Health insurance claims firm LifeWallet, under the leadership of John Ruiz, confronts NASDAQ delisting amidst financial challenges
LifeWallet, a publicly traded health insurance claims firm led by Miami lawyer John Ruiz, has informed federal regulators of its looming risk of delisting from the NASDAQ stock exchange. This development marks a significant setback for the Coral Gables-based company, dealing with financial troubles throughout the year.
Impending NASDAQ delisting
LifeWallet disclosed on Friday its precarious situation, revealing that it faces the possibility of being removed from the NASDAQ stock exchange. Despite the looming delisting, the company intends to appeal the decision, which will be heard within 30-45 days after filing with NASDAQ.
In response to these challenges, the company recently approved a reverse stock split plan in a bid to boost its share price above the NASDAQ's $1 minimum threshold, a critical requirement for continued listing. The company remains optimistic that the reverse stock split will help its shares "trade at a level sufficient to regain compliance." However, it's a blunt reversal of fortune for a company once valued at $32 billion when it went public in May 2022.
John Ruiz: Ongoing legal and financial troubles
LifeWallet's path to potential delisting has been blemished by a series of legal and financial troubles. The company had previously faced delays in filing its required financial statements with the U.S. Securities and Exchange Commission (SEC) and admitted to accounting errors in its filings from the previous year.
Additionally, federal authorities have launched investigations into John Ruiz and LifeWallet, including a subpoena from the SEC and a grand jury inquiry in the U.S. Southern District of Florida. These investigations were initiated following reports by the Miami Herald in July that raised questions about the company's operations.
LifeWallet's core business involves seeking to recover insurance claims that were paid by the wrong party, mainly on behalf of Medicare-affiliated health insurance companies. However, its most recent financial filings show the company faces substantial losses, with claims recoveries of just over $6.5 million in the first half of 2023, offset by a net loss of approximately $385 million.