Cyclerion Therapeutics, Inc.

Previous wording

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the corresponding notes included in this Quarterly Report on Form 10-Q, as well as the audited condensed consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those referenced or set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.

Current wording

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the corresponding notes included in this Quarterly Report on Form 10-Q, as well as the audited condensed consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as amended by the filing of a Form 10-K/A with the SEC on November 12, 2025, which was filed solely to correct a paragraph in the report of the independent registered public accounting firm which inadvertently omitted a discussion of the Critical Audit Matter relating to the assessment of indicators of impairment of the Company’s investment in Tisento Therapeutics Holdings Inc. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those referenced or set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.

Previous wording

Our strategy for Cyclerion is to build a new pipeline with therapeutics to treat certain neuropsychiatric diseases. Over the past year, Cyclerion’s diligence team which is composed of committed external experts and internal personnel in their respective fields, have been conducting asset evaluations in many therapeutic areas. Throughout this process, the team identified and assessed dozens of products and other opportunities directed at addressing patients’ needs and increasing shareholder value. The team prioritized an individualized therapy for treatment resistant depression (“TRD”) as our foundational product candidate and we have entered into a non-binding option to license agreement for the intellectual property associated with this product. With the large unmet medical need in TRD, the clinical development stage of this asset, and the strong commercial opportunity, we believe that this product is well suited to be the foundation moving forward for Cyclerion. The program team is currently developing an integrated development and commercial strategy in TRD.

Current wording

Our strategy for Cyclerion is to build a new pipeline with therapeutics to treat certain neuropsychiatric diseases. Over the past year, Cyclerion’s diligence team which is composed of committed external experts and internal personnel in their respective fields, have been conducting asset evaluations in many therapeutic areas. Throughout this process, the team identified and assessed dozens of products and other opportunities directed at addressing patients’ needs and increasing shareholder value. The team prioritized an individualized therapy for treatment resistant depression (“TRD”) as our foundational product candidate and we have entered into a license agreement with Massachusetts Institute of Technology (“MIT”) for the intellectual property associated with this product in September 2025. With the large unmet medical need in TRD, the clinical development stage of this asset, and the strong commercial opportunity, we believe that this potential product is well suited to be the foundation moving forward for Cyclerion. The program team is currently developing an Integrated clinical, regulatory and commercial strategy in TRD.

Previous wording

In addition to significantly reducing operating expenses and the potential to obtain revenues from our legacy soluble guanylate cyclase (sGC) stimulator clinical assets, we intend to raise funds to support the execution of the product plans in TRD. As such, we have developed a financing strategy plan and recently filed a registration statement on Form S-3 (the “Shelf Registration”) with the Securities and Exchange Commission (the “SEC”) which would allow us to sell registered shares of our common stock if we choose to do so. The Shelf Registration was declared effective by the SEC in February 2025.

Current wording

In addition to significantly reducing operating expenses and the potential to obtain revenues from our legacy soluble guanylate cyclase (sGC) stimulator clinical assets, we intend to raise funds to support the execution of the product plans in TRD. As such, we have developed a financing strategy plan and in February 2025 filed a registration statement on Form S-3 (the “Shelf Registration”) with the Securities and Exchange Commission (the “SEC”) which would allow us to sell registered shares of our common stock if we choose to do so. The Shelf Registration was declared effective by the SEC in February 2025.

Previous wording

We continue to build our infrastructure, and Regina Graul, Ph.D. was promoted to Chief Executive Officer (CEO) and Director to our Board in August of 2024 after she was hired as President in late 2023. Dr. Graul has significant experience in research and development, product search and evaluation and has extensive knowledge growing and leading integrated high-functioning teams. We also hired Rhonda Chicko, an independent contractor, as our Chief Financial Officer in 2024, who has extensive experience working with early and later-stage drug development companies. To limit our operating expenses, we have used consultants rather than hiring additional full-time employees; Dr. Graul is the only current employee to date. Our goal is to hire additional C-suite executives later this year.

Current wording

We continue to build our infrastructure, and Regina Graul, Ph.D. was promoted to Chief Executive Officer (CEO) and Director to our Board in August of 2024 after she was hired as President in late 2023. Dr. Graul has significant experience in research and development, product search and evaluation and has extensive knowledge growing and leading integrated high-functioning teams. We also hired Rhonda Chicko, an independent contractor, as our Chief Financial Officer in 2024, who has extensive experience working with early and later-stage drug development companies. To limit our operating expenses, we have used consultants rather than hiring additional full-time employees; Dr. Graul is the only current employee to date and we currently rely on a team of specialist consultants to assist us in other areas of our operations. Our goal is to hire additional C-suite executives later this year.

