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

Rhea-AI Summary

Luna Innovations has received a notice from Nasdaq on May 17, 2024, regarding its failure to file Form 10-Q for Q1 2024 and its delayed Form 10-K for FY 2023. According to Nasdaq Listing Rule 5250(c)(1), timely filing of these reports is required. This notice does not immediately affect Luna's Nasdaq listing, but non-compliance could lead to delisting. Luna has until June 3, 2024, to submit a compliance plan. If accepted, the company may get an extension until September 30, 2024. Luna is actively working to complete its filings and will update accordingly.

Positive

• Luna Innovations has received a grace period until June 3, 2024, to submit a compliance plan to Nasdaq.
• If the plan is accepted, Luna may be granted up to 180 days (until September 30, 2024) to regain compliance.
• The company is actively working to complete its delayed financial reports, indicating efforts to resolve the issues.

Negative

• Luna Innovations failed to file both Form 10-Q for Q1 2024 and Form 10-K for FY 2023 on time.
• Non-compliance with Nasdaq Listing Rule 5250(c)(1) could lead to the delisting of Luna's common stock from Nasdaq.
• The company's stock may face increased volatility and investor concern due to the missed filings and potential delisting risk.

Insights

Financial Analyst

Receiving a notice from Nasdaq regarding late filings is concerning for investors. The underlying issue, which is the delay in filing the Form 10-K for 2023 and Form 10-Q for Q1 2024, raises questions about the Company's financial reporting processes. Non-compliance with Nasdaq Listing Rule 5250(c)(1) can lead to delisting, which has serious implications for liquidity and stock valuation.

Short-term Impact: The notice does not immediately affect the stock’s listing, but it puts pressure on the Company to resolve its filing issues quickly. The looming June 3, 2024, deadline to submit a compliance plan means that there is a potential for volatility in the stock price as the market reacts to this uncertainty.

Long-term Impact: If the Company successfully regains compliance, this episode might only be a temporary setback. However, repeated delays in financial filings can erode investor confidence, suggesting possible internal issues such as financial instability or inadequate management controls. This could result in a higher cost of capital and lower stock valuation over time.

Context: Nasdaq's Listing Rule 5250(c)(1) is designed to ensure transparency and reliability in financial reporting, thus protecting investors. Non-compliance might suggest underlying issues that could be significant, such as liquidity problems or operational challenges.

Legal Expert

From a legal perspective, missing the deadlines for filing Form 10-K and Form 10-Q puts Luna Innovations at risk of non-compliance with SEC regulations and Nasdaq rules. Non-compliance can result in delisting, which would significantly impact the company's exposure to investors and its ability to raise capital through public markets.

The fact that Nasdaq requires Luna Innovations to submit a compliance plan by June 3, 2024, creates a short window for legal and administrative efforts to get the company's filings in order. If the plan is accepted, the company will have until September 30, 2024, to regain compliance. If the plan is rejected, Luna Innovations could face an appeal process involving a Nasdaq Hearings Panel, adding more complexity and uncertainty.

Moreover, prolonged non-compliance could lead to investigations by regulatory authorities, increasing the risk of potential penalties and further delays. Regulatory scrutiny might also uncover additional issues, potentially exacerbating the current situation.

Overall, this legal uncertainty can result in increased volatility and risk for investors, who may be wary of potential adverse outcomes.

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 May 17, 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 March 31, 2024 (the “Form 10-Q”) and because the Company remains delinquent in filing its Form 10-K for the year ended December 31, 2023 (the "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").

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.

As previously disclosed, the Company has until June 3, 2024 to submit to Nasdaq a plan to regain compliance with the Nasdaq Listing Rule. 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 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 Form 10-K and Form 10-Q 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 Annual Report on Form 10-K for the year ended December 31, 2023 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, the potential submission of a 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 Annual Report on Form 10-K and its Quarterly Report on 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/20240521596763/en/

Investor Contact:

Allison Woody

Luna Innovations Incorporated

Phone: 540.769.8465

Email: woodya@lunainc.com

Media Contact:

Chris Kittredge/Stephen Pettibone

FGS Global

Email: luna@fgsglobal.com

Source: Luna Innovations Incorporated

FAQ

What is the recent notice Luna Innovations received from Nasdaq?

Luna Innovations received a notice from Nasdaq on May 17, 2024, for failing to file Form 10-Q for Q1 2024 and being delinquent in filing Form 10-K for FY 2023.

Does the Nasdaq notice affect Luna Innovations' stock listing immediately?

No, the notice does not have an immediate effect on Luna Innovations' Nasdaq listing, but continued non-compliance could lead to delisting.

What is the deadline for Luna Innovations to submit a compliance plan to Nasdaq?

Luna Innovations has until June 3, 2024, to submit a compliance plan to Nasdaq.

How long could Luna Innovations have to regain compliance if Nasdaq accepts their plan?

If Nasdaq accepts Luna Innovations' plan, they could have up to 180 days, or until September 30, 2024, to regain compliance.

What could happen if Luna Innovations fails to regain compliance with Nasdaq rules?

If Luna Innovations fails to regain compliance, their common stock could be delisted from Nasdaq.

What is Luna Innovations doing to resolve the filing issues?

Luna Innovations is working diligently to complete and file its delayed Form 10-K and Form 10-Q.