Cellectar to Restate Previously Issued Financial Statements – Company Announces Receipt of Expected Delinquency Notification Letter from Nasdaq

Rhea-AI Summary

Cellectar Biosciences (NASDAQ: CLRB) has received a delinquency notification from Nasdaq due to a delay in filing its Q2 2024 10-Q report. The delay is caused by the need to restate previously filed financial statements following a re-evaluation of accounting treatment for warrants issued in October 2022. The restatement affects audited financials for 2022-2023 and unaudited quarterly reports from Q1 2023 to Q1 2024.

Cellectar has until October 21, 2024, to submit a compliance plan to Nasdaq. If accepted, Nasdaq may grant an extension until February 17, 2025. The company expects to complete the restatement process in about six weeks, after which it will file the Q2 2024 10-Q. The notice does not currently affect Cellectar's Nasdaq Capital Market listing.

Positive

• The financial statement changes are expected to be non-cash and non-operating
• The company has a clear timeline for addressing the issue, expecting to complete the restatement process in about six weeks
• Cellectar's listing on the Nasdaq Capital Market is not currently impacted by the notice

Negative

• Cellectar is not in compliance with Nasdaq's periodic financial report filing requirement
• The company needs to restate financial statements for multiple periods, indicating potential accounting issues
• There is a risk of delisting if Nasdaq does not accept the compliance plan or if the company fails to meet extended deadlines
• The delay in financial reporting could impact investor confidence and potentially affect the stock price

Financial Analyst

This restatement of financial statements is a significant red flag for investors. The need to re-evaluate accounting treatment for warrants suggests potential internal control weaknesses. While the changes are expected to be non-cash and non-operating, they could still impact key financial metrics and investor confidence.

The delay in filing the Q2 2024 10-Q and the Nasdaq non-compliance notice add further pressure. Although Cellectar has time to submit a compliance plan, this situation creates uncertainty and may lead to increased scrutiny from regulators and investors. The 6-week estimated timeline for restatement seems optimistic given the complexity of the issue.

Investors should closely monitor the company's progress in addressing these accounting issues and regaining Nasdaq compliance. This event may also impact Cellectar's ability to raise capital in the near term, which is important for a late-stage biopharmaceutical company.

Legal Expert

The restatement of financial statements raises potential legal and regulatory risks for Cellectar. While the company has disclosed the issue proactively, there's still a risk of shareholder litigation or SEC investigation, especially if the restatement reveals significant discrepancies or impacts key financial metrics.

The company's compliance with Nasdaq listing rules is now under scrutiny. Although Cellectar has been given time to submit a compliance plan, failure to meet Nasdaq's requirements could lead to delisting proceedings. This would have severe consequences for the company's ability to raise capital and maintain investor confidence.

Investors should be aware that the restatement process may uncover additional issues, potentially leading to further delays or complications. The company's transparency and timeliness in addressing these issues will be important in mitigating legal and regulatory risks.

Market Research Analyst

This financial restatement could significantly impact investor sentiment towards Cellectar. The biopharmaceutical sector relies heavily on investor confidence and accounting issues can erode trust quickly. We may see increased volatility in CLRB stock as the market digests this news and awaits the restated financials.

The timing is particularly challenging as Cellectar is in the late-stage clinical phase, typically a capital-intensive period. Any hesitation from investors or difficulty in raising funds could potentially delay clinical progress or force the company to seek less favorable financing options.

Competitors in the oncology space may gain an edge if Cellectar's focus is diverted to resolving these financial issues. However, if the company can swiftly address the restatement and maintain its clinical timelines, the long-term impact on its market position might be Investors should closely monitor both the financial restatement process and any updates on clinical progress.

FLORHAM PARK, N.J., Aug. 23, 2024 (GLOBE NEWSWIRE) -- Cellectar Biosciences, Inc. (NASDAQ: CLRB), a late-stage clinical biopharmaceutical company focused on the discovery, development, and commercialization of drugs for the treatment of cancer, today announced that the Company had received an expected delinquency notification letter (the “Notice”) from the Listing Qualifications Staff of the Nasdaq Stock Market LLC (“Nasdaq”) on August 20, 2024. The Notice indicated that the Company is not in compliance with the periodic financial report filing requirement set forth in Nasdaq Listing Rule 5250(c)(1) as a result of the Company's delay in filing its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (the “Second Quarter 10-Q”), by the applicable due date.

