NewGen Issues Clarification on Press Release Titled “NewGen Receives Continued Nasdaq Listing Approval and Announces New Business Development Director” dated February 20, 2025

Rhea-AI Summary

NewGen (NASDAQ: NIVF) issued a clarification regarding its February 20, 2025 press release about Nasdaq listing compliance. The company clarified it has not yet achieved compliance with Nasdaq's $2.5 million minimum stockholders' equity requirement. However, during Q1, $2.3 million of debt was converted to equity, and approximately $4.3 million was drawn from its Equity Line of Credit with White Lion Capital.

The company believes it currently exceeds the $2.5 million stockholders' equity requirement but awaits Nasdaq confirmation. The Nasdaq Hearings Panel has granted NewGen an extension to meet compliance requirements. As part of its compliance plan, the company completed a reverse split on February 11, 2025, and has maintained a closing bid price above $1.00 for six consecutive trading days as of February 19, 2025. NewGen plans to apply for transition to the Nasdaq Capital Market by February 26, 2025.

Positive

• Conversion of $2.3 million debt to equity improves balance sheet
• Successfully secured $4.3 million from Equity Line of Credit
• Stock price maintained above $1.00 for six consecutive trading days
• Received extension from Nasdaq Hearings Panel for compliance

Negative

• Not yet confirmed compliant with Nasdaq's $2.5M equity requirement
• Risk of potential delisting if compliance is not achieved
• Required reverse stock split to meet minimum bid requirement

Insights

Financial Compliance Analyst

The clarification reveals critical financial maneuvers that NewGen is executing to maintain its Nasdaq listing. The company has strategically restructured its capital composition through two key transactions: $2.3 million in debt-to-equity conversions and a $4.3 million drawdown from their White Lion Capital Equity Line of Credit. These actions serve a dual purpose - addressing immediate compliance requirements while simultaneously improving the balance sheet structure.

The debt-to-equity conversion is particularly noteworthy as it reduces interest burden and strengthens the equity position without immediate cash requirements. However, this transformation comes with dilutive effects for existing shareholders. The substantial drawdown from the Equity Line of Credit, while providing necessary capital, also signals potential limitations in accessing traditional financing channels.

The company's reverse split implementation, coupled with six consecutive trading days above the $1.00 threshold, demonstrates progress toward bid price compliance. However, reverse splits often face market skepticism due to their historical association with struggling companies. The planned transition to the Nasdaq Capital Market by February 26 suggests a strategic pivot to a market tier with potentially more suitable listing requirements.

While NewGen appears to be meeting the technical requirements for continued listing, the rapid sequence of these financial adjustments raises questions about long-term sustainability. The Panel's extension provides important breathing room, but the company must demonstrate that these compliance measures are part of a broader strategic transformation rather than merely technical solutions to immediate regulatory challenges.

BANGKOK, Feb. 21, 2025 (GLOBE NEWSWIRE) -- NewGenIvf Group Limited (NASDAQ: NIVF) (“NewGen” or the “Company”) today issued a clarification that, in the press release titled “NewGen Receives Continued Nasdaq Listing Approval and Announces New Business Development Director” issued on February 20, 2025, the Company did not intend to imply that it has already achieved compliance with the Nasdaq Capital Market’s $2.5 million minimum stockholders’ equity requirement (the “Equity Rule”). However, during its 1^st quarter to date, certain NewGen debtholders converted $2.3 million of debt to equity and the Company has drawn down approximately $4.3 million from its Equity Line of Credit with White Lion Capital. Therefore, the Company believes it has in excess of $2.5 million in stockholders’ equity as of this date. The Company is awaiting confirmation from Nasdaq that it has evidenced compliance with the Equity Rule. However, there can be no assurance that Nasdaq will determine that the Company has regained compliance with the Nasdaq continued listing rules.

NewGen further confirms that the Nasdaq Hearings Panel (the "Panel") granted an extension, allowing the Company additional time to regain compliance with Nasdaq’s continued listing requirements, subject to meeting specific compliance criteria within designated timeframes. In accordance with the Panel’s extension, the Company has already made progress on its compliance plan (along with the update on the Equity Rule already noted above), including carrying out a reverse split on February 11, 2025 in order to regain compliance with the $1.00 bid price requirement (NewGen’s closing bid price has traded above $1.00 for six consecutive trading days as of February 19, 2025). The Company also intends to apply for transition to the Nasdaq Capital Market on or before February 26, 2025.  

About NewGen

NewGen is a comprehensive fertility services provider in Asia helping couples and individuals obtain access to fertility treatments. With a mission to aid couples and individuals in building families regardless of fertility challenges, NewGen has dedicated itself to creating increased access to infertility treatment and providing comprehensive fertility services for its customers. NewGen’s management team collectively has over a decade of experience in the fertility industry. NewGen’s clinics are located in Thailand, Cambodia, and Kyrgyzstan, and present a full suite of services for its patients, including comprehensive infertility and assisted reproductive technology treatments, egg and sperm donation, and surrogacy, in the appropriate jurisdictions, respectively. To learn more, visit www.newgenivf.com. The information contained on, or accessible through, NewGen’s website is not incorporated by reference into this press release, and you should not consider it a part of this press release.

Forward-Looking Statements

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Without limiting the generality of the foregoing, the forward-looking statements in this press release include descriptions of the Company’s future commercial operations, business strategy, and financial condition. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release. You should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s annual report on Form 20-F and other documents filed or to be filed by the Company with the SEC from time to time, which could cause actual events and results to differ materially from those contained in the forward-looking statements. Copies of these documents are available on the SEC’s website, www.sec.gov. All information provided herein is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact

ICR, LLC
Robin Yang
Phone: +1 (212) 537-4406
Email: Newgenivf.IR@icrinc.com

FAQ

What progress has NIVF made toward Nasdaq compliance in February 2025?

NIVF has converted $2.3M of debt to equity, drawn $4.3M from its credit line, completed a reverse split, and maintained a $1.00+ bid price for six consecutive trading days as of February 19, 2025.

How much funding did NIVF secure from White Lion Capital in Q1 2025?

NIVF drew down approximately $4.3 million from its Equity Line of Credit with White Lion Capital during the first quarter of 2025.

When will NIVF apply for transition to Nasdaq Capital Market?

NIVF plans to apply for transition to the Nasdaq Capital Market on or before February 26, 2025.

What is the minimum stockholders' equity requirement NIVF needs to meet for Nasdaq compliance?

NIVF needs to meet a minimum stockholders' equity requirement of $2.5 million to maintain Nasdaq listing compliance.

When did NIVF implement its reverse stock split to meet Nasdaq requirements?

NIVF implemented its reverse stock split on February 11, 2025, to regain compliance with the $1.00 bid price requirement.