0001698530 12/31 2023 Q2 false 33.333 33.333 33.333.0208.0208.0278.0833 xbrli:shares iso4217:USD iso4217:USD xbrli:shares utr:sqft xcur:extension_period xbrli:pure xcur:agreement xcur:vote xcur:member 0001698530 2023-01-01 2023-06-30 0001698530 2023-08-09 0001698530 2023-06-30 0001698530 2022-12-31 0001698530 2023-04-01 2023-06-30 0001698530 2022-04-01 2022-06-30 0001698530 2022-01-01 2022-06-30 0001698530 us-gaap:CommonStockMember 2022-12-31 0001698530 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001698530 us-gaap:RetainedEarningsMember 2022-12-31 0001698530 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0001698530 2023-01-01 2023-03-31 0001698530 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0001698530 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0001698530 us-gaap:CommonStockMember 2023-03-31 0001698530 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0001698530 us-gaap:RetainedEarningsMember 2023-03-31 0001698530 2023-03-31 0001698530 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0001698530 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0001698530 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0001698530 us-gaap:CommonStockMember 2023-06-30 0001698530 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001698530 us-gaap:RetainedEarningsMember 2023-06-30 0001698530 us-gaap:CommonStockMember 2021-12-31 0001698530 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001698530 us-gaap:RetainedEarningsMember 2021-12-31 0001698530 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0001698530 2021-12-31 0001698530 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001698530 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0001698530 2022-01-01 2022-03-31 0001698530 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-03-31 0001698530 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001698530 us-gaap:CommonStockMember 2022-03-31 0001698530 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001698530 us-gaap:RetainedEarningsMember 2022-03-31 0001698530 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-03-31 0001698530 2022-03-31 0001698530 us-gaap:CommonStockMember 2022-04-01 2022-06-30 0001698530 us-gaap:AdditionalPaidInCapitalMember 2022-04-01 2022-06-30 0001698530 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001698530 us-gaap:CommonStockMember 2022-06-30 0001698530 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001698530 us-gaap:RetainedEarningsMember 2022-06-30 0001698530 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0001698530 2022-06-30 0001698530 srt:ScenarioPreviouslyReportedMember 2023-06-30 0001698530 srt:RestatementAdjustmentMember 2023-06-30 0001698530 srt:ScenarioPreviouslyReportedMember 2023-04-01 2023-06-30 0001698530 srt:RestatementAdjustmentMember 2023-04-01 2023-06-30 0001698530 srt:ScenarioPreviouslyReportedMember 2023-01-01 2023-06-30 0001698530 srt:RestatementAdjustmentMember 2023-01-01 2023-06-30 0001698530 us-gaap:EquipmentMember 2023-06-30 0001698530 us-gaap:EquipmentMember 2022-12-31 0001698530 xcur:ComputersandSoftwareMember 2023-06-30 0001698530 xcur:ComputersandSoftwareMember 2022-12-31 0001698530 us-gaap:FurnitureAndFixturesMember 2023-06-30 0001698530 us-gaap:FurnitureAndFixturesMember 2022-12-31 0001698530 us-gaap:EquipmentMember 2023-01-01 2023-06-30 0001698530 xcur:ChicagoMember 2020-07-01 2020-07-01 0001698530 xcur:ChicagoMember 2020-07-01 0001698530 xcur:ChicagoMember 2023-05-04 2023-05-04 0001698530 xcur:ConvertibleBondsMember 2023-05-01 2023-05-31 0001698530 xcur:ConvertibleBondsOneMember 2023-05-31 0001698530 xcur:ConvertibleBondsTwoMember 2023-05-31 0001698530 xcur:ConvertibleBondsMember 2023-05-31 0001698530 us-gaap:PrivatePlacementMember 2022-09-26 2022-09-26 0001698530 us-gaap:PrivatePlacementMember 2022-09-26 0001698530 us-gaap:PrivatePlacementMember xcur:CBIUSAIncMember 2023-02-24 2023-02-24 0001698530 2023-02-24 2023-02-24 0001698530 us-gaap:PrivatePlacementMember 2023-02-01 2023-02-28 0001698530 2022-09-26 2022-09-26 0001698530 us-gaap:PrivatePlacementMember 2022-05-09 2022-05-09 0001698530 us-gaap:PrivatePlacementMember 2022-05-09 0001698530 us-gaap:CommonStockMember 2021-12-16 2021-12-16 0001698530 us-gaap:CommonStockMember 2021-12-16 0001698530 xcur:PreFundedWarrantsMember 2021-12-16 2021-12-16 0001698530 us-gaap:WarrantMember 2021-12-16 2021-12-16 0001698530 xcur:CommonStockAndAccompanyingWarrantMember 2021-12-16 2021-12-16 0001698530 xcur:PreFundedWarrantsAndAccompanyingWarrantMember 2021-12-16 2021-12-16 0001698530 xcur:PreFundedWarrantsMember 2021-12-16 0001698530 us-gaap:WarrantMember 2021-12-16 0001698530 2021-12-16 0001698530 2021-12-16 2021-12-16 0001698530 xcur:PreFundedWarrantsMember 2022-01-01 2022-01-31 0001698530 2023-06-23 2023-06-23 0001698530 xcur:ExicureInc.2017EquityIncentivePlanMember 2017-09-22 0001698530 xcur:ExicureOpCo2015EquityIncentivePlanMember 2017-09-22 0001698530 xcur:ExicureInc.2017EquityIncentivePlanMember 2023-01-01 2023-06-30 0001698530 xcur:ExicureInc.2017EquityIncentivePlanMember 2023-06-30 0001698530 xcur:ExicureInc.2017EquityIncentivePlanMember us-gaap:EmployeeStockOptionMember 2023-01-01 0001698530 xcur:ExicureInc.2017EquityIncentivePlanMember us-gaap:ShareBasedCompensationAwardTrancheOneMember xcur:InitialEmployeeStockOptionMember 2023-01-01 2023-06-30 0001698530 xcur:ExicureInc.2017EquityIncentivePlanMember xcur:InitialEmployeeStockOptionMember 2023-01-01 2023-06-30 0001698530 xcur:SubsequentEmployeeStockOptionMember xcur:ExicureInc.2017EquityIncentivePlanMember 2023-01-01 2023-06-30 0001698530 xcur:ExicureInc.2017EquityIncentivePlanMember xcur:NonemployeeDirectorMember xcur:InitialEmployeeStockOptionMember 2023-01-01 2023-06-30 0001698530 xcur:SubsequentEmployeeStockOptionMember xcur:ExicureInc.2017EquityIncentivePlanMember xcur:NonemployeeDirectorMember 2023-01-01 2023-06-30 0001698530 xcur:ExicureInc.2017EquityIncentivePlanMember us-gaap:EmployeeStockOptionMember 2023-01-01 2023-06-30 0001698530 us-gaap:EmployeeStockMember 2017-09-30 0001698530 us-gaap:EmployeeStockMember 2017-09-01 2017-09-30 0001698530 us-gaap:EmployeeStockMember 2023-01-01 2023-01-01 0001698530 us-gaap:EmployeeStockMember 2023-06-30 0001698530 us-gaap:ResearchAndDevelopmentExpenseMember 2023-04-01 2023-06-30 0001698530 us-gaap:ResearchAndDevelopmentExpenseMember 2022-04-01 2022-06-30 0001698530 us-gaap:ResearchAndDevelopmentExpenseMember 2023-01-01 2023-06-30 0001698530 us-gaap:ResearchAndDevelopmentExpenseMember 2022-01-01 2022-06-30 0001698530 us-gaap:GeneralAndAdministrativeExpenseMember 2023-04-01 2023-06-30 0001698530 us-gaap:GeneralAndAdministrativeExpenseMember 2022-04-01 2022-06-30 0001698530 us-gaap:GeneralAndAdministrativeExpenseMember 2023-01-01 2023-06-30 0001698530 us-gaap:GeneralAndAdministrativeExpenseMember 2022-01-01 2022-06-30 0001698530 srt:MinimumMember 2023-01-01 2023-06-30 0001698530 srt:MaximumMember 2023-01-01 2023-06-30 0001698530 srt:MinimumMember 2022-01-01 2022-06-30 0001698530 srt:MaximumMember 2022-01-01 2022-06-30 0001698530 srt:WeightedAverageMember 2023-01-01 2023-06-30 0001698530 srt:WeightedAverageMember 2022-01-01 2022-06-30 0001698530 srt:WeightedAverageMember 2023-06-30 0001698530 srt:MinimumMember 2022-06-30 0001698530 srt:MaximumMember 2022-06-30 0001698530 srt:WeightedAverageMember 2022-06-30 0001698530 2022-01-01 2022-12-31 0001698530 2022-04-01 0001698530 us-gaap:RestrictedStockUnitsRSUMember 2022-12-31 0001698530 us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-06-30 0001698530 us-gaap:RestrictedStockUnitsRSUMember 2023-06-30 0001698530 xcur:PerformanceBasedRestrictedStockMember 2022-12-31 0001698530 xcur:PerformanceBasedRestrictedStockMember 2023-01-01 2023-06-30 0001698530 xcur:PerformanceBasedRestrictedStockMember 2023-06-30 0001698530 xcur:PerformanceBasedRestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2023-01-01 2023-06-30 0001698530 us-gaap:ShareBasedCompensationAwardTrancheThreeMember xcur:PerformanceBasedRestrictedStockMember 2023-01-01 2023-06-30 0001698530 xcur:PerformanceBasedRestrictedStockMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2023-01-01 2023-06-30 0001698530 us-gaap:EmployeeStockOptionMember 2023-01-01 2023-06-30 0001698530 us-gaap:EmployeeStockOptionMember 2022-01-01 2022-06-30 0001698530 us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-06-30 0001698530 us-gaap:RestrictedStockUnitsRSUMember 2022-01-01 2022-06-30 0001698530 xcur:PerformanceBasedRestrictedStockMember 2023-01-01 2023-06-30 0001698530 xcur:PerformanceBasedRestrictedStockMember 2022-01-01 2022-06-30 0001698530 us-gaap:WarrantMember 2023-01-01 2023-06-30 0001698530 us-gaap:WarrantMember 2022-01-01 2022-06-30 0001698530 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2023-06-30 0001698530 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2023-06-30 0001698530 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2023-06-30 0001698530 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2023-06-30 0001698530 xcur:ConvertibleBondsMember us-gaap:FairValueMeasurementsRecurringMember 2023-06-30 0001698530 xcur:ConvertibleBondsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2023-06-30 0001698530 xcur:ConvertibleBondsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2023-06-30 0001698530 xcur:ConvertibleBondsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2023-06-30 0001698530 us-gaap:FairValueMeasurementsRecurringMember 2023-06-30 0001698530 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2023-06-30 0001698530 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2023-06-30 0001698530 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2023-06-30 0001698530 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2022-12-31 0001698530 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2022-12-31 0001698530 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2022-12-31 0001698530 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2022-12-31 0001698530 us-gaap:FairValueMeasurementsRecurringMember 2022-12-31 0001698530 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2022-12-31 0001698530 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2022-12-31 0001698530 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2022-12-31 0001698530 us-gaap:RelatedPartyMember 2023-02-27 2023-02-27
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________
FORM 10-Q/A
Amendment No. 2
______________________________________
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-39011
______________________________________
EXICURE, INC.
(Exact name of registrant as specified in its charter)
_____________________________________

Delaware |  | 81-5333008
(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

2430 N. Halsted St.
Chicago, IL 60614
(Address of principal executive offices)
Registrant’s telephone number, including area code (847) 673-1700
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading symbol(s) |  | Name of each exchange on which registered
Common Stock, par value $0.0001 per share |  | XCUR |  | The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☐ |  | Accelerated filer | ☐
Non-accelerated filer | ☒ |  | Smaller reporting company | ☒
|  |  | Emerging growth company | ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☒
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 9, 2023, there were 8,648,307 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

Table of Contents
EXPLANATORY NOTE
Explanatory Note to this Amendment No. 2
Exicure, Inc. (the “Company,” “Exicure,” “we,” “us” and “our”) is filing this Amendment No. 2 (“Amendment No. 2”) to its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2023 initially filed on August 11, 2023 (the “Original Report”), as previously amended by Amendment No. 1 filed on May 16, 2024 (“Amendment No. 1” and as further amended by this Amendment No. 2, the “Form 10-Q/A”).
The sole purpose of this Amendment No. 2 is to amend Part II, Item 6. Exhibits to include certifications from the Company’s principal executive officer and principal financial officer as Exhibits 31.1, 31.2 and 32.1. In Amendment No. 1, the Company inadvertently refiled certifications to the Original Report from its former principal executive and financial officer and omitted currently dated certifications from its current officers.
This Amendment No. 2 sets forth our Original Report, as amended, in its entirety. Except as described above and this Explanatory Note, no other changes have been made to Amendment No. 1. Items included in the Original Report that are not amended by this Amendment No. 2 and were not amended by Amendment No. 1 remain unchanged and are as of August 11, 2023. Items amended by Amendment No. 1 as described below remain unchanged and are as of May 16, 2024. This Amendment No. 2 does not reflect events occurring after the date of the Original Report or modify or update those disclosures that may be affected by subsequent events, and no other changes are being made to any other disclosure contained in the Original Report or Amendment No. 1. Therefore, this Amendment No. 2 should be read together with the Company’s other filings with the SEC that were made after the date of the Original Report and Amendment No. 1.
Explanatory Note to Amendment No. 1
Amendment No. 1 was filed by the Company to amend and restate its unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2023 included in the Original Report. Amendment No. 1 also amended certain other Items in the Original Report, as listed in “Items Amended in Amendment No. 1” below.
Restatement Background
As previously announced in our Current Report on Form 8-K filed with the SEC on December 1, 2023, the management of Exicure, after discussion with its Audit Committee of the Board of Directors (the “Audit Committee”), concluded that the Company’s previously issued unaudited condensed consolidated interim financial statements included in the Original Report contained an error related to classification of research and development expenses in connection with its wind down activities on the condensed consolidated statement of operations for the three and six months ended June 30, 2023. This error is described in further detail below. As a result of the errors, management and the Audit Committee determined that the Company’s consolidated financial statements included in the Original Report should no longer be relied upon. Similarly, any previously furnished or filed reports, related earnings releases, investor presentations or similar communications of the Company describing those financial statements and other information covering those periods should no longer be relied upon.
Approximately $0.9 million of expenses in the second quarter of 2023 were corrected from research and development into general and administrative. These expenses primarily related to office lease, depreciation, and wind down costs. There was no impact to the net loss as of June 30, 2023, and none of the other financial statements included in the Original Report were affected by this correction.

Table of Contents
In addition, the Company incorrectly classified its investment in convertible notes receivable as held-to-maturity instead of as available-for-sale (“AFS”) and incorrectly did not record the investment at fair value as a result of additional analysis completed during its third quarter review.
An explanation of the impact on the Company’s financial statements is contained in Note 1. Nature of the Business and Basis of Presentation - Restatement to the accompanying financial statements.
Internal Control Considerations
As a result of the restatement of the Company’s financial statements and the filing of Amendment No. 1, management has determined that a material weakness existed in the Company’s internal control over financial reporting. The identified material weakness and the Company’s remediation plan are further described in Part I, Item 4 within this Form 10-Q/A. In addition, as a result of the restatement of the Company’s financial statements and the material weakness described above, management has reconsidered its assessment and now concludes that we did not maintain effective disclosure controls and procedures for the quarter ended June 30, 2023.
Items Amended in Amendment No. 1
Except as described below, there were no changes to any other parts of the Original Report in Amendment No. 1. The following items were amended in Amendment No. 1, solely as a result of and to reflect the restatement:
•Part I, Item 1. Financial Statements
•Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
•Part I, Item 4. Controls and Procedures
•Part II, Item 1A. Risk Factors

EXICURE, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION |  | 9
Item 1. Financial Statements |  | 9
Unaudited Condensed Consolidated Balance Sheets |  | 9
Unaudited Condensed Consolidated Statements of Operations |  | 10
Unaudited Condensed Consolidated Statements of Comprehensive Loss |  | 11
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity |  | 12
Unaudited Condensed Consolidated Statements of Cash Flows |  | 14
Notes to Unaudited Condensed Consolidated Financial Statements |  | 16
Item 2. Management's Discussion and Analysis and Results of Operations |  | 34
Item 3. Quantitative and Qualitative Disclosures About Market Risk |  | 43
Item 4. Controls and Procedures |  | 43
PART II - OTHER INFORMATION |  | 45
Item 1. Legal Proceedings |  | 45
Item 1A. Risk Factors |  | 47
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |  | 58
Item 3. Defaults Upon Senior Securities |  | 58
Item 4. Mine Safety Disclosures |  | 58
Item 5. Other Information |  | 58
Item 6. Exhibits |  | 59
Signatures |  | 61

