Evine Live, the former ShopHQ, said it has received notice from the NASDAQ that it has 180 days to get its stock price above $1 per share or risk being delisted from the stock exchange.

The notification is the latest in a series of setbacks for the company, which was the subject of a proxy fight in 2014 where one of its largest shareholders took control of the company and rearranged its management team.

In the past month, Evine’s CEO – former HSN executive Mark Bozek – resigned, replaced by chairman Bob Rosenblatt in the interim. EVP and chief strategy officer Russell Nuce also resigned.

In a Securities and Exchange Commission filing, Evine revealed that Bozek, who left the company effective Feb. 8, received a severance package valued at more than $1.2 million.

Evine stock, once as high as $7 per share during the proxy battle, has been trading under $1 each since Feb. 5. The stock was trading at 82 cents each (up 6 cents) in early trading Wednesday.

According to an SEC filing, Evine received notification from NASDAQ about its non-compliance on March 21. In accordance with NASDAQ rules it has 180 days, or until Sept. 19, to regain compliance, which would mean the stock has to trade above $1 per share for a minimum of 10 consecutive business days. If it does not reach that level by the Sept. 19 deadline, Evine could be eligible for an extension, but would be required to transfer from the NASDAQ Global Market exchange to the NASDAQ Capital Market exchange and meet all the necessary requirements. If it still fails to meet the Exchange’s standards, then the stock would be subject to delisting.

Evine also reported fourth quarter results, with revenue up 5% $212 million but cash flow down 29% to just $4.9 million in the period. For the full year, revenue increased 3% to $693.3 million while cash flow was down 60% to $9.2 million.

“Although the company had solid revenue growth in the fourth quarter, we are disappointed with the overall bottom line results,” Rosenblatt said in a statement. “The profit erosion that continued into our fourth quarter doesn’t reflect the merchandising balance and operational discipline necessary to deliver consistent growth in value to all stakeholders. We are in the midst of implementing plans to address these issues, but we are mindful that it will take some time to fix them in the right way. Last week we took our first steps toward addressing these issues and cut our full-year operating expense by $5 million through a reduction in corporate overhead and other operating costs.”

Rosenblatt continued, “Evine Live has a proven business model and we are strongly positioned to continue to use our expertise as a leader in the digital video commerce space.  Our historical focus on developing proprietary and exclusive brands to broaden our product offering is proving to be a good idea. However, it is only one piece of a much broader business strategy that is required to create profitable results and to build shareholder value. Our work going forward is centered on building a cohesive merchandising strategy with clear accountability. With the $17 million bank term loan from GACP Finance Co., LLC, our recently strengthened balance sheet provides the Company some additional flexibility in building long-term relationships with our vendors, as well as the ability to be more opportunistic in the broader marketplace.”

RELATED:Evine Unveils Shareholders Rights Plan

About a year after a proxy fight gave it new owners and a new board of directors, management and direction, Evine Live, the former ShopHQ, is finding the path to success may take a little longer than it first expected.

Expectations were high when New York-based investment adviser The Clinton Group took control of the company in what was at times a contentious proxy fight. A new board of directors — including former Fremantle Media North America CEO and reality show pioneer Thom Beers — and former HSN CEO Mark Bozek were brought in to transform the company from a hawker of watches and jewelry into a retailer with a heavy concentration on proprietary product lines.

The idea was that by intertwining aspects of reality television and TV talent shows, Evine could create a “seamless entertainment transactional experience.”

INITIAL ENTHUSIASM

Early results were good: in the fourth quarter of 2014, Evine grew revenue 4% to $201 million and adjusted EBITDA increased 44% to $7 million. Evine stumbled in Q1, though. Total revenue of $158 million in the quarter fell short of analyst estimates and was down about 1% from the prior year. Cash flow was $1.6 million in the period, down 71% from $5.5 million in the prior year. Sales in the next two quarters would be flat compared to the prior year, Evine also said, with growth not expected until the fourth quarter.

