Ernexa Therapeutics Inc 8-K, filed Jun 17, 2022
Ernexa Therapeutics Inc. (ERNA)
8-K
2022-06-17
For: 2022-06-16
View Original
Added on
April 06, 2026
About this 8-K
Ernexa Therapeutics Inc filed this 8-K on June 17, 2022, reporting on events of June 16, 2022.
Items reported
- Item 3.01: Delisting notice or listing transfer
- Item 4.02: Earlier financial statements no longer reliable
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 16, 2022
(Exact Name of Registrant as Specified in its Charter)
|
|
|
|
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
|
||
|
|
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Registrant’s telephone number, including area code: (212 ) 582-1199
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
||
|
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities
Exchange Act of 1934:
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 3.01 |
Notice of Delisting or Failure to Satisfy a Continued Listing rule or Standard; Transfer of Listing.
|
On June 17, 2022, Brooklyn ImmunoTherapeutics, Inc., a Delaware corporation (the “Company”), received a notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”), stating that the Company’s common stock, par value $0.005 per share (the “common stock”), fails to
comply with the $1.00 minimum bid price requirement for continued listing on Nasdaq in accordance with Nasdaq Listing Rule 5450(a)(1) based upon the closing bid price of the common stock for the 30 consecutive business days prior to the date of
the Notice.
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 December 14, 2022, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days prior
to December 14, 2022.
If the Company is unable to regain compliance by December 14, 2022, the Company may be eligible for an additional 180 calendar
day compliance period to demonstrate compliance with the minimum bid price requirement. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing
standards for The Nasdaq Capital Market, with the exception of the minimum bid price requirement, and will need to provide written notice to Nasdaq of its intention to cure the deficiency during the second compliance period. If the Company does not
qualify for the second compliance period or fails to regain compliance during the second 180 calendar day period, then Nasdaq will notify the Company of its determination to delist the common Stocks, at which point the Company would have an
opportunity to appeal the delisting determination to a Hearings Panel.
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 June 16, 2022, the Audit Committee of the Company’s Board of Directors (the “Committee”) determined that
the Company’s financial statements as of and for the years ended December 31, 2021 and 2020 and the Company’s financial statements for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021 (collectively, the “Subject
Financial Statements”) should no longer be relied upon because of an error in the Subject Financial Statements. The Company communicated its determination to its prior independent registered public accounting firm, Marcum LLP (“Marcum”)
and its current independent registered public accounting firm, Grant Thornton LLP (“Grant Thornton”).
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 November 2018 between the Company’s wholly owned subsidiary, Brooklyn
ImmunoTherapeutics LLC (“Brooklyn LLC”), and IRX Therapeutics, Inc. (“IRX”), pursuant to which Brooklyn LLC acquired substantially all of the assets and assumed certain of the liabilities of IRX (the “IRX Acquisition”). The
liabilities assumed by Brooklyn LLC in the IRX Acquisition included certain license and royalty agreements that IRX entered into at various times from 2000 to 2012 with third
parties and certain noteholders and shareholders of IRX (the “Royalty Recipients”). These agreements include the obligation to pay royalties to the Royalty Recipients based on revenues from any future
IRX-2 product sales (the “IRX Royalties”).
The IRX Acquisition was accounted for under Accounting Standards Codification (“ASC”) No. 805, Business Combinations, and resulted in Brooklyn LLC recording, among other items, the
fair value of an in-process research and development asset (“IPR&D”) of $6.9 million and the fair value of a contingent liability related to the IRX Royalties of approximately $0.9 million as part of the opening balance sheet of
Brooklyn LLC. During each reporting period thereafter, the Company recorded any change in the fair value of the contingent liability to the statement of operations.
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 December 31, 2021 and 2020
| • |
overstatement of both IPR&D and total assets by $0.9 million as of December 31, 2021 and 2020;
|
| • |
overstatement of both the contingent consideration liability and total liabilities by $19.3 million and $20.1 million as of December 31, 2021 and 2020, respectively;
|
| • |
overstatement of accumulated deficit by $19.1 million and $19.2 million as of December 31, 2021 and 2020, respectively;
|
| • |
understatement of total stockholders’ and members’ equity by $19.1 million and $19.2 million as of December 31, 2021 and 2020, respectively;
|
| • |
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 ended December 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 ended December 31, 2020;
|
| • |
understatement of basic and diluted net loss per common share of $0.01 for the year ended December 31, 2021 and overstatement of basic and diluted net loss per common share of $1.09 for the year ended December 31, 2020.
|
Effect of Error for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021
| • |
overstatement of both IPR&D and total assets by $0.9 million as of March 31, 2021, June 30, 2021 and September 30, 2021;
|
| • |
overstatement of both the contingent consideration liability and total liabilities by $19.3 million as of March 31, 2021 and June 30, 2021 and $19.4 million as of September 30, 2021;
|
| • |
overstatement of accumulated deficit of $18.4 million as of March 31, 2021 and June 30, 2021 and $18.5 million as of September 30, 2021;
|
| • |
understatement of total stockholders’ equity of $18.4 million as of March 31, 2021 and June 30, 2021 and $18.5 million as of September 30, 2021;
|
| • |
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 ended March 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 ended September 30, 2021. There was no impact to net loss for the quarter ended June 30, 2021;
|
| • |
understatement of basic and diluted net loss per common share of $0.03 for the quarter ended March 31, 2021. There was no impact to basic or diluted net loss per common share for the quarters ended June 30, 2021 and September 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 December 31, 2021, originally filed with the
Securities and Exchange Commission on April 15, 2022, to include restated financial statements as of and for the years ended December 31, 2021 and 2020, which amended filing will additionally include amendments to the Subject Financial Statements
for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021.
