Simply put
- KindlyMD’s stock saw a nearly 10% drop on Monday after the company failed to meet its third-quarter earnings deadline, which was complicated by accounting issues from the Nakamoto merger.
- The stock value of this Bitcoin treasury company has plummeted 95% compared to six months ago.
- The projected losses for the third quarter include $59 million from the Nakamoto acquisition, $22 million in unrealized losses on digital assets, and a $1.4 million realized loss from selling virtual currencies.
On Monday, Kindly MD’s stock price dropped nearly 10%. It was revealed that the company would miss its third-quarter financial deadline due to some complexities. Quite a situation, right?
Trading on Nasdaq as NAKA, the stock fell to $0.55 by the end of the trading day, marking a 25% decline from just a week ago and over 95% from six months back.
Typically, large companies are expected to file their reports within 40 days after a quarter ends. Meanwhile, U.S.-listed companies like KindlyMD have a 45-day window. The deadline for the third quarter, which ended on September 30, was November 14.
Instead of the usual 10-Q form, KindlyMD informed the U.S. Securities and Exchange Commission on Friday that accounting challenges associated with the Nakamoto merger necessitated extra time for accurate and complete reporting.
Earlier this year, KindlyMD merged with Nakamoto, a Bitcoin finance entity that was previously known as Nakamoto Games. Following the merger, Nakamoto’s founder, David Bailey, took the role of CEO in August.
Bailey has mentioned taking charge of BTC, a company he co-founded, although he hasn’t explicitly addressed the current state of stock prices or the performance for the latter half of the quarter.
The company indicated in its filing that the figures would show a “significant change” from last year.
NAKA shared plans to report a realized loss of $1.4 million related to its digital assets, suggesting the sale of some holdings. Additionally, its remaining digital assets have unrealized losses exceeding $22 million, with a debt extinguishment loss anticipated to be $14.4 million.
Moreover, the filing details a projected loss of $59 million on the Nakamoto acquisition, indicating that the company spent more than the fair market value of the net assets acquired.
Conversely, the company also anticipates reporting a positive shift in its contingent liability’s fair value, amounting to $21.8 million. This indicates that one of its debts may reflect profit in the overall accounting.
