Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing rule or
Standard; Transfer of Listing.
On
The Notice has no immediate effect on the listing of the Company's common stock
on Nasdaq. However, if the Company fails to timely regain compliance with the
Nasdaq Listing Rule, the Company's common stock will be subject to delisting
from Nasdaq. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has
been provided an initial compliance period of 180 calendar days, or until
If the Company is unable to regain compliance by
The Company will monitor the closing bid price of its common stock and is considering its options to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
On
Background
In the Subject Financial Statements, the Company recorded a liability on the
respective balance sheets contained therein in respect of contingent
consideration related to an asset purchase agreement entered into in
The IRX Acquisition was accounted for under Accounting Standards Codification
("ASC") No. 805, Business Combinations, and resulted in
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However, the Committee, in consultation with the Company's principal financial and accounting officers, determined that the contingent consideration liability should not have been accounted for as a separate unit of account and recorded on a gross basis. Instead, it should have been accounted for as an element of the acquired IPR&D asset and recorded on a net basis.
The effect of the foregoing error on the Company's previously issued balance sheets and statements of operations contained in the Subject Financial Statements is currently anticipated to be as follows:
Effect of Error for the Years ended
• overstatement of both IPR&D and total assets by
2021 and 2020;
• overstatement of both the contingent consideration liability and total
liabilities by$19.3 million and$20.1 million as ofDecember 31, 2021 and 2020, respectively;
• overstatement of accumulated deficit by
• understatement of total stockholders' and members' equity by
• overstatement of the credit to the change in fair value of the contingent
consideration and understatement of net loss by$0.2 million for the year endedDecember 31, 2021 and overstatement of expense related to the change in fair value of the contingent consideration and to net loss by$19.2 million for the year endedDecember 31, 2020 ;
• understatement of basic and diluted net loss per common share of
year endedDecember 31, 2021 and overstatement of basic and diluted net loss per common share of$1.09 for the year endedDecember 31, 2020 .
Effect of Error for the quarters ended
• overstatement of both IPR&D and total assets by
2021,
• overstatement of both the contingent consideration liability and total
liabilities by$19.3 million as ofMarch 31, 2021 andJune 30, 2021 and$19.4 million as ofSeptember 30, 2021 ;
• overstatement of accumulated deficit of
• understatement of total stockholders' equity of
2021 and
• overstatement of the credit to the change in fair value of the contingent
consideration and understatement of net loss by$0.8 for the quarter endedMarch 31, 2021 and overstatement of expense related to the change in fair value of the contingent consideration and to net loss of$0.1 million for the quarter endedSeptember 30, 2021 . There was no impact to net loss for the quarter endedJune 30, 2021 ;
• understatement of basic and diluted net loss per common share of
quarter endedMarch 31, 2021 . There was no impact to basic or diluted net loss per common share for the quarters endedJune 30, 2021 andSeptember 30, 2021 .
The Company cannot provide assurance that the foregoing amounts and the financial statement line items affected will not change materially as the Company finalizes its restatement process.
Financial Statements to be Restated
The Company will promptly amend its Annual Report on Form 10-K for the year
ended
The Committee discussed with
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Item 7.01 Regulation FD Disclosure.
On
The information contained in this Item 7.01, including in Exhibit 99.1 attached hereto, is "furnished" and not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, except to the extent such other filing specifically incorporates such information by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 99.1 Press Release ofBrooklyn ImmunoTherapeutics, Inc. datedJune 17, 2022 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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