock pursuant to the Lincoln Park Purchase Agreement. We expect that any proceeds received from such sales to Lincoln Park will be used for working capital and general corporate purposes.
As of the date of this Annual Report, we have received approximately $2.2 million from the sale of Common Stock pursuant to the Lincoln Park Purchase Agreement. We expect that any proceeds received from such sales to Lincoln Park will be used for working capital and general corporate purposes.
Our future capital requirements will depend on many factors, including: • the progress and costs of our research and development activities; • the costs of manufacturing our device; • the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; • the potential costs of contracting with third parties to provide marketing and distribution services for us or for building such capacities internally; and • the magnitude of our general and administrative expenses.
Our future capital requirements will depend on many factors, including: • the progress and costs of our R&D activities; • the costs of manufacturing our device; • the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; • the potential costs of contracting with third parties to provide marketing and distribution services for us or for building such capacities internally; and • the magnitude of our general and administrative expenses.
As of the date of this Annual Report on Form 10-K, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
As of the date of this Annual Report on Form 10-K, we are no t aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
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.
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 70 Table of Contents immediately prior to the Reverse Stock Split was proportionately increased by a multiple of 100 following the Reverse Stock Split.
We attended an August 17, 2023 hearing before the Nasdaq Hearing Panel (the “Panel”) , and requested the continued listing of its securities on the Nasdaq Capital Market pending our return to compliance with the Minimum Stockholder's Equity Requirement and Minimum Bid Price Requirement.
We attended an August 17, 2023 hearing before the Nasdaq Hearing Panel (the “Panel”), and requested the continued listing of our securities on the Nasdaq Capital Market pending our return to compliance with the Minimum Bid Price Requirement.
Inventory consists mainly of raw materials and components used in the current hardware build of the MyoVista wav ECG devices and components are used for research and development purposes and device sales, which to date have been in international markets as sale of the MyoVista wav ECG in the U.S. is subject to FDA clearance.
Inventory consists mainly of raw materials and components used in the current hardware build of the MyoVista wav ECG devices and components are used for R&D purposes and device sales, which to date have been in international markets as sale of the MyoVista wav ECG in the U.S. is subject to FDA clearance.
No matter how well designed or implemented our internal controls are, we will not be able to 63 Table of Contents anticipate all cybersecurity threats, and we may not be able to implement effective preventive or detective measures against such security breaches in a timely manner.
No matter how well designed or implemented our internal controls are, we will not be able to anticipate all cybersecurity threats, and we may not be able to implement effective preventive or detective measures against such security breaches in a timely manner.
On January 30, 2024, we received a letter from the Panel advising that we have been granted an additional 180-day extension to July 29, 2024, to regain compliance with the Minimum Bid Price Requirement. 70 Table of Contents On May 9, 2024, the Company received a Staff Determination from Nasdaq to delist the Company’s securities from the Nasdaq Capital Market.
On January 30, 2024, we received a letter from the Panel advising that we have been granted an additional 180-day extension to July 29, 2024, to regain compliance with the Minimum Bid Price Requirement. 69 Table of Contents On May 9, 2024, we received a staff determination from Nasdaq to delist the Company’s securities from the Nasdaq Capital Market (the “Staff Determination”).
We require FDA clearance to market our products in the U.S. and do not expect to generate significant revenues from the sale of our devices in the near future or prior to FDA clearance. As of April 30, 2024, our cash and cash equivalents were $5.8 million. We will need to seek additional financing to fund our future operations.
We require FDA clearance to market our products in the U.S. and do not expect to generate significant revenues from the sale of our devices in the near future or prior to FDA clearance. As of April 30, 2025, our cash and cash equivalents were $1.1 million. We will need to seek additional financing to fund our future operations.
Recent Developments during Fiscal 2024 Going Concern On July 29, 2024, our independent registered public accounting firm issued an opinion on our audited financial statements, included in our Annual Report on Form 10-K for the year ended April 30, 2024, that contained an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern because we have experienced recurring losses, negative cash flows from operations, and limited capital resources.
