LAKEWOOD, N.J. - Reliance Global Group, Inc. (NASDAQ: RELI; RELIW), an InsurTech company, announced that its Board of Directors has approved a 1-for-17 reverse stock split of its common stock.
The action aims to meet the Nasdaq Capital Market's minimum bid price requirement. This strategic move does not require shareholder approval and will be effective at 5:00 p.m. Eastern Time on June 28, 2024. Trading on a reverse split-adjusted basis will commence on July 1, 2024, under the same ticker symbol RELI and a new CUSIP number.
The reverse stock split will convert every 17 shares of issued and outstanding common stock into one share, maintaining the par value at $0.086 per share and reducing the total number of shares from approximately 15.7 million to about 921,000. Shareholders' ownership percentages will remain unchanged post-split. Adjustments will also be made to outstanding stock options, warrants, and other incentive awards.
Ezra Beyman, CEO of Reliance, expressed optimism about the company's future, citing the upcoming acquisition of Spetner Associates. This acquisition, expected to be the largest in the company's history, is anticipated to double annual revenues to around $28 million and significantly contribute to the company's profitability and shareholder returns.
Stockholders holding shares in certificate form will receive instructions from the company's transfer agent, VStock Transfer, LLC, on exchanging their certificates. Those with shares in book-entry form or held in brokerage accounts need not take any action to effect the exchange after the reverse stock split.
Reliance Global Group is recognized for its use of artificial intelligence and cloud-based technologies to enhance the insurance agency/brokerage industry. Its platforms, including RELI Exchange and 5minuteinsure.com, aim to provide competitive advantages and efficiencies to independent insurance agencies and consumers seeking insurance quotes.
The information in this article is based on a press release statement from Reliance Global Group, Inc.
In other recent news, Reliance Global Group has made a significant strategic move with the acquisition of Spetner Associates. This deal is expected to more than double the company's annual revenue to over $14 million and significantly increase EBITDA by $4 million.
Despite a net loss of $5.3 million for the first quarter of 2024, largely due to a non-cash impairment charge, the company is hopeful about the positive impact of the Spetner deal on its financial performance. The acquisition, valued at $13.7 million, is set to close in the third quarter and is anticipated to contribute substantially to the company's financial performance. These are recent developments that highlight the company's growth strategy.
The company is also progressing with its "one firm" vision, focusing on streamlining operations and exploring new revenue-generating opportunities. However, it's important to note that the company also faced an increase in expenses, which rose to $1.4 million from the previous year's $838,000, mainly due to acquisition costs and regulatory compliance.
InvestingPro Insights
As Reliance Global Group, Inc. (NASDAQ: RELI; RELIW) prepares for a significant reverse stock split, investors are closely monitoring the company's financial health and market performance. Recent data from InvestingPro provides a snapshot of RELI's current standing in the market.
InvestingPro Data metrics reveal that Reliance Global Group has a market capitalization of $3.39 million USD, reflecting its size and equity value in the market. The company's P/E Ratio stands at -0.09, which indicates that the company is not currently profitable. This is further substantiated by an adjusted P/E Ratio for the last twelve months as of Q1 2024 at -0.56. Moreover, the Gross Profit Margin for the same period is reported at 17.08%, which aligns with the InvestingPro Tip that RELI suffers from weak gross profit margins.
In terms of stock performance, RELI has experienced a strong return over the last month, with a 45.09% price total return. This contrasts with the longer-term trend where the price has fallen significantly over the last year by -91.39%, and the previous five years, supporting the InvestingPro Tip that the stock has performed poorly over the last decade.
Investors interested in a deeper analysis can find additional insights on RELI through InvestingPro, which offers a comprehensive set of metrics and tips. For instance, there are four more InvestingPro Tips available that could provide further guidance on the company's volatility and dividend policy. Accessing these insights could be particularly beneficial for those considering the implications of the upcoming reverse stock split and acquisition of Spetner Associates.
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