F45 Training Faces Mounting Pressure as NYSE Issues Second Notice of Non-Compliance

“F45 Training Faces Mounting Pressure as NYSE Issues Second Notice of Non-Compliance”

F45 Training, a prominent fitness company listed on the New York Stock Exchange (NYSE), finds itself in a precarious position as it receives a second notice of non-compliance. The NYSE has alerted F45 Training that its average closing stock price has dipped below $1.00 for a consecutive 30-day period, signaling a concerning trend. This development could potentially have far-reaching consequences for the company if not addressed promptly.

This latest notification comes as a follow-up to a previous non-compliance notice from the NYSE. In April, F45 Training was informed of its failure to file the required 10-K form for the fourth quarter of 2022 and the full-year 2022 with the Securities and Exchange Commission. Such non-compliance issues raise concerns among shareholders and investors about the company’s adherence to regulatory requirements.

Since April 20, F45 Training’s stock price has remained below the $1.00 threshold, exacerbating the non-compliance situation. Over the past six months, the stock’s highest closing price reached a mere $3.40 on December 20, 2022, further highlighting the challenges faced by the company.

While this notice does not immediately impact the listing of F45 Training’s stock on the NYSE, it serves as a clear warning sign. The company now has a limited six-month window to regain compliance with the NYSE’s minimum share price requirement, failing which it could face dire consequences, including potential delisting and a significant drop in stock price.

To address this critical situation, F45 Training has vowed to respond to the NYSE within 10 business days of receiving the notice, emphasizing that it is actively exploring multiple avenues to rectify the issue. The company’s leadership, under the newly appointed CEO Tom Dowd and chief brand officer Mark Wahlberg, has been working diligently to devise strategies aimed at restoring compliance and revitalizing investor confidence.

Earlier this year, F45 Training took steps to fortify its financial position by securing a substantial $90 million subordinated debt facility. This funding injection, facilitated by a consortium of existing investors led by Kennedy Lewis Management LP, aimed to enhance the company’s balance sheet and drive future growth. However, these efforts might not be sufficient to counter the concerns arising from non-compliance with NYSE regulations.

The road ahead remains challenging for F45 Training as it navigates the complexities of financial compliance while striving to maintain its market position and regain investor trust. The company’s ability to swiftly address these issues will be crucial in determining its long-term viability and safeguarding against potential bankruptcy. The next few months will undoubtedly be a critical period for F45 Training, and stakeholders will be watching closely to see how the company responds to this pressing challenge.