EXICURE, INC. 10-K

Item 8. Financial Statements and Supplementary Data. EXICURE, INC. INDEX TO FINANCIAL STATEMENTS PAGE Report of Independent Registered Public Accounting Firm ( Marcum LLP , PCAOB ID 688 ) 37 Consolidated Balance Sheets as of December 31, 2024 and 2023 39 Consolidated Statements of Operations for the years ended December 31, 2024 and 2023 40 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024 and 2023 41 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 42 Notes to Consolidated Financial Statements 44 36 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Exicure, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Exicure, Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 , the Company has incurred significant losses and negative cash flows since inception, and may need to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 37 Table of Contents Critical Audit Matter Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2023 . New York, New York March 18, 2025 38 Table of Contents EXICURE, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, 2024 2023 ASSETS Current assets: Cash, cash equivalents and restricted cash $ 12,508 $ 816 Other receivable 521 15 Prepaid expenses and other current assets 644 1,193 Total current assets 13,673 2,024 Property and equipment, net 26 54 Right-of-use asset — 6,517 Other noncurrent assets 1,357 2,985 Total assets $ 15,056 $ 11,580 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,031 $ 1,631 Accrued expenses and other current liabilities 2,040 879 Total current liabilities 3,071 2,510 Lease liability, noncurrent 5,213 6,039 Total liabilities $ 8,284 $ 8,549 Commitments and Contingencies (Note 15) Stockholders’ equity: Preferred stock, $ 0.0001 par value per share; 10,000,000 shares authorized, no shares issued and outstanding, December 31, 2024 and December 31, 2023 — — Common stock, $ 0.0001 par value per share; 200,000,000 shares authorized, 6,026,841 issued and outstanding, December 31, 2024; 1,832,988 issued and outstanding, December 31, 2023 * 1 — Additional paid-in capital 206,035 192,594 Accumulated deficit ( 199,264 ) ( 189,563 ) Total stockholders' equity 6,772 3,031 Total liabilities and stockholders’ equity $ 15,056 $ 11,580 * reflects a one-for-five (1:5) reverse stock split effected on August 27, 2024 See Accompanying Notes to Consolidated Financial Statements. 39 Table of Contents EXICURE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) Year Ended December 31, 2024 2023 Revenue: Revenue $ 500 $ — Total revenue 500 — Operating expenses: Research and development expense — 1,423 General and administrative expense 5,449 11,715 Litigation legal expense 1,562 938 Right-of-use asset impairment loss 5,721 — Loss from sale of property and equipment — 920 Total operating expenses 12,732 14,996 Operating loss ( 12,232 ) ( 14,996 ) Other (expense) income, net: Changes in fair value of investment in convertible notes receivable — ( 2,000 ) Dividend income 5 52 Interest income 8 32 Interest expense ( 18 ) — Gain on settlement of accounts payables 407 — Other income (expense), net 2,137 ( 2 ) Total other income (expense), net 2,539 ( 1,918 ) Net loss before provision for income taxes ( 9,693 ) ( 16,914 ) Provision for income taxes 8 — Net loss $ ( 9,701 ) $ ( 16,914 ) Basic and diluted loss per common share * $ ( 4.75 ) $ ( 10.55 ) Weighted-average basic and diluted common shares outstanding * 2,043,278 1,602,790 * reflects a one-for-five (1:5) reverse stock split effected on August 27, 2024 See Accompanying Notes to Consolidated Financial Statements. 40 Table of Contents EXICURE, INC. 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 1,096,017 $ — $ 187,571 $ ( 172,649 ) $ 14,922 Reclassification of common stock warrants to liability — — ( 800 ) — ( 800 ) Equity-based compensation — — 1,348 — 1,348 Vesting of restricted stock units and related repurchases 56,971 — ( 122 ) — ( 122 ) Issuance of common stock, net 680,000 — 4,597 — 4,597 Net loss — — — ( 16,914 ) ( 16,914 ) Balance at December 31, 2023 1,832,988 $ — $ 192,594 $ ( 189,563 ) $ 3,031 Equity-based compensation — — 22 — 22 Vesting of restricted stock units and related repurchases 166 — — — — Issuance of common stock, debt to equity conversion 339,214 — 1,018 1,018 Sale of common stock, financings 3,854,473 1 12,401 — 12,402 Net loss — — — ( 9,701 ) ( 9,701 ) Balance at December 31, 2024 6,026,841 $ 1 $ 206,035 $ ( 199,264 ) $ 6,772 * reflects a one-for-five (1:5) reverse stock split effected on August 27, 2024 See Accompanying Notes to Consolidated Financial Statements. 41 Table of Contents EXICURE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 9,701 ) $ ( 16,914 ) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization 28 634 Amortization of right-of-use asset 796 741 Equity-based compensation 22 1,348 Right-of-use asset impairment loss 5,721 — Gain on settlement of accounts payables ( 407 ) — Changes in fair value of investment in convertible notes receivable — 2,000 Loss from sale of property and equipment — 920 Changes in operating assets and liabilities: Accounts receivable ( 506 ) — Prepaid expenses and other current assets 977 733 Other noncurrent assets — 38 Accounts payable ( 193 ) 1,270 Accrued expenses 1,180 ( 399 ) Other liabilities ( 827 ) ( 728 ) Net cash used in operating activities ( 2,910 ) ( 10,357 ) Cash flows from investing activities: Purchase of available-for-sale securities — ( 2,000 ) Proceeds from sale of property and equipment — 922 Net cash (used in) provided by investing activities — ( 1,078 ) Cash flows from financing activities: Proceeds from sale of common stock 12,402 5,440 Payment of common stock financing costs — ( 843 ) Proceeds from short term debt 1,000 — Payment of exercise of common stock warrants — ( 800 ) Payments for minimum statutory tax withholding related to net share settlement of equity awards — ( 123 ) Net cash provided by financing activities 13,402 3,674 Net (decrease) in cash, cash equivalents, and restricted cash 10,492 ( 7,761 ) Cash, cash equivalents, and restricted cash - beginning of year 2,016 9,777 Cash, cash equivalents, and restricted cash - end of year $ 12,508 $ 2,016 See Accompanying Notes to Consolidated Financial Statements. 42 Table of Contents EXICURE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2024 2023 Supplemental disclosure of cash flow information Non-cash operating activities: Reclass prepaid expenses from noncurrent to current $ 428 $ — Non-cash financing activities: Equity effect of debt to equity conversion $ 1,018 $ — The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the consolidated statements of cash flows: Year Ended December 31, 2024 2023 Cash, cash equivalents and restricted cash $ 12,508 $ 816 Restricted cash included in other noncurrent assets — 1,200 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 12,508 $ 2,016 See Accompanying Notes to Consolidated Financial Statements. 