EXICURE, INC. SEC 10-K Report

Exicure, Inc., a biotechnology firm historically focused on developing nucleic acid therapies, has released its Form 10-K report, detailing significant financial and operational changes. The report highlights the company's strategic pivot, financial performance, and the challenges it faces as it explores new avenues for growth and value creation.

Financial Highlights

• Total Revenue: $0.5 million, generated from a patent license agreement for the development of cavrotolimod for potential treatment for hepatitis.
• Operating Loss: $12.2 million, a decrease of $2.8 million compared to the previous year, primarily due to a reduction in general and administrative expenses.
• Net Loss: $9.7 million, a decrease of $7.2 million from the previous year, reflecting cost reductions and a gain on settlement of accounts payable.
• Basic and Diluted Loss Per Common Share: $4.75, reflecting the impact of the reverse stock split and reduced net loss.

Business Highlights

• Business Overview: Historically, Exicure has been an early-stage biotechnology firm focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. However, in September 2022, the company announced a significant reduction in force, suspension of preclinical activities, and halting of all research and development.
• Strategic Alternatives: The company is actively exploring strategic alternatives to maximize stockholder value, including potential transactions with partners interested in joining an existing, publicly-traded organization.
• Licensing and Asset Sales: In February 2024, Exicure received an upfront payment from a licensing agreement for patents related to a historical drug candidate. Additionally, in the third quarter, the company sold its historical biotechnology intellectual property and other assets, recognizing significant other income.
• Change of Control: As of March 12, 2025, HiTron Systems Inc. beneficially owns 53% of the outstanding shares of common stock, following a series of stock purchase agreements.
• Current Focus: The company plans to focus on growth through acquisitions and transactions, particularly in Asia, leveraging relationships and business connections of significant investors and board members.
• Intellectual Property: Exicure has sold its historical biotechnology intellectual property and no longer owns any intellectual property following an asset purchase agreement with Flashpoint Therapeutics, Inc.
• Manufacturing and Supply: The company does not currently own or operate manufacturing facilities and has no manufacturing or supply needs following its restructuring.
• Employees: As of December 31, 2024, the company had seven full-time employees engaged in finance and general management activities after winding down its research and development programs.
• Corporate Information: The company was originally incorporated in Delaware in 2017 and has undergone several transformations, including a merger and name changes, to become Exicure, Inc.
• Future Outlook: The company is seeking additional financing to support its activities and continue operations. There is substantial uncertainty regarding the ability to generate significant value from historical assets, and the company may need to seek bankruptcy protection if unable to raise capital.

Strategic Initiatives

• Strategic Initiatives: Exicure, Inc. has been exploring strategic alternatives to maximize stockholder value, including the sale of historical biotechnology intellectual property and other assets. The company is actively seeking growth through transactions with potential partners interested in joining an existing, publicly-traded organization. In January 2025, Exicure acquired GPCR Therapeutics USA Inc., which is conducting a Phase 2 clinical trial focused on blood cancer patients.
• Capital Management: The company has engaged in several capital management activities, including entering into common stock purchase agreements with HiTron and SangSang, raising approximately $13.4 million in total. Exicure also executed a reverse stock split at a ratio of 1-for-5 to meet Nasdaq listing requirements. Additionally, the company converted existing debt into equity through debt-for-equity exchange agreements, enhancing its equity base. As of December 31, 2024, Exicure's cash and cash equivalents were approximately $12.5 million, but the company faces substantial doubt about its ability to continue as a going concern without additional financing.
• Future Outlook: Exicure plans to continue its exploration of strategic alternatives and may require additional financing to support ongoing operations and potential transactions. The company is focused on maintaining compliance with Nasdaq listing requirements and is subject to a one-year mandatory panel monitor. Exicure's future capital requirements will depend on the results of its strategic initiatives, potential litigation outcomes, and macroeconomic conditions. The company anticipates seeking financing primarily through equity offerings, although market conditions may impact its ability to raise funds on favorable terms.

Challenges and Risks

• Strategic Alternatives: The exploration of strategic alternatives may not be successful, and the company lacks experience in executing such transactions in the U.S. public markets. This could lead to unfavorable terms or failure to deliver anticipated benefits.
• Funding and Liquidity: The company requires substantial funding to continue operations and explore strategic alternatives. Limited liquidity and no current revenue sources exacerbate this risk, with potential challenges in obtaining additional capital due to market conditions and investor sentiment.
• Convertible Notes Receivable: The company may not be able to redeem its investment in convertible notes receivable, as the issuer appears to have closed operations, impacting financial condition and prospects.
• Management Experience: The controlling stockholders and management have limited experience with U.S. public companies, which could affect compliance with laws and stock exchange requirements.
• Nasdaq Listing: The company has faced multiple deficiency notices from Nasdaq and risks delisting, which could impact stock price, liquidity, and access to capital markets.
• Operational Risks: The company is concentrated in one location, and any events affecting this location could have material adverse consequences.
• Cybersecurity: The company is vulnerable to cybersecurity threats, which could disrupt operations and compromise sensitive information.
• Regulatory Risks: Compliance with European data protection laws, including GDPR, poses significant challenges and potential liabilities.
• Future Outlook: The company has undergone significant changes, including a change of control and the sale of its historical assets. Management is focused on exploring strategic alternatives and securing additional financing to support these efforts. However, there is substantial doubt about the company's ability to continue as a going concern without additional funding. The company has also faced challenges in maintaining compliance with Nasdaq listing requirements, which could impact its market presence and financial stability.

SEC Filing: EXICURE, INC. [ XCUR ] - 10-K - Mar. 18, 2025