EXICURE INC
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
XCUR$0.95+6.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001698530-24-000089
Item 2. Management's Discussion and Analysis and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001698530-24-000117
Item 2. Management's Discussion and Analysis and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 88 current paragraphs.
49 unchanged; 21 reworded; 18 added; 3 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Following the purchase agreement, any value we may generate from our historical biotechnology intellectual property and other assets will be primarily through royalties and license fees that we may receive in the future under the purchase agreement. However, whether we receive any royalties or licenses fees, and the amounts and timing thereof, are uncertain and out of our control.
Current report
In an agreement dated November 6, 2024 and executed November 12, 2024, the Company agreed to sell and issue to HiTron Systems Inc. (“HiTron”) 433,333 shares of common stock for $1,300. This agreement provides HiTron with director appointment rights and the appointment of a Chief Restructuring Officer upon closing, which is expected to occur within 10 days from its execution. On November 13, 2024, in a subsequent agreement, the Company agreed to sell and issue to HiTron 2,900,000 additional shares of common stock for $8,700. The closing of the investment pursuant to this subsequent agreement is conditioned on stockholder approval, among other customary conditions.
Current report
•As the Company will not meet Nasdaq’s listing requirements as of September 30, 2024, the Company has requested another extension by the Panel to demonstrate compliance. We cannot provide assurance that the Panel will determine to continue the Company’s listing at the November 14, 2024 expiration of the current extension or that, if another extension is granted, that we will be able to meet the Panel’s requirements by the deadline.
Current report
Reverse Stock Split
Current report
On August 26, 2024, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation, or the Amendment, with the Secretary of State of the State of Delaware to effect a one-for-five (1-for-5) reverse stock split of our outstanding common stock. The Amendment became effective at 5:00 p.m. Eastern Time on August 27, 2024.
Current report
The Amendment provided that, at the effective time of the Amendment, every five (5) shares of our issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock, without any change in par value per share. The reverse stock split effected all shares of our common stock outstanding immediately prior to the effective time of the Amendment. As a result of the reverse stock split, proportionate adjustments have been made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted share unit award issued by us and outstanding immediately prior to the effective time of the Amendment, which resulted in a proportionate decrease in the number of shares of our common stock reserved for issuance upon exercise or vesting of such stock options, restricted share unit award, and, in the case of stock options, a proportionate increase in the exercise price of all such stock options. In addition, the number of shares reserved for issuance under our equity compensation plans immediately prior to the effective time of the Amendment was reduced proportionately.
Current report
No fractional shares were issued as a result of the reverse stock split. Stockholders of record who would otherwise be entitled to receive a fractional share received a full share in lieu thereof. The reverse stock split affected all stockholders proportionately and did not affect any stockholder’s percentage ownership of our common stock (except to the extent that the reverse stock split results in any stockholder owning only a fractional share).
Current report
Our common stock began trading on The Nasdaq Capital Market on a split-adjusted basis when the market opened on August 28, 2024. The new CUSIP number for our common stock following the reverse stock split is 30205M 309.
Current report
Litigation legal expense
Current report
The increase of $1.1 million for the three months ended September 30, 2024 was due to accruals recorded for the amount of the unsatisfied self insured retainer and legal defense costs related to the securities litigation lawsuit.
Current report
On September 27, 2024, the Company entered into and closed the sale of certain assets pursuant to the Purchase Agreement with the purchaser. The assets sold to the purchaser include the Company’s historical biotechnology intellectual property and other assets and include spherical nucleic acid-related technology, research and development programs, and clinical assets (the “Sold Assets”). The Company will receive gross proceeds of $1,500 from the sale of the Sold Assets.
Current report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Current report
Litigation legal expense
Current report
The increase of $1.1 million for the nine months ended September 30, 2024 was due to accruals recorded for the amount of the unsatisfied self insured retainer and legal defense costs related to the securities litigation lawsuit.
Current report
Loss from sale of property and equipment
Current report
In the third quarter of 2023, the Company sold the majority of its scientific equipment through a third party auctioneer and incurred a loss on the sale of these assets as a result.
Current report
The closing of the subsequent $8.7 million investment by HiTron is subject to receipt of stockholder approval, among other customary conditions.
Current report
The closing of the initial common stock purchase agreement for $1.3 million with HiTron executed on November 12, 2024 is expected to close in the near term and provide the Company with proceeds to fund operations into 2025. The closing of the subsequent $8.7 million investment by HiTron would provide additional liquidity and reduce our short-term funding needs. However, it is subject to receipt of stockholder approval, among other customary conditions, so we cannot provide assurance as to whether we will satisfy those conditions and close the investment, in a timely manner or at all.
Removed paragraphs (3)
Previous report
Recent accounting pronouncements not yet adopted
Previous report
There are no recent accounting pronouncements that the Company has not yet adopted.
Previous report
Comparison of the Six Months Ended June 30, 2024 and 2023
Reworded paragraphs (21)
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. 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.
