CHERRY HILL, N.J. - The Real Good Food Company, Inc. (NASDAQ: RGF), known for its health and wellness frozen and refrigerated foods, is set to be delisted from the Nasdaq Stock Market due to non-compliance with filing requirements. The company, currently trading at $3.43 and showing an InvestingPro Financial Health score of "WEAK," has seen its market capitalization shrink to just $6.24 million amid ongoing challenges. The company, which has not met the Nasdaq Listing Rule 5250(c)(1) for filing periodic financial reports, will see trading of its common stock suspended on January 7, 2025.
Following the suspension, Real Good Foods' stock is expected to begin trading on the Pink Open Market, operated by the OTC Markets Group, Inc., on the same date. However, there is a possibility that trading may shift to the OTC's Expert Market, which would result in the company's stock quotes no longer being publicly available. InvestingPro data reveals the stock has experienced significant volatility, with shares down nearly 81% over the past year and currently trading 82% below its 52-week high of $19.32.
The delisting notice comes as a significant development for the company, which offers a range of products including breakfast, lunch, dinner, and snacks that are low in sugar and carbohydrates while being high in protein. Real Good Foods' products are distributed in over 16,000 stores nationwide and through direct-to-consumer channels.
The company’s transition to the Pink Open Market is part of a broader narrative involving its failure to file timely financial reports. While Real Good Foods has made forward-looking statements regarding the commencement of trading on the OTC markets, these statements are subject to various risks and uncertainties. The company has acknowledged the potential impact of further delays in filing its late periodic reports and restated financial statements, as well as the discovery of additional information related to previously identified errors in its financial statements.
Investors and stakeholders are advised to consider the risks outlined by the company, including the remediation of identified material weaknesses in internal control over financial reporting. The company's annual report for the year ended December 31, 2023, and subsequent filings with the SEC provide further details on these risk factors.
This news article is based on a press release statement from The Real Good Food Company.
In other recent news, The Real Good Food Company has been actively maneuvering through significant changes. The company has announced a 12-to-1 reverse stock split of its Class A and Class B common stock, aimed at maintaining compliance with Nasdaq's minimum bid price requirement. This move was approved by stockholders and is expected to affect all uniformly. In addition, Real Good Food has received approval for the issuance of additional shares.
The company has also made substantial amendments to its corporate governance, including the issuance of preferred stock and changes to its Certificate of Incorporation. These changes are part of an agreement with Emblem Investments Fund I, LP, involving the issuance of a new series of preferred stock, known as Series A Preferred Stock.
On the financial front, Real Good Food has announced a restatement of its financial statements for 2022 and the quarterly periods of 2023 due to errors in revenue recognition. The company is also facing potential delisting from the Nasdaq Global Market due to non-compliance with the exchange's listing rules and has requested a hearing to seek an extension to regain compliance.
To boost its financial flexibility, the company has increased its borrowing capacity by amending its credit agreement with PMC Financial Services Group, raising the revolving credit facility from $42 million to $46 million. Finally, in an effort to expand its Frozen Proteins portfolio, Real Good Food has introduced its new Seasoned Chicken Breast Chunks in 4,000 Walmart (NYSE:WMT) stores nationwide. These are the recent developments impacting The Real Good Food Company.
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