Rubicon Technologies Receives Delisting Notice from the New York Stock Exchange

Rhea-AI Summary

Rubicon Technologies (NYSE: RBT) has received a delisting notification from the New York Stock Exchange, effective after market close on June 7, 2024. The company plans to appeal this decision, and if successful, trading will resume on the NYSE. Meanwhile, Rubicon's stock will begin trading on the OTC markets from June 10, 2024. This delisting does not impact the company’s operations or SEC reporting obligations. Recently, Rubicon sold its fleet technology business for $61.7 million and a potential $12.5 million earnout. The company is focused on expanding its RUBICONConnect™ product and has secured a significant contract with a national grocer for its Technical Advisory Services (TAS). CEO Phil Rodoni emphasized the company's commitment to sustainable practices and future growth.

Positive

• Rubicon sold its fleet technology unit for $61.7 million and a potential $12.5 million earnout.
• The company secured a contract with a national grocer with over 500 locations, enhancing growth prospects.
• Introduction of new services such as Technical Advisory Services (TAS) to meet customer sustainability goals.
• Rubicon is focusing on expanding its RUBICONConnect™ product, catering to a diverse range of businesses.
• CEO Phil Rodoni expresses confidence in the company's fundamentals and future growth.

Negative

• Rubicon received a delisting notice from the NYSE, with trading suspended from June 7, 2024.
• Delisting may impact investor confidence and limit liquidity in the short term.
• Uncertainty regarding the appeal of the NYSE delisting decision.
• Transition to OTC markets could pose challenges in terms of market perception and accessibility.
• The current market cap is not reflecting the true value of the business, according to the company.

Insights

Financial Analyst

Rubicon Technologies' delisting notice from the New York Stock Exchange (NYSE) is a significant event with considerable implications. The suspension of trading and subsequent move to the OTC (Over-The-Counter) market can severely impact investor sentiment and the stock’s liquidity. OTC markets typically have less stringent regulatory requirements and lower visibility compared to major exchanges like the NYSE, which may lead to reduced interest from institutional investors. Additionally, market makers on OTC markets may offer wider spreads, resulting in higher transaction costs for investors.

From a financial perspective, the delisting notice can be seen as a red flag, indicating deeper financial or regulatory issues. The sale of Rubicon's fleet technology business unit for $61.7 million with an additional potential earnout of $12.5 million hints at an attempt to streamline operations and focus on core competencies. However, it is important to assess whether this move will be sufficient to stabilize the company's financial health.

Investors should be wary of the uncertainties surrounding the appeal process and the potential for prolonged market instability. The transition to OTC trading might also result in lower trading volumes and higher volatility, making it harder to sell shares at favorable prices.

Market Research Analyst

From a market perspective, Rubicon Technologies' situation requires a closer look at the broader implications within the waste management and recycling industry. The delisting from the NYSE could reshape the competitive landscape, especially for businesses dealing with sustainability and circular economy solutions. Rubicon’s focus on the RUBICONConnect™ product and its recent high-profile contract with a national grocer highlight its commitment to innovation and sustainability. While these developments are promising, they may not be sufficient to counterbalance the negative sentiment from the delisting notice.

The delisting could also affect Rubicon's brand perception and trustworthiness among its commercial customers. Given that the company serves a diverse clientele from small businesses to Fortune 500 companies, maintaining confidence is crucial. The impact on customer acquisition and retention will be a key metric to watch in the coming quarters.

Additionally, the broader market may react with increased scrutiny towards other tech-based service providers in the waste management sector, potentially causing short-term volatility. Investors should consider the long-term growth prospects of Rubicon's specialized services versus the immediate turbulence caused by the delisting.

Legal Expert

From a legal standpoint, the NYSE's decision to delist Rubicon Technologies under Rule 802.01B of the NYSE Listed Company Manual is a significant development. Rule 802.01B typically addresses issues related to inadequate market capitalization, suggesting that Rubicon's financial metrics did not meet the exchange's minimum requirements. This can raise concerns about the company's financial stability and compliance with regulatory standards.

The company's decision to appeal the delisting, if successful, would mean a return to the NYSE and potentially restore some investor confidence. However, the outcome of such appeals is uncertain and can be a lengthy process, during which investors need to remain vigilant.

In terms of operational impact, the transition to OTC trading is generally perceived as a downgrade, but it is important to note that this does not affect Rubicon's business operations or its SEC reporting obligations. Investors should focus on the company’s adherence to its financial reporting and transparency during this period to gauge the management’s commitment to resolving these issues.

NEW YORK--(BUSINESS WIRE)-- Rubicon Technologies, Inc. (“Rubicon” or the “Company”) (NYSE: RBT), a leading provider of technology-based waste and recycling solutions, today announced that it has received a delisting notification from the New York Stock Exchange (“NYSE”) indicating that the common stock of the Company will be delisted and trading of its Class A common stock on the NYSE was suspended after market close on June 7, 2024.