The delay in filing the Second Quarter 10-Q is a result of the Company’s need to restate certain previously filed financial statements. As was previously reported on Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) on August 9, 2024, after engaging Deloitte & Touche LLP as the Company’s independent registered accounting firm the Company determined that it was necessary to re-evaluate its accounting treatment for warrants issued as part of a financing completed in October 2022. The financial statement changes are all expected to be non-cash and non-operating. The Company expects to restate the previously issued (i) audited consolidated financial statements for the fiscal years ended December 31, 2023 and 2022, contained in its Annual Reports on Form 10-K and (ii) unaudited interim condensed consolidated financial statements for the periods ending March 31, 2023, June 30, 2023, September 30, 2023, and March 31, 2024, contained in its Quarterly Reports on Form 10-Q (the “Previously Issued Statements”). Restating and filing the Previously Issued Statements must be completed prior to filing the Second Quarter 10-Q.

The Company has 60 calendar days, or until October 21, 2024, to submit a plan (“Plan”) to Nasdaq to regain compliance. If Nasdaq accepts the Plan, Nasdaq may grant an exception of up to 180 calendar days from the Form 10-Q’s due date, or until February 17, 2025, to regain compliance. If Nasdaq does not accept the Plan, the Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel.

The Notice does not impact the Company’s listing of its common stock on The Nasdaq Capital Market at this time. The Company expects the process of restating and filing the Previously Issued Statements will require approximately six weeks to complete, immediately after which it expects to file its Second Quarter 10-Q.

About Cellectar Biosciences, Inc.
Cellectar Biosciences is a late-stage clinical biopharmaceutical company focused on the discovery and development of proprietary drugs for the treatment of cancer, independently and through research and development collaborations. The company’s core objective is to leverage its proprietary Phospholipid Drug Conjugate™ (PDC) delivery platform to develop the next-generation of cancer cell-targeting treatments, delivering improved efficacy and better safety as a result of fewer off-target effects.

The company’s product pipeline includes lead asset iopofosine I 131, a small-molecule PDC designed to provide targeted delivery of iodine-131 (radioisotope), proprietary preclinical PDC chemotherapeutic programs and multiple partnered PDC assets.

For more information, please visit www.cellectar.com or join the conversation by liking and following us on the company’s social media channels: Twitter, LinkedIn, and Facebook.

Forward-Looking Statement Disclaimer

This news release contains forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. The Company advises caution in reliance on forward-looking statements. Forward-looking statements include, without limitation: statements related to the completion of the Company’s review of accounting matters and audits of the Company’s financial statements, the Company’s plans to restate and file the Previously Issued Statements, and the preparation and filing the Second Quarter 10-Q. These forward-looking statements are made only as of the date hereof, and we disclaim any obligation to update any such forward-looking statements.

Contacts

MEDIA:
Claire LaCagnina
Bliss Bio Health
315-765-1462
clacagnina@blissbiohealth.com

INVESTORS:
Chad Kolean
Chief Financial Officer
investors@cellectar.com

FAQ

Why did Cellectar Biosciences (CLRB) receive a delinquency notification from Nasdaq?

Cellectar Biosciences (CLRB) received a delinquency notification from Nasdaq due to a delay in filing its Q2 2024 10-Q report, caused by the need to restate previously filed financial statements.

What financial periods are affected by Cellectar's (CLRB) restatement of financial statements?

Cellectar's (CLRB) restatement affects audited financial statements for fiscal years 2022 and 2023, and unaudited quarterly reports from Q1 2023 to Q1 2024.

When does Cellectar Biosciences (CLRB) expect to complete the restatement process?

Cellectar Biosciences (CLRB) expects to complete the restatement process in approximately six weeks from August 23, 2024.

What is the deadline for Cellectar (CLRB) to submit a compliance plan to Nasdaq?

Cellectar (CLRB) has until October 21, 2024, to submit a compliance plan to Nasdaq.

Is Cellectar's (CLRB) listing on the Nasdaq Capital Market currently affected by the delinquency notice?

No, Cellectar's (CLRB) listing on the Nasdaq Capital Market is not currently affected by the delinquency notice.