EXICURE, INC. 10-K

Item 9A. Controls and Procedures. Limitations on Effectiveness of Controls In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Evaluation of Disclosure Controls and Procedures We maintain “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023. Based on the evaluation of our disclosure controls and procedures as of December 31, 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. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the guidelines established in Internal Control-Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the results of its evaluation, management concluded that our internal control over financial reporting was not effective as of December 31, 2023. Attestation Report of the Registered Public Accounting Firm This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm as we are a non-accelerated filer as of December 31, 2023. 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. 81 Table of Contents 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 securities. 3. The Company failed to design and implement controls around all accounting and information technology processes and procedures. These matters have been reviewed with our Audit Committee. Remediation Plan We are evaluating the material weakness and are developing a plan of remediation to strengthen the effectiveness of the design and operation of our internal control environment. The remediation plan will include enhancing our review procedures within our accounting department, implementing additional review procedures with respect to accumulation and evaluation of information that is known or knowable to the Company at the time, and applying that information to the applicable accounting guidance. Subject to our ability to obtain additional financing and the results of our review of strategic alternatives, we will also consider whether additional personnel are necessary. Changes in Internal Control over Financial Reporting Other than as described above, there were no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5- 1 trading arrangement” or “non-Rule 10b5- 1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 82 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance. Directors Our Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Any vacancies on our Board of Directors resulting from death, resignation, disqualification, removal or other causes, and any newly created directorships resulting from any increase in the number of directors, shall be filled by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors. Any director elected to fill a vacancy shall hold office for the remainder of the unexpired term in which the vacancy occurred or newly created directorship was created and until such director’s successor shall have been elected and qualified. Our Board of Directors presently has 6 directors. Minhee Eom, Jiyoung Hwang, Paul Kang, Raymond Ko, Dongho Lee, and Hojoon Lee. Ms. Hwang and Mr. Kang were delegated to the Board of Directors by CBI pursuant to its rights under the Securities Purchase Agreement, and Mr. Hojoon Lee, although not formally delegated by CBI, is also affiliated with CBI. Class III Directors (Term Expired 2023) Paul Kang, age 62, has served as a member of our Board of Directors since February 2023 and served as CEO and President since August 21, 2023. Mr. Kang began his 35-year investment and merger advisory career at Goldman Sachs in New York. He also served as CEO of Alta Capital Group, focusing on cross border merchant banking. He began his career as a brand manager at Procter & Gamble in Cincinnati. Mr. Kang has served as an interim CEO for a range of industries, and his investment experience includes leading the acquisition for KBL Healthcare Acquisition Corp., the first successful healthcare SPAC. His biopharma experience began with advising LG on the first Korean FDA-approved drug in the late 90s. He received his A.B. in applied mathematics from Harvard College and his M.B.A. from the Stanford Graduate School of Business. Mr. Kang’s experience in finance and working with companies in a range of industries qualifies him to serve on the Board. Hyuk Joon (Raymond) Ko, age 56, has served as a member of our Board of Directors since August 2023. Mr. Ko has been an Internal Auditor at Woori Bank since 2022. Prior to that, Mr. Ko was the CFO of XEME Biopharma Holdings Inc. during 2021, where he supervised audit preparations and supervised and approved budgeting, expenditure, and finance of its subsidiary, XEME Biopharma, Inc. as the company prepared for a potential Regulation A offering. Prior to being the CFO of XEME, he has 10 years of experience working as a financial accountant at various U.S. accounting firms. Mr. Ko has a Bachelor’s degree in Business Administration from Seoul National University, a Master’s degree in Economics and Econometrics from Iowa State University, a Master’s degree in Operation Research and Information Engineering and Financial Engineering from Cornell University, and a Master of Taxation and International Tax from University of Denver. He is certified as a CPA from the State of California. Mr. Ko’s accounting, auditing and other financial experience qualifies him to serve on the Board. Although the regular three-year term of the Class III directors expired in 2023, they continue to serve since we did not hold an Annual Meeting of Stockholders in 2023. Class I Directors (Term Expires 2024) Jiyoung Hwang, age 47, has served as a member of our Board of Directors since April 2023 and served as CFO since August 28, 2023. Ms. Hwang is the Director of CBI USA and Executive Director of CBI Co. Ltd., the parent company of CBI USA. Ms. Hwang currently serves on the board of directors of Jokwang I.L.I Co., Ltd., a Korea-based manufacturing company, since November 2019, HuM&C Co., Ltd., a Korea-based manufacturing and distribution company, since April 2021 and CBI USA, Inc., a subsidiary of Korea-based automotive engine and mission parts manufacturer CBI Co. Ltd., that focuses on investment in dynamic businesses initially in the life science sector, since June 2021, and has served on the board of directors of Kineta, Inc., a clinical-stage 83 Table of Contents biotechnology company, from June 2022 to November 2022. Previously, Ms. Hwang held the role of Managing Director in Venture Capital Investment at Intervest Co., Ltd., a venture capital firm, from March 2016 until February 2017 and Neoplux Co., Ltd., a venture capital company, from September 2011 until April 2016. Ms. Hwang holds a Bachelor of Science degree in Life Science from Pohang University of Science and Technology and a Master’s degree in Environmental Management from Seoul National University. has served as an independent consultant since 2017. As a consultant she has worked on investments in Viral Gene, Liminatus Pharma, Epivara and Hyperfine. She also serves as a member of the evaluation committee at MSIT, KHIDI, KIPA, and KIPO of the Republic of Korea since 2013. Prior to 2017 she was the Managing Director of Intervest Co., Ltd a venture capital fund. Prior to 2017, she also served as a Managing Director at Neoplux Co., Ltd, a Fund Manager at National Agricultural Cooperative Federation, a Manager at NEXUS Investment Co, Ltd., a Manager at Pulmuone Holdings Co., Ltd and Venture Capitalist & Analyst at Hyundai Venture Investment Corp. Ms. Hwang holds a Life Science degree from Pohang University of Science of Technology and a graduate degree in Environmental Management from Graduate School of Environmental Studies, Seoul National University. She also serves as a member of the evaluation committee at MSIT, KHIDI, KIPA, and KIPO of the Republic of Korea since 2013. Prior to 2017 she was the Managing Director of Intervest Co., Ltd a venture capital fund. Prior to 2017, she also served as a Managing Director at Neoplux Co., Ltd, a Fund Manager at National Agricultural Cooperative Federation, a Manager at NEXUS Investment Co, Ltd., a Manager at Pulmuone Holdings Co., Ltd and Venture Capitalist & Analyst at Hyundai Venture Investment Corp. Ms. Hwang holds a Life Science degree from Pohang University of Science of Technology and a graduate degree in Environmental Management from Graduate School of Environmental Studies, Seoul National University. Dongho Lee, age 62, has served as a member of our Board of Directors since August 2023. Since 2021, Mr. Lee has served as the President & CEO of Lumios Co. Ltd., a South Korean company that specializes in investment and provides real estate related consulting services to local development projects. He is currently an independent Director and member of the Audit Committee of Quantapia Inc., a renewable energy company listed in South Korea. Mr. Lee began his professional career in finance as a FINRA-licensed financial advisor in asset management in New York from 1989 and in Korea from 1995. Since 2000, Mr. Lee has served in various corporate executive and management positions, from CEO and CFO to advisor to the board of directors, at various companies in both Korea and the United States. From 2007 to 2011, he was the CSO & SVP of Finance at Englewood Lab Inc., a cosmetics R&D and manufacturing company in Englewood, NJ. From 2012 to 2018, he was the COO of Tchopstix, Inc., a restaurant group in Indianapolis, IN. Mr. Lee graduated from Korea University with a Bachelor’s degree in Business Administration with emphasis in Finance. Class II Directors (Term Expires 2025) Minhee Eom, age 57, has served as a member of our Board of Directors since September 2023. Ms. Eom, Ph.D., has been an associate professor of writing and language skills at University of Texas Rio Grande Valley since 2015 and prior to that at University of Texas-Pan American from 2006 to 2015. She has also been serving as the Vice President of The Texas Coastal Band of the Korea Scientists and Engineers Association since 2017. Prior to academia, Ms. Eom was a senior management consultant at Maekyung International Business Incubator from 2000 to 2001 and a manager at Applied Material Korea, the Korean subsidiary of a global semiconductor manufacturer Applied Materials, from 1994 to 1997. Ms. Eom has an MBA in Information Systems Management from George Washington University and a Ph.D. in Teaching and Learning (foreign language and ESL education). Ms. Eom’s prior consulting experience and education qualify here to serve on the Board. Hojoon Lee, age 51, has served as a member of our Board of Directors since August 2023. Mr. Lee has been serving in various leadership positions in the Growth & Value Group, a Korean group of investment funds, heading its private equity, venture capital and asset management arms since 2011, specializing in fundraising and investment through real estate securitization and structured financing primarily targeting listed small-cap companies in Korea and overseas. Since 2020, he has also been serving on the board and management of several Growth & Value fund portfolio companies, including CBI, DGP and KOASIS. Prior to that, he was the vice president and partner of New Buds Inc., where he supervised investor sourcing, investment advisory, corporate consulting, company analysis and trading from 2009 to 2011. Throughout his 23-year career, he has spanned various roles in consulting, marketing and distribution, commodities trading, M&A and restructuring, fundraising and investor relations. Mr. Lee has a bachelor’s degree in electrical engineering from Hongik University. Mr. Lee’s investment experience, as well as affiliate in CBI and DGP, qualify him to serve on the Board. 