LMFA Stock: 1-For-5 Reverse Stock Split

By Amit Chowdhry ● May 7, 2021
  • LM Funding America Inc (NASDAQ: LMFA) announced a 1-for-5 reverse stock split. These are the details.

LM Funding America Inc (NASDAQ: LMFA) – a technology-based specialty finance company – announced a 1-for-5 reverse stock split of its outstanding common stock, effective at 12:01 a.m. Eastern time on May 7, 2021. Starting today, LM Funding’s common stock will trade on a split-adjusted basis.

At LM Funding’s Annual Meeting of Shareholders held on May 11, 2020, the company’s shareholders approved a proposal to amend the Certificate of Incorporation to effect a reverse stock split of its common stock at a ratio within the range of one-for-two (1:2) to one-for-ten (1:10), as determined by the company’s Board of Directors. And on April 21, 2021, the Board of Directors approved a 1-for-5 reverse split, and on May 5, 2021, LM Funding filed a Certificate of Amendment to its Certificate of Incorporation to effect the reverse stock split effective as of May 7, 2021.

LM Funding’s shares of common stock are going to continue to trade on the NASDAQ under the symbol “LMFA.” And the new CUSIP number for the Company’s common stock post reverse stock split is 502074404.

Upon the effectiveness of the reverse stock split, every 5 shares of LM Funding’s issued and outstanding common stock will automatically be converted into 1 share of common stock. No fractional shares will be issued if, as a result of the reverse stock split, a stockholder would otherwise become entitled to a fractional share. Instead, each stockholder will be entitled to receive a cash payment equal to the product of the closing price of the company’s common stock on May 6, 2021 and the amount of the fractional share.

KEY QUOTE:

“Consistent with the reason for obtaining shareholder approval of the reverse split proposal at our most recent annual shareholder meeting. Our Board of Directors believe that it is our shareholders’ best interest to raise the per-share trading price of our common stock to ensure continued compliance with Nasdaq’s $1.00 minimum bid price requirement and to make our stock more attractive to a broader range of institutional and other investors.” Mr. Rodgers added: “The reverse stock split will also effectively make available an increased number of authorized but unissued shares to pursue potential acquisitions, additional financing activities, and/or other strategic transactions to grow shareholder value in the wake of our substantially improved cash position, our sponsorship of a successful SPAC IPO in January 2021, and the launch of our recently announced digital assets strategy.”

— Bruce M. Rodgers, Chairman and CEO of LM Funding

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.