Item 2.05 Costs Associated With Exit or Disposal Activities.
As previously disclosed, on October 10, 2024, Gritstone bio, Inc. (the “Company”) filed a voluntary petition for relief (the “Chapter 11 Case”) under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
On October 16, 2024, the Company announced the termination or separation of approximately 25 employees, effective November 15, 2024, representing an approximate 19% reduction in force to maintain an organization of approximately 101 employees to continue operations in connection with the Chapter 11 Case.
In connection with the reduction in force effective November 15, 2024, the impacted employees will be provided all earned wages and salary, all earned but unused paid time off, and a severance payment that is equal to 30 days of employment. The Company expects to record a one-time charge of approximately $0.3 million related to the reduction in its workforce, consistent primarily of one-time severance payments upon termination of the employees. The Company expects that the majority of these charges will be incurred in the fourth quarter of 2024.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On October 11, 2024, the Company received written notice (the “Delisting Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, as a result of the Chapter 11 Case and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq had determined that the Company’s common stock will be delisted from Nasdaq. In the Delisting Notice, the staff of Nasdaq referenced the Chapter 11 Case and associated public concerns raised by it, concerns regarding the residual equity interest of the existing listed securities holders and concerns about the Company’s ability to sustain compliance with all requirements for continued listing on Nasdaq. The Delisting Notice also indicates that the Company may appeal Nasdaq’s determination pursuant to procedures set forth in Nasdaq Listing Rule 5800 Series. The Company does not intend to appeal this determination.
Trading of the Company’s common stock will be suspended at the opening of business on October 22, 2024 and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company’s securities from listing and registration on Nasdaq.