84 Table of Contents Executive Officers The following sets forth information about our executive officers as of May 27, 2024. Name Position Age Paul Kang Chief Executive Officer 62 Jiyoung Hwang Chief Financial Officer 47 Paul Kang. Biographical information for Mr. Kang is presented above under the caption “Directors.” Jiyoung Hwang. Biographical information for Ms. Hwang is presented above under the caption “Directors.” Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors, and greater than ten percent stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, (i) during the fiscal year ended December 31, 2023, all Section 16(a) filing requirements applicable to our officers, directors, and greater than ten percent beneficial owners were complied with, except that: a late report on Form 4 was filed by CBI USA on March 9, 2023 reporting a transaction dated February 22, 2023; a late report on Form 3 was filed on May 15, 2023 relating to an initial statement of beneficial ownership of securities by former officer Jung Sang Kim who was appointed April 26, 2023; a late report on Form 4 was filed by officer Joshua Miller on May 25, 2023 reporting a transaction dated May 16, 2023; and a late report on Form 4 was filed by officer Joshua Miller on December 1, 2023 reporting a transaction dated November 16, 2023 Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The Code of Business Conduct and Ethics is available on our website at www.exicuretx.com . If we make any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website. Audit Committee Matters Our Audit Committee is currently comprised of Minhee Eom, Raymond Ko, and Dongho Lee. Mr. Ko serves as the chairperson of the Audit Committee. Our Board of Directors has determined that all members are “independent” for Audit Committee purposes as that term is defined in the applicable rules of the SEC and Nasdaq rules. Our Board has determined that Mr. Ko qualifies as an “audit committee financial expert,” as defined under the applicable rules of the SEC. Item 11. Executive Compensation. Compensation Overview This section provides a discussion of the total compensation awarded to, earned by, or paid to, during the years ended December 31, 2023 and 2022: (1) the individuals who served as our principal executive officer during the fiscal year ended December 31, 2023, (2) our next two most highly compensated executive officers serving as of December 31, 2023 who earned more than $100,000 during the fiscal year ended December 31, 2023 (of which we 85 Table of Contents had none), and (3) any individual who would otherwise be included in (2) above but for the fact that such individual was not serving as an executive officer of ours as of December 31, 2023. We refer to these individuals in this prospectus as our named executive officers. Our named executive officers for 2023 who appear in the Summary Compensation Table are: • Paul Kang, our Chief Executive Officer; • Matthias Schroff, our former Chief Executive Officer; • Jung Sang (Michael) Kim, our former Chief Executive Officer; • Elias Papadimas, our former Chief Financial Officer; • Sarah Longoria, our former Chief Human Resource and Compliance Officer; Summary Compensation Table The following table provides a summary of compensation paid or accrued for the years ended December 31, 2023 and 2022 to our named executive officers, amounts in dollars: Name and principal position Year Salary ($) Bonus ($) Stock awards ($) (1) Option awards ($) (2) All other compensation ($) (3) Total ($) Paul Kang (4) Chief Executive Officer 2023 50,000 — — — — 50,000 Jung Sang (Michael) Kim (5) Former Chief Executive Officer 2023 90,625 — — — 313 90,938 Matthias G. Schroff, Ph.D. (6) Former Chief Executive Officer 2023 183,333 603,825 (7) — — 10,313 797,471 2022 538,163 122,197 (8) 267,323 277,785 12,250 1,217,718 Elias D. Papadimas (9) Former Chief Financial Officer 2023 135,000 370,000 (10) — — 11,250 516,250 2022 400,625 140,000 (11) 48,759 67,125 10,250 666,759 Sarah Longoria (12) Chief Human Resources and Compliance Officer 2023 125,000 370,000 (13) — — 11,250 506,250 2022 300,000 99,750 (14) 20,786 26,125 — 446,661 86 Table of Contents (1) The amounts reported in this column reflect the aggregate grant date fair value for performance stock units granted during such fiscal year. (2) The amounts reported in this column reflect the grant date fair value of the option awards granted to the named executive officers during the years presented and do not reflect the actual amounts earned. Such grant date fair values do not take into account any estimated forfeitures related to service-based vesting conditions. These values have been