SAN JOSE, CA – Outset Medical, Inc., a medical technology company, received a notification from The Nasdaq Stock Market LLC on Monday, indicating that the company no longer meets the minimum bid price requirement for continued listing on the Nasdaq Global Select Market. The notice was triggered as the closing bid price of Outset Medical's common stock remained below $1.00 for 30 consecutive trading days.
The company, which trades under the ticker NASDAQ:OM, has been given an initial period of 180 days, until March 24, 2025, to regain compliance with Nasdaq's minimum bid price rule. To achieve this, the company's stock must close at $1.00 or higher for at least 10 consecutive trading days before the deadline.
If compliance is not regained by March 24, 2025, Outset Medical may be eligible for an additional 180-day period provided it meets the Nasdaq Capital Market's continued listing criteria, excluding the minimum bid price, and it submits a transfer application along with a plan to resolve the bid price issue. Nasdaq will then assess the company's ability to address the deficiency.
The current notice does not affect the company's stock listing, which will continue to be traded on the Nasdaq Global Select Market. However, should Outset Medical fail to meet the necessary requirements or be deemed ineligible for an additional compliance period, it may face delisting. In such an event, the company has the right to appeal the decision.
Outset Medical, previously known as Home Dialysis Plus, Ltd., specializes in electromedical and electrotherapeutic apparatus. It is headquartered in San Jose, California, and is incorporated in Delaware. The company is actively working to maintain its Nasdaq listing, but there is no guarantee of compliance with the minimum bid price requirement or other Nasdaq listing rules in the future.
In other recent news, Outset Medical, a medical technology firm, has reported less than stellar second-quarter earnings for 2024, falling short of market expectations. This disappointing performance was largely due to the slower roll-out of its TabloCart product and an extended sales cycle. Despite these setbacks, the company saw a silver lining with robust treatment sales and growth in its installed base for the Tablo console. The non-GAAP gross margin surpassed forecasts, hitting 37.3%, with a product margin of 44.8%. Recurring revenue also saw a 24% increase compared to Q2 2023.
In other developments, Jim Hinrichs, a director at Outset Medical, has resigned from the Board of Directors and as Audit Committee Chair, in preparation for his significant affiliation with Vantive, a new entity to be created following Baxter International Inc (NYSE:BAX).'s divestiture of its kidney care business. The Board, now reduced to seven directors, has appointed Patrick T. Hackett, a member since 2019, as the new Audit Committee Chair.
In response to the recent challenges, Outset Medical is restructuring its commercial team and implementing new sales processes to enhance enterprise opportunities.
While a cyberattack did disrupt operations and contributed to the sales slowdown, the company is focused on returning to sustainable top-line growth and remains confident in its long-term revenue prospects. Outset Medical did not provide specific guidance for 2025 but expressed optimism about closing deals in the pipeline.
InvestingPro Insights
Recent data from InvestingPro sheds light on Outset Medical's current financial situation, providing context to the company's Nasdaq listing challenges. As of the last twelve months ending Q2 2024, Outset Medical reported revenue of $116.42 million, with a concerning revenue decline of 9.94% over this period. The company's market capitalization stands at $31.67 million, reflecting the significant drop in stock value.
InvestingPro Tips highlight several critical issues facing the company. Outset Medical is "quickly burning through cash," which aligns with the reported operating loss of $150.48 million in the same period. This cash burn rate could exacerbate the company's ability to meet Nasdaq's listing requirements. Additionally, the stock "has taken a big hit over the last week," with a 7.89% decline, and has "fared poorly over the last month" with an 18.52% drop, illustrating the ongoing struggle to maintain its stock price above the $1.00 threshold.
These insights from InvestingPro, along with 13 additional tips available on the platform, offer valuable context to Outset Medical's current predicament and its efforts to maintain its Nasdaq listing.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.