NKMAX, a local biotech firm specializing in NK cell therapy, announced plans to file an objection to its potential delisting from the Korea Exchange (KRX).

The company, which has been listed on the Kosdaq since August 2018, is facing delisting due to significant operational challenges.

On March 5, NKMAX received a disclaimer of opinion from its external auditors for the fiscal year 2023, citing uncertainties about the company's ability to continue as a going concern and restrictions on key audit procedures.

Such disclaimers can trigger delisting procedures under the regulations of the KRX, with companies facing delisting given 15 days from notification to file an appeal.

In response, NKMAX has stated its intent to submit its objection by April 29. If the objection is accepted, the company will be granted a period to improve management practices.

During this period, NKMAX must secure a favorable re-audit of its financial statements to resume trading after a substantive review of its listing eligibility.

The company's troubles were compounded when Park Sang-woo, the CEO, defaulted on a margin loan secured against company shares during efforts to list its U.S. subsidiary, NKGen Biotech, on Nasdaq.

This financial misstep led to a margin call, causing Park's stake in NKMAX to plummet from 12.94 percent to just 0.01 percent, effectively stripping him of his status as the largest shareholder.

Furthermore, NKMAX faced additional regulatory challenges for failing to timely disclose this significant change in major shareholding, leading to its designation as a company with unfaithful disclosure practices.

"We sincerely apologize to our shareholders for the disapproval of our 2023 audit report," NKMAX said. "We promise to do our utmost to maintain our listing and will do our best to resume trading.

In the event of a delisting due to a disclaimer of opinion, a company is usually granted a one-year grace period, it added.

The company stressed that it will undergo a re-audit and substantive review of listing eligibility to resolve the reasons for delisting and resume trading during the grace period.