Exicure buys about $3.125 million of convertible bonds from South Korean subsidiary

The bond terms

Exicure, Inc. (Nasdaq: XCUR) said in an 8-K dated May 6, 2025 that it had bought convertible bonds from its own wholly owned South Korean subsidiary, KC Creation Co., Ltd. The purchase was made under a Convertible Bond Agreement dated April 30, 2025, which the 8-K files as Exhibit 10.1. Exicure bought non-guaranteed private placement convertible bonds for a subscription amount of 4.5 million KRW, or approximately $3.125 million.

The bonds mature on April 30, 2028, and carry a yield to maturity of 2.9% a year, compounded every three months. KC Creation says the proceeds will be used to acquire stocks of other corporations. The 8-K does not name those corporations.

Exicure can convert the bonds into KC Creation common stock at 901 KRW, or $0.63, a share. Conversion rights run from April 30, 2026 to March 31, 2028. The conversion price can be adjusted in several cases, including new securities issued below market price, mergers, capital reductions and significant moves in the market price. It also resets automatically every three months based on the recent stock price, so the number of KC Creation shares Exicure would receive is not fixed.

Exicure also holds a put option. From the first anniversary of issue, and every three months after that until maturity, it can redeem all or part of the principal in exchange for KC Creation shares. Late payments accrue damages at 12% a year, or the maximum legal rate if that is lower. KC Creation must repay at once if certain events occur, including dissolution or bankruptcy proceedings.

A loan to its own subsidiary

The arrangement moves cash from one part of the group to another. Exicure lends to KC Creation, and KC Creation says it will use the money to buy stakes in other companies. Whether the money ever reaches an outside party depends on the subsidiary's later choices. The 8-K does not say what KC Creation will hold, what it will pay, or how it will value the stakes it buys.

The 8-K names no placement agent or adviser for the bonds. It describes the deal as a private placement, and it contains no statement that an outside investor bought any part of it.

The business behind the bonds

The annual report on Form 10-K for 2024 describes Exicure as a company that was an early-stage biotechnology developer until a September 2022 restructuring. That restructuring halted research and development. Since then Exicure has earned one-time income from selling assets. It recorded other income of $637,000 from the sale of samples tied to a licensed product, and $1,500,000 from the third-quarter 2024 sale of its historical biotechnology intellectual property. The company says the sale leaves it with royalties and license fees that are uncertain in amount and timing.

The 10-K says Exicure does not expect its historical assets to generate significant value for stockholders, and that it is continuing a broader search for strategic alternatives. It also says the company "obtained significant financing late in 2024" to keep operating and pursue those alternatives.

That financing came from HiTron Systems Inc. HiTron agreed on November 12, 2024 to buy 433,333 shares at $3.00 a share, for $1.3 million, and on November 13, 2024 to buy 2,900,000 more shares at the same price, for $8.7 million. The second sale closed on December 24, 2024. As of March 12, 2025, HiTron owned 53% of the outstanding common stock. The company also agreed on January 19, 2025 to acquire GPCR Therapeutics USA Inc., a California company, from GPCR Therapeutics Inc., a Korean corporation.

What the bond deal adds

The $3.125 million bond purchase is small next to the HiTron money, and the 8-K gives no reason it was needed at this point. The bonds' conversion price can reset, so the value Exicure would get back depends on KC Creation's share price at the time it converts or puts the bonds. The filing does not give KC Creation's share count, its assets, or its cash position.

The 8-K is signed by Andy Yoo, chief executive officer. Exicure is a Delaware corporation headquartered in Redwood City, California.

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