Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________________________ FORM 10-Q ______________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Delaware 81-5333008 (State or other jurisdiction of incorporation or o ...

Financial Performance - Total revenue for the year ended December 31, 2024, was $500 million, compared to $0 in 2023[204]. - Net loss for 2024 was $9,701 million, a significant improvement from a net loss of $16,914 million in 2023, reflecting a reduction of about 43%[204]. - Basic and diluted loss per common share improved to $4.75 in 2024 from $10.55 in 2023[204]. - The total operating expenses for the Biotechnology segment were $12,732,000 for 2024, down from $14,996,000 in 2023[326]. Assets and Equity - Total assets increased to $15,056,000 in 2024 from $11,580,000 in 2023, representing a growth of 29%[201]. - Stockholders' equity improved to $6,772,000 in 2024, up from $3,031,000 in 2023, reflecting a 123% increase[201]. - Cash and cash equivalents rose significantly to $12,508,000 in 2024, compared to $816,000 in 2023, indicating a substantial increase in liquidity[201]. - Cash and cash equivalents at the end of 2024 were $12,508 million, up from $2,016 million at the end of 2023[210]. Liabilities and Deficits - The accumulated deficit increased to $199,264,000 in 2024 from $189,563,000 in 2023, showing a rise of approximately 5%[201]. - Current liabilities totaled $3,071,000 in 2024, compared to $2,510,000 in 2023, marking an increase of 22%[201]. - The company's accrued expenses and other current liabilities increased to $2,040 thousand in 2024 from $879 thousand in 2023, representing a 132.5% increase[264]. Strategic Initiatives - The company is exploring strategic alternatives to maximize stockholder value, which may involve unexpected costs and liabilities[15]. - The company plans to continue exploring strategic alternatives, including potential partnerships and acquisitions, to maximize stockholder value[215]. Risks and Concerns - The company has incurred significant losses and negative cash flows since inception, raising substantial doubt about its ability to continue as a going concern[194]. - The company anticipates significant expenses and negative cash flows in the foreseeable future, raising concerns about its ability to continue as a going concern[225]. - Future financial performance is subject to inherent risks and uncertainties, including macroeconomic conditions and potential management turnover[22]. Research and Development - Research and development expenses are charged as incurred, including employee-related expenses, third-party research costs, and lab supplies, indicating a significant ongoing investment in R&D[251]. Financing and Capital Structure - Additional financing will be necessary to support ongoing operations and strategic initiatives, with no assurance that such financing will be available[226]. - The company executed a promissory note for a loan of $300 thousand at 6.0% interest, due by May 3, 2025[281]. - The company executed another promissory note for a loan of $700 thousand at 6.0% interest, due by March 25, 2025[282]. - The company entered into two subscription agreements for convertible notes receivable totaling $2 million, with a yield to maturity of 4.5% per annum, maturing in May 2026[265]. Stock and Equity Transactions - A reverse stock split at a ratio of 1-for-5 was executed on August 27, 2024, affecting the outstanding shares[221]. - The company has 6,026,841 shares of common stock outstanding as of December 31, 2024, up from 1,832,988 shares in 2023, reflecting a 228.5% increase[286]. - The Company entered into a securities purchase agreement with CBI USA to issue 680,000 shares of Common Stock at $8.00 per share, resulting in gross proceeds of $5,440,000[296]. - The Company agreed to file a registration statement for the resale of shares sold under the Securities Purchase Agreement, with a commitment to keep it effective for two years[298]. Tax and Regulatory Matters - The effective income tax rate for the year ended December 31, 2024, was (0.1)%, attributed to the Company generating tax losses and a full valuation allowance against deferred tax assets[329]. - The Company has no unrecognized tax benefits as of December 31, 2024, and is subject to examination by tax authorities for the years 2020 through 2024[338]. Asset Management - The company recognized a right of use asset of $8,931 thousand and a lease liability of $8,147 thousand for its Chicago office lease, with an incremental borrowing rate of 8.3%[274]. - The company closed an asset purchase agreement on September 27, 2024, selling certain biotechnology intellectual property for gross proceeds of $1,500, with additional royalties and license fees expected over 10 years[356].

