Avid Bioservices Announces Receipt of Deficiency Notice from Nasdaq Regarding Late Form 10-Q
- None.
- The delay in filing the Form 10-Q could impact investor confidence and lead to potential delisting if not addressed promptly.
Insights
The notification of non-compliance from Nasdaq to Avid Bioservices is a significant concern from a financial perspective. The company's delay in filing its quarterly report could indicate underlying issues with its financial controls or potential restatements, which might affect the accuracy of previously reported financials. Investors generally rely on timely and accurate filings to assess a company's performance and prospects. The delay could lead to increased scrutiny from investors and analysts, potentially impacting the stock's liquidity and investor confidence.
Moreover, the mention of the need to reclassify the company’s Exchangeable Senior Notes due to an event of default raises questions about the company's debt management and liquidity position. The market typically reacts negatively to such uncertainties and a potential restatement could lead to volatility in the company's stock price. The company's ability to address these issues swiftly and transparently will be critical in maintaining market trust.
From a legal standpoint, Avid Bioservices' situation highlights the importance of compliance with SEC regulations and Nasdaq listing requirements. The failure to file required financial reports in a timely manner can lead to legal repercussions, including delisting. The company's proactive communication about its intention to submit a compliance plan within the 60-day grace period is a positive step towards rectifying the situation. However, the legal implications of the event of default on the Exchangeable Senior Notes and the subsequent impact on financial statements are complex issues that will require careful navigation to avoid further legal and regulatory complications.
The notice from Nasdaq serves as a cautionary tale for the biologics CDMO industry where regulatory compliance and financial transparency are paramount. Investors and potential clients in this sector closely monitor such developments, as they could reflect on the company's operational capabilities. For competitors, this situation could represent an opportunity to attract clients who may perceive Avid Bioservices as less reliable due to these compliance issues. On the other hand, if Avid Bioservices can demonstrate a robust plan to address these concerns and improve their financial reporting processes, they could regain some of the lost confidence from stakeholders in the medium to long term.
TUSTIN, Calif., March 20, 2024 (GLOBE NEWSWIRE) -- Avid Bioservices, Inc. (Nasdaq:CDMO), a dedicated biologics contract development and manufacturing organization (CDMO), announced today it received a notice (the “Notice”) on March 19, 2024 from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) advising the company that it was not in compliance with Nasdaq’s continued listing requirements under Nasdaq Listing Rule 5250(c)(1) (the “Rule”) as a result of its failure to file its Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2024 (the “Form 10-Q”) in a timely manner.
The Rule requires listed companies to timely file all required periodic reports with the Securities and Exchange Commission (the “SEC”). The company previously reported in its Form 12b-25 filed with the SEC on March 12, 2024 that the company was unable to file the Form 10-Q within the prescribed time period due to the need to restate and file certain prior period financial statements as a result of the continued classification of the company’s
Under Nasdaq rules, the company has 60 calendar days from the receipt of the Notice, or until May 20, 2024, to submit a plan to regain compliance with the Rule. If Nasdaq accepts the company’s plan, Nasdaq may grant the company up to 180 calendar days from the due date of the Form 10-Q (as extended by Rule 12b-25 of the Securities Exchange Act of 1934, as amended), or until September 16, 2024, to regain compliance.
The company intends to file the Form 10-Q as promptly as reasonably practicable. If the company does not file the Form 10-Q by May 20, 2024, the company intends to timely submit a plan to regain compliance with the Rule.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based upon current expectations or beliefs, as well as a number of assumptions about future events. Although the company believes that the expectations reflected in the forward-looking statements and the assumptions upon which they are based are reasonable, the company can give no assurance that such expectations and assumptions will prove to be correct. Forward-looking statements include all statements that are not historical facts and can generally be identified by terms such as “expect,” “intend,” “may,” “plan,” “potentially,” or “will” or similar expressions and the negatives of those terms. These statements include, but are not limited to, statements regarding the filing of the Form 10-Q, the potential for Nasdaq to grant the company a 180-day exception if the company is unable to file the Form 10-Q within 60 days of the date of the Notice, and the company’s ability to regain compliance with the Nasdaq continued listing standards. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors relate to, among others: the completion of the company’s restatement analysis and financial close and reporting process, as well as the financial statement audits and reviews for the impacted financial reporting periods. These and other factors are described in greater detail under the “Risk Factors” heading of the company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2023, filed with the SEC on June 21, 2023, and in the company’s subsequent quarterly reports on Form 10-Q. All information provided in this release is as of the date of this release, and any forward-looking statements contained herein are based on assumptions that the company believes to be reasonable as of this date. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof. The company undertakes no duty to update this information unless required by law.
FAQ
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