Is NeoImmuneTech (KOSDAQ:950220) Using Too Much Debt?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. Importantly, NeoImmuneTech, Inc. (KOSDAQ:950220) does carry debt. But the real question is whether this debt is making the company risky.

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is NeoImmuneTech's Debt?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 NeoImmuneTech had ₩8.48b of debt, an increase on none, over one year. However, its balance sheet shows it holds ₩71.4b in cash, so it actually has ₩63.0b net cash.

How Strong Is NeoImmuneTech's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that NeoImmuneTech had liabilities of ₩20.5b due within 12 months and liabilities of ₩2.34b due beyond that. Offsetting this, it had ₩71.4b in cash and ₩12.1m in receivables that were due within 12 months. So it actually has ₩48.6b more liquid assets than total liabilities.

This surplus strongly suggests that NeoImmuneTech has a rock-solid balance sheet (and the debt is of no concern whatsoever). Having regard to this fact, we think its balance sheet is as strong as an ox. Succinctly put, NeoImmuneTech boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But it is NeoImmuneTech's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

View our latest analysis for NeoImmuneTech

In the last year NeoImmuneTech had a loss before interest and tax, and actually shrunk its revenue by 29%, to ₩94m. That makes us nervous, to say the least.

So How Risky Is NeoImmuneTech?

Statistically speaking companies that lose money are riskier than those that make money. And the fact is that over the last twelve months NeoImmuneTech lost money at the earnings before interest and tax (EBIT) line. And over the same period it saw negative free cash outflow of ₩34b and booked a ₩30b accounting loss. But at least it has ₩63.0b on the balance sheet to spend on growth, near-term. Overall, its balance sheet doesn't seem overly risky, at the moment, but we're always cautious until we see the positive free cash flow. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. These risks can be hard to spot. Every company has them, and we've spotted 3 warning signs for NeoImmuneTech (of which 2 are a bit concerning!) you should know about.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.