Current wording
Historically, we were 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. In February 2024, the Company received an upfront payment of $500 from 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 other income of $637 from the sale of our samples related to the licensed product. In the third quarter, we sold our historical biotechnology intellectual property and other assets (including the licensing agreement described above) pursuant to the purchase agreement and recognized other income of $1,500. 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
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.”
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 September 30, 2024, our cash and cash equivalents were $0.3 million.
Previous wording
On September 26, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with CBI USA, Inc. (“CBI USA”), pursuant to which the Company agreed to issue and sell to CBI USA in a private placement an aggregate of 3,400,000 shares of Common Stock, at a purchase price of $1.60 per share. The private placement closed on February 24, 2023 (the “Closing Date”).
Current wording
On September 26, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with CBI USA, Inc. (“CBI USA”), pursuant to which the Company agreed to issue and sell to CBI USA in a private placement an aggregate of 680,000 shares of Common Stock, at a purchase price of $8.00 per share. The private placement closed on February 24, 2023 (the “Closing Date”).
Previous wording
CBI USA funded the acquisition pursuant to the Securities Purchase Agreement through a loan from its affiliate, DGP Co., Ltd. (“DGP”). On June 23, 2023, DGP exercised its the option pursuant to the loan and acquired the 3,400,000 shares of Common Stock initially acquired by CBI USA pursuant to the Securities Purchase Agreement. DGP subsequently agreed to sell its shares to a third party, with the closing of 10% (340,000 shares) occurring in February 2024 and the remainder to close by or on September 30, 2024.
Current wording
CBI USA funded the acquisition pursuant to the Securities Purchase Agreement through a loan from its affiliate, DGP Co., Ltd. (“DGP”). On June 23, 2023, DGP exercised its the option pursuant to the loan and acquired the 680,000 shares of Common Stock initially acquired by CBI USA pursuant to the Securities Purchase Agreement. DGP subsequently agreed to sell its shares to a third party, with the closing of 10% (68,000 shares) occurring in February 2024 and the remainder to close by or on October 31, 2024. The sale of the remainder did not close on October 31, 2024. However, on October 31, 2024, DGP agreed to sell 612,000 shares to two different third parties, with such sales expected to close by February 2025 subject to satisfaction of certain conditions.
Previous wording
The Securities Purchase Agreement, as confirmed and clarified by that certain letter agreement, dated October 31, 2022, between the Company and CBI USA, provided CBI USA together with its affiliates and any “group” of which it or they are a member with the right to designate directors to the Company’s board of directors in proportion to the ownership of CBI USA and its affiliates and any such group. CBI USA and DGP have announced they expect to exercise such rights as a group. Together, they beneficially own 45% of the outstanding shares of Common Stock based on their most recent Schedule 13D amendment. As noted above, DGP has entered into an agreement to sell its remaining shares to a third party by or on September 30, 2024.
Current wording
The Securities Purchase Agreement, as confirmed and clarified by that certain letter agreement, dated October 31, 2022, between the Company and CBI USA, provided CBI USA together with its affiliates and any “group” of which it or they are a member with the right to designate directors to the Company’s board of directors in proportion to the ownership of CBI USA and its affiliates and any such group. CBI USA and DGP have announced they expect to exercise such rights as a group. Together, they beneficially own 47% of the outstanding shares of Common Stock based on their most recent Schedule 13D amendment.
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. 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.
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 effected a one-for-five reverse stock split on August 27, 2024 in order to attempt to raise the stock price. On September 13, 2024, the Company received a letter received from Nasdaq noting it met the closing bid price requirement.
Previous wording
•On May 28, 2024, the Company requested an appeal of the delisting determination to Nasdaq’s hearings panel, the hearing took place on July 9, 2024. On July 31, 2024, the Company received formal notice that the Nasdaq Hearings Panel determined to continue the Company’s listing subject to the Company evidencing compliance with all applicable criteria for continued listing on The Nasdaq Capital Market by September 16, 2024. The Company is diligently working to timely satisfy the terms of the Panel’s decision and to ensure the Company’s continued listing on Nasdaq.
Current wording
•On May 28, 2024, the Company requested an appeal of the delisting determination to Nasdaq’s Hearings Panel (“Panel”), and the hearing took place on July 9, 2024. On July 31, 2024, the Company received formal notice that the Panel determined to continue the Company’s listing subject to the Company evidencing compliance with all applicable criteria for continued listing on The Nasdaq Capital Market by September 16, 2024. The Company received an additional extension to November 14, 2024 to satisfy the terms of the Panel’s decision and to ensure the Company’s continued listing on Nasdaq.
Previous wording
Even if the Company regains compliance with Nasdaq’s listing requirements and addresses the outstanding deficiency notices to Nasdaq’s satisfaction, there can be no assurance that the Company will remain in compliance with Nasdaq’s requirements and will not be delisted.
Current wording
Even if the Company regains compliance with Nasdaq’s listing requirements and satisfied the Panel’s requirements, there can be no assurance that the Company will remain in compliance with Nasdaq’s requirements and will not be delisted.