43 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 1. Description of Business, Basis of Presentation and Going Concern 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. In the first quarter, the Company entered into a licensing agreement for patents related to one of our historical drug candidates, and received a small, one-time payment and an entitlement to only modest royalties on future sales of the licensed technology that we do not believe will be material. In the second quarter, the Company sold some of our samples related to the licensed product. In the third quarter, the Company entered into a sale agreement to sale our historical biotechnology intellectual property and other assets pursuant to the purchase agreement. The Company continues to engage in a broader exploration of strategic alternatives. This effort involves exploring growth through transactions with potential partners that see opportunity in joining an existing, publicly-traded organization. On January 19, 2025, we entered into a Share Purchase Agreement with GPCR Therapeutics Inc, a Korean corporation, (“GPCR”) pursuant to which we acquired from GPCR all of the issued and outstanding equity securities of GPCR Therapeutics USA Inc., a California corporation (“GPCR USA”). In connection with the closing of the Share Purchase Agreement, the Company and GPCR entered into a License and Collaboration Agreement to further develop and commercialize GPCR’s technologies related to certain intellectual property and patents. GPCR USA has an ongoing Phase 2 clinical trial focused on blood cancer patients, particularly those eligible for hematopoietic stem cell transplantation. Its current clinical trial involves the combined administration of G-CSF, GPC-100 (Burixafor) and propranolol. GPCR USA plans to complete the administration of GPC-100 to 20 patients by the end of April and aims to announce the clinical trial results by September. Throughout these 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 These consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“US GAAP”) as defined by the Financial Accounting Standards Board (“FASB”) within the FASB Accounting Standards Codification (“ASC”) and are presented in thousands, except number of shares and per share data. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Exicure, Inc. and its wholly owned subsidiary, Exicure Operating Company. All intercompany transactions and accounts are eliminated in consolidation. Reverse Stock Split At the Company’s Special Meeting of Stockholders held on August 15, 2024, the Company’s stockholders approved a proposal to approve and adopt an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of its shares of common stock, issued and outstanding or reserved for issuance, at a ratio within the range from 1-for-2 to 1-for-15, with such ratio to be determined in the discretion of the Board of Directors. On August 20, 2024, the Company’s Board of Directors adopted resolutions to effect as soon as reasonably practicable the reverse split of the issued and outstanding shares of the Common Stock at a ratio of 1-for-5. 44 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) The Company effected a reverse stock split of its Common Stock at a ratio of 1-for-5 as of 5:00 p.m. Eastern Time on August 27, 2024. No fractional shares were issued in connection with the reverse stock split. Stockholders of record who would otherwise be entitled to receive a fractional share received a full share in lieu thereof. An additional 102,837 shares were issued as a result of the fractional shares rounded up. All information presented in the accompanying unaudited condensed consolidated financial statements, unless otherwise indicated herein, assumes a 1-for-5 reverse stock split of the Company’s outstanding shares of Common Stock, and unless otherwise indicated, all such amounts and corresponding conversion price or exercise price data set forth herein have been adjusted to give effect to such assumed reverse stock split. 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 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 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 December 31, 2024, the Company expects to incur significant expenses and negative cash flows for the foreseeable future. As of December 31, 2024, the Company’s cash and cash equivalents were $ 12,508 . 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. Additional financing will be needed to fund our ongoing operations, support of GPCR USA’s operations, and exploration of strategic alternatives and pursuing any alternatives that we identify. Management believes that the Company’s existing cash and cash equivalents are insufficient to continue to fund its operating expenses and additional funding is needed. There can be no assurance that such additional financing will be available and, if available, can be obtained on acceptable terms. The accompanying 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. Use of Estimates The preparation of the financial statements in conformity with US 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. Reclassification Certain accounts in the prior period consolidated statement of operations have been reclassified to conform to the presentation of the current year consolidated financial statements. These reclassifications had no effect on the previously reported operating results. 45 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 2. Significant Accounting Policies Cash and cash equivalents The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. As of December 31, 2024, cash equivalents represented funds held in a money market account. Restricted cash The Company secures a standby letter of credit with a restricted certificate of deposit account as part of its Chicago lease agreement, which was used to pay the lease during 2024. The Company considers the restricted certificate of deposit account in the amount of $ 109 to be restricted cash because its use to the Company is contractually limited and presents the balance within current assets on the accompanying consolidated balance sheet at December 31, 2024 and 2023. Fair value of financial instruments The Company has estimated the fair value of its financial instruments. The carrying amounts for cash, cash equivalents, and accounts payable approximate their fair value due to the relatively short-term nature of these instruments. The Company records short-term investments at their estimated fair value based on quoted market prices for identical or similar instruments. 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 $ 0 as of December 31, 2024. As of December 31, 2024, the aggregate cost of the investment in convertible notes receivable accounted for under the fair value option was $ 0 , which included principal balances of $ 2,000 and the change in fair value of $ 2,000 . Concentrations of credit risk and other risks and uncertainties Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents with reputable financial institutions. The Company’s cash accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per financial institution in the United States. The Company's cash equivalent securities are insured by the Securities Investor Protection Corp. (“SIPC”) up to $500,000 per account, with a limit of $250,000 in cash. The Company has not experienced any credit losses in such accounts. The Company has no financial instruments with off-balance sheet risk of loss. The Company is currently not profitable and no assurance can be provided that it will ever be profitable. The Company’s research and development activities have required significant investment since inception and operations are expected to continue to require cash investment in excess of its revenues. See also Note 1, Going Concern , for more information. Property and equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the various classes of property and equipment, which range from three to seven years . Leasehold 46 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) improvements are amortized using the straight-line method over the shorter of the remaining terms of the respective leases or the estimated lives of the assets. Depreciation begins at the time the asset is placed in service. Property and equipment are reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss for the year ended December 31, 2024 resulted from an analysis of the Company’s right-of-use asset related to its office lease. No impairment losses were recorded for the year ended December 31, 2023. Warrants The Company accounts for freestanding warrants within stockholder’s equity or as liabilities based on the characteristics and provisions of each instrument. The Company evaluates outstanding warrants in accordance with ASC 480, Distinguishing Liabilities from Equity , and ASC 815, Derivatives and Hedging . If none of the criteria