Form 4: HeartSciences Grants Executive Mark Hilz Performance-Based Stock Options and RSUs

HeartSciences Inc. has granted its Chief Operating Officer and Director, Mark T. Hilz, 225,000 stock options and 56,250 restricted stock units, with vesting tied to regulatory milestones and continued employment.

Summary

• Mark T. Hilz, Chief Operating Officer, Secretary, and Director of HeartSciences Inc., was granted 225,000 stock options and 56,250 Restricted Stock Units (RSUs) on July 9, 2025.
• The stock options have an exercise price of $4.37 and will vest one-third on July 9, 2026, with an additional 8.333% vesting quarterly thereafter until fully vested on July 9, 2028.
• Options also feature accelerated vesting upon U.S. FDA regulatory clearance for the MyoVista wavECG device or AI-ECG algorithm, or a Change of Control.
• The options expire on July 9, 2035.
• The 56,250 RSUs vest immediately upon the earlier of FDA clearance for the MyoVista Device (including AI algorithm) or the MyoVista Insights platform with the first AI algorithm.
• Both grants are subject to Mr. Hilz's continued employment and include accelerated vesting upon a Change of Control.
• As of the filing date, FDA regulatory clearance has not been received for the MyoVista wavECG device or AI-ECG algorithm.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. While it's a compensation grant, it aligns executive incentives with critical company milestones (FDA clearance), which is a positive for long-term value creation. The grants are forward-looking and tied to future success, indicating confidence in achieving those milestones. The potential for dilution is a minor negative, but typical for equity compensation.

Positives

• Aligns executive incentives with company performance and key strategic milestones, specifically FDA clearance for critical products.
• Serves as a retention mechanism for a key executive through continued employment clauses.
• The grants demonstrate the company's commitment to its leadership and future product development.

Negatives

• Potential for future dilution of existing shareholders if options are exercised and RSUs vest.
• Vesting tied to regulatory clearance introduces a dependency on external factors, which are not entirely within the company's control.

Risks

• Failure to obtain U.S. FDA regulatory clearance for the MyoVista wavECG device, AI-ECG algorithm, or MyoVista Insights platform could delay or prevent vesting of a significant portion of executive compensation.
• Risk of dilution for existing shareholders upon the exercise of stock options and settlement of RSUs.
• Continued employment is a condition for vesting, posing a risk if the executive departs prematurely.

Future Outlook

The company's future outlook is implicitly tied to achieving FDA regulatory clearance for its MyoVista wavECG device, AI-ECG algorithm, and MyoVista Insights platform, as significant executive compensation vesting is contingent upon these milestones.

Management Comments

• These options were granted to the Reporting Person effective as of July 9, 2025, pursuant to the approval of the compensation committee of the Issuer's board of directors.
• As of the date of this filing, such regulatory clearance has not been received.

Industry Context

This filing highlights the importance of regulatory milestones, particularly FDA clearance, in the medical device and AI-driven diagnostics industry. Executive compensation structures often reflect key strategic objectives, such as product commercialization and market entry, which are heavily dependent on regulatory approvals in this sector.

Comparison to Industry Standards

• This document does not provide sufficient detail for specific comparisons to comparable companies, projects, or results.
• Executive compensation structures, including performance-based equity grants tied to regulatory milestones, are common in the medical technology and biotechnology sectors, where product development and regulatory approval are critical value drivers.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential future dilution from the exercise of stock options and settlement of RSUs, but also potential benefit from increased executive incentive to achieve key regulatory milestones and drive company value.
• Employees: No direct impact mentioned, but successful FDA clearance could lead to broader company success and opportunities.
• Management: Mark T. Hilz's compensation is now significantly tied to the company's success in achieving regulatory milestones and overall performance, providing strong incentives.

Next Steps

• Continued employment of Mark T. Hilz with HeartSciences Inc.
• HeartSciences Inc. pursuing U.S. FDA regulatory clearance for its MyoVista wavECG device, AI-ECG algorithm, or MyoVista Insights platform.
• Vesting of stock options on scheduled dates (July 9, 2026, October 9, 2026, and quarterly thereafter until July 9, 2028) or upon accelerated conditions.
• Vesting of Restricted Stock Units upon FDA clearance or Change of Control.
• Potential exercise of stock options by Mark T. Hilz after vesting.
• Settlement of vested RSUs into common stock.

Key Dates

Keywords

HeartSciences Inc., HSCS, SEC Form 4, Stock Options, Restricted Stock Units, RSUs, Executive Compensation, Mark T. Hilz, FDA Clearance, MyoVista wavECG, AI-ECG, Corporate Governance, Incentive Plan, Officer Compensation, Director Compensation