Banzai Announces Reverse Split to Regain NASDAQ Compliance

Rhea-AI Summary

Banzai International (NASDAQ: BNZI) has announced a one-for-fifty reverse stock split effective September 19, 2024, at 12:01 a.m. EDT. This strategic move is primarily aimed at regaining compliance with Nasdaq's minimum average closing share price requirement. The company's stock will continue trading under the symbol 'BNZI' but with a new CUSIP Number (06682J 308).

Post-split, Banzai will have 916,558 shares of Class A common stock outstanding. The split will affect all issued and outstanding Class A shares, as well as those available for issuance under stock options and warrants. Fractional shares will be rounded up to the nearest whole share. Shareholders with physical certificates will receive information from Continental Stock Transfer & Trust Company regarding the exchange process.

Positive

• Potential to regain compliance with Nasdaq listing requirements
• Maintains current stock symbol (BNZI) for continuity

Negative

• Significant reduction in total outstanding shares
• Potential dilution of shareholder value
• Risk of not meeting Nasdaq compliance despite the reverse split

Insights

Financial Analyst

This reverse stock split is a critical move for Banzai to maintain its NASDAQ listing. The 1-for-50 split will artificially inflate the stock price, likely bringing it above the $1 minimum required by NASDAQ. However, it's important to note that this doesn't change the company's underlying value or market capitalization. The reduction from approximately 45.8 million to 916,558 outstanding shares could potentially improve liquidity and attract institutional investors who have minimum share price requirements. Investors should be cautious, as reverse splits are often seen as a red flag, indicating financial distress or poor performance. The key will be watching how the stock performs post-split and whether Banzai can demonstrate improved fundamentals to support the higher share price.

Market Research Analyst

Banzai's reverse split reflects broader challenges in the marketing technology sector. The industry has faced headwinds due to reduced marketing budgets amid economic uncertainties. This move suggests Banzai has struggled to maintain investor confidence and share value in this environment. However, it's worth noting that the marketing tech market is projected to grow at a CAGR of 19.8% from 2023 to 2030. If Banzai can leverage this growth potential and improve its market position, the reverse split could provide a fresh start. Investors should closely monitor Banzai's upcoming financial reports and market share data to gauge whether this corporate action will be followed by meaningful business improvements.

Legal Expert

From a legal perspective, this reverse split is a standard corporate action to maintain NASDAQ compliance. It's important to note that while the split itself doesn't raise legal concerns, it could potentially expose the company to increased scrutiny. Shareholders should be aware that reverse splits can sometimes precede delisting if the company fails to address underlying financial issues. However, Banzai has followed proper procedures, including board approval and shareholder notification. The rounding up of fractional shares is a shareholder-friendly move that avoids potential legal complications associated with cash-outs. Investors should review the company's SEC filings for any risk factors or legal issues that may have contributed to the need for this action.

SEATTLE, Sept. 19, 2024 (GLOBE NEWSWIRE) -- Banzai International, Inc. (NASDAQ: BNZI) (“Banzai” or the “Company”), a leading marketing technology company that provides essential marketing and sales solutions, today announced that effective at 12:01 a.m., EDT, on September 19, 2024, the Company will effect a one-for-fifty (1 for 50) reverse stock split of its outstanding Class A common stock.

The reverse stock split is primarily intended to bring the Company into compliance with the minimum average closing share price requirement for maintaining its listing on the Nasdaq Capital Market. The Company's common stock will continue to trade under the symbol "BNZI". Upon the effectiveness of the reverse stock split, every fifty shares of issued and outstanding common stock before the open of business on September 19, 2024, will be combined into one issued and outstanding share of common stock, with no change in par value per share. The Company's common stock will open for trading on Nasdaq on September 19, 2024, on a post-split basis but will trade under a new CUSIP Number, 06682J 308.

As a result of the Reverse Stock Split, the Company will have 916,558 shares of Class A common stock issued and outstanding. No fractional shares will be issued as a result of the reverse stock split. Any fractional shares that would result from the reverse stock split will be rounded up to the nearest whole share.

