Just when ShiftPixy Inc. started to show significant revenue growth, the provider of restaurant workers is in danger of being kicked off the Nasdaq.
The Irvine-based scheduling and recruiting technology firm (Nasdaq: PIXY) last week revealed that on June 6 it received two letters from Nasdaq’s Listing Qualification Department because its stock has been below the minimum $1 for 30 consecutive business days. The Nasdaq also requires a company to have a minimum $35 million market cap.
The notice doesn’t have an immediate effect. ShiftPixy can stay on the trading platform if in the next six months its price tops $1 and the market cap is above $35 million for at least 10 consecutive business days.
ShiftPixy went public two years ago at $6 a share. Shortly thereafter, the stock passed $10 for a few days before heading mostly downhill ever since. Last week, the shares fell to 40 cents and a $14 million market cap. The share price last topped $1 in April.
Shifters
ShiftPixy is designed to help employers reduce turnover by coordinating their need for employees with the shifts of workers. The company focuses on the restaurant and hospitality industries, which account for about half the workers in the U.S part-time labor market.
ShiftPixy hires the workers itself and manages the many compliance needs. The workers, or “shifters,” are able to more easily move among flexible shifts.
In April, it reported fiscal second-quarter revenue rose 67% to $13.2 million, while gross profit jumped more than threefold to $3.2 million. Its gross billings climbed 70% to $82.5 million. Its net loss narrowed to $338,531 from $2.72 million a year earlier. It’s aiming to get to breakeven by the end of the year.
The number of restaurant employees using the site increased from 3,110 to 9,660 a year ago. Co-founder and Chief Executive Scott Absher said on an April conference call with investors that it’s on track to hit 50,000 worksite employees by the end of the year.
Giving Up
The main reason for the share decline appears to be in large part because shareholders have opted to cash out.
Five shareholders that participated in company offerings of notes and warrants have registered to sell most of their holdings in the tech-based temp agency.
Alpha Capital Anstalt, CVI Investments Inc., Dominion Capital, Osher Capital Partners, and Drexel Hamilton LLC will sell up to 36.4 million shares, or 93%, of their stake, at prices between 31 cents and $1.75 per share, according to a company filing in April. The shares were senior convertible notes and warrants issued by ShiftPixy on March 12.
ShiftPixy had about 31.2 million common shares as of Feb. 28. After the holders complete their sale, it’s expected to have 71.8 million common shares, according to a company filing.
