Results

Exicure Inc.

03/25/2026 | Press release | Distributed by Public on 03/25/2026 14:43

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties as described under the heading "Cautionary Note Regarding Forward-Looking Statements" elsewhere in this Annual Report on Form 10-K. You should review the disclosure under the heading "Risk Factors" in this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
Historically, we have been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. In September 2022, we announced a significant reduction in force, suspension of preclinical activities and halting of all research and development, and that we were exploring strategic alternatives to maximize stockholder value. In 2024, we entered into a licensing agreement for patents related to one of our historical drug candidates, and received a small, one-time payment and an entitlement to only modest royalties on future sales of the licensed technology that was not material. We then sold some of its samples related to the licensed product. Also in 2024, we entered into an Asset Purchase Agreement with Flashpoint Therapeutics, Inc. to sell our historical biotechnology intellectual property and other assets to the purchaser. Any value we may generate from our historical biotechnology intellectual property and other assets will be primarily through royalties and license fees that we may receive in the future under the Asset Purchase Agreement. However, whether we receive any royalties or licenses fees, and the amounts and timing thereof, are uncertain and out of our control.
We continue to engage in a broader exploration of strategic alternatives, including but not limited to private company acquisitions, raising additional capital, strategic partnerships, some combination of these, and other arrangements that are in management's view worth exploring. We obtained significant financing late in 2024 in order to continue operations and our exploration of strategic alternatives and consummate any transactions that we may identify.
On January 19, 2025, we entered into a Share Purchase Agreement with GPCR pursuant to which we acquired from GPCR all of the issued and outstanding equity securities of GPCR USA. In connection with the closing of the Share Purchase Agreement, the Company and GPCR entered into a License and Collaboration Agreement to further develop and commercialize GPCR's technologies related to certain intellectual property and patents. This License and Collaboration Agreement requires us to make milestone payments to GPCR upon the achievement of specific milestone events relating to clinical trials, marketing authorizations, and net sales, as well as for us to pay a recurring royalty payments, as set forth in the agreement.
GPCR USA completed its Phase 2 clinical trial in January 2026 that focused on blood cancer patients, particularly those eligible for hematopoietic stem cell transplantation, commonly referred to as bone marrow transplant. Its current clinical trial involves the combined administration of GPC-100 (a small molecule antagonist with a high binding affinity to a chemokine receptor) and propranolol (a beta-blocker drug that affects the heart and circulation) for mobilization of stem cells in Multiple Myeloma patients. In accordance with the terms of the License and Collaboration Agreement, we intend to make a milestone payment of $1.0 million to GPCR in the form of shares of our common stock in the second quarter of 2026.
On March 26, 2025, the Company formed KC Creation Co., Ltd., a wholly-owned South Korean subsidiary. It was established based on potential future growth strategies, such as a collaboration with GPCR USA and Korean bio-platform companies, response to sustainability trends by development of infrastructure based on eco-friendly renewable energy, and diversification of business and utilization of global growth potential of Korean entertainment content. However, Management decided to sell this subsidiary on November 24, 2025.
Operating, financing, and cash flow considerations
Since our inception in 2011, we have primarily funded our operations through sales of our securities, loans and collaborations. Effective as of November 12, 2024, we entered into the Initial Common Stock Purchase Agreement with HiTron, pursuant to which we agreed to issue and sell to HiTron 433,333 shares of our common stock, par value $0.0001 per share (the "Common Stock"), for an aggregate purchase price of $1.3 million, at a purchase price per share of $3.00. On November 13, 2024, we entered into the Subsequent Common Stock Purchase Agreement, pursuant to which we agreed to sell and issue to HiTron 2,900,000 additional shares of Common Stock for an aggregate purchase price of $8.7 million, at a purchase price per share of $3.00. The issuance of such shares under the Subsequent Common Stock Purchase Agreement closed on December 24, 2024.
On December 9, 2024, we entered into a common stock purchase agreement (the "SangSang Purchase Agreement") with SangSangIn Investment & Securities Co., Ltd. ("SangSang"), pursuant to which we agreed to issue and sell to SangSang 433,332 shares of our Common Stock, for an aggregate purchase price of approximately $2.0 million, at a purchase price per share of $4.61. The transactions under the SangSang Purchase Agreement closed on December 24, 2024.
On December 10, 2024, the Company entered into a common stock purchase agreement with MIRTO Co. LTD. ("MIRTO"), pursuant to which the Company agreed to issue and sell to MIRTO 87,808 shares of its Common Stock, for an aggregate purchase price of approximately $0.41 million, at a purchase price per share of $4.61, which closed on December 24, 2024.
