PLANO, TX - Stryve Foods, Inc., a manufacturer of food and kindred products, has been notified by the Nasdaq Stock Market LLC of a potential delisting due to its share price falling below the required minimum. The Nasdaq Listing Qualifications Department issued a deficiency letter to the company on Thursday, stating that for 30 consecutive business days, the bid price of Stryve Foods' Class A common stock had not met the minimum $1.00 per share threshold.
Despite this notice, which does not immediately affect the trading of Stryve Foods' stock (NASDAQ:SNAX), the company has been granted a 180-day period, until May 20, 2025, to regain compliance with the Nasdaq's minimum bid price rule. To achieve this, the stock's bid price must close at $1.00 or higher for at least 10 consecutive business days before the deadline.
Stryve Foods has the option for an additional 180-day compliance period if it meets all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement. The company would need to notify Nasdaq of its intent to cure the deficiency during this second period.
The company is considering various strategies, including a potential reverse stock split, to address the non-compliance and regain eligibility for continued listing on the Nasdaq. This issue has not affected the company's scheduled hearing before a Nasdaq Hearing Panel on November 26, 2024, where it will present its compliance plan regarding stockholders' equity.
There is no certainty that Stryve Foods will successfully regain compliance with the Nasdaq's minimum bid price rule or other listing requirements, nor can it be guaranteed that the company's appeal to the delisting determination will be successful. This news is based on a press release statement and the company's recent SEC filing.
In other recent news, Stryve Foods reported robust growth in their Q3 earnings call. The company saw a 36.4% increase in net sales, reaching $5.7 million, and improved gross margins from 13.3% to 21.7% year-over-year. These improvements were attributed to increased retail velocity, promotional efficiencies, and operational efficiencies.
Stryve Foods also highlighted a reduction in operating expenses by 15.9% to $3.5 million due to disciplined cost management. Furthermore, the company managed to decrease its adjusted EBITDA loss to $1.7 million from $2.5 million in the previous year.
In response to strong demand, Stryve Foods raised $2.9 million in equity to build inventory, despite current working capital constraints. The company expressed optimism about growth into 2025, with new retail placements and continued operational efficiencies. However, it acknowledged the need for additional capital to fully support its expansion plans.
InvestingPro Insights
Recent data from InvestingPro sheds light on Stryve Foods' financial situation, providing context to the company's Nasdaq listing challenges. As of the last twelve months ending Q3 2024, Stryve Foods reported revenue of $19.36 million, with a concerning revenue growth decline of 4.29%. This aligns with an InvestingPro Tip indicating that the company is "quickly burning through cash," which could be contributing to its current stock price woes.
The company's stock price has taken a significant hit, with a one-year price total return of -69% as of the most recent data. This dramatic decline underscores the gravity of Stryve Foods' situation regarding the Nasdaq's minimum bid price requirement. Another relevant InvestingPro Tip notes that the stock "generally trades with high price volatility," which may complicate efforts to stabilize the share price above the $1 threshold.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips on Stryve Foods, providing deeper insights into the company's financial health and market position. These additional tips could be particularly valuable as the company navigates its Nasdaq listing challenges and considers strategies like a potential reverse stock split.
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