Rocky Mountain Chocolate Factory, Inc. (NASDAQ:RMCF), currently valued at $15.18 million and trading below its InvestingPro Fair Value, has received a deficiency notice from Nasdaq due to its failure to meet the minimum stockholders' equity requirement for continued listing on the Nasdaq Global Market. The confectioner reported stockholders' equity of $9,834,000 in its latest quarterly filing, falling short of the $10 million threshold set by Nasdaq Listing Rule 5450(b)(1)(A).
The notice, dated January 21, 2025, also indicated that the company did not meet alternative quantitative standards, such as a market value of listed securities of $50 million or a combination of $50 million in total assets and total revenue. The company's financial challenges are reflected in its year-to-date stock decline of 17.28% and negative EBITDA of $2.63 million. Despite the warning, the company's common stock remains listed and is trading on the Nasdaq Global Market under the symbol "RMCF."
Rocky Mountain Chocolate Factory has until March 7, 2025, to submit a plan to regain compliance. According to InvestingPro analysis, which offers comprehensive insights through its Pro Research Reports covering 1,400+ US stocks, the company maintains a healthy current ratio of 2.6, indicating sufficient liquid assets to meet short-term obligations. If Nasdaq accepts the plan, the company may receive up to 180 days from the notice date to meet the listing requirements. If the plan is rejected, the company can appeal the decision to a Nasdaq Hearings Panel.
The company has expressed its intention to submit a compliance plan by the deadline and to take the necessary steps to regain compliance with Nasdaq's listing rules. However, there is no guarantee that the compliance plan will be approved or that the company will successfully regain compliance.
This development does not immediately affect the trading of the company's common stock, which continues to be available to investors on the Nasdaq Global Market. The information in this article is based on a press release statement.
In other recent news, Rocky Mountain Chocolate Factory (RMCF) reported a mixed bag of outcomes in its Q4 2024 earnings. The company disclosed a net loss of $800,000, translating to a loss of $0.10 per share, despite a slight increase in revenue to $7.9 million from the previous year's $7.7 million. The company's e-commerce sales saw a significant boost, nearly tripling during the quarter. RMCF is making strategic hires and implementing a new ERP system to boost operational efficiency and manage costs.
In Q3 2025, RMCF continued to strengthen its foundation and drive future growth. The company announced plans for two new stores and one new kiosk in Chicago, Illinois; Charleston, South Carolina; and Brandon, Florida. The company also reported nearly 100% fulfillment of franchisee and specialty market demand during the holiday season. RMCF's new ERP system will provide improved visibility into consumer purchasing behavior, enabling the company to optimize pricing and factory output.
These recent developments underscore RMCF's commitment to long-term improvement despite ongoing challenges. The company's focus remains on operational efficiency, strategic investments, and a return to franchise store growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.