Previous 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.
Current wording
General and administrative expense was $1.4 million for the three months ended September 30, 2024, representing an decrease of $1.0 million or 40%, from $2.4 million for the three months ended September 30, 2023. The decrease for the three months ended September 30, 2024 was mostly due to lower expenses as a result of reduced operations and higher costs in 2023 resulting from the separation costs of former employees.
Previous wording
The following table summarizes the results of our operations for the six months ended June 30, 2024 and 2023:
Current wording
The following table summarizes the results of our operations for the nine months ended September 30, 2024 and 2023:
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 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.
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. $500 was paid to the Company after the execution of this agreement.
Previous 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.
Current wording
Research and development expense was $0.0 million for the nine months ended September 30, 2024, reflecting a decrease of $1.4 million, or 100% from research and development expense of $1.4 million for nine months ended September 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 $1.2 million for the three months ended June 30, 2024, representing an decrease of $4.4 million or 78%, from $5.6 million for the three months ended June 30, 2023. The decrease for the three months ended June 30, 2024 was mostly due to higher costs in 2023 due to separation pay for executives and related stock based compensation expense, and consulting fees, partially offset by lower bonus, retention, and insurance expense. In addition, $0.9 million of expenses, primarily facilities, depreciation and other expense and platform and discovery-related expense, no longer met the criteria to be classified as research and development expenses due to the shift in our historical operations suspending all research and development activities as discussed above.
Current wording
General and administrative expense was $4.0 million for the nine months ended September 30, 2024, representing an decrease of $7.2 million or 64%, from $11.2 million for the nine months ended September 30, 2023. The decrease for the nine months ended September 30, 2024 was due to higher costs in 2023 from separation pay of former executives and related stock based compensation expense, payroll and related benefits, legal and consulting fees, facility and lease costs, depreciation from assets sold, and the research and development wind down costs that no longer met the criteria to be classified as research and development due to the shift in our historical operations suspending all research and development activities as previous discussed.
Previous wording
The Company sold samples of its clinical products to a private clinical stage biopharmaceutical company.
Current wording
The Company sold samples of its clinical products during the second quarter to a private clinical stage biopharmaceutical company. On September 27, 2024, the Company entered into and closed the sale of certain assets pursuant to the purchase agreement with the Purchaser. The assets sold to Purchaser include the Company’s spherical nucleic acid-related technology, research and development programs, and clinical assets (the “Acquired Assets”) to the Purchaser as described in the purchase agreement. The Company will receive gross proceeds of $1,500 from the sale of the Acquired Assets.
Previous 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.”
Current wording
As of September 30, 2024, our cash and cash equivalents were $0.3 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, the License Agreement and the Purchase Agreement.
Previous 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.
Current wording
We incurred net losses of approximately $2.5 million and $15.4 million for the nine months ended September 30, 2024 and 2023, respectively. We expect to incur significant expenses and negative cash flows for the foreseeable future.
Previous wording
Our current liquidity is not sufficient to continue to fund operations. As a result, there is substantial doubt about our ability to continue as a going concern. Substantial additional financing will be needed in the very near term to fund our operations and there is no certainty we will obtain such financing. If we are unable to raise capital, we will be unable to continue operations. We may need to seek bankruptcy protection and/or cease operations in the near term, which may result in our stockholders receiving no or very little value in respect of their shares of our common stock.
Current wording
The closing of the initial common stock purchase agreement for $1.3 million with HiTron executed on November 12, 2024 is expected to provide the Company with proceeds to fund operations into 2025. However, our current liquidity is not sufficient to continue to fund operations in the long term. As a result, there is substantial doubt about our ability to continue as a going concern. Substantial additional financing will be needed in the very near term to fund our operations and there is no certainty we will obtain such financing. If we are unable to raise capital, we will be unable to continue operations. We may need to seek bankruptcy protection and/or cease operations in the near term, which may result in our stockholders receiving no or very little value in respect of their shares of our common stock.
Previous wording
The following table shows a summary of our cash flows for the six months ended June 30, 2024 and 2023:
Current wording
The following table shows a summary of our cash flows for the nine months ended September 30, 2024 and 2023:
Previous 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.
Current wording
Net cash used in operating activities was $2.1 million and $9.5 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease in cash used in operating activities for the nine months ended September 30, 2024 of $7.4 million was due to the reduction of operating activities and lower headcount, and revenue received related to the patent license agreement and the sale of samples of clinical products and the purchase agreement for the Sold Assets.
Previous 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.
Current wording
Net cash used in investing activities was $0.0 million and $1.8 million for the nine months ended September 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 in 2023.
Previous 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.
Current wording
Net cash provided by financing activities was $1.0 million and $3.7 million for nine months ended September 30, 2024 and 2023, respectively. The decrease of $2.7 million is due to the funds received from the Private Placement in February 2023.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Company sold samples of its clinical products during the second quarter to a private clinical stage biopharmaceutical company.