in the evaluation in these standards are met, the warrants are classified as a component of stockholders’ equity and initially recorded at their grant date fair value without subsequent remeasurement. Warrants that meet the criteria are classified as liabilities and remeasured to their fair value, estimated using the Black-Scholes option-pricing model, at the end of each reporting period with changes in the fair value of the liability recorded in other income (expense), net in the consolidated statements of operations. Revenue recognition The core principle of ASC Topic 606 “Revenue from Contracts with Customers” (“ASC 606”) requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company allocates the transaction price to all contractual performance obligations included in the contract. If a contract has more than one performance obligation, we allocate the transaction price to each performance obligation based on standalone selling price, which depicts the amount of consideration we expect to be entitled in exchange for satisfying each performance obligation. The Company recognizes revenue when it was satisfied or fulfilled it’s obligation to the customer. Equity-based compensation The Company measures the cost of equity-based awards at fair value and records the cost of the awards, net of estimated forfeitures, on a straight-line basis over the requisite service period. The Company measures fair value for all common stock options using the Black-Scholes option-pricing model. The fair value of common stock option awards is affected by the valuation assumptions, including the expected volatility based on comparable market participants, expected term of the common stock option, risk-free interest rate, and expected dividends. For all equity-based awards, the fair value measurement date is the date of grant and the requisite service period is the period over which the recipient is required to provide service in exchange for the equity-based awards, which is generally the vesting period. Segments and geographic information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment. All long-lived assets of the Company are located in the United States. Leases The Company determines if an arrangement is a lease at contract inception. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized on the balance sheet at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or to terminate the lease when it is 47 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) reasonably certain that the Company will exercise that option. The Company uses the implicit interest rate when readily determinable and uses the Company’s incremental borrowing rate when the implicit rate is not readily determinable based upon the information available at the commencement date in determining the present value of the lease payments. The lease payments used to determine the Company’s operating lease assets may include lease incentives, stated rent increases and escalation clauses linked to rates of inflation when determinable. In addition, the Company’s lease arrangements may contain lease and non-lease components. The Company combines lease and non-lease components, which are accounted for together as a single lease component. Variable lease payments, such as real estate taxes and facility maintenance costs that are allocated by the lessor to the lessee and are not based on an index or a rate, are excluded from the measurement of the lease liability. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Short-term leases, defined as leases that have a lease term of twelve months or less at the commencement date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease. Costs for variable lease payments that are not included in the lease liability are recognized as expense as incurred. Research and development expense Research and development expenses are charged to expense as incurred in performing research and development activities in accordance with ASC 730, Research and Development . The costs include employee‑related expenses including salaries, benefits, and stock‑based compensation expense, costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on the Company’s behalf, the cost of purchasing lab supplies and non‑capital equipment used in preclinical and clinical activities and in manufacturing preclinical and clinical study materials, consultant fees, facility costs including rent, depreciation and maintenance expenses, fees for acquiring and maintaining licenses under third party licensing agreements, including any sublicensing or success payments made to the Company’s licensors, and overhead and other expenses directly related to research and development operations. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the Company’s estimate, the accrual or prepaid is adjusted accordingly. The Company defers and capitalizes non-refundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. In circumstances where amounts have been paid in excess of costs incurred, the Company records a prepaid expense. Income taxes The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of its assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, is applied during the years in which temporary differences are expected to be settled and is reflected in the financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. At December 31, 2024 and 2023, the Company established a full valuation allowance against its deferred tax assets to an amount that is more likely than not to be realized. 48 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) Recent Accounting Pronouncements Adopted Segment Reporting Disclosures In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures which will require companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”). The pronouncement is effective for annual filings for the year ended December 31, 2024. The Company adopted this standard for our fiscal year 2024 annual financial statements and interim financial statements thereafter and have applied this standard retrospectively for all prior periods presented in the financial statements. See Note 9 – Segment Reporting for further information. Accounting Pronouncements Not Yet Adopted Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The standard requires that public business entities disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods. The standard will become effective for us for our fiscal year 2027 annual financial statements and interim financial statements thereafter and may be applied prospectively to periods after the adoption date or retrospectively for all prior periods presented in the financial statements, with early adoption permitted. The Company plans to adopt the standard when it becomes effective in our fiscal year 2027 annual financial statements, and the Company is currently evaluating the impact this guidance will have on the disclosures included in the Notes to the Consolidated Financial Statements. Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Update No. 2023-09 aims to enhance the transparency and decision usefulness of income tax disclosures. Update No. 2023-09 modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state, and foreign). Update 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. Update No. 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company has not yet adopted this standard for our fiscal year 2024 annual financial statements and is currently evaluating the impact this guidance will have on the disclosures included in the Notes to the Consolidated Financial Statements. See Note 10 – Income Taxes for further information. 