NKGen Biotech, Inc. (NASDAQ:NKGN), a company specializing in biological products, announced the resignation of three members of its Board of Directors. Effective as of Friday, Michael Klowden, Sangwoo Park, and Kathleen Scott stepped down from the board and its various committees, marking the end of their one-year service since the company's public listing and the closure of a business combination with Graf Acquisition Corp. IV.
The departure of Klowden, Park, and Scott, who also served on the Audit Committee, Compensation Committee, and Nomination and Corporate Governance Committee, was not due to any disagreements with the company's operational policies or practices. NKGen Biotech expressed its appreciation for their dedicated service and contributions.
Following these resignations, the size of the Board has been temporarily reduced from five to two directors, and the Committees from three to one member each. The company has stated that it aims to appoint new directors and committee members within the next 180 days. Discussions are ongoing regarding the potential reappointment of Klowden and Scott to the Board.
In other recent news, NKGen Biotech is facing potential delisting from the Nasdaq Global Market due to its stock price failing to meet the minimum bid price requirement. The biotechnology company also issued approximately 162,000 shares of common stock in a debt conversion agreement, a strategic move to partially repay its debt obligations and potentially expand its shareholder base. NKGen Biotech has also increased financial commitment and share consideration to Meteora Capital Partners.
The company is making strides in its clinical trials, reporting promising preliminary results from its Phase 1/2a clinical trial of troculeucel, a cell therapy for Alzheimer's disease. The data indicates cognitive improvements in a majority of patients treated with the highest dose. In addition, NKGen Biotech secured $2.75 million in financing through a promissory note with CFIC-2015 NV Family Investments, allowing conversion of outstanding principal and interest into common stock at $2.00 per share.
NKGen Biotech is appealing the Nasdaq delisting decision and has proposed a plan to shift from the Nasdaq Global Market to the Nasdaq Capital Market, which has a lower minimum market value requirement. The company's Chief Operating Officer, Pierre Gagnon, stepped down but will continue serving as an advisor until November 2024.
InvestingPro Insights
NKGen Biotech's recent board resignations come amid challenging financial circumstances for the company. According to InvestingPro data, NKGN's market capitalization stands at a modest $13.12 million, reflecting its current struggles. The company's stock has experienced significant declines, with a one-year price total return of -91.72% and a year-to-date return of -86.51% as of the latest data.
InvestingPro Tips highlight that NKGN is not profitable over the last twelve months and suffers from weak gross profit margins. This financial strain is further evidenced by the company's negative EBITDA of -$30.23 million for the last twelve months as of Q2 2024. These factors may have contributed to the governance changes and underscore the importance of appointing new board members who can guide the company through its current challenges.
For investors considering NKGN, it's worth noting that InvestingPro offers 10 additional tips for this stock, providing a more comprehensive analysis of its financial health and market position. These insights could be particularly valuable as the company navigates its board restructuring and aims to improve its financial performance.
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