determined in accordance with FASB ASC Topic 718. See Note 10 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 27, 2023 for a discussion of the relevant assumptions used in calculating these amounts. The amounts in this column for 2022 for Dr. Schroff, Mr. Papadimas, and Ms. Longoria also include the incremental fair value of outstanding awards as a result of the repricing of stock options effective April 1, 2022. (3) Except as set forth below in footnotes 10 and 15 with respect to 2023 amounts, and footnote 14 with respect to 2022 amounts, the amounts reported in this column represent a match of contributions to our 401(k) savings plan. (4) Effective August 21, 2023, Mr. Kang was appointed as Chief Executive Officer, succeeding Mr. Kim. (5) Effective April 27, 2023, Mr. Kim was appointed as Chief Executive Officer and Chief Financial Officer, succeeding Mr. Schroff and Mr Papadimas, respectively. He resigned from those positions as of August 18, 2023. (6) Effective February 4, 2022, Dr. Schroff was appointed as Chief Executive Officer, succeeding Mr. Bock. He separated from the Company effective April 26, 2023. Dr. Schroff served as our Chief Operating Officer in 2021 until December 10, 2021, and as our Chief Scientific Officer from December 10, 2021 through February 4, 2022. (7) Represents separation amount paid to Dr. Schroff as the result of his departure on April 26, 2023. (8) Represents retention award amounts earned and paid to Dr. Schroff in 2022. (9) Mr. Papadimas was appointed as our Chief Financial Officer in January 2022. He separated from the Company effective April 26, 2023 (10) Represents separation amount paid to Mr. Papadimas as the result of his departure on April 26, 2023. (11) The amount reported represents (i) a retention award in the amount of $120,000 earned in 2022 and (ii) a bonus in the amount of $20,000 earned in 2022, each paid to Mr. Papadimas in 2022. (12) Ms. Longoria was appointed as our Chief Human Resources and Compliance Officer in December 2021 and separated from the Company effective May 26, 2023. (13) Represents separation amount paid to Ms. Longoria as the result of her departure on May 26, 2023. (14) Represents retention award amounts earned and paid to Ms. Longoria in 2022. Employment Agreements We had employment agreements with each of our named executive officers who were still serving in their positions at the end of 2023. These employment agreements are described below. Refer to the footnotes to the Summary Compensation Table above with respect to named executive officers who were no longer serving at the end of 2023. Paul Kang . We and Mr. Kang entered into a Employment Agreement dated August 28, 2023. Under the terms of this Employment Agreement, Mr. Kang’s annual base salary was $150,000. Outstanding Equity Awards at Fiscal Year-End Mr. Kang does not have any outstanding equity awards, and none of our named executive officers who were not serving with the Company at the end of fiscal 2023 still had any outstanding equity awards. Defined Contribution Plan We sponsor a defined contribution plan intended to qualify under Section 401 of the Internal Revenue Code (the “Code”) as a 401(k) plan. Employees who are at least 21 years of age are generally eligible to participate and may enter the plan on the first day of any month following the employment start date. Participants may make pre-tax contributions or Roth 401(k) contributions up to the maximum limit established by the Code. Our 401(k) plan also has a “catch-up contribution” feature for employees aged 50 or older (including those who qualify as “highly compensated” employees) who can defer amounts over the statutory limit that applies to all other employees below age 50. Participant contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participant’s directions. Participants are immediately and fully vested in their contributions. We provide matching contributions under the plan of up to 100% of the first 50% of the participant’s elective contributions. 87 Table of Contents Director Compensation Under our director compensation policy, as amended, each of our directors is eligible to receive cash compensation for service on our Board of Directors and committees of our Board of Directors. 2023 Director Compensation Cash Compensation Following the closing of the Private Placement in February 2023, each director is entitled to an annual retainer of $20,000. None of our current directors have received any equity grants, and none of our prior directors received equity grants in 2023. Director Compensation Table The following table presents information regarding the compensation earned for service by our directors during the year ended December 31, 2023, amounts in dollars. Name Fees Earned or Paid In Cash ($) Option Awards (13) ($) Total ($) Paul Kang (1) 16,944 — 16,944 Jiyoung Hwang (2) 16,973 — 16,973 Hyuk Joon (Raymond) Ko (3) 7,215 — 7,215 Dongho Lee (4) 7,215 — 7,215 Hojoon Lee (5) 7,215 — 7,215 Minhee Eom (6) 5,000 — 5,000 Seung Soo Shin (7) 1,778 — 1,778 Hyukku Lee (8) — — — Changil Ahn (9) 6,944 — 6,944 Cheolho Jo (10) 6,778 — 6,778 Jeffrey L. Cleland, Ph.D. (11) 8,200 — 8,200 Elizabeth Garofalo, M.D. (12) 13,826 — 13,826 (1) Mr. Kang was appointed to the Board of Directors effective February 24, 2023. (2) Ms. Hwang was appointed to the Board of Directors effective February 24, 2023. (3) Mr. Ko was appointed to the Board of