Big Tree Cloud Holdings Limited (DSY) received two Nasdaq listing rule deficiency notices on December 29 and December 31 2025, a fact disclosed on January 5 2026. The notices were issued because the company’s Market Value of Listed Securities (MVLS) and Market Value of Publicly Held Shares (MVPHS) fell below Nasdaq’s minimum thresholds of $50 million and $15 million, respectively.
Nasdaq granted the company a 180‑day compliance window that ends on June 29 2026, during which DSY must restore each metric to the required levels for at least ten consecutive business days. In addition to the MVLS and MVPHS deficiencies, Nasdaq also notified DSY that its share price had remained below $1.00 for 30 consecutive business days from October 7 to November 17 2025, triggering a separate minimum bid‑price deficiency.
DSY’s financial position underscores the urgency of the compliance effort. The company reported a net loss of $32.5 million for the fiscal year ended June 30 2025 and an operating cash flow of negative $6.5 million. With a market capitalization of $28.04 million, the firm is well below the $50 million MVLS requirement. Gross profit margins have weakened, reflecting pressure from declining demand in its traditional paper hygiene segment and the high upfront costs associated with its new artificial‑intelligence initiatives.
Management has outlined a multi‑pronged strategy to regain compliance. The CEO stated that DSY will explore capital‑raising options, pursue operational optimization, and accelerate the development of an AI creator‑ecosystem platform. The company’s leadership emphasized that disciplined cost management and targeted investments in high‑return verticals are essential to restoring market value and sustaining long‑term growth.
The deficiency notices signal significant financial distress and elevate the risk of Nasdaq delisting if compliance is not achieved within the allotted period. Failure to regain MVLS and MVPHS thresholds would force the company to either raise substantial capital or restructure its shareholder base, both of which could dilute existing ownership and further strain cash resources. While the AI platform offers a potential growth engine, its current revenue contribution is limited, and the company must demonstrate rapid monetization to offset the losses incurred in its legacy business.
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