Previous wording

On December 13, 2024, we announced that Cyclerion and Akebia re-negotiated a mutually beneficial amendment to Akebia's exclusive license agreement for praliciguat. Under this new license amendment, we will receive $1.75 million in amendment payments, of which $1.25 million was paid in December 2024 and an additional payment of $0.5 million is due in September 2025. In addition, Akebia is responsible for all intellectual property expenses associated with praliciguat at an earlier date than as originally agreed between the parties. We are eligible to receive additional milestone cash payments of up to approximately $558.5 million in total related to potential future development, regulatory, and commercialization milestone payments for praliciguat. In exchange for a reduction in certain development milestone payments, we are eligible to receive certain higher-tiered sales-based royalties ranging from mid-single-digits to twenty percent. In 2021, Akebia paid a $3.0 million upfront payment to us upon signing of the Akebia License Agreement, and subsequently paid us an additional $1.25 million in December 2024 and is obligated to pay us an additional $0.5 million in September 2025.

Current wording

On December 13, 2024, we announced that Cyclerion and Akebia re-negotiated a mutually beneficial amendment to Akebia's exclusive license agreement for praliciguat. Under this new license amendment, we received $1.75 million in amendment payments, of which $1.25 million was paid in December 2024 and an additional payment of $0.5 million was paid in September 2025. In addition, Akebia is responsible for all intellectual property expenses associated with praliciguat at an earlier date than as originally agreed between the parties. We are eligible to receive additional milestone cash payments of up to approximately $558.5 million in total related to potential future development, regulatory, and commercialization milestone payments for praliciguat. In exchange for a reduction in certain development milestone payments, we are eligible to receive certain higher-tiered sales-based royalties ranging from mid-single-digits to twenty percent.

Previous wording

Olinciguat is a Phase 2, orally administered, once-daily, vascular sGC stimulator. On July 22, 2024, we entered into an Option to License Agreement (the “Option Agreement”) with a third party (the “Optionee”), pursuant to which the Optionee has an option (the “Option”) to enter into an exclusive license to olinciguat for human therapeutics, subject to certain carveouts. Under the terms of the Option Agreement, the Optionee paid us an Option fee of $150,000 in August 2024. The Optionee originally could exercise the Option on or before March 20, 2025, which may be extended for an additional two-month period for an additional fee of $25,000. The Option Period was extended for two months by the Optionee in March 2025. If the Optionee exercises the Option during the Option Period, the Parties shall promptly commence negotiations of the definitive license agreement. The terms of the license agreement will be negotiated in good faith within a period not to exceed 90 days after the date of exercise of the Option. If the parties cannot reach agreement, all rights revert to us. In addition, the Optionee has agreed to reimburse us for certain patent expenses incurred during the Option period.

Current wording

Olinciguat is a Phase 2, orally administered, once-daily, vascular sGC stimulator. On July 22, 2024, we entered into an Option to License Agreement (the “Option Agreement”) with a third party (the “Optionee”), pursuant to which the Optionee had an option (the “Option”) to enter into an exclusive license to olinciguat for human therapeutics, subject to certain carveouts. Under the terms of the Option Agreement, the Optionee paid us an Option fee of $150,000 in August 2024 and subsequent fees totaling $80,000 to extend the term of the Option Agreement. The Optionee originally could exercise the Option on or before March 20, 2025, which option period was ultimately extended through August 22, 2025. Thereafter, the parties had an additional 60 days to negotiate the terms of a definitive license agreement. The parties were unable to agree upon the terms of a license agreement and we provided notice on October 23, 2025 that it was terminating the Option Agreement. We are currently exploring potential license opportunities for olinciguat.

