NKGen Biotech, Inc. has entered into a Securities Purchase Agreement with CFIC-2015 NV Family Investments, LLC, issuing a promissory note at a principal amount of $2.75 million with a 12% interest rate, as disclosed in a recent SEC filing. The agreement, which took place on Tuesday, includes a purchase discount, setting the price at $2.5 million. This transaction is set to close on August 12, 2024.
The note, due on February 7, 2027, grants the purchaser the right to convert the outstanding principal and interest into common stock at a conversion price of $2.00 per share. Additionally, NKGen Biotech has issued a warrant for the purchase of up to 2.75 million shares of common stock at the same conversion price, valid for five years, and has agreed to issue over 2 million shares as commitment shares, pending shareholder approval.
In a related move, NKGen Biotech signed a letter agreement with the purchaser potentially allowing the sale of additional notes and warrants, along with more commitment shares, under similar terms. This option is available until August 7, 2026.
Furthermore, NKGen Biotech has reached agreements with existing note holders from Meteora and Sandia, adjusting the terms of repayment rights associated with previously issued promissory notes. The note holders have agreed not to exercise their repayment rights until the company receives excess proceeds exceeding $10 million, up from the previously agreed $5 million threshold. In exchange, NKGen Biotech has agreed to pay an amendment fee, issue common stock shares, and provide warrants to each note holder.
These financial maneuvers come as NKGen Biotech, which operates under the industrial classification of Biological Products, continues to navigate its financial strategy. The California-based company, listed on the Nasdaq Global Market under the ticker NKGN and on the Nasdaq Capital Market for its warrants under NKGNW, has not disclosed specific plans for the use of the proceeds from these agreements.
In other recent news, NKGen Biotech reported progress in its Phase I trial for the SNK01 therapy, a potential Alzheimer's treatment. The therapy showed potential in reducing α-synuclein protein levels in Alzheimer's patients, with 60% of patients seeing a decrease. The company plans to pursue a larger Phase II trial.
NKGen Biotech has also made alterations to its financial agreements with Sandia Investment Management LP, Polar Multi-Strategy Master Fund, and Meteora Capital Partners, resulting in an increase in the Prepayment Shortfall and additional shares under the Confirmation. The company also welcomed Dr. Marco Gottardis to its board, filling a vacancy left by Ms. Alana McNulty's resignation.
The U.S. Food and Drug Administration has given clearance to NKGen Biotech to proceed with its Investigational New Drug application for SNK01, a therapy aimed at treating Parkinson’s disease, paving the way for the company to initiate its Phase 1/2a clinical trial.
NKGen Biotech has also recently engaged WithumSmith+Brown, PC as its new independent registered public accounting firm, replacing Ernst & Young LLP. These are the latest developments from NKGen Biotech.
InvestingPro Insights
As NKGen Biotech, Inc. navigates its financial strategy, recent data from InvestingPro provides a snapshot of the company's current status. With a market capitalization of approximately $26.29 million, the company's financial health is under scrutiny, especially considering its P/E ratio stands at -0.32, indicating that the company is not currently profitable. This aligns with an InvestingPro Tip highlighting that NKGen Biotech has not been profitable over the last twelve months.
Furthermore, the company's share price has experienced a significant decline, with a 90.17% drop from its 52-week high, reflecting investor sentiment and market performance. This is consistent with another InvestingPro Tip, which points out the substantial price fall over the last year. The liquidity situation also appears challenging, as short-term obligations surpass liquid assets, which could impact the company's financial flexibility.
For investors considering NKGen Biotech's future prospects, it's worth noting that the InvestingPro Fair Value estimate stands at $0.67, suggesting potential discrepancies between current market prices and intrinsic valuations. For those looking for a deeper analysis, there are additional InvestingPro Tips available, providing further insights into NKGen Biotech's financial health and market performance.
These insights and tips are part of a broader analysis available on InvestingPro, which includes a comprehensive set of data points and expert evaluations to assist investors in making informed decisions.
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