CryptoSlate
Fortitude Mining, the Digital Currency Group affiliate that mines Zcash, paid just under $1 million for a 9.4% stake in Nasdaq-listed HeartSciences on Aug. 12, locking in a direct equity position in its own proposed merger partner. The private placement covered 411,522 shares at $2.43 each, a 22% premium to HeartSciences' closing price on the purchase date. Because the cash injection sits outside the exchange-ratio formula, Fortitude's existing equity holders will not pick up extra closing shares once the deal lands.
Why it matters
The structure is asymmetric by design. Fortitude gets 9.4% of HeartSciences for $1 million while paying nothing extra to its own shareholders at closing. Digital Currency Group, the parent, would end up with roughly 95% of the voting interests in the combined company, leaving existing HeartSciences holders with about 5%, per the preliminary proxy. For HeartSciences, the cash is runway: net proceeds fund operating expenses until shareholders vote on the combination, expected in H2 2026.
The same proxy carries a sharper warning. If the merger fails and no alternative transaction materializes, HeartSciences said it may have limited ability to keep operating and could ultimately liquidate, with no guarantee that residual cash reaches shareholders. The Aug. 20 preliminary proxy still had blank fields for the special meeting and record date, so the next state-changing disclosure is a definitive proxy that sets the vote.
Market impact
Fortitude's own reporting frames the picture in two registers. Adjusted EBITDA came in at $8.5 million, but GAAP results showed a $9.5 million net loss that included a $10.3 million mining-equipment impairment. The cash-flow story for Zcash mining is real, the accounting picture is messier. For ZEC specifically, Fortitude's deepening ties to a public-market vehicle give the mining side a Nasdaq-listed footprint through the proposed combination, which is the kind of legitimizing plumbing that tends to attract institutional flow when the merger actually closes.
Frequently asked questions
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Who is Fortitude Mining?
Fortitude Mining is the Digital Currency Group affiliate focused on mining Zcash. It is the entity that paid just under $1 million for the 9.4% HeartSciences stake ahead of the proposed merger.
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Why does the $1M placement sit outside the merger exchange ratio?
Buying ordinary shares at the placement price gives Fortitude direct HeartSciences equity, but the cash is not counted in the formula that determines how many combined-company shares Fortitude's existing holders receive at closing.
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What happens to HeartSciences if the merger fails?
HeartSciences' preliminary proxy says the company may have limited ability to continue operating without a viable alternative transaction, and could ultimately liquidate with no guarantee that cash would remain for shareholders.
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When is the HeartSciences deal expected to close?
Both companies are targeting H2 2026, but the Aug. 20 preliminary proxy still left blank fields for the special meeting and record date, so the timing of shareholder approval is still pending.
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How is Fortitude's mining business performing financially?
Fortitude reported $8.5 million in adjusted EBITDA, but its GAAP results showed a $9.5 million net loss that included a $10.3 million mining-equipment impairment.
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