NKGen Biotech, Inc., a biotechnology company specializing in biological products, is facing potential delisting from the Nasdaq Global Market due to its stock price failing to meet the minimum bid price requirement. On September 23, 2024, the company received a notice from Nasdaq that its common stock had closed below the required $1.00 per share for 30 consecutive business days.
Under Nasdaq's rules, NKGen Biotech has 180 days, until March 24, 2025, to regain compliance. The company can achieve this if its stock price closes at or above $1.00 per share for at least 10 consecutive business days. If compliance is not met by the deadline, NKGen may be given a second 180-day period to address the issue, provided it transfers to the Nasdaq Capital Market and meets all other initial listing requirements, except for the bid price.
Additionally, NKGen Biotech is appealing a separate delisting action related to its market capitalization deficiency, with a hearing scheduled for October 31, 2024. The outcome of this appeal and the company's efforts to regain compliance with the bid price requirement are uncertain.
In other recent news, NKGen Biotech has been actively managing its financial obligations and making progress in clinical trials. The company has issued approximately 162,000 shares of common stock in a debt conversion agreement, a strategic move that could potentially expand its shareholder base and partially repay its debt obligations.
NKGen Biotech has also amended its forward purchase agreement, increasing financial commitment and share consideration to Meteora Capital Partners.
In a bid to regain compliance with Nasdaq's listing requirements, NKGen Biotech is appealing a delisting decision. The company has proposed a plan to shift from the Nasdaq Global Market to the Nasdaq Capital Market, which has a lower minimum market value requirement.
On the clinical front, NKGen Biotech reported 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.
Meanwhile, the company 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. Lastly, Pierre Gagnon, the company's Chief Operating Officer, stepped down but will continue serving as an advisor until November 2024.
InvestingPro Insights
Recent InvestingPro data paints a challenging picture for NKGen Biotech, aligning with the company's Nasdaq listing woes. The company's market capitalization stands at a modest $13.98 million, reflecting its current struggles. NKGen's financial performance has been concerning, with an adjusted operating income of -$31.41 million for the last twelve months as of Q2 2024, indicating significant operational challenges.
InvestingPro Tips highlight that NKGen "suffers from weak gross profit margins" and is "not profitable over the last twelve months," which explains the company's difficulty in maintaining Nasdaq's listing requirements. The stock's performance has been particularly poor, with a one-year price total return of -93.97% as of the latest data, further illustrating the uphill battle NKGen faces in regaining compliance with the $1.00 per share minimum bid price.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for NKGen Biotech, providing deeper insights into the company's financial health and market position.
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