But losses mount for the home furnishings e-retailer that went public in October.
Shift to the OTC Bulletin Board follows NASDAQ delisting last month.
EDiets.com Inc. is now trading its common stock on the OTC Bulletin Board.
The move occurred after the NASDAQ stock exchange announced last month it would delist the retailer of at-home meals and diet, fitness and health plans.
The retailer was required to identify a minimum of $2.5 million in stockholders’ equity by Nov. 30 to maintain its NASDAQ listing. EDiets did not meet the deadline, nor did it appeal the exchange’s action because the company “believes its efforts are better directed towards improving the company’s performance and executing its business plan.”
In a new regulatory filing the company says it will maintain the registration of its common stock with the U.S. Securities and Exchange Commission and will continue to file periodic, quarterly and annual reports with the U.S. Securities and Exchange Commission.. The common stock will continue to trade under the symbol DIET.
EDiets.com, No. 371 in the Internet Retailer Top 500 Guide, also has entered into a private stock sale with BBS Capital Fund LP. Under the terms of the private sale, eDiets.com is selling 1,000,000 newly issued shares of common stock at $0.50 per share, to raise $500,000. The private sale is expected to close by the end of the year.
EDiets.com also appointed Berke Bakay to its board of directors. Bakay is the founder and director of BBS Capital Management, a Texas limited partnership that manages the BBS Capital Fund.
“As a significant stockholder, BBS Capital believes in our business model and we are confident that his contributions will help further our efforts to improve EBITDA and enhance the value of our business,” says CEO Kevin McGrath.
EBITDA is earnings before interest, taxes, depreciation and amortization.
Sales fell sharply for eDiets.com in the third quarter of 2011, but the company reduced its net loss.
For the third quarter ended Sept. 30, eDiets.com reported:
- Sales dropped 25% to $4.5 million from $6 million in the third quarter of 2010.
- Net loss was $1.5 million compared with a net loss of $3.6 million.
For the first three quarters:
- Sales increased 5.5% to $17.4 million from $16.5 million in the first three quarters of 2010.
- Net loss was $2.7 million compared with a net loss of $4.2 million.