SCHEDULE: DCG & Fortitude Invest in HeartSciences Merger

Digital Currency Group and Fortitude Mining Holdings have jointly filed a Schedule 13D, detailing their acquisition of a 9.4% stake in HeartSciences Inc. as part of a merger agreement.

Summary

• Digital Currency Group (DCG) and its subsidiary Fortitude Mining Holdings (Fortitude) have filed a Schedule 13D, reporting beneficial ownership of 411,522 shares of HeartSciences Inc. common stock, representing 9.4% of the outstanding shares.
• This acquisition is part of a larger merger agreement entered into on June 23, 2026, and amended on July 27, 2026, involving HeartSciences, Fortitude, Fortitude Mining HoldCo, and Cordis Acquisition.
• Fortitude acquired its shares for $999,998.46 on August 12, 2026, funded by working capital.
• The transaction involves Fortitude contributing its mining operations to HeartSciences in exchange for Class V Common Stock (voting) and Class A Common Stock (economic), with HeartSciences to be renamed 'Fortitude Mining Group, Inc.' post-merger.
• The structure is an 'Up-C' where Fortitude will hold approximately 95% of the combined voting power, and DCG will indirectly control the combined company.
• The merger is expected to result in a Nasdaq listing application and a reconstituted board of directors and executive officers designated by Fortitude.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing as moderately positive, indicating a significant strategic transaction and capital infusion, though tempered by past regulatory issues for one of the parties.

Positives

• Significant capital infusion into HeartSciences through Fortitude's purchase of shares and planned cash contribution.
• Strategic merger creating a combined entity focused on digital asset mining, to be renamed 'Fortitude Mining Group, Inc.'.
• Fortitude's acquisition of 9.4% of HeartSciences' outstanding shares indicates a substantial investment.
• The transaction is structured to provide DCG with indirect control over the combined company's operations.
• The combined company plans to apply for a Nasdaq listing, suggesting a move towards greater public market visibility.

Negatives

• DCG has a past regulatory issue, having consented to a cease-and-desist order and a $38 million penalty in January 2025 related to misleading investors about the financial condition of Genesis entities.
• The Class V Common Stock, while providing voting power, carries no economic rights and is not freely transferable.
• The combined company will be a 'controlled company' under Nasdaq rules, potentially limiting independent board oversight.

Risks

• Potential for regulatory scrutiny given DCG's past SEC order.
• The success of the merger is contingent on closing the transactions as contemplated.
• The 'Up-C' structure and the nature of Class V Common Stock may create complexities for certain stakeholders.
• Future exchanges of non-voting units for Class A Common Stock could alter the capital structure.

Future Outlook

Following the Closing, the Issuer will be renamed 'Fortitude Mining Group, Inc.' and will be organized in an 'Up-C' structure. The company plans to submit an initial listing application with Nasdaq. Fortitude may exchange its non-voting units for Class A Common Stock or cash over time.

Management Comments

• DCG's principal business is investing in and operating companies focused on the cryptocurrency industry and decentralized technologies.
• Fortitude's principal business is a digital asset mining platform.
• DCG is the sole stockholder of Fortitude.
• As a result of the Transactions, Fortitude is expected to hold approximately 95% of the outstanding combined voting power of the Combined Company.
• DCG will have the ability to control the Combined Company's business and operations, including director elections, asset dispositions, and financing arrangements.

Industry Context

StockSavvy.ai notes that this transaction reflects a trend of consolidation and strategic restructuring within the digital asset and mining sectors, aiming to leverage existing infrastructure and capital for growth, while also highlighting the ongoing regulatory scrutiny faced by major players in the crypto space.

Management Changes

Corporate Governance

Legal Proceedings

• In January 2025, DCG consented to the entry of a cease-and-desist order by the SEC and agreed to pay a civil money penalty of $38 million. The order arose out of the SEC's findings that DCG negligently engaged in conduct that misled investors regarding the impact of a certain default on the financial condition of Genesis Global Holdco, LLC and certain of its subsidiaries in violation of federal securities laws.

Related Party Transactions

• Fortitude, a wholly-owned subsidiary of DCG, acquired shares in HeartSciences Inc. as part of a merger agreement where DCG is the sole stockholder of Fortitude.

Stakeholder Impact

• Shareholders: Potential for increased value if the merger is successful and the company achieves Nasdaq listing, but also potential dilution and a controlled company structure.
• Creditors: The merger and capital infusion may improve the financial stability of the combined entity.
• Employees: Changes in executive management and board composition may lead to shifts in company culture and operational focus.

Next Steps

• The Issuer will be renamed 'Fortitude Mining Group, Inc.'
• The board of directors of the Issuer will be reconstituted to include individuals designated by Fortitude.
• The executive officers of the Issuer will be replaced with individuals selected by Fortitude.
• The Issuer's certificate of formation will be amended and restated.
• The Issuer will submit an initial listing application with Nasdaq and obtain approval for the listing of the Class A Common Stock.

Key Dates

Recommendation

The filing details a significant strategic transaction and capital infusion, which is positive. However, the past regulatory issues of DCG and the controlled company structure warrant a cautious approach. A 'hold' recommendation reflects the potential for upside from the merger and Nasdaq listing, balanced against the inherent risks and complexities.

Keywords

Merger Agreement, Schedule 13D, Digital Currency Group, Fortitude Mining Holdings, HeartSciences Inc., Capital Raise, Cryptocurrency, Mining