In a recent shift of its financial oversight, NKGen Biotech, Inc., a Delaware-based biotech firm, has changed its certifying accountant. On Monday, the company engaged WithumSmith+Brown, PC (Withum) as its independent registered public accounting firm for the fiscal year ending December 31, 2024. The change was approved by NKGen's Audit Committee and marks the replacement of Ernst & Young LLP (EY), which was dismissed following the new engagement.
EY's previous reports on NKGen's financials for the years 2022 and 2023 did not contain any adverse opinion or significant disagreements on accounting principles or practices. However, EY's reports included a note regarding the uncertainty about NKGen's ability to continue as a going concern. Throughout the tenure of EY, leading up to the switch, there were no reported disagreements or reportable events that would have impacted EY's audit reports.
Before the appointment of Withum, NKGen had not consulted with the new firm regarding the application of accounting principles or auditing matters. This transition in financial oversight comes without any prior disagreements or reportable events with Withum.
As part of the transition process, NKGen has provided EY with the disclosures it made in the SEC filing and has obtained a letter from EY to confirm their agreement with the disclosed statements. This letter is included as an exhibit in the SEC filing.
In other recent news, NKGen Biotech has experienced significant developments. The biotechnology company expanded its existing forward purchase agreement with Meteora Capital Partners, according to the latest SEC filing. This amendment includes an additional $200,000 prepayment shortfall and an increase of 200,000 shares in share consideration shares.
NKGen Biotech also announced the appointment of Dr. Marco Gottardis as a new board member, filling the vacancy left by the resignation of Ms. Alana McNulty. Dr. Gottardis, with his extensive experience in the biopharmaceutical sector, is expected to contribute significantly to the company's strategic direction.
Furthermore, NKGen Biotech has received clearance from the U.S. Food and Drug Administration (FDA) to proceed with its Investigational New Drug (IND) application for SNK01. This natural killer (NK) cell therapy is aimed at treating Parkinson’s disease. The FDA's approval allows the company to initiate its Phase 1/2a clinical trial, which is expected to commence in the second half of 2024. The trial will explore the safety, tolerability, and preliminary effectiveness of SNK01 in patients with Parkinson's disease. These are the latest developments from NKGen Biotech.
InvestingPro Insights
Amidst NKGen Biotech's change in financial oversight, the company's stock performance and financial health come into focus. According to InvestingPro data, NKGen Biotech has a market capitalization of $22.35 million and has been facing significant challenges, as indicated by a negative price-to-earnings (P/E) ratio of -0.32 for the last twelve months as of Q1 2024. This suggests that the company is not currently profitable. Additionally, the stock has experienced a substantial decline over the past year, with a 91.41% drop in the one-year price total return. The InvestingPro Fair Value estimate stands at $0.66, below the previous close price of $0.9, hinting at potential overvaluation.
InvestingPro Tips highlight that the stock is currently in oversold territory according to the Relative Strength Index (RSI), which could interest traders looking for rebound opportunities. Moreover, the company's short-term obligations exceeding its liquid assets is a critical concern for investors evaluating the company's financial stability. These insights are particularly relevant considering the recent accountant change and the ongoing scrutiny of NKGen's financial practices. For investors seeking a deeper analysis, there are additional InvestingPro Tips available, which can be accessed with the promo code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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