ScanTech AI secures $50 million equity line of credit from ARC Group

ATLANTA - ScanTech AI Systems Inc. (NASDAQ:STAI), a micro-cap technology company with a market value of $28.9 million, has secured an equity line of credit (ELOC) of up to $50 million from ARC Group International Ltd., according to a press release statement issued Friday. InvestingPro data shows the company has been rapidly burning through cash, making this funding crucial for its operations.

The AI-powered security screening systems developer will also receive an initial $500,000 PIPE equity investment from ARC Group, a global financial services firm. The funding arrangement is contingent upon SEC registration of shares to be issued under the ELOC. With a current ratio of 0.14, indicating significant short-term liquidity challenges, this initial investment could provide vital working capital.

ScanTech AI plans to use the capital to fund research and development, commercialize its SENTINEL AI threat detection platform, and work toward regaining Nasdaq compliance.

"This investment represents a powerful vote of confidence in ScanTech AI’s technology and growth strategy," said Dolan Falconer, CEO of ScanTech AI. "The structure provides us with both immediate capital and the flexibility to access additional funding as we scale."

The company retains discretion over the timing of drawdowns from the facility. The financing aims to accelerate deployment of the company’s security systems across aviation and critical infrastructure applications while supporting advancements in AI-driven detection analytics. Despite challenging market conditions that have led to a 95% year-to-date stock price decline, the company has achieved impressive revenue growth of 139% over the last twelve months. InvestingPro subscribers can access 12 additional key insights about ScanTech’s financial health and market performance.

Mac McDonald, Director of ARC Asset Management, stated that ARC sees "strong potential in ScanTech’s AI, particularly in aviation, critical infrastructure, and logistics."

ScanTech AI develops non-intrusive CT screening technologies using artificial intelligence and machine learning to detect hazardous materials and contraband. The company’s systems are designed for use in airports, seaports, borders, and other security-sensitive facilities.

The funding is also expected to support the company’s efforts to achieve international certification milestones targeted for 2026. According to InvestingPro’s analysis, ScanTech currently maintains a weak overall financial health score of 1.42, highlighting the strategic importance of this funding for its future growth initiatives and certification goals.

In other recent news, ScanTech AI Systems Inc. has been actively making changes to its auditing and compliance processes. The company announced the appointment of Berkowitz Pollack Brant Advisors + CPAs as its new independent registered public accounting firm, effective for the fiscal year ending December 31, 2025. This follows the resignation of its previous auditor, UHY LLP, who stepped down after ScanTech AI filed its Quarterly Report on Form 10-Q for the period ending June 30, 2025, in a bid to regain Nasdaq compliance. To further address compliance issues, ScanTech AI engaged FSR Capital for advisory services related to capital markets and Nasdaq compliance. Additionally, the company reported changes to its board of directors, with Thomas McMillen resigning and Michael McGarrity being appointed as the new chair of the Nominating and Corporate Governance Committee. Bradley Buswell was also appointed to the Audit Committee to fill the vacancy left by McMillen. These developments reflect ScanTech AI’s ongoing efforts to strengthen its governance and regulatory standing.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.