Going Concern On July 24, 2025, our independent registered public accounting firm issued an opinion on our audited financial statements, included in our Annual Report on Form 10-K for the year ended April 30, 2025, that contained an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern because we have experienced recurring losses, negative cash flows from operations, and limited capital resources.
Equity Distribution Agreement On September 18, 2023, we entered into an EDA with Maxim Group LLC as sales agent (“Maxim”) pursuant to which we may offer and sell up to $3.25 million of our shares of Common Stock in an at-the-market offering.
On September 18, 2023, we entered into an Equity Distribution Agreement (the “EDA”) with Maxim Group LLC (“Maxim”), as sales agent pursuant to which we may offer and sell up to $3.25 million of our shares of Common Stock in at-the-market offerings (the “ATM Facility”).
Research and development expenses include payroll and personnel-related costs for our research and development, clinical and regulatory personnel, including expenses related to stock-based compensation for such employees, consulting services, clinical trial expenses, regulatory expenses, prototyping and testing.
R&D expenses include payroll and personnel-related costs for our R&D, clinical and regulatory personnel, including expenses related to stock-based compensation for such employees, consulting services, clinical trial expenses, regulatory expenses, prototyping and testing.
Recent Sales of Unregistered Securities The following sets for information regarding all unregistered securities sold by the registrant in the three years preceding the date of this Annual Report on Form 10-K.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings The following sets for information regarding all unregistered securities sold by the registrant in the three years preceding the date of this Annual Report on Form 10-K.
Selling, general and administrative expenses also include costs attributable to professional fees for legal and accounting services, premises costs, IT, insurance, consulting, recruiting fees, travel expenses and depreciation. 73 Table of Contents Interest Expense Interest expense relates to our loan facilities and convertible notes.
Selling, general and administrative expenses also include costs attributable to professional fees for legal and accounting services, premises costs, IT, insurance, consulting, recruiting fees, travel expenses and depreciation. Interest Expense Interest expense relates to our loan facilities.
This was in respect of a hypertrophic cardiomyopathy algorithm and in late September 2023, the FDA cleared an algorithm for low ejection fraction (less than 40%) under the 510(k) pathway using this new product code. Accordingly, we are now preparing for a 510(k) FDA submission and are aiming for a submission in the first calendar quarter of 2025.
This was in respect of a hypertrophic cardiomyopathy algorithm and in late September 2023, the FDA cleared an algorithm for low ejection fraction (less than 40%) under the 510(k) pathway using this new product code. We have been preparing for a 510(k) FDA submission in calendar 2025.
We expect these products to fall under the 510(k) pathway and are aiming for an FDA submission of our MyoVista Insights Cloud Platform and low ejection fraction algorithm in the middle of 2025.
We expect these products to fall under the 510(k) pathway and are aiming for an FDA submission of our MyoVista Insights Cloud Platform and low ejection fraction algorithm during the first half of calendar 2026.
The table below presents our cash flows for the periods indicated: For the year ended April 30, U.S. dollars, in thousands 2024 2023 (In thousands) Net cash used in operating activities $ (6,070 ) $ (5,774 ) Net cash used in investing activities $ (125 ) $ (18 ) Net cash provided by financing activities $ 10,343 $ 6,534 Net change in cash and cash equivalents during the period $ 4,147 $ 742 Operating Activities Net cash used by our operating activities of $6.1 million during Fiscal 2024 was primarily due to our net loss of $6.6 million plus net non-cash operating expense items of $0.9 million less $0.4 million of net changes in operating assets and liabilities.
The table below presents our cash flows for the periods indicated: For the year ended April 30, U.S. dollars, in thousands 2025 2024 (In thousands) Net cash used in operating activities $ (7,413 ) $ (6,070 ) Net cash used in investing activities $ (30 ) $ (125 ) Net cash provided by financing activities $ 2,734 $ 10,343 Net change in cash and cash equivalents during the period $ (4,710 ) $ 4,147 Operating Activities Net cash used by our operating activities of $7.4 million during Fiscal 2025 was primarily due to our net loss of $8.8 million plus net non-cash operating expense items of $0.8 million and $0.6 million of net changes in operating assets and liabilities.