4

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains express or implied “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan,”, “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,” “contemplate,” “project,” “continue,” “potential,” “ongoing” or the negative of these terms or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to such statements.
Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, such expectations or any of the forward-looking statements may prove to be incorrect and actual results could differ materially from those projected or assumed in the forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties, including, but not limited to, the risk factors described in the “Risk Factor Summary” below and set forth in Part II, Item 1A “Risk Factors” below and for the reasons described elsewhere in this Quarterly Report on Form 10-Q. All forward-looking statements and reasons why results may differ included in this report are made as of the date hereof and we do not intend to update any forward-looking statements except as required by law. These forward-looking statements include, but are not limited to, statements concerning the following:
•substantial uncertainties regarding our exploration of strategic alternatives to maximize stockholder value, including whether we are able to identify potential partners and consummate transactions, in a timely manner or at all, whether we would be able to obtain sufficient funding to complete this process and whether any such transactions would generate value for stockholders;
•our ability to generate any meaningful value from sales, out-licensing or other transactions involving our historical assets;
•our ability to raise the substantial additional capital that is needed within the next few months to fund our operations and our pursuit of strategic alternatives, particularly given our current lack of a revenue source or committed financing and the substantial doubt about our ability to continue as a going concern;
•our ability to correct deficiencies and to remain listed on The Nasdaq Capital Market (“Nasdaq”), including the ability to maintain minimum stockholders’ equity and stock price, and comply with applicable governance requirements, for continued listing on Nasdaq;
•any strategic plan or alternative that we may identify and pursue may involve unexpected costs, liabilities and/or delays and may not deliver anticipated benefits to our stockholders;
•our estimates of expenses, use of cash, timing of future cash needs, ongoing losses and capital requirements, including our expectations relating to our needs for additional financing and the timing thereof may prove to be inaccurate;
•uncertainty about reaction from investors and potential business partners to our recent change of control and board composition and the future direction of the Company, and the ability of our controlling stockholder and new board members to earn the confidence of investors and potential partners despite limited experience with U.S. public companies, and how these factors may impact our ability to obtain funding and execute any strategic alternatives that we may identify;
•potential turnover of senior management in the near term, and any inability to attract and retain qualified management and other key personnel, could create significant continuity risk and impair our ability to raise capital and execute on our exploration of strategic alternatives;
5

•our ability to comply with all applicable laws, which may be particularly challenging given the recent turnover in our board, potential turnover in management, significant reductions in force, limited resources and the potential to enter into new business areas with which we have no past experience;
•our ability to obtain and maintain intellectual property protection for our technologies and our ability to operate our business without infringing the intellectual property rights of others;
•the impact of worsening macroeconomic conditions, including rising global inflation, actions taken by central banks to counter inflation, capital market and bank instability, exchange rate fluctuations, supply chain disruptions and energy and fuel prices;
•the impact of government laws and regulations as well as developments relating to our competitors or our industry; and
•other factors that may impact our financial results and condition and our ongoing strategic efforts.
These statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed in Part II, Item 1A of this Quarterly Report on Form 10-Q under the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.
Any forward-looking statement in this Quarterly Report on Form 10-Q reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our business, results of operations, industry and future growth. Given these uncertainties, you should not place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed with the SEC as exhibits thereto completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Except as required by law, we assume no, and specifically decline any, obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Quarterly Report on Form 10-Q also contains or may contain estimates, projections and other information concerning our industry, our business and the markets for certain therapeutics, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived.
Except where the context otherwise requires, in this Quarterly Report on Form 10-Q, the “Company,” “Exicure,” “we,” “us” and “our” refers to Exicure, Inc., a Delaware corporation, and, where appropriate, our subsidiary.
6

SUMMARY RISK FACTORS
Investing in common stock involves numerous risks, including the risks described in “Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q. Below are some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations and prospects.
•Our exploration of strategic alternatives may not be successful.
•We need to obtain substantial funding in the near term in order to continue operations and our exploration of strategic alternatives.
•Our controlling stockholder, executive officers and members of our board, have limited experience controlling or governing a public company in the United States.
•Turnover of senior management, and any inability to attract and retain qualified management and other key personnel, could impair our ability to implement our business plan.
•Our unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern.
•We currently do not comply with the Nasdaq continued listing requirements. Our common stock may be delisted from Nasdaq, which could negatively impact the price of our common stock, liquidity and our ability to access the capital markets.
•We have a history of losses. We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability, which could result in a decline in the market value of our common stock.
•Our internal computer systems, or those of contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our business operations.
•Our information technology systems could face disruptions that could adversely affect our business.
•Our business and operations could suffer in the event of system failures or unauthorized or inappropriate use of or access to our information technology systems.
•Increasing scrutiny and changing expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
•Our current operations are concentrated in one location and any events affecting this location may have material adverse consequences.
•The investment of our cash, cash equivalents and fixed income marketable securities is subject to risks which may cause losses and affect the liquidity of these investments.
•If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.
•We currently license patent rights from Northwestern University. If Northwestern University does not properly or successfully obtain, maintain or enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be adversely affected.
•Our licensors, or any current or future strategic partners, may become subject to third-party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, and we may need to resort to litigation to protect or enforce our patents or other proprietary rights, all of which could be costly, time consuming, or put our patents and other proprietary rights at risk.
•We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
•If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our therapeutic candidates or we could lose certain rights to grant sublicenses.
•Our status as a “controlled company” could make our Common Stock less attractive to some investors or otherwise harm the trading price of our Common Stock.
•The market price of our common stock has been, and is likely to continue to be, highly volatile, and you may not be able to resell your shares at or above the price you paid for them.
7

•Raising additional funds by issuing securities may cause dilution to existing stockholders and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights.
•We are an “emerging growth company” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.
•Anti-takeover provisions in our charter documents and under the General Corporation Law of the State of Delaware could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our management.
•Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
•Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
•FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock due to our low stock price.
•If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.
8

Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

| June 30, 2023 (Restated) |  | December 31, 2022
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 2,335 |  |  | $ | 8,577 |
Prepaid expenses and other assets | 1,329 |  |  | 1,474 |
Total current assets | 3,664 |  |  | 10,051 |
Property and equipment, net | 1,796 |  |  | 2,530 |
Right-of-use asset | 6,893 |  |  | 7,257 |
Investment in convertible notes receivable | 2,000 |  |  | — |
Other noncurrent assets | 3,202 |  |  | 3,490 |
Total assets | $ | 17,555 |  |  | $ | 23,328 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 343 |  |  | $ | 361 |
Accrued expenses and other current liabilities | 1,088 |  |  | 1,278 |
Total current liabilities | 1,431 |  |  | 1,639 |
Lease liability, noncurrent | 6,419 |  |  | 6,767 |
Total liabilities | 7,850 |  |  | 8,406 |
Contingencies (Note 11) |  |  |
Stockholders’ equity: |  |  |
Preferred stock, $0.0001 par value per share; 10,000,000 shares authorized, no shares issued and outstanding, June 30, 2023 and December 31, 2022 | — |  |  | — |
Common stock, $0.0001 par value per share; 200,000,000 shares authorized, 8,648,307 issued and outstanding, June 30, 2023; 4,965,901 issued and outstanding, December 31, 2022 | 1 |  |  | — |
Additional paid-in capital | 192,524 |  |  | 187,571 |
Accumulated deficit | (182,820) |  |  | (172,649) |
Total stockholders’ equity | 9,705 |  |  | 14,922 |
Total liabilities and stockholders’ equity | $ | 17,555 |  |  | $ | 23,328 |

See accompanying notes to the unaudited condensed consolidated financial statements.
9

Table of Contents
EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 (Restated) |  | 2022 |  | 2023 (Restated) |  | 2022
Revenue: |  |  |  |  |  |  |
Collaboration revenue | $ | — |  |  | $ | 2,471 |  |  | $ | — |  |  | $ | 5,036 |
Total revenue | — |  |  | 2,471 |  |  | — |  |  | 5,036 |
Operating expenses: |  |  |  |  |  |  |
Research and development expense | — |  |  | 6,749 |  |  | 1,423 |  |  | 13,889 |
General and administrative expense | 5,642 |  |  | 3,205 |  |  | 8,758 |  |  | 6,367 |
Total operating expenses | 5,642 |  |  | 9,954 |  |  | 10,181 |  |  | 20,256 |
Operating loss | (5,642) |  |  | (7,483) |  |  | (10,181) |  |  | (15,220) |
Other income (expense), net: |  |  |  |  |  |  |
Dividend income | 15 |  |  | 16 |  |  | 32 |  |  | 18 |
Interest income | 13 |  |  | 1 |  |  | 24 |  |  | 3 |
Interest expense | — |  |  | — |  |  | — |  |  | (595) |
Other income (expense), net | (150) |  |  | (4) |  |  | (46) |  |  | (24) |
Total other income (expense), net | (122) |  |  | 13 |  |  | 10 |  |  | (598) |
Net loss before provision for income taxes | (5,764) |  |  | (7,470) |  |  | (10,171) |  |  | (15,818) |
Provision for income taxes | — |  |  | — |  |  | — |  |  | — |
Net loss | $ | (5,764) |  |  | $ | (7,470) |  |  | $ | (10,171) |  |  | $ | (15,818) |
Basic and diluted loss per common share | $ | (0.68) |  |  | $ | (1.66) |  |  | $ | (1.38) |  |  | $ | (3.71) |
Weighted-average basic and diluted common shares outstanding | 8,432,394 |  |  | 4,503,983 |  |  | 7,366,594 |  |  | 4,268,955 |

See accompanying notes to the unaudited condensed consolidated financial statements.
10

Table of Contents
EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except share and per share data)

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net loss | $ | (5,764) |  |  | $ | (7,470) |  |  | $ | (10,171) |  |  | $ | (15,818) |
Other comprehensive (loss), net of taxes |  |  |  |  |  |  |
Unrealized (loss) on available-for-sale securities, net of tax | — |  |  | — |  |  | — |  |  | (3) |
Other comprehensive (loss) | — |  |  | — |  |  | — |  |  | (3) |
Comprehensive loss | $ | (5,764) |  |  | $ | (7,470) |  |  | $ | (10,171) |  |  | $ | (15,821) |

See accompanying notes to the unaudited condensed consolidated financial statements.
11

Table of Contents
EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except shares)

| Common Stock |  |  |  |  |  |  |  |
| Shares |  | $ |  | Additional Paid-in- Capital |  | Accumulated Deficit |  |  |  | Total Stockholders' Equity
Balance at January 1, 2023 | 4,965,901 |  |  | $ | — |  |  | $ | 187,571 |  |  | $ | (172,649) |  |  |  |  | $ | 14,922 |
Equity-based compensation | — |  |  | — |  |  | 308 |  |  | — |  |  |  |  | 308 |
Reclassification of common stock warrants to liability | — |  |  | — |  |  | (800) |  |  | — |  |  |  |  | (800) |
Vesting of restricted stock units and related repurchases | 5,561 |  |  | 1 |  |  | (2) |  |  | — |  |  |  |  | (1) |
Issuance of common stock, net | 3,400,000 |  |  | — |  |  | 4,597 |  |  | — |  |  |  |  | 4,597 |
Net loss | — |  |  | — |  |  | — |  |  | (4,407) |  |  |  |  | (4,407) |
Balance at March 31, 2023 | 8,371,462 |  |  | $ | 1 |  |  | $ | 191,674 |  |  | $ | (177,056) |  |  |  |  | $ | 14,619 |
Equity-based compensation | — |  |  | — |  |  | 969 |  |  | — |  |  |  |  | 969 |
Vesting of restricted stock units and related repurchases | 276,845 |  |  | — |  |  | (119) |  |  | — |  |  |  |  | (119) |
Net loss | — |  |  | — |  |  | — |  |  | (5,764) |  |  |  |  | (5,764) |
Balance at June 30, 2023 | 8,648,307 |  |  | $ | 1 |  |  | $ | 192,524 |  |  | $ | (182,820) |  |  |  |  | $ | 9,705 |

See accompanying notes to the unaudited condensed consolidated financial statements.
12

Table of Contents
EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except shares)

| Common Stock |  |  |  |  |  |  |  |
| Shares |  | $ |  | Additional Paid-in- Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Income |  | Total Stockholders' Equity
Balance at January 1, 2022 | 3,626,073 |  |  | $ | — |  |  | $ | 181,301 |  |  | $ | (170,067) |  |  | $ | (2) |  |  | $ | 11,232 |
Exercise of common stock warrants | 466,666 |  |  | — |  |  | 14 |  |  | — |  |  | — |  |  | 14 |
Equity-based compensation | — |  |  | — |  |  | 342 |  |  | — |  |  | — |  |  | 342 |
Vesting of restricted stock units and related repurchases | 324 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | (1) |
Other comprehensive loss, net | — |  |  | — |  |  | — |  |  | — |  |  | (3) |  |  | (3) |
Net loss | — |  |  | — |  |  | — |  |  | (8,348) |  |  | — |  |  | (8,348) |
Balance at March 31, 2022 | 4,093,063 |  |  | $ | — |  |  | $ | 181,656 |  |  | $ | (178,415) |  |  | $ | (5) |  |  | $ | 3,236 |
Exercise of options | 124 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | 1 |
Equity-based compensation | — |  |  | — |  |  | 507 |  |  | — |  |  | — |  |  | 507 |
Vesting of restricted stock units and related repurchases | 324 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | (1) |
Issuance of common stock-ESPP | 1,351 |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | 4 |
Issuance of common stock and warrants | 867,369 |  |  | — |  |  | 4,886 |  |  | — |  |  | — |  |  | 4,886 |
Net loss | — |  |  | — |  |  | — |  |  | (7,470) |  |  | — |  |  | (7,470) |
Balance at June 30, 2022 | 4,962,231 |  |  | $ | — |  |  | $ | 187,053 |  |  | $ | (185,885) |  |  | $ | (5) |  |  | $ | 1,163 |

See accompanying notes to the unaudited condensed consolidated financial statements.
13

Table of Contents
EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

| Six Months Ended June 30,
| 2023 |  | 2022
Cash flows from operating activities: |  |  |
Net loss | $ | (10,171) |  |  | $ | (15,818) |
Adjustments to reconcile net loss to cash used in operating activities: |  |  |
Depreciation and amortization | 479 |  |  | 593 |
Equity-based compensation | 1,277 |  |  | 849 |
Amortization of long-term debt issuance costs and fees | — |  |  | 477 |
Amortization of right-of-use asset | 364 |  |  | 341 |
Amortization of investments | — |  |  | (2) |
Other | 44 |  |  | 18 |
Changes in operating assets and liabilities: |  |  |
Prepaid expenses and other current assets | 145 |  |  | 1,999 |
Other noncurrent assets | 288 |  |  | 24 |
Accounts payable | (18) |  |  | (1,820) |
Accrued expenses | (190) |  |  | (3,156) |
Deferred revenue | — |  |  | (5,036) |
Other liabilities | (347) |  |  | (303) |
Net cash used in operating activities | (8,129) |  |  | (21,834) |
Cash flows from investing activities: |  |  |
Purchase of available-for-sale securities | (2,000) |  |  | (1,499) |
Proceeds from sale or maturity of available-for-sale securities | — |  |  | 5,000 |
Capital expenditures | — |  |  | (10) |
Proceeds from sale of capital assets | 211 |  |  | — |
Net cash (used in) provided by investing activities | (1,789) |  |  | 3,491 |
Cash flows from financing activities: |  |  |
Repayment of long-term debt | — |  |  | (7,500) |
Payment of long-term debt fees and issuance costs | — |  |  | (506) |
Proceeds from common stock offering | 5,440 |  |  | 5,054 |
Payment of common stock financing costs | (843) |  |  | (154) |
Payment of exercise of common stock warrants | (800) |  |  | — |
Proceeds from issuance of employee stock purchase plan | — |  |  | 4 |
Proceeds from exercise of common stock warrants | — |  |  | 1 |
Payments for minimum statutory tax withholding related to net share settlement of equity awards | (121) |  |  | (2) |
Net cash provided by (used in) provided by financing activities | 3,676 |  |  | (3,103) |
Net (decrease) in cash, cash equivalents, and restricted cash | (6,242) |  |  | (21,446) |
Cash, cash equivalents, and restricted cash - beginning of period | 9,777 |  |  | 43,844 |
Cash, cash equivalents, and restricted cash - end of period | $ | 3,535 |  |  | $ | 22,398 |

See accompanying notes to the unaudited condensed consolidated financial statements.
14

EXICURE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands)
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the amounts shown in the unaudited condensed consolidated statements of cash flows:

| June 30, 2023 |  | December 31, 2022
Cash and cash equivalents | $ | 2,335 |  |  | $ | 8,577 |
Restricted cash included in other noncurrent assets | 1,200 |  |  | 1,200 |
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows | $ | 3,535 |  |  | $ | 9,777 |

See accompanying notes to the unaudited condensed consolidated financial statements.
15