As a result, Evine’s stock has plunged by more than 50% since it reported those results in May and last week raised some eyebrows with the initiation of a shareholders’ rights plan — also known as a “poison pill” — that would make it harder for an outside party to attempt a hostile takeover of the company.

Brean Capital senior vice president and senior analyst equity research Tom Forte said he believes the poison pill is merely a measure to preserve Evine’s $486 million in net operating losses, which are used to offset future tax payments.

That said, Forte said there are two story lines to Evine — the actual company and its stock.

“From the standpoint of the company, you have a CEO, Mark Bozek, who has taken an aggressive approach to transforming the business,” Forte said. “Instead of maintaining the status quo of the business he took over, he has boldly made changes that if successful will position the company for sustained sales and profitability growth.”

Evine management was not immediately available and declined to comment for this article.

Some of those changes include the introduction of a new line of cookware and accessories by celebrity chef Todd English and a surprisingly successful line of seafood and cookware modeled after The Deadliest Catch on Discovery Channel.

The other Evine, its stock, indicates that the transition from Shop HQ to Evine has been “choppy,” Forte said. That’s mainly because the transformation of the company from a watch and jewelry seller to a retailer with its own proprietary brands has taken longer than expected.

“It takes time to build new brands, even the ones I believe will be successful,” Forte said.

Forte is obviously bullish on the stock and his company, Brean Capital, makes a market in Evine securities, but he also has a point.

Even QVC and HSN, the two home-shopping leaders, didn’t make the switch to proprietary brands overnight. And Evine has had some early successes: Mark Cuban’s American Dream, a show starring the Dallas Mavericks owner, investor and Shark Tank panelist, along with a lineup of nine entrepreneurs hawking their own products and inventions, was one of its most-watched programs ever. The addition of English and the success of the Deadliest Catch line, all expected to continue their relationship with Evine, looks encouraging.

But even Forte admits that the Q1 slowdown has created some skepticism in management’s ability to do the job.

PRODUCT MIX QUESTION

While Evine management has said the rebound should begin in the fourth quarter, Forte said the bigger question is whether or not the company can transform its product mix to more than 70% proprietary offerings.

Evine has said proprietary products make up about 33.8% of sales, but Forte believe the figure is more like 20% to 25%.

“When that day comes, I suspect that they will have solid financial performance,” Forte said.

A top investor in Shop HQ parent ValueVision Media who once criticized its former management for sticking shareholders with the bill of fighting off a proxy battle with activist investors, has soundly backed the company’s new ownership and management team, stating in a letter filed with the Securities and Exchange Commission that he is switching his funds investment position in the company from “active” to “passive.”

In a brief letter to ShopHQ CEO Mark Bozek, Cannell Capital managing member J. Carlo Cannell wrote that his hedge fund “no longer seeks to effect positive change in the change in the control of ValueVision Media, Inc.("VVTV"). We are content and confident that you have this sacred duty in hand.”

Cannell Capital owns about 3 million ValueVision shares, or about 5.6% of its outstanding stock. The letter was part of a quarterly 13-G filing with the SEC Cannell made on Oct. 14. Owners of 5% or more of a public company‘s shares are required by the SEC to file 13-G statements each quarter.

While 13-Gs are usually dry and to the point, Cannell has used them as a forum on occasion. In June, he criticized ValueVision’s then-CEO Randy Ronning for sticking shareholders with a $3 million bill for public relations and legal advisors to defend the company from a proxy battle being waged by dissident investor Clinton Group.

Clinton won that fight – it ended up electing a majority of the board of directors, ousting ValueVision’s management and installing new executives including Bozek, the former CEO of shopping network rival HSN, Inc.

“Since arriving about four months ago you have pruned the executive suite, driving away those to whom the very notion of a five day work was apparently abhorrent,” Cannel wrote. “You have let in air, light and a general feeling of relevance to all employees. You have given customers a taste of what should, and can, happen with the success of the Mark Cuban American Dream show (the debut of which set a ShopHQ viewership record). Perhaps most importantly, you have reactivated relationships with merchants. Good start. Good luck. Godspeed.”