8-K: FAT Brands Faces Nasdaq Delisting Warning

FAT Brands Inc. received multiple notices from Nasdaq regarding non-compliance with minimum bid price and market value requirements for its Class A and Class B common stock.

Summary

• FAT Brands Inc. received separate written notices from The Nasdaq Stock Market LLC on January 8, 2026, indicating non-compliance with several listing rules.
• The Class A Common Stock (Nasdaq: FAT) failed to maintain a minimum bid price of $1.00 per share for 30 consecutive business days between November 20, 2025, and January 7, 2026.
• The Class A Common Stock also had a market value of listed securities (MVLS) below the minimum requirement of $35 million.
• The Class B Common Stock (Nasdaq: FATBB) had a market value of publicly held shares (MVPHS) below the $1,000,000 threshold.
• The company has been granted a period of 180 calendar days, until July 7, 2026, to regain compliance for all three deficiencies.
• To regain compliance, the Class A Common Stock's closing bid price must be at least $1.00 for a minimum of ten consecutive business days.
• To regain compliance, the Class A Common Stock's MVLS must close at $35 million or more for a minimum of ten consecutive business days.
• To regain compliance, the Class B Common Stock's MVPHS must close at $1,000,000 or more for a minimum of ten consecutive business days.
• The notices have no immediate effect on the listing or trading of the Class A or Class B Common Stock on The Nasdaq Capital Market.

Sentiment

Score: 3

Explanation: The sentiment is negative due to multiple non-compliance notices from Nasdaq, indicating significant issues with the company's stock performance and market valuation. While a compliance period is granted, the explicit risk of delisting creates substantial uncertainty and downside potential for investors.

Negatives

• FAT Brands Inc. is not in compliance with Nasdaq's minimum bid price requirement for its Class A Common Stock.
• The market value of listed securities for Class A Common Stock is below Nasdaq's $35 million minimum requirement.
• The market value of publicly held shares for Class B Common Stock is below Nasdaq's $1,000,000 minimum requirement.
• There is no assurance that the company will be able to regain compliance within the given period or any subsequent extension.

Risks

• Potential delisting of the Class A Common Stock (Nasdaq: FAT) from The Nasdaq Capital Market if compliance with the minimum bid price and MVLS requirements is not regained by July 7, 2026.
• Potential delisting of the Class B Common Stock (Nasdaq: FATBB) from The Nasdaq Capital Market if compliance with the MVPHS requirement is not regained by July 7, 2026.
• Uncertainty regarding the Nasdaq staff granting any request for continued listing or extension of compliance periods if the company fails to regain compliance.

Future Outlook

FAT Brands Inc. has a 180-calendar-day period, until July 7, 2026, to regain compliance with Nasdaq's listing requirements. There is no assurance that the company will be able to meet these requirements within the specified timeframe or any potential extension, which could lead to delisting.

Industry Context

This announcement reflects a common challenge faced by publicly traded companies when their stock performance or market capitalization falls below exchange-mandated thresholds. While not directly indicative of broader industry trends, it highlights the importance of maintaining investor confidence and market valuation to ensure continued listing on major exchanges.

Stakeholder Impact

• Shareholders face increased risk of delisting, which could lead to reduced liquidity and potentially lower valuations for their holdings.
• The company's ability to attract new investors or raise capital may be negatively impacted by the delisting threat.

Next Steps

• Regain compliance with Nasdaq's minimum bid price requirement for Class A Common Stock by achieving a closing bid price of at least $1.00 for ten consecutive business days by July 7, 2026.
• Regain compliance with Nasdaq's MVLS requirement for Class A Common Stock by achieving a closing MVLS of $35 million or more for ten consecutive business days by July 7, 2026.
• Regain compliance with Nasdaq's MVPHS requirement for Class B Common Stock by achieving a closing MVPHS of $1,000,000 or more for ten consecutive business days by July 7, 2026.
• Potentially appeal Nasdaq's delisting determination if compliance is not regained, though there is no assurance such an appeal would be granted.

Key Dates

Recommendation

The multiple notices of non-compliance from Nasdaq, particularly concerning minimum bid price and market value, present a significant delisting risk for FAT Brands' Class A and Class B common stock. While a compliance period is provided, the explicit lack of assurance regarding regaining compliance, coupled with the potential for reduced liquidity and investor confidence post-delisting, suggests a 'sell' recommendation for seasoned investors looking to mitigate further downside risk and avoid potential complications associated with an OTC market listing.

Keywords

FAT Brands, Nasdaq, Delisting, Common Stock, Minimum Bid Price, Market Value, Listing Rules, FAT, FATBB, 8-K