Asian food maker DayDayCook soars amid negotiations with creditors

Quotes on micro-cap ready-made meal maker DayDayCook (DDC) jumped 25% yesterday, February 19, after the company shared two updates with investors. First, in 2024, its revenue grew at least 17.6% on preliminary numbers. Second, it unveiled a proposal to shareholders regarding overdue loan payments.

Yesterday, shares of Hong Kong-based DayDayCook rose 25% on the New York Stock Exchange before giving back almost 9% to $0.22 per share in the first minutes of premarket trading today.

Yesterday, the company made two announcements. First, according to preliminary financials, its revenue for 2024 grew at least 17.6% to $34 million, with a potential growth rate of up to 38%.

Second, DDC revealed that it is negotiating with shareholders to extend a deadline to repay a loan. As of February 14, the company owed them about $12 million, originally due on January 1, 2025. The parties are looking to push the maturity date to January 1, 2029, subject to annual payments of $3 million. Lenders who sign the agreement will receive 1 million new Class A DDC shares and will be entitled to at least 30% of the company’s gross proceeds from asset sales in excess of $250,000 and any financing of at least $5 million.

Founded by Norma Chu in Hong Kong in 2012, DDC went public on the NYSE in November 2023. However, its public market debut got off to a rocky start. Its IPO failed to excite investors and was priced 10% below the lower end of the indicated range in the prospectus, at $8.50 per share. Since then, the company has lost more than 96% of its market value.

Last year, the NYSE notified the company of no fewer than three rule violations. Initially, the exchange flagged noncompliance with listing standards due to a shareholders' equity deficit. A month later, it issued a second warning, as the company had failed to submit its 2023 report on time. The third issue is DDC's low share price, which has fallen below the exchange’s minimum listing requirement of $1 per share.

DDC has since resolved two of them. On December 31, it increased shareholder equity by converting part of its debt. In January, the company released its 2023 report, which showed a 16.5% year-over-year increase in revenue to $28.9 million. To resolve the third issue, DDC has voiced its intention to carry out a reverse stock split but has yet to do so.

Initially, the NYSE had given the company six months to rectify all violations before extending the deadline to October 25, 2025, stipulating quarterly monitoring.