Financial Performance - Cash and cash equivalents increased to $12.5 million as of December 31, 2024, compared to $0.8 million as of December 31, 2023[3] - The net loss for the year ended December 31, 2024, was $(9.7) million, an improvement from a net loss of $(16.9) million in 2023, a decrease of $7.2 million[8] - Total revenue for 2024 was $500,000, compared to no revenue in 2023[17] Expenses - Research and development expenses were $0 for the year ended December 31, 2024, down from $1.4 million in 2023, reflecting the halt of all R&D activities[4] - General and administrative expenses decreased to $5.4 million in 2024 from $11.7 million in 2023, a reduction of $6.3 million[5] Assets and Liabilities - Total assets increased to $15.1 million as of December 31, 2024, from $11.6 million in 2023[15] - The company reported a right-of-use asset impairment loss of $5.7 million in 2024[17] Going Concern - The company has substantial doubt about its ability to continue as a going concern due to insufficient cash to fund operations for the next 12 months[9] Strategic Alternatives - The company is exploring strategic alternatives to maximize stockholder value following a significant reduction in force and suspension of R&D activities[2] Shareholder Information - The weighted-average basic and diluted common shares outstanding increased to 2,043,278 in 2024 from 1,602,790 in 2023[17]

Financial Performance - The company reported a net loss of $1,091,000 for the three months ended September 30, 2024, compared to a net loss of $5,256,000 for the same period in 2023, representing a reduction of approximately 79.2%[13]. - The net loss for the nine months ended September 30, 2024, was $2,520, significantly improved from a net loss of $15,427 for the same period in 2023[18]. - Basic and diluted loss per common share for the nine months ended September 30, 2024, was $(1.36), compared to $(9.89) for the same period in 2023[88]. - The company incurred net losses of approximately $2.5 million and $15.4 million for the nine months ended September 30, 2024 and 2023, respectively[154]. Revenue and Expenses - The company had no revenue reported for the three months ended September 30, 2024, consistent with the same period in 2023, while total revenue for the nine months ended September 30, 2024, was $500,000[13]. - Operating expenses for the three months ended September 30, 2024, were $2,572,000, down from $3,317,000 in the same period of 2023, a decrease of about 22.4%[13]. - General and administrative expenses decreased to $4.0 million for the nine months ended September 30, 2024, a reduction of $7.2 million or 64% from $11.2 million in the same period of 2023[148]. - Total operating expenses for the three months ended September 30, 2024, were $2.6 million, down $745,000 or 22% from $3.3 million in the prior year[140]. - Research and development expenses were $0 for the nine months ended September 30, 2024, reflecting a decrease of $1.4 million or 100% from $1.4 million in the same period of 2023[147]. Assets and Liabilities - Total current assets increased to $2,600,000 as of September 30, 2024, compared to $2,024,000 on December 31, 2023, reflecting a growth of approximately 28.4%[11]. - Total liabilities rose to $9,086,000 as of September 30, 2024, up from $8,549,000 at the end of 2023, indicating an increase of about 6.3%[11]. - The company’s accumulated deficit increased to $192,083,000 as of September 30, 2024, compared to $189,563,000 at the end of 2023, reflecting an increase of about 1.3%[12]. - As of September 30, 2024, total stockholders' equity was $1,545, a decrease from $2,207 at June 30, 2024, reflecting a net loss of $1,091 for the quarter[14]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $343,000 as of September 30, 2024, from $816,000 on December 31, 2023, a decline of approximately 58.1%[11]. - The company reported a net cash used in operating activities of $2,065 for the nine months ended September 30, 2024, compared to $9,541 for the same period in 2023[18]. - Cash and cash equivalents were $0.3 million as of September 30, 2024, down from $0.8 million as of December 31, 2023[153]. - The company will need to obtain substantial additional funding in the near term to continue operations[162]. Going Concern and Compliance - The company is facing significant doubt about its ability to continue as a going concern due to the lack of a significant ongoing revenue source[5]. - The company is not in compliance with Nasdaq's requirement for stockholders' equity of at least $2,500,000 based on its September 30, 2024 balance sheet[122]. - The company has received multiple deficiency notices from Nasdaq regarding compliance with listing requirements, including minimum bid price and corporate governance[121]. - The company anticipates that if it cannot raise capital, it may seek bankruptcy protection and/or cease operations, potentially resulting in minimal value for stockholders[114]. Strategic Alternatives - The company is exploring strategic alternatives to maximize stockholder value, which may involve substantial uncertainties and risks, including the ability to secure funding and consummate transactions[5]. - The company has suspended all research