Exicure, Inc.: Form 10-Q for the period ended Jun 30, 2026

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.

Overview

Historically, we have been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. Following the acquisition of GPCR USA in January 2025 and changes in our ownership, board composition and management team, our activities have primarily focused on supporting GPCR USA’s clinical development programs, evaluating strategic alternatives strategic alternatives and preserving capital.

We continue to evaluate a board range of strategic alternatives intended to maximize stockholder value, including private company acquisitions, additional capital raising transactions, business combination opportunities and other strategic transactions. No assurance can be given that any such evaluation process will result in the consummation of a transaction.

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, the first milestone payment of $1,000,000 became payable the second quarter of 2026. Due to the Company’s limited cash resources, the payment terms were amended and the milestone obligation is expected to be satisfied through the issuance of shares of the Company’s common stock

The Company previously formed KC Creation Co., Ltd. a wholly-owned South Korean subsidiary, which was subsequently disposed of on November 24, 2025 and dose not represent and ongoing operations of the Company.

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 June 30, 2026, our cash and cash equivalents were approximately $1.7 million, compared to approximately $3.7 million as of December 31, 2025. The decrease primarily reflects cash utilized to fund operating activities, support GPCR USA’s clinical development activities and satisfy public company compliance obligations. 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. Management continues to evaluate potential equity financings, strategic transactions, partnering opportunities and other

capital-raising alternatives. 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

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 March 31, 2026. On May 29, 2026, the Company filed its Form 10-Q for the period ended March 31, 2026, and on June 5, 2026, the Company received a formal notice from Nasdaq confirming that the Company had regained compliance with the applicable listing requirement and that this matter was officially closed.

In addition, on June 5, 2026, the Company received a deficiency notification from Nasdaq stating that the Company’s Stockholders' Equity reported in its Form 10-Q for the period ended March 31, 2026 ($2.098 million) had fallen below Nasdaq's minimum requirement of $2.5 million. On July 30, 2026, the Company submitted a formal Plan of Compliance to Nasdaq to address the equity shortfall. The Company is currently awaiting Nasdaq’s review and approval of its plan. If accepted, Nasdaq may grant an extension period of up to 180 days for the Company to regain compliance.

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.

Contingent Consideration

The contingent consideration liability associated with the GPCR USA acquisition is measured at fair value using significant unobservable inputs and is therefore classified as a Level 3 liability under ASC 820. The valuation incorporates management’s estimates regarding the probability and timing of achieving specified clinical, regulatory and commercial milestones, as well as appropriate discount rates. Changes in these assumptions could result in material changes in the fair value of the contingent consideration liability and corresponding gains or losses in future reporting periods.

Results of Operations

Comparison of the three months ended June 30, 2026 and 2025

We did not generate revenue during the three or six months ended June 30, 2026 or the comparable periods in 2025. Accordingly, period-to-period changes in operating results are primarily attributable to changes in research and development activities, general and administrative expenses and non-cash valuation adjustments.

The following table summarizes the results of our operations for the three months ended June 30, 2026 and 2025:

(dollars in thousands)

Research and development expense

The following table summarizes our research and development expenses incurred during the periods indicated:

(dollars in thousands)

Research and development expense was $0.17 million for the three months ended June 30, 2026, reflecting a decrease of $0.76 million, or 81% from research and development expense of $0.93 million for three months ended June 30, 2025. The Company incurred research and development expense in 2025 after the acquisition of GPCR USA; however, the Company temporarily deferred certain operating expenses, including research and development expense, during the three months ended June 30, 2026 pending the Company’s restructuring and reorganization.

General and administrative expense

(dollars in thousands)

General and administrative expense was $0.09 million for the three months ended June 30, 2026, representing a decrease of $0.63 million or 41%, from $1.51 million for the three months ended June 30, 2025. The decrease for the three months ended June 30, 2026 was primarily attributable to reduced headcount, lower payroll-related costs and reduced expenditures on professional services and corporate administration activities.