Net cash used by our operating activities of $5.8 million during Fiscal 2023 was primarily due to our net loss of $6.4 million plus net non-cash operating expense items of $0.4 million and $0.2 million of net changes in operating assets and liabilities.
Net cash used by our operating activities of $6.1 million during Fiscal 2024 was primarily due to our net loss of $6.6 million plus net non-cash operating expense items of $0.9 million less $0.4 million of net changes in operating assets and liabilities.
Cost of sales also includes certain direct costs such as those incurred for shipping and freight. Operating Expenses Our operating expenses have consisted solely of research and development expenses and selling, general and administrative expenses. Research and Development Expenses Our research and development activities primarily consist of clinical, regulatory, engineering and research work associated with our MyoVista wav ECG device.
Cost of sales also includes certain direct costs such as those incurred for shipping and freight. Operating Expenses Our operating expenses have consisted solely of R&D expenses and selling, general and administrative expenses. R&D Expenses Our R&D activities primarily consist of clinical, regulatory, engineering and research work associated with our MyoVista wavECG device and Myo Vista Insights Cloud Platform.
On August 2, 2023, we received a letter from the Staff indicating that, based upon the closing bid price of the Company’s Common Stock for the last 30 consecutive business days, the Company no longer met the Minimum Bid Price Requirement.
Compliance with Nasdaq Listing Requirements On August 2, 2023, we received a letter from the Staff indicating that, based upon the closing bid price of the Company’s Common Stock for the last 30 consecutive business days, the Company no longer met the requirement to maintain a minimum bid price of $1 per share (the “Minimum Bid Price Requirement”).
The JQA Note and related accrued interest and the MSW Note converted to equity in November 2023. Liquidity and Capital Resources As of April 30, 2024, we had approximately $5.8 million in cash, an increase of $4.1 million from $1.7 million as of April 30, 2023.
The JQA Note and related accrued interest converted to equity in November 2023. Liquidity and Capital Resources As of April 30, 2025, we had approximately $1.1 million in cash, a decrease of $4.7 million from $5.8 million as of April 30, 2024. We incurred a net loss of $8.8 million for the year ended April 30, 2025.
Financing Activities Net cash provided by financing activities of $10.3 million during Fiscal 2024 is primarily from the issuance of Common Stock under the ATM Facility and Equity Line.
Financing Activities Net cash provided by financing activities of $2.7 million during Fiscal 2025 is primarily from the issuance of Common Stock under the ATM Facility, Equity Line and proceeds from the Streeterville Note.
Transfer agent and registrar The transfer agent and registrar for our Common Stock and IPO Warrants is Equiniti Trust Company, LLC. It em 6. Reserved 67 Table of Contents It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Equity Incentive Plan See “Executive Compensation — 2023 Equity Incentive Plan” section in Part III. Transfer agent and registrar The transfer agent and registrar for our Common Stock and IPO Warrants is Equiniti Trust Company, LLC. It em 6. Reserved 66 Table of Contents It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
In May 2024, we were granted a patent from the Indian Patent Office covering MyoVista wavelet technology. 72 Table of Contents Reverse Stock Split On May 6, 2024, the Company filed a Certificate of Amendment to the Amended and Restated Certificate of Formation with the Secretary of the State of Texas to effect the Reverse Stock Split of its outstanding shares of Common Stock, with an effective date of May 17, 2024.
Reverse Stock Split On May 6, 2024, the Company filed a Certificate of Amendment to the Amended and Restated Certificate of Formation with the Secretary of the State of Texas to effect the Reverse Stock Split of its outstanding shares of Common Stock, with an effective date of May 17, 2024.
Compliance with Nasdaq Listing Requirements On December 21, 2022, we received notice from the Listing Qualifications Staff of Nasdaq indicating that we were not in compliance with the Minimum Stockholders’ Equity Requirement, because our stockholders’ equity of $1,082,676 as reported in our Quarterly Report on Form 10-Q for the period ended October 31, 2022 was below the required minimum of $2.5 million, and because, as of October 31, 2022, we did not meet the alternative compliance standards, relating to the market value of listed securities of $35 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.