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
1. Description of Business, Basis of Presentation, Going Concern and Restatement of Financial Statement
Description of Business
Exicure, Inc. has historically been an early-stage biotechnology company focused on developing nucleic acid therapies targeting ribonucleic acid against validated targets. In September 2022, the Company announced a significant reduction in force, suspension of preclinical activities and halting of all research and development, and that the Company was exploring strategic alternatives to maximize stockholder value. While the foregoing efforts are continuing, the Company does not expect they will generate significant value for stockholders, at least in the near term. Therefore, the Company is engaging 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. The Company is exploring transactions in industries unrelated to its historical operations.
Throughout these unaudited condensed consolidated financial statements, the terms the “Company,” and “Exicure” refer to Exicure, Inc. and where appropriate, its wholly owned subsidiary, Exicure Operating Company. Exicure Operating Company holds all material assets and conducts all business activities and operations of Exicure, Inc.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements as of June 30, 2023 and December 31, 2022, and for the three and six months ended June 30, 2023 and 2022, have been presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of Exicure and its wholly owned subsidiary, Exicure Operating Company. All intercompany transactions and accounts are eliminated in consolidation.
Unaudited Interim Financial Information
The accompanying interim condensed consolidated balance sheet as of June 30, 2023, the interim condensed consolidated statements of operations for the three and six months ended June 30, 2023 and 2022, the interim condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2023 and 2022, the interim condensed consolidated statements of changes in stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and the interim condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and with instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934, as amended; and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2023, the results of its operations for the three and six months ended June 30, 2023 and 2022, and the results of its cash flows for the six months ended June 30, 2023 and 2022. The financial data and other information disclosed in these notes related to the six months ended June 30, 2023 and 2022 are unaudited. The results for the six months ended June 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, or any other interim periods, or any future year or period.
Going Concern
At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date that the
16

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
financial statements are issued. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern for a period of one year after the date that the financial statements are issued. As of June 30, 2023, the Company has generated an accumulated deficit of $201,657 since inception and expects to incur significant expenses and negative cash flows for the foreseeable future. As of June 30, 2023, the Company’s cash, and cash equivalents were $2,335. Management believes that, given the Company’s current cash position, operating plans and forecasted negative cash flows from operating activities over the next twelve months, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. Substantial additional financing will be needed by the Company to fund its operations.
Management believes that the Company’s existing cash and cash equivalents will fund its operating expenses into the fourth quarter of 2023. However, this estimate is based on assumptions about how the Company can limit spending that may prove to be wrong. It is very difficult to project the Company’s current cash burn rate given the transitional status of the Company and this estimate may prove inaccurate. Depending on the direction of the Company’s review of strategic alternatives, the Company may use available resources sooner than management currently expects. The Company has already engaged in significant cost reductions, so our ability to further cut costs and extend the Company’s operating runway is limited. As a result, substantial additional financing will be needed by the Company within the next few months to pay expenses, fund the ongoing exploration of strategic alternatives and pursue any alternatives that may be identified. The Company seeks to raise capital in the third quarter of 2023 to fund its operations through 2024. There can be no assurance that such additional financing will be available and, if available, can be obtained on acceptable terms.
The accompanying unaudited condensed consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Restatement
The Company is restating its previously issued condensed consolidated financial statements and related notes as of and for the three and six months ended June 30, 2023. The Company identified errors related to the incorrect classification of certain expenses as research and development expenses on the condensed consolidated statements of operations. The Company also incorrectly classified its investment in convertible notes receivable as held-to-maturity instead of as available-for-sale (“AFS”) and incorrectly did not record such investment at fair value on the condensed consolidated balance sheet as of June 30, 2023.
17

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
The following table illustrates the effects of the error corrections on the balance sheet:

As of June 30, 2023 | Previously Reported | Adjustments | Restated
ASSETS |  |  |
Total current assets | $ | 3,664 |  | $ | — |  | $ | 3,664 |
Property and equipment, net | 1,796 |  | — |  | 1,796 |
Right-of-use asset | 6,893 |  | — |  | 6,893 |
Investment in convertible notes receivable | — |  | 2,000 |  | 2,000 |
Other noncurrent assets | 5,202 |  | (2,000) |  | 3,202 |
Total assets | $ | 17,555 |  | $ | — |  | $ | 17,555 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |
Total liabilities | 7,850 |  | — |  | 7,850 |
Contingencies (Note 11) |  |  |
Stockholders’ equity: |  |  |
Preferred stock, $0.0001 par value per share; 10,000,000 shares authorized, no shares issued and outstanding, June 30, 2023 and December 31, 2022 | — |  | — |  | — |
Common stock, $0.0001 par value per share; 200,000,000 shares authorized, 8,648,307 issued and outstanding, June 30, 2023; 4,965,901 issued and outstanding, December 31, 2022 | 1 |  | — |  | 1 |
Additional paid-in capital | 192,524 |  | — |  | 192,524 |
Accumulated deficit | (182,820) |  | — |  | (182,820) |
Total stockholders’ equity | 9,705 |  | — |  | 9,705 |
Total liabilities and stockholders’ equity | $ | 17,555 |  | $ | — |  | $ | 17,555 |

The following table illustrates the effects of the error corrections to operating expenses:

For the three months ended June 30, 2023 | Previously Reported | Adjustments | Restated
Research and development expense | $ | 921 |  | $ | (921) |  | $ | — |
General and administrative expense | 4,721 |  | 921 |  | 5,642 |
Total operating expenses | $ | 5,642 |  | $ | — |  | $ | 5,642 |

For the six months ended June 30, 2023 | Previously Reported | Adjustments | Restated
Research and development expense | $ | 2,902 |  | $ | (1,479) |  | $ | 1,423 |
General and administrative expense | 7,279 |  | 1,479 |  | 8,758 |
Total operating expenses | $ | 10,181 |  | $ | — |  | $ | 10,181 |

2. Significant Accounting Policies
The Company’s significant accounting policies are disclosed in the audited consolidated financial statements and the notes thereto, which are included in the in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 27, 2023, as amended by Amendment No. 1 filed with the SEC on May 1, 2023 (the “Annual Report”). Since the date of those audited consolidated financial statements, there have been no material changes to the Company’s significant accounting policies.
18

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on certain assumptions which it believes are reasonable in the circumstances and while actual results could differ from those estimates, management does not believe that any change in those assumptions in the near term would have a significant effect on the Company’s financial position, results of operations or cash flows. Actual results in future periods could differ from those estimates.
Investment in Convertible Notes Receivable
Securities are classified as current or noncurrent based on the remaining contractual maturities of the securities. Securities are designated by the Company at the point of investment, as either trading, AFS, or held to maturity. Under ASC 825, Financial Instruments, the Company elected the fair value option for all outstanding convertible notes receivable. Management evaluates the performance of the securities on a fair value basis. Under the fair value option, the notes receivable are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the Condensed Consolidated Statements of Operations.
Investment in convertible notes receivable at fair value totaled $2,000 as of June 30, 2023. As of June 30, 2023, the aggregate cost of the investment in convertible notes receivable accounted for under the fair value option was $2,000, which included principal balances of $2,000. The principal balance of the investment in convertible notes receivable equaled fair value as of June 30, 2023.
Recent Accounting Pronouncements Adopted
Financial Instruments - Credit Losses
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) (“ASU 2016-13”). This ASU changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard replaces the “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for credit losses. ASU No. 2016-13 was effective for the Company beginning on January 1, 2020. The Company adopted this ASU in January 2023. There was no material impact on the condensed consolidated financial statements.
3. Supplemental Balance Sheet Information
Prepaid expenses and other current assets

| June 30, 2023 |  | December 31, 2022
Prepaid clinical, contract research and manufacturing costs | $ | — |  |  | $ | 213 |
Prepaid insurance | 628 |  |  | 408 |
Other | 701 |  |  | 853 |
Prepaid expenses and other current assets | $ | 1,329 |  |  | $ | 1,474 |

19

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
Other noncurrent assets

| June 30, 2023 (Restated) |  | December 31, 2022
Restricted cash | $ | 1,200 |  |  | $ | 1,200 |
Prepaid insurance | 1,999 |  |  | 2,252 |
Other | 3 |  |  | 38 |
Other noncurrent assets | $ | 3,202 |  |  | $ | 3,490 |

Property and equipment, net

| June 30, 2023 |  | December 31, 2022
Scientific equipment | $ | 5,265 |  |  | $ | 6,087 |
Computers and software | 63 |  |  | 63 |
Furniture and fixtures | 30 |  |  | 30 |
Property and equipment, gross | 5,358 |  |  | 6,180 |
Less: accumulated depreciation and amortization | (3,562) |  |  | (3,650) |
Property and equipment, net | $ | 1,796 |  |  | $ | 2,530 |

Depreciation and amortization expense was $479 and $593 for the six months ended June 30, 2023 and 2022, respectively. During the six months ended June 30, 2023, the Company sold scientific equipment with a net book value of $255 and recognized a loss of $44 included in other income (expense) in the accompanying statement of operations for the six months ended June 30, 2023.
Accrued expenses and other current liabilities

| June 30, 2023 |  | December 31, 2022
Accrued clinical, contract research and manufacturing costs | $ | — |  |  | $ | 48 |
Accrued restructuring costs | — |  |  | 48 |
Lease liability | 580 |  |  | 539 |
Accrued payroll-related expenses | 16 |  |  | 32 |
Accrued federal and state tax payable | — |  |  | 209 |
Accrued other expenses | 492 |  |  | 402 |
Accrued expenses and other current liabilities | $ | 1,088 |  |  | $ | 1,278 |

4. Leases
The Company’s lease arrangements at June 30, 2023 consist of (i) a lease for office and laboratory space at its headquarters in Chicago, Illinois that commenced in July 2020 (the “Chicago Lease”) and (ii) a lease for office equipment (the “Office Equipment Lease”). The Chicago Lease and the Office Equipment Lease are classified as operating leases.
Chicago Lease
The Company has approximately thirty thousand square feet of office and laboratory space in Chicago, Illinois. The original term (the “Original Term”) of the Chicago Lease is 10 years, commencing on July 1, 2020 (the “Commencement Date”), which is the date the premises were ready for occupancy under the terms of the Chicago
20

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
Lease. The Company has options to extend the term of the Chicago Lease for two additional successive periods of five years each (the “Extension Periods”) at the then prevailing effective market rental rate.
The initial annual base rent during the Original Term is approximately $1,113 for the first 12-month period of the Original Term, payable in monthly installments beginning on the Commencement Date. Base rent thereafter is subject to annual increases of 3%, for an aggregate amount of $12,761 over the Original Term. The Company must also pay its proportionate share of certain operating expenses and taxes for each calendar year during the term. During the first 12-month period of the Original Term, the base rent and the Company's proportionate share of operating expenses and taxes were subject to certain abatements.
The following table summarizes lease costs in the Company’s unaudited condensed consolidated statement of operations:

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Operating lease costs | $ | 326 |  |  | $ | 326 |  |  | $ | 652 |  |  | $ | 652 |
Variable lease costs | (19) |  |  | 505 |  |  | 313 |  |  | 846 |
Short term lease costs | — |  |  | 1 |  |  | — |  |  | 15 |
Total lease costs | $ | 307 |  |  | $ | 832 |  |  | $ | 965 |  |  | $ | 1,513 |

The Company made cash payments for operating leases $860 and $1,703 during the six months ended June 30, 2023 and 2022, respectively.
Sublease of Office Space
The Company entered into a sublease agreement with Cyclopure, Inc. (the “Subtenant”) to sublease approximately 57% of its office space pursuant to that certain sublease agreement (the “Sublease Agreement”), dated as of May 4, 2023. The term of the Sublease Agreement began on May 15, 2023 and ends on June 30, 2030, the expiration date of the Chicago Lease. The first three months under the Sublease Agreement are rent free. Beginning August 15, 2023, the Company will charge the Subtenant for 57% of the base rent under the Chicago Lease, and the subtenant is responsible for its pro rata share of operating expenses and taxes payable.
5. Investment in Convertible Notes Receivable
In May 2023, the Company entered into two subscription agreements to purchase non-guaranteed private placement convertible bonds (the “Bonds”) for a subscription amount of $1 million each. The Bonds mature in May 2026 and the yield to maturity is 4.5% per annum. The Company has the option to redeem part or the entire principal amount of the Bonds on the first anniversary after the issue date and every three months thereafter before the maturity date. The conversion ratio will be one hundred percent (100%) of the Bond’s face value. The Company also has the ability to convert the debt into shares based on the number of shares computed by dividing the face value of each security by a calculated conversion price, which is subject to adjustment provisions, determined at the time of issuance. The securities may be converted from May 3, 2024, the first anniversary of the issue date of the first agreement, to April 15, 2026, one month prior to the maturity date to the second agreement.
The Company’s debt securities are classified as AFS pursuant to ASC 320 - Investments - Debt Securities. AFS securities are recorded at fair value. The Company held no AFS securities as of December 31, 2022.
21

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
6. Stockholders’ Equity
Preferred Stock
As of June 30, 2023 and December 31, 2022, the Company had 10,000,000 shares of preferred stock, par value $0.0001 authorized and no shares issued and outstanding.
Common Stock
As of June 30, 2023 and December 31, 2022, the Company had authorized 200,000,000 shares of common stock, par value $0.0001. As of June 30, 2023 and December 31, 2022, the Company had 8,648,307 shares and 4,965,901 shares issued and outstanding, respectively.
The holders of shares of the Company’s common stock are entitled to one vote per share on all matters to be voted upon by the Company’s stockholders and there are no cumulative rights. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of the Company’s common stock are entitled to receive ratably any dividends that may be declared from time to time by the Board of Directors (the “Board”) out of funds legally available for that purpose. In the event of the Company’s liquidation, dissolution or winding up, the holders of shares of the Company’s common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock then outstanding. The Company’s common stock has no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Company’s common stock. The outstanding shares of the Company’s common stock are fully paid and non-assessable.
September 2022 PIPE (Private Investment in Public Equity)
Securities Purchase Agreement
On September 26, 2022, the Company entered into a securities purchase agreement (the “September 2022 Securities Purchase Agreement”) with CBI USA, Inc. (“CBI USA”), pursuant to which the Company agreed to issue and sell to CBI USA in a private placement an aggregate of 3,400,000 shares (the “September 2022 PIPE Shares”) of its common stock, par value $0.0001 per share (the “Common Stock”), at a purchase price of $1.60 per share (the “September 2022 PIPE”).
The September 2022 PIPE closed on February 24, 2023 (the “September 2022 PIPE Closing Date”). As a result of the closing of the September 2022 PIPE, CBI USA is the beneficial owner of approximately 50.4% of the Company’s outstanding shares. Pursuant to the board designation rights of CBI USA, CBI USA designated three members to the Company’s board of directors.
In February 2023, the Company received gross proceeds of $5,440 from the September 2022 PIPE (or net proceeds of $4,597 after transaction expenses).
September 2022 Registration Rights Agreement
In connection with the September 2022 PIPE, on September 26, 2022, the Company entered into a registration rights agreement (the “September 2022 Registration Rights Agreement”) with CBI USA, pursuant to which the Company agreed to register the resale of the September 2022 PIPE Shares. Under the September 2022 Registration Rights Agreement, the Company has agreed to file a registration statement covering the resale of the September 2022 PIPE Shares no later than the sixtieth (60th) day following the September 2022 PIPE Closing Date. The Company has agreed to use reasonable best efforts to cause such registration statement to become effective as promptly as practicable after the filing thereof but in any event on or prior to the Effectiveness Deadline (as defined in the September 2022 Registration Rights Agreement), and to keep such registration statement continuously effective until the earlier of (i) the date the September 2022 PIPE Shares covered by such registration statement have been sold or may be resold pursuant to Rule 144 without restriction, or (ii) the date that is two (2) years following
22

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
the September 2022 PIPE Closing Date. The Company has also agreed, among other things, to pay all reasonable fees and expenses (excluding any underwriters’ discounts and commissions and all fees and expenses of legal counsel, accountants and other advisors for CBI USA except as specifically provided in the September 2022 Registration Rights Agreement) incident to the performance of or compliance with the September 2022 Registration Rights Agreement by the Company.
Pursuant to the 2022 Registration Rights Agreement, the Company paid a pro rata payment of $27 to CBI USA in the second quarter of 2023 as liquidated damages in an amount equal to 0.5% of the aggregate amount invested by CBI USA in the September 2022 PIPE Shares for failure to file a registration statement within 90 days following the September 2022 PIPE Closing Date. Additionally, payments may be required per 30-day period or pro rata for any portion thereof for each such month during which such event continues, subject to certain caps set forth in the September 2022 Registration Rights Agreement.
The Company has granted CBI USA customary indemnification rights in connection with the registration statement. CBI USA has also granted the Company customary indemnification rights in connection with the registration statement.
May 2022 PIPE
Securities Purchase Agreement
On May 9, 2022, the Company entered into a securities purchase agreement (the “May 2022 Securities Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company agreed to issue and sell to the Investors in a private placement an aggregate of 867,369 shares (the “May 2022 PIPE Shares”) of the Company’s Common Stock, par value $0.0001 per share, at a purchase price of $5.81 per share (the “May 2022 PIPE”). The May 2022 PIPE closed on May 18, 2022 (the “May 2022 PIPE Closing Date”). The Company received aggregate net proceeds from the May 2022 PIPE of approximately $4,886 after deducting transaction-related expenses.
Pursuant to the May 2022 Securities Purchase Agreement, in connection with the May 2022 PIPE, CBI USA will have the right to nominate a member to the Board, subject to the approval by the Board and provided such nominee qualifies as an “independent” director under Nasdaq Listing Rule 5605(a)(2), effective as of the May 2022 PIPE Closing Date. CBI USA will also have the right, effective as of the May 2022 PIPE Closing Date, to designate one individual to attend all meetings of the Board in a non-voting observer capacity.
Registration Rights Agreement
Also, on May 9, 2022, the Company entered into a registration rights agreement (the “May 2022 Registration Rights Agreement”) with the Investors, pursuant to which the Company agreed to register the resale of the May 2022 PIPE Shares. Under the May 2022 Registration Rights Agreement, the Company agreed to file a registration statement covering the resale of the Shares no later than July 18, 2022. On July 11, 2022, the Company filed a registration statement on Form S-3 with the SEC for the resale of the Shares and caused the registration statement to become effective on July 20, 2022.
The Company has granted the Investors customary indemnification rights in connection with the registration statement. The Investors have also granted the Company customary indemnification rights in connection with the registration statement.
Registered Direct Offering
On December 16, 2021, the Company completed a securities purchase agreement (the “Purchase Agreement”) with certain institutional purchasers (the “Purchasers”) entered into on December 14, 2021, pursuant to which the Company offered to the Purchasers, in a registered direct offering priced at-the-market consistent with the rules of Nasdaq (the “Registered Direct Offering”), (i) an aggregate of 433,553 shares (the “Shares”) of the Company’s
23

