DALLAS - Spectral AI, Inc. (NASDAQ:MDAI), a company specializing in artificial intelligence for medical diagnostics, has called for an investigation into what it suspects to be manipulative trading practices affecting its stock.
Erich Spangenberg, a board member and the largest shareholder, has reached out to Nasdaq and state securities regulators in Florida, Louisiana, and Texas, urging them to look into possible naked short selling of the company's shares.
In letters originally sent on June 24, 2024, and followed up on Monday, Spangenberg highlighted concerns over trading activities that may be infringing Nasdaq rules and federal and state laws. These communications were disclosed to the public through Form 8-K filings with the Securities and Exchange Commission (SEC), with the latest letter to be filed later today.
Spectral AI's primary focus is on improving the speed and accuracy of treatment decisions in wound care. Its flagship product, the DeepView System, is designed to assist clinicians in assessing the healing potential of wounds, such as burns and diabetic foot ulcers, before treatment. The company aims to transform wound management by leveraging AI for predictive diagnostics.
The company's pursuit of an investigation into the alleged market manipulation reflects its concern over the potential negative impact on its stock and the broader market, particularly companies emerging from SPAC transactions. Spectral AI's actions underscore the seriousness with which it views these allegations and its commitment to protecting shareholder interests.
This news comes as part of Spectral AI's broader strategy and initiatives, which are detailed in the company's forward-looking statements. These statements, however, are subject to various risks and uncertainties that could cause actual results to differ from those projected.
The information provided is based on a press release statement, and investors are advised to consider the risks and other factors detailed in the company's SEC filings when evaluating such forward-looking statements.
In other recent news, Spectral AI has announced a collaboration with PolyNovo Limited, intending to introduce its DeepView System for burn indication in Australia. The company also expanded its US clinical trial sites for its 2024 Burn Pivotal Study. Spectral AI reported a 24.6% increase in Research & Development revenue to $6.3 million for the first quarter ending March 31, 2024, alongside an improved cash position of $10.2 million.
BTIG adjusted its price target on Spectral AI shares following the company's first-quarter financial results for 2024. Despite a slower-than-expected enrollment in Spectral AI's pivotal Burn trial in the United States, the company still forecasts full-year 2024 R&D revenue to be approximately $28 million, marking a 55% year-over-year increase.
Finally, Spectral AI is set to join the Russell Microcap Index, a move expected to raise its profile among investment professionals. These developments reflect the company's ongoing efforts to advance its operations and financial standing.
InvestingPro Insights
As Spectral AI, Inc. (NASDAQ:MDAI) urges regulatory authorities to investigate potential manipulative trading practices, investors might be taking a closer look at the company's financial health and market performance. According to InvestingPro, MDAI holds more cash than debt on its balance sheet, which could be a sign of financial stability in these turbulent times. Still, it is worth noting that the company's short-term obligations exceed its liquid assets, which may raise concerns about its ability to meet immediate financial liabilities.
From a profitability standpoint, analysts do not expect Spectral AI to be profitable this year, and the company has not been profitable over the last twelve months. This context is important for investors considering the potential impact of any alleged market manipulation on the company's stock value. Despite these challenges, the company's stock has seen a strong return over the last month.
InvestingPro data shows a market capitalization of $33.04M, indicating that Spectral AI is a smaller player in the market, which can be subject to higher volatility. The company's revenue has declined by 21.53% over the last twelve months as of Q1 2024, yet it showed a quarterly revenue growth of 24.58% in Q1 2024, suggesting some recent positive momentum. Moreover, the gross profit margin stands at 44.78%, which could be a silver lining for the company as it navigates through its current challenges.
For investors seeking a deeper dive into Spectral AI's financials and market performance, there are additional InvestingPro Tips available on the platform. By using the coupon code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking access to a wealth of insights that could inform investment decisions. There are currently 6 additional tips listed for Spectral AI on InvestingPro, providing a more comprehensive understanding of the company's potential and risks.
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