On February 14, 2025, the Company entered into a Common Stock Purchase Agreement with Shin Chang Partners and RMS0718 Co., Ltd., pursuant to which the Company agreed to issue and sell to each of the purchasers 145,454 shares at a purchase price of $5.50 per share. The Company received aggregate gross process of approximately $1.6 million.
As of December 31, 2025, our cash and cash equivalents cash were approximately $3.7 million. Our current liquidity may not be sufficient to fund operations for the next 12 months. As a result, there is substantial doubt about our ability to continue as a going concern. Additional financing will be needed to fund our ongoing operations and exploration of strategic alternatives and pursue any alternatives that we identify. If we are unable to raise capital, the Company could seek bankruptcy protection and/or cease operations, which may result in our stockholders receiving no or very little value in respect of their shares of our common stock.
We expect to seek financing through equity offerings. However, it may be difficult to obtain financing given our current condition and uncertainty over its future direction. Therefore, we may be unable to raise capital at all or on favorable terms. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to continue operations.
Recent Developments
Significant Stockholder
As discussed above, effective as of November 12, 2024, we entered into the Initial Common Stock Purchase Agreement with HiTron, pursuant to which we agreed to issue and sell to HiTron 433,333 shares of Common Stock for an aggregate purchase price of $1.3 million, at a purchase price per share of $3.00.
On November 13, 2024, we entered into the Subsequent Common Stock Purchase Agreement, pursuant to which we agreed to sell and issue to HiTron 2,900,000 additional shares of the Company's Common Stock, for an aggregate purchase price of $8.7 million, at a purchase price of $3.00 per share. The issuance of such shares under the Subsequent Common Stock Purchase Agreement closed on December 24, 2024.
As of March 17, 2026, HiTron beneficially owns 25% of the outstanding shares of Common Stock based on information available to the Company.
Nasdaq Listing Requirements Compliance
As previously disclosed, we have received numerous deficiency notices with respect to various Nasdaq listing requirements in the past year. Most recently, on May 21, 2025, the Company received a delinquency notification from Nasdaq that it had not filed its Form 10-Q for the period ended March 31, 2025. The Company became compliant upon filing its Form 10-Q for the period ended March 31, 2025 on June 27, 2025.
Even though we regained compliance with Nasdaq's listing requirements, there can be no assurance that we will remain in compliance with Nasdaq's requirements and will not be delisted in the future.
Reverse Stock Split
On August 26, 2024, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation, or the Amendment, with the Secretary of State of the State of Delaware to effect a one-for-five (1-for-5) reverse stock split of our outstanding common stock. The Amendment became effective at 5:00 p.m. Eastern Time on August 27, 2024.
The Amendment provided that, at the effective time of the Amendment, every five (5) shares of our issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock, without any change in par value per share. The reverse stock split effected all shares of our common stock outstanding immediately prior to the effective time of the Amendment. As a result of the reverse stock split, proportionate adjustments have been made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted share unit award issued by us and outstanding immediately prior to the effective time of the Amendment, which resulted in a proportionate decrease in the number of shares of our common stock reserved for issuance upon exercise or vesting of such stock options, restricted share unit award, and, in the case of stock options, a proportionate increase in the exercise price of all such stock options. In addition, the number of shares reserved for issuance under our equity compensation plans immediately prior to the effective time of the Amendment was reduced proportionately.
No fractional shares were issued as a result of the reverse stock split. Stockholders of record who would otherwise be entitled to receive a fractional share received a full share in lieu thereof. The reverse stock split affected all stockholders proportionately and did not affect any stockholder's percentage ownership of our common stock (except to the extent that the reverse stock split results in any stockholder owning only a fractional share).
Our common stock began trading on The Nasdaq Capital Market on a split-adjusted basis when the market opened on August 28, 2024. The new CUSIP number for our common stock following the reverse stock split is 30205M 309.
Critical Accounting Estimates
We prepare our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.
We consider an accounting estimate to be critical if: (1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statements that require estimation but are not deemed critical, as defined above.
Management has discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors. Changes in estimates used in these and other items could have a material impact on our financial statements. This includes estimates where the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the impact of the estimate on financial condition or operating performance is material.
