The most famous booster for Miami Hurricanes basketball helped build a team that now finds itself in the Final Four.
But beneath the surface, LifeWallet CEO John Ruiz’s business is thriving amid the threat of being delisted as a public company and alleged fraud against the company’s original founder Norberto Menendez.
Ruiz handed out name, image and likeness deals for four players who will compete tonight for Miami against UConn: Kansas State transfer Nijel Pack, Isaiah Wong, Jordan Miller and Norchad Omier.
Pack received a two-year deal worth $800,000 to transfer from Kansas State while Wong received $100,000 to stay. Miller and Omier’s deals were not disclosed.
They represent the four top scorers for Miami this season.
In total, LifeWallet has supported more than 100 Miami athletes in all sports for more than $5 million, including deals with twin influencers Hanna and Haley Cavinder.
But away from sports, LifeWallet is a mess.
Amidst multi-million dollar sponsorships for college athletes, the company has faced litigation from its original founder, missed a recent earnings call and has seen its stock price plummet. that Nasdaq may boot LifeWallet completely.
When LifeWallet went public through a reverse merger in May of last year, the company was declared worth $32 billion, the same amount that the ill-fated crypto exchange FTX hit just five months earlier.
The stock — listed as LIFW on the Nasdaq — opened slightly above $10 a share, making Ruiz a billionaire on paper.
However, that doesn’t last.
Within nine days, LIFW would drop to $1 per share.
And after hovering between $1 and $2 per share last year, on March 13, LifeWallet dipped below $1 per share. The stock has remained below the $1 threshold for the past two weeks.
After a stable trade below $1 for 30 days, Nasdaq can begin the process of removing that company from its exchange.
“I’m very strict and cautious about saying anything that hasn’t been made public,” Ruiz told Action Network about his company’s potential delisting.
Overall, LifeWallet is down 91% from its IPO price. The Nasdaq as a whole is down just under 18% year-to-date.
LifeWallet has two businesses. The main part of its valuation involves suing insurance companies that should have paid for medical bills that Medicare or Medicaid ended up funding. The company told investors it could recover up to $89 billion by doing so.
And Ruiz gave guidance that 2022 revenue will reach $1 billion.
When the company first reported quarterly earnings, the numbers were low. Nine-month revenue came in at just $3.9 million after projecting revenue of $992 million. Operating losses were $118 million.
The company says its projected revenue will come next year.
The second part of the business includes the original LifeWallet brand, which is a digital health wallet that helps emergency and hospital staff better understand a person who may be incapacitated.
This is the backdrop of LifeWallet founder Menendez’s lawsuit against Ruiz.
Ruiz’s original company — MSP Recovery — acquired LifeWallet and took its name and assets.
Menendez alleged in his suit that Ruiz failed to pay him for his LifeWallet assets despite rebranding all of Ruiz’s businesses “to use the LifeWallet name,” using LifeWallet’s software and technology platform to do so. .
Ruiz says that MSP Recovery has acquired all of the proprietary assets that currently make up LifeWallet and that the company only acquired the LifeWallet name from Menendez.
The lawsuit also claims that Ruiz strongly advised him to get shares in the company in exchange for cash because the stock was “going to $30 or $40.”
Other allegations besides fraud include breach of contract and negligent misrepresentation.
Since its third quarter earnings reports were released four months ago, the company has been radio silent on new numbers.
LifeWallet was supposed to issue an earnings report on March 31 but missed the deadline, saying “management needs more time to finalize and analyze” its numbers.
Missing earnings reports are often seen as a big red flag for investors and regulators.
“John claims he has algorithms to find good cases and because he’s in the public eye now, he’s going to be forced to prove he has something important,” said David Winker, a Florida health care attorney representing a plaintiff against Ruiz in a lawsuit. “If he’s right, it has the potential to be valuable.
“But Elizabeth Holmes told the investors that she had a proprietary method of analyzing blood and when the investors called her, she had nothing.”
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