Previous wording

PRIZM – a Phase 2b Randomized, Placebo-Controlled Trial Investigating Zagociguat in MELAS – is evaluating the efficacy and safety of oral zagociguat 15 mg or 30 mg compared to placebo when administered once-daily for 12 weeks in participants with genetically and phenotypically defined MELAS. The PRIZM study has a crossover design, with two 12-week treatment periods separated by a 4-week washout period. All participants will receive zagociguat during one of the 12-week periods and placebo during the other. Participants who complete the study may be eligible for an open-label extension study. PRIZM is a global study that will enroll approximately 44 participants at mitochondrial disease centers of excellence in the U.S., Italy, Germany, United Kingdom, Australia, and Canada. ClinicalTrials.gov (NCT06402123) for more information.

Current wording

PRIZM – a Phase 2b Randomized, Placebo-Controlled Trial Investigating Zagociguat in MELAS – is evaluating the efficacy and safety of oral zagociguat 15 mg or 30 mg compared to placebo when administered once-daily for 12 weeks in participants with genetically and phenotypically defined MELAS. The PRIZM study has a crossover design, with two 12-week treatment periods separated by a 4-week washout period. All participants will receive zagociguat during one of the 12-week periods and placebo during the other. Participants who complete the study may be eligible for an open-label extension study. PRIZM is a global study with plans to enroll approximately 44 participants at mitochondrial disease centers of excellence in the U.S., Italy, Germany, United Kingdom, Australia, and Canada. Tisento announced its first patient was dosed in the study in January 2025 and in August 2025, Tisento announced that the first patient was enrolled in Tisento's open-label extension study in MELAS. Further information regarding the study is available at ClinicalTrials.gov (NCT06402123).

Previous wording

The following table summarizes our research and development expenses, employee and facility related costs allocated to research and development expense, and discovery and pre-clinical phase programs, for the three and six months ended June 30, 2025 and 2024. The product pipeline expenses relate primarily to external costs associated with nonclinical studies.

Current wording

The following table summarizes our research and development expenses, employee and facility related costs allocated to research and development expense, and discovery and pre-clinical phase programs, for the three and nine months ended September 30, 2025 and 2024. The product pipeline expenses relate primarily to external costs associated with nonclinical studies.

Previous wording

The successful development of any current or potential future product candidates is highly uncertain and subject to a number of risks. Please refer to Item 1A, Risk Factors, in this Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

The successful development of any current or potential future product candidates is highly uncertain and subject to a number of risks. Please refer to Item 1A, Risk Factors, in this Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as amended by the filing of a Form 10-K/A with the SEC on November 12, 2025.

Previous wording

We believe that our application of accounting policies requires significant judgments and estimates on the part of management and is the most critical to aid in fully understanding and evaluating our reported financial results. Our significant accounting policies are more fully described in Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements elsewhere in Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Current wording

We believe that our application of accounting policies requires significant judgments and estimates on the part of management and is the most critical to aid in fully understanding and evaluating our reported financial results. Our significant accounting policies are more fully described in Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements elsewhere in Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as amended by the filing of a Form 10-K/A with the SEC on November 12, 2025.

Previous wording

All research and development expenses are expensed as incurred. We defer and capitalize nonrefundable advance payments we make for research and development activities until the related goods are received or the related services are performed. A discussion of our critical accounting policies and estimates may be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations under the heading Critical Accounting Policies and Estimates.

Current wording

All research and development expenses are expensed as incurred. We defer and capitalize nonrefundable advance payments we make for research and development activities until the related goods are received or the related services are performed. A discussion of our critical accounting policies and estimates may be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as amended by the filing of a Form 10-K/A with the SEC on November 12, 2025, in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations under the heading Critical Accounting Policies and Estimates.

Previous wording

Revenue from option agreement. On July 22, 2024, we entered into the Option Agreement with the Optionee, which the Optionee has the Option to enter into an exclusive license to olinciguat for human therapeutics, subject to certain carveouts. In May 2025, we entered into the Amendment to extend the Option Period for an additional three months beginning May 22, 2025. We recognized revenue of $0.1 million and $0.2 million related to the Option extension fee, amendment fee and expense reimbursement during the three and six months ended June 30, 2025.

Current wording

Revenue from option agreement. On July 22, 2024, we entered into the Option Agreement with the Optionee, under which the Optionee had the Option to enter into an exclusive license to olinciguat for human therapeutics, subject to certain carveouts. We recognized revenue of $0.2 million related to the Option fee payment and expense reimbursement during the three and nine months ended September 30, 2024 and we recognized revenue $0.1 million and $0.2 million related to the Option extension fee, amendment fee and expense reimbursement during the three and nine months ended September 30, 2025.