Business Combinations
We follow the acquisition method of accounting to record identifiable assets acquired and liabilities assumed in connection with acquired businesses at their estimated fair value as of the date of acquisition. Identifiable intangible assets from business combinations are recognized at their estimated fair values as of the date of acquisition and consist of in-process research and development ("IPR&D"). Determination of the estimated fair value of identifiable intangible assets requires judgment. The fair value of intangible assets is estimated using the Multi-Period Excess Earnings Method for the acquired IPR&D. The fair value methods are income-based valuation approaches, which require judgment to estimate appropriate discount rates, probability of success rates related to the drug under development, projected revenue, gross margins, operating costs, and growth rates.
The contingent consideration liability, associated with our business combination, is estimated based on the discounted cash flow method to determine the probability of achieving certain milestones. In order to perform the fair value calculations, the following estimates are considered: probability of achieving certain milestones, discount period, and discount rates.
We believe our assumptions, estimates, and judgements to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed.
Recent adopted accounting pronouncements
In the normal course of business, we evaluate all new accounting pronouncements issued by the FASB, SEC, or other authoritative accounting bodies to determine the potential impact they may have on our Consolidated Financial Statements. See Note 2, Significant Accounting Policies, of the notes to our consolidated financial statements in this Annual Report for additional information about these recently issued accounting standards and their potential impact on our financial condition or results of operations.
Components of Statements of Operations
Revenue
There was no revenue for the year ended December 31, 2025. For the year ended December 31, 2024, the Company's revenue was generated from a patent license agreement to develop cavrotolimod for potential treatment for hepatitis with a private clinical stage biopharmaceutical company. Under the terms of the agreement, this biopharmaceutical company received an exclusive license in the field of hepatitis to all of the Company's relevant patents. We have never generated any commercial product revenue and do not expect to generate any product revenue in the near term.
Research and development expense
As previously announced, we halted all research and development activities in 2022 and stopped recording any research and development expenses after the first quarter of 2023 until the acquisition of GPCR USA in the first quarter of 2025.
Research and development expense consisted of costs associated with GPCR USA's research activities, including clinical development expenses with third parties such as contract research organization, costs and services to complete its Phase 2 clinical trial, and employee-related expenses, including salaries, bonuses, and benefits.
We expensed research and development costs as they were incurred. A significant portion of our research and development costs were not tracked by project as they benefit multiple projects or our technology.
General and administrative expense
General and administrative expense consists primarily of salaries and related benefits, including equity-based compensation, related to our executive, finance, legal, business development and support functions. Other general and administrative expenses include travel expenses, professional fees for auditing, tax and legal services and facility-related costs.
Litigation legal expense
Litigation legal expense consists of expenses from its self-insured retention related to the securities litigation lawsuit.
Right-of-use asset impairment loss
This loss resulted from the impairment analysis of the Company's right-of-use asset related to its office lease.
Dividend income
Dividend income consists of income earned on our money market funds that are recorded as cash equivalents on our consolidated balance sheets.
Interest income
Interest income consists of income earned on our available for sale securities that are recorded as short-term investments on our consolidated balance sheets, as well as income earned on our cash balances.
Interest expense
Interest expense includes amounts pursuant to debt agreements executed in 2024 that were later converted to equity.
Gain on settlement of accounts payable
During the year, the Company agreed to settle overdue legal expenses incurred in the prior year at a discounted amount resulting in a gain on this transaction.
Other income
The Company sold samples of its clinical products during the second quarter of 2024 to a private clinical stage biopharmaceutical company. In the fourth quarter of 2024, the Company sold certain assets pursuant to the purchase agreement with the purchaser.
Results of Operations
Comparison of the Year Ended December 31, 2025 and 2024
The following table summarizes the results of our operations for the years ended December 31, 2025 and 2024:
Year Ended
December 31,
(dollars in thousands) 2025 2024 Change
Revenue:
Revenue $ - $ 500 $ (500) 100 %
Total revenue - 500 (500) 100 %
Operating expenses:
Research and development expense 3,286 - 3,286 100 %
General and administrative expense 6,831 5,449 1,382 25 %
Litigation legal expense - 1,562 (1,562) (100) %
Right-of-use asset impairment loss - 5,721 (5,721) 100 %
Loss from sale of property and equipment 90 - 90 100 %
Gain on early lease termination (5,974) - (5,974) 100 %
Total operating expenses 4,233 12,732 (8,499) (67) %
Operating loss (4,233) (12,232) 7,999 (65) %
Other (expense) income, net:
Dividend income 107 5 102 2,040 %
Interest income 29 8 21 263 %
Interest expense (1) (18) 17 (100) %
Gain on settlement of accounts payables 346 407 (61) 100 %
Change in fair value of contingent liability (1,553) - (1,553) 100 %
Other (expense) income, net (275) 2,137 (2,412) 100 %
Total other (expense) income, net (1,347) 2,539 (3,886) (153) %
Net loss before provision for income taxes (5,580) (9,693) 4,113 (42) %
Provision (benefit) for income taxes (634) 8 (642) (100) %
Net loss $ (4,946) $ (9,701) $ 4,755 (49) %
Revenue
On February 5, 2024, the Company entered into a patent license agreement to develop cavrotolimod for potential treatment for hepatitis with a private clinical stage biopharmaceutical company. Under the terms of the agreement, this biopharmaceutical company received an exclusive license in the field of hepatitis to all of the Company's relevant patents. A total of $0.5 million was paid to the Company after the execution of this agreement.
