KindlyMD risk Nasdaq delisting as share price woes reach critical levels

KindlyMD Inc., the Utah-based healthcare company turned Bitcoin treasury asset, is facing the risk of being delisted from the Nasdaq exchange after its shares failed to meet the minimum price requirement of $1 over the last month.

The company, which trades under the ticker NAKA, disclosed in a regulatory filing dated December 12 that its stock has closed below the $1 threshold for 30 consecutive trading days. That failure led to a formal notice from Nasdaq warning that the company is no longer in compliance with listing standards.

KindlyMD’s shares were changing hands at $0.38 before the US market’s Tuesday open, extending its loss streak from its May $35 high. The company’s shares have traded as low as $ 0.36 over the past year, after tanking below $1 for the first time this year in October.

Nasdaq warns KindlyMD amid bleak stock performance 

According to Nasdaq’s compliance deadline and delisting risk rules, companies have a defined period to cure a price deficiency before proceedings advance. KindlyMD now has 180 calendar days to regain compliance by lifting its closing bid price to at least $1 for a minimum of 10 consecutive business days.

That compliance window expires on June 8, next year, and the stock exchange retains discretion to require the company to hold that price level for up to 20 straight trading sessions before confirming compliance has been restored.

If the stock fails to meet the threshold within that period, the company can exercise its clause for additional time by applying to transfer its listing to the Nasdaq Capital Market. That option would require a formal application, a $5,000 fee, and confirmation that the firm meets all other continued listing standards, alongside the bid price rule.

KindlyMD would also need to formally notify Nasdaq that it plans to fix the price problem, possibly by doing a reverse stock split. This would make the exchange check to see if the firm had a viable way to get back in compliance.

“If the Company does not regain compliance within the allotted compliance period, Nasdaq will provide notice that the Company’s shares of common stock will be subject to delisting. At such time, the Company may appeal the delisting determination to a Hearings Panel. There can be no assurance that the Company will be successful in maintaining the listing of its common stock on the Nasdaq Global Market, or, if transferred, on the Nasdaq Capital Market,” the filing read.

KindlyMD promises to review stock price troubles

In its filing, KindlyMD said it plans to actively monitor its stock price and consider available options to keep its Nasdaq listing. However, opponents of the Bitcoin DAT say it might be time for the company to let go of its crypto holdings. 

KindlyMD was acquired in August through a reverse takeover by Nakamoto, a Bitcoin-focused firm, in a deal that preserved the KindlyMD name while changing the stock ticker. The announcement initially sent shares soaring, pushing the stock to a record high in May, but the rally has fully unwound since.

As of the time of this reporting, it owns 5,398 BTC, valued at approximately $466 million based on recent prices, the 19th-largest corporate holder of the crypto according to BitcoinTreasuries.net.

Looking at its balance sheet leverage and Bitcoin-backed borrowing, the previously healthcare services firm is reliant on debt financing secured by its holdings. As reported by Cryptopolitan last week, the company disclosed that it agreed to borrow $210 million from crypto exchange Kraken to refinance an existing loan with Antalpha Digital, which itself was used to repay a credit line from Two Prime Lending. 

Moreover, the new loan was executed through KindlyMD’s subsidiary, Nakamoto Holdings, and carries a one-year maturity date of December 4, 2026. The borrowing bears an annual interest rate of 8%, according to a separate regulatory filing.

The lender may extend funding in fiat currency or digital assets “from time to time” through individual loan term sheets, and KindlyMD must maintain collateral with a value of at least $323.4 million, equivalent to roughly 3,500 BTC at current market prices. 

Want your project in front of crypto’s top minds? Feature it in our next industry report, where data meets impact.