and development activities and is exploring strategic alternatives to maximize stockholder value[22]. - The company is engaging in a broader exploration of strategic alternatives, including potential partnerships with other organizations[22]. Stock and Equity - The company issued 339,214 shares of common stock, resulting in an additional $1,018 in additional paid-in capital during the quarter[14]. - As of September 30, 2024, the company had 2,172,323 shares of common stock issued and outstanding, an increase from 1,832,988 shares as of December 31, 2023[59]. - The company completed a private placement in February 2023, issuing 680,000 shares of common stock at a purchase price of $8.00 per share, resulting in gross proceeds of $5.44 million[61]. - The company agreed to sell and issue 433,333 shares of common stock for $1,300 to HiTron Systems Inc. on November 6, 2024[120]. Other Income and Assets - The company recognized other income of $1,500 from the sale of its historical biotechnology intellectual property and other assets in the third quarter[110]. - The company recorded an accrual of approximately $1.14 million for the unsatisfied portion of its self-insured retainer as of September 30, 2024[95]. - The company received an upfront payment of $500 from a licensing agreement for patents related to a historical drug candidate in February 2024[110]. - The company sold certain assets for gross proceeds of $1.5 million, including spherical nucleic acid-related technology and clinical assets[151].

Share Issuance and Financial Transactions - The Company has agreed to issue 43,333 shares of common stock at a price of $3.00 per share, totaling approximately $130,000[2] - The proceeds from the share purchase will be used for general corporate purposes and business development[11] - The Company is required to obtain Stockholder Approval for the transactions contemplated in the agreement[19] - The shares issued will be validly issued, fully paid, and nonassessable, free from any liens or encumbrances[21] - The Closing Date will occur as soon as regulatory approvals are obtained and conditions are satisfied[6] - The Company does not have any outstanding options or rights to purchase additional shares, except as disclosed in recent reports[23] - The Company will execute additional documents as necessary to consummate the transactions outlined in the agreement[10] - The Shares are being offered in a private placement and have not been registered under the Securities Act, meaning they cannot be resold without an effective registration statement or applicable exemption[50] - The Purchaser and its Affiliates beneficially own no shares of capital stock of the Company as of the date hereof, excluding the Shares or the First Tranche Shares[51] - The Purchaser acknowledges that the Shares will be acquired for its own account and not with a view to resale or distribution in violation of the Securities Act[56] - The Purchaser has the knowledge and experience in business and financial matters to evaluate the merits and risks of the investment in the Shares[57] - The Purchaser must provide an opinion of counsel to the Company for any transfer of Shares not pursuant to an effective registration statement or Rule 144[75] - The Lock-Up Period for the Purchasers is set at 90 days post-Closing Date, during which they cannot sell or transfer shares without prior written consent from the Company[65] - The Company may impose stop-transfer instructions on the Purchaser's shares to enforce the Lock-Up covenant[66] - The Purchasers will be entitled to designate directors proportional to their equity ownership of shares of Common Stock, provided they comply with Nasdaq Listing Rules[67] Corporate Compliance and Governance - The Company has filed all required reports with the SEC since January 1, 2023, ensuring compliance with the Exchange Act[25] - The Board of Directors has unanimously determined that the agreement is fair and in the best interests of the Company and its stockholders[4] - The Company is in good standing under Delaware law and has the requisite corporate power to conduct its business[18] - The Company has established a system of internal accounting controls to ensure transactions are executed in accordance with management's authorization[29] - The Company is in compliance with all provisions of the Sarbanes-Oxley Act of 2002[30] - The Company has maintained insurance covering its properties and operations, which is ordinary and customary for comparable companies[32] - The Company has paid all material taxes required through the date hereof, except for those being contested in good faith[31] - Since January 1, 2023, the Company has operated in compliance with applicable privacy and data protection laws[35] - The Company has not experienced any actual security incidents resulting in unauthorized access to personal data since January 1, 2023[35] - The Company has not been subject to any material litigation that could have a Material Adverse Effect[39] - There has been no material adverse change in the Company's financial condition or operating results since December 31, 2023[36] - The Company has not declared or paid any dividends or made any distributions on its