8-K: Finance of America Receives NYSE Non-Compliance Notice Due to Low Share Price

Finance of America has received a notice from the NYSE stating that it is not in compliance with listing standards due to its average share price falling below $1.00 over a 30-day period.

Summary

• Finance of America Companies Inc. received a notice from the New York Stock Exchange (NYSE) on February 12, 2024, indicating non-compliance with Section 802.01C of the NYSE Listed Company Manual.
• The non-compliance is due to the average closing price of the company's Class A Common Stock being less than $1.00 over a consecutive 30 trading-day period, as of February 9, 2024.
• The NYSE provides a six-month cure period for the company to regain compliance.
• To regain compliance, the company's share price must close at or above $1.00 on the last trading day of any calendar month during the cure period and maintain an average closing price of at least $1.00 over the prior 30 trading-day period.
• Finance of America intends to notify the NYSE within ten business days of the notice that it plans to regain compliance within the six-month cure period.
• The company is considering all available options to regain compliance and intends to remain listed on the NYSE.
• The notice does not have an immediate effect on the listing of the Class A Common Stock and is not expected to impact the company's business operations or reporting requirements with the SEC.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the non-compliance notice and the risk of delisting. While the company is taking steps to address the issue, the situation is concerning for investors.

Positives

• The notice does not immediately affect the listing of the company's stock on the NYSE.
• The company has a six-month cure period to regain compliance with the NYSE listing standards.
• The notice is not expected to impact the company's ongoing business operations or reporting requirements with the SEC.
• Finance of America intends to remain listed on the NYSE and is actively considering options to regain compliance.

Negatives

• The company's average share price has fallen below the required $1.00 threshold for 30 consecutive trading days.
• The company is now subject to a cure period to avoid potential delisting from the NYSE.

Risks

• There is a risk that the company may not be able to regain compliance with the NYSE listing standards within the six-month cure period.
• Failure to regain compliance could lead to the delisting of the company's stock from the NYSE.
• The company's share price may be negatively impacted by the non-compliance notice.
• The company's ability to raise capital may be affected by the non-compliance notice.

Future Outlook

The company intends to regain compliance with the NYSE listing standards within the six-month cure period and is considering all available options to do so. The company is also considering actions that may require shareholder approval.

Management Comments

• Finance of America plans to notify the NYSE within ten business days of its receipt of the Notice that it intends to bring the Company into compliance with this listing standard within the six month cure period.
• Finance of America intends to remain listed on the NYSE and is considering all available options to regain compliance with the NYSEs continued listing standards.

Industry Context

This announcement is not uncommon for companies experiencing a decline in share price. Many companies have faced similar challenges and have had to implement strategies to regain compliance with exchange listing standards. The real estate and mortgage industry has been under pressure due to rising interest rates and economic uncertainty, which may be contributing to the company's share price decline.

Comparison to Industry Standards

• Many companies in the financial sector, particularly those in the mortgage industry, have faced similar challenges with share price volatility due to market conditions.
• Companies like Rocket Companies (RKT) and UWM Holdings Corporation (UWMC) have also experienced fluctuations in their stock prices, although they may not have faced the same delisting risk at this time.
• The six-month cure period is a standard procedure provided by the NYSE, and many companies have successfully regained compliance within this timeframe.
• The company's situation is not unique, but its ability to recover will depend on its specific strategies and market conditions.

Stakeholder Impact

• Shareholders may experience a decline in the value of their investment due to the non-compliance notice.
• Employees may be concerned about the company's future prospects.
• Customers and suppliers may be impacted by the uncertainty surrounding the company's listing status.
• Creditors may be concerned about the company's ability to meet its financial obligations.

Next Steps

• Finance of America will notify the NYSE within ten business days of its intention to regain compliance.
• The company will explore all available options to increase its share price and meet the NYSE listing requirements.
• The company may need to seek shareholder approval for certain actions to regain compliance.

Key Dates

Keywords

NYSE, listing standards, non-compliance, share price, cure period, delisting, Finance of America, FOA