Presurance Holdings Inc. will begin trading on a split-adjusted basis on June 2 as the insurer moves to address a share price that has remained below Nasdaq’s $1 minimum requirement for several months.
The company said it will carry out a 1-for-7 reverse stock split, meaning every seven existing shares will be combined into one share. The move comes after Presurance shares failed to trade above $1 since mid-December.
According to Nasdaq, Presurance Holdings Inc. shares traded at $0.62 midday May 29, which is down 8.33% from the previous close.
The split will reduce Presurance’s outstanding common shares to about 3.7 million from around 26.2 million, according to Best Wire. Its authorized common shares will remain unchanged at 100 million, so the change affects the number of shares currently outstanding but not the total number of shares the company is allowed to issue.
Presurance had already secured stockholder approval for a possible reverse split a year earlier. That approval allowed the company to choose a ratio ranging from 1-for-2 to 1-for-12, with the timing and final ratio left to its board of directors. Presurance had said the option would help it comply with Nasdaq Stock Market continued listing requirements.
Stockholders will not receive fractional shares from the reverse split. Any fractional share will be rounded down to the next whole share, with stockholders receiving cash equal to the market value of the fractional share.
The reverse split comes as Presurance moves further from its old business model. Formerly known as Conifer Holdings, the company rebranded last year after significant operating changes. It is also exiting commercial lines to focus on select personal lines homeowners’ business.
Its recent results show the uneven state of that transition. Presurance narrowed its allocable fourth-quarter net loss to $17 million from a $25.4 million net loss a year earlier, even as its combined ratio worsened to 333.5.
In the first quarter, Presurance reported net income of $2.6 million, up from $522,000 in the same period a year earlier. Its consolidated combined ratio improved to 105.7 from 140.5. The company said the ongoing runoff of legacy commercial lines has helped reduce earnings volatility.