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
common stock, $0.0001 par value per share, (ii) pre-funded warrants to purchase up to an aggregate of 718,981 shares of Common Stock (the “Pre-Funded Warrants”), and (iii) warrants to purchase up to 576,261 shares of Common Stock (the “Warrants”). The combined purchase price of each share of Common Stock and accompanying Warrant is $9.9780 per share. The combined purchase price of each Pre-Funded Warrant and accompanying Warrant is $9.9480 (equal to the combined purchase price per share of Common Stock and accompanying Warrant, minus $0.03). The per share exercise price for the Warrants is $8.1031, the closing bid price of the Company’s Common Stock on December 13, 2021 (and as adjusted for the reverse stock split referenced in Note 1). The Warrants will be exercisable immediately from the closing December 16, 2021, and will expire on the five-year anniversary of the date of issuance, or December 16, 2026. The Pre-Funded Warrants and Warrants, which met equity classification, were recognized as a component of permanent stockholders’ equity within additional paid-in-capital together with the net proceeds from the Registered Direct Offering. The gross proceeds to the Company from the Registered Direct Offering (excluding effect of subsequent exercises of pre-funded warrants) were $11,478 and net proceeds after deducting the placement agent’s fees and other offering expenses paid or payable by the Company were $10,226. The securities were offered by the Company pursuant to an effective shelf registration statement on Form S-3 (File No. 333-251555) previously filed with the Securities and Exchange Commission (the “SEC”) on December 21, 2020, and which was declared effective by the SEC on January 7, 2021 (the “Registration Statement”).
Each Warrant is exercisable for one share of Common Stock at an exercise price of $8.1031 per share. The Warrants are immediately exercisable as of the date of issuance of December 16, 2021 and will expire on the five-year anniversary of the date of issuance, or December 16, 2026. The Pre-Funded Warrants were offered in lieu of shares of Common Stock to one of the Purchasers whose purchase of shares of Common Stock in the Registered Direct Offering would otherwise result in said Purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the Purchaser, 9.99%) of the Company’s outstanding Common Stock immediately following the consummation of the Registered Direct Offering. Each Pre-Funded Warrant is exercisable for one share of Common Stock at an exercise price of $0.030 per share. The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.
A holder (together with its affiliates) of the Warrant or Pre-Funded Warrant may not exercise any portion of the Warrant or Pre-Funded Warrant, as applicable, to the extent that the holder would own more than 4.99% (or, at the holder’s option upon issuance, 9.99%) of the Company’s outstanding Common Stock immediately after exercise, as such percentage ownership is determined in accordance with the terms of the Warrant or Pre-Funded Warrant, as applicable. In lieu of making the cash payment otherwise contemplated to be made to the Company upon exercise of a Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the Warrants, provided that such cashless exercise shall only be permitted if the Registration Statement is not effective at the time of such exercise or if the prospectus to which the Registration Statement is a part is not available for the issuance of shares of Common Stock to the Warrant holder.
In lieu of making the cash payment otherwise contemplated to be made to the Company upon exercise of a Pre-Funded Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Common Stock determined according to a formula set forth in the Pre-Funded Warrants.
Common Stock Warrants
In January 2022, Pre-Funded Warrants were exercised for a total exercise price of $14, resulting in the issuance of 466,666 shares of common stock. As of June 30, 2023, there are no unexercised pre-funded warrants that are outstanding.
Warrants to purchase 576,261 shares of common stock at a price of $8.1031 per share were acquired in the December 2021 registered-direct offering transaction. The warrants were classified as equity. As a result of the closing of the September 2022 PIPE, a warrant holder elected to exercise their option within 30 days of the closing
24

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
of the September 2022 PIPE (February 24, 2023) to receive a cash payout for the outstanding warrants in the amount of the Black-Scholes value of each warrant as prescribed in the warrant agreement. The Company paid $800 to this warrant holder on June 23, 2023 and 526,151 were settled as a result. As of June 30, 2023, warrants to purchase 50,110 shares of common stock at a price of $8.1031 per share that were acquired in the December 2021 registered-direct offering transaction remain outstanding.
25

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
7. Equity-Based Compensation
2017 Equity Incentive Plan
On September 22, 2017, the Company’s stockholders approved the Exicure, Inc. 2017 Equity Incentive Plan (the “2017 Plan”), which became effective on November 15, 2017. The 2017 Plan provides for the issuance of incentive awards of up to 194,750 shares of Exicure common stock, which includes 72,330 shares of Exicure common stock to be issued to officers, employees, consultants and directors, plus a number of shares not to exceed 122,793 that are subject to issued and outstanding awards under the Exicure OpCo 2015 Equity Incentive Plan (the “2015 Plan”) and were assumed in the merger transaction on September 26, 2017. Awards that may be awarded under the 2017 Equity Incentive Plan include non-qualified and incentive stock options, stock appreciation rights, bonus shares, restricted stock, restricted stock units, performance units and cash-based awards. The number of shares of common stock reserved for issuance under the 2017 Equity Incentive Plan automatically increases on January 1 of each year, beginning on January 1, 2020, by the lesser of (i) 153,333 shares, (ii) 5% of the total number of shares of its capital stock outstanding on December 31 of the preceding calendar year, or (iii) a lesser number of shares determined by the Compensation Committee of the Board (the “Compensation Committee”). No future awards will be made under the 2015 Plan upon the effectiveness of the 2017 Plan. On January 1, 2023, pursuant to the terms of the 2017 Plan, the number of awards that are reserved and may be awarded under the 2017 Plan was automatically increased by 153,333 awards.
As of June 30, 2023, the aggregate number of equity awards available for grant under the 2017 Equity Incentive Plan was 574,302.
Awards granted under the 2017 Plan are contingent on the participants’ continued employment or provision of non-employee services and are subject to forfeiture if employment or continued service terminates for any reason. The initial award granted to an employee or consultant generally vests 25% on the first 12-month anniversary of the grant date and vests 1/48th monthly thereafter until fully vested at the end of 48 months. Subsequent awards granted to employees or consultants generally vest 1/48th monthly until fully vested at the end of 48 months. The initial stock option grant to a non-employee director vests 1/36th monthly until fully vested at the end of 36 months. Subsequent stock option grants to a non-employee director vests 1/12th monthly until fully vested at the end of 12 months. The term of common stock option grants is 10 years unless terminated earlier as described above.
Employee Stock Purchase Plan
The 2017 Employee Stock Purchase Plan (the “ESPP”) was adopted by the Board in September 2017 and approved by the Company’s stockholders in September 2017. Through the ESPP, eligible employees may authorize payroll deductions of up to 15% of their compensation to purchase common stock. The maximum number of shares that an employee may purchase on any exercise date in an offer period will be the smaller of (i) 250 shares or (ii) such number of shares as has a fair market value (determined as of the offering date for such offer period) equal to $25,000 within one calendar year minus the fair market value of any other shares of common stock that are attributed to such calendar year. The purchase price per share at each purchase date is equal to 85% of the lower of (i) the closing market price per share of Exicure common stock on the employee’s offering date or (ii) the closing market price per share of Exicure common stock on the exercise date.
The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2018 and each January 1 thereafter through January 1, 2027, by the least of (i) 10,000 shares; (ii) 0.3% of the outstanding shares of common stock on the last day of the immediately preceding calendar year; or (iii) a lesser number of shares determined by the Board. On January 1, 2023, the number of shares of common stock available for issuance under the ESPP increased by 10,000 shares. As of June 30, 2023, there were 51,971 shares available for issuance under the ESPP.
26

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
Equity-based compensation expense is classified in the statements of operations as follows:

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 (Restated) |  | 2022 |  | 2023 (Restated) |  | 2022
Research and development expense | $ | — |  |  | $ | 171 |  |  | $ | 154 |  |  | $ | 330 |
General and administrative expense | 969 |  |  | 336 |  |  | 1,123 |  |  | 519 |
| $ | 969 |  |  | $ | 507 |  |  | $ | 1,277 |  |  | $ | 849 |

Unamortized equity-based compensation expense at June 30, 2023 was $532, which is expected to be amortized over a weighted-average period of 1.8 years.
The Company utilizes the Black-Scholes option-pricing model to determine the fair value of common stock option grants. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model also requires the input of highly subjective assumptions. The following table presents the assumptions used in the Black-Scholes option-pricing model for stock options granted during the six months ended June 30, 2023 and 2022:

| Six Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022
Expected term | 5.8 to 5.8 years |  | 5.3 to 6.1 years
Risk-free interest rate | 3.83% to 3.83%; weighted avg. 3.83% |  | 2.86% to 3.56%; weighted avg. 2.91%
Expected volatility | 100.9% to 100.9%; weighted avg. 100.9% |  | 95.2% to 95.8%; weighted avg. 95.2%
Forfeiture rate | 5 | % |  | 5 | %
Expected dividend yield | — | % |  | — | %

The expected term is based upon the “simplified method” as described in Staff Accounting Bulletin Topic 14.D.2. Currently, the Company does not have sufficient experience to provide a reasonable estimate of an expected term of its common stock options. The Company will continue to use the “simplified method” until there is sufficient experience to provide a more reasonable estimate in conformance with ASC 718-10-30-25 through 30-26. The risk-free interest rate assumptions were based on the U.S. Treasury bond rate appropriate for the expected term in effect at the time of grant. For stock options granted after December 31, 2021, the expected volatility is based on the volatility of shares of the Company. For stock options granted prior to January 1, 2022, the expected volatility is based on calculated enterprise value volatilities for publicly traded companies in the same industry and general stage of development. The estimated forfeiture rates were based on historical experience for similar classes of employees. The dividend yield was based on expected dividends at the time of grant.
The fair value of the underlying common stock and the exercise price for the common stock options granted during the six months ended June 30, 2023 and 2022 are summarized in the table below.

Common Stock Options Granted During Period Ended: | Fair Value of Underlying Common Stock |  | Exercise Price of Common Stock Option
Six months ended June 30, 2023 | $1.58; weighted avg. $1.58 |  | $1.58; weighted avg. $1.58
Six months ended June 30, 2022 | $3.46 to $5.51; weighted avg. $4.56 |  | $3.46 to $5.51; weighted avg. $4.56

27

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
The weighted-average grant date fair value of common stock options granted in the six months ended June 30, 2023 was $1.26 per common stock option.
A summary of common stock option activity as of the periods indicated is as follows:

| Options |  | Weighted-Average Exercise Price (1) |  | Weighted-Average Remaining Contractual Term (years) |  | Aggregate Intrinsic Value (thousands)
Outstanding - December 31, 2022 | 222,833 |  |  | $ | 4.74 |  |  | 7.5 |  | $ | — |
Granted | 10,000 |  |  | 1.58 |  |  |  |  |
Exercised | — |  |  | — |  |  |  |  |
Forfeited | (65,927) |  |  | 5.40 |  |  |  |  |
Outstanding - June 30, 2023 | 166,906 |  |  | $ | 4.28 |  |  | 6.1 |  | $ | — |
Exercisable - June 30, 2023 | 161,763 |  |  | $ | 4.26 |  |  | 6.1 |  | $ | — |
Vested and Expected to Vest - June 30, 2023 | 166,671 |  |  | $ | 4.28 |  |  | 6.1 |  | $ | — |

(1) On March 24, 2022, the Company’s Board of Directors unanimously approved the repricing of all outstanding and unexercised stock options granted under our 2015 Equity Incentive Plan and 2017 Equity Incentive Plan and held by its current employees, executive officers, and directors. Effective April 1, 2022, the exercise price of the eligible stock options was reduced to $5.51, the closing price of our common stock on April 1, 2022. See below section titled “Repricing of Outstanding and Unexercised Options” for more information.
A summary of restricted stock unit activity of the periods indicated is as follows:

| Restricted Stock Units |  | Weighted-Average Grant Date Fair Value
Unvested balance - December 31, 2022 | 20,885 |  |  | $ | 12.65 |
Granted | 295,992 |  |  | 1.02 |
Settled | (305,569) |  |  | 1.91 |
Forfeited | (3,608) |  |  | 14.58 |
Unvested balance - June 30, 2023 | 7,700 |  |  | $ | 10.41 |

The grant date fair value of restricted stock units is based on the Company’s closing stock price at the date of grant. At vesting, each outstanding restricted stock unit will be exchanged for one share of the Company’s common stock. Restricted stock units generally vest evenly on a quarterly basis over a period of 4 years in exchange for continued service provided by the restricted stock unit recipient during that vesting period.
28

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
A summary of performance-based restricted stock unit activity of the periods indicated is as follows:

| Performance-Based Restricted Stock Units |  | Weighted-Average Grant Date Fair Value
Unvested balance - December 31, 2022 | 97,643 |  |  | $ | 3.45 |
Granted | — |  |  | — |
Settled | (97,643) |  |  | 1.91 |
Unvested balance - June 30, 2023 | — |  |  | $ | — |

The grant date fair value of performance-based restricted stock units is based on the Company’s closing stock price at the date of grant. At vesting, each outstanding restricted stock unit will be exchanged for one share of the Company’s common stock. Certain performance metrics must be met by the performance measurement date in 2023 in order for the performance-based restricted stock units granted during 2022 to vest as follows: one-third on May 16, 2023, one-third on May 16, 2024, and one-third on May 16, 2025, in exchange for continued service provided by the performance-based restricted stock unit recipient during that vesting period.
8. Income Taxes
The Company incurred a pretax loss in each of the six months ended June 30, 2023 and 2022, which consists entirely of loss in the United States and resulted in no provision for income tax expense during the periods then ended. The effective tax rate is 0% in each of the six months ended June 30, 2023 and 2022 because the Company has generated tax losses and has provided a full valuation allowance against its deferred tax assets.
9. Loss Per Common Share
Basic loss per common share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per common share is calculated using the treasury share method by giving effect to all potentially dilutive securities that were outstanding. Potentially dilutive options, restricted stock units and warrants to purchase common stock that were outstanding during the periods presented were excluded from the diluted loss per share calculation for the periods presented because such shares had an anti-dilutive effect due to the net loss reported in those periods. Therefore, basic and diluted loss per common share is the same for each of the six months ended June 30, 2023 and 2022.
The following is the computation of loss per common share for the six months ended June 30, 2023 and 2022:

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Net loss | $ | (5,764) |  |  | $ | (7,470) |  |  | $ | (10,171) |  |  | $ | (15,818) |
Weighted-average basic and diluted common shares outstanding | 8,432,394 |  |  | 4,503,983 |  |  | 7,366,594 |  |  | 4,268,955 |
Loss per share - basic and diluted | $ | (0.68) |  |  | $ | (1.66) |  |  | $ | (1.38) |  |  | $ | (3.71) |

29

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
The outstanding securities presented below were excluded from the calculation of loss per common share, for the periods presented, because such securities would have been anti-dilutive due to the Company’s loss per share during that period:

| As of June 30,
| 2023 |  | 2022
Options to purchase common stock | 166,906 |  |  | 317,262 |
Restricted stock units | 7,700 |  |  | 49,411 |
Performance stock units | — |  |  | 97,643 |
Warrants to purchase common stock | 50,110 |  |  | 576,261 |

10. Fair Value Measurements
ASC Topic 820, Fair Value Measurement, establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value, as follows: Level 1 Inputs - unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date; Level 2 Inputs - other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 Inputs - unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
Assets measured at fair value on a recurring basis as of June 30, 2023 are as follows:

| Total |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |
Money market funds | $ | 1,148 |  |  | $ | 1,148 |  |  | $ | — |  |  | $ | — |
Short-term investments: |  |  |  |  |  |  |
Investment in convertible notes receivable | 2,000 |  |  | — |  |  | — |  |  | 2,000 |
Total financial assets | $ | 3,148 |  |  | $ | 1,148 |  |  | $ | — |  |  | $ | 2,000 |

Assets measured at fair value on a recurring basis as of December 31, 2022 are as follows:

| Total |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |
Cash equivalents: |  |  |  |  |  |  |
Money market funds | $ | 1,612 |  |  | $ | 1,612 |  |  | $ | — |  |  | $ | — |
Total financial assets | $ | 1,612 |  |  | $ | 1,612 |  |  | $ | — |  |  | $ | — |

The Company uses the market approach and Level 1 and Level 2 inputs to value its cash equivalents and Level 2 inputs to value its short-term investments. The Company uses the market approach and Level 3 inputs to value its liabilities. There were no liabilities measured at fair value on a recurring basis as of December 31, 2022.
30

