Entero Therapeutics, Inc. Receives Nasdaq Notification Regarding Delayed Form 10-Q

Rhea-AI Summary

Entero Therapeutics (NASDAQ: ENTO), a clinical-stage biopharmaceutical company focused on gastrointestinal (GI) diseases, has received a notification from Nasdaq regarding its delayed Form 10-Q filing. The company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to the late submission of its quarterly report for the period ended June 30, 2024.

Entero Therapeutics has until October 21, 2024, to submit a compliance plan to Nasdaq. If approved, the company may receive an extension until February 17, 2025, to regain compliance. The delay is attributed to the resignation of Forvis Mazars, LLP as the company's independent auditors on August 9, 2024. Entero Therapeutics is currently seeking a new accounting firm and aims to file the Form 10-Q before the October deadline.

Positive

• Company has until October 21, 2024, to submit a compliance plan to Nasdaq
• Potential extension until February 17, 2025, to regain compliance if plan is approved
• No immediate effect on the listing of the company's securities on Nasdaq

Negative

• Failure to timely file Quarterly Report on Form 10-Q for Q2 2024
• Non-compliance with Nasdaq Listing Rule 5250(c)(1)
• Resignation of independent registered public accountants on August 9, 2024
• Risk of potential delisting if compliance is not regained

Insights

Financial Analyst

This Nasdaq notification regarding Entero Therapeutics' delayed Form 10-Q filing is a significant red flag for investors. The company's failure to file timely financial reports raises questions about its internal controls and financial transparency. The resignation of their independent auditor, Forvis Mazars, LLP, further compounds these concerns.

Investors should be cautious as this situation could lead to potential delisting from Nasdaq if not resolved promptly. The company has until October 21, 2024 to submit a compliance plan, with a possible extension until February 17, 2025. However, there's no guarantee of regaining compliance.

This development may negatively impact investor confidence and could potentially affect the company's ability to raise capital in the future, which is important for a clinical-stage biopharmaceutical company.

Legal Expert

The Nasdaq notification highlights potential regulatory compliance issues for Entero Therapeutics. Failure to file the Form 10-Q on time is a violation of Nasdaq Listing Rule 5250(c)(1), which requires timely filing of periodic financial reports.

The company now faces a tight timeline to either file the Form 10-Q or submit a credible compliance plan. The sudden departure of their auditor raises questions about possible disagreements on accounting practices or internal control issues.

Investors should be aware that continued non-compliance could lead to delisting proceedings, which would have severe consequences for the company's market access and shareholder value. The situation also increases the risk of potential shareholder litigation if material information is found to have been withheld or misrepresented.

BOCA RATON, Fla., Aug. 23, 2024 (GLOBE NEWSWIRE) -- Entero Therapeutics, Inc., (NASDAQ: ENTO), (“Entero Therapeutics” or the “Company”), a clinical-stage biopharmaceutical company specializing in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases, today announced that it received a letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) advising that, because the Company failed to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (the “Form 10-Q”), the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”). Nasdaq has informed the Company that it has until October 21, 2024, to submit a plan to regain compliance with the Rule. If Nasdaq approves the Company’s plan, it has the discretion to grant the Company an extension of up to 180 calendar days from the due date of the Form 10-Q (or until February 17, 2025) to regain compliance.

As the Company previously reported, Forvis Mazars, LLP resigned as the Company’s independent registered public accountants on August 9, 2024. The Company is currently in the process of engaging a new independent registered public accounting firm and will use its best efforts to file the Form 10-Q prior to October 21, 2024. If the Company does not file the Form 10-Q in advance of the sixty-day deadline, it intends to timely file a plan to regain compliance with Nasdaq. There can be no assurance, however, that the Company will be able to regain compliance with the listing requirements discussed above or otherwise satisfy the other Nasdaq listing criteria. This notification has no immediate effect on the listing of the Company’s securities on Nasdaq.

About Entero Therapeutics, Inc. 
Entero Therapeutics is a clinical-stage biopharmaceutical company specializing in the development of targeted, non-systemic therapies for gastrointestinal (GI) diseases. The Company currently has a therapeutic development pipeline with multiple late-stage clinical programs built around three proprietary technologies: latiglutenase, a Phase 3-ready, potentially first-in-class, targeted, oral biotherapeutic for celiac disease; capeserod, a selective 5-HT4 receptor partial agonist being developed for gastroparesis; and adrulipase, a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients in cystic fibrosis and chronic pancreatitis patients with exocrine pancreatic insufficiency. Entero Therapeutics is headquartered in Boca Raton, Florida. For more information visit www.enterothera.com. 

Forward-Looking Statements 
This press release may contain certain statements relating to future results which are forward-looking statements. It is possible that the Company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements, depending on factors including the Company’s current and future capital requirements and its ability to raise additional funds to satisfy its capital needs; whether there are delays in the engagement of a new independent registered public accounting firm; whether there are any further delays in the preparation and filing of the Company’s Form 10-Q; whether any financing or licensing transaction may be obtained, completed in an untimely manner, or not at all; whether the Company will be able to realize the expected benefits of its acquisition of ImmunogenX; the Company’s ability to integrate the assets and contemplated commercial operations acquired from ImmunogenX into the Company’s business; whether the Company will be able to effectively and timely service its debt; whether results obtained in preclinical and nonclinical studies and clinical trials will be indicative of results obtained in future clinical trials; whether preliminary or interim results from a clinical trial will be indicative of the final results of the trial; whether the Company will be able to maintain compliance with Nasdaq’s continued listing criteria and the effect of a delisting from Nasdaq on the market for the Company’s securities; whether the Company will be able to satisfy the terms of any plan of compliance it submits to Nasdaq; whether Nasdaq will accept any plan of compliance the Company submits, or provide any other accommodations to the Company; the size of the potential markets for the Company’s drug candidates and its ability to service those markets; and the effects of the First Wave Bio, Inc. acquisition, the related settlement and their effect on the Company’s business, operating results and financial prospects. Additional information concerning the Company and its business, including a discussion of factors that could materially affect the Company’s financial results are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, under the heading “Risk Factors,” as well as the Company’s subsequent filings with the Securities and Exchange Commission. All forward-looking statements included in this press release are made only as of the date of this press release, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware. 

For more information: 
Entero Therapeutics, Inc. 
777 Yamato Road, Suite 502 
Boca Raton, FL 33431 
Phone: (561) 589-7020 
info@enterothera.com 

Media contact: 

Russo Partners 
David Schull or Liz Phillips 
(347) 956-7697 
david.schull@russopartnersllc.com 
elizabeth.phillips@russopartnersllc.com 

This press release was published by a CLEAR® Verified individual.

FAQ

Why did Entero Therapeutics (ENTO) receive a notification from Nasdaq?

Entero Therapeutics received a notification from Nasdaq due to its failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, resulting in non-compliance with Nasdaq Listing Rule 5250(c)(1).

What is the deadline for Entero Therapeutics (ENTO) to submit a compliance plan to Nasdaq?

Entero Therapeutics has until October 21, 2024, to submit a plan to regain compliance with Nasdaq Listing Rule 5250(c)(1).

What caused the delay in Entero Therapeutics' (ENTO) Form 10-Q filing?

The delay in filing the Form 10-Q was caused by the resignation of Forvis Mazars, LLP, Entero Therapeutics' independent registered public accountants, on August 9, 2024.

Is there an immediate effect on Entero Therapeutics' (ENTO) Nasdaq listing?

No, the notification from Nasdaq has no immediate effect on the listing of Entero Therapeutics' securities on Nasdaq.