Other income and expense

The Company recognized a loss of $52,000 related to the change in the fair value of its contingent liability for the three months ended June 30, 2026, compared to $159,000 in the comparative period in 2025.

For the three months ended June 30, 2026, the Company did not have any dividend and interest income, and had interest income of $11,000, whereas the Company reported dividend income of $52,000 and interest income of $4,000 for the three months ended June 30, 2025.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table summarizes the results of our operations for the six months ended June 30, 2026 and 2025:

(dollars in thousands)

28

Research and development expense

The following table summarizes our research and development expenses incurred during the periods indicated:

(dollars in thousands)

Research and development expense was $0.49 million for the six months ended June 30, 2026, reflecting a decrease of $1.26 million, or 72% from research and development expense of $1.74 million for six months ended June 30, 2025. The Company incurred research and development expense in 2025 after the acquisition of GPCR USA; however, the Company temporarily deferred certain operating expenses, including research and development expense, during the six months ended June 30, 2026 pending the Company’s restructuring and reorganization.

General and administrative expense

(dollars in thousands)

General and administrative expense was $2.2 million for the six months ended June 30, 2026, representing a decrease of $1.56 million or 42%, from $3.7 million for the six months ended June 30, 2025. The decrease for the three months ended June 30, 2026was due to the decreased number of full time employees and professional services compared to the same prior-year quarter.

Gain on early lease termination

Due to the early termination of the Chicago Lease as of January 31, 2025, the Company recognized a $6 milliongain resulting from the reversal of the remaining liability related to this lease for the six months ended June 30, 2025. Accordingly, period-to-period comparisons of operating results are significantly affected by this one-time, non-recurring gain. Excluding the lease termination gain, operating losses improved primarily as a result of reductions in headcount, professional services costs and clinical development expenditures.

Other income and expense

The Company recognized a loss of $240,000 related to the change in the fair value of its contingent liability for the six months ended June 30, 2026, compared to $295,000 in the comparative period in 2025.

For the six months ended June 30, 2026, the Company did not have any dividend income and had interest income of $11,000, whereas the Company reported dividend income of $79,000 and interest income of $9,000 for the six months ended June 30, 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 evaluating strategic alternatives and did not generate revenue during the six months ended June 30, 2026. As of June 30, 2026, our cash and cash equivalents were $1.7 million.

We incurred net loss of approximately $2.9 million for the six months ended June 30, 2026 and net income of $0.4 million for the six months ended June 30, 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 six months ended June 30, 2026 and 2025:

(in thousands)

(unaudited)

Operating activities

Net cash used in operating activities was $1.1 million and $1.6 million for the six months ended June 30, 2026 and 2025, respectively. The decrease in cash used in operating activities for the six months ended June 30, 2026of $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 six months ended June 30, 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 six months ended June 30, 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 six months ended June 30, 2025. The Company did not have any financing activities during the six months ended June 30, 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.

Based on our current cash position and operating forecasts, we will require additional capital to continue operations, satisfy existing obligations and execute our strategic objectives. There can be no assurance that such financing will be available when needed or on acceptable terms.

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.

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item.

Limitations on Effectiveness of Controls

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026. Based on the evaluation of our disclosure controls and procedures as of June 30, 2026, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weakness described below.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Management identified material weaknesses in the Company’s internal control over financial reporting related to the following:

1. Management’s review of the accounting treatment of non-routine activities.

2. The Company failed to design and implement controls around all accounting and information technology processes and procedures.

These matters have been reviewed with our Audit Committee.

Remediation Plan

We are evaluating the material weakness and are developing a plan of remediation to strengthen the effectiveness of the design and operation of our internal control environment. The remediation plan will include enhancing our review procedures within our accounting department, implementing additional review procedures with respect to accumulation and evaluation of information that is known or knowable to the Company at the time, and applying that information to the applicable accounting guidance. Subject to our ability to obtain additional financing and the results of our review of strategic alternatives, we will also consider whether additional personnel are necessary.

Changes in Internal Control over Financial Reporting

Other than described above, there were no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.