Exicure Inc.

05/29/2026 | Press release | Distributed by Public on 05/29/2026 12:10

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following information should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q and the audited financial information and the notes thereto included in our Annual Report on Form 10-K (the "Annual Report") for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission, or SEC, on March 25, 2026. This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act, that involve significant risks and uncertainties. Our actual results, performance or experience could differ materially from what is indicated by any forward-looking statement due to various important factors, risks, uncertainties, assumptions and other factors including, but not limited to, those identified in this Quarterly Report on Form 10-Q and in our other SEC filings.
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.
As of March 31, 2026, our cash and cash equivalents were approximately $2.6 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.
Overview
Historically, we have been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. We continue to engage in a broader exploration of strategic alternatives. This effort involves exploring growth through transactions with potential partners that see opportunity in joining an existing, publicly-traded organization.
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.
On January 19, 2025, we entered into a share purchase agreement (the "Share Purchase Agreement") with GPCR Therapeutics Inc, a Korean corporation, ("GPCR"), pursuant to which we acquired from GPCR all of the issued and outstanding equity securities of its then-subsidiary, GPCR Therapeutics USA Inc., a California corporation ("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. The 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 $1,000,000 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. ("KC Creation"), a wholly-owned South Korean subsidiary. It was established based on potential 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. On November 24, 2025, the Company completed the sale of KC Creation to East Ocean Development Co., Ltd. for total consideration of $474,000. As a result of the transaction, the Company no longer has a controlling financial interest in the subsidiary, and therefore, deconsolidated the entity as of the disposal date.
Recent Developments
Nasdaq Listing Requirements Deficiency Notices
As previously disclosed, we have received numerous deficiency notices with respect to various Nasdaq listing requirements in the past year. Most recently, On May 28, 2026, the Company received a notice from Nasdaq indicating that the Company was not in compliance with Nasdaq Listing Rules as a result of the delayed filing of its Quarterly Report on Form 10-Q for the period ended March 31, 2026. The Company is working diligently to complete and file the Form 10-Q as soon as practicable in order to regain compliance with the applicable Nasdaq listing requirements.
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.
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 condensed consolidated 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 condensed consolidated 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 or recognized 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 (MPEEM) 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.
Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table summarizes the results of our operations for the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
(dollars in thousands)
2026
2025
Change
Revenue:
Revenue
$ -
$ -
-
- %
Total Revenue
-
-
-
- %
Operating expenses:
Research and development expense
312
808
(496)
(61) %
General and administrative expense
1,291
2,217
(926)
(42) %
Loss on disposal of assets
37
26
11
42 %
Gain on early lease termination
-
(5,974)
5,974
100 %
Total operating expenses
1,640
(2,923)
4,563
(153) %
Operating income (loss)
(1,640)
2,923
(4,563)
(153) %
Other income, net:
Dividend income
-
27
(27)
(100) %
Interest income
-
5
(5)
(100) %
Gain on settlement of accounts payables
-
191
(191)
(100) %
Change in fair value of contingent liability
(188)
(136)
(52)
38 %
Total other income, net
(188)
87
(275)
(316) %
Net loss before provision for income taxes
(1,828) 3,010 (4,838) (161) %
Provision for income taxes
-
-
-
Net income (loss)
$ (1,828) $ 3,010 $ (4,838) (161) %
Research and development expense
The following table summarizes our research and development expenses incurred during the periods indicated:
Three Months Ended
March 31,
(dollars in thousands)
2026
2025
Change
Employee-related expense
$ 275
$ 209
$ 66
32 %
Clinical development programs expense
37
599
(562)
(94) %
Total research and development expense
$ 312
$ 808
$ (496)
(61) %
Research and development expense was $0.3 million for the three months ended March 31, 2026, reflecting a decrease of $0.5 million, or 61% from research and development expense of $0.8 million for three months ended March 31, 2025. The Company incurred research and development expense in 2025 after the acquisition of GPCR USA; however, the Company significantly reduced its operating expenses, including research and development expense, during the three months ended March 31, 2026 pending the Company's restructuring and reorganization.
General and administrative expense
Three Months Ended
March 31,
(dollars in thousands)
2026
2025
Change
General and administrative expense
$ 1,291
$ 2,217
(926)
(42) %
Full time employees
2
8
(6)
General and administrative expense was $1.3 million for the three months ended March 31, 2026, representing a decrease of $0.9 million or 42%, from $2.2 million for the three months ended March 31, 2025. The decrease for the three months ended March 31, 2026 was due to the decreased number of full time employees and professional services compared to the same prior-year quarter.
Loss from sale or disposal of property and equipment
The Company recognized a $37,000 loss from the disposal of GPCR USA's fixed assets for the three months ended March 31, 2026, compared to $26,000 in the comparative period in 2025.
Gain on early lease termination
Due to the early termination of the Chicago Lease as of January 31, 2025, the Company recognized a $6 million gain resulting from the reversal of the remaining liability related to this lease for the three months ended March 31, 2025.
Other income and expense
The Company recognized a loss of $188,000 related to the change in the fair value of its contingent liability for the three months ended March 31, 2026, compared to $136,000 in the comparative period in 2025.
For the three months ended March 31, 2026, the Company did not have any dividend and interest income, whereas the Company reported dividend income of $27,000 and interest income of $5,000 for the three months ended March 31, 2025. In addition, the Company recognized a gain on settlement of accounts payable of $191,000 for the three months ended March 31, 2025.
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 March 31, 2026, our cash and cash equivalents were $2.6 million.
We incurred net loss of approximately $1.8 million for the three months ended March 31, 2026 and net income of $3.0 million for the three months ended March 31, 2025. We 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 three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
(in thousands)
2026
2025
(unaudited)
Net cash used in operating activities
$ (1,142)
$ (1,598)
Net cash used in investing activities
-
(2,090)
Net cash provided by financing activities
-
1,600
Net (decrease) in cash and cash equivalents
$ (1,142)
$ (2,088)
Operating activities
Net cash used in operating activities was $1.1 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively. The decrease in cash used in operating activities for the three months ended March 31, 2026 of $0.5 million was due to the Company's reduced spending and reduced number of employees, to conserve cash during the restructuring and reorganization.
Investing activities
Net cash used in investing activities was $0.0 million and $2.1 million for the three months ended March 31, 2026 and 2025, respectively. The cash used by investing activities of $2.1 million for the prior year was due to the purchase of GPCR USA. The Company did not have any investing activities for the current year.
Financing activities
Net cash provided by financing activities was $0.0 million and $1.6 million for three months ended March 31, 2026 and 2025, respectively. The $1.6 million provided by financing activities in the prior year is due to the funds
received from the common stock purchase agreements during the three months ended March 31, 2025. The Company did not have any financing activities during the three months ended March 31, 2026.
Funding Requirements
Our existing cash and cash equivalents may not be 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, but not limited to:
•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 condensed 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
There have been no material changes to our contractual obligations and commitments from those described in our Annual Report.
Exicure Inc. published this content on May 29, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 29, 2026 at 18:10 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]