On March 19, 2025, we received a letter from Nasdaq stating that we were not in compliance with the minimum stockholders ’ equity requirement for continued listing on the Nasdaq Capital Market, under Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Requirement”) , because our stockholders’ equity of $1,786,689 as reported in our Quarterly Report on Form 10-Q for the period ending January 31, 2025, was below the required minimum of $2.5 million, and because, as of January 31, 2025, we did not meet the alternative compliance standards, relating to the market value of listed securities of $25 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or two of the last three most recently completed fiscal years.
Net cash provided by financing activities of $6.5 million during Fiscal 2023 is primarily from the issuance of Common Stock in the IPO and to Lincoln Park, and exercise of Bridge Warrants. Current Outlook We have financed our operations to date primarily through the issuance of Common Stock, preferred stock, warrants and debt securities.
Net cash provided by financing activities of $10.3 million during Fiscal 2024 is primarily from the issuance of Common Stock under the ATM Facility and Equity Line. Current Outlook We have financed our operations to date primarily through the issuance of Common Stock, preferred stock, warrants and debt securities.
The closing price of our Common Stock and IPO Warrants on Nasdaq on July 26, 2024 was $4.58 and $0.03, respectively. Holders As of July 26, 2024, there were approximately 292 holders of record of our Common Stock.
The closing price of our Common Stock and IPO Warrants on Nasdaq on July 23, 2025 was $3.83 and $0.11, respectively. Holders As of July 23, 2025, there were approximately 289 holders of record of our Common Stock.
Our principal sources of capital are cash on hand and the proceeds of future offerings of equity and debt securities. We cannot assure you that we will be able to consummate the sale of any such securities on terms acceptable to us, if at all.
We cannot assure you that we will be able to consummate the sale of any such securities on terms acceptable to us, if at all.
On June 3, 2024, the Company received a letter from Nasdaq informing the Company that the Nasdaq Listing Qualifications staff has confirmed that the Company has regained compliance with the $1.00 per share minimum bid price requirement pursuant to the Minimum Bid Price Requirement, and that the Company is therefore in compliance with Nasdaq’s listing requirements.
On June 3, 2024, we received a letter from Nasdaq informing the Company that the Nasdaq Listing Qualifications staff confirmed that the Company regained compliance with the Minimum Bid Price Requirement.
For more information, see “—Description of Indebtedness.” Other Income (Expense), Net Other income (expense), net primarily consists of forgiveness of loans issued under the CARES Act. The following table summarizes our results of operations for the periods presented and as a percentage of our total revenue for those periods based on our statement of operations data.
Other Income (Expense), Net Other income (expense), net primarily consists of interest earned on cash balances. 72 Table of Contents The following table summarizes our results of operations for the periods presented and as a percentage of our total revenue for those periods based on our statement of operations data.
Our revenues to date have been mainly generated in the establishment of distributor relationships outside the United States as part of obtaining feedback during product development and improvement of the MyoVista wav ECG. The increase in revenue and cost of sales in the year ended April 30, 2024, is due to electrode sales during the year.
Our revenues in the fiscal years have been mainly generated from suppliers in the establishment of distributor relationships outside the United States as part of obtaining feedback during product development and improvement of the MyoVista wav ECG.
The ECG is a ubiquitous, relatively low-cost, simple and quick test; it is portable and can be performed in a wide range of clinical settings by a non-specialist clinician or clinical aide. There are three basic categories of heart disease: electrical (such as an arrhythmia), structural (such as valvular disease) and ischemic (such as coronary artery disease, or CAD).
The ECG is a ubiquitous, relatively low-cost, simple and quick test; it is portable and can be performed in a wide range of clinical settings by a 67 Table of Contents non-specialist clinician or clinical aide.
On March 10, 2023, we entered into the Lincoln Park Purchase Agreement providing for the purchase, from time to time at our discretion, of up to $15.0 million of our Common Stock, over the 36-month term of the agreement.