capital stock since December 31, 2023[36] Indemnification and Liability - The Company agrees to indemnify Purchaser Indemnitees against all losses, liabilities, claims, damages, costs, fees, and expenses arising from the Company's breach of any representation, warranty, or covenant[76] - The indemnification provisions are the sole and exclusive remedy for Purchasers and Purchaser Indemnitees, except for actions seeking specific performance or in cases of fraud[82] - For six years post-Closing, the Company will indemnify current directors, officers, and employees against losses related to their service prior to the Closing[83] - The Company will maintain provisions in its bylaws regarding the elimination of liability and indemnification for directors and officers for at least six years after the Closing[84] - The Company must obtain non-cancellable D&O Insurance for a claims reporting period of at least six years post-Closing, with terms no less favorable than existing policies[85] - If the Company merges or consolidates, successors must assume the obligations set forth in the indemnification section[88] - The rights of Indemnified Persons under the indemnification section are in addition to any rights under the Company's bylaws or applicable law[89] Agreement Provisions - The agreement stipulates that any amendments or waivers require written consent from both the Company and the Purchasers[108] - The agreement is governed by the laws of the State of Delaware, with exclusive jurisdiction in the Delaware Chancery Court[114] - The agreement allows for electronic delivery of signed counterparts, which are considered valid[115] - The Company may not assign the agreement without prior written consent from the Purchaser, except in certain business combination scenarios[110] - The agreement includes provisions for adjustments in share numbers and prices due to stock splits or similar events[117] Company Information - The Company is located at 2430 N. Halsted St., Chicago, IL 60614, with Paul Kang as the President and CEO[107] - The Purchaser's email contact is andy.yoo@balancers.co.kr, and the attention is directed to Andy Yoo, CEO[121] - The Purchaser's address is 99-13 Masan-gil, Miyang-myeon, Anseong-si, Gyeonggi-do, Korea 17601[121] - HiTron Systems Inc. purchased 2,900,000 shares for a total of $8,700,000[121]

Financial Performance - Total revenue for the six months ended June 30, 2024, was $500,000, compared to $0 for the same period in 2023[17] - Operating loss for the three months ended June 30, 2024, was $(1,235,000), a decrease from $(5,642,000) in the same period of 2023[17] - Net loss for the six months ended June 30, 2024, was $(1,429,000), compared to $(10,171,000) for the same period in 2023[17] - The company reported a net loss of $600,000 for the three months ended June 30, 2024, compared to a net loss of $5,764,000 for the same period in 2023, indicating a significant reduction in losses[78] - For the six months ended June 30, 2024, the net loss was $1,429,000, down from $10,171,000 in the same period of 2023, reflecting improved financial performance[78] - The basic and diluted loss per share for the three months ended June 30, 2024, was $(0.07), a significant improvement from $(0.68) in the same period of 2023[78] Cash and Liquidity - Cash and cash equivalents decreased to $528,000 as of June 30, 2024, from $816,000 as of December 31, 2023[13] - The company's cash and cash equivalents as of June 30, 2024, were $0.5 million, indicating insufficient liquidity to continue operations[95] - The company raised gross proceeds of $5.4 million from a private placement on February 24, 2023, but these funds have been largely utilized for operational expenses[95] - Net cash used in operating activities for the six months ended June 30, 2024, was $1,616,000, a decrease from $8,129,000 for the same period in 2023[23] - The company expects to incur significant expenses and negative cash flows for the foreseeable future, raising substantial doubt about its ability to continue as a going concern[121] - The company will need to obtain substantial additional funding in the near term to continue operations, with no certainty of obtaining such financing[126] Assets and Liabilities - Total assets decreased to $10,688,000 as of June 30, 2024, from $11,580,000 as of December 31, 2023[13] - Total liabilities increased to $9,075,000 as of June 30, 2024, compared to $8,549,000 as of December 31, 2023[13] - Total stockholders' equity decreased to $1,613,000 as of June 30, 2024, from $3,031,000 as of December 31, 2023[13] - The accrued expenses and other current liabilities totaled $846 million as of June 30, 2024, compared to $879 million as of December 31, 2023, indicating a decrease of about 3.8%[41] Expenses - The company reported a significant increase in general and administrative expenses to $2,571,000 for the six months ended June 30, 2024, from $8,758,000 for the same period in 2023[17] - General and administrative expense decreased to $1.2 million for the three months ended June 30, 2024, down 78% from $5.6 million in the same period of 2023[110] - Total operating expenses for the six months ended June 30, 2024, were $2.6 million, a decrease of 75% from $10.2 million in the same period of 2023[113] - Research and development expense was $0.0 million for the six months ended June 30, 2024, reflecting a 100% decrease from $1.4 million in the same period of 2023[116] Strategic Initiatives - The company is exploring strategic alternatives to maximize stockholder value, facing substantial uncertainties regarding potential partnerships and funding[5] - The company has halted all research and development activities and is focusing on licensing its intellectual property[26] - The company intends to seek financing through equity offerings, although obtaining such financing may be challenging given its current condition[96] - The company has received multiple deficiency notices from Nasdaq regarding compliance with listing requirements, including a minimum bid price rule[100] - The company has until September 16, 2024, to cure outstanding deficiencies to maintain its Nasdaq listing[104] Shareholder Information - The Company had 8,651,148 shares of common stock issued and outstanding as of June 30, 2024, a slight increase from 8,650,753 shares as of December 31, 2023[52] - CBI USA and its affiliates own 45% of the outstanding shares of common stock, with plans to exercise their rights to designate directors on the Company's board[56] - The Company completed a registered direct offering on December 16, 2021, raising gross proceeds of $11,478,000 and net proceeds of $10,226,000 after fees[59] Legal and Compliance - The company is currently entering the discovery phase of litigation related to a complaint filed by a former employee regarding their separation from the company[85] - The Northwestern University License Agreements were terminated on September 10, 2023, and October 3, 2023, due to alleged breaches related to development requirements[88] - The Company has accrued $191 million in liquidated damages related to the registration rights agreement due to delays in filing a registration statement[57] Financing Activities - The Company entered into two subscription agreements for convertible notes receivable totaling $2 million, with a yield to maturity of 4.5% per annum, maturing in May 2026[48] - On May 3, 2024, the Company executed a promissory note and received a loan of $300 million, with interest accruing at 6.0%[50] - The Company executed another promissory note on June 3, 2024, receiving a loan of $700 million from a related party, also at an interest rate of 6.0%[50]

Group 1 - XCUR stock experienced a significant rally, rising 76% during normal trading hours with over 14 million shares traded, far exceeding its daily average of approximately 536,000 shares [1] - Following the rally, XCUR stock dropped 27.1% on Monday morning, with around 393,000 shares traded, nearing its daily average [2][5] - Exicure, the company behind XCUR, currently has no significant operations and is struggling to maintain its listing on the Nasdaq Exchange [6][7] Group 2 - The future of Exicure appears uncertain due to its lack of operations and potential delisting risks, which may accompany other financial troubles [7] - XCUR is classified as a penny stock, making it subject to high volatility, which may deter traders from engaging with it amid recent price movements [8]

Financial Performance - Total revenue for Q1 2024 was $500,000, compared to $0 in Q1 2023, indicating a significant increase[24] - Operating expenses decreased to $1,336,000 in Q1 2024 from $4,539,000 in Q1 2023, representing a reduction of approximately 70.5%[24] - The net loss for Q1 2024 was $829,000, a substantial improvement from the net loss of $4,407,000 in Q1 2023, reflecting a decrease of about 81.2%[24] - For the three months ended March 31, 2024, the net loss was $829,000 compared to a net loss of $4,407,000 for the same period in 2023, indicating a significant reduction in losses[101] - Basic and diluted loss per common share improved from $(0.70) in Q1 2023 to $(0.10) in Q1 2024, showing a substantial decrease in loss per share[101] Cash and Liquidity - Cash and cash equivalents decreased to $366,000 as of March 31, 2024, down from $816,000 at the end of 2023, indicating a decline of approximately 55.1%[21] - Total cash, cash equivalents, and restricted cash at the end of Q1 2024 amounted to $1,566, compared to $2,016 at the end of Q4 2023, a decline of approximately 22.3%[36] - Cash used in operating activities for Q1 2024 was $450, compared to $3,318 in Q1 2023, indicating a decrease of approximately 86.5%[33] - As of March 31, 2024, there is substantial doubt about the company's ability to continue as a going concern without additional financing[46] - The company has no source of revenue or committed financing, necessitating substantial additional funding to continue operations[125] Assets and Liabilities - Total assets decreased to $10,711,000 as of March 31, 2024, from $11,580,000 at the end of 2023, a reduction of about 7.5%[21] - Total liabilities remained relatively stable at $8,504,000 as of March 31, 2024, compared to $8,549,000 at the end of 2023[21] - Stockholders' equity decreased to $2,207,000 as of March 31, 2024, down from $3,031,000 at the end of 2023, reflecting a decline of approximately 27.1%[21] Strategic Initiatives - The company is exploring strategic alternatives to maximize stockholder value, facing substantial uncertainties regarding potential partnerships and funding[12] - The company is exploring strategic alternatives, including potential partnerships in industries unrelated to its historical operations[39] - The company does not expect its historical assets to generate significant value for stockholders, prompting a broader exploration of strategic alternatives[39] - The Company has engaged in significant cost reductions and anticipates needing substantial additional financing in the near term to fund operations[47] Stock and Equity - The weighted-average basic and diluted common shares outstanding increased to 8,650,878 in Q1 2024 from 6,288,952 in Q1 2023, an increase of about 37.7%[24] - As of March 31, 2024, the Company had 8,650,950 shares of common stock issued and outstanding, an increase from 8,650,753 shares as of December 31, 2023[68] - The Company completed a private placement in February 2023, raising gross proceeds of $5.440 million from the issuance of 3,400,000 shares of common stock at a price of $1.60 per share[71] - The Company has accrued $191 in liquidated damages to DGP for not filing a registration statement within the specified timeframe following the September 2022 PIPE[75] Legal and Compliance - The company is currently involved in multiple legal proceedings, including a putative securities class action lawsuit and several shareholder derivative lawsuits[108] - The Company has received multiple deficiency notices from Nasdaq regarding compliance with listing requirements, including stock price and equity levels[131] - An appeal for the delisting determination has been requested, with a hearing scheduled for July 9, 2024[132] Research and Development - Research and development expenses were $0 for the three months ended March 31, 2024, a decrease of 100% from $1.4 million in the same period of 2023[140] Other Financial Metrics - The effective tax rate remained at 0% for both Q1 2024 and Q1 2023 due to the Company generating tax losses and maintaining a full valuation allowance against deferred tax assets[99] - The total financial assets measured at fair value as of March 31, 2024, were $273,000, down from $1,629,000 as of December 31, 2023, primarily due to a decrease in cash equivalents[105]

Financial Performance - Revenue for the quarter ended March 31, 2024, was $0.5 million, compared to $0 for the same quarter in 2023, due to an initial payment from a patent license agreement[4][17] - The net loss for the quarter ended March 31, 2024, was $0.8 million, significantly reduced from a net loss of $4.4 million for the same quarter in 2023, driven by lower payroll and operating costs[7] Cash and Liquidity - Cash and cash equivalents decreased to $0.4 million as of March 31, 2024, down from $0.8 million as of December 31, 2023, and further decreased to approximately $0.2 million as of May 31, 2024[3] - Total current assets decreased to $1.463 million as of March 31, 2024, from $2.024 million as of December 31, 2023[15] - The company has engaged in significant cost reductions and believes additional financing is needed in the very near term to continue operations[8][9] - The company received a $0.7 million loan from a significant stockholder, DGP Co., Ltd., with a maturity of ten months and an interest rate of 6.0% per annum[3] Expenses - Research and development expenses were $0 for the quarter ended March 31, 2024, a decrease of $1.4 million from $1.4 million for the same quarter in 2023, reflecting the halt of clinical and preclinical activities[5] - General and administrative expenses decreased to $1.3 million for the quarter ended March 31, 2024, down from $3.1 million for the same quarter in 2023, primarily due to reduced operations[6] Liabilities - Total liabilities were $8.504 million as of March 31, 2024, slightly down from $8.549 million as of December 31, 2023[15] Strategic Direction - The company is exploring strategic alternatives to maximize stockholder value following its restructuring and suspension of clinical and development activities[10]

Financial Condition - The company currently has no source of revenue or committed financing and requires substantial additional funding in the very near term to continue operations [30]. - The company has significant liquidity concerns, requiring substantial additional financing in the near term to fund operations and explore strategic alternatives [59]. - The company has substantial doubt about its ability to continue as a going concern without additional financing in the near term [136]. - The company may need to seek bankruptcy protection if it is unable to raise capital, which could result in stockholders receiving little to no value for their shares [177]. - The company has an accumulated deficit of $208.4 million as of December 31, 2023, with a net loss of $16.9 million for the year ended December 31, 2023 [66]. - The company has not generated any product revenue and expects to continue incurring significant operating losses for the foreseeable future [67]. - The company incurred net losses of approximately $16.9 million for the year ended December 31, 2023, compared to $2.6 million for 2022, resulting in an accumulated deficit of $208.4 million since inception [176]. - The company reported cash and cash equivalents of $0.8 million as of December 31, 2023, which decreased to approximately $0.2 million by May 31, 2024 [176]. - The company has deferred payments totaling approximately $1.6 million in accounts payable due to its deteriorating financial condition [176]. Operational Changes - The company announced a significant reduction in force, suspending all R&D activities and reducing approximately 66% of its workforce to extend cash runway [31]. - The company has terminated its licenses from Northwestern University in 2023 but continues to own numerous issued patents and pending patent applications [35]. - The company is exploring strategic alternatives for growth, including potential transactions in Asia and other industries unrelated to its historical operations [38]. - The company is exploring asset out-licensing and sales but does not expect these efforts to generate significant value for stockholders [68]. - The company is facing challenges in attracting and retaining qualified management and key personnel, which could impair its ability to implement its business plan [57]. - The company has limited resources following recent reductions in force, complicating risk management and compliance efforts [56]. Compliance and Governance - The company received a delisting determination from Nasdaq due to non-compliance with listing requirements, including a stock price below $1.00 for over 30 consecutive business days [60]. - The company has received numerous deficiency notices from Nasdaq regarding corporate governance and compliance with minimum stockholder equity requirements [62]. - The company has not complied with Nasdaq's requirement to hold an annual meeting, which must be held by June 28, 2024 [62]. - The company is currently in the process of appealing a delisting determination by Nasdaq, with no assurance that its common stock will remain listed [124]. - The company is governed by anti-takeover provisions that may complicate acquisitions and management changes, including a classified board of directors and restrictions on stockholder actions [97]. Revenue and Expenses - For the year ended December 31, 2023, the company reported total revenue of $0, a decrease of $28.8 million, or 100%, from $28.8 million in 2022 due to the termination of collaboration agreements with AbbVie and Ipsen [165]. - Operating expenses for 2023 were $14,996,000, down 51% from $30,657,000 in 2022 [214]. - General and administrative expenses increased to $12.7 million for the year ended December 31, 2023, representing an increase of $1.8 million, or 16%, from $10.9 million in 2022, primarily due to reclassification of certain expenses and separation pay for former executives [169]. - Research and development expenses for the year ended December 31, 2023, were $1.4 million, reflecting a decrease of $18.3 million, or 93%, from $19.8 million in 2022, as the company halted all research and development activities after Q1 2023 [168]. Market and Stock Performance - The market price of the company's common stock has been highly volatile, influenced by various factors including the ongoing impact of the COVID-19 pandemic and geopolitical events [94]. - The company has limited research coverage by securities analysts, which may adversely affect its stock price and trading volume [104]. - The company may face challenges in raising additional capital due to its current transitional state, which could lead to dilution of existing stockholders [95]. - The company has received deficiency notices from Nasdaq regarding compliance with minimum bid price and stockholders' equity requirements, with a deadline to cure the bid price issue by September 9, 2024 [143]. Intellectual Property and Legal Matters - The company has entered into a license agreement for its patents in the field of hepatitis, receiving a small one-time payment and a modest royalty on future sales [38]. - The company may need to engage in costly litigation to protect its intellectual property rights, which could divert management's attention and resources [81]. - The company may be subject to claims challenging the inventorship or ownership of its patents, which could result in substantial costs and loss of valuable intellectual property rights [86]. - The company identified material weaknesses in its internal control over financial reporting, leading to restatements of its first and second quarter unaudited interim condensed consolidated financial statements [80]. Future Outlook - The company is exploring strategic alternatives to generate future revenues, indicating substantial uncertainty regarding revenue generation [167]. - The company expects to evaluate the sustainability of resources dedicated to exploring value from historical intellectual property on an ongoing basis [36]. - The company may need to seek bankruptcy protection or cease operations if sufficient additional capital funding is not obtained in the near term [51]. - The company expects to incur significant expenses and negative cash flows for the foreseeable future, complicating its financial outlook [176].