Celularity faces Nasdaq delisting over reporting delays

Celularity Inc., a biotechnology firm specializing in pharmaceutical preparations, has been notified by The Nasdaq Stock Market LLC of its noncompliance with continued listing requirements due to delays in filing its quarterly financial reports. The company, which is listed under the ticker CELU for its Class A Common Stock and CELUW for its warrants, failed to file its Quarterly Reports on Forms 10-Q for the periods ending March 31, 2024, and June 30, 2024.

The company was granted an extension until October 14, 2024, to regain compliance but did not meet this deadline. Consequently, Nasdaq informed Celularity on Monday that its securities would be suspended from trading on The Nasdaq Capital Market starting October 25, 2024, unless an appeal is filed by October 23, 2024. Celularity has expressed its intention to appeal this determination.

Celularity's management is currently considering options to achieve compliance with Nasdaq's listing rules. However, there is no guarantee that the company will file the appeal, that the appeal will be successful, or that it will manage to regain or maintain compliance with Nasdaq's requirements.

Despite the notice, trading of Celularity's common stock and warrants continues on The Nasdaq Capital Market under their respective symbols. The company, incorporated in Delaware and headquartered in Florham Park, New Jersey, is also identified as an emerging growth company.

Celularity's noncompliance issue is based on a press release statement and reflects the challenges faced by some biotech firms in maintaining regulatory requirements for public listings. The situation underscores the importance of timely financial reporting in adhering to market regulations and maintaining investor confidence.

In other recent news, Celularity Inc., a leader in regenerative and cellular medicine, has made significant strides on multiple fronts. The company has announced its acquisition of Rebound, a placental-derived allograft matrix from Sequence LifeScience, Inc. This strategic move is expected to enhance Celularity's biomaterial product portfolio, which has already seen sales surpass the previous year's total in the first half of 2024.

With the addition of Rebound, the company anticipates a significant contribution to its revenue in the fourth quarter of 2024. However, Celularity has also seen changes in its executive team, with the departure of Chief Medical Officer, Adrian Kilcoyne, and the appointment of Richard J. Berman, a veteran in venture capital and mergers and acquisitions, to its Board of Directors.

The company has been given until September 6, 2024, to present a plan to regain compliance due to non-compliance with Nasdaq's listing rules stemming from delayed financial reporting. Meanwhile, Celularity's therapy platform, PT-CD16VS, has shown promising activity against various types of cancer, expanding on previous findings targeting HER2-positive cancers.

InvestingPro Insights

Celularity's current financial situation aligns with the challenges highlighted in the article regarding its Nasdaq listing compliance. According to InvestingPro data, the company's market capitalization stands at $55.18 million, reflecting its small-cap status. This relatively modest valuation underscores the potential impact of a delisting on the company's market presence.

InvestingPro Tips reveal that Celularity is "quickly burning through cash" and "operates with a significant debt burden." These factors likely contribute to the company's difficulties in meeting regulatory filing deadlines and maintaining Nasdaq compliance. Additionally, the tip indicating that "short term obligations exceed liquid assets" suggests potential cash flow issues that could further complicate the company's efforts to address its regulatory challenges.

The company's financial health is further illuminated by its negative operating income of -$54.36 million for the last twelve months as of Q1 2024, and a concerning operating income margin of -162.19%. These figures underscore the financial pressures Celularity faces as it navigates its listing compliance issues.

For investors seeking a more comprehensive analysis, InvestingPro offers 6 additional tips that could provide valuable insights into Celularity's financial outlook and market position.

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