QT Imaging Holdings, Inc., a company specializing in electromedical and electrotherapeutic apparatus, is currently facing the risk of being delisted from The Nasdaq Global Market. On Monday, the company received a notice from the Nasdaq Listing Qualifications Department indicating that the Market Value of Publicly Held Securities (MVPHS) had fallen below the required minimum of $15 million for 31 consecutive business days.
This notice does not immediately affect the company's listing, but an indicator of non-compliance will now be associated with QT Imaging Holdings' stock information. The company, which previously operated under the name GigCapital5, Inc., has until March 3, 2025, to regain compliance with Nasdaq's MVPHS requirement.
QT Imaging Holdings has also been previously notified of non-compliance with other listing requirements, including a minimum Market Value of Listed Securities (MVLS) of $50 million and a minimum bid price of $1.00 per share for its common stock. The company has 180 calendar days from the date of the latest notice to address the MVPHS issue and is considering various options to regain compliance, which may include transferring its listing to The Nasdaq Capital Market if it meets the criteria for that exchange.
The forward-looking statements from the company suggest that there is no guarantee of regaining compliance with the listing requirements or the success of any potential appeal to a Nasdaq Hearings Panel if delisting occurs. These statements, along with other risk factors, have been outlined in the company's Quarterly Report filed with the SEC on August 8, 2024.
In other recent news, QT Imaging Holdings, Inc. has formed an exclusive distribution agreement with NXC Imaging, Inc., a subsidiary of Canon Medical Systems USA, Inc. This development supersedes a previous non-exclusive sales agent agreement, indicating a strategic shift in QT Imaging's sales and service operations.
NXC Imaging will now become the exclusive reseller of QT Imaging's specified equipment within the U.S. and its territories, overseeing marketing, advertising, and reselling activities.
As per the agreement, NXC Imaging has the right to appoint sales agents for equipment sales and can mark up the equipment cost by a maximum of twenty percent, subject to mutual agreement with QT Imaging. QT Imaging, however, retains the right to sell directly to customers and other entities globally, without requiring NXC's consent.
Payment terms are such that NXC pays half upon order approval and the remaining 50% upon shipment, while QT Imaging retains a security interest in the equipment until full payment is received.
The partnership is set to continue until December 31, 2025, subject to earlier termination or extension by mutual written agreement. This arrangement reflects QT Imaging's strategy to enhance its distribution capabilities and market reach through this exclusive relationship with NXC Imaging.
InvestingPro Insights
As QT Imaging Holdings, Inc. grapples with the challenges of meeting Nasdaq's listing requirements, real-time data from InvestingPro provides a clearer picture of the company's financial health. With a market capitalization adjusted to just $14.19 million, the company falls short of the Nasdaq's minimum Market Value of Publicly Held Securities (MVPHS) requirement. This is further compounded by a significant quarterly revenue growth of 53,749.67% as of Q2 2024, which may indicate volatility or one-off gains rather than sustainable growth. The company's gross profit margin stands at 50.84% for the same period, highlighting its ability to retain half of its revenue as gross profit.
InvestingPro Tips suggest caution for potential investors, as the company has been quickly burning through cash and analysts anticipate a sales decline in the current year. Additionally, QT Imaging Holdings has not been profitable over the last twelve months and its stock price has fallen significantly over the last year. These factors could be crucial for investors considering the company's ability to regain compliance with Nasdaq's listing standards.
For those seeking more in-depth analysis, there are additional InvestingPro Tips available that delve into the company's financials and stock performance. These tips can be accessed for QT Imaging Holdings at https://www.investing.com/pro/QTI, providing investors with a comprehensive tool to make informed decisions.
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