LOS ANGELES - Zevia PBC (NYSE:ZVIA), a producer of zero-calorie and sugar-free beverages, has been notified by the New York Stock Exchange (NYSE) of non-compliance with the exchange's minimum price criteria, the company disclosed Monday.
The notice, received on June 26, 2024, cites that Zevia's average stock price fell below the $1.00 threshold over a 30-day trading period, which is against the NYSE's continued listing standards.
Despite the warning, the notice does not immediately affect the trading of Zevia's Class A common stock on the NYSE. The company has expressed its intention to submit a plan within the next 10 business days to the NYSE affirming its commitment to rectify the price deficiency. Zevia is exploring various options to meet the NYSE's standards and maintain its listing status.
To regain compliance, Zevia must achieve a closing share price of at least $1.00 on the last trading day of any calendar month during the six-month cure period. Additionally, the company must maintain an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month.
The current situation does not impact Zevia's business operations or its obligations to the U.S. Securities and Exchange Commission. The company will continue to be listed and traded on the NYSE during the cure period, provided it adheres to other listing requirements.
Zevia, known for its plant-based, non-GMO and zero-sodium beverages, serves a health-conscious consumer base and is available in over 34,000 retail locations across the U.S. and Canada. The company's commitment to offering alternatives to sugary drinks aligns with its status as a Certified B Corporation.
This news is based on a press release statement from Zevia PBC and contains forward-looking statements that involve risks and uncertainties, including the company's ability to regain compliance with the NYSE listing standards within the designated timeframe.
In other recent news, Zevia PBC shareholders have elected two Class III members to the company's board of directors and ratified the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the current fiscal year. This move follows Zevia's announcement of a strategic shift to enhance its market presence and long-term profitability, despite a 10.4% decrease in net sales compared to the previous year.
The company's plans include the launch of a regional direct-store distribution (DSD) system and an increase in marketing efforts. Zevia is also aiming to cut costs and improve profitability, with the goal of reducing losses by Q3 2024 and achieving sustainable adjusted EBITDA profitability by 2026.
In terms of financial projections, Zevia expects full-year net sales for 2024 to be between $158 million and $166 million. Despite a delay in SKU-level distribution recovery at retailers, the company has returned to baseline customer fulfillment levels with a stable supply chain. These recent developments are a part of Zevia's strategic move to grow its base and build profitability.
InvestingPro Insights
As Zevia PBC grapples with NYSE compliance issues, the market's sentiment towards the company's stock reflects recent challenges. Zevia's market capitalization has adjusted to $49.16 million, highlighting the company's current valuation in the eyes of investors. Moreover, Zevia's stock trades with significant price volatility, as indicated by recent price movements, including a steep 19.44% drop in the past month and a precipitous 84.08% decline over the past year.
An InvestingPro Tip worth noting is that Zevia is quickly burning through cash, a concern for investors considering the company's financial sustainability. Additionally, the fact that analysts have revised their earnings downwards for the upcoming period suggests that market expectations are tempering, which could influence investor confidence.
Despite the challenges, Zevia does hold more cash than debt on its balance sheet, which could provide some financial flexibility as the company strategizes to meet the NYSE's listing standards. Furthermore, Zevia's liquid assets exceed short-term obligations, indicating that the company has the resources to cover its immediate liabilities.
For investors seeking a deeper dive into Zevia's financial health and stock performance, InvestingPro offers additional insights and metrics. There are currently 14 additional InvestingPro Tips available, which can be accessed at: https://www.investing.com/pro/ZVIA. For those interested in a yearly Pro or a yearly or biyearly Pro+ subscription, use coupon code PRONEWS24 to get up to 10% off and gain comprehensive analysis that could aid in making informed investment decisions.
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