Kaspien Holdings to delist from Nasdaq exchange
Year-end financials show declines in sales, incomeJune 8th, 2023
Spokane Valley-based e-commerce company Kaspien Holdings Inc. has announced that it will voluntarily delist its common stock from the Nasdaq Capital Market.
The company expects the delisting of its common stock to become effective later this month.
CEO Brock Kowalchuk says in a statement to the Journal, “The delisting doesn’t impact the day-to-day operations of the business.”
In mid-December, Kaspien reported the company had fallen out of compliance with the Nasdaq’s minimum bid price and the minimum stockholders’ equity requirements for continued listing on the exchange.
Kowalchuk says in a statement received June 5 that, “Over the past year, we have made significant progress to improve margins and get the business to a healthier position financially. We’ll share more about our progress in our 10-Q to be published next week.”
Separately, on June 6, Kaspien filed notice with the U.S. Securities and Exchange Commission that states the company has agreed to sell some of its assets to Las Vegas-based Channel Key LLC.
The sold assets relate to Kaspien’s support services for account management, media planning, media analytics, search strategy, business planning, and data reporting, according to the report.
Kaspien sold the assets for a base purchase price of $200,000, paid in cash, in addition to the assumption of certain liabilities. Additional purchase terms include Kaspien’s entitlement to an earnout payment equal to 50% of the total revenue Channel Key earns for each quarter in the next 12 months, up to a maximum aggregate amount of $550,000.
Also on June 6, the company’s stock was trading at 30 cents per share at market close, down from a 52-week high of $10.16 per share and up from a 52-week low of 26 cents per share.
The company’s stock has been traded on the Nasdaq exchange under the KSPN stock symbol.
In 2016, the e-commerce retailer, then known as etailz, was acquired by Trans World Entertainment Corp., of Albany, New York, after the Spokane company reported sales of $116 million for the 12-month period ending Sept. 30, 2016.
Kaspien’s board of directors chose to delist voluntarily in the best interest of the company and its stockholders after evaluating available options for compliance, according to the release.
Board members include Jonathan Marcus, CEO of Santa Clara, California-based asset management and alternative financial company Alimco Financial Corp.; W. Michael Reickert, managing member of Albany, New York-based Independent Family Office LLC; and Tom Simpson, CEO of Spokane-based Ignite Northwest.
Simpson declines to comment for this story, citing his status as an active board member at Kaspien.
Simpson co-founded the company, originally dubbed Green Cupboards, along with husband-and-wife entrepreneurs Josh Neblett and Sarah Wollnick, in 2008.
Green Cupboards was renamed to etailz in 2013, and the company rebranded to Kaspien in 2020.
Despite the prospect of the Nasdaq delisting, Kaspien doesn’t plan to deregister as a public company, the release says.
Kaspien’s common stock likely will still be quoted on the over-the-counter exchange OTCQB, or another market operated by OTC Markets Group Inc., so “a trading market may continue to exist for its common stock,” the release says.
In late April, the company also released its financial results for the fourth quarter and 2022 fiscal year ended Jan. 28, 2023, which shows net income, revenue, and gross profits declined compared to the respective year-earlier periods.
Kaspien’s Q4 net loss of $6.6 million, or $1.34 per diluted share, was greater than a loss of $5.8 million, or $2.33 per diluted share, in the year-earlier quarter.
The fiscal 2022 net loss was $19 million, or $5.47 a diluted share, compared with a smaller loss of $8 million, or $3.28 a share, in 2021. Higher net losses in 2022 were driven by declining sales and merchandise margins, the company says in the earnings report.
Kaspien’s net revenue for the quarter was $33.4 million, a decline of 7.3% compared with revenue of $36 million in the year-earlier quarter.
Annual revenue was $128.2 million, a decline of 10.8% compared with 2021 sales.
Annual and fourth quarter revenue declined due to a decrease in fulfillment for Amazon.com Inc.’s U.S. segment, the earnings report states.
Gross profit—revenue minus the cost of goods—for the fourth quarter was $4.2 million, a 31% decrease from the year-earlier quarter. Kaspien reported that annual gross profits dropped to $24.4 million, a 25.6% decline from the $32.8 million reported in fiscal year 2021.
The earnings report attributes gross profit declines to the write-down of obsolete inventory, increased warehousing expenses, and other factors.