49 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 3. Supplemental Balance Sheet Information Prepaid expenses and other current assets December 31, 2024 2023 Prepaid insurance $ 444 $ 508 Prepaid franchise tax — 259 Lease costs 37 235 Prepaid professional fees 70 95 Prepaid software 61 72 Other 32 24 Prepaid expenses and other current assets $ 644 $ 1,193 Other noncurrent assets December 31, 2024 2023 Restricted cash $ — $ 1,200 Prepaid insurance, noncurrent 1,357 1,785 Other noncurrent assets $ 1,357 $ 2,985 Property and equipment, net December 31, 2024 2023 Scientific equipment $ 246 $ 246 Computers and software 3 3 Furniture and fixtures 30 30 Property and equipment, gross 279 279 Less: accumulated depreciation ( 253 ) ( 225 ) Property and equipment, net $ 26 $ 54 Depreciation and amortization expense was $ 28 and $ 634 , for the years ended December 31, 2024 and 2023, respectively. During the year ended December 31, 2023, the Company sold scientific equipment with a net book value of $ 1,834 and recognized a loss of $ 920 in the accompanying statement of operations for the year ended December 31, 2023. There were no sales in 2024. 50 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) Accrued expenses and other current liabilities December 31, 2024 2023 Current lease liability $ 722 $ 626 Accrued payroll-related expenses — 71 Accrued litigation legal fee 1,138 — Accrued other expenses 180 182 Accrued expenses and other current liabilities $ 2,040 $ 879 4. Investment in Convertible Notes Receivable In May 2023, the Company entered into two subscription agreements to purchase non-guaranteed private placement convertible notes receivable (the “Notes Receivable”) for a subscription amount of $ 1 million each. The Notes Receivable mature in May 2026 and the yield to maturity is 4.5 % per annum. The Company has the option to request that the issuer redeem part or the entire principal amount of the Notes Receivable 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 Notes Receivable’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. In March 2024, the Company notified the issuer of the Notes Receivable that it was exercising its redemption right with respect to the entire principal amount of the Notes Receivable after the first anniversary of their issue dates (May 3 and May 16, 2024, respectively) for an aggregate redemption price of $ 2.090 million (representing the principal amount plus 4.5 % per annum yield to the redemption date). The issuer has taken the position that the Notes Receivable are not redeemable until August 3, 2024 and August 16, 2024. The Company’s debt securities are classified as AFS pursuant to ASC 320 - Investments - Debt Securities. AFS securities are recorded at fair value. During the year ended December 31, 2023, management did not believe these AFS investments are recoverable and booked a change in fair value to record them at a fair value of $ 0 and believes their fair value is still $ 0 as of December 31, 2024. 5. Leases The Company’s lease arrangements at December 31, 2024 consist of (i) a lease for office space at its headquarters in Chicago, Illinois that commenced in July 2020 (the “Chicago Lease”) and (ii) leases for office equipment (the “Office Equipment Leases”). The Chicago Lease and the Office Equipment Leases are classified as operating leases. See the subsequent event footnote for information on the early termination of the Chicago lease that terminated in February 2025. Chicago Lease The Company has approximately thirty thousand square feet of office space in Chicago, Illinois (the “Chicago Lease”). 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 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. 51 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) During the first 12-month period of the Original Term, the base rent and the Company's proportionate share of operating expenses and taxes are subject to certain abatements. Upon execution of the Chicago Lease, the Company paid to the landlord the first installment of base rent and the estimated monthly amount of its pro rata share of taxes and its pro rata share of operating expenses in the aggregate amount of $ 87 which amount had been adjusted for the abatement as set forth in the lease agreement. The Company also paid the landlord a net amount of $ 697 toward tenant improvements. As part of the agreement for the Chicago Lease, the Company is required to maintain a standby letter of credit during the term of the lease, which had a balance of $ 109 at December 31, 2024, and was secured by a restricted certificate of deposit account and presented within current assets on the Company’s consolidated balance sheet at December 31, 2024. The Company recognized a right of use asset of $ 8,931 and a lease liability of $ 8,147 on the Commencement Date. Because the rate implicit in the Chicago Lease is not readily determinable, the Company used its incremental borrowing rate of 8.3 % on the Commencement Date to determine the present value of the lease payments over the Original Term. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The weighted-average discount rate related to the Company’s operating lease asset and related operating lease liabilities was 8.3 %. See Footnote 17 - Subsequent Events for details on the early termination of the Chicago Lease. The following table summarizes lease costs in the Company’s consolidated statement of operations: December 31, 2024 2023 Operating lease costs $ 858 $ 789 Variable lease costs 290 690 Short term lease costs 41 — Total lease costs $ 1,189 $ 1,479 The Company made cash payments for operating leases of $ 1,217 and $ 1,808 during the years ended December 31, 2024 and 2023, respectively. On June 11, 2024, the Company received a formal notice from its landlord indicating the landlord will draw on the restricted cash account designated for the lease as a result of past due rent for December 2023 through June 2024. The landlord continued to make monthly withdrawals from the restricted cash account and the Company is current on its rent payments. These draws are within the terms and conditions of the lease and the related restricted cash account. 52 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) Maturities of the Company’s lease liability as of December 31, 2024 were as follows: Years Ending December 31, Operating Leases 2025 $ 1,167 2026 1,310 2027 1,349 2028 1,390 2029 1,432 Thereafter 726 Total $ 7,374 Less: imputed interest ( 1,439 ) Total lease liability $ 5,935 Current operating lease liability $ 722 Noncurrent operating lease liability 5,213 Total lease liability $ 5,935 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 began charging 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. In 2024, the Company did not receive payments from the Subtenant as the Subtenant paid $ 584 directly to the Company’s landlord. In 2023, the Subtenant paid the Company $ 550 . On October 21, 2024, the Subtenant provided notice that it is exercising its right to termination under the Sublease, effective as of November 30, 2024. However, the Company sent a formal notice disputing the subtenant’s right to terminate the Sublease as the provisions for termination were not met and has $ 121 in other receivables related to the Subtenant’s past due rent. 6. Debt On May 3, 2024, the Company executed a promissory note (“Note”) and subsequently received a loan in the amount of $ 300 from an individual investor. All principal and accrued interest were due and payable on the earlier of (i) May 3, 2025 or (ii) upon an event of default, at such time, such amounts declared by the investor would become due and payable by Company. Interest accrued on this Note at 6.0 % and was payable at maturity. On June 3, 2024, the Company executed another promissory note (“DGP Note”) and subsequently received a loan in the amount of $ 700 from DGP, a related party. All principal and accrued interest were due and payable on the earlier of (i) March 25, 2025 or (ii) upon an event of default, at such time, such amounts declared by the investor would become due and payable by Company. Interest accrued on this DGP Note at 6.0 % and was payable at maturity. On September 11, 2024, the Company executed two Debt for Equity Exchange Agreements converting the existing debt and related interest described above into shares of its common stock. The Company exchanged in full satisfaction of the principal and accrued interest obligations on the Note into 101,991 of its common stock shares. The Company exchanged in full satisfaction of the principal and accrued interest obligations on the DGP Note into 237,223 shares of its common stock. As this was considered a troubled debt restructuring with a related party, the difference between fair value and book value was recognized within additional paid in capital. 