Spectral AI, Inc., a medical device company headquartered in Dallas, Texas, is confronting the risk of being delisted from the Nasdaq Stock Market. The company, trading under the symbol NASDAQ:MDAI, has failed to meet the Nasdaq's minimum market value requirement of $35 million over the past 30 consecutive business days.
The Nasdaq Listing Rule 5550(b)(2), also known as the Market Value Rule, stipulates that companies must maintain a minimum market value of listed securities of $35 million for continued listing on The Nasdaq Capital Market. Spectral AI was initially notified of its non-compliance on June 3, 2024, and was given until December 2, 2024, to regain compliance. The company was required to maintain a closing market capitalization of at least $35 million for a minimum of 10 consecutive business days during this period.
However, as of December 2, 2024, Spectral AI had not achieved compliance. Consequently, on December 5, 2024, Nasdaq informed the company that its common stock was at risk of being delisted. In response, Spectral AI has requested a hearing before the Nasdaq Listing Qualifications Panel to present its compliance plan and seek an extension.
The hearing request has delayed any potential delisting or suspension actions until the Panel issues a final decision. The Panel may grant an additional period of up to 180 calendar days from December 2, 2024, for the company to meet the Market Value Rule.
Despite the delisting notice, Spectral AI remains optimistic about regaining compliance. The company reports that its current market capitalization exceeds the $35 million threshold and anticipates maintaining this level for the necessary period to satisfy Nasdaq's requirements.
InvestingPro analysis indicates the stock has shown strong momentum, with a 19.3% return over the past six months. However, InvestingPro Tips reveal concerns about short-term obligations exceeding liquid assets, with a current ratio of 0.73.
In other recent news, Spectral AI, a Dallas-based artificial intelligence firm, has announced significant advancements in its operations. The company has finalized its plan to spin off its intellectual property subsidiary, Spectral IP, into an independent publicly-traded entity. This strategic move is expected to enhance shareholder value and allow Spectral IP to explore opportunities beyond Spectral AI's primary focus on medical diagnostics.
Spectral AI has also made substantial progress in its U.S. Burn Pivotal Study, completing the final clinical visits. This development is a significant step towards the planned submission for U.S. Food and Drug Administration approval of its DeepView AI®-Burn system in 2025. Additionally, the company has successfully completed a proof-of-concept for a module within its DeepView System, aimed at enhancing burn care treatment decisions.
In financial developments, Spectral AI secured over $850,000 from the Medical (TASE:PMCN) Technology Enterprise Consortium for the development of its handheld predictive burn wound healing device, DeepView SnapShot M®. The company's R&D revenue is projected to reach approximately $28 million for the full year of 2024, marking a 55% year-over-year increase, according to an analysis by BTIG.
The company's patent portfolio has grown by 30%, now totaling 26 patents. Spectral AI has also urged Nasdaq and state securities regulators in Florida, Louisiana, and Texas to investigate possible manipulative trading practices affecting its stock. These are among the recent developments for Spectral AI.
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