LifeWallet Announces Reverse Stock Split to Regain Compliance with Nasdaq’s Minimum Bid Price Requirement

Rhea-AI Summary

LifeWallet (NASDAQ: LIFW) has announced a 1-for-25 reverse stock split effective November 15, 2024, at 11:59 PM, to regain compliance with Nasdaq's minimum $1.00 bid price requirement. The company's common stock will begin trading on a split-adjusted basis on November 18, 2024, under the same symbol 'LIFW' but with a new CUSIP number: 553745-30-8. Following the reverse split, every 25 shares will be converted into one share, resulting in approximately 1.6 million shares of Class A common stock outstanding.

Positive

• Potential compliance with Nasdaq's minimum bid price requirement, avoiding potential delisting risk

Negative

• Implementation of 1-for-25 reverse stock split indicates significant share price deterioration
• Reverse split reduces total outstanding shares but doesn't change fundamental company value

Insights

Financial Analyst

This reverse stock split represents a critical but concerning development for LifeWallet. The 1-for-25 ratio is particularly aggressive, signaling significant underlying challenges. While this move helps maintain Nasdaq listing compliance, it's essentially a cosmetic change that doesn't address fundamental business issues.

The reduction from approximately 40 million shares to just 1.6 million shares outstanding could severely impact trading liquidity. Historical data shows companies implementing such dramatic reverse splits often face continued downward pressure post-split. Moreover, the timing, just before year-end, suggests urgency in meeting compliance requirements.

The market typically views reverse splits negatively, particularly at this ratio. Investors should note that while the share price will mathematically increase by 25x, the company's market capitalization and fundamental value remain unchanged. This action often indicates deeper financial distress and rarely serves as a turning point for struggling companies.

LifeWallet’s Common Stock Will Begin Trading on Split-Adjusted Basis on Monday, November 18, 2024

MIAMI, Nov. 12, 2024 (GLOBE NEWSWIRE) -- MSP Recovery, Inc. d/b/a LifeWallet (NASDAQ: LIFW) (“LifeWallet,” or the “Company”), a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery and technology leader, today announced that it will affect a reverse stock split of its Class A common stock at a reverse stock split ratio of 1-for-25, effective at 11:59 P.M. on November 15, 2024, in order to regain compliance with the minimum $1.00 bid price per share requirement of Nasdaq’s Marketplace Rule 5450(a)(1).

LifeWallet’s Common Stock will continue to trade on the Nasdaq Global Market (“Nasdaq”) under the symbol “LIFW” and will begin trading on a split-adjusted basis when the Nasdaq opens on November 18, 2024 (“Effective Time”). The new CUSIP number for the Class A common stock following the reverse split will be: 553745-30-8.

The Company’s stockholders previously approved the reverse stock split and granted the Company’s board of directors the authority to determine the final reverse stock split ratio and when to proceed with the reverse stock split. The Company has filed an amendment to its Second Amended and Restated Certificate of Incorporation to affect the reverse stock split at the ratio of 1-for-25 as of the Effective Time.

As a result of the reverse split, every 25 shares of the Company’s issued and outstanding Common Stock will automatically be converted into one share of issued and outstanding Common Stock. The Company’s shares will begin trading on a split-adjusted basis on the Nasdaq Capital Market commencing upon market open on November 18, 2024. Immediately after the reverse split becomes effective, there will be approximately 1.6 million shares of Class A common stock issued and outstanding.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” “will,” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled “Risk Factors” included in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by it with the SEC. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.

About LifeWallet

Founded in 2014 as MSP Recovery, LifeWallet has become a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery leader, disrupting the antiquated healthcare reimbursement system with data-driven solutions to secure recoveries from responsible parties. LifeWallet provides comprehensive solutions for multiple industries including healthcare, legal, and sports NIL. For more information, visit: LIFEWALLET.COM.

Contacts

Media
Media@LifeWallet.com

Investors
Investors@LifeWallet.com

FAQ

What is the reverse stock split ratio announced by LifeWallet (LIFW)?

LifeWallet announced a 1-for-25 reverse stock split, meaning every 25 shares will be converted into one share.

When will LifeWallet (LIFW) stock begin trading on a split-adjusted basis?

LifeWallet stock will begin trading on a split-adjusted basis when the Nasdaq opens on November 18, 2024.

How many shares of LIFW will be outstanding after the reverse split?

After the reverse split, there will be approximately 1.6 million shares of Class A common stock issued and outstanding.

Why is LifeWallet (LIFW) implementing a reverse stock split?

LifeWallet is implementing the reverse stock split to regain compliance with Nasdaq's minimum $1.00 bid price requirement.