Our ability to generate revenues in the future is dependent on our ability to successfully explore and execute strategic alternatives. Therefore, there is substantial uncertainty as to how, when or if we might be able to generate revenues in the future.
Research and development expense
The following table summarizes our research and development expenses incurred during the periods indicated:
Year Ended
December 31,
(dollars in thousands) 2025 2024 Change
Employee-related expense $ 1,027 $ - $ 1,027 100 %
Clinical development programs expense 2,259 - 2,259 100 %
Total research and development expense $ 3,286 $ - $ 3,286 100 %
Research and development expense was $3.3 million for the year ended December 31, 2025, a $3.3 million increase from the year ended December 31, 2024. The Company incurred research and development expense in 2025 after the acquisition of GPCR USA. In 2022, the Company suspended its clinical, preclinical, and discovery program activities and reduced headcount as it began exploring strategic alternatives in April 2023 and stopped recording any research and development expenses until the acquisition of GPCR USA in the first quarter of 2025.
General and administrative expense
Year Ended
December 31,
(dollars in thousands) 2025 2024 Change
General and administrative expense $ 6,831 $ 5,449 $ 1,382 25 %
Full time employees 7 6 1
General and administrative expense was $6.8 million for the year ended December 31, 2025, representing an increase of $1.4 million, or 25%, from $5.4 million for the year ended December 31, 2024. The increase for the year ended December 31, 2025 was to the additional expenses incurred from the acquisition of GPCR USA.
Litigation legal expense
The $1.6 million for the year ended December 31, 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.
Right-of-use asset impairment loss
This loss for the year ended December 31, 2024 resulted from the impairment analysis of the Company's right-of-use asset related to its office lease.
Loss from sale or disposal of property and equipment
The Company recognized a $90,000 loss from the sale of GPCR USA's fixed assets.
Gain on early lease termination
Due to the early termination of the Chicago Lease as of January 31, 2025, the Company recognized a $6.0 million gain resulting from the reversal of the remaining liability related to this lease.
Other income and expense
The Company recognized a gain of $346,000 from satisfying its self-insured retainer with the insurer and from the reversal of liability related to registration rights delay amounts owed to DGP. The Company recognized a loss of $1.6 million related to the change in the fair value of its contingent liability. The Company recognized a loss of $275,000 related to the sale of its subsidiary, KC Creation, as well as additional currency translation losses associated with this foreign subsidiary.
The Company sold samples of its clinical products during the second quarter of 2024 to a private clinical stage biopharmaceutical company. During the third quarter of 2024, the Company sold certain assets pursuant to a purchase agreement for $1.5 million to the purchaser for the Company's historical biotechnology intellectual
property and other assets and included spherical nucleic acid-related technology, research and development programs, and clinical assets.
Provision for income taxes
The Company recognized an income tax benefit for the year ended December 31, 2025 as a result of the GPCR USA acquisition. The effective tax rate for the year ended December 31, 2025 is attributable to the fact that the Company is subject to state income taxes. The effective income tax rate for the year ended December 31, 2025 was 11.4% because the Company generated tax losses and provided a full valuation allowance against its deferred tax assets to an amount that is more likely than not to be realized. The effective tax rate for the year ended December 31, 2024 of 11.4% was attributable to the fact the Company was subject to the IRC Section 174 regulations requiring companies to capitalize certain research and experimental expenditures and IRC Section 382 loss limitation rules on our ability to utilize net operating losses to offset the capitalization requirement, with the ownership change being in the fourth quarter of 2022. This resulted in current income tax expense in 2022.