Directors effective August 21, 2023. (4) Mr. D. Lee was appointed to the Board of Directors effective August 21, 2023. (5) Mr. Hojoon Lee was appointed to the Board of Directors effective August 21, 2023. (6) Ms. Eom was appointed to the Board of Directors effective September 26, 2023. (7) Mr. Shin was appointed to the Board of Directors effective February 27, 2023, and resigned from the Board of Directors effective April 26, 2023. (8) Mr. Hyukku Lee was appointed to the Board of Directors effective February 24, 2023, and resigned from the Board of Directors effective May 3, 2023. (9) Mr. Ahn was appointed to the Board of Directors effective February 24, 2023, and resigned from the Board of Directors effective August 18, 2023. (10) Mr. Jo was appointed to the Board of Directors effective February 24, 2023, and resigned from the Board of Directors effective August 1, 2023. (11) Dr. Cleland resigned from the Board of Directors effective February 10, 2023. (12) Dr. Garofalo resigned from the Board of Directors effective February 24, 2023. (13) During 2023, no options were issued to any directors. During 2022, Dr. Cleland and Dr. Garofalo each had outstanding options to purchase the of shares, however, those were forfeited upon their resignation. 88 Table of Contents Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Equity Compensation Plan Information The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2023, which as of that date consisted of our 2017 Equity Incentive Plan and 2017 Employee Stock Purchase Plan. Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by stockholders 15,158 $ 4.28 506,607 (1) (2) Equity compensation plans not approved by stockholders - - - Total 15,158 $ 4.28 506,607 (1) Represents 454,636 and 51,971 shares of common stock available for issuance under the 2017 Equity Incentive Plan and 2017 Employee Stock Purchase Plan, respectively, as of December 31, 2023. (2) 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 our capital stock outstanding on December 31 of the preceding calendar year, or (iii) a lesser number of shares determined by the Compensation Committee. Effective January 1, 2024, pursuant to the terms of the 2017 Equity Incentive Plan, the number of awards that are reserved and may be awarded under the 2017 Equity Incentive Plan was automatically increased by 153,333 awards. The number of shares of common stock reserved for issuance under the 2017 Employee Stock Purchase Plan automatically increases on January 1 of each year, beginning on January 1, 2018, by the lesser of (i) 10,000 shares of common stock, (ii) 0.3% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or (iii) such lesser number of shares determined by our Board. Effective January 1, 2023, pursuant to the terms of the 2017 Employee Stock Purchase Plan, the number of shares that are reserved and may be issued under the 2017 Employee Stock Purchase Plan was automatically increased by 10,000 shares. Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding the ownership of our common stock as of May 24, 2024 by: (i) each of our directors; (ii) each of our named executive officers named in the 2023 Summary Compensation Table above; (iii) all of our current executive officers and directors as a group; and (iv) all those known by us to be beneficial owners of more than five percent of our common stock. Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities, or have the right to acquire such powers within 60 days. Common stock subject to options that are currently exercisable or exercisable within 60 days of May 31, 2024 are deemed to be outstanding and beneficially owned by the person holding the options. These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them. Percentage ownership calculations are based on 8,651,148 shares outstanding as of May 31, 2024, adjusted as required by rules promulgated by the SEC. This table is based upon information supplied by our officers, directors and principal stockholders and Schedules 13D and 13G filed with the SEC. Except as otherwise noted below, the address for each executive officer and director listed in the table is c/o Exicure, Inc., 2430 N. Halsted Street, Chicago, Illinois 60614. 89 Table of Contents Beneficial Ownership Beneficial Owner Greater than 5% Stockholders Number of Shares Beneficially Owned (#) Percentage of Common Stock Beneficially Owned (%) DGP Co., Ltd. (1) 3,060,000 35.4 % CBI USA, Inc. (1) 818,299 9.5 % Directors and Named Executive Officers Paul Kang — * Jiyoung Hwang (2) — * Hyuk Joon (Raymond) Ko — * Dongho Lee — * Hojoon Lee (2) — * Minhee Eom — * All directors and executive officers as a group (6 persons) (2) — * * Indicates beneficial ownership of less than one percent of the outstanding shares of common stock. (1) Based on most recent Schedule 13D amendment filed March 4, 2024. The address of CBI USA is c/o Baker & Hostetler LLP, One North Wacker Drive, Suite 4500, Chicago, IL 60606-2841. The address of DGP is 23, Geurintekeu-ro, Yeonggwang-eup, Yeonggwang-gun, Jeollanam-do, Republic of Korea (57024). (2) As a result of Mr. Hojoon Lee’s role as director and/or executive of CBI USA, DGP and the parent company of CBI USA, he may be deemed to beneficially own the shares of common stock held by CBI USA and DGP. In addition, Ms. Hwang, as a director of CBI USA and an executive of the parent company of CBI USA, may be deemed to beneficially own the shares of common stock