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HSCS Neutral Sentiment Score: 60/100

(2) The issuances of warrants to purchase up to 240,000 shares of common stock, at an exercise price of $0.17 per share, to a consultant of the Company as consideration for services rendered. (3) The issuance to Mount Si

Thursday, January 25, 2024 1 min read
Key Takeaway: Heart Test Laboratories, Inc. (HSCS) has released its pro forma balance sheet showing increases in total assets primarily due to new capital raised through equity offerings. Recent actions include the issuance of significant shares to various parties, such as consultants and to settle notes. While the company’s current assets are bolstered, it continues to face substantial accumulated deficits and high current liabilities, which raises potential liquidity concerns. These updates were filed with the SEC as part of their quarterly report.

Market Sentiment Analysis

POSITIVE FACTORS

  • Issuances of common stock suggest a positive move for securing funding.
  • Total assets reported show an increase compared to previous filings.
  • Investments into the company may boost its growth potential.

CONCERNS & RISKS

  • Accumulated deficit still remains significant at over $63 million.
  • The issuance of large amounts of common stock may dilute existing shares.
  • Current liabilities exceed current assets, indicating potential liquidity concerns.

Full Press Release Details

(4) The issuance to Mr. John Q. Adams of 3,656,288 shares of common stock in consideration for the conversion of principal and interest in the amounts of $585,006 due under the JQA Note. (5) The issuance to Matthews Holdings Southwest, Inc. of 3,125,000 shares of common stock in consideration for the conversion of principal in the amount of $500,000 due under the MSW Note.
HEART TEST LABORATORIES, INC. D/B/A HEARTSCIENCES
Balance Sheet
Unaudited
Pro Forma Note As Adjusted
October 31, Adjustments Reference October 31,
2023 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 100,144 $ 9,340,209 (1) $ 9,440,353
Accounts receivable 3,900 3,900
Inventory, net 674,839 674,839
Prepaid expenses 368,803 368,803
Other current assets 40,374 40,374
Deferred offering costs 624,171 (131,684 ) (1) 492,487
Total current assets 1,812,231 9,208,525 11,020,756
Property and equipment, net 53,316 53,316
Acquired Intangible asset, net 1,528,430 (3) 1,528,430
Right-of-use assets, net 502,831 502,831
TOTAL ASSETS $ 2,368,378 $ 10,736,955 $ 13,105,333
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,088,297 $ (102,125 ) (2) $ 986,172
Accrued expenses 772,670 (85,000 ) (4) 687,670
Operating lease liabilities 94,463 94,463
Current portion of notes payable net of amortization 1,417,125 (917,125 ) (4) (5) 500,000
Other current liabilities 158,620 158,620
Total current liabilities 3,531,175 (1,104,250 ) 2,426,925
LONG-TERM LIABILITIES
Operating lease liabilities, long-term 486,885 486,885
Total long-term liabilities 486,885 486,885
TOTAL LIABILITIES 4,018,060 (1,104,250 ) 2,913,810
COMMITMENTS AND CONTINGENCIES (NOTE 2, 4-6, and 8)
STOCKHOLDERS (DEFICIT) EQUITY
Series A, B, and C convertible preferred stock, $0.001 par value, 20,000,000 shares authorized and 620,000 designated; 380,440 shares issued and outstanding as of October 31, 2023 and 380,871 shares issued and outstanding as of April 30, 2023. 380 380
Common stock, $0.001 par value, 500,000,000 shares authorized; 11,213,438 shares issued and outstanding as of October 31, 2023 and 10,118,440 shares issued and outstanding as of April 30, 2023. 11,213 52,398 (1) (3) (4) (5) 63,611
Additional paid-in capital 62,211,156 11,714,803 (1) (2) (3) (4) (5) 73,925,959
Accumulated deficit (63,872,431 ) 74,004 (2) (63,798,427 )
TOTAL STOCKHOLDERS (DEFICIT) EQUITY (1,649,682 ) 11,841,205 10,191,523
TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY $ 2,368,378 $ 10,736,955 $ 13,105,333
Notes to the ProForma Balance Sheet:
This Pro Forma Balance Sheet reflects the Heart Test Laboratories, Inc (HSCS) Balance Sheet as reported in the Company's 10-Q for the quarter ended October 31, 2023, filed with the Securities and Exchange Commission on December 14, 2023, adjusted to reflect the subsequent events after the balance sheet date of October 31, 2023 through the date of filing, as set out in Note 9 of the 10-Q as described below:
(1) The sale of 586,833 shares of Common Stock under the Equity Line and the sale of 40,175,218 shares of Common Stock under the ATM Facility receiving total gross proceeds of $9.8 million and net proceeds of approximately $9.2 million net of commissions fees and deferred offering costs.
(2) The issuances of warrants to purchase up to 240,000 shares of common stock, at an exercise price of $0.17 per share, to a consultant of the Company as consideration for services rendered.
(3) The issuance to Mount Sinai of 4,854,853 shares of common stock, 710,605 pre-funded warrants to purchase shares of common stock with an exercise price of $0.00001, and 914,148 warrants to purchase shares of common stock with an exercise price of $.5060, as consideration for the acquired rights to certain license agreements.
(4) The issuance to Mr. John Q. Adams of 3,656,288 shares of common stock in consideration for the conversion of principal and interest in the amounts of $585,006 due under the JQA Note.
(5) The issuance to Matthews Holdings Southwest, Inc. of 3,125,000 shares of common stock in consideration for the conversion of principal in the amount of $500,000 due under the MSW Note.

Frequently Asked Questions

What is the total amount of common stock issued to John Q. Adams?

John Q. Adams received 3,656,288 shares of common stock.

How many shares were issued to Matthews Holdings Southwest, Inc.?

Matthews Holdings Southwest, Inc. was issued 3,125,000 shares of common stock.

What were the total current assets of Heart Test Laboratories?

Total current assets were $11,020,756 as of October 31, 2023.

What is the total liabilities amount for Heart Test Laboratories?

Total liabilities amount to $2,913,810 as per the pro forma balance sheet.

What is the accumulated deficit reported for Heart Test Laboratories?

The accumulated deficit reported is $(63,798,427).

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Last updated: Jan 25, 2024