NKGen Biotech Receives Notification From Nasdaq Related to Delayed Quarterly Report

Rhea-AI Summary

NKGen Biotech (Nasdaq: NKGN) has received a standard notice from Nasdaq on August 20, 2024, stating that the company is not in compliance with Nasdaq Listing Rule 5250(c)(1). This is due to the delayed filing of its Quarterly Report on Form 10-Q for the period ended June 30, 2024. The delay is partly attributed to recent changes in the company's independent registered public accounting firm and valuation firm.

NKGen has been given 60 calendar days, until October 21, 2024, to submit a plan to regain compliance. Nasdaq can grant an exception of up to 180 calendar days, until February 18, 2025. The notice has no immediate effect on the listing or trading of NKGen's common stock on the Nasdaq Global Market. The company is actively working to file the Form 10-Q promptly and regain compliance within the given timeframe.

Positive

• None.

Negative

• Delayed filing of Quarterly Report (Form 10-Q) for Q2 2024
• Non-compliance with Nasdaq Listing Rule 5250(c)(1)
• Risk of potential delisting if compliance is not regained within the given timeframe

Insights

Financial Analyst

The delayed filing of NKGen Biotech's Q2 2024 10-Q raises concerns about the company's financial transparency and internal controls. While the 60-day grace period provides some breathing room, it's important to monitor whether NKGen can meet this deadline. The change in both accounting and valuation firms suggests potential underlying issues in financial reporting or valuation methodologies. Investors should be cautious, as delayed filings can often precede restatements or other financial irregularities. However, it's worth noting that the Nasdaq listing remains intact for now, which is a positive sign. The market's reaction to this news will be telling - any significant stock price volatility could indicate investor unease about the company's financial stability.

Legal Expert

NKGen Biotech's notification from Nasdaq is a standard procedure for late filings, but it shouldn't be taken lightly. The company now faces a critical timeline to regain compliance. The 60-day window to submit a compliance plan is crucial, as failure to do so could lead to more severe consequences, including potential delisting. It's noteworthy that the company has up to 180 days to actually file the report, which provides some flexibility. The change in both accounting and valuation firms is intriguing from a legal standpoint, as it could suggest disagreements over accounting practices or valuation methods. Shareholders should closely monitor any subsequent SEC filings for further explanations or potential legal risks associated with the delay.

Market Research Analyst

This filing delay could have ripple effects on NKGen Biotech's market perception. Investors often view such delays as red flags, potentially impacting stock liquidity and valuation. The biotech sector is particularly sensitive to timely disclosures due to the importance of clinical trial results and regulatory milestones. NKGen's delay might lead to increased scrutiny from institutional investors and analysts, potentially affecting future capital raising efforts. However, the impact might be mitigated if the company can provide a clear and convincing explanation for the delay and file within the 60-day window. It's important to monitor peer companies' reactions and any sector-wide implications, as NKGen's situation could influence investor sentiment towards similar-sized biotech firms.

SANTA ANA, Calif., Aug. 22, 2024 (GLOBE NEWSWIRE) -- NKGen Biotech, Inc. (Nasdaq: NKGN) (“NKGen” or the “Company”), today announced it received a standard notice (the “Notice”) on August 20, 2024 from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) stating that the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”) because it had not timely filed its Quarterly Report on Form 10-Q for the period ended June 30, 2024 (the “Form 10-Q”) with the Securities and Exchange Commission (the “SEC”) on or before August 19, 2024, the extended period provided for the filing under Rule 12b-25(b) of the Securities Exchange Act of 1934, as amended. The delay is in part due to the recent change in the Company’s independent registered public accounting firm and its valuation firm. The Notice indicated that the Company has 60 calendar days, or until October 21, 2024, to submit a plan to regain compliance and that Nasdaq can grant an exception of up to 180 calendar days from the Form 10-Q due date, or until February 18, 2025, to regain compliance. The Notice from Nasdaq has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Market.

The Company is actively working with its auditors and advisors and intends to file the Form 10-Q as promptly as possible in order to regain compliance with the Rule within the 60-day period described above.

For additional information regarding the Nasdaq notifications and related terms, please see the Current Report on Form 8-K the Company filed with the SEC on August 22, 2024, which is available at sec.gov. 

Forward-Looking Statements

Statements contained in this press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “could”, “continue”, “expect”, “estimate”, “may”, “plan”, “outlook”, “future” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Because such statements are subject to risks and uncertainties, many of which are outside of the Company’s control, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include, but are not limited to, statements regarding the Company’s plans and expected timing for developing SNK01, including the expected timing of completing and announcing further results from its ongoing clinical studies; and the Company’s expected timing for developing its product candidates and potential benefits of its product candidates. Risks that contribute to the uncertain nature of the forward-looking statements include: the Company’s ability to execute its plans and strategies; risks related to performing clinical studies; the risk that initial and interim results of a clinical study do not necessarily predict final results and that one or more of the clinical outcomes may materially change as patient enrollment continues, following more comprehensive reviews of the data, and as more patient data become available; potential delays in the commencement, enrollment and completion of clinical studies and the reporting of data therefrom; the risk that studies will not be completed as planned; the risk that the abstract will not be published as planned including delays in timing, format, or accessibility; and NKGen’s ability to raise additional funding to complete the development of its product candidates. These and other risks and uncertainties are described more fully under the caption “Risk Factors” and elsewhere in the Company’s filings and reports, which may be accessed for free by visiting the Securities and Exchange Commission’s website at www.sec.gov and on the Company’s website under the subheading “Investors—Financial and Filings”. Investors should take such risks into account and should not rely on forward-looking statements when making investment decisions. All forward-looking statements contained in this press release speak only as of the date on which they were made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

Internal Contact:
Denise Chua, MBA, CLS, MT (ASCP)
Vice President, Investor Relations and Corporate Communications
949-396-6830
dchua@nkgenbiotech.com

External Contacts:
Chris Calabrese
Managing Director
LifeSci Advisors, LLC
ccalabrese@lifesciadvisors.com

Kevin Gardner
Managing Director
LifeSci Advisors, LLC
kgardner@lifesciadvisors.com

FAQ

Why did NKGen Biotech (NKGN) receive a notice from Nasdaq on August 20, 2024?

NKGen Biotech received a notice from Nasdaq because it failed to timely file its Quarterly Report on Form 10-Q for the period ended June 30, 2024, violating Nasdaq Listing Rule 5250(c)(1).

What is the deadline for NKGen Biotech (NKGN) to submit a compliance plan to Nasdaq?

NKGen Biotech has until October 21, 2024 (60 calendar days from the notice) to submit a plan to regain compliance with Nasdaq listing rules.

Will NKGen Biotech's (NKGN) stock continue trading on Nasdaq despite the non-compliance notice?

Yes, the notice from Nasdaq has no immediate effect on the listing or trading of NKGen Biotech's common stock on the Nasdaq Global Market.

What is the maximum extension Nasdaq can grant NKGen Biotech (NKGN) to regain compliance?

Nasdaq can grant NKGen Biotech an exception of up to 180 calendar days from the Form 10-Q due date, until February 18, 2025, to regain compliance.