Lument Finance Trust Sets 1-for-10 Reverse Split for Sept. 9 to Address NYSE Price Criteria

by Jonas Halvorsen · August 16, 2026

Companies Reporter, The MicroCap Herald

Lument Finance Trust said on Thursday, Aug. 13, that its board of directors has unanimously approved a 1-for-10 reverse split of its common stock, a step the company tied directly to the New York Stock Exchange listing standard it fell out of compliance with in July. The announcement came in the same release as the company's second-quarter 2026 results.

According to that release, the reverse split will take effect at 5:00 p.m. Eastern time on Wednesday, Sept. 9, 2026, with the common stock expected to begin trading on a split-adjusted basis at the opening of trading on Thursday, Sept. 10. The shares will continue to trade under the ticker symbol LFT, but with a new CUSIP number, 55025L306.

The company gave its reason in a single sentence: "The Reverse Stock Split is being implemented in order to regain compliance with applicable New York Stock Exchange listing requirements and support an efficient public trading market for the Company's common stock."

The compliance problem it refers to was disclosed two weeks earlier. The company's Form 8-K filed July 30, reporting Items 3.01, 7.01 and 9.01, states that the notice was received on July 24, 2026; the accompanying press release of the same date does not itself name a receipt date. In that release, Lument Finance Trust said the NYSE had advised it that the company "is not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of the Company's common stock was less than $1.00 over a consecutive 30 trading-day period." The release adds, in the company's own words, that "The notice is a notice of deficiency, not delisting, and does not currently impact the listing and trading of the Company's common stock on the NYSE."

The mechanics of that standard are conditional rather than immediate. The company states the cure period is six months and "ends on January 24, 2027" — that end date is the company's own, printed in its July 30 release, not an arithmetic inference by this desk. It regains compliance if, on the last trading day of any calendar month during that period, the stock closes at $1.00 or more and its average closing price over the preceding 30 trading days is also at least $1.00. Both tests must be met, and they are measured at month-end. The July release stated that the common stock "will continue to be listed and trade on the NYSE during the cure period, subject to the Company's continued compliance with the NYSE's other continued listing standards." At that point the company committed to no particular remedy, saying only that it "intends to continue monitoring the market price of its common stock and is considering all available alternatives to regain compliance with the NYSE minimum share price requirement." The July release did not name a reverse split as one of them.

One further condition sits inside the rule itself. Section 802.01C provides that where a company's cure requires shareholder approval — as a reverse split effected by charter amendment ordinarily would — the company must obtain that approval no later than its next annual meeting. Lument Finance Trust's Aug. 13 release cites only unanimous board approval and does not say whether a stockholder vote or charter amendment was required here, so this desk cannot report which route the company is taking.

On Friday, Aug. 14 — the last completed session before publication — LFT closed at $0.6597, down 5.08 percent on the day, according to Yahoo Finance, which stamped the quote "At close: August 14 at 4:00:03 PM EDT." Yahoo Finance listed a 52-week range of $0.6200 to $2.3700, an average daily trading volume of 284,153 shares, and a market capitalisation of $34.625 million. That market value reconciles with the share count in the company's own release: roughly 52.5 million common shares at $0.6597 is about $34.6 million. Readers may encounter a higher figure of $0.6950 for Aug. 14 on some quote pages; on the provider this desk checked, that number carried an intraday stamp of 12:09 p.m. EDT with the market open, and is not the closing price.

That $0.6597 close is a pre-split price. It is worth stating plainly, because reverse-split coverage frequently blurs the two bases: nothing in the Sept. 9 transaction changes the aggregate market value of a holder's position. The company's release says the split "will affect all stockholders uniformly and will not alter any stockholder's percentage ownership interest in the Company, except with respect to the treatment of fractional shares."

On the share counts, the company said the reverse split "is expected to reduce the number of issued and outstanding shares of the Company's common stock from approximately 52.5 million shares to approximately 5.3 million shares." The 52.5 million figure is shares of common stock issued and outstanding on a pre-split basis; the 5.3 million figure is the same measure on a post-split basis. Neither is a trading-volume number, and neither is a vote count. Both are the company's own roundings: 52.5 million divided by ten is 5.25 million, which the company reports as approximately 5.3 million. Quote providers show shares outstanding of about 52.4 million, consistent with the company's pre-split figure. No fractional shares will be issued, and stockholders otherwise entitled to one will receive cash in lieu; the release available to this desk did not specify how that cash amount will be calculated.

There is a rule wrinkle that any reverse-split-to-cure story on the NYSE now has to account for. On Jan. 15, 2025, the SEC granted accelerated approval to an amendment to Section 802.01C restricting when a listed company may use a reverse split at all (File No. SR-NYSE-2024-48, Release No. 34-102201). A caveat on sourcing: the approval order sets out these restrictions as the Commission's description of the rule change rather than as the codified text of the manual, and this desk has read the order, not the manual entry. As the order describes it, a company is not eligible for a compliance period if it "has effected a reverse stock split over the prior one-year period," or if it "has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 200 shares or more to one." A third condition applies "if the effectuation of such reverse stock split results in the company's security falling below the continued listing requirements of Section 802.01A." Where those circumstances apply, the order states, "the Exchange will immediately commence suspension and delisting procedures with respect to such security in accordance with Section 804.00 of the Manual." This desk found no record that the January 2025 approval has been stayed, vacated or superseded as of publication.

Nothing in either Lument Finance Trust release indicates that any of those conditions applies to this company, and this desk found no record of a prior LFT reverse split within the relevant lookback windows — but the absence of a record is not the same as confirmation, and neither release addresses the point. The company's disclosures also do not discuss its post-split position against the Section 802.01A distribution criteria. Readers should not infer jeopardy from that silence; it is simply not disclosed.

On the quarter itself, the Aug. 13 release reported a GAAP net loss of $0.18 per share of common stock and a distributable loss of $0.10 per share of common stock for the second quarter of 2026. Distributable earnings is a non-GAAP measure defined by the company, not by generally accepted accounting principles, and is not a substitute for GAAP net income. Several figures a reader would reasonably want were not obtainable from the release and are therefore not reported here: book value per share, any dividend declaration or suspension for the quarter, the size and composition of the loan portfolio, credit-loss reserves, and the cash position. The company's Form 10-Q for the period ended June 30, 2026, was not reachable through EDGAR at the time of writing, and this desk does not publish figures it has not read in a primary document.

Also undisclosed in the material reviewed: the record date for the reverse split, whether a charter amendment or stockholder vote was required to effect it, and how the transaction treats the company's separately listed preferred series. Neither release mentions the preferred stock, and this desk will not characterise the split's effect on it in the absence of a company statement.

The risks here are the ordinary ones for a sub-$1.00 exchange-listed issuer, and they do not end on Sept. 9. A reverse split raises the quoted price mechanically, but compliance under 802.01C is restored only when the month-end price and 30-day average tests are both satisfied; the exchange does not deem a company compliant merely because it has split. Post-split, roughly 5.3 million common shares outstanding is a small base, and a proportionally smaller share count generally means thinner absolute trading volume. The company remains subject to the NYSE's other continued listing standards throughout. Nothing disclosed to date makes delisting a present fact: the company describes the July notice as one of deficiency, not delisting, and says the stock remains listed and trading during the cure period.

The dates to watch, on the company's own timetable: Sept. 9, 2026, when the split becomes effective after the close; Sept. 10, when split-adjusted trading begins; and Jan. 24, 2027, the end of the six-month cure period.

The MicroCap Herald has no paid, sponsored or issuer-funded relationship with Lument Finance Trust. This article is a factual account of disclosed corporate actions and is not investment advice.