SANTA ANA, Calif. - NKGen Biotech Inc. (NASDAQ:NKGN), a biotechnology company, is currently addressing a compliance issue with the Nasdaq Stock Market after failing to file its quarterly report on time. The company received a notice from Nasdaq's Listing Qualifications Department on November 20, 2024, indicating non-compliance with the exchange's filing requirements.
The delay in filing the Quarterly Report on Form 10-Q for the period ended September 30, 2024, is attributed to the time needed for valuation and review of various derivative securities, a task the company has taken on more reporting responsibility for internally. Despite the notice, there is no immediate impact on the listing or trading of NKGen Biotech's common stock on the Nasdaq Global Market.
NKGen Biotech is actively working with its auditors and advisors to file the required Form 10-Q as soon as possible. Following the receipt of the non-compliance notice, the company was granted a temporary exception by Nasdaq, allowing it until January 7, 2025, to regain compliance with the listing rule and the minimum market value of listed securities requirement.
The company's future plans hinge in part on a decision by the Seoul Bankruptcy Court regarding the rehabilitation of NKMax Co. Ltd and NKGen Biotech's proposal to acquire a majority interest in NKMax. The outcome is expected to be announced by the court on or before January 7, 2025. Should the acquisition be successful, NKGen Biotech must present a compliance plan to the Nasdaq Hearings Panel by the same date.
NKGen Biotech has the option to request a review of the Panel's decision by the Nasdaq Listing and Hearing Review Council by December 5, 2024, which would involve a $15,000.00 fee. The Council may then choose to review any Panel decision by January 4, 2025. Currently, the company does not intend to appeal the decision and plans to submit an updated compliance plan by the January 7 deadline.
For additional details on the Nasdaq notifications and related terms, NKGen Biotech has filed a Current Report on Form 8-K with the Securities and Exchange Commission, available at sec.gov. This article is based on a press release statement and includes forward-looking statements that involve risks and uncertainties. Investors should consider these risks when making investment decisions.
In other recent news, NKGen Biotech successfully regained compliance with Nasdaq's minimum market value requirement, averting potential delisting from the Nasdaq Global Market. This development followed the issuance of approximately 492,800 shares of common stock, a strategic move that could impact existing shareholders due to dilution. The company also announced the appointment of two new directors, Michael Klowden and Kathleen Scott, to its board, while three other directors resigned.
NKGen Biotech has been navigating significant developments, including potential delisting due to non-compliance with certain listing requirements. In response, the company proposed transitioning to the Nasdaq Capital Market. The company also secured $2.75 million in financing through a promissory note with CFIC-2015 NV Family Investments, enabling conversion of outstanding principal and interest into common stock at $2.00 per share.
On the clinical front, NKGen Biotech reported encouraging preliminary results from its Phase 1/2a clinical trial of troculeucel, a cell therapy for Alzheimer's disease, indicating cognitive improvements in a majority of patients treated with the highest dose. These are some of the recent developments in NKGen Biotech's operations.
InvestingPro Insights
NKGen Biotech's current financial situation reflects the challenges highlighted in the article. According to InvestingPro data, the company's market capitalization stands at a modest $13.09 million, underscoring its small-cap status and the potential volatility associated with such stocks.
An InvestingPro Tip indicates that NKGen Biotech "generally trades with high price volatility," which aligns with the company's current regulatory challenges and uncertain future. This volatility is evident in the stock's recent performance, with a significant 25.35% return over the last week, contrasting sharply with a 74.41% decline over the past six months.
The company's financial health appears precarious, as another InvestingPro Tip reveals that "short term obligations exceed liquid assets." This could exacerbate the challenges NKGen faces in meeting Nasdaq's compliance requirements and executing its strategic plans, including the potential acquisition of NKMax Co. Ltd.
Moreover, NKGen Biotech is "not profitable over the last twelve months," with an adjusted operating income of -$31.41 million for the last twelve months as of Q2 2024. This lack of profitability may complicate the company's efforts to regain compliance and maintain its Nasdaq listing.
Investors considering NKGen Biotech should note that there are 6 additional InvestingPro Tips available, which could provide further insights into the company's financial position and market performance. These tips, along with real-time metrics, are accessible through the InvestingPro product, offering a more comprehensive view for those evaluating the stock amidst its current challenges.
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