As of December 31, 2024, the Company has "discontinued the original business" of Exicure within the meaning of Section 382(c). This change has and will continue to subject our net operating loss carryforwards as of the fourth quarter of 2022 to an annual zero limitation, which will fully restrict our ability to use loss carryforwards and deductions from built in loss assets generated before the ownership change date to offset our taxable income in periods following the ownership change.
Liquidity and Capital Resources
Since our inception, we have incurred significant operating losses. We generated limited revenue from our collaboration agreements, which have since been terminated. We have funded our operations to date with proceeds received from equity financings and payments received in connection with collaboration agreements, which have since been terminated. Currently we are exploring strategic alternatives and generating limited revenue. As of December 31, 2025, our cash and cash equivalents cash were $3.7 million.
We incurred net losses of approximately $4.9 million and $9.7 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we have generated an accumulated deficit of $223.0 million, including $18,837 of additional paid-in capital reclassed to accumulated deficit upon C-corporation conversion, since inception and expect to incur significant expenses and negative cash flows for the foreseeable future.
Our current liquidity is not sufficient to continue to fund existing obligations and operations. As a result, there is substantial doubt about our ability to continue as a going concern. Additional financing will be needed to fund our ongoing operations and exploration of strategic alternatives and pursue any alternatives that we identify. We may need to seek bankruptcy protection and/or cease operations in the near term, which may result in our stockholders receiving no or very little value in respect of their shares of our common stock.
See "Funding Requirements" below for additional information on our future capital needs.
Cash Flows
The following table shows a summary of our cash flows for the years ended December 31, 2025 and 2024:
Years Ended
December 31,
(in thousands) 2025 2024
Net cash used in operating activities $ (8,555) $ (2,910)
Net cash used in investing activities (1,807) -
Net cash provided by financing activities 1,600 13,402
Net increase (decrease) in cash, cash equivalents, and restricted cash $ (8,762) $ 10,492
Operating activities
Net cash used in operating activities was $8.6 million and $2.9 million for the years ended December 31, 2025 and 2024, respectively. The increase in cash used in operating activities for the year ended December 31, 2025 of $5.6 million was due to the increase of operating activities and higher headcount from the GPCR USA acquisition.
Investing activities
Net cash used in investing activities was $1.8 million and $0.0 million for the years ended December 31, 2025 and 2024, respectively. The increase in cash used in investing activities of $1.8 million was due to purchase of GPCR USA and capital expenditures by KC Creation.
Financing activities
Net cash provided by financing activities of $1.6 million for year ended December 31, 2025 was due to the funds received from the common stock purchase agreement in February 2025. Net cash provided by financing activities of $13.4 million for the year ended December 31, 2024 was due to the stock purchase agreements closed in November and December 2024.
Funding Requirements
Our existing cash and cash equivalents are not sufficient to enable us to fund our existing obligations and ongoing operating expenses for the near term. Our future capital requirements are difficult to forecast and will depend on many factors, including:
•the results of our exploration of strategic alternatives, including any potential transactions;
•the results of any future or pending litigation against the Company;
•the extent to which we encounter increased costs as a result of global and macroeconomic conditions, including rising inflation and interest rates, supply chain disruptions, fluctuating exchange rates, and increases in commodity, energy and fuel prices; and
•unknown legal, administrative, regulatory, accounting, and information technology costs as well as additional costs associated with operating as a public company.
Until such time, if ever, as we can generate substantial revenue, we expect to finance our cash needs primarily through equity offerings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specified actions, such as incurring additional debt, making capital expenditures or declaring dividends. Further, the global financial markets have experienced significant disruptions over the past couple of years due to global health crisis, the ongoing conflict between Russia and Ukraine, and in the Middle East, and worsening global macroeconomic conditions, including actions taken by central banks to counter inflation, volatility in the capital markets and related market uncertainty, may impact our ability to obtain additional financing when needed on favorable terms or at all. Any further disruption or slowdown in the global financial markets and economy may negatively affect our ability to raise funding through equity or debt financings on attractive terms or at all, which could in the future negatively affect our operations.
Going Concern
In accordance with Accounting Standards Codification 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. In the absence of a significant source of recurring revenue, our continued viability is dependent on our ability to continue to raise
additional capital to finance our operations. As discussed above, there are substantial uncertainties about our ability to raise such financing.
Contractual Obligations and Commitments
Redwood City Lease and Chicago Lease
Refer to Note 5 - Leases to the Notes to our Consolidated Financial Statements included herein.
Exicure Inc. published this content on March 25, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 25, 2026 at 20:43 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]