EXICURE INC

Previous wording

Historically, we have been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. In September 2022, we announced a significant reduction in force, suspension of preclinical activities and halting of all research and development, and that we were exploring strategic alternatives to maximize stockholder value. While the foregoing efforts are continuing with respect to our historical assets, we do not expect they will generate significant value for stockholders. For example, in February 2024, we announced a licensing deal for patents related to one of our historical drug candidates, and received a small, one-time payment and an entitlement to only modest royalties on future sales of the licensed technology that we do not believe will be material. Therefore, we are engaging in a broader exploration of strategic alternatives. This effort involves exploring growth through transactions with potential partners that see opportunity in joining an existing, publicly-traded organization. We are exploring transactions in industries unrelated to our historical operations.

Current wording

Historically, we have been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. In September 2022, we announced a significant reduction in force, suspension of preclinical activities and halting of all research and development, and that we were exploring strategic alternatives to maximize stockholder value. The Company is attempting to license its intellectual property to generate value for stockholders. In February 2024, the Company received an upfront payment of $500 from executed a licensing agreement for patents related to one of our historical drug candidates, and received a small, one-time payment and an entitlement to only modest royalties on future sales of the licensed technology that we do not believe will be material. In the second quarter, we recognized revenues of $637 from the sale of our samples related to the licensed product. We continue to engage in a broader exploration of strategic alternatives. This effort involves exploring growth through transactions with potential partners that see opportunity in joining an existing, publicly-traded organization.

Previous wording

Because we currently have no source of revenue or committed financing, we will require substantial additional funding in the very near term in order to continue to operate and continue our exploration of strategic alternatives and consummate any transactions that we may identify.

Current wording

Because we currently have no source of significant, ongoing revenue or committed financing, we will require substantial additional funding in the very near term in order to continue to operate and continue our exploration of strategic alternatives and consummate any transactions that we may identify.

Previous wording

Since our inception in 2011, we have primarily funded our operations through sales of our securities, loans and collaborations. On February 24, 2023, we raised gross proceeds of $5.4 million on the closing of the Private Placement (as defined below) (or net proceeds of approximately $4.6 million after transaction expenses). However, we already used these net proceeds for severance payments, warrant put payments, acquisition of the Notes Receivable, payroll, and general working capital purposes as we pursue strategic alternatives. As of March 31, 2024, our cash and cash equivalents were $0.4 million. Subsequent to March 31, 2024, our cash and cash equivalents have decreased to approximately $0.2 million as of May 31, 2024. We will attempt to redeem the $2.0 million aggregate principal amount of the Notes Receivable in the third quarter of 2024, however, there can be no assurance that we will be able to do so, in the near term or at all. See “Risk Factors – We may not be able to redeem the investment in notes receivable.”

Current wording

Since our inception in 2011, we have primarily funded our operations through sales of our securities, loans and collaborations. On February 24, 2023, we raised gross proceeds of $5.4 million on the closing of the Private Placement (as defined below) (or net proceeds of approximately $4.6 million after transaction expenses). However, we already used these net proceeds for severance payments, warrant put payments, acquisition of the Notes Receivable, payroll, and general working capital purposes as we pursue strategic alternatives. As of June 30, 2024, our cash and cash equivalents were $0.5 million. We have attempted to redeem the $2 million aggregate principal amount of the convertible Notes Receivable in March and again in May, but have not received a response to our most recent request. Management does not believe the Notes Receivable are recoverable and they have been written down to $0 on our balance sheet. See “Risk Factors – We may not be able to redeem the investment in notes receivable.”

Previous wording

•Compliance with Nasdaq’s minimum bid price rule due to the Company’s stock trading below $1.00 for a sustained period of time. The Company effected a one-for-thirty reverse stock split on June 29, 2022 in order to attempt to raise the stock price. On September 13, 2023, the Company received a delinquency notification that the closing bid price of the Company’s stock traded below $1.00 for the previous 30 consecutive business days. The Company’s stock price has remained below $1.00 since receipt of the notification, which must be cured by September 9, 2024, per the March 12, 2024 extension letter received from Nasdaq.