53 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 7. Stockholders’ Equity Preferred Stock The Company has 10,000,000 shares of preferred stock, par value $ 0.0001 authorized and no shares issued and outstanding. Common Stock The Company has 200,000,000 shares of common stock, par value $ 0.0001 , authorized. As of December 31, 2024 and December 31, 2023, the Company had 6,026,841 and 1,832,988 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 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. Common Stock Purchase Agreements In an agreement dated November 6, 2024 and executed on November 12, 2024, the Company entered into a common stock purchase agreement (the “Initial Common Stock Purchase Agreement”) with HiTron Systems Inc. (“HiTron”), pursuant to which the Company agreed to issue and sell to HiTron 433,333 shares (the “Initial Shares”) of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”), at a purchase price of $ 3.00 per share (the “Initial Purchase”). On November 13, 2024, in a subsequent agreement (the “Subsequent Common Stock Purchase Agreement”), the Company agreed to sell and issue to HiTron 2,900,000 additional shares of Common Stock (the “Subsequent Shares” and together with the Initial Shares, the “Shares”), for $ 8.7 million, at a purchase price of $ 3.00 per share (the “Subsequent Purchase”). The Subsequent Common Stock Purchase Agreement provides HiTron with the right to nominate additional members of the Board in proportion to its equity interest, subject to approval by the Board and compliance with SEC and Nasdaq rules. On December 9, 2024, the Company entered into a Common Stock Purchase Agreement with SangSangIn Investment & Securities Co., Ltd. (“SangSang”), pursuant to which the Company agreed to issue and sell to SangSang 433,332 shares of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”), at a purchase price of $ 4.61 per share. On December 10, 2024, the Company entered into a common stock purchase agreement (the “MIRTO Purchase Agreement”) with MIRTO Co., LTD. (“MIRTO”), pursuant to which the Company agreed to issue and sell to MIRTO 87,808 shares of our Common Stock, for an aggregate purchase price of approximately $ 0.5 million, at a purchase price per share of $ 4.61 . The transactions under the MIRTO Purchase Agreement closed on December 24, 2024. Registration Rights Agreements In connection with the HiTron Common Stock Purchase Agreements and SangSang Common Stock Purchase Agreement, the Company entered into registration rights agreements (the “Registration Rights Agreements”) with HiTron and SangSang, pursuant to which the Company agreed to register the resale of the Shares. Under these 54 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) Registration Rights Agreements, the Company has agreed to file registration statements covering the resale of the Shares no later than the sixth ( 60 th ) day following the applicable closing (the “Filing Deadline”). 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 these Registration Rights Agreements), and to keep such registration statement continuously effective until the earlier of (i) the date the 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 the applicable 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 HiTron or SangSang except as specifically provided in these Registration Rights Agreements) incident to the performance of or compliance with these Registration Rights Agreements by the Company. In the event a registration statement has not been filed within 90 days following the closing date, subject to certain limited exceptions, then the Company has agreed to make pro rata payments to HiTron as liquidated damages in an amount equal to 0.5 % of the aggregate amount invested by HiTron in the Shares 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 Registration Rights Agreements. The Filing Deadline has passed for both of these agreements, however, the Company is making its best efforts to file such registration statements as soon as reasonably possible. September 2022 PIPE Securities Purchase Agreement On September 26, 2022, the Company entered into a securities purchase agreement (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 680,000 shares of Common Stock, at a purchase price of $ 8.00 per share. The private placement closed on February 24, 2023 (the “Closing Date”). The Company received gross proceeds of $ 5,440 from the September 2022 PIPE (or net proceeds of $ 4,597 after transaction expenses). CBI USA funded the acquisition pursuant to the Securities Purchase Agreement through a loan from its affiliate, DGP Co., Ltd. (“DGP”). On June 23, 2023, DGP exercised its the option pursuant to the loan and acquired the 680,000 shares of Common Stock initially acquired by CBI USA pursuant to the Securities Purchase Agreement. DGP subsequently agreed to sell its shares to a third party, with the closing of 10 % ( 68,000 shares) occurring in February 2024, and sold 424,611 to another third party on February 24, 2025. CBI USA and DGP, collectively, beneficially own 9 % of the outstanding shares of Common Stock based on information available to the Company. September 2022 Registration Rights Agreement In connection with the Securities Purchase Agreement, the Company entered into a registration rights agreement with CBI USA (the “Registration Rights Agreement’). CBI USA assigned its rights under the Registration Rights Agreement to DGP when DGP acquired the 680,000 shares of Common Stock initially sold to CBI USA. Pursuant to the Registration Rights Agreement, the Company agreed to file a registration statement covering the resale of the shares of Common Stock sold pursuant to the Securities Purchase Agreement, to use reasonable best efforts to cause such registration statement to become effective as promptly as practicable, and to keep such registration statement continuously effective until the earlier of (i) the date the 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 the Closing Date. In the event the registration statement was not filed within 90 days following the Closing Date, subject to certain limited exceptions, the Company agreed to make payments as liquidated damages in an amount equal to 0.5 % of the aggregate amount invested in the shares of Common Stock pursuant to the Securities Purchase Agreement per 30-day period or pro rata for any portion thereof for each such month during which such event 55 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) continues, subject to certain caps set forth in the Registration Rights Agreement. The Company paid $ 27 to CBI USA and accrued $ 191 to DGP pursuant to this provision. On February 19, 2025, the Company received a waiver letter from DGP confirming they agreed to waive the outstanding $ 191 penalty amount owed to DGP. On February 24, 2025, DGP sold 424,611 of their shares to an unaffiliated company. Common Stock Warrants Warrants to purchase 115,253 shares of common stock at a price of $ 40.5155 per share that were acquired in the December 2021 registered-direct offering transaction remained outstanding. The warrants are 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 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 105,231 warrants were settled as a result. As of December 31, 2024, warrants to purchase 10,022 shares of common stock at a price of $ 40.5155 per share that were acquired in the December 2021 registered-direct offering transaction remain outstanding. 