8-K: Delta Apparel to be Delisted from NYSE American Following Chapter 11 Filing

Delta Apparel's common stock will be delisted from the NYSE American after the company filed for Chapter 11 bankruptcy.

Summary

• Delta Apparel, Inc. has received notice from NYSE Regulation that its common stock will be delisted from the NYSE American due to the company's Chapter 11 bankruptcy filing on June 30, 2024.
• Trading of Delta Apparel's common stock has been suspended, effective July 1, 2024.
• The company does not intend to appeal the delisting decision.
• Following delisting, the common stock may begin trading on the over-the-counter market.
• J. Bradley Campbell resigned from the company's Board of Directors and all subcommittees, effective July 1, 2024.
• The company cautions that trading in its common stock during the bankruptcy proceedings is highly speculative and poses substantial risks.
• Shareholders are likely to experience a complete or significant loss on their investment.
• The company has an Asset Purchase Agreement with Salt Life, LLC and FCM Saltwater Holdings, Inc., which is subject to Bankruptcy Court approval.

Sentiment

Score: 2

Explanation: The sentiment is very negative due to the bankruptcy filing, delisting, and warnings of significant losses for shareholders. The resignation of a board member also adds to the negative outlook.

Positives

• The company has an Asset Purchase Agreement in place with Salt Life, LLC and FCM Saltwater Holdings, Inc., which could provide some value to creditors.

Negatives

• The company's common stock will be delisted from the NYSE American.
• Trading of the company's stock has been suspended.
• The company has filed for Chapter 11 bankruptcy.
• Shareholders are likely to experience a complete or significant loss on their investment.
• Trading in the company's stock is highly speculative and poses substantial risks.

Risks

• Trading in the company's common stock during the bankruptcy proceedings is highly speculative and poses substantial risks.
• The company's actual results may differ materially from forward-looking statements due to risks and uncertainties related to the Chapter 11 Cases.
• The outcome of the Chapter 11 Cases is uncertain, and the company may not be able to successfully reorganize.
• The company's ability to obtain Bankruptcy Court approval for its Asset Purchase Agreement is not guaranteed.
• The trading price of the company's common stock is expected to be volatile.

Future Outlook

The company's future is highly uncertain due to the Chapter 11 bankruptcy proceedings, and the outcome of the Asset Purchase Agreement is subject to Bankruptcy Court approval. The company expects that holders of shares of the company's common stock will experience a complete or significant loss on their investment.

Management Comments

• The company cautions that trading in its common stock during the bankruptcy proceedings is highly speculative and poses substantial risks.
• The company expects that holders of shares of the company's common stock will experience a complete or significant loss on their investment.
• The company does not intend to appeal the delisting decision.

Industry Context

The delisting of Delta Apparel from the NYSE American reflects the challenges faced by companies in the apparel industry, particularly those with high debt levels and operational difficulties. The bankruptcy filing and subsequent delisting highlight the risks associated with investing in companies undergoing financial distress.

Comparison to Industry Standards

• Many apparel companies have faced challenges in recent years due to changing consumer preferences, increased competition, and supply chain disruptions.
• Companies like American Apparel and True Religion have also experienced bankruptcy and delisting, indicating the volatility of the apparel market.
• Delta Apparel's situation is similar to other companies that have struggled with debt and operational issues, leading to financial distress and delisting from major exchanges.
• The company's reliance on traditional retail channels may have contributed to its challenges, as many consumers are shifting to online shopping.

Management Changes

Legal Proceedings

• Delta Apparel and its domestic direct and indirect subsidiaries have filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code.

Stakeholder Impact

• Shareholders are likely to experience a complete or significant loss on their investment.
• Employees may face uncertainty regarding their jobs and the future of the company.
• Creditors may face losses depending on the outcome of the bankruptcy proceedings.
• Customers may experience disruptions in the availability of products and services.

Next Steps

• The company expects NYSE American to file a Form 25-NSE with the SEC to remove the common stock from listing and registration.
• The company's common stock may begin trading on the over-the-counter market.
• The company will continue to operate under Chapter 11 bankruptcy protection.
• The company will seek Bankruptcy Court approval for its Asset Purchase Agreement.

Key Dates

Keywords

delisting, bankruptcy, Chapter 11, NYSE American, common stock, Delta Apparel, Salt Life, Asset Purchase Agreement, trading suspension