held by CBI USA. Each of Mr. Lee and Ms. Hwang disclaim beneficial ownership of these shares. Item 13. Certain Relationships and Related Transactions, and Director Independence. Certain Relationships and Related Party Transactions Policies and Procedures for Related Party Transactions Our Board of Directors adopted a written related person transaction policy to set forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K promulgated under the Exchange Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds or will exceed the lesser of $120,000 or 1% of the average of our total assets as of the end of the last two completed fiscal years and a related person had, has or will have a direct or indirect material interest, including purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. As provided by our Audit Committee charter, our Audit Committee is responsible for reviewing and approving in advance the related party transactions covered by our related transaction policies and procedures. A related party transaction reviewed under the policy will be considered approved or ratified if it is authorized by the Audit Committee of our Board of Directors or the chairperson of the Audit Committee in accordance with the standards set forth in the policy after full disclosure of the related party’s interests in the transaction. As appropriate for the circumstances, the Audit Committee or the chairperson of the Audit Committee, as applicable, shall review and consider: • the related party’s interest in the transaction; 90 Table of Contents • the approximate dollar value of the amount involved in the related party transaction; • the approximate dollar value of the amount of the related party’s interest in the transaction without regard to the amount of any profit or loss; • whether the transaction was undertaken in our ordinary course of business; • whether the transaction with the related party is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party; • required public disclosure, if any; and • any other information regarding the related party transaction in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction. Related Party Transactions The following is a description of related party transactions we have entered into since January 1, 2022 with our directors, executive officers and holders of more than 5% of our outstanding voting securities and their affiliates, whom we refer to as our related persons, in which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets as of the end of the last two completed fiscal years, other than the compensation arrangements we describe in the sections titled “Director Compensation” and “Executive Compensation” in this Proxy Statement. CBI USA Private Placement On September 26, 2022, the Company entered into the Securities Purchase Agreement with 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 of the Company’s common stock at a purchase price of $1.60 per share (the “Private Placement”). CBI USA was already a holder of more than 5% of our outstanding voting securities at the time we entered into the Securities Purchase Agreement as a result of a previous private placement completed in May 2022. The Private Placement closed on February 24, 2023. Since the registration statement was not filed within 90 days following the Closing Date of the Registration Rights Agreement, the Company paid $27 to CBI USA and accrued $191 to DGP pursuant to the liquidated damages provision in this agreement. Paul Kang Consulting Fees The Company engaged entities controlled by Mr. Kang to provide business development consulting services in 2023 and 2022. The Company paid the entities controlled by Mr. Kang $218 and $248 for the years ended December 31, 2023 and 2022, respectively, for such services to date. Mr. Kang was not yet serving as a director at the time he was engaged to provide these services. DGP Promissory Note On June 3, 2024, the Company executed another promissory note (“DGP Note”) and subsequently received a loan in the amount of $700 from DGP. All principal and accrued interest will be due and payable on the earlier of (i) ten months from the date of this DGP Note or (ii) upon an event of default, at that time, such amounts declared by the investor will become due and payable by Company. Interest will accrue on this DGP Note at 6.0% and is payable at maturity. Independence of the Board of Directors and Controlled Company Exemption The following current directors were determined to be independent under the applicable Nasdaq standards: Hyuk Joon (Raymond) Ko , Dongho Lee and Minhee Eom. The following former directors who served during 2023 were also determined to be independent under such standards: Changil Ahn, Jeffrey L. Cleland, Ph.D., Elizabeth Garofalo, M.D., Cheolho Jo, and Hyukku Lee. 91 Table of Contents Following the closing of the private placement to CBI USA in February 2023, we became a “controlled company” under Nasdaq rules. As a result, we were exempt from the requirements that a majority of our Board of Directors be independent and that we have an independent compensation committee and an independent nominating committee or function. Following the consummation of private placement, our Board of Directors dissolved the Compensation Committee and Nominating and Corporate Governance Committee. In August 2023, CBI USA and its affiliate, DGP Co., Ltd., filed a Schedule 13D/A reporting that they