8-K: Better Choice Company Faces NYSE American Delisting Notice Due to Equity Shortfall

Better Choice Company has received a notice from the NYSE American for non-compliance with continued listing standards due to insufficient stockholders' equity.

Summary

• Better Choice Company has been notified by the NYSE American that it is not in compliance with continued listing standards.
• The company's stockholders' equity of $3.0 million as of December 31, 2023, falls below the required $4 million and $6 million thresholds due to losses in recent fiscal years.
• The company must submit a plan by May 24, 2024, to regain compliance by October 24, 2025.
• Failure to submit or adhere to the plan could result in delisting from the NYSE American.
• The company's stock will continue to trade under the symbol BTTR but will have an added designation of '.BC' to indicate its non-compliance status.

Sentiment

Score: 3

Explanation: The document indicates significant financial challenges and potential delisting, which is a negative outlook for investors.

Positives

• The company's stock will continue to trade on the NYSE American during the plan period.
• The company has begun preparing a plan to regain compliance.
• The company is committed to undertaking transactions to achieve compliance.

Negatives

• The company's stockholders' equity is below the required thresholds.
• The company has reported losses in three of the last four fiscal years.
• There is no assurance that the company will be able to regain compliance within the required timeframe.
• The company faces potential delisting if it fails to meet the requirements.

Risks

• The company may be delisted from the NYSE American if it does not submit an acceptable plan or regain compliance by October 24, 2025.
• There is no guarantee that the company will be able to raise sufficient capital or complete transactions to meet the listing requirements.
• The '.BC' designation on the stock may negatively impact investor confidence.

Future Outlook

The company is committed to undertaking transactions to achieve compliance with the NYSE American's requirements, but there is no assurance that they will be successful in doing so within the required timeframe.

Management Comments

• The company is committed to undertaking a transaction or transactions in the future to achieve compliance with the NYSE American's requirements.
• The company has begun to prepare its plan for submission to the NYSE American by the May 24, 2024 deadline.

Industry Context

The pet health and wellness industry is experiencing growth, but Better Choice Company's financial struggles highlight the challenges of maintaining profitability and meeting listing requirements in a competitive market.

Comparison to Industry Standards

• Many publicly listed companies in the pet health and wellness sector maintain significantly higher levels of stockholders' equity, often exceeding $100 million.
• Companies like Chewy (CHWY) and Zoetis (ZTS) are examples of well-capitalized businesses in the same industry that meet all listing requirements.
• Better Choice's situation is not typical for established companies in this sector, indicating potential financial distress.

Stakeholder Impact

• Shareholders face the risk of delisting and potential loss of investment.
• Employees may experience uncertainty due to the company's financial challenges.
• Customers and suppliers may be concerned about the company's long-term viability.

Next Steps

• The company must submit a compliance plan to the NYSE American by May 24, 2024.
• The company must regain compliance with listing standards by October 24, 2025.
• The company will be subject to continued periodic review by the NYSE American staff.

Key Dates

Keywords

NYSE American, delisting, non-compliance, stockholders' equity, listing standards, BTTR, compliance plan, pet health, wellness