As of April 30, 2025, we had an accumulated deficit of $76.1 million and working capital deficit of $1.5 million. 73 Table of Contents On March 10, 2023, we entered into a Purchase Agreement (the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), providing for the purchase, from time to time at our discretion, of up to $15.0 million of our Common Stock, over the 36-month term of the Lincoln Park Purchase Agreement.
The lease was a 64-month lease and was amended on September 27, 2022, extending the lease term for an additional 64 months, commencing on February 1, 2023 and expiring on May 31, 2028. We consider our current office space sufficient to meet our anticipated needs for the foreseeable future and believe it is suitable for the conduct of our business.
The lease was a 64-month lease and was amended on September 27, 2022, extending the lease term for an additional 64 months, 62 Table of Contents commencing on February 1, 2023 and expiring on May 31, 2028.
Selling, general, and administrative expenses are primarily related to personnel and professional services. Selling, general, and administrative expenses were $3.4 million for the year ended April 30, 2024, representing a decrease of $214,000, or 6%, when compared to the year ended April 30, 2023.
Selling, general, and administrative expenses were $3.9 million for the year ended April 30, 2025, representing an increase of $529,000, or 15%, when compared to the year ended April 30, 2024.
Summary of Statements of Operations for Fiscal 2024 and Fiscal 2023: For the year ended April 30, 2024 2023 $ Change % Change (In thousands, except percentages) Revenue $ 19 $ 5 $ 14 280 % Cost of sales 6 3 3 100 % Gross margin 13 2 11 550 % Operating expenses: Research and development 2,879 2,461 418 17 % Selling, general and administrative 3,440 3,654 (214 ) (6 )% Total operating expenses 6,319 6,115 204 3 % Loss from operations (6,306 ) (6,113 ) (193 ) 3 % Other income (expense) Interest expense (354 ) (243 ) (111 ) 46 % Other income 55 2 53 2,650 % Other income (expense), net (299 ) (241 ) (58 ) 24 % Net loss $ (6,605 ) $ (6,354 ) $ (251 ) 4 % Revenues were $19,000 and cost of sales were $6,000 for the year ended April 30, 2024, compared to revenues of $5,000 and costs of sales of $3,000 for the year ended April 30, 2023.
Summary of Statements of Operations for Fiscal 2025 and Fiscal 2024: For the year ended April 30, 2025 2024 $ Change % Change (In thousands, except percentages) Revenue $ 4 $ 19 $ (15 ) (79 )% Cost of sales 2 6 (4 ) (67 )% Gross margin 2 13 (11 ) (85 )% Operating expenses: Research and development 4,386 2,879 1,507 52 % Selling, general and administrative 3,969 3,440 529 15 % Total operating expenses 8,355 6,319 2,036 32 % Loss from operations (8,353 ) (6,306 ) (2,047 ) 32 % Other income (expense) Interest expense (500 ) (354 ) (146 ) 41 % Other income 88 55 33 60 % Other income (expense), net (412 ) (299 ) (113 ) 38 % Net loss $ (8,765 ) $ (6,605 ) $ (2,160 ) 33 % Revenues were $4,000 and cost of sales were $2,000 for the year ended April 30, 2025, compared to revenues of $19,000 and costs of sales of $6,000 for the year ended April 30, 2024.
Research and development expenses were $2.9 million for the year ended April 30, 2024, representing an increase of $418,000, or 17%, when compared to the year ended April 30, 2023. Increase is primarily due to consulting costs incurred for development of our Cloud Platform and increase in headcount and professional services supporting the FDA submission process.
The increase is primarily due to $1.2 million in consulting costs incurred for development of our MyoVista Insights Cloud Platform and increase in headcount and professional services supporting the FDA submission process. Selling, general, and administrative expenses are primarily related to personnel and professional services.
In September 2023, the Company drew $0.5 million under the MSW Note and in November 2023, the MSW Note was converted into shares of Common Stock. Our cash requirements are, and will continue to be, dependent upon a variety of factors. We expect to continue devoting significant capital resources to R&D, clinical studies and go-to-market strategies.
Our cash requirements are, and will continue to be, dependent upon a variety of factors. We expect to continue devoting significant capital resources to R&D, clinical studies and go-to-market strategies. Our principal sources of capital are cash on hand and the proceeds of future offerings of equity and debt securities.