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
Warrant Liability
A summary of the warrant liability activity for the six months ended June 30, 2023, is as follows:

| Warrants Outstanding |  | Fair Value Per Share |  | Fair Value
(in thousands, except per share data) |  |  |  |  |
Balance at December 31, 2022 | — |  |  | $ | — |  |  | $ | — |
Option to exercise | 526 |  |  | $ | 1.52 |  |  | $ | 800 |
Payment to warrant holder | (526) |  |  | $ | 1.52 |  |  | $ | (800) |
Balance at June 30, 2023 | — |  | 0 | $ | — |  |  | — |

Investment in Convertible Notes Receivable
A summary of the AFS activity for the six months ended June 30, 2023, is as follows:

|  | Fair Value
Balance at December 31, 2022 |  | $ | — |
Investment in convertible notes receivable |  | 2,000 |
Balance at June 30, 2023 |  | $ | 2,000 |

Fair value as of June 30, 2023 approximated the purchase price as there were no significant changes in fair value between purchase in May and June 30, 2023.
There were no transfers between Level 1, 2, or 3, during the years ended December 31, 2023, and 2022. Both observable and unobservable in puts were used to determine fair value of the positions that the Company classified within the Level 3 category. Unrealized gains and losses associated within the Level 3 category include changes in fair value that were attributable to both observable and unobservable inputs.
11. Commitments and Contingencies
Legal Proceedings
On December 13, 2021, Mark Colwell filed a putative securities class action lawsuit against the Company, David A. Giljohann and Brian C. Bock in the United States District Court for the Northern District of Illinois, captioned Colwell v. Exicure, Inc. et al., Case No. 1:21-cv-0663. On February 4, 2021, plaintiff filed an amended putative securities class action complaint. On March 20, 2023, the court entered an order appointing James Mathew as lead plaintiff and Bleichmar Fonti & Auld LLP as lead counsel in the action pursuant to the Private Securities Litigation Reform Act of 1995. On May 26, 2023, lead plaintiff filed a second amended complaint against the Company, Dr. Giljohann, Mr. Bock, and Grant Corbett. The second amended complaint alleges that Dr. Giljohann, Mr. Bock, and Dr. Corbett made materially false and/or misleading statements related to the Company’s clinical programs purportedly causing losses to investors who acquired Company securities between January 7, 2021 and December 10, 2021. The second amended complaint does not quantify any alleged damages but, in addition to attorneys’ fees and costs, lead plaintiff seeks to recover damages on behalf of himself and others who acquired the Company’s stock during the putative class period at allegedly inflated prices and purportedly suffered financial harm as a result. The Company intends to move to dismiss the second amended complaint.
On March 1, 2022, Kapil Puri filed a shareholder derivative lawsuit on behalf of the Company in the United States District Court for the Northern District of Illinois, against Dr. Giljohann and Mr. Bock, Jeffrey L. Cleland, Elizabeth Garofalo, Bosun Hau, Bali Muralidhar, Andrew Sassine, Matthias Schroff, James Sulat and Timothy Walbert, captioned Puri v. Giljohann, et al., Case No. 1:22-cv-01083. On March 8, 2022, Yixin Sim filed a similar shareholder derivative lawsuit in the same court against the same individuals, captioned Sim v. Giljohann, et al., Case No. 1:22-cv-01217. On April 25, 2022, Stourbridge Investments LLC filed a similar shareholder derivative lawsuit against the same individuals in the United States District Court for the District of Delaware, captioned Stourbridge Investments LLC v. Exicure, Inc. et al., Case No. 1:22-cv-00526. Based on similar factual allegations
31

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
presented in the Colwell complaint, described above, the Puri, Sim, and Stourbridge complaints (collectively, the “Derivative Complaints”) allege that the defendants caused the Company to issue false and/or misleading statements in the proxy statement for its 2021 Annual Meeting of Stockholders regarding risk oversight, code of conduct, clinical program and compensation matters, among other things, in violation of federal securities law, and committed breaches of fiduciary duties. The Derivative Complaints also assert that Dr. Giljohann and Mr. Bock are liable for contribution under the federal securities laws. The Puri and Stourbridge complaints further assert state law claims for unjust enrichment, and the Puri complaint additionally asserts state law claims for abuse of control, gross mismanagement and corporate waste. The plaintiffs do not quantify any alleged damages in the Derivative Complaints, but seek restitution for damages to the Company, attorneys’ fees, costs, and expenses, as well as an order directing that certain proposals for strengthening board oversight be put to a vote of the Company’s shareholders.
On March 18, 2022, James McNabb, through counsel, sent a written demand to the Company (the “Demand Letter”) demanding that the Board of Directors investigate certain allegations and commence proceedings on the Company’s behalf against certain of the Company’s current officers and directors for alleged breaches of fiduciary duties and corporate waste. All of the Derivative Cases have been stayed pending a decision on any motion to dismiss that may be filed in the Colwell case. In addition, the Stourbridge case has been administratively closed pending the decision on motion to dismiss that may be filed in the Colwell case. Further, pursuant to agreement, the Demand Letter is being held in abeyance and any related statute of limitations tolled pending such motion and decision.
In June 2023, a director of the Company designated by CBI USA served a demand on the Company to access certain books and records pursuant to Section 220(d) of the Delaware General Corporation Law. The Company served its response and is working with the director to resolve this demand amicably and in accordance with the Company’s obligations under Delaware law.
Northwestern University License Agreements
On December 12, 2011, (1) AuraSense, LLC, the Company’s former parent, assigned to the Company all of its worldwide rights and interests under AuraSense, LLC’s 2009 license agreement with Northwestern University (“NU”) in the field of the use of nanoparticles, nanotechnology, microtechnology or nanomaterial-based constructs as therapeutics or accompanying therapeutics as a means of delivery, but expressly excluding diagnostics (the “assigned field”); (2) in accordance with the terms and conditions of this assignment, the Company assumed all liabilities and obligations of AuraSense, LLC as set forth in its license agreement in the assigned field; and (3) in order to secure this assignment and the patent rights from NU, the Company agreed (i) to pay NU an annual license fee, which may be credited against any royalties due to NU in the same year, (ii) to reimburse NU for expenses associated with the prosecution and maintenance of the license patent rights, (iii) to pay NU royalties based on any net revenue generated by the Company’s sale or transfer of any licensed product, (iv) to pay NU, in the event the Company grants a sublicense under the licensed patent rights, the greater of a percentage of all sublicensee royalties or a percentage of any net revenue generated by a sublicensee’s sale or transfer of any licensed product, and (v) to pay NU a percentage of all other sublicense payments received by the Company. In August 2015, the Company entered into a restated license agreement with NU (the “Restated License Agreement”). In February 2016, the Company obtained exclusive license as to NU’s rights in certain SNA technology it jointly owns with NU (the “Co-owned Technology License”). The Company’s license to NU’s rights is limited to the assigned field, however the Company has no such limitation as to its own rights in this jointly owned technology. The Company’s rights and obligations in the Co-owned Technology License agreement is substantially the same as in the Restated License Agreement from August 2015 (collectively referred to as “the Northwestern University License Agreements”). As of June 30, 2023, the Company has paid to NU an aggregate of $11,550 in consideration of each of the obligations described above.
On August 3, 2023, the company received a notice letter (the “Letter”) from counsel for NU alleging the Company breached the Northwestern University License Agreements. The Letter alleges that a lack of development required under the Northwestern University License Agreements is a breach. The Company is currently evaluating
32

Table of Contents
EXICURE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
the letter and expects to have discussions with NU regarding the matters set forth in the Letter. At this time, the Company cannot determine the outcome of any such discussions.
Leases
Refer to Note 4, Leases, for a discussion of the commitments associated with the Company’s lease agreements.
12. Related-Party Transactions
Pursuant to a Consulting Agreement, effective as of September 25, 2022, between the Company and Alta Companies LTD (“Alta”), the Company paid Alta $218 on February 27, 2023 for a consulting fee earned as a result of the September 2022 PIPE closing. Paul Kang, a director of the Company since February 2023, is the President of Alta.
33

Table of Contents
Item 2. 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 for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission, or SEC, on March 27, 2023, as amended by Amendment No. 1 filed with the SEC on May 1, 2023 (the “Annual Report”). 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 Securities Exchange Act of 1934, as amended, or 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 those set forth under the section titled “Risk Factors” in Part II, Item 1A of 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. 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. While the foregoing efforts are continuing, we do not expect they will generate significant value for stockholders in the near term. Therefore, we are engaging 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 are exploring transactions in industries unrelated to our historical operations.
Because we currently have no source of revenue or committed financing, we will require substantial additional funding within the next several months in order to continue our exploration of strategic alternatives and consummate any transactions that we may identify.
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, 2023, our cash, cash equivalents, and restricted cash were $3.5 million. On February 24, 2023, we raised gross proceeds of $5.4 million on the closing of the Private Placement (as defined below) (or net proceeds of approximately $4.6 million after transaction expenses) and expect to use the net proceeds for general working capital purposes as we pursue strategic alternatives as well as for the payout for warrant put rights that were exercised as a result of the change of control.
Our current liquidity is not sufficient to fund operations over the next twelve months from the date of the issuance of the accompanying consolidated financial statements. As a result, there is substantial doubt about our ability to continue as a going concern. Substantial additional financing will be needed within the next several months to fund our operations and ongoing exploration of strategic alternatives and pursue any alternatives that we identify. If we are unable to raise capital, the Company may seek bankruptcy protection in the near term, which may result in the Company’s stockholders receiving no or very little value in respect of their shares of the Company’s common stock.
We expect to seek financing through equity offerings. However, it may be difficult to obtain financing given the Company’s current condition and uncertainty over its future direction. Therefore, we may be unable to raise capital when needed 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.
34

Table of Contents
Recent Developments
Restructuring
On December 10, 2021, we announced a strategic reduction in force and other cost cutting measures to reduce cash burn. On September 26, 2022, we announced our commitment to a plan to wind down our existing preclinical programs, including the development of our SCN9A program, to suspend all of our research and development (“R&D”) activities, including suspension of all partnered programs, and to implement a reduction in force whereby we reduced approximately 66% of our then-existing workforce, as well as other cost-cutting measures (collectively, the “Plan”). The purpose of the Plan was to decrease expenses, thereby, extending our cash runway, and enable us to maintain a streamlined organization to support key corporate functions.
Change of Control
On February 24, 2023, following the satisfaction of closing conditions, including the approval by our stockholders at a Special Meeting of Stockholders held on December 15, 2022, we closed our private placement (the “Private Placement”) to CBI USA. Exicure received gross proceeds of approximately $5.4 million in connection with the close of the Private Placement (or net proceeds of approximately $4.6 million after transaction expenses) and expects to use the net proceeds for general working capital purposes as we pursue strategic alternatives as well as for the payout for warrant put rights that were exercised as a result of the change of control.
Following the closing of the Private Placement, CBI USA is the beneficial owner of approximately 50.4% of the Company’s outstanding shares, resulting in a “change of control” of Exicure under the applicable Nasdaq rules. At closing, CBI USA designated three members to the Company’s board of directors. We are currently relying on Nasdaq’s “controlled company” exception to the requirements that a majority of our board be independent and that we have an independent compensation committee and independent nominating committee or function.
Nasdaq Listing Requirements Deficiency Notice
As previously disclosed, the Company has received numerous deficiency notices with respect to various Nasdaq listing requirements in the past year. These related to:
•Compliance with Nasdaq’s minimum bid price rule due to the Company’s stock trading below $1.00 for a sustained period of time. The Company effected a one-for-thirty reverse stock split on June 29, 2022 in order to attempt to raise the stock price. As of August 9, 2023, the Company’s stock price closed at $0.86.
•Compliance with Nasdaq’s rule requiring stockholders’ equity of at least $2,500,000 based on the Company’s balance sheet as of June 30, 2022. The Company believes it is in compliance with this requirement based on its June 30, 2023 balance sheet, but there can be no assurance it will remain in compliance.
•Compliance with Nasdaq’s corporate governance requirements with respect to board and committee composition due to the lack of (i) a majority independent board, (ii) an audit committee comprised of three independent directors and (iii) a compensation committee comprised of at least two independent directors. With respect to the majority independence and the audit committee requirements, Nasdaq informed the Company that it was not entitled to a cure period and must submit a plan to regain compliance no later than April 10, 2023. Following the closing of the Private Placement, the Company qualifies for Nasdaq’s controlled company exemptions from the requirements to have a majority independent board and independent compensation committee. The Company must still have an audit committee comprised of three independent directors. On May 10, 2023, the Company received an additional delinquency notification regarding compliance with the listing requirements for an audit committee to be comprised of at least three independent directors.
•On August 4, 2023, the Company received an additional delinquency notification regarding compliance with the listing requirements for an audit committee to be comprised of at least three independent directors. The audit committee is currently comprised of only one independent director, and therefore, the Company is no longer eligible for the cure period described in the delinquency notification received on May 10, 2023,
35

Table of Contents
and previously disclosed. Under Rule 5605(c)(2), the Company has 45 calendar days to submit a plan to regain compliance. If the Company’s plan is accepted, Nasdaq can grant an extension of up to 180 calendar days from the date of the delinquency notification. The Company is searching for qualified candidates to add as independent directors.
•On May 17 2023, the Company received a delinquency notification as it had not filed its first quarter Form 10-Q at the deadline. On July 17, 2023, the company received a letter noting this delinquency was cured.
We may not be able to regain compliance with Nasdaq's listing requirements and our failure to do so may result in the delisting of our Common Stock by Nasdaq. Even if the Company regains compliance with Nasdaq’s listing requirements and addresses the outstanding deficiency notices to Nasdaq’s satisfaction, there can be no assurance that the Company will remain in compliance with Nasdaq’s requirements and will not be delisted.
Critical Accounting Estimates
We prepare our condensed consolidated financial statements in accordance with accounting principles 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: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) 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.
Recently adopted accounting pronouncements
Refer to Note 2, Significant Accounting Policies, of the accompanying unaudited condensed consolidated financial statements for a description of recent accounting pronouncements ASU 2016-13 adopted during the first quarter of 2023.
Recent accounting pronouncements not yet adopted
There are no recent accounting pronouncements that the Company has not yet adopted.
36

Table of Contents
Results of Operations
Comparison of the Three Months Ended June 30, 2023 and 2022
The following table summarizes the results of our operations for the three months ended June 30, 2023 and 2022:

| Three Months Ended June 30, |  |  |  |
(dollars in thousands) | 2023 (Restated) |  | 2022 |  | Change
Revenue: |  |  |  |  |  |  |
Collaboration revenue | $ | — |  |  | $ | 2,471 |  |  | $ | (2,471) |  |  | (100) | %
Total revenue | — |  |  | 2,471 |  |  | (2,471) |  |  | (100) | %
Operating expenses: |  |  |  |  |  |  |
Research and development expense | — |  |  | 6,749 |  |  | (6,749) |  |  | (100) | %
General and administrative expense | 5,642 |  |  | 3,205 |  |  | 2,437 |  |  | 76 | %
Total operating expenses | 5,642 |  |  | 9,954 |  |  | (4,312) |  |  | (43) | %
Operating loss | (5,642) |  |  | (7,483) |  |  | 1,841 |  |  | (25) | %
Other income (expense), net: |  |  |  |  |  |  |
Dividend income | 15 |  |  | 16 |  |  | (1) |  |  | (6) | %
Interest income | 13 |  |  | 1 |  |  | 12 |  |  | 1,200 | %
Interest expense | — |  |  | — |  |  | — |  |  | — | %
Other expense, net | (150) |  |  | (4) |  |  | (146) |  |  | 3,650 | %
Total other income (expense), net | (122) |  |  | 13 |  |  | (135) |  |  | (1,038) | %
Net loss before provision for income taxes | (5,764) |  |  | (7,470) |  |  | 1,706 |  |  | (23) | %
Provision for income taxes | — |  |  | — |  |  | — |  |  | — | %
Net loss | $ | (5,764) |  |  | $ | (7,470) |  |  | $ | 1,706 |  |  | (23) | %

Revenue
The following table summarizes our revenue earned during the periods indicated:

| Three Months Ended June 30, |  |
(dollars in thousands) | 2023 |  | 2022 |  | Change
Collaboration revenue: |  |  |  |  |  |  |
Ipsen Collaboration Agreement | $ | — |  |  | $ | 1,775 |  |  | $ | (1,775) |  |  | (100) | %
AbbVie Collaboration Agreement | — |  |  | 696 |  |  | (696) |  |  | (100) | %
Total collaboration revenue | $ | — |  |  | $ | 2,471 |  |  | $ | (2,471) |  |  | (100) | %
Total revenue | $ | — |  |  | $ | 2,471 |  |  | $ | (2,471) |  |  | (100) | %

Collaboration revenue was $0.0 million during the three months ended June 30, 2023, reflecting a decrease of $2.5 million, or 100%, from collaboration revenue of $2.5 million for the three months ended June 30, 2022. The decrease in collaboration revenue of $2.5 million is due the termination of the Ipsen and AbbVie Collaboration Agreements in December 2022 that resulted in recognition of the remaining deferred revenue associated with each of those collaboration agreements in the fourth quarter of 2022.
37

