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

Rhea-AI Summary

Luna Innovations (Nasdaq: LUNA) received a notice from Nasdaq on November 14, 2024, regarding non-compliance with listing rules due to failure to file multiple financial reports. The company has not filed its Q3 2024 Form 10-Q and remains delinquent in filing Q1 and Q2 2024 Form 10-Qs, as well as its 2023 Form 10-K. While this notice doesn't immediately affect LUNA's listing, continued non-compliance could lead to delisting. The company has requested a hearing before the Nasdaq Panel scheduled for November 26, 2024, and received a stay of suspension pending the hearing process.

Positive

• Received temporary stay of suspension from Nasdaq delisting

Negative

• Failed to file Q1, Q2, and Q3 2024 Form 10-Qs
• Failed to file 2023 Form 10-K
• Risk of delisting from Nasdaq due to non-compliance
• Multiple notices of non-compliance from Nasdaq

Insights

Legal & Compliance Expert

This continued non-compliance with Nasdaq listing requirements represents a significant risk for Luna Innovations. The company is now delinquent on multiple filings, including three quarterly reports and an annual report, which raises serious concerns about internal controls and financial reporting capabilities. The upcoming Nasdaq hearing on November 26, 2024 is important - while the automatic stay provides temporary relief, failure to present a convincing remediation plan could lead to delisting. The lack of financial transparency for nearly a year creates substantial uncertainty for investors and could impact the company's ability to raise capital or maintain business relationships. Historical precedents suggest companies in similar situations often face significant stock price volatility and potential long-term value deterioration.

Financial Analyst

The extensive delay in financial reporting is a major red flag. Being delinquent on four consecutive regulatory filings (Q1, Q2, Q3 2024 and FY 2023) suggests potential deeper issues beyond simple accounting delays. Without current financial statements, investors cannot properly evaluate Luna's operational performance, cash position, or financial health. The company's market cap of $55.5M makes it particularly vulnerable to market sentiment shifts. The ongoing uncertainty could trigger covenant breaches in any existing debt agreements and restrict access to capital markets. Institutional investors typically avoid companies with reporting delinquencies, which could lead to reduced liquidity and increased volatility in the stock.

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 November 14, 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 September 30, 2024 (the “Q3 2024 Form 10-Q”) and because the Company remains delinquent in filing its Form 10-Qs for the quarters ended March 31, 2024 (the “Q1 2024 Form 10-Q”) and June 30, 2024 (the “Q2 2024 Form 10-Q”) and its Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”, and collectively with the Q1 2024 10-Q, Q2 2024 10-Q and Q3 2024 10-Q, the “Delinquent Filings”), 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 August 20, 2024, May 17, 2024 and April 2, 2024 because it had not yet filed its Q2 2024 Form 10-Q, 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.

As previously disclosed on October 7, 2024, the Company intended to appeal a determination by the Nasdaq Listing Qualifications Department to delist the Company’s securities due to the Company’s Delinquent Filings. On October 8, 2024, the Company timely requested a hearing before the Nasdaq Hearings Panel (the “Panel”) and requested that the automatic stay of suspension be extended through the completion of the hearings process and the expiration of any additional extension period granted by the Panel following the hearing. The hearing is scheduled for November 26, 2024 and the request for the automatic stay of suspension was granted.

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 expectations regarding the Delinquent Filings 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 Delinquent Filings 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/20241115379669/en/

Investor Contact:

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 November 14, 2024?

Luna Innovations received the notice due to failure to file its Q3 2024 Form 10-Q and remaining delinquent in filing Q1, Q2 2024 Form 10-Qs and 2023 Form 10-K.

When is Luna Innovations (LUNA) Nasdaq hearing scheduled?

Luna Innovations' hearing before the Nasdaq Hearings Panel is scheduled for November 26, 2024.

Will Luna Innovations (LUNA) be immediately delisted from Nasdaq?

No, the notice has no immediate effect on LUNA's listing as the company received a stay of suspension pending the hearing process, but continued non-compliance could lead to delisting.