Presto Automation Inc., a prepackaged software services provider, has been notified of non-compliance with Nasdaq's minimum bid price requirement, which could lead to the delisting of its common stock and warrants. The company received a Staff Determination Letter from Nasdaq on June 27, 2024, after failing to maintain the required $1.00 minimum closing bid price for 30 consecutive business days.
The initial notice of non-compliance was issued on December 28, 2023, giving Presto Automation 180 calendar days to meet the requirement, a deadline which expired on June 25, 2024. To address the situation, the company plans to request a hearing before a Nasdaq Hearings Panel by July 5, 2024. This action will temporarily halt the delisting process until the hearing's outcome.
Presto Automation has also disclosed that it is dealing with additional deficiency notices from Nasdaq concerning the minimum market value of publicly held securities and the minimum market value of listed securities. The company's board has proposed a reverse stock split, subject to stockholder approval at a special meeting on July 16, 2024, as a measure to regain compliance with the bid price requirement.
The company's common stock and warrants will continue trading on the Nasdaq Global Market pending the resolution of the hearing process. However, there is no assurance that the Panel will allow continued listing or that Presto Automation will satisfy the listing criteria within the granted time frame.
In other recent news, Presto, the innovative technology solutions provider, has shared its Q3 financial results for 2024, revealing a strategic shift towards Voice AI. The company reported revenue of $4.5 million and an adjusted EBITDA loss of $12.2 million, with operating expenses reaching $15.5 million. To streamline its capital structure, Presto completed a $3 million financing round and secured an extension of forbearance on existing defaults from its principal senior secured lender.
As part of its recent developments, Presto is discontinuing its Touch pay-at-table business to concentrate on Voice AI, a move that has seen efficiency improvements in tests, with plans for further expansion. The company has also successfully piloted a Spanish language feature, which is set to be rolled out soon.
Looking forward, Presto projects its Q4 2024 revenue to be between $1.6 million and $1.9 million. The company also plans to transfer its debt position to a new lender as part of its realignment towards Voice AI technology. Despite the reported losses, Presto remains optimistic about its operational progress and the potential of Voice AI to enhance profitability.
InvestingPro Insights
As Presto Automation Inc. faces the challenges of Nasdaq non-compliance, real-time data from InvestingPro reveals critical aspects of the company's financial health. With a market capitalization of merely $12.42 million, the company's financial struggles are evident. The data shows a stark revenue decline of 34.78% over the last twelve months as of Q3 2024, coupled with a gross profit margin of 15.51%, reflecting underlying operational difficulties. Furthermore, the company's stock has experienced a significant downturn, with a 1-week total price return of -5.56% and a 1-year total price return of -98.43%, underscoring the urgency of the situation.
InvestingPro Tips highlight critical concerns for investors considering Presto Automation's future. The company operates with a significant debt burden and is quickly burning through cash, which may be contributing to its inability to maintain Nasdaq's minimum bid price. Additionally, analysts anticipate a sales decline in the current year, and the stock has been marked by high price volatility. With these factors in mind, the proposed reverse stock split could be a pivotal move for the company's attempt to regain compliance and investor confidence.
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