Luna Innovations Announces Receipt of Additional Notice from Nasdaq Regarding Late Filing of Quarterly Report on Form 10-Q

Rhea-AI Summary

Luna Innovations (Nasdaq: LUNA) has received a written notice from Nasdaq on August 20, 2024, regarding non-compliance with Nasdaq Listing Rule 5250(c)(1) due to late filing of its Q2 2024 Form 10-Q. The company remains delinquent in filing its Q1 2024 Form 10-Q and 2023 Form 10-K. While this notice has no immediate effect on LUNA's listing, failure to regain compliance may result in delisting. Luna must submit an updated compliance plan by September 4, 2024. If accepted, Nasdaq may grant an extension until September 30, 2024, to file the 2023 Form 10-K. The company is working to complete its delinquent filings and will provide updates as available.

Positive

• No immediate effect on Luna Innovations' Nasdaq listing
• Potential extension until September 30, 2024, to regain compliance if plan is accepted

Negative

• Non-compliance with Nasdaq Listing Rule 5250(c)(1) due to late filings
• Delinquent in filing Q2 2024, Q1 2024 Form 10-Qs and 2023 Form 10-K
• Risk of delisting from Nasdaq if compliance is not regained
• Required to submit updated compliance plan by September 4, 2024

Insights

Financial Analyst

Luna Innovations' failure to file multiple financial reports is a significant red flag for investors. This non-compliance with Nasdaq listing rules puts the company at risk of delisting, which could severely impact stock liquidity and valuation. The repeated delays in financial reporting suggest potential internal control issues or more serious accounting problems. While Nasdaq has granted an extension until September 11, 2024, the company's need to submit an updated compliance plan by September 4 indicates ongoing challenges. Investors should be cautious as the lack of timely financial information makes it difficult to assess the company's true financial health and performance.

Legal Expert

The multiple notices of non-compliance from Nasdaq highlight serious regulatory issues for Luna Innovations. The company is now facing a tight deadline to submit an updated compliance plan by September 4, 2024. If accepted, they may have until September 30, 2024, to file the overdue reports. However, failure to meet these deadlines could result in delisting proceedings. This situation exposes the company to potential shareholder lawsuits and SEC investigations. The repeated delays in financial reporting raise questions about the company's internal controls and governance practices, which could lead to additional regulatory scrutiny and legal challenges.

Market Research Analyst

The ongoing reporting delays at Luna Innovations are likely to erode investor confidence significantly. The lack of timely financial information creates uncertainty, which typically leads to increased stock volatility and potential downward pressure on share prices. Competitors may seize this opportunity to gain market share, as customers and partners might become wary of Luna's stability. The threat of delisting could trigger forced selling by institutional investors with mandates to hold only listed securities. This situation may also hinder the company's ability to raise capital or pursue strategic initiatives, potentially impacting long-term growth prospects.

ROANOKE, Va.--(BUSINESS WIRE)-- Luna Innovations Incorporated (Nasdaq: LUNA) (the “Company”), a global leader in advanced fiber optic-based technology, today announced that it has received a written notice (the “Notice”) on August 20, 2024, from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that because the Company has not yet filed its Form 10-Q for the quarter ended June 30, 2024 (the “Q2 2024 Form 10-Q”) and because the Company remains delinquent in filing its Form 10-Q for the quarter ended March 31, 2024 (the “Q1 2024 Form 10-Q”) and its Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”), it is not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission (the “SEC”). As previously announced, the Company received earlier notices of non-compliance with respect to the Rule on May 17, 2024 and April 2, 2024 because it had not yet filed its Q1 2024 Form 10-Q and 2023 Form 10-K, respectively.

This Notice has no immediate effect on the listing of the Company’s shares on Nasdaq. However, if the Company fails to timely regain compliance with the Rule, the Company’s common stock will be subject to delisting from Nasdaq.

The Company previously submitted a plan to regain compliance with the Nasdaq Listing Rules to Nasdaq in connection with an earlier notice of non-compliance from Nasdaq. In response, Nasdaq granted the Company an extension until September 11, 2024 to regain compliance. However, as a result of the additional delinquency, the Company must submit an update to its original plan to regain compliance by September 4, 2024. If Nasdaq accepts the Company’s plan, then Nasdaq may grant the Company up to 180 days, or until September 30, 2024, from the prescribed due date for filing the 2023 Form 10-K to regain compliance. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel.

The Company is working diligently to complete its delinquent filings and will provide an update once more information is available.

About Luna

Luna Innovations Incorporated (www.lunainc.com) is a leader in optical technology, providing unique capabilities in high-performance, fiber optic-based, test products for the telecommunications industry and distributed fiber optic-based sensing for a multitude of industries. Luna’s business model is designed to accelerate the process of bringing new and innovative technologies to market.

Forward-Looking Statement

The statements in this release that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include the expected timing of the Company’s filing of its 2023 Form 10-K, Q1 2024 Form 10-Q and Q2 2024 Form 10-Q, the potential submission of an updated plan to Nasdaq and the potential for Nasdaq to accept such plan or grant the Company an exception period or the success of any hearing process, and the Company’s ability to regain compliance with the Nasdaq continued listing standards. Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown risks and uncertainties, and actual results, performance, and/or achievements of Luna may differ materially from the future results, performance, and/or achievements expressed or implied by these forward-looking statements as a result of a number of factors. These factors include, without limitation, the investigation being overseen by the Special Committee of the Board is still ongoing, the determinations with respect to the degree of transactions and relevant financial reporting periods implicated thereby, the resulting effects on the Company’s reported financial results and the delay in the Company’s reporting of its financial results and filing of its 2023 Form 10-K, Q1 2024 Form 10-Q and Q2 2024 Form 10-Q with the SEC, the possibility that the Company is unable to regain compliance with, or thereafter continue to comply with, the Nasdaq Listing Rules, or experience violations of additional Nasdaq Listing Rules, the possibility that the Nasdaq may delist the Company’s securities, as well as the other risks and uncertainties set forth in the sections entitled “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, as well as in subsequent filings with the Securities and Exchange Commission (“SEC”). Such filings are available on the SEC’s website at www.sec.gov and on Luna’s website at www.lunainc.com. The statements made in this release are based on information available to Luna as of the date of this release and Luna undertakes no obligation to update any of the forward-looking statements after the date of this release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240826550557/en/

Allison Woody

Luna Innovations Incorporated

Phone: 540.769.8465

Email: woodya@lunainc.com

Source: Luna Innovations Incorporated

FAQ

Why did Luna Innovations (LUNA) receive a notice from Nasdaq on August 20, 2024?

Luna Innovations received a notice from Nasdaq on August 20, 2024, due to non-compliance with Nasdaq Listing Rule 5250(c)(1) for failing to timely file its Q2 2024 Form 10-Q, Q1 2024 Form 10-Q, and 2023 Form 10-K.

What is the deadline for Luna Innovations (LUNA) to submit an updated compliance plan to Nasdaq?

Luna Innovations must submit an updated compliance plan to Nasdaq by September 4, 2024.

What is the potential extension period Nasdaq may grant Luna Innovations (LUNA) to regain compliance?

If Nasdaq accepts Luna Innovations' plan, they may grant an extension until September 30, 2024, to regain compliance by filing the 2023 Form 10-K.

What are the consequences if Luna Innovations (LUNA) fails to regain compliance with Nasdaq Listing Rules?

If Luna Innovations fails to regain compliance with Nasdaq Listing Rules, the company's common stock may be subject to delisting from Nasdaq.