Net realizable value is the estimated sales price, which is derived from similar marketable devices, less standard costs approximating the purchase costs on a first-in, first-out basis. Reserves for slow-moving, excess, or obsolete inventories are recorded when required to reduce inventory values to their estimated net realizable values based on product life cycle, development plans, production expiration or quality issues.
Reserves for 76 Table of Contents slow-moving, excess, or obsolete inventories are recorded when required to reduce inventory values to their estimated net realizable values based on product life cycle, development plans, production expiration or quality issues. Inventory that is used for R&D are expensed as consumed.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Neither the Company nor any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Exchange Act) repurchased any equity securities of the Company during the year ended April 30, 2024. Equity Incentive Plan See “Executive Compensation — 2023 Equity Incentive Plan” section in Part III.
Subsequent to April 30, 2025, and as of the date of this Annual Report, 583,386 shares of Series D Preferred Stock converted into 583,386 shares of our Common Stock. 65 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers Neither the Company nor any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Exchange Act) repurchased any equity securities of the Company during the year ended April 30, 2025.
All Common Stock share and per share data, and exercise price data for applicable Common Stock equivalents, included below have been retroactively adjusted to give effect to the Reverse Stock Split. • In July 2021 and November 2021, the Company issued warrants to purchase 231 shares of Common Stock in exchange for consulting services and extensions of the $1M Loan and Security Agreement and $1.5M Notes.
All Common Stock share and per share data, and exercise price data for applicable Common Stock equivalents, included below have been retroactively adjusted to give effect to the Reverse Stock Split. • In July 2022, August 2022, October 2022, February 2023, and July 2023 we issued an aggregate of 2,426 shares of Common Stock without the payment of additional consideration upon the conversion of 88,025 shares of Series C Preferred Stock by holders.
Decrease in selling, general, and administrative expenses is primarily related to reduced D&O insurance premiums and reduced professional fees relating to the IPO in the prior year. Interest expense was $355,000 for the year ended April 30, 2024, representing an increase of $112,000, or 46%, when compared to the year ended April 30, 2023.
Interest expense was $500,000 for the year ended April 30, 2025, representing an increase of $146,000, or 41%, when compared to the year ended April 30, 2024. Interest expense in Fiscal 2025 is related to interest on the FRV Note and interest and debt service amortization on the Streeterville Note.
Removed
See “Description of Securities—$1M Lender Warrants and $1.5M Lender Warrants” for a description of these warrants.
Added
We consider our current office space sufficient to meet our anticipated needs for the foreseeable future and believe it is suitable for the conduct of our business. Ite m 3. Legal Proceedings.
Removed
These warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. • In August 2021, the Company issued 101 shares of Common Stock as a facility fee in connection with debt for non-cash consideration amounting to $35,000.
Added
Series D Preferred Stock Offering On February 12, 2025, we filed an Offering Statement on From 1-A (File No. 024-12572) with the Securities & Exchange Commission (the "SEC") for the sale of up to 4,285,714 Units, with each Unit consisting of (a) one share of our Series D Convertible Preferred Stock (the “Series D Preferred Stock”) and (b) one warrant to purchase one share of our Common Stock, $0.001 par value, for a total of 4,285,714 shares of our Series D Preferred Stock and warrants to purchase up to an aggregate of 4,285,714 shares of our Common Stock, at an offering price of $3.50 per Unit (the "Series D Preferred Stock Offering").
Removed
These shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. • From October 2021 to February 2022, in connection with the 2021 Bridge Securities, the Company issued Bridge Warrants to purchase 13,677 shares of Common Stock (as adjusted following consummation of the IPO, as required under the terms of the Bridge Warrants).
Added
The Offering Statement was qualified by the SEC on March 10, 2025. Digital Offering, LLC acted as the lead placement agent in the Series D Preferred Stock Offering. We intend to use the net proceeds from the Series D Preferred Stock Offering for general and corporate expenses and debt repayment.
