BranchOut Food Inc., a food and kindred products manufacturer based in Oregon, is confronting potential delisting from the Nasdaq Capital Market due to non-compliance with the minimum stockholders' equity requirement. The company, which trades under the ticker BOF, was notified by Nasdaq on October 10, 2024, that its stockholders' equity fell below the required $2.5 million threshold.
The shortfall was identified in the company's 2023 annual report, which showed stockholders' equity of $2,210,476 as of December 31, 2023. BranchOut Food Inc. initially received notice of the deficiency on April 11, 2024, and submitted a compliance plan accepted by Nasdaq on June 7, 2024. However, the company failed to meet the terms of the extension granted to regain compliance by October 8, 2024.
In response to the delisting notice, BranchOut Food Inc. has requested a hearing with Nasdaq's Hearings Panel, which has stayed the suspension of trading and the filing of the Form 25-NSE that would formally remove the company's securities from Nasdaq. The hearing is set to determine the company's future on the exchange.
In addition to the delisting concerns, the company held its 2024 Annual Meeting of Stockholders on October 14, 2024.
At the meeting, stockholders voted on several key issues, including the election of director nominees, the approval of the conversion of a senior secured convertible promissory note, the exercise of warrants to purchase company stock, executive compensation, and the frequency of advisory votes on executive compensation. All director nominees were elected, and all proposals were approved by the stockholders.
The company also secured ratification for the appointment of M&K CPAS, PLLC as its independent registered public accountants.
The information in this article is based on an SEC filing by BranchOut Food Inc.
InvestingPro Insights
BranchOut Food Inc.'s financial challenges, as highlighted in the article, are further illuminated by recent data from InvestingPro. The company's market capitalization stands at a modest $12.74 million, reflecting its current struggles. Despite these difficulties, BranchOut has shown remarkable revenue growth, with a 703.78% increase over the last twelve months as of Q2 2024, and a 297.3% quarterly growth in Q2 2024. This rapid expansion, however, has not translated into profitability.
InvestingPro Tips indicate that the company is "quickly burning through cash" and is "not profitable over the last twelve months." These insights align with the company's struggle to maintain the required stockholders' equity for Nasdaq listing. The tip suggesting that the stock "generally trades with high price volatility" is evident in the recent price movements, with a significant 138.96% return over the last three months, contrasted by a 14.42% decline in the past month.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for BranchOut Food Inc., providing a deeper understanding of the company's financial position and market performance.
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