Table of Contents
Research and development expense
The following table summarizes our research and development expenses incurred during the periods indicated:

| Three Months Ended June 30, |  |
(dollars in thousands) | 2023 (Restated) |  | 2022 |  | Change
Employee-related expense | $ | — |  |  | $ | 2,339 |  |  | $ | (2,339) |  |  | (100) | %
Platform and discovery-related expense | — |  |  | 1,997 |  |  | (1,997) |  |  | (100) | %
Facilities, depreciation, and other expenses | — |  |  | 1,229 |  |  | (1,229) |  |  | (100) | %
Clinical development programs expense | — |  |  | 1,184 |  |  | (1,184) |  |  | (100) | %
Total research and development expense | $ | — |  |  | $ | 6,749 |  |  | $ | (6,749) |  |  | (100) | %
Full time employees | — |  |  | 31 |  |  | (31) |  |  |

Research and development expense was $0.0 million for the three months ended June 30, 2023, reflecting a decrease of $6.7 million, or 100%, from research and development expense of $6.7 million for three months ended June 30, 2022. The decrease in research and development expense for the three months ended June 30, 2023 of $6.7 million was a result of the suspension of clinical, preclinical, and discovery program activities and the reduction in headcount resulting from the restructuring activities that were announced in December 2021 and September 2022, and our shift in our historical business operations suspending all research and development expenses.
General and administrative expense

| Three Months Ended June 30, |  |
(dollars in thousands) | 2023 (Restated) |  | 2022 |  | Change
General and administrative expense | $ | 5,642 |  |  | $ | 3,205 |  |  | 2,437 |  |  | 76 | %
Full time employees | 7 |  |  | 8 |  |  | (1) |  |  |

General and administrative expense was $5.6 million for the three months ended June 30, 2023, representing an increase of $2.4 million, or 76%, from $3.2 million for the three months ended June 30, 2022. The increase for the three months ended June 30, 2023 was mostly due to higher costs due to separation pay for executives and related stock based compensation expense, legal and consulting fees, partially offset by lower bonus, retention, and insurance expense. In addition, $0.9 million of expenses, primarily facilities, depreciation and other expense and platform and discovery-related expense, no longer met the criteria to be classified as research and development expenses due to the shift in our historical operations suspending all research and development activities as discussed above.
38

Table of Contents
Comparison of the Six Months Ended June 30, 2023 and 2022
The following table summarizes the results of our operations for the six months ended June 30, 2023 and 2022:

| Six Months Ended June 30, |  |  |  |
(dollars in thousands) | 2023 (Restated) |  | 2022 |  | Change
Revenue: |  |  |  |  |  |  |
Collaboration revenue | $ | — |  |  | $ | 5,036 |  |  | $ | (5,036) |  |  | (100) | %
Total revenue | — |  |  | 5,036 |  |  | (5,036) |  |  | (100) | %
Operating expenses: |  |  |  |  |  |  |
Research and development expense | 1,423 |  |  | 13,889 |  |  | (12,466) |  |  | (90) | %
General and administrative expense | 8,758 |  |  | 6,367 |  |  | 2,391 |  |  | 38 | %
Total operating expenses | 10,181 |  |  | 20,256 |  |  | (10,075) |  |  | (50) | %
Operating loss | (10,181) |  |  | (15,220) |  |  | 5,039 |  |  | (33) | %
Other (expense) income, net: |  |  |  |  |  |  |
Dividend income | 32 |  |  | 18 |  |  | 14 |  |  | 78 | %
Interest income | 24 |  |  | 3 |  |  | 21 |  |  | 700 | %
Interest expense | — |  |  | (595) |  |  | 595 |  |  | (100) | %
Other expense, net | (46) |  |  | (24) |  |  | (22) |  |  | 92 | %
Total other expense, net | 10 |  |  | (598) |  |  | 608 |  |  | (102) | %
Net loss before provision for income taxes | (10,171) |  |  | (15,818) |  |  | 5,647 |  |  | (36) | %
Provision for income taxes | — |  |  | — |  |  | — |  |  | — | %
Net loss | $ | (10,171) |  |  | $ | (15,818) |  |  | $ | 5,647 |  |  | (36) | %

Revenue
The following table summarizes our revenue earned during the periods indicated:

| Six Months Ended June 30, |  |
(dollars in thousands) | 2023 |  | 2022 |  | Change
Collaboration revenue: |  |  |  |  |  |  |
Ipsen Collaboration Agreement | $ | — |  |  | $ | 3,854 |  |  | $ | (3,854) |  |  | (100) | %
AbbVie Collaboration Agreement | — |  |  | 1,182 |  |  | (1,182) |  |  | (100) | %
Total collaboration revenue | $ | — |  |  | $ | 5,036 |  |  | $ | (5,036) |  |  | (100) | %
Total revenue | $ | — |  |  | $ | 5,036 |  |  | $ | (5,036) |  |  | (100) | %

Collaboration revenue was $0.0 million during the six months ended June 30, 2023, reflecting a decrease of $5.0 million, or 100%, from collaboration revenue of $5.0 million for the six months ended June 30, 2022. The decrease in collaboration revenue of $5.0 million is due to the termination of the Ipsen and AbbVie Collaboration Agreements in December 2022 that resulted in recognition of the remaining deferred revenue associated with each of those collaboration agreements in the fourth quarter of 2022
39

Table of Contents
Research and development expense
The following table summarizes our research and development expenses incurred during the periods indicated:

| Six Months Ended June 30, |  |
(dollars in thousands) | 2023 (Restated) |  | 2022 |  | Change
Platform and discovery-related expense | $ | 93 |  |  | $ | 4,484 |  |  | $ | (4,391) |  |  | (98) | %
Employee-related expense | 511 |  |  | 4,300 |  |  | (3,789) |  |  | (88) | %
Clinical development programs expense | 64 |  |  | 2,855 |  |  | (2,791) |  |  | (98) | %
Facilities, depreciation, and other expenses | 755 |  |  | 2,250 |  |  | (1,495) |  |  | (66) | %
Total research and development expense | $ | 1,423 |  |  | $ | 13,889 |  |  | $ | (12,466) |  |  | (90) | %
Full time employees | — |  |  | 31 |  |  | (31) |  |  |

Research and development expense was $1.4 million for the six months ended June 30, 2023, reflecting a decrease of $12.5 million, or 90% from research and development expense of $13.9 million for six months ended June 30, 2022. The decrease in research and development expense for the six months ended June 30, 2023 of $12.5 million reflects the suspension of clinical, preclinical, and discovery program activities and the reduction in headcount resulting from the restructuring activities that were announced in December 2021 and September 2022. More specifically, the decrease in research and development expense for the six months ended June 30, 2023 of $12.5 million was primarily due to a decrease in costs related to lower platform and discovery-related expense of $4.4 million, lower employee-related expense of $3.8 million, and lower clinical development programs of $2.8 million.
The decrease in platform and discovery-related expense for the six months ended June 30, 2023 of $4.4 million was mostly due to lower CRO and materials costs, all in connection with suspension of R&D activities in connection with reduction in headcount and fewer R&D activities.
The decrease in employee-related expense for the six months ended June 30, 2023 of $3.8 million was due to lower compensation and related costs in connection with a lower average headcount during the period resulting from the restructuring activities that were announced in September 2022 and December 2021.
The decrease in clinical development programs expense for the six months ended June 30, 2023 of $2.8 million was primarily due to lower manufacturing and toxicology study costs in connection with IND-enabling and Phase 1 clinical trial preparation activities for the XCUR-FXN program which we indefinitely suspended in December 2021, contributed to the decrease in clinical development program expense as compared to the prior-year period.
General and administrative expense

| Six Months Ended June 30, |  |
(dollars in thousands) | 2023 (Restated) |  | 2022 |  | Change
General and administrative expense | $ | 8,758 |  |  | $ | 6,367 |  |  | 2,391 |  |  | 38 | %
Full time employees | 7 |  |  | 8 |  |  | (1) |  |  |

General and administrative expense was $8.8 million for the six months ended June 30, 2023, representing an increase of $2.4 million or 38%, from $6.4 million for the six months ended June 30, 2022. The increase for the six months ended June 30, 2023 was mostly due to higher costs due to separation pay for executives and related stock based compensation expense, and consulting fees, partially offset by lower bonus, retention, and insurance expense. In addition, $1.5 million of expenses, primarily facilities, depreciation and other expense and platform and
40

Table of Contents
discovery-related expense, no longer met the criteria to be classified as research and development expenses due to the shift in our historical operations suspending all research and development activities as discussed above.
Liquidity and Capital Resources
Since our inception, we have incurred significant operating losses as an early-stage biotechnological company. We have generated limited revenue to date from our collaboration agreements, which have since been terminated. We have not commercialized any of our product candidates, and we do not expect to generate revenue from sales of any product. 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 little to no revenue.
As of June 30, 2023, our cash, cash equivalents, and restricted cash were $3.5 million as compared to $9.8 million as of December 31, 2022. To date, we have funded our operations primarily with proceeds received from equity financings and to a lesser extent, payments received in connection with collaboration agreements. We have generated limited revenue to date from our collaboration agreements.
We incurred net losses of approximately $10.2 million and $15.8 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, we have generated an accumulated deficit of $201.7 million since inception and expect to incur significant expenses and negative cash flows for the foreseeable future.
Based on our current operating plans and existing working capital at June 30, 2023, it is uncertain whether our current liquidity is sufficient to fund operations over the next twelve months from the date of the issuance of the accompanying unaudited condensed consolidated financial statements. As a result, there is substantial doubt about our ability to continue as a going concern. Substantial additional financing will be needed to fund our operations and there is no certainty we will obtain such financing. If we are unable to raise capital, we will need to consider other various strategic alternatives, including a merger or sale, or be unable to continue operations. We may need to seek bankruptcy protection 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.
Private Placements
In September 2022, we entered into the Securities Purchase Agreement with CBI USA, pursuant to which we agreed to issue and sell to CBI USA in a private placement an aggregate of 3,400,000 shares of our common stock, par value $0.0001 per share, at a purchase price of $1.60 per share. This Private Placement closed on February 24, 2023. Immediately following the closing of the Private Placement, CBI USA held approximately 50.4% of the shares of our common stock.
In May 2022, we entered into a securities purchase agreement with several accredited investors, pursuant to which we issued and sold 867,369 shares of common stock, par value $0.0001 per share, at a purchase price of $5.81 per share for net proceeds of approximately $4.9 million.
41

Table of Contents
Cash Flows
The following table shows a summary of our cash flows for the six months ended June 30, 2023 and 2022:

|  | Six Months Ended June 30,
(in thousands) |  | 2023 |  | 2022
|  | (unaudited)
Net cash used in operating activities |  | $ | (8,129) |  |  | $ | (21,834) |
Net cash (used in) provided by investing activities |  | (1,789) |  |  | 3,491 |
Net cash provided by (used in) financing activities |  | 3,676 |  |  | (3,103) |
Net increase (decrease) in cash, cash equivalents, and restricted cash |  | $ | (6,242) |  |  | $ | (21,446) |

Operating activities
Net cash used in operating activities was $8.1 million and $21.8 million for the six months ended June 30, 2023 and 2022, respectively. The decrease in cash used in operating activities for the six months ended June 30, 2023 of $13.7 million was due to the suspension of R&D activities and lower headcount from the September 2022 and December 2021 restructurings.
Investing activities
Net cash used in investing activities was $1.8 million and and provided by investing activities was $3.5 million for the six months ended June 30, 2023 and 2022, respectively. The decrease in cash provided by investing activities of $5.3 million was primarily due to a decrease in proceeds from the maturity, net of purchases of available-for-sale securities.
Financing activities
Net cash provided in financing activities of $3.7 million for six months ended June 30, 2023 is due to the Private Placement closed in February. Net cash used by financing activities of $3.1 million for the six months ended June 30, 2022 was primarily due to the repayment in full of all outstanding indebtedness and other obligations under the Credit and Security Agreement, dated as of September 25, 2020, as amended on October 21, 2020, July 30, 2021, September 30, 2021, and December 10, 2021, with MidCap Financial Trust, as agent, and the lenders party thereto from time to time, or the MidCap Credit Agreement, partially offset by net proceeds of approximately $4.9 million received in connection with the May 2022 private placement transaction.
Funding Requirements
We will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on acceptable terms, we would be forced to consider other various strategic alternatives, including a merger or sale; or cease operations.
We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2023. However, we have based this estimate on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. 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 or collaborations;
•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
42

Table of Contents
•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 through a combination of equity offerings and distribution or licensing arrangements with third parties. 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 the COVID-19 pandemic, the ongoing conflict between Russia and Ukraine, 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 unaudited 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.
JOBS Act
We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.
In addition, as an emerging growth company, we will not be required to provide an auditor’s attestation report on our internal control over financial reporting in future annual reports on Form 10-K as otherwise required by Section 404(b) of the Sarbanes-Oxley Act.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
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.
Item 4. Controls and Procedures.
Limitations on Effectiveness of Controls and Procedures
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
43

Table of Contents
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, 2023. Based on the evaluation of our disclosure controls and procedures as of June 30, 2023, 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.The precision of management’s review of the Statement of Operations, resulting in inappropriately classifying certain general and administrative expenses as research and development expenses for the three months ended March 31, 2023, and three and six months ended June 30, 2023.
2.Management’s review of the accounting treatment of non-routine activities, specifically the Company’s analysis of the AFS debt securities.
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, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
44

Table of Contents
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
On December 13, 2021, Mark Colwell filed a putative securities class action lawsuit against the Company, David A. Giljohann and Brian C. Bock in the United States District Court for the Northern District of Illinois, captioned Colwell v. Exicure, Inc. et al., Case No. 1:21-cv-0663. On February 4, 2021, plaintiff filed an amended putative securities class action complaint. On March 20, 2023, the court entered an order appointing James Mathew as lead plaintiff and Bleichmar Fonti & Auld LLP as lead counsel in the action pursuant to the Private Securities Litigation Reform Act of 1995. On May 26, 2023, lead plaintiff filed a second amended complaint against the Company, Dr. Giljohann, Mr. Bock, and Grant Corbett. The second amended complaint alleges that Dr. Giljohann, Mr. Bock, and Dr. Corbett made materially false and/or misleading statements related to the Company’s clinical programs purportedly causing losses to investors who acquired Company securities between January 7, 2021 and December 10, 2021. The second amended complaint does not quantify any alleged damages but, in addition to attorneys’ fees and costs, lead plaintiff seeks to recover damages on behalf of himself and others who acquired the Company’s stock during the putative class period at allegedly inflated prices and purportedly suffered financial harm as a result. The Company intends to move to dismiss the second amended complaint.
On March 1, 2022, Kapil Puri filed a shareholder derivative lawsuit on behalf of the Company in the United States District Court for the Northern District of Illinois, against Messrs. Giljohann and Bock, Jeffrey L. Cleland, Elizabeth Garofalo, Bosun Hau, Bali Muralidhar, Andrew Sassine, Matthias Schroff, James Sulat and Timothy Walbert, captioned Puri v. Giljohann, et al., Case No. 1:22-cv-01083. On March 8, 2022, Yixin Sim filed a similar shareholder derivative lawsuit in the same court against the same individuals, captioned Sim v. Giljohann, et al., Case No. 1:22-cv-01217. On April 25, 2022, Stourbridge Investments LLC filed a similar shareholder derivative lawsuit against the same individuals in the United States District Court for the District of Delaware, captioned Stourbridge Investments LLC v. Exicure, Inc. et al., Case No. 1:22-cv-00526. Based on similar factual allegations presented in the Colwell complaint, described above, the Puri, Sim, and Stourbridge complaints, or collectively, the Derivative Complaints, allege that the defendants caused the Company to issue false and/or misleading statements in its 2021 proxy statement regarding risk oversight, code of conduct, clinical program and compensation matters, among other things, in violation of federal securities law, and committed breaches of fiduciary duties. The Derivative Complaints also assert that Dr. Giljohann and Mr. Bock are liable for contribution under the federal securities laws. The Puri and Stourbridge complaints further assert state law claims for unjust enrichment, and the Puri complaint additionally asserts state law claims for abuse of control, gross mismanagement and corporate waste. The plaintiffs do not quantify any alleged damages in the Derivative Complaints, but seek restitution for damages to the Company, attorneys’ fees, costs, and expenses, as well as an order directing that certain proposals for strengthening board oversight be put to a vote of the Company’s shareholders.
On March 18, 2022, James McNabb, through counsel, sent a written demand to the Company (the “Demand Letter”) demanding that the Board of Directors investigate certain allegations and commence proceedings on the Company’s behalf against certain of the Company’s current officers and directors for alleged breaches of fiduciary duties and corporate waste. All of the Derivative Cases have been stayed pending a decision on any motion to dismiss that may be filed in the Colwell case. In addition, the Stourbridge case has been administratively closed pending the decision on motion to dismiss that may be filed in the Colwell case. Further, pursuant to agreement, the Demand Letter is being held in abeyance and any related statute of limitations tolled pending such motion and decision.
In June 2023, a director of the Company designated by CBI USA served a demand on the Company to access certain books and records pursuant to Section 220(d) of the Delaware General Corporation Law. The Company served its response and is working with the director to resolve this demand amicably and in accordance with the Company’s obligations under Delaware law.
We may also be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome,
45

