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Kona Grill Inc. stock

Kona Grill receives Nasdaq delisting warning

Company’s market value falls below required threshold

Kona Grill Inc. has received a notice from the Nasdaq Stock Market that it hasn’t complied with market rules and could face being delisted.

The Scottsdale, Ariz.-based grill and sushi company on Friday filed documents with the Securities and Exchange Commission that said it had received “deficiency notice” from the Nasdaq that it had fallen below the listing standard of $15 million minimum market value in the prior 30 consecutive business days. 

According to Nasdaq’s rules, the company has until June 26, or 180 calendar days, to regain compliance.

“Based on the number of publicly held shares on the date of this filing, in order to satisfy the $15 million market value requirement, the closing bid price of the company’s common stock would need to be at least $1.89 per share for 10 consecutive business days,” the company said in its SEC filing. 

As of Friday’s market close, Kona’s shares traded at $1.29. Over the prior 52 weeks, Kona’s shares ranged between $1.01 and $3 a share. 

Kona Grill has received Nasdaq notices in the past for board seat vacancies and trading matters, and it has complied before any delisting actions were taken.

In this case, Kona also has the option of transferring its securities to the Nasdaq Capital Market. 

In the past year, the company has faced market challenges. In November, Kona replaced CEO Jim Kuhn after three months in the position and named Marcus Jundt and industry veteran Steven Schussler as co-CEOs.

For the third quarter ended Sept. 30, Kona Grill’s loss widened to $5.1 million, or 39 cents a share, from $3.3 million, or 33 cents a share, in the same period a year ago. Revenues fell 15.7 percent, to $37.4 million, from $44.4 million in the prior-year quarter.

The brand’s same-store sales in the quarter fell 14.1 percent.

Kona Grill ranked No. 195 in U.S. systemwide sales among the chains in Nation’s Restaurant News’ most recent Top 200, booking $176.3 million for the fiscal year ended in December 2017.

As of Sept. 30, Kona had 44 locations in 22 states and Puerto Rico. The company had two franchised international restaurants in Dubai and Vaughan, Ontario. 

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

TAGS: Finance
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