Veru Announces Notification from Nasdaq Related to Delayed Quarterly Report on Form 10-Q
Veru Inc. received a delinquency notification from Nasdaq due to non-compliance with filing its Quarterly Report on Form 10-Q. The company has 60 days to submit a plan to regain compliance, with a potential extension until August 19, 2024. The delay was caused by higher estimated research and development expenses, leading to a longer cash runway.
Negative
The delay in filing the Quarterly Report on Form 10-Q could impact investor confidence and raise concerns about the company's financial management. The potential need to appeal the decision to a Nasdaq Hearings Panel could further prolong the compliance process, adding uncertainty for shareholders.
The notification of delinquency received by Veru Inc. from Nasdaq for failing to file its quarterly report in a timely manner is a significant concern for shareholders and potential investors. This non-compliance can affect investor confidence as it puts the company's transparency and governance practices into question. The delay in filing, as attributed to discrepancies in estimated research and development expenses, suggests potential internal control weaknesses that could have broader implications on financial reporting quality.
From a financial perspective, the reassurance that cash on hand may last longer than previously expected could mitigate some immediate liquidity concerns. However, the underlying issue of financial reporting accuracy remains a critical factor in assessing the company's operational efficiency and financial health. Investors would benefit from a thorough investigation into the cause of the discrepancy and measures taken to prevent future occurrences.
It is also important to consider the potential consequences of non-compliance with Nasdaq's listing rules. If Veru Inc. is unable to present a satisfactory plan to regain compliance, or if such a plan is not accepted by Nasdaq, the risk of delisting could have a material impact on the company's stock price and liquidity. Delisting typically results in reduced market visibility and investor interest, which could adversely affect the stock's performance.
The legal implications of Veru Inc.'s failure to file the required Form 10-Q are non-trivial. Nasdaq's Listing Rule 5250(c)(1) is designed to ensure that all market participants have access to timely and accurate financial information, which is essential for maintaining fair and efficient markets. The Notice serves as a formal warning and initiates a compliance process that the company must navigate carefully.
Veru Inc. has a 60-day window to submit a compliance plan and if accepted, a maximum of 180 days to correct the filing delinquency. This period allows the company to rectify the issue without immediate drastic consequences, but it is a time-sensitive situation that requires prompt and decisive action. The potential for an appeal to a Nasdaq Hearings Panel introduces additional layers of complexity and uncertainty, which could extend the timeframe and resource allocation for resolution.
In terms of governance, this event highlights the importance of robust internal controls and compliance mechanisms. The company's ability to address the identified weaknesses and enhance its reporting processes will be critical in regaining stakeholder trust and ensuring regulatory adherence. The legal team's role in guiding the company through this process, while minimizing risk and exposure, is paramount.
The market's reaction to Veru Inc.'s announcement will likely be influenced by several factors, including the company's market position, the perceived severity of the filing delay and the response strategy outlined by management. In the biopharmaceutical sector, where investor sentiment is particularly sensitive to regulatory compliance and financial stability, such news can have an amplified effect on stock performance.
While the company's statement that cash on hand will last longer than initially projected may provide some reassurance, investors will be closely monitoring the situation for further developments. The market will also assess the company's ability to adhere to its stated plan to regain compliance and the efficacy of any remedial measures implemented. A swift and transparent resolution could help stabilize the stock, whereas prolonged uncertainty or additional negative disclosures could exacerbate market concerns.
Additionally, the impact on Veru Inc.'s research and development pipeline, particularly for its innovative medicines in oncology and ARDS, should be considered. Delays in financial reporting can distract from core business activities and potentially delay critical R&D milestones, which in turn could influence the company's competitive edge and future revenue streams.
02/27/2024 - 07:15 PM
MIAMI, FL, Feb. 27, 2024 (GLOBE NEWSWIRE) -- Veru Inc. (NASDAQ: VERU), a late clinical stage biopharmaceutical company focused on developing innovative medicines for preserving muscle for higher quality weight loss, oncology, and viral induced acute respiratory distress syndrome (ARDS), today announced that it received a delinquency notification letter (“Notice”) from the Listing Qualifications staff of the Nasdaq Stock Market LLC (“Nasdaq”) on February 21, 2024 due to the Company’s non-compliance with Nasdaq Listing Rule 5250(c)(1) as a result of the Company’s failure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2023 (the “Form 10-Q”). Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission (the “SEC”).
The Notice states that the Company has 60 calendar days to submit to Nasdaq a plan to regain compliance with the Nasdaq Listing Rules. If Nasdaq accepts the Company’s plan, then Nasdaq may grant the Company up to 180 calendar days from the prescribed due date for filing the Form 10-Q or until August 19, 2024, 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.
As previously disclosed, the Company’s estimated research and development expenses recorded were higher than the actual expenses that were incurred, leading to the Company’s failure to file the Form 10-Q on a timely basis. The net result of these research and development estimated expenses being recorded at too high of an amount is that the Company’s cash on hand is expected to last longer than initially stated. The Company continues to work diligently to complete the Form 10-Q and plans to file the Form 10-Q as promptly as possible to regain compliance with the Listing Rule.
This announcement is made in compliance with Nasdaq Listing Rule 5810(b).
About Veru Inc.
Enobosarm, a selective androgen receptor modulator (SARM), is being developed for two indications: (i) Phase 2b clinical study of enobosarm as a treatment to augment fat loss and to prevent muscle loss in sarcopenic obese or overweight elderly patients receiving a GLP-1 RA who are at-risk for developing muscle atrophy and muscle weakness and (ii) subject to the availability of sufficient funding, Phase 3 ENABLAR-2 clinical trial of enobosarm for the treatment of androgen receptor positive (AR+), estrogen receptor positive (ER+) and human epidermal growth factor receptor 2 negative (HER2-) metastatic breast cancer in the 2nd line setting.
Sabizabulin, a microtubule disruptor, is being developed as a Phase 3 clinical trial for the treatment of hospitalized patients with viral-induced ARDS. The Company does not intend to undertake further development of sabizabulin for the treatment of viral-induced ARDS until we obtain funding from government grants, pharmaceutical company partnerships, or other similar third-party external sources.
The Company also has an FDA-approved commercial product, the FC2 Female Condom® (Internal Condom), for the dual protection against unplanned pregnancy and sexually transmitted infections.
Forward-Looking Statements
Investor and Media Contact:veruinvestor@verupharma.com
Why did Veru Inc. receive a delinquency notification from Nasdaq?
Veru Inc. received a delinquency notification from Nasdaq due to non-compliance with filing its Quarterly Report on Form 10-Q.
What is the deadline for Veru Inc. to submit a plan to regain compliance?
Veru Inc. has 60 days to submit a plan to regain compliance, with a potential extension until August 19, 2024.
What caused the delay in filing the Form 10-Q for Veru Inc.?
The delay in filing the Form 10-Q was caused by higher estimated research and development expenses, leading to a longer cash runway.