Table of Contents
litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
46

Table of Contents
Item 1A. Risk Factors.
In addition to other information contained in this Quarterly Report on Form 10-Q, the following risks should be considered in evaluating our business and future prospects and an investment in our common stock. The risks and uncertainties described below are not the only ones we face. If any of the following risks and uncertainties develops into actual events, our business, financial condition, results of operations and cash flows could be materially adversely affected. In that case, the price of our common stock could decline and you may lose all or part of your investment.
Risks Related to Our Business
Our exploration of strategic alternatives may not be successful.
Given the Company’s current focus to explore growth through strategic transactions with potential partners, the Company’s ability to execute its current business plan depends on its ability to obtain additional funding via a strategic transaction or a series of strategic transactions, or to obtain funding to support such a transaction. We currently have no source of revenues or committed financing, and our financial resources are limited to our cash and cash equivalents. With respect to our efforts to maximize value from historical assets, while those efforts are continuing, based on the interest we have received to date we do not think it is likely they will generate significant value, at least in the near term.
The Company plans to continue actively pursuing strategic alternatives, however, there can be no assurance that the Company will have sufficient resources or obtain additional financing necessary to complete this effort. Even if we do have such resources or can obtain financing, we may not be able to consummate such a transaction in a timely manner or at all or in a manner that would not adversely impact our business. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Strategic transactions are complex and time-consuming to identify, evaluate, negotiate and consummate in compliance with applicable laws and Nasdaq requirements. Our board and management do not have meaningful experience executing this type of endeavor in the U.S. public markets. Even if we are successful in entering into a strategic transaction, the terms and conditions of that transaction may restrict us from entering into future agreements with other potential collaborators. Additionally, such strategic transactions may not be favorable to investors nor deliver any anticipated benefits by the time of business integration.
We need to obtain substantial funding in the near term in order to continue operations and our exploration of strategic alternatives.
We require significant capital resources in order to continue to operate our business and conduct our exploration of strategic alternatives, and our limited liquidity could materially and adversely affect our business operations. Because we have no current source of revenue or committed financing, our current available cash and cash equivalents provide us with limited liquidity. We believe that our existing cash and cash equivalents could allow us to fund our business operations into early in the fourth quarter of 2023; however, it is very difficult to project our current monthly cash burn rate given the transitional status of the Company and this estimate may prove inaccurate and we may expend our limited resources sooner. Any such required additional capital may not be available on reasonable terms, if at all, due to a variety of factors, including uncertainty about the future direction of the Company and investor reaction to our new controlling stockholder and board composition, as well as broader conditions in the economy and capital markets, including recent volatility caused by inflation, questions about bank stability and other factors. The Company has already engaged in significant cost reductions, so our ability to further cut costs and extend our operating runway is limited. Without sufficient additional capital funding in the near term, we may be required, among other things, to seek bankruptcy protection.
Our controlling stockholder, executive officers and members of our board, have limited experience controlling or governing a public company operating in the United States.
Our controlling stockholder has not previously controlled a U.S. public company. In addition, the majority of our board is made of up Korean citizens, and no members of the board or our chief executive officer or chief financial officer have experience serving as directors or management of a U.S. publicly traded company. This could make it difficult to ensure that the Company complies with all applicable laws and stock exchange requirements, maintains adequate internal and disclosure controls and appropriately assesses and manages risk. This concern is exacerbated by the limited resources the Company has following recent reductions in force, and if there are further reductions in force or members of management leave the Company, it may be very difficult to manage this risk. The transitional state of the Company and ongoing exploration of strategic alternatives also exacerbates the challenging environment in this respect. If the board of directors does not successfully or efficiently manage their roles and responsibilities, including the significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of investors, our prospects may be adversely impacted. In addition, against this backdrop, it may be difficult to earn the confidence of
47

Table of Contents
prospective investors or strategic partners, threatening our ability to obtain much needed financing and hindering our exploration of strategic alternatives.
Turnover of senior management, and any inability to attract and retain qualified management and other key personnel, could impair our ability to implement our business plan.
As we continue our exploration of strategic alternatives, and potentially pursue transactions involving new business lines or industries, we expect significant turnover in senior management. Departures of members of our senior management team and board members, will create significant continuity risks and challenges to our ability to operate our business, assess and manage risks and comply with applicable laws. If key members of our senior management team depart, which we believe is likely in the near term, it will be important that we attract and retain qualified managers promptly and develop and implement an effective succession plan. We expect to face significant competition in attracting experienced executives and other key personnel, and there can be no assurance that we will be able to do so. In addition, there are significant uncertainties as to how our controlled company status, transitional state of operations, financial condition and related matters will impact our ability to attract the necessary personnel and manage these succession risks. Depending on the circumstances of any management departures, it is also possible that we will be required to pay significant severance, adversely impacting our financial condition. Our urgent need to raise capital and engage with potential partners in strategic transactions magnify these risks. If we are unable to adequately address these concerns in the near term, and earn the confidence of potential investors and/or business partners, our prospects and financial condition would be adversely impacted.
Our consolidated financial statements have been prepared assuming that we will continue as a going concern.
Our ability to continue as a going concern will require us to obtain additional funding. Based on our current operating plans and existing working capital at June 30, 2023, our current liquidity is not sufficient to fund operations over the next twelve months from the date of the issuance of the accompanying consolidated financial statements. As a result, there is substantial doubt about our ability to continue as a going concern. Substantial additional financing will be needed by us to fund our operations and exploration of strategic alternatives in the near term. Although we currently estimate that available funds could be sufficient into early in the fourth quarter of 2023, we have based these estimates on assumptions that may prove to be wrong, and we could spend our available financial resources much faster than we currently expect. It is very difficult to project our current monthly cash burn rate given the transitional status of the Company as we explore strategic alternatives. The perception of our ability to continue as a going concern may make it more difficult for us to obtain financing for the continuation of our operations and could result in the loss of confidence by investors and employees. Obtaining additional financing contains risks, including:
•additional equity financing may not be available to us on satisfactory terms and any equity we are able to issue could lead to dilution for current stockholders;
•loans or other debt instruments may have terms and/or conditions, such as interest rate, restrictive covenants and control or revocation provisions;
•the current environment in capital markets combined with our capital constraints may prevent us from being able to obtain adequate debt financing; and
•if we fail to obtain required additional financing to grow our business we may need to seek bankruptcy protection in the near term.
We currently do not comply with the Nasdaq continued listing requirements. Our common stock may be delisted from Nasdaq which could negatively impact the price of our common stock, liquidity and our ability to access the capital markets.
Our common stock is currently listed on Nasdaq under the symbol “XCUR.” As previously disclosed, the Company has received numerous deficiency notes with respect to various Nasdaq listing requirements in the past year. These related to:
•Compliance with Nasdaq’s minimum bid price rule due to the Company’s stock trading below $1.00 for a sustained period of time. The Company effected a one-for-thirty reverse stock split on June 29, 2022 in order to attempt to raise the stock price. As of August 9, 2023, the Company’s stock price closed at $0.86.
•Compliance with Nasdaq’s rule requiring stockholders’ equity of at least $2,500,000 based on the Company’s balance sheet as of June 30, 2023. The Company believes it is in compliance with this requirement based on its June 30, 2023 balance sheet, but there can be no assurance it will remain in compliance.
48

Table of Contents
•Compliance with Nasdaq’s corporate governance requirements with respect to board and committee composition due to (i) the lack of a majority independent board, (ii) the lack of an audit committee comprised of three independent directors and (iii) the lack of a compensation committee comprised of at least two independent directors. With respect to the majority independence and the audit committee requirements, Nasdaq informed the Company that it was not entitled to a cure period and must submit a plan to regain compliance no later than April 10, 2023. Following the closing of the Private Placement, the Company qualifies for Nasdaq’s controlled company exemptions from the requirements to have a majority independent board and independent compensation committee. The Company must still have an audit committee comprised of three independent directors. On May 10, 2023 the Company received an additional delinquency notification regarding compliance with the listing requirements for an audit committee to be comprised of at least three independent directors.
•On August 4, 2023, the Company received an additional delinquency notification regarding compliance with the listing requirements for an audit committee to be comprised of at least three independent directors. The audit committee is currently comprised of only one independent director, and therefore, the Company is no longer eligible for the cure period described in the delinquency notification received on May 10, 2023, and previously disclosed. Under Rule 5605(c)(2), the Company has 45 calendar days to submit a plan to regain compliance. If the Company’s plan is accepted, Nasdaq can grant an extension of up to 180 calendar days from the date of the delinquency notification.The Company is searching for qualified candidates to add as independent directors.
We may not be able to regain compliance with Nasdaq's listing requirements and our failure to do so may result in the delisting of our Common Stock by Nasdaq. Even if the Company regains compliance with Nasdaq’s listing requirements and addresses the outstanding deficiency notices to Nasdaq’s satisfaction, there can be no assurance that the Company will remain in compliance with Nasdaq’s requirements and will not be delisted.
If Nasdaq delists our securities from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant negative consequences including:
•limited availability of market quotations and liquidity for our securities;
•a determination that the common stock is a “penny stock” which would require brokers trading in the common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of common stock;
•a limited amount of analyst coverage, if any; and
•a decreased ability to issue additional securities or obtain additional financing in the future.
Delisting from Nasdaq could also result in other negative consequences, including the potential loss of institutional investor interest and make obtaining new financing much more challenging. In addition, fewer strategic opportunities may be available, particularly from counterparties that are interested in combining with a listed company.
We have a history of losses. We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability, which could result in a decline in the market value of our common stock.
Between our inception in June 2011 and the Company’s decision to engage in a broader exploration of strategic alternatives, we devoted our resources to the development of SNA technology, and are currently exploring out-licensing opportunities and strategic alternatives to maximize stockholder value. We have had significant operating losses since our inception. As of June 30, 2023, we have generated an accumulated deficit of $201.7 million. For the six months ended June 30, 2023 and 2022, our net loss was $10.2 million and $15.8 million, respectively. Substantially all of our losses have resulted from expenses incurred in connection with our research programs and from general and administrative costs associated with our operations.
We have not generated, and do not expect to generate, any product revenue for the foreseeable future and currently have no source of revenue or committed financing, and we expect to continue to incur significant operating losses for the foreseeable future. The amount of future losses is uncertain. Our future financial performance and condition are substantially dependent on the results of our ongoing exploration of strategic alternatives, and we cannot predict whether we will be successful.
We are pursuing asset out-licenses, asset sales and similar strategic transactions with respect to our historical assets. There can be no assurance that we will be successful in executing such a strategic transaction.
49

Table of Contents
These strategic alternatives may include a variety of different business arrangements, such as the sale of certain of our assets, out-licensing, strategic partnerships, joint ventures, restructurings, divestitures, investments and other alternatives. We may not be able to identify or consummate a suitable transaction as a result of this review, or any transactions that we are able to identify and consummate may not provide material benefits to our stockholders. Based on the interest in these assets that we have seen to date, we do not currently expect any such transaction to provide significant value, at least in the near term.
Our internal computer systems, or those of contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our business operations.
Despite the implementation of security measures, our internal computer systems and those of our contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Such events could cause interruptions of our operations. For instance, theft or other exposure of data may interfere with our ability to protect our intellectual property, trade secrets, and other information critical to our operations. We can provide no assurances that certain sensitive and proprietary information relating to one or more of our therapeutic candidates has not been, or will not in the future e, compromised. Although we have invested resources to enhance the security of our computer systems, there can be no assurances we will not experience additional unauthorized intrusions into our computer systems, or those of our contractors and consultants, that we will successfully detect future unauthorized intrusions in a timely manner, or that future unauthorized intrusions will not result in material adverse effects on our financial condition, reputation, or business prospects. Payments related to the elimination of ransomware may materially affect our financial condition and results of operations.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the development of our therapeutic candidates could be delayed.
Our information technology systems could face serious disruptions that could adversely affect our business.
Our information technology and other internal infrastructure systems, including corporate firewalls, servers, documents storage systems, backup systems, leased lines and connection to the Internet, face the risk of systemic failure that could disrupt our operations. A significant disruption in the availability of our information technology and other internal infrastructure systems could cause interruptions and delays in our operations.
Our business and operations could suffer in the event of system failures or unauthorized or inappropriate use of or access to our information technology systems.
We are increasingly dependent on our information technology systems and infrastructure for our business. We collect, store and transmit sensitive information including intellectual property, proprietary business information and personal information in connection with business operations. The secure maintenance of this information is critical to our operations and business strategy. Some of this information could be an attractive target of criminal attack or unauthorized access and use by third parties with a wide range of motives and expertise, including organized criminal groups, “hacktivists,” patient groups, disgruntled current or former employees and others. Cyber-attacks are of ever-increasing levels of sophistication, and despite our security measures, our information technology systems and infrastructure may be vulnerable to such attacks or may be breached, including due to employee error or malfeasance.
The pervasiveness of cybersecurity incidents in general and the risks of cyber-crime are complex and continue to evolve. Although we are making significant efforts to maintain the security and integrity of our information systems and are exploring various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Despite the implementation of security measures, our internal computer systems and those of our employees, contractors and consultants are vulnerable to damage or interruption from computer viruses, unauthorized or inappropriate access or use, natural disasters, pandemics (including COVID-19), terrorism, war, and telecommunication and electrical failures. Such events could cause interruption of our operations. For example, the loss or compromise of preclinical data for our therapeutic candidates could result in delays in our regulatory filings and development efforts, as well as delays in the commercialization of our products, and significantly increase our costs. To the extent that any disruption, security breach or unauthorized or inappropriate use or access to our systems were to result in a loss of or damage to our data, or inappropriate disclosure of confidential or proprietary information, including but not limited to patient, employee or vendor information, we could incur notification obligations to affected individuals and government agencies, liability, including potential lawsuits from patients, collaborators, employees, stockholders or other third parties and liability under foreign, federal and state laws that protect the privacy and security of personal information, and the development and potential commercialization of our therapeutic candidates could be delayed. Existing insurance
50

Table of Contents
arrangements may not provide protection for the costs that may arise from such loss or damage. Any long-term disruption in our ability to access our information technology systems could have a material adverse effect on our operations, our business, results of operations and stock price.
Increasing scrutiny and changing expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance practices. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, supply chain management, diversity and human rights. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation and the price of our ordinary shares.
Any of the factors mentioned above, or the perception that we or our suppliers, or contract manufacturers or collaborators have not responded appropriately to the growing concern for such issues, regardless of whether we are legally required to do so, may damage our reputation and have a material adverse effect on our business, financial condition, results of operations cash flows and/or ordinary share price.
Our current operations are concentrated in one location and any events affecting this location may have material adverse consequences.
Our current operations are located in our facilities situated in Chicago, Illinois. Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics, power shortage, telecommunication failure or other natural or man-made accidents or incidents that result in us being unable to fully utilize the facilities, may have a material adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions. Loss of access to these facilities may result in increased costs, or interruption of our business operations. As part of our risk management policy, we maintain insurance coverage at levels that we believe are appropriate for our business. However, in the event of an accident or incident at these facilities, we cannot assure you that the amounts of insurance will be sufficient to satisfy any damages and losses. If our facilities are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our research and development programs may be harmed. Any business interruption may have a material adverse effect on our business, financial position, results of operations and prospects.
The investment of our cash, cash equivalents and fixed income marketable securities is subject to risks which may cause losses and affect the liquidity of these investments.
As of June 30, 2023, we had $3.5 million in cash, cash equivalents, and restricted cash. We invest our excess cash in U.S. government or U.S. government agency securities, floating rate and variable rate demand notes of U.S. and foreign corporations, and commercial paper. These investments are subject to general credit, liquidity, market and interest rate risks, including potential future impacts from economic, capital market or bank instability. We may from time to time have balances in bank accounts that are in excess of insured deposit limits, and could be subject to risks of bank failures. We may realize losses in the fair value of these investments, an inability to access cash in these investments for a potentially meaningful period, or a complete loss of these investments, which would have a negative effect on our financial statements.
In addition, should our investments cease paying or reduce the amount of interest paid to us, our interest income would suffer. The market risks associated with our investment portfolio may have an adverse effect on our results of operations, liquidity and financial condition.
If we continue to fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act, and the rules and regulations of Nasdaq. Pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, we are required to perform system and process evaluation and testing of our internal control over financial reporting to allow our management to report on the effectiveness of our internal control over financial reporting. However, while we remain a non-accelerated filer or an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
51

