The Real Good Food Company, Inc. (NASDAQ:RGF), a food and kindred products manufacturer, is confronting the possibility of being delisted from the Nasdaq Global Market. The company, headquartered in Cherry Hill, New Jersey, received notifications from Nasdaq on two separate occasions indicating non-compliance with the exchange's listing rules.
On Monday, the company was informed of its failure to meet the minimum bid price requirement, as its common stock had not maintained the necessary $1.00 per share over the past 30 consecutive business days. This issue had previously been identified, with a 180-day compliance period ending on October 16, 2024, which the company did not meet.
Additionally, on October 22, 2024, Real Good Food was notified of another non-compliance issue concerning the minimum market value of publicly held shares. The company's market value had fallen below the required $15 million threshold for 30 consecutive business days. A similar 180-day period to rectify this was provided, concluding on October 21, 2024, which also went unmet.
In response to these notices and a previous delisting warning related to delayed periodic financial reporting, the company has requested a hearing with an independent Hearings Panel. This request has temporarily stayed the delisting process until the hearing date and any subsequent extension period granted by the Panel. During the hearing, Real Good Food will seek an extension to regain compliance with all listing requirements, with the maximum possible extension running through April 16, 2025, for the bid price rule and April 21, 2025, for the market value rule.
The company's struggle with compliance was initially disclosed in April 2024, revealing issues with both the minimum bid price and market value of publicly held shares. Despite efforts to regain compliance, there is no certainty that the company will meet the necessary criteria for continued listing on the Nasdaq or that the Panel will grant an extension.
This news is based on the company's recent 8-K filing with the Securities and Exchange Commission. The Real Good Food Company, Inc.'s future on the Nasdaq remains uncertain as it navigates these regulatory challenges.
In other recent news, Real Good Food Company, Inc. has increased its borrowing capacity by amending its credit agreement. The company's subsidiary, Real Good Foods, LLC, entered into a deal with PMC Financial Services Group, LLC, raising the revolving credit facility from $42 million to $46 million. The amendment also includes an increase in the amount available for overadvance loans to $46 million.
Further, Real Good Food has expanded its distribution in 4,000 Walmart (NYSE:WMT) stores nationwide with the introduction of its new Seasoned Chicken Breast Chunks. This move is part of a broader strategy to grow the Frozen Proteins portfolio.
However, the company is currently dealing with a compliance issue with the Nasdaq Stock Market LLC for not filing its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, in a timely manner. The company has deadlines in June and October 2024 to submit plans to regain compliance. Despite these challenges, Real Good Food continues to focus on providing nutritious food options.
InvestingPro Insights
The Real Good Food Company's (NASDAQ:RGF) struggle with Nasdaq compliance is reflected in its recent financial performance and market position. According to InvestingPro data, the company's market capitalization stands at a modest $12.43 million, underscoring its small-cap status and the challenges it faces in meeting Nasdaq's market value requirements.
InvestingPro Tips highlight that RGF's stock "generally trades with high price volatility" and has "fallen significantly over the last year," with a one-year price total return of -84.62%. This aligns with the company's difficulty in maintaining the minimum bid price required by Nasdaq. The stock's current price of $0.37 is only 13.73% of its 52-week high, further illustrating the uphill battle RGF faces in regaining compliance.
Despite these challenges, there's a glimmer of hope as InvestingPro data shows a 47.6% price total return over the last six months. This recent uptick could be crucial for RGF as it seeks an extension from the Nasdaq Hearings Panel to meet listing requirements.
For investors seeking a deeper understanding of RGF's situation, InvestingPro offers 10 additional tips, providing a comprehensive view of the company's financial health and market position.
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