Removed
See “Description of Securities—Warrants issued in connection with the 2021 Bridge Financing” for a description of the Bridge Warrants. Upon consummation of the IPO, and as required under the terms of the Bridge Notes, the Company issued 16,061 shares of Common Stock and Pre-Funded Warrants to purchase 775 shares of Common Stock from the conversion of the Bridge Notes.
Added
Subsequent to April 30, 2025, and as of the date of this Annual Report, we issued 887,452 Units consisting of shares of Series D Preferred Stock and warrants to purchase shares of Common Stock for gross proceeds of approximately $3.1 million.
Removed
See “Description of Securities—Warrants issued in connection with the 2021 Bridge Financing” for a description of the Pre-Funded Warrants. The Bridge Warrants and the Pre-Funded Warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
Added
There are three basic categories of heart disease: electrical (such as an arrhythmia), structural (such as valvular disease) and ischemic (such as coronary artery disease, or CAD).
Removed
The Benchmark Company, LLC served as the underwriter for the 2021 Bridge Securities and was paid $94,500 in compensation. • In June 2022, as a result of the IPO, as required under the terms of the $1.5M Notes, the Company issued 9,091 shares of Common Stock from the conversion of the $1.5M Notes.
Added
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.
Removed
These shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) and/or Section 3(a)(9) of the Securities Act. 65 Table of Contents • In June 2022, as a result of IPO, the Series B convertible preferred stock, par value $0.001 per share, was cancelled and we issued 7,033 shares of Common Stock to certain officers, prior directors and employees in connection with the conversion of the Series A convertible preferred stock, par value $0.001 per share. • In July 2022, August 2022, October 2022, February 2023, and July 2023 we issued an aggregate of 2,426 shares of Common Stock without the payment of additional consideration upon the conversion of 88,025 shares of Series C Preferred Stock by holders.
Added
HeartSciences is now evaluating alignment with the newly published standards prior to submission, with validation against our existing FDA study dataset still available.
Removed
Except as disclosed above with respect to the 2021 Bridge Securities, no underwriters were involved in the foregoing sales of securities described above under “Issuances of Unregistered Securities.” All of the purchasers in these transactions represented to us in connection with their purchase that they were acquiring the securities for investment and not distribution, that they could bear the risks of the investment and could hold the securities for an indefinite period of time.
Added
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.
Removed
Such purchasers received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration statement or an available exemption from such registration.
Added
We are now evaluating alignment with the newly published standards prior to submission.
Removed
We have been adjusting the algorithm to reflect updated echo measurement thresholds in respect of ≥60 year old patients. The change was made, and agreed with the FDA, to reflect recent clinical findings which we believe will further increase the clinical value of this algorithm.
Added
Recent Developments during Fiscal 2025 Corporate Name Change On October 17, 2024, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Formation with the Secretary of State of Texas to change the Company's corporate name to “HeartSciences Inc.”, with an effective date of October 17, 2024.
Removed
These events and conditions raise substantial doubt about our ability to continue as a going concern.
Added
The Name Change was approved by the Company's shareholders at the Company's 2024 Annual Meeting of Shareholders. The Name Change became effective at the open of market on October 23, 2024, and does not affect the Company’s ticker symbols or the applicable CUSIP number for the Company’s outstanding shares of Common Stock and public warrants.
Removed
On November 22, 2023, we were formally notified by the Panel that we have demonstrated compliance with the Minimum Stockholders’ Equity Requirement. Pursuant to Nasdaq Listing Rule 5815(d)(4)(B), we are subject to a Mandatory Panel Monitor through November 22, 2024.
Added
On May 5, 2025, we submitted to Nasdaq a plan to regain compliance with the Minimum Stockholders’ Equity Requirement. On May 14, 2025, Nasdaq notified us that they granted us an extension of up to 180 calendar days from March 19, 2025, or through September 15, 2025, to regain compliance.
Removed
The Company's common stock and public warrants continue to be listed on Nasdaq.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative a nd Qualitative Disclosures About Market Risk. The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this item. 78 Table of Contents
Biggest changeItem 7A. Quantitative a nd Qualitative Disclosures About Market Risk. The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this item. 77 Table of Contents

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