8-K: HeartSciences Faces Nasdaq Delisting Warning

HeartSciences Inc. received a notice from Nasdaq for failing to meet minimum stockholders' equity requirements, with a proposed merger cited as a potential solution to regain compliance.

Summary

• HeartSciences Inc. was notified by Nasdaq on August 4, 2026, that it is not in compliance with Listing Rule 5550(b)(1), which requires a minimum of $2,500,000 in stockholders' equity.
• The company reported stockholders' equity of $226,060 in its Form 10-K for the fiscal year ended April 30, 2026, and did not meet alternative listing requirements.
• The notice has no immediate impact on the trading of its common stock or warrants, which remain listed on Nasdaq.
• HeartSciences has 45 days (until September 18, 2026) to submit a plan to regain compliance.
• The company believes its proposed merger with Fortitude Mining Holdings, Inc. will form the basis of its compliance plan.
• If the plan is accepted, the company could have up to 180 days (until January 31, 2027) to demonstrate compliance.
• Failure to regain compliance could lead to suspension or delisting, negatively impacting liquidity, market price, financing ability, and the ability to consummate the proposed merger.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative development due to the company's non-compliance with Nasdaq listing rules, although the proposed merger offers a potential path to resolution.

Positives

• The Nasdaq notice does not have an immediate impact on the listing of the company's common stock or public warrants.
• The company has a clear path to potentially regain compliance through its proposed merger with Fortitude Mining Holdings, Inc.
• Nasdaq has provided a defined period (45 days) to submit a compliance plan and potentially up to 180 days to evidence compliance if the plan is accepted.

Negatives

• HeartSciences is not in compliance with Nasdaq Listing Rule 5550(b)(1) due to insufficient stockholders' equity ($226,060 as of April 30, 2026).
• The company failed to meet alternative continued listing standards (market value of listed securities or net income from continuing operations).
• There is no assurance that the company will be able to regain compliance or that its proposed plan will be accepted by Nasdaq.
• Failure to regain compliance could lead to suspension or delisting, significantly harming the company's liquidity, market price, and access to capital.

Risks

• The risk that the Proposed Transaction may not be completed on the anticipated timeline or at all.
• The failure to satisfy the conditions to the closing of the Proposed Transaction, including obtaining the requisite approval of the HeartSciences shareholders.
• Market, macroeconomic, or other conditions that could adversely affect either HeartSciences or Fortitude, or the combined company.
• Risks related to the integration of the two companies and the management of a newly public company.
• Risks relating to Fortitude's operations and business, including the highly volatile nature of the price of Zcash and other cryptocurrencies.
• Risks relating to significant legal, commercial, regulatory and technical uncertainty regarding digital assets generally.

Future Outlook

The company's future outlook is contingent on its ability to regain compliance with Nasdaq listing rules. The proposed merger with Fortitude Mining Holdings, Inc. is viewed as the primary mechanism to achieve this compliance. There is uncertainty regarding the successful consummation of the merger and Nasdaq's acceptance of the compliance plan.

Management Comments

• The Company believes that its plan to consummate the Proposed Transaction (as defined below) will serve as a basis for its plan to regain compliance.
• There can be no assurance that the Company will be able to regain compliance with all applicable continued listing requirements or that its plan will be accepted by the Nasdaq staff.
• The Company intends to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and remain listed on Nasdaq.
• The Company is currently evaluating its available options to resolve the deficiency and regain compliance with the Nasdaq minimum stockholders equity requirement, including by consummating the Proposed Transaction.
• There can be no assurance that the Company will be able to consummate the Proposed Transaction.

Industry Context

StockSavvy.ai notes that Nasdaq delisting warnings are not uncommon for companies facing financial challenges. The reliance on a merger to rectify listing deficiencies highlights the strategic importance of such transactions for survival and continued market access, especially in sectors with high volatility or capital requirements.

Stakeholder Impact

• Shareholders: Potential negative impact on stock liquidity and market price if delisted; potential dilution from the all-stock merger.
• Creditors: Increased risk if the company is delisted, potentially impacting its ability to service debt.
• Employees: Negative impact on morale and potential difficulty in providing equity incentives if delisted.
• Investors: Reduced willingness to hold or acquire stock due to delisting risk and market price reduction.

Next Steps

• Submit a plan to regain compliance with Nasdaq listing rules by September 18, 2026.
• Consummate the Proposed Transaction with Fortitude Mining Holdings, Inc.
• Demonstrate compliance with Nasdaq listing rules by January 31, 2027, if the plan is accepted and an extension is granted.
• Shareholders will vote on the Proposed Transaction, requiring the mailing of a definitive proxy statement.

Key Dates

Recommendation

The company faces a significant Nasdaq delisting risk due to insufficient equity. While the proposed merger offers a potential solution, its successful completion and Nasdaq's acceptance of the compliance plan are uncertain. The speculative nature of the merger and the underlying business (digital assets via Fortitude) warrants a cautious 'hold' until greater clarity emerges on compliance and merger execution.

Keywords

Nasdaq compliance, Stockholders equity, Delisting warning, Merger agreement, Fortitude Mining Holdings, Capital raise, Listing rules, Compliance plan