Boxed warned about NYSE listing

Almost a year after going public, online bulk-products retailer Boxed Inc. has received listing warnings from the New York Stock Exchange (NYSE).

New York-based Boxed (ticker symbol BOXD) said the day after Thanksgiving that NYSE sent a continued listing standard notice because the e-tailer’s average global market capitalization fell below $50 million over a 30 trading-day period. Under the exchange’s rules, Boxed has 45 days to submit an action plan to bring the company into compliance with the market-cap floor within 18 months.

After Monday’s market close, Boxed’s market capitalization stood at $34.61 million. The company said it aims to notify NYSE by Dec. 8 that it will submit a plan to return to compliance with the continued listing standards.

Just over a month earlier, NYSE had notified Boxed that the average closing price of its common stock dropped below $1 over a 30 trading-day period, bringing the company out of compliance with the exchange’s share listing standard. Boxed’s share price finished at 48 cents as of today’s market close.

A pure-play online retailer, Boxed provides warehouse club-style shopping—without the fee—through its website and mobile app. / Photo courtesy of Boxed Inc.

Boxed reported that it can regain compliance within a six-month period after receipt of the NYSE notice if, on the last trading day of any calendar month during the cure period, the retailer has a closing share price of at least $1 and an average closing-share price of at least $1 over the 30 trading-day period. To rectify the situation, the company said it will consider various options, including a reverse stock split, subject to shareholder approval.

Boxed made its debut as a public company in December 2021 after closing a merger with special purpose acquisition company (SPAC) Seven Oaks Acquisition Corp. Boxed Inc. is led by Boxed co-founder and CEO Chieh Huang, with Seven Oaks Chairman and CEO Gary Matthews serving as chairman.

Founded in 2013, pure-play online retailer Boxed provides warehouse club-style shopping—including groceries, pantry items, household staples, health and beauty aids, office supplies, and a variety of organic and green products—through its website and mobile app. Consumers and businesses can purchase club-sized packages with free two-day delivery in the continental U.S. on purchases of over $49, without the membership fees of traditional warehouse clubs. It also offers Boxed Express, an on-demand delivery service for perishables.

Boxed generates big customer baskets, with an average of eight items for a value of about $100 per order, and its expanding BoxedUp paid subscriber base provides a loyal, recurring revenue stream. Boxed’s B2B customers range from small and midsize businesses to Fortune 100 enterprises, and its technology stack—encompassing the customer-facing front-end, back-end operational software and homegrown automation robotics for fulfillment—is licensed to other businesses.

Also last December, Boxed entered the fast grocery delivery arena with the acquisition of New York City online grocer MaxDelivery. Serving most of Manhattan, MaxDelivery offers delivery in less than an hour from a selection of more than 10,000 food and grocery items—including fresh produce, organic meat and dairy products, local gourmet and specialty foods, wine and spirits— as well as nonfood products like over-the-counter medicines and everyday home and office supplies.

In the second quarter, Boxed rebranded MaxDelivery as Boxed Market and its software-and-services business as Spresso. Last month, Boxed Market expanded its reach to New York’s Westchester County, with service set to launch in Brooklyn this month.

For the third quarter ended Sept. 30, Boxed reported net revenue of $41.7 million, down 15% year over year, mainly from a decline in software and services revenue. The company noted that technology segment revenue is expected to vary from quarter to quarter in the near-to-medium term, as revenue recognition reflects the timing of enterprise software deployments and implementation work performed.

Meanwhile, Q3 retail net revenue rose 8.9% to $41.6 million, gross merchandise value (GMV) climbed 8.3% to $49 million and retail net revenue per active customer advanced 38.4%. Boxed said retail gross profit surged 88.8% in the quarter, with retail gross margin up 503 basis points. At the bottom line, Boxed recorded a net loss of $26.4 million for the third quarter, compared with a net loss of $5.9 million a year earlier, as the company recognized almost no software-and-services revenue in the quarter versus $10.8 million in the prior-year period.

“The team and I are very pleased to have met or exceeded many expectations on multiple levels in the third quarter. We are also proud to share the quick progress we have made on the strategic vision we announced last quarter, which increased focus on some of our fastest-growing, stickiest and most-profitable areas of the business,” Huang said in a statement earlier this month. “By executing on the strategic vision to increase profitability, and as a result of certain financing cash inflows, we are also able to cut quarter-over-quarter cash consumption by more than half. We continue to actively explore additional capital markets opportunities, and we hope to further improve near-term liquidity, with the goal of an additional capital raise prior to year-end.”