Zoomcar Holdings Inc. (NASDAQ:ZCAR), an auto rental service provider with a market capitalization of just $3.85 million, is currently facing potential delisting from the Nasdaq Stock Market due to non-compliance with certain listing requirements.
According to InvestingPro data, the company's overall financial health score stands at a concerning 1.96 out of 10, labeled as "FAIR." On January 17, 2025, the company's market value of publicly held shares remained below the Nasdaq's minimum requirement of $15 million for over 30 consecutive business days, failing to meet the Nasdaq Global Market's continued listing standards.
Despite being granted an initial 180-day period to regain compliance, which expired on January 21, 2025, Zoomcar Holdings was unable to rectify the deficiency. The company's financial challenges are evident in its concerning current ratio of 0.07 and total debt to capital ratio of 0.83, as revealed by InvestingPro analysis. The company also reported non-compliance with other listing requirements and presented a compliance plan to a Nasdaq Hearing Panel on January 9, 2025.
The company received additional notice on January 23, 2025, stating that the failure to meet the market value requirement could lead to delisting and that the Panel would consider this in their final decision. With a negative beta of -0.13 indicating contrary movement to the broader market, and a significant year-to-date price decline of over 99%, investors seeking detailed analysis can access 15 additional key insights through InvestingPro.
Zoomcar Holdings has until January 30, 2025, to submit a written appeal to the Panel. The company plans to present a compliance plan, which may include transferring to the Nasdaq Capital Market. However, there is no guarantee that the Panel will accept the company's appeal to prevent delisting.
In executive news, Zoomcar Holdings announced that Sachin Gupta has been appointed as the Chief Financial Officer effective immediately on January 17, 2025, after previously serving as the Interim CFO. Additionally, Hiroshi Nishijima, the Acting Chief Executive Officer, had his annual salary restored to $350,000 from a reduced salary of $175,000, retroactive to January 1, 2025.
On the regulatory front, Zoomcar is grappling with potential delisting from Nasdaq due to non-compliance with several listing requirements. The firm has until January 21, 2025, to regain compliance. In response to these challenges, shareholders approved a reverse stock split and elected two Class I directors to the board. They also consented to the exercise of the Bridge Warrants, potentially resulting in the issuance of over 20% of Zoomcar's outstanding common stock.
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