The reverse stock split will affect all issued and outstanding shares of the Company's Class A common shares, as well as the number of shares of Class A common shares available for issuance under the Company's stock options and warrants. In addition, the reverse stock split will reduce the number of shares of Class A common stock issuable upon the exercise of stock options and warrants outstanding immediately prior to the reverse split and correspondingly increase the respective aggregate exercise prices. The reverse stock split will affect all holders of Class A common stock uniformly and will not alter any shareholder's percentage interest in the Company's Class A common stock, except to the extent that the reverse stock split results in some shareholders experiencing an adjustment of a fractional share as described above.

Shareholders holding share certificates will receive information from Continental Stock Transfer & Trust Company, the Company's transfer agent, regarding the process for exchanging their shares of common stock. Shareholders with questions may contact our transfer agent by calling 800-509-5586.

About Banzai

Banzai is a marketing technology company that provides essential marketing and sales solutions for businesses of all sizes. On a mission to help their customers achieve their mission, Banzai enables companies of all sizes to target, engage, and measure both new and existing customers more effectively. Banzai customers include Square, Hewlett Packard Enterprise, Thermo Fisher Scientific, Thinkific, Doodle and ActiveCampaign, among thousands of others. Learn more at www.banzai.io. For investors, please visit https://ir.banzai.io.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often use words such as “believe,” “may,” “will,” “estimate,” “target,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “propose,” “plan,” “project,” “forecast,” “predict,” “potential,” “seek,” “future,” “outlook,” and similar variations and expressions. Forward-looking statements are those that do not relate strictly to historical or current facts. Examples of forward-looking statements may include, among others, statements regarding Banzai International, Inc.’s (the “Company’s”): future financial, business and operating performance and goals; annualized recurring revenue and customer retention; ongoing, future or ability to maintain or improve its financial position, cash flows, and liquidity and its expected financial needs; potential financing and ability to obtain financing; acquisition strategy and proposed acquisitions and, if completed, their potential success and financial contributions; strategy and strategic goals, including being able to capitalize on opportunities; expectations relating to the Company’s industry, outlook and market trends; total addressable market and serviceable addressable market and related projections; plans, strategies and expectations for retaining existing or acquiring new customers, increasing revenue and executing growth initiatives; and product areas of focus and additional products that may be sold in the future. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements. Therefore, investors should not rely on any of these forward-looking statements. Factors that may cause actual results to differ materially include changes in the markets in which the Company operates, customer demand, the financial markets, economic, business and regulatory and other factors, such as the Company’s ability to execute on its strategy. More detailed information about risk factors can be found in the Company’s Annual Report on Form 10-K and the Company’s Quarterly Reports on Form 10-Q under the heading “Risk Factors,” and in other reports filed by the Company, including reports on Form 8-K. The Company does not undertake any duty to update forward-looking statements after the date of this press release.

Investor Contacts:
Chris Tyson
Executive Vice President
MZ Group - MZ North America
949-491-8235
BNZI@mzgroup.us
www.mzgroup.us

Media
Rachel Meyrowitz
Director, Demand Generation, Banzai
rachel.meyrowitz@banzai.io

FAQ

What is the reverse stock split ratio announced by Banzai (BNZI) on September 19, 2024?

Banzai (BNZI) announced a one-for-fifty (1 for 50) reverse stock split effective September 19, 2024.

Why is Banzai (BNZI) implementing a reverse stock split in September 2024?

Banzai (BNZI) is implementing the reverse stock split primarily to regain compliance with Nasdaq's minimum average closing share price requirement for maintaining its listing.

How many shares of Class A common stock will Banzai (BNZI) have outstanding after the reverse split?

After the reverse stock split, Banzai (BNZI) will have 916,558 shares of Class A common stock issued and outstanding.

Will Banzai's (BNZI) stock symbol change after the reverse split on September 19, 2024?

No, Banzai's stock will continue to trade under the symbol 'BNZI' on Nasdaq after the reverse split, but it will have a new CUSIP Number (06682J 308).