HSCS HeartSciences Inc

Item 3.02 Unregistered Sales of Equity Securities.

As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on February 3, 2023 (the “Bridge Warrant Amendment 8-K”), Heart Test Laboratories, Inc. (the “Company”) entered into Amendment No. 2 (the “Amendment”) to the warrants to purchase shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), issued in the Company’s private placement of securities pursuant to that certain Securities Purchase Agreement dated as of December 22, 2021 (the “SPA,” and such warrants issued thereunder, as previously amended on September 8, 2022 and as amended by the Amendment, the “Bridge Warrants”). The Bridge Warrants were issued to the buyers under the SPA along with 8% secured subordinated convertible notes, which subsequently converted into shares of Common Stock upon the Company’s initial public offering on June 15, 2022.

As disclosed in the Bridge Warrant Amendment 8-K, pursuant to the Amendment, the exercise price of the Bridge Warrants was lowered from $4.25 per share to $1.00 per share for a period of ten (10) business days beginning February 3, 2023 and ending February 16, 2023 (the “Limited Period”). The Amendment also amended the Bridge Warrants to provide that, during the Limited Period, the holders of the Bridge Warrants were permitted to elect a cashless exercise of the Bridge Warrants in whole or in part, pursuant to which the holder would receive a net number of shares of Common Stock equal to one-third of the total number of shares with respect to which the Bridge Warrant was then being exercised.

The Company is filing this Current Report on Form 8-K with the SEC to announce that during the Limited Period, the Company issued 1,322,304 shares of Common Stock pursuant to exercises of the Bridge Warrants and received approximately $1.3 million in proceeds from these exercises. The Company will issue new amended and restated Bridge Warrants reflecting the amendments set forth in the Amendment to the holders that continue to hold unexercised Bridge Warrants. A copy of the form of new amended and restated Bridge Warrant is attached hereto as Exhibit 4.1. Immediately after the end of the Limited Period, Bridge Warrants to purchase 298,667 shares of Common Stock remained outstanding, with an exercise price of $4.25 per share, subject to adjustments as set forth in the Bridge Warrants.

The issuance of the shares of Common Stock upon the exercises of the Bridge Warrants were completed in accordance with Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), as a transaction by an issuer not involving any public offering. The issuance of the new amended and restated Bridge Warrants are being completed in accordance with Section 3(a)(9) of the Securities Act. In accordance with Section 3(a)(9) of the Securities Act, the amended and restated Bridge Warrants are being exchanged by the Company with its existing security holders in a transaction where no commission or other remuneration is being paid or given directly or indirectly for soliciting such exchange. The new amended and restated Bridge Warrants will take on the registered characteristics of the existing Bridge Warrants as in effect prior to the Amendment.