Current wording

•Compliance with Nasdaq’s minimum bid price rule due to the Company’s stock trading below $1.00 for a sustained period of time. The Company effected a one-for-thirty reverse stock split on June 29, 2022 in order to attempt to raise the stock price. On September 13, 2023, the Company received a delinquency notification that the closing bid price of the Company’s stock traded below $1.00 for the previous 30 consecutive business days. The Company’s stock price has remained below $1.00 since receipt of the notification, which must be cured by September 9, 2024, per the March 12, 2024 extension letter received from Nasdaq. As described below, the Company now has until September 16, 2024 to cure all outstanding deficiencies pursuant to the decision of the Nasdaq Hearings Panel. The Company intends to attempt to cure the bid price deficiency by effecting another reverse stock split, subject to stockholder approval. A special meeting of stockholders has been called for August 15, 2024, at which stockholders will vote on a proposal to approve a reverse stock split at a ratio in the range of 1-for-2 to 1-for-15, with such ratio to be determined at the discretion of the Board of Directors.

Previous wording

•Compliance with Nasdaq’s requirement to hold an annual meeting. On January 11, 2024, Nasdaq notified the Company that it did not comply with listing requirements by not holding an annual meeting in 2023. The Company received an extension letter on March 12, 2024 from Nasdaq noting it must hold its annual meeting by June 28, 2024.

Current wording

•Compliance with Nasdaq’s requirement to hold an annual meeting. On January 11, 2024, Nasdaq notified the Company that it did not comply with listing requirements by not holding an annual meeting in 2023. The Company held its combined 2023 and 2024 annual meeting on June 28, 2024.

Previous wording

Nasdaq staff as a result of not filing its Annual Report Form 10-K by the May 20, 2024 deadline and failure to timely file this Form 10-Q. The staff’s delisting determination also noted the failure to hold its 2023 annual meeting as another basis of the delisting determination.

Current wording

•Although the Company filed its Form 10-Q for the quarter ended September 30, 2023 prior to the extended deadline of May 20, 2024, on May 21, 2024, the Company received a delisting determination from the Nasdaq staff as a result of not filing its Annual Report Form 10-K by the May 20, 2024 deadline and failure to timely file its Form 10-Q for the quarter ended March 31, 2024 (which was subsequently filed on June 17, 2024). The staff’s delisting determination also noted the failure to hold its 2023 annual meeting as another basis of the delisting determination.

Previous wording

On February 5, 2024, the Company entered into a patent license agreement to develop cavrotolimod for potential treatment for hepatitis with a private clinical stage biopharmaceutical company. Under the terms of the agreement, this biopharmaceutical company will receive an exclusive license in the field of hepatitis to all of the Company’s relevant patents. An initial payment of $500 was paid to the Company after the execution of this agreement. The Company will also be entitled to modest royalties on future net sales on all licensed technology during the term of the licensed patents. The Company will be responsible for, and make all decisions concerning, the preparation, filing, prosecution, and maintenance for each patent and patent application included within the licensed patents.

Current wording

On February 5, 2024, the Company entered into a patent license agreement to develop cavrotolimod for potential treatment for hepatitis with a private clinical stage biopharmaceutical company. Under the terms of the agreement, this biopharmaceutical company received an exclusive license in the field of hepatitis to all of the Company’s relevant patents. An initial payment of $500 was paid to the Company after the execution of this agreement.

Previous wording

Research and development expense was $0.0 million for the three months ended March 31, 2024, reflecting a decrease of $1.4 million, or 100% from research and development expense of $1.4 million for three months ended March 31, 2023. In 2022, the Company suspended its clinical, preclinical, and discovery program activities and reduced headcount as it began exploring strategic alternatives in April 2023. As a result, after the first quarter of 2023, we determined it was no longer appropriate to record any research and development expenses.

Current wording

Research and development expense was $0.0 million for the six months ended June 30, 2024, reflecting a decrease of $1.4 million, or 100% from research and development expense of $1.4 million for six months ended June 30, 2023. In 2022, the Company suspended its clinical, preclinical, and discovery program activities and reduced headcount as it began exploring strategic alternatives in April 2023. As a result, after the first quarter of 2023, the Company determined it was no longer appropriate to record any research and development expenses.

Previous wording

General and administrative expense was $1.3 million for the three months ended March 31, 2024, representing an decrease of $(1.8) million or (57)%, from $3.1 million for the three months ended March 31, 2023. The decrease for the three months ended March 31, 2024 was mostly due to lower professional fees as a result of reduced operations and higher costs in 2023 from the separation pay of former executives and related stock based compensation expense.

