Celularity Inc. Receives Notice from Nasdaq; Confirms Intention to File an Appeal

Rhea-AI Summary

Celularity Inc. (Nasdaq: CELU) has received a delisting notice from Nasdaq due to delayed filings of its Q1 and Q2 2024 Forms 10-Q. The company plans to appeal the decision and request a hearing to present its compliance plan. CELU stock continues trading on Nasdaq Capital Market under symbols 'CELU' and 'CELUW'.

The company has filed its 2023 annual report and Q1 2024 report, with Q2 2024 report expected in the coming weeks. CEO Robert J. Hariri attributes the delays to financial challenges and resource constraints, not accounting issues. He expresses confidence in the company's future, citing the recent Rebound™ product acquisition as a boost to cash position and operational stability.

Positive

• Company has filed its 2023 annual report and Q1 2024 report
• Recent acquisition of Rebound™ product expected to enhance cash position
• Company remains committed to regaining full compliance with Nasdaq listing requirements

Negative

• Received delisting notice from Nasdaq due to delayed Q1 and Q2 2024 filings
• No assurance that Nasdaq will accept compliance plan or grant additional time
• Company facing significant financial challenges affecting timely reporting

Insights

Financial Analyst

The notice from Nasdaq regarding potential delisting is a significant concern for Celularity Inc. (CELU). This situation highlights the company's ongoing financial challenges and operational issues, which have led to delays in filing important financial reports. The inability to meet Nasdaq's listing requirements could have severe implications:

• Potential loss of investor confidence and reduced liquidity for shareholders
• Difficulty in raising capital through equity markets if delisted
• Increased scrutiny from regulators and stakeholders

However, there are some positive aspects to consider:

• The company has filed its 2023 annual report and Q1 2024 report
• Management expects to file Q2 2024 report soon
• The acquisition of Rebound™ product may improve cash position

Investors should closely monitor the appeal process and the company's ability to regain compliance. The outcome of the Nasdaq hearing will be important for CELU's future market status and investor perception. While the CEO's statement attributes delays to sector-wide challenges rather than accounting irregularities, the repeated filing delays raise questions about the company's internal controls and financial management capabilities.

Legal Expert

The Nasdaq delisting notice presents significant legal and regulatory challenges for Celularity Inc. Key points to consider:

• The company has until October 24, 2024, to appeal and request a hearing
• A stay of suspension may be requested pending the hearing outcome
• There's no guarantee that Nasdaq will accept the compliance plan

From a legal perspective, the company must navigate several critical issues:

• Ensuring full disclosure of material information to investors
• Compliance with SEC reporting requirements
• Potential shareholder litigation risks due to the delisting threat

The company's statement that delays are not due to accounting irregularities is important, as it may help mitigate some legal risks. However, the repeated failure to file timely reports could still attract regulatory scrutiny. The appeal process will be important and the company must present a compelling plan to regain compliance. Investors should be aware that even if CELU wins the appeal, it will likely face heightened regulatory oversight and must demonstrate improved financial reporting processes to maintain its listing status long-term.

FLORHAM PARK, N.J., Oct. 18, 2024 (GLOBE NEWSWIRE) -- Celularity Inc. (Nasdaq: CELU) (the “Company”), a regenerative medicine company developing and commercializing placental-derived technologies, today announced that it has received a formal notice from the Listing Qualifications department of the Nasdaq Stock Market LLC (“Nasdaq”) on October 16, 2024, indicating that the Company is subject to delisting due to its inability to timely file its Forms 10-Q for the the periods ended March 31, 2024, and June 30, 2024 (the “Forms 10-Q”) within the prescribed 180-day compliance period. Nasdaq’s notice has no immediate effect on the listing of the Company’s common stock and warrants, which continue to trade on the Nasdaq Capital Market under the symbols “CELU” and “CELUW”, respectively.

The Company will appeal the determination with the Nasdaq Hearings Panel prior to October 24, 2024, and request a hearing to present its plan to regain compliance and, if necessary, request a stay of suspension pending the hearing. However, there can be no assurance that Nasdaq will accept the plan, that the Company will regain compliance within any additional compliance period, or that the Company will maintain compliance with the other Nasdaq listing requirements.