Previous wording

General and administrative expense. The increase in general and administrative expenses of approximately $0.4 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily driven by an increase of approximately $0.3 million in professional consulting and approximated $0.2 million in corporate legal fees, offset by a decreases of approximately $0.1 million in employee-related expenses primarily due to the separation benefits payment during the three months ended June 30 2024.

Current wording

General and administrative expense. The increase in general and administrative expenses of $0.3 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily driven by an increase of $0.1 million in professional consulting, $0.2 million in outside service fee and $0.1 million in corporate legal fees, offset by a decrease of $0.1 million in patent fees.

Previous wording

The increase in general and administrative expenses of approximately $0.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily driven by an increase of approximately $0.4 million in professional consulting and approximately $0.5 million in corporate legal fees, offset by a decrease of approximately $0.1 million in patent fees, approximately $0.1 million in insurance expense, approximately $0.1 million in board member fees and approximately $0.2 million in employee-related expenses.

Current wording

The increase in general and administrative expenses of $0.7 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily driven by an increase of $0.6 million in professional consulting, $0.2 million in outside service fee and $0.5 million in corporate legal fees, offset by a decrease of $0.2 million in patent fees, $0.2 million in insurance expense, $0.1 million in board member fees and $0.2 million in employee-related expenses.

Previous wording

Interest income. Interest income decreased by $31,000 and $79,000 for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively, primarily attributable to the decrease of our money market fund balance.

Current wording

Interest income. Interest income decreased by $12,000 and $91,000 for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, primarily attributable to the decrease of our money market fund balance and reduction in interest rates.

Previous wording

Gain from insurance recovery. During the three and six months ended June 30, 2025, we recorded approximately $1.3 million of insurance recoveries related to loss of advanced intermediated GMP finished materials covered by several policies with third-party insurers.

Current wording

Gain from insurance recovery. During the nine months ended September 30, 2025, we recorded approximately $1.3 million of insurance recoveries related to loss of advanced intermediated GMP finished materials covered by several policies with third-party insurers. No such gain was recognized in the three months ended September 30, 2025 and three and nine months ended September 30, 2024.

Previous wording

On March 21, 2025, we closed on a private placement of 499,998 shares of our common stock, pursuant to a Stock Purchase Agreement, for total gross proceeds of approximately $1.375 million. We also incurred transaction costs of $0.1 million during the six months ended June 30, 2025.

Current wording

On March 21, 2025, we closed on a private placement of 499,998 shares of our common stock, pursuant to a Stock Purchase Agreement, for total gross proceeds of approximately $1.375 million. We also incurred transaction costs of $0.1 million during the nine months ended September 30, 2025.

Previous wording

Pursuant to Instruction I.B.6, in no event will we sell ATM Shares with a value exceeding more than one-third of our “public float” (the aggregate market value of our outstanding common stock held by non-affiliates) in any twelve-month period so long as our public float remains below $75.0 million. We did not offer any securities pursuant to Instruction I.B.6 during the prior twelve calendar month period ending June 30, 2025. From July 1, 2025 through August 4, 2025, we sold 129,246 ATM Shares for net proceeds of $0.4 million.

Current wording

Pursuant to Instruction I.B.6, in no event will we sell ATM Shares with a value exceeding more than one-third of our “public float” (the aggregate market value of our outstanding common stock held by non-affiliates) in any twelve-month period so long as our public float remains below $75.0 million. From July 1, 2025 through September 30, 2025, we sold 604,166 ATM Shares for net proceeds of $1.8 million. From October 1, 2025 through November 3, 2025, we sold 111,054 ATM Shares for net proceeds of $0.3 million.

Previous wording

On June 30, 2025, we had approximately $3.0 million of unrestricted cash and cash equivalents. Our cash equivalents include amounts held in U.S. government money market funds. We invest cash in excess of immediate requirements in accordance with our investment policy, which requires all investments held by us to be at least “AAA” rated or equivalent, with a remaining final maturity when purchased of less than twelve months, so as to primarily achieve liquidity and capital preservation.

Current wording

On September 30, 2025, we had approximately $4.6 million of unrestricted cash and cash equivalents. Our cash equivalents include amounts held in U.S. government money market funds. We invest cash in excess of immediate requirements in accordance with our investment policy, which requires all investments held by us to be at least “AAA” rated or equivalent, with a remaining final maturity when purchased of less than twelve months, so as to primarily achieve liquidity and capital preservation.

