Exicure, Inc. (Nasdaq: XCUR, the "Company") has historically been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. In September 2022, the Company announced a significant reduction in force, suspension of preclinical activities and halting of all research and development, and that the Company was exploring strategic alternatives to maximize stockholder value.
Equity Financing
In an agreement dated November 6, 2024 and executed on November 12, 2024, the Company agreed to sell and issue to HiTron Systems Inc. (“HiTron”) 433,333 shares of common stock, par value $0.0001 per share, for $1.3 million, at a purchase price of $3.00 per share. The closing of this transaction 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, par value $0.0001 per share, for $8.7 million, at a purchase price of $3.00 per share. The closing of the investment pursuant to this subsequent agreement is conditioned on stockholder approval, among other customary conditions.
Upon closing of the initial $1.3 million investment, HiTron will have the right to appoint two nominees to the Company’s board of directors, subject to certain conditions. Upon closing of the subsequent $8.7 million investment, HiTron will have the right to appoint additional nominees in proportion to its equity interest, subject to certain conditions.
Request for Subsequent Extension to Nasdaq Hearings Panel
As previously disclosed, the Nasdaq Hearings Panel granted an extension through November 14, 2024 to continue the Company’s listing subject to the Company evidencing compliance with all applicable criteria for continued listing on The Nasdaq Capital Market. As of September 30, 2024, the Company did not meet the continued listing requirement related to stockholders’ equity, primarily due to the litigation accrual described below. However, the Company believes it will be in pro forma compliance with the stockholders’ equity requirement once the $1.3 million sale to HiTron closes. Therefore, the Company has requested an additional extension through December 17, 2024. We cannot provide any assurance as to whether the Panel will grant the extension or, if granted, whether we can adequately demonstrate to the Panel’s satisfaction that we have regained, and will be able to maintain, compliance with the continued listing standards in order to avoid delisting.
Third Quarter 2024 Financial Results
Cash Position: Cash and cash equivalents were $0.3 million as of September 30, 2024, as compared to $0.8 million as of December 31, 2023. The Company believes that its cash and cash equivalents are insufficient to continue to fund operations and additional funding is needed in the very near term.
General and Administrative (G&A) Expense: General and administrative expenses were $1.46 million for the quarter ended September 30, 2024, as compared to $2.4 million for the quarter ended September 30, 2023. The decrease in G&A expense of $0.2 million 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.
Litigation legal expense: 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.
Other Income: The Company will receive gross proceeds of $1.5 million from closing the sale of certain assets pursuant to the Asset Purchase Agreement. The Purchaser acquired the Company’s historical biotechnology intellectual property and other assets and include spherical nucleic acid-related technology, research and development programs, and clinical assets.
Net Loss: The Company had a net loss of $1.1 million for the quarter ended September 30, 2024, as compared to a net loss of $5.3 million for the quarter ended September 30, 2023. The decrease in net loss of $4.2 million was primarily driven by the $1.5 million of revenue from the Asset Purchase Agreement, the $2 million loss incurred in 2023 from the write down of its investment in convertible bonds, and the reduction of payroll and operating costs due to reduced operations.
Going Concern: Management believes that the Company’s existing cash and cash equivalents is not sufficient to continue to fund operations. The Company has already engaged in significant cost reductions, so our ability to further cut costs and extend the Company’s operating runway is limited. As a result, substantial additional financing is needed in very near term to pay expenses, fund the ongoing exploration of strategic alternatives and pursue any alternatives that may be identified. The Company needs to raise capital to fund its operations. There can be no assurance that such additional financing will be available and, if available, can be obtained on acceptable terms.