Current wording

General and administrative expense was $2.6 million for the six months ended June 30, 2024, representing an decrease of $6.2 million or 71%, from $8.8 million for the six months ended June 30, 2023. The decrease for the six months ended June 30, 2024 was mostly due to lower professional fees as a result of reduced operations and higher costs in 2023 from the separation pay of former executives and related stock based compensation expense.

Previous wording

Since our inception, we have incurred significant operating losses. We generated limited revenue from our collaboration agreements, which have since been terminated. We have funded our operations to date with proceeds received from equity financings and payments received in connection with collaboration agreements, which have since been terminated. Currently we are exploring strategic alternatives and generating no revenue.

Current wording

Since our inception, we have incurred significant operating losses. We generated limited revenue from our collaboration agreements, which have since been terminated. We have funded our operations to date with proceeds received from equity financings and payments received in connection with collaboration agreements, which have since been terminated. Currently we are exploring strategic alternatives and generating limited revenue.

Previous wording

As of March 31, 2024, our cash and cash equivalents were $0.4 million as compared to $0.8 million as of December 31, 2023. To date, we have funded our operations primarily with proceeds received from equity financings and to a lesser extent, payments received in connection with collaboration agreements. Subsequent to March 31, 2024, our cash and cash equivalents have decreased to approximately $0.2 million as of May 31, 2024. We will attempt to redeem the $2.0 million aggregate principal amount of the convertible notes receivable in August 2024, however, there can be no assurance that we will be able to do so, in the near term or at all. See “Risk Factors – We may not be able to redeem the investment in convertible notes receivable.”

Current wording

As of June 30, 2024, our cash and cash equivalents were $0.5 million as compared to $0.8 million as of December 31, 2023. To date, we have funded our operations primarily with proceeds received from equity financings and to a lesser extent, payments received in connection with collaboration agreements. We attempted to redeem the $2 million aggregate principal amount of the convertible Notes Receivable in March and again in May, but have not received a response to our most recent request. Management does not believe the Notes Receivable are recoverable and they have been written down to $0 on our balance sheet. See “Risk Factors – We do not expect to be able to redeem the investment in convertible Notes Receivable.”

Previous wording

We incurred net losses of approximately $0.8 million and $4.4 million for the three months ended March 31, 2024 and 2023, respectively. We expect to incur significant expenses and negative cash flows for the foreseeable future.

Current wording

We incurred net losses of approximately $1.4 million and $10.2 million for the six months ended June 30, 2024 and 2023, respectively. We expect to incur significant expenses and negative cash flows for the foreseeable future.

Previous wording

The following table shows a summary of our cash flows for the three months ended March 31, 2024 and 2023:

Current wording

The following table shows a summary of our cash flows for the six months ended June 30, 2024 and 2023:

Previous wording

Net cash used in operating activities was $0.5 million and $3.3 million for the three months ended March 31, 2024 and 2023, respectively. The decrease in cash used in operating activities for the three months ended March 31, 2024 of $2.9 million was due to the reduction of operating activities and lower headcount.

Current wording

Net cash used in operating activities was $1.6 million and $8.1 million for the six months ended June 30, 2024 and 2023, respectively. The decrease in cash used in operating activities for the six months ended June 30, 2024 of $6.5 million was due to the reduction of operating activities and lower headcount, and revenue received related to the patent license agreement.

Previous wording

Net cash used in investing activities was $0.0 million and provided by investing activities was $0.1 million for the three months ended March 31, 2024 and 2023, respectively. The decrease in cash provided by investing activities of $0.1 million was primarily due to the lack of investing activities and a sale of scientific equipment in 2023.

Current wording

Net cash used in investing activities was $0.0 million and $1.8 million for the six months ended June 30, 2024 and 2023, respectively. The decrease in cash provided by investing activities of $1.8 million was primarily due to purchase of the convertible Notes Receivable.

Previous wording

Net cash provided in financing activities of $0.0 million for three months ended March 31, 2024. The decrease of $4.6 million is due to the funds received from the Private Placement in February 2023.

Current wording

Net cash provided by financing activities was $1.0 million and $3.7 million for six months ended June 30, 2024 and 2023, respectively. The decrease of $2.7 million is due to the funds received from the Private Placement in February 2023.