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HeartSciences Inc., a Texas-based medical device company currently valued at $3.13 million in market capitalization, has been notified by The Nasdaq Stock Market LLC of non-compliance with its listing rules due to insufficient stockholder equity. The notice, received on March 19, 2025, indicates that HeartSciences does not meet the Nasdaq Listing Rule 5550(b)(1), which requires a minimum stockholders’ equity of $2.5 million. According to InvestingPro data, the company has been quickly burning through cash, with its stock price declining over 75% in the past year.
According to the company’s quarterly report, as of January 31, 2025, stockholders’ equity was reported at $1,786,689. HeartSciences has not met alternative compliance standards based on market value of listed securities or net income from continuing operations. InvestingPro analysis reveals concerning financial metrics, including a weak Financial Health Score of 1.33 and a current ratio of 1.02, indicating minimal cushion for meeting short-term obligations.
Despite the notice, trading of HeartSciences’ common stock and public warrants will continue on Nasdaq, provided the company meets other listing requirements. Nasdaq has given HeartSciences until May 5, 2025, to submit a plan to regain compliance. If the plan is accepted, the company may have up to 180 days from the date of the initial notice to demonstrate compliance. With the stock currently trading at $2.91, analysis suggests the company is overvalued relative to its Fair Value, adding another layer of complexity to its market position.
There is no assurance that HeartSciences will successfully regain compliance or that Nasdaq will accept its compliance plan. If the plan is rejected or the company fails to comply within the granted period, HeartSciences may request a hearing before an independent panel, which would delay any delisting action. Gain deeper insights into HeartSciences’ financial health and compliance challenges with InvestingPro, which offers 8 additional key insights and comprehensive financial analysis tools.
HeartSciences intends to take appropriate measures to address the deficiency and maintain its Nasdaq listing. The company is evaluating options to meet the minimum stockholders’ equity requirement and plans to submit a compliance plan by the given deadline.
Suspension or delisting from Nasdaq could negatively affect HeartSciences by reducing the liquidity and market price of its common stock and public warrants, deterring investor interest, limiting access to equity markets and financing, and hindering the company’s ability to provide equity incentives. This news is based on a press release statement from HeartSciences.
In other recent news, HeartSciences Inc. disclosed the issuance of stock options to its executive officers and non-employee directors. According to a filing with the U.S. Securities and Exchange Commission, the company’s compensation committee authorized these stock option grants under the 2023 Equity Incentive Plan. Andrew Simpson, the President, CEO, and Chairman, along with Mark Hilz, COO, Secretary, and Director, each received 45,000 options. Danielle Watson, the CFO and Treasurer, was granted 9,000 options. These options have an exercise price of $3.33 and will vest over a three-year period starting in January 2026, with potential acceleration upon FDA approval or clearance of certain company devices. Additionally, non-employee directors Brian Szymczak, Bruce Brent, and David R. Wells were each awarded 6,000 options, with a quarter vested by January 2025 and the remainder in equal installments every three months. These stock options are part of HeartSciences’ strategy to align leadership interests with those of shareholders and to drive the achievement of regulatory milestones.
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