Previous wording

We have incurred recurring losses since our inception, including a net loss of $1.8 million for the six months ended June 30, 2025. In addition, as of June 30, 2025, we had an accumulated deficit of $269.2 million. We expect that our cash and cash equivalents as of June 30, 2025, will be sufficient to fund operations into the first quarter of 2026, however we will need to obtain additional funding to sustain operations as we expect to continue to generate operating losses for the foreseeable future. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern.

Current wording

We have incurred recurring losses since our inception, including a net loss of $2.7 million for the nine months ended September 30, 2025. In addition, as of September 30, 2025, we had an accumulated deficit of $270.2 million. We expect that our cash and cash equivalents as of September 30, 2025, will be sufficient to fund operations into the second quarter of 2026, however we will need to obtain additional funding to sustain operations as we expect to continue to generate operating losses for the foreseeable future. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern.

Previous wording

The condensed consolidated 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 result from the outcome of the uncertainties described above.

Current wording

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The condensed consolidated 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 result from the outcome of the uncertainties described above.

Previous wording

The following is a summary of cash flows for the six months ended June 30, 2025 and 2024:

Current wording

The following is a summary of cash flows for the nine months ended September 30, 2025 and 2024:

Previous wording

Net cash used in operating activities was $1.5 million for the six months ended June 30, 2025 was primarily a result of our $1.8 million net loss from operations. The net loss was offset by non-cash stock-based compensation expense of $0.2 million.

Current wording

Net cash used in operating activities was $1.7 million for the nine months ended September 30, 2025 was primarily a result of our $2.7 million net loss from operations. The net loss was offset by non-cash stock-based compensation expense of $0.3 million, a decrease of accounts receivable of $0.5 million, an increase of accounts payable of $0.1 million and an increase of accrued expenses and other current liabilities of $0.1 million.

Previous wording

Net cash used in operating activities was $3.0 million for the six months ended June 30, 2024 was primarily a result of our $2.9 million net loss from operations. The net loss was offset by non-cash stock-based compensation expense of $0.4 million and a decrease in prepaid expense of $0.3 million. The net loss was also adjusted by a decrease in accounts payable of $0.5 million and a decrease in accrued expenses and other current liabilities of $0.3 million.

Current wording

Net cash used in operating activities was $4.7 million for the nine months ended September 30, 2024 was primarily a result of our $3.6 million net loss from operations. The net loss was offset by non-cash stock-based compensation expense of $0.5 million. The net loss was also adjusted by gain from settlement of accounts payable of $0.4 million, an increase in prepaid expense of $0.2 million, a decrease in accounts payable of $0.5 million and a decrease in accrued expenses and other current liabilities of $0.5 million.

Previous wording

Net cash provided by financing activities for the three and six months ended June 30, 2025 of $1.2 million was due to net cash received from the 2025 Equity Private Placement related to issuance of 499,998 shares common stock at a purchase price of $2.75 per share. There was no financing activity in the three and six months ended June 30, 2024.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2025 of $3.1 million was due to $1.2 million net cash received from the 2025 Equity Private Placement related to the issuance of 499,998 shares of our common stock at a purchase price of $2.75 per share and $1.8 million net cash received from ATM related to the issuance of 604,166 shares of our common stock under the ATM. There was no financing activity in the nine months ended September 30, 2024.

Previous wording

We expect our expenses to fluctuate as we continue to maintain out-license opportunities and seek to broaden our portfolio through in-licensing of assets. We expect that our cash and cash equivalents as of June 30, 2025, will be sufficient to fund operations into the first quarter of 2026, however we will need to obtain additional funding to sustain operations as we expect to continue to generate operating losses for the foreseeable future. Failure to obtain necessary capital when needed may delay development of any current or potential future product candidates, or other operations.

Current wording

We expect our expenses to fluctuate as we continue to maintain out-license opportunities and seek to broaden our portfolio through in-licensing of assets. We expect that our cash and cash equivalents as of September 30, 2025, will be sufficient to fund operations into the second quarter of 2026, however we will need to obtain additional funding to sustain operations as we expect to continue to generate operating losses for the foreseeable future. Failure to obtain necessary capital when needed may delay development of any current or potential future product candidates, or other operations.