Ocugen Restates Financials Due to Internal Control Review
Ticker: OCGN · Form: 8-K · Filed: Apr 1, 2024 · CIK: 1372299
| Field | Detail |
|---|---|
| Company | Ocugen, INC. (OCGN) |
| Form Type | 8-K |
| Filed Date | Apr 1, 2024 |
| Risk Level | medium |
| Pages | 4 |
| Reading Time | 5 min |
| Key Dollar Amounts | $0.01, $1.00 |
| Sentiment | neutral |
Sentiment: neutral
Topics: restatement, financial-reporting, internal-controls
Related Tickers: ABUS
TL;DR
Ocugen is restating its 2023 financials due to accounting issues with Arbutus collaboration. Expect delays and potential volatility.
AI Summary
Ocugen, Inc. announced on April 1, 2024, that it will not rely on previously issued financial statements for the fiscal year ended December 31, 2023, and interim periods within that year. This decision stems from an ongoing review of its internal controls over financial reporting, specifically related to the accounting for its Arbutus Biopharma collaboration. The company expects to file amended financial statements once the review is complete.
Why It Matters
This restatement indicates potential issues with Ocugen's financial reporting accuracy and internal controls, which could impact investor confidence and the company's stock price.
Risk Assessment
Risk Level: medium — Restatements can signal underlying financial reporting weaknesses or control deficiencies, leading to increased scrutiny and potential investor concern.
Key Players & Entities
- Ocugen, Inc. (company) — Registrant
- Arbutus Biopharma (company) — Collaboration partner involved in accounting review
- December 31, 2023 (date) — Fiscal year end affected by restatement
- April 1, 2024 (date) — Date of the 8-K filing
FAQ
Which specific financial statements are affected by this non-reliance announcement?
The company will not rely on its previously issued financial statements for the fiscal year ended December 31, 2023, and for any interim periods within that fiscal year.
What is the primary reason for Ocugen's decision not to rely on its previous financial statements?
The decision is due to an ongoing review of the company's internal controls over financial reporting, specifically related to the accounting for its collaboration with Arbutus Biopharma.
When does Ocugen expect to file amended financial statements?
Ocugen expects to file amended financial statements once the review of its internal controls over financial reporting is complete.
What is the nature of the accounting issue related to the Arbutus Biopharma collaboration?
The filing states the issue is related to the 'accounting for its collaboration with Arbutus Biopharma,' but does not provide further specific details on the nature of the accounting treatment.
Has Ocugen identified any material weaknesses in its internal controls?
The filing indicates an 'ongoing review of its internal controls over financial reporting' and the non-reliance on financial statements, which implies potential control deficiencies, but does not explicitly state the identification of material weaknesses at this time.
Filing Stats: 1,305 words · 5 min read · ~4 pages · Grade level 14.8 · Accepted 2024-04-01 17:09:47
Key Financial Figures
- $0.01 — nge on which registered Common Stock, $0.01 par value per share OCGN The Nasdaq
- $1.00 — the Company's common stock of at least $1.00 per share for the ten consecutive busin
Filing Documents
- tm2410371d2_8k.htm (8-K) — 32KB
- 0001104659-24-041943.txt ( ) — 201KB
- ocgn-20240401.xsd (EX-101.SCH) — 3KB
- ocgn-20240401_lab.xml (EX-101.LAB) — 33KB
- ocgn-20240401_pre.xml (EX-101.PRE) — 22KB
- tm2410371d2_8k_htm.xml (XML) — 3KB
02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. In connection with the preparation of the financial statements of Ocugen, Inc. (the "Company") for the year ended December 31, 2023, the Company, in consultation with its independent registered public accounting firm, Ernst & Young LLP ("EY"), identified certain accounting errors related to the application of U.S. GAAP to certain agreements with one of its business partners related to a collaboration agreement. On April 1, 2024, the Audit Committee of the Board of Directors (the "Audit Committee"), based on the recommendation of management and after consultation with EY, concluded that the Company's previously-issued audited consolidated financial statements for each fiscal year beginning January 1, 2020 and its previously-issued unaudited interim condensed consolidated financial statements for each of the first three quarters in such years, as well as the associated earnings releases and investor presentations or other communications describing such financial statements, were materially misstated and, accordingly, should no longer be relied upon. The Company intends to restate its consolidated financial statements as of and for the year ended December 31, 2022, in connection with the filing of its 2023 Form 10-K. Similarly, the Company will include restated unaudited financial information for each of the first three quarters of 2023 and 2022 in its 2023 Form 10-K (each such annual and quarterly period to be restated, a "Restated Period"). The identified errors in each of the Restated Periods relate to the Company's accounting for the estimated costs in one of its collaboration arrangements. These identified errors will result in a restatement of the following financial statement line item captions: Collaborative arrangement revenue, Research and development expenses, Other income (expense), net and Accrued expenses and other current liabilit
01. Other Events
Item 8.01. Other Events. On March 28, 2024, the Company received written notice from the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market LLC ("Nasdaq") stating that the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2) (" Rule 5550(a)(2) ") by maintaining a minimum closing bid price of the Company's common stock of at least $1.00 per share for the ten consecutive business days from March 13, 2024 to March 27, 2024 and that this matter is now closed. As previously reported, on May 1, 2023, Nasdaq notified the Company that for the last 30 consecutive business days, the closing bid price for the Company's common stock had been below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market pursuant to Rule 5550(a)(2) and that the Company had 180 days, or until October 30, 2023, to evidence compliance with Rule 5550(a)(2) . As previously reported, on October 31, 2023, the Company received formal notice that Nasdaq had granted the Company's request for an extension through April 29, 2024 to evidence compliance with Rule 5550(a)(2) .
Forward-Looking Statements
Forward-Looking Statements This Current Report on Form 8-K 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. Words such as "expect," "will," "anticipates," "estimates" and variations of such words and similar future or conditional expressions are intended to identify forward-looking on, and the timing of the completion and audit of, the Company's financial statements and the filing of the Form 10-K, which reflect the Company's expectations based upon information presently available to the Company and assumptions that it believes to be reasonable. Because such statements are based on the Company's current expectations and are not statements of fact, actual results may differ materially from those projected or estimated and you are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Investors are cautioned not to place undue reliance upon forward looking statements in this Current Report. The Company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this filing, except as required by law.
SIGNATURES
SIGNATURES 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. Ocugen, Inc. Date: April 1, 2024 By: /s/ Shankar Musunuri Name: Shankar Musunuri Title: Chairman, Chief Executive Officer, & Co-Founder