Table of Contents
During the evaluation and testing process, we identified material weaknesses as described under Part I, Item 4 of this Form 10-Q/A. If we fail to remediate the material weaknesses, or if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. Further, we may in the future discover additional weaknesses in our system of internal financial and accounting controls and procedures that could result in additional material misstatements of our financial statements. Moreover, our internal controls over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. Moreover, we are aware that the remote working arrangements implemented in connection with the COVID-19 pandemic potentially present new areas of risk, and we continue to carefully monitor any impact to our internal controls and procedures.
Our limited resources and recent reductions in force, as well as the turnover in our board of directors and the potential for future management changes, present significant continuity risk and could impact our ability to remediate our material weaknesses and maintain effective internal control over financial reporting in the future.
If we are unable to remedy our material weaknesses and assert that our internal control over financial reporting is effective, investors could lose confidence in the reliability of our financial statements, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
The restatement of our prior quarterly financial statements may affect stockholder and investor confidence in us or harm our reputation, and may subject us to additional risks and uncertainties, including increased costs and the increased possibility of legal proceedings and regulatory inquiries, sanctions or investigations.
Subsequent to the filing of the Original Report, in connection with the restatement, management identified a material weakness in the Company’s internal control over financial reporting, specific to the evaluation of information that was known or knowable at the time of the transaction or event. Refer to the section titled “Restatement” in Note 1 to the unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2023 included in this Form 10-Q/A.
As a result of the restatement described above, we have incurred, and may continue to incur, unanticipated costs for accounting and legal fees in connection with, or related to, such restatement. In addition, such restatement could subject us to a number of additional risks and uncertainties, including the increased possibility of legal proceedings and inquiries, sanctions or investigations by the SEC or other regulatory authorities. Any of the foregoing may adversely affect our reputation, the accuracy and timing of our financial reporting, or our business, results of operations, liquidity and financial condition, or cause stockholders, investors, members and customers to lose confidence in the accuracy and completeness of our financial reports or cause the market price of our common stock to decline.
Risks Related to Intellectual Property
We currently license patent rights from Northwestern University. If Northwestern University does not properly or successfully obtain, maintain or enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be adversely affected.
We rely on intellectual property rights licensed from third parties to protect our technology. We are a party to a number of licenses that give us rights to third-party intellectual property that is necessary or useful for our business. In particular, we have a license from Northwestern University, which provides us the exclusive worldwide right under certain patents and patent applications owned by Northwestern University to exploit therapeutics and processes using nanoparticles, nanotechnology, microtechnology and nanomaterial-based constructs as therapeutics or accompanying therapeutics as a means of administration. To the extent we are successful in selling, licensing or otherwise generating value from our historical assets, it would depend significantly on the value of the rights licenses from Northwestern. We may also license additional third-party intellectual property in the future. Our success will depend in part on the ability of our licensors to obtain, maintain and enforce patent protection for our licensed intellectual property, and in particular, for those patents to which we have secured exclusive rights. Our licensors may not successfully prosecute the patent applications licensed to us. Even if patents issue or are granted, our licensors may fail to maintain these patents, may determine not to pursue litigation against other companies that are infringing these patents, or may pursue litigation less aggressively than we would. Further, we may not obtain exclusive rights, which would allow for third parties to develop competing therapeutics. Without protection for, or exclusive rights to, the intellectual property we license, other companies might be able to offer substantially identical therapeutics for sale, which could adversely affect our competitive business position and harm our business prospects.
52

Table of Contents
We or our licensors, or any current or future strategic partners, may become subject to third-party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights, and we may need to resort to litigation to protect or enforce our patents or other proprietary rights, all of which could be costly, time consuming, or put our patents and other proprietary rights at risk.
We or our licensors, or any current or future strategic partners, may be subject to third-party claims for infringement or misappropriation of patent or other proprietary rights. We are generally obligated under our license agreements to indemnify and hold harmless our licensors for damages arising from intellectual property infringement by us. If we or our licensors, or any current or future strategic partners, are found to infringe a third-party patent or other intellectual property rights, we could be required to pay damages, potentially including treble damages, if we are found to have willfully infringed. In addition, we or our licensors, or any current or future strategic partners, may choose to seek, or be required to seek, a license from a third-party, which may not be available on acceptable terms, if at all. Even if a license can be obtained on acceptable terms, the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us. If we fail to obtain a required license, we or any current or future collaborator may be unable to effectively market therapeutic candidates based on our technology, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations. In addition, we may find it necessary to pursue claims or initiate lawsuits to protect or enforce our patent or other intellectual property rights. The cost to us in defending or initiating any litigation or other proceeding relating to patent or other proprietary rights, even if resolved in our favor, could be substantial, and litigation would divert our management’s attention. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could delay our research and development efforts and limit our ability to continue our operations.
If we were to initiate legal proceedings against a third-party to enforce a patent covering one of our therapeutics or our technology, the defendant could counterclaim that our patent is invalid or unenforceable. In patent litigation in the U.S., defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our therapeutics or certain aspects of our technology. Such a loss of patent protection could have a material adverse impact on our business. Patents and other intellectual property rights also will not protect our technology if competitors design around our protected technology without legally infringing our patents or other intellectual property rights.
It is also possible that we have failed to identify relevant third-party patents or applications. For example, U.S. applications filed before November 29, 2000 and certain U.S. applications filed after that date that will not be filed outside the U.S. remain confidential until patents issue. Patent applications in the U.S. and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent applications covering our therapeutics or technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our SNA technology, our therapeutics or the use of our therapeutics. Third-party intellectual property right holders may also actively bring infringement claims against us. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or continue costly, unpredictable and time-consuming litigation and may be prevented from or experience substantial delays in marketing our therapeutics. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing any of our therapeutic candidates that are held to be infringing. We might, if possible, also be forced to redesign therapeutic candidates so that we no longer infringe the third-party intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.
We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
53

Table of Contents
We may also be subject to claims that former employees or other third parties have an ownership interest in our patents or other intellectual property. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and distraction to management and other employees.
If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our therapeutic candidates or we could lose certain rights to grant sublicenses.
Our current licenses impose, and any future licenses we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement, and other obligations on us. If we breach any of these obligations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in us being unable to develop, manufacture and sell therapeutics that are covered by the licensed technology or could enable a competitor to gain access to the licensed technology. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights in such unlicensed intellectual property. In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future therapeutics, if any, the amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in therapeutics that we successfully develop and commercialize, if any. Therefore, even if we successfully develop and commercialize therapeutics, we may be unable to achieve or maintain profitability.
Risks Related to Ownership of Our Common Stock
Our status as a “controlled company” could make our Common Stock less attractive to some investors or otherwise harm the trading price of our Common Stock.
More than 50% of our voting power is held by CBI USA. As a result, we are a “controlled company” under the corporate governance rules for Nasdaq-listed companies and may elect not to comply with certain Nasdaq corporate governance requirements with respect to board independence and compensation and nominating committee functions. We are relying on these exceptions. Following the closing of the Private Placement, our board includes 5 members, 2 of whom are affiliated or associated with CBI USA or were otherwise delegated by CBI USA. Investors may be hesitant to invest in the Company absent compliance with these governance requirements. In addition, should the interest or interests of our controlling stockholder differ from those of other stockholders, the other stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance rules for Nasdaq-listed companies. Our status as a controlled company could make our Common Stock less attractive to some investors, including but not limited to potential strategic partners, or otherwise harm our stock price.
Additionally, it is possible we could pursue strategic or financing transactions with our controlling stockholder or its affiliates. The interests of the controlling stockholder and other stockholders would diverge in this case, and the lack of an independent board to evaluate such a transaction could adversely impact other stockholders. These conflicts of interest (or the perception that they could occur) might adversely affect our business and prospects for obtaining financing or completing a strategic transaction.
For so long as CBI USA owns a majority of our common stock, it will have sufficient votes to elect a majority of our directors and to approve any other corporate action requiring the affirmative vote of holders of a majority of the outstanding shares of our Common Stock. Our control by a single stockholder, and our reliance on the Nasdaq controlled company exemptions, could deter investment in the Company and adversely impact our stock price and ability to obtain financing. These impacts may be more pronounced in the near term as investors assess the direction of the Company under the control of CBI USA and the actions of the new board. Potential partners considering engaging in a strategic transaction with the Company could have similar concerns. Given our urgent need for additional funding and/or to complete a strategic transaction, it is imperative that our controlling stockholder and our board earn the confidence of investors and potential partners in the near term and there is no assurance this will occur.
The market price of our common stock has been, and is likely to continue to be, highly volatile, and you may not be able to resell your shares at or above the price you paid for them.
54

Table of Contents
Our stock price will continue to be volatile. As a result of this volatility, investors may not be able to sell their common stock at or above the price paid for the shares. The market price for our common stock may be influenced by a variety of factors, including the other risks described in this section titled “Risk Factors” and the following:
•our ability or inability to raise additional capital and the terms on which we raise it;
•the development, execution and announcement of any proposed strategic alternative;
•investors may react negatively to our controlled company status and the influence of our controlling stockholder or our reconstituted board and/or our uncertain business strategy;
•strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;
•we are unable to achieve the perceived benefits of our Company as rapidly or to the extent anticipated by financial or industry analysts; and
•changes in general economic, industry, political and market conditions, including, but not limited to, the ongoing impact of the COVID-19 pandemic.
In addition, the stock markets in general, and the markets for pharmaceutical and biotechnology stocks in particular, have experienced extreme volatility that has been often unrelated to the operating performance of the issuer. These broad market and industry factors, such as those related to the COVID-19 pandemic and Russia’s invasion of Ukraine and retaliatory actions taken by the United States, NATO and others, may seriously harm the market price of our common stock, regardless of our operating performance.
Raising additional funds by issuing securities may cause dilution to existing stockholders and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights.
Until such time, if ever, as we can generate substantial revenues, we expect to attempt to finance our cash needs through a combination of equity offerings and debt financings. As discussed elsewhere, it may be very challenging to obtain equity or debt financing given the current transitional state of the Company. However, to the extent that we raise additional capital through the issuance of shares or other securities convertible into shares, our stockholders will be diluted. Future issuances of our common stock or other equity securities, or the perception that such sales may occur, could adversely affect the prevailing market price of our common stock and impair our ability to raise capital through future offerings of equity or equity-linked securities.
We are an “emerging growth company” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.
We are an “emerging growth company” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (3) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data. We expect to lose emerging growth company status at the end of this year. Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” and/or “non-accelerated filer” which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.
Anti-takeover provisions in our charter documents and under the General Corporation Law of the State of Delaware could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our management.
Provisions in our amended and restated certificate of incorporation and our bylaws may delay or prevent an acquisition of us or a change in our management. These provisions include a classified board of directors, a prohibition on
55

Table of Contents
actions by written consent of our stockholders, and the ability of the Board of Directors of the Company, or the Board, to issue preferred stock without stockholder approval. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which prohibits stockholders owning in excess of 15% of the outstanding combined organization voting stock from merging or combining with the combined organization. Although we believe these provisions collectively will provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our Board, they would apply even if the offer may be considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove then-current management by making it more difficult for stockholders to replace members of the Board, which is responsible for appointing the members of management.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our amended and restated certificate of incorporation provides that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any of the following types of actions or proceedings under Delaware statutory or common law: derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws or any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claims for which a court or forum other than the Court of Chancery has exclusive jurisdiction or for which the Court of Chancery does not have subject matter jurisdiction. Furthermore, Section 22 of the Securities Act, creates concurrent jurisdiction for federal and state courts over all Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. Our amended and restated certificate of incorporation also provides that any person purchasing or otherwise acquiring any interest in any shares of our common stock shall be deemed to have notice of and to have consented to this provision of our amended and restated certificate of incorporation.
This choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents even though an action, if successful, might benefit our stockholders. Stockholders who do bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The Court of Chancery may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. If a court were to find this exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in any action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could have a material adverse effect on our business, financial condition or results of operations.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
We have incurred substantial losses during our history and do not expect to become profitable in the near future and we may never achieve profitability. Our net operating loss, or NOL, carryforwards generated in tax years beginning on or before December 31, 2017, are only permitted to be carried forward for 20 years under applicable U.S. tax law. Under the Tax Cuts and Jobs Act, as modified by the CARES Act, our federal NOLs generated in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs is be limited to 80% of taxable income. In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL, and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited. We have experienced ownership changes in the past. We completed a review of our changes in ownership through December 31, 2022 and determined that we experienced an “ownership change” within the meaning of Section 382(g) during the fourth quarter of 2022. This ownership change has and will continue to subject our net operating loss carryforwards to an annual limitation, which will significantly restrict our ability to use them to offset our taxable income in periods following the ownership change.
56

Table of Contents
We determined that at the date of the 2022 ownership change, we had a net unrealized built-in loss (“NUBIL”). The NUBIL was determined based on the difference between the fair market value of our assets and their tax basis at the ownership change date. Because of the NUBIL, certain deductions recognized during the five-year period beginning on the date of the IRC Section 382 ownership change (the "recognition period") are subject to the same limitation as the net operating loss carryforwards or certain other deductions.
In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which are outside of our control. As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.
General Risk Factors
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock due to our low stock price.
The Financial Industry Regulatory Authority, or FINRA, has adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a high probability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements are applicable to us or our securities, which we believe they are, they may make it more difficult for broker-dealers to recommend that at least some of their customers buy our common stock, which may limit the ability of our stockholders to buy and sell our common stock and could have an adverse effect on the market for and price of our common stock.
If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. Our research coverage by securities and industry analysts is currently limited. In addition, because we did not become a reporting company by conducting an underwritten initial public offering of our common stock, security analysts of brokerage firms may not provide wider coverage of our Company. In addition, investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might if we became a public reporting company by means of an underwritten initial public offering, because they may be less familiar with our Company as a result of more limited coverage by analysts and the media, and because we became public at an early stage in our development. The failure to receive wider research coverage or support in the market for our shares will have an adverse effect on our ability to develop a liquid market for our common stock and the trading price for our stock would be negatively impacted.
In the event we obtain wider securities or industry analyst coverage, if any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if our target studies and operating results fail to meet the expectations of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
57

Table of Contents
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Not applicable.
58

Table of Contents
Item 6. Exhibits

|  |  |  | Incorporated by Reference
Exhibit No. |  | Exhibit Description |  | Form |  | Exhibit No. |  | Filing Date |  | File No.
3.1 |  | Certificate of Amendment to Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on September 26, 2017. |  | 8-K |  | 3.2 |  | 10/02/17 |  | 000-55764
3.2 |  | Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on November 15, 2017. |  | 10-K |  | 3.3 |  | 3/11/21 |  | 001-39011
3.3 |  | Certificate of Amendment to Amended and Restated Certificate of Incorporation of Exicure, Inc., effective June 29, 2022. |  | 8-K |  | 3.1 |  | 06/29/22 |  | 001-39011
3.4 |  | Amended and Restated Bylaws, as currently in effect. |  | 8-K |  | 3.4 |  | 10/02/17 |  | 000-55764
10.1 |  | Employment Agreement, dated April 27, 2023, among Exicure, Inc. and Jung S. Kim. |  | 8-K |  | 10.1 |  | 05/02/23 |  | 001-39011
10.2 |  | Separation and Release Agreement, dated April 26, 2023, among Exicure, Inc. and Matthias Schroff. |  | 8-K |  | 10.2 |  | 05/02/23 |  | 001-39011
10.3 |  | Separation and Release Agreement, dated April 26, 2023, among Exicure, Inc. and Elias Papadimas. |  | 8-K |  | 10.3 |  | 05/02/23 |  | 001-39011
10.4 |  | Convertible Bond Subscription Agreement, dated May 3, 2023, among Cyworld Z Co., Ltd. and Exicure, Inc. |  | 8-K |  | 10.1 |  | 05/09/23 |  | 001-39011
10.5 |  | Convertible Bond Subscription Agreement, dated May 16, 2023, among Cyworld Z Co., Ltd. and Exicure, Inc. |  | 8-K |  | 10.1 |  | 05/18/23 |  | 001-39011
10.6 |  | Separation and Release Agreement, dated May 27, 2023, among Exicure, Inc. and Sarah Longoria. |  | 8-K |  | 10.1 |  | 06/01/23 |  | 001-39011
10.7 |  | Amended and Restated Employment Agreement, dated May 24, 2023, among Exicure, Inc. and Joshua Miller. |  | 8-K |  | 10.2 |  | 06/01/23 |  | 001-39011
10.8 |  | Retention Agreement, dated May 24, 2023, among Exicure, Inc. and Joshua Miller. |  | 8-K |  | 10.3 |  | 06/01/23 |  | 001-39011
10.9 |  | First Amendment to the Separation and Release Agreement of Matthias Schroff, dated June 12, 2023, among Exicure, Inc. and Matthias Schroff. |  | 8-K |  | 10.1 |  | 06/14/23 |  | 001-39011
31.1* |  | Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |  |  |  |  |  |  |  |

59

Table of Contents

31.2* |  | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |  |  |  |  |  |  |  |
32.1** |  | Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |  |  |  |  |  |  |  |
101.INS* |  | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |  |  |  |  |  |  |  |
101.SCH* |  | Inline XBRL Taxonomy Extension Schema Document |  |  |  |  |  |  |  |
101.CAL* |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |  |  |  |  |
101.DEF* |  | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |  |  |  |  |
101.LAB* |  | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  |  |  |  |  |
101.PRE* |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |  |  |  |  |
104* |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |  |  |  |  |  |  |

† Indicates that portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
* Filed herewith.
** The certification attached as Exhibit 32.1 that accompanies this Quarterly Report on Form 10-Q is not deemed filed with the SEC and is not to be incorporated by reference into any filing of Exicure, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of such Form 10-Q), irrespective of any general incorporation language contained in such filing.
60

Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: June 6, 2024

EXICURE, INC.
By: | /s/ Paul Kang
| Paul Kang
| Chief Executive Officer
By: | /s/ Joshua Miller
| Joshua Miller
| Chief Accounting Officer

61