Form 4: HeartSciences COO Granted 45,000 Restricted Stock Units

HeartSciences Inc. Chief Operating Officer Mark T. Hilz was granted 45,000 Restricted Stock Units, vesting over three years with performance and change of control accelerators.

Summary

• Mark T. Hilz, Chief Operating Officer and Secretary of HeartSciences Inc. (HSCS), was granted 45,000 Restricted Stock Units (RSUs) on December 22, 2025.
• The RSUs were granted under the Issuer's 2023 Equity Incentive Plan, as amended, and approved by the Issuer's board of directors.
• Each vested RSU will be settled by the delivery of one share of the Issuer's common stock ($0.001 par value per share).
• Vesting is subject to two primary conditions: (i) shareholder approval of any amendment or modification to the Plan contemplating the RSU award, and (ii) time-based vesting.
• Time-based vesting occurs as follows: 1/3rd of the RSUs vest on the one-year anniversary of the grant date (December 22, 2026), and thereafter, 1/12th of the RSUs vest on each subsequent quarterly anniversary, leading to full vesting on the three-year anniversary of the grant date (December 22, 2028).
• Continuous employment in good standing with the Issuer and the Employment Agreement remaining in effect are required for vesting, with an exception for termination without Just Cause.
• 100% of the RSUs will vest immediately upon a Change of Control (as defined in the Employment Agreement) or if the Issuer achieves $250,000 or more of revenue in any fiscal quarter ending after the grant date.

Sentiment

Score: 7

Explanation: The grant of Restricted Stock Units to a key executive is generally a positive event as it aligns management incentives with long-term shareholder value and aids in executive retention. While there are conditions, the overall intent is to motivate performance and commitment.

Positives

• The RSU grant aligns the Chief Operating Officer's incentives with long-term shareholder value, promoting retention and performance.
• The inclusion of performance-based vesting (achieving $250,000 in quarterly revenue) provides a clear financial target for accelerated vesting.
• Accelerated vesting upon a Change of Control offers a potential benefit to the executive in the event of a strategic transaction.

Negatives

• Vesting of the RSUs is contingent on shareholder approval of an amendment to the 2023 Equity Incentive Plan, introducing a potential point of failure.
• The time-based vesting schedule requires continuous employment for three years, which could be a disincentive if the executive seeks earlier liquidity or career changes.

Risks

• Shareholder approval risk: The RSU award is contingent on shareholder approval of an amendment to the 2023 Equity Incentive Plan.
• Employment risk: The RSUs generally require continuous employment for vesting, except in specific termination scenarios.
• Performance risk: The accelerated vesting condition tied to achieving $250,000 in quarterly revenue depends on the company's future financial performance.

Future Outlook

The RSU grant structure implies an expectation for the company to achieve a quarterly revenue of at least $250,000, which would trigger accelerated vesting for the Chief Operating Officer. It also signals a commitment to retaining key management over a three-year period.

Management Comments

• Mark T. Hilz is identified as the Chief Operating Officer and Secretary of HeartSciences Inc.

Industry Context

The grant of Restricted Stock Units to a key executive is a common practice in the biotechnology and medical device industries, particularly for growth-stage companies like HeartSciences. It serves as a critical tool for executive retention and to align management's long-term interests with those of shareholders, often incorporating both time-based and performance-based vesting conditions.

Comparison to Industry Standards

• The RSU grant structure, combining time-based vesting with performance and change of control accelerators, is a standard compensation mechanism widely adopted by public companies, including those in the medical technology sector.
• Comparable companies often use similar RSU grants to incentivize executives. For instance, early-stage biotech firms like 'BioTech Innovators Inc.' or 'MedDevice Solutions Corp.' frequently grant RSUs to their COOs with multi-year vesting schedules and performance milestones, such as regulatory approvals or revenue targets, to drive strategic objectives.
• The specific revenue target of $250,000 for accelerated vesting is tailored to HeartSciences' current stage and financial goals, similar to how other small-cap growth companies set achievable, yet challenging, operational or financial benchmarks for executive incentives.

Corporate Governance

Related Party Transactions

• The grant of Restricted Stock Units to Mark T. Hilz, an officer of HeartSciences Inc., constitutes a related party transaction as it involves compensation between the company and a key management personnel.

Stakeholder Impact

• Shareholders: Potential for future dilution upon RSU vesting, but also potential for increased shareholder value if the executive's incentives lead to improved company performance and achievement of revenue targets.
• Employees: Retention of a key executive (COO) can provide stability and continuity in leadership, potentially benefiting overall employee morale and strategic direction.

Next Steps

• Shareholder approval of the amendment or modification to the Issuer's 2023 Equity Incentive Plan is required for the RSUs to vest.

Key Dates

Recommendation

This Form 4 reports a standard Restricted Stock Unit grant to a key executive, which is a routine compensation event. It does not provide new financial performance data or strategic shifts that would warrant a change in investment recommendation. The grant aligns executive incentives with long-term company performance, which is generally positive, but does not alter the fundamental investment thesis.

Keywords

HeartSciences, HSCS, Restricted Stock Units, RSU, Executive Compensation, Stock Grant, Mark T. Hilz, COO, Corporate Governance, SEC Form 4