Luna Innovations Stock to Be Suspended from Nasdaq Listing

Rhea-AI Summary

Luna Innovations (LUNA) announced that its stock will be suspended from Nasdaq trading on January 7, 2025, due to failing to meet the March 27, 2025 deadline for filing delinquent SEC reports. Following the suspension, the company's shares are expected to trade on the OTC Expert Market.

The company emphasizes that the delisting does not directly impact its business operations, and it continues to support customers, partners, and suppliers normally. CEO Kevin Ilcisin noted that despite restatement process delays, the company secured notable wins during the second half of 2024. Luna plans to provide a business update later this month, including preliminary revenue and booking numbers for fiscal year 2024.

Positive

• Company continues normal business operations despite delisting
• Reports securing notable business wins in H2 2024
• Plans to release preliminary 2024 revenue and booking numbers

Negative

• Failed to meet SEC filing deadline for delinquent reports
• Stock to be delisted from Nasdaq
• Trading moving to less prestigious OTC Expert Market
• Ongoing delays in financial restatement process

Insights

Financial Analyst

<p>The suspension and subsequent delisting from Nasdaq represents a <b>severe blow to Luna Innovations' market credibility</b>. The inability to file required financial statements suggests significant internal control issues and raises serious concerns about the company's financial reporting capabilities. The transition to OTC Expert Market will substantially reduce trading liquidity and institutional investor access, likely leading to increased volatility and potentially higher cost of capital.</p><p>The preliminary revenue announcement planned for later this month, while positive, doesn't address the core issue of financial reporting deficiencies. The restatement delays indicate complex accounting problems that could reveal previously unknown financial issues. For context, companies moving from Nasdaq to OTC markets typically experience a <b>20-30% decline in valuation</b> due to reduced visibility and stricter institutional investment mandates that prohibit holding OTC stocks.</p>

Corporate Governance Expert

<p>The failure to meet SEC filing deadlines despite having nearly three months until the March 2025 deadline is particularly troubling. This suggests the accounting irregularities are more extensive than initially anticipated. The lack of transparent communication about the specific nature of the restatement issues compounds governance concerns. While management highlights operational improvements, the fundamental breakdown in financial controls and reporting processes represents a material governance failure.</p><p>The transition to OTC Expert Market - a tier specifically designed for companies with reporting deficiencies - will significantly restrict trading to broker-dealer transactions, effectively limiting retail investor participation. This restricted trading environment typically leads to wider bid-ask spreads and increased transaction costs for shareholders.</p>

ROANOKE, Va.--(BUSINESS WIRE)-- Luna Innovations Incorporated (Nasdaq: LUNA) (the “Company”), a global leader in advanced fiber optic-based technology, today announced that, due to the Company’s inability to meet the March 27, 2025 deadline to file its previously disclosed delinquent filings with the Securities and Exchange Commission to regain compliance, the trading in its securities will be suspended tomorrow, January 7, 2025, and subsequently delisted from The Nasdaq Stock Market LLC (“Nasdaq”). Following the suspension, the Company expects its shares to be eligible to trade on the over-the-counter (“OTC”) market, specifically the OTC Expert Market.

The suspension/delisting of the Company’s stock from Nasdaq does not directly impact the Company’s business operations. The Company remains focused on its strategic alternatives and continues to support its customers, partners, and suppliers in the usual course.

Kevin Ilcisin, the Company’s President and Chief Executive Officer, said, “While we are disappointed in the restatement process schedule delays, we are encouraged by the operational discipline and improvements by the entire Luna team since May. During the second half of 2024, we secured notable wins, underscoring our commitment to providing exceptional products and services to our customers.”

Looking ahead, the Company plans to provide a broader business update later this month, including preliminary revenue and booking numbers for fiscal year 2024.

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 listing of the Company’s common stock on Nasdaq and the OTC Markets, the corresponding impact on the Company’s operations and the Company’s plans regarding business updates and strategic alternatives. 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 the Company 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, risks associated with being moved to the OTC Markets’ “Expert Market” tier and 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/20250106056700/en/

Investor Contact:

Allison Woody

Luna Innovations Incorporated

Phone: 540.769.8465

Email: woodya@lunainc.com

Source: Luna Innovations Incorporated

FAQ

Why is Luna Innovations (LUNA) being delisted from Nasdaq?

Luna Innovations is being delisted because it failed to meet the March 27, 2025 deadline to file delinquent SEC reports required to maintain Nasdaq compliance.

When will LUNA stock be suspended from Nasdaq trading?

LUNA stock will be suspended from Nasdaq trading on January 7, 2025.

Where will LUNA stock trade after Nasdaq delisting?

After Nasdaq delisting, LUNA stock is expected to trade on the OTC Expert Market.

Will the Nasdaq delisting affect Luna Innovations' business operations?

According to the company, the Nasdaq delisting does not directly impact Luna Innovations' business operations, and they continue to support customers, partners, and suppliers normally.

When will Luna Innovations release its 2024 financial results?

Luna Innovations plans to provide preliminary revenue and booking numbers for fiscal year 2024 later in January 2025.