Reliance Global Group Announces Reverse Stock Split
Reliance Global Group has announced a 1-for-17 reverse stock split to regain compliance with Nasdaq's $1.00 minimum bid price requirement. The split will take effect on June 28, 2024, with trading on a split-adjusted basis starting July 1, 2024, under the symbol 'RELI'. The move aims to consolidate approximately 15.7 million shares into 921,000 shares, without altering the ownership percentages. CEO Ezra Beyman highlighted that this step is important for maintaining Nasdaq listing and emphasized the anticipated acquisition of Spetner Associates, expected to double annual revenues to $28 million. Shareholders holding certificates will receive further instructions from VStock Transfer, , the company's transfer agent.
- Reverse stock split ensures compliance with Nasdaq listing requirements.
- Consolidation of shares to strengthen stock price.
- Anticipated acquisition of Spetner Associates expected to double annual revenues to $28 million.
- Reverse stock split reduces outstanding shares from approximately 15.7 million to 921,000.
Insights
Reverse stock splits are often seen as a move by companies to bolster their stock price when it falls below critical levels, in this case, the $1.00 minimum bid price requirement for Nasdaq. This is sometimes viewed as a desperation measure, but it can also be a strategic step to maintain compliance with listing standards. For investors, a reverse split does not inherently change the value of their holdings since the overall market capitalization remains the same. However, it does reduce the number of shares available, which can increase liquidity and potentially make the stock less volatile.
One critical point to consider is the company's rationale behind this move. The announcement mentions a significant upcoming acquisition of Spetner Associates, expected to double the company's annual revenues to approximately
In the short term, the reverse split might provide some stability and attract institutional investors who prefer higher-priced stocks. In the long term, the success hinges on the company’s ability to execute its acquisition strategy effectively and realize the anticipated benefits.
From a market perspective, the decision to implement a reverse stock split while emphasizing a major acquisition is an interesting strategic move. The company is clearly aware of the negative connotation associated with reverse splits, often perceived as a ‘last resort’ for struggling stocks. By coupling this announcement with the news of a potentially substantial acquisition, Reliance is attempting to convey confidence and forward momentum.
Acquiring Spetner Associates aligns with their goal of expanding their revenue base significantly. However, the success of this acquisition will depend heavily on market conditions and the company’s ability to integrate Spetner and extract value from it. If successful, this acquisition could place Reliance in a stronger competitive position within its sector. For retail investors, it’s important to monitor post-acquisition performance metrics such as revenue growth, profit margins and integration costs.
Legally, the reverse stock split does not alter shareholders' equity positions but consolidates them at a higher share price. This action is compliant with Nasdaq’s listing requirements, which safeguard the company from potential delisting—a scenario that could negatively impact investor confidence and stock value. Additionally, the company has streamlined the process by not necessitating shareholder approval, which is within its rights but might not sit well with some investors who prefer more transparency and involvement in such decisions.
Given the coordinated timing with the anticipated acquisition of Spetner Associates, it’s clear the company is strategically positioning itself to meet compliance needs while setting the stage for growth. It's important for investors to remain vigilant about the terms of the acquisition and any legal stipulations that could affect future profitability and company structure.
LAKEWOOD, N.J., June 26, 2024 (GLOBE NEWSWIRE) -- Reliance Global Group, Inc. (Nasdaq: RELI; RELIW) (“Reliance”, “we” or the “Company”) today announced that the Company’s Board of Directors approved a 1-for-17 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock (the “Common Stock”) in order to regain compliance with the
Ezra Beyman, CEO of Reliance, remarked, “Reliance is proud to be a Nasdaq listed company and we know the actions being taken are important to our investors as they will help ensure continued compliance with Nasdaq listing rules. This is a pivotal time for Reliance as we complete the final steps to close what we anticipate will be a groundbreaking acquisition for our Company—the proposed acquisition of Spetner Associates in the second half of 2024. This acquisition, poised to be the largest in our history, is expected to double our annual revenues to approximately
Upon implementation of the Reverse Stock Split, every 17 shares of the Company’s issued and outstanding Common Stock will automatically convert into one share of Common Stock without any change to the par value of
Information to Stockholders
VStock Transfer, LLC, the Company transfer agent, will send instructions to stockholders of record who hold stock certificates regarding the exchange of certificates for Common Stock. Stockholders who hold their shares of Common Stock in book-entry form or in brokerage accounts or “street name” are not required to take any action to effect the exchange of their shares of Common Stock following the Reverse Stock Split. VStock Transfer, LLC may be reached for questions at (212) 828-8436.
About Reliance Global Group, Inc.
Reliance Global Group, Inc. (NASDAQ: RELI; RELIW) is an InsurTech pioneer, leveraging artificial intelligence (AI), and cloud-based technologies, to transform and improve efficiencies in the insurance agency/brokerage industry. The Company’s business-to-business InsurTech platform, RELI Exchange, provides independent insurance agencies an entire suite of business development tools, enabling them to effectively compete with large-scale national insurance agencies, whilst reducing back-office cost and burden. The Company’s business-to-consumer platform, 5minuteinsure.com, utilizes AI and data mining, to provide competitive online insurance quotes within minutes to everyday consumers seeking to purchase auto, home, and life insurance. In addition, the Company operates its own portfolio of select retail “brick and mortar” insurance agencies which are leaders and pioneers in their respective regions throughout the United States, offering a wide variety of insurance products. Further information about the Company can be found at https://www.relianceglobalgroup.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions and include statements such as the Company having built a best-in-class InsurTech platform, making RELI Exchange an even more compelling value proposition and further accelerating growth of the platform, rolling out several other services in the near future to RELI Exchange agency partners, building RELI Exchange into the largest agency partner network in the U.S., the Company moving in the right direction and the Company’s highly scalable business model driving significant shareholder value. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission and elsewhere and risk as and uncertainties related to: the Company’s ability to generate the revenue anticipated and the ability to build the RELI Exchange into the largest agency partner network in the U.S., and the other factors described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the risk factors included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, the Company’s Quarterly Reports on Form 10-Q, the Company’s recent Current Reports on Form 8-K and subsequent filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Contact:
Crescendo Communications, LLC
Tel: +1 (212) 671-1020
Email: RELI@crescendo-ir.com
FAQ
What is the effective date of Reliance Global Group's reverse stock split?
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