no longer owned 50% of outstanding shares as a result of dilutive issuances, and thus we were no longer a “controlled company” under Nasdaq rules. Thereafter, we reinstated our Compensation Committee and Nominating and Corporate Governance Committee and appointed our three independent directors to those committees in compliance with Nasdaq rules with respect to those committees. We are still relying on the phase-in provisions of the Nasdaq rules with respect to the requirement that a majority of our Board of Directors be independent. We must comply with that requirement within 12 months of losing “controlled company” status. Item 14. Principal Accounting Fees and Services. Independent Registered Public Accounting Firm Fees and Services The following table sets forth the aggregate fees billed to us for the year ended December 31, 2023 by Marcum LLP, Chicago, Illinois (PCAOB ID: 688) and year ended December 31, 2022 by KPMG LLP, Chicago, IL (PCAOB ID: 185), our independent registered public accounting firm for such years. Year Ended December 31, 2023 2022 Audit Fees (1) $ 432,846 $ 440,000 Audit-Related Fees (2) — 21,000 Total Fees $ 432,846 $ 461,000 (1) Audit fees for the fiscal years ended December 31, 2023 and 2022 consist of fees for professional services rendered in connection with the audit of our annual financial statements and review of our quarterly financial statements. (2) Audit-related fees for the fiscal years ended December 31, 2023 and 2022 consist principally of fees for professional services rendered that are reasonably related to the performance of the audit or review of our financial statements and fees related to assistance with registration statements filed with the SEC. All fees described above were pre-approved by the Audit Committee of the Board of Directors. Pre-Approval Policies and Procedures The Audit Committee has adopted policies and procedures for the pre-approval of audit and non-audit services provided by our independent registered public accounting firm. The policy generally requires pre-approval for specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individual explicit case-by-case basis before the independent registered public accounting firm is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. The Audit Committee will review both audit and non-audit services performed by the independent registered public accounting firm and the fees charged for such services on at least an annual basis. Among other things, the Audit Committee will review non-audit services proposed to be provided by the independent registered public accounting firm and pre-approve such services only if they are compatible with maintaining the independent registered public accounting firm’s status as an independent registered public accounting firm. All services provided by Marcum LLP in 2023 and KPMG LLP in 2022 were pre-approved by our Audit Committee after review of each of the services proposed for approval. 92 Table of Contents 93 Table of Contents PART IV Item 15. Exhibit and Financial Statement Schedules. (a) The following documents are filed as part of this report: 1. Financial Statements See Index to Financial Statements on page 37 of this Annual Report on Form 10-K. 2. Financial Statement Schedules All financial statement schedules are omitted because they are not applicable or the required information is included in the financial statements or notes thereto. 3. Exhibits Exhibit Number Exhibit Description Filed with this Report Incorporated by Reference herein from Form or Schedule Filing Date SEC File/Reg. Number 3.1 Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on November 15, 2017. 10-K (Exhibit 3.3) 3/11/2021 001-39011 3.2 Certificate of Amendment to Amended and Restated Certificate of Incorporation of Exicure, Inc., effective June 29, 2022. 8-K (Exhibit 3.1) 6/29/2022 001-39011 3.3 Amended and Restated Bylaws, as currently in effect. 8-K (Exhibit 3.4) 10/2/2017 000-55764 4.1 Description of Securities 10-K (Exhibit 4.4) 3/10/2020 001-39011 10.1+ 2015 Equity Incentive Plan and forms of awards thereunder, assumed in the Merger. 8-K (Exhibit 10.1) 10/2/2017 000-55764 10.2+ 2017 Equity Incentive Plan and forms of award agreements thereunder. 8-K (Exhibit 10.2) 10/2/2017 000-55764 10.3+ 2017 Employee Stock Purchase Plan. 8-K (Exhibit 10.3) 10/2/2017 000-55764 10.4+ Form of Indemnification Agreement by and between the Company and each of its directors and executive officers. 8-K (Exhibit 10.4) 10/2/2017 000-55764 10.5+ Second Amended and Restated Employment Agreement, by and between Exicure, Inc. and Matthias Schroff, Ph.D. 8-K (Exhibit 10.2) 2/4/2022 001-39011 10.6+ First Amendment to the Second Amended and Restated Employment Agreement, by and between Exicure, Inc. and Matthias Schroff, dated September 23, 2022. 8-K (Exhibit 10.3) 9/27/2022 001-39011 10.7+ Amended and Restated Employment Agreement dated as of June 1, 2021 by and between Elias D. Papadimas and Exicure, Inc. 10-Q (Exhibit 10.3) 8/12/2021 001-39011 10.8+ First Amendment to Amended and Restated Employment Agreement by and between Exicure, Inc. and Elias D. Papadimas, dated January 17, 2022 8-K (Exhibit 10.2) 1/18/2022 001-39011 10.9+ Second Amendment to the Amended and Restated Employment Agreement, by and between Exicure, Inc. and Elias Papadimas, dated September 23, 2022. 