The Company does not believe the current market cap is reflective of the true value of the business and intends to appeal this determination by the NYSE. If the Company is successful in its appeal, NYSE will resume trading the Company’s Class A common stock.

The Company’s Class A common stock will begin trading publicly on the OTC markets on June 10, 2024. This transition to the over-the-counter market will not affect the Company’s business operations or its U.S. Securities and Exchange Commission reporting obligations, and it does not conflict with or cause an event of default under any of the Company’s material debt or other agreements.

The NYSE reached its decision to issue a delisting notice pursuant to Rule 802.01B of the NYSE Listed Company Manual.

Last month, Rubicon announced the sale of its fleet technology business unit in a deal that includes up-front cash of $61.7 million and an earnout consideration of $12.5 million that could become payable in 2024. This strategic move underscores Rubicon’s dedication to the RUBICONConnect™ product, which serves commercial waste generators from small to medium-sized businesses to Fortune 500 companies. Many of the Company’s commercial customers are looking to Rubicon to help them achieve sustainability goals with tailored zero waste and circular economy solutions, including through the Company’s recently launched Technical Advisory Services (TAS) and the onboarding of a premier, 500+ location national grocer with complex material streams at the beginning of the second quarter. This is a valuable contract for Rubicon, with strong potential for incremental growth opportunities along the way.

“Rubicon’s strategic vision to lead our industry by innovating and investing in sustainable practices that meet the evolving needs of both our hauler network and customer base is as strong as ever,” said Phil Rodoni, CEO of Rubicon. “While it is clear that we never experienced the full benefit of the public market, we are confident in the fundamentals of the business and are excited to drive future growth, enhance our competitive edge, and deliver exceptional value to our shareholders and customers alike.”

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact included in this press release, are forward-looking statements. When used in this press release, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon current expectations, estimates, projections, and assumptions that, while considered reasonable by Rubicon and its management, are inherently uncertain; factors that may cause actual results to differ materially from current expectations include, but are not limited to: 1) the outcome of any legal proceedings that may be instituted against Rubicon or others following the closing of the business combination; 2) changes in applicable laws or regulations; 3) the possibility that Rubicon may be adversely affected by other economic, business and/or competitive factors; 4) Rubicon’s execution of anticipated operational efficiency initiatives, cost reduction measures and financing arrangements; and 5) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (filed March 28, 2024 with the Securities and Exchange Commission (the “SEC”)), Registration Statement on Form S-3, as amended, filed with the SEC, and other documents Rubicon has filed with the SEC. Although Rubicon believes the expectations reflected in the forward-looking statements are reasonable, nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward looking statements will be achieved. There may be additional risks that Rubicon presently does not know of or that Rubicon currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements, many of which are beyond Rubicon’s control. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Rubicon does not undertake, and expressly disclaims, any duty to update these forward-looking statements, except as otherwise required by applicable law.

About Rubicon

Rubicon builds AI-enabled technology products and provides expert sustainability solutions to waste generators and material processors to help them understand, manage, and reduce waste. As a mission-driven company, Rubicon helps its customers improve operational efficiency, unlock economic value, and deliver better environmental outcomes. To learn more, visit rubicon.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240607062376/en/

Investor Contact:

Alexandra Clark

Director of Finance & Investor Relations

alexandra.clark@rubicon.com

Media Contact:

Benjamin Spall

Director of Communications

benjamin.spall@rubicon.com

Source: Rubicon Technologies, Inc.

FAQ

Why did Rubicon Technologies receive a delisting notice from the NYSE?

Rubicon Technologies received a delisting notice from the NYSE due to not meeting the listing standards defined in Rule 802.01B of the NYSE Listed Company Manual.

When will Rubicon Technologies' stock stop trading on the NYSE?

Rubicon Technologies' stock will stop trading on the NYSE after market close on June 7, 2024.

What is Rubicon Technologies’ plan after receiving the delisting notice from the NYSE?

Rubicon Technologies plans to appeal the NYSE's delisting decision. If successful, trading will resume on the NYSE. Meanwhile, the stock will trade on the OTC markets starting June 10, 2024.

Will the delisting affect Rubicon Technologies' business operations?

No, the delisting will not affect Rubicon Technologies' business operations or its SEC reporting obligations.

What recent business development did Rubicon Technologies announce?

Rubicon Technologies announced the sale of its fleet technology business for $61.7 million and a potential earnout of $12.5 million.

What is Rubicon Technologies' focus going forward?

Rubicon Technologies is focusing on expanding its RUBICONConnect™ product and has launched Technical Advisory Services (TAS) to help customers achieve sustainability goals.

How does Rubicon Technologies view the delisting notice?

Rubicon Technologies believes the current market cap does not reflect the true value of the business and is confident in its fundamentals and future growth.