Key Highlights

  • HeartSciences filed a preliminary proxy seeking Shareholder approval for an all-stock Merger that would give Digital currency Group roughly 95% of the combined company, converting the medical device firm into a listed ZCash Mining operation.
  • Days after filing the merger proxy, Nasdaq notified HeartSciences it no longer meets the minimum stockholders' Equity requirement for continued listing, with a compliance plan due by September 18, 2026.
  • The company's diagnostics Business hit real commercial milestones in fiscal 2026, including its first SaaS Revenue agreements for its AI-powered ECG platform, even as fiscal year net loss widened to $9.14 million on roughly $1.7 million of cash.

HeartSciences Inc. (NASDAQ:HSCS) spent the past year selling hospitals on artificial-intelligence software that reads electrocardiograms. It now sits at the centre of a very different story: an all-stock merger that would hand roughly 95% of the company to Digital Currency Group and turn the medical-device firm into a listed Zcash miner.

The deal moved to formal paperwork on 29 July 2026, when HeartSciences filed a preliminary proxy statement seeking shareholder approval. The same day it reported fiscal 2026 results showing no meaningful revenue and roughly $1.7 million of cash.

Days later, on 4 August, Nasdaq notified the company that it no longer meets the exchange's minimum stockholders' equity test for continued listing. A transformational merger, a nearly empty Balance Sheet and a listing deficiency on a clock explain the attention.

What Happened

On 23 June 2026, HeartSciences and Fortitude Mining Holdings announced a business combination intended to bring Fortitude's vertically integrated Zcash mining platform to public markets. Fortitude is wholly owned by Digital Currency Group and has mined since 2019.

The structure is all-stock with no cash consideration. HeartSciences would issue approximately 107.6 million shares of a new Class V common stock to DCG, leaving DCG with about 95% of the combined company on a fully diluted basis. The merged business would operate as Fortitude and trade on Nasdaq under the ticker TUDE, with closing targeted for the second half of 2026.

HeartSciences would retain its MyoVista healthcare unit, which chief executive Andrew Simpson would continue to lead. The July proxy also proposed a Reverse Stock Split of between 1-for-2 and 1-for-5, which the company said is driven by Nasdaq listing requirements for the combined entity.

Why It Matters

Zcash (ZEC) is a privacy-focused Cryptocurrency mined using the Equihash algorithm, which needs purpose-built machines rather than the chips used for Bitcoin. Fortitude says it mined 72,696 ZEC in the six months to 30 June 2026, roughly 28% of all Zcash produced on the network.

For DCG, folding Fortitude into an already-listed company is quicker than a conventional IPO. For HeartSciences holders, it converts a speculative MedTech position into a minority stake in a leveraged bet on the Zcash price.

The Numbers

For fiscal 2026, the year ended 30 April, HeartSciences reported no meaningful revenue and a net loss of $9.14 million, wider than the $8.77 million loss in fiscal 2025. Cash stood at roughly $1.7 million at year end, down from $3.4 million nine months earlier, and total shareholders' equity had fallen to $226,060. About 3.9 million shares were outstanding as of 20 July 2026.

Fortitude's figures operate on a different scale. It reports more than 60 MW of contracted power across seven sites in four states, at electricity costs near $0.045 per kilowatt-hour. It puts its current cost to mine a single ZEC at approximately $70 against a target near $40, and estimates run-rate adjusted EBITDA above $50 million at Zcash prices exceeding $500. Pro forma combined shareholders' equity is stated at $70.0 million.

Fortitude has kept spending through the deal process. On 30 July it ordered 9,000 Bitmain Antminer Z15 Pro units for $31.5 million, or $3,499 each, adding roughly 7.56 GSol/s of capacity, with deliveries split across October and November. On 4 August it closed the purchase of a 12.5 MW Facility in Prosser, Nebraska for $6.25 million.

What It Means for the Company

The diagnostics business did hit real milestones in fiscal 2026. MyoVista Insights, a cloud-native, device-agnostic ECG management platform, reached full commercial launch during the year. It is regulated as a Medical Device Data System, a lighter classification exempt from FDA 510(k) clearance.

In June the company shipped version 1.3 with an AI-ECG algorithm marketplace. Its first cleared model is Bunkerhill Health's ECG-EF, which flags reduced left-ventricular ejection fraction of 40% or below, meaning weak pumping by the heart's main chamber, from a standard 12-lead ECG. Medicare pays roughly $136 per assessment under Ambulatory Payment Classification 5734 in 2026.

Paying customers followed. St. Vincent Health, a critical-access hospital in Colorado, signed the first SaaS revenue agreement in May, followed by North Shore Health. Terms were not disclosed. Whether that momentum survives inside a DCG-controlled miner is the open question.

Risks Investors Should Watch

Dilution is a stated term rather than a risk. Existing holders would move from owning all of a roughly 3.9 million-share company to about 5% of one with more than 100 million shares issued.

Listing risk is immediate. Nasdaq's 4 August notice cites Listing Rule 5550(b)(1), requiring $2,500,000 in stockholders' equity for continued listing on the Nasdaq Capital Market. HeartSciences reported $226,060 and did not meet the alternative market-value or net-income tests. A compliance plan is due by 18 September 2026, with the exchange able to grant until 31 January 2027 if it accepts that plan. The company has indicated it will point to the merger as its remedy.

The combined entity's Economics would track the Zcash price, a volatile asset with limited institutional depth; Fortitude's EBITDA estimate is explicitly conditioned on ZEC above $500. Mining is also capital-hungry, and the newly ordered machines are not due to energize until late 2026.

On the healthcare side, the MyoVista wavECG device remains under FDA review following a 510(k) submission in December 2025, with no guaranteed decision date.

What Comes Next

The preliminary proxy must clear SEC review before a definitive version and a meeting date are set. The vote covers the share issuance, the reverse split and related proposals, with a close targeted for the second half of 2026.

Before that, HeartSciences must file its Nasdaq compliance plan by 18 September 2026. Fortitude's operational markers are the Antminer deliveries and the ramp of the recently energized Grand Island and newly acquired Prosser sites.

HeartSciences' fiscal first quarter ended 31 July, so a Form 10-Q is due in September, showing whether the $1.7 million cash balance has been supplemented.

Conclusion

HeartSciences' merger with Fortitude Mining represents a genuine pivot rather than a modest partnership, existing shareholders would go from owning all of a struggling diagnostics company to a roughly 5% stake in a much larger, DCG-controlled Zcash mining operation. The Nasdaq equity deficiency notice arriving days after the merger filing isn't a coincidence so much as a consequence, the company's own $226,060 in stockholders' equity made the merger less an opportunity and more a necessity for maintaining a public listing. Whether the underlying MyoVista diagnostics business, which did land its first paying hospital customers this year, retains any meaningful value or priority inside a crypto-mining-focused combined entity is the open question shareholders are being asked to vote on.