8-K (Exhibit 10.4) 9/27/2022 001-39011 10.10+ Retention Agreement by and between Exicure, Inc. and Elias D. Papadimas 10-K (Exhibit 10.20) 3/25/2022 001-39011 10.11+ Employment Agreement by and between Exicure, Inc. and Sarah Longoria, dated March 5, 2021 10-K (Exhibit 10.14) 3/25/2022 001-39011 10.12+ First Amendment to Employment Agreement by and between Exicure, Inc. and Sarah Longoria, dated December 10, 2021 10-K (Exhibit 10.15) 3/25/2022 001-39011 94 Table of Contents 10.13+ Second Amendment to Employment Agreement by and between Exicure, Inc. and Sarah Longoria, dated September 23, 2022 10-K (Exhibit 10.16) 3/25/2022 001-39011 10.14 Lease Agreement dated as of February 28, 2020 by and between 2430 N. Halsted, LLC and Exicure, Inc. 10-Q (Exhibit 10.1) 5/14/2020 001-39011 10.15 Form of Securities Purchase Agreement, dated May 9, 2022, by and among Exicure, Inc. and the purchaser parties thereto. 8-K (Exhibit 10.1) 5/13/2022 001-39011 10.16 Registration Rights Agreement, dated May 9, 2022, by and among Exicure, Inc. and the purchasers party thereto. 8-K (Exhibit 10.2) 5/13/2022 001-39011 10.17 Securities Purchase Agreement, dated September 26, 2022, by and between Exicure, Inc. and CBI USA. 8-K (Exhibit 10.1) 9/27/2022 001-39011 10.18 Registration Rights Agreement, dated September 26, 2022, by and between Exicure, Inc. and CBI USA. 8-K (Exhibit 10.2) 9/27/2022 001-39011 10.19+ Separation and Release Agreement, dated April 26, 2023, among Exicure, Inc. and Matthias Schroff. 8-K (Exhibit 10.2) 5/2/2023 001-39011 10.20+ Separation and Release Agreement, dated April 26, 2023, among Exicure, Inc. and Elias Papadimas. 8-K (Exhibit 10.3) 5/2/2023 001-39011 10.21 Convertible Bond Subscription Agreement, dated May 3, 2023, among Cyworld Z Co., Ltd. and Exicure, Inc. 8-K (Exhibit 10.1) 5/9/2023 001-39011 10.22 Convertible Bond Subscription Agreement, dated May 16, 2023, among Cyworld Z Co., Ltd. and Exicure, Inc. 8-K (Exhibit 10.1) 5/18/2023 001-39011 10.23+ Separation and Release Agreement, dated May 27, 2023, among Exicure, Inc. and Sarah Longoria. 8-K (Exhibit 10.1) 6/1/2023 001-39011 10.24+ Amended and Restated Employment Agreement, dated May 24, 2023, among Exicure, Inc. and Joshua Miller. 8-K (Exhibit 10.2) 6/1/2023 001-39011 10.25+ Retention Agreement, dated May 24, 2023, among Exicure, Inc. and Joshua Miller. 8-K (Exhibit 10.3) 6/1/2023 001-39011 10.26+ First Amendment to the Separation and Release Agreement of Matthias Schroff, dated June 12, 2023, among Exicure, Inc. and Matthias Schroff. 8-K (Exhibit 10.9) 6/14/2023 001-39011 10.27+ Employment Agreement, dated Aug. 28, 2023, among Exicure, Inc. and Paul Kang 8-K (Exhibit 10.1) 8/23/2023 001-39011 10.28+ Employment Agreement, dated Aug. 28, 2023, among Exicure, Inc. and Jiyoung Hwang 8-K (Exhibit 10.2) 8/23/2023 001-39011 21.1 Subsidiaries of Exicure, Inc. 10-K (Exhibit 21.1) 3/25/2022 001-39011 23.1 Consent of Marcum LLP, independent registered public accounting firm. X 23.2 Consent of KPMG LLP, independent registered public accounting firm. X 24.1 Power of Attorney (included on the signature page hereto). X 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. X 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. X 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. X 97 Compensation Recoupment Policy X 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 X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 95 Table of Contents 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X + Indicates a management contract or compensatory plan. * Indicates that portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. ** This certification 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-K), irrespective of any general incorporation language contained in such filing. Item 16. Form 10-K Summary. None. 96 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on June 6, 2024. EXICURE, INC. By: /s/ Paul Kang Paul Kang Chief Executive Officer By: /s/ Jiyoung Hwang Jiyoung Hwang Chief Financial Officer By: /s/ Joshua Miller Joshua Miller Chief Accounting Officer 97 Table of Contents POWER OF ATTORNEY We, the undersigned directors and officers of Exicure, Inc., hereby severally constitute and appoint Paul Kang and Jiyoung Hwang, and each of them singly, our true and lawful attorneys-in-fact, with full power to them, and to each of them singly, to sign for us and in our names in the capacities indicated below, any and all amendments to this Annual Report on Form 10-K and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as each of them might or could do in person, and hereby ratifying and confirming all that said attorneys-in-fact, and each of them, or their substitute or substitutes, shall do or cause to be done by virtue of this Power of Attorney. This Power of Attorney does not revoke any power of attorney previously granted by the undersigned, or any of them. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: SIGNATURE TITLE DATE /s/ Paul Kang President, Chief Executive Officer, and Director ( Principal Executive Officer) June 6, 2024 Paul Kang /s/ Jiyoung Hwang Chief Financial Officer, and Director ( Principal Financial Officer) June 6, 2024 Jiyoung Hwang /s/ Joshua Miller Chief Accounting Officer ( Principal Accounting Officer) June 6, 2024 Joshua Miller /s/ Raymond Ko Director June 6, 2024 Raymond Ko /s/ Minhee Eom Director June 6, 2024 Minhee Eom /s/ Dongho Lee Director June 6, 2024 Dongho Lee /s/ Hojoon Lee Director June 6, 2024 Hojoon Lee 98