After receiving a delisting warning from Nasdaq, KindlyMD's bitcoin strategy faces pressure

KindlyMD Inc. is a healthcare company that transformed this year into a publicly listed company focused on a bitcoin treasury. Due to its stock price remaining below the minimum bid requirement of the Nasdaq exchange for an extended period, the company faces the risk of being delisted from Nasdaq.

In an 8-K form filing released on December 12, the company disclosed that its common stock had closed below $1 for 30 consecutive trading days, thus receiving a notice from the Nasdaq Listing Qualifications Department indicating non-compliance with Nasdaq Listing Rule 5450(a)(1).

Although this notice does not immediately result in delisting, it initiates a formal compliance process that could determine the future of the stock on the exchange.

The latest price of KindlyMD (ticker: NAKA) is $0.38. The stock is down nearly 19% this week and has dropped more than 30% over the past month.

KindlyMD stock price (Source: Google Finance)

Deadline for Regaining Compliance: June 2026

According to Nasdaq rules, KindlyMD has 180 calendar days, until June 8, 2026, to regain compliance by maintaining a closing price of at least $1 for 10 consecutive trading days.

The company stated that the notice does not immediately affect its listing on the Nasdaq Global Market, and its shares will continue to trade during the compliance period. If the company fails to regain compliance, it may seek to transfer to the Nasdaq Capital Market or conduct a reverse stock split. However, KindlyMD cautioned that neither option guarantees approval or success.

From Healthcare Operator to Bitcoin Treasury Bet

This compliance warning marks a sharp reversal from KindlyMD’s previous optimism regarding its bitcoin strategy. In May of this year, the company merged with Nakamoto, a bitcoin-focused public company, becoming one of the first healthcare companies to officially adopt bitcoin as a core asset.

After the merger, the combined entity retained the KindlyMD name, with Nakamoto operating as its wholly owned subsidiary. To raise funds for purchasing bitcoin, the company raised over $700 million through private placements, public offerings, and convertible bonds.

This strategy was reinforced in August, when KindlyMD purchased 5,764 bitcoins in a single transaction, spending approximately $679 million at an average price of over $118,000 per bitcoin.

Market Shift Puts Pressure on Bitcoin Holdings

According to Bitcoin Treasury data, KindlyMD currently holds about $470.37 million worth of bitcoin, ranking around 19th among institutions with publicly held bitcoin treasuries. At current prices, this position has an unrealized loss of about $176 million, a loss rate of approximately 26%.

KindlyMD bitcoin holdings (Source: Bitcoin Treasury)

Bitcoin itself is trading near $87,000, with a slight increase this week. However, the stocks of companies holding large amounts of bitcoin have not performed well. Crypto treasury stocks are increasingly lagging behind the underlying asset, reflecting investor concerns about leverage, equity dilution, and earnings volatility.

Quarterly Results Reflect Financial Pressure

KindlyMD’s financial reports show that its rapid transformation has brought significant pressure. In its third-quarter financial report, the company’s healthcare business revenue was only $400,000, while operating expenses soared to $10.8 million. The increase in expenses was mainly related to the acquisition of Nakamoto and costs associated with the company’s bitcoin-centric strategy.

The company reported a net loss of $86 million for the quarter, including non-cash expenses related to the merger and unrealized digital asset losses.

Not All Bitcoin Treasury Investments Face the Same Risks

KindlyMD’s situation differs from that of Strategy Inc. (formerly MicroStrategy), which faces uncertainty related to index eligibility rather than exchange listing rules. In October, MSCI began reviewing its index compilation methodology, triggering a sharp sell-off in MSTR stock.

Although the strategy stabilized after maintaining its position in the Nasdaq 100 Index, risks remain. If the strategy is removed from MSCI indices, it could trigger forced selling of billions of dollars by passive funds, with MSCI expected to make a final decision in January 2026.

Demand for Digital Asset Treasuries Cools

From a broader market perspective, investor demand for digital asset treasuries appears to be cooling. Data from DefiLlama shows that total inflows into digital asset treasuries in November were only $1.32 billion, the lowest monthly figure so far this year, indicating waning market enthusiasm amid ongoing volatility and regulatory uncertainty.

For KindlyMD, the coming months will be crucial in determining whether its bitcoin-driven transformation can regain investor confidence or if the risks of this strategy will continue to affect its standing in the public market.