LeddarTech Threatened With Expulsion From NASDAQ

Time is running out for LeddarTech, which needs money. As its discussions with potential investors drag on, the Quebec-based driver assistance software provider is facing expulsion from NASDAQ, just eight months after it went public.

LeddarTech management said Tuesday it has received notices from NASDAQ that the company has failed to meet certain requirements for continued listing: a minimum stock price of $1 per share, a minimum public share value of $15 million and a minimum market capitalization of $50 million.

LeddarTech’s stock, which fell below $1 a share in mid-June, hit a low of 58 cents at the close of trading Tuesday on the NASDAQ, and its market capitalization is now about $17 million.

LeddarTech has 180 days to regain compliance with NASDAQ requirements.

Management maintains that it will evaluate the options available to it to meet NASDAQ’s expectations and that it intends to “actively” monitor the market’s assessment.

Discussions underway with Quebec

LeddarTech is continuing discussions with shareholders and other potential investors to assist in securing financing that may include funds to meet short-term obligations, the company said.

Management had announced a month ago that it had received indications of interest from “several of its major shareholders” regarding a total investment of up to US$9.7 million.

Investissement Québec is one of the three main shareholders of LeddarTech with a shareholding valued at just over 15%.

It was not possible to obtain a comment from Investissement Québec. “The Ministry of Economy, Innovation and Energy and Investissement Québec never publicly discuss the talks they have, or could have, with companies and do not share any information regarding their financial situation and future prospects,” the Ministry said in an email.

Modified conditions

LeddarTech also announced on Tuesday that it had once again adjusted its financing conditions with its lender Desjardins.

The Quebec financial institution has just agreed to temporarily reduce the clause relating to minimum liquidity and to temporarily postpone the payment of interest for the months of July, August, September and October.

“We are pleased to have Desjardins’ continued support as we continue to make significant progress in securing the financing we need to achieve our short- and long-term goals,” LeddarTech CEO Frantz Saintellemy said in a statement.

It was not possible to speak with him on Tuesday.

The cash balance stood at 14.3 million at the beginning of April.

The change to the Desjardins deal suggests to this expert that LeddarTech is spending more than expected or that decisions in the automotive market are taking longer than anticipated. “LeddarTech may have thought it had already been able to conclude a production agreement by now,” says Kevin Garrigan.

LeddarTech’s business model is based on the sale of its software as a service, which should generate recurring revenue.

An update is expected next Wednesday when the financial performance for the spring months is published. However, only a press release is planned for now, without a conference call.

The company generated a net loss of US$17.4 million in the first three months of the year.

LeddarTech became a public company last December through a merger with Prospector Capital, a special purpose acquisition company whose shares were already listed on NASDAQ. The transaction enabled LeddarTech to raise approximately US$70 million in capital to support the adoption and development of its technology.

LeddarTech wanted to go public to offer its long-term shareholders a more liquid vehicle for their shares, but also to gain access to a market that could potentially raise capital to finance future projects.