XChange TEC.INC RECEIVES NASDAQ MINIMUM MARKET VALUE DEFICIENCY NOTICE

Rhea-AI Summary

XChange TEC has received a notice from Nasdaq dated November 13, 2024, indicating non-compliance with the minimum Market Value of Listed Securities (MVLS) requirement of $35 million. The company failed to maintain this threshold for 30 consecutive business days from October 2 to November 12, 2024. XChange TEC has been granted a 180-day compliance period until May 12, 2025, to regain compliance by maintaining an MVLS above $35 million for at least 10 consecutive business days. Failure to meet this requirement could result in delisting from Nasdaq.

Positive

• None.

Negative

• Company fails to meet Nasdaq's minimum market value requirement of $35 million
• Risk of potential delisting from Nasdaq if compliance is not achieved by May 12, 2025
• Company does not meet alternative Nasdaq listing requirements under Rules 5550(b)(1) and 5550(b)(3)

Insights

Financial Analyst

This NASDAQ deficiency notice represents a significant red flag for XHG. The company's market value has fallen below $35 million for an extended period, triggering compliance issues that could lead to delisting. With a current market cap of $218.2 million, the situation appears complex and concerning.

The 180-day compliance window until May 12, 2025, provides some breathing room, but the company needs to demonstrate sustainable market value growth. To regain compliance, XHG must maintain a market value above $35 million for at least 10 consecutive business days. The failure to meet alternative compliance requirements under Rules 5550(b)(1) and 5550(b)(3) suggests deeper financial challenges.

Investors should closely monitor the company's strategic actions to address this deficiency. The risk of delisting could trigger forced selling by institutional investors and index funds, potentially creating additional downward pressure on the stock price.

SHANGHAI, Nov. 15, 2024 /PRNewswire/ -- XChange TEC.INC (NASDAQ: XHG) (the "Company"), today announced that it has received a notice (the "Notice") from The Nasdaq Stock Market LLC ("Nasdaq") dated November 13, 2024 stating that the Company is not in compliance with the requirement to maintain a minimum Market Value of Listed Securities ("MVLS") of $35 million as set forth under Nasdaq Listing Rule for continued listing on The Nasdaq Capital Market.

Nasdaq Listing Rule 5550(b)(2) requires companies to maintain a minimum MVLS of $35 million (the "MVLS Requirement"), and Nasdaq Listing Rule 5810(c)(3)(C) specifies that a deficiency occurs if the MVLS falls below this threshold for 30 consecutive business days. Based on the Company's MVLS for the 30 consecutive business days from October 2, 2024, to November 12, 2024, the Company no longer meets this requirement. The Notice further states that the Company also does not meet the alternative requirements under Nasdaq Listing Rules 5550(b)(1) and 5550(b)(3).

Pursuant to Nasdaq Listing Rule 5810(c)(3)(C), the Company has a 180-calendar-day compliance period, which expires on May 12, 2025. If, during this period, the Company's MVLS closes at or above $35 million for at least 10 consecutive business days, Nasdaq will notify the Company of its compliance, and the matter will be closed.

If the Company is unable to regain compliance with the applicable Nasdaq Listing Rules by the end of the compliance period, it will receive a written notice that its securities are subject to delisting.

The Notice has no immediate effect on the listing of the Company's securities and the Company's securities continue to trade on Nasdaq. The Company intends to take appropriate actions within the specified period to regain compliance. However, there can be no assurance that the Company will be able to regain compliance under the MVLS Requirement and other applicable Nasdaq Listing Rules.

About XChange TEC.INC

XChange TEC.INC, through its subsidiaries and consolidated variable interest entities, operates insurance agency and insurance technology business. The insurance agency is PRC-licensed and operates nationwide in the PRC with a wide range of insurance products underwritten by major insurance companies, including industry leading and/or state-owned property and casualty insurance companies as well as certain regional property and casualty insurance companies in the PRC. The insurance technology business is focused on operating and developing insurance technology in the PRC, including developing SaaS platform to connect consumers and underwriting support.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements include, among others, statements regarding the Company's plans to regain compliance with Nasdaq Rules for continued listing. The Company's actual results may differ materially from those expressed in any forward-looking statements as a result of various factors and uncertainties. The reports filed by the Company with the U.S. Securities and Exchange Commission discuss these and other important factors and risks that may affect the Company's business, results of operations and financial conditions. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

View original content:https://www.prnewswire.com/news-releases/xchange-tecinc-receives-nasdaq-minimum-market-value-deficiency-notice-302307100.html

SOURCE XChange TEC.INC

FAQ

What is the minimum market value requirement XHG needs to maintain for Nasdaq listing?

XHG needs to maintain a minimum Market Value of Listed Securities (MVLS) of $35 million to comply with Nasdaq listing requirements.

When does XHG's Nasdaq compliance period end?

XHG's compliance period ends on May 12, 2025, which is 180 calendar days from receiving the notice.

How can XHG regain Nasdaq compliance?

XHG can regain compliance if its market value closes at or above $35 million for at least 10 consecutive business days before May 12, 2025.

What happens if XHG fails to meet Nasdaq requirements by May 12, 2025?

If XHG fails to meet the requirements by May 12, 2025, it will receive a written notice that its securities are subject to delisting from Nasdaq.