Business context and reporting period
The supplied filing is for Max-1 Acquisition Corporation, not Exicure, Inc. It is a Form 10-Q for the three months ended May 31, 2017. Max-1 was a newly formed shell/blank-check company seeking to acquire or merge with an operating business; it had no operating revenue.
Financial results and liquidity
- Revenue: $0 for the quarter.
- Expenses and loss: General and administrative expenses were $17,832; interest expense was $215; net loss was $18,047, or $0.02 per share.
- Cash flow: Operating cash used was $11,332. Related-party advances provided $12,500, resulting in a $1,168 increase in cash.
- Balance sheet at May 31: Cash and total assets were $7,193; current liabilities were $27,325, including $24,600 due to related parties and $2,725 of accounts payable and accrued expenses. Working capital was negative by approximately $20,000.
- Debt and funding: A promissory note to a shareholder/director accrues interest at 6% annually; the filing says the rate rises to 18% following an event of default. The company depended on further related-party advances or equity financing, with no assurance funding would be available.
- No meaningful margin measures are applicable to this pre-revenue company. No cash equivalents were reported.
Changes, outlook, and risks
Compared with February 28, 2017, cash rose from $6,025 to $7,193, while total assets declined from $10,025 to $7,193 as prepaid expenses were used. Current liabilities increased from $12,110 to $27,325, and stockholders’ deficit widened from $2,085 to $20,132. The filing provides no comparable prior-quarter operating results.
Management planned to continue searching for a business combination and expected to fund reporting and acquisition-search costs with shareholder, management, or other investor financing. Management reported discussions with a potential target, but no binding agreement existed and completion was uncertain. The company disclosed substantial doubt about its ability to continue as a going concern, citing accumulated losses, negative working capital, and dependence on financing and a successful transaction. A subsequent event: on June 16, 2017, the company issued 250,000 shares for gross proceeds of $6,250. Management concluded disclosure controls were effective; no material legal proceedings or off-balance-sheet arrangements were reported.
Key facts for investors to verify
- Confirm the issuer identity: this filing names Max-1 Acquisition Corporation, despite the request metadata naming Exicure, Inc.
- Assess the company’s ability to obtain cash funding and address the disclosed going-concern uncertainty.
- Review the related-party note terms, outstanding advances, accrued interest, and potential default consequences.
- Check whether the potential business-combination discussions led to a binding agreement or completed transaction.
- Consider the dilution and ownership impact of the subsequent 250,000-share issuance.