The Company remains committed to regaining full compliance with Nasdaq’s listing requirements. The Company has filed its annual report on Form 10-K for fiscal year 2023 within the compliance period and its quarterly report on Form 10-Q for the first quarter 2024 on October 16, 2024. Additionally, the Company intends to file its Form 10-Q for the second quarter 2024 within the coming weeks.

Robert J. Hariri, MD, PhD, Chairman and CEO of the Company, commented, "Like many companies operating in our sector, we have faced significant financial challenges over the years, which affected our ability to file financial reports on time. It’s important to note that these delays are not due to any accounting irregularities or issues, but rather reflect the limitations imposed by our liquidity constraints and the stretched capacity of our internal resources. We remain confident in the path forward, particularly with the recently announced acquisition of the Rebound™ product, which will meaningfully enhance our cash position and provide a stronger foundation for operational stability. With this strengthened financial outlook, we do not expect similar delays to occur in the future."

The Company remains dedicated to meeting its reporting obligations and is working diligently with its auditors to complete the necessary filings. The Company will provide further updates as developments occur.

About Celularity 
Celularity Inc. (Nasdaq: CELU) is a regenerative medicine company developing and commercializing advanced biomaterial products and allogeneic, cryopreserved, placental-derived cell therapies, all derived from the postpartum placenta. Its therapeutic programs target aging-related diseases, including degenerative diseases, cancer, and immune disorders, using mesenchymal-like adherent stromal cells (MLASCs), T-cells engineered with CAR (CAR T-cells), and genetically modified and unmodified natural killer (NK) cells. Celularity believes that by harnessing the placenta’s unique biology and ready availability, it can develop therapeutic solutions that address significant unmet global needs for effective, accessible, and affordable therapies.   For more information, visit www.celularity.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, as well as within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are “forward-looking statements,” including those relating to future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “can,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intends,” “may,” “might,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and the negative of terms like these or other comparable terminology, and other words or terms of similar meaning. The forward-looking statements in this press release include express or implied statements regarding the expected timing of the Company’s filing of its quarterly report for the period ending June 30, 2024 on Form 10-Q, the potential submission of a plan to the Nasdaq Hearings Panel, the potential for Nasdaq to accept such plan or grant the Company any exception period, the Company’s ability to regain compliance with the Nasdaq continued listing standards, the Company’s financial outlook, and expectations regarding delays in future filings. Many factors could cause actual results to differ materially from those described in these forward-looking statements, including but not limited to: the Company’s liquidity situation; the volatility in the Company’s stock price; inherent risks in biotechnological development, including with respect to the development of novel advanced biomaterials; and the regulatory approval process; along with those risk factors set forth under the caption “Risk Factors” in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on July 30, 2024, and other filings with the SEC. If any of these risks materialize or underlying assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company does not presently know, or that the Company currently believes are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, these forward-looking statements reflect the Company’s current expectations, plans, or forecasts of future events and views as of the date of this communication. Subsequent events and developments could cause assessments to change. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date, and the Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Investor Contact:
Carlos Ramirez
Senior Vice President, Celularity Inc.
Carlos.ramirez@celularity.com

Media Contacts:
Raquel Cona / Michaela Fawcett
KCSA Strategic Communications
rcona@kcsa.com / mfawcett@kcsa.com

FAQ

Why did Celularity (CELU) receive a delisting notice from Nasdaq?

Celularity (CELU) received a delisting notice from Nasdaq on October 16, 2024, due to its failure to timely file Forms 10-Q for Q1 and Q2 2024 within the prescribed 180-day compliance period.

What is Celularity's (CELU) plan to address the Nasdaq delisting notice?

Celularity (CELU) plans to appeal the determination with the Nasdaq Hearings Panel before October 24, 2024, and request a hearing to present its plan to regain compliance. The company will also request a stay of suspension pending the hearing.

Has the delisting notice affected Celularity's (CELU) stock trading?

No, the delisting notice has no immediate effect on Celularity's (CELU) stock trading. The company's common stock and warrants continue to trade on the Nasdaq Capital Market under the symbols 'CELU' and 'CELUW', respectively.

What reasons did Celularity (CELU) give for the delayed filings?

Celularity (CELU) attributed the delayed filings to significant financial challenges, liquidity constraints, and stretched internal resources. The company emphasized that the delays were not due to accounting irregularities or issues.