EXICURE, INC.XCUR

EXICURE, INC. Income Taxes Disclosure

10-KFiled Mar 25, 20265 min read
Income Taxes
Pre-tax loss before income taxes was $5,580 and $9,693 for the years ended December 31, 2025 and 2024, respectively, which consists entirely of losses in the U.S. and resulted in $634 provision for income tax benefit for the year ended December 31, 2025 and $8 provision for income tax expense for the year ended December 31, 2024.
Components for the provision for income taxes consist of the following:
Year Ended
December 31,
20252024
Current
Federal$— $— 
State and local2 8 
Total current tax expense$2 $8 
Deferred
Federal$(568)$— 
State and local(68)— 
Total deferred tax benefit$(636)$— 
(Benefit)/Provision for income tax expense $(634)$8 
We adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025. The following table presents the required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal income tax expense and rate to our actual global effective income tax expense and rate for the year ended December 31, 2025:
Year Ended
December 31, 2025
Federal income tax expense at statutory rate$(1,172)21.0 %
State income tax expense at statutory rate (1)
(151)2.7 
Change in valuation allowance378 (6.8)
Nontaxable or nondeductible items:
FMV remeasurement adjustment326 (5.8)
Other10 (0.2)
Reduction of worthless attributes(25)0.5 
$(634)11.4 %
(1) State and local income taxes in California made up more than 50% of the tax effect in this.
The following table presents the required disclosures prior to our adoption of ASU 2023-09 and reconciles the U.S. federal statutory income tax rate of 21% to our actual global effective income tax rate for the years ended December 31, 2024:
Year Ended
December 31, 2024
Federal income tax expense at statutory rate$(2,035)21.0 %
State income tax expense at statutory rate (672)6.9 
Permanent differences14 (0.1)
State rate differential25 (0.3)
Change in valuation allowance2,670 (27.6)
Other6 — 
Reduction of worthless attributes— — 
$8 (0.1)%
The following table presents cash paid for income taxes by jurisdiction for the year ended December 31, 2025:
U.S. federal statutory income tax rate
Federal$— 
State and local2 
Total cash paid for U.S. income taxes2 
Cash paid for federal income taxes
Korea— 
Total cash paid for foreign federal income taxes— 
Cash paid for income taxes$2 
The significant components of the Company’s net deferred tax assets are as follows:
December 31,
20252024
Deferred Tax Assets
   Net operating losses$6,089 $3,957 
Tax credits382 — 
Capitalized R&D expenses1,202 556 
Accrued expenses277 318 
Operating lease liability— 1,661 
Investment loss adjustment560 560 
Other37 — 
Less: valuation allowance(7,738)(6,920)
Total deferred tax assets809 132 
Deferred Tax Liabilities
Prepaid expenses(129)(125)
Fixed assets and other(44)(7)
Intangibles(1,059)— 
Total deferred tax liabilities(1,232)(132)
Deferred taxes, net$(423)$— 
We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. As of December 31, 2025, we maintained a $7,738 valuation allowance against the tax benefits of our U.S. net deferred tax assets because we determined these assets are not more likely than not to be realized as of December 31, 2025. In making this determination, we considered all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income (loss), tax planning strategies, and recent results of operations.
The following table summarizes the changes in the carrying amount of our deferred tax asset valuation allowance during the years ended December 31, 2025, and 2024:
Year Ended
December 31,
20252024
Valuation allowance at beginning of year$6,920 $4,250 
Charged (credited) to costs and expenses460 2,670 
Charged (credited) to other accounts358 — 
Valuation allowance at end of year$7,738 $6,920 
The Company’s effective income tax rate for the year ended December 31, 2025 is 11.4%. The Company has recorded a valuation allowance against its definite lived deferred tax assets and indefinite lived deferred tax assets in excess of future sources of taxable income. 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, 2025, the Company had a federal net operating loss carryforward of $21,807, which are indefinitely lived. At December 31, 2025, the Company had $20,848 of state net operating loss carryforwards, which will begin to expire in 2043. At December 31, 2024, the Company had a federal and a state net operating loss carryforward of $13,951.
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 2025. 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 2024 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 2024, 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 both federal and state net operating losses from prior to ownership change.
At December 31, 2025 and 2024, 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 2025. There are no pending examinations in any jurisdiction.
Free Sentinel

Want the next EXICURE, INC. income taxes disclosure the moment it drops?

Set a Sentinel and we'll alert you the moment EXICURE, INC.'s next filing hits EDGAR. No credit card, your email never gets sold.

Track for free

Historical Timeline

Fiscal YearFiled
2025Mar 25, 2026Showing above
2024Mar 18, 2025
2023Jun 6, 2024
2022Mar 27, 2023
2021Mar 25, 2022
2020Mar 11, 2021
2019Mar 10, 2020
2018Mar 8, 2019
2017Mar 9, 2018

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

Other Available Disclosures

Earnings Per ShareFair ValuePP&ELeasesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance