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].
Exicure(XCUR) - 2023 Q4 - Annual Report