By MATT BLOIS
The Brentwood addiction treatment provider American Addiction Centers has received a third warning from the New York Stock Exchange that the company is at risk of delisting.
The newest warning was triggered because the company’s stock has been below $1 for at least 30 trading days.
The second warning in May was due to the company’s market capitalization falling below $50 million, and the first warning in April was because the company didn’t file its annual report on time.
Shares of AAC were hovering between $0.66 and $1 for most of June.
The company’s stock was trading at about $1.25 per share on Tuesday afternoon with a market capitalization of about $31.9 million. The company’s market capitalization was about $75 million in November 2018.
On July 1 the company submitted a plan to the New York Stock Exchange about its efforts to improve market capitalization. Two days later, the stock exchange notified the company that it was at risk of delisting because of its low stock price.
According to a press release, submitting a plan to the stock exchange should allow the company to continue trading. The plan makes AAC eligible for an 18 month period to improve market capitalization and a six month period to improve share prices.
The plan submitted to the stock exchange wasn’t included in the press release.
AAC operates nine inpatient alcohol and drug addiction treatment facilities across the U.S. It also runs 15 outpatient rehabilitation centers and four sober living facilities.
Changes to Google’s search algorithm about a year ago made it harder to find AAC branded websites, reducing the number of incoming patients.
AAC’s had an inpatient occupancy rate of 69% in December 2018. The company reported in a presentation in June that occupancy had climbed to 80% by March 2019.
The company has previously earned more than 90% of its revenue through addiction treatment services. By next year, AAC hopes to earn 15% of its revenue from mental health services and only 70% from addiction treatment.
It also plans to increase advertising on its network of websites offering information about addiction treatment and sell a line of natural medicines.