NKGen Biotech, Inc., a biotechnology firm specializing in biological products, has received a notification from the Stock Market indicating that the company’s securities are subject to delisting due to non-compliance with certain listing requirements.
The notification, dated September 10, 2024, follows the company’s failure to meet the Nasdaq Global Market’s minimum Market Value of Listed Securities (MVLS) of $50 million over the past 30 consecutive business days.
The company, based in Santa Ana, California, had until September 9, 2024, to regain compliance with this requirement. However, NKGen Biotech was unable to meet this deadline. In addition, the company had not filed its Form 10-Q on time, further violating Nasdaq Listing Rule 5250(c)(1).
On September 12, 2024, NKGen Biotech filed the overdue 10-Q, regaining compliance with the filing requirements. Despite this, the company still faces the possibility of its common stock, trading under the symbol NKGN, and warrants (NKGNW) being suspended from trading on September 19, 2024, unless an appeal is successfully made to Nasdaq by September 17, 2024.
The company intends to appeal the delisting determination and request a stay of the suspension pending the hearing date. The hearing is expected to be scheduled within 30-45 days of the appeal request. However, the company has cautioned that there can be no guarantee that the appeal will result in a favorable outcome or that Nasdaq will grant an extended stay of the suspension.
Furthermore, on September 11, 2024, NKGen Biotech received another notice from Nasdaq concerning non-compliance with the minimum market value of publicly held shares (MVPHS) requirement of $15 million. The company has until March 10, 2025, to address this issue and will be exploring options to regain compliance.
Delisting from Nasdaq could significantly impact NKGen Biotech’s stock and warrant price and could hinder the company’s ability to raise capital. It could also trigger defaults and penalties under the company’s existing agreements. This news comes as a concern for investors and stakeholders of NKGen Biotech, which was formerly known as Graf Acquisition Corp. IV until its name change on February 10, 2021.
In other recent news, NKGen Biotech, a clinical-stage biotechnology company, reported promising results from its Phase 1/2a clinical trial of troculeucel, a cell therapy for Alzheimer’s disease. Preliminary data indicates cognitive improvements in two-thirds of patients treated with the highest dose.
The company also received a notice from the Nasdaq Stock Market for failing to file its quarterly financial report on time and is working to rectify this within the allotted 60-day period.
NKGen Biotech has also amended its forward purchase agreement, increasing both financial commitment and share consideration to Meteora Capital Partners. The firm secured $2.75 million in financing through a promissory note with CFIC-2015 NV Family Investments, LLC, allowing conversion of outstanding principal and interest into common stock at $2.00 per share.
The company’s Chief Operating Officer, Pierre Gagnon, has stepped down from his role but will continue to serve as an advisor until November 2024. Shareholders approved a potential issuance of shares, which could significantly influence the company’s capital structure.
InvestingPro Insights
As NKGen Biotech faces the challenges of Nasdaq delisting, real-time data from InvestingPro provides further context on the company’s financial health. The company’s market capitalization stands at a modest $19.94 million, reflecting the market’s valuation of the firm amidst its current troubles. Additionally, NKGen Biotech’s price has been significantly impacted over various time frames, with a 92.38% decline over the past year and a 71.87% drop year-to-date. This aligns with the InvestingPro Tip that the stock is trading near its 52-week low and has taken a considerable hit over the last six months.
InvestingPro Tips also highlight that NKGen Biotech suffers from weak gross profit margins and that its short-term obligations exceed its liquid assets, which could contribute to the financial instability that risks Nasdaq delisting. Moreover, the company is not profitable over the last twelve months, which is corroborated by an operating income of -$31.41 million in the same period. These factors are critical for investors to consider as they assess the potential risks associated with the company’s securities.
For those seeking a deeper analysis, there are additional InvestingPro Tips available, which can be found at InvestingPro NKGen Biotech, providing a comprehensive view of the company’s financial status and future prospects.
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