8-K: Marpai Inc. to Transition from Nasdaq to OTCQX Market, Citing Cost Savings

Marpai, Inc. announced its decision to withdraw from the Nasdaq hearings process and transition its stock listing to the OTCQX market to reduce costs and focus on profitable growth.

Summary

• Marpai, Inc. has decided to move its stock listing from the Nasdaq Capital Market to the OTCQX Market.
• This decision was made because the company was not in compliance with Nasdaq's minimum stockholders' equity requirement.
• The company expects its shares to be suspended from trading on Nasdaq on May 29, 2024, and begin trading on OTCQX immediately after.
• Marpai anticipates that Nasdaq will file a Form 25 with the SEC to formally delist the company's shares.
• The company believes this move will reduce costs and allow them to focus on driving profitable growth.
• Marpai will remain subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934.
• The company expects its shares to trade on OTCQX under the current symbol MRAI.
• There is no guarantee that a broker will continue to make a market in the shares or that trading will continue on OTCQX.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the delisting from Nasdaq, which is generally seen as a negative event. However, the company is trying to spin it positively by focusing on cost savings and continued trading on OTCQX.

Positives

• The move to OTCQX is expected to reduce the company's costs.
• The company believes this will allow them to focus on driving profitable growth.
• The company expects that transferring its Shares to OTCQX will ensure that a trading market may continue to exist for such securities.
• The company believes this change also benefits shareholders as it represents a significant reduction in our public company expenses.

Negatives

• The company was not in compliance with Nasdaq's minimum stockholders' equity requirement.
• The company's shares will be suspended from trading on Nasdaq.
• There is no guarantee that a broker will continue to make a market in the shares on OTCQX.
• There is no guarantee that trading will continue on OTCQX.

Risks

• There is a risk that trading of the company's shares may not continue on OTCQX.
• The company's share price could be negatively impacted by the delisting from Nasdaq.
• The company's ability to raise capital may be affected by the move to OTCQX.
• The company's visibility to institutional investors and analysts may be reduced.

Future Outlook

The company expects to reduce costs and focus on driving profitable growth after transitioning to OTCQX. They believe this move will benefit shareholders by reducing public company expenses. The company will remain subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934.

Management Comments

• Damien Lamendola, CEO of Marpai, stated that the transition to OTCQX reflects the company's commitment to transparency and shareholder value.
• He also believes that OTCQX will ensure continued visibility among institutional investors and analysts.

Industry Context

The move to OTCQX is not uncommon for companies facing compliance issues with major exchanges like Nasdaq. It reflects a broader trend of companies seeking cost-effective listing options while maintaining a trading market for their securities. The company operates in the Third-Party Administration (TPA) sector, which is a competitive market.

Comparison to Industry Standards

• Many smaller companies that fail to meet the minimum listing requirements of exchanges like Nasdaq or NYSE often transition to the OTC markets.
• This move is similar to other companies that have faced delisting and sought to maintain a trading market for their shares.
• Companies like iBio, Inc. and others have previously moved to OTC markets after facing delisting from Nasdaq.
• The cost savings mentioned by Marpai are a common driver for such transitions, as maintaining compliance with major exchange listing requirements can be expensive.

Stakeholder Impact

• Shareholders will see their shares move from Nasdaq to OTCQX.
• Shareholders may experience a change in the liquidity of their shares.
• Employees may be impacted by the company's cost-cutting measures.
• Customers and suppliers may not be directly impacted by the change in listing.

Next Steps

• The company will transition its listing to OTCQX.
• The company will continue to operate and report under SEC regulations.
• The company will focus on driving profitable growth.

Key Dates

Keywords

OTCQX, Nasdaq, delisting, stock listing, MRAI, trading suspension, cost reduction, shareholder value, profitable growth, minimum stockholders equity