8. 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 38,950 shares of Exicure common stock, which includes 14,466 shares of Exicure common stock to be issued to officers, employees, consultants and directors, plus a number of shares not to exceed 25,559 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) 30,667 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, 2024, 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 30,667 awards. As of December 31, 2024, the aggregate number of awards available for grant under the 2017 Plan was 121,700 . 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. 56 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 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) 50 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. Each offering period is approximately six-months in duration and the first offering period began on November 16, 2020 and ended on May 14, 2021. No shares were issued during 2024 or 2023. 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) 2,000 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. As of December 31, 2024, there were 12,394 shares available for issuance under the ESPP. On January 1, 2025, the number of shares of common stock available for issuance under the ESPP increased by 10,000 shares. Equity-based compensation expense is classified in the statements of operations as follows: Year Ended December 31, 2024 2023 Research and development expense $ — $ 154 General and administrative expense 22 1,194 $ 22 $ 1,348 Unamortized equity-based compensation expense at December 31, 2024 was $ 10 , which is expected to be amortized over a weighted-average period of 0.9 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. In addition to an assumption on the expected term of the option grants as discussed below, application of the Black-Scholes model requires additional inputs for which we have assumed the values described in the table below: Year Ended December 31, 2023 Expected term 5.8 to 5.8 years Risk-free interest rate 3.83 % to 3.83 %; weighted avg. 3.83 % Expected volatility 100.9 % to 100.9 %; weighted avg. 100.9 % Forfeiture rate 5 % Expected dividend yield — % 57 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 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 year ended December 31, 2023 is summarized in the table below. No options were granted during 2024. Common Stock Options Granted During Period Ended: Fair Value of Underlying Common Stock Exercise Price of Common Stock Option Year ended December 31, 2023 $ 1.58 ; weighted avg. $ 1.58 $ 1.58 ; weighted avg. $ 1.58 The weighted-average grant date fair value of common stock options granted in the years ended December 31, 2023 was $ 6.30 per common stock option, respectively. A summary of common stock option activity as of the periods indicated is as follows: Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (years) Aggregate Intrinsic Value (thousands) Outstanding - December 31, 2022 44,567 $ 23.70 7.5 $ — Granted 2,000 7.90 Forfeited ( 44,140 ) 27.00 Outstanding - December 31, 2023 2,427 $ 21.40 5.4 $ — Forfeited ( 84 ) 27.55 Outstanding - December 31, 2024 2,343 $ 27.55 4.4 $ — Exercisable - December 31, 2024 2,343 $ 27.55 4.4 $ — Vested and Expected to Vest - December 31, 2024 2,343 $ 27.55 4.4 $ — 58 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 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 4,177 $ 63.25 Granted 59,198 5.10 Vested ( 61,805 ) 9.55 Forfeited ( 961 ) 72.90 Unvested balance - December 31, 2023 609 $ 52.05 Granted — — Vested ( 237 ) 92.94 Forfeited ( 84 ) 17.25 Unvested balance - December 31, 2024 288 $ 47.93 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. The restricted stock units granted in the past 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. A summary of performance-based 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 97,643 $ 3.45 Settled ( 97,643 ) 1.91 Unvested balance - December 31, 2023 — $ — Unvested balance - December 31, 2024 — $ — 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. Repricing of Outstanding and Unexercised Options On March 24, 2022, the Board unanimously approved the repricing of all outstanding and unexercised stock options granted under the 2015 Plan and 2017 Plan (the “Plans”) and held by current employees, executive officers, and directors of the Company (the “Eligible Stock Options”). Effective April 1, 2022, the exercise price of the eligible stock options was reduced to $ 5.51 , the closing price of its common stock on April 1, 2022. Except for the modification to the exercise price of the Eligible Stock Options, all other terms and conditions of each of the Eligible Stock Options will remain in full force and effect. Pursuant to the Plans, the Board, as the administrator of the Plans, has discretionary authority, exercisable on such terms and conditions that it deems appropriate under the circumstances, to reduce the exercise price in effect for outstanding options under the Plans. In approving the repricing, the Board considered the impact of the current exercise prices of outstanding stock options on the incentives provided to employees and directors, the lack of retention value provided by the outstanding stock options to employees and directors, and the impact of such options on the capital structure of the Company. As of March 24, 2022, there were 46,645 stock options outstanding under 59 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) the Plans, and all of the Company’s outstanding stock options had exercise prices in excess of the current fair market value of the Company’s common stock as of March 24, 2022, which is why the Board made the determination to deem all outstanding and unexercised stock options held by current employees, executive officers, and directors as Eligible Stock Options. 9. Segment Reporting The Company manages our business activities on a consolidated basis and operate as a single operating segment: Biotechnology. Our revenue this year was solely from one patent license agreement with a private clinical stage biopharmaceutical company. Under the terms of the agreement, this biopharmaceutical company will receive an exclusive license in the field of hepatitis to all of the Company’s relevant patents for $ 500 , see Note 16 for further details. The accounting policies of the Biotechnology segment are the same as those described in Note 2 – Summary of Significant Accounting Policies. Our CODM is our President and Chief Executive Officer, Andy Yoo. The CODM uses net loss, as reported on our Consolidated Statements of Comprehensive Income, in evaluating performance of the Biotechnology segment and determining how to allocate resources of the Company as a whole. The CODM does not review assets in evaluating the results of the Biotechnology segment, and therefore, such information is not presented. The following table provides the operating financial results of our Biotechnology segment: Year Ended December 31, 2024 2023 Total revenues $ 500 $ — Significant segment expenses: Research and development expense — 1,423 General and administrative expense 5,449 11,715 Litigation legal expense 1,562 938 Right-of-use asset impairment loss 5,721 — Loss from sale of property and equipment — 920 Total operating expenses 12,732 14,996 Interest and dividend income 13 84 Interest expense ( 18 ) — Other income (expense) 2,544 ( 2 ) Total other income (expense) 2,539 ( 1,918 ) Segment net loss $ ( 9,701 ) $ ( 16,914 ) 10. Income Taxes Pre-tax loss before income taxes was $ 9,693 and $ 16,914 for the years ended December 31, 2024 and 2023, respectively, which consists entirely of losses in the U.S. and resulted in $ 8 and $ 0 provision for income