The Committee discussed with Grant Thornton and Marcum the matters disclosed in this Item 4.02.
| Item 7.01 |
Regulation FD Disclosure.
|
On June 17, 2022, the Company issued a press release disclosing its receipt of the Notice referenced in Item 3.01 of this
Current Report on Form 8-K. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference in this Item 7.01.
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
|
|
|
Press Release of Brooklyn ImmunoTherapeutics, Inc. dated June 17, 2022
|
||
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
|
Brooklyn ImmunoTherapeutics, Inc.
|
||
|
Dated: June 17, 2022
|
By:
|
/s/ Andrew Jackson
|
|
Andrew Jackson
|
||
|
Chief Financial Officer
(Principal Financial Officer)
|
||
Exhibit 99.1
Brooklyn ImmunoTherapeutics Announces Receipt of Nasdaq Notification Regarding Minimum Bid Price Deficiency
SAN DIEGO, JUNE 17, 2022 (GLOBE NEWSWIRE) -- Brooklyn ImmunoTherapeutics, Inc. (Nasdaq:BTX) (“Brooklyn” or the “Company”), a biopharmaceutical
company focused on developing advanced therapies using state-of-the-art mRNA cell engineering technology, today announced that on June 17, 2022, it received a notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”), stating that the
Company is not in compliance with the minimum bid price requirement ("Minimum Bid Requirement") of US$1.00 per share under the Nasdaq Listing Rule 5450(a)(1) based upon the closing bid price of the Company’s common stock for the 30 consecutive
business days prior to the date of the Notice. The Notice has no immediate effect on the listing or trading of the Company’s common stock on Nasdaq.
Under Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days from the date of the Notice, or December 14, 2022, to regain
compliance with the Minimum Bid Requirement, during which time the Company’s common stock will continue to trade on Nasdaq. If at any time before December 14, 2022, the bid price of the common shares closes at or above US$1.00 per share for a
minimum of 10 consecutive business days, the Company will regain compliance with the Minimum Bid Requirement. If the Company does not regain compliance with the Minimum Bid Requirement by December 14, 2022, the Company may be eligible, upon
satisfaction of certain Nasdaq listing requirements, for an additional period of 180 calendar days to regain compliance or its common stock may be subject to delisting from Nasdaq.
The Company will closely monitor the closing bid price of its common stock and is considering its options to regain compliance with the Minimum
Bid Requirement under the Nasdaq Listing Rules.
About Brooklyn ImmunoTherapeutics
Brooklyn is focused on developing advanced therapies using state-of-the-art mRNA cell engineering technology.
Brooklyn has multiple next-generation cell and gene-editing therapies in preclinical development for various indications. For more information
about Brooklyn, please visit www.BrooklynITx.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are any statements that are not statements of
historical fact and may be identified by terminology such as “believe,” “could,” “estimate,” “expect,” “plan,” “possible,” “potential,” “project,” “will” or other similar words and the negatives of such words. Forward-looking statements are based
on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those stated or implied in any forward-looking statement as a result of various
factors, including, but not limited to, uncertainties related to: (i) the evolution of Brooklyn’s business model into a platform company focused on cellular, gene editing and cytokine programs; (ii) Brooklyn’s ability to successfully,
cost-effectively and efficiently develop its technology and products; (iii) Brooklyn’s ability to successfully commence clinical trials of any products on a timely basis or at all; (iv) Brooklyn’s ability to successfully fund and manage the growth
of its development activities; (v) Brooklyn’s ability to obtain regulatory approvals of its products for commercialization; (vi) uncertainties related to the impact of the COVID-19 pandemic on the business and financial condition of Brooklyn,
including on the timing and cost of its clinical trials; and (vii) Brooklyn’s ability to regain compliance with the Minimum Bid Requirement. You should not rely upon forward-looking statements as predictions of future events. The forward-looking
statements made in this communication speak only as of the date on which they were made, and Brooklyn does not undertake any obligation to update the forward-looking statements contained herein to reflect events that occur or circumstances that
exist after the date hereof, except as required by applicable law. Factors that may cause Brooklyn's actual results from those expressed or implied in forward-looking statements contained in this press release are more fully disclosed in
Brooklyn’s periodic public filings with the U.S. Securities and Exchange Commission, particularly under the heading “Risk Factors” in Brooklyn’s Annual Report on Form 10-K for the year ended December 31, 2021.
Investor Relations Contact:
Solebury Trout
917-936-8430
investors@brooklynitx.com
Media Contact:
Michael V. Morabito, Ph.D.
Solebury Trout
917-936-8430
btx@soleburytrout.com