tax expense during the years then ended, respectively. Components for the provision for income taxes consist of the following: 60 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) Year Ended December 31, 2024 2023 Current Federal $ — $ — State and local 8 — Total current tax expense $ 8 $ — Provision for income tax expense $ 8 $ — The differences between income taxes computed using the U.S. federal income tax rate and the provision for income taxes are as follows: Year Ended December 31, 2024 2023 Federal income tax expense at statutory rate $ ( 2,035 ) 21.0 % $ ( 3,552 ) 21.0 % State income tax expense at statutory rate ( 672 ) 6.9 ( 1,167 ) 6.9 Permanent differences 14 ( 0.1 ) 285 ( 1.7 ) State rate differential 25 ( 0.3 ) 72 ( 0.5 ) Change in valuation allowance 2,670 ( 27.6 ) ( 39,891 ) 236.9 Other 6 — — — Reduction of worthless attributes — — 44,253 ( 262.6 ) $ 8 ( 0.1 ) % $ — — % The effective tax rate for the year ended December 31, 2024 is attributable to the fact that the Company is subject to state income taxes. The effective income tax rate for the year ended December 31, 2024 was ( 0.1 )% because the Company generated tax losses and provided a full valuation allowance against its deferred tax assets to an amount that is more likely than not to be realized. 61 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) The significant components of the Company’s net deferred tax assets are as follows: December 31, 2024 2023 Deferred Tax Assets Net operating losses $ 3,957 $ 3,145 Capitalized R&D expenses 556 741 Accrued expenses 318 41 Operating lease liability 1,661 1,900 Investment Loss Adjustment 560 570 Less: Valuation allowance ( 6,920 ) ( 4,250 ) Total deferred tax assets 132 2,147 Deferred Tax Liabilities Prepaid expenses ( 125 ) ( 217 ) Fixed assets and other ( 7 ) ( 15 ) Deferred Rent — ( 57 ) Right-of-use asset — ( 1,858 ) Total deferred tax liabilities ( 132 ) ( 2,147 ) Deferred taxes, net $ — $ — The Company’s effective income tax rate for the year ended December 31, 2024 is ( 0.1 )%. The Company has recorded a full valuation allowance against its deferred tax assets. This determination is based on significant negative evidence, including: • Cumulative losses: The Company has been in a significant cumulative loss position since its inception in 2011. • Projected realization of net operating loss carry forward amounts: Projections of future pre-tax book loss and taxable losses based on the Company's recent actual performance and current industry data indicate it is more likely than not that the benefits will not be recognized. At December 31, 2024, the Company had a federal net operating loss carryforward of $ 13,951 , which are indefinitely lived. At December 31, 2024, the Company had $ 13,951 of state net operating loss carryforwards, which will begin to expire in 2044. The Company experienced an “ownership change” within the meaning of Section 382(g) (“Section 382”) of the Internal Revenue Code of 1986, as amended, during the fourth quarter of 2022. In general, the annual use limitation equals the aggregate value of our stock at the time of the ownership change multiplied by a specified tax-exempt interest rate. The Company determined that at the date of the 2023 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 as 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. As of 2023, the business model has substantially changed which fully limits our ability to recognize these deductions. As the Company disposed of the majority of their operating business, they are subject to a zero limitation under Section 382 of the Internal Revenue Code which makes the net operating losses unusable. Accordingly, the Company has not recorded federal and state net operating losses from prior to ownership change. In December 2024, the Company had another 62 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) ownership change and a formal analysis was not performed as any further limitation would not have a material impact on the financial statements due to the valuation allowance. At December 31, 2024 and 2023, the Company had no unrecognized tax benefits. The Company's estimate of the potential outcome of any uncertain tax positions is subject to management's assessment of relevant risks, facts and circumstances existing at that time. The Company evaluates uncertain tax positions to determine if it is more-likely-than-not that they would be sustained upon examination. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company is subject to taxation in the U.S. and various state jurisdictions. The Company remains subject to examination by U.S. federal and state tax authorities for the years 2020 through 2024. There are no pending examinations in any jurisdiction. 11. 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 years ended December 31, 2024 and 2023. The following is the computation of loss per common share for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Net loss $ ( 9,701 ) $ ( 16,914 ) Weighted-average basic and diluted common shares outstanding 2,043,278 1,602,790 Loss per share - basic and diluted $ ( 4.75 ) $ ( 10.55 ) 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: December 31, 2024 2023 Options to purchase common stock 2,343 2,427 Restricted stock units 288 609 Performance stock units — — Warrants to purchase common stock 10,022 10,022 12. 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. 63 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) Cash and cash equivalents were measured using level 1 inputs as of December 31, 2024 and 2023. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the December 31, 2024 and year ended December 31, 2023. The carrying amount of the Company’s receivables and payables approximate their fair value due to their maturity. 13. Defined Contribution Plan The Company maintains a defined contribution savings plan for the benefit of its employees. Company contributions are determined under various formulas. The expense recognized for this plan was $ 37 and $ 119 for the years ended December 31, 2024 and 2023, respectively. 14. 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-06637. 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. On October 8, the court granted preliminary approval of the settlement in the securities class action and set a schedule for final approval proceedings, including a final approval hearing on January 13, 2025. On January 13, 2025, the court entered final judgment approving the settlement. The settlement described above will be fully covered by insurance. However, the settlement will include a reservation of rights by the insurers against the Company for the unsatisfied portion of its self-insured retainer. As a result, the Company recorded an accrual as of September 30, 2024 for the amount of the unsatisfied retainer of approximately $ 1.1 million needed to bridge the $ 2.5 million retainer that the Company is liability for under its self-insured retention. In March and April 2022, three different stockholders filed separate shareholder derivative lawsuits on behalf of the Company against Dr. Giljohann and Mr. Bock, Jeffrey L. Cleland, Elizabeth Garofalo, Bosun Hau, Bali Muralidhar, Andrew Sassine, Matthias Schroff, James Sulat and Timothy Walbert. The cases in the ordered filed are captioned Puri v. Giljohann, et al., Case No. 1:22-cv-01083; Sim v. Giljohann, et al., Case No. 1:22-cv-01217; and Stourbridge Investments LLC v. Exicure, Inc. et al., Case No. 1:22-cv-00526. Complaints in these cases (collectively, the “Derivative Complaints”) assert, among other things, that the Company included false or misleading statements in its proxy statement for its 2021 Annual Meeting of Stockholders, also alleging certain breaches of fiduciary duties. The Derivative Complaints seek contribution from Dr. Giljohann and Mr. Bock under federal securities laws. The Puri and Stourbridge complaints further assert for a variety of related state law claims, including unjust enrichment, abuse of control, gross mismanagement, and corporate waste. Plaintiffs seek restitution for damages to the Company, attorneys’ fees, costs, and expenses, as well stockholder adoption of certain board oversight measures. 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 officers and directors for alleged breaches of fiduciary duties 64 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) and corporate waste. The Derivative Complaints and Demand Letter are currently stayed, and the Company is engaged in settlement discussions with plaintiffs’ counsel regarding these matters. On October 3, 2023, a former employee filed a complaint against the Company and its executives related to the former employee’s separation from the Company. The parties proceeded with paper discovery and this matter did not settle at an in-person settlement conference on July 17, 2024. As a result, we are in the discovery phase of this litigation. The parties exchanged discovery and a status conference was held on February 11, 2025, wherein opposing counsel asserted alleged various discovery deficiencies. The parties are working through these alleged discovery deficiencies and anticipate deposing the plaintiff as well as witnesses on behalf of the Company and the individual defendants themselves in the coming months. Leases Refer to Note 7, Leases , for a discussion of the commitments associated with the Company’s lease agreements. 15. 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 and former CEO of the Company, is the President of Alta. There were no related party transactions with Alta in 2024. Refer to the subsequent event in Footnote 17. Also, refer to the Note and the DGP Note in Footnote 6. 16. License and Purchase Agreements License Agreement On February 5, 2024, the Company entered into a patent license agreement to develop cavrotolimod for potential treatment for hepatitis with a private clinical stage biopharmaceutical company. Under the terms of the agreement, this biopharmaceutical company will receive an exclusive license in the field of hepatitis to all of the Company’s relevant patents. $ 500 was paid to the Company after the execution of this agreement. This payment was recognized as revenue in accordance with ASC 606, Revenue from Contracts with Customers . The Company will also be entitled to modest royalties on future net sales on all licensed technology during the term of the licensed patents. The Company determined that the amount of variable consideration would be constrained until the period the uncertainty related to the consideration is relieved. This patent license agreement was assigned to, and assumed by, the purchaser pursuant to this purchase agreement, but any royalties would be passed through to the Company. Purchase Agreement On September 27, 2024, the Company entered into and closed the sale of certain assets pursuant to an Asset Purchase Agreement (the “Purchase Agreement”). The assets sold to the purchaser consist of the Company’s historical biotechnology intellectual property and other assets and include the Company’s spherical nucleic acid-related technology, research and development programs, and clinical assets (the “Sold Assets”). The Company will receive gross proceeds of $ 1,500 from the sale of the Sold Assets. The gross proceeds were recognized as other income. The Company will be entitled to royalties and license fees in connection with future sales or licenses derived from the Sold Assets for a period of 10 years as set out in further detail in the purchase agreement. The Company determined that the amount of variable consideration would be constrained until the period the uncertainty related to the consideration is relieved. The Company received $ 150 in September, $ 550 in October, and $ 400 in December. The remaining $ 400 will be received in March. Licenses of intellectual property : If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from consideration allocated to the license when the license is transferred to the customer and the customer is able to 65 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) use and benefit from the licenses. For licenses that are combined with other promises, the Company utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates the probability of reaching the milestones and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur in the future, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore revenue recognized is constrained as management is unable to assert that a reversal of revenue would not be possible. The transaction price is then allocated to each performance obligation on a relative standalone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenues and earnings in the period of adjustment. To date, the Company has not recognized any milestone payment revenue from any of its collaboration agreements. Royalties : For arrangements that include sales-based royalties, including milestone payments based on levels of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its collaboration agreements. 17. Subsequent Events GPCR Share Purchase Agreement On January 19, 2025, the Company entered into a Share Purchase Agreement with GPCR Therapeutics Inc, a Korean corporation, (“GPCR”) pursuant to which the Company acquired from GPCR all of the issued and outstanding equity securities of GPCR Therapeutics USA Inc., a California corporation (“GPCR USA”). The transactions contemplated under the Share Purchase Agreement closed concurrently with execution. GPCR USA was, until immediately prior to closing under the Share Purchase Agreement, a wholly owned subsidiary of GPCR. The Company purchased GPCR USA’s six million common shares outstanding for $ 1.6 million. It is not yet known how much goodwill versus intangibles will be recognized. It is also not yet known the acquisition date fair value of the major classes of consideration transferred. In connection with the closing of the Share Purchase Agreement, the Company and GPCR entered into a License and Collaboration Agreement (“L&C Agreement”) to further develop and commercialize GPCR’s technologies related to certain intellectual property and patents. The L&C Agreement requires the Company to make milestone payments to GPCR upon the achievement of specific milestone events relating to clinical trials, marketing authorizations, and net sales, as well as for the Company to pay a recurring royalty payment based on 10 % of net sales, as set forth in the L&C Agreement. Termination of Chicago Lease Agreement On February 14, 2025, the Company executed a Lease Termination Agreement with its landlord effective as of January 31, 2025. As a result of this early termination for the Chicago lease that expired in June 2030, the Company vacated the Chicago office and stopped any further amounts owed to its landlord. There were no additional fees or costs related to the early termination. The Company expects to recognize a $ 6 million gain in the first quarter of 2025 related to this early termination. 66 Table of Contents EXICURE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) Common Stock Purchase Agreement On February 14, 2025, the Company entered into a Common Stock Purchase Agreement with Shin Chang Partners and RMS0718 Co., Ltd. (the “Purchasers”), pursuant to which the Company agreed to issue and sell to each of the Purchasers 145,454 shares of the Company’s common stock, par value $ 0.0001 per share, at a purchase price of $ 5.50 per share for gross proceeds of approximately $ 2 million. Consulting Agreement Pursuant to a Consulting Agreement, effective as of February 27, 2025, between the Company and Alta, the Company entered into a Consulting Agreement with Paul